Patriot Coal Corporation 12312 Olive Boulevard, Suite 400 St. Louis, MO 63141 Attention: Joseph W. Bean Magnum Coal Company Suite 900 Charleston, WV 25301 Paul Vining c/oMagnum Coal Company Suite 900 Charleston, WV 25301 Ladies and Gentlemen:
Exhibit
99.5
July
22, 2008
Patriot
Coal Corporation
00000
Xxxxx Xxxxxxxxx, Xxxxx 000
Xx.
Xxxxx, XX 00000
Attention: Xxxxxx
X. Xxxx
Magnum
Coal Company
000
Xxx Xxxxxx Xxxx
Xxxxx
000
Xxxxxxxxxx,
XX 00000
Xxxx
Xxxxxx
c/oMagnum
Coal Company
000
Xxx Xxxxxx Xxxx
Xxxxx
000
Xxxxxxxxxx,
XX 00000
Ladies
and Gentlemen:
Reference
is made to the Agreement and Plan of Merger, dated as of April 2, 2008 (the
"Merger
Agreement"), among Magnum Coal Company (the "Company"), Patriot
Coal Corporation ("Parent"), Colt Merger
Corporation ("Merger
Sub") and ArcLight Energy Partners Fund I, L.P. and ArcLight Energy
Partners Fund II, L.P., acting jointly, as Stockholder Representative (the
"Stockholder
Representative"). Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed thereto in the Merger
Agreement.
The
undersigned Designated Stockholders (as defined in the Voting Agreement) desire
to cause certain shares of Parent Stock received by such Designated Stockholders
pursuant to the Merger Agreement to be directed to Xx. Xxxx Xxxxxx ("Xxxxxx") following
the lapse of certain restrictions on transfer of shares of Parent Stock
contained in the Voting Agreement; provided that Xxxxxx is then employed by
Parent. Accordingly, the parties hereto agree as
follows:
1. Delivery of Shares to
Xxxxxx. Each of the undersigned Designated Stockholders shall (i) on the
date that is no later than ten days following the Initial Lock-up Date (as
defined in the Voting Agreement) deliver and convey to Xxxxxx such Designated
Stockholder's Applicable Percentage of the number of shares of Parent Stock
equal to the Initial Lock-up Directed Share Amount, (ii) on the date that is no
later than ten days following the Second Lock-up Date (as defined in the Voting
Agreement) deliver to Xxxxxx such Designated
1
Stockholder's
Applicable Percentage of the number of shares of Parent Stock equal to the
Second Lock-up Directed Share Amount and (iii) on the date that is no later than
ten days following the date that is 360 days following the Effective Time (the
"Lock-up Expiration Date") deliver to Xxxxxx such Designated Stockholder's
Applicable Percentage of the Lock-up Expiration Directed Share Amount; provided, in each
case, that Xxxxxx is employed by Parent as of the Initial Lock-up Date, the
Second Lock-up Date or the Lock-up Expiration Date, as
applicable. Upon termination of Xxxxxx'x employment for any reason,
Xxxxxx'x right to receive Directed Shares after such date shall
terminate.
For
purposes of this letter agreement (a) "Initial Lock-up Directed Share Amount"
means the number of shares of Parent Stock equal to the quotient obtained by
dividing (1) $1,500,000 by (2) the average of the closing price of Parent Stock
on the principal stock exchange on which Parent Stock is traded for the 10
consecutive trading days ending five trading days after the Initial Lock-up
Date, (b) "Second Lock-up Directed Share Amount" means the number of shares of
Parent Stock equal to the quotient obtained by dividing (1) $750,000 by (2) the
average of the closing price of Parent Stock on the principal stock exchange on
which Parent Stock is traded for the 10 consecutive trading days ending five
trading days after the Second Lock-up Date, (c) "Lock-up Expiration Directed
Share Amount" means the number of shares of Parent Stock equal to the quotient
obtained by dividing (1) $750,000 by (2) the average of the closing price of
Parent Stock on the principal stock exchange on which Parent Stock is traded for
the 10 consecutive trading days ending five trading days after the Lock-up
Expiration Date, (d) "Directed Shares" means the shares of Parent Stock
delivered to Xxxxxx pursuant to this paragraph 1 of this letter agreement and
(e) "Applicable Percentage" for any Designated Stockholder means the percentage
set forth opposite such Designated Stockholder's name on Exhibit A
hereto.
2. Acceptance and
Acknowledgement by Xxxxxx. Xxxxxx hereby accepts the delivery
of Directed Shares, if any, as contemplated by paragraph 1 above and
acknowledges that any such Directed Shares shall be subject to the terms of the
Voting Agreement to the same extent as other shares of Parent Stock received by
Xxxxxx pursuant to the Merger. In consideration of the right to
receive the shares of Parent Stock pursuant to paragraph 1 above, Xxxxxx hereby
acknowledges that he shall not be entitled to the transaction bonus under
Section 3.1(d) of his current Employment Agreement with the Company dated as of
April 15, 2006. Xxxxxx further acknowledges that any Directed Shares
delivered to him by an "affiliate" (as defined in Rule 144(a)(1) under the 1933
Act ("Rule
144")) of Parent will be "restricted securities" (as defined in rule
144(a)(3)) and will be subject to applicable requirements under Rule 144,
including but not limited to the holding period requirement.
3. Acknowledgement by
Parent. Parent hereby acknowledges and agrees to the
conveyance of the Directed Shares, if any, to Xxxxxx. Parent further
agrees that this letter agreement and the transactions contemplated thereby
shall not constitute a Transfer from the undersigned to Xxxxxx for purposes of
Voting Agreement (including Section 1.02(e) and Section 3.01
thereof).
4. Acknowledgement by the
Company. The Company hereby acknowledges the conveyance of the
Directed Shares, if any, to Xxxxxx.
2
5. Further
Assurances. Each of the parties hereto agrees to execute and
deliver, or cause to be executed and delivered, all further documents and
instruments and to take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations, to consummate and make effective the transactions contemplated by
this letter agreement, including to register the Directed Shares in the name of
Xxxxxx or his nominee.
6. Amendments and
Waivers. Any provision of this letter agreement may by amended
or waived, if, but only if, such amendment or waiver is in writing and is signed
by each of Xxxxxx, the Stockholder Representative and Parent. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
7. Governing
Law. This letter agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to
conflicts of law principles.
8. Jurisdiction. The
parties hereto agree that any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
letter agreement or the transactions contemplated hereby shall be brought in any
Delaware state court, and each of the parties hereby irrevocably consents to the
jurisdiction of such court (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on such party as provided
in Section 4.10 of the Voting Agreement shall be deemed effective service of
process on such party.
9. WAIVER OF JURY
TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS LETTER AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
10. No Impact on Employment
Relationship. Nothing in this letter agreement shall impose on
Parent an obligation to continue Xxxxxx'x employment or lessen or affect
Parent's right to terminate Xxxxxx'x employment.
11. Counterparts; Third Party
Beneficiaries. This letter agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same
instrument. Until and unless each party has received a counterpart of
this letter agreement signed by each of the other parties, this letter agreement
shall have no effect, and no party shall have any right or obligation under this
letter
3
agreement
(whether by virtue of any other oral or written agreement or other
communication). This letter agreement shall become effective when
each party shall have received a counterpart hereof signed by the other
parties. No provision of this letter agreement is intended to confer
upon any Person other than the parties hereto any rights or remedies
hereunder. Any such counterpart may be delivered by facsimile or
other electronic format (including “.pdf”).
* * * *
4
Please
indicate your agreement with the foregoing by executing a copy of this letter
agreement.
Sincerely,
|
|||
ARCLIGHT
ENERGY PARTNERS
FUND
I, L.P.
|
|||
By: ArcLight PEF GP, LLC, its General
Partner
|
|||
By: ArcLight Capital Holdings, LLC, its
Manager
|
|||
By:
|
/s/Xxxxxx
X. Xxxxxx
|
||
Name: Xxxxxx
X. Xxxxxx
|
|||
Title: Manager
|
|||
ARCLIGHT
ENERGY PARTNERS
FUND
II, L.P.
|
|||
By: ArcLight PEF GP, LLC, its General
Partner
|
|||
By: ArcLight Capital Holdings, LLC, its
Manager
|
|||
By:
|
/s/Xxxxxx
X. Xxxxxx
|
||
Name: Xxxxxx
X. Xxxxxx
|
|||
Title: Manager
|
|||
CASCADE
INVESTMENT, L.L.C.
|
|||
By:
|
/s/Xxxxxxx
Xxxxxx
|
||
Name:
Xxxxxxx Xxxxxx
|
|||
Title:
Business manager
|
0
XXXXXX XX XXXXX XX
XXXXXXXXX XX XXXXXX
|
|||
By:
|
/s/Xxxxxxxx
Xxxxxxxx
|
||
Name:
Xxxxxxxx Xxxxxxxx
|
|||
Title:
Senior Vice-President
|
|||
By:
|
/s/Xxxxxxx
Xxxxxxxx
|
||
Name:
Xxxxxxx Xxxxxxxx
|
|||
Title:
Vice-President, Investments
|
|||
CITIGROUP CAPITAL PARTNERS
II 2006 CITIGROUP
INVESTMENT,
L.P.
|
|||
By: Citigroup
Private Equity LP, its General partner
|
|||
By:
|
/s/Xxxxx
Xxxxxxxxxx
|
||
Name:
Xxxxx Xxxxxxxxxx
|
|||
Title:
Vice President
|
|||
CITIGROUP CAPITAL PARTNERS
II EMPLOYEE MASTER FUND,
L.P.
|
|||
By:
|
/s/Xxxxx
Xxxxxxxxxx
|
||
Name:
Xxxxx Xxxxxxxxxx
|
|||
Title:
Vice President
|
|||
CITIGROUP CAPITAL PARTNERS
II ONSHORE, L.P.
|
|||
By:
|
/s/Xxxxx
Xxxxxxxxxx
|
||
Name:
Xxxxx Xxxxxxxxxx
|
|||
Title:
Vice President
|
6
CITIGROUP CAPITAL PARTNERS
II CAYMAN HOLDINGS, L.P.
|
|||
By: Citigroup
Private Equity LP, its General partner
|
|||
By:
|
/s/Xxxxx
Xxxxxxxxxx
|
||
Name:
Xxxxx Xxxxxxxxxx
|
|||
Title:
Vice President
|
|||
XXXXXX XXXXXX MEDICAL
INSTITUTE
|
|||
By:
|
/s/Xxxx
Xxxxxxx
|
||
Name: Xxxx
Xxxxxxx
|
|||
Title:
Managing Director
|
|||
THE NORTHWESTERN LIFE
INSURANCE COMPANY
|
|||
By:
|
/s/Xxxxxx
Xxxxx
|
||
Name:
Xxxxxx Xxxxx
|
|||
Title:
Authorized Representative
|
|||
THE BOARD OF TRUSTEES OF THE
XXXXXX XXXXXXXX JUNIOR
UNIVERSITY
|
|||
By: The
Stanford Management Company
|
|||
By:
|
/s/Xxxx
Xxxxx
|
||
Name: Xxxx
Xxxxx
|
|||
Title:
Manager, Natural Resources
|
7
Agreed
to and acknowledged as of the date
first
above written:
|
|||
PATRIOT
COAL CORPORATION
|
|||
By:
|
/s/Xxxxxx X. Xxxx
|
||
Name:
|
Xxxxxx
X. Xxxx
|
||
Title:
|
|||
MAGNUM
COAL COMPANY
|
|||
By:
|
/s/Xxxxx St. Clair
|
||
Name:
|
Xxxxx
St. Clair
|
||
Title:
|
CFO
|
||
/s/Xxxx
Vining__________________________________
|
|||
Xxxx
Xxxxxx
|
8
Exhibit
A
Designated Stockholder
Name
|
Applicable
Percentage
|
ArcLight
Energy Partners Fund I, L.P.
|
31.84%
|
ArcLight
Energy Partners Fund II, L.P.
|
25.50%
|
Cascade
Investment, L.L.C.
|
10.46%
|
Caisse
de Depot et Placement du Quebec
|
10.03%
|
Citigroup
Capital Partners II 2006 Citigroup Investment, L.P.
|
2.15%
|
Citigroup
Capital Partners II Employee Master Fund, L.P.
|
2.42%
|
Citigroup
Capital Partners II Onshore, L.P.
|
1.09%
|
Citigroup
Capital Partners II Cayman Holdings, L.P.
|
1.37%
|
Xxxxxx
Xxxxxx Medical Institute
|
6.98%
|
The
Northwestern Mutual Life Insurance Company
|
5.31%
|
The
Board of Trustees of the Xxxxxx Xxxxxxxx Junior University
|
2.85%
|
Total
|
100.00%
|
9