MASSEY ENERGY COMPANY Incentive Award Agreement (Based on Cumulative Earnings Before Taxes)
EXHIBIT
10.5
XXXXXX
ENERGY COMPANY
(Based
on Cumulative Earnings Before Taxes)
THIS
AGREEMENT dated as of November 12, 2007, between XXXXXX ENERGY COMPANY, a
Delaware Corporation (the “Company”) and [________] (“Participant”) is made
pursuant and subject to the provisions of the Xxxxxx Energy Company 2006
Stock
and Incentive Compensation Plan, as amended from time to time (the “Plan”), a
copy of which is attached. All terms used herein that are defined in
the Plan have the same meaning given them in the Plan.
1. Incentive
Award. Pursuant to the Plan, the
Company, on November 12, 2007 (the “Grant Date”), awarded to Participant,
subject to the terms and conditions of the Plan and subject further to the
terms
and conditions herein set forth, the opportunity to earn a cash payment based
on
the satisfaction of the performance criteria set forth in Paragraph 3 below
(the “Incentive Award”).
2. Definitions.
(a) Earnout
Period means the three year period from January 1, 2008 through
December 31, 2010 (“Earnout Period”).
(b) Performance
Period EBT means the Company’s cumulative earnings before taxes,
for the three fiscal years of the Company ending December 31, 2008, December
31,
2009, and December 31, 2010 (the “Performance Period EBT”), all as confirmed by
the Company’s Chief Financial Officer and the Chairman of the Compensation
Committee (“Committee”); provided, however, that extraordinary, unusual or
infrequently occurring events and transactions, may, in the sole discretion
of
the Committee, be excluded pursuant to the Plan in such
determination.
3. Amount
of Award. Subject to Paragraph 5
and except as provided in Paragraphs 4 and 6 below, Participant’s Incentive
Award will be calculated under the amount and formula shown in column (b)
below,
based on satisfaction of the criteria set forth in column (a)
below:
|
(a)
Performance
Period EBT
|
(b)
Participant’s
Incentive Award
|
|
|
High
Target
|
$[________]
|
$[________]
|
|
Middle
Target
|
$[________]
|
$[________]
|
|
Low
Target
|
$[________]
|
$[________]
|
If
the
Performance Period EBT falls between any target amounts, the amount of
Participant’s Incentive Award is calculated proportionately between the two
nearest target levels. No Incentive Award will be paid if the
Performance Period EBT is less than the low target of $[________] and no
increase to the Incentive Award will be made for cumulative earnings before
taxes above the high target of $[________].
Participant’s
Incentive Award for the Earnout Period, to the extent earned, will be paid
in
cash on or about March 31, 2011.
4. Death
or Disability. If Participant dies or
becomes permanently and totally disabled within the meaning of Section 22(e)(3)
of the Internal Revenue Code of 1986, as amended (the “Code”) (“Permanently and
Totally Disabled”) while in the employ or service of the Company or a Subsidiary
within the Earnout Period, Participant or Participant’s estate will be entitled
to receive a pro rata portion of Participant’s Incentive Award as calculated
pursuant to Section 3, based on the portion of the Earnout Period elapsed
prior
to Participant’s death or becoming Permanently and Totally
Disabled.
5. Forfeiture. Participant’s
right to receive an Incentive Award is forfeited if Participant’s employment or
service with the Company and its Subsidiaries terminates during the Earnout
Period for any reason other than on account of Participant’s death or becoming
Permanently and Totally Disabled or as set forth in Paragraph 6
below.
6. Change
in Control. Notwithstanding any other
provision of this Agreement, Participant's right to receive the Incentive
Award
shall be vested if Participant's employment is terminated during the Earnout
Period by the Company or an Affiliate without Cause within two years following
a
Change in Control that occurs on or after the date of this Agreement through
the
Earnout Period. For purposes of this Agreement, Cause shall occur
upon:
(i) the willful and continued failure by Participant
substantially to perform Participant's duties with the Company or an Affiliate
(other than any such failure resulting from Participant's incapacity due
to
physical or mental illness) after written demand for substantial performance
is
delivered to Participant by the Company or an Affiliate which specifically
identifies the manner in which the Company or Affiliate believes that
Participant has not substantially performed Participant's duties,
(ii) Participant’s willful breach of fiduciary
duty, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses), willful violation of a final cease and desist
order or willfully engaging in any other gross misconduct which is materially
and demonstrably injurious to the Company or any Affiliate, or
(iii) Participant’s conviction of, or pleading guilty
or nolo condentere to, the commission of a felony involving fraud,
embezzlement, theft or moral turpitude.
For
purposes hereof, no act, or failure to act, on Participant’s part described in
clause (i) or (ii) above shall be considered “willful” unless done, or omitted
to be done, by Participant not in good faith and without reasonable belief
that
Participant's action or omission was in the best interest of the Company
and its
Affiliates. The fact that Participant is or shortly may be “retirement
eligible” and thus eligible for or entitled to post-retirement benefits from any
plan, arrangement or program sponsored, participated in or contributed to
by the
Company or an Affiliate shall not prevent Participant’s termination from being
considered for Cause.
7. Notice. Any
notice or other communications given pursuant to this Agreement shall be
in
writing and shall be personally delivered or mailed by United States registered
or certified mail, postage prepaid, return receipt requested, to the following
addresses:
|
If
to the Company:
|
|
|
By
hand-delivery:
|
By
mail:
|
|
Xxxxxx
Energy Company
|
Xxxxxx
Energy Company
|
|
Attention:
Corporate Secretary
|
Attention:
Corporate Secretary
|
|
0
Xxxxx Xxxxxx Xxxxxx
|
X.X.
Xxx 00000
|
|
Xxxxxxxx,
Xxxxxxxx 23219
|
Xxxxxxxx,
Xxxxxxxx 00000
|
|
If
to Participant:
|
|
|
[Name]
|
|
|
[Address]
|
|
|
[Address]
|
8. Confidentiality. Participant
agrees that this Agreement and the receipt of this Incentive Award are
conditioned upon Participant not disclosing the terms of this Agreement or
the
receipt of the Incentive Award to anyone other than Participant’s spouse,
confidential financial advisor, or senior management of the Company prior
to end
of the Earnout Period. If Participant discloses such information to any person
other than those named in the prior sentence, except as may be required by
law,
Participant agrees that this Incentive Award will be forfeited.
9. No
Right to Continued Employment or
Service. This Agreement does not confer
upon Participant any right to continue in the employ or service of the Company
or a Subsidiary, nor shall it interfere in any way with the right of the
Company
or a Subsidiary to terminate such employment or service at any
time.
10. Governing
Law. This Agreement shall be governed
by the laws of the State of Delaware.
11. Conflicts. In
the event of any conflict between the provisions of the Plan as in effect
on the
date hereof and the provisions of this Agreement, the provisions of the Plan
shall govern. All references herein to the Plan shall mean the Plan as in
effect
on the date hereof or as duly amended.
12. Participant
Bound by Plan. Participant hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all
the
terms and provisions thereof.
13. Binding
Effect. Subject to the limitations
stated above and in the Plan, this Agreement shall be binding upon and inure
to
the benefit of the legatees, distributees, and personal representatives of
Participant and the successors of the Company.
14. Taxes. Participant
shall make arrangements acceptable to the Company for the satisfaction of
income
and employment tax withholding requirements attributable to the vesting or
payment of this Award.
15. Employment
and Service. In determining cessation
of employment or service, transfers between the Company and/or any Subsidiary
shall be disregarded, and changes in status between that of a Member, a
Non-Employee Service Provider and a Non-Employee Director shall be
disregarded.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be signed by a
duly
authorized officer, and Participant has affixed his signature
hereto.
XXXXXX
ENERGY COMPANY
By:
__________________________
Name:
Xxxxxx X. Xxxxxxxx, Xx.
Its:
Executive Vice President and Chief Administrative Officer
_____________________________
[Participant]
