MASSEY ENERGY COMPANY Incentive Award Agreement (Based on Cumulative Earnings Before Interest, Taxes, Depreciation and Amortization)
EXHIBIT
10.6
▇▇▇▇▇▇
ENERGY COMPANY
(Based
on Cumulative Earnings Before Interest, Taxes, Depreciation and
Amortization)
THIS
AGREEMENT dated as of November 9, 2009,
between ▇▇▇▇▇▇ ENERGY COMPANY, a Delaware Corporation (the “Company”) and
[________] (“Participant”) is made pursuant and subject to the provisions of the
▇▇▇▇▇▇ 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 9, 2009 (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, 2010
through December 31,
2012 (“Earnout Period”).
(b) Performance
Period EBITDA means the Company’s cumulative earnings before interest,
taxes, depreciation and amortization, for the three fiscal years of the Company
ending December 31,
2010, December
31, 2011, and December 31, 2012
(the “Performance Period EBITDA”), 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:
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(a)
Performance Period EBITDA
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(b)
Participant’s Incentive
Award
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High
Target
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$_____
MM
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$[________]
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Middle
Target
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$_____
MM
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$[________]
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Low
Target
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$_____
MM
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$[________]
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If the
Performance Period EBITDA 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 EBITDA is less than the low target of $_____ million and no
increase to the Incentive Award will be made for cumulative earnings before
interest, taxes, depreciation and amortization above the high target of $_____
million.
Participant’s
Incentive Award for the Earnout Period, to the extent earned, will be paid in
cash no later than the March 15 immediately following the calendar year in which
the Earnout Period ends.
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:
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If
to the Company:
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By
hand-delivery:
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By
mail:
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▇▇▇▇▇▇
Energy Company
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▇▇▇▇▇▇
Energy Company
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Attention:
Corporate Secretary
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Attention:
Corporate Secretary
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▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇.▇.
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▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ 23219
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▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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If
to Participant:
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[Name]
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[Address]
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[Address]
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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.
▇▇▇▇▇▇
ENERGY COMPANY
By:
__________________________
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Its:
President
_____________________________
[Participant]