SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
__________
FORM
8-K
__________
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): November 19, 2007
(November 13, 2007)
___________
MASSEY
ENERGY COMPANY
(Exact
name of registrant as specified in its charter)
__________
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Delaware
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1-7775
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95-0740960
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(State
or other jurisdiction
of
incorporation )
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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4
North
4th
Street, Richmond, Virginia
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23219
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(Address
of
principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (804) 788-1800
N/A
(Former
name or former address, if changed since last report)
__________
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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Item 5.02.
Departure of Directors or Principal Officers; Election of Directors; Appointment
of Principal Officers; Compensatory Arrangements of Certain
Officers.
Letter
Agreement with Don L. Blankenship
On
November 13, 2007, Massey Energy Company (the “Registrant”) entered into a
letter agreement with Don L. Blankenship regarding his continued employment
as
Chairman, Chief Executive Officer and President of the Registrant through
December 31, 2009 (the “Letter Agreement”).
The
material terms and conditions of the Letter Agreement which relate to
Mr. Blankenship’s employment by the Registrant for fiscal years 2008 and
2009 are as follows: (i) a base salary of $83,333 per month; (ii) a
target cash incentive bonus award for fiscal year 2008 of $900,000 and a
target
cash incentive bonus award for fiscal year 2009 of $900,000, each based on
the
achievement of certain performance objectives set by the Compensation Committee
for fiscal years 2008 and 2009, respectively; (iii) long term incentive
awards, subject to the terms, conditions and performance and service-based
requirements of the grants made to employees participating in the Registrant’s
2008 and 2009 Long Term Incentive Programs (with the following exception,
the
non-qualified stock options must be exercised by Mr. Blankenship in the
first 20 days exercise is permissible pursuant to the Registrant’s trading
window policy and applicable securities laws following vesting, otherwise
they
will be automatically forfeited), which includes, for each 2008 and 2009
Long
Term Incentive Program, four components: a $300,000 target cash incentive
award
based on the achievement of a certain performance objective, 50,000
non-qualified stock options, 12,700 shares of restricted stock, and 7,300
restricted stock units; (iv) two performance-based restricted unit awards
for each of fiscal years 2008 and 2009, one for a total of 120,000 units
(assuming the achievement of Level 1 targeted performance for all the
performance objectives) and the other for a total of 70,000 units (assuming
the
achievement of Level 2 targeted performance for all the performance objectives)
which shall vest, in whole or in part, based on the achievement of certain
performance objectives set by the Compensation Committee for fiscal years
2008
and 2009, respectively; (v) two performance-based cash incentive awards for
each of fiscal years 2008 and 2009, one for a total of 90,000 units (assuming
the achievement of Level 3 targeted performance for all the performance
objectives) and one for a total of 200,000 units (assuming the achievement
of
Level 4 targeted performance for all the performance objectives) which shall
be
earned, in whole or in part, based on the achievement of certain performance
objectives set by the Compensation Committee for fiscal years 2008 and 2009,
respectively, which for fiscal year 2008 shall be equal to the number of
earned units times the closing market price of the Registrant’s common stock on
the New York Stock Exchange on the last trading day of 2008, and for fiscal
year
2009 shall be equal to the number of earned units times the closing market
price
of the Registrant’s common stock on the New York Stock Exchange on the last
trading day of 2009; (vi) an additional stock option award for each of
fiscal years 2008 and 2009 of 200,000 non-qualified stock options granted,
for
the 2008 award, on November 13, 2007 and, for the 2009 award, on or before
December 29, 2008, with exercise prices based on the closing market price
of the
Registrant’s common stock on the New York Stock Exchange on such dates with
service-based vesting, for the 2008 award, on December 30, 2008 and,
for the 2009 award, on December 30, 2009, that once vested must be
exercised in the first twenty days exercise is permissible pursuant to the
Registrant’s trading window policy and applicable securities laws; (vii) a
retention cash bonus award of $300,000 if employed through December 30,
2008 and a retention cash bonus award of $300,000 if employed through December
30, 2009; and (viii) the premium payments during 2008 and 2009, if any, on
split dollar life insurance policies owned by the Registrant with death benefit
endorsements payable to Mr. Blankenship, his estate or designated
beneficiaries, totaling $4,000,000. In accordance with the Massey Energy
Company
2006 Stock and Incentive Compensation Plan (the “2006 Plan”) from which the
foregoing equity- and performance-based awards are made, the aggregate maximum
amount payable as “incentive awards” under the 2006 Plan (which consists of the
cash incentive bonus awards in item (ii) above, the cash incentive awards
in item (iii) above, and the performance-based cash incentive awards in
item (v) above) shall not exceed $10,000,000 in a calendar year.
Notwithstanding the foregoing, the Compensation Committee retains the discretion
to cause the Registrant to pay or provide for additional or other compensation
for extraordinary performance regardless of the outcome on any performance-based
pay contained in the Letter Agreement provided such extraordinary performance
relates to performance which is not based on the performance criteria or
goals
contained in the Letter Agreement.
The
performance objectives set by the Compensation Committee for the cash incentive
bonus awards in item (ii) above include targeted levels of performance
based on: earnings before interest and taxes, produced tons, productivity
by
mining type (e.g. continuous miners, longwalls and surface), reduction in
environmental violations, non-fatal days lost safety rate, successorship
development for key executive positions, employee retention, and employee
diversity. The performance objective set by the Compensation Committee for
the
cash incentive award component of the long term incentive awards in item
(iii) above is targeted levels of performance based on earnings before
taxes. The performance objectives set by the Compensation Committee for the
performance-based restricted units awards in item (iv) above and the
performance-based cash incentive awards in item (v) above include targeted
levels of performance based on: earnings before interest and taxes, produced
tons sold, non-fatal days lost safety rate, and productivity by mining type
(e.g. continuous miners, longwalls and surface).
In
the
event that Mr. Blankenship’s employment with the Registrant terminates
during the period commencing January 1, 2008 through December 30, 2009
for any reason other than for Cause (as such term is defined in that certain
Change in Control Severance Agreement dated December 21, 2005 between the
Registrant and Mr. Blankenship) under circumstances where such cessation of
employment is not covered by the Change in Control Severance Agreement, then
the
Registrant shall pay to Mr. Blankenship, or if Mr. Blankenship is
deceased, to his estate, 2.5 times the sum of Mr. Blankenship’s annual base
salary of $1,000,000 plus Mr. Blankenship’s annual target cash incentive
bonus award of $900,000, unless Mr. Blankenship elects to terminate his
employment voluntarily during the period commencing January 1, 2008 through
December 30, 2009 other than for any reason which would constitute “a
Constructive Termination Associated With a Change in Control” (as defined, and
determined pursuant to the procedure set forth in the Change in Control
Severance Agreement, under circumstances where such Constructive Termination
is
not covered by the Change in Control Severance Agreement).
In
the
event that Mr. Blankenship’s employment with the Registrant terminates
during the period commencing January 1, 2008 through December 30, 2008
for any reason, all of Mr. Blankenship’s rights with respect to the
following awards covering the 2008 fiscal year (the performance-based restricted
unit awards, performance-based cash incentive awards, additional stock option
award and retention cash bonus award, as described in items (iv), (v),
(vi) and (vii) above) shall terminate and all rights thereunder cease
(with the following exception noted in the last sentence of this paragraph),
and
payments of life insurance premiums as described in item (viii) above shall
cease. In the event that Mr. Blankenship’s employment with the
Registrant terminates during the period commencing January 1, 2009 through
December 30, 2009 for any reason, all of Mr. Blankenship’s rights with
respect to the following awards covering the 2009 fiscal year (the
performance-based restricted unit awards, performance-based cash incentive
awards, additional stock option award and retention cash bonus award, as
described in items (iv), (v), (vi) and (vii) above) shall terminate
and all rights thereunder cease (with the following exception noted in the
next
sentence), and payments of life insurance premiums as described in item
(viii) above shall cease. In the event that Mr. Blankenship ceases to
be employed on or before December 30, 2009 and is entitled to payment and
benefits under the Change in Control Severance Agreement, the performance-based
restricted unit award of 120,000 units related to the fiscal year of performance
when his termination occurs shall vest and become payable based on the closing
market price of the Registrant’s common stock on the New York Stock Exchange on
the date of termination.
In
addition to the specific forms of remuneration discussed above,
Mr. Blankenship will continue to participate in the employment benefit
plans and arrangements provided by the Registrant to its other employees
and be
entitled to receive perquisites provided to him in keeping with past practice,
including but not limited to, use of the Registrant’s airplanes.
The
Letter Agreement may be extended by mutual agreement between the Executive
and
the Registrant for an additional two years.
The
Letter Agreement will be filed with the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2007.
Special
Successorship and Retention Program with Don L. Blankenship
In
October 1998 Fluor Corporation (the predecessor to the Registrant) and Mr.
Blankenship entered into a Special Successorship and Retention Program in
which
Fluor Corporation agreed to provide Mr. Blankenship at anytime after age
55
title to a company-owned residence and associated property in Sprigg, West
Virginia and to pay an amount to reimburse him for any income taxes owed
by him
as a result of such transfer. On November 13, 2007, in conjunction with its
review of this program and in light of the non-qualified deferred compensation
rules codified in Section 409A of the Internal Revenue Code, the Compensation
Committee recommended and the Board of Directors approved the transfer of
the
residence to Mr. Blankenship on January 1, 2008.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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MASSEY
ENERGY COMPANY
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Date:
November 19, 2007
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By:
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Name:
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Richard
R. Grinnan
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Title:
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Vice
President and Corporate Secretary
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