EXHIBIT 10.1
June 5, 2000
Steven F. Leer
2 Bellerive Country Club Grounds
St. Louis, MO 63141
Dear Steve:
Arch Coal, Inc. considers the establishment and maintenance of a sound
and vital management to be essential to protecting and enhancing the best
interests of the Company and its shareholders. In this regard, the Company
recognizes that, as is the case with many publicly-held corporations, the
possibility of a Change in Control of the Company does exist and that such
possibility, and the uncertainty and questions which a Change in Control of the
Company may raise among management, may result in the departure or distraction
of management personnel to the detriment of the Company and its shareholders. In
addition, difficulties in attracting and retaining new senior management
personnel may be experienced. Accordingly, on the basis of the recommendation of
the Personnel and Compensation Committee of the Board, the Board has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of certain members of the Company's management,
including you, to their assigned duties without distraction in the face of the
potentially disruptive circumstances arising from the possibility of a Change in
Control of the Company.
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 higher of the current year
bonus earned or the average annual bonus paid to you or earned by 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, but were employed by Ashland Coal, Inc. or ARCO
Coal Company prior to your employment by the Company, any annual bonus
earned or paid by such predecessor company shall be used to determine your
Average Annual Bonus. If you have not been employed by the Company, Ashland
Coal, Inc. or ARCO Coal Company for three full calendar years prior to the
Date of Termination, your Average Annual Bonus 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 earned as an
annual bonus by all executives of the Company at your Incentive
Compensation level in the three 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 after a written demand
to cease such misconduct is delivered to you by the Board, or (C) your
conviction of or the entering of a plea of nolo contendere to the
commission of a felony involving moral turpitude. 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 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 involving moral turpitude.
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.
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. "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 by you unless a later date is specified.
13. "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.
14. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
15. "Excise Tax" shall have the meaning as set forth in Section E.
16. "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 Company immediately prior to
a Change in Control of the Company, or a diminution in your
titles or offices 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),
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 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.
17. "Gross-up Payment" shall have the meaning as set forth in Section
E.
18. "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.
19. "Payment" shall have the meaning as set forth in Section E.
20. "Person" shall have the meaning as set forth in Sections 13(d) and
14(d)(2) of the Exchange Act.
21. "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.
22. "Salary Continuation Period" shall have the meaning set forth in
Section C, paragraph 1.
23. "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.
24. "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.
SECTION B. TERM AND BENEFITS
This Agreement shall be in effect from the date you accept this
Agreement until December 31, 2001 and shall automatically renew for successive
one (1) year periods on the first day of each month. This Agreement may be
terminated by either party provided that at least fifteen (15) days advance
written notice is given by either party to the other party hereto 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:
(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 one (1) year 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 paid or payable during the prior three (3) fiscal
years preceding the fiscal year in which your Date of Termination
occurs;
(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.
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,
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.
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 rate 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 paid or payable 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;
(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;
(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
exerciseable 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.
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 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 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
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 all prior employment and severance
agreements between you and the Company and its divisions or Subsidiaries.
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 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:/s/ Bradley M. Allbritten
ACCEPTED this
day of ,19
/s/Steven F. Leer
---------------------
Employee
