With rumor reports flying left and right about possible sales of the company (see here, here and here), Massey Energy on Friday disclosed that it had re-written its severance agreement with CEO Don Blankenship.
Massey filed this disclosure with the U.S. Securities and Exchange Commission saying:
On August 17, 2010, and as recommended by the Compensation Committee, the Board of Directors approved the elimination of the gross-ups of excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any interest or penalties pertaining to such tax, for any payments made under the Change in Control Severance Agreements with Don L. Blankenship and certain other executive officers of the Company, the Employment and Change in Control Agreement with Baxter F. Phillips, Jr., the Retention and Employment Agreement with John Christopher Adkins and the Employment Agreement with Michael K. Snelling (collectively, the “Agreements”) to be effective upon execution by such individuals and the Company of the amended and restated Agreements. In addition, as recommended by the Compensation Committee, the Board of Directors approved the amendment of the Agreements to clarify that the Company is not liable to an executive in the event any compensation or benefits provided to, or for the benefit of, the executive are subject to any additional income tax, interest or penalties imposed under Section 409A of the Code.
As I understand it, this basically means that Massey will no longer pay any federal taxes due on any severance compensation paid to Blankenship and other executives should they leave the company because of a change in ownership control.