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ALPHA METALLURGICAL RESOURCES, INC.

340 Martin Luther King, Jr. Blvd.

Bristol, Tennessee 37620

March 29, 2021

Dear Fellow Stockholder:

It is my pleasure to invite you to attend the 2021 annual meeting of stockholders of Alpha Metallurgical Resources, Inc. The annual meeting will be held via interactive webcast on Thursday, April 29, 2021, at 10:00 a.m., Eastern Time. To join the meeting webcast, go to www.VirtualShareholderMeeting.com/AMR2021 shortly before the meeting time and follow the instructions. Your board of directors and management team look forward to hearing from you at the meeting.

Our original intention was to hold this year’s annual meeting both in person and virtually, but given ongoing public health issues, we determined that it would be more appropriate to hold the meeting via webcast only.

During the meeting, you will be asked to elect the entire board of directors, to approve the amendment of our certificate of incorporation to replace stockholder supermajority approval requirements with majority approval requirements, to approve increasing the number of shares of common stock reserved for awards under our 2018 Long-Term Incentive Plan, to ratify the selection of RSM US LLP as our independent registered public accounting firm for 2021 and to participate in an advisory vote to approve our executive compensation as disclosed in the proxy statement for the meeting. These matters are important, and we urge you to vote in favor of each of these proposals. To familiarize yourself with these matters, please review the proxy statement, proxy card and 2020 annual report that accompany this letter.

Regardless of the number of Alpha shares that you own, it is important that you vote your shares during the meeting or by proxy. You will find the instructions for voting in the accompanying proxy materials. We appreciate your prompt attention.

We thank you for your ongoing support.

 

 

Registered Holders. If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares, a registered holder, and the proxy materials were sent directly to you. As a registered holder, you have the right to attend the Annual Meeting and vote your shares in advance of and during the Annual Meeting.

Beneficial owner. If your shares are held in an account at a brokerage firm, bank, broker-dealer, trust, or other nominee, like the vast majority of our stockholders, you are considered the beneficial owner of shares held in “street name,” and notice of the meeting was sent to you by your nominee. As the beneficial owner, you are invited to attend and vote your shares in advance of and during the Annual Meeting. See the section below entitled “How can I attend and vote at the Annual Meeting?”

The Board of Directors unanimously recommends that you vote “FOR” each of these proposals.

For more information regarding each proposal, see the section of this Proxy Statement entitled “Proposals”.

shares are registered, your control number, the date of the proxy you wish to revoke or change, your new voting instructions, if applicable, and your signature. Mr. Nicholson must receive your letter before the Annual Meeting begins.

The chairman of the Annual Meeting may refuse to allow presentation of a proposal or nominee for the board of directors if the proposal or nominee was not properly submitted. The requirements for submitting proposals and nominations for next year’s Annual Meeting are described in the section entitled “Stockholder Proposals for the 2022 Annual Meeting”.

The Board of Directors unanimously recommends that you vote “FOR” each of these proposals.

If you own your shares in “street name” if your broker or other “street” nominee is actually the record owner. Under the NYSE rules, brokers or other “street” nominees have authority to vote in their discretion on “routine” matters – such as Proposal 4 (to ratify the appointment of RSM as the independent registered public accounting firm for the fiscal year ending December 31, 2021) if they have not received voting instructions from their clients who are the beneficial owners of such shares at least ten days before the date of the meeting.

When the broker or other “street” nominee does not receive voting instructions from clients with respect to “non-routine” matters, the broker or other “street” nominee may not vote on the matter, resulting in a “broker non-vote.” Broker non-votes are included in the calculation of the number of votes considered to be present at the Annual Meeting for purposes of determining a quorum, but otherwise will not affect the voting outcome of the proposals. Non-routine matters to be considered at the Annual Meeting are Proposals   .

Alpha is led by David J. Stetson, our chairman and chief executive officer. In addition to Mr. Stetson, whose detailed biography appears in the section entitled “About Our Board of Directors”, the following persons comprise the Company’s management committee.

All of the Company’s directors are elected annually. Each of the current seven directors, whose biographies appear below, has been nominated to stand for election at the Annual Meeting to another one-year term. For information about the board committees on which each director serves, please see “Committee Membership”.

Under the NYSE rules and, with respect to the audit committee under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and rules adopted under the Exchange Act, we are required to have a majority of independent directors on our board of directors, and all of our directors are independent other than our chairman and chief executive officer, Mr. Stetson. Only independent directors serve on each of our audit, compensation and nominating and corporate governance committees. As more fully described below, our safety, health and environmental committee must be composed of at least a majority of independent directors pursuant to the committee’s charter.

Our board of directors undertook an annual review of director and director nominee independence in March 2021. The purpose of this review was to determine whether any relationships or transactions involving non-management director nominees, their family members and affiliates were inconsistent with a determination that the director nominee is independent under the independence standards set forth in the NYSE rules and our Corporate Governance Guidelines and, with respect to audit and compensation committee

members and nominees, under the independence standards for audit and compensation committee members adopted by the SEC. Based on that review, our board of directors has determined that each of the non-management director nominees qualifies as “independent” under the independence standards set forth in the NYSE rules and each audit and compensation committee member qualifies as “independent” under the independence standards for audit and compensation committee members adopted by the SEC.

In connection with each of the quarterly meetings of the board of directors, the non-management directors meet in executive session without any members of management present. If at a given time there are any non-management directors who are not independent, the independent directors also regularly meet separately. If the board of directors convenes a special meeting, the non-management directors may meet in executive session if the circumstances warrant. The lead independent director presides at executive sessions of the non-management directors.

Our board of directors has four standing committees: (i) an audit committee, (ii) a compensation committee, (iii) a nominating and corporate governance committee, and (iv) a safety, health and environmental committee. Although the NYSE rules require only that the board of directors have standing audit, compensation and nominating and corporate governance committees, the board feels that it is important to maintain a safety, health and environmental committee to oversee the Company’s policies and procedures regarding these matters. From time to time, our board of directors may also form special ad hoc committees to which it may delegate certain authority to administer particular duties of the board.

Each of the standing committees acts according to a written charter adopted by the board. Stockholders may obtain a copy of each charter, at no cost, either on our website, www.alphametresources.com, or upon written request to William L. Phillips III, Assistant Secretary, Alpha Metallurgical Resources, Inc., 340 Martin Luther King, Jr. Blvd., Bristol, Tennessee 37620 (overnight courier) or P.O. Box 848, Bristol, Tennessee 37621 (U.S. mail).

The board of directors held 12 meetings in 2020, either in person or by telephone. Each currently serving director attended at least 75% of the aggregate of the total number of meetings of the board of directors in 2020 (held during the periods for which he or she served as a director) and the total number of meetings held by each committee on which he or she served in 2020 (during the period that he or she served). See “Committee Membership” for information regarding the committees on which each of our directors sits and the number of committee meetings held by each committee in 2020.

Under Alpha’s Corporate Governance Guidelines, directors are expected to attend stockholder meetings. All then-serving directors attended the 2020 annual meeting of stockholders. A copy of Alpha’s Corporate Governance Guidelines is available at no cost either through our website, www.alphametresources.com, or upon written request to William L. Phillips III, Assistant Secretary, Alpha Metallurgical Resources, Inc., 340 Martin Luther King, Jr. Blvd., Bristol, Tennessee 37620 (overnight courier) or P.O. Box 848, Bristol, Tennessee 37621 (U.S. mail).

In addition to his service as chief executive officer, Mr. Stetson is also the chairman of our board of directors. The board of directors believes that unifying the roles of chairman and chief executive officer creates important efficiencies both for the management of the

Company and the operation of the board. The chairman presides at all meetings of the board and stockholders. In addition, the chairman performs such other duties as are prescribed by our governing documents or that may be assigned to him by the board from time to time, including, but not limited to:

Mr. Quillen currently serves as our board’s lead independent director. The lead independent director has the following duties and powers:

Each of the board of directors’ standing committees is chaired by an independent director, further helping to ensure a robust role for the board’s independent directors.

Our management team is responsible for the assessment and control of risk at the Company. Under our Corporate Governance Guidelines, our board of directors is charged with evaluating major risks facing Alpha which are communicated to the board by management, and overseeing that appropriate risk management and control procedures are in place.

Our board of directors has delegated to various of its committees the responsibility for overseeing the management of certain risks. Even when risk oversight has been delegated to a committee, however, the full board maintains oversight of these risks.

In accordance with NYSE rules, the board of directors has delegated to the audit committee oversight of risks related to the integrity of the Company’s financial reporting processes. The audit committee:

Oversight of certain risks has also been delegated to the safety, health and environmental committee, such as risks associated with safety and health and the protection of the environment. The compensation committee regularly assesses whether Alpha’s compensation policies and practices incentivize excessive risk-taking. The nominating and corporate governance committee reviews material governance-related risks, such as those related to director and officer succession. For more information about the functions and activities of the board’s standing committees, see the section entitled “Board Committees”.

Alpha has adopted a Code of Ethics that applies to all employees (including senior financial employees), officers (including the chief executive officer and chief financial officer), and directors. The Code of Ethics is available at no cost either through Alpha’s website, www.alphametresources.com, or upon written request to William L. Phillips III, Assistant Secretary, Alpha Metallurgical Resources, Inc., 340 Martin Luther King, Jr. Blvd., Bristol, Tennessee 37620 (overnight courier) or P.O. Box 848, Bristol, Tennessee 37621 (U.S. mail).

The number of meetings held by each of the standing board committees in 2020 was as follows:

The board’s standing committees meet at scheduled times during the year, typically prior to quarterly board meetings. However, other scheduled meetings may be conducted in person or telephonically, depending on the work tasks of the committee. The agendas for meetings are initially prepared by the general counsel in consultation with the committee’s chairman, and are also provided for comments to the chairman and chief executive officer, the lead independent director and, at times, other legal counsel. To allow committees to make detailed inquiries into matters for which they are responsible, and to assist them in making informed decisions, appropriate members of management and external advisers are typically invited to attend committee meetings. For example, audit committee meetings are generally attended by the chief financial officer, the general counsel and the leader of the Company’s internal audit function, as well as certain other members of management and representatives of the independent auditor. Committees also typically conduct private meetings after each regular meeting and regularly meet privately and individually with key members of management and with the committee’s external advisors such as independent auditors or a compensation consultant.

The actions of each committee are recorded in the minutes of its meetings. The committee chair reports to the board as appropriate regarding the committee’s actions and recommendations.

Our board of directors has determined that all current members of the audit committee are financially literate under current listing standards of the NYSE. Further, our board has determined that all current members of the committee are independent within the meaning of SEC and NYSE regulations and that each of Mr. Ferrara and Ms. Fessenden qualifies as an “audit committee financial expert.”

The audit committee assists the board of directors in monitoring the quality, reliability and integrity of our accounting policies and financial statements, overseeing our compliance with legal and regulatory requirements and reviewing the independence, qualifications and performance of our internal and independent auditors. Among other matters enumerated in the audit committee charter, the committee is generally responsible for:

Our board has determined that all current members of the compensation committee are independent within the meaning of the NYSE rules and qualify as “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act.

The compensation committee is generally responsible for assisting our board of directors in all matters relating to the compensation of our directors and executive officers and overseeing our compliance with legal and regulatory requirements as they relate to matters of compensation. The compensation committee charter sets forth the committee’s role and responsibilities. Among other responsibilities enumerated in its charter, our compensation committee is responsible for:

Our compensation committee is authorized to administer our Management Incentive Plan (the “MIP”) and our 2018 LTIP and may delegate its authority thereunder to another committee of the board or to an appropriate officer of Alpha, in accordance with law and the terms of the applicable plan. For example, the 2018 LTIP provides our compensation committee the authority to delegate certain of its powers under the plan, relating only to employees who are not executive officers, to our chief executive officer. The committee has also delegated authority to our chief executive officer and/or certain other officers to approve eligible non-executive employees for participation in the Company’s Deferred Compensation Plan (the “Deferred Compensation Plan”).

In addition, our human resources department and our benefits committee, which is composed of senior employees, support the compensation committee in its work and act pursuant to delegated authority to fulfill various functions in administering the day-to-day aspects of our compensation and benefits plans.

Our compensation committee works with our management team in reviewing compensation matters, as more fully described above and in the section entitled “Compensation Discussion and Analysis”.

As more fully described under “Compensation Discussion and Analysis”, our compensation committee, together with the independent compensation consultant engaged by the committee, conducts an annual review of our overall compensation program for executive officers and directors. With respect to executive officer compensation, our compensation committee reviews, among other items, each of the key components of compensation — base salary, short- and long-term incentives and other compensation and benefit programs — both within Alpha and as compared to peer data, to determine whether each of these components is in line with our compensation philosophy and the Company’s related goals and objectives. Upon the recommendation of our chief executive officer with respect to the compensation of each other executive officer, and, following its review of the findings of our independent compensation consultants, our compensation committee then determines the compensation for all executive officers.

The compensation committee has the authority to directly engage the services of outside advisors, including an independent compensation consultant, to assist the committee with its review of the Company’s executive and director compensation programs. The role of the independent compensation consultant includes, without limitation: (i) reviewing the peer group for benchmarking purposes with respect to compensation and performance, (ii) conducting a competitive assessment of each executive’s total direct compensation (e.g., base salary, annual- and long-term incentives), (iii) developing a trends report regarding executive compensation and keeping the compensation committee apprised of regulatory changes and other developments related to executive compensation, (iv) advising the compensation committee regarding annual- and long-term incentive plan design, (v) performing a competitive assessment of non-employee director compensation, and (vi) assisting with the preparation of proxy disclosures.

In May 2018 the committee retained Pearl Meyer & Partners, LLC (“Pearl Meyer”) as independent compensation consultant, which assisted the committee with its work during 2018 and 2019. During that time Pearl Meyer was the only compensation consultant that had a role in determining or recommending the amount or form of compensation paid to our executives and non-employee directors.

To maintain independence from management, Pearl Meyer did not provide any services to the Company other than services provided to the compensation committee. Prior to retaining Pearl Meyer, and during the course of Pearl Meyer’s service, the committee reviewed the following with respect to the services provided by Pearl Meyer: (i) whether Pearl Meyer provided other services to Alpha, (ii) the amount of fees received from the Company by Pearl Meyer as a percentage of the total revenue of Pearl Meyer, (iii) policies and procedures of Pearl Meyer that are designed to prevent conflicts of interest, (iv) any business or personal relationships of the consultants or Pearl Meyer with members of the compensation committee or Alpha’s executive officers, and (v) any Alpha stock owned by the consultants. In each case, the committee found that Pearl Meyer did not have any such relationships with Alpha or own stock in the Company.

Pearl Meyer reported directly to the compensation committee and, with the consent of the committee, coordinated and gathered information from members of management and human resources personnel with which to advise the committee. The work of Pearl Meyer for the committee did not present any conflicts of interest that required the committee’s consideration.

In January 2020, the compensation committee retained Meridian Compensation Partners, LLC (“Meridian”) to assist the committee with its review of the Company’s executive and

director compensation programs. During 2020 Meridian was the only compensation consultant that had a role in determining or recommending the amount or form of compensation paid to our executives and non-employee directors. To maintain independence from management, Meridian has not provided, and it is expected that Meridian will not provide, any services to the Company other than services provided to the compensation committee. Prior to retaining Meridian, the committee reviewed, and on an annual basis will continue to review, the following with respect to the services provided by Meridian: (i) whether Meridian provided other services to Alpha, (ii) the amount of fees received from the Company by Meridian as a percentage of the total revenue of Meridian, (iii) policies and procedures of Meridian that are designed to prevent conflicts of interest, (iv) any business or personal relationships of the consultants or Meridian with members of the compensation committee or Alpha’s executive officers, and (v) any Alpha stock owned by the consultants. In each case, the committee has found that Meridian does not have any such relationships with Alpha or own stock in the Company.

Meridian reported directly to the compensation committee and, with the consent of the committee, coordinated and gathered information from members of management and human resources personnel with which to advise the committee. The work of Meridian for the committee did not present any conflicts of interest that required the committee’s consideration.

For more information regarding our compensation committee’s processes for determining executive officer compensation and the role of our independent compensation consultants in executive compensation matters, see “Compensation Discussion and Analysis”.

The nominating and corporate governance committee assists the board in identifying individuals qualified to become board members and executive officers and selecting, and recommending that the board select, director nominees for election to our board and its committees. Our nominating and corporate governance committee is also generally responsible for:

Pursuant to our Corporate Governance Guidelines and the committee’s charter, our nominating and corporate governance committee reviews the qualifications of proposed director nominees to serve on our board and recommends nominees to our board. Our board is ultimately responsible for proposing a slate of nominees to the stockholders for election to the board, using information provided by the committee.

Our chief executive officer, members of our nominating and corporate governance committee, and other members of our board are sources for the identification of

prospective director nominees. Our nominating and corporate governance committee also has authority to retain third-party search firms to identify director candidates. The committee may consider proposed nominees that are identified by stockholders in the manner prescribed by our bylaws (as described below).

Sections 2.10(a) and 2.10(b) of our third amended and restated bylaws describe the process by which stockholders of the Company may submit director nominations at an annual or special meeting of stockholders, respectively, at which directors are to be elected. The procedures for a stockholder to nominate a director at an annual meeting of stockholders include the following:

The foregoing summary of our stockholder director nomination procedures is not complete and is qualified in its entirety by reference to the full text of our bylaws that has been publicly filed with the SEC and is available at no cost at www.sec.gov.

We believe that our board members should have the highest professional and personal ethics and values. Candidates should bring integrity, insight, energy, and analytical skills to

board deliberations. We recognize that the strength and effectiveness of the board reflects the balance, experience, and diversity of the individual directors, their commitment and, importantly, the ability of directors to work effectively as a group in carrying out their responsibilities. We seek board candidates who are:

We seek candidates who demonstrate an understanding of our short- and long-term goals and objectives and a commitment to enhancing stockholder value. Toward this goal, we believe that our directors should have experience with certain matters, including:

Non-management director candidates should generally be free from any relationship with management or Alpha that could create a conflict of interest or compromise their independent judgment. The committee will also consider the length of an existing director’s service on the board and the extent to which a particular director would fill a present or anticipated future need on the board.

Our Corporate Governance Guidelines and the charter of the nominating and corporate governance committee state that the board, in identifying director candidates, will take into account all factors it considers appropriate to assure a strong board, which may include, among other things, diversity in geographic origin, gender, ethnic background and professional experience. Consistent with these documents, the board seeks nominees with

distinct professional backgrounds, experience and perspectives so that the board as a whole has the range of skills and viewpoints necessary to fulfill its responsibilities. As part of our annual board self-evaluation process, the board evaluates whether or not the board as a whole has the appropriate mix of skills, experience, backgrounds and diversity in relation to the needs of the Company for the current issues facing the Company.

Our nominating and corporate governance committee periodically reviews with our board of directors and each committee the requisite skills and characteristics of individual directors as well as the composition of our board as a whole. From time to time, we may seek to enhance our board of directors with one or more members who possess a specific area of experience or expertise.

Once our nominating and corporate governance committee has identified a prospective nominee, the committee evaluates the prospective nominee against the standards and qualifications set forth above, as well as any other criteria the committee may consider appropriate.

While our nominating and corporate governance committee has no fixed process for evaluating proposed nominees, the members of the committee generally will review the resume of a proposed nominee and consult the proposed nominee’s personal references. Our nominating and corporate governance committee will also personally interview (and, as appropriate, suggest that other members of our board interview) the proposed nominee, if the committee considers the proposed nominee suitable for consideration. After completing this evaluation, our nominating and corporate governance committee makes a recommendation to the full board as to the persons who should be nominated by our board, and the board determines the nominees after considering the recommendation and report of the committee.

The safety, health and environmental committee provides oversight of the Company’s performance in relation to safety, occupational health and environmental issues, including: (i) reviewing appropriate objectives and policies for the Company relative to the protection of the safety and health of employees, contractors, customers, the public and the environment, (ii) overseeing the Company’s monitoring and enforcement of these policies and related procedures and practices and, in connection with such oversight, assessing reports and other information provided by Company management and such external resources as the committee deems appropriate, (iii) overseeing the Company’s policies and procedures for identifying, assessing, monitoring and managing the principal risks in the Company’s business associated with safety and occupational health and the protection of the environment and, in connection with such oversight, assessing reports and other information provided by Company management and such external resources as the committee deems appropriate, (iv) discussing with management annually the scope, plans, and resources for conducting audits of the Company’s safety, health and environmental practices and performance and, at least annually, reviewing significant results of these audits, (v) reviewing the Company’s response to significant safety, health and environmental-related public policy, legislative, regulatory, political and social issues and trends that may affect the business operations, financial performance, or public image of the Company or the industry, and (vi) performing such other duties as assigned to it from time to time by the board.

Although not required by law, under the committee’s charter, a majority of its members must satisfy the independence standards of the NYSE.

In addition to the annual retainer, for each Compensation Year non-employee directors are entitled to receive additional cash retainers in connection with service as a non-employee chair of the board, lead independent director or chair or member of a committee of our board, as set forth in the following chart.

Non-employee directors’ annual awards are granted pursuant to agreements that generally provide for vesting on the day immediately preceding the first anniversary of the grant date. The awards accelerate and vest in full in connection with a change in control of Alpha or if the director ceases to serve as a member of our board as a result of a reason other than for cause as of a date that is more than six months after the beginning but prior to the completion of the applicable Compensation Year. Unvested RSUs and cash amounts are forfeited upon a separation from service for cause.

Annual awards for the 2020 Compensation Year were made on May 1, 2020 for the non-employee directors serving on that date. The awards were comprised of 86% cash awards and 14% stock-settled RSUs, with the number of RSUs based on the grant date fair market value of the Company’s common stock. This blend of cash- and equity-based awards aligns with the award mix granted to our non-CEO executive officers in 2020 under the LTIP program described under “Long-Term Incentive Awards”. This structure also minimized the use of the limited shares remaining under the 2018 LTIP.

In connection with his appointment to the board in December 2020, Mr. Quillen received a pro-rated annual RSU award and pro-rated cash retainer for the then-current quarter of service, which he elected to receive in the form of RSUs. In connection with their appointments to the board in February 2021, Mr. Courtis, Ms. Fessenden and Mr. Smith each received a pro-rated cash retainer for the then-current quarter of service, and each received a pro-rated annual RSU award.

In November 2020, in connection with the resignations of Messrs. Lushefski and Geiger and Ms. Medine from the board, the board determined that each resigning director, at his or her prior written notice to the Company, would be eligible to elect to have their stock settled RSU awards that vested upon their resignation be paid to him or her in cash in lieu of shares of common stock. Each such resigning director elected to receive such cash payment and was paid an amount equal to $26,425 based on the value of the number of shares that otherwise would have been issued to the resigning director multiplied by $7.21, the closing price of a share of the Company’s common stock on November 20, 2020, the effective date of their resignation. In addition, the cash portion of the annual grant made to each resigning director was also accelerated and paid upon their resignation in the amount of $86,000 each.

We reimburse non-employee directors for travel expenses incurred in connection with attending board, committee and stockholder meetings and for other business-related expenses in accordance with our reimbursement policies, as they may be amended from time to time.

To align our non-employee directors’ and executive officers’ interests with those of our stockholders, the board adopted stock ownership guidelines applicable to Alpha’s non-employee directors and executive officers effective August 13, 2019 (the “Ownership Guidelines”). Generally, non-employee directors must accumulate and maintain equity ownership in Alpha within five years of becoming a director with a value of no less than five times their annual cash retainer (not including meeting fees or committee chair or member compensation). In determining if a non-employee director has satisfied the Ownership Guidelines, all stock and equity interests beneficially owned by the director, or to which the director is otherwise entitled, are taken into consideration, including, without limitation, any unvested equity grants. For purposes of the Ownership Guidelines, equity ownership is measured following the end of each fiscal year of the Company, based on the average daily stock price of our common stock during the December of such fiscal year. The nominating and corporate governance committee is responsible for the administration and interpretation of the Ownership Guidelines. For a description of the Ownership Guidelines applicable to executive officers, see “Executive Stock Ownership Guidelines”.

The Company has adopted an insider securities trading policy that prohibits directors, officers and certain other employees from engaging in hedging transactions involving Company securities such as short selling, buying or selling publicly traded options (including puts and calls), zero-cost collar, and forward sales contracts. The policy also prohibits the holding by these persons of Alpha securities in a margin account or pledging Alpha securities as collateral for a loan.

The following table sets forth information concerning the compensation to our non-employee directors in respect of the fiscal year ended December 31, 2020. As noted above, Mr. Stetson receives no additional compensation for his service as a non-employee director. No compensation is reflected for Mr. Courtis, Ms. Fessenden and Mr. Smith, each of whom joined the board in February 2021.

Pursuant to the Company’s Corporate Governance Guidelines, management directors (currently only Mr. Stetson) are required to offer to resign from our board upon their resignation, removal or retirement as an officer of the Company, which resignation may be accepted by our board in its sole discretion. Our non-employee directors must inform, and offer his or her resignation to, the chair of the nominating and corporate governance committee, the chairman of the board and the CEO (if a different person from the chairman of the board) in the event of (i) any principal occupation or business association change, including retirement, or (ii) any change in circumstances which may cause him or her not to qualify as an independent member of our board under the rules of the NYSE or other applicable regulatory requirements. The nominating and corporate governance committee, with the advice and aid of the foregoing individuals, may make a recommendation to our board, which will then determine whether to accept or reject the offer of resignation.

Stockholders and other interested parties may contact an individual director, the independent directors as a group or the board of directors as a whole by writing to one of the following addresses:

Stockholders and other interested parties should clearly specify in each communication the name of the individual director or group of directors to whom the communication is addressed. Communications from stockholders and other interested parties will be promptly forwarded by the corporate secretary of Alpha to the specified director addressee. Communications addressed to the full board of directors or the group of non-management directors will be forwarded by the corporate secretary of Alpha to the chairman of the board of directors or the lead independent director, if any, as appropriate. Communications received through this method of delivery that do not indicate a specific recipient will be sent to the full board of directors. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the chairman of the audit committee and are handled in accordance with procedures established by the audit committee. Items not related to directors’ duties and responsibilities, including solicitations or advertisements, may be excluded by the Corporate Secretary.

In reliance on the reviews and discussions referred to above, the audit committee recommended to the board of directors, and the board of directors has approved, that the audited consolidated financial statements be included in our 2020 Annual Report. The audit committee approved, and the board of directors ratified, the selection of the Company’s independent registered public accounting firm.

Compensation Committee’s Role in Determining Executive Compensation

The compensation committee is responsible for ensuring that the Company’s executive compensation policies and programs reflect the short- and long-term interests of the Company’s stockholders and are competitive in the markets in which the Company competes for talent. The compensation committee reviews and approves the design of the compensation program, compensation levels, and benefit programs for the NEOs. When appropriate, the compensation committee consults with other board committees, such as the safety, health and environmental committee, to determine appropriate performance targets that relate to the Company’s non-financial achievements.

The compensation committee is committed to ensuring that our compensation and benefit programs are aligned with our values and business strategy by reviewing and analyzing the competitiveness of our executive compensation programs and our performance. Each key component of compensation (base salary, short- and long-term incentives) is reviewed for both internal equity and, when appropriate comparisons are available, for external competitiveness based on industry peers and published survey data.

At the 2020 annual meeting, our stockholders approved the 2019 compensation of our NEOs by approximately 95% of the votes cast. In making decisions with respect to 2020 and 2021 compensation, the compensation committee, with the assistance of its independent compensation consultant, has carefully considered the results of the advisory vote on executive compensation.

The compensation committee also takes into account external market conditions, such as competition for executives for a particular position, and position-specific factors when approving the total compensation for each NEO. The position-specific factors influencing the compensation levels include largely qualitative factors such as experience, tenure, job performance, contributions to our financial results, scope of responsibilities, and complexity of the position.

Role of Management and CEO in Determining Executive Compensation

As part of our process for establishing executive compensation, our CEO and the human resources department provide information and recommendations to the compensation committee and compensation consultant regarding compensation program design and appropriate performance metrics. Our CEO reviews the performance of our other NEOs with the compensation committee and makes recommendations to the committee regarding compensation levels and awards for our other NEOs. The compensation committee is responsible for determining the CEO’s compensation following a review of market data provided by our compensation consultant and the committee’s evaluation of the CEO’s performance. Our CEO does not participate in meetings of the compensation committee, or portions thereof, during which the committee discusses the CEO’s compensation.

Compensation Consultants

In 2020 the compensation committee used the services of Meridian, a nationally recognized public company compensation advisor, to advise it on executive and director compensation matters. The services performed by Meridian in 2020 are described under “Compensation Committee - Independent Compensation Consultants”. Meridian reported directly to the compensation committee and, with the consent of the compensation committee, coordinated and gathered from members of management and human resources personnel information with which to advise the compensation committee.

Ultimately, decisions about the amount and form of executive compensation are made by the compensation committee alone and may reflect factors and considerations other than the information and advice provided by our compensation consultants or management.

Peer Group

In 2020, the committee, with the input of Meridian and management, reviewed and revised our public company peer group to be used to assist us in making compensation decisions going forward. The companies were selected from a group of public companies in the mining, metals and energy industries, taking into account market capitalization and revenues similar to ours. Our public company peer group approved by the compensation committee consisted of the following companies:

The same peer group was also used to inform compensation decisions through most of 2020. In July 2020, the compensation committee added Alliance Resource Partners, L.P. and removed Denbury Resources Inc. and Southwestern Energy Company from the peer group.

Executive Stock Ownership Guidelines

The board of directors believes it is important for our executive officers, including our NEOs, and directors to be owners in the Company to ensure the alignment of their goals with the interests of our stockholders. In August 2019, the board adopted the Ownership Guidelines, pursuant to which the Company’s executive officers are required to hold the

equivalent of three times their base salary in our common stock, except in the case of our CEO, who is required to hold five times his base salary in our common stock. Each executive officer has a transition period of five years to meet the requirements set forth in the Ownership Guidelines. In determining if an executive officer has satisfied the Ownership Guidelines, all stock and equity interests beneficially owned by the executive officer, or to which the executive officer is otherwise entitled, are taken into consideration, including certain unvested equity grants. For further information regarding the Ownership Guidelines, including a description of the terms applicable to non-employee directors, see “Director Stock Ownership Guidelines”.

2020 Primary Elements of Compensation

The 2020 compensation program for our NEOs consisted of a number of elements that support our performance and retention objectives. The compensation earned under certain components may vary significantly based on company performance. The following chart summarizes the main components of our 2020 executive compensation program and the primary objectives of each.

Pay Mix

As illustrated in the chart below, approximately 82% of Mr. Stetson’s and 75% of our other NEOs’ 2020 target annualized direct compensation was “at risk,” with most of the

compensation subject to the achievement of short- and long-term financial or operational performance objectives. The compensation breakdown shown in the chart below reflects annualized target compensation for 2020. We believe that this balance of fixed and variable compensation is consistent with our executive compensation philosophy and maintains a strong link between the NEOs’ compensation and company performance, motivating executives to deliver strong business performance and, importantly, to create stockholder value.

 

Base Salary

Base salary is the fixed element of each NEO’s annual cash compensation, and the foundation upon which other primary elements of compensation are based. The compensation committee awards competitive salaries in order to assist in attracting and retaining each NEO. Base salaries are reviewed by the compensation committee annually and determined with reference to the median salaries for similarly situated executives and also each NEO’s position-specific skills, tenure, experience, responsibility and performance. Our NEOs received a temporary 10% decrease in base salary in April 2020 as result of the company implementing wage reductions for selling, general and administrative expense (SG&A) related positions in an initial response to market uncertainties stemming from the coronavirus pandemic (COVID). These reductions were lifted in May 2020. In June 2020, our NEOs received a temporary 5% decrease in base salary as result of the company implementing longer term wage reductions in response to ongoing market uncertainties related to COVID. Mr. Whitehead’s base salary (before giving effect to the temporary wage reduction) increased from $475,000 to $650,000 effective July 6, 2020 as result of a compensation market analysis and benchmarking to other executives within the industry. Mr. Eidson’s base salary (before giving effect to the temporary wage reduction) increased from $500,000 to $600,000 in connection with his promotion and title change to President and CFO effective December 14, 2020. Mr. Nicholson’s base salary (before giving effect to the temporary wage reduction) increased from $450,000 to $500,000 in connection with his promotion and title change to EVP, CAO, General Counsel and Secretary effective December 14, 2020. The current base salaries for Mr. Stetson ($950,000), Mr. Eidson ($570,000), Mr. Whitehead ($617,500), and Mr. Nicholson

($475,000) include the 5% wage reduction, which remains in effect. The company plans to lift the wage reductions effective March 29, 2021 for non-executive employees, but the NEOs will remain subject to the wage reduction beyond that date. Mr. Horn’s base salary increased from $325,000 to $380,000 effective August 31, 2020 and has not increased since becoming a NEO effective December 14, 2020.

2020 Annual Bonuses

The Alpha Metallurgical Resources, Inc. Annual Incentive Bonus Plan (the “Bonus Plan” or “AIB”) provides annual cash incentives to our executive officers and other key employees to reward performance, as measured against fundamental company financial and operational goals. During 2020, all of our NEOs participated in the AIB.

In establishing 2020 performance goals under the AIB, the compensation committee considered the economic environment and challenges to be faced during the fiscal year including uncertainties stemming from the COVID. The compensation committee designed the performance goals to ensure that performance significantly in excess of the target performance goals would be rewarded with above target payout levels, up to the cap established by the compensation committee. In setting the target goals, the compensation committee sought to establish challenging but attainable goals that would motivate and reward the NEOs for strong performance without encouraging excessive risk taking.

For 2020, the compensation committee approved a mix of performance measures based on financial metrics and operational metrics, as shown in the table below. Additional information regarding the performance metrics is included in the footnotes to the table below.

The compensation committee approved the following metrics, the respective weighting of each metric and the performance thresholds for the executives’ 2020 annual bonuses under the Bonus Plan. There were no adjustments made to these metrics after initial approval. The metrics were intended to align annual incentive compensation for 2020 with the goals and objectives set forth in the Company’s business plan, specifically a focus on safety, environmental compliance and financial performance, especially with respect to costs. If the threshold level of performance for any of our metrics is not achieved, the resulting payout as a percentage of target is 0%, and no payouts are made under the metric.

The table below sets forth the performance metrics and their respective weightings and thresholds as well as the 2020 performance under each metric:

The compensation committee sets the target amount of executives’ bonus opportunities to be at or around the median of competitors and industry peers. Potential 2020 bonus payouts for our NEOs who participated in the AIB ranged from 0% to 200% of the target opportunity, based on the achievement of performance metrics. There is no payout for achievement at or below a threshold goal.

Payouts under the Bonus Plan are typically made around or following the end of the applicable fiscal year, after achievement of performance metrics for the year have been determined. For 2020, performance was measured in early December 2020 based on the metrics’ actual performance levels through November and the forecasted performance for December. Since performance was tracking well above target, an initial payout at target was made in late December 2020. Thereafter, in February 2021, the compensation committee reviewed the metrics’ actual performance levels through December 31, 2020, and approved the remaining payout based on actual performance metrics minus the initial payout. The final payout occurred in March 2021.

The following table sets forth the payouts earned by each participating NEO pursuant to the Bonus Plan for 2020. Each NEO’s annual bonus payment equaled 177.51% of his target bonus amount.

Long-Term Incentive Awards

In 2016, when the Company was still private, the Company adopted, and stockholders approved, the MIP, under which grants of RSUs, restricted stock, stock options and vested shares of our common stock were made to our NEOs and other executives, non-employee directors and key employees.

The Company adopted the 2018 LTIP on April 29, 2018, pursuant to which awards of stock options, stock appreciation rights, restricted stock, RSUs, performance awards and other cash- and stock-based awards may be granted to our employees, consultants and non-employee directors.

Based on a review of the Company’s historical grant practices and compensation objectives, the compensation committee and the board determined in February 2020 that there was an insufficient number of shares available for issuance under the 2018 LTIP to make the annual grants for 2020 under the 2018 LTIP that the compensation committee believes were appropriate to fulfill the Company’s long-term compensation objectives. As a result of this shortfall, in 2020, PSUs were granted only to the CEO and the compensation committee approved the adoption of an interim long-term incentive framework for 2020 for the other NEOs that was comprised of a combination of both equity-based and cash-based awards, as follows: (i) 14% of each award was granted in the form of stock-settled RSUs that are scheduled to vest in equal installments on each of February 18, 2021, 2022 and 2023; (ii) 21% of each award was granted in the form of a time-based cash award that is scheduled to vest in full on February 18, 2023; and (iii) 65% of each award was granted in the form of a performance-based cash award that is scheduled to vest at the end of a three-year performance period, from January 1, 2020 through December 31, 2022, based on the achievement of safety, production and relative total shareholder return performance metrics. The performance-based component of the award will have potential payouts ranging from 0% to 200% of target levels. In February 2020, Messrs. Eidson, Whitehead, Nicholson and Horn received awards under this new framework having aggregate target award values of $1,000,000, $950,000, $900,000 and $227,500, respectively.

The PSUs and performance-based cash are scheduled to vest on February 18, 2023, subject to the employees’ continued employment through such date and the satisfaction of performance conditions that are based 50% on the Company’s achievement of relative total shareholder return (rTSR) as compared to the median of its comparator group, 25% on the Company’s safety metric achievement of non-fatal days lost (NFDL), and 25% on the Company’s production metric achievement of underground feet per shift (FPS) during a three-year performance period. The performance period for awards granted in 2020 is January 1, 2020 through December 31, 2022. Following February 18, 2023, any vested PSUs will be paid in shares of our common stock and any vested performance-based cash awards will be paid in cash.

For 2020, Mr. Stetson’s long-term incentive award was comprised of two stock-settled components in accordance with the terms of his employment agreement, as follows: (i) 35% of his award was granted in the form of RSUs that are scheduled to vest in equal installments on each of February 18, 2021, 2022 and 2023, and (ii) 65% of the award was granted in the form of PSUs that are scheduled to vest at the end of a three-year performance period, from January 1, 2020 through December 31, 2022, based on the achievement of the same safety, production and relative total shareholder return performance metrics as for the performance-based cash awards granted to the other long-term incentive plan participants for 2020. The target award value for Mr. Stetson's PSUs was $1,950,000. The terms of the long-term incentive award granted to Mr. Stetson was subsequently modified in January 2021 pursuant to his amended and restated employment agreement as further described below under “2021 Compensation Decisions”.

To ensure that the 2021 long-term incentive compensation for the NEOs other than the CEO could be comprised of an equity award mix that closely aligns to stockholder returns, rewards superior performance over peer companies, and maintains a retentive element through time-based vesting requirements, Mr. Stetson volunteered to forgo his 2021 grant entirely and cancel the PSUs granted to him in 2020. This action was accepted by the board and compensation committee and was set forth in Mr. Stetson’s amended and restated employment agreement effective January 26, 2021. This action returned 302,795 shares to the MIP pool, which were made available for the January 29, 2021 equity grants to the NEOs other than the CEO in the form of RSUs and PSUs.

2020 Executive Retention Awards

No retention awards were granted to any of our NEOs in 2020.

In December 2020, Mr. Horn became vested in two cash retention awards of $105,400 and $113,795 originally granted in April 2018 and November 2018, respectively. These payments were paid to Mr. Horn on December 18, 2020.

2021 Compensation Decisions

In January 2021, the compensation committee and the board modified the vesting schedule of the 2020 time-based cash awards to provide for vesting in equal installments on each of February 18, 2021, 2022 and 2023. The compensation committee and the board also more broadly modified the long-term incentive framework for 2021, which, for executives other than the CEO, is comprised of 100% equity-based awards, as follows: (i) 50% of each award is granted in the form of stock-settled RSUs that are scheduled to vest in equal installments over a three-year period on the annual anniversary of the grant date; and (ii) 50% of each award is granted in the form of PSUs that are scheduled to vest at the end of a three-year performance period based on the achievement of safety, production and relative total shareholder return performance metrics.

As part of Mr. Stetson’s amended and restated employment agreement effective January 26, 2021, his 2020 grant of PSUs was cancelled entirely. Mr. Stetson also waived his right to receive any 2021 LTIP awards in connection with his amended and restated employment agreement. These actions were necessary because there would otherwise have been insufficient shares available under our LTIP program to accomplish the goal of the compensation committee and the CEO that the non-CEO executive officers receive equity-based awards in 2021, rather than cash-based awards. The vesting terms of Mr. Stetson’s 2020 RSUs, which were scheduled to service-vest in equal installments over a three-year period from the grant date, were modified such that the last two-thirds of the award will vest on the second anniversary of the grant date.

Our NEOs are eligible to participate in the Deferred Compensation Plan which permits certain of our highly compensated employees to receive supplemental retirement benefits in excess of the tax-qualified plan limits under the Internal Revenue Code. The Deferred Compensation Plan is designed to further the interests of our stockholders by helping us attract and retain key talent by providing them with these additional retirement benefits. Under the Deferred Compensation Plan, we maintain a supplemental retirement account for each participant to which we credit annual contributions equal to the sum of (i) the participant’s compensation that is in excess of the federal tax-qualified plan limit under Section 401(a)(17) of the Internal Revenue Code multiplied by the aggregate matching company contribution percentage for our tax-qualified retirement plans in effect for the applicable year (none in 2020), plus, in the discretion of our compensation committee (ii) a discretionary contribution in an amount equal to a percentage of the participant’s eligible compensation under our tax-qualified plans (none in 2020).

Upon a participant’s termination of employment without cause or by the participant for good reason, involuntary termination in connection with a change in control (as determined by the Company in its discretion prior to the change in control) or due to death or disability (all as defined in the participant’s employment agreement or the Deferred Compensation Plan), the participant will receive a pro-rated credit as of December 31st of the year for which the contribution was made. All contributions made to participant accounts are fully vested when credited.

Our chief executive officer has historically entered into an employment agreement with the Company, which is intended to retain and competitively compensate the executive for his position with the Company and provide severance benefits on specified terminations of employment. The terms of the amended and restated employment agreement entered into with Mr. Stetson, including the severance amounts payable to Mr. Stetson under the terms of his employment agreement in connection with a qualifying termination of employment are described under “Potential Payments on Termination and Change in Control—Chief Executive Officers”.

No other NEOs have individual employment agreements with the Company, but each of our executive officers (other than our CEOs) executed an offer letter with the Company upon the executive’s commencement of employment. The offer letters set forth the general terms of the executive’s compensation, including annual base salary, target annual bonus opportunity under the AIB (as a percentage of base salary), target annual equity award value (as a percentage of base salary) and severance multiple under the KESP.

Our NEOs other than Mr. Stetson are participants in our KESP, which provides participants with severance benefits following a qualifying termination of employment and enhanced benefits in connection with a change in control. The terms and estimated amounts of these benefits are described below under “Potential Payments on Termination and Change in Control—Key Employee Separation Plan”.

The compensation committee believes these change in control and termination provisions are necessary to ensure that the actions and recommendations of senior management and other employees with respect to change in control transactions are in our and our stockholders’ best interests, and to reduce the distraction regarding the impact of such a transaction on the employment status of an NEO. These programs were reviewed by our board who concluded that the terms of these programs were in line with market practices.

The CEO’s employment agreement and the KESP do not provide for payment to cover “golden parachute” excise taxes imposed under Section 4999 of the Internal Revenue Code. Rather, payments due in connection with a change of control to participants will be reduced to the extent necessary to avoid the excise tax, unless it is determined that the net after-tax benefits to a participant would be greater if the reductions were not imposed (i.e., “best net” treatment).

Our NEOs are eligible to participate in our employee benefit plans provided to other employees, including health and welfare benefits and our 401(k) plan. In April 2020, the Company suspended matching contributions, which were up to 100% of the first 3% and 50% of next 2% (aggregate of 4%) of a participant’s contributions. For 2020, the Company also did not make a qualified non-elective contribution.

We recognize a charge to earnings for accounting purposes for equity awards over their vesting period. As a private company, we did not consider the accounting impact as a material factor in determining the equity award amounts for our executive officers. However, since we became a public company, the compensation committee has considered the accounting impact of equity awards in addition to considering the impact to dilution and overhang when deciding the amounts and terms of equity grants.

We do not require executive compensation to be tax deductible for our Company, but instead balance the cost and benefits of tax deductibility to comply with our executive compensation goals. For example, Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to a publicly held corporation for compensation in excess of $1 million paid in any taxable year to its chief executive officer, chief financial officer and certain other executive officers. As a private company, we were not subject to the deductibility limit of Section 162(m), and did not take such limit into consideration in setting compensation for our executive officers because Section 162(m) did not apply to us. Following the expiration of any transition period that may be available to us as a newly public company and taking into account other transition relief that may be available, we expect that the compensation committee will consider the tax deductibility of compensation, but will be fully authorized, in the exercise of its business judgment and in accordance with its compensation philosophy, to approve compensation that is not tax deductible when it believes that such payments are in our stockholders’ best interests.

Our compensation committee, after considering the input of its independent compensation consultant, conducted an assessment of the risks associated with our compensation policies and programs, and determined that our compensation policies and programs do not create risks that are reasonably likely to have a material adverse effect on us.