Item
5.02
DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT
OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
On July 29, 2019 (the “Effective Date”), Contura
Energy, Inc. (the “Company”), announced that David J. Stetson, age 62, has been named Chief Executive Officer of the
Company and has been appointed to serve on the board of directors of the Company (the “Board”). Mr. Stetson’s
appointment is the culmination of the previously-announced search by the Company for a permanent chief executive officer following
the resignation of Kevin S. Crutchfield from such position on May 6, 2019. Charles Andrew Eidson and Mark M. Manno, who have served
as interim co-chief executive officers of the Company since May 7, 2019, will continue to serve as the Company’s Executive
Vice President and Chief Financial Officer, and Executive Vice President, Chief Administrative and Legal Officer and Secretary,
respectively.
Mr. Stetson previously served on the Board from November 2018
through April 2019. He previously served as chairman of the board of directors and chief executive officer of both ANR, Inc. and
Alpha Natural Resources Holdings, Inc. (together, “Alpha”) from July 2016 until Alpha’s merger with the Company
in November 2018. Mr. Stetson has held a myriad of leadership positions, including Chief Executive Officer, Chief Restructuring
Officer, and Senior Advisor for various energy companies, including Trinity Coal Corporation, American Resources Offshore, Inc.,
Lexington Coal Company, and Lipari Energy Inc. Mr. Stetson earned an M.B.A from the University of Notre Dame, a J.D.
from the Brandeis School of Law at the University of Louisville, and a B.S. from Murray State University.
There are no arrangements or understandings between Mr. Stetson
and any other persons pursuant to which he was selected as an officer of the Company, and Mr. Stetson is not related to any other
executive officer or director of the Company. Mr. Stetson has no direct or indirect material interest in any transaction required
to be disclosed pursuant to Item 404(a) of Regulation S-K.
In connection with his appointment as the Company’s
Chief Executive Officer, Mr. Stetson and the Company have entered into an employment agreement dated July 29, 2019 (the
“Employment Agreement”). Under the terms of the Employment Agreement, Mr. Stetson will serve as the
Company’s Chief Executive Officer until July 29, 2021, and during any renewal period (the term automatically renews for
successive 12-month periods unless terminated by either party with 90 days’ written notice). Mr. Stetson’s annual
base salary is $1,000,000. For 2019, Mr. Stetson will be eligible to receive an annual bonus in the amount of $450,000 or
such higher amount (“2019 Bonus”) as may be determined in the discretion of the compensation committee of the
Board (the “Compensation Committee”). Commencing in 2020, Mr. Stetson’s annual target and maximum bonus
opportunities will be 125% and 200% of his base salary, respectively, subject to any applicable performance criteria. For a
period of 6 months following the Effective Date, the Company will reimburse Mr. Stetson for up to $10,000 per month for
automobile and housing costs in the Bristol, Tennessee metropolitan area and for the cost of up to 3 first class commercial
round-trip flights per month between Bristol, Tennessee and Fort Walton Beach, Florida.
Mr. Stetson will receive a sign-on equity award granted under
the Company’s 2018 Long-Term Incentive Plan (the “LTIP”) consisting of restricted stock units with respect to
37,200 shares of the Company’s common stock, par value $0.01 (“Shares”), that will service-vest in equal annual
installments over a three-year period from the Effective Date. Commencing in 2020 and for each year thereafter during the term,
Mr. Stetson will be eligible to receive under the LTIP an annual award consisting of restricted stock units with respect to a number
of Shares having a fair market value of $3,000,000 as of the grant date, subject to the terms established from time to time by
the Compensation Committee. For 2020, 35% of such award will consist of service-based restricted stock units and 65% of such award
will consist of performance-based restricted stock units.
If Mr. Stetson is terminated without cause or resigns for good
reason (each as defined in the Employment Agreement), he will be entitled to receive the following severance benefits, subject
to his execution of a release of claims:
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an amount equal to (i) 2 times base salary plus (ii) 2 times either the 2019 Bonus or the target annual bonus, as applicable,
for the year in which the termination occurs, payable in equal installments for 24 months following the date of termination;
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for any equity-based awards that are outstanding as of the date of termination, any unvested tranche of such award will service-vest
on a pro rata basis based on the period of time that Mr. Stetson was employed during the applicable vesting period for such tranche,
with any such awards that are also subject to performance-vesting conditions remaining outstanding subject to the achievement of
the applicable performance goals as provided under the terms of the applicable award agreement;
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earned and accrued but unpaid individual bonuses or individual incentive compensation for prior years; and
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reimbursement by the Company for Consolidated Omnibus Budget Reconciliation Act (COBRA) health and dental insurance premiums
and life insurance premiums for him and his dependents until the earliest of Mr. Stetson obtaining the age of 65, the date he becomes
eligible to participate in another employer’s group health plan and 18-months following the date of termination (the “Continuation
Benefits”).
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If Mr. Stetson is terminated without cause
or resigns for good reason during the period beginning 90-days prior to and ending twelve months following a change in control
(as defined in the Employment Agreement), he will be entitled to receive the following enhanced severance benefits, subject to
his execution of a release of claims:
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an amount equal to (i) 2.5 times base salary plus (ii) 2.5 times either the 2019 Bonus or the target annual bonus, as applicable,
for the year in which the termination occurs, payable in equal installments for 30 months following the date of termination;
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service-vesting of all equity awards with any such awards that are also subject to performance-vesting conditions remaining
outstanding subject to the achievement of the applicable performance goals as provided under the terms of the applicable award
agreement;
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payment of the pro rata share of his individual annual bonus or individual annual cash incentive compensation, based on target
performance, for the year of termination;
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earned and accrued but unpaid individual bonuses or individual incentive compensation for prior years; and
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the Continuation Benefits.
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If Mr. Stetson’s employment is terminated
due to death or disability, he will be entitled to receive earned and accrued but unpaid individual bonuses or individual incentive
compensation for prior years and the Continuation Benefits (other than life insurance in the case of his death).
The description of the Employment Agreement does not purport
to be complete and is subject to, and qualified in its entirety by, the full text of the Employment Agreement attached to this
Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.
A copy of the press release of the Company, dated July 29, 2019,
announcing the appointment of Mr. Stetson as Chief Executive Officer is attached to this Current Report on Form 8-K as Exhibit
99.1.