April 10, 2006
VIA U.S. MAIL AND FACSIMILE: (804) 788-8218
Melvin E.Tull, III, Esq.
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, VA 23219
(804) 788-8200
Re: Massey Energy Company
Preliminary Proxy Statement on Schedule 14A, filed March 31, 2006
File No. 1-07775
Soliciting Materials Filed Pursuant to Rule 14a-12 on March
20,
March 22, and April 4, 2006
File No. 1-07775
Dear Mr. Tull:
We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Schedule 14A
General, page 1
1. Consistent with the requirements of Item 6(c)(3) of Schedule
14A,
supplement your disclosure regarding cumulative voting rights held
by
shareholders to specify whether there are any conditions precedent
to
the exercise of such rights. Further, revise the proxy card to
specifically state that you have sought discretionary authority to
cumulate votes and absent specific instructions, persons named as
proxies will have the discretionary authority to cumulatively vote
for all or less than all of the three nominees of the Board of
Directors.
Election of Directors, page 3
2. Please revise the biographical information of the nominees so
that
it complies with Item 401 of Regulation S-K. Refer to Item 7(b)
of
Schedule 14A. For example, revise the biographies to ensure that
you
completely describe each individual`s business experience for the
past five years and disclose the dates of experience by month and
year. Also, ensure that there are no gaps or ambiguities
regarding
time in the five-year business sketches you provide. For example,
we
note that you do not include information about Mr. Crawford`s
business experience from 2003 through February 2004.
3. We refer you to Item 401(f)(1) of Regulation S-K. We note
that
Mr. Crawford was serving as chief executive officer of James River
Coal during 2003 and that on March 23, 2003, James River Coal and
all
of its subsidiaries filed voluntary petitions with the United
States
Bankruptcy Court for the Middle District of Tennessee for
reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Consistent with the requirements of Item 7(b) of Schedule 14A,
such
information should be included with respect to your director
nominee,
particularly in light of your disclosure regarding the wealth of
experience of your nominees. We also remind you of your
disclosure
requirements under Rule 14a-9(a). Please revise the preliminary
proxy accordingly to address this omission.
4. We note your reference to the "wealth of experience" your
nominees
have in the coal industry, among other areas. It appears however,
that only one of the three nominees has an extensive and specific
business background in the coal industry. Given that the company
operates in the coal industry, background experience specific to
the
coal industry would appear to be material to a shareholder`s
understanding of the experience possessed by the respective
nominees.
Revise your disclosure to clarify that only Mr. Crawford has had
specific business experience in the coal industry. We also refer
you
to our prior comment with respect to what appears to be material
information regarding Mr. Crawford`s business background.
Third Point Nominees, page 4
5. Your disclosure in this section should be balanced. While
addressing the ways in which you believe the company continues to
create long-term value for its shareholders, please also address
the
challenges the company has faced with respect to short-term
results.
Address for example, the downward adjustment with respect to
earnings
that occurred during fiscal 2005 and reference the ways in which
management intends to recover from the Aracoma fire and "ongoing
lack
of experienced, available labor" that was noted by Mr. Blankenship
in
soliciting materials filed on March 20, 2006.
6. Revise to specify the "favorable" interest rate the company
negotiated with respect to its long-term debt. Specify the old
rate
and the new rate and the dollar amount of the debt now subject to
the
new rate.
7. You disclose that in response to a shareholder request, the
company authorized $500 million in share repurchases. Revise
your
statement to identify the shareholders who were principally
involved
in this request.
8. You state that the company "prudently" decided to not incur
additional debt in November 2005 in order to fund the share
repurchase. Revise to provide support for the statement that
initiating a share repurchase at that time would have
"substantially
weaken[ed] the company`s balance sheet and reduce[ed] the
company`s
strategic and financial flexibility."
9. We note that your fourth bullet point, dealing with the board`s
belief that any change in the board would be disruptive, focuses
on
the experience of the board`s nominees and argues that the loss of
this experience "could be detrimental to the Company`s strategic
plan." Please explain exactly what the strategic plan is and,
moreover, how the absence of two directors could be detrimental to
your strategic plan. For example, it appears that the board may
have
already provided very substantial and specific guidance to
management, thereby communicating the strategic plan.
Alternatively,
if the company`s strategic plan means management`s general
thoughts
on the business of the company, then so state.
10. Support for each statement or assertion of opinion or belief
must
be self-evident, disclosed in the proxy materials, or provided to
the
staff on a supplemental basis. Provide us with support for the
statements you make with respect to:
* the company having tripled its coal reserve base, becoming
the
"preeminent holder of reserve in Central
Appalachia...";
* the company becoming the "preeminent" producer of coal in the
region;
* the company preserving the strength of its balance sheet,
including
fully funding its pension plan and keeping legacy liabilities
to
a level "significantly below that of its publicly traded peer
group."
Where the basis are other documents, such as prior proxy
statements,
Forms 10-K and 10-Q, annual reports, analysts` reports and
newspaper
articles, provide either complete copies of the documents or
sufficient pages of information so that we can assess the context
of
the information upon which you rely. Mark the supporting
documents
provided to identify the specific information relied upon, such as
quoted statements, financial statement line items, press releases,
and mathematical computations, and identify the sources of all
data
utilized. In addition, when you refer to particular periods,
explain
why you believe that the periods selected are representative and
do
not inappropriately skew the data.
Committees of the Board, page 9
11. Rather than state that the Chairman of the Audit Committee
spoke
"frequently" with the independent registered public accounting
firm
on "several" occasions, quantify the times, if known, that such
conversations occurred.
Employment Arrangement with Don L. Blankenship through December
31,
2005, page 20
12. Please revise your disclosure to include "a specific
discussion
of the relationship of the [company`s] performance to the CEO`s
compensation for the last completed fiscal year, describing each
measure of the [company`s] performance, whether qualitative or
quantitative, on which the CEO`s compensation was based." Please
see
Item 402(k) of Regulation S-K. In this regard, we not that Mr.
Blankenship`s payment of percentages of target performance goals
is
disclosed on page 21, but the measures of the performance are not
disclosed.
Approval of the Massey Energy Company 2006 Stock and Incentive
Compensation Plan , page 34
13. Please provide the tabular information required by Item 10(b)
of
Schedule 14A.
Proxy Solicitation and Expenses, page 44
14. We note that proxies may be solicited personally and by
telephone, facsimile, courier, service, mail, email, Internet,
press
release, advertisement, or "otherwise". Revise to specify any
"other" means by which you may solicit proxies. Further, we
remind
you that all written soliciting materials, including any scripts
to
be used in soliciting proxies over the telephone, or e-mail
correspondence and information posted on the Internet must be
filed
under the cover of Schedule 14A. Refer to Rule 14a-6(b) and (c).
Please confirm your understanding.
Approval of Amendments to the Company`s Restated Certificate of
Incorporation and Restated Bylaws, page 42
15. Supplement your disclosure to address the reasons for the
agreed
upon percentage change from 80% to 67% necessary to amend the
charter
documents of the company. Moreover, if the amendment is not
approved, specify the consequences to the company.
16. Please file as an exhibit the Stipulation of Settlement
agreement
referenced in this proposal. Advise us of why such agreement has
not
been filed as an exhibit to any of your periodic or current
reports.
Annex B
17. Please update the information required by Item 5 (b)(iv) of
Schedule 14A regarding the amount of each class of securities
owned
by the participants as of the most recent practicable date prior
to
the filing of the definitive proxy statement.
Form of Proxy Card
18. Please revise the form of proxy card to clearly indicate that
it
is a preliminary copy. See Rule 14a-6(e)(1).
19. Rule 14a-4(c)(3) contemplates the use of discretionary
authority
only for matters unknown "a reasonable time before the
solicitation."
Please clarify this on the proxy card.
Soliciting Materials Filed Pursuant to Rule 14a-12 on March 20 and
22, 2006
20. Support for each statement or assertion of opinion or belief
must
be self-evident, disclosed in the proxy materials, or provided to
the
staff on a supplemental basis. Please provide support for any
statements relating to the company`s financial and market
performances, including but not limited to the following:
* In the soliciting materials filed on March 20, 2006, the company
states that management is "confident" in its strategy to build
long-
term value and expects to improve productivity and margin
expansion
in 2006 and future years. Provide us with the basis for such
statements and address why management is confident of achieving
such
results in light of short-term difficulties related to the Aracoma
fire and potential long-term challenges due to the shortage of
available, experienced labor;
* On page 29 of the slide presentation filed as soliciting
materials
on March 22, 2006, the statement regarding the company`s coal as
the
"highest quality coal in the world";
* On page 29 of the slide presentation, the statements that the
company is the largest "met coal producer in the United States"
and
has low level of liabilities especially compared to peers; and,
* On page 29 of the slide presentation, the statement regarding
the
opportunity the company has for increasing profitability in 2006-
2008.
Where the basis are other documents, such as prior proxy
statements,
Forms 10-K and 10-Q, annual reports, analysts` reports and
newspaper
articles, provide either complete copies of the documents or
sufficient pages of information so that we can assess the context
of
the information upon which you rely. Mark any supporting
documents
provided to identify the specific information relied upon, such as
quoted statements, financial statement line items, press releases,
and mathematical computations, and identify the sources of all
data
utilized. In addition, when you refer to particular periods,
explain
why you believe that the periods selected are representative and
do
not inappropriately skew the data.
Soliciting Materials Filed April 4, 2006
21. You must avoid statements that directly or indirectly impugn
the
character, integrity, or personal reputation or make charges of
illegal or immoral conduct without factual foundation. If you
have
disclosed the support for such statements, then revise to specify
the
sources upon which you have relied. In this regard, note that the
factual foundation for such assertions must be reasonable. Refer
to
Rule 14a-9. We note as an example the statement that you judge
the
nominees proposed by Third Point LLC and affiliates to be "less-
qualified" than the company`s slate of nominees.
Closing Comment
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
its disclosure, it is responsible for the accuracy and adequacy of
the disclosures it has made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of Enforcement
has
access to all information you provide to the staff of the Division
of
Corporation Finance in our review of your filing or in response to
our comments on your filing.
* * * * *
As appropriate, please amend your filing. You may wish to
provide us with marked copies of the amendment to expedite our
review. Please furnish a cover letter, marked as correspondence
on
EDGAR with your amendment that keys your responses to our comments
and provides any requested information. Detailed cover letters
greatly facilitate our review. Please understand that we may have
additional comments after reviewing your amendment and responses
to
our comments.
Please contact Mellissa Campbell Duru at (202) 551-3757 or
me
at (202) 551-3257 with any questions.
Sincerely,
Celeste M. Murphy,
Special Counsel
Office of Mergers and Acquisitions
Mr. Melvin E. Tull, III
Hunton & Williams
April 10, 2006
page 7
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405
DIVISION OF
CORPORATION FINANCE
MAIL STOP 3698