MEE Massey Energy Co.

RICHMOND, Va., May 12, 2011 /PRNewswire/ -- Massey Energy Company (NYSE: MEE) today provided the following notice to the holders of its 3.25% Convertible Senior Notes due 2015:

ACTION REQUIRING A SUPPLEMENTAL INDENTURE

NOTICE IS HEREBY GIVEN pursuant to Section 10.10 of the First Supplemental Indenture (as defined below), that, as previously reported, Massey Energy Company (the "Company") has entered into an Agreement and Plan of Merger (the "Merger Agreement"), dated as of January 28, 2011, by and among the Company, Mountain Merger Sub, Inc. ("MergerSub"), a Delaware corporation and a wholly-owned subsidiary of Alpha Natural Resources, Inc. ("Parent"), a Delaware corporation, and Parent, whereby MergerSub shall merge with and into the Company with the Company surviving the Merger as a wholly-owned subsidiary of Parent (such transaction, the "Merger"). Pursuant to the Merger Agreement, upon consummation of the Merger, each share of common stock of the Company will be exchanged for a combination of cash and common stock of Parent.  As a result of the Merger, the Company's common stock will cease to be listed and traded on the New York Stock Exchange ("NYSE"), although the Parent's common stock will continue to be traded and listed on the NYSE.  The Company anticipates that the effective date of the Merger will occur on June 1, 2011 (the "Anticipated Effective Date").  As a result of the Merger, the Company will be required to enter into a supplemental indenture pursuant to Section 10.11 of the First Supplemental Indenture providing that on and after the actual effective date of the Merger, each Convertible Note will be convertible into the kind of cash and securities to be received pursuant to the Merger Agreement by holders of common stock of the Company; provided, that the portion of the Daily Settlement Amount (as defined in the Indenture) payable in cash upon the conversion of a Convertible Note shall continue to be payable in cash and the Daily Conversion Value (as defined in the Indenture) and Daily Share Amount (as defined in the Indenture) shall be calculated as set forth in the Indenture.

MAKE-WHOLE FUNDAMENTAL CHANGE

NOTICE IS HEREBY GIVEN pursuant to Section 10.14(E) of the First Supplemental Indenture, that the Merger, upon consummation, will result in a Make-Whole Fundamental Change (as defined in the Indenture (as defined below)).  As a result, any of the Company's outstanding 3.25% Convertible Senior Notes due 2015 (the "Convertible Notes") surrendered for conversion during the period beginning on the actual effective date of the Merger (the "Effective Date," which is anticipated to occur on the Anticipated Effective Date) and continuing until the earlier of the date that is (i) 41 business days after the Effective Date and (ii) the Fundamental Change Repurchase Date (as defined in the Indenture) (which could occur as soon as 20 calendar days after the Effective Date) (such period of time, the "Make-Whole Conversion Period") will be entitled to an increase in the conversion rate for the Convertible Notes surrendered.  During the Make-Whole Conversion Period, the then current conversion rate (which as of the date hereof is 11.4542 shares of the Company's common stock per $1,000 principal amount of Convertible Notes) will be increased in the manner set forth in the following paragraph.  During the Make-Whole Conversion Period, the Convertible Notes will no longer be convertible into cash and the common stock of the Company but will instead be convertible into cash and the common stock of the Parent.

Upon the Effective Date, for those holders surrendering notes during the Make-Whole Conversion Period the then conversion rate will be increased by the number of additional shares referenced in the table below (the "Make-Whole Applicable Increase") (subject to adjustment in the manner set forth in the first paragraph following the table upon a change to the conversion rate, if any).  The Make-Whole Applicable Increase is dependent upon two variables: (i) the Effective Date and (ii) the average of the closing sale prices of the Company's common stock over the five consecutive trading days immediately preceding the Effective Date (the "Applicable Price").  

If the exact Applicable Price and Effective Date are not set forth in the table below:

(A)  if the Applicable Price is between two applicable prices listed below, or the Effective Date is between two effective dates listed below, the Make-Whole Applicable Increase will be determined by linear interpolation between the Make-Whole Applicable Increase set forth for the two applicable prices, or for the two effective dates based on a 365-day year, as applicable;

(B)  if the Applicable Price is greater than $199.24 per share, the conversion rate will not be increased; and

(C)  if the Applicable Price is less than $61.26 per share, the conversion rate will not be increased.

The conversion rate will never be increased to an amount in excess of 16.3223 shares per $1,000 principal amount of the Convertible Notes as a result of the Make-Whole Applicable Increase (the "Make-Whole Cap").

If the conversion rate were to change between the date hereof and the date of conversion, each of the Applicable Price values set forth in the table above must be adjusted by multiplying such values by a fraction consisting of (i) a numerator equal to the conversion rate immediately prior to the adjustment and (ii) a denominator equal to the conversion rate immediately after the adjustment.  In addition, each Make-Whole Applicable Increase amount set forth in the table above and the Make-Whole Cap will be adjusted in the same manner as the conversion rate was adjusted.

Holders should also note that, because the Company's, MergerSub's and Parent's obligations to consummate the Merger are subject to various conditions set forth in the Merger Agreement, the Company cannot be sure that the Merger will in fact occur at the Anticipated Effective Date, or at all.  If the Merger is not consummated, holders will not be eligible (i) to receive the Make-Whole Applicable Increase, (ii) to participate in the Fundamental Change Repurchase Right (as defined in the Indenture) or (iii) to surrender notes for conversion after holders' receipt of notice of termination of the Merger transaction (unless the notes are otherwise convertible at that time).  

As used herein, the term "Indenture" means that certain Senior Indenture, dated as of August 12, 2008, as supplemented by the First Supplemental Indenture dated as of August 12, 2008 (the "First Supplemental Indenture"), the Second Supplemental Indenture, dated as of July 20, 2009, the Third Supplemental Indenture, dated as of August 28, 2009, the Fourth Supplemental Indenture, dated as of April 30, 2010 and the Fifth Supplemental Indenture, dated as of June 29, 2010, by and among the Company, the guarantors identified therein and Wilmington Trust Company, as trustee.

The Conversion Agent for this transaction is Wilmington Trust Company and their address is as follows:

By:  Massey Energy Company

Dated:  May 12, 2011

* No representation is made herein as to the accuracy or correctness of the CUSIP number printed herein or on the Convertible Notes.

Company Information

Massey Energy Company, headquartered in Richmond, Virginia, with operations in West Virginia, Kentucky and Virginia, is the largest coal producer in Central Appalachia and is included in the S&P 500 Index.

FORWARD-LOOKING STATEMENTS:  Certain statements in this press release constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to come within the safe harbor protection provided by those sections. Any forward-looking statements are also subject to a number of assumptions regarding, among other things, future economic, competitive and market conditions. These assumptions are based on facts and conditions as they exist at the time such statements are made as well as predictions as to future facts and conditions, the accurate prediction of which may be difficult and involve the assessment of circumstances or events beyond the Company's control. The Company disclaims any intent or obligation to update these forward-looking statements unless required by securities law, and the Company cautions the reader to not rely on them unduly. Caution must be exercised in relying on forward-looking statements including disclosures that use words such as "believe," "anticipate," "expect," "estimate," "intend," "may," "plan," "project," "will," and similar words or statements that are subject to risks, trends and uncertainties that could cause the Company's actual results to differ materially from the expectations expressed or implied in such forward-looking statements. Factors potentially contributing to such differences include, among others: the Company's cash flows, results of operation or financial condition; the successful completion of acquisition, disposition or financing transactions; the impact of the Upper Big Branch mine explosion and the effect thereof on our business; our ability to successfully integrate the operations we acquire, including as a result of the acquisition of Cumberland; governmental policies, laws, regulatory actions and court decisions affecting the coal industry or our customers' coal usage; legal and administrative proceedings, settlements, investigations and claims and the availability of insurance coverage related thereto; inherent risks of coal mining beyond our control, including weather and geologic conditions or catastrophic weather-related damage; inherent complexities make it more difficult and costly to mine in Central Appalachia than in other parts of the United States; our production capabilities to meet market expectations and customer requirements; our ability to obtain coal from brokerage sources or contract miners in accordance with their contracts; our ability to obtain and renew permits necessary for our existing and planned operations in a timely manner; the cost and availability of transportation for our produced coal; our ability to expand our mining capacity; our ability to manage production costs, including labor costs; adjustments made in price, volume or terms to existing coal supply agreements; the worldwide market demand for coal, electricity and steel; environmental concerns related to coal mining and combustion and the cost and perceived benefits of alternative sources of energy such as natural gas and nuclear energy; competition among coal and other energy producers, in the United States and internationally; our ability to timely obtain necessary supplies and equipment; our reliance upon and relationships with our customers and suppliers; the creditworthiness of our customers and suppliers; our ability to attract, train and retain a skilled workforce to meet replacement or expansion needs; our assumptions and projections concerning economically recoverable coal reserve estimates; our failure to enter into anticipated new contracts; future economic or capital market conditions; foreign currency fluctuations; the availability and costs of credit, surety bonds and letters of credit that we require; the lack of insurance against all potential operating risks; our assumptions and projections regarding pension and other post-retirement benefit liabilities; our interpretation and application of accounting literature related to mining specific issues; our assumptions concerning economically recoverable coal reserve estimates, and the successful implementation of our strategic plans and objectives for future operations and expansion or consolidation.

Additional information concerning these and other factors can be found in press releases and Massey's public filings with the Securities and Exchange Commission, including Massey's Annual Report on Form 10-K for the year ended December 31, 2010, which was filed on March 1, 2011 and subsequently filed interim reports.  Massey's filings are available either publicly, on the Investor Relations page of Massey's website, www.masseyenergyco.com, or upon request from Massey's Investor Relations Department: (866) 814-6512 (toll free).  For further information, please visit Massey's website at www.masseyenergyco.com.

SOURCE Massey Energy Company