SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED].
For the fiscal year ended December 31, 2001
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED].
For the transition period from _____ to ______
Commission File Number: 1-7775
A. Full title of plan and the address of the plan, if different from that
of the issuer named below:
COAL COMPANY SALARY DEFERRAL
AND PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Massey Energy Company
4 North 4/th/ Street
Richmond, Virginia 23219
REQUIRED INFORMATION
Financial Statements. The following financial statements and schedules are filed
as part of this annual report and appear immediately after the signature page
hereof.
1. Statement of Net Assets Available for Benefits
2. Statement of Changes in Net Assets Available for Benefits
3. Notes to Financial Statements
4. Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
Exhibits. The following exhibit is filed as part of this annual report:
Exhibit 23.1 - Consent of Ernst & Young LLP.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
COAL COMPANY SALARY DEFERRAL
AND PROFIT SHARING PLAN
By: /s/ Madeleine M. Curle
-----------------------------------
Madeleine M. Curle
Vice President, Human Resources
Dated: July 1, 2002
Coal Company Salary Deferral and Profit Sharing Plan
Financial Statements and Supplemental Schedule
Years ended December 31, 2001 and 2000
with Report of Independent Auditors
Coal Company Salary Deferral and Profit Sharing Plan
Financial Statements and Supplemental Schedule
Years ended December 31, 2001 and 2000
Contents
Report of Independent Auditors ....................................... 1
Financial Statements
Statements of Net Assets Available for Benefits ...................... 2
Statement of Changes in Net Assets Available for Benefits ............ 3
Notes to Financial Statements ........................................ 4
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) ....... 10
Report of Independent Auditors
Board of Directors
Coal Company Salary Deferral and Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits
of the Coal Company Salary Deferral and Profit Sharing Plan as of December 31,
2001 and 2000, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2001. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the year ended December 31, 2001 in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2001, is presented for the purpose of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
Richmond, Virginia
June 24, 2002
1
Coal Company Salary Deferral and Profit Sharing Plan
Statements of Net Assets Available for Benefits
December 31
2001 2000
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Investments, at fair value $124,511,932 $100,811,008
Receivables:
Investment income 146,780 209,538
Receivable from sale of securities - 750,000
Contributions due from employees 464,155 434,287
Contributions due from employer 1,822,463 2,191,219
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Total receivables 2,433,398 3,585,044
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Net assets available for benefits $126,945,330 $104,396,052
===========================
See accompanying notes to financial statements.
2
Coal Company Salary Deferral and Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2001
Additions:
Employer contributions $ 2,385,266
Employee contributions 10,125,685
Investment income 3,348,975
Transfer from Mingo-Pike Pension Plan 29,665,750
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45,525,676
Deductions:
Withdrawals by participants (13,893,237)
Net depreciation in fair value of investments (9,083,161)
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Net deductions 22,976,398
Net assets available for benefits at beginning of year 104,396,052
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Net assets available for benefits at end of year $ 126,945,330
=============
See accompanying notes to financial statements.
3
Coal Company Salary Deferral and Profit Sharing Plan
Notes to Financial Statements
December 31, 2001 and 2000
1. Plan Description
The following description of the Coal Company Salary Deferral and Profit Sharing
Plan (the "Plan") provides only general information. Participants should refer
to the Summary Plan Description for a more complete description of the Plan's
provisions.
General
The Plan is a contributory defined contribution plan established effective
January 1, 1985 by A. T. Massey Coal Co., Inc. (a wholly owned subsidiary of
Massey Energy Company) ("Massey" or the "Plan Sponsor") and is administered by
Massey for the benefit of full-time Massey employees, including eligible
employees of certain subsidiaries. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
On July 17, 2001, the Board of Directors of Massey Energy Company, parent
company of the Plan Sponsor, approved a resolution to merge the Mingo-Pike
Employees' Pension Plan effective October 1, 2001 with and into The Plan. Assets
of the Mingo-Pike Plan were transferred to the Plan on October 1, 2001.
Participation
Employees may begin participation on the first day of the calendar quarter after
hire.
Contributions and Vesting
Participants may elect to defer up to 15% of their compensation, as defined by
the Plan and as limited by restrictions of the Internal Revenue Code. Effective
October 1, 2001, the Plan Sponsor contributes 30% of the first 10% of
compensation that a participant contributes to the Plan, prior to this date
contributions by the Plan Sponsor were discretionary.
The Plan Sponsor also may contribute a discretionary amount to the Plan each
year as determined by its management.
4
Coal Company Salary Deferral and Profit Sharing Plan
Notes to Financial Statements (continued)
1. Plan Description (continued)
Contributions and Vesting (continued)
The Matching Account for a Participant who was an Employee on September 30,
2001, is fully vested and nonforfeitable at all times. The Discretionary
Matching Account and Matching Account for an individual who was hired on or
after October 1, 2001 shall become fully vested if the Participant dies or
reaches his Normal Retirement Age while employed by the Plan Sponsor or any of
its participating subsidiaries. Otherwise, such Participant shall vest 20% after
two years of service and then shall vest 20% each year after two until fully
vested.
Upon enrollment in the Plan, employees may direct their investments to any of
the Plan's fund options. Participants may change their investment options
monthly.
Distributions
Participants may obtain distributions from their accounts, subject to certain
restrictions, upon termination of employment, retirement, upon reaching age 59
1/2, or by incurring a disability or hardship, as defined by the Plan.
Designated beneficiaries are entitled to receive the participant's unpaid
benefits upon the death of the participant.
Loans to Participants
Loans are made from the participant's account and are secured by the remaining
participant's account balance. Participants may borrow from their accounts a
minimum of $1,000 and a maximum equal to the lesser of 50% of the participant's
account or $50,000 in accordance with the Department of Labor's regulations on
loans to participants. Loans shall bear a reasonable rate of interest and must
be repaid over a period not to exceed 5 years unless the loan is used to
purchase the participant's primary residence, in which case the loan term may
not exceed 10 years. Principal and interest is paid ratably through monthly
payroll deductions. Loans to terminated participants and loans in default are
treated as distributions to the participant. Effective December 31, 2001, the
provision to grant new loans to participants was eliminated.
5
Coal Company Salary Deferral and Profit Sharing Plan
Notes to Financial Statements (continued)
1. Plan Description (continued)
Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants would receive the value of their individual account.
2. Summary of Accounting Policies
Accounting Method
The financial statements of the Plan have been prepared using the accrual method
of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Investments
All of the Plan's investments are stated at fair value. Common trusts are valued
at quoted redemption values determined by the trustee. Government securities,
corporate debt instruments and shares of registered investment companies are
valued at quoted market values on the last business day of the Plan year.
Participant loans are valued at their outstanding balances, which approximate
fair value. Securities transactions are recorded as of the trade date. Interest
income is recorded on the accrual basis.
Administrative Expenses
Expenses of the Plan are paid by the Plan Sponsor.
6
Coal Company Salary Deferral and Profit Sharing Plan
Notes to Financial Statements (continued)
3. Investments
All of the Plan's investments are held in a trust fund administered by Wachovia
Bank & Trust Co., N.A. Effective July 1, 2001, the Plan began offering as an
investment option Massey Energy (the Plan Sponsor) common stock. At December 31,
2001 and 2000, investments in each fund (including short-term investments
allocated to such funds) consisted of the following:
December 31
2001 2000
-----------------------------
Money market fund $ 18,737,184 $ 7,310,764
Fixed income fund 13,508,003 5,400,246
American balanced fund 28,489,215 17,902,036
Fundamental investors 31,304,187 37,669,410
AIM constellation fund 20,667,017 26,866,791
Massey Energy Stock account 5,548,595 -
Loan fund 6,257,731 5,661,761
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$124,511,932 $100,811,008
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During 2001, the Plan's investments (including investments purchased and sold,
as well as held during the year) depreciated in value by $9,083,161 as follows:
Year Ended
December 31, 2001
-----------------
Money market fund $ 27,839
Fixed income fund (62,941)
American balanced fund 579,952
Fundamental investors (4,138,557)
AIM constellation fund (6,000,427)
Massey Energy Stock 510,973
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$ (9,083,161)
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7
Coal Company Salary Deferral and Profit Sharing Plan
Notes to Financial Statements (continued)
4. Related Party Transactions
Certain Plan assets are invested in funds sponsored by Wachovia Bank and Trust
Co., N.A., trustee of the Plan. Transactions involving these instruments are
considered to be party-in-interest transactions for which statutory exemption
exists under the Department of Labor Regulations.
5. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated February 14, 1996, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. The Plan has been amended since the date of its
determination letter. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax-exempt.
6. Differences Between Financial Statements and Forms 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31
2001 2000
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Net assets available for benefits per the
financial statements $126,945,330 $104,396,052
Amounts allocated to withdrawn participants 1,741,646 2,202,232
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Net assets available for benefits per the Form 5500 $125,203,684 $102,193,820
=============================
8
Coal Company Salary Deferral and Profit Sharing Plan
Notes to Financial Statements (continued)
6. Differences Between Financial Statements and Forms 5500 (continued)
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended
December 31, 2001
-----------------
Benefits paid to participants per the financial statements $ 13,893,237
Add: Amounts allocated on Form 5500 to withdrawn participants
in the current year 1,741,646
Less: Amounts allocated on form 5500 to withdrawn participants
in the prior year (2,202,232)
---------------
Benefits paid to participants per the Form 5500 $ 13,432,651
===============
Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
year-end but not yet paid.
9
Supplemental Schedule
Coal Company Salary Deferral and Profit Sharing Plan
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
Employer Identification Number 54-0295165, Plan Number 002
Year ended December 31, 2001
Description of investment including
Identity of issue, borrower, maturity date, rate of interest, collateral, Current
lessor or similar party par, or maturity value Value
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Common/Collective Trusts:
*WB DTF Short-Term Investment
Fund 18,240,875 $ 18,240,875
============
Government Securities:
U.S. Treasury Bills Maturing 1/17/2002; $650,000 par $ 649,545
U.S. Treasury Bills Maturing 1/31/2002; $650,000 par 649,129
U.S. Treasury Bills Maturing 2/14/2002; $650,000 par 648,720
U.S. Treasury Bills Maturing 2/28/2002; $650,000 par 648,232
Federal Farm Credit Bank Bond Maturing 5/1/2002; 5.25%; $900,000 par 910,404
U.S. Treasury Notes Maturing 8/15/2003; 5.75%; $250,000 par 261,875
Federal Home loan Bank Note Maturing 9/15/2003; 5.125%;
$100,000 par 103,484
U.S. Treasury Notes Maturing 11/15/2004; 5.875%;
$100,000 par 105,844
U.S. Treasury Notes Maturing 11/15/2005; 5.875%;
$2,100,000 par 2,231,250
U.S. Treasury Notes Maturing 5/15/2006; 4.625%; $45,000 par 45,612
Federal National Mortgage Association Maturing 10/15/2006; 4.375%;
$4,000,000 par 3,918,120
Federal National Mortgage Association Maturing 10/15/2007; 6.625%;
$400,000 par 431,500
U.S. Treasury Notes Maturing 5/15/2008; 5.625%;
$400,000 par 419,252
Federal Home Loan Mortgage Corp. Maturing 3/15/2009; 5.745%;
$700,000 par 712,796
Federal Home Loan Mortgage Corp. Maturing 9/15/2010; 6.875%;
$200,000 par 215,844
------------
Total Government Securities $ 11,951,607
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Coal Company Salary Deferral and Profit Sharing Plan
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) (continued)
Employer Identification Number 54-0295165, Plan Number 002
Description of investment including
Identity of issue, borrower, maturity date, rate of interest, collateral, Current
lessor or similar party par, or maturity value Value
---------------------------------------------------------------------------------------------------------
Corporate Debt Instruments:
American General Finance Corp. Maturing 11/1/2003; 5.75%; $100,000 par $ 104,310
Associates Corp. N.A. Maturing 5/16/2005; 6.20%; $75,000 par 78,003
AT&T Corp. Maturing 9/15/2002; 6.50%; $100,000 par 102,346
Bank One Corp. Maturing 8/1/2008; 6.00%; $175,000 par 175,480
Chase Manhattan Corp Maturing 6/1/2007; 7.25%; $170,000 par 183,858
Coca Cola Enterprise Inc. Maturing 11/1/2008; 5.75%; $100,000 par 100,074
Disney Global Maturing 3/30/2006; 6.75%; $100,000 par 104,983
Du Pont De Nemours & Co. Maturing 10/15/2002; 6.75%;
$100,000 par 103,605
Ford Motor Credit Maturing 2/1/2011; 7.375%; $175,000 par 172,690
GTE North Inc. Maturing 11/15/2008; 6.65%; $75,000 par 73,766
General Motors Acceptance Corp. Maturing 3/2/2011; 7.25%; $175,000 par 176,248
Household Finance Corp. Maturing 6/3/2002; 7.08%; $15,000 par 15,260
International Lease Finance Maturing 6/2/2003; 4.75%; $140,000 par 142,251
Lehman Brothers Holdings Inc. Maturing 5/15/2003; 7.00%; $45,000 par 46,971
Morgan Stanley Group Maturing 3/1/2007; 6.875%; $40,000 par 41,912
Morgan Stanley Dean Witter & Co. Maturing 4/15/2006; 6.105%;
$100,000 par 103,069
National Rural Utilities Maturing 11/1/2008; 5.75%; $175,000 par 170,891
Pepsi Bottling Holding Inc. Maturing 2/12/2009; 5.625%;
$175,000 par 172,856
PP&L Transition Bond Co LLC Maturing 6/25/2009; 7.05%; $55,000 par 59,300
Scana Corporation Maturing 7/8/2003; 6.25%; $100,000 par 103,042
Sonoco Products Maturing 11/15/2004; 7.00%; $170,000 par 178,648
Textron Financial Corp. Maturing 3/15/2004; 5.95%; $200,000 par 203,344
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Total Corporate Debt Instruments $ 2,612,907
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Coal Company Salary Deferral and Profit Sharing Plan
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) (continued)
Employer Identification Number 54-0295165, Plan Number 002
Description of investment including
Identity of issue, borrower, maturity date, rate of interest, collateral, Current
lessor or similar party par, or maturity value Value
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Registered Investment Companies:
Fundamental Investments 1,129,777 shares $ 31,012,389
American Balanced Fund 1,787,544 shares 28,332,579
AIM Equity Funds, Inc. -
Constellation Fund Class A 924,782 shares 20,437,697
Blackrock Strategic Term Trust Inc. 26,277 shares 255,451
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Total Registered Investment Companies $ 80,038,116
============
Common Stock:
Massey Energy Company 261,008 shares $ 5,410,696
============
*Participant Loans: Interest rates range from 7.0% to 11.5%
maturity dates vary with remaining terms of
1 to 10 years $ 6,257,731
============
Grand Total $124,511,932
============
*Party-in-interest.
EXHIBIT INDEX
Exhibit No. Description
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23.1 Consent of Ernst & Young LLP.