CTRA Coterra Energy Inc

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CONTURA ENERGY, INC.
340 Martin Luther King, Jr. Blvd.
Bristol, Tennessee 37620

June 12, 2020

Dear Fellow Stockholder:

It is my pleasure to invite you to attend the 2020 annual meeting of stockholders of Contura Energy, Inc. The annual meeting will be held via interactive webcast on Wednesday, July 15, 2020, at 10:00 a.m., Eastern Time. To join the meeting webcast, go to www.VirtualShareholderMeeting.com/CTRA2020 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 the 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 ratify the selection of RSM US LLP as our independent registered public accounting firm for 2020 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 the director nominees, the ratification of the appointment of our independent auditor and our executive compensation. To familiarize yourself with these matters, please review the proxy statement, proxy card and 2019 annual report that accompany this letter.

Regardless of the number of Contura 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.

 

Stockholder of record. 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, the stockholder of record, and a notice was sent directly to you by Contura. As the stockholder of record, you have the right to attend the Annual Meeting and vote your shares 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 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”.

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 2021 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 2 (to ratify the appointment of RSM as the independent registered public accounting firm for the fiscal year ending December 31, 2020) 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. A non-routine matter to be considered at the Annual Meeting is Proposal 1.

Contura 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 six 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 to have only independent directors serving 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 2020. 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 committee members and nominees, under the independence standards for audit 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 committee member qualifies as “independent” under the independence standards for audit 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 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. Each of these committees has adopted and acts according to a written charter. Stockholders may obtain a copy of each charter, at no cost, either on our website, www.conturaenergy.com, or upon written request to William L. Phillips III, Assistant Secretary, Contura Energy, Inc., 340 Martin Luther King, Jr. Blvd., Bristol, Tennessee 37620 (overnight courier) or P.O. Box 848, Bristol, Tennessee 37621 (U.S. mail). 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.

The board of directors held 26 meetings in 2019, 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 2019 (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 2019 (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 2019.

Under Contura’s Corporate Governance Guidelines, directors are expected to attend stockholder meetings. All then-serving directors attended the 2019 annual meeting of stockholders. Contura has scheduled one of its quarterly board of directors meetings on the same date as the Annual Meeting. A copy of Contura’s Corporate Governance Guidelines is available at no cost either through our website, www.conturaenergy.com, or upon written request to William L. Phillips III, Assistant Secretary, Contura Energy, Inc., 340 Martin Luther King, Jr. Blvd., Bristol, Tennessee 37620 (overnight courier) or P.O. Box 848, Bristol, Tennessee 37621 (U.S. mail).

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.

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. Lushefski currently serves as our board’s lead independent director. Contura’s bylaws provide that, when the chairman of the board of directors is not an independent director, the board should elect a lead independent director who has served as a director of the Company for at least one year. The Company believes that such a structure is most appropriate under those circumstances. 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 Contura 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 Contura’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”.

Contura 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 Contura’s website, www.conturaenergy.com, or upon written request to William L. Phillips III, Assistant Secretary, Contura Energy, 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 2019 was as follows:

Our audit committee consists of three directors: Messrs. Ferrara, Lushefski, and Geiger, with Mr. Ferrara serving as chair. 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 Mr. Ferrara 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:

The audit committee meets 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 of the board of directors and the chief executive officer and, at times, other legal counsel. Typically, the chief executive officer, 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, are invited to attend audit committee meetings. Other members of the board of directors who are not members of the audit committee also often attend its meetings. The attendance of the chief executive officer and certain other officers, principally the chief financial officer, allows the audit committee to make detailed inquiries into matters for which it is responsible and assists the committee in making informed decisions. Following regularly scheduled meetings, the committee meets privately with the independent auditor and then with the head of the Company’s internal audit function. At times it also meets privately with the chief financial officer. The actions of the audit committee are recorded in the minutes of its meetings. The committee chairman reports to the board as appropriate regarding the committee’s actions and recommendations.

Our compensation committee consists of five members: Ms. Medine and Messrs. Ferrara, Geiger, Lushefski and Vogel, with Ms. Medine serving as chair. 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 Long-Term Incentive Plan (the “2018 LTIP”) and may delegate its authority thereunder to another committee of the board or to an appropriate officer of Contura, in accordance with law and the terms of the applicable plan. Additionally, the 2018 LTIP provides our compensation committee

the authority to delegate certain of its powers under the plan, relating 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”) and the Key Employee Separation Plan (the “KESP”).

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

The compensation committee meets 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 chief executive officer, the compensation committee’s independent compensation consultants and, at times, other legal counsel. Other members of the board of directors who are not members of the compensation committee also often attend its meetings. Typically, the chief executive officer, the chief financial officer and the general counsel are invited to attend compensation committee meetings; however, neither the chief executive officer nor any other officers of the Company attend executive sessions held by the compensation committee. The compensation committee’s independent compensation consultant typically attends the entire committee meeting, including most executive sessions. The attendance of the chief executive officer and certain other officers allows the compensation committee to make detailed inquiries into matters for which it is responsible and assists the committee in making informed decisions. The actions of the compensation committee are recorded in the minutes of the meeting. The committee chairman reports to the board as appropriate regarding the committee’s actions and recommendations.

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 Contura 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.

Our compensation committee reviews, and makes recommendations to the board of directors regarding, non-employee directors’ compensation and benefits, including cash, equity-based awards and any other compensation. In determining non-employee director compensation, our

compensation committee seeks advice from the independent compensation consultant retained by the committee to, among other functions: (i) conduct a competitive assessment of non-employee director compensation compared to competitive practice, (ii) inform the committee of emerging trends in director pay practices, and (iii) assess the amount of compensation that is adequate to compensate our directors for their time and effort with respect to board obligations. If, after the annual review of non-employee director compensation by our compensation committee, the committee determines that any changes should be made to such program, it will recommend them to our board for approval.

For details regarding 2019 non-employee director compensation, see the section entitled “Director Compensation”.

The compensation committee has the authority to directly engage the services of outside advisors to assist the committee with its review of the Company’s executive and director compensation programs. In May 2018 the committee retained Pearl Meyer & Partners, LLC (“Pearl Meyer”), 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.

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.

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 Contura, (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 Contura’s executive officers, and (v) any Contura stock owned by the consultants. In each case, the committee found that Pearl Meyer did not have any such relationships with Contura 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. 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 Contura, (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 Contura’s executive officers, and (v) any Contura stock owned by the consultants. In each case, the committee has found that Meridian does not have any such relationships with Contura or own stock in the Company.

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”.

Our nominating and corporate governance committee has three members: Messrs. Ferrara, Geiger and Lushefski, with Mr. Lushefski serving as chair. Our board has determined that all members of the nominating and corporate governance committee are independent within the meaning of the NYSE rules.

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:

The nominating and corporate governance committee meets 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 chief executive officer, the chairman of the board and, at times, other legal counsel. Typically, the chief executive officer and general counsel are invited to attend committee meetings; however, neither the chief executive officer nor any other officers of the Company attend executive sessions held by the committee. Other members of the board of directors who are not members of the nominating and corporate governance committee also often attend its meetings. The attendance of the chief executive officer and certain other officers allows the committee to make detailed inquiries into matters for which it is responsible and assists the committee in making informed decisions. The actions of the nominating and corporate governance committee are recorded in the minutes of the meeting and resolutions document all formal actions taken by the committee. The committee chairman reports to the board as appropriate regarding the committee’s actions and recommendations.

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 Contura 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.

All of our directors serve on the safety, health and environmental committee, with Mr. Geiger serving as chair. Although not required by law, under the committee’s charter, a majority of its members must satisfy the independence standards of the NYSE.

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.

The safety, health and environmental committee meets 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 also provided for comments to the chief executive officer, the chairman of the board and, at times, other legal counsel. Typically, the chief executive officer, the chief financial officer, the general counsel and the executive heads of the safety and environmental departments, among others, are invited to attend committee meetings; however, neither the chief executive officer nor any other officers of the Company attend executive sessions held by the committee. The attendance of the chief executive officer and certain other officers allows the committee to make detailed inquiries into matters for which it is responsible and assists the committee in making informed decisions. The actions of the safety, health and environmental committee are recorded in the minutes of the meeting. The committee chairman reports to the board as appropriate regarding the committee’s actions and recommendations.

anniversary of the grant date. The awards will accelerate and vest in full in connection with a change in control of Contura or if the director ceases to serve as a member of our board as a result of permanent disability or death. Unvested RSUs are forfeited upon a separation from service for any other reason.

During his service as chief executive officer, Mr. Crutchfield served as a member of our board and did not receive any additional compensation in connection with his service on our board. Mr. Stetson, who became our chief executive officer and an employee director in July 2019, had previously served as a non-employee director of our board from November 2018 through April 2019, and received compensation under the Director Policy in connection with that service. Mr. Stetson does not receive additional compensation in connection with his service as an employee director. The compensation paid to Mr. Crutchfield for his service as chief executive officer, and the compensation paid to Mr. Stetson for his service as both a non-employee director and as chief executive officer, are reported in the Summary Compensation Table and the tables that follow.

To align our non-employee directors’ and executive officers’ interests with those of our stockholders, the board adopted stock ownership guidelines applicable to Contura’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 Contura 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 Contura securities in a margin account or pledging Contura securities as collateral for a loan.

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 such offer of resignation.

In connection with his resignation as chief executive officer of the Company on May 6, 2019, Mr. Crutchfield contemporaneously resigned from his position as a director.

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 Contura 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 Contura 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.

new chief executive officer and a member of the board of directors. Mr. Stetson was selected after considering his familiarity with the Company’s operational assets, and his robust executive experience, strategic ability and natural leadership talent.

Our executive compensation programs are designed to attract, retain and reward executives who create long-term stockholder value, share our mission, and perform in a manner that enables the Company to achieve its strategic goals. Our compensation programs provide a market-based total compensation program tied to financial and operating performance and aligned with the interests of our stockholders. Our compensation programs reflect, reinforce and communicate our commitment to operate safely, responsibly and ethically, and continually strive to improve and deliver quality in everything we do.

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.

In connection with the appointments of Mr. Stetson as CEO in July 2019 and Mr. Whitehead as chief operating officer in August 2019, the compensation committee, with the assistance of Pearl Meyer, reviewed and approved the annual target compensation levels of the executives based on market data.

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 2019 annual meeting, our shareholders approved the 2018 compensation of our NEOs by approximately 93% of the votes cast. In making decisions with respect to 2019 and 2020 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 2019 the compensation committee used the services of Pearl Meyer, a nationally recognized public company compensation advisor, to advise it on executive compensation matters. The services performed by Pearl Meyer in 2019 are described under “Compensation Committee - Independent Compensation Consultants”. Pearl Meyer 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. In January 2020, the compensation committee retained Meridian, a nationally recognized public company compensation advisor, to advise it on executive and director compensation matters going forward. Meridian has performed, and it is the expectation of the compensation committee that Meridian will continue to perform, substantially the same services regarding executive and director compensation matters in 2020 as those performed by Pearl Meyer in 2019.

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 2018, the committee, with the input of Pearl Meyer and management, reviewed and approved a 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 2019. In November 2019, the compensation committee removed Cloud Peak Energy Inc. from the group following its bankruptcy.

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”.

Pay Mix

As illustrated in the chart below, approximately 80% of Mr. Stetson’s and 74% of our other NEOs’ (not including Mr. Crutchfield and excluding any additional compensation paid to Messrs. Eidson and Manno in their capacity as interim co-chief executive officers) 2019 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 2019. 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. None of our NEOs received an increase in base salary from 2018 to 2019, except for Mr. Kreutzer, whose base salary increased from $400,000 to $475,000 effective January 1, 2019.

For 2019, the annual base salaries of our NEOs were as follows:

2019 Annual Bonuses

In establishing 2019 performance goals under the CIB, the compensation committee considered the economic environment and challenges to be faced during the fiscal year. 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 2019, 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’ 2019 annual bonuses under the Bonus Plan. The metrics were intended to align annual incentive compensation for 2019 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 2019 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 2019 bonus payouts for our NEOs who participated in the CIB ranged from 0% to 200% of the target opportunity, based on the achievement of performance metrics.

Payouts under the Bonus Plan are typically made following the completion of the applicable fiscal year, after achievement of performance metrics for the year have been determined. For 2019, performance was measured as of December 13, 2019 based on the metrics’ actual performance levels through November and the forecasted performance for December. These payouts were made on January 3, 2020.

The following table sets forth the payouts earned by each participating NEO pursuant to the Bonus Plan for 2019. Each NEO’s annual bonus payment equaled 60% 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. Upon becoming a public company in November 2018, we introduced a new long-term incentive program under the 2018 LTIP which consists of grants of RSUs and PSUs. In connection with his appointment as CEO in July 2019, Mr. Stetson received a sign-on RSU grant for 32,700 shares of our common stock that are scheduled to vest in equal installments on each of July 29, 2020, 2021 and 2022. Other than the retention RSUs granted to Messrs. Manno, Eidson, Kreutzer and Stanley (as described below under “2019 Executive Retention Awards”), no other RSUs were granted to our NEOs in 2019.

PSUs granted in 2019 are scheduled to vest on February 9, 2022, subject to the employee’s continued employment through such date and the satisfaction of performance conditions that are based 75% on the Company’s achievement of relative total shareholder return as compared to the median of its comparator group and 25% on the Company’s achievement of absolute total shareholder return during a three-year performance period. We chose to include PSUs in our mix of equity awards because these awards more closely align our executives’ long-term incentive compensation to shareholder returns, and reward superior performance over peer companies, while also retaining a retentive element through time-based vesting requirements. The performance period for awards granted in 2019 will be January 1, 2019 through December 31, 2021. Any vested PSUs will be paid following February 9, 2022 in the form of shares of our common stock, with potential payouts ranging from 0% to 200% of target levels for the portion of PSUs tied to absolute total shareholder return (aTSR) and 0% to 400% for the portion of PSUs tied to relative total shareholder return (rTSR). The following number of target PSUs were granted to our NEOs on February 9, 2019: Kevin S. Crutchfield, 31,319 shares; Charles A. Eidson, 7,829 shares; Mark M. Manno, 7,829; and J. Scott Kreutzer: 7,438 shares; and Kevin L. Stanley: 5,480 shares. Messrs. Stetson and Whitehead did not receive PSU grants in 2019.

2019 Executive Retention Awards

The compensation committee also approved retention payments to each of Messrs. Kreutzer and Stanley in May 2019, which consisted of (i) cash payments of $158,333 for Mr. Kreutzer and $133,333 for Mr. Stanley, each payable on November 7, 2019, (ii) additional cash payments of $158,333 for Mr. Kreutzer and $133,333 for Mr. Stanley, each scheduled to vest on May 7, 2020, subject to the executive’s continued employment through such date, except that such cash payment would be payable upon a termination of employment by the Company for any reason other than for cause and (iii) a grant of 2,643 RSUs to Mr. Kreutzer, having a value of $158,289 on the grant date, and a grant of 2,226 RSUs to Mr. Stanley, having a value of $133,315 on the grant date, each scheduled to vest on May 7, 2020, subject to the executive’s continued employment through such date, except that such RSUs would become fully vested in the event of a termination of employment by the Company for any reason other than for cause.

2020 Compensation Decisions

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 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, the compensation committee approved the adoption of an interim long-term incentive framework for 2020 that is 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 and Whitehead received awards under this new framework having aggregate target award values of $1,000,000 and $950,000, respectively.

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.

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, if any, 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 (4% for our 401(k) plan in 2019), 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 2019).

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

employment agreements entered into with Messrs. Crutchfield and 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”. Mr. Crutchfield’s resignation from the Company was other than for good reason under the terms of his employment agreement. Accordingly, Mr. Crutchfield did not receive any severance payments or benefits as a result of his resignation.

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 CIB (as a percentage of base salary), target annual long-term incentive 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).

The departures of Messrs. Kreutzer and Stanley on November 15, 2019 and Mr. Manno on December 1, 2019 were under circumstances entitling each executive to receive the severance payments and benefits under the terms of the KESP, as set forth in the following table. Except for the COBRA Benefits and Life Insurance Benefits, as described below, and any PSUs that remain outstanding following the termination date, all amounts were paid to Messrs. Kreutzer, Stanley and Manno in a lump sum within 60 days of the termination date.

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. For 2019, we made matching contributions of up to 100% of the first 3% and 50% of next 2% (aggregate of 4%) of a participant’s contributions. For 2019, the Company did not make a qualified non-elective in addition to the matching contributions.

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 continue to 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.