On October 27, 2009, the Compensation and Human Resources Committee (the "Committee") of the Board of Directors of Walter Energy, Inc. (the "Company") approved financial and operational metrics for 2009 under the Company's Executive Incentive Plan (the "EI Plan") approved by shareholders in 2006. Under the EI Plan, each plan participant is assigned a threshold (minimum), target and maximum award based on performance of the Company relative to criteria approved by the Committee for the performance period. Each plan participant, including the Company's Named Executive Officers, has a designated target incentive opportunity, expressed as a percentage of base pay. Payouts under the EI Plan can range from 0% to 200% of the target incentive opportunity based upon results achieved. The EI Plan contains a clawback provision pursuant to which the Committee may seek to recover any award paid in the event that a plan participant has received an award based on performance results predicated upon the achievement of financial results that are subsequently the subject of restatement as a consequence of errors, omissions, fraud or misconduct.

The following table shows the 2009 annual incentive targets for plan participants in the corporate office and the business units of the Company:

Business or
Operation                    Goals                 Financial/Operational Component
Corporate         † Financial and operational   Consolidated net income- 70%
Office            - 90%                         Safety- 20%
                † † Individual- 10%
Business Units    † Financial and operational   Earnings Before Interest & Taxes- 40%
                  - 90%                         Consolidated net income - 30%
                † † Individual- 10%             Safety- 20%

The Compensation Committee may use its discretion to consider matters such as individual contribution and performance, strategic plans and market conditions when performing its review, and, if it deems appropriate, the Compensation Committee will approve awards to each plan participant based on the achievement of individual goals and the Company's performance with respect to the annual financial and operational goals. If the minimum award level is not met and no amounts would otherwise be payable, the Committee may exercise discretion in granting awards.