May 3 / 2011

Best regards,

/s/ Keith Calder

‘May 3 / 2011

Keith Calder

Date

Chief Executive Officer

Walter Energy, Inc.

/s/ Neil Winklemann

13th May 2011

Neil Winklemann

Date

Initials

/s/

Name:

Neil Winklemann

Role Title:

President — Walter Energy Canadian & European Operations

Role Band:

n/a

Department:

Corporate

Employer:

Western

Date of Appointment:

Date of consummation of the transaction contemplated by the Arrangement Agreement, dated December 2, 2010 between Walter and Western.

Continuous Employment Date:

July 5, 2010

Base Salary and Remuneration:

The remuneration for this position is a base salary of CDN$400,000 per annum which will be subject to review and adjustment by the Compensation and Human Resources Committee of the Board of Directors of Walter (the “Compensation Committee”) and paid in accordance with Western’s payroll practices, as they may change from time to time. Your annual base salary, as in effect from time to time, is hereinafter referred to as the “Base Salary.”

The remuneration structure is designed to provide competitive levels of total remuneration for strong individual and corporate performance and achieve a close alignment between personal and business performance and remuneration.

Annual Bonus (EIP):

You will continue to participate in the Western annual bonus plan on the same terms and conditions as you currently enjoy until the end of the current fiscal year on June 30,

2011. Thereafter, you will be eligible to participate in Walter’s Executive Incentive Plan, as it may be amended from time to time (the “EIP”) and will be eligible to earn an annual target bonus of 80% of your Base Salary (the “Target Bonus”), with an upside potential of 2 times your Target Bonus for top performance. The actual amount of your bonus, if any, will fluctuate based upon actual performance under the performance metrics associated with the EIP. Participation in the bonus pool is dependent upon the achievement of Walter’s and Western’s annual performance goals, as well as the accomplishment of individual objectives mutually agreed upon in writing each year. In order to receive a bonus under the EIP, you must be employed at the time the bonus is paid. For greater certainty, you will not be entitled to a bonus under the EIP if your employment is terminated for any reason (including without Cause) prior to the date of payment. Notwithstanding anything in this Agreement to the contrary, your bonus, if any, under the EIP, earned in respect of the year ending December 31, 2011, will be pro-rated based upon the percentage of such fiscal year that will have elapsed from July 1, 2011 through the last day of such fiscal year and based solely on the Base Salary actually earned in such fiscal year from your commencement date through the last day of such fiscal year.

Please note that participation in Walter’s Employee Stock Purchase Plan is a condition to participation in the bonus pool under the EIP.

Long Term Incentive:

Subject to your continued active employment with Western, you will be eligible to participate in Walter’s Amended and Restated 2002 Long-Term incentive Award Plan, as it may be amended and restated from time to time (and any successor long term incentive award plan) (collectively, the “LTIP”), and will be eligible to receive annual equity grants from Walter.

Your annual equity grant in respect of the 2011 fiscal year will be valued at 130% of Base Salary, based on the Black-Scholes value at the date of grant, fifty percent (50%) of which will be in the form of non-qualified stock options and fifty percent (50%) of which will be in the form of restricted stock units. Such equity grants will be awarded under and subject to the terms and conditions of the LTIP and the terms and conditions applicable to other awards granted by

Walter under the LTIP to employees of Walter.

For greater certainty, you shall cease to participate in any Western stock option or other long term incentive plans immediately upon the effective date of this Agreement.

Expenses:

Reimbursement for all reasonable and customary out-of-pocket business expenses incurred by you in the performance of your duties hereunder, in accordance with the policies, practices and procedures of Western relating to reimbursement of business expenses incurred by Western employees in effect at any time during the 12 month period preceding the date you incur the expenses; provided, however, that any such expense reimbursement will be made no later than the last day of the calendar year following the calendar year in which you incur the expense, will not affect the expenses eligible for reimbursement in any other calendar year, and cannot be liquidated or exchanged for any other benefit.

Health Care:

You will be eligible to participate in Western’s life and health insurance benefit programs made available to other executive employees in Canada. Your participation will be in accordance with the terms of the applicable plan documents, as they may change from time to time. Additional benefit plan information will be available for your review upon request. After you are enrolled in the benefit plans, you and all eligible family members will be eligible for coverage in accordance with the plan terms.

Retirement Plan:

You will continue to be eligible to participate in Western’s Group RRSP according to its terms as they may change from time to time. Information on the retirement plan will be available for your review upon request.

Vacation:

Your vacation entitlement will accrue at the rate of 25 days of paid vacation per year.

Change in Control:

You will execute an Executive Change-in-Control Severance Agreement in a form substantially similar to the form attached hereto as Exhibit A (the “CIC Agreement”).

Separation Package:

In the event the CIC Agreement does not apply, and subject to (a) your compliance with the restrictive covenants set forth in Sections 4 through 6 of Schedule B and (b) your

execution, delivery and non-revocation of a waiver and release of claims in a form substantially similar to the form attached hereto as Exhibit B (the “Release”) on or prior to the 10th day following the date on which your employment with Western terminates due to (x) the termination of your employment by Western, other than for “Cause” (as defined below) or (y) the termination of your employment by you for “Good Reason” (as defined below), but in each case, excluding any cessation of employment by reason of your death or Disability (as defined below) (such date, without regard to any notice period, the “Severance Date”), you will be entitled to receive the following severance payments and benefits:

·   For the period commencing on the day immediately following the Severance Date and ending on the first anniversary of the Severance Date, monthly pay continuation with each monthly payment equal to one-twelfth (1/12) times the sum of your Base Salary and Target Bonus, in each case, as in effect on the Severance Date. Monthly payments will occur in accordance with the payroll dates in effect on the Severance Date, and such payment dates will not be affected by any subsequent change in payroll practices.

·   Except as provided below and subject to the terms of the applicable plans, continuation of group medical, dental, and vision benefits, provided, to the extent applicable, regular contributions are made, at the level in effect on the Severance Date, in each case, for a period (such period, the “Continuation Coverage Period”) beginning immediately upon the Severance Date and continuing until the earliest to occur of (A) the first anniversary of the Severance Date, (B) the last date you are eligible to participate in the benefit under applicable statute, or (C) the date you are eligible to receive comparable benefits from a subsequent employer, as determined solely by Western in good faith; provided, however, that if you fail to execute and deliver the Release or revoke the Release, in either case, the Continuation Coverage Period shall cease immediately upon such date. Such benefits shall be provided to you at the same coverage and cost to you as in effect on the Severance Date. Notwithstanding the foregoing, your participation in the Employee Stock Purchase Plan, long-term disability insurance plan and all

other benefits will cease effective on the Severance Date. For purposes of this subsection, you shall send written notice of the terms and conditions of any subsequent employment and the corresponding benefits earned from such employment and shall provide, or cause to be provided, to Western, in writing, correct, complete and timely information concerning the same to the extent requested by Western.

provided, however, that, subject to applicable employment standards legislation, Western shall have the right to cease making such payments and you shall be obligated to repay any such amounts to Western already paid if you fail to execute and deliver the Release within the time period provided for above or, after timely delivery, revoke it within the time period specified in such Release.

Notwithstanding anything in this Agreement to the contrary and for the avoidance of doubt, you shall not be entitled to severance payments or benefits under this Severance Package provisions of the Agreement in the event your employment is terminated without Cause within twenty-four (24) months following a Change in Control of the Company (as defined in the CIC Agreement). Severance payments and benefits payable upon such a termination of employment, if any, shall be determined and paid under the CIC Agreement.

For purposes of this Agreement, the term “Cause” shall mean any grounds at common law for which an employer is entitled to dismiss an employee summarily, and includes, without limitation, the following: (i) your willful and continued refusal to perform the duties of your position (other than any such failure resulting from your incapacity due to physical or mental illness); (ii) your conviction or guilty plea of an indictable offence involving fraud or dishonesty; (iii) theft or embezzlement by you of property from Walter or any subsidiary or affiliate; or (iv) fraudulent preparation by you of financial information of Walter or any subsidiary or affiliate.

For purposes of this Agreement, the term “Good Reason” shall mean the occurrence of any of the following conditions (in each case arising without your consent): (A) a material breach of this Agreement by Western or (B) a

material diminution in your authority, duties or responsibilities. Notwithstanding the foregoing, your voluntary separation from service shall be for “Good Reason” only if (x) you provide written notice of the facts or circumstances constituting a “Good Reason” condition to Western within 30 days after the initial existence of the Good Reason condition, (y) the Company does not remedy the Good Reason condition within 30 days after it receives such notice and (z) the voluntary separation from service occurs within 90 days after the initial existence of the Good Reason condition. For purposes of this Agreement, the parties agree that “Good Reason” will not exist solely because the amount of your bonus fluctuates due to performance considerations under the EIP or other Walter or Western incentive plan applicable to you and in effect from time to time.

For purposes of this Agreement, the term “Disability” shall mean any medical condition whatsoever which leads to your absence from your job function for a continuous period of six months without you being able to resume such functions on a full time basis at the expiration of such period, it being understood that unsuccessful attempts to return to work for periods under thirty days shall not be deemed to have interrupted said continuity.

You acknowledge that the Separation Package provided pursuant to this Agreement is reasonable and supersedes and replaces any and all rights to reasonable notice of termination that you might otherwise be entitled to at common law. You agree that the payments include all amounts owing in connection with the termination of your employment, including termination pay, severance pay and/or any vacation pay which may accrue after the Severance Date, whether under any contract, statute (including the British Columbia Employment Standards Act), common law or otherwise.