Exhibit 10.2

 

AMENDED AND RESTATED DEFERRED COMPENSATION PLAN

FOR

CLOUD PEAK ENERGY RESOURCES LLC

 

Cloud Peak Energy Resources LLC, a Delaware limited liability company (the
“Company”),  hereby amends and restates its previously established  Deferred
Compensation Plan (as amended, the “Plan”), effective as of April 1, 2016 (the
“Effective Date”). The Plan was established for the purpose of attracting high
quality executives and promoting in them increased efficiency and an interest in
the successful operation of the Company.  The Plan is intended to, and shall be
interpreted to, comply in all respects with Code Section 409A and those
provisions of ERISA applicable to an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of “management or
highly compensated employees.”

 

ARTICLE I

TITLE AND DEFINITIONS

 

1.1                                          “Account” or “Accounts” shall mean
the bookkeeping account or accounts established under this Plan pursuant to
Article 4, including the Deferral Account, and if applicable the Company
Contribution Account.

 

1.2                                          “Base Salary” shall mean a
Participant’s annual base salary, excluding incentive and discretionary bonuses,
commissions, reimbursements and other non-regular remuneration, received from
the Company prior to reduction for any salary deferrals under benefit plans
sponsored by the Company, including but not limited to, plans established
pursuant to Code Section 125 or qualified pursuant to Code Section 401(k).

 

1.3                                          “Beneficiary” or “Beneficiaries”
shall mean the person, persons or entity designated as such pursuant to
Section 6.1.

 

1.4                                          “Bonus(es)” shall mean amounts paid
to the Participant by the Company annually in the form of discretionary or
incentive compensation or any other bonus designated by the Committee before
reductions for contributions to or deferrals under any pension, deferred
compensation or benefit plans sponsored by the Company.

 

1.5                                          “Code” shall mean the Internal
Revenue Code of 1986, as amended, as interpreted by Treasury regulations and
applicable authorities promulgated thereunder.

 

1.6                                          “Committee” shall mean the person
or persons appointed by the Sole Managing Member to administer the Plan in
accordance with Article 7.

 

1.7                                          “Company Contributions” shall mean
the contributions made by the Company pursuant to Section 3.2.

 

1.8                                          “Company Contribution Account”
shall mean the Account maintained for the benefit of the Eligible Executive
which is credited with Company Contributions, if any, pursuant to Section 4.2.

 

1.9                                          “Compensation” shall mean all
amounts eligible for deferral for a particular Plan Year under Section 3.1(a).

 

1.10                                   “Crediting Rate” shall mean the notional
gains and losses credited on the Participant’s Account balance which are based
on the Participant’s choice among the investment alternatives made available by
the Committee pursuant to Section 3.3 of the Plan.

 

1.11                                   “Deferral Account” shall mean the Account
maintained for each Participant which is credited with Participant deferrals
pursuant to Section 4.1

 

1.12                                   “Director” shall mean a non-employee
member of the Sole Managing Member’s Board of Directors eligible to participate
in the Plan.

 

1.13                                   “Director Retainer Fee” shall mean the
monthly fee paid to a Director for serving on the Sole Managing Member’s Board
of Directors; and shall be the sole amount of compensation eligible for deferral
to the Plan.

 

1.14                                   “Disability” shall mean (consistent with
the requirements of Section 409A) that the Participant (i) is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, or (ii) is,
by

 

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reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than three months under an accident and health plan covering
employees of the Company. The Committee may require that the Participant submit
evidence of such qualification for disability benefits in order to determine
that the Participant is disabled under this Plan.

 

1.15                                   “Distributable Amount” shall mean the
vested balance in the applicable Account as determined under Article 4.

 

1.16                                   “Eligible Executive” shall mean a highly
compensated or management level employee of the Company, or the Company’s
parent, subsidiaries or affiliates, selected by the Committee to be eligible to
participate in the Plan.

 

1.17                                   “ERISA” shall mean the Employee
Retirement Income Security Act of 1974, as amended, including Department of
Labor and Treasury regulations and applicable authorities promulgated
thereunder.

 

1.18                                   “Financial Hardship” shall mean a severe
financial hardship to the Participant resulting from an illness or accident of
the Participant, the Participant’s spouse, or a dependent (as defined in IRC
Section 152(a)) of the Participant, loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the Participant, (but shall in all
events correspond to the meaning of the term “unforseeable emergency” under Code
Section 409A(a)(2)(v)).

 

1.19                                   “Fund” or “Funds” shall mean one or more
of the investments selected by the Committee pursuant to Section 3.3 of the
Plan.

 

1.20                                   “Hardship Distribution” shall mean an
accelerated distribution of benefits or a reduction or cessation of current
deferrals pursuant to Section 5.7 to a Participant who has suffered a Financial
Hardship.

 

1.21                                   “Interest Rate” shall mean, for each
Fund, an amount equal to the net gain or loss on the assets of such Fund during
each month, as determined by the Committee.

 

1.23                                   “Participant” shall mean any Eligible
Executive or (as of the Effective Date) Director who becomes a Participant in
this Plan in accordance with Article 2.

 

1.24                                   “Participant Election(s)” shall mean the
forms or procedures by which a Participant makes elections with respect to
(1) voluntary deferrals of his/her Compensation, (2) the investment Funds which
shall act as the basis for crediting of interest on Account balances, and
(3) the form and timing of distributions from Accounts.  Participant Elections
may take the form of an electronic communication followed by appropriate
confirmation according to specifications established by the Committee.

 

1.25                                   “Payment Date” shall mean the date by
which a total distribution of the Distributable Amount shall be made or the date
by which installment payments of the Distributable Amount shall commence. 
Unless otherwise specified, the Payment Date for specified employees (as defined
in Code Section 409A) shall be the first business day of the seventh (7th) month
commencing after the event triggering the payout occurs, and thirty (30) days
after the event triggering payout occurs for all other participants. Subsequent
installments shall be made in February of each succeeding Plan Year.  In the
case of death, the Committee shall be provided with documentation reasonably
necessary to establish the fact of the Participant’s death.  The Payment Date of
a Scheduled Distribution shall be February of the Plan Year in which the
distribution is scheduled to commence.  Payment Date for Participants who are
not specified employees will be no later than 60 days after death or retirement
if February of the next Plan Year is not elected. Notwithstanding the foregoing,
the Payment Date shall not be before the earliest date on which benefits may be
distributed under Code Section 409A without violation of the provisions thereof
as reasonably determined by the Committee.

 

1.26                                   “Plan Year” shall mean the calendar year.

 

1.27                                   “Retirement” shall mean Termination of
Service after having attained age 55 and completed at least 10 Years of Service.
Effective for Company Contributions and Participant deferrals of Compensation on
and after January 1, 2014, “Retirement” means Termination of Service after
having attained age 55 and completed at least 10 Years of Service, or having
attained age 65 irrespective of Years of Service.

 

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1.28                                   “Scheduled Distribution” shall mean a
scheduled distribution date elected by the Participant for distribution of
amounts from a specified Account, including notional earnings thereon, as
provided under Section 5.6.

 

1.29                                   “Sole Managing Member” shall mean Cloud
Peak Energy Inc., or such other Manager of the Company appointed in accordance
with the terms of the Company’s limited liability company agreement, as amended
from time to time.

 

1.27                                   “Termination of Service” shall mean the
date of the cessation of the Participant’s provision of services to the Company
or the Company’s parent, subsidiaries or affiliates as defined under Code
Section 409A for any reason whatsoever, whether voluntary or involuntary,
including as a result of the Participant’s Retirement, death or Disability.

 

1.30                                   “Years of Service” shall mean the
cumulative years of continuous full-time employment with the Company or the
Company’s parent, subsidiaries or affiliates (including approved leaves of
absence of six months or less or legally protected leaves of absence), beginning
on the date the Participant first began service with the Company (or the
Company’s parent, subsidiaries or affiliates), and counting each anniversary
thereof. If the Participant completed five or more years of service and
terminates employment with the Company, then is rehired at a future date, the
participant will have his/her previous years of service added to an adjusted
service date based on rehire date.  Years of service with a predecessor employer
will count for purposes of determining a Participant’s Years of Service to the
extent approved by the Committee.

 

ARTICLE II

PARTICIPATION

 

An Eligible Executive or Director shall become a Participant in the Plan by
completing and submitting to the Committee the appropriate Participant
Elections, including such other documentation and information as the Committee
may reasonably request, within 30 days after the date the Eligible Executive
first becomes eligible and notified to participate in the Plan, and thereafter
during the enrollment period established by the Committee prior to the beginning
of each Plan Year in which the Participant remains eligible to participate in
the Plan.

 

ARTICLE III

CONTRIBUTIONS & DEFERRAL ELECTIONS

 

3.1                                          Elections to Defer Compensation.

 

(a)                                 Form of Elections.  A Participant may only
elect to defer Compensation attributable to services provided after the time an
election is made.  Elections shall take the form of a whole percentage (less
applicable payroll withholding requirements for Social Security and income taxes
and employee benefit plans as determined in the sole and absolute discretion of
the Committee) of:

 

(1)                                 up to 80% of Base Salary,

 

(2)                                 up to 100% of Bonuses

 

(3)                                 An amount of Base Salary equivalent to the
amount of any excess contributions distributed from the Cloud Peak Energy
401(k) Plan by reason of the Actual Deferral Percentage Test or Actual
Contribution Percentage Test or otherwise.  Such deferrals will be deferred from
Base Salary payable immediately following any excess contribution distribution.

 

(4)                                 100% of Director Retainer Fees.

 

(b)                                 Duration of Compensation Deferral Election. 
A Participant’s initial election to defer Compensation shall be made during the
enrollment period established by the Committee prior to the date of the
Participant’s commencement of participation in the Plan and shall apply only to
Compensation for services performed after such deferral election is processed. 
A Participant may increase, decrease, terminate or recommence a deferral
election with respect to Compensation for any subsequent Plan Year by filing a
Participant Election during the enrollment period established by the Committee
prior to the beginning of such Plan Year, which election shall be effective on
the first day of the next following Plan Year.  In the absence of an affirmative
election by the Participant, the deferral election for the prior Plan Year will
not continue for future Plan Years.  After the beginning of the Plan Year,
deferral elections with respect to Compensation for services performed during
such Plan Year shall be irrevocable except in the event of Financial Hardship.

 

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(c)                                  Deferral of 401(k) Excess Contributions. 
Notwithstanding anything in the Plan to the contrary, the Committee may
administer deferrals equivalent to excess 401(k) contributions (as described in
item (3) above) as an automatic deferral, where an election to defer such
amounts is by default presumed to have been made.  The Committee may permit the
Participant to elect not to defer such amount, provided such election not to
defer is made prior to the beginning of the Plan Year in which such an excess
contribution distribution may occur, and provided that if the Participant does
not opt out, the election to defer will become irrevocable at the close of the
enrollment period.

 

3.2                                          Company Contributions.

 

(a)                                 Discretionary Company Contributions.  The
Company shall have the discretion to make Company Contributions to the Plan at
any time on behalf of any Eligible Executive.  Company Contributions shall be
made in the complete and sole discretion of the Company and no Eligible
Executive shall have the right to receive any Company Contribution in any
particular Plan Year regardless of whether Company Contributions are made on
behalf of other Eligible Executives.

 

(b)                                 Company Matching Contributions. The Company
shall make Matching Contributions on behalf of the Eligible Executive equal to
the Matching Contribution provided in the Cloud Peak Energy 401(k) Plan for each
Plan Year in which the Eligible Executive makes a deferral under this Plan.

 

(c)                                  Company Profit Sharing Contributions.  The
Company shall have the discretion to make Profit Sharing Contributions on behalf
of an Eligible Executive who is a Participant, in an amount equal to the profit
sharing contribution the Eligible Executive was prevented from receiving in the
Cloud Peak Energy 401(k) Plan due to Internal Revenue Code limits on the amount
of the contribution or the compensation that maybe taken into account, subject
to any conditions or rules as established by the Committee.

 

3.3                                          Investment Elections.

 

(a)                                 Participant Designation. At the time of
entering the Plan and/or of making the deferral election under the Plan, the
Participant shall designate, on a Participant Election provided by the
Committee, the Funds in which the Participant’s Deferral Account(s) and Company
Contribution Account(s) shall be deemed to be invested for purposes of
determining the amount of earnings and losses to be credited to each Account. 
The Participant may specify that all or any percentage of his or her Account or
Accounts shall be deemed to be invested, in whole percentage increments, in one
or more of the Funds selected as alternative investments under the Plan from
time to time by the Committee pursuant to subsection (b) of this Section.  All
contributions made by or for a Participant in any Plan Year will be invested in
the same Fund or Funds.  A Participant may change the designation made under
this Section at least monthly by filing a revised election, on a Participant
Election provided by the Committee.

 

(b)                                 Investment Funds. Prior to the beginning of
each Plan Year, the Committee may select, in its sole and absolute discretion,
each of the types of commercially available investments communicated to the
Participant pursuant to subsection (a) of this Section to be the Funds.  If an
investment selection is not made the Participant will default to a Money Market
fund. The Interest Rate of each such commercially available investment shall be
used to determine the amount of earnings or losses to be credited to
Participant’s Account under Article IV.  The Participant’s choice among
investments shall be solely for purposes of calculation of the Crediting Rate on
Accounts.  The Company shall have no obligation to set aside or invest amounts
as directed by the Participant and, if the Company elects to invest amounts as
directed by the Participant, the Participant shall have no more right to such
investments than any other unsecured general creditor.

 

3.4                                          Distribution Elections.

 

(a)                                 Participant Election.  Prior to the
beginning of any calendar year (or later, if permitted by Code Section 409A and
applicable guidance), a Participant may designate the time and form of
distribution of benefits under the Plan by choosing among the alternatives
permitted by the Plan, according to policies and procedures established by the
Committee.

 

(b)                                 Default Distribution Elections.  Prior to
the Effective Date, all Participants made affirmative elections with respect to
the time and form of payment for their benefits under the Plan. After the
Effective Date, if a Participant fails for any reason to timely designate the
time and form of distribution of benefits under the Plan, then such amount will
be distributed in a lump sum at Termination of Service.

 

(c)                                    Modification of Election.  A new
distribution election may be made with respect to deferrals for any Plan Year
after the Participant’s first distribution election is made.  However, a
distribution election with respect to

 

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previously deferred amounts may only be changed under the terms and conditions
specified in Code Section 409A.  Except as expressly provided in the Plan or as
allowed by Code Section 409A and applicable guidance, no acceleration of a
distribution is permitted.  A subsequent election that delays payment or changes
the form of payment shall be permitted if and only if all of the following
requirements are met:

 

(1)                    the new election does not take effect until at least
twelve (12) months after the date on which the new election is made;

 

(2)                    in the case of payments made on account of Termination of
Service or a Scheduled Distribution, the new election delays payment for at
least five (5) years from the date that payment would otherwise have been made,
absent the new election; and

 

(3)                    in the case of payments made according to a Scheduled
Distribution, the new election is made not less than twelve (12) months before
the date on which payment would have been made (or, in the case of installment
payments, the first installment payment would have been made) absent the new
election.

 

For purposes of application of the above change limitations, installment
payments shall be treated as a single payment and only one change shall be
allowed to be made by a Participant with respect to form of benefits to be
received by such Participant upon Retirement.  Election changes made pursuant to
this Section shall be made in accordance with rules established by the
Committee, and shall comply with all requirement of Code Section 409A and
applicable authorities.

 

ARTICLE IV

ACCOUNTS

 

4.1                                          Deferral Accounts.  The Committee
shall establish and maintain a Deferral Account for each Participant for each
Plan Year in which the Participant participates under the Plan.  Each
Participant’s Deferral Account shall be further divided into separate
subaccounts (“Fund Subaccounts”), each of which corresponds to a Fund elected by
the Participant pursuant to Section 3.  A Participant’s Deferral Account shall
be credited as follows:

 

(a)                                 As soon as reasonably possible after amounts
are withheld and deferred from a Participant’s Compensation, the Committee shall
credit the Fund Subaccounts of the Participant’s Deferral Account with an amount
equal to Compensation deferred by the Participant in accordance with the
Participant’s election under Section 3; that is, the portion of the
Participant’s deferred Compensation that the Participant has elected to be
deemed to be invested in a Fund shall be credited to the Fund Subaccount to be
invested in that Fund;

 

(b)                                 Each business day, each investment fund
subaccount of a Participant’s Deferral Account shall be credited with earnings
or losses in an amount equal to that determined by multiplying the balance
credited to such Fund Subaccount as of the prior day, less any distributions
valued as of the end of the prior day, by the Interest Rate for the
corresponding Fund as determined by the Committee pursuant to Section 3.3(b);
and

 

4.2                                          Company Contribution Account.  The
Committee shall establish and maintain a Company Contribution Account for each
Eligible Executive under the Plan. Each Eligible Executive’s Company
Contribution Account shall be further divided into separate Fund Subaccounts
corresponding to the investment Fund elected by the Eligible Executive pursuant
to Section 3.3(a).  An Eligible Executive’s Company Contribution Account shall
be credited as follows:

 

(a)                                 As soon as reasonably possible after a
Company Contribution is made, the Company shall credit the Fund Subaccounts of
the Eligible Executive’s Company Contribution Account with an amount equal to
the Company Contributions, if any, made on behalf of that Eligible Executive,
that is, the proportion of the Company Contributions, if any, which the Eligible
Executive has elected to be deemed to be invested in a certain Fund shall be
credited to the Fund Subaccount to be invested in that Fund.  ; and

 

(b)                                 Each business day, each Fund Subaccount of
an Eligible Executive’s Company Contribution Account shall be credited with
earnings or losses in an amount equal to that determined by multiplying the
balance credited to such Fund Subaccount as of the prior day, less any
distributions valued as of the end of the prior day, by the Interest Rate for
the corresponding Fund as determined by the Committee pursuant to
Section 3.3(b).

 

4.3                                          Trust.  The Company shall be
responsible for the payment of all benefits under the Plan.  At its discretion,
the Company may establish one or more grantor trusts for the purpose of
providing for payment of benefits under the Plan.  Such

 

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trust or trusts may be irrevocable, but the assets thereof shall be subject to
the claims of the Company’s creditors.  Benefits paid to the Participant from
any such trust or trusts shall be considered paid by the Company for purposes of
meeting the obligations of the Company under the Plan.

 

4.4                                          Statement of Accounts.  The
Committee shall provide each Participant with electronic statements at least
quarterly setting forth the Participant’s Account balance as of the end of each
calendar quarter.

 

4.5                                          Vesting of Accounts.  The
Participant shall be vested at all times in amounts credited to the
Participant’s Deferral Accounts and Company Contributions Account, except to the
extent that the Company designates a vesting schedule or condition with respect
to a Discretionary Company Contribution.

 

ARTICLE V

DISTRIBUTIONS

 

5.1                                          Section not used.

 

5.2                                          Small Benefit Exception.
Notwithstanding any other provision of the Plan to the contrary, if on
commencement of benefits payable from an Account the Distributable Amount from
such Account is less than or equal to the applicable dollar amount under
Internal Revenue Code Section 402(g)(l )(B), the total Distributable Amount from
such Account shall be paid in a lump sum in cash on the scheduled Payment Date.

 

5.3                                          Termination Distributions.  Except
as provided in Section 5.6, in the event of a Participant’s Termination of
Service other than by reason of Retirement, death or Disability, the
Distributable Amount credited to the Participant Accounts shall be paid in a
lump sum in cash on the Payment Date following Termination of Service.

 

5.4                                          Retirement or Disability
Distributions. Except as provided in Section 5.6, in the event of a
Participant’s Retirement or Disability, the Distributable Amount credited to the
Participant’s Accounts shall be paid to the Participant in cash on the Payment
Date following the Participant’s Retirement or date of Disability unless the
Participant has made an alternative benefit election on a timely basis pursuant
to Section 3.4 to receive substantially equal annual installments over up to
fifteen (15) years.

 

5.5                                          Death Benefits.

 

(a)                                Prior to Commencement of Benefits. In the
event that the Participant dies prior to commencement of benefit payable from an
Account, the Company shall pay to the Participant’s Beneficiary a death benefit
equal to the Distributable Amount of such Account in a lump sum in cash on the
Payment Date following the Participant’s death.

 

(b)                                After Commencement of Benefits. In the event
that the Participant dies after commencement of benefits payable from an
Account, benefits from such Account shall continue to be paid to the
Participant’s Beneficiary at the same time and in the same form as they would
have been paid to the Participant had the Participant not died.

 

5.6                                          Scheduled Distributions.

 

(a)                                 Scheduled Distribution Election. In the case
of a Participant who has elected to receive a Scheduled Distribution, such
Participant shall receive the Distributable Amount, including earnings thereon,
on the date specified by the Participant Election. A Participant’s Scheduled
Distribution commencement date shall be no earlier than two (2) years from the
last day of the Plan Year in which the contributions are credited to the
Participant’s Account. The Participant may elect to receive the Scheduled
Distribution in a single lump sum or substantially equal annual installments
over a period of up to five (5) years. A Participant may delay and change the
form of a Scheduled Distribution, provided such extension complies with the
requirements of Section 3.4.

 

(b)                                 Small Benefit Exception. If on commencement
of benefits payable by reason of a Schedule Distribution the total balance of
the Scheduled Distributions is less than or equal to the applicable dollar
amount under Internal Revenue Code Section 402(g)(l)(B), the Scheduled
Distribution shall be paid in the form of a single lump sum distribution on the
scheduled commencement date.

 

(c)                                  Termination of Service. In the event of a
Participant’s Termination of Service prior to

 

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commencement of a Scheduled Distribution, the Participant’s Scheduled
Distribution election shall be disregarded and the Participant’s Account will
instead be paid in the form applicable to such Termination of Service under
Section 5.2, 5.3 or 5.4 above (provided, however, that prior to January 1, 2014,
a Participant’s Scheduled Distribution Election will be applied even in the
event that the Participant has a Termination of Service prior to commencement of
the Scheduled Distribution, but only if the Participant has five years of
service or more as of the date of Termination of Service). In the event of a
Participant’s Termination of Service for any reason after a Scheduled
Distribution has commenced installment payments, such Scheduled Distribution
benefits shall continue to be paid at the same time and in the same form as they
would have been paid to the Participant had the Participant not terminated
service.

 

5.7                                          Hardship Distribution. Upon a
finding that the Participant (or, after the Participant’s death, a Beneficiary)
has suffered a Financial Hardship, subject to compliance with Code Section 409A
the Committee may, at the request of the Participant or Beneficiary, accelerate
distribution of benefits or approve reduction or cessation of current deferrals
under the Plan in the amount reasonably necessary to alleviate such Financial
Hardship subject to the following conditions:

 

(a)                                 The request to take a Hardship Distribution
shall be made by filing a form provided by and filed with the Committee prior to
the end of any calendar month.

 

(b)                                 The amount distributed pursuant to this
Section with respect to a Financial Hardship shall not exceed the amount
necessary to satisfy such financial emergency plus amounts necessary to pay
taxes reasonably anticipated as a result of the distribution, after taking into
account the extent to which such hardship is or may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant’s assets (to the extent the liquidation of such assets would not
itself cause severe financial hardship).

 

(c)                                  The amount determined by the Committee as a
Hardship Distribution shall be paid in a single cash lump sum as soon as
practicable after the end of the calendar month in which the Hardship
Distribution election is made and approved by the Committee.

 

(d)                                 Upon a finding that the Participant (or,
after the Participant’s death, a Beneficiary) has suffered a Financial Hardship,
subject to Treasury Regulations promulgated under Code Section 409A the
Committee may at the request of the Participant, accelerate distribution of
benefits or approve reduction or cessation of current deferrals under the Plan
in the amount reasonably necessary to alleviate such Financial Hardship. The
amount distributed pursuant to this Section with respect to an emergency shall
not exceed the amount necessary to satisfy such emergency plus amounts necessary
to pay taxes reasonably anticipated as a result of the distribution, after
taking into account the extent to which such hardship is or may be relieved
through reimbursement or compensation by insurance or otherwise or by
liquidation of the Participant’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship).

 

5.9                               Specified Employees. In the case of any
Participant who is a specified employee within the meaning of Code Section 409A
as of the date of a separation from service, payments due as of the
Participant’s separation from service may not be made before the date that is
six months after the date of separation from service (or, if earlier, the date
of the Participant’s death.

 

ARTICLE VI

PAYEE DESIGNATIONS AND LIMITATIONS

 

6.1                                          Beneficiaries.

 

(a)                                 Beneficiary Designation.  The Participant
shall have the right, at any time, to designate any person or persons as
Beneficiary (both primary and contingent) to whom payment under the Plan shall
be made in the event of the Participant’s death.  The Beneficiary designation
shall be effective when it is submitted to and received by the Committee during
the Participant’s lifetime in the format prescribed by the Committee.

 

(b)                                 Absence of Valid Designation.  If a
Participant fails to designate a Beneficiary as provided above, or if every
person designated as Beneficiary predeceases the Participant or dies prior to
complete distribution of the Participant’s benefits, then the Committee shall
direct the distribution of such benefits to the Participant’s estate.

 

6.2                                          Payments to Minors.  In the event
any amount is payable under the Plan to a minor, payment shall not be made to
the minor, but instead be paid (a) to that person’s living parent(s) to act as
custodian, (b) if that person’s parents are then divorced, and one parent is the
sole custodial parent, to such custodial parent, to act as custodian, or (c) if
no parent of that person is then living, to a custodian selected by the
Committee to hold the funds for the minor under the Uniform

 

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Transfers or Gifts to Minors Act in effect in the jurisdiction in which the
minor resides.  If no parent is living and the Committee decides not to select
another custodian to hold the funds for the minor, then payment shall be made to
the duly appointed and currently acting guardian of the estate for the minor or,
if no guardian of the estate for the minor is duly appointed and currently
acting within sixty (60) days after the date the amount becomes payable, payment
shall be deposited with the court having jurisdiction over the estate of the
minor.

 

6.3                                          Payments on Behalf of Persons Under
Incapacity.  In the event that any amount becomes payable under the Plan to a
person who, in the sole judgment of the Committee, is considered by reason of
physical or mental condition to be unable to give a valid receipt therefore, the
Committee may direct that such payment be made to any person found by the
Committee, in its sole judgment, to have assumed the care of such person.  Any
payment made pursuant to such determination shall constitute a full release and
discharge of any and all liability of the Committee and the Company under the
Plan.

 

6.4                                          Inability to Locate Payee.  In the
event that the Committee is unable to locate a Participant or Beneficiary within
two years following the scheduled Payment Date, the amount allocated to the
Participant’s Account shall be forfeited.  If, after such forfeiture, the
Participant or Beneficiary later claims such benefit, such benefit shall be
reinstated without interest or earnings.

 

ARTICLE VII

ADMINISTRATION

 

7.1                                          Committee.  The Plan shall be
administered by a Committee appointed by the Sole Managing Member, which shall
have the exclusive right and full discretion (a) to appoint agents to act on its
behalf, (b) to select and establish Funds, (c) to interpret the Plan, (d) to
decide any and all matters arising hereunder (including the right to remedy
possible ambiguities, inconsistencies, or admissions), (e) to make, amend and
rescind such rules as it deems necessary for the proper administration of the
Plan and (f) to make all other determinations and resolve all questions of fact
necessary or advisable for the administration of the Plan, including
determinations regarding eligibility for benefits payable under the Plan.  All
interpretations of the Committee with respect to any matter hereunder shall be
final, conclusive and binding on all persons affected thereby.  No member of the
Committee or agent thereof shall be liable for any determination, decision, or
action made in good faith with respect to the Plan.  The Company will indemnify
and hold harmless the members of the Committee and its agents from and against
any and all liabilities, costs, and expenses incurred by such persons as a
result of any act, or omission, in connection with the performance of such
persons’ duties, responsibilities, and obligations under the Plan, other than
such liabilities, costs, and expenses as may result from the bad faith, willful
misconduct, or criminal acts of such persons.

 

7.2                                          Claims Procedure.  Any Participant,
former Participant or Beneficiary may file a written claim with the Committee
setting forth the nature of the benefit claimed, the amount thereof, and the
basis for claiming entitlement to such benefit.  The Committee shall determine
the validity of the claim and communicate a decision to the claimant promptly
and, in any event, not later than ninety (90) days after the date of the claim. 
The claim may be deemed by the claimant to have been denied for purposes of
further review described below in the event a decision is not furnished to the
claimant within such ninety (90) day period.  If additional information is
necessary to make a determination on a claim, the claimant shall be advised of
the need for such additional information within forty-five (45) days after the
date of the claim.  The claimant shall have up to one hundred eighty (180) days
to supplement the claim information, and the claimant shall be advised of the
decision on the claim within forty-five (45) days after the earlier of the date
the supplemental information is supplied or the end of the one hundred eighty
(180) day period.  Every claim for benefits which is denied shall be denied by
written notice setting forth in a manner calculated to be understood by the
claimant (a) the specific reason or reasons for the denial, (b) specific
reference to any provisions of the Plan (including any internal rules,
guidelines, protocols, criteria, etc.) on which the denial is based,
(c) description of any additional material or information that is necessary to
process the claim, and (d) an explanation of the procedure for further reviewing
the denial of the claim and shall include an explanation of the claimant’s right
to submit the claim for binding arbitration in the event of an adverse
determination on review.

 

7.3                                          Review Procedures.  Within sixty
(60) days after the receipt of a denial on a claim, a claimant or his/her
authorized representative may file a written request for review of such denial. 
Such review shall be undertaken by the Committee and shall be a full and fair
review. The claimant shall have the right to review all pertinent documents. 
The Committee shall issue a decision not later than sixty (60) days after
receipt of a request for review from a claimant unless special circumstances,
such as the need to hold a hearing, require a longer period of time, in which
case a decision shall be rendered as soon as possible but not later than one
hundred twenty (120) days after receipt of the claimant’s request for review. 
The decision on review shall be in writing and shall include specific reasons
for the decision written in a manner calculated to be understood by the claimant
with specific reference to any provisions of the Plan on which the decision is

 

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based and shall include an explanation of the claimant’s right to submit the
claim for binding arbitration in the event of an adverse determination on
review.

 

ARTICLE VIII

MISCELLANEOUS

 

8.1                                          Amendment or Termination of Plan. 
The Company may, at any time, direct the Committee to amend or terminate the
Plan, except that no such amendment or termination may reduce a Participant’s
Account balances.  If the Company terminates the Plan, no further amounts shall
be deferred hereunder, and amounts previously deferred or contributed to the
Plan shall be fully vested and shall be paid in accordance with the provisions
of the Plan as scheduled prior to the Plan termination.  Notwithstanding the
forgoing, to the extent permitted under Code Section 409A and applicable
authorities, the Company may, in its complete and sole discretion, accelerate
distributions under the Plan in the event of a “change in ownership” or
“effective control” of the Company or a “change in ownership of a substantial
portion of assets” or under such other terms and conditions as may be
specifically authorized under Code Section 409A and applicable authorities.

 

8.2                                          Unsecured General Creditor. The
benefits paid under the Plan shall be paid from the general assets of the
Company, and the Participant and any Beneficiary or their heirs or successors
shall be no more than unsecured general creditors of the Company with no special
or prior right to any assets of the Company for payment of any obligations
hereunder. It is the intention of the Company that this Plan be unfunded for
purposes of ERISA and the Code.

 

8.3                                          Restriction Against Assignment. The
Company shall pay all amounts payable hereunder only to the person or persons
designated by the Plan and not to any other person or entity.  No part of a
Participant’s Accounts shall be liable for the debts, contracts, or engagements
of any Participant, Beneficiary, or their successors in interest, nor shall a
Participant’s Accounts be subject to execution by levy, attachment, or
garnishment or by any other legal or equitable proceeding, nor shall any such
person have any right to alienate, anticipate, sell, transfer, commute, pledge,
encumber, or assign any benefits or payments hereunder in any manner
whatsoever.  No part of a Participant’s Accounts shall be subject to any right
of offset against or reduction for any amount payable by the Participant or
Beneficiary, whether to the Company or any other party, under any arrangement
other than under the terms of this Plan.

 

8.4                                          Withholding. The Participant shall
make appropriate arrangements with the Company for satisfaction of any federal,
state or local income tax withholding requirements, Social Security and other
employee tax or other requirements applicable to the granting, crediting,
vesting or payment of benefits under the Plan. There shall be deducted from each
payment made under the Plan or any other Compensation payable to the Participant
(or Beneficiary) all taxes which are required to be withheld by the Company in
respect to such payment or this Plan.  The Company shall have the right to
reduce any payment (or other Compensation) by the amount of cash sufficient to
provide the amount of said taxes.

 

8.5                                          Protective Provisions.  The
Participant shall cooperate with the Company by furnishing any and all
information requested by the Committee, in order to facilitate the payment of
benefits hereunder, taking such physical examinations as the Committee may deem
necessary and taking such other actions as may be requested by the Committee. 
If the Participant refuses to so cooperate, the Company shall have no further
obligation to the Participant under the Plan.  In the event of the Participant’s
suicide during the first two (2) years in the Plan, or if the Participant makes
any material misstatement of information or non-disclosure of medical history,
then no benefits shall be payable to the Participant under the Plan, except that
benefits may be payable in a reduced amount in the sole discretion of the
Committee.

 

8.6                                          Receipt or Release.  Any payment
made in good faith to a Participant or the Participant’s Beneficiary shall, to
the extent thereof, be in full satisfaction of all claims against the Committee,
its members and the Company.  The Committee may require such Participant or
Beneficiary, as a condition precedent to such payment, to execute a receipt and
release to such effect.

 

8.7                                          Errors in Account Statements,
Deferrals or Distributions.  In the event an error is made in an Account
statement, such error shall be corrected as soon as administratively practicable
following the date such error is discovered.  In the event of an error in
deferral amount, consistent with and as permitted by any correction procedures
established under IRC Section 409A, the error shall be corrected immediately
upon discovery by, in the case of an excess deferral, distribution of the excess
amount to the Participant, or, in the case of an under deferral, reduction of
other compensation payable to the Participant.  In the event of an error in a
distribution, the over or under payment shall be corrected by payment to or
collection from the Participant consistent with any correction procedures
established under IRC Section 409A, immediately upon the discovery of such
error. In the event of an overpayment, the Company may, at its discretion,
offset other amounts payable to the Participant from the Company (including but
not limited to salary, bonuses, expense reimbursements, severance benefits

 

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or other employee compensation benefit arrangements, as allowed by law and
subject to compliance with IRC Section 409A) to recoup the amount of such
overpayment(s).

 

8.8                                          Employment Not Guaranteed.  Nothing
contained in the Plan nor any action taken hereunder shall be construed as a
contract of employment or as giving any Participant any right to continue the
provision of services in any capacity whatsoever to the Company.

 

8.9                                          Successors of the Company.  The
rights and obligations of the Company under the Plan shall inure to the benefit
of, and shall be binding upon, the successors and assigns of the Company.

 

8.10                                   Notice.  Any notice or filing required or
permitted to be given to the Company or the Participant under this Plan shall be
sufficient if in writing and hand-delivered, or sent by registered or certified
mail, in the case of the Company, to the principal office of the Company,
directed to the attention of the Committee, and in the case of the Participant,
to the last known address of the Participant indicated on the employment records
of the Company.  Such notice shall be deemed given as of the date of delivery
or, if delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.  Notices to the Company may be
permitted by electronic communication according to specifications established by
the Committee.

 

8.11                                   Headings.  Headings and subheadings in
this Plan are inserted for convenience of reference only and are not to be
considered in the construction of the provisions hereof.

 

8.12                                   Gender, Singular and Plural.  All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, or neuter, as the identity of the person or persons may require.  As
the context may require, the singular may be read as the plural and the plural
as the singular.

 

8.13                                   Governing Law.  The Plan is intended to
be an unfunded plan maintained primarily to provide deferred compensation
benefits for a select group of “management or highly compensated employees”
within the meaning of Sections 201, 301 and 401 of ERISA and therefore to be
exempt from Parts 2, 3 and 4 of Title I of ERISA.  In the event any provision
of, or legal issue relating to, this Plan is not fully preempted by federal law,
such issue or provision shall be governed by the laws of the State of Delaware.

 

8.14                                   Binding Arbitration.  Any claim, dispute
or other matter in question of any kind relating to this Plan which is not
resolved by the claims procedures under this Plan shall be settled by
arbitration in accordance with the applicable employment dispute resolution
rules of the American Arbitration Association.  Notice of demand for arbitration
shall be made in writing to the opposing party and to the American Arbitration
Association within a reasonable time after the claim, dispute or other matter in
question has arisen.  In no event shall a demand for arbitration be made after
the date when the applicable statute of limitations would bar the institution of
a legal or equitable proceeding based on such claim, dispute or other matter in
question.  The decision of the arbitrators shall be final and may be enforced in
any court of competent jurisdiction.  The arbitrators may award reasonable fees
and expenses to the prevailing party in any dispute hereunder and shall award
reasonable fees and expenses in the event that the arbitrators find that the
losing party acted in bad faith or with intent to harass, hinder or delay the
prevailing party in the exercise of its rights in connection with the matter
under dispute.

 

IN WITNESS WHEREOF, the Sole Managing Member of the Company has approved the
amended and restated Plan as of the Effective Date and has caused the Plan to be
executed by its duly authorized representative effective as of the 1st day of
April, 2016.

 

 

CLOUD PEAK ENERGY RESOURCES LLC

 

 

 

 

 

By:

/s/ Cary W. Martin

 

Name:

Cary W. Martin

 

Title:

SVP – Human Resources

 

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