Exhibit 10.1

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) executed this
8th day of September, but intended to be effective as of the 31st day of August,
2011 is between Rhino GP LLC (“Employer”) and R. Chad Hunt (“Employee”).

 

W I T N E S S E T H

 

WHEREAS Employer desires to continue to employ Employee on the terms hereof, and
Employee desires to accept employment with Employer on such terms; and

 

In consideration of the mutual covenants herein contained, the parties agree as
follows:

 

1.                                      Prior Agreement; Terms and Duties.  This
Agreement amends, restates and supercedes that certain Employment Agreement
dated September 1, 2006, as amended by First, Second and Third Amendments to
Employment Agreement dated October 31st, 2006, March 18th, 2008, and April 26th,
2010, respectively, as well as by that certain Assignment Agreement and
Amendment to Employment Agreement dated August 26, 2008 (collectively, the
“Prior Agreement”).  The Prior Agreement was between Rhino Energy LLC (the
“Prior Employer”) and Employee.  Effective as of January 1, 2011, Employee’s
employment was transitioned from the Prior Employer to the Employer.  Each of
Employer, Employee and Prior Employer hereby acknowledge and agree that
Employee’s employment was transitioned to Employer effective January 1, 2011 and
Prior Employer is hereby released and discharged from all obligations under the
Prior Agreement, except for any such obligations which survive by their own
terms.

 

The Employer shall continue to employ Employee as its Vice President of
Technical Services, beginning on the date hereof and continuing until August 31,
2014, unless sooner terminated as herein provided or extended by mutual
agreement of the parties (the “Employment Term”), or in such other related
position, or with such other related duties, as Employer may

 

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reasonably designate during the Employment Term.  Employee shall also hold such
other offices with Employer’s direct and indirect subsidiaries as Employer may
direct from time to time.  In such capacities, the Employee shall report
directly to the Employer’s (i.e. Rhino GP LLC’s) CEO, President, or Chief
Operating Officer.  The Employee agrees to devote all of his business time and
his best efforts to the business of Employer as may be necessary to perform his
duties in accordance with the policies and budgets established from time to time
by Employer.  During the Employment Term, the Employee will not have any other
employment.  Employee shall be bound by, and agree to comply with, all policies,
procedures, and employment conditions of Employer in effect from time to time
applicable to its employees.

 

2.                                      Compensation.  For Employee’s services
hereunder during the Employment Term, Employer shall pay to Employee a salary at
the rate of $225,000 per year, payable periodically in accordance with
Employer’s usual executive payroll payment procedures.  Employee’s annual salary
shall be adjusted upward by an additional $10,000 on each September 1 of the
Employment Term, to begin September 1, 2012.

 

3.                                      Bonus & Equity Incentive Compensation. 
 Employee shall be eligible for an annual discretionary bonus of up to 40% of
Employee’s base salary.  Such bonus shall commence with a bonus for calendar
year 2011 and shall be determined and paid within 120 days of the end of each
calendar year of the Employment Term.  Employee shall also participate in any
equity incentive compensation (e.g. “phantom unit” grants) applicable to
Employer’s senior management group in such amounts, and on such terms, as
Employer’s CEO, acting in consultation with Employer’s Compensation Committee,
may decide in their sole and absolute discretion.

 

4.                                      Place of Employment. The Employee’s
regular place of employment during the

 

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Employment Term shall be at the Employer’s offices in or near Lexington,
Kentucky.

 

5.                                      Automobile.  Employer shall provide
Employee with the use of a 4-wheel drive vehicle suitable for the intended
duties of the Employee, which may be used for business and personal use. 
Employee’s use of such vehicle, including his personal use thereof, shall be
subject to Employer’s company vehicle policies, as they may be modified, amended
and supplemented at any time and from time to time and all applicable federal
income tax, regulations and guidelines.  Employee acknowledges and understands
that his personal use of the company vehicle will result in federal income tax
implications which shall be his responsibility, and not the Employer’s.

 

6.                                      Travel; Expenses.  The Employee shall
engage in such travel as may reasonably be required in connection with the
performance of his duties. All reasonable travel and other expenses incurred by
the Employee (in accordance with the policies and the budget of the Employer
established from time to time) in carrying out his duties hereunder will be
reimbursed by the Employer on presentation to it of expense accounts and
appropriate documentation in accordance with the customary procedures of the
Employer for reimbursement of employee expenses.

 

7.                                      Confidentiality; Competition.

 

a.                                       The Employer possesses and will
continue to possess confidential information to which the Employee may gain
access.  For the purposes hereof, all non-public information about the business
and affairs of the Employer (including, without limitation, business plans, real
and personal property leases, financial, engineering and marketing information
and information about costs, mining and processing methods, suppliers and
customers, including such information created by Employee and confidential
information of

 

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others obtained by Employer pursuant to confidentiality agreements) constitute
“Employer Confidential Information.” Employee acknowledges that he will have
access to and knowledge of Employer Confidential Information, and that improper
use or disclosure of same by the Employee during or after the Employment Term
could cause serious injury to the business of the Employer.  Accordingly, the
Employee agrees that he will forever keep secret and inviolate all Employer
Confidential Information which comes into his possession, and that he will not
use the same for his own private benefit, or directly or indirectly for the
benefit of others, and that he will not disclose such Employer Confidential
Information to any other person except as necessary in the proper pursuance of
his duties.  All of the foregoing shall not prohibit Employee from disclosing
Confidential Information if required by law, regulation or other legal process. 
In the case of any such compelled disclosure, Employee shall promptly notify
Employer of such requirement in order that Employer may seek confidential
treatment of the Confidential Information.

 

b.                                      The Employee agrees that during the
Employment Term (and for a period of one (1) year following the termination of
this Agreement for any reason with the sole exception of Employee’s resignation
for “Good Reason,” as that term is defined in Paragraph 11 below) the Employee
shall not, without the prior written consent of the Employer, participate or
engage in, directly or indirectly (as an owner, partner, employee, officer,
director, independent contractor, consultant, advisor or in any other capacity
calling for the rendition of services, advice, or acts of management, operation
or control) any business for an individual or entity whose principal business
involves coal mining or coal marketing in the following regions: Central
Appalachia, Northern Appalachia, Illinois Basin, Western Colorado, Utah and any
other region in which the Employer or any of the Employer’s subsidiaries or
affiliates conduct

 

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business.  During such period of non-competition, and for a period of six
(6) months thereafter, Employee shall not directly or indirectly solicit,
interview or make any decision or recommendation to hire or to retain as a
consultant or advisor or in any other capacity, any current employee of Employer
or its subsidiaries or affiliates, for himself, or for or to, any other person
or entity.  Employee shall notify any subsequent employer of Employee of the
foregoing agreement

 

c.                                       The terms of this Agreement are
intended to limit disclosure and competition by the Employee to the maximum
extent permitted by law. If it shall be finally determined by any court of
competent jurisdiction ruling on this Agreement that the scope or duration of
any limitation contained in this paragraph 7 is too extensive to be legally
enforceable, then the parties hereby agree that the scope and duration (not
greater than that provided for herein) of such limitation shall be the maximum
scope and duration which shall be legally enforceable and the Employee hereby
consents to the enforcement of such limitation as so modified.

 

d.                                      The Employee acknowledges that any
violation by him of the provisions of this paragraph 7 could cause serious and
irreparable harm and damage to the Employer.  He further acknowledges that it
might not be possible to measure such damages in money and that Employer’s
remedy at law for a breach or threatened reach of the provisions of paragraph 7
would be inadequate. Accordingly, the Employee agrees that, in the event of a
breach or threatened breach by him of the provisions of this paragraph 7, the
Employer may seek, in addition to any other rights or remedies, including money
damages, an injunction or restraining order, restraining the Employee from doing
or continuing to do or perform any acts constituting such breach or threatened
breach. In the event Employer seeks an injunction or restraining order,

 

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Employee and Employer agree that Employer shall not be required to post a bond
to obtain the necessary equitable relief.

 

8.                                      Indemnification.  Subject to the
Company’s limited liability company agreement (or the corresponding charter
documents of a successor employer as contemplated by Paragraph 12 below),
Employer shall indemnify and hold harmless Employee from and against any loss,
cost, damage, expense, or liability incurred by Employee for any action taken in
the scope of Employee’s employment for the Employer or for any action that was
previously taken in the scope of Employee’s employment for the Prior Employer or
one of its subsidiaries, provided such action (i) is within the scope, duties,
and authority of Employee, (ii) is not in willful violation of any law,
regulation, or code of conduct adopted by the Employer, and (iii) does not
constitute gross negligence or intentional misconduct by Employee, as finally
determined by a court of competent jurisdiction.  The obligations of the
Employer under this Section 8 shall survive the termination of this Agreement. 
If there is any conflict between this Section 8 and the Company’s limited
liability company agreement (or the corresponding charter documents of a
successor employer as contemplated by Paragraph 12 below), the Company’s limited
liability company agreement shall control, provided however, that no revision to
the Company’s limited liability company agreement may effect any diminishment to
the Company’s indemnification obligations hereunder as they exist on the date
hereof.

 

9.                                      Benefits; Vacation. The Employer agrees
to provide to the Employee the benefits available to all salaried employees
generally, as modified from time to time.  Employee shall be entitled to three
(3) weeks of vacation per year, plus any additional “personal” or “extra
vacation” days off that are awarded to employees pursuant to Employer’s
personnel policies, as they may be amended from time to time.  Unused vacation
and additional time off may carry

 

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over to future years if approved in writing by Employee’s supervisor.

 

10.                               Employee’s Representation Regarding Prior and
Future Employment.  Employee hereby represents to the Employer that he has full
lawful right and power to enter into this Agreement and carry out his duties
hereunder, and that same will not constitute a breach of or default under any
employment, confidentiality, non-competition or other agreement by which he may
be bound. Further, Employee hereby represents to the Employer that he is not
listed in the Office of Surface Mining’s Applicant Violator System database. 
Employee further agrees to provide prompt notice to Employer of Employee’s first
subsequent employment after ceasing to be an employee of Employer.

 

11.                               Termination for Cause, Voluntary Resignation
or Termination for Good Reason or Following a Change in Control by Employee;
Termination Upon Death or Disability.

 

If Employee shall:

 

a.                                       commit an act of dishonesty against the
Employer or fraud upon the Employer; or

 

b.                                      materially breach his obligations under
this Agreement and fail to cure such breach within five (5) business days after
written notice thereof, or

 

c.                                       be convicted of, or make a plea of
guilty or no contest to (A) a felony or (B) a misdemeanor involving dishonesty,
fraud or any other crime that would reflect negatively on the Employer or the
Employee’s ability to successfully perform his duties hereunder; or

 

d.                                      materially fail or neglect to diligently
perform his duties hereunder and fail to cure such breach within five
(5) business days after written notice thereof;

 

then, and in any such case, the Employer may terminate the employment of the
Employee and this termination shall constitute a termination and is defined to
be a termination “For Cause” hereunder.  In the event of termination “For Cause”
or voluntary resignation by Employee, the

 

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Employee shall no longer have any right to any of the benefits (including future
salary or bonus payments) which would otherwise have accrued or been payable
after such termination.  However, in the event of a termination by Employer of
the employment of the Employee other than “For Cause,” the Employer shall
(i) pay to the Employee a severance payment equal to one (1) year of Employee’s
base salary then in effect, plus (ii) continue Employee’s family health
insurance coverage under Employer’s group plan, at the same premium cost to
Employee as was in effect on the date of termination, until the earlier of
(x) one (1) year following such termination other than “For Cause,” or (y) the
date Employee is covered under a health insurance policy through a subsequent
employer.

 

Employee may also terminate this agreement for “Good Reason” (as that term is
defined below) and, in the case of such a termination, the Employee shall be
entitled to all of the severance benefits as if such termination had been other
than For Cause, as set forth above. “Good Reason” for termination by Employee of
Employee’s employment means the occurrence (without Employee’s express written
consent) of any one of the following acts by the Employer or failures by the
Employer to act:

 

a)              the assignment to Employee of any duties inconsistent in any
material respect with those of the office to which Employee is assigned pursuant
to Paragraph 2 hereof (including status, office, title and reporting
requirements), or any other diminution in any material respect in such position,
authority, duties or responsibilities unless agreed to by Employee;

 

b)             a reduction in Executive’s base salary;

 

c)              a reduction in Employee’s welfare benefits plans, qualified
retirement plan, or paid time off benefit, other than a reduction as a result of
a general change in any such plan; or

 

d)             any purported termination of Employee’s employment under this
Agreement by the Employer other than For Cause, death or Disability.

 

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Prior to Employee’s right to terminate this Agreement, he shall give written
notice to the Employer of his intention to terminate his employment on account
of Good Reason.  Such notice shall state in detail the particular act or acts of
the failure or failures to act that constitute the grounds on which Employee’s
Good Reason termination is based and such notice shall be given within six
(6) months of the occurrence of the act or acts or the failure or failures to
act which constitute the grounds for Good Reason.  The Employer shall have
thirty (30) days upon receipt of the notice in which to cure such conduct, to
the extent such cure is possible and reasonable.

 

Employee shall also have the right to terminate this Agreement if substantially
all of the Employer’s assets or 50% of its voting membership units are sold to
one or more entities that are not a subsidiaries or affiliates of the Employer,
Wexford Capital LP or any investment fund managed by Wexford Capital LP.  Such a
sale shall include a merger, consolidation, sale of assets or membership units
or other corporate reorganization.  Such a termination by Employee shall be a
termination for and is defined to be a termination upon a “Change in Control”
and the non-competition provisions set forth in Paragraph 7(b) shall not apply
but Employee shall not be entitled to the severance payment and related benefits
set out in Subsections (i) and (ii) of this Section above.

 

This Agreement shall also terminate by its own terms in the event of Employee’s
death or Disability (as defined below).  “Disability” means the inability of
Employee to perform his normal duties as a result of any physical or mental
injury or ailment for (i) any consecutive forty five (45) day period or (ii) any
ninety (90) days (whether or not consecutive) during any consecutive three
hundred sixty five (365) day period.  In the event of the termination of this
Agreement due to death or Disability, then Employee shall be entitled to all
base salary earned but upaid up until the date of termination as well as all
other earned but unpaid compensation up

 

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to the date of termination as well as all other benefits payable upon death or
disability according to the Employer’s benefit plans, including its long term
incentive plan.

 

12.                               Successors.  The rights, benefits, duties and
obligations under this Agreement shall inure to and be binding upon the
Employer, its successors and assigns and upon the Employee and his legal
representatives, legatees and heirs. It is specifically understood, however,
that this Agreement may not be transferred or assigned by the Employee. The
Employer may assign any of its rights and obligations hereunder to any
subsidiary or affiliate of the Employer, or to a successor or survivor resulting
from a merger, consolidation, sale of assets or stock or other corporate
reorganization, on condition that the assignee shall assume all of the
Employer’s obligations hereunder and it is agreed that such successor or
surviving corporation shall continue to be obligated to perform the provisions
of this Agreement.

 

13.                               Waiver of Breach.  The failure of either party
to insist upon the strict performance of any of the terms, conditions, and
provisions of this Agreement shall not be construed as a waiver or
relinquishment of future compliance therewith, and said terms, conditions, and
provisions shall remain in full force and effect. No waiver of any term or
condition of this Agreement on the part of the Employer shall be effective for
any purposes whatsoever unless such waiver is in writing by Employer’s CEO.

 

14.                               Amendments.  No amendment or variation of the
terms and conditions of this Agreement or a waiver of any right or a breach
hereunder shall be made unless the terms of such amendment, variation or waiver
are in a writing, which explicitly states that it is intended to amend, vary or
waive a right or a breach hereunder and duly executed by Employee and Employer’s
CEO.

 

15.                               Entire Agreement; Survival.  This Agreement
constitutes the complete and

 

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entire agreement governing the terms and conditions of the employment
relationship between the parties and supersedes any and all prior agreements or
understandings. Both Employee and Employer acknowledge and agree that there are
no oral or written understandings concerning the Employee’s employment by
Employer outside of this Agreement.  The terms of this Agreement shall survive
the termination or expiration of this Agreement and the conclusion of the
Employment Term.

 

16.                               Governing Law.  This Agreement shall be
construed and enforced pursuant to the laws of the Commonwealth of Kentucky,
including matters of law relating to the choice of law.  Employee hereby
consents to the jurisdiction of the courts of the Commonwealth of Kentucky,
including the Fayette County, Kentucky Circuit Court and hereby waives any
objection to venue of any action brought in said court.

 

17.                               Counterparts.  This Agreement, as executed
separately by the individual parties, shall be deemed to be an original, but all
of which together shall constitute one document.

 

18.                               Confidential Terms.  Employee agrees to
maintain as confidential the terms and conditions of this Agreement, provided
however Employee may disclose the terms of this agreement to his legal counsel,
and accountant or tax preparer, or as may be otherwise required by law.

 

19.                               JURY TRIAL WAIVER.  EMPLOYEE HEREBY
VOLUNTARILY AND IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY WITH REGARD TO
ANY ACTION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE EMPLOYMENT
OF THE EMPLOYEE BY THE EMPLOYER.

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.

 

 

 

EMPLOYER:

 

 

 

 

RHINO GP LLC

 

 

 

 

 

 

By:

/s/ David G. Zatezalo

 

 

David G. Zatezalo, President & CEO

 

 

 

 

PRIOR EMPLOYER:

 

(Joining Solely for Purposes of Paragraph 1)

 

 

 

 

RHINO ENERGY LLC

 

 

 

 

 

 

 

By:

/s/ David G. Zatezalo

 

 

David G. Zatezalo, President & CEO

 

 

 

 

EMPLOYEE:

 

 

 

 

 

 

 

/s/ R Chad Hunt

 

R. Chad Hunt

 

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