Exhibit 10.1

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) executed this 2nd day of April,
2012, is between Rhino GP LLC (“Employer”) and Christopher I. Walton
(“Employee”).

 

W I T N E S S E T H

 

WHEREAS Employee is currently employed by the Employer pursuant to an Employment
Agreement dated as of December 11, 2009.

 

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

 

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

 

1.                                      Prior Agreement; Assignment of Prior
Agreement; Terms and Duties.  This Agreement amends, restates and supercedes the
Prior Agreement.  Each of Employer and Employee acknowledge that the Prior
Agreement was assigned and Employee’s employment transferred from Sands Hill
Mining LLC to Rhino GP LLC on December 31, 2010 incident to the initial public
offering of units in Rhino Resource Partners LP (the “Partnership”).  Commencing
on the date hereof, the Employer shall employ the Employee as its Chief
Operating Officer until April 30, 2015, unless sooner terminated as herein
provided or extended by mutual agreement of the parties (the “Employment Term”),
or in such other position, or with such other duties, as Employer may designate
during the Employment Term.  In this capacity, Employee shall serve as the chief
operations officer of the Partnership’s subsidiaries in all regions and shall
report directly to Employer’s CEO.  Employee shall also serve as an officer of
those subsidiaries of the Partnership that the Employer determines.  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.

 

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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 Three Hundred Thousand Dollars ($300,000) per year, payable
periodically in accordance with Employer’s usual executive payroll payment
procedures. Employee is to receive increases of $15,000 per annum as of
April 1st of each successive year under this agreement.

 

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 2012 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 Employment Term shall be at or near the
Employer’s offices in 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.  Employee’s use of such vehicle 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.

 

6.                                      Travel; Expenses.  The Employee shall
engage in such travel as may reasonably

 

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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 and its affiliates (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 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.  It is recognized that the
Employee may be compelled to disclose confidential information through various
legal means, In which case,

 

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Employee shall promptly notify Employer of such requirement in order to allow
the Employeer to seek confidential treatment of this information.

 

(b)                                 The Employee agrees that during the
Employment Term (and for a period of twelve (12) months following Employee’s
voluntary resignation or termination with or without cause) the Employee will
not engage (whether as an officer, director, partner, proprietor, member,
shareholder, investor, associate, employee, consultant, adviser, public
relations or advertising representative or otherwise), directly or indirectly,
in the businesses of coal mining or coal marketing or in any hydrocarbon related
businesses which the Partnership and its subsidiaries may engage in the
following regions: Central Appalachia, Northern Appalachia, Illinois Basin,
Western Colorado, Utah and any other region in which the Employer, the
Partnership or any of their subsidiaries or affiliates conduct business. For
purposes of the preceding sentence, the Employee shall be deemed to be engaged
in any business with any person for whom he shall be an employee, officer,
director, owner, employer, consultant, shareholder, member or partner.  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 any of its direct or
indirect 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,

 

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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, 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 or
that was taken in connection with the Prior Agreement in the scope of Employee’s
employment for the Employer, 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

 

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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 over to future years if approved in writing by
Employer’s CEO.  Employer recognizes previously agreed carryover as specified in
previous agreement.

 

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.

 

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11.                               Termination for Cause, Employment at Will or
Voluntary Resignation by Employee.  If Employee shall:

 

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

 

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

 

(c)                                  be convicted of or plead guilty or nolo
contendere to any felony or to any misdemeanor involving financial dishonesty or
any other crime that would indicate that Employee is not capable of successfully
performing his obligations under this Agreement; or

 

(d)                                 fail or neglect to diligently perform his
duties hereunder as reasonably determined by Employer;

 

then, and in any such case, the Employer may terminate the employment of the
Employee “for cause” hereunder.  In the event of termination “for cause” or
voluntary resignation by Employee, the 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 twelve (12) months 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) twelve (12) months following such
termination other than “for cause,” or (y) the date Employee is covered under a
health insurance policy through a subsequent employer.

 

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

 

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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 nor any waiver of any rights hereunder
shall be made unless the terms of such amendment are in writing and-duly
executed by Employee and Employer’s CEO and such amendment specifically states
it is the intent to amend this Agreement.

 

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

 

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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.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURES APPEAR ON FOLLOWING PAGE]

 

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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. Zatazelo

 

 

 

David G. Zatezalo, CEO

 

 

 

EMPLOYEE:

 

 

 

 

 

    /s/ Christopher I. Walton

 

Christopher I. Walton

 

SIGNATURE PAGE TO CHRISTOPER I. WALTON EMPLOYMENT AGREEMENT

 

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