Exhibit 10.3

 

Execution Version

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made
effective as of October 24, 2019 (the “Effective Date”) by and among Cloud Peak
Energy Inc., a Delaware corporation (the “Company”) and Heath Hill (the
“Executive”).

 

RECITALS

 

WHEREAS, the Company and the Executive previously entered into that certain
Employment Agreement dated March 16, 2015 (the “Original Agreement”); and

 

WHEREAS, in connection with the sale of certain of the Company’s operating
assets to Navajo Transitional Energy Company, LLC (“NTEC”) pursuant to that
Asset Purchase Agreement between the Company and NTEC dated as of August 19,
2019, as amended (the “Sale”) and the Company’s bankruptcy filing pursuant to
chapter 11 of title 11 of the United States Code (the “Bankruptcy”), the Company
and the Executive desire to amend and restate the Original Agreement as set
forth below, replacing the Original Agreement in its entirety.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other valid consideration the sufficiency of which is acknowledged, the parties
hereto agree as follows:

 

Section 1.                                           Employment.

 

1.1.                            Term.  The “Term” of this Agreement shall be for
a period commencing on the closing date of the Sale, and ending on the earlier
of (i) December 31, 2019 and (ii) the date that the Company’s Joint Chapter 11
Plan of Cloud Peak Energy Inc. and Certain of its Debtor Affiliates (including
all exhibits and schedules attached thereto, the “Plan”) becomes effective.  The
Term shall terminate automatically without any action on the part of either the
Company or the Executive.

 

1.2.                            Title; Duties; Place of Performance.  During the
Term, the Executive shall serve as Executive Vice President and Chief Financial
Officer of the Company and, if needed, as a member of the board of directors of
the Company (the “Board”).  In such positions, the Executive shall have during
the Term such authority, duties, functions and responsibilities as are typically
accorded to and consistent with the Executive’s position as Executive Vice
President and Chief Financial Officer and will be responsible for overseeing the
management of the Estates (as defined within the Plan) throughout the Term.  The
Executive’s principal places of employment during the Term shall be in the
Denver, Colorado region; provided, however, that the Executive may provide
services remotely as and when appropriate.

 

1.3.                            Non-Exclusivity.  During the Term, the Executive
shall devote appropriate time and attention during normal business hours to the
business and affairs of the Company, and shall conform to and comply with the
lawful and reasonable directions and instructions given to him by the Board,
consistent with Section 1.2 above; provided, however, that the Company and the
Executive have agreed that the Executive may engage in personal or business
activities outside of the Company, including, without limitation, accepting or
beginning full-time employment with a third party employer during the Term.

 

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Section 2.                                           Compensation.

 

2.1.                            Service Payment.  For providing services to the
Company following the Sale, the Executive shall receive a lump sum cash payment
in the amount of $77,463.77  (the “Service Payment”). The Service Payment will
be paid to the Executive as soon as practicable following the beginning of the
Term, but in no event later than thirty (30) days following the beginning of the
Term.

 

2.2.                            Employee Benefits.

 

(i)                                     Company Benefits.  In connection with
the Sale, the Company shall terminate, cancel or otherwise cease to maintain any
employee benefit plans, arrangements or policies (including any policy regarding
vacation or paid time-off), and the Executive acknowledges that during the Term
he shall not participate in any Company benefit arrangements (including, without
limitation, vacation benefits) or receive benefits from the Company other than
specifically provided pursuant to this Agreement.

 

(ii)                                  COBRA Rights Pursuant to NTEC Plan.  In
connection with the Sale, the Company shall cease to sponsor any medical, dental
or vision benefits plans, and any such plans that were sponsored by the Company
prior to the Sale (the “CPE Plans”) shall be adopted by NTEC (the “NTEC
Plans”).  Provided that the Executive makes the proper elections, the Executive
shall be eligible to receive benefits under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”) pursuant to the NTEC Plans or
law during and following the Term.

 

Section 3.                                           Unauthorized Disclosure. 
The Executive agrees and understands that in the Executive’s position with the
Company, the Executive has been and may be exposed to, and has and may receive
information relating to, the confidential affairs of the Company and its
affiliates (collectively, the “Confidential Information”).  The Executive agrees
that at all times during the Executive’s employment with the Company and
thereafter, the Executive shall not disclose, communicate, or furnish to any
other person any information that the Company and its affiliates have identified
to the Executive in writing as confidential or proprietary information or that,
even without such identification, the Executive knows or should know to be
confidential or proprietary information except for Permitted Disclosures (as
defined below).  This confidentiality covenant has no temporal, geographical or
territorial restriction.  Upon termination of the Executive’s employment with
the Company, the Executive shall promptly supply to the Company all property
including computers, keys, notes, memoranda, writings, lists, files, reports,
customer lists, correspondence, tapes, disks, cards, surveys, maps, logs,
machines, technical data and any other tangible product or document which has
been produced by, received by or otherwise submitted to the Executive during or
prior to the Executive’s employment with the Company, and any copies thereof in
his (or capable of being reduced to his) possession.  “Permitted Disclosure”
means the disclosure of confidential or proprietary information that (i) is made
with the prior written consent of the Company, (ii) is required to be disclosed
by law or legal process, or (iii) is made in the course of the Executive’s
employment with the Company, but only to the extent the Executive

 

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reasonably deemed such disclosure necessary or appropriate to perform the
Executive’s responsibilities on behalf of the Company or otherwise advance the
interests of the Company.

 

Section 4.                                           Company Acknowledgements
Regarding Retention Bonuses.  The Company and the Executive previously entered
into that certain Executive Retention Agreement dated January 29, 2019 (the
“Retention Agreement”).  The Company acknowledges that the Executive has fully
satisfied all requirements to retain the “Retention Bonus” (as defined in the
Retention Agreement) previously paid to the Executive pursuant to the Retention
Agreement, and such Retention Bonus is no longer subject to the clawback
provisions of Section 3 of the Retention Agreement.

 

Section 5.                                           D&O Insurance.  The Company
will provide directors and officers insurance coverage and a supporting tail
policy during the Term in a coverage amount reasonably acceptable to the
Executive. The cost of such coverage and tail policy shall be paid by the
Company.

 

Section 6.                                           Withholding; Taxes.  All
amounts paid to the Executive under this Agreement during or following the Term
shall be subject to any required withholding and other employment taxes imposed
by applicable law.

 

Section 7.                                           Miscellaneous.

 

7.1.                            Amendments and Waivers.  This Agreement and any
of the provisions hereof may be amended, waived (either generally or in a
particular instance and either retroactively or prospectively), modified or
supplemented, in whole or in part, only by written agreement signed by the
parties hereto.

 

7.2.                            Assignment; No Third-Party Beneficiaries.  This
Agreement, and the Executive’s rights and obligations hereunder, may not be
assigned by the Executive or the Company, and any purported assignment by the
Executive or the Company shall be null and void; provided, however, the Company
is authorized to assign this Agreement to a successor to substantially all of
its assets by merger or otherwise.

 

7.3.                            Notices.  Unless otherwise provided herein, all
notices, requests, demands, claims and other communications provided for under
the terms of this Agreement shall be in writing.  Any notice, request, demand,
claim or other communication hereunder shall be sent by (i) personal delivery
(including receipted courier service) or overnight delivery service,
(ii) facsimile during normal business hours, with confirmation of receipt, to
the number indicated, (iii) reputable commercial overnight delivery service
courier or (iv) registered or certified mail, return receipt requested, postage
prepaid and addressed to the intended recipient as set forth below:

 

(a)                                 If to the Executive, to the most recent home
address that the Company maintains in its records for the Executive.

 

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(b)                                 If to the Company, to:

 

Cloud Peak Energy Inc.
Attention:  Alan Boyko
999 17th Street, Suite 700

Denver, CO 80202

Facsimile: (303) 689-8803
Telephone: (303) 689-8892

 

All such notices, requests, consents and other communications shall be deemed to
have been given when received.  Any party may change its facsimile number or its
address to which notices, requests, demands, claims and other communications
hereunder are to be delivered by giving the other parties hereto notice in the
manner then set forth.

 

7.4.                            Governing Law.  This Agreement shall be
construed and enforced in accordance with, and the rights and obligations of the
parties hereto shall be governed by, the laws of the state of Colorado, without
giving effect to the conflicts of law principles thereof.

 

7.5.                            Severability.  Whenever possible, each provision
or portion of any provision of this Agreement will be interpreted in such manner
as to be effective and valid under applicable law but the invalidity or
unenforceability of any provision or portion of any provision of this Agreement
in any jurisdiction shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of this Agreement, including that provision or portion of any
provision, in any other jurisdiction.  In addition, should a court or arbitrator
determine that any provision or portion of any provision of this Agreement is
not reasonable or valid, either in period of time, geographical area, or
otherwise, the parties hereto agree that such provision should be interpreted
and enforced to the maximum extent which such court or arbitrator deems
reasonable or valid.

 

7.6.                            Entire Agreement.  This Agreement constitutes
the entire agreement between the parties and supersedes all prior
representations, agreements and understandings (including any prior course of
dealings), both written and oral, between the parties with respect to the
subject matter hereof; including, without limitation, the Original Agreement.

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.

 

 

 

CLOUD PEAK ENERGY INC.

 

 

 

 

 

 

 

 

/s/ Heath Hill

 

By:

/s/ Colin Marshall

Heath Hill

 

 

Colin Marshall

 

 

 

 

 

 

 

President, Chief Executive Officer and Director

 

 

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