Exhibit 10.11


 




 





EMPLOYMENT AGREEMENT


 


by and among


 


RHINO RESOURCES, INC.


 


HOPEDALE MINING LLC


 


and


 


DAVID ZATEZALO




 





 


Effective Date:                    ,
2008


 

















 


DAVID ZATEZALO


EMPLOYMENT AGREEMENT


 


THIS
EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into effective as of the
        th day of                           ,
2008 (the “Effective Date”), by and among (i) Rhino Resources, Inc.,
a Delaware corporation (the “Company”), (iii) Hopedale Mining LLC,
a Delaware limited liability company (“Hopedale”), and (iii) David Zatezalo (“Executive”)
and joined in by Rhino GP, LLC, a Delaware limited liability company (“Rhino GP”)
for the sole purpose set forth in the last sentence of Paragraph 1 hereof.


 


Recitals:


 


Executive
is currently employed by Hopedale pursuant to an Amended and Restated
Employment Agreement dated April 3, 2007 among Rhino, Hopedale and
Executive (the “Prior Agreement”). 
Hopedale and the Company seek to continue the Executive’s employment
with Hopedale until the completion of an initial public offering of common
stock of the Company (the “Offering”), upon the completion of which the Company
will indirectly own all of the interests in Hopedale, and thereafter to
transfer the Executive’s employment from Hopedale to the Company such that upon
the completion of the Offering the Executive will serve as an employee of the
Company.  For purposes of this Agreement,
the term “Employer” shall mean the entity (Hopedale or Company) employing
Executive at the applicable time.


 


The
Company and Hopedale desire to enter into this Agreement in order to amend and
restate the terms of Executive’s employment. 
Executive desires to enter into this Agreement, and to accept employment
by Employer on the terms hereinafter set forth in this Agreement.


 


Agreement:


 


NOW,
THEREFORE, in consideration of the premises and mutual covenants herein and for
other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:


 


1.                                       Term of Employment. 
Unless terminated earlier in accordance with the provisions of Section 7,
Executive’s employment under this Agreement shall be effective for a term
commencing on the Effective Date and ending on May 31, 2011 (the “Employment
Term”).  From the Effective Date until
the closing of the Offering, should it occur, Executive shall be employed by
Hopedale.  Upon the closing of the
Offering, Executive shall become an employee of the Company; provided, however,
that any obligations or references specifically applicable to Hopedale (as
opposed to Employer) shall remain in effect. 
Upon the parties’ execution and delivery of this Agreement, the Prior
Agreement shall be deemed voided by this Agreement is hereby declared null and
void, ab initio.


 


2.                                       Position and Duties.  As of
the Effective Date, Executive shall serve as the Chief Operating Officer of the
Company and Hopedale.  In such positions,
Executive shall report directly to the CEO of Hopedale and, upon the completion
of the Offering, to the CEO of the


 


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Company.
Executive shall have the customary authority, responsibilities and duties of
such position(s), subject to the direction and definition of such authority,
responsibilities, and duties from time to time by Employer.  During the Employment Term, Executive will
devote all of his business time and efforts to the performance of his duties
hereunder.    Executive shall be subject
to all of the employment and personnel policies and procedures in effect from
time to time and applicable to executive employees of the Employer.  Executive’s regular place of employment
during the Employment Term shall be at the Employer’s executive offices in
Lexington, Fayette County, Kentucky, and Executive shall engage in such travel
as may be reasonably required in connection with the performance of his duties
hereunder.


 


3.                                       Base Salary.  The
Employer shall pay Executive a base salary (the “Base Salary”) at the annual
rate of $325,000 per year, subject to annual review for possible increase,
payable in regular installments in accordance with the usual executive payroll
practices of Employer.


 


4.                                       Incentive Compensation. 
Executive shall be permitted to participate in any annual or long-term,
cash or equity based, incentive plan or other similar arrangements of the
Employer, as they may exist from time-to-time, for which Executive is eligible
pursuant to the terms of such plan or arrangement, provided that the specific
grant to Executive under any such plan or arrangement shall be in Employer’s
sole discretion.


 


5.                                       Discretionary Bonus.  The
Employer may consider and approve in its sole discretion an annual
performance-based discretionary bonus (“Discretionary Bonus”) for Executive of
up to forty percent (40%) of Executive’s Base Salary.  The Discretionary Bonus will be calculated on
a full calendar year basis for 2008, 2009 and 2010.  The Discretionary Bonus for the period January 1,
2011 through the end of the Employment Term will be pro-rated for the partial
year.


 


6.                                       Other Benefits.


 


(a)                                  Retirement Benefits. 
During the Employment Term, Executive shall be provided with the
opportunity to participate in the Employer’s qualified 401(k) profit
sharing plan and non-qualified deferred compensation plan (if any), as they may
exist from time to time, in each case, in accordance with the terms of such
plans.


 


(b)                                 Welfare Benefits; Vacation. 
During the Employment Term, Executive shall be provided with the
opportunity to participate in the Employer’s medical plan and other employee
welfare benefits on a comparable basis as such benefits are generally provided
by the Employer from time to time to Employer’s other executives, in each case,
in accordance with the terms of such plans; provided, however, the premiums for
all such plans shall be paid by the Employer. 
Executive shall be entitled to three (3) weeks of paid vacation
each year during the Employment Term.


 


(c)                                  Indemnification. 
Subject to the Company’s bylaws, the Employer shall indemnify and hold
harmless Executive from and against any loss, cost, damage, expense, or
liability incurred by Executive for any action taken by Executive in the scope
of Executive’s employment for the Employer, provided such action (i) is
within the scope, duties, and authority of Executive, (ii) is not in
willful violation of any law, regulation, or code of conduct adopted by


 


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the
Employer, and (iii) does not constitute gross negligence or intentional
misconduct by Executive.  The obligations
of Employer under this Section 6(c) shall survive the termination of
this Agreement.  If there is any conflict
between this Section 6(c) and the Company’s bylaws, the Company’s
bylaws shall control.


 


(d)                                 Reimbursement of Business Expenses. 
During the Employment Term, all reasonable business expenses incurred by
Executive in the performance of his duties hereunder shall be reimbursed by the
Employer upon receipt of documentation of such expenses in a form reasonably
acceptable to the Employer, and otherwise in accordance with the Employer’s
expense reimbursement policies.  Any
reimbursement of any costs and expenses by the Employer to Executive under this
Agreement shall be made by the Employer in no event later than the close of
Executive’s taxable year following the taxable year in which the cost or
expense is incurred by Executive.  The
expenses incurred by Executive in any calendar year that are eligible for
reimbursement under this Agreement shall not affect the expenses incurred by
Executive in any other calendar year that are eligible for reimbursement
hereunder and Executive’s right to receive any reimbursement hereunder shall
not be subject to liquidation or exchange for any other benefit.


 


(e)                                  Vehicle Employer shall provide Executive with
the use of a 4-wheel drive vehicle suitable for the intended duties of the
Executive.


 


(f)                                    Benefits.  To the extent the Company does
not have employee benefits or benefit plans called for or referred to under
this Agreement, and such benefits are available to employees of Hopedale, at
the election of the Company, (i) to the extent legally permitted,
Executive shall have the right to participate in any employee benefits or
benefit plans maintained by Hopedale to the extent he would have been entitled
as an employee of Hopedale, or (ii) the Company shall (x) provide
Executive with reasonably equivalent benefits or (y) pay Executive the
average cost per employee that Hopedale pays to enable Hopedale’s employees to
participate in such plans.


 


7.                                       Termination. 
Notwithstanding any other provision of this Agreement:


 


(a)                                  For Cause by the Employer or Voluntary
Resignation by Executive Without Good Reason.  If Executive is terminated by
the Employer for Cause (as defined in Section 12(c)) or if Executive
voluntarily resigns without Good Reason (as defined in Section 12(i)),
Executive shall be entitled to receive as soon as reasonably practicable after
his date of termination or such earlier time as may be required by applicable
statute or regulation: (i) any earned but unpaid Base Salary through the
date of termination; (ii) payment in respect of any vacation days accrued
but unused through the date of termination; and (iii) reimbursement for
all business expenses properly incurred in accordance with the Employer’s
policy prior to the date of termination and not yet reimbursed by the Employer
(the aggregate benefits payable pursuant to clauses (i), (ii), and (iii) hereafter
referred to as the “Accrued Obligations”); and except as provided herein
Executive shall have no further rights to any compensation (including any Base
Salary or bonus, if any) or any other benefits under this Agreement.


 


(b)                                 Without Cause by the Employer or Voluntary
Resignation by Executive for Good Reason.  If Executive is terminated by
the Employer other than for Cause, Disability


 


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(as
defined in Section 12(f)) or death, or if Executive voluntarily resigns
for Good Reason, Executive shall receive: 
(i) the Accrued Obligations; and (ii) subject to Section 7(f) and
Section 7(h), Base Salary for a period of twelve (12) months from the
termination of employment, payable in a lump sum as provided in Section 7(f).  Except as provided herein, Executive shall
have no further rights to any compensation (including any Base Salary or bonus,
if any) or any other benefits under this Agreement.


 


(c)                                  Death.  Following termination of
employment for death, Executive’s estate shall be entitled to receive the
Accrued Obligations as well a pro-rated annual discretionary bonus as awarded
by Employer.  Except as provided herein,
Executive’s estate shall have no further rights to any other compensation or
any other benefits under this Agreement.


 


(d)                                 Disability.  Following termination of
employment for Disability, Executive shall be entitled to receive the Accrued
Obligations.  Except as provided herein,
Executive shall have no further rights to any compensation (including any Base
Salary) or any other benefits under this Agreement.


 


(e)                                  Accrued & Vested Benefits.  Upon
any termination of Executive’s employment, whether by Executive or Employer,
Executive shall be entitled, in addition to any other benefits that may be
payable hereunder, to all benefits accrued and vested as of the date of such
termination, due to Executive under any plan, policy or practice of Employer
(such as, for example, accrued health benefits or reimbursements)
(collectively, “Accrued and Vested Benefits”).


 


(f)                                    Release Etc. 
Notwithstanding any other provision of this Agreement to the contrary,
Executive acknowledges and agrees that any and all payments to which Executive
is entitled under this Section 7 which are described as being subject to
this Section 7(f) are conditioned upon and subject to (i) Executive’s
execution of an agreement in such reasonable and customary form as shall be
prepared by the Employer reaffirming Executive’s obligations under Section 8
hereof, and (ii) Executive’s execution of, and not having revoked within
any applicable revocation period, a general release and waiver, in such
reasonable and customary form as shall be prepared by the Employer, of all
claims Executive may have against the Employer and its directors, officers,
subsidiaries and affiliates, except as to (x) matters covered by
provisions of this Agreement that expressly survive the termination of this
Agreement or are covered by the grant referred to in Section 9 hereof, and
(y) any Accrued and Vested Benefits to which Executive may be
entitled.  Unless such release becomes
irrevocable within 55 days of Executive’s termination of employment, Executive
shall not be entitled to any severance benefits that are described as being
subject to this Section 7(f).  If
the release has become irrevocable within such 55-day period, the Employer
shall pay such severance benefits to Executive within 60 days of his termination
of employment.


 


(g)                                 Resignation.  Upon
Executive’s termination of employment for any reason, Executive shall be deemed
to have immediately resigned from all offices with the Employer and any of the
Employer’s subsidiaries or affiliates and shall, immediately upon the request
of the Employer, confirm such resignations in writing.


 


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(h)                                 Section 409A Delay in Payment. 
Notwithstanding anything in this Agreement to the contrary, if at the
time of Executive’s termination of employment with the Employer, Executive is a
“specified employee,” as defined in Section 409A of the Code, and the
deferral of the commencement of any severance benefits otherwise payable under
this Agreement as a result of such termination of employment is necessary in
order to avoid the additional tax under Section 409A of the Code, then the
Employer will defer the payment of any such severance payments until the date
that is six months following Executive’s termination of employment with the
Employer (or the earliest date as is permitted under Section 409A of the
Code).  Any payment deferred pursuant to
this Section 7(h) will be accumulated and paid to Executive (without
interest) in a lump sum.


 


(i)                                     Termination of Employment.  For
purposes of this Agreement, a termination of Executive’s employment means a “separation
from service” for purposes of Section 409A of the Code and the applicable
Treasury regulations thereunder.


 


8.                                       Covenants.


 


(a)                                  Confidentiality. 
Executive agrees that Executive will not at any time during Executive’s
employment with the Employer or thereafter, except in performance of Executive’s
duties for and obligations to the Employer hereunder, use or disclose, either
directly or indirectly, any Confidential Information (as hereinafter defined)
of the Employer or its subsidiaries or affiliates that Executive may learn by
reason of his association with the Employer. 
The term “Confidential Information” shall mean any past, present, or
future confidential or sensitive plans, programs, documents, agreements,
internal management reports, financial information, or other material relating
to the business, strategies, services, or activities of the Employer,
including, without limitation, information with respect to the Employer’s
operations, processes, products, inventions, business practices, finances,
principals, vendors, suppliers, customers, potential customers, marketing
methods, costs, prices, contractual relationships, including leases, regulatory
status, compensation paid to employees, or other terms of employment, and trade
secrets, market reports, customer investigations, customer lists, and other
similar information that is proprietary information of the Employer or its
subsidiaries or affiliates; provided, however, the term “Confidential
Information” shall not include any of the above forms of information which has
become public knowledge, unless such Confidential Information became public
knowledge due to an act or acts by Executive or his representative(s) in
violation of this Agreement. 
Notwithstanding the foregoing, Executive may disclose such Confidential
Information when required to do so by a court of competent jurisdiction, by any
governmental agency having supervisory authority over the business of the
Employer or its subsidiaries or affiliates, as the case may be, or by any
administrative body or legislative body (including a committee thereof) with
jurisdiction to order Executive to divulge, disclose or make accessible such
information; provided, further, that in the event that Executive is ordered by
any such court or other government agency, administrative body, or legislative
body to disclose any Confidential Information, Executive shall (i) promptly
notify the Employer of such order, (ii) at the reasonable written request
of the Employer, diligently contest such order at the sole expense of the
Employer as expenses occur or at the election of Employer, cooperate with
Employer’s effort to contest such order, and (iii) at the reasonable
written request of the Employer, seek to obtain, at the sole expense of the
Employer, such confidential treatment as may be available


 


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under
applicable laws for any information disclosed under such order or at the
election of Employer, cooperate with Employer’s effort to obtain such
confidential treatment.


 


(b)                                 Non-Compete. 
During the Employment Term and for one (1) year immediately
following a termination of employment for any reason, Executive 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, and any
other region in which the Employer or any of the Employer’s subsidiaries
conduct business.


 


(c)                                  Non-Solicitation. 
During the Employment Term and for two (2) years immediately
following a termination of Employment for any reason, Executive shall not,
without the prior written consent of the Employer, solicit or induce any
then-existing employee of the Employer or any of its subsidiaries or affiliates
to leave employment with the Employer or any of its subsidiaries or affiliates,
or contact any then-existing customer or vendor under contract with the
Employer or any of its affiliates or subsidiaries for the purpose of obtaining
business similar to that engaged in, or received (as appropriate), by the
Employer or any of its affiliates or subsidiaries.


 


(d)                                 Cooperation. 
Executive agrees that during the Employment Term or following a
termination of employment for any reason, Executive shall, upon reasonable
advance notice, assist and cooperate with the Employer with regard to any investigation
or litigation related to a matter or project in which Executive was involved
during Executive’s employment.  The
Employer shall reimburse Executive for all reasonable and necessary expenses
related to Executive’s services under this Section 8(d) (i.e., travel,
lodging, meals, telephone, overnight courier) within ten (10) business
days of Executive submitting to the Employer appropriate receipts and expense
statements.


 


(e)                                  Survivability.  The
duties and obligations of Executive pursuant to this Section 8 shall
survive the termination of this Agreement and Executive’s termination of
employment for any reason.


 


(f)                                    Remedies.  Executive acknowledges that the
protections of the Employer set forth in this Section 8 are fair and
reasonable, and that any violation of such protections would cause serious and
irreparable harm and damage to the Employer and its subsidiaries and
affiliates.  Executive agrees that
remedies at law for a breach or threatened breach of the provisions of this Section 8
would be inadequate and, therefore, the Employer shall be entitled, in addition
to any other available remedies (including money damages), without posting a
bond, to equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction, or any other equitable
remedy that may be then available.


 


(g)                                 Limitation.  The terms of this Section 8
are intended to limit disclosure and competition by the Executive to the
maximum extent permitted by law.  If the
duration, scope, or nature of any limitation or restriction imposed by any
provision of this Section 8 is


 


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finally
determined by any court or tribunal of competent jurisdiction to be in excess
of what is valid and enforceable under applicable law, such provision shall be
construed to cover only that duration, scope or activity that is valid and
enforceable.  Executive hereby
acknowledges that this Section 8 shall be given the construction which
renders its provisions valid and enforceable to the maximum extent, not
exceeding its express terms, possible under applicable law.


 


9.                                       Offering Incentives.  By a
grant separate from this document, the Employer shall grant to Executive
certain stock in the Company upon, and subject to, the closing of the Offering
on terms (including, without limitation, vesting) acceptable to the Company in
its sole discretion within the Employment Term. 
The terms of such grant shall be determined by the Company, but shall
have a value of $800,000 upon the closing of the Offering, based upon the
issuance price of stock or units in such Offering.  In addition to the foregoing, in the event an
Offering is completed within the Employment Term, the Employer shall pay to the
Executive, within [      ] days after the completion of the
Offering, a one-time cash bonus of $100,000. 
Nothing herein shall require the Company to complete any Offering.


 


10.                                 Representations of Executive. 
Executive hereby represents to the Employer that Executive has full
lawful right to enter into this Agreement and carry out Executive’s duties
hereunder, and that performance of Executive’s obligations hereunder will not
constitute a breach of or default under any employment, confidentiality,
non-competition or other agreement. 
Executive further represents to the Employer that Executive is not
listed in the Office of Surface Mining’s Applicant Violator System
database.  Executive shall provide prompt
notice to the Employer of Executive’s first employment subsequent to a
termination of employment.


 


11.                                 Miscellaneous.


 


(a)                                  Satisfaction of Obligations Under Prior
Agreement; Term Bonus.  The Company, Hopedale and Executive hereby
acknowledge that this Agreement amends, restates and supersedes the Prior
Agreement.


 


(b)                                 [Intentionally Omitted]


 


(c)                                  Governing Law.  This
Agreement will be governed by, and interpreted in accordance with, the laws of
the Commonwealth of Kentucky applicable to agreements made and to be wholly
performed within the Commonwealth of Kentucky, without regard to the conflict
of laws provisions of any jurisdiction which would cause the application of any
law other than that of the Commonwealth of Kentucky.  Executive hereby consents to the jurisdiction
of the state and federal courts of the Commonwealth of Kentucky, including the
Fayette Circuit Court, and hereby waives any objection to venue of any action
brought in such courts.


 


(d)                                 Entire Agreement; Amendments.  This
Agreement contains the entire understanding of the parties with respect to the
employment of Executive by the Employer. 
There are no restrictions, agreements, promises, warranties, covenants
or undertakings between the parties with respect to the subject matter herein
other than those expressly set forth or referred to herein.  This Agreement may not be altered, modified,
or amended, nor may any of its provisions be waived, except by written
instrument signed by the parties hereto which states that it is intended to
alter, modify or amend this agreement or waive a right hereunder.  Sections 7


 


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and
8 hereof shall survive the termination of Executive’s employment with the
Employer, except as otherwise specifically stated therein.


 


(e)                                  Neutral Interpretation.  This
Agreement constitutes the product of the negotiation of the parties hereto and
the enforcement of this Agreement shall be interpreted in a neutral manner, and
not more strongly for or against any party based upon the source of the
draftsmanship of the Agreement.   Each
party has been provided ample time and opportunity to review and negotiate the
terms of this Agreement and consult with legal counsel regarding the Agreement.


 


(f)                                    No Waiver.  The failure of a party to
insist upon strict adherence to any term of this Agreement on any occasion
shall not be considered a waiver of such party’s rights or deprive such party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement.


 


(g)                                 Severability.  In
the event that any one or more of the provisions of this Agreement shall be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions of this Agreement shall not be
affected thereby.


 


(h)                                 Successors.


 


(i)                                     This Agreement is personal to Executive and
shall not be assignable by Executive otherwise than by will or the laws of
descent and distribution.  This Agreement
shall inure to the benefit of and be enforceable by Executive’s legal
representatives.


 


(ii)                                  This Agreement shall inure to the benefit of
and be binding upon Hopedale, the Company and their successors and
assigns.  The Company, or Hopedale, as
applicable, shall require any successor (whether direct or indirect, by
purchase, merger, reorganization, consolidation, acquisition of property or
stock, liquidation, or otherwise) to all or a substantial portion of its
business and/or assets, by agreement in form and substance reasonably
satisfactory to Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be required
to perform this Agreement if no such succession had taken place.  Regardless of whether such an agreement is
executed, the Employer shall cause this Agreement to be binding upon any
successor of the Company or Hopedale and such successor shall be deemed the “Employer”
for purposes of this Agreement. 
Notwithstanding anything to the contrary contained herein, the Executive
shall have the right to terminate this Agreement if Employer’s assets or
membership units are sold to an entity that is not a subsidiary or an affiliate
of the Employer.  Such a sale shall
include a merger, consolidation, sale of assets or membership units or other
corporate reorganization; however it shall not include a change in ownership as
a result of a public offering.  Such a termination
by Executive shall not be deemed a termination for “Good Reason” as herein
defined, under which Executive would be entitled to the severance payment set
out in Section 7 (b) (ii) above.


 


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(i)                                     Notice.  For the purpose of this
Agreement, notices and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given if delivered
personally, if delivered by overnight courier service, if sent by facsimile
transmission or if mailed by United States registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses or sent via
facsimile to the respective facsimile numbers, as the case may be, as set forth
below, or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt; provided, however, that (i) notices
sent by personal delivery or overnight courier shall be deemed given when
delivered; (ii) notices sent by facsimile transmission shall be deemed
given upon the sender’s receipt of confirmation of complete transmission, and (iii) notices
sent by United States registered mail shall be deemed given two days after the
date of deposit in the United States mail.


 


If
to the Company or Hopedale, to:


 


Rhino
Resources, Inc.

411 W. Putnam Ave.

Greenwich, CT 06830

Attn:  Arthur Amron


 


If
to Executive, to such address as shall most currently appear on the records of
the Employer.


 


(j)                                     Withholding.  The
Employer may withhold from any amounts payable under this Agreement such Taxes
(as defined in Section 12(j)) as may be required to be withheld pursuant
to any applicable law or regulation.


 


(k)                                  Counterparts.  This Agreement
may be signed in counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.


 


(l)                                     Code Section 409A.  It is
intended that any amounts payable under this Agreement and the Employer’s and
Executive’s exercise of authority or discretion hereunder shall comply with
Code Section 409A (including the Treasury regulations and other published
guidance relating thereto) so as not to subject Executive to the payment of any
interest or additional tax imposed under Code Section 409A.  To the extent any amount payable under this
Agreement would trigger the additional tax imposed by Code Section 409A,
the Agreement shall be modified to avoid such additional tax.


 


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


 


(n)                                 Waiver of Jury Trial.  The
parties hereby voluntarily and irrevocably waive 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 Executive by the Employer.


 


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12.                                 Definitions.


 


(a)                                  Accrued Obligations.  “Accrued
Obligations” has the meaning set forth in Section 7(a).


 


(b)                                 Base Salary.   “Base
Salary” has the meaning set forth in Section 3.


 


(c)                                  Cause.  “Cause” for termination by the
Employer of Executive’s employment with the Employer means any of the
following:


 


(i)                                     the failure of Executive to perform
substantially his duties (other than any such failure resulting from incapacity
due to disability), within ten days after written notice from the Employer;


 


(ii)                                  Executive’s conviction of, or plea of guilty
or no contest to (A) a felony or (B) a misdemeanor involving
dishonesty or moral turpitude; or


 


(iii)                               Executive engaging in any illegal conduct,
gross misconduct, or other material breach of this Agreement which is
materially and demonstrably injurious to the business or reputation of the
Employer; or


 


(iv)                              Executive engaging in any act of dishonesty
or fraud involving Employer or any subsidiary or affiliate of Employer.


 


(d)                                 Code.  “Code” means the Internal
Revenue Code of 1986, as amended from time to time.


 


(e)                                  Company.   “Company” means Rhino
Resources, Inc., a Delaware corporation.


 


(f)                                    Disability.   “Disability” means the
inability of Executive 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 three hundred sixty five (365) calendar day period.


 


(g)                                 Employment Term.   “Employment
Term” has the meaning set forth in Section 1.


 


(h)                                 Executive.   “Executive” means David
Zatezalo.


 


(i)                                     Good Reason.  “Good
Reason” for termination by Executive of Executive’s employment means the
occurrence (without Executive’s express written consent) of any one of the
following acts by the Employer or failures by Employer to act:


 


(i)                                     the assignment to Executive of any duties
inconsistent in any material respect with those of the office to which
Executive is assigned pursuant to Section 2 hereof (including status,
office, title and reporting requirements), or any other


 


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diminution
in any material respect in such position, authority, duties or responsibilities
unless agreed to by Executive;


 


(ii)                                  a reduction in Base Salary;


 


(iii)                               a reduction in Executive’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


 


(iv)                              any purported termination of Executive’s employment under this
Agreement by the Employer other than for Cause or Disability.


 


Prior
to Executive’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 Executive’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.


 


(j)                                     Taxes.  “Taxes” mean the incremental
United States federal, state and local income, excise and other taxes payable
by Executive with respect to any applicable item of income.


 


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IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
dates written below.


 


EXECUTIVE:


 


 


	
   

  	
   

  
	
  David
  Zatezalo

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
  signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RHINO RESOURCES, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
  signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HOPEDALE MINING LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
  Signed:

  	
   

  	
   

  
								



 


13

















 


	
  RHINO GP, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  For the sole purpose set forth in Section 1 hereof

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
  signed:

  	
   

  	
   

  
							



 


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