EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT


              This   Employment   Agreement,   (hereinafter   referred   to   as
"Agreement")  entered  into as of May 25, 2006 (the  "Effective  Date"),  by and
between National Coal  Corporation,  a corporation  organized and existing under
the laws of the State of Tennessee, with its principal place of business at 8915
George  Williams  Road,  Knoxville,   Tennessee   (hereinafter  referred  to  as
"Operating  Company"),  and National Coal Corp., a Florida  corporation  and the
sole shareholder of the Company  ("Parent," and together with Operating Company,
the  "Company")  and Daniel A. Roling  residing at 162  Hartshorn  Drive,  Short
Hills, New Jersey 07078 (Employee).


SECTION 1: EMPLOYMENT AND TERM OF AGREEMENT

         1.1 EMPLOYMENT. Commencing no more than ninety-three (93) days from the
Effective  Date, and upon the terms and conditions set forth in this  Agreement,
the Company hereby  employs  Employee and Employee  accepts  employment as Chief
Executive Officer of Operating Company and Parent. Employee shall give notice of
his employment  commencement date no later than fourteen (14) days following the
Effective Date.

         1.2  DUTIES.  a.  During the term of his  employment  pursuant  to this
Agreement,  Employee  shall serve the Company  faithfully and to the best of his
ability  and shall  devote his  business  and  professional  time,  energy,  and
diligence to the  performance  of the duties of such office and he shall perform
such  services  and duties in  connection  with the  business and affairs of the
Company  (i) as are  customarily  incident  to such  office and (ii)  subject to
Section  1.2(b)  hereof,  as may reasonably be assigned or delegated to him from
time to time by the Board of Directors of the Company. Employee shall also serve
as a director of Parent and each of its subsidiaries and affiliates.

                  b.   Notwithstanding   the   foregoing,   Employee   shall  be
principally  responsible for, and shall have full power and authority to direct,
the  management  and  operation  of the  business  of the  Company  to develop a
strategic plan for the Company,  to implement  such strategic  plan, to plan for
the  growth  of  the  Company,   including   acquisitions,   to  assist  in  the
communication  to  investors  and  lead the  management  team to  achieve  these
objectives. To the extent permitted by law, and as long as no event described in
Section 3.1(b) or (c) has occurred and is continuing, the Boards of Directors of
the Company  shall take no action to restrict or  interfere  with the powers and
responsibilities assigned and delegated to Employee pursuant to this Agreement.

                  c.  Notwithstanding  the  foregoing,  it  is  understood  that
Employee shall continue to provide services substantially of the type and amount
described  in Schedule A hereto,  to  Straightfellow  Farms Ltd.,  a real estate
investment company,  and that the performance of such services shall not be used
as a basis for termination under Section 4.1.

         1.3 TERM OF  EMPLOYMENT.  Unless  earlier  terminated  pursuant  to the
provisions  hereof,  the  initial  term  of  Employee's  employment  under  this
Agreement shall be for the period of three (3) years commencing with the date of
this Agreement (the "Initial Term").  Said Term shall be  automatically  renewed
thereafter for successive two-year terms (each a


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"Renewal  Term," and,  together  with the Initial Term,  the "Term")  unless the
Board of Directors of the Company or any successor entity provides Employee with
written  notice  that the  Agreement  will not be renewed no later than 120 days
prior to the expiration of the then-current Term. Notwithstanding the foregoing,
in the event a Change in Control (as defined  below) occurs during the Term, the
Term of this  Agreement  shall not end prior to the  first  anniversary  of such
Change in Control.

SECTION 2: COMPENSATION, BENEFITS AND OTHER ENTITLEMENTS

         2.1 BASE SALARY.  a. As compensation for his services  hereunder and as
consideration  for his covenant not to compete provided for in Section 4 hereof,
Employee shall be paid a base annual salary at the rate of SIX HUNDRED  THOUSAND
AND 00/00 DOLLARS ($600,000.00) PER YEAR, which rate of compensation shall be in
effect from the  Effective  Date until the end of the initial  term set forth in
Section 1.3 hereof.  Thereafter,  the base  annual  salary  shall be at the rate
determined  in good faith by the  Company's  Board of  Directors  at the Board's
regularly  scheduled  meeting next following the end of each fiscal year or upon
any special meeting,  based upon the Company's review of Employee's  performance
during the  preceding  fiscal  year or lesser  period,  but shall not be reduced
below the base annual salary in effect at the end of the  immediately  preceding
fiscal year. The base annual salary shall be payable at such periodic intervals,
not less than semi-monthly,  as from time to time are applicable with respect to
salaried  executive  personnel  of the  Company,  and shall be  inclusive of all
applicable income taxes,  Social Security,  and other taxes and charges that are
required  by law to be  withheld  by the  Company  or that are  requested  to be
withheld by Employee.

                  b. If Employee's base annual salary is hereafter  increased by
the Board of Directors,  it shall not thereafter be reduced below a figure equal
to the  amount  of base  annual  salary  in  effect  immediately  prior  to such
increase, together with an amount equal to the product of (x) the amount of base
annual salary in effect  immediately  prior to such increase,  multiplied by (y)
the percentage  increase in the consumer price index in Nashville,  Tennessee to
the last day of the fiscal year preceding any such reduction.

         2.2 BONUS.  For each full fiscal year during which Employee is employed
as the Company's Chief Executive Officer pursuant to this Agreement,  commencing
with the fiscal year  ending on December  31,  2006,  Employee  shall be paid an
annual  cash bonus in an amount to be  determined  in good faith by the Board of
Directors  but not more than an amount equal to fifty  percent (50%) of the base
amount of Employee's salary, which bonus shall be payable in a lump sum no later
than three (3) business days following the filing of the Company's Annual Report
on Form  10-K for the  applicable  fiscal  year  period  with the  Securities  &
Exchange Commission.

         2.3  INSURANCE.  The Company  shall  provide to Employee  the  standard
package of family  insurance  benefits  which are from time to time  provided to
other  executive  employees,  including  medical  and  major  medical  insurance
coverage.  The  Company  shall  also  provide  to  Employee  long  term care and
disability income insurance coverage (at Employee's  option), in an amount equal
to not less than eighty  percent (80%) of his base annual salary with  benefits,
and with disability for purposes of such coverage being defined as the inability
to perform the usual and customary  activities as Chief Executive Officer of the
Company.  The disability  insurance and the long-term  care  insurance  shall be
issued on a basis that would  permit  Employee to continue  coverage  under such
policies upon termination of his employment with the Company at


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<PAGE>


his own expense or, in  circumstances  where the Company is obligated to pay for
continued coverage under paragraph 4.3 below, at the Company's expense.

         2.4  OTHER BENEFITS.  The Company shall provide  Employee the following
additional benefits:

                  a. A  Company  owned and  maintained  automobile  suitable  to
Employee's  position and  appropriate  for the  performance of his duties,  such
automobile to be replaced at appropriate intervals.

                  b.  Reimbursement  of all  reasonable  expenses  incurred  for
Company  business,  provided  the same are of a type  which  are  allowable  for
deductions under applicable federal tax law.

                  c.  Reimbursement  for accounting,  tax, legal,  and financial
services to be performed by accountants,  lawyers, or other professionals of his
choice to  assist  Employee  in  financial,  estate  and tax  planning,  and tax
reporting,  provided  that the  Company  shall  not be  obligated  to  reimburse
Employee more than Ten Thousand and 00/00 Dollars ($10,000.00) per year for such
expenses.

                  d. Paid vacation of four (4) weeks per fiscal year  (pro-rated
with respect to any portion thereof), or such greater amount as may be permitted
from time to time by the Company's  vacation policy, to be taken at such time as
selected by  Employee.  Consistent  with the policy  outlined  in the  Company's
Employee Handbook,  vacation benefits granted during a fiscal year automatically
expire and may no longer be utilized  at the close of business on December  31st
of such fiscal year.

                  e.  Employee  shall be entitled to  short-term  medical  leave
benefits for up to three months for time out of work due to a  psychological  or
physical illness, injury, or condition.  Such benefits shall include full pay to
Employee for any leave which is due to medical or  psychological  conditions  as
supported by appropriate  written  verification from Employee's treating medical
or psychological/psychiatric professional.

                  f. In addition to the benefits  bestowed upon Employee in this
Agreement,  Employee  shall be entitled to  participate in and enjoy benefits as
are generally extended to employees serving in an executive capacity,  including
any  capacity  similar to that of Employee,  in  accordance  with the  Company's
customary practices and policies.

                  g. In addition to the other benefits  provided to the employee
in this  Agreement,  the  company  agrees  that the  company  paid "key man life
insurance"  in no less than the amount of the  Employee's  base  annual  salary,
which shall,  upon the Employees death be  distributable  fifty percent (50%) to
the company and fifty percent (50%) to the Employee's  heirs as he may direct in
his will.

                  h. The Company will maintain  directors and officers liability
insurance  with  coverage of no less than $10 million at all times that Employee
is an officer or director of the Company.

                  i.  MOVING  EXPENSES.  The  Company  shall pay  Employee up to
$50,000 for any loss incurred in the sale of employee's residence in New Jersey,
including any brokers fees,


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interest or tax payments incurred after the commencement of employment and until
the sale of the residence.  For the purpose of this Section the Employee's basis
as of the  commencement of his employment is $2,750,000.  In addition,  upon the
Employee moving to Tennessee to assume this position, the Company will reimburse
Employee for $10,000 of moving expenses.

                  j. TEMPORARY LIVING  EXPENSES.  The Company will reimburse the
Employee for any temporary  living  expenses,  including rent,  storage or other
costs for a period of up to six (6)  months  from the  start of  employment  and
shall pay  Employee a travel  stipend to cover one (1) round trip a week between
Newark,  New  Jersey  and  Knoxville,  Tennessee  for a period  of up to six (6)
months.  If permanent  living  arrangements are obtained prior to the end of the
six (6) month period, payments pursuant to this Section shall end on the date of
obtaining such permanent living arrangements.

SECTION 3: STOCK INCENTIVE

         3.1  STOCK OPTIONS.  On the Effective Date, Employee shall be granted a
non-qualified  option to purchase  500,000 shares of Parent's  common stock (the
"Option  Grant"),  which  shall  be  issued  pursuant  to the  terms of the 2004
National Coal Corp.  Stock Option Plan.  The Option Grant shall have an exercise
price of  $8.88,  which is the  closing  price of the  Company  common  stock as
reported on the Nasdaq National Market on the date immediately  prior to date of
grant.  The Option  Grant shall vest in four equal  annual  installments  on the
anniversary of the date of commencement  of employment,  provided,  however,  if
there is a Change in  Control as  defined  in  EXHIBIT A after  commencement  of
Employee's employment, all options shall immediately vest.

         3.2  SALE OF  SHARES.  As an  incentive  for  Employee  accepting  this
position,  100,000  shares of common  stock of the  Company  shall be offered to
Employee  pursuant to the 2004  National  Coal Corp.  Option Plan,  for purchase
$8.88 per share,  the closing  price of the Company  common stock as reported on
the Nasdaq  National  Market on May 24,  2006.  Such offer shall  remain open to
Employee for a period of fifteen (15)  business  days  following  the  Effective
Date.

SECTION 4: TERMINATION OF EMPLOYMENT

         4.1  TERMINATION  BY  COMPANY.  The  Company  shall  have the  right to
terminate  Employee's  employment at any time upon the  occurrence of any one of
the following events:

                  a. Employee's death or the inability of Employee to adequately
perform his duties as Chief  Executive  Officer,  as determined in good faith by
the Company's Board of Directors,  for more than 90 consecutive days as a result
of the mental or physical illness or condition of Employee; or

                  b. Conduct of Employee  involving any of the following,  other
than by reason of mental or physical illness or condition and as determined by a
majority  vote of the Board of Directors  after notice to Employee (as described
below) and advice of independent legal counsel:

                           i.  Habitual and continued  unavailability  to act or
respond on behalf of the Company;


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<PAGE>


                           ii. Willful misconduct,  which shall include, without
limitation, any act of omission knowingly undertaken or omitted by Employee with
the intent of causing damage to the Company, its properties,  assets or business
or its stockholder, officers, directors or employee, or fraud, including without
limitation  any  misappropriation  of  embezzlement  by Employee  resulting in a
material personal profit to Employee, in any case, involving properties,  assets
of funds of the Parent, the Company, or any of its subsidiaries;

                           iii.  Any past or  future  conviction,  by a court of
competent  jurisdiction,  of a felony (whether or not committed  during the term
hereof or in the course of employment hereunder);

                           iv.  Willful,  continued,  and  material  failure  to
observe or perform the duties of his employment hereunder;

                           v.   Habitual  and  gross  neglect  of  the  faithful
performance of the duties of his
employment hereunder.

                  c. With regard to Section 4.1(b),  Company shall first provide
Employee  with  thirty  (30) days  written  notice of such  alleged  misconduct,
including a specific description of such breach,  failure, or neglect of duty or
obligation  sufficient to allow  Employee an  opportunity  to correct such noted
problems.  Employee shall not be terminated under paragraph 4.1(b) unless, after
the notice  period  expires,  Employee  continues to engage in such  misconduct.
Prior to any vote regarding  misconduct,  Employee will be given the opportunity
to appear  before the Board,  with his legal  counsel,  to present any  relevant
information he believes the Board should consider in making such a decision.

                  d. In the  event of a Change  in  Control,  which  shall,  for
purposes of this Agreement,  be defined as set forth in the attached  EXHIBIT A,
which is incorporated herein by reference;  provided,  however, that in the case
of termination  pursuant to this Section  4.1(d),  the Board of Directors of the
Company shall make a  determination  either to terminate  Employee's  employment
hereunder or continue such employment  within six (6) months after the effective
date of the Change in Control and shall give  Employee  ninety (90) days' notice
of any such determination to terminate Employee's employment hereunder,  and the
failure to make such  determination  within such six-month period will be deemed
an election by the Company to continue Employee's employment hereunder.

         4.2      TERMINATION BY EMPLOYEE.

                  a. If substantial  differences of opinion between Employee and
the  Board  and/or  the  ownership  of the  Company  should  develop,  or  other
circumstances  should arise such that Employee,  in good faith,  no longer feels
that he can function effectively as Chief Executive Officer of the Company, then
Employee  may elect to resign from his  employment  hereunder by giving 30 days'
written notice to the Company.

                  b.  Employee  may elect to  resign  from  employment  with the
Company, upon 30 days written notice, if, in Employee's reasonable judgment, one
or more of the following events has occurred:

                           i.  A   material   change   in   Employee's   duties,
responsibilities,  authority,  or status with the  Company,  without  Employee's
consent;


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<PAGE>


                           ii. A  significant  increase  in the amount of travel
required for Employee to perform his job, without Employee's consent; or

                           iii.  Any other matter or  circumstance  requested by
the Board of  Directors  of the  Company  if either  (a) made with the intent of
hindering  Employee in the performance of his duties hereunder or (b) the effect
of  such  request  could  reasonably  be  expected  to  hinder  Employee  in the
performance of his duties hereunder.

         4.3      PAYMENT OF SEVERANCE BENEFITS UPON TERMINATION.

                  (a) In the  event  of  termination  of  Employee's  employment
pursuant to Section 4.1 or 4.2 above,  other than pursuant to Section 4.1 (b) or
4.2(a),   Employee  will  be  entitled  to  the  following   severance  benefits
(collectively  "Severance")  upon  execution  of a  Release  of Claims in a form
substantially   similar  to  that  attached   hereto  as  Exhibit  B,  which  is
incorporated herein by reference, within 21 days of his separation:

                           i.  Continuation of Employee's base annual salary for
the  Severance  Period (as  defined  below) at the rate in effect at the time of
such  termination  and payable at the time and in the manner such payments would
have been made to Employee if such termination had not occurred;

                           ii. A prorated  annual cash bonus payment  calculated
by  multiplying  the  target  amount  (50% of base  salary) by a  fraction,  the
numerator  of which is the number of calendar  months  (full or partial)  during
which  Employee was employed by the Company in the fiscal year of his separation
from  employment  and the  denominator of which is 12, said prorated bonus to be
payable as soon as practicable following Employee's separation from employment;

                           iii. Continued  insurance  coverage,  as described in
Section 2.3 and to include  medical and major medical  coverage for Employee and
his eligible  dependents,  at the Company's  expense for the  Severance  Period;
provided,  however,  that  Employee  will be  responsible  for any  co-payments,
deductibles,  or other out-of-pocket  expenses associated with use of any health
coverage;

                           iv. Continued use, during the Severance  Period, of a
company-owned and maintained
automobile suitable to Employee's prior position as Chief Executive Officer; and

                           v.  Reimbursement  for  accounting,  tax,  legal  and
financial  services,  as described in Section  2.4(c),  up to $10,000.00 in each
fiscal year during the Severance Period.

                           vi.  Immediate  vesting of all  unvested  options and
immediate lapse of any forfeiture provisions relating to restricted share grants
scheduled to vest during the Severance Period.

                  For purposes of this Agreement,  the Severance Period shall be
twelve (12) months.

                  (b) In the event of termination pursuant to Section 4.1 (b) or
4.2(a),  all salary and benefits  (other than vested benefits under any pension,
profit sharing or other compensation or benefit plan) shall cease at the time of
termination.


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<PAGE>


                  (c) In the event of a Change in Control,  the Company,  at its
sole  expense,  shall  cause its  independent  auditors  promptly  to review all
payments, distributions, and benefits that have been made to or provided to, and
are to be made to or provided to, Employee under this  Agreement,  and any other
agreement  and plan  benefiting  Employee,  to determine  the  applicability  of
Section 4999 of the United States Internal Revenue Code of 1986, as amended (the
"Code"). If the Company's independent auditors determine that any such payments,
distributions, or benefits are subject to excise taxes as provided under Section
4999 of the Code (the  "Excise  Tax"),  then  such  payment,  distributions,  or
benefits  (the  "Original  Payments")  shall  be  increased  by an  amount  (the
"Gross-Up  Amount")  such  that,  after the  Company  withholds  all taxes  due,
including  any excise and  employment  taxes  imposed  on the  Gross-Up  Amount,
Employee will retain a net amount equal to the Original Payments less all income
and employment  taxes (other than Excise Taxes) on that amount.  Employee agrees
to cooperate  with the  Company's  independent  auditors by providing  necessary
information  to perform this  analysis/calculation,  and the Company agrees that
Employee  shall be  entitled  to copies of the  calculations.  The intent of the
parties is that the Company shall be solely  responsible for, and shall pay, any
Excise  Tax on the  Original  Payments  and  Gross-Up  Amount and any income and
employment taxes (including, without limitation, penalties and interest) imposed
on  the  Gross-Up  Amount.  If no  determination  by the  Company's  independent
auditors  is made prior to the time  Employee  is  required to file a tax return
reflecting  any portion of the  Original  Payments,  and  subsequently  a taxing
authority  determines  that an Excise Tax should be  imposed  upon the  Original
Payments,  Employee  shall be  entitled  to  receive  the full  Gross-Up  Amount
calculated on the basis of such additional amount of Excise Tax determined to be
payable by such tax authority  (including  related  penalties and interest) from
the Company within 30 days of such  determination  as long as Employee has taken
all  reasonable  actions to  minimize  any such  amounts.  If any tax  authority
finally  determines the Excise Tax to be less than the amount taken into account
hereunder  in  calculating  the  Gross-Up  Amount,  Employee  shall repay to the
Company,  within  30  days  of his  receipt  of a  refund  resulting  from  that
determination, the portion of the Gross-Up Amount attributable to such reduction
(plus the refunded portion of the Gross-Up Amount attributable to the Excise Tax
and federal, state, and local income and employment taxes imposed on the portion
of the Gross-Up  Amount being repaid,  less any additional  income tax resulting
from such refund).

                  (d)   Notwithstanding   anything  to  the   contrary  in  this
Agreement,  the Gross-Up Amount payable by the Company,  specifically  including
any  payments  to be  made  pursuant  to  Section  4.3(c)  hereof,  shall  in no
circumstance exceed $200,000.

                  (e)   Notwithstanding   anything  to  the   contrary  in  this
Agreement,  no Severance  payments or benefits shall be paid to Employee  during
the six-month  period  following the Employee's  separation  from service to the
extent that the Company determines in good faith that paying such amounts at the
time or times indicated in this SECTION 4.3 would cause the Employee to incur an
additional  tax under Section 409A of the Code (in which case such amounts shall
be paid at the time or times indicated in this SECTION  4.3(D)).  If the payment
of any such  amounts are delayed as a result of the previous  sentence,  then on
the first day following the end of such six-month  period,  the Company will pay
the Employee a lump-sum  amount equal to the  cumulative  amount that would have
otherwise been payable to the Employee during such six-month period.


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<PAGE>


SECTION 5: NONCOMPETITION

         The parties recognize that in the course of Employee's  employment with
the Company,  Employee has had and will continue to have access to a substantial
amount of confidential and proprietary information and trade secrets relating to
the business of the Company, and that it would be detrimental to the business of
the  Company,  and have a  substantial  detrimental  effect  on the value to the
Company of  Employee's  employment  if Employee were to compete with the Company
upon termination of his employment.  Employee therefore agrees, in consideration
of the  Company  entering  this  Agreement  and  establishing  the  base  annual
compensation  and other  compensation  and benefits at the level herein provided
for,  that  during the period of the term of his  employment  with the  Company,
whether pursuant to this Agreement or otherwise,  and, if and only if Employee's
employment is terminated  pursuant to Section  4.1(b) or 4.2 (a),  above,  for a
period of one (1) year  thereafter,  he shall  not,  without  the prior  written
consent of the Company, directly as principal, partner, director, or stockholder
or through any corporation,  partnership,  or other entity  (including,  without
limitation,  a sole proprietorship),  engage or participate in, or assist in any
manner  or in any  capacity,  or have any  interest  in or make any loan to,  or
otherwise be related with, any person, firm, corporation,  association, or other
entity with any  locations,  including any mines,  anywhere  within the central,
northern and southern  Appalachian  regions of the United  States and engaged in
any  business  competing in any material way with the business of the Company or
any  subsidiary  of the  Company  as  such  business  exists  as of the  date of
termination  of  employment;  provided,  however,  that the foregoing  shall not
prevent  Employee  from  owning  up to  five  percent  (5%)  of the  outstanding
securities  of, or being  employed  by, a  publicly  held  corporation  that may
compete with the Company. For purposes hereof, a business shall not be deemed to
be competing with the Company in a material way unless it  manufactures,  sells,
distributes,  or otherwise  deals in one or more  products  manufactured,  sold,
distributed  or otherwise  dealt in by the Company and which product or products
account for at least five  percent (5%) of the  Company's  gross sales volume at
the time in question.

                  The  parties  believe,  in light of the facts  known as of the
date  hereof,  and after  considering  the nature  and  extent of the  Company's
business, the amount of compensation and other benefits provided herein, and the
damage that could be done to the Company's business by Employee's competing with
the Company,  that the foregoing  covenant not to compete is reasonable in time,
scope, and geographical  limitation.  However,  if any court should construe the
time, scope, or geographical limitation of the covenant not to compete to be too
broad or  extensive,  it is the  intention  of the parties  that the contract be
automatically  reformed,  and as so reformed,  enforced,  to the maximum  limits
which may be found to be reasonable by such court.

SECTION 6: CONFIDENTIAL INFORMATION.

         6.1  COMPANY INFORMATION.  Employee agrees at all times during the term
hereof  and  thereafter,  to hold  in  strictest  confidence,  and not to use or
disclose, except for the benefit of the Company or as authorized by the Company,
the Confidential Information of


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<PAGE>


Company. Employee understands that "Confidential  Information" means any Company
proprietary information, trade secrets and other information not generally known
to the public,  such as technical and non-technical  data,  know-how,  research,
product plans, marketing plans, products, business forecasts, services, customer
lists and customers (including, but not limited to, customers of Company on whom
Employee may call or with whom Employee becomes more acquainted  during the term
of this Agreement or has become acquainted with during any prior period in which
he performed services for the Company),  information  regarding employees of the
Company, software,  developments,  inventions,  processes, formulas, technology,
designs, drawings, engineering,  hardware configuration information,  marketing,
financial or other  business  information  disclosed to Employee by the Company,
either directly or indirectly in writing, electronically,  orally or by drawings
or observation of parts or equipment prior to or after the  commencement of this
Agreement.

         In light of the  highly  competitive  nature of the  industry  in which
Company conducts its business, Employee agrees that all Confidential Information
heretofore  or in  the  future  obtained  by the  Employee  as a  result  of the
Employee's  association  with  Company,  shall be  considered  confidential.  In
recognition  of this  fact,  Employee  agrees  that he will  not,  except in the
performance of his duties under this  Agreement or except as otherwise  provided
herein,  during and after the execution of this  Agreement  (for so long as such
information otherwise remains  confidential),  disclose any of such Confidential
Information to any person or entity for any reason or purpose whatsoever, and he
will not make use of any  Confidential  Information  for his own purposes or for
the benefit of any person or entity (except Company) under any circumstances not
authorized by the Company. The provisions contained in this paragraph shall also
apply to  information  obtained by Employee with respect to any subsidiary of or
company otherwise affiliated with Company.

         In the event that Employee is requested or required (by oral questions,
interrogatories,   requests  for  information  or  documents,   subpoena,  civil
investigative  demand, any informal or formal investigation by any government or
governmental   agency  or  authority  or  otherwise)  to  disclose  any  of  the
Confidential  Information,  Employee will notify Company  promptly in writing so
that  Company may seek a  protective  order or other  appropriate  remedy or, in
Company's sole  discretion,  waive  compliance with the terms of this Agreement.
Employee agrees not to oppose any action by Company to obtain a protective order
or other appropriate remedy. In the event that no such protective order or other
remedy is obtained,  or that Company  waives  compliance  with the terms of this
Agreement,   Employee  will  furnish  only  that  portion  of  the  Confidential
Information which Employee is advised in writing by his own independent  counsel
that he is legally  required to furnish and will  exercise his  reasonable  best
efforts,  at Company's  expense,  to obtain reliable assurance that confidential
treatment will be accorded to the Confidential  Information.  To the extent that
Employee  retains  counsel  to  assist  him in any  situation  covered  by  this
paragraph, he shall be entitled to reimbursement for reasonable fees incurred in
obtaining advice and representation.

         6.2   THIRD PARTY INFORMATION.  Employee  recognizes  that  Company has
received and in the future will receive from third parties their confidential or
proprietary  information  subject to a duty on  Company's  part to maintain  the
confidentiality  of such  information  and to use it only  for  certain  limited
purposes. Employee agrees to hold all such


                                       9
<PAGE>


confidential or proprietary  information in the strictest  confidence and not to
disclose it to any person,  firm or corporation or to use it except as necessary
in carrying out Employee work for Company  consistent  with  Company'  agreement
with such third party.  Employee  agrees to comply with  Company's  policies and
procedures, as applicable from time to time with respect to such information.

SECTION 7: CODE SECTION 409A

         7.1  Certain amounts under this Agreement may constitute  "nonqualified
deferred  compensation"  which are intended to comply with the  requirements  of
Section 409A of the Code.  To the extent that the parties  reasonably  determine
that any  compensation  or benefits  payable under this Agreement are subject to
Section  409A of the  Code,  this  Agreement  shall  incorporate  the  terms and
conditions  required  by Section  409A of the Code and  Department  of  Treasury
regulations  as reasonably  determined  by the Company and the Employee.  To the
extent  applicable,  this  Agreement  shall be  interpreted  in accordance  with
Section  409A of the Code and  Department  of  Treasury  regulations  and  other
interpretative  guidance  issued  thereunder.  In the event that  following  the
Effective  Date,  the Company and the  Employee  reasonably  determine  that any
compensation or benefits  payable under this Agreement may be subject to Section
409A of the Code and related  Department of Treasury  guidance,  the Company and
the Employee  shall work together to adopt such  amendments to this Agreement or
adopt  other  policies  or  procedures  (including   amendments,   policies  and
procedures  with  retroactive   effective),   or  take  any  other  commercially
reasonable  actions  necessary or appropriate to (a) exempt the compensation and
benefits  payable  under this  Agreement  from  Section  409A of the Code and/or
preserve the intended tax treatment of the  compensation  and benefits  provided
with respect to this Agreement,  or (b) comply with the  requirements of Section
409A of the Code and related Department of Treasury guidance.

SECTION 8: MISCELLANEOUS PROVISIONS

         8.1  OUTPLACEMENT SERVICE.  In the event of  termination  of Employee's
employment by the Company,  the Company shall,  upon the request of Employee (a)
pay for  outplacement  service for  Employee for a period of twelve (12) months,
such  payment  to be made to an agency  selected  by  Employee,  based  upon the
customary  fees charged by  nationally  rated firms  engaged in  providing  such
services for executives of similar level,  qualifications,  and experience,  and
(b)  provide  to  Employee,  for a  reasonable  time  following  termination  of
employment,  not to exceed  twelve (12)  months,  office  space and  secretarial
support to assist  Employee in searching for and obtaining a new position,  such
office space to be provided in a location reasonably determined by the Company.

         8.2  INDEMNITY.  The  Company  shall  indemnify  Employee  and hold him
harmless  for all acts or decisions  made by him in good faith while  performing
services for the Company to the full extent permitted by applicable law.

         8.3 NON-DISPARAGEMENT. Except as compelled to do so by law, the Company
and its past and present affiliated companies and their officers, directors, and
employees  shall  refrain  from  making any  remark or taking  any action  which
disparages,  defames, or places Employee in a negative light, and Employee shall
refrain from making any remark or taking any action which  disparages,  defames,
or places the Company or any of its parent,  subsidiary, or affiliated companies
or their past or present officers, directors, or employees in a negative light.


                                       10
<PAGE>


         8.4  EMPLOYEE BENEFITS.  This Agreement shall not be construed to be in
lieu or to the exclusion of any other rights,  benefits, and privileges to which
Employee  may be entitled as an  employee of the Company  under any  retirement,
pension,  profit-sharing,  insurance,  hospital, or other plans or benefits that
may now be in effect or that may hereafter be adopted.

         8.5 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee,  and jurisdiction  shall lie
in the courts of competent jurisdiction in Knox County.

         8.6  ENTIRE   AGREEMENT.   This   Agreement   constitutes   the  entire
understanding  of the Company and Employee  with respect to its subject  matter,
supersedes any prior agreement or arrangement relative to Employee's  employment
by the Company, and no modification,  supplement,  or amendment of any provision
hereof shall be valid unless made in writing and signed by the parties.

         8.7 SUCCESSORS AND ASSIGNS; PERMITTED ASSIGNMENT.  This Agreement shall
inure to the benefit of and be binding  upon the Company and  Employee and their
respective  successors,  executors.   administrators,   heirs  and/or  permitted
assigns;  provided,  however, that neither Employee nor the Company may make any
assignment  of this  Agreement or any interest  therein,  by operation of law or
otherwise, without the prior written consent of the other parties hereto, except
that,  without  such  consent,  the  Company may assign  this  Agreement  to any
successor  to all or  substantially  all of its assets and  business by means of
dissolution,  merger, consolidation,  transfer of assets, or otherwise, provided
that such  successor  assumes in writing all of the  obligations  of the Company
under this Agreement,  subject,  however,  to Employee's right of termination as
provided in Section 4.2 hereof.

         8.8  CAPTIONS.  The  captions  set  forth  in  this  Agreement  are for
convenience  only and shall not be considered as part of this Agreement or as in
any way limiting or amplifying the terms and conditions hereof.

         8.9 NO CONFLICTING OBLIGATIONS. Employee represents and warrants to the
Company that he is not under, or bound to be under in the future, any obligation
to any person,  firm,  or  corporation  that is or would be  inconsistent  or in
conflict with this Agreement or would prevent,  limit,  or impair in any way the
performance by him of his obligations hereunder.

         8.10 WAIVERS.  The failure of any party to require the  performance  or
satisfaction of any term or obligation of this  Agreement,  or the waiver by any
party of any breach of this Agreement,  shall not prevent subsequent enforcement
of such term or obligation or be deemed a waiver of any subsequent breach.

         8.11  NOTICES.  Any notice  given  hereunder  shall be in  writing  and
delivered or mailed by registered or certified mail, return receipt requested:


                                       11
<PAGE>


               (a)          if to the Company:         8915 George Williams Road
                                                       Knoxville, TN 37923

               (b)          if to the Employee:        162 Hartshorn Drive
                                                       Short Hills, NJ 07078

         8.12  SEVERABILITY.  In the event  that any court  having  jurisdiction
shall  determine that any restrictive  covenant or other provision  contained in
this Agreement shall be unreasonable or unenforceable in any respect,  then such
covenant  or other  provision  shall be deemed  limited to the extent  that such
other court deems it reasonable or  enforceable,  and as so limited shall remain
in full  force and  effect.  In the event  that such  court  shall deem any such
covenant or other provision wholly  unenforceable,  the remaining  covenants and
other provisions of this Agreement shall  nevertheless  remain in full force and
effect.

         8.13  COUNTERPARTS.  More than one counterpart of this Agreement may be
executed by the parties  hereto,  and each fully executed  counterpart  shall be
deemed an original.


                                       12
<PAGE>


              IN WITNESS WHEREOF,  the parties hereto have caused this Agreement
to be duly executed under seal and delivered as of the date first above written.

                                 NATIONAL COAL CORPORATION ("OPERATING COMPANY")


                                 By: /s/ Kenneth Z. Scott
                                     ------------------------
                                 Name:   Kenneth Z. Scott
                                 Title:  Director

                                 NATIONAL COAL CORP. ("PARENT")


                                 By: /s/ Kenneth Z. Scott
                                     ------------------------
                                 Name:   Kenneth Z. Scott
                                 Title:  Director



                                 EMPLOYEE:


                                 /s/ Daniel A. Roling
                                 ----------------------------
                                 Daniel A. Roling


                                       13
<PAGE>


                                    EXHIBIT A

                         DEFINITION OF CHANGE IN CONTROL

         The occurrence of any of the following events shall constitute a Change
in Control for  purposes of this  Agreement:  (a) any  "person" (as such term is
used in Sections  13(d) and 14(d) of the  Securities  Exchange  Act of 1934,  as
amended (the "Exchange  Act")) other than the Operating  Company or Parent,  any
trustee or other fiduciary holding securities under any employee benefit plan of
the Company and/or Parent, or any company owned, directly or indirectly,  by the
stockholders of Parent in substantially  the same proportions as their ownership
of the Operating Company and/or Parent is or becomes the "beneficial  owner" (as
defined in Rule 13d-3  under the  Exchange  Act),  directly  or  indirectly,  of
securities of the Operating  Company and/or Parent  representing  30% or more of
the combined  voting power of such  entity's  then-outstanding  securities;  (b)
during any period of two  consecutive  years (not  including any period prior to
the effective date of this Agreement), individuals who, at the beginning of such
period,  constitute  the  Board,  and any new  director  (other  than a director
designated  by a person who has entered  into an  agreement  with the  Operating
Company  and/or Parent to effect a transaction  described in clause (a), (c), or
(d) of this Exhibit A) whose election by the Board or nomination for election by
such entity's  stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
two-year  period or whose  election or nomination for election was previously so
approved,  cease for any reason to  constitute at least a majority of the Board;
(c) the  consummation  of a merger or  consolidation  of the  Operating  Company
and/or Parent with any other  corporation,  other than a merger or consolidation
which  would  result  in  the  voting  securities  of  such  entity  outstanding
immediately   prior  thereto   continuing  to  represent  (either  by  remaining
outstanding  or by being  converted  into  voting  securities  of the  surviving
entity) more than 50% of the combined  voting power of the voting  securities of
such   surviving   entity   outstanding   immediately   after  such   merger  or
consolidation;  provided,  however,  that a merger or consolidation  effected to
implement a recapitalization  of the Operating Company and/or Parent (or similar
transaction) in which no person acquires no more than 30% of the combined voting
power of such entity's then-outstanding securities shall not constitute a Change
in Control of the Operating  Company and/or Parent;  or (d) the  stockholders of
the Operating  Company and/or Parent  approve a plan of complete  liquidation of
the Operating  Company and/or Parent or an agreement for the sale or disposition
by the  Operating  Company  and/or  Parent  of all or  substantially  all of its
assets.


                                       14
<PAGE>


                                    EXHIBIT B

               I acknowledge  that I have had twenty-one  days to decide whether
to execute  this Release of Claims  ("Release")  and that I have been advised to
consult an attorney  before  executing this Release.  I acknowledge  that I have
seven  days from the date I execute  this  Release  to  revoke my  signature.  I
understand  that if I choose to revoke  this  Release I must  deliver my written
revocation to National Coal  Corporation and National Coal Corp.  before the end
of the seven-day period.

              I, for  myself,  my  heirs,  successors,  and  assigns,  do hereby
settle,  waive,  and release each of National Coal Corporation and National Coal
Corp.  (together,  the  "Company")  and any of their past and present  officers,
owners,  stockholders,   partners,  directors,  agents,  employees,  successors,
predecessors,  assigns, representatives,  attorneys, divisions, subsidiaries, or
affiliates  from  any and all  claims,  charges,  complaints,  rights,  demands,
actions, and causes of actions of any kind or character,  in contract,  tort, or
otherwise,  based on actions or omissions  occurring in the past and/or present,
and regardless of whether known or unknown to me at this time,  including  those
not specifically mentioned in this Release. Among the rights, claims, and causes
of action  which I give up under this  Release are those  arising in  connection
with my employment and the termination of that  employment,  including,  without
limitation,  rights or claims under federal,  state,  and local fair  employment
practice or  discrimination  laws  (including the various Civil Rights Acts, the
Age  Discrimination  in  Employment  Act, the Equal Pay Act,  and the  Tennessee
Commission  on Human  Rights  Act),  laws  pertaining  to breach  of  employment
contract,  wrongful termination or other wrongful treatment,  and any other laws
or rights relating to my employment with the Company and the termination of that
employment.  I  acknowledge  that  I  am  aware  of  my  rights  under  the  Age
Discrimination  in  Employment  Act,  and that I am  knowingly  and  voluntarily
waiving and  releasing  any claim of age  discrimination  which I may have under
that statute as part of this Release.  This  agreement does not waive or release
any rights,  claims,  or causes of action that may arise from acts or  omissions
occurring  after the date I execute this Release,  nor does this agreement waive
or  release   any   rights,   claims  or  causes  of  action   relating  to  (a)
indemnification  from  the  Company  and  its  affiliates  with  respect  to  my
activities on behalf of the Company and its  affiliates  prior to my termination
of  employment,  (b)  compensation  or benefits to which I am entitled under any
compensation or benefits plan of the Company or its  affiliates,  (c) amounts to
which I am entitled pursuant to the agreement to which a form of this Release of
Claims  was  attached  as  Exhibit  B, (d) my right  to file a charge  with,  or
participate  in any  investigation  conducted by, any federal,  state,  or local
agency charged with enforcing laws prohibiting employment discrimination, (e) my
right to challenge the voluntary and knowing  nature of this release in court or
before any federal,  state,  or local agency charged with  enforcing  employment
laws, or (f) any right,  claim,  or cause of action  arising after the effective
date of this Release.


                                       15
<PAGE>


                                   SCHEDULE 1

Straightfellow  Farms,  Ltd. is a real estate holding company owned by Daniel A.
Roling  and  Tamara  Lyons.  The  purpose  of the  company  is to own  and  rent
condominium apartments. At present there are four apartments in the company with
another two to be added shortly. Ms. Lyons is the Company Secretary and does the
majority of the work. Mr. Roling's time commitment is limited, mainly outside of
office hours,  but at times could  require time during  office hours.  Estimated
hours per month spent on Straightfellow is approximately ten.


                                       16