Document:

Exhibit 10.1

 

LADDER CAPITAL CORP

 

DEFERRED COMPENSATION PLAN

 

1.                                      EFFECTIVE DATE AND PURPOSE

 

(a)                                 Effective Date.  This Plan shall be effective as of July 3, 2014 (the “Effective Date”) and shall apply to Compensation deferred by Participants pursuant to the terms hereof following the Effective Date.

 

(b)                                 Purpose.  The purpose of this Plan is to provide eligible Participants with the opportunity to defer Compensation and, in some circumstances, require such deferral.  The Plan is also intended to establish a method of attracting and retaining persons whose abilities, experience and judgment can contribute to the long-term strategic objectives of Participating Employers.

 

2.                                      DEFINITIONS.  The following terms when used in this Plan have the designated meanings.

 

(a)                                 “Account” means the records maintained on the books of the applicable Participating Employer to reflect deferrals of Compensation by a Participant pursuant to Section 3(d).

 

(b)                                 “Administrator” means the person or committee designated by the Committee as responsible for the day-to-day administration of the Plan.

 

(c)                                  “Annual Bonus” means the Participant’s cash performance-based compensation for a particular Plan Year.

 

(d)                                 “Beneficiary” means the person or persons designated pursuant to Section 7(d) to receive a benefit in the event of a Participant’s death before the Participant’s benefit under this Plan has been paid.

 

(e)                                  “Board” means the Board of Directors of the Ladder Capital Corp. a Delaware corporation.

 

(f)                                   “Cause” means, unless otherwise determined by the Company: (a) in the case where there is no employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an affiliate and the Participant at the time (or where there is such an agreement but it does not define “cause” (or words of like import)), termination of employment or other service relationship due to the Participant’s insubordination, dishonesty, fraud, incompetence, moral turpitude, willful misconduct, refusal to perform the Participant’s duties or responsibilities for any reason other than illness or incapacity, repeated or material violation of any employment policy, violation or breach of any confidentiality agreement, work product agreement or other agreement between the Participant and the Company, or materially unsatisfactory performance of the Participant’s duties for the Company or an affiliate, as determined by the Committee in its good faith discretion; or (b) in the case where there is an

 

 

employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an affiliate and the Participant at the time that defines “cause” (or words of like import), “cause” as defined under such agreement; provided, however, that with regard to any agreement under which the definition of “cause” only applies on occurrence of a change in control, such definition of “cause” shall not apply until a change in control actually takes place and then only with regard to a termination thereafter.

 

(g)                                  “Change in Control” shall mean, with respect to any Participant, a Control Event, but only to the extent that any such Control Event is considered to be an event or occurrence described in Section 409A(a)(2)(A)(v) of the Code with respect to such Participant.

 

(h)                                 “Code” means the Internal Revenue Code of 1986, as amended, and its related regulations, rulings and other guidance published by the Internal Revenue Service.

 

(i)                                     “Committee” means the Compensation Committee of the Board or such other committee as may be designated by the Board from time to time to administer the Plan as provided in Section 8.

 

(j)                                    “Company” means Ladder Capital Finance LLC, a Delaware limited liability company and any successor thereto.

 

(k)                                 “Compensation” means (i) a Participant’s base salary, (ii) a Participant’s Annual Bonus or other performance based compensation, if any, but excluding any equity-based compensation (iii) a Participant’s commissions, if any and/or (iv) any other compensation to be earned by a Participant that is designated as “Compensation” hereunder for a particular Plan Year by the Committee.

 

(l)                                     “Control Event” shall mean, either:

 

(i)                                     any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than Ladder, any trustee or other fiduciary holding securities under any employee benefit plan of Ladder, TowerBrook Capital Partners, L.P., GI International L.P., or their affiliates, or any company owned, directly or indirectly, by the stockholders of Ladder in substantially the same proportions as their ownership of Common Stock of Ladder), becoming the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Ladder representing 50% or more of the combined voting power of Ladder’s then outstanding securities, other than pursuant to Business Transaction that does not constitute a “Change in Control” thereunder;

 

(ii)                                  during any period of two consecutive years, 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 Ladder to effect a transaction described in paragraph (i), (iii), or (iv) of this definition or a director whose initial assumption of office occurs as a result of either an actual or

 

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threatened election contest (or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board) whose election by the Board or nomination for election by Ladder’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;

 

(iii)                               a merger or consolidation of Ladder or any direct or indirect subsidiary of Ladder (a “Business Transaction”) with any other corporation, other than a merger or consolidation which would result in the voting securities of Ladder 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 Ladder or its successor (or the ultimate parent company of the Company or its successor) outstanding immediately after such merger or consolidation; provided, however, that a merger or consolidation effected to implement a recapitalization of Ladder (or similar transaction) in which no person (other than those covered by the exceptions in paragraph (i) of this definition) acquires more than 50% of the combined voting power of Ladder’s then outstanding securities shall not constitute a Change in Control of Ladder; or

 

(iv)                              a complete liquidation or dissolution of Ladder or the consummation of a sale or disposition by Ladder of all or substantially all of Ladder’s assets other than the sale or disposition of all or substantially all of the assets of Ladder to a person or persons who beneficially own, directly or indirectly, 50% or more of the combined voting power of the outstanding voting securities of Ladder at the time of the sale (or to an entity controlled by such person or persons).

 

(m)                             “Disabled” means the date a Participant becomes “disabled” within the meaning of Section 409A(a)(2) of the Code.

 

(n)                                 “Employee” means any full-time employee of a Participating Employer, other than with respect to a particular Plan Year, a Mandatory Participant for such Plan Year.

 

(o)                                 “Exchange Act” means the Securities Exchange Act of 1934, as amended.  Reference to a specific section of the Exchange Act or regulation thereunder shall include such section or regulation, any valid regulation or interpretation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.

 

(p)                                 “Fair Market Value” means, for purposes of the Plan, unless otherwise required by any applicable provision of the Code or any regulations issued thereunder, as of any date, the last sales price reported for the Participating Unit on the applicable date:  (a) as reported on the principal national securities exchange in the United States on which it is then traded or (b) if the Participating Unit is not traded, listed or otherwise reported

 

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or quoted, the Committee shall determine the Fair Market Value in its good faith discretion.

 

(q)                                 “Ladder” means Ladder Capital Corp a Delaware corporation.

 

(r)                                    “Mandatory Participant” means any full-time employee of a Participating Employer whose Compensation for a particular Plan Year exceeds $500,000 (or such other amount as may be selected by the Committee prior to the calendar year to which such compensation relates or such earlier time as may be required pursuant to Section 409A of the Code); provided however that (i) no full-time employee who has an employment agreement with the Company in effect as of immediately prior to the Effective Date shall be a Mandatory Participant for Plan Year 2014 or any subsequent Plan Year and (ii) in the case of Plan Year 2015 and each Plan Year thereafter, no full-time employee who enters into an an employment agreement with the Company after the Effective Date shall be a Mandatory Participant to the extent that such employment agreement specifically states that the Participant will not be a Mandatory Participant under the Plan.

 

(s)                                   “Participant” means any Mandatory Participant and Employee who the Committee, in its sole discretion, determines should be a Participant.

 

(t)                                    “Participating Employer” means the Company and each direct or indirect subsidiary or affiliate of Ladder that has been invited by the Board and has elected to participate in the Plan with respect to its Participants.

 

(u)                                 “Participating Unit” means the the Class A common stock, $0.001 par value per share, of Ladder or securities issues in respect of or in exchange for such common stock, as determined pursuant to Section 5(c).

 

(v)                                 “Payment Date” means a date certain designated pursuant to Section 6 for payment of some portion or all of a Participant’s Account.

 

(w)                               “Plan” means this “Ladder Capital Corp Deferred Compensation Plan” as set forth herein and as amended from time to time.

 

(x)                                 “Plan Year” means the calendar year.

 

(y)                                 “Separation from Service” means a Participant’s termination of service with the Participating Employer, but only to the extent such termination of service is considered to be a “separation from service” described in Section 409A(a)(2) of the Code.

 

(z)                                  “Specified Employee” means each Participant who is considered to be a “specified employee” under Section 409A(a)(2) of the Code.

 

3.                                      ELIGIBILITY AND CONTRIBUTIONS

 

(a)                                 Eligibility.  Each Mandatory Participant, and each other Employee designated by the Committee as eligible to participate in the Plan shall be eligible to be a

 

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Participant hereunder.  The Committee has the sole and complete discretion to determine which Employees are eligible to participate on a Plan Year by Plan Year basis, and the Compensation that each such eligible Participant shall be eligible or shall be required to defer, and the Committee may treat similarly situated employees differently.  To the extent permitted by the Committee, a Participant may elect to defer different percentages of each component of the Participant’s Compensation eligible to be deferred for a Plan Year.  No Employee shall have a right to be designated as a Participant and the designation of an Employee as a Participant in one Plan Year shall not obligate the Committee to continue such Employee as a Participant in any subsequent Plan Year.

 

(b)                                 Elective Contributions.  Each Participant for a particular Plan Year shall be permitted to defer receipt of a portion of such Participant’s Annual Bonus and have such amount credited to the Participant’s Account under the Plan (an “Elective Contribution”).  A deferral election pursuant to this Section 3(b) shall be made in writing at such time and in such manner as the Administrator shall prescribe; provided that all such elections shall be made in accordance with Section 409A of the Code.  A deferral election shall apply only with respect to the Plan Year for which it is made and shall not continue in effect for any subsequent Plan Year.  Any election to defer Compensation that is made at a time that would subject such Participant to the excise tax under Section 409A of the Code shall be disregarded and void ab initio.  Subject to the preceding sentence, a deferral election, once executed and filed with the Administrator, cannot be revoked or modified after the date specified by the Administrator.

 

(c)                                  Mandatory Contributions.  The receipt of a portion of the Compensation of each Mandatory Participant shall automatically be deferred and credited to such Mandatory Participant’s Account under the Plan (a “Mandatory Contribution”).  The amount of the Mandatory Contributions shall be determined pursuant to a schedule adopted by the Committee prior to such time as may be required to avoid the excise tax under Section 409A of the Code, which such schedule shall be attached to this Plan as Schedule A.  Any requirement to defer Mandatory Contributions that is made at a time that would subject a Participant to the excise tax under Section 409A of the Code shall be disregarded and void ab initio.  Until such time as the Administrator modifies such schedule, the amount of Mandatory Contributions shall be determined in accordance with Schedule A attached hereto and such amounts shall only be contributed from the Annual Bonus, and to the extent any Annual Bonus is earned and paid.

 

(d)                                 Accounts.  The Administrator shall establish an Account for each Participant to which all Mandatory Contributions and Elective Contributions shall be allocated.  Each Participant’s Account shall separately reflect all Mandatory Contributions and Elective Contributions allocated with respect to such Participant, the Plan Year of such deferral, and all income, gains or losses with respect to each type of contribution.

 

4.                                      VESTING

 

(a)                                 Elective Contributions.  Elective Contributions allocated to a Participant’s Account shall be fully vested at all times.

 

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(b)                                 Mandatory Contributions.

 

(i)                                     Normal Vesting.  One-third of Mandatory Contributions credited to a Participant’s Account (and any associated gains or losses) shall vest on December 31 of the calendar year following the applicable Plan Year in which the related Compensation was earned and the remaining unvested Mandatory Contributions shall vest in ratable installments on December 31 of each of the of the second and third calendar year following the applicable Plan Year in which the related Compensation was earned, in each case if the Participant is then employed by any Participating Employer.  For example, if Mandatory Contributions were allocated to a Participant’s Account based on the Annual Bonus earned with respect to the 2014 Plan Year (even if such Compensation would otherwise have been paid to the Participant in 2015), one-third of such Mandatory Contributions shall vest on December 31, 2015 and the remaining unvested Mandatory Contributions shall vest in ratable installments on each of December 31, 2016 and December 31, 2017.

 

(ii)                                  Accelerated Vesting.  Any unvested Mandatory Contributions shall accelerate vesting as follows, in each case so long as the Participant remains continuously employed by any Participating Employer through such event: (a) 100% of the then unvested Mandatory Contributions shall immediately vest upon the termination of the Participant’s employment by each Participating Employer other than for Cause that also constitutes a Separation from Service and only if such termination occurs within six (6) months following the consummation of a Change in Control, (b) 100% of the then unvested Mandatory Contributions shall immediately vest in full upon an event described in Section 2(l)(ii) (related to the definition of a Control Event) (c) 100% of the then unvested Mandatory Contributions shall immediately vest in full upon the termination of the Participant’s employment with each Participating Employer due to death or Disability, and (d) upon a Participant’s involuntary termination of employment by each Participating Employer for a reason other than Cause that also constitutes a Separation from Service, the Participant shall become immediately vested in the portion of the unvested Mandatory Contributions that would have vested had the Participant remained continuously employed through December 31 of the Plan Year in which such termination occurred; provided that upon such termination the Participant executes and does not revoke a release of claims in the form provided in Schedule B within 60 days of such termination and prior to the next scheduled Payment Date.

 

(iii)                               Forfeiture.  Except as provided in this Section 4(b), all unvested Mandatory Contributions shall be immediately forfeited upon the termination of the Participant’s employment with each Participating Employer.  In the event of the termination of the Participant’s employment with any Participating Employer for Cause, all Mandatory Contributions, whether vested or unvested, shall be immediately forfeited.

 

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5.                                      NOTIONAL INVESTMENT OF ACCOUNTS

 

(a)                                 General.  Mandatory Contributions and Elective Contributions shall be credited to each Participant’s Account on the first business day following the date such Compensation would otherwise have been paid to such Participant.

 

(b)                                 Phantom Investment in Participating Units.  All Mandatory Contributions and Elective Contributions shall be deemed invested on a phantom basis in Participating Units as of the December 31 of the Plan Year with respect to which the related Compensation was earned.   The number of full and fractional Participating Units that shall be allocated to such Participant’s Account as of such December 31 shall equal the quotient of the aggregate amount of Mandatory Contributions and Elective Contributions required to be allocated for such Plan Year and the Fair Market Value of a Participating Unit as of December 31 of the Plan Year in which the related Compensation was earned.

 

(c)                                  Events Affecting Participating Units

 

(i)                                     General.  With respect to each full Participating Unit credited to a Participant’s Account, the Participant’s Account shall be credited with any dividend or other distribution (other than tax distributions) received by holders of Participating Units (with such amount appropriately pro-rated in the event the Participant’s Account is credited with a fractional Participating Unit).  In the event that such dividend or distribution was paid in cash, such cash shall be deemed invested on a phantom basis in the number of Participating Units equal to the quotient of the aggregate amount of such dividend or distribution divided by the Fair Market Value of a Participating Unit immediately after such dividend or distribution.  In the event that any recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split up, spin off, combination, repurchase, change of control or exchange of Participating Units or other corporate transaction or event (each, a “Corporate Event”) affects the Participating Units such that an adjustment is necessary to prevent dilution or enlargement of benefits or potential benefits intended to be made available under this Plan, the Board shall, in such manner as it in good faith deems equitable, adjust the number of Participating Units (or number and kind of other securities or property) allocated to a Participant’s Account or make provision for a cash payment on the underlying Payment Date to the Participant in consideration for the cancellation of the Participating Units allocated to the Participant’s Account in an amount equal to the Fair Market Value of such Participating Units as determined immediately prior to such cancellation.  Any dividends, distributions, securities or other property (including additional Participating Units) credited to a Participant’s Account under this Section 5(c)(i) shall be subject to the same vesting and payment conditions as were applicable to the applicable Participating Units.

 

(ii)                                  No Corporate Action Restriction.  The existence of this Plan shall not limit, affect or restrict in any way the right or power of the Board or any equivalent governing body or the securityholders of Ladder or any of its affiliates to make or authorize (a) any adjustment, recapitalization, reorganization or other change in Company’s or its Affiliates’ capital structure or business,  (b) any

 

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merger, consolidation or change in the ownership of Company or any of its affiliates, (c) any issue of bonds, debentures, capital, preferred stock ahead of or affecting Company or its affiliates’ capital securities or the rights thereof, (d) any dissolution or liquidation of Company or any of its affiliates, (e) any sale or transfer of all or any part of Company’s or any of its affiliates’ assets or business, or (f) any other corporate act or proceeding by Company or any of its affiliates.  No Participant or any Person claiming through a Participant shall have any claim against the Board or any equivalent governing body of Company or any of its affiliates, or any employees, officers, directors, managers, securityholders or agents of Company or any of its Affiliates, as a result of any such action.  The Company may, in its discretion, terminate the Plan and distribute any amounts then held in a Participant’s Account in a manner and to the extent allowed pursuant to Treasury Regulation 1.409A-3(j)(4)(ix).

 

6.                                      PAYMENT

 

(a)                                 To the extent that any amounts are credited to a Participant’s Account as Elective Contributions pursuant to Section 3(b) (as adjusted for any deemed investment gains or losses related to such amounts), the Payment Date shall be the earlier to occur of (i) a Change in Control, (ii) within sixty (60) days following a Participant’s Separation from Service and (iii) the first business day following the date of payment of the annual bonus payments following December 31 of third calendar year following the Plan Year to which the underlying deferred Compensation relates, provided that in no event shall such Payment Date occur later than February 28 following December 31 of the third calendar year following the Plan Year to which the underlying deferred Compensation relates.  For example, any amounts deferred on account of an Annual Bonus that is earned with respect to the 2014 Plan Year shall be paid on the next annual bonus payment date following December 31, 2017 and in no event shall such Payment Date be later than February 28, 2018.

 

(b)                                 To the extent that any amounts are credited to a Participant’s Account as Mandatory Contributions pursuant to Section 3(c) (as adjusted for any deemed investment gains or losses related to such amounts) and have vested pursuant to Section 4(b), the Payment Date shall be the earlier to occur of (i) a Change in Control, (ii) within sixty (60) days following the Mandatory Participant’s Separation from Service and (iii) the first business day following the date of payment of the annual bonus payments following December 31 of third calendar year following the Plan Year to which the underlying deferred Compensation relates, provided that in no event shall such Payment Date occur later than February 28 following December 31 of the third calendar year following the Plan Year to which the underlying deferred Compensation relates.  For example, any amounts deferred on account of an Annual Bonus that is earned with respect to the 2014 Plan Year shall be paid on the next annual bonus payment date following December 31, 2017 and in no event shall such Payment Date be later than February 28, 2018.

 

(c)                                  Upon the applicable Payment Date, the Participant shall receive a cash payment in an amount equal to the Fair Market Value of the number Participating Units of Ladder (or portion thereof, as applicable) credited to such Participant’s Account (or

 

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any property or securities issued in respect of or in exchange for such Participating Units), in each case taking into account any adjustments pursuant to Section 5(c).  Notwithstanding the foregoing, (i) in the event of a Participant’s voluntary termination of employment or other service with any Participating Employer, any property attributable to Elective Contributions or Mandatory Contributions (with the exception of unvested Mandatory Contributions forfeited by a Participant pursuant to Section 4(b)(iii)) then held in the Participant’s Account shall be paid based upon the lowest Fair Market Value of a Participating Unit during the forty-five (45) day period following the Separation from Service, and (ii) in the event of a Participant’s termination of employment or other service with any Participating Employer by such Participating Employer for Cause, any property attributable to Elective Contributions then held in the Participant’s Account shall be paid based upon the lowest Fair Market Value of a Participating Unit during the forty-five (45) day period following the Separation from Service.

 

(d)                                 To the extent required under Section 409A of the Code, any distribution to a Specified Employee on account of the Participant’s Separation from Service shall be made no earlier than after the six-month anniversary of such Separation from Service.  For purposes of Code Section 409A, a Participant’s right to receive any installment payments pursuant to this Plan shall be treated as a right to receive a series of separate and distinct payments.

 

7.                                      MISCELLANEOUS

 

(a)                                 Source of Payment.  The Compensation deferred by a Participant pursuant to this Plan (and the income, gains and losses credited thereon) shall be a general obligation of the Participating Employer that employs the Participant at the time of such deferral.  No Participating Employer shall have any liability or responsibility with respect to Compensation deferred (and the income, gains and losses thereon) by a Participant at a time such Participant was not employed by such Participating Employer.  The claim of a Participant or Beneficiary to a benefit shall at all times be merely the claim of an unsecured creditor of the applicable Participating Employer.  No trust, security, escrow, or similar account need be established for the purpose of paying benefits hereunder.  A Participating Employer shall not be required to purchase, hold or dispose of any investments pursuant to this Plan; however, if in order to cover its obligations hereunder a Participating Employer elects to purchase any investments the same shall continue for all purposes to be a part of the general assets and property of the Participating Employer, subject to the claims of its general creditors and no person other than the Participating Employer shall by virtue of the provisions of this Plan have any interest in such assets other than an interest as a general creditor.

 

(b)                                 Withholding.  The Company or any of its subsidiaries or affiliates shall have the right to deduct from any distribution to be made pursuant to the Plan, or to otherwise require, within 30 days of such distribution, payment by the Participant of, any federal, state or local taxes required by law to be withheld.  To the extent permitted by Section 409A of the Code, all amounts credited to Participants’ Accounts pursuant to this Plan and all payments under the Plan shall be subject to any applicable withholding requirements imposed by any tax (including, without limitation, FICA) or other law.  If a Participant’s share of any of the taxes referred to above are due at the time of deferral,

 

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instead of at the time of payout, the Participant will be required to pay (by payroll deduction or check) to the applicable Participating Employer the Participant’s share of any such taxes then due and payable.  Notwithstanding the previous sentence and to the extent allowed under Section 409A of the Code, the Company shall distribute from Participant’s Account any amounts required to pay employment taxes (including, without limitation, FICA and FUTA).

 

(c)                                  Right of Offset.  Any distribution to a Participant made pursuant to this Plan shall be reduced at the discretion of the Administrator to take account of any amount due, and not paid, by the Participant to the Company or any of its subsidiaries or affiliates at the time payment is to be made hereunder, to the extent that such offset right does not subject the Participant to the additional 20% excise tax imposed under Section 409A of the Code.

 

(d)                                 Beneficiary Designation.  A Participant may from time to time designate, in the manner specified by the Administrator, a Beneficiary to receive payment pursuant to Section 6 in the event of the Participant’s death.  In the event that there is no properly designated Beneficiary living at the time of a Participant’s death, such Participant’s benefit hereunder shall be paid to the Participant’s estate.

 

(e)                                  Spendthrift Clause.  No benefit, distribution or payment under the Plan may be anticipated, assigned (either at law or in equity), alienated or subject to attachment, garnishment, levy, execution or other legal or equitable process whether pursuant to a “qualified domestic relations order” as defined in Section 414(p) of the Code or otherwise.

 

8.                                      ADMINISTRATION AND RESERVATION OF RIGHTS

 

(a)                                 Powers of the Committee.  The Committee shall have the power and discretion to administer and oversee the Plan, including to (i) determine all questions arising in the interpretation and application of the Plan; (ii) determine the person or persons to whom benefits under the Plan shall be paid; (iii) decide any dispute arising hereunder; (iv) correct defects, supply omissions and reconcile inconsistencies to the extent necessary to effectuate the Plan; (v) select, remove and replace the Administrator; (vi) promulgate and enforce such rules, regulations and procedures as shall be proper for the efficient administration of the Plan; (vii) determine all questions arising in the administration of the Plan; (viii) make recommendations to the Board with respect to proposed amendments to the Plan; and (ix) have all such other powers as may be necessary to discharge its duties hereunder.

 

(b)                                 Powers of the Administrator.  The Administrator shall have the power and discretion to administer the day-by-day operations of the Plan (subject to the oversight of the Committee), including to (i) compute the amount of benefits and other payments which shall be payable to any Participant in accordance with the provisions of the Plan; (ii) advise the Committee and the Board regarding the known future need for funds to be available for distribution; (iii) file all reports with government agencies, Participants and other parties as may be required by law, whether such reports are initially the obligation

 

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of the Company or the Plan; and (iv) have all such other powers as may be necessary to discharge its duties hereunder.

 

(c)                                  Claims Procedure.  If the Committee denies any Participant’s or Beneficiary’s claim for benefits under the Plan: (i)     the Committee shall notify such Participant or Beneficiary of such denial by written notice which shall set forth the specific reasons for such denial; and (ii) the Participant or Beneficiary shall be afforded a reasonable opportunity for a full and fair review by the Committee of the decision to deny the Participant’s claim for Plan benefits.

 

(d)                                 Consent.  By becoming a Participant, each Participant shall be deemed conclusively to (i) have accepted and consented to all terms of the Plan and all actions or decisions made by the Company, Administrator, the Committee or the Board with regard to the Plan and (ii) have agreed that a Participating Employer, the Administrator, the Committee and the Board (and any person who is employed by, is a member of, or provides services to or on behalf of, any of the foregoing) shall not have any liability related to, or be responsible for any claim related to, the incurrence by the Participant of any tax, interest expense, loss of deferral benefit, or any other obligation, liability or damage, in each case, arising under or related to Section 409A of the Code.  This Section 8(d) shall apply to, and be binding upon, the Beneficiaries, distributees and personal representatives and other successors in interest of each Participant.

 

(e)                                  Agents and Expenses.  The Administrator or the Committee may employ agents and provide for such clerical, legal, actuarial, accounting, medical, advisory or other services as it deems necessary to perform its duties under this Plan.  Unless otherwise determined by the Committee, the cost of such services and all other expenses incurred by the Administrator or the Committee in connection with the administration of the Plan shall be paid by the Company.

 

(f)                                   Delegation of Duties.  The Administrator may delegate any of his or her respective duties to employees of a Participating Employer or its subsidiaries.

 

(g)                                  Actions Conclusive.  Any action on matters within the discretion of the Administrator or the Committee shall be final, binding and conclusive, provided that the Committee may review/void any actions taken by the Administrator that the Committee deems to be outside of the scope of the Administrator’s discretion.

 

(h)                                 Records and Reports.  The Administrator and the Committee shall maintain adequate records of their respective actions and proceedings in administering this Plan and shall file all reports and take all other actions as are deemed appropriate in order to comply with any Federal or state law.

 

(i)                                     Liability and Indemnification.  The Administrator and the Committee shall perform all duties required of them under this Plan in a prudent manner.  The Administrator and the Committee shall not be responsible in any way for any action or omission of Ladder, the Company, their subsidiaries or their employees in the performance of their duties and obligations as set forth in this Plan.  The Administrator and the Committee also shall not be responsible for any act or omission of any of their

 

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respective agents provided that such agents were prudently chosen by the Administrator or the Committee and that the Administrator or the Committee relied in good faith upon the action of such agents.

 

(j)                                    Right to Amend or Terminate.  The Board may at any time amend the Plan in any respect, retroactively or otherwise, or terminate the Plan in whole or in part for any other reason.  However, no such amendment or termination shall reduce the amount standing credited to any Participant’s Account as of the date of such amendment or termination.  In the event of the termination of the Plan, amounts deferred hereunder will be paid in accordance with the terms of the Plan as in effect prior to such termination.  It is the intention of the Company that this Plan be established, maintained and operated in compliance with Section 409A of the Code.  Notwithstanding anything to the contrary contained herein, any provision of this Plan or any administrative procedure promulgated with respect to the Plan that is inconsistent with Section 409A of the Code shall be automatically deemed amended to the minimum extent necessary to comply with Section 409A of the Code.  Any action taken by the Administrator, Committee, Participant or Participant inconsistent with Section 409A shall be ineffective and void ab initio.

 

(k)                                 Usage.  Whenever applicable, the masculine gender, when used in the Plan, includes the feminine gender, and the singular includes the plural.

 

(l)                                     Separability.  If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provisions of the Plan, and the Plan shall be construed and enforced as if such provision had not been included therein.

 

(m)                             Captions.  The captions in this document are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge or describe the scope or intent of the Plan and shall in no way affect the Plan or the construction of any provision thereof.

 

(n)                                 Right of Discharge Reserved.  Nothing contained in this Plan shall be construed as a guarantee or right of any Participant to be continued as an Employee of Ladder or its subsidiaries (or of a right of a Participant to any specific level of Compensation) or as a limitation of the right of Ladder or its subsidiaries or affiliates to terminate any Participant.

 

(o)                                 Governing Law and Construction.  The Plan is intended to constitute an unfunded, nonqualified deferred compensation arrangement.  Except to the extent preempted by Federal law, all rights under the Plan shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of law.  No action shall be brought by or on behalf of any Participant or Beneficiary for or with respect to benefits due under this Plan unless the person bringing such action has timely exhausted the Plan’s claim review procedure.

 

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SCHEDULE A

 

	
Annual Total Compensation
    	
 
    	
Mandatory Contribution Percent of
   Incremental Excess, but not to exceed the
   Annual Bonus (if any)
    
	
Up   to $500,000
    	
 
    	
0%
    
	
$500,001   to $1,000,000
    	
 
    	
15%   of the amount between $500,001 and $1,000,000
    
	
$1,000,000   to $2,000,000
    	
 
    	
20%   of the amount between $1,000,001 and $2,000,000
    
	
More   than $2,000,000
    	
 
    	
25%   of the amount in excess of $2,000,000.
    

 

 

SCHEDULE B

 

General Release

 

I,                                       , in consideration of and subject to the performance by Ladder Capital Corp, a Delaware corporation (the “Company”), of its obligations, promises and covenants under the Ladder Capital Corp Deferred Compensation Plan (the “Plan”), do hereby release and forever discharge as of the date hereof the Company and its affiliates and all present and former directors, officers, agents, representatives, employees, successors and assigns of the Company and its affiliates and the Company’s direct or indirect owners (collectively, the “Released Parties”) to the extent provided below:

 

1.              I understand that any payments or benefits paid or granted to me under the Plan represent, in part, consideration for signing this General Release.  I understand and agree that I will not receive the payments and benefits specified in the Plan unless I execute this General Release and do not revoke this General Release within the time period permitted hereafter or breach any provision of this General Release.  If I timely accept and do not revoke this General Release the Company shall be obligated to provide the payments and benefits under and in accordance with the terms of the Plan.  I also acknowledge and represent that I have received all payments and benefits that I am entitled to receive by virtue of any employment with the Company through the effective date of my separation.

 

2.              Except as provided in paragraphs 4 and 5 below and except for the provisions of any agreement between me and any Released Party which expressly survive the termination of my employment with the Company and only to the extent permitted by law, I knowingly and voluntarily (for myself, my heirs, executors, administrators and assigns) release and forever discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross claims, counter claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through the date this General Release becomes effective and enforceable) and whether known or unknown, suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns, may have, which arise out of or are connected with my employment with, or my separation or termination from, the Company (including, but not limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law, or under any other local, state, or federal law, regulation or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Company; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim for

 

 

costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to herein as the “Claims”).

 

3.              I represent that I have made no assignment or transfer of any right, Claim, or other matter covered by paragraph 2 above.

 

4.              The parties hereto agree that this General Release does not waive or release: (a) any rights or claims that I (or my heirs, executors, administrators and assigns) have or may have under the Age Discrimination in Employment Act of 1967 which arise after the date I execute this General Release, (b) any rights or claims that I (or my heirs, executors, administrators and assigns) have or may have based on any event, conduct, statement, act or omission occurring after the date I execute this General Release; (c) any rights or claims that I (or my heirs, executors, administrator and assigns) have or may have arising under, or otherwise to enforce, this General Release and/or the Company’s obligations under the Plan; [(d) any rights to or claims for defense, indemnification, and to be held harmless by the Company pursuant to and in accordance with the terms and conditions of Section 8 of the Employment Agreement; and (e) any rights or claims that I (or my heirs, executors, administrators and assigns) have or may have under that certain (i) Limited Liability Company Agreement dated as of                          ,              by and among Ladder Capital Finance Holdings LLC (“Parent”), me and the other parties listed on the signature pages thereto, (ii) Equity Grant Agreement dated as of                          ,              by and between Parent and me, (iii) Registration Rights Agreement dated as of                          ,              by and among Parent, me and the other parties listed on the signature pages thereto and (iv) any other documents executed in connection with the transaction contemplated by the foregoing agreements, in each case, as amended, restated or otherwise modified from time to time.](1)  I acknowledge and agree that my separation from employment with the Company and this General Release shall not serve as the basis for any Claim (including, without limitation, any Claim under the Age Discrimination in Employment Act of 1967).

 

5.              In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied to the extent permitted by laws.  I expressly consent that this General Release shall be given full force and effect according to each and all of its terms and provisions, including those relating to unknown, unsuspected and unanticipated Claims (notwithstanding any state statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied.  I acknowledge and agree that this waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the terms of the Plan.  I further agree that in the event I should bring a Claim seeking damages against the Company or any of its affiliates, or in the event I should seek to recover against the Company or any of its affiliates in any Claim brought by a governmental agency on my behalf, this

 

(1) NTD: This should be removed or tailored “down” to retain only what is absolutely necessary.  This is a list of potential claims that might be reserved through other documents, but should not appear in toto in any agreement given to a departing employee.

 

B-2

 

General Release shall serve as a complete defense to such Claims to the extent permitted by applicable law.

 

Notwithstanding the foregoing, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived by law, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding.  I further agree that, after reasonable inquiry, I am not aware of any pending charge, complaint or facts that could reasonably be expected to give rise to any claim of the type described in paragraph 2 as of the date I execute this General Release.

 

6.              I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct.

 

7.              I agree that I will forfeit all amounts payable by the Company pursuant to the Plan if I challenge the validity of this General Release.  I also agree that if I violate this General Release by suing the Company or the other Released Parties with regard to any of the Claims released herein, I will pay all costs and expenses of defending against the suit incurred by the Released Parties, including reasonable attorneys’ fees, and return all payments received by me pursuant to the Plan.  Notwithstanding the foregoing, this paragraph 7 shall be subject to the requirements of any applicable law and shall not apply to any challenge by me or any Release to the validity of this General Release under the Older Workers Benefit Protection Act or to any suit or Claim brought under the Age Discrimination in Employment Act.

 

8.              I agree that this General Release is confidential and agree not to disclose any information regarding the terms of this General Release, except to my immediate family and any tax, accounting, legal or other counsel I have consulted or hereafter may consult regarding the meaning or effect hereof, in connection with the preparation of my tax returns, or as required by law, and I will instruct each of the foregoing not to disclose the same to anyone.  Notwithstanding anything herein to the contrary, each of the parties hereto (and each affiliate and person acting on behalf of any such party) agree that each party hereto (and each employee, representative, and other agent of such party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of this transaction contemplated in the Plan and hereunder and all materials of any kind (including opinions or other tax analyses) that are provided to such party or such person relating to such tax treatment and tax structure, except to the extent necessary to comply with any applicable federal or state securities laws.  This authorization is not intended to permit disclosure of any other information including (without limitation) (i) any portion of any materials to the extent not related to the tax treatment or tax structure of this transaction, (ii) the identities of participants or potential participants in the Plan, (iii) any financial information (except to the extent such information is related to the tax treatment or tax structure of this transaction), or (iv) any other term or detail not relevant to the tax treatment or the tax structure of this transaction.  Nothing herein shall be deemed to limit or preclude any disclosure of this

 

B-3

 

General Release or the information herein by any party hereto to the extent necessary for such party to enforce his or its rights or the other party’s obligations under the Plan and/or this General Release.

 

9.              I agree not to disparage the Company, its past and present investors, officers, directors or employees or any of its affiliates and to comply with my non disclosure obligations between me and the Company under and in accordance with the terms and conditions therein, unless a prior written release from the Company is obtained.  I further agree that as of the date hereof, and except as otherwise authorized by the Company, I have returned to the Company any and all property, tangible or intangible, relating to its business which I possessed or had control over at any time (including, but not limited to, company provided credit cards, building or office access cards, keys, computer equipment, manuals, files, documents, records, software, customer data base and other data).

 

10.       The Company will direct and will take reasonable measures to ensure that current officers and directors of the Company and its affiliates will not, directly or indirectly through a third party, disparage me.

 

11.       Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish, or in any way affect any rights or claims arising out of any breach by the Company or by any Released Party of the Plan or this General Release after the effective date hereof or any vested rights I may have pursuant to any retirement or pension plan.

 

12.       Whenever possible, each provision of this General Release shall be interpreted in, such manner as to be effective and valid under applicable law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

 

·                                          I HAVE READ IT CAREFULLY;

 

·                                          I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED; TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963; THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

 

·                                          I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 

·                                          [I HAVE BEEN ADVISED BY THE COMPANY, IN WRITING, TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER

 

B-4

 

CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;

 

·                                          I HAVE HAD AT LEAST 21/45(2) DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON                                    ,            TO CONSIDER IT AND THE CHANGES MADE SINCE THE                                    ,            VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21 DAY PERIOD;

 

·                                          THE CHANGES TO THE AGREEMENT SINCE                                      ,            EITHER ARE NOT MATERIAL OR WERE MADE AT MY REQUEST;

 

·                                          I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;](3)

 

·                                          I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

 

·                                          I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.

 

[Remainder of this page intentionally left blank.  Signature page(s) immediately follow.]

 

(2) If this provision is retained due to the departing employee being asked to sign this agreement is 40 or older, the 45-day “consideration period” should only be granted when more than one employee is terminating at approximately the same time and for the same or related reasons.

 

(3) The bracketed terms should be deleted for any departing employee asked to sign this release who is under 40 years of age.

 

B-5

 

IN WITNESS WHEREOF, the parties hereto have executed this General Release as of the date(s) indicated below.

 

Knowingly and voluntarily accepted and agreed to by the Company, after review for a reasonable and sufficient period of time and consultation with the Company’s attorneys, and with the full understanding of the terms, conditions and legal consequences hereof and with the intent to be bound hereby:

 

	
 
    	
LADDER   CAPITAL CORP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
Date:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EMPLOYEE
    

 

B-6Exhibit 10.1

 

RICHARD A. BOONE

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into effective as of the 1st day of June, 2014 (the “Effective Date”), by and between Rhino GP LLC, a Delaware limited liability company (the “Employer”) and Richard A. Boone (“Executive”).

 

Recitals:

 

Executive is currently employed by Employer pursuant to an Employment Agreement dated May 31, 2011 (the “Prior Agreement”).  The Employer is the general partner of Rhino Resource Partners L.P. (the “Partnership”) and seeks to continue the Executive’s employment with the Employer.

 

The Employer and Executive 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.  This Agreement amends, restates and supersedes the Prior 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, 2016 (the “Employment Term”).

 

2.              Position and Duties.  As of the Effective Date, Executive shall serve as the Executive Vice President and Chief Financial Officer of the Employer.  In such positions, Executive shall report directly to the CEO of the Employer except, where appropriate and/or required by the rules of the New York Stock Exchange, Employer’s charter documents and/or other applicable rule or regulation, to the Board of Directors of Employer and/or Employer’s Audit Committee. 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 Employer.  Executive’s regular place of employment during the Employment Term shall be at 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 initial annual rate of $315,000 per year, which Base Salary shall be evaluated annually for potential increase, payable in regular installments in accordance with the usual executive payroll practices of Employer.

 

4.              Incentive Compensation.  During the Employment Term, Executive shall participate in any annual or long-term cash or equity based incentive plans or other similar arrangements of the Employer on a comparable basis as Employer’s other executives, in each case, in accordance with the terms of such plans, 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 one hundred percent (100%) of Executive’s Base Salary.  The Discretionary Bonus will be calculated on a full calendar year basis for 2014 and 2015, and on a prorated basis for 2016.  The prorated bonus for 2016 shall be paid on Executive’s last regularly scheduled pay date, in the event that this Agreement has not been extended prior to that date.

 

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) plan and profit sharing and non-qualified deferred compensation plans (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.  Executive shall be entitled to three (3) weeks of paid vacation each year during the Employment Term.

 

(c)          Indemnification.  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 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.

 

(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.

 

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

 

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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 Employer for Cause (as defined in Section 12(d)) or if Executive voluntarily resigns without Good Reason (as defined in Section 12(j)), 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 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 (as defined in Section 12(g)) or death, or if Executive voluntarily resigns for Good Reason, Executive shall receive:  (i) the Accrued Obligations; and (ii) subject to Section 7(f), Base Salary for a period of twelve (12) months from the termination of employment, payable in a lump sum within thirty (30) days of the date of termination.  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 as well as any other compensation Executive’s estate or beneficiary(ies) are entitled to receive under Employer’s workmen’s compensation insurance program and (if any) other death benefits payable to Executive’s estate or beneficiary(ies) under Employer’s benefits plans according to their terms if Executive has elected to participate in any such plans, as they may be amended from time to time.  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

 

3

 

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.

 

(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.

 

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

 

4

 

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 Bituminous 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., consulting, 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 finally

 

5

 

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.              [Intentionally Omitted]/

 

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.  Employer, Rhino 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 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.

 

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(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 the Employer and its successors and assigns.  The Employer 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 Employer would be required to perform this Agreement if no such succession had taken place.  Regardless of whether such an agreement is executed, this Agreement shall be binding upon any successor of the Employer 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.

 

(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.

 

7

 

If to the Employer, to:

 

Rhino GP LLC

424 Lewis Hargett Circle

Suite 250

Lexington, Kentucky 40503

Attn:  CEO

 

cc:

 

Rhino GP LLC

5 Orchard Road

Wheeling, West Virginia 26003

Attn:  David Zatezalo

 

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(k)) 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.

 

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.

 

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(c)          Board.  “Board” means the Board of Directors of the Employer.

 

(d)         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.

 

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

 

(f)           Employer.  “Employer” means Rhino GP LLC, a Delaware limited liability company.

 

(g)          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.

 

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

 

(i)             Executive.  “Executive” means Richard A. Boone.

 

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

 

9

 

(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, death 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.

 

(k)         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.

 

10

 

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

 

 

	
EXECUTIVE:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Richard A. Boone
    	
 
    
	
Richard A. Boone
    	
 
    
	
 
    	
 
    	
 
    
	
Date   signed:
    	
05/29/14
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
RHINO GP LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   David G. Zatezalo
    	
 
    
	
 
    	
 
    
	
Name: David Zatezalo
    	
 
    
	
 
    	
 
    
	
Title: Chairman
    	
 
    
	
 
    	
 
    
	
Date   signed:
    	
05/29/14
    	
 
    
					

 

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