Document:

EXHIBIT 10.15

 

 

CHRISTOPHER N. MORAVEC

EMPLOYMENT AGREEMENT

 

 

THIS
EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into effective as of the
31st day of March, 2010, (the “Effective Date”), by and among (i) Rhino GP LLC, a
Delaware limited liability company (the “Company”), (ii) Rhino Energy LLC, a
Delaware limited liability company, (“Rhino”) and (iii) Christopher N. Moravec
(“Executive”).

 

Recitals:

 

Executive
is currently employed by Rhino pursuant to an Employment Agreement dated March 11,
2007, as amended by that certain First Amendment to Employment Agreement dated
effective as of September 17, 2009 (the “Prior Agreement”).  The Company is the general partner of Rhino
Resource Partners, L.P. (the “Partnership”) and Rhino and the Company seek to
continue Executive’s employment with Rhino until the completion of a public
offering of units in the Partnership (the “Offering”) and thereafter to
transfer Executive’s employment from Rhino to the Company such that upon the
completion of the Offering the Executive will serve as an employee of the
Company.  For purposes of this Agreement,
the term “Employer” shall mean the entity (Rhino or Company) employing
Executive at the applicable time.

 

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

 

Agreement:

 

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

 

1.           Term
of Employment.  Unless
terminated earlier in accordance with the provisions of Section 7,
Executive’s employment under this Agreement shall be effective for a term
commencing on the Effective Date and ending on March 31, 2013 (the “Employment
Term”).  From the Effective Date until
the closing of the Offering, should it occur, Executive shall be employed by
Rhino.  Upon the closing of the Offering,
Executive shall become an employee of the Company; provided, however, that any
obligations or references specifically applicable to Rhino (as opposed to the
Employer) shall remain in effect.

 

2.           Position
and Duties.  As of the
Effective Date, Executive shall serve as the Executive Vice President of the
Company and Rhino.  In addition,
Executive shall also serve as an officer of 
those other subsidiaries of Rhino Energy LLC and/or the Company as may
be directed at any time and from time to time by the CEO and/or the Manager, as
applicable, in their sole and absolute discretion.

 

1

 

In
such positions, Executive shall report directly to the CEO of the Company and
Rhino.  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 the Employer, acting through the CEO or the Board.  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(s) of
employment during the Employment Term shall be at the Employer’s executive
offices in Lexington, Fayette County, Kentucky, and Executive shall engage in
such travel as may be reasonably required in connection with the performance of
his duties hereunder.

 

3.           Base
Salary.  The Employer shall pay
Executive a base salary (the “Base Salary”) at the annual rate of $400,000 per
year, subject to annual review for potential increase in Employer’s sole and
absolute discretion.  Executive’s Base
Salary shall be payable in regular installments in accordance with the usual
executive payroll practices of the Employer.

 

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

 

5.           Annual
Minimum & Annual Discretionary Bonuses.  The Employer shall pay to the Executive an
annual minimum bonus in the aggregate annual amount of $200,000 (the “Annual
Minimum Bonus”), payable in bi-weekly installments equal to 1/26th of the total Annual Minimum Bonus, with each
such installment payable on Executive’s 
regularly scheduled payroll dates, along with his Base Salary.  In addition to the Annual Minimum Bonus, the
Employer may also consider and approve, in its sole discretion, an annual
performance-based discretionary bonus (“Discretionary Bonus”) for Executive of
up to forty percent (40%) of Executive’s Base Salary.  Both the Annual Minimum and Discretionary
Bonuses are subject to all applicable Taxes.

 

6.           Other Benefits.

 

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

 

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

 

1

 

(c) Indemnification. 
Subject to the Employer’s Limited Liability Company Agreement, 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.  If there
is any conflict between this Section 6(c) and the Employer’s Limited
Liability Company Agreement, the Employer’s Limited Liability Company Agreement
shall control, provided however, that no revision to the Employer’s limited
liability company agreement may effect any diminishment to the Employer’s
indemnification obligations hereunder as they exist on the date hereof.

 

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

 

(e) Vehicle.  The
Employer shall provide Executive with the use of a 4-wheel or all wheel drive
vehicle suitable for the intended duties of Executive and which may also be
used for personal use.  Executive’s use
of such vehicle shall be subject to Employer’s policies and procedures
applicable to company vehicles, as they may be amended from time to time, and
all applicable Internal Revenue Service and other applicable regulations relating
to the personal use of such vehicle.

 

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

 

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

 

(a) For Cause by the Employer or Voluntary Resignation by
Executive Without Good Reason.  If
Executive is terminated by Employer for Cause (as defined in Section12(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 

 

2

 

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 in Section 7(e), 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) and
Section 7(h), Base Salary for a period of six (6) months from the
termination of employment, payable in a lump sum as provided in said
Sections.  Except as provided in Section 7(e),
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 and any a pro-rated Discretionary Bonus as
awarded by the Employer.  Except as
provided in Section 7(e), 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 in Section 7(e), 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 employee benefit plan, policy or
practice of Employer (such as, for example, accrued health benefits or
reimbursements) (collectively, “Accrued and Vested Benefits”).

 

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

 

3

 

Executive’s
termination of employment, Executive shall not be entitled to any severance
benefits that are described as being subject to this Section 7(f).  If the release has become irrevocable within
such 55-day period, the Employer shall pay such severance benefits to Executive
on the 60th day following his termination of employment,
subject to Section 7(h).

 

(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.

 

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

 

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

 

8.           Covenants.

 

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

 

4

 

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 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 six (6) months immediately
following Executive’s termination of employment for any reason, Executive shall
not, without the prior written consent of the Employer, participate or engage
in, directly or indirectly (as an owner, partner, employee, officer, director,
independent contractor, consultant, advisor or in any other capacity calling
for the rendition of services, advice, or acts of management, operation or
control) any business for an individual or entity whose principal business
involves coal mining or coal marketing in the following regions: Central Appalachia,
Northern Appalachia, Illinois Basin, Western Colorado, and any other region in
which the Employer or any of the Employer’s subsidiaries conduct business.  Provided, however, that nothing contained in
this Section 8(b) shall prohibit Executive from engaging in the
business of commercial or investment banking or related financial advisory
services subsequent to Executive’s termination of employment, subject in all
cases to the confidentiality obligations of Section 8(a), the
non-solicitation obligations of Section 8(c) and the other provisions
of this Agreement.

 

(c) Non-Solicitation. 
During the Employment Term and for two (2) years immediately
following Executive’s 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 causing
such customer or vendor to terminate its relationship with the Employer or its
subsidiary or affiliate.

 

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

 

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

 

5

 

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

 

9.           Offering
Incentives.  By a grant separate from
this document, the Employer shall grant to Executive certain units or phantom
units in Rhino Resource Partners, L.P. upon, and subject to, the closing of the
Offering within the Employment Term on terms (including, without limitation,
vesting) acceptable to the Company in its sole discretion.  The terms of such grant shall be determined
by the Company, but shall have a value of $150,000 upon the closing of the
Offering, based upon the issuance price of stock or units in such
Offering.  In addition to the foregoing,
in the event an Offering is completed within the Employment Term, the Employer
shall pay to the Executive a one-time cash bonus of $150,000.  Nothing herein shall require the Company to
complete any Offering.  The term “Offering”
as used herein shall mean any sale of equity or convertible securities to the
public, whether units in Rhino Resource Partners, L.P. or Rhino Energy LLC, or
stock in another entity which succeeds to the business of or acquires Rhino
Energy LLC.

 

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.  Company, Rhino and Executive hereby
acknowledge that this Agreement amends, restates and supersedes the Prior
Agreement, except for any obligations thereunder which survive by their own
terms and are not superceded hereby, to include the payment of all compensation
due and owing to Executive such as the remaining $120,000 portion of Executive’s
March 31, 2010 Bonus.

 

6

 

(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.

 

(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 Rhino, the Company
and their successors and assigns.  The
Company, or Rhino, as applicable, shall require any successor (whether direct
or indirect, by purchase, merger, reorganization, consolidation, acquisition of
property or stock, liquidation, or otherwise) to all or a substantial portion
of its business and/or assets, by agreement in form and substance reasonably
satisfactory to Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform this Agreement if no such 

 

7

 

succession had taken place.  Regardless of whether such an agreement is
executed, this Agreement shall be binding upon any successor of the Company or
Rhino and such successor shall be deemed the “Employer” for purposes of this
Agreement.  Notwithstanding anything to
the contrary contained herein, Executive shall have the right to terminate this
Agreement if the Employer’s assets or membership units are sold to an entity
that is not a subsidiary or an affiliate of the Employer, Wexford Capital LP or
any investment fund managed by Wexford Capital LP.  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 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.

 

If
to the Company or Rhino, to:

 

Rhino
GP LLC

c/o
Wexford Capital LP

411
W. Putnam Ave.

Greenwich,
CT 06830

Attn:  Mark Zand

and
to

 

Rhino
GP LLC

c/o
Wexford Capital LP

411
W. Putnam Ave.

Greenwich,
CT 06830

Attn:  Arthur Amron

 

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

 

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

 

8

 

(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 this Agreement and the Employer’s and Executive’s
exercise of authority or discretion hereunder comply with Code Section 409A
(including the Treasury regulations and other published guidance relating
thereto), to the extent applicable, so as not to subject Executive to the
payment of any interest or additional tax imposed under Code Section 409A
with respect to any amounts payable or benefits provided under this
Agreement.  To the extent any amount
payable or benefit provided 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 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.

 

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

 

(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.

 

9

 

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

 

(f) Company.   “Company”
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 consecutive three hundred sixty five (365) day period.

 

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

 

(i) Executive.   “Executive”
means Christopher N. Moravec.

 

(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 the 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;

 

(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;

 

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

 

(v)           any sale of Employer’s assets or
membership units to an entity that is not a subsidiary or an affiliate of the
Employer, Wexford Capital LP or any investment fund managed by Wexford Capital
LP, as provided in Section 11(h)(ii).

 

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.

 

10

 

(k) Manager.  “Manager means Wexford Capital LP, successor
by merger to Wexford Capital LLC and the “Manager” of Rhino Energy LLC, as
contemplated by Rhino Energy LLC’s Limited Liability Company Agreement or its
successor manager.

 

(l)  Taxes.  “Taxes”
mean any United States federal, state or local income, excise or other taxes
the Employer is required to withhold by applicable law with respect to any item
of compensation paid or provided to Executive by the Employer.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURES APPEAR ON FOLLOWING PAGE]

 

11

 

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

 

 

EXECUTIVE:

 

 

	
  /s/
  Christopher N. Moravec

  	
   

  
	
  Christopher
  N. Moravec

  	
   

  
	
   

  	
   

  
	
  Date
  signed: 

  	
  04/22/10

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RHINO GP LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  

  	
  /s/
  David G. Zatezalo

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  David
  G. Zatezalo

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:
  

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
  signed: 

  	
  04/22/10

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RHINO:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RHINO ENERGY LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  

  	
  /s/
  David G. Zatezalo

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  David
  G. Zatezalo

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:
  

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
  signed: 

  	
  04/22/10

  	
   

  

 

12EXHIBIT 10.16

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) executed
this 2nd day of January, 2007, and effective no later than January 31,
2007, as provided herein, is between CAM
Holdings LLC, a/k/a Rhino Energy
LLC (“Employer”) and Andrew W. Cox
(“Employee”).

 

W I T N E S
S E T H

 

WHEREAS Employer desires to employ
Employee on the terms hereof, and Employee desires to accept employment on such
terms; and

 

WHEREAS the parties hereto
acknowledge that this Agreement is to be effective upon the resignation by
Employee of his current employment, but no later than January 31, 2007
(the “Effective Date”).

 

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

 

1.                                      Terms and Duties.  Commencing on
such date as agreed by the Employee and Employer, but no later than January 31,
2007 (such date being the “Commencement Date”) and continuing until December 31,
2010, unless sooner terminated as herein provided or extended by mutual
agreement of the parties (the “Employment Term”), the Employer hereby employs
the Employee as Vice President of Sales, with such duties as Employer may
designate during the Employment Term. 
The Employee agrees to devote all of his business time and his best efforts
to the business of Employer as may be necessary to perform his duties in
accordance with the policies and budgets established from time to time by
Employer. During the Employment Term, the Employee will not have any other
employment.  Employee shall be bound by,
and agree to comply with, all policies, procedures, and employment conditions
of Employer in effect from time to time applicable to its employees.  Employee agrees to give Employer at least 14
days prior written notice of any voluntary resignation by Employee; provided that
upon such notice 

 

1

 

Employer shall have the
option of having the voluntary resignation by the Employee effective earlier.

 

2.                                      Compensation.  For Employee’s
services hereunder during the Employment Term, Employer shall pay to Employee a
salary at the rate of $200,000 per year, payable periodically in accordance
with Employer’s usual executive payroll payment procedures.

 

3.                                      Bonus.   Employee shall be eligible for an annual
discretionary bonus of up to 40% of Employee’s base salary.  Such bonus shall commence with a bonus for
calendar year 2007 and shall be determined and paid within 120 days of the end
of each calendar year of the Employment Term.

 

4.                                      Place of Employment. The Employee’s regular place
of employment during the Employment Term shall be at the Employer’s offices in
Fayette County, Kentucky.  Employer
agrees that for up to the first six months of the Employment Term Employee will
not live in the Fayette County, Kentucky area. 
Employer shall provide Employee relocation benefits as outlined in the
Employer relocation policy summary provided by Employer to Employee in
connection with Employee’s move to the Fayette County, Kentucky area.

 

5.                                      Travel; Expenses.  The Employee
shall engage in such travel as may reasonably be required in connection with
the performance of his duties. All reasonable travel and other expenses
incurred by the Employee (in accordance with the policies and the budget of the
Employer established from time to time) in carrying out his duties hereunder
will be reimbursed by the Employer on presentation to it of expense accounts
and appropriate documentation in accordance with the customary procedures of
the Employer for reimbursement of employee expenses.  In addition, the Employer will provide to the
Employee a vehicle for Employee’s use during the Employment Term and the
Employer will provide the fuel, insurance and maintenance 

 

2

 

on such vehicle.  The use of the vehicle will be governed by
general standards set by the Employer from time to time.  The vehicle shall be selected by mutual
agreement of Employee and Employer with an approximate value of $35,000.

 

6.                                      Confidentiality; Competition.

 

(a)                                  The Employer
possesses and will continue to possess confidential information to which the
Employee may gain access. For the purposes hereof, all non-public information
about the business and affairs of the Employer (including, without limitation,
business plans, real and personal property leases, financial, engineering and
marketing information and information about costs, mining and processing
methods, suppliers and customers, including such information created by
Employee and confidential information of others obtained by Employer pursuant to
confidentiality agreements) constitute “Employer Confidential Information.”
Employee acknowledges that he will have access to and knowledge of Employer
Confidential Information, and that improper use or disclosure of same by the
Employee during  or after the
Employment Term could cause serious injury to the business of the Employer.
Accordingly, the Employee agrees that he will forever keep secret and inviolate
all Employer Confidential Information which comes into his possession, and that
he will not use the same for his own private benefit, or directly or indirectly
for the benefit of others, and that he will not disclose such Employer
Confidential Information to any other person except as necessary in the proper
pursuance of his duties.

 

(b)                                 The Employee
agrees that during the Employment Term (and for a period of six (6) months
after Employee’s voluntary resignation or termination of the Employee by the
Employer with cause, and ninety (90) days after termination of the Employee by
the Employer without cause) the Employee will not (whether as an officer,
director, partner, proprietor, 

 

3

 

member, shareholder,
investor, associate, employee, consultant, adviser, public relations or
advertising representative or otherwise), directly or indirectly, be engaged in
the business of coal mining, coal processing, coal loading or coal marketing
within the United States of America.  For
purposes of the preceding sentence, the Employee shall be deemed to be engaged
in any business with any person for whom he shall be an employee, officer,
director, owner, employer, consultant, shareholder, member or partner.
Notwithstanding the foregoing, there shall be no restriction under this
subsection (b) on the Employee owning, as a passive investment, less than
five percent (5%) of the voting or non-voting securities of any publicly traded
company. During such period of non-competition, and for a period of six (6) months
thereafter, Employee shall not directly or indirectly solicit, interview or
make any decision or recommendation to hire or to retain as a consultant or
advisor or in any other capacity, any current employee of Employer, for
himself, or for or to, any other person or entity.  Employee shall notify any subsequent employer
of Employee of the foregoing agreement

 

(c)                                  The terms of
this Agreement are intended to limit disclosure and competition by the Employee
to the maximum extent permitted by law. If it shall be finally determined by
any court of competent jurisdiction ruling on this Agreement that the scope or
duration of any limitation contained in this paragraph 6 is too extensive to be
legally enforceable, then the parties hereby agree that the scope and duration
(not greater than that provided for herein) of such limitation shall be the
maximum scope and duration which shall be legally enforceable and the Employee
hereby consents to the enforcement of such limitation as so modified.

 

(d)                                 The Employee
acknowledges that any violation by him of the provisions of this paragraph 6
could cause serious and irreparable harm and damage to the Employer. He 

 

4

 

further acknowledges that it
might not be possible to measure such damages in money and that Employer’s
remedy at law for a breach or threatened reach of the provisions of paragraph 6
would be inadequate. Accordingly, the Employee agrees that, in the event of a
breach or threatened breach by him of the provisions of this paragraph 6, the
Employer may seek, in addition to any other rights or remedies, including money
damages, an injunction or restraining order, restraining the Employee from
doing or continuing to do or perform any acts constituting such breach or
threatened breach. In the event Employer seeks an injunction or restraining
order, Employee and Employer agree that Employer shall not be required to post
a bond to obtain the necessary equitable relief.

 

7.                                      Benefits; Vacation. The Employer agrees to
provide to the Employee the benefits available to all salaried employees
generally, as modified from time to time. 
Without limiting the foregoing, such benefits shall include family
participation in Employer’s group health insurance plan, with Employer paying
all premiums (but not deductibles or co-pays) in connection with such
participation by Employee. Employee shall be entitled to three (3) weeks
of vacation per year.  Unused vacation
shall not carry over to future years.

 

8.                                      Employee’s Representation Regarding Prior and Future Employment.  Employee hereby represents
to the Employer that he has full lawful right and power to enter into this
Agreement and carry out his duties hereunder, and that same will not constitute
a breach of or default under any employment, confidentiality, non-competition
or other agreement by which he may be bound. Further, Employee hereby
represents to the Employer that he is not listed in the Office of Surface
Mining’s Applicant Violator System database. 
Employee further agrees to provide prompt notice to Employer of Employee’s
first subsequent employment after ceasing to be an employee of Employer.

 

5

 

9.                                      Termination for Cause or Voluntary Resignation by Employee.   If Employee shall:

 

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

 

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

 

(c)                                  be indicted for
or convicted of a crime involving moral turpitude; or

 

(d)                                 materially fail
or neglect to diligently perform his duties hereunder;

 

then, and in any such case,
the Employer may terminate the employment of the Employee “for cause”
hereunder.  In the event of termination “for
cause” or voluntary resignation by Employee, the Employee shall no longer have
any right to any of the benefits (including future salary or bonus payments)
which would otherwise have accrued  or
been payable after such termination. 
However, in the event of a termination by Employer of the employment of
the Employee other than “for cause”, the Employer shall (i) pay to the
Employee a severance payment equal to six (6) months of Employee’s base
salary then in effect., plus (ii) continue Employee’s family health
insurance coverage under Employer’s group plan, at no premium cost to Employee,
until the earlier of (x) six (6) months following such termination
other than “for cause”, or (y) the date Employee is covered under a health
insurance policy through a subsequent employer.

 

10.                               Successors.  The rights,
benefits, duties and obligations under this Agreement shall inure to and be
binding upon the Employer, its successors and assigns and upon the Employee and
his legal representatives, legatees and heirs. It is specifically understood,
however, that this Agreement may not be transferred or assigned by the
Employee. The Employer may assign any of its rights and obligations hereunder
to any subsidiary or affiliate of the 

 

6

 

Employer,
or to a successor or survivor resulting from a merger, consolidation, sale of
assets or stock or other corporate reorganization, on condition that the
assignee shall assume all of the Employer’s obligations hereunder and it is
agreed that such successor or surviving corporation shall continue to be obligated
to perform the provisions of this Agreement.

 

11.                               Waiver of
Breach.  The failure of either party
to insist upon the strict performance of any of the terms, conditions, and
provisions of this Agreement shall not be construed as a waiver or relinquishment
of future compliance therewith, and said terms, conditions, and provisions
shall remain in full force and effect. No waiver of any term or condition of
this Agreement on the part of the Employer shall be effective for any purposes
whatsoever unless such waiver is in writing by Employer’s President.

 

12.                               Amendments.  No amendment or variations
of the terms and conditions of this Agreement shall be made unless the terms of
such amendment are in writing and-duly executed by Employee and Employer’s
President.

 

13.                               Entire
Agreement; Survival.  This
Agreement constitutes the complete and entire agreement governing the terms and
conditions of the employment relationship between the parties and supersedes
any and all prior agreements or understandings. Both Employee and Employer
acknowledge and agree that there are no oral or written understandings
concerning the Employee’s employment by Employer outside of this
Agreement.  The terms of this Agreement
shall survive the termination or expiration of this Agreement and the
conclusion of the Employment Term.

 

14.                               Governing
Law.  This Agreement shall be
construed and enforced pursuant to the laws of the Commonwealth of Kentucky,
including matters of law relating to the choice of law.  Employee hereby consents to the jurisdiction
of the courts of the Commonwealth of 

 

7

 

Kentucky, including the
Fayette Circuit Court and hereby waives any objection to venue of any action
brought in said court.

 

15.                               Counterparts.  This Agreement, as executed separately by the
individual parties, shall be deemed to be an original, but all of which
together shall constitute one document.

 

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

 

17.                               JURY TRIAL
WAIVER.  EMPLOYEE HEREBY VOLUNTARILY AND
IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY WITH REGARD TO ANY ACTION
ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE EMPLOYMENT OF THE
EMPLOYEE BY THE EMPLOYER.

 

IN WITNESS WHEREOF, the parties hereto have
executed and delivered this Agreement as of the day and year first above
written.

 

	
   

  	
  EMPLOYER:

  
	
   

  	
   

  
	
   

  	
  CAM
  Holdings LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Nicholas R. Glancy

  
	
   

  	
   

  	
  Nicholas
  R. Glancy, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Andrew W. Cox

  
	
   

  	
  Andrew W.
  Cox

  

 

8

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