Document:

EX-10.42

 Exhibit 10.42 

GUARANTOR JOINDER AND ASSUMPTION AGREEMENT 

THIS GUARANTOR JOINDER AND ASSUMPTION AGREEMENT is made as of January 29, 2015, by Armstrong Coal Sales, LLC, a Delaware limited
liability company (the “New Guarantor”). 
 Background 

Reference is made to (i) the Credit Agreement dated as of December 21, 2012 (as the same may be modified, supplemented, restated, or
amended, the “Credit Agreement”) by and among Armstrong Energy, Inc., a Delaware corporation (the “Borrower”), the Guarantors party thereto, the Lenders party thereto, and PNC Bank, National Association, in its
capacity as administrative agent for the Lenders party thereto (in such capacity, the “Administrative Agent”), (ii) the Continuing Agreement of Guaranty and Suretyship dated as of December 21, 2012 (as the same may be
modified, supplemented, restated, or amended, the “Guaranty”) of Guarantors issued to the Lenders and the Administrative Agent, (iii) the Regulated Substances Certificate and Indemnity Agreement dated as of December 21,
2012 (as the same may be modified, supplemented, restated, or amended, the “Indemnity”) of the Borrower and the Guarantors party thereto to the Lenders and the Administrative Agent, (iv) the Intercompany Subordination Agreement
dated as of December 21, 2012 (as the same may be modified, supplemented, restated, or amended, the “Intercompany Subordination Agreement”) by and among the Borrower, the Guarantors party thereto, and the Lenders and the
Administrative Agent, (v) the Pledge Agreement dated as of December 21, 2012 (as the same may be modified, supplemented, restated, or amended, the “Pledge Agreement”) by and among the Borrower, the Guarantors party
thereto, and the Lenders and the Administrative Agent, (vi) the Security Agreement dated as of December 21, 2012 (as the same may be modified, supplemented, restated, or amended, the “Security Agreement”) by and among the
Borrower, the Guarantors party thereto, and the Lenders and the Administrative Agent, (vii) the Patent, Trademark and Copyright Security Agreement dated as of December 21, 2012 (as the same may be modified, supplemented, restated, or
amended, the “PTC Agreement”) by and among the Borrower, the Guarantors party thereto, and the Lenders and the Administrative Agent and (viii) the other Loan Documents referred to in the Credit Agreement, as the same may be
modified, supplemented, or amended. 
 Agreement 

Capitalized terms defined in the Credit Agreement are used herein as defined therein. In consideration of the New Guarantor becoming a
Guarantor under the terms of the Credit Agreement and in consideration of the value of the direct and indirect benefits received by New Guarantor as a result of becoming affiliated with the Borrower and the Guarantors, the New Guarantor hereby
agrees that effective as of the date hereof it hereby is, and shall be deemed to be, a Guarantor under the Credit Agreement, the Guaranty, the Indemnity, the Intercompany Subordination Agreement, the Pledge Agreement, the Security Agreement, the PTC
Agreement, and each of the other Loan Documents to which the Guarantors are a party and agrees that from the date hereof and so long as any Loan or any Commitment of any Lender shall remain 

 
outstanding and until the Payment In Full, New Guarantor has assumed the joint and several obligations of a “Guarantor”, a “Loan Party”, a “Company”, a
“Pledgor”, or a “Debtor” under, and New Guarantor shall perform, comply with and be subject to and bound by, jointly and severally, each of the terms, provisions and waivers of the Credit Agreement, the Guaranty, the Indemnity,
the Intercompany Subordination Agreement, the Pledge Agreement, the Security Agreement, the PTC Agreement, and each of the other Loan Documents which are stated to apply to or are made by a “Guarantor”, a “Loan Party”, a
“Company”, a “Pledgor”, or a “Debtor”. Without limiting the generality of the foregoing, the New Guarantor hereby represents and warrants that (i) each of the representations and warranties set forth in
Article 6 of the Credit Agreement applicable to New Guarantor as a Guarantor is true and correct as to New Guarantor on and as of the date hereof, and (ii) New Guarantor has heretofore received a true and correct copy of the Credit
Agreement, the Guaranty, the Indemnity, the Intercompany Subordination Agreement, the Pledge Agreement, the Security Agreement, PTC Agreement, and each of the other Loan Documents (including any modifications thereof or supplements or waivers
thereto) in effect on the date hereof. 
 New Guarantor hereby makes, affirms, and ratifies in favor of the Lenders and the Administrative
Agent the Credit Agreement, the Guaranty, the Indemnity, the Intercompany Subordination Agreement, the Pledge Agreement, the Security Agreement, the PTC Agreement, and each of the other Loan Documents given by the Guarantors to Administrative Agent
and any of the Lenders. 
 New Guarantor is simultaneously delivering to the Administrative Agent the following documents together with the
Guarantor Joinder required under Section 8.2.9 [Subsidiaries, Partnerships and Joint Ventures]: 
 Updated Schedules to Credit Agreement
and to other applicable Loan Documents. [Note: updates to schedules do not cure any breach of warranties]. 
  

					
	 Schedule No. and Description
	  	Delivered	  	Not
Delivered
	 Schedule 1.1(R) - Real Property (if applicable)
	  	x	  	 ̈
			
	 Schedule 6.1.1 - Qualifications To Do Business
	  	x	  	 ̈
			
	 Schedule 6.1.2 - Subsidiaries
	  	x	  	 ̈
			
	 Schedule 6.1.14 - Insurance (if applicable)
	  	x	  	 ̈
			
	 Opinion of Counsel (Schedule 7.1.1)
	  	x	  	 ̈
			
	 Any other Schedules to Credit Agreement and to any other applicable Loan Documents that necessitate updates after giving effect to this
Guarantor Joinder and Assumption Agreement
	  	x	  	 ̈

  
 2 

 In furtherance of the foregoing, New Guarantor shall execute and deliver or cause to be executed
and delivered at any time and from time to time such further instruments and documents and do or cause to be done such further acts as may be reasonably necessary in the reasonable opinion of the Administrative Agent to carry out more effectively
the provisions and purposes of this Guarantor Joinder and Assumption Agreement. 
 This Guarantor Joinder and Assumption Agreement may be
executed in any number of counterparts, and by different parties hereto in separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same instrument. New Guarantor
acknowledges and agrees that a telecopy transmission to the Administrative Agent or any Lender of signature pages hereof purporting to be signed on behalf of New Guarantor shall constitute effective and binding execution and delivery hereof by New
Guarantor. 
 [SIGNATURE PAGE FOLLOWS] 

  
 3 

 [SIGNATURE PAGE TO GUARANTOR JOINDER] 

IN WITNESS WHEREOF, and intending to be legally bound hereby, the New Guarantor has duly executed this Guarantor Joinder and Assumption
Agreement and delivered the same to the Administrative Agent for the benefit of the Lenders, as of the date and year first above written with the intention that it constitute a sealed instrument. 

 

			
	ARMSTRONG COAL SALES, LLC
		
	By:		 /s/ Martin D. Wilson

	Name:		Martin D. Wilson
	Title:		Manager

 Acknowledged and accepted: 
  

			
	 PNC BANK, NATIONAL ASSOCIATION,

as Administrative Agent

		
	By:		 /s/ Richard C. Munsick

	Name:		Richard C. Munsick
	Title:		Senior Vice PresidentEXHIBIT 10.1

 

U.S. Energy Corp.

Performance Compensation Plan

2015 Performance Period Matrix

Plan Objectives

The objectives of the Performance Compensation Plan (the "Plan") are to:

	
·

	
incentivize top level managers and senior management of U.S. Energy Corp ("US Energy" or the "Company");

	
·

	
to improve shareholder value by accomplishing aggressive, yet realistic, financial and production objectives;

	
·

	
encourage employees to contribute to the ultimate goal of improving shareholder value by making participating employees eligible for an annual performance bonus under the Plan; and

	
·

	
heavily weighting the compensation of senior management towards performance based incentives.

Performance Period

The Performance Period shall be from January 1, 2015 to December 31, 2015.

Award Determination

The Compensation Committee and the Board shall have the authority, in their discretion, to determine whether any bonuses have been earned under the Plan for a particular Performance Period.  In addition to the Financial and Operation Factors defined below, the Compensation Committee and the Board shall have the authority, in their discretion; to impose an activation trigger (the "Bonus Trigger") conditioning any awards under the Plan on the satisfaction of designated performance criteria.  In the event the Bonus Trigger has not been satisfied, the Compensation Committee and the Board shall have the authority, in their discretion, to reduce or forgo any bonuses under the Plan.

2015 Award Levels

The Threshold, Target, and Maximum bonus awards (as a percentage of base salary) for the 2015 Performance Period are provided below under "2015 Bonus Award Matrix Criteria".

2015 Performance Metric

The performance metric utilized for 2015 will be Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA").  The Compensation Committee will establish a target level for the performance metric, the achievement of which will result in earned incentives equal to 100% of the participant's target award amount.  Additionally, the Compensation Committee, in its discretion, may determine to reduce an award under the 

 

 

Plan even though certain objectives have been met.  See below 2015 Bonus Award Matrix Criteria.

Payment of Awards

Payment of all bonuses under the Plan is to be made after the Form 10-K for the year ended December 31, 2015 is filed, but before March 15, 2016.

2015 Bonus Award Matrix Criteria

	
Metric

	 	
% Allocated

	 	
Criteria

	 	 	 	 	 
	
EBITDA

	 	
100%

	 	
100% for positive EBITDA for the year, per the audited consolidated financial statements

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