Document:

exv10w27

Exhibit 10.27

EMPLOYMENT AGREEMENT

     This
Employment Agreement (“Agreement”) is entered into this
1st day of October,
2011, by and between Armstrong Energy, Inc. (“Employer”), 7733 Forsyth Boulevard, Suite 1625, St.
Louis, Missouri 63105 and J. Richard Gist (“Gist”), 1310 Christmas Valley Drive, Wildwood, Missouri
63005.

     In consideration of the mutual covenants and promises contained herein, and other good and
valuable consideration, the adequacy and receipt of which are hereby acknowledged, Employer and
Gist hereby agree as follows.

     1. Duties and Position. Gist shall be employed as the Senior Vice President of
Finance and Administration and Chief Financial Officer of Employer and shall report to Employer’s President. Gist shall have
such duties as are customarily performed by persons serving in similar capacities in other
businesses similar to Employer’s business. Gist shall devote his full working time, attention, and
best efforts to performing all reasonably assigned responsibilities. Gist shall not, while employed
by Employer, engage in any other business or employment without the prior written approval of
Employer’s President or Board of Directors (the “Board”). Notwithstanding the foregoing, nothing
herein is intended or shall be construed as preventing Gist from engaging in such civic,
charitable, or political activities as do not interfere with the performance of Gist’s duties
hereunder.

     2. Term of Employment.

          2.1 On-Going Term. Gist’s employment under this agreement shall be for one year
commencing on the date set forth above. However, the term of Gist’s employment under this
Agreement shall automatically extend for additional one (1) year terms until such time, if any, as
Employer or Gist give written notice to the other that such automatic extension shall cease, the
same of which shall be given with no less than sixty (60) days notice prior to the expiration of
the then current term.

          2.2 Exemption. Notwithstanding the foregoing, Gist’s employment hereunder may be
earlier terminated in accordance with the terms of Section 6 of this Agreement.

     3. Compensation.

          3.1 Base Salary Compensation. Employer shall pay Gist an initial annual base salary
of Two Hundred Ten Thousand Dollars ($210,000.00) (the “Salary Compensation”), which Employer’s
President or Board may elect to adjust, in their sole discretion and without any requirement that
they do so, on each anniversary of the date first written above. Gist’s Salary Compensation shall
be payable in equal periodic installments according to Employer’s customary payroll practices, but
no less frequently than bi-monthly. During the term of his employment as defined herein, Gist shall
also be entitled to an annual target bonus of 50% of the then annual salary. Such bonus shall be
based upon the achievement of performance criteria

 

 

established by the Company and to be awarded at the discretion of the Company’s President or
Board of Directors.

          3.2 Withholding. All payments under this Section 3 shall be less such amounts as are
required to be withheld by law or as otherwise authorized by Gist in writing.

     4. Benefits.

          Gist shall be eligible to participate in such benefits as may be authorized and adopted from
time to time by the Board for Employer employees including, without limitation, any pension plan,
profit-sharing plan, or other qualified retirement plan and any group insurance plan. Employer
shall reimburse Gist for normal and reasonable business expenses incurred in performance of his
responsibilities as determined in the sole discretion of Employer. During each calendar year Gist
shall be entitled to the vacation as Employer employees would be entitled to under Employer’s
standard vacation policy. Employer may furnish such other benefits to Gist as it shall determine,
from time to time, within its discretion, to be in the best interests of Employer and Gist.
Nothing herein is intended or shall be construed as precluding Employer from modifying or
discontinuing any benefit plan, policy or program.

     5. Termination of Employment. Gist’s employment with Employer under this Agreement
shall terminate:

          5.1 Cause. For “Cause” immediately upon notice from Employer to Gist. As used
herein, “Cause” shall mean:

               A. Gist’s failure substantially to perform his duties hereunder in a manner
satisfactory to Employer, as determined in good faith by Employer, provided that Employer
has given Gist written notice of the action(s) or omission(s) which are claimed to
constitute such failure and Gist does not fully remedy such failure within ten (10) calendar
days after receipt of the written notice;

               B. Gist has engaged in gross misconduct, dishonest, disloyal, illegal or unethical
conduct, or any other conduct which has or could reasonably have a detrimental impact on
Employer or its reputation, all facts to be determined in good faith by Employer;

               C. Gist has acted in a dishonest or disloyal manner, or breached any fiduciary duty to
Employer, that, in either case, results or was intended to result in personal profit to Gist
at the expense of Employer or any of its customers;

               D. Gist has been convicted of, pleads guilty, or enters a nolo plea, Alford plea or
plea or no contest to any felony.

               E. Gist has one or more physical or mental impairments which have substantially
impaired his ability to perform the essential functions of his job under this

2

 

Agreement. Any dispute as to whether Gist has been so impaired shall be determined by
Employer in consultation with a physician appointed by Employer;

               F. Gist’s death;

               G. Any breach by Gist of his obligations under Sections 7-11 or 13 of this Agreement;
or

               H. Gist resigns under circumstances where a termination for “Cause” was impending or
could have reasonably been foreseen.

          5.2 Change in Control. Upon the occurrence of a “Change in Control,” provided Gist’s
employment with Employer or an acquiring entity is terminated, other than for Cause, within twelve
(12) months of an event constituting a Change in Control. As used herein, “Change in Control”
means:

               A. any purchase or other acquisition by an individual or group of person(s) (including
entity(ies)) acting in concert, which results in persons who are shareholders of Employer as
of the date first written above no longer being the legal and beneficial owners of fifty-one
percent (51%) or more of the outstanding equity in Employer, excluding any affiliates,
parents, subsidiaries or related parties of Employer;

               B. consummation of a reorganization, merger, recapitalization, consolidation, or any
other transaction, in each case with respect to which persons who were shareholders of
Employer as of the date first written above do not, immediately thereafter, legally and
beneficially own fifty-one percent (51%) or more of the equity in the newly-organized,
merged, recapitalized, consolidated, or other resulting entity; or

               C. the sale of all or substantially all of the assets of Employer in a transaction
approved by the Board.

          5.3 Without Cause. Upon notice from Employer to Gist.

          5.4 For Good Reason. For “Good Reason” immediately upon written notice from Gist to
Employer’s Board of Directors or at such later time as such notice may specify, which date shall
not be more than fourteen (14) calendar days after the date on which Employer is deemed to receive
such notice. As used herein, “Good Reason” shall mean a material demotion or reduction, without
Gist’s consent, in Gist’s duties.

          5.5 Miscellaneous. Employer may pay Gist in lieu of having him work during all or
part of any notice period under this Section 5. Following any notice of termination, Gist shall
fully cooperate with Employer in all matters relating to the winding up of his pending work on
behalf of Employer and the orderly transfer of any such pending work to such others as may be
designated by Employer. To that end Employer shall be entitled to such full-time or part-time
services of Gist as Employer may reasonably require during all or any part of the period from the
time of giving any such notice until the effective date of such termination.

3

 

     6. Separation Package

          6.1 Cause. In the event Employer terminates Gist’s employment for Cause, Gist shall
not be entitled to any compensation or benefits beyond his termination date.

     6.2 Without Cause; For Good Reason. In the event Employer terminates Gist’s
employment without Cause, or Gist terminates his employment for Good Reason, Employer shall:

               A. continue, for twelve (12) months following such termination, Gist’s Salary
Compensation at the same rate as such Salary Compensation was set hereunder on the day prior
to Gist’s termination, plus pay any accrued but unpaid Bonus as of the date of such
termination;

               B. pay, for twelve (12) months, the premiums for Gist and his dependents to continue
group health insurance under such group policy(ies), if any, on the same terms as Employer
provides to Employer employees, provided such payments may cease earlier than twelve (12)
months following termination if:

                    (i) the applicable group policy does not permit continuation coverage
beyond the maximum time periods established by applicable law for
continuation coverage, in which case payments shall cease when the
applicable maximum period is reached for each covered individual; or

                    (ii) Gist and/or any covered dependent(s) advise Employer that Gist
and/or any covered dependent(s) have obtained other satisfactory group
health coverage in which case coverage shall cease only for such individuals
who have obtained such other group coverage; and

                    (iii) Employer ceases to provide any group health policy to any
employees.

          6.3 Change in Control. In the event of a termination under Section 5.2, Employer
shall provide Gist with the benefits on the terms described in Section 6.2(B) for twelve (12)
months following termination. In addition, Employer shall, promptly following such termination,
pay Gist a lump sum payment equal to one (1) times Gist’s Salary Compensation at the time of his
termination plus one (1) year’s bonus in an amount equal to 1/2 of Gist’s then existing Salary
Compensation. To the extent Gist has received any restricted stock or similar inventive awards
from the Company, such awards shall vest in accordance with the terms of the agreement(s) pursuant
to which they were awarded and nothing in this Agreement shall be deemed to modify or amend the
terms of those awards.

          6.4 Miscellaneous. Any payments under this Section 6 shall be subject to such
deductions as may be required by law. In addition, in the event Gist violates any of the terms of
Section 7 or 9-11 of this Agreement, as determined in good faith by Employer, any payments and
benefits otherwise due under this Section 6 shall immediately cease and Gist shall be required to
repay to Employer any amounts already paid to him under this Section 6. Any

4

 

payments under this agreement associated with termination of employment are conditional upon
Gist’s execution of an appropriate release of all future claims against Employer or its successors.

     7. Confidential Information and Relationships. Gist acknowledges and agrees that, in
the course of his employment with Employer, he has and will continue to come into possession of
technical, financial and/or business information pertaining to Employer which is not published or
readily available to the public, including, but not limited to: financing opportunities; market
research and analyses; customer contact information, specifications, needs and histories; contract
terms; sales figures, reports and projections; marketing concepts and plans; cost and pricing
information; plans for future developments including product and market expansion; and lists of and
other information pertaining to and/or received from customers, suppliers and/or employees
(“Confidential Information”). Gist also acknowledges and agrees that he has received training
regarding Employer’s business and shall have contact with Employer’s customers and suppliers. Such
contacts will enable Gist to establish and maintain, at Employer’s expense, favorable relationships
and goodwill with such person/entities, and to influence with whom such persons/entities do
business. Gist acknowledges that Confidential Information and such relationships and goodwill are
important to and will greatly affect the success of Employer. Gist agrees that during employment
with Employer and at all times thereafter, regardless of how, when and why employment may end, he
shall hold in the strictest confidence, and shall not disclose, duplicate and/or use for himself or
any other person or entity any Confidential Information without the prior written consent of
Employer, or unless required to do so in order to perform his responsibilities while employed by
Employer. Gist also agrees that at all times during his employment with Employer, he shall comply
with all of Employer’s policies and procedures relating to the protection and confidentiality of
Confidential Information.

     8. No Other Contract. Gist warrants that he is not bound by any other agreement, oral
or written, which would limit or preclude him from performing any responsibility reasonably
assigned by Employer hereunder. Gist also agrees not to disclose to Employer or seek to induce
Employer to use, any confidential information, material or trade secret belonging to any other
person or entity.

     9. Work Product. Any and all designs, plans, inventions, products, improvements,
programs, specifications, methods, reports, notebooks, databases, notes, analyses, memoranda,
files, correspondence, rolodexes, and other embodiments of work conceived, made, discovered and/or
produced by Gist during his employment by Employer, either solely or jointly with others: (A) in
the course of performing any duties for Employer, (B) which are based, in whole or part, upon
Confidential Information, the supplies, facilities or business, financial or technical information
of Employer, or (C) which relate to the business of Employer (“Work Product”), shall be the sole
property of Employer or its designee and available to Employer or its designee at all times. Gist
agrees promptly to disclose and hereby assigns in perpetuity to Employer or its designee, without
royalty or other additional consideration, any and all of his rights to any and all Work Product.
Gist further agrees that during his employment by Employer and after that employment ends,
regardless of how, when and why, he shall, upon request from the Chairman of the Board or his
designee: (i) execute any and all applications for copyright, patent, trademark or other
intellectual or proprietary right relating to Work Product which may be prepared for his signature,
(ii) assign to Employer or its designee any and all such applications, copyrights,

5

 

patents, trademarks or other intellectual or proprietary rights relating thereto, and (iii) assist
Employer or its designee, as Employer or its designee deems necessary, in order for Employer or its
designee to apply for, defend or enforce any copyright, patent, trademark or other intellectual or
proprietary right or otherwise protect its interests in Work Product. Employer or its designee
shall pay all expenses of preparing, filing and prosecuting any such application and of obtaining
such copyrights, patents, trademarks or other intellectual or proprietary right.

     10. Return of Property. All documents, records, reports, lists, databases, software,
analyses, notes and similar items relating to Employer’s business that Gist has or may prepare or
receive in the course of his employment are and shall remain Employer’s property. At such times as
Employer may request, and upon separation from employment with Employer, regardless of how, when
and why employment may end, Gist shall immediately deliver to Employer all Confidential
Information, Work Product and other property of Employer in his possession or control, including,
but not limited to, all records, documents, notes and disks (including copies), containing,
excerpting or relating, in whole or in part, to Confidential Information.

     11. Non-Competition. Gist recognizes that Employer will or has spent substantial
money, time and effort to develop and maintain its relationships with its customers, suppliers and
employees, Employer is paying Gist to, among other things, develop and preserve business
information, methods of doing business and goodwill, and Employer has agreed to employ or continue
employing Gist based on his assurances and promises not to divert or misuse Employer’s Confidential
Information, Work Product or goodwill or to put himself in a position following employment with
Employer in which the confidentiality of Confidential Information or Work Product might somehow be
comprised. Therefore, Gist agrees that while employed by Employer and for twelve (12) months
following termination of that employment, regardless of how, when or why employment may end, he
shall not in any manner or in any capacity, directly or indirectly, for himself or any other person
or entity, actually or attempt:

     A to acquire any interest in, be employed by or otherwise associated or affiliated with
any person or entity which offers any product or service which competes or operates in any
coal producing region in which Employer or its affiliates, parent companies, subsidiary
companies or related entities also operate;

     B. to solicit, interfere with, divert or take away from Employer any business with or
from any person or entity who/that was a customer or prospective customer of Employer:

	 	(i)	 	in the case of Gist’s on-going employment,
during all or part of the twelve (12) months immediately preceding any
dispute under this Section 11; and
	 
	 	(ii)	 	in the case of employment having ended, during
all or part of the twelve (12) months preceding termination of Gist’s
employment.

6

 

A prospective customer shall mean any person/entity who/that, within the relevant period
described in subsection (B)(i) and (ii) above, was in negotiation with Employer or received
a written proposal from Employer; or

          C. to hire or solicit for work any employee of Employer or otherwise to induce any
employee of Employer to leave employment with Employer.

Gist further agrees that if he has any question regarding the scope of activities restricted by
this Section 11, he shall submit the question in writing to Employer. Gist also agrees to keep
Employer advised of the identity of any employer (including, without limitation, any contractors or
consulting arrangements), his work location and general responsibilities during the twelve (12)
month post-employment period covered by this Section 11. The provisions of this Section 11 shall
not apply to those business relationships set forth on Exhibit A.

     12. Securities. Notwithstanding the terms of Sections 1 and 11 above, nothing in this
Agreement is intended or shall be construed as limiting Gist’s right, as an investor, to hold or
acquire the stock of any business that is registered on a national securities exchange or regularly
traded on a generally recognized over-the-counter market, so long as his interest in any such
business does not exceed five percent (5%) of the ownership of that business.

     13. Remedies. The parties agree that the terms of Sections 7 and 9-11 of this
Agreement are intended and shall be construed not as personal services but as terms governing the
ownership and use of property, including Confidential Information and goodwill. Gist agrees that
the covenants in Sections 7 and 9-11 of this Agreement are reasonable and necessary to protect the
legitimate business interests of Employer, that any violation by Gist of any such covenant would
result in great damage and irreparable injury to Employer, and that his experience, knowledge and
skills are such that enforcement of Sections 7 and 9-11 by way of injunction would not cause him
unreasonable hardship or prevent him from earning a living. Gist further acknowledges and agrees
that if he were to violate the terms of Section 11, the unauthorized disclosure or use of
Confidential Information, goodwill and/or Work Product would be inevitable. Gist, therefore,
agrees that, in the event of actual or threatened violation of any of the covenants in Sections 7
or 9-11 of this Agreement, in addition to whatever other legal and/or equitable remedies allowed by
law, Employer shall be entitled to enforce the terms of this Agreement by way of injunction and/or
specific performance. In addition, Gist and Employer agree that any dispute or controversy arising
between/among them relating to this Agreement shall be brought in the Missouri or federal court
with jurisdiction in the County of St. Louis, State of Missouri (the “Courts”), and that the Courts
shall have exclusive jurisdiction over any such dispute or controversy. Furthermore, each of the
parties hereby voluntarily consents to the jurisdiction of the Courts and stipulates that the
Courts are not an unreasonable forum within which to litigate any dispute or controversy related to
this Agreement. Gist further agrees that if there is any question as to the enforceability of any
of the covenants in Sections 7 or 9-11 of this Agreement, he shall not engage in any conduct
inconsistent with or contrary to any such covenant until after the question has been resolved by a
final judgment of the Courts. In the event Employer has to consult with or retain any attorney to
enforce the terms of this Agreement, Gist agrees that he shall pay Employer for all costs, expenses
and attorneys’ fees Employer incurs in enforcing this Agreement, whether or not litigation is
commenced.

7

 

     14. Binding Effect.

     A. Gist may not sell, assign or transfer this Agreement or any of his rights, interests
or obligations under this Agreement, in whole or in part, by operation of law or otherwise.

     B. Employer may sell, assign or transfer any of its rights and/or interests under
Sections 7, 9-11 and 13-21 of this Agreement without any additional consent of or notice to
Gist. In such event, said Sections shall remain in full force after such sale, assignment
or other transfer, shall inure to the benefit of and may be enforced by (i) any successor,
assignee, or transferee of all or any part of Employer’s business as fully and completely as
it would inure to the benefit of and it could be enforced by Employer if no such sale,
assignment or transfer had occurred, and (ii) Employer in the case of any sale, assignment
or other transfer of a part, but not all, of the business.

     C. Whether or not Employer assigns any of its rights and/or interests under Sections 7,
9-11 and 13-21 of this Agreement, the parties intend and agree that any successor or
transferee of all or part of Employer’s business shall be a third party beneficiary of the
terms of said Sections. The parties further intend and agree that, in the event of any
sale, merger or other change in the ownership or structure of Employer, in whole or in part,
the resulting entity shall step into the place of Employer under Sections 7, 9-11 and 13-21
of this Agreement, without any additional consent of or notice to Gist, as if the term
“Employer” were defined in this Agreement to include such person/entity. In addition, the
parties agree that, in the event Employer sells, transfers or merges part, but not all, of
its business, the terms of Sections 7, 9-11 and 13-21 shall be enforceable by both Employer
and the successor or transferee of part of Employer’s business. As used herein, a
“successor” or “transferee” includes any person/entity which, at any time, merges with, or
purchases all or substantially all of the stock or assets of Employer.

     15. Severability/Interpretation. The parties acknowledge and agree that the terms of
Sections 7, 9-11 and 13-21 are severable from the remainder of this Agreement and supported by
adequate consideration. In the event any one or more whole or partial provisions of this Agreement
shall be adjudicated to be invalid or unenforceable in any respect, the validity and enforceability
of the remaining whole or partial provisions shall not be affected, and such adjudication shall not
affect the validity or enforceability of such whole or partial provision in any other jurisdiction.
The parties further agree that if any whole or partial restrictive covenant in this Agreement is
deemed invalid or unenforceable because overly broad in geographic scope, activity or time
duration, this Agreement shall be interpreted as if such invalid or unenforceable whole or partial
provision were not contained herein; provided, however, if, under applicable law, such whole or
partial provision may be modified or interpreted so as to be enforceable, that provision shall be
so modified or interpreted so as to be enforceable to the maximum extent permitted by applicable
law.

     16. Preservation of Rights. Gist agrees that termination of his employment with
Employer, regardless of how, when or why employment may end, shall in no manner affect his promises
contained in Sections 7, 9-11 and 13-21 of this Agreement. In order to preserve its rights
hereunder, Employer may advise any third party with whom Gist may consider, establish

8

 

or contract a relationship of the existence of this Agreement and its terms, and Employer shall
have no liability for so acting.

     17. Notice. Any written notice required under this Agreement shall be deemed given on
the date of hand delivery, the calendar day following the day sent by a next day mail or delivery
service, and two (2) calendar days following the date postmarked by U.S. mail, all postage or
delivery charges prepaid. Any such notice shall be given:

	 	 	 

	to Employer, addressed to its President at:

	 	7733 Forsyth Suite 1625.
	 

	 	St. Louis, Mo. 63105
	 
	 	 
	to Gist at:

	 	1310 Christmas Valley Drive
	 

	 	Wildwood, Mo. 63005

or such other address as specified in notice given in accordance with the foregoing.

     18. Entire Agreement. This Agreement contains the entire agreement between Gist and
Employer and supersedes any prior oral or written agreement between them pertaining to the subject
matter of this Agreement. Each party warrants that, in entering into this Agreement, it is not
relying on any representation or promise other than those set forth in this Agreement. This
Agreement may be modified only by a writing signed by Gist and Employer.

     19. Waiver of Breach. Failure of either party to exercise any right under this
Agreement, in the event the other party breaches this Agreement, shall not be construed as a waiver
of such breach or prevent the non-breaching party from later enforcing strict compliance with the
terms of this Agreement. Waiver of any right by Employer hereunder must be in writing signed by
Employer.

     20. Choice of Law. The parties agree that this Agreement shall be governed and
construed in accordance with the laws of the State of Missouri without giving effect to any choice
of law or conflict of law rule or principle that would cause application of the law of a
jurisdiction other than the State of Missouri.

     21. Miscellaneous. The headings of each Section herein are for convenience only and
shall have no significance in the interpretation of this Agreement. This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original but all of which
together will constitute but one instrument.

     22. Acknowledgment. Gist acknowledges and agrees that, to the extent desired, he has
discussed this Agreement with the advisors of his choice, he has read, fully understands and
intends to comply with all of the provisions of this Agreement, and he is voluntarily signing it
below.

9

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

Armstrong Energy, Inc.

/s/ Martin D. Wilson 

Martin D. Wilson, President

/s/
J. Richard Gist 

J. Richard Gist

10exv10w28

Exhibit 10.28

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) is
made as of the 1st day of October, 2011
by and between Armstrong Energy, Inc. (the “Company”) with offices at 7733 Forsyth
Boulevard, Suite 1625, St. Louis, Missouri 63105; and J. Hord Armstrong, III (the
“Executive”) of 748 Cella Road, St. Louis, Missouri 63124.

     Whereas, the Company desires to enter an employment contract with Executive upon the
terms and conditions set forth herein, and Executive desires to accept employment upon the same
terms and conditions;

     Now, Therefore, in consideration of the premises and mutual covenants herein set
forth, the parties hereto agree as follows:

1. Employment; Position and Responsibilities. 

     The Company agrees to continue to employ the Executive as its Chairman and Chief Executive
Officer, and the Executive agrees to continue to be employed by the Company in such capacity,
subject to the terms and conditions set forth in this Agreement. The Executive shall during the
continuance of his employment:

	 	(a)	 	serve the Company to the best of his ability in the capacity of Chairman and
Chief Executive Officer or in such other capacity or capacities, consistent with the
Executive’s level of experience and expertise as may be specified from time to time by
the Board of Directors in its sole discretion;

	 	(b)	 	faithfully and diligently perform such duties and exercise such powers
consistent with such office, subject to the direction and supervision of the Board of
Directors;

	 	(c)	 	if and so long as the Board of Directors so directs, perform and exercise the
said duties and powers on behalf of any Affiliated Company and act as a director or
other officer of any Affiliated Company; and

	 	(d)	 	unless prevented by sickness, injury or otherwise agreed by the Board of
Directors, devote the necessary time and attention and abilities during his hours of
work (which shall be normal business hours and such reasonable additional hours as may
be necessary for the proper performance of his duties) to the performance of his duties
under this Agreement.

2. Compensation.

     2.1 Salary and Bonus. The Company shall pay to the Executive during the continuance
of his employment a salary at the rate of $300,000 per year (the “Salary”), prorated for any
partial period of employment, and, at the Executive’s option, either the use of an automobile
appropriate for his position or an automobile allowance in conformity with

 

 

Employer’s existing
policy at the time, either of which may be discontinued at any time at the sole discretion of the
Board of Directors. The Salary shall be payable in equal semi-monthly installments in arrears or as
otherwise determined by the Company on a company-wide basis. During the term of his employment as
defined herein, the Executive shall also be entitled to be considered for an annual discretionary
bonus based upon the achievement of performance criteria established by the Company in its sole
discretion and to be awarded an amount for such bonus as determined by the Company’s Board of
Directors in its sole discretion, and the target amount will not be less that 75% of the
Executive’s then annual Salary (the “Bonus”). The Salary and Bonus shall be reviewed from time to
time and the rates thereof may be increased by the Company. Unless otherwise specifically provided
for in this Agreement, the Executive must be employed by the Company or an affiliate on the date
the Bonus or other discretionary payment is made to be entitled to receive the Bonus or other
discretionary payment. Any Bonus or other discretionary payments due under this Agreement shall be
paid to the Executive at the time specified by the Board of Directors at the time any such Bonus or
other discretionary payment is awarded, but in no event later than 21/2 months after the end of the
taxable year in which any substantial risk of forfeiture with respect to such Bonus or other
payment lapses.

     2.2 Vesting and Exercise of Incentive Awards. This Agreement nor any term or
provision herein shall be deemed to alter, amend or modify any provision in any agreement related
to any (i) stock options, (ii) stock appreciation rights, (iii) restricted stock, membership units
or limited partnership units, (iv) restricted stock units, (v) performance grants and (vi) any
other type of award granted to the Executive under any incentive plan, stock option plan or other
award plan by the Company or any of its affiliates or subsidiaries, including, without limitation,
Elk Creek, L.P. (the foregoing collectively being referred to herein as “Incentive Awards”) (but
subject, however, to any restriction contained in any stock incentive plan as in effect on the
date hereof).

3. Insurance and Related Benefits.

     The Executive shall be entitled to participate in any Benefit Plans (including any medical
expense insurance and health and accident insurance and travel insurance plans) of the Company
enjoyed by or made available to other senior executive officers of the Company to the extent that
the Executive qualifies under the eligibility provisions of any such plan, as presently in effect
or as they may be modified from time to time. Any employment benefits provided to the Executive
pursuant to this Agreement shall be governed by the applicable plan documents, insurance policies,
and/or employment policies, and may be modified, suspended, revoked, or terminated in accordance
with the terms of the applicable documents or policies without violating this Agreement.

4. Reimbursement of Expenses.

     The Company shall reimburse the Executive in respect of all reasonable and appropriate travel,
accommodation, entertainment and other similar out-of-pocket expenses actually incurred or expended
by him in the performance of his duties hereunder during the Term (as defined below). All expenses
shall be reimbursed in accordance with Company policy subject to the Executive providing
appropriate authorized evidence (including receipts, invoices, tickets and/or

2

 

vouchers as may be
appropriate) of the expenditure with respect to which he seeks reimbursement.

5. Vacation.

     The Executive shall, in addition to the holidays recognized by the Company, be entitled during
the term of his employment to 25 business days paid vacation each calendar year. Such vacation
will be carried over from calendar year to calendar year or forfeited if not used by the end of the
calendar year in which it was granted in conformity with Employer’s existing policy at the time.

6. Intellectual Property. 

     If at any time in the course of his employment the Executive makes or discovers or
participates in the making or discovery of any Intellectual Property relating to or capable of
being used in the business of the Company or any Affiliated Company, he shall immediately disclose
full details of such Intellectual Property to the Company and all such Intellectual Property shall
be the sole property of the Company. At the request and expense of the Company he shall do all
things which may be necessary or desirable for obtaining appropriate forms of protection for the
Intellectual Property in such parts of the world as may be specified by the Company and for vesting
all rights in the same in the Company or its nominee. All rights and obligations under this
Paragraph 6 with respect to Intellectual Property made or discovered by the Executive during his
employment shall continue in full and force and effect after the termination of his employment and
shall be binding upon the Executive’s personal representatives. The Executive acknowledges that
all original works of authorship protectable by copyright that are produced by the Executive in the
performance of his duties, responsibilities, or authorities for the Company are “works made for
hire” as defined in the United States Copyright Act (17 U.S.C. § 101). In addition, to the extent
that any such works are not works made for hire under the United States Copyright Act, the
Executive hereby assigns without further consideration all right, title, and interest in such works
to the Company.

7. Confidentiality. 

     Except as necessary or appropriate to the proper performance of his duties, or with the prior
written consent of the Company, or as ordered by a court of competent jurisdiction, the Executive
shall not, at any time either during the term of his employment or after its termination, disclose
or communicate to any person, or use for his own benefit or the benefit of any person other than
the Company or any Affiliated Company, any information relating to the Company or any Affiliated
Company that is not generally known to the public (“Confidential Information”) which may come to
his knowledge or be made available to him in the course of his employment. All notes and memoranda
of any trade secret or other Confidential Information concerning the business of the Company and
the Affiliated Companies or any of its or their suppliers, agents, contractual counterparties,
clients, customers or others which shall have been acquired, received or made by the Executive
during the course of his employment shall be the property of the Company and shall be immediately
surrendered by the Executive to someone duly authorized in

3

 

that behalf at the termination of his
employment or at the request of the Board of Directors at any time during the course of his
employment.

9. Term; Termination.

     9.1 Term. The term of the Executive’s employment under this Agreement shall be three
years from the date first set forth above unless sooner terminated as set forth herein and, unless
sooner terminated as set forth herein, shall automatically renew for successive one year terms
thereafter unless either party gives the other a written notice of non-renewal at least 90 days
before the end of the then current term (the “Term”).

     9.2 Termination by the Company without Cause; Termination by the Executive for Good
Reason. The Company may terminate the employment of the Executive at any time without Cause by
giving the Executive written notice of such termination within ten (10) business days prior to the
effective date of such termination. The Executive may terminate his employment by the Company at
any time for Good Reason by giving the Company written notice of such termination within ten (10)
business days prior to the effective date of such termination.

     9.3. Effect of Termination without Cause by Company or for Good Reason by Executive.
Except as provided in Paragraph 9.4, in the event of a termination by the Company without Cause,
failure to renew this Agreement by the Company pursuant to Paragraph 9.1, or termination by the
Executive for Good Reason, the Company shall have no further obligation to the Executive under this
Agreement or otherwise, except the Executive shall be entitled to receive the Accrued Obligations
and the following severance benefits:

	 	(a)	 	the Company shall continue to pay the Executive’s Salary for a period of 24
months after the Executive’s Separation from Service; and

	 	(b)	 	the Company shall pay to the Executive, within 30 days following the
Executive’s Separation from Service (as defined below), a bonus for that year equal to
75% of his Salary then in effect, provided, however, that in the event of a termination
for Good Reason pursuant to Paragraph 15.1(h)(ii) the annual salary used for
computation under this Paragraph 9.3(b) shall be the one in effect prior to the
reduction referred to in Paragraph 15.1(h)(ii); and

	 	(c)	 	during the portion, if any, of the 24-month period (unless otherwise limited by
COBRA or similar state law) commencing on the date of the Executive’s Separation from
Service (as defined below) that the Executive is eligible to elect and elects to
continue coverage for himself and his eligible dependents under the Company’s or an
affiliate’s group heath plan pursuant to the Consolidated Omnibus Budget Reconciliation
Act (COBRA) or similar state law, the Company shall reimburse the Executive on a
monthly basis for the difference between the amount the Executive pays to effect and
continue such coverage and the employee contribution amount that active senior
executive employees of the Company pay for the same or similar coverage.

4

 

     9.4 Effect of Change of Control. Notwithstanding the other provisions of Paragraph
9.3, in the event that: (i) the Company terminates the Executive’s employment without Cause in
anticipation of, or pursuant to a notice of termination delivered to the Executive within 24 months
after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant
to a notice of termination delivered to the Company in anticipation of, or within 24 months after,
a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or
within 24 months after, a Change of Control, the Company shall have no further obligation to the
Executive under this Agreement or otherwise, except the Executive shall be entitled to receive the
Accrued Obligations and the following benefits:

	 	(a)	 	the Company shall pay to the Executive, within 30 days following the
Executive’s Separation from Service (as defined below), a lump-sum cash amount equal
to: (i) two times the sum of (A) his Salary then in effect and (B) 75% of his then
current Salary; plus (ii) a bonus for the then current fiscal year equal to 75% of his
Salary (irrespective of whether performance objectives have been achieved); plus (iii)
if such notice is given within the first 12 months after the date first set forth
above, then, the Salary the Executive should have been paid from the date of
termination through the end of such 12 month period, provided, however, that in the
event of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii), the
annual salary used for computation under this Paragraph 9.4(a) shall be the one in
effect prior to the reduction referred to in Paragraph 15.1(h)(ii); and

	 	(b)	 	during the portion, if any, of the 24-month period (unless otherwise limited by
COBRA or similar state law) commencing on the date of the Executive’s Separation from
Service (as defined below) that the Executive is eligible to elect and elects to
continue coverage for himself and his eligible dependents under the Company’s or an
affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall
reimburse the Executive on a monthly basis for the difference between the amount the
Executive pays to effect and continue such coverage and the employee contribution
amount that active senior executive employees of the Company pay for the same or
similar coverage.

For purposes of this Agreement, a Change of Control shall not be considered to be
anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of
intent outlining provisional sale terms and conditions are being negotiated and/or have been
offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to
allow further due diligence for a prospective buyer(s) of the Company and/or its assets,
and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has
been negotiated or has been executed.

     9.5 Other Benefits upon Termination without Cause by Company or for Good Reason by
Executive. In the event of a termination without Cause by the Company, failure to renew this
Agreement by the Company or termination for Good Reason by the Executive, in addition to the rights
and benefits to which the Executive would be entitled under Paragraphs 9.3 or 9.4:

5

 

	 	(a)	 	the Company shall provide the Executive with appropriate outplacement services
through a nationally recognized outplacement firm at a cost to the Company of no more
than 15% of the Executive’s Salary immediately prior to termination (without giving
effect to any reduction thereto unless such reduction was made with the Executive’s
consent); provided that such services are provided to the Executive prior to the end of
the second calendar year following the calendar year in which the Executive’s
Separation from Service (as defined below) occurs; and

	 	(b)	 	the Executive shall also be entitled to a contribution under the Company’s
Executive Retirement Benefit Plan for that fiscal year equal to the greater of (i) the
amount that would have been contributed for that fiscal year determined in accordance
with past practice or (ii) the highest amount contributed by the Company on behalf of
the Executive under that Plan for any of the three prior fiscal years.

     9.6 Termination by the Company for Cause. The Company may at any time terminate the
Executive’s employment for Cause by giving the Executive written notice, effective upon delivery of
such notice. In the event of a termination by the Company for Cause, the Company shall have no
further obligation to the Executive under this Agreement or otherwise, except the Executive shall
be entitled to receive the Accrued Obligations.

     9.7 Retirement. The employment of the Executive shall terminate automatically upon his
Retirement. “Retirement” shall mean a termination of the Executive’s employment initiated by the
Executive, other than for Good Reason, whereby the Executive is entitled to receive an immediately
payable benefit, including any applicable early retirement benefit, under any pension or retirement
plan then generally applicable to the Company’s salaried employees or under any retirement
arrangement established with respect to the Executive with his prior written consent; in either
case, whether or not the Executive commences to receive such benefit at the time of such
termination. In the event of the termination of the Executive’s employment pursuant to his
Retirement, the Company shall have no further obligation to the Executive under this Agreement or
otherwise, except the Executive shall be entitled to receive the Accrued Obligations.

     9.8 Disability. Subject to the requirements of the Americans with Disabilities Act of
1990, as amended, the Family and Medical Leave Act of 1993, as amended, and/or any other law
applicable to the Executive’s employment by the Company, the Company may terminate the employment
of the Executive, by giving him not less than 30 days written notice prior to the effective of such
termination, if the Executive shall have been absent from work due to sickness, injury or other
incapacity for a continuous period of more than 120 days or if, in the opinion of a physician
reasonably selected by the Company, the Executive is likely to be unable to perform his duties for
a continuous period of more than 120 days; provided, however, the Company shall withdraw such
notice if during its pendency the Executive fully resumes his performance hereunder and provides
the Company with a certificate from a physician reasonably acceptable to the Company certifying the
Executive’s ability to perform his duties hereunder. Circumstances justifying termination of the
Executive’s employment by the Company pursuant to this Paragraph

6

 

9.8 are referred to herein as
“Disability”. Any refusal by the Executive to submit to a medical examination by a physician or
other appropriate expert selected by the Company for the purposes of certifying his ability to
perform his duties and responsibilities hereunder shall, at the option of the Company, be deemed to
constitute conclusive evidence of the Executive’s inability to perform such duties and
responsibilities. In the event of a termination by the Company for Disability, the Company shall
have no further obligation to the Executive under this Agreement or otherwise, except the Executive
shall be entitled to receive the Accrued Obligations.

     9.9 Death. In the event of the death of the Executive while employed by the Company,
his employment shall terminate automatically and the Company shall have no further obligation to
the Executive under this Agreement or otherwise, except for payment of the Accrued Obligations to
the Executive’s surviving spouse, or if there is no surviving spouse, then to the Executive’s
heirs, designee or representative (as the case may be).

     9.10 Vacation upon Termination. Upon the termination of his employment, the Executive
shall be entitled to accrued vacation pay calculated on a pro rata basis in respect of each
completed month of service in the calendar year in which his employment terminates and the
appropriate amount shall be paid in cash to the Executive within 60 days of his termination of
employment, provided that if the Executive shall have taken more days than his accrued entitlement
the Company is hereby authorized to make an appropriate deduction from the Executive’s final salary
payment.

     9.11 Mitigation; Offset. The Executive shall have no obligation to take any action to
mitigate or offset any amounts payable by the Company pursuant to this Paragraph 9, by seeking
other employment or otherwise, nor shall the amount of any payment provided for in this Agreement
be reduced by any compensation earned by the Executive as the result of employment by another
employer after the date of termination of this Agreement or otherwise.

     9.12 Survival. The termination of the Executive’s employment for any reason
whatsoever shall not operate to terminate this Agreement as an entirety or to adversely affect the
respective continuing rights and obligations of the parties under Paragraphs 6, 7 and 10, all of
which shall survive the effective date of such termination of employment in accordance with their
respective terms.

     9.13 Affiliated Companies and Related Positions. Upon the termination of his
employment (for whatever reason and howsoever arising), the Executive shall, at the request of the
Company, immediately resign without claim for compensation from office as a Director of the Company
and any Affiliated Company and from any other office held by him in the Company or any Affiliated
Company (but without prejudice to any claim he may have for damages for breach of this Agreement),
and the Executive hereby irrevocably authorizes the Company to appoint some person in his name and
on his behalf to sign and deliver such resignations to the Board in the event of the Executive’s
failure to so resign.

     9.14 Treatment of Severance and Change of Control Benefits. Any severance or change
of control benefits paid to the Executive pursuant to this Paragraph 9 are intended to be exempt
from the application of Internal Revenue Code (the “Code”) Section 409A (“Code

7

 

Section 409A”) as
short term deferrals or as exempt separation pay and the provisions of this Agreement shall be
construed and administered in a manner consistent therewith, and any amounts payable to the
Executive as severance or change of control benefits are to be treated as separate payments for
purposes of Code Section 409A; provided, however, that if the total amount of severance or change
of control benefits payable to the Executive exceeds the amount that may be provided to the
Executive as exempt separation pay pursuant Treasury Regulation section 1.409A-1(b)(9)(iii) or any
successor provision thereto or similar applicable guidance (the “Exempt Amount”), then the total
amount of severance or change of control benefit payments due pursuant to this Paragraph 9 in
excess of such Exempt Amount shall be accelerated by payment to the Executive in a single lump sum
as soon as practicable following his Separation from Service (as defined below) with the Company
and in no event later than the 15th day of the third month following the end of the calendar year
in which such Separation from Service occurs.

     9.15 Conditions on Receipt of Severance Benefits.

     (a) Compliance with Restrictive Covenants and Execution and Non-Revocation of
General Release Agreement. Notwithstanding any other provision in this Agreement, the
Company’s payment to the Executive pursuant to this Paragraph 9 of any severance benefits,
except in the event of the termination of this Agreement as the result of or in anticipation
of a Change of Control, is subject to the conditions that (i) the Executive fully complies
with all applicable restrictive covenants under this Agreement and the Company shall have
the right to cease payment of the severance benefits, and the Executive shall immediately
repay to the Company any such severance benefits already paid, if such covenants have been
breached by the Executive but all other provisions of this Agreement shall remain in full
force and effect; and (ii) within 55 days after the date of the Executive’s Separation from
Service (as defined below), the Executive executes, delivers to the Company, and not revoke
as permitted by applicable law a General Release Agreement in a form reasonably acceptable
to the Company that fully and finally releases and waives any and all claims, demands,
actions, and suits whatsoever which he has or may have against the Company and its
affiliates, whether under this Agreement or otherwise, that arose before the General Release
Agreement was executed (the “Release”). For purposes of this Agreement, the Release shall
not become fully enforceable and irrevocable until the Executive has timely executed the
Release and not revoked his acceptance of the Release within seven days after its execution.

     (b) Separation from Service Requirement. Notwithstanding any other provision
of this Agreement, the Executive shall not be entitled to the severance or change of control
benefits under this Paragraph 9 unless the termination of the Executive’s employment
constitutes a Separation from Service. For purposes of this Agreement, “Separation from
Service” means separation from service (within the meaning of Code Section 409A and the
regulations and other guidance promulgated thereunder) with the group of employers that
includes the Company and each of its Affiliates. For this purpose, “Affiliate” means any
incorporated or unincorporated trade or business or other entity or person, other than the
Company, that along with the Company is considered a single employer under Code Section
414(b) or Code Section

8

 

414(c), but (i) in applying Code Section 1563(a)(1), (2), and (3) for
the purposes of determining a controlled group of corporations under Code Section 414(b),
the phrase “at least 50 percent” shall be used instead of the phrase “at least 80 percent”
in each place the phrase “at least 80 percent” appears in Code Section 1563(a)(1), (2), and
(3), and (ii) in applying Treasury Regulation Section 1.414(c)-2 for the purposes of
determining trades or businesses (whether or not incorporated) that are under common control
for the purposes of Code Section 414(c), the phrase “at least 50 percent” shall be used
instead of the phrase “at least 80 percent” in each place the phrase “at least 80 percent”
appears in Treasury Regulation Section 1.414(c)-2.

10. Non-Competition; Non-Solicitation. 

     To protect the Confidential Information, goodwill, and other legitimate business interests of
the Company and its affiliates, the Executive hereby covenants with the Company that during the
term of his employment he will not either directly or indirectly engage or participate in any
activity competitive with or adverse to the business or interests of the Company or any of its
Affiliated Companies. The Executive hereby covenants with the Company that during the 18 month
period following the last day of the Executive’s employment (or 24 months with respect to Paragraph
10.1(c)), the Executive shall not, directly or indirectly, as a stockholder (other than as a less
than 1% stockholder of a publicly and traded Company), partner, officer, director, agent,
consultant, employee, or otherwise:

	 	(a)	 	engage in any business that competes with the business then conducted by the
Company or any Affiliated Company (“Company” defined in this clause to mean all
Affiliated Companies, divisions, successors, and assigns of the Company);

	 	(b)	 	purposefully interfere or attempt to interfere with any of the Company’s or any
Affiliated Company’s contracts (regardless of whether these contracts are in writing or
verbal) or business relationships or advantages existing and in effect as of the
employment date of termination of Executive’s employment;

	 	(c)	 	solicit for employment, either directly or indirectly, for himself or for
another, any persons who are or were employed by the Company or any Affiliated Company
during the six month period prior to the termination of his employment; or

	 	(d)	 	request or cause or attempt to cause any customer or supplier of the Company or
an Affiliated Company to alter or terminate, reduce, or curtail any business
relationship with the Company or any Affiliated Company.

     The covenants contained in this Paragraph 10 are intended to be separate and severable and
enforceable as such. The Executive acknowledges that the restrictive covenants contained in this
Agreement are of a special nature and that any actual or threatened breach, violation, or evasion
of the restricted covenants of this Agreement will (i) result in damages to the Company or its
Affiliated Companies in amounts difficult to ascertain, and (ii) give rise to irreparable injury to
the Company or its Affiliated Companies. Therefore, in the event of a breach of this Paragraph 10,
the Executive acknowledges and agrees that in addition to any other remedies

9

 

available under law to
the Company and any Affiliated Company, the Company and any Affiliated Company shall be entitled to
equitable relief, including without limitation injunctive relief (in the form of a temporary
restraining order, temporary injunction, and permanent injunction) and specific performance,
without the necessity of proof of actual damage or posting a bond against the Executive or any
person or persons acting for or with the Executive in any capacity whatsoever from violating any of
the terms thereof. The Company may pursue any remedy available to it concurrently or consecutively
in any order as to any breach, violation, or threatened breach or violation of this Agreement, and
the pursuit of one of such remedies at any time shall not be deemed an election of remedies or
waiver of the right to pursue any other of such remedies as to such breach, violation, or
threatened breach or violation, or as to any other breach, violation, or threatened breach or
violation.

11. Assignment. 

     This Agreement shall be binding upon and shall inure to the benefit of the Company and any
successor or assign of the Company. This Agreement shall be binding upon and shall inure to the
benefit of Executive, his legal representatives, heirs, legatees, executors, administrators and
assigns, except that Executive’s obligations to perform services and rights to receive payments and
benefits under this Agreement are personal and are expressly declared to be non-assignable and
non-transferable by him without the consent in writing of the Company. In the event of a Change in
Control, the Company shall require the successor to the Company as the Executive’s employer
(whether such succession is direct or indirect, by purchase, merger, consolidation or otherwise, to
all or a substantial portion of the business and/or assets of the Company) to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in this Agreement, the term
“Company” as hereinbefore defined and any successor to all or a substantial portion of its business
and/or assets as aforesaid.

	12.	 	Notices.

     Any notice to be given under the Agreement shall be given in writing and shall be deemed to be
sufficiently served by one party on the other if it is delivered personally or is sent by facsimile
transmission, overnight service or registered or recorded delivery prepaid post addressed to either
the Company’s principal office for the time being or the Executive’s last known address as the case
may be. Any purported termination of the Executive’s employment by the Company or by the Executive
or non-renewal of this Agreement shall not be effective unless communicated in writing to the other
party hereto in accordance with this Section 12. A notice of termination shall identify the
specific termination provision of this Agreement relied upon and shall specify the intended
effective date of such termination (which date shall comply with the notice period requirements of
the provision so identified) and shall summarize in reasonable detail the facts and circumstances
claimed to provide a basis for termination under the provision so identified; provided, however,
that any failure to provide such detail shall not delay the effectiveness of the termination.

10

 

13. Parachute Payment Limitation.

     Notwithstanding any contrary provision in this Agreement, if the Executive is a “disqualified
individual” (as defined in Section 280G of the Code), and the severance or change of control
payments and benefits described in Paragraph 9, together with any other payments which the
Executive has the right to receive from the Company, would constitute a “parachute payment” (as
defined in Section 280G of the Code), the payments and benefits provided hereunder shall be reduced
(but not below zero) so that the aggregate present value of such payments and benefits received by
the Executive from the Company shall be $1.00 less than three times the Executive’s “base amount”
(as defined in Section 280G of the Code) and so that no portion of such payments received by the
Executive shall be subject to the excise tax imposed by Section 4999 of the Code. The
determination as to whether any such reduction in the amount of the payments and benefits is
necessary shall be made by the Company in good faith and such determination shall be conclusive and
binding on the Executive. If a reduced payment is made to the Executive and through error or
otherwise that payment, when aggregated with other payments from the Company (or its affiliates)
used in determining if a parachute payment exists, exceeds $1.00 less than three times the
Executive’s base amount, the Executive shall immediately repay such excess to the Company upon
notification that an overpayment has been made.

14. Miscellaneous.

     14.1 Authority. The Executive hereby warrants that by virtue of entering into this
Agreement he will not be in breach of any express or implied terms of any court order, contract or
of any other obligation legally binding upon him. The Executive further represents and warrants
that his execution of this Agreement and employment with the Company or its affiliates do not
constitute a breach of any other agreement between the Executive and any third party.

     14.2 Additional Benefits. Any benefits provided by the Company to the Executive or
his family which are not expressly referred to in this Agreement shall be regarded as ex gratia
benefits provided at the entire discretion of the Company and shall not form part of the
Executive’s agreement for employment.

     14.3 Taxes. The Executive shall be responsible for the payment of all individual taxes
on all amounts paid or benefits provided to him under this Agreement. All compensation (including
with limitation, salary and any severance or change of control payments) paid to the Executive
shall be subject to such deductions as from time to time may be required by law or regulation or by
agreement with or with the consent of the Executive.

     14.4 Waiver. Any waiver by either party of any breach of any provision of this
Agreement must be set forth in a writing signed by such party, in order for it to be effective, and
no such waiver shall operate as a waiver of any subsequent breach of that provision or any breach
of any other provision of this Agreement.

     14.4 Indemnification. The Company will indemnify the Executive and advance all costs
related thereto (and his legal representatives, heirs, estate or other successors) to the fullest
extent permitted (including payment of expenses in advance of final disposition of any proceeding)
by the laws of the State of Delaware as in effect at the time of the subject act or

11

 

omission, or by
the certificate of incorporation and by-laws of the Company as in effect at such time or on the
date of this Agreement, or by the terms of any indemnification agreement between the Company and
the Executive, whichever affords or afforded greatest protection to the Executive, and the
Executive shall be entitled to the protection of any insurance policies the Company or an
Affiliated Company may elect to maintain generally for the benefit of its directors and officers
(and to the extent the Company or an Affiliated Company maintains such an insurance policy or
policies, the Executive shall be covered by such policy or policies, in accordance with its or
their terms, to the maximum extent of the coverage available for a person serving or having served
in the positions and offices in which the Executive is serving or has served), against all costs,
charges and expenses whatsoever incurred or sustained by him (or his legal representative, heirs,
estate or other successors) at the time such costs, charges and expenses are incurred or sustained,
in connection with any action, suit or proceeding to which he (or his legal representatives, heirs,
estate or other successors) may be made a party by reason of his being or having been a director,
officer or employee of the Company or any Affiliated Company, or be reason of he serving or having
served any other enterprise as a director, officer or employee at the request of the Company or any
Affiliated Company; provided, however, that any such indemnification obligations shall not apply
with respect to any liability imposed in connection with any such action, suit, or proceeding
caused in whole or in part by the gross negligence or intentional or willful misconduct of the
Executive.

15. Definitions; Rules of Interpretation; Miscellaneous.

     15.1 Defined Terms. In this Agreement unless the context otherwise requires or as
otherwise defined herein the following expressions have the following meanings:

	 	(a)	 	“Accrued Obligations.” Accrued Obligations means (i) payment to the Executive
of all earned but unpaid Salary through the date of termination, prorated as provided
above, within 60 days of such date of termination (ii) payment to the Executive, in
accordance with the terms of the applicable benefit plan of the Company or to the
extent required by law, of any benefits to which the Executive has a vested entitlement
as of the date of termination (other than any entitlement to severance or separation
pay, if any, or any similar benefits), and (iii) payment to the Executive of any
approved but un-reimbursed business expenses incurred in accordance with applicable
Company policy and the terms of this Agreement, all of which shall be payable in
accordance with the Company’s plans and policies and applicable law.

	 	(b)	 	“Affiliated Company.” Any legal entity that, directly or indirectly, controls,
is controlled by or is under common control with the Company, where “control” means the
power to direct or cause the direction of the management and policies of such entity,
whether through ownership of voting securities, by contract or otherwise.

	 	(c)	 	“Benefit Plans.” The 401(k) plan and any other pension, retirement, life
insurance, medical, health, accident, disability, welfare, savings, deferred
compensation or similar plans of the Company and its Affiliated Companies.

12

 

	 	(d)	 	“Board of Directors.” The Board of Directors for the time being of the Company
including any duly appointed committee thereof.

	 	(e)	 	“Cause.” Any of the following: (i) the Executive’s willful and continued
failure substantially to perform his duties hereunder (other than as a result of
sickness, injury or other physical or mental incapacity or as a result of termination
by the Executive for Good Reason); provided, however, that such failure shall
constitute “Cause” only if (x) the Company delivers a written demand for substantial
performance to the Executive that specifies the manner in which the Company believes
the Executive has failed substantially to perform his duties hereunder and (y) the
Executive shall not have corrected such failure within 10 business days after his
receipt of such demand; (ii) willful misconduct by the Executive in the performance of
his duties hereunder that is demonstrably and materially injurious to the Company or
any Affiliated Company for which he is required to perform duties hereunder; (iii) the
Executive’s conviction of (or plea of nolo contendere or similar plea to) any
financial-related felony or other similarly material crime under the laws of the United
States or any state thereof; or (iv) any material violation of this Agreement by the
Executive. No action, or failure to act, shall be considered “willful” if it is done
by the Executive in good faith and with the reasonable belief that he action or
omission was in the best interest of the Company. If the Board of Directors determines
in its sole discretion that a cure of the acts or omissions just described above is
possible and appropriate, the Company will give the Executive written notice of the
acts or omissions constituting Cause and no termination of this Agreement shall be for
Cause unless and until the Executive fails to cure such acts or omissions within 20
business days following receipt of such written notice. If the Board of Directors
determines in its sole discretion that a cure is not possible and appropriate, the
Executive shall have no notice or cure rights before this Agreement is terminated for
Cause.

	 	(f)	 	“Change in Control.” The occurrence of any of the following: (i) a merger,
consolidation, exchange, combination or other transaction involving the Company and
another entity (or the securities of the Company and such other entity) as a result of
which the holders of all of the shares of Common Stock of the Company outstanding prior
to such transaction do not hold, directly or indirectly, shares of the outstanding
voting securities of, or other voting ownership interest in, the surviving, resulting
or successor entity in such transaction in substantially the same proportions as those
in which they held the outstanding shares of Common Stock of the Company immediately
prior to such transaction; (ii) the sale, transfer, assignment or other disposition by
the Company in one transaction or a series of transactions within any period of 18
consecutive calendar months (including, without limitation, by means of the sale of
capital stock of any subsidiary or subsidiaries of the Company) of assets which account
for an aggregate of 50% or more of the consolidated revenues of the Company and its
subsidiaries, as determined in accordance with U.S. generally accepted accounting
principles, for the fiscal year most recently ended prior to the date of such
transaction (or, in the case of a series of transactions as described above, the first
such transaction); provided, however, that no such transaction shall be taken into
account if substantially all the proceeds thereof (whether in cash or in kind) are

13

 

	 	 	 	used
after such transaction in the ongoing conduct by the Company and/or its subsidiaries of
the business conducted by the Company and/or its subsidiaries prior to such
transaction; (iii) the Company is dissolved; or (iv) a majority of the directors of the
Company are persons who were not members of the Board of Directors as of the date (the
“Reference Date”) which is the more recent of the date hereof and the date which is two
years prior to the date on which such determination is made, unless the first election
or appointment (or the first nomination for election by the Company’s shareholders) of
each director who was not a member of the Board of Directors on the Reference Date was
approved by a vote of at least two-thirds of the Board of Directors in office prior to
the time of such first election, appointment or nomination. Notwithstanding the
foregoing, a “Change in Control” shall not be deemed to occur upon any merger or
consolidation effecting a reincorporation of the Company in another state or any other
merger or consolidation in which the equity holders of the surviving corporation and
their proportionate interests therein immediately after the merger or consolidation are
substantially similar to the equity holders of the Company and their proportionate
interests therein immediately prior to the merger or consolidation.

	 	(g)	 	“Chief Executive Officer.” The Chief Executive Officer of the Company.

	 	(h)	 	“Good Reason.” The occurrence of any of the following (other than by reason of
a termination of the Executive for Cause or Disability or with the consent of the
Executive): (i) the authority, duties or responsibilities of the Executive are
significantly and materially reduced (including, without limitation, by reason of the
elimination of the Executive’s position or the failure to elect the Executive to such
position or by reason of a change in the reporting responsibilities to and of such
position, or, following a Change in Control, by reason of a substantial reduction in
the size of the Company or other substantial change in the character or scope of the
Company’s operations); (ii) the Salary provided in Section 2 hereof (as the same may be
increased from time to time) is materially reduced (except if such reduction occurs
prior to a Change in Control and is part of an across-the board reduction applicable to
all senior level executives of the Group); (iii) the Executive is required to change
his regular work location to a location that is more than 75 miles from his regular
work location prior to such change; or (iv) any other action or inaction that
constitutes a material breach by the Company of this Agreement. To exercise his right
to terminate for Good Reason, the Executive must provide written notice to the Company
of his belief that Good Reason exists within 90 days of the initial existence of the
condition(s) giving rise to Good Reason, and that notice shall describe the
condition(s) believed to constitute Good Reason. The Company shall have 20 days to
remedy the Good Reason condition(s). If not remedied within that 20-day period, the
Executive may terminate his employment; provided, however, that such termination must
occur no later than 180 days after the date of the initial existence of the
condition(s) giving rise to the Good Reason; otherwise, the Executive is deemed to have
accepted the condition(s), or the Company’s correction of such condition(s), that may
have given rise to the existence of Good Reason.

14

 

	 	(i)	 	“Intellectual Property.” Letters patent, trademarks, trade names, service
marks, designs, copyrights, utility models, design rights, applications for
registration of any of the foregoing and the right to apply for them in any part of the
world, inventions, drawings, computer programs, trade secrets (as defined by applicable
law) and other nonpublic proprietary information, know-how and right of like nature
arising or subsisting anywhere in the world in relation to all of the foregoing whether
registered or unregistered.

	 	(j)	 	“IRS.” The United States Internal Revenue Service, or any successor agency of
the United States Government.

     15.2 Headings. The headings in this Agreement are for convenience only and shall not
affect its construction or interpretation.

     15.3 Statutory References. Any reference in this Agreement to a statutory provision
shall be deemed to include a reference to any statutory amendment, modification or re-enactment of
it or to any legislation that supersedes it.

     15.4 Entire Agreement. This Agreement contains the entire understanding between the
parties, and all prior agreements, arrangements and understandings (written or oral) between the
Company and the Executive, relating to the employment of the Executive with the Company which such
agreements, arrangements and understandings shall be deemed to have been terminated by mutual
consent; provided, however, that this Agreement shall not terminate any agreement in effect on the
date hereof between the Company and the Executive as reflected on Exhibit B to this Agreement
granting or otherwise relating to any stock option, and any such agreement shall be deemed to be
modified and amended hereby to the extent that the terms of such agreement are inconsistent with
the terms hereof.

     15.5 Severability. The provisions of this Agreement are severable and if any
provision or identifiable part thereof is held to be invalid or unenforceable by an court of
competent jurisdiction then such invalidity or unenforceability shall not affect the validity or
enforceability of the remaining provisions or identifiable parts thereof in this Agreement, and the
parties hereto agree that the portion so held invalid, unenforceable or void shall, if possible, be
deemed amended or reduced in scope, or otherwise be stricken from this agreement, to the extent
required for the purposes of the validity and enforcement hereof.

     15.6 Legal Fees and Expenses. In the event of a dispute between the Executive and the
Company with respect to any provision of this Agreement, prevailing party as determined by a court
of competent jurisdiction shall be entitled to receive from the non-prevailing party reimbursement
of the prevailing party’s reasonable legal fees and disbursements incurred by him or it in
connection with enforcing such rights, at the time such fees and disbursements are incurred (but in
no event more frequently than monthly).

     15.7 Governing Law. This Agreement is governed by and shall be construed in
accordance with the laws of the State of Missouri and the parties to this Agreement hereby submit
to the exclusive jurisdiction of the federal and state courts sitting in St. Louis County,

15

 

Missouri. Nothing in this Agreement, however, precludes either party from seeking to remove a civil
action from any state court to federal court.

     15.8 Code Sections 409A.

          (a) Code Section 409A. The parties intend for all payments provided to the Executive
under this Agreement to be exempt from or comply with the provisions of Code Section 409A and not
be subject to the tax imposed by Code Section 409A. The provisions of this Agreement shall be
interpreted in a manner consistent with this intent. Any reimbursement or in-kind benefit provided
under this Agreement which constitutes a “deferral of compensation” within the meaning of Treasury
Regulation Section 1.409A-1(b) shall be made or provided in accordance with the requirements of
Code Section 409A, including, where applicable, the requirement that (i) any reimbursement is for
expenses incurred during the period of time specified in this Agreement, (ii) the amount of
expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other
calendar year, (iii) the reimbursement of an eligible expense will be made no later than the last
day of the calendar year following the year in which the expense is incurred, and (iv) the right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

          (b) Specified Employee Postponement. Notwithstanding any contrary provision of this
Agreement, if the Company or an affiliate is publicly traded on an established securities market
(or otherwise) and the Executive is a “specified employee” (as defined below) and is entitled to
receive a payment that is subject to Code Section 409A on account of his Separation from Service,
such payment may not be made earlier than six months following the date of his Separation from
Service if required by Code Section 409A and the regulations thereunder, in which case, the
accumulated postponed amount shall be paid in a lump sum payment on the second day after the end of
the six-month period. If the Executive dies during the postponement period prior to the payment of
the postponed amount, the amounts withheld on account of Code Section 409A shall be paid to the
personal representative of his estate within 30 days after the date of death. The determination of
whether the Executive is a “specified employee” shall be made in accordance with Code Section 409A
and the applicable regulations and other guidance thereunder using the default provisions in such
regulations and other guidance unless another method permitted pursuant to such regulations and
other guidance has been prescribed for such purpose by the Company.

     15.9 Right to Consult a Tax Advisor. Notwithstanding any contrary provision in this
Agreement, the Executive shall be solely responsible for any risk that the tax treatment of all or
part of any payments provided by this Agreement may be affected by Code Section 409A, which may
impose significant adverse tax consequences on him, including accelerated taxation, a 20%
additional tax, and interest. Because of the potential tax consequences, the Executive has the
right, and is encouraged by this paragraph, to consult with a tax advisor of his choice before
signing this Agreement.

     15.10 Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which together shall be considered one and the

16

 

same
agreement. The delivery of this Agreement in the form of a clearly legible facsimile or
electronically scanned version by e-mail shall have the same force and effect as delivery of the
originally executed document.

     15.12 Amendment of Agreement. This Agreement may not be modified or amended in any
respect except by an instrument in writing signed by the party against whom such modification or
amendment is sought to be enforced. Notwithstanding the previous sentence, the Company may modify
or amend this Agreement in its sole discretion at any time without the further consent of the
Executive in any manner necessary to comply with applicable law and regulations or the listing or
other requirements of any stock exchange upon which the Company is or may become listed. No
modification or amendment may be enforced against the Company unless such modification or amendment
is in writing and signed by the Board of Directors.

In Witness Whereof, this Agreement has been executed and delivered by an authorized
representative of the Company and by the Executive as of the date first above written.

	 	 	 	 	 
	Armstrong Energy, Inc.

 	 
	/s/ Martin D. Wilson	 
	By: Martin D. Wilson, President 	 
	 	 	 
	 

	 	 	 	 	 
	 	 
		/s/
J. Hord Armstrong, III	 
	 	J. Hord Armstrong, III 	 
	 	 	 
	 

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00195-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00195-of-00352.parquet"}]]