EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement, (hereinafter referred to as
"Agreement") entered into as of May 25, 2006 (the "Effective Date"), by and
between National Coal Corporation, a corporation organized and existing under
the laws of the State of Tennessee, with its principal place of business at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (hereinafter referred to as
"Operating Company"), and National Coal Corp., a Florida corporation and the
sole shareholder of the Company ("Parent," and together with Operating Company,
the "Company") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ residing at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (Employee).
SECTION 1: EMPLOYMENT AND TERM OF AGREEMENT
1.1 EMPLOYMENT. Commencing no more than ninety-three (93) days from the
Effective Date, and upon the terms and conditions set forth in this Agreement,
the Company hereby employs Employee and Employee accepts employment as Chief
Executive Officer of Operating Company and Parent. Employee shall give notice of
his employment commencement date no later than fourteen (14) days following the
Effective Date.
1.2 DUTIES. a. During the term of his employment pursuant to this
Agreement, Employee shall serve the Company faithfully and to the best of his
ability and shall devote his business and professional time, energy, and
diligence to the performance of the duties of such office and he shall perform
such services and duties in connection with the business and affairs of the
Company (i) as are customarily incident to such office and (ii) subject to
Section 1.2(b) hereof, as may reasonably be assigned or delegated to him from
time to time by the Board of Directors of the Company. Employee shall also serve
as a director of Parent and each of its subsidiaries and affiliates.
b. Notwithstanding the foregoing, Employee shall be
principally responsible for, and shall have full power and authority to direct,
the management and operation of the business of the Company to develop a
strategic plan for the Company, to implement such strategic plan, to plan for
the growth of the Company, including acquisitions, to assist in the
communication to investors and lead the management team to achieve these
objectives. To the extent permitted by law, and as long as no event described in
Section 3.1(b) or (c) has occurred and is continuing, the Boards of Directors of
the Company shall take no action to restrict or interfere with the powers and
responsibilities assigned and delegated to Employee pursuant to this Agreement.
c. Notwithstanding the foregoing, it is understood that
Employee shall continue to provide services substantially of the type and amount
described in Schedule A hereto, to Straightfellow Farms Ltd., a real estate
investment company, and that the performance of such services shall not be used
as a basis for termination under Section 4.1.
1.3 TERM OF EMPLOYMENT. Unless earlier terminated pursuant to the
provisions hereof, the initial term of Employee's employment under this
Agreement shall be for the period of three (3) years commencing with the date of
this Agreement (the "Initial Term"). Said Term shall be automatically renewed
thereafter for successive two-year terms (each a
"Renewal Term," and, together with the Initial Term, the "Term") unless the
Board of Directors of the Company or any successor entity provides Employee with
written notice that the Agreement will not be renewed no later than 120 days
prior to the expiration of the then-current Term. Notwithstanding the foregoing,
in the event a Change in Control (as defined below) occurs during the Term, the
Term of this Agreement shall not end prior to the first anniversary of such
Change in Control.
SECTION 2: COMPENSATION, BENEFITS AND OTHER ENTITLEMENTS
2.1 BASE SALARY. a. As compensation for his services hereunder and as
consideration for his covenant not to compete provided for in Section 4 hereof,
Employee shall be paid a base annual salary at the rate of SIX HUNDRED THOUSAND
AND 00/00 DOLLARS ($600,000.00) PER YEAR, which rate of compensation shall be in
effect from the Effective Date until the end of the initial term set forth in
Section 1.3 hereof. Thereafter, the base annual salary shall be at the rate
determined in good faith by the Company's Board of Directors at the Board's
regularly scheduled meeting next following the end of each fiscal year or upon
any special meeting, based upon the Company's review of Employee's performance
during the preceding fiscal year or lesser period, but shall not be reduced
below the base annual salary in effect at the end of the immediately preceding
fiscal year. The base annual salary shall be payable at such periodic intervals,
not less than semi-monthly, as from time to time are applicable with respect to
salaried executive personnel of the Company, and shall be inclusive of all
applicable income taxes, Social Security, and other taxes and charges that are
required by law to be withheld by the Company or that are requested to be
withheld by Employee.
b. If Employee's base annual salary is hereafter increased by
the Board of Directors, it shall not thereafter be reduced below a figure equal
to the amount of base annual salary in effect immediately prior to such
increase, together with an amount equal to the product of (x) the amount of base
annual salary in effect immediately prior to such increase, multiplied by (y)
the percentage increase in the consumer price index in Nashville, Tennessee to
the last day of the fiscal year preceding any such reduction.
2.2 BONUS. For each full fiscal year during which Employee is employed
as the Company's Chief Executive Officer pursuant to this Agreement, commencing
with the fiscal year ending on December 31, 2006, Employee shall be paid an
annual cash bonus in an amount to be determined in good faith by the Board of
Directors but not more than an amount equal to fifty percent (50%) of the base
amount of Employee's salary, which bonus shall be payable in a lump sum no later
than three (3) business days following the filing of the Company's Annual Report
on Form 10-K for the applicable fiscal year period with the Securities &
Exchange Commission.
2.3 INSURANCE. The Company shall provide to Employee the standard
package of family insurance benefits which are from time to time provided to
other executive employees, including medical and major medical insurance
coverage. The Company shall also provide to Employee long term care and
disability income insurance coverage (at Employee's option), in an amount equal
to not less than eighty percent (80%) of his base annual salary with benefits,
and with disability for purposes of such coverage being defined as the inability
to perform the usual and customary activities as Chief Executive Officer of the
Company. The disability insurance and the long-term care insurance shall be
issued on a basis that would permit Employee to continue coverage under such
policies upon termination of his employment with the Company at
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his own expense or, in circumstances where the Company is obligated to pay for
continued coverage under paragraph 4.3 below, at the Company's expense.
2.4 OTHER BENEFITS. The Company shall provide Employee the following
additional benefits:
a. A Company owned and maintained automobile suitable to
Employee's position and appropriate for the performance of his duties, such
automobile to be replaced at appropriate intervals.
b. Reimbursement of all reasonable expenses incurred for
Company business, provided the same are of a type which are allowable for
deductions under applicable federal tax law.
c. Reimbursement for accounting, tax, legal, and financial
services to be performed by accountants, lawyers, or other professionals of his
choice to assist Employee in financial, estate and tax planning, and tax
reporting, provided that the Company shall not be obligated to reimburse
Employee more than Ten Thousand and 00/00 Dollars ($10,000.00) per year for such
expenses.
d. Paid vacation of four (4) weeks per fiscal year (pro-rated
with respect to any portion thereof), or such greater amount as may be permitted
from time to time by the Company's vacation policy, to be taken at such time as
selected by Employee. Consistent with the policy outlined in the Company's
Employee Handbook, vacation benefits granted during a fiscal year automatically
expire and may no longer be utilized at the close of business on December 31st
of such fiscal year.
e. Employee shall be entitled to short-term medical leave
benefits for up to three months for time out of work due to a psychological or
physical illness, injury, or condition. Such benefits shall include full pay to
Employee for any leave which is due to medical or psychological conditions as
supported by appropriate written verification from Employee's treating medical
or psychological/psychiatric professional.
f. In addition to the benefits bestowed upon Employee in this
Agreement, Employee shall be entitled to participate in and enjoy benefits as
are generally extended to employees serving in an executive capacity, including
any capacity similar to that of Employee, in accordance with the Company's
customary practices and policies.
g. In addition to the other benefits provided to the employee
in this Agreement, the company agrees that the company paid "key man life
insurance" in no less than the amount of the Employee's base annual salary,
which shall, upon the Employees death be distributable fifty percent (50%) to
the company and fifty percent (50%) to the Employee's heirs as he may direct in
his will.
h. The Company will maintain directors and officers liability
insurance with coverage of no less than $10 million at all times that Employee
is an officer or director of the Company.
i. MOVING EXPENSES. The Company shall pay Employee up to
$50,000 for any loss incurred in the sale of employee's residence in New Jersey,
including any brokers fees,
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interest or tax payments incurred after the commencement of employment and until
the sale of the residence. For the purpose of this Section the Employee's basis
as of the commencement of his employment is $2,750,000. In addition, upon the
Employee moving to Tennessee to assume this position, the Company will reimburse
Employee for $10,000 of moving expenses.
j. TEMPORARY LIVING EXPENSES. The Company will reimburse the
Employee for any temporary living expenses, including rent, storage or other
costs for a period of up to six (6) months from the start of employment and
shall pay Employee a travel stipend to cover one (1) round trip a week between
Newark, New Jersey and Knoxville, Tennessee for a period of up to six (6)
months. If permanent living arrangements are obtained prior to the end of the
six (6) month period, payments pursuant to this Section shall end on the date of
obtaining such permanent living arrangements.
SECTION 3: STOCK INCENTIVE
3.1 STOCK OPTIONS. On the Effective Date, Employee shall be granted a
non-qualified option to purchase 500,000 shares of Parent's common stock (the
"Option Grant"), which shall be issued pursuant to the terms of the 2004
National Coal Corp. Stock Option Plan. The Option Grant shall have an exercise
price of $8.88, which is the closing price of the Company common stock as
reported on the Nasdaq National Market on the date immediately prior to date of
grant. The Option Grant shall vest in four equal annual installments on the
anniversary of the date of commencement of employment, provided, however, if
there is a Change in Control as defined in EXHIBIT A after commencement of
Employee's employment, all options shall immediately vest.
3.2 SALE OF SHARES. As an incentive for Employee accepting this
position, 100,000 shares of common stock of the Company shall be offered to
Employee pursuant to the 2004 National Coal Corp. Option Plan, for purchase
$8.88 per share, the closing price of the Company common stock as reported on
the Nasdaq National Market on May 24, 2006. Such offer shall remain open to
Employee for a period of fifteen (15) business days following the Effective
Date.
SECTION 4: TERMINATION OF EMPLOYMENT
4.1 TERMINATION BY COMPANY. The Company shall have the right to
terminate Employee's employment at any time upon the occurrence of any one of
the following events:
a. Employee's death or the inability of Employee to adequately
perform his duties as Chief Executive Officer, as determined in good faith by
the Company's Board of Directors, for more than 90 consecutive days as a result
of the mental or physical illness or condition of Employee; or
b. Conduct of Employee involving any of the following, other
than by reason of mental or physical illness or condition and as determined by a
majority vote of the Board of Directors after notice to Employee (as described
below) and advice of independent legal counsel:
i. Habitual and continued unavailability to act or
respond on behalf of the Company;
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ii. Willful misconduct, which shall include, without
limitation, any act of omission knowingly undertaken or omitted by Employee with
the intent of causing damage to the Company, its properties, assets or business
or its stockholder, officers, directors or employee, or fraud, including without
limitation any misappropriation of embezzlement by Employee resulting in a
material personal profit to Employee, in any case, involving properties, assets
of funds of the Parent, the Company, or any of its subsidiaries;
iii. Any past or future conviction, by a court of
competent jurisdiction, of a felony (whether or not committed during the term
hereof or in the course of employment hereunder);
iv. Willful, continued, and material failure to
observe or perform the duties of his employment hereunder;
v. Habitual and gross neglect of the faithful
performance of the duties of his
employment hereunder.
c. With regard to Section 4.1(b), Company shall first provide
Employee with thirty (30) days written notice of such alleged misconduct,
including a specific description of such breach, failure, or neglect of duty or
obligation sufficient to allow Employee an opportunity to correct such noted
problems. Employee shall not be terminated under paragraph 4.1(b) unless, after
the notice period expires, Employee continues to engage in such misconduct.
Prior to any vote regarding misconduct, Employee will be given the opportunity
to appear before the Board, with his legal counsel, to present any relevant
information he believes the Board should consider in making such a decision.
d. In the event of a Change in Control, which shall, for
purposes of this Agreement, be defined as set forth in the attached EXHIBIT A,
which is incorporated herein by reference; provided, however, that in the case
of termination pursuant to this Section 4.1(d), the Board of Directors of the
Company shall make a determination either to terminate Employee's employment
hereunder or continue such employment within six (6) months after the effective
date of the Change in Control and shall give Employee ninety (90) days' notice
of any such determination to terminate Employee's employment hereunder, and the
failure to make such determination within such six-month period will be deemed
an election by the Company to continue Employee's employment hereunder.
4.2 TERMINATION BY EMPLOYEE.
a. If substantial differences of opinion between Employee and
the Board and/or the ownership of the Company should develop, or other
circumstances should arise such that Employee, in good faith, no longer feels
that he can function effectively as Chief Executive Officer of the Company, then
Employee may elect to resign from his employment hereunder by giving 30 days'
written notice to the Company.
b. Employee may elect to resign from employment with the
Company, upon 30 days written notice, if, in Employee's reasonable judgment, one
or more of the following events has occurred:
i. A material change in Employee's duties,
responsibilities, authority, or status with the Company, without Employee's
consent;
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ii. A significant increase in the amount of travel
required for Employee to perform his job, without Employee's consent; or
iii. Any other matter or circumstance requested by
the Board of Directors of the Company if either (a) made with the intent of
hindering Employee in the performance of his duties hereunder or (b) the effect
of such request could reasonably be expected to hinder Employee in the
performance of his duties hereunder.
4.3 PAYMENT OF SEVERANCE BENEFITS UPON TERMINATION.
(a) In the event of termination of Employee's employment
pursuant to Section 4.1 or 4.2 above, other than pursuant to Section 4.1 (b) or
4.2(a), Employee will be entitled to the following severance benefits
(collectively "Severance") upon execution of a Release of Claims in a form
substantially similar to that attached hereto as Exhibit B, which is
incorporated herein by reference, within 21 days of his separation:
i. Continuation of Employee's base annual salary for
the Severance Period (as defined below) at the rate in effect at the time of
such termination and payable at the time and in the manner such payments would
have been made to Employee if such termination had not occurred;
ii. A prorated annual cash bonus payment calculated
by multiplying the target amount (50% of base salary) by a fraction, the
numerator of which is the number of calendar months (full or partial) during
which Employee was employed by the Company in the fiscal year of his separation
from employment and the denominator of which is 12, said prorated bonus to be
payable as soon as practicable following Employee's separation from employment;
iii. Continued insurance coverage, as described in
Section 2.3 and to include medical and major medical coverage for Employee and
his eligible dependents, at the Company's expense for the Severance Period;
provided, however, that Employee will be responsible for any co-payments,
deductibles, or other out-of-pocket expenses associated with use of any health
coverage;
iv. Continued use, during the Severance Period, of a
company-owned and maintained
automobile suitable to Employee's prior position as Chief Executive Officer; and
v. Reimbursement for accounting, tax, legal and
financial services, as described in Section 2.4(c), up to $10,000.00 in each
fiscal year during the Severance Period.
vi. Immediate vesting of all unvested options and
immediate lapse of any forfeiture provisions relating to restricted share grants
scheduled to vest during the Severance Period.
For purposes of this Agreement, the Severance Period shall be
twelve (12) months.
(b) In the event of termination pursuant to Section 4.1 (b) or
4.2(a), all salary and benefits (other than vested benefits under any pension,
profit sharing or other compensation or benefit plan) shall cease at the time of
termination.
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(c) In the event of a Change in Control, the Company, at its
sole expense, shall cause its independent auditors promptly to review all
payments, distributions, and benefits that have been made to or provided to, and
are to be made to or provided to, Employee under this Agreement, and any other
agreement and plan benefiting Employee, to determine the applicability of
Section 4999 of the United States Internal Revenue Code of 1986, as amended (the
"Code"). If the Company's independent auditors determine that any such payments,
distributions, or benefits are subject to excise taxes as provided under Section
4999 of the Code (the "Excise Tax"), then such payment, distributions, or
benefits (the "Original Payments") shall be increased by an amount (the
"Gross-Up Amount") such that, after the Company withholds all taxes due,
including any excise and employment taxes imposed on the Gross-Up Amount,
Employee will retain a net amount equal to the Original Payments less all income
and employment taxes (other than Excise Taxes) on that amount. Employee agrees
to cooperate with the Company's independent auditors by providing necessary
information to perform this analysis/calculation, and the Company agrees that
Employee shall be entitled to copies of the calculations. The intent of the
parties is that the Company shall be solely responsible for, and shall pay, any
Excise Tax on the Original Payments and Gross-Up Amount and any income and
employment taxes (including, without limitation, penalties and interest) imposed
on the Gross-Up Amount. If no determination by the Company's independent
auditors is made prior to the time Employee is required to file a tax return
reflecting any portion of the Original Payments, and subsequently a taxing
authority determines that an Excise Tax should be imposed upon the Original
Payments, Employee shall be entitled to receive the full Gross-Up Amount
calculated on the basis of such additional amount of Excise Tax determined to be
payable by such tax authority (including related penalties and interest) from
the Company within 30 days of such determination as long as Employee has taken
all reasonable actions to minimize any such amounts. If any tax authority
finally determines the Excise Tax to be less than the amount taken into account
hereunder in calculating the Gross-Up Amount, Employee shall repay to the
Company, within 30 days of his receipt of a refund resulting from that
determination, the portion of the Gross-Up Amount attributable to such reduction
(plus the refunded portion of the Gross-Up Amount attributable to the Excise Tax
and federal, state, and local income and employment taxes imposed on the portion
of the Gross-Up Amount being repaid, less any additional income tax resulting
from such refund).
(d) Notwithstanding anything to the contrary in this
Agreement, the Gross-Up Amount payable by the Company, specifically including
any payments to be made pursuant to Section 4.3(c) hereof, shall in no
circumstance exceed $200,000.
(e) Notwithstanding anything to the contrary in this
Agreement, no Severance payments or benefits shall be paid to Employee during
the six-month period following the Employee's separation from service to the
extent that the Company determines in good faith that paying such amounts at the
time or times indicated in this SECTION 4.3 would cause the Employee to incur an
additional tax under Section 409A of the Code (in which case such amounts shall
be paid at the time or times indicated in this SECTION 4.3(D)). If the payment
of any such amounts are delayed as a result of the previous sentence, then on
the first day following the end of such six-month period, the Company will pay
the Employee a lump-sum amount equal to the cumulative amount that would have
otherwise been payable to the Employee during such six-month period.
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SECTION 5: NONCOMPETITION
The parties recognize that in the course of Employee's employment with
the Company, Employee has had and will continue to have access to a substantial
amount of confidential and proprietary information and trade secrets relating to
the business of the Company, and that it would be detrimental to the business of
the Company, and have a substantial detrimental effect on the value to the
Company of Employee's employment if Employee were to compete with the Company
upon termination of his employment. Employee therefore agrees, in consideration
of the Company entering this Agreement and establishing the base annual
compensation and other compensation and benefits at the level herein provided
for, that during the period of the term of his employment with the Company,
whether pursuant to this Agreement or otherwise, and, if and only if Employee's
employment is terminated pursuant to Section 4.1(b) or 4.2 (a), above, for a
period of one (1) year thereafter, he shall not, without the prior written
consent of the Company, directly as principal, partner, director, or stockholder
or through any corporation, partnership, or other entity (including, without
limitation, a sole proprietorship), engage or participate in, or assist in any
manner or in any capacity, or have any interest in or make any loan to, or
otherwise be related with, any person, firm, corporation, association, or other
entity with any locations, including any mines, anywhere within the central,
northern and southern Appalachian regions of the United States and engaged in
any business competing in any material way with the business of the Company or
any subsidiary of the Company as such business exists as of the date of
termination of employment; provided, however, that the foregoing shall not
prevent Employee from owning up to five percent (5%) of the outstanding
securities of, or being employed by, a publicly held corporation that may
compete with the Company. For purposes hereof, a business shall not be deemed to
be competing with the Company in a material way unless it manufactures, sells,
distributes, or otherwise deals in one or more products manufactured, sold,
distributed or otherwise dealt in by the Company and which product or products
account for at least five percent (5%) of the Company's gross sales volume at
the time in question.
The parties believe, in light of the facts known as of the
date hereof, and after considering the nature and extent of the Company's
business, the amount of compensation and other benefits provided herein, and the
damage that could be done to the Company's business by Employee's competing with
the Company, that the foregoing covenant not to compete is reasonable in time,
scope, and geographical limitation. However, if any court should construe the
time, scope, or geographical limitation of the covenant not to compete to be too
broad or extensive, it is the intention of the parties that the contract be
automatically reformed, and as so reformed, enforced, to the maximum limits
which may be found to be reasonable by such court.
SECTION 6: CONFIDENTIAL INFORMATION.
6.1 COMPANY INFORMATION. Employee agrees at all times during the term
hereof and thereafter, to hold in strictest confidence, and not to use or
disclose, except for the benefit of the Company or as authorized by the Company,
the Confidential Information of
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Company. Employee understands that "Confidential Information" means any Company
proprietary information, trade secrets and other information not generally known
to the public, such as technical and non-technical data, know-how, research,
product plans, marketing plans, products, business forecasts, services, customer
lists and customers (including, but not limited to, customers of Company on whom
Employee may call or with whom Employee becomes more acquainted during the term
of this Agreement or has become acquainted with during any prior period in which
he performed services for the Company), information regarding employees of the
Company, software, developments, inventions, processes, formulas, technology,
designs, drawings, engineering, hardware configuration information, marketing,
financial or other business information disclosed to Employee by the Company,
either directly or indirectly in writing, electronically, orally or by drawings
or observation of parts or equipment prior to or after the commencement of this
Agreement.
In light of the highly competitive nature of the industry in which
Company conducts its business, Employee agrees that all Confidential Information
heretofore or in the future obtained by the Employee as a result of the
Employee's association with Company, shall be considered confidential. In
recognition of this fact, Employee agrees that he will not, except in the
performance of his duties under this Agreement or except as otherwise provided
herein, during and after the execution of this Agreement (for so long as such
information otherwise remains confidential), disclose any of such Confidential
Information to any person or entity for any reason or purpose whatsoever, and he
will not make use of any Confidential Information for his own purposes or for
the benefit of any person or entity (except Company) under any circumstances not
authorized by the Company. The provisions contained in this paragraph shall also
apply to information obtained by Employee with respect to any subsidiary of or
company otherwise affiliated with Company.
In the event that Employee is requested or required (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand, any informal or formal investigation by any government or
governmental agency or authority or otherwise) to disclose any of the
Confidential Information, Employee will notify Company promptly in writing so
that Company may seek a protective order or other appropriate remedy or, in
Company's sole discretion, waive compliance with the terms of this Agreement.
Employee agrees not to oppose any action by Company to obtain a protective order
or other appropriate remedy. In the event that no such protective order or other
remedy is obtained, or that Company waives compliance with the terms of this
Agreement, Employee will furnish only that portion of the Confidential
Information which Employee is advised in writing by his own independent counsel
that he is legally required to furnish and will exercise his reasonable best
efforts, at Company's expense, to obtain reliable assurance that confidential
treatment will be accorded to the Confidential Information. To the extent that
Employee retains counsel to assist him in any situation covered by this
paragraph, he shall be entitled to reimbursement for reasonable fees incurred in
obtaining advice and representation.
6.2 THIRD PARTY INFORMATION. Employee recognizes that Company has
received and in the future will receive from third parties their confidential or
proprietary information subject to a duty on Company's part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. Employee agrees to hold all such
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confidential or proprietary information in the strictest confidence and not to
disclose it to any person, firm or corporation or to use it except as necessary
in carrying out Employee work for Company consistent with Company' agreement
with such third party. Employee agrees to comply with Company's policies and
procedures, as applicable from time to time with respect to such information.
SECTION 7: CODE SECTION 409A
7.1 Certain amounts under this Agreement may constitute "nonqualified
deferred compensation" which are intended to comply with the requirements of
Section 409A of the Code. To the extent that the parties reasonably determine
that any compensation or benefits payable under this Agreement are subject to
Section 409A of the Code, this Agreement shall incorporate the terms and
conditions required by Section 409A of the Code and Department of Treasury
regulations as reasonably determined by the Company and the Employee. To the
extent applicable, this Agreement shall be interpreted in accordance with
Section 409A of the Code and Department of Treasury regulations and other
interpretative guidance issued thereunder. In the event that following the
Effective Date, the Company and the Employee reasonably determine that any
compensation or benefits payable under this Agreement may be subject to Section
409A of the Code and related Department of Treasury guidance, the Company and
the Employee shall work together to adopt such amendments to this Agreement or
adopt other policies or procedures (including amendments, policies and
procedures with retroactive effective), or take any other commercially
reasonable actions necessary or appropriate to (a) exempt the compensation and
benefits payable under this Agreement from Section 409A of the Code and/or
preserve the intended tax treatment of the compensation and benefits provided
with respect to this Agreement, or (b) comply with the requirements of Section
409A of the Code and related Department of Treasury guidance.
SECTION 8: MISCELLANEOUS PROVISIONS
8.1 OUTPLACEMENT SERVICE. In the event of termination of Employee's
employment by the Company, the Company shall, upon the request of Employee (a)
pay for outplacement service for Employee for a period of twelve (12) months,
such payment to be made to an agency selected by Employee, based upon the
customary fees charged by nationally rated firms engaged in providing such
services for executives of similar level, qualifications, and experience, and
(b) provide to Employee, for a reasonable time following termination of
employment, not to exceed twelve (12) months, office space and secretarial
support to assist Employee in searching for and obtaining a new position, such
office space to be provided in a location reasonably determined by the Company.
8.2 INDEMNITY. The Company shall indemnify Employee and hold him
harmless for all acts or decisions made by him in good faith while performing
services for the Company to the full extent permitted by applicable law.
8.3 NON-DISPARAGEMENT. Except as compelled to do so by law, the Company
and its past and present affiliated companies and their officers, directors, and
employees shall refrain from making any remark or taking any action which
disparages, defames, or places Employee in a negative light, and Employee shall
refrain from making any remark or taking any action which disparages, defames,
or places the Company or any of its parent, subsidiary, or affiliated companies
or their past or present officers, directors, or employees in a negative light.
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8.4 EMPLOYEE BENEFITS. This Agreement shall not be construed to be in
lieu or to the exclusion of any other rights, benefits, and privileges to which
Employee may be entitled as an employee of the Company under any retirement,
pension, profit-sharing, insurance, hospital, or other plans or benefits that
may now be in effect or that may hereafter be adopted.
8.5 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee, and jurisdiction shall lie
in the courts of competent jurisdiction in ▇▇▇▇ County.
8.6 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the Company and Employee with respect to its subject matter,
supersedes any prior agreement or arrangement relative to Employee's employment
by the Company, and no modification, supplement, or amendment of any provision
hereof shall be valid unless made in writing and signed by the parties.
8.7 SUCCESSORS AND ASSIGNS; PERMITTED ASSIGNMENT. This Agreement shall
inure to the benefit of and be binding upon the Company and Employee and their
respective successors, executors. administrators, heirs and/or permitted
assigns; provided, however, that neither Employee nor the Company may make any
assignment of this Agreement or any interest therein, by operation of law or
otherwise, without the prior written consent of the other parties hereto, except
that, without such consent, the Company may assign this Agreement to any
successor to all or substantially all of its assets and business by means of
dissolution, merger, consolidation, transfer of assets, or otherwise, provided
that such successor assumes in writing all of the obligations of the Company
under this Agreement, subject, however, to Employee's right of termination as
provided in Section 4.2 hereof.
8.8 CAPTIONS. The captions set forth in this Agreement are for
convenience only and shall not be considered as part of this Agreement or as in
any way limiting or amplifying the terms and conditions hereof.
8.9 NO CONFLICTING OBLIGATIONS. Employee represents and warrants to the
Company that he is not under, or bound to be under in the future, any obligation
to any person, firm, or corporation that is or would be inconsistent or in
conflict with this Agreement or would prevent, limit, or impair in any way the
performance by him of his obligations hereunder.
8.10 WAIVERS. The failure of any party to require the performance or
satisfaction of any term or obligation of this Agreement, or the waiver by any
party of any breach of this Agreement, shall not prevent subsequent enforcement
of such term or obligation or be deemed a waiver of any subsequent breach.
8.11 NOTICES. Any notice given hereunder shall be in writing and
delivered or mailed by registered or certified mail, return receipt requested:
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(a) if to the Company: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) if to the Employee: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8.12 SEVERABILITY. In the event that any court having jurisdiction
shall determine that any restrictive covenant or other provision contained in
this Agreement shall be unreasonable or unenforceable in any respect, then such
covenant or other provision shall be deemed limited to the extent that such
other court deems it reasonable or enforceable, and as so limited shall remain
in full force and effect. In the event that such court shall deem any such
covenant or other provision wholly unenforceable, the remaining covenants and
other provisions of this Agreement shall nevertheless remain in full force and
effect.
8.13 COUNTERPARTS. More than one counterpart of this Agreement may be
executed by the parties hereto, and each fully executed counterpart shall be
deemed an original.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed under seal and delivered as of the date first above written.
NATIONAL COAL CORPORATION ("OPERATING COMPANY")
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
NATIONAL COAL CORP. ("PARENT")
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
EMPLOYEE:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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EXHIBIT A
DEFINITION OF CHANGE IN CONTROL
The occurrence of any of the following events shall constitute a Change
in Control for purposes of this Agreement: (a) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) other than the Operating Company or Parent, any
trustee or other fiduciary holding securities under any employee benefit plan of
the Company and/or Parent, or any company owned, directly or indirectly, by the
stockholders of Parent in substantially the same proportions as their ownership
of the Operating Company and/or Parent is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Operating Company and/or Parent representing 30% or more of
the combined voting power of such entity's then-outstanding securities; (b)
during any period of two consecutive years (not including any period prior to
the effective date of this Agreement), individuals who, at the beginning of such
period, constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Operating
Company and/or Parent to effect a transaction described in clause (a), (c), or
(d) of this Exhibit A) whose election by the Board or nomination for election by
such entity's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
two-year period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority of the Board;
(c) the consummation of a merger or consolidation of the Operating Company
and/or Parent with any other corporation, other than a merger or consolidation
which would result in the voting securities of such entity outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
such surviving entity outstanding immediately after such merger or
consolidation; provided, however, that a merger or consolidation effected to
implement a recapitalization of the Operating Company and/or Parent (or similar
transaction) in which no person acquires no more than 30% of the combined voting
power of such entity's then-outstanding securities shall not constitute a Change
in Control of the Operating Company and/or Parent; or (d) the stockholders of
the Operating Company and/or Parent approve a plan of complete liquidation of
the Operating Company and/or Parent or an agreement for the sale or disposition
by the Operating Company and/or Parent of all or substantially all of its
assets.
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EXHIBIT B
I acknowledge that I have had twenty-one days to decide whether
to execute this Release of Claims ("Release") and that I have been advised to
consult an attorney before executing this Release. I acknowledge that I have
seven days from the date I execute this Release to revoke my signature. I
understand that if I choose to revoke this Release I must deliver my written
revocation to National Coal Corporation and National Coal Corp. before the end
of the seven-day period.
I, for myself, my heirs, successors, and assigns, do hereby
settle, waive, and release each of National Coal Corporation and National Coal
Corp. (together, the "Company") and any of their past and present officers,
owners, stockholders, partners, directors, agents, employees, successors,
predecessors, assigns, representatives, attorneys, divisions, subsidiaries, or
affiliates from any and all claims, charges, complaints, rights, demands,
actions, and causes of actions of any kind or character, in contract, tort, or
otherwise, based on actions or omissions occurring in the past and/or present,
and regardless of whether known or unknown to me at this time, including those
not specifically mentioned in this Release. Among the rights, claims, and causes
of action which I give up under this Release are those arising in connection
with my employment and the termination of that employment, including, without
limitation, rights or claims under federal, state, and local fair employment
practice or discrimination laws (including the various Civil Rights Acts, the
Age Discrimination in Employment Act, the Equal Pay Act, and the Tennessee
Commission on Human Rights Act), laws pertaining to breach of employment
contract, wrongful termination or other wrongful treatment, and any other laws
or rights relating to my employment with the Company and the termination of that
employment. I acknowledge that I am aware of my rights under the Age
Discrimination in Employment Act, and that I am knowingly and voluntarily
waiving and releasing any claim of age discrimination which I may have under
that statute as part of this Release. This agreement does not waive or release
any rights, claims, or causes of action that may arise from acts or omissions
occurring after the date I execute this Release, nor does this agreement waive
or release any rights, claims or causes of action relating to (a)
indemnification from the Company and its affiliates with respect to my
activities on behalf of the Company and its affiliates prior to my termination
of employment, (b) compensation or benefits to which I am entitled under any
compensation or benefits plan of the Company or its affiliates, (c) amounts to
which I am entitled pursuant to the agreement to which a form of this Release of
Claims was attached as Exhibit B, (d) my right to file a charge with, or
participate in any investigation conducted by, any federal, state, or local
agency charged with enforcing laws prohibiting employment discrimination, (e) my
right to challenge the voluntary and knowing nature of this release in court or
before any federal, state, or local agency charged with enforcing employment
laws, or (f) any right, claim, or cause of action arising after the effective
date of this Release.
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SCHEDULE 1
Straightfellow Farms, Ltd. is a real estate holding company owned by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇. The purpose of the company is to own and rent
condominium apartments. At present there are four apartments in the company with
another two to be added shortly. ▇▇. ▇▇▇▇▇ is the Company Secretary and does the
majority of the work. ▇▇. ▇▇▇▇▇▇'▇ time commitment is limited, mainly outside of
office hours, but at times could require time during office hours. Estimated
hours per month spent on Straightfellow is approximately ten.
16