Employment Agreement

Employment Agreement

Exhibit 10.8




THIS EMPLOYMENT AGREEMENT (the “Agreement”) executed this 1st day of August, 2013, (“the Effective Date”) is between Rhino GP LLC (“Employer”) and Brian Aug (“Employee”).




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


WHEREAS the parties hereto acknowledge that this Agreement is to be effective on the date hereof (the “Effective Date”) and except as specifically provided in this Agreement, supersedes and replaces any prior terms of employment between Employer and Employee.


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


1.                                      Terms and Duties.  The Employer shall employ Employee as its Vice President of Sales commencing from the Effective Date until August 1st, 2016, unless sooner terminated as herein provided or extended by mutual agreement of the parties (the “Employment Term”), performing such duties as Employer deems necessary during the Employment Term.  Employee shall also hold such other offices with Employer’s direct and indirect subsidiaries as Employer may direct from time to time.  The Employee agrees to devote all of his business time and his best efforts to the business of Employer as may be necessary to perform his duties in accordance with the policies and budgets established from time to time by Employer. During the Employment Term, the Employee will not have any other employment.  Employee shall be bound by, and agree to comply with, all policies, procedures, and employment conditions of Employer in effect from time to time applicable to its employees.


2.                                      Compensation.  For Employee’s services hereunder during the Employment Term,




Employee shall pay to Employee a salary at the rate of $200,000 per year, payable periodically in accordance with Employer’s usual executive payroll payment procedures.


3.                                      Bonus & Equity Incentive Compensation.  Employee shall be eligible for an annual discretionary bonus of up to 40% of Employee’s base salary.  Such bonus shall commence with a pro-rated bonus for calendar year 2013 and shall be determined and paid within 120 days of each the calendar year of the Employment Term.  Employee shall also participate in any equity incentive compensation (e.g. “phantom unit” grants) applicable to Employer’s senior management group in such amounts, and on such terms, as Employer’s CEO, acting in consultation with Employer’s Compensation Committee, may decide in their sole and absolute discretion.


4.                                      Automobile.  Employer shall provide Employee with the use of a vehicle suitable for the intended duties of the Employee. The cost of the vehicle to be provided shall be determined by Employer.  The Employee’s use of the vehicle shall be governed by all of Employer’s policies, procedures and employee manuals regarding company vehicles, as they may be amended from time to time.


5.                                      Place of Employment. While it is understood that travel is an essential part of the Employee’s duties hereunder, the Employee’s regular place of employment during the Employment Term shall be at the Employer’s offices in or near Fayette County, Kentucky.


6.                                      Travel; Expenses.  The Employee shall engage in such travel as may reasonably be required in connection with the performance of his duties. All reasonable travel and other expenses incurred by the Employee (in accordance with the policies and the budget of the Employer established from time to time) in carrying out his duties hereunder will be reimbursed by the Employer on presentation to it of expense accounts and appropriate documentation in




accordance with the customary procedures of the Employer for reimbursement of employee expenses.


7.                                      Confidentiality; Competition.


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


(b)                                 The Employee agrees that during the Employment Term (and for a period of six (6) months following Employee’s voluntary resignation or termination for cause) the Employee will not (whether as an officer, director, partner, proprietor, member, shareholder, investor, associate, employee, consultant, adviser, public relations or advertising representative or otherwise), directly or indirectly, be engaged in the business of coal mining, coal processing,




coal loading or coal marketing within the United States of America.  For purposes of the preceding sentence, the Employee shall be deemed to be engaged in any business with any person for whom he shall be an employee, officer, director, owner, employer, consultant, shareholder, member or partner.  During such period of non-competition, and for a period of six (6) months thereafter, Employee shall not directly or indirectly solicit, interview or make any decision or recommendation to hire or to retain as a consultant or advisor or in any other capacity, any current employee of Employer, for himself, or for or to, any other person or entity.  Employee shall notify any subsequent employer of Employee of the foregoing agreement.


(c)                                  The terms of this Agreement are intended to limit disclosure and competition by the Employee to the maximum extent permitted by law. If it shall be finally determined by any court of competent jurisdiction ruling on this Agreement that the scope or duration of any limitation contained in this Paragraph 7 is too extensive to be legally enforceable, then the parties hereby agree that the scope and duration (not greater than that provided for herein) of such limitation shall be the maximum scope and duration which shall be legally enforceable and the Employee hereby consents to the enforcement of such limitation as so modified.


(d)                                 The Employee acknowledges that any violation by him of the provisions of this Paragraph 7 could cause serious and irreparable harm and damage to the Employer. He further acknowledges that it might not be possible to measure such damages in money and that Employer’s remedy at law for a breach or threatened reach of the provisions of Paragraph 7 would be inadequate. Accordingly, the Employee agrees that, in the event of a breach or threatened breach by him of the provisions of this Paragraph 7, the Employer may seek, in addition to any other rights or remedies, including money damages, an injunction or restraining




order, restraining the Employee from doing or continuing to do or perform any acts constituting such breach or threatened breach. In the event Employer seeks an injunction or restraining order, Employee and Employer agree that Employer shall not be required to post a bond to obtain the necessary equitable relief.


8.                                      Indemnification.  Subject to the Company’s limited liability company agreement (or the corresponding charter documents of a successor employer as contemplated by Paragraph 12 below), Employer shall indemnify and hold harmless Employee from and against any loss, cost, damage, expense, or liability incurred by Employee for any action taken or that has been taken by Employee in the scope of Employee’s employment for Employer, provided such action (i) is within the scope, duties, and authority of Employee, (ii) is not in willful violation of any law, regulation, or code of conduct adopted by Employer, and (iii) does not constitute gross negligence or intentional misconduct by Employee, as finally determined by a court of competent jurisdiction. The obligations of the Employer under this Paragraph 8 and the Company’s limited liability company agreement (or the corresponding charter documents of a successor employer as contemplated by Paragraph 12 below), the Company’s limited liability charter agreement shall control, provided however, that no revision to the Company’s limited liability company agreement may affect any diminishment to the Company’s indemnification obligations hereunder as they exist on the date hereof.


9.                                      Benefits; Vacation. The Employer agrees to provide to the Employee the benefits available to all salaried employees generally, as modified from time to time. Employee shall be entitled to three (3) weeks of vacation per year, plus any additional “personal” or “extra vacation” days off that are awarded to employees pursuant to Employer’s personnel policies, as they may be amended from time to time. Unused vacation and additional time off may carry




over to future years if approved in writing by Employer’s CEO.


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


11.                               Termination for Cause, Employment at Will or Voluntary Resignation by Employee.   If Employee shall:


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


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


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


(h)                                 fail or neglect to diligently perform his duties hereunder as reasonably determined by Employer;


then, and in any such case, the Employer may terminate the employment of the Employee “for cause” hereunder.  In the event of termination “for cause” or voluntary resignation by Employee, the Employee shall no longer have any right to any of the benefits (including future salary or bonus payments) which would otherwise have accrued after such termination.  However, in the event of a termination by Employer of the employment of the Employee other than “for cause”, the Employer shall (i) pay to the Employee a severance payment equal to six (6) months of




Employee’s base salary then in effect, plus (ii) continue Employee’s family health insurance coverage under Employer’s group plan, at the same premium cost to Employee as was in effect on the date of termination, until the earlier of (x) six (6) months following such termination other than “for cause,” or (y) the date Employee is covered under a health insurance policy through a subsequent employer.


12.                               Successors.  The rights, benefits, duties and obligations under this Agreement shall inure to and be binding upon the Employer, its successors and assigns and upon the Employee and his legal representatives, legatees and heirs. It is specifically understood, however, that this Agreement may not be transferred or assigned by the Employee. The Employer may assign any of its rights and obligations hereunder to any subsidiary or affiliate of the Employer, or to a successor or survivor resulting from a merger, consolidation, sale of assets or stock or other corporate reorganization, on condition that the assignee shall assume all of the Employer’s obligations hereunder and it is agreed that such successor or surviving corporation shall continue to be obligated to perform the provisions of this Agreement.


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


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




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


16.                               Governing Law.  This Agreement shall be construed and enforced pursuant to the laws of the Commonwealth of Kentucky, including matters of law relating to the choice of law.  Employee hereby consents to the jurisdiction of the courts of the Commonwealth of Kentucky, including the Fayette Circuit Court and hereby waives any objection to venue of any action brought in said court.


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


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










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






Rhino GP LLC







/s/ David G. Zatezalo



David G. Zatezalo, President and CEO












/s/ Brian Aug


Brian Aug