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EXHIBIT 10.3 AMENDED AND RESTATED EMPLOYMENT
AGREEMENT This Amended and
Restated Employment Agreement (this " Agreement ")
dated as of December 9, 2008 (the " Effective
Date ") is by and between United Fuel & Energy
Corporation, a Nevada corporation (" Employer "), and
Joseph M. Juliano (" Employee " and, together with
Employer, the " Parties " and each individually, a "
Party "). RECITALS:
A. Employer and
Employee are each a party to that certain Employment Agreement (the
" Original Agreement ") dated March 30, 2008
(the " Commencement Date ").
B. This Agreement is
intended to amend and restate the Original Agreement as of the
Effective Date. Only the terms of the Original Agreement are
applicable to the employment relationship between the Employer and
the Employee prior to the Effective Date. AGREEMENT:
In consideration of the premises and
the mutual promises herein made, and in consideration of the
representations, warranties, and covenants contained herein, each
Party agrees as follows:
1. Employment Term . This Agreement will remain in
effect from the Commencement Date and shall end on the date that is
the first anniversary of the Commencement Date unless this
Agreement is earlier terminated in accordance with its express
terms (the " Initial Term "); provided ,
however , that upon the expiration of the Initial Term, and
on each anniversary of the Commencement Date thereafter, the term
of this Agreement shall automatically extend for an additional
one-year term (each a " Renewal Term ," and together
with the Initial Term, the " Employment Term ")
unless (a) either Party gives the other Party three
(3) months’ notice of its desire not to extend this
Agreement prior to the expiration of the Initial Term or Renewal
Term, as applicable, or (b) this Agreement is earlier
terminated in accordance with its express terms.
2. Responsibilities and
Authority . Employer hereby employs Employee to serve as its
President and Chief Operating Officer. In such capacity, Employee
will have such duties and responsibilities as determined by
Employer’s Board of Directors and Chief Executive Officer
consistent with the Employer’s Bylaws. If requested by
Employer, Employee will serve as an officer or director of any
subsidiary of Employer without additional compensation.
3. Acceptance of
Employment . Employee accepts employment by Employer on the
terms and conditions herein provided and agrees, subject to the
terms of this Agreement, to devote all of Employee’s full
business time to Employer’s affairs. Employee shall not
during the Employment Term engage, directly or indirectly, in any
other business activity (whether or not pursued for pecuniary
advantage) which might interfere with Employee’s duties and
responsibilities hereunder.
4. Compensation and Benefits . As compensation for
Employee’s services hereunder, Employee will be entitled to
the following: 4.1 Base
Salary . From and after the Commencement Date, Employee will
receive a base salary at the rate of $225,000 per annum ("
Base Salary "). Beginning January 1, 2009,
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Employee’s Base Salary will be increased to the rate of
$255,000 per annum. The Base Salary will be paid in substantially
equal installments in accordance with Employer’s regular
payroll practices, as in effect from time to time, and subject to
all appropriate withholdings. 4.2
Bonus . Employee shall be eligible to receive a cash bonus on
an annual basis in the event that Employee meets certain
performance criteria established in advance in writing by the
Compensation Committee of Employer’s Board of Directors (the
" Compensation Committee ") for such year ("
Performance Criteria "). Additional bonuses may be
paid to Employee at such times and in such amounts as may be
determined in the sole discretion of the Compensation Committee. If
awarded, payment of all bonuses will be subject to all appropriate
withholdings. 4.3 Equity
Incentive Grants. (a) Original
Stock Options . Pursuant to the terms of the Original
Agreement, Employee received a one-time grant of options to
purchase up to 300,000 shares of common stock of Employer at an
exercise price equal to $1.20 per share (the " Original Stock
Options "). The Original Stock Options were granted
pursuant to the terms and conditions of the Employer’s 2005
Stock Incentive Plan, and were evidenced by a separate stock option
agreements between the Employer and the Employee. The Original
Stock Options had a term of ten years from the date of grant, and
vested and became exercisable in twelve equal quarterly
installments beginning on June 30, 2008. As consideration for
the Employer’s new equity incentive grants described below in
Sections 4.3(b) and 4.3(c) , Employee hereby
agrees to the immediate cancellation of all Original Stock Options.
(b) New Stock Options . As
will be evidenced by a separate stock option agreement in
substantially the form attached hereto as Exhibit A ,
the Employer shall grant to Employee an incentive stock option on
the Effective Date or as soon as administratively feasible
thereafter, to purchase 150,000 shares of the Employer’s
common stock pursuant to the Employer’s 2005 Equity Incentive
Plan (the " 2005 Plan "). The option will vest in
twelve (12) equal quarterly installments with an exercise
price equal to the Fair Market Value of the Employer’s common
stock (as defined in the 2005 Plan) on the Effective Date or the
actual date of grant if the grant occurs after the Effective Date.
(c) Restricted Stock . As will
be evidenced by a separate restricted stock agreement in
substantially the form attached hereto as Exhibit B ,
the Employer shall grant to Employee pursuant to the 2005 Plan
150,000 shares of the Employer’s common stock on the
Effective Date or as soon as administratively feasible thereafter.
The restricted stock shall be subject to forfeiture, and will vest
in twelve (12) equal quarterly installments.
4.4 Benefits . Employee will
be entitled to receive the benefits specified on Exhibit A
(" Benefits "). 4.5
Expense Reimbursement . Employer will promptly reimburse
Employee for all authorized expenses reasonably incurred or paid by
Employee in connection with the performance of Employee’s
services under this Agreement upon presentation of expense
statements or vouchers and such other supporting information as
Employer may from time to time reasonably require or request ("
Reimbursable Expenses ").
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5. Termination; Payments
upon Termination . This Agreement may be terminated upon the
following terms: 5.1 Termination
Upon Death . If Employee should die during the Employment Term,
this Agreement will terminate on the date of death. All Base Salary
through such date and any amounts owed for Reimbursable Expenses
that Employee incurs through such date, as well as any previously
awarded but unpaid bonuses, will be paid to Employee’s
designated beneficiary as promptly as practicable following the
date of death. All Benefits will, unless otherwise expressly set
forth on Exhibit A , otherwise provided by Employer
policy applicable to its employees generally, or otherwise required
by law, terminate on the date of death. In the event of
Employee’s death, the stock option described in
Section 4.3(b) shall fully vest and become exercisable
by Employee’s legal representative or authorized assignee for
a period of no more than six (6) months following
Employee’s date of death and the restrictions shall
immediately lapse with respect to the restricted stock grant
described in Section 4.3(c) above.
5.2 Termination Upon
Disability . This Agreement shall automatically terminate upon
the Employee’s Disability (as defined below). The Base Salary
will continue to be paid to Employee through the date of
Disability, and any amounts owed for Reimbursable Expenses that
Employee incurs through such date and any previously awarded but
unpaid bonuses will be paid as promptly as practicable following
such date. In such event of Employee’s Disability, Employer
will also continue to pay Employee the Base Salary in effect at the
time of such Disability for a period of 6 months following the date
of Disability. All Benefits will, unless otherwise expressly set
forth on Exhibit A , otherwise provided by Employer
policy applicable to its employees generally, or otherwise required
by law, terminate on the date of termination. In the event of
Employee’s Disability, the stock option described above in
Section 4.3(b) shall fully vest and become exercisable
by Employee for a period of no more than six (6) months
following Employee’s date of Disability and the restrictions
shall immediately lapse with respect to the restricted stock grant
described in Section 4.3(c) above. "
Disability " means that the (i) Employee is
unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a
continuous period of not less than 12 months;
(ii) Employee is, by reason of any medically determinable
physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for
a period of not less than three months under an accident and health
plan covering employee’s of Employer; (iii) Employee is
determined to be totally disabled by the Social Security
Administration; or (iv) Employee is determined to be disabled
in accordance with the disability insurance program under which the
Employer has provided disability insurance to the Employee,
provided that the definition of disability applied under such
disability insurance program complies with the requirements of
Treasury Regulation Section 1.409A-3(i)(4). If a
disagreement arises between Employee and Employer as to whether
Employee is suffering from Disability, such issue will be
determined by a physician designated by Employer. Nothing in this
Paragraph relieves the Employer of any of its obligations of
reasonable accommodation under the Americans with Disabilities Act.
5.3 Termination by Employer With
Cause . Employer will be entitled to terminate Employee’s
employment at any time for Cause. The Base Salary will continue to
be paid to Employee through the date of termination, and any
amounts owed for Reimbursable Expenses that Employee incurs through
such date will be paid to Employee following termination, subject
to Employer’s right to offset against such sum the amount of
any damages which Employer may suffer as a result of the actions of
Employee constituting Cause. All Benefits will, unless
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otherwise required by law, terminate on the date of termination.
" Cause " will constitute any one of the following:
(a) Employee’s continued
failure to perform substantially Employee’s duties and
responsibilities (other than a failure resulting from a
Disability), provided that the Employer has previously addressed
these failures with Employee and has given Employee a reasonable
opportunity to cure; (b) Employee
engaging in willful, reckless, or grossly negligent misconduct that
is materially injurious to Employer, monetarily or otherwise;
(c) Employee’s conviction of,
plea of guilty or nolo contender to, or the issuance of an
indictment or an information by a grand jury or prosecutor, as
applicable, for, a felony or a crime involving moral turpitude;
(d) Employee commits an act of fraud,
misappropriation, or personal dishonesty (that is not de minimus);
and (e) Employee commits a breach of
this Agreement and fails to cure such breach within thirty
(30) days from the date that Employer gives notice thereof to
Employee identifying the provision of this Agreement that Employer
has determined has been breached.
5.4 Termination by Employer Without Cause . Employer may at
any time terminate Employee’s employment without Cause. In
such event, the Base Salary will continue to be paid through such
the date of termination, and any amounts owed for Reimbursable
Expenses that Employee incurs through such date and any previously
awarded but unpaid bonus will be paid to Employee promptly
following termination. Employer will also continue to pay Employee,
as severance, the Base Salary for the remaining Employment Term in
substantially equal installments in accordance with
Employer’s regular payroll practices, as in effect from time
to time, and subject to all appropriate withholdings. All Benefits
will, unless otherwise expressly set forth on Exhibit A
or provided by Employer policy applicable to its employees
generally or otherwise required by law, terminate on the date of
termination. In the event that the Employee is involuntarily
terminated without Cause, the stock option described above in
Section 4.3(b) shall remain exercisable by Employee for
a period of no more than twelve (12) months following the date
of termination to the extent such option was vested and exercisable
as of the date of termination.
5.5 Resignation for Good Reason . Employee may terminate
this Agreement for Good Reason (as defined below) by giving written
notice of such termination, which termination will become effective
on the thirtieth (30th) day following receipt by the Employer. As
used in this Agreement, " Good Reason " shall mean
any one of the following: (i) a material reduction in
Employee’s Base Salary and/or a material failure to provide
the benefits required in Section 4 ; (ii) any other
action or inaction that constitutes a material breach by the
Employer of this Agreement; (iii) a material diminution in
Employee’s authority, duties or responsibilities such that
they are materially inconsistent with his position as Chief
Operating Officer of the Employer; (iv) relocation of the
Employer’s headquarters to a location more than thirty
(30) miles from 1800 W. Katella Avenue in Orange, California;
and (v) in the event of a Change in Control (as defined
below), failure of the successor to the Employer or to the
Employer’s business (A) to offer Employee the position
of President and Chief Operating Officer of the successor company,
reporting only to the board of directors and/or the chief executive
officer of the successor to the
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Employer, with duties, responsibilities, compensation and
benefits materially similar to those enjoyed by Employee
immediately preceding the Change in Control, or (B) to assume
the obligations of the Employer under and to become a party to this
Agreement, provided that no termination for Good Reason shall be
effective until Employee has given the Employer written notice
(pursuant to Section 8(g) below) within sixty
(60) days of the initial occurrence of any of the foregoing
specifying the event or condition constituting the Good Reason and
the specific reasonable cure requested by Employee, the Employer
has failed to cure the occurrence within thirty (30) days of
receiving written notice from Employee, and Employee resigns within
six (6) months following the initial occurrence. In the event
of a termination for Good Reason, the Base Salary will continue to
be paid through such the date of termination, and any amounts owed
for Reimbursable Expenses that Employee incurs through such date
and any previously awarded but unpaid bonus will be paid to
Employee promptly following termination. Employer will also
continue to pay Employee, as severance, the Base Salary for the
remaining Employment Term in substantially equal installments in
accordance with Employer’s regular payroll practices, as in
effect from time to time, and subject to all appropriate
withholdings. All Benefits will, unless otherwise expressly set
forth on Exhibit A or provided by Employer policy
applicable to its employees generally or otherwise required by law,
terminate on the date of termination. In the event that the
Employee terminates this Agreement for Good Reason, the stock
option described above in Section 4.3(b) shall remain
exercisable by Employee for a period of no more than twelve
(12) months following the date of termination to the extent
such option was vested and exercisable as of the date of
termination. As used in this
Agreement, a " Change in Control " shall mean any of
the following events: (1) the
acquisition by any Group or Person (as such terms are defined in
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the " 1934 Act ")), other than (A) a
trustee or other fiduciary holding securities of the Employer under
an employee benefit plan of the Employer, (B) an entity in
which the Employer directly or indirectly beneficially owns fifty
percent (50%) or more of the voting securities of such entity (an "
Affiliate "), or (C) Frank Greinke or an
affiliate of Frank Greinke, of any securities of the Emplo
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