EXHIBIT 10.1
[NC OF ALABAMA LETTERHEAD]
January 23, 2009
Scott A. Deppe
2125 Winning Colors Lane
Lexington, KY 40509
Dear Scott:
NATIONAL COAL OF
ALABAMA, INC., an Alabama corporation (the "COMPANY"),
and a wholly-owned subsidiary of National Coal
Corp., a Florida corporation
("PARENT"), is pleased to offer you employment on the following
terms:
1. POSITION. You will
serve in a full-time capacity as Senior
Vice President of the Company. You will report to the Chief
Operating Officer of
Parent. You will be primarily responsible
for the general supervision and
management of the Company's coal mining operations, and will
perform such other
duties as determined by the Chief Operating Officer of
Parent. By signing this
letter agreement, you represent and
warrant to the Company you are under no
contractual commitments inconsistent with your obligations to the
Company.
2. SALARY AND BONUS
OPPORTUNITY. You will be paid a salary at the
annual rate of $215,000, payable in
accordance with the Company's standard
payroll practices for salaried employees. Your pay will be subject
to adjustment
pursuant to the Company's employee compensation policies in
effect from time to
time. You shall also be eligible for
an incentive bonus, upon terms and
conditions to be established by the Company's Board, for an
annual amount up to
and not to exceed 50% of your annual salary.
3. STOCK OPTIONS.
Subject to the approval of Parent's Board of
Directors or its Compensation Committee,
you will be granted an option to
purchase 50,000 shares of Parent's Common Stock.
The exercise price per share
will be equal to the fair market value per
share on the date the option is
granted or on your first day of employment, whichever is
later. The option will
be subject to the terms and conditions applicable to
options granted under the
Company's 2004 Stock Plan, as described in that Plan and
the applicable stock
option agreement. You will vest in 25% of
the option shares on the first,
second, third and fourth anniversaries of your start
date, as described in the
applicable stock option agreement. Additionally, the options will
accelerate and
vest in their entirety upon a Change of
Control, which shall include the
occurrence of any of the following events:
(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 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 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
Company and/or Parent representing 50% or more of the
combined voting power of
such entity's then-outstanding securities; (b) the
consummation of a merger or
consolidation of the 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's
then-outstanding securities which shall
not constitute a Change of Control of the Company
and/or Parent; or (c) the
stockholders of the Company and/or Parent approve a plan of
complete liquidation
of the Company and/or Parent or an agreement for the sale or
disposition by the
Company and/or Parent of all or substantially all of its
assets.
<PAGE>
4. TERM LIFE INSURANCE.
As additional consideration under this
Agreement, the Company shall purchase and own a term
life insurance policy on
Employee's life in the face amount of
$1,000,000.00 issued by an insurance
company selected by the Company with a rating of A or better by
A.M. Best Co. So
long as you remain actively employed by the Company,
the Company shall pay the
annual premium of such policy. The
Company's obligation to pay such premiums
shall terminate upon your termination of
employment with the Company for any
reason. The beneficiary on such policy shall
be designated as the Company or
Parent with respect to 50% of the death
benefit under such policy and the
remaining 50% of the death benefit
shall be payable to the
beneficiary
designated by you, or, failing such designation, your
estate. You acknowledge
that the Company will report imputed wage income in
accordance with Internal
Revenue Service guidelines for the 50% of the
death benefit payable to your
beneficiary and withhold taxes related thereto form your cash
compensation, and
you agree to consent to the purchase of
such policy in accordance with the
requirements of Section 101 of the Internal
Revenue Code (the "Code") so that
any proceeds payable to the Company thereunder shall be income tax
free.
5. PERIOD OF EMPLOYMENT. Your
employment with the Company will be
"at will," meaning that either you or the Company will be
entitled to terminate
your employment at any time and for any
reason, with or without cause. Any
contrary representations which may have been made to you are
superseded by this
offer. This is the full and complete agreement
between you and the Company on
this term. Although your job duties, title,
compensation and benefits, as well
as the Company's personnel policies and
procedures, may change from time to
time, the "at will" nature of your employment may only be
changed in an express
written agreement signed by you and a duly authorized officer of
the Company.
6. SEVERANCE PAY.
You will be entitled to ninety (90)
days
severance pay upon the termination of your
employment by the Company without
"cause" at any time prior to December 31, 2009,
which severance pay shall be
payable in equal installments over a ninety (90) period (the
"SEVERANCE PERIOD")
in accordance with the Company's
standard payroll practices for salaried
employees. Payment to you of any Severance Pay shall be
conditional upon your
delivery of a full release of claims, known
and unknown, that you may have
against the Company in form attached hereto as EXHIBIT
A, and your compliance
with the non-compete provisions described in SECTION 8 below.
For
purposes hereof, "Cause" shall mean a termination by
the
Company after notice to you (as
described below), effected for any of the
following limited reasons: (i) habitual and continued
unavailability to act or
respond on behalf of the Company; (ii)
willful misconduct or fraud; (iii)
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) willfully acting in a manner materially
adverse to the
best interests of the Company. With regard to the
notice required for a Cause
termination, Company shall first provide you with 45 days written
notice of such
alleged misconduct, including a specific description of such
breach, failure or
neglect of duty or obligation sufficient to allow you an
opportunity to correct
such noted problems. You shall not be terminated
for Cause unless, after the
notice period expires, you continue to fail
to satisfactorily perform your
duties. Prior to any vote
regarding misconduct, you will be
given the
opportunity to appear before the Company's Board of
Directors, with your legal
counsel, to present any relevant information that you
believe the Board should
consider in making such decision.
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<PAGE>
7. OTHER
BENEFITS. You will be entitled
to the following
additional benefits: (i) insurance benefits provided to all
corporate employees;
(ii) company vehicle; and (iii) cellular phone.
8. NON-COMPETE
AGREEMENT. You acknowledge that while
employed
with the Company, you will learn
significant confidential and proprietary
information and trade secrets of the Company, the disclosure or use
of which for
purposes other than the Company's business will be
detrimental to the Company.
You agree that for the duration of your employment by the
Company, and for the
Severance Period (in the latter case, if,
and only if, you are entitled to
Severance Pay in accordance with SECTION 6(B) hereof), you shall
not without the
prior written consent of the
Company, directly or
indirectly, engage,
participate in, or assist in any capacity whatever, or have
an interest in, any
firm, enterprise, entity or arrangement operating in the
states of Tennessee or
Alabama or any other state in which the Company is mining coal
(either directly
or using contract miners) on the date of termination of your
employment with the
Company, which competes with the business of the
Company. For purposes of this
Agreement, "business of the Company" shall mean
coal mining operations. The
foregoing shall not prevent you from acquiring on
the open market up to 5% of
the outstanding securities of any publicly held
corporation. In the event that
you breach this agreement not to compete, you shall forfeit any
Severance Pay to
which you are entitled under SECTION 6(B) for the
remainder of the Severance
Period.
9. OUTSIDE ACTIVITIES.
While you render services to the Company,
you will not engage in any other gainful
employment, business or activity
without the written consent of the Company. While
you render services to the
Company, you also will not assist any person or
organization in competing with
the Company, in preparing to compete with the Company or in hiring
any employees
of the Company.
10. WITHHOLDING TAXES.
All forms of compensation referred to in
this letter are subject to reduction to
reflect applicable withholding and
payroll taxes.
11. ENTIRE AGREEMENT.
This letter contains all of the terms of
your employment with the Company and supersedes
any prior understandings or
agreements, whether oral or written, between you and the
Company.
12. AMENDMENT AND GOVERNING LAW. This
letter agreement may not be
amended or modified except by an express written
agreement signed by you and a
duly authorized officer of the Company. The terms of
this letter agreement and
the resolution of any disputes will be governed by Tennessee
law.
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<PAGE>
We hope that you
find the foregoing terms acceptable. You may indicate
your agreement with these terms and accept this offer by signing
and dating both
the enclosed duplicate original of this letter
and returning it to me. This
offer, if not accepted, will expire at the close of business
on Monday, January
26, 2009, which shall also be your start date.
We look forward to
having you join us on January 26, 2009.
Very truly yours,
NATIONAL COAL OF ALABAMA, INC.,
an Alabama corporation
By: /S/ DANIEL ROLING
------------------------------------
Dan
Roling, Chief Executive Officer
I have read and accept this employment offer:
/S/ SCOTT A. DEPPE
---------------------------
Signature of Scott A. Deppe
Dated: January 26, 2009
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<PAGE>
EXHIBIT A
[NATIONAL COAL OF ALABAMA, INC. LETTERHEAD]
RELEASE
[DATE]
Scott Deppe
2125 Winning Colors Lane
Lexington, KY 40509
RE: SEPARATION TERMS AND GENERAL
RELEASE AGREEMENT
Dear Scott:
This letter
confirms the terms of your separation from the employment
of National Coal of Alabama, Inc., an Alabama corporation
("NCC ALABAMA") and a
wholly-owned subsidiary of
National&n
