September 6, 2006
Board of Directors
National Coal Corp.
0000 Xxxxxx Xxxxxxxx Xx.
Knoxville, TN 37923
Attn: Xxx Xxxxx, Chairman of the
Compensation Committee
RE: RESIGNATION AS CHIEF EXECUTIVE OFFICER
Gentlemen:
This letter agreement (this "AGREEMENT") confirms our agreement
regarding my change of status with National Coal Corp. and each of its
subsidiaries, including National Coal Corporation, and my continuing services to
the company.
1. I confirm my resignation as President and Chief Executive
Officer of National Coal Corp. (the "COMPANY") and each of its subsidiaries,
including National Coal Corporation (the Company and its subsidiaries are
collectively referred to herein as the "COMPANY GROUP"), and from all other
positions I hold with the Company Group other than as expressly provided herein,
effective August 9, 2006 (the "EFFECTIVE DATE"), immediately prior to the time
Xxx Xxxxxx commenced service as Chief Executive Officer of the Company.
2. I shall continue as a director of the Company and shall serve
as its Chairman of the Board of Directors from and after the Effective Date, and
shall be entitled to compensation as a non-employee director of the Company in
accordance with the Company's standard compensation policies for non-employee
directors in effect from time to time. In addition, as Chairman of the Board, I
shall be entitled to additional compensation of $1 per annum, plus a
discretionary annual bonus in an amount, if any, determined by the
non-management directors then serving on the Board based on extraordinary
services I provide to the Company as its Chairman.
3. On the Effective Date, my Amended Employment Agreement, dated
October 1, 2004, with National Coal Corporation, as amended to date (the
"EMPLOYMENT AGREEMENT"), was terminated and is of no further force or effect,
except for Sections 4, 5 and 6, which provisions shall survive termination.
4. The Company shall provide me with the following compensation
and benefits:
4.1 Until the earlier of (i) the date I no longer serve
on the Company's Board of Directors, and (ii) the date my family and I are
entitled to health coverage from another
0000 Xxxxxx Xxxxxxxx Xx. Knoxville, TN 37923
000-000-0000 (phone) 000-000-0000 (fax) xxx.xxxxxxxxxxxx.xxx
National Coal Corp.
September 6, 2006
Page 2
employer, the Company shall maintain and continue to provide to me and my
family, the same healthcare benefits that were in place for me and my family
immediately prior to the date of this Agreement; PROVIDED, that if the terms of
the Company's health insurance plan do not permit me and my family to be covered
thereunder, then the Company shall reimburse me for all premiums I incur in
obtaining health insurance coverage for me and my family on substantially the
same terms provided by the Company on Effective Date.
4.2 All options to purchase Common Stock of the Company
that I own on the date hereof (the "OPTIONS") shall immediately vest and become
exercisable, without any further action by the Company or me, and I shall
continue to have the right to exercise the Options for the period specified
therein or, if later, for a period of one year following the Effective Date. So
long as I continue to serve the Company as a member of its Board of Directors, I
shall be considered to be employed with the Company on an uninterrupted basis
for purposes of determining the period during which I may exercise such Options.
4.3 All options to purchase Common Stock of the Company
that my spouse, Xxxxxx Xxx, owns on the date hereof (the "SPOUSE OPTIONS") shall
immediately vest and become exercisable, without any further action by the
Company or Xx. Xxx, and Xx. Xxx shall continue to have the right to exercise the
Spouse Options for the period specified therein or, if later, for so long as I
may exercise my Options; provided, however, that in no event shall Xx. Xxx'x
right to exercise the Spouse Options extend beyond the expiration date of such
options.
5. This Agreement and the terms and conditions set forth in EXHIBIT A
attached hereto shall constitute the entire agreement between the parties and
supersede all prior oral and written negotiations and agreements.
6. I have been allowed a period of at least 21 days to consider the terms
of this Agreement, including the terms attached as EXHIBIT A, and I have decided
to execute this Agreement in fewer than 21 days with the express understanding
that I have been given and declined the opportunity to consider this Agreement
for a full 21 days.
National Coal Corp.
September 6, 2006
Page 3
If you have any questions or comments regarding the terms or conditions
contained in this Agreement or attached Exhibit, please contact me. If this
Agreement confirms our understanding, please indicate the Company's agreement by
executing this Agreement in the space provided and returning an original of the
executed copy to me.
Very truly yours,
/s/ Xxx X. Xxx
------------------------
Xxx X. Xxx
ACKNOWLEDGED AND AGREED
this 11th day of September, 2006:
NATIONAL COAL CORP.
By: /s/ Xxxxxx Xxxxx
--------------------------------------------
Xxxxxxx Xxxxx
Title: Director and Chairman of
the Compensation Committee
NATIONAL COAL CORPORAITON
By: /s/ Xxxxxxx Xxxxx
--------------------------------------------
Xxxxxxx Xxxxx
Title: Director
National Coal Corp.
September 6, 2006
Page 4
EXHIBIT A
TERMS AND CONDITIONS
1. Xxx Xxx ("EMPLOYEE") will comply with the following:
1.1. Employee will return all keys, files, records, documents,
plans, drawings, specifications and equipment concerning the business of the
Company Group or any related entity, whether prepared by Employee or otherwise
coming into Employee's possession or control.
1.2. Employee will not engage in or assist in any litigation
against any of the Company Group, relating to anything occurring prior to the
Effective Date, unless litigation results from Employee's employment by the
Company, or unless compelled to do so by subpoena or other legal process.
2. In exchange for receipt of the consideration provided for in the
Agreement to which these Terms and Conditions are attached as EXHIBIT A,
Employee, on his own behalf, and for Employee's heirs, executors,
administrators, successors, and assigns, does hereby fully and forever release
and discharge the Company Group and its related entities, and their
shareholders, employees and former employees, agents, directors, officers,
attorneys, predecessors, successors, assigns, heirs, executors, administrators,
and all other persons, firms, corporations, associations, partnerships, or
entities having any legal relationship to any of them, of and from any and all
claims, demands, causes of action, charges and grievances, of whatever kind or
nature, whether known or unknown, suspected or unsuspected, which Employee now
owns or holds or has at any time before the date of his termination owned or
held against any of them, including, but not limited to, any and all claims,
charges, demands and causes of action: (1) which are alleged in, set forth in,
arise out of, or are in any way connected with any transactions, occurrences,
acts or omissions or claims; (2) which arise out of or are in any way connected
with Employee's employment with the Company Group or the termination of
Employee's employment with the Company Group; (3) which are related to or
concern (i) violations of any local, state or federal law based on race, sex,
age, disability, pregnancy or any other category protected by law; (ii) wrongful
termination, breach of express and implied-in-fact contract, breach of the
covenant of good faith and fair dealing, intentional and negligent infliction of
emotional distress, defamation, invasion of privacy, breach of employment
contract, fraud or negligent misrepresentation, intentional interference with
contractual relations and prospective economic advantage, and other torts; (4)
any claim for wages, benefits, salary, commissions or bonuses; or (5) which
arise out of or are in any way connected with any loss, damage or injury
whatsoever resulting from any act committed or omission made prior to the date
hereof.
3. In exchange for receipt of the consideration provided for above, the
Company Group, on its own behalf, and for its administrators, successors, and
assigns, does hereby fully and forever release and discharge Employee and his
agents, attorneys, predecessors, successors, assigns, heirs, executors,
administrators, and all other persons, firms, corporations, associations,
partnerships, or entities having any legal relationship to any of them, of and
from any and all claims, demands, causes of action, charges and grievances, of
whatever kind or nature, whether known or unknown, suspected or unsuspected,
which Employer now owns or holds or has at any
National Coal Corp.
September 6, 2006
Page 5
time before the Effective Date owned or held against any of them, including, but
not limited to, any and all claims, charges, demands and causes of action: (1)
which are alleged in, set forth in, arise out of, or are in any way connected
with any transactions, occurrences, acts or omissions or claims; (2) which arise
out of or are in any way connected with Employee's employment with the Company
Group or the termination of such employment; or (3) which arise out of or are in
any way connected with any loss, damage or injury whatsoever resulting from any
act committed or omission made prior to the date hereof.
4. Employee acknowledges that, by virtue of Employee's employment with the
Company Group, Employee has been exposed to confidential and proprietary
information ("CONFIDENTIAL INFORMATION"). Unless compelled to do so by subpoena
or other legal process, Employee will not at ANY time after the date hereof, in
any fashion, form, or manner, either directly or indirectly, divulge, disclose,
or communicate to any person, firm, or corporation (other than Employee's legal
counsel) in any manner whatsoever any information of any kind, nature, or
description concerning any "Confidential Information" relating to the business
of the Company Group, including, without limitation, the names of any of its
customers, customer lists, the prices it obtains or has obtained, or at which it
sells or has sold its products, the names of its suppliers, methods of obtaining
new business, or any other "Confidential Information" concerning the business of
Employer, its manner of operation or its plans, processes, or other data of any
kind, nature, or description. The parties hereby stipulate that, as between
them, the foregoing matters are important, material, and confidential, and
gravely affect the effective and successful conduct of the business of Employer,
and its good will, and that any breach of the terms of this section is a
material breach of this agreement. The confidentiality provisions in this
EXHIBIT A shall be in addition to, and not in lieu of, any other obligations of
confidentiality owed by Employee to the Company Group.
5. Employee agrees that Employee will not, for Employee's own account or
jointly with another, directly or indirectly, for or on behalf of any
individual, partnership, corporation, or other legal entity, as principal, agent
or otherwise, solicit or induce any person employed by the Company Group to
leave such employment, whether or not such employment is pursuant to a written
contract or is at-will, for the period Employee serves on the Company Board of
Directors and for one year following the date Employee ceases to serve on the
Company's Board of Directors.
6. The terms of this Agreement are made for the benefit of each person or
entity named above. It is the intention of the parties hereto in executing this
Agreement that, except for those obligations, promises and covenants expressly
set forth herein, it shall be effective as a bar against each and every claim,
demand, cause of action, charge or grievance (whether known or unknown,
suspected or unsuspected, alleged or unalleged, actual or potential) that either
of them may have as of the date hereof. The parties hereto have had the
opportunity to speak with counsel of his or its choice regarding the effect of
this waiver.
7. Nothing in this Agreement constitutes and shall not be construed as an
admission by either of the parties hereto, or any of the entities or individuals
referred to above, of the truth of any contested matter or of any liability, any
wrongful act, or any omission.
National Coal Corp.
September 6, 2006
Page 6
8. The parties represent and agree that this Agreement is freely and
voluntarily executed. No promise, inducement, or agreement not expressed in this
Agreement has been made to Employee or the Company.
9. If any term or provision of this Agreement is held to be invalid or
unenforceable, the remaining terms or provisions of this Agreement shall
continue to be valid and will be performed, construed and enforced to the
fullest extent permitted by law. The invalid or unenforceable term or provision
shall be deemed amended and limited in accordance with the intent of the
parties, as determined from the face of the Agreement, to the extent necessary
to permit the maximum enforceability or validation of the term or provision. The
terms of this Agreement are to be construed pursuant to Tennessee law.
10. The date indicated and Employee's signature above acknowledge
Employee's and the Company's review, understanding and full, knowing and
voluntary acceptance of the terms and conditions set forth in this Agreement.
