AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT
10.1
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This
Amended and Restated Employment Agreement (this "Agreement") is
entered into this first day of October, 2008 (the "Effective Date") by
and between Far East Energy Corporation, a Nevada corporation ("Company"), and Xxxxxx
Xxx ("Employee").
WHEREAS,
the Company and Employee previously entered into an Employment Agreement dated
January 29, 2007 (the "Prior
Agreement");
WHEREAS,
the Company and Employee desire to amend and restate the Prior Agreement;
and
WHEREAS,
the Company wishes to assure itself of the services of Employee as the Company's
Chief Financial Officer for the period provided in this Agreement, and Employee
is willing to perform services for the Company for such period, upon the terms
and conditions hereinafter provided beginning on October 1, 2008 (the "Effective
Date").
1. Term. The
term of employment under this Agreement shall commence and this Agreement shall
commence on the Effective Date and shall continue for
a period ending on the second anniversary of the Effective Date, unless extended
or sooner terminated in accordance with the terms hereof (the "Term"). Upon
mutual agreement of the Company and Employee, this Agreement may be extended on
the same terms and conditions for such period as the parties may
agree.
2. Employment;
Duties. During the Term, Employee shall be employed by
Company, and Employee shall serve as the Company's Chief Financial Officer and
shall have such duties, responsibilities and authority as shall be consistent
with that position. Employee shall report directly to the Company's Chief
Executive Officer and Board of Directors (the "Board"). Employee
shall devote his full business time (except holidays and vacation time described
in Section 4), attention and best efforts to all the duties that may be required
by the express and implicit terms of this Agreement, to the reasonable
satisfaction of the Company.
3. Compensation. During
the Term, Employee shall receive an annual base salary of not less than
US$195,000, payable in equal semi-monthly installments (the "Base Salary"). In
addition to the Base Salary, during the Term, Employee shall be eligible to
receive an annual discretionary performance bonus in an amount equal to up to
45% of his Base Salary, with the performance criteria to be established by the
Compensation Committee of Company (or the Board, if the Company does not have a
Compensation Committee) in discussions with Employee (each a "Bonus"). The
Compensation Committee (or the Board, if the Company does not have a
Compensation Committee) may review the Base Salary, Bonus and other compensation
of Employee based upon performance and other factors deemed appropriate by the
Compensation Committee (or the Board, if the Company does not have a
Compensation Committee) and make such increases, supplemental bonus payments, or
other incentive awards as it deems appropriate. Notwithstanding the foregoing,
in no event will the Base Salary be less than an annual rate of
US$195,000. In addition to the Base Salary, the Bonus and other
compensation described in this Section
3, to the extent permitted by applicable law, Employee shall be entitled to
receive any benefits and fringes (whether subsidized in part, or paid for in
full by Company) including, but not limited to, medical, dental, life and
disability insurance which Company now or in the future pays or subsidizes for
any of its employees in the same class as Employee whose primary location of
work for the Company is in the United States.
4. Holidays and
Vacation. During the Term, Employee shall be entitled to
receive the designated holidays established by the Company during each calendar
year. Any holiday time accruing during one calendar year must be used
by Employee during the calendar year in which such holiday time accrues and
shall not carry over to the succeeding year. In addition, Employee
shall be entitled to receive and accrue vacation days in accordance with the
Company's vacation policy as such is in effective from time to
time.
5. Expense
Reimbursement. Employee shall be reimbursed by the Company in
accordance with the Company's business travel and expenditure policy for all
reasonable out-of-pocket disbursements incurred by Employee in connection with
the performance of his services under this Agreement, including but not limited
to travel expenses. Such reimbursement shall be made by the Company as soon as
reasonably practical following the Company's receipt of a reimbursement request
by Employee in accordance with the Company's business travel and expenditure
policy.
6. Option
Grant. Company and Employee agree that, on October 1, 2008
(the "Date of
Grant"), Employee will receive an option (the "Options") to acquire
up to 100,000 shares of the common stock of the Company at an exercise price
equal to the "fair market value" (as defined in the Company's 2005 Stock
Incentive Plan (the "2005 Plan")) of the
Company's common stock on the Date of Grant, with one-third (1/3) of such shares
of common stock vesting on the Date of Grant and an additional one-third (1/3)
of such shares of common stock vesting on the two subsequent anniversaries of
the Date of Grant, subject to Employee's continued employment with the
Company. Company and Employee also agree that, on the Date of Grant,
Employee will receive 45,000 shares of restricted stock (the "Restricted Stock"),
with one-third (1/3) of such shares of common stock vesting on the first
anniversary of the Date of Grant and an additional one-third (1/3) of such
shares of common stock vesting on the two subsequent anniversaries of the Date
of Grant, subject to Employee's continued employment with the
Company. Company will grant such Options and Restricted Stock under
the Company's 2005 Plan.
7. Termination.
(a) Death. The
Term and Employee's employment hereunder shall terminate upon Employee's
death.
(b) Disability. In
the event Employee incurs a Disability for a continuous period exceeding thirty
(30) days, the Company may, at its election, terminate the Term and Employee's
employment by giving Employee a notice of termination as provided in Section
7(e). The term "Disability" as used
in this Agreement shall mean the inability of Employee to substantially perform
his duties under this Agreement, as a result of a physical or mental illness or
personal injury he
has incurred, as determined by an independent physician selected with the
approval of the Company and Employee.
(c) Cause. The
Company may terminate this Agreement and the Term and discharge Employee for
Cause by giving Employee a notice of termination as provided in Section
7(e). "Cause" shall mean:
(i) Employee's gross and willful misappropriation or theft of the Company's or
its respective subsidiary's funds or property, (ii) Employee's commission of any
fraud, misappropriation, embezzlement or similar act, whether or not a
punishable criminal offense, or Employee's conviction of or entering of a plea
of guilty or nolo contendere to a charge of any felony or crime involving
dishonesty or moral turpitude, (iii) Employee's material breach of this
Agreement or failure to perform any of his material duties owed to the Company
or their respective subsidiaries, or (iv) Employee's commission of any act
involving willful malfeasance or gross negligence or Employee's failure to act
involving material nonfeasance.
(d) Good
Reason. Employee may terminate his employment and the Term at
any time for Good Reason (as defined below) by giving written notice as provided
in Section 7(e), which shall set forth in reasonable detail the facts and
circumstances constituting Good Reason. Notwithstanding the foregoing
to the contrary, for the termination of employment to be for Good Reason
Employee's Separation from Service (as defined in Section 409A of the Internal
Revenue Code of 1986, as amended (the "Code") and the
Treasury Regulations thereunder) must occur within two years following the
initial existence of one or more of the Good Reason conditions enumerated
below. "Good Reason" shall
mean the occurrence of any of the following during the Term without Employee's
consent and without the same being corrected within thirty (30) days after the
Company being giving notice thereof:
(i) the
Company materially reduces Employee's title, duties or responsibilities
under Section 2;
(ii) the
Company fails to pay any regular semi-monthly installment of Base Salary to
Employee and such failure to pay continues for a period of more than thirty
(30) days;
(iii) the
Company materially reduces Employee's Base Salary or eliminates Employee's
eligibility to participate in the discretionary performance bonus program for
which he is eligible pursuant to Section 3;
(iv) the
Company materially changes the geographic location of the performance of
Employee's duties; or
(v) any other
material breach of this Agreement by the Company.
(e) Notice of
Termination. Any termination of this Agreement by the Company
or by Employee shall be communicated in writing to the other party before the
date on which such termination is proposed to take effect and, unless otherwise
agreed to by the Company and Employee, shall be effective immediately upon such
notice. Notwithstanding the foregoing, if this Agreement is being
terminated for Good Reason, the date of the termination shall be the end
of the
thirty (30) day "cure" period set forth in Section 7(d) above, or if sooner, the
date the Company notifies Employee in writing that it will not make a
correction.
(f) Assistance After
Termination. From and after the termination of this Agreement
by the Company or by Employee, Employee agrees to do or cause to be done all
other things and acts, to execute, deliver, file and perform or cause to be
executed, delivered, filed and performed all other instruments, documents and
certificates as may be reasonably requested by the Company or are necessary,
proper or advisable in order to effect the removal, transition, substitution or
modification of Employee as an officer, agent, affiliate, director, manager or
authorized representative of the Company or any other positions that Employee
holds with the Company or their respective subsidiaries.
(g) Separation and
Release. In order to receive the payments set forth in this
Section 7, Employee must first execute a separation agreement and release
of all claims (other than the benefits under Section 8) in a form suitable
to the Company.
8. Payments Upon
Termination.
(a) Death or
Disability. If Employee's employment shall be terminated by
reason of death or Disability, the Company shall pay Employee's estate or
Employee the portion of the Base Salary which would have been payable to
Employee through the date his employment is terminated; plus, any other amounts
earned, accrued or owing as of the date of death or Disability of Employee but
not yet paid to Employee under Section 3. In the event of the death
or Disability of Employee, then any payment due under this Section 8(a) shall be
made to Employee's estate, heirs, executors, administrators, or personal or
legal representatives, as the case may be.
(b) Cause and Voluntary
Termination. If Employee's employment shall be terminated for
Cause or Employee terminates his employment (other than for death or
Disability), then without waiving any rights or remedies by reason
thereof:
(i) the
Company shall pay Employee his Base Salary and all amounts, in each case,
actually earned, accrued or owing as of the date of termination but not yet paid
to Employee under Section 3 through the date of termination;
(ii) Employee
shall be entitled to exercise within 90 days after the date of termination of
Employee's employment all options granted to him under this Agreement or
otherwise to the extent vested and exercisable at the date of termination of
Employee's employment; and
(iii) except
as otherwise provided in this subsection (b), the Company shall have no further
obligations to Employee under this Agreement.
(c) Without Cause; Good Reason;
Change in Control. If Employee's employment is terminated by
the Company without Cause or Employee terminates his employment for Good Reason
(other than as a result of death, Disability or Cause as specified in Section
7(a) or (b) above):
(i) if
such termination is by the Company without Cause at a date on or after 120 days
after the Effective Date or is by Employee for Good Reason, then Employee shall
be entitled to a lump sum payment in an amount equal to one hundred percent
(100%) of Employee's annual Base Salary in the year in which he experiences a
Separation of Service; provided that, notwithstanding the foregoing, if
Employee's employment is terminated, either without Cause or for Good Reason, on
or within 24 months after a Change of Control (as defined below), then the
Company shall pay Employee a lump sum payment in an amount equal to two hundred
percent (200%) of Employee's annual Base Salary in the year of such
termination;
(ii) Employee
shall be entitled to all amounts earned, accrued or owing through the date his
employment is terminated but not yet paid to Employee under Section 3;
and
(iii) Employee
shall be entitled to exercise all options granted to him to the extent vested
and exercisable at the date of termination of Employee's
employment.
(d) The
payment of the lump sum amount under Section 8(c)(i) shall be made on the
earlier of the date ending on the expiration of thirty (30) days following the
earlier of the date of the termination of employment or the death of Employee;
provided that notwithstanding the foregoing, to the extent any payment under
Section 8(c)(i) is "nonqualified deferred compensation" and Employee is
considered a "Key Employee" of the Company within the meaning of Section 409A of
the Code and the Treasury Regulations promulgated thereunder, then such payment
shall be made on the date ending on the expiration of six months and one day
following the date of such Separation from Service of Employee, or if earlier,
the date of Employee's death. For purposes of this Agreement, a Key
Employee means a "specified employee" as described under Code Section
409A. Within three months following Employee's termination of
employment, Employee or Employee's estate, heirs, executors, administrators, or
personal or legal representatives, as the case may be, shall be entitled to
exercise all options granted to him to the extent such options are vested and
exercisable at the time of such termination pursuant to this Agreement or
otherwise and all such options not exercised within such three month period
shall be forfeited. All options and restricted stock that are not
vested and exercisable pursuant to this Agreement or otherwise as of the date
of, or as a result of, Employee's termination of employment shall be
forfeited. Employee shall not be under any duty or obligation to seek
or accept other employment following Employee's termination of employment by the
Company or Employee and the amounts due Employee hereunder shall not be reduced
or suspended if Employee accepts subsequent employment.
(e) For
purposes of this Agreement, a "Change of Control"
shall mean:
(i) the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange
Act")), (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than forty percent (40%) of the combined voting power of
the then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that the following acquisitions shall not
constitute a Change of Control: (A) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, (B) any acquisition by Employee, by any
group of persons consisting of relatives within the second degree of
consanguinity or affinity of Employee or by any affiliate of Employee or (C) any
acquisition by an entity pursuant to a reorganization, merger or consolidation,
unless such reorganization, merger or consolidation constitutes a Change of
Control under clause (ii) of this Section 8(e);
(ii) the
consummation of a reorganization, merger or consolidation, unless following such
reorganization, merger or consolidation sixty percent (60%) or more of the
combined voting power of the then-outstanding voting securities of the entity
resulting from such reorganization, merger or consolidation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Voting
Securities immediately prior to such reorganization, merger or
consolidation;
(iii) the
(A) approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company or (B) sale or other disposition (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company, unless the successor entity existing immediately
after such sale or disposition is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Voting
Securities immediately prior to such sale or disposition;
(iv) if
individuals who, as of the Effective Date constitute the Board of the Company
(the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then constituting the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board; provided further that in no
event shall any such individual be deemed to be a member of the Incumbent Board,
whether or not previously or currently a member of the Incumbent Board, if such
individual's assumption of office occurs, directly or indirectly, as a result of
either an actual or threatened election contest subject to Regulation 14A
promulgated under the Exchange Act or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(v) the
Board adopts a resolution to the effect that, for purposes hereof, a Change of
Control has occurred.
9. Binding Agreement;
Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of Employee and the Company and their respective heirs,
legal representatives and permitted successors and assigns. If the
Company shall at any time be merged or
consolidated into or with any other entity, the provisions of this Agreement
shall survive any such transaction and shall be binding on and inure to the
benefit and responsibility of the entity resulting from such merger or
consolidation (and this provision shall apply in the event of any subsequent
merger or consolidation), and the Company, upon the occasion of the
above-described transaction, shall include in the appropriate agreements the
obligation that the payments herein agreed to be paid to or for the benefit of
Employee, his beneficiaries or estate, shall be paid.
10. Dispute
Resolution. Any controversy or claim arising with regard to
this Agreement shall be settled by expedited arbitration in accordance with the
provisions of the Texas Arbitration Act. The controversy or claim shall be
submitted to an arbitrator appointed by the presiding judge of the Xxxxxx
County, Texas Judicial District Court. The decision of the arbitrator shall be
final and binding upon the parties hereto and shall be delivered in writing
signed by the arbitrator to each of the parties hereto. Any appeal arising out
of the ruling of any arbitrator shall be determined in a court of competent
jurisdiction in Houston, Texas, or the federal court for Houston, Texas, and
each party waives any claim to have the matter heard in any other local, state,
or federal jurisdiction. The prevailing party in the arbitration
proceeding or in any appeal shall be entitled to recover attorney's fees, court
costs and all related costs from the non-prevailing party.
11. Survivorship. The
respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement to the extent necessary to effect the intended
preservation of such rights and obligations and to the extent that any
performance is required following termination of this
Agreement. Without limiting the foregoing, Section 7(f) and (g) and
Sections 8 through 23 shall expressly survive the termination of this
Agreement.
12. Nonassignability. Neither
this Agreement nor any right or interest hereunder shall be assignable by
Employee, his beneficiaries, dependents or legal representatives without the
Company's prior written consent; provided, however, that nothing in this Section
12 shall preclude (a) Employee from designating a beneficiary to receive any
benefit payable hereunder upon his death or (b) the executors, administrators or
other legal representatives of Employee or his estate from assigning any rights
hereunder to the person or persons entitled thereto.
13. Compliance with IRS
409A. It is the intent of this Agreement that no payment to
Employee shall result in nonqualified deferred compensation within the meaning
of Section 409A of the Code and the Treasury Regulations promulgated
thereunder. However, in the event that all, or a portion, of the
payments set forth in this Agreement meet the definition of nonqualified
deferred compensation, the Company intends that such payments be made in a
manner that complies with Section 409A of the Code and any guidance issued
thereunder. The Company shall be entitled to take reasonable steps to
fulfill this intent, including, but not limited to, making any amendments to
this Agreement as may be necessary to comply with the provisions of Section 409A
Code, in each case, without the consent of Employee. Notwithstanding
the foregoing, the Company makes no representation that the benefits provided
under this Agreement will be exempt from Section 409A of the Code and makes no
undertakings to preclude Section 409A of the Code from applying to the benefits
provided under this Agreement. In addition, the following delays of
payment will not in and of themselves constitute a
violation of the deferral or distribution requirements of Section 409A of the
Code or a breach of this Agreement so long as such delays are based on the
Company's reasonable understanding that such payment would:
(i) limit
the ability of the Company to take a deduction under Section 162(m) of the Code;
provided payment shall be made at the earliest date at which the Company
reasonably anticipates that the deduction of the payment amount will not be
limited by application of Section 162(m) of the Code or by the end of the
calendar year in which Employee terminates employment;
(ii) violate
the term of a loan agreement, or other similar contract, to which the Company is
a party and such violation will cause material harm to the Company; provided
payment shall be made at the earliest date at which the Company reasonably
anticipates that making such payment will not cause such violation or such
violation will not cause material harm to the Company; or
(iii) violate
U.S. federal securities laws or other applicable laws; provided payment shall be
made at the earliest date at which the Company reasonable anticipates making the
payment will not cause such violation.
14. Amendments to this
Agreement. Except for increases in the Base Salary, Bonus and
other compensation made as provided in Section 3 and Section 13, this Agreement
may not be modified or amended except by an instrument in writing signed by
Employee and the Company. No increase in the Base Salary, Bonus or
other compensation made as provided in Section 3 will operate as a cancellation
or termination of this Agreement.
15. Waiver. No
term or condition of this Agreement shall be deemed to have been waived, nor
shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
16. Severability. If, for
any reason, any provision of this Agreement is held invalid, illegal or
unenforceable such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement not held so invalid, illegal or
unenforceable, and each such other provision shall, to the full extent
consistent with law, continue in full force and effect. In addition,
if any provision of this Agreement shall be held invalid, illegal or
unenforceable in part, such invalidity, illegality or unenforceability shall in
no way affect the rest of such provision not held so invalid, illegal or
unenforceable and the rest of such provision, together with all other provisions
of this Agreement, shall, to the full extent consistent with law, continue in
full force and effect. If any provision or part thereof shall be held
invalid, illegal or unenforceable, to the fullest extent permitted by law, a
provision or part thereof shall be substituted therefor that is valid, legal and
enforceable.
17. Notices. All
notices, requests and other communications under this Agreement must be in
writing and will be deemed duly delivered (a) when delivered if delivered in
person, (b) three days after being sent by registered or certified mail, return
receipt requested, postage prepaid, (c) one day after being sent for next
business day delivery, fees prepaid, via a reputable nationwide overnight
courier service, (d) on the date of confirmation of receipt of transmission by
facsimile or (e) on the date of the notice being sent by e-mail at the e-mail
address in the records of the Company, in each case to the intended recipient as
set forth below (or to such other address, facsimile number, email address or
individual as a party may designate by notice to the other
parties):
If to
Company:
Far East
Energy Corporation
000 Xxxxx
Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxx
000
Xxxxxxx,
Xxxxx 00000
Attention: Chairman
of Compensation Committee
If to
Employee:
Xxxxxx
Xxx
0000
Xxxxxx Xxxxxx
Xxxxxxx,
Xxxxx 00000
Email
address: xxxx.xxxxxx.xxx@xxxxx.xxx
or to
such other address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
18. Headings. The
headings of Sections are included solely for convenience of reference and shall
not control the meaning or interpretation of any of the provisions of this
Agreement.
19. Governing
Law. This Agreement has been executed and delivered in the
State of Texas, and its validity, interpretation, performance and enforcement
shall be governed by the laws of Texas, without giving effect to any principles
of conflicts of law.
20. Withholding. All
amounts paid pursuant to this Agreement shall be subject to withholding for
taxes (federal, state, local, social security or otherwise) to the extent
required by applicable law.
21. Counterparts. This
Agreement may be executed in counterparts, each of which, when taken together,
shall constitute one original Agreement.
22. Amendment and
Restatement. This Agreement constitutes an amendment,
modification and restatement of the Prior Agreement. This Agreement
contains the entire understanding between the parties hereto and supersedes any
prior employment agreement between the Company or any predecessor of the Company
and Employee, including the Prior Agreement, except
that this Agreement shall not affect or operate to reduce any benefit or
compensation inuring to Employee of a kind elsewhere provided and not expressly
provided for in this Agreement.
23. Conflict. In
the event of any conflict between the terms and conditions of this Agreement, on
the one hand, and the terms and conditions of any option, restricted stock or
other equity award agreement with Employee or any equity plan of the Company, on
the other hand, with respect to the exercise of any option, restricted stock or
other equity award granted or awarded by the Company to Employee, the effect of
a Change of Control or the vesting of such option, restricted stock or other
equity award upon or following termination of employment or a Change of Control,
the terms and conditions of this Agreement shall control.
[Remainder
of page intentionally left blank. Signature page
follows.]
IN
WITNESS WHEREOF, Company has caused its duly authorized officer and directors to
execute and attest to this Agreement, and Employee has placed his signature
hereon, effective as of the Effective Date.
COMPANY:
FAR
EAST ENERGY (BERMUDA), LTD.
By: /s/ Xxxxxxx X.
XxXxxxxxx
Name: Xxxxxxx X.
XxXxxxxxx
Title: Chief
Executive Officer
EMPLOYEE:
By: /s/ Xxxxxx
Xxx
Xxxxxx Xxx
