SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit
10.70
SECOND
AMENDMENT TO
This
Second Amendment to Employment Agreement (this "Amendment") is
entered this 31st day of
December, 2008 (the "Effective Date"), by
and between Far East Energy (Bermuda), Ltd., a Bermuda company (the "Company") and Xxxx
Xxxxxxxxx (the "Employee").
RECITALS
WHEREAS,
the Company and the Employee entered into that certain Employment Agreement
dated effective March 12, 2008 (as amended, the "Existing
Agreement");
WHEREAS,
the Company and the Employee desire to amend the Existing Agreement on the terms
herein provided;
WHEREAS,
Section 457A of the Internal Revenue Code of 1986, as amended ("Section 457A"),
imposes certain limitations and restrictions on the time at which certain types
of compensation may be payable;
WHEREAS,
all documents that may provide for the payment of compensation that may be
subject to Section 457A must be brought into compliance with the requirements of
Section 457A on or before December 31, 2008, or the service provider to whom
such compensation is payable will be subjected to certain adverse tax
consequences; and
WHEREAS,
the Company and the Employee have determined that it is advisable to amend the
Existing Agreement in accordance with Section 457A to ensure that, to the extent
subject to Section 457A, the Existing Agreement complies therewith and to avoid
the imposition of any adverse tax consequences under Section 457A.
NOW,
THEREFORE, in consideration of the premises and mutual covenants and agreements
of the parties herein contained, the parties hereto agree as
follows:
ARTICLE
I
Definitions
Section
1.01. Capitalized terms used in this Amendment that are not defined herein
shall have the meanings ascribed thereto by the Existing Agreement.
ARTICLE
II
Amendments
Section
2.01. Section
23. A new Section 23 is hereby added to the Existing Agreement
to read as follows in its entirety:
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"23.
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Compliance with Code
Section 457A.
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Notwithstanding
anything to the contrary in this Agreement, the following provisions shall apply
from and after January 1, 2009:
(a) This
Agreement and the benefits provided hereunder are intended to comply, to the
extent applicable thereto, with Code Section 457A and the Treasury Regulations
and other guidance promulgated or issued thereunder, and the provisions of this
Agreement shall be interpreted and construed consistent with this
intent. If the Employee or the Company believes, at any time, that
any such benefit or right does not so comply with Code Section 457A, it shall
promptly advise the other and shall negotiate reasonably and in good faith to
amend the terms of such benefits and rights such that they comply with Code
Section 457A (with the most limited possible economic effect on the Employee and
on the Company).
(b) ‘Ineligible Compensation’ means
compensation relating to services performed for the benefit or on behalf of the
Company as determined by the Parent, in its sole discretion regardless of
whether the cost of such compensation is actually borne by the Company. To
the extent the Employee
performs such services for the Company, as well as for the Parent, and
any subsidiary or affiliate of the Company, the determination of what portion of
such compensation shall be considered Ineligible Compensation shall also be made
by the Parent in its sole discretion.
(c) If
and to the extent required by Code Section 457A, and subject to Code Section
409A:
(i)
Any Ineligible Compensation which is attributable to services
performed for the Company after December 31, 2008, as adjusted for any earnings
and losses attributable thereto, shall be paid to the Employee no later than the last
day of the twelfth month after the end of the taxable year of the Company during
which the right to the payment of such Ineligible Compensation is no longer
subject to a "substantial risk of forfeiture" within the meaning of Code Section
457A.
(ii) In
the case of any deferred amount of Ineligible Compensation which is attributable
to services performed for the Company before January 1, 2009, to the extent such
deferred amount is not includible in the Employee’s gross income in a
taxable year beginning before 2018, such deferred amount, as adjusted for any
earnings and losses attributable thereto, shall be paid to the Employee in the later of (1) the
last taxable year beginning before 2018, or (2) the taxable year in which
there
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is no
"substantial risk of forfeiture" of the Employee’s rights to such
Ineligible Compensation, within the meaning of Code Section 457A."
ARTICLE
III
Miscellaneous
Section
3.01. Ratifications. The
terms and provisions set forth in this Amendment shall modify and supersede all
inconsistent terms and provisions set forth in the Existing
Agreement. Except as expressly modified and superseded by this
Amendment, the Company and the Employee each hereby (a) ratifies and confirms
the Existing Agreement, (b) agrees that the same shall continue in full force
and effect, and (c) agrees that the same are the legal, valid and binding
obligations of the Company and the Employee, enforceable against the Company and
the Employee in accordance with its respective terms.
Section
3.02. Severability. If,
for any reason, any provision of this Amendment is held invalid, illegal or
unenforceable such invalidity, illegality or unenforceability shall not affect
any other provision of this Amendment 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 Amendment 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 Amendment, 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.
Section
3.03. 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
Amendment.
Section
3.04. Governing
Law. This Amendment 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.
Section
3.05. Withholding. All
amounts paid pursuant to the Existing Agreement and this Amendment shall be
subject to withholding for taxes (federal, state, local or otherwise) to the
extent required by applicable law.
Section
3.06. Counterparts. This
Amendment may be executed in counterparts, each of which, when taken together,
shall constitute one original agreement.
Section
3.07. Waiver. No
term or condition of the Existing Agreement or this Amendment shall be deemed to
have been waived, nor shall there be any estoppel against the enforcement of any
provision of this Amendment or the Existing Agreement except by written
instrument of the
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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.
Section
3.08. Entire
Agreement. The Existing Agreement and this Amendment,
together, contain the entire understanding between the parties hereto regarding
this subject except that this Amendment 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 the Existing Agreement or this
Amendment.
IN
WITNESS WHEREOF, the Company has caused its duly authorized officer or director
to execute and attest to this Amendment, and Employee has placed this signature
hereon, effective as of the date set forth above.
FAR
EAST ENERGY (BERMUDA), LTD.
By: /s/ Xxxxxxx X.
XxXxxxxxx
Name:
Xxxxxxx X. XxXxxxxxx
Title: Chief
Executive Officer
EMPLOYEE:
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/s/ Xxxx Xxxxxxxxx
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Xxxx
Xxxxxxxxx
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