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FIRST AMENDMENT
TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT
AGREEMENT (the
“Amendment”) is made and entered into as of this
31 st
day of December, 2008, by and
between ENERGY WEST, INCORPORATED (the
“Company”), a Montana corporation, and JAMES W.
GARRETT (the “Executive”).
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A.
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The Company and the Executive are
parties to an Employment Agreement dated as of November 16,
2007 (the “Original Agreement”).
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B.
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In order to ensure compliance with
Section 409A of the Internal Revenue Code of 1986, as amended,
and the U.S. Department of Treasury regulations and other
interpretive guidance issued thereunder, the Company and the
Executive desire to amend the Original Agreement as set forth in
this Amendment.
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ACCORDINGLY, in consideration of the promises hereinafter set
forth in this Amendment, the parties agree as follows:
1. Changes to Section 3 of the
Original Agreement . The Company and the Executive hereby agree that
Section 3 of the Original Agreement is hereby amended as
follows:
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(a)
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The following is added in its
entirety as the last sentence of Section 3(b) of the Original
Agreement:
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To ensure compliance with
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), and the U.S. Department of Treasury
regulations and other interpretive guidance issued thereunder, each
as in effect from time to time (collectively,
“Section 409A”), any bonus payment payable under
this Section 3(b) shall be paid on a date no later than the later
of the fifteenth day of the third month following the end of the
Executive’s or the Company’s taxable year in which the
amount was earned and accrued.
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(b)
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The following is added in its
entirety as Section 3(g) of the Original Agreement:
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To ensure
compliance with Section 409A, no (i) payment of Annual
Base Salary under Section 3(a) of this Agreement,
(ii) reimbursed expenses payable under Section 3(e) of this
Agreement or (iii) fringe benefits or reimbursements payable
under Section 3(f) of this Agreement that are taxable to the
Executive shall be made later than March 15 of the calendar
year following the calendar year in which the amount was earned and
accrued.
2. Changes to Section 5 of the
Original Agreement . The Company and the Executive hereby agree that
Section 5(e) of the Original Agreement is hereby added in its
entirety as follows:
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5(e)
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Timing of Payments
. Notwithstanding the
foregoing, to ensure compliance with Section 409A, the Company
shall pay:
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(i)
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any amount payable under
Sections 5(a)(A), (B) and (C) (collectively, the
“Accrued Base Pay Amount”) by no later than
March 15 of the calendar year following the year of
Termination;
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(ii)
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to the extent that any continued
payments or reimbursements of benefit continuation or conversion
under Section 5(a) above are deemed to constitute taxable
compensation to the Executive, any such payment or reimbursement
due to the Executive shall be paid to the Executive on or before
the last day of the Executive’s taxable year following the
taxable year in which the related expense was incurred. The amount
of any such payments eligible for reimbursement in one year shall
not affect the payments or expenses that are eligible for payment
or reimbursement in any other taxable year, and the
Executive’s right to such payments or reimbursements shall
not be
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