Exhibit
10.2
Pacific
Ethanol, Inc.
FIRST
AMENDMENT TO
EMPLOYMENT
AGREEMENT
for
Bryan
McGregor
This First Amendment to the Employment
Agreement (the “Amendment”) is hereby entered into by
and between Bryon
McGregor (“Executive”) and Pacific Ethanol,
Inc. (the "Company") (collectively, the "Parties") is effective as of December 19, 2008,
and amends the Employment
Agreement between the Parties dated December 19, 2008 (the "Employment
Agreement").
WHEREAS, the Parties wish to amend the
Employment Agreement, in order to come into compliance with Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations and other guidance thereunder and any state law of similar effect
(collectively "Section
409A"), as set
forth below.
NOW,
THEREFORE,
in consideration of the mutual promises and covenants contained herein, it is
hereby agreed by and between the parties hereto as
follows:
AGREEMENT
The
Parties, intending to be legally bound, agree as follows effective as of the
Effective Date:
1. AMENDMENT OF
EMPLOYMENT AGREEMENT
1.1 Section 5.4(b) of the Employment
Agreement. The first sentence of Section 5.4(b) of the Employment
Agreement is hereby amended to read as follows:
"(b)
Disability, If Executive
is prevented from performing his duties as described in Section 1.1 of this
Agreement by reason of any physical or mental incapacity that results in
Executive's satisfaction of requirements necessary to receive benefits under the
Company's long-term disability plan due to a total disability, then, to the
extent by law, the Company may terminate the employment of Executive and this
Agreement at or after such time."
1.2 Section 5.6 of the
Employment Agreement. Section 5.6 of the Employment Agreement
is hereby amended and restated in its entirety as follows:
“5.6 Section 409A
Compliance. Notwithstanding anything to the contrary set forth
herein, any payments and benefits provided under this Agreement (the “Severance
Benefits”) that constitute “deferred compensation” within the meaning of Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the
regulations and other guidance thereunder and any state law of similar effect
(collectively “Section 409A”) shall not commence in connection with Executive’s
termination of employment unless and until Executive has also incurred a
“separation from service” (as such term is defined in Treasury Regulation
Section 1.409A-1(h) (“Separation From
Service”), unless the Company reasonably determines that such amounts may
be provided to Executive without causing Executive to incur the additional 20%
tax under Section 409A.
It is
intended that each installment of the Severance Benefits payments provided for
in this Agreement is a separate “payment” for purposes of Treasury Regulation
Section 1.409A-2(b)(2)(i). For avoidance of doubt, it is intended that payments
of the Severance Benefits set forth in this Agreement satisfy, to the greatest
extent possible, the exemptions from the application of Section 409A provided
under Treasury Regulation Sections 1.409A-1(h)(4), 1.409A- 1 (b)(5)
and 1.409A- 1(b)(9).
If
Executive is a "specified employee" within the meaning of 409A(a)(2)(B)(i) of
the Code, any Severance Benefit payments that are triggered by a separation from
service shall be accelerated to the minimum extent necessary so that (a) the
lesser of (y) the total cash severance payment amount, or (z) six (6) months of
such installment payments are paid no later than March 15 of the calendar year
following such termination, and (b) all amounts paid pursuant to the foregoing
clause (a) will constitute separate payments for purposes of Section
1.409A-2(b)(2) of the Treasury Regulations and thus will be payable pursuant to
the "short-term deferral" rule set forth in Section 1.409A-1(b)(4) of the
Treasury Regulations. It is intended that if Executive is a "specified employee"
within the meaning of Section 409A(a)(2)(B)(i) of the Code at the time of such
separation from service the foregoing provision shall result in compliance with
the requirements of Section 409A(a)(2)(B)(i) of the Code since payments to
Executive will either be payable pursuant to the "short-term deferral" rule set
forth in Section 1.409A-1(b)(4) of the Treasury Regulations or will not be paid
until at least 6 months after separation from service."
2. Miscellaneous
Provisions.
2.1 Original
Agreement. The Employment
Agreement, as amended by this Amendment, shall continue in full force and
effect after the date hereof.
2.2 Whole Agreement. No
Agreements, representations or understandings (whether oral or written and
whether express or implied) which are not expressly set forth in the Employment
Agreement, as amended by this Amendment, have been made or entered into by
either party with respect to the subject matter of this Amendment.
2.3. Counterparts. This
Amendment may be executed in separate counterparts, any one of which need not
contain signatures of more than one party, but all of which taken together will
constitute one and the same Amendment.