NGAS Resources, Inc.
 
FORM OF AMENDMENT TO LONG TERM INCENTIVE AGREEMENT
 
This AMENDMENT TO LONG TERM INCENTIVE AGREEMENT (the “Amendment”) is entered
into as of December 23, 2010 between NGAS Resources, Inc., a British Columbia
corporation (the “Company”), and_______________ , the _____________ of the
Company (the “Executive”).
 
The parties entered into a Long-Term Incentive Agreement dated as of December 9,
2008 (the “Incentive Agreement”), providing for the Incentive Payout and Stock
Option specified therein as an incentive to remain as an executive of the
Company and its subsidiaries.  The parties desire to amend the Incentive
Agreement as set forth below to ensure documentary compliance with Section 409A
of the Internal Revenue Code of 1986, as amended.
 
NOW, THEREFORE, in consideration of the foregoing, the parties agree as follows:
 
1.     Section 2.2 of the Incentive Agreement is hereby amended and restated as
follows to provide that payments shall be made in a single lump sum and no
longer in periodic installments at the election of the Executive:
 
“2.2   Payment.  A vested Incentive Payout shall be payable by the Company in
cash in a single lump sum the on the Initial Vesting Date, if applicable, and
the Final Vesting Date in the amounts provided under Section 2.1.”
 
2.     The following new paragraph is hereby added after Section 7 of the
Incentive Agreement:
 
“8.    Section 409A.  The intent of the parties is that payments and benefits
under this Agreement (including all attachments, exhibits and annexes) comply
with Section 409A of the Internal Revenue Code of 1986, as amended (“Code
Section 409A”), to the extent subject thereto.  Accordingly, to the maximum
extent permitted, this Agreement shall be interpreted and be administered to be
in compliance with Code Section 409A in all respects.  Notwithstanding anything
to the contrary in this Agreement, to the extent required in order to avoid
accelerated taxation and/or tax penalties under Code Section 409A, the Executive
shall not be considered to have terminated employment with the Company or its
subsidiaries for purposes of this Agreement, and no payment shall be due to the
Executive under this Agreement, until the Executive would be considered to have
incurred a “separation from service” from the Company and its subsidiaries
within the meaning of Code Section 409A.  In addition, notwithstanding anything
to the contrary in the Incentive Agreement, to the extent that any payments to
be made upon the Executive’s separation from service would result in the
imposition of any individual penalty tax imposed under Code Section 409A, the
payment shall instead be made on the first business day after the earlier of (a)
the date that is six (6) months following such separation from service and (b)
the Executive’s death.”
 
3.     The Incentive Agreement, as expressly modified hereby, shall remain in
full force and effect.
 
[Signature page follows]

 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
 

 
NGAS RESOURCES, INC.
     
By
       
EXECUTIVE:
       

 
Long Term Incentive Agreement – Page 2

 
 

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