ex10_64.htm


    
      

    

    
      Exhibit 10.64

      FAR
EAST ENERGY CORPORATION

      


      SECOND
AMENDED AND RESTATED

      NONQUALIFIED
STOCK OPTION AGREEMENT

      


      General
Information

      


      
        
          	
                  Name:

                	
                  Michael
      R. McElwrath

                
	 
      	 
      
	
                  Award
      Date:

                	
                  January
      29, 2002

                
	 
      	 
      
	
                  Options:

                	
                  60,000

                
	 
      	 
      
	
                  Exercise
      Price for the Options:

                	
                  $0.65

                
	 
      	 
      
	
                  Expiration
      Date:

                	
                  January
      29, 2012

                


        

      

      

        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

       

      FAR
EAST ENERGY CORPORATION

      SECOND
AMENDED AND RESTATED

      NONQUALIFIED
STOCK OPTION AGREEMENT

      


      


      THIS SECOND AMENDED AND RESTATED
NONQUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is made and
entered into as of this 14th day of
January, 2009, by and between Far East Energy Corporation, a Nevada corporation
(the "Corporation"), and
Michael R. McElwrath ("Participant").

      


      WHEREAS, the Corporation and
the Participant previously entered into a Stock Option Agreement (the "Original Option Agreement")
dated as of January 29, 2002 (the "Award Date") setting forth the
grant of options to purchase 100,000 shares of common stock, par value $0.001
per share, of the Corporation (the "Common Stock") at an exercise
price per share of $0.65;

      


      WHEREAS, the Corporation and
the Participant subsequently entered into an Amended and Restated Nonqualified
Stock Option Agreement (the "2004 Option Agreement") dated
December 23, 2004, which amended, restated and superseded the Original Option
Agreement;

      


      WHEREAS, the Participant has
entered into an Amended and Restated Employment Agreement (as amended, restated
and modified from time to time, the "Employment Agreement") dated
December 23, 2004 with the Corporation;

      


      WHEREAS, the Corporation and
the Participant acknowledge that of the 100,000 options granted under the
Original Option Agreement, 60,000 options vested on or before December 31, 2004
(the "Options"), and
that 40,000 options vested on or after January 1, 2005;

      


      WHEREAS, the Options remain
subject to the 2004 Option Agreement and the remaining 40,000 options, which
vested on or after January 1, 2005, are subject to that certain Second Amended
and Restated Nonqualified Stock Option Agreement dated December 27, 2007 between
the Corporation and the Participant;

      


      WHEREAS, the Corporation and
Participant desire to extend expiration of the Exercise Period for the Options
subject to the 2004 Option Agreement from January 29, 2009 to January 29, 2012;
and

      


      WHEREAS, by executing this
Agreement, the Corporation and Participant desire to amend, replace and
supersede the 2004 Option Agreement with respect to the Options.

      


      NOW, THEREFORE, in
consideration of the foregoing, of the mutual promises hereinafter set forth and
of such other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:

      


      1.           Defined
Terms.  Capitalized terms
used herein without definition shall have the meaning ascribed to such terms in
the Employment Agreement.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      
        	
                2.

              	
                Non-Qualified Stock
      Options to Purchase Shares.

              


      

      


      
        	
                 
      

              	
                (a)

              	
                Number of Option
      Shares and Option Prices.  The Corporation granted the
      Options to the Participant, which are subject to the 2004 Option
      Agreement, as non-qualified stock options, to purchase up to 60,000 shares
      of the Corporation's Common Stock (the "Option Shares"), with an
      exercise price of $0.65 per share ("Exercise
      Price").  The shares of Common Stock purchasable upon
      exercise of the Option are hereinafter referred to as the "Shares." The Option is
      intended by the parties hereto to be, and shall be treated as, a
      nonqualified stock option (as such term is defined under Section 422 of
      the Internal Revenue Code of 1986, as
amended).

              


      

      


      
        	
                 
      

              	
                (b)

              	
                Exercise
      Period.  The Options are fully vested as of the date
      hereof and shall be exercisable, in whole or in part, subject to the terms
      set forth in this Agreement and the Employment Agreement (as may be
      adjusted in accordance with Article 6 of this Agreement), from the date
      hereof until January 29, 2012 (the "Exercise
      Period").

              


      

      


      
        	
                 
      

              	
                (c)

              	
                The
      Option shall be immediately vested and exercisable in accordance with the
      terms and conditions of, and to the extent provided in, the Employment
      Agreement.

              


      

      


      3.           Termination
of Option.  The Option and
all rights hereunder with respect thereto, to the extent such rights shall not
have been exercised, shall terminate and become null and void after January 29,
2012 (the "Option Termination
Date").

      


      
        	
                4.

              	
                Exercise of
      Options.

              


      

      


      A.      
     Participant may exercise the Options with respect
to all or any part of the number of Shares then exercisable hereunder by giving
the Secretary of the Corporation written notice of intent to
exercise.  The notice of exercise shall specify the number of Shares
as to which Participant is exercising and the date of exercise thereof, which
date shall be not less than five (5) days after the giving of such notice
(unless an earlier time shall have been mutually agreed upon in
writing).  All or any portion of the vested portion of the Option may
be exercised by Participant during the Exercise Period.

      


      B.       
    Notwithstanding anything contained in this Article 4 to
the contrary, each Option may be exercised only in compliance with all
applicable securities laws and only by (i) Participant’s completion, execution
and delivery to the Corporation of a notice of exercise and, if required by the
Corporation, an "investment letter" as supplied by the Corporation and (ii) the
payment to the Corporation, as provided in Article 4D hereof, of an amount equal
to the amount obtained by multiplying the Exercise Price of such Option by the
number of Shares being purchased pursuant to such exercise as shall be specified
by Participant in such notice of exercise.

      


      C.        
   In the event of the death or Disability of Participant at such
time that Participant shall possess an Option pursuant to the terms of this
Agreement, within three years following Participant’s termination of employment,
Participant or Participant’s estate, executors or administrators, or personal or
legal representatives, as the case may be, shall be entitled to exercise any
Options  that are or become exercisable within three years following
Participant's termination of employment (but not beyond the Option Termination
Date) and all such Options not exercised within such period shall be
forfeited.  Any person, other than Participant, so desiring to
exercise Participant's Options shall be required, as a condition to the exercise
of the Options, to furnish to the Corporation such documentation as the
Corporation shall deem satisfactory to evidence the authority of such person to
exercise the Options on


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      behalf of
Participant.  In the event of the exercise of such Options by
Participant's estate, executors or administrators, or personal or legal
representatives, all references herein to Participant shall, to the extent
applicable, be deemed to refer to and include such estate, executors or
administrators, or personal or legal representatives, as the case may
be.

      


      D.        
   The Exercise Price shall be paid in full by Participant for
the Shares purchased on or before the exercise date specified in the notice of
exercise, at Participant's option, in one or a combination of the following
methods:  (i) in cash or by electronic funds transfer; (ii) by check
payable to the order of the Corporation; (iii) if authorized by the Board of
Directors of the Corporation (the "Board"), or the Compensation
Committee of the Board (the "Committee"), by a promissory
note of the Participant; (iv) by notice and third party payment in such manner
as may be authorized by the Board or the Committee; (v) by the delivery of
shares of Common Stock of the Corporation already owned by the Participant; or
(vi) pursuant to a "cashless exercise" procedure (the "Cashless Exercise Right")
pursuant to which the Participant shall surrender to the Corporation such Option
and a notice of exercise, duly completed and executed by the Participant to
evidence the exercise of the Cashless Exercise Right by authorizing the
Corporation to withhold from issuance a number of Shares issuable upon such
exercise of such Option which, when multiplied by the Fair Market Value (as
defined below) of such Shares, is equal to the aggregate Exercise Price of such
Option (and such withheld Shares shall no longer be issuable under such
Option).  Shares of Common Stock used to satisfy the Exercise Price of
an Option shall be valued at their Fair Market Value on the date of
exercise.

      


      
        	
                 
      

              	
                E.

              	
                The
      "Fair Market
      Value" shall be determined as
follows:

              


      

      


      (a)  if
the security at issue is listed on a national securities exchange or admitted to
unlisted trading privileges on such an exchange or quoted on either the National
Market System or the Small Cap Market of the automated quotation service
operated by The Nasdaq Stock Market, Inc., the Fair Market Value shall be the
last reported sale price of that security on such exchange or system on the day
for which the Fair Market Value is to be determined or, if no such sale is made
on such day, the average of the highest closing bid and lowest asked price for
such day on such exchange or system; or

      


      (b)  if
the security at issue is not so listed or quoted or admitted to unlisted trading
privileges, the Fair Market Value shall be the average of the last reported
highest bid and lowest asked prices quoted on the Electronic Bulletin Board
operated by The Nasdaq Stock Market, Inc., or, if not so quoted, then by the
National Quotation Bureau, Inc. on the last business day prior to the day for
which the Fair Market Value is to be determined; or

      


      (c)  if
the security at issue is not so listed or quoted or admitted to unlisted trading
privileges and bid and asked prices are not reported, the Fair Market Value
shall be determined in such reasonable manner as may be prescribed from time to
time by the Board.

      


      F.           
Upon the exercise of all or any portion of an Option by Participant, or as soon
thereafter as is practicable, the Corporation shall issue and deliver to
Participant (or to any broker or, if acceptable to the Corporation, to any other
person designated by Participant) a certificate or certificates evidencing such
number of Option Shares as Participant has elected to purchase.  Such
certificate or certificates shall be registered in the name of Participant (or
the designated broker or other person) and, if applicable, shall bear an
appropriate investment warranty legend, any legend required by an applicable
securities law, rule or regulation and, if applicable, a legend referring to the
restrictions provided hereunder and under the Employment Agreement and any
legend required by applicable law.  Upon the exercise of an Option and
the issuance and delivery of such certificate or certificates, Participant (or
the person to whom such stock


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      certificates
are registered) shall have all the rights of a stockholder with respect to such
Option Shares and to receive all dividends or other distributions paid or made
with respect thereto.  In the event that the capital stock of the
Corporation is converted in whole or in part into securities of any other
entity, a determination as to whether the securities of the other entity so
received (if any) shall be subject to the restrictions set forth in this
Agreement shall be made solely by the other entity.

      


      5.           Rights
Prior to Exercise.  Participant shall
have no equity interest in the Corporation or any voting, dividend, liquidation
or dissolution rights with respect to any capital stock of the Corporation
solely by reason of having an Option or having executed this
Agreement.  Prior to the exercise of all or a portion of the Options,
as set forth in Article 4A hereof, and the issuance and delivery of a
certificate or certificates evidencing the Shares purchased pursuant to the
exercise of all or a portion of such Options, Participant shall have no interest
in, or any voting, dividend, liquidation or dissolution rights with respect to,
the Option Shares, except to the extent that Participant has exercised all or a
portion of such Options and has been issued and received delivery of a
certificate or certificates evidencing the Option Shares purchased pursuant to
such exercise.

      


      
        	
                6.

              	
                Adjustment
      of Purchase and Number of
Shares.

              


      

      


      A.           
Adjustment.  The
number and kind of securities purchasable upon the exercise of an Option and the
Exercise Price of such Option shall be subject to adjustment from time to time
upon the happening of certain events as follows:

      


      (a)           Reclassification,
Consolidation or Merger.  At any time while the Option remains
outstanding and unexpired, in case of (i) any reclassification or change of
outstanding securities issuable upon exercise of this Option (other than a
change in par value, or from par value to no par value per share, or from no par
value per share to par value or as a result of a subdivision or combination of
outstanding securities issuable upon the exercise of this Option), (ii) any
consolidation or merger of the Corporation with or into another corporation
(other than a merger with another corporation in which the Corporation is a
continuing corporation and which does not result in any reclassification or
change, other than a change in par value, or from par value to no par value per
share, or from no par value per share to par value, or as a result of a
subdivision or combination of outstanding securities issuable upon the exercise
of this Option), or (iii) any sale or transfer to another corporation of the
property of the Corporation as an entirety or substantially as an entirety, the
Corporation, or such successor or purchasing corporation, as the case may be,
shall without payment of any additional consideration therefore, execute new
Option providing that the holder of this Option shall have the right to exercise
such new Option (upon terms not less favorable to the holder than those then
applicable to the Option and to receive upon such exercise, in lieu of each
share of Common Stock theretofore issuable upon exercise of the Option, the kind
and amount of shares of stock, other securities, money or property receivable
upon such reclassification, change, consolidation, merger, sale or
transfer.  Such new Option shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Section 6A.  The provisions of this Section 6A(a) shall similarly
apply to successive reclassifications, changes, consolidations, mergers, sales
and transfers.

      


      (b)           Subdivision or Combination
of Shares. If the Corporation at any time while the Option remains
outstanding and unexpired, shall subdivide or combine its capital stock, the
Exercise Price of such Option shall be proportionately reduced, in case of
subdivision of such shares as of the effective date of such subdivision, or, if
the Corporation shall take a record of holders of its capital stock for the
purpose of so subdividing, as of such record date, whichever is earlier, or
shall be proportionately increased, in the case of combination of such shares,
as of the effective date of such combination, or, if


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      the
Corporation shall take a record of holders of its capital stock for the purpose
of so combining, as of such record date,  whichever is
earlier.

      


      (c)           Stock
Dividends.  If the Corporation at any time which the Option is
outstanding and unexpired shall pay a dividend in shares of, or make other
distribution of shares of, its capital stock, then the Exercise Price of the
Option shall be adjusted, as of the date the Corporation shall take a record of
the holders of its capital stock for the purpose of receiving such dividend or
other distribution (or if no such record is taken, as at the date of such
payment or other distribution), to that price determined by multiplying the
Exercise Price of the Option in effect immediately prior to such payment or
other distribution by a fraction (i) the numerator of which shall be the total
number of shares of capital stock outstanding immediately prior to such dividend
or distribution, and (ii) the denominator of which shall be the total number of
shares of capital stock outstanding immediately after such dividend or
distribution.  The provisions of this Section 6A(c) shall not apply
under any of the circumstances for which an adjustment is provided in Section
6A(a) or 6A(b).

      


      (d)           Liquidating Dividends,
Etc.  If the Corporation at any time while the Option is
outstanding and unexpired makes a distribution of its assets to the holders of
its capital stock as a dividend in liquidation or by way of return of capital or
other than as a dividend payable out of earnings or surplus legally available
for dividends under applicable law or any distribution to such holders made in
respect of the sale of all or substantially all of the Corporation’s assets
(other than under the circumstances provided for in the Sections 6A(a) through
(c)), the holder of such Option shall be entitled to receive upon the exercise
hereof, in addition to the shares of Common Stock receivable upon such exercise,
and without payment of any consideration other than the Exercise Price of such
Option, an amount in cash equal to the value of such distribution per share of
Common Stock multiplied by the number of shares of Common Stock which, on the
record date for such distribution, are issuable upon exercise of the Option
(with no further adjustment being made following any event which causes a
subsequent adjustment in the number of shares of Common Stock issuable upon the
exercise hereof ), and an appropriate provision therefor should be made a part
of any such distribution.  The value of a distribution which is paid
in other than cash shall be determined in good faith by the Board.

      


      B.      
     Notice of
Adjustments.  Whenever any of the Exercise Price of an Option
or the number of shares of Common Stock purchasable under the terms of such
Option at that Exercise Price shall be adjusted pursuant to Section 6A hereof,
the Corporation shall promptly make a certificate signed by its Chief Executive
Officer, President or a Vice President and by its Treasurer or Assistant
Treasurer or its Secretary or Assistant Secretary, setting forth in reasonable
detail the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis upon which the Board or the Committee made any determination hereunder),
and the Exercise Price and number of shares of Common Stock purchasable at that
Exercise Price after giving effect to such adjustment, and shall promptly cause
copies of such certificate to be mailed (by First Class and Postage Prepaid) to
the registered holder of such Option.

      


      7.           Headings.  The headings and
other captions contained in this Agreement are for convenience of reference
only, and shall not be used in interpreting, construing or enforcing any of the
provisions of this Agreement.

      


      8.           Entire
Agreement.  This Agreement,
together with the Employment Agreement, sets forth all of the promises,
agreements, conditions, understandings, warranties and representations between
the parties hereto with respect to the Options, and there are no promises,
agreements, conditions, understandings, warranties or representations, oral or
written, express or implied, between them with respect to the


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Options
other than as set forth herein and in the Employment Agreement.  Any
and all prior agreements between the parties hereto with respect to any stock
acquisition rights regarding the Options are hereby revoked.  This
Agreement, together with the Employment Agreement, is, and is intended by the
parties to be, an integration of any and all prior agreements or understandings,
oral or written, with respect to the Options and the Shares.

      


      9.           Notices.  Any and all
notices provided for herein shall be sufficient if in writing, and sent by hand
delivery, by an overnight delivery service that produces a signed receipt
evidencing delivery or by certified or registered mail (return receipt requested
and first class postage prepaid), in the case of the Corporation, to its
principal office, and in the case of Participant, to Participant's address as
shown on the Corporation's records.

      


      10.           Invalid
or Unenforceable Provisions.  The provisions of
this Agreement shall be deemed severable, and the invalidity or unenforceability
of any one or more of the provisions hereof shall not affect the validity and
enforceability of the other provisions hereof.  Participant agrees
that the breach or alleged breach by the Corporation of (a) any covenant
contained in another agreement (if any) between the Corporation and Participant
or (b) any obligation owed to Participant by the Corporation, shall not affect
the validity or enforceability of the covenants and agreements of Participant
set forth herein.

      


      11.           Modifications.  No change or
modification of this Agreement shall be valid unless the same is in writing and
signed by the parties hereto; provided, however, that
Participant hereby covenants and agrees to execute any amendment to this
Agreement which shall be required or desirable (in the opinion of the
Corporation or its counsel) in order to comply with any rule or regulation
promulgated or proposed under the Code by the Internal Revenue
Service.

      


      12.           Incorporation
of Employment Agreement by Reference.  The Option is
granted pursuant to the terms of the Employment Agreement, the terms of which
are incorporated herein by reference, and the Option shall in all respects be
interpreted in accordance with the Employment Agreement.  To the
extent that any conflict may exist between any term or provision of this
Agreement and any term or provision of the Employment Agreement (other than with
respect to matters that, pursuant to the Employment Agreement, may be altered in
this Agreement), such term or provision of the Employment Agreement shall
control.

      


      13.           Governing
Law.  The validity,
construction, interpretation and effect of this Agreement shall exclusively be
governed by and determined in accordance with the laws of Texas (other than the
conflicts-of-law or choice-of-law rules thereof), except to the extent preempted
by federal law, which solely to the extent of such preemption shall
govern.  Venue shall lie only in the State and Federal Courts in and
for the County of Harris, Texas, as to all disputes arising under this
Agreement, and such venue is hereby consented to by the Corporation and
Participant.

      


      14.           Counterparts.  This Agreement
may be executed in counterparts, each of which, when taken together, shall
constitute one original agreement.

      


      15.           Amendment
and Restatement.  This Agreement
constitutes an amendment, modification and restatement of the 2004 Option
Agreement and sets forth the entire understanding of the parties hereto with
respect to the Options, and supersedes the 2004 Option Agreement and all other
prior arrangements or understandings among the parties regarding such
matters.

      


      [SIGNATURE
PAGE FOLLOWS]


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      IN WITNESS WHEREOF, the
Corporation has caused its duly authorized officer to execute and attest to this
Agreement, and to apply the corporate seal hereto, and Participant has placed
his or her signature hereon, effective as of the date first written
above.

      


      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	
                                  CORPORATION:

                                
	 
      	 
      	 
      
	 
      	
                                  FAR
      EAST ENERGY CORPORATION

                                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                                  By:

                                	
                                  /s/ Andrew Lai

                                
	 
      	 
      	
                                  Andrew
      Lai, Chief Financial Officer

                                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                                  PARTICIPANT:

                                
	 
      	 
      	 
      
	 
      	
                                  By:

                                	
                                  /s/
      Michael R.
McElwrath