Exhibit 10.8





Exhibit 10.8




FIRST AMENDMENT

TO ENERGY WEST INCORPORATED

2002 STOCK OPTION PLAN




ENERGY WEST INCORPORATED (the “Company”), having adopted the 2002 Stock Option Plan (the
“Original Plan”) effective as of October 4, 2002, hereby amends the Original Plan in accordance
with this First Amendment to Energy West Incorporated 2002 Stock Option Plan, effective as of
December 31, 2008 (the “Amendment,” and together with the Original Plan, the “Amended Plan”), as
follows:



1. Addition of New Section 1.2 to the Amended Plan. The Company hereby adds Section
1.2 to the Amended Plan in its entirety as follows:




	 	1.2	 	Section 409A. This Plan and any Awards granted hereunder are
intended to be exempt from the requirements of Section 409A, and shall be
interpreted and administered in a manner consistent with those intentions. Any
provision of this Plan to the contrary notwithstanding, Grandfathered Awards
shall not be governed by the provisions of this Plan but instead shall continue
to be governed by the provisions of the Energy West Incorporated 2002 Stock
Plan effective as of October 4, 2002 (the “Original Plan”) as in effect on
December 31, 2004.






2. Changes to Section 2 of the Original Plan. The Company hereby amends Section 2 of
the Original Plan as follows:




	 	(a)	 	Section 2.14 is deleted from the Original Plan in its entirety
and is replaced in the Amended Plan by the following new Section 2.14:







2.14 “Fair Market Value” means, as of any given date, the value of a Share
determined as follows (in order of applicability): (i) if on the Grant
Date or other determination date the Share is listed on an established
national or regional stock exchange, is admitted to quotation on The NASDAQ
Stock Market, Inc. or is publicly traded on an established securities
market, the Fair Market Value of a Share shall be the closing price of the
Share on that exchange or in that market (if there is more than one such
exchange or market the Committee shall determine the appropriate exchange
or market) on the Grant Date or such other determination date (or if there
is no such reported closing price, the Fair Market Value shall be the mean
between the highest bid and lowest asked prices or between the high and low
sale prices on that trading day) or, (ii) if no sale of Shares is reported
for that trading day, on the next preceding day on which any sale has been
reported. If the Share is not listed on such an exchange, quoted on such
system or traded on such a market, Fair Market Value shall be the value of
the Share as determined by the
determined by such methods or procedures as shall be established from time
to time by the Committee in good faith in a manner consistent with Section
409A.


 


 









 






	 	(b)	 	The following is added in its entirety as the last sentence of
Section 2.16 of the Amended Plan:







The Grant Date of an Award shall not be earlier than the date the Award is
approved by the Committee.




	 	(c)	 	The following is added in its entirety as Section 2.17 of the
Amended Plan:







2.17 “Grandfathered Awards” means all Awards made under the Plan which were
earned and vested on or before December 31, 2004. Grandfathered Awards are
subject to the provisions of Section 1.2 above.To ensure compliance with
Section 409A, any bonus payment payable under this Section 3(b) shall be
paid no later than March 15 of the calendar year following the calendar year
in which the amount was earned and accrued.




	 	(d)	 	Section 2.17 of the Original Plan is redesignated in its
entirety as Section 2.18 of the Amended Plan.







	 	(e)	 	Section 2.18 of the Original Plan is redesignated in its
entirety as Section 2.19 of the Amended Plan.







	 	(f)	 	Section 2.19 of the Original Plan is redesignated in its
entirety as Section 2.20 of the Amended Plan.







	 	(g)	 	The following is added in its entirety as Section 2.21 of the
Amended Plan:







	 	2.21	 	“Original Plan” has the meaning set forth in
Section 1.2.







	 	(h)	 	Section 2.20 of the Original Plan is redesignated in its
entirety as Section 2.22 of the Amended Plan.







	 	(i)	 	Section 2.21 of the Original Plan is redesignated in its
entirety as Section 2.23 of the Amended Plan.







	 	(j)	 	Section 2.22 of the Original Plan is redesignated in its
entirety as Section 2.24 of the Amended Plan.





 


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	 	(k)	 	The following is added in its entirety as Section 2.25 of the
Amended Plan:







“Section 409A” means Section 409A of the Code and the U.S. Department of
Treasury regulations and other interpretive guidance issued thereunder.




	 	(l)	 	Section 2.23 of the Original Plan is redesignated in its
entirety as Section 2.26 of the Amended Plan.







	 	(m)	 	Section 2.24 of the Original Plan is redesignated in its
entirety as Section 2.27 of the Amended Plan.







	 	(n)	 	Section 2.25 of the Original Plan is redesignated in its
entirety as Section 2.28 of the Amended Plan.






3. Change to Section 4.2 of the Original Plan. The Company hereby amends Section 4.2
of the Original Plan by adding the following in its entirety as the last sentence of Section 4.2 in
the Amended Plan:




Notwithstanding the foregoing, no amendment or modification shall be made under
Section 4.2(d) which will result in an Award becoming subject to the terms and
conditions of Section 409A or otherwise constitute an impermissible acceleration,
unless agreed upon by the Committee and the Participant.



4. Change to Section 5.3 of the Original Plan. The Company hereby amends Section 5.3
of the Original Plan by adding the following in its entirety as the last sentence of Section 5.3 in
the Amended Plan:




Notwithstanding the foregoing, no adjustment shall be made which will result in an
Award becoming subject to the terms and conditions of Section 409A or otherwise
constitute an impermissible acceleration, unless agreed upon by the Committee and
the Participant.



5. Changes to Section 6 of the Original Plan. The Company hereby amends Section 6 of
the Original Plan as follows:




	 	(a)	 	The last sentence of Section 6.3.3 is deleted from the Original
Plan in its entirety and is replaced in the Amended Plan by the following:







If such substitute Options are granted, the Committee, consistent with
Section 424(a) of the Code and Section 409A, may determine that such
substitute Options shall have an exercise price less than one hundred
percent (100%) of the Fair Market Value of the Shares on the Grant Date.


 


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	 	(b)	 	The following is added in its entirety as the last two
sentences of Section 6.4.2 of the Amended Plan:







With respect to extensions that were not included in the original terms of
the Option but were provided by the Committee after the date of grant, if at
the time of any such extension, the exercise price per Share of the Option
is less than the Fair Market Value of a Share, the extension shall, unless
otherwise determined by the Committee, be limited to the earlier of (a) the
maximum term of the Option as set by its original terms or (b) ten (10)
years from the Grant Date. Unless otherwise determined by the Committee,
any extension of the term of an Option under this Section 6.4.2 shall comply
with Section 409A to the extent applicable.




	 	(c)	 	The second sentence of Section 6.5.1 of the Original Plan is
deleted in its entirety and is replaced in the Amended Plan by the following:







After an Option is granted, the Committee may accelerate the exercisability
of the Option; provided, however, that any such acceleration of the
exercisability of the Option is subject to the limitations of Section 409A
and, unless otherwise determined by the Committee, any acceleration of the
exercisability of the Option under this Section 6.5.1 shall comply with
Section 409A.




	 	(d)	 	The last sentence of Section 6.5.1 of the Original Plan is
deleted in its entirety and is replaced in the Amended Plan by the following:







If the Committee provides that any Option is exercisable only in
installments, the Committee may at any time waive such installment exercise
provisions, in whole or in part, based on such factors as the Committee may
determine; provided, however, that any such waiver of installment exercise
provisions of the Option is subject to the limitations of Section 409A and,
unless otherwise determined by the Committee, any waiver of installment
exercise provisions of the Option under this Section 6.5.1 shall comply with
Section 409A.


 


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	 	(e)	 	Section 6.5.2 is deleted from the Original Plan in its entirety
and is replaced in the Amended Plan by the following new Section 6.5.2:







Restrictions on Exercise. The Committee may postpone any exercise of an
Option for such period as the Committee in its discretion may deem necessary
in order to permit the Company (i) to effect or maintain registration of the
Plan or the Shares issuable upon the exercise of an Option under the
Securities Act of 1933, as amended, or the securities laws of any applicable
jurisdiction, (ii) to permit any action to be taken in order to comply with
restrictions or regulations incident to the maintenance of a public market
for its Shares or to list the Shares thereon; or (iii) to determine that
such Shares and the Plan
are exempt from such registration or that no action of the kind referred to
in (ii) above need be taken; and the Company shall not be obligated by
virtue of any terms and conditions of any Award or any provision of the Plan
to permit the exercise of an Option to sell or deliver Shares in violation
of any federal or state securities or other law. With respect to any
postponements that were not included in the original terms of the Option but
were provided by the Committee after the date of grant, if at the time of
any such postponement, the exercise price per Share of the Option is less
than the Fair Market Value of a Share, the postponement shall, unless
otherwise determined by the Committee, be limited to the earlier of (a) the
maximum term of the Option as set by its original terms or (b) ten (10)
years from the Grant Date. Unless otherwise determined by the Committee,
any postponement of the term of an Option under this Section 6.5.2 shall
comply with Section 409A to the extent applicable. Neither the Company nor
its directors or officers or any of them shall have any obligation or
liability to the Participant, to any successor of a Participant or to any
other person with respect to any Shares as to which an Option shall lapse
because of such postponement. The Company may toll the expiration of an
Option while the participant cannot exercise the Option because such an
exercise would jeopardize the ability of the Company to continue as a going
concern; provided that the period during which the Option may be exercised
is not extended by more than thirty (30) days after the exercise of the
Option (a) would no longer violate an applicable Federal, state, local, or
foreign law or (b) would first no longer jeopardize the ability of the
Company to continue as a going concern. Unless otherwise determined by the
Committee, any tolling of the expiration of an Option under this Section
6.5.2 shall comply with Section 409A to the extent applicable.




	 	(f)	 	The last sentence of Section 6.6.2 of the Original Plan is
deleted in its entirety and is replaced in the Amended Plan by the following:







The Committee may also permit exercise (a) by tendering previously acquired
Shares having an aggregate Fair Market Value at the time of exercise equal
to the total Exercise Price or (b) by any other means which the Committee
determines to provide legal consideration for the Shares, and to be
consistent with the purposes of the Plan and with all applicable laws and
regulations, provided that such other means shall be set forth in the Award
Agreement and provided further, that such form of payment does not
constitute a deferral of compensation within the meaning of Section 409A or
otherwise cause the Option to be subject to the requirements of Section
409A.


 


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6. Addition of New Section 7.9 to the Amended Plan. The Company hereby adds Section
7.9 to the Amended Plan in its entirety as follows:




7.9 Section 409A. The Plan is intended to comply with the requirements of Section
409A, without triggering the imposition of any tax penalty thereunder. To the
extent necessary or advisable, the Board may amend the Plan or any Award to delete
any conflicting provisions and to add any such other provisions as are required to
fully comply with the applicable provisions of Section 409A applicable to the Plan.
The Committee shall comply with Section 409A in establishing the rules and
procedures applicable to the Plan. Notwithstanding any provision of this Plan or
any Award to the contrary, if all or any portion of the payments and/or benefits
under this Plan or any Award are determined to be “nonqualified deferred
compensation” subject to Section 409A and the Participant is a “specified employee”
(within the meaning of Treasury Regulation Section 1.409A-1(i)), as determined by
the Committee in accordance with Section 409A, as of the date of the Participant’s
separation from service (within the meaning of Treasury Regulation Section
1.409A-1(h)), and the delayed payment or distribution of all or any portion of such
amounts to which the Participant is entitled under this Plan and/or any Award is
required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i)
of the Code, then such portion deferred under this Section 7.9 shall be paid or
distributed to the Participant in a lump sum on the earlier of (a) the date that is
six (6) months following termination of the Participant’s employment, (b) a date
that is no later than thirty (30) days after the date of the Participant’s death or
(c) the earliest date as is permitted under Section 409A. For purposes of clarity,
the six (6) month delay shall not apply in the case of severance pay contemplated by
Treasury Regulation Section 1.409A-1(b)(9)(iii) to the extent of the limits set
forth therein. Any remaining payments due under this Plan and any Award shall be
paid as otherwise provided therein.


7.
Change to Section 8.1 of the Original Plan. The Company hereby deletes
the first sentence of Section 8.1 of the Original Plan in its entirety and replaces in
it in the Amended Plan with the following:




The Board, in its sole discretion, may amend, suspend, or terminate the
Plan, or any part thereof, at any time and for any reason; provided,
however, that if and to the extent required by law or to maintain the Plan’s
qualification under the Code, the rules of any national securities exchange
(if applicable), or any other applicable law, any such amendment shall be
subject to stockholder approval.


 


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8. Change to Section 9.3 of the Original Plan. The Company hereby amends
Section 9.3 of the Original Plan by adding the following in its entirety as the last
sentence of Section 9.3 in the Amended Plan:



To ensure compliance with Section 409A, any tax bonus payable under
this Section 9.3 shall be paid no later than March 15 of the calendar year
following the calendar year in which the amount was earned and accrued and
in which the Participant’s right to the payment is no longer subject to a
substantial risk of forfeiture.



9. Full Force and Effect. Except to the extent specifically modified in this
Amendment, each and every provision of the Original Plan remains in full force and effect in the
Amended Plan.



10. Miscellaneous. This Amendment shall be governed by and construed in accordance
with the substantive laws of the State of Montana. In the event of any conflict between the
original terms of the Original Plan and this Amendment, the terms of this Amendment shall prevail.




 


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