peix_8kex10-5.htm


    Exhibit
10.5

    Pacific
Ethanol, Inc.

     

    FIRST
AMENDMENT TO

    AMENDED
AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

    for

    ___________________

     

    This
First Amendment to the Amended and Restated Executive Employment Agreement (the
“Amendment”)
is hereby entered into by and between ________________ (“Executive”)
and Pacific Ethanol, Inc. (the “Company”)
(collectively, the “Parties”)
is effective as of December 30, 2008, and amends the Amended and Restated
Executive Employment Agreement between the Parties dated December 14, 2007 (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 all requirements necessary to receive benefits under
the Company’s long-term disability plan due to a total disability, then, to the
extent permitted by law, the Company may terminate the employment of Executive
and this Agreement at or after such time.”

    


    1.2 Section 5.5 of the Employment
Agreement. Section 5.5 of the Employment Agreement is hereby amended and
restated in its entirety as follows:

     

    “5.5           Deferred
Compensation.  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.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    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 the 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(b)(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.

    


    Notwithstanding
any other payment schedule set forth in this Agreement, none of the Severance
Benefits will be paid or otherwise delivered prior to the effective date of the
Separation Date Release of all claims set forth as Exhibit B
hereto.  On the first regular payroll pay day following the effective
date of the Separation Date Release of all claims, the Company will pay
Executive the Severance Benefits Executive would otherwise have received under
the Agreement on or prior to such date but for the delay in payment related to
the effectiveness of the release of claims, with the balance of the Severance
Benefits being paid as originally scheduled.  All amounts payable
under the Agreement will be subject to standard payroll taxes and
deductions.”

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    1.3 Section 5.6 of the Employment
Agreement.  The first paragraph of Section 5.6 of the
Employment Agreement is hereby amended and restated in its entirety as
follows:

     

    “5.6           Limitation on
Payments.  In the event that the payments or other benefits
provided for in this Agreement or otherwise payable to Executive (i) constitute
“parachute payments” within the meaning of Section 280G of the Code, and (ii)
would be subject to the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”), then Executive’s benefits under this Agreement shall be either
(a) delivered in full, or (b) delivered to such lesser extent which would result
in no portion of such benefits being subject to the Excise Tax, whichever of the
foregoing amounts, taking into account the applicable federal, state and local
income taxes and the Excise Tax, results in the receipt by Executive on an
after-tax basis, of the greatest amount of benefits, notwithstanding that all or
some portion of such benefits may be taxable under Section 4999 of the
Code.  If a reduction in payments or benefits constituting “parachute
payments” is necessary pursuant to the foregoing provision, reduction shall
occur in the following order: reduction of cash payments; cancellation of
accelerated vesting of stock awards; reduction of employee
benefits.  If acceleration of vesting of stock award compensation is
to be reduced, such acceleration of vesting shall be cancelled in the reverse
order of the date of grant of the Executive’s stock awards.”

     

    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.

     

    2.4 Headings.  The
headings of the sections hereof are inserted for convenience only and shall not
be deemed to constitute a part hereof nor to affect the meaning
thereof.

     

    2.5 Choice of Law.  All
questions concerning the construction, validity and interpretation of this
Amendment will be governed by the law of the State of California.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    In Witness
Whereof, each of the Parties has executed this Amendment, in the case of
the Company by its duly authorized representative, effective as of the day and
year first above written.

     

    In Witness
Whereof, the parties have executed this Amendment.

     

    
      
        	 	Pacific
      Ethanol, Inc.	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	 	The
      Head of the Board’s Compensation Committee	 
	 	 	 	 
	 	Date: 	December
      30, 2008	 


      

    

     

    
 

     

    Understood
and Agreed:

    


    Executive

    


    


    


     

    
      	By:	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Date:	December 30,
      2008	 	 


    

     

     

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