Document:

EX-10.2

KNBT BANCORP, INC.

Executive Annual Incentive Plan

I. Purpose

The Board of Directors of KNBT Bancorp, Inc. (the “Company”) has established this Executive Annual
Incentive Plan (“AIP” or “Plan”) to advance the interests of the Company. The purpose of the AIP
is to drive performance to meet and exceed goals and to promote a culture of achievement. Through
payment of incentive compensation beyond base salaries, the AIP provides rewards for meeting and
exceeding Company goals for participants. Its primary objectives include:

a. Support Recruitment and Retention

i) Provide superior earnings opportunities for superior results

ii) Attract and keep entrepreneurial attitudes

iii) Optimize retention of executives through periods of growth and strategic change

b. Promote an Energetic, Innovative, Entrepreneurial Culture

i) Emphasize variable, performance-based compensation

	 	ii)	 	Maintain an incentive to provide meaningful portion of total cash earnings
opportunity for participating executives

II. Effective Date

a. The Executive AIP will be effective as of January 1, 2005.

III. Definitions

a. Board of Directors (“Board”): The Board of Directors of the Company

	 	b.	 	CEO: Chief Executive Officer of the Company as designated by its bylaws, and
any other title bestowed upon him or her by the Board.

	 	c.	 	CFO: Chief Financial Officer and Treasurer of the Company as designated by its
bylaws and any other title bestowed upon him or her by the Board.

	 	d.	 	Company-Wide Plan Targets: Targets made up of quantitative Measures and Goals
used to determine the amounts of bonuses paid. Quantitative measures may be:

i) Profit related, as in Net Income or Earnings Per Share,

	 	 	 
	ii)

iii)

iv)

	 	Profitability related, such as Return on Equity, Return on Assets or Net Interest Margin,

Productivity related, such as Efficiency Ratio,

Growth related, such as Loan Growth, Asset Growth or Deposit Growth,

v) Capital structure related, as Capital Ratio or Capital Adequacy, or

	 	vi)	 	Asset quality related, such as Non-Performing Loan Percentage or Loan Loss
Provisions,

all as defined in this AIP or in the Performance Agreement between the Participant and the
Company.

e. Committee: The Compensation Committee of the Board.

	 	f.	 	Incentive Opportunity Range: The Range of Incentive Opportunity will be from
50% at Threshold performance to 150% at Superior performance, of the Incentive Opportunity
Target.

	 	g.	 	Incentive Opportunity Target: The Incentive Opportunity Target will be a
percentage, established by the Committee of the Participant’s base salary at the beginning
of the Company’s fiscal year.

	 	h.	 	Performance Agreement: The annual contract between the Participant and the
Company specifying the Measures, Weights, Goals, Reward Opportunities and Terms and
Conditions for each year’s incentive program.

	 	i.	 	Performance Goals (“Goals”): Those objectives, which are required to be
achieved to activate distribution of awards under this Plan and include Target, Threshold
and Superior performance levels.

	 	j.	 	Performance Matrix: A table, which contains each year’s Measures, Goals,
Weights and Incentive Opportunities, which shall be attached to and made a part of the
Participant’s Performance Agreement.

	 	k.	 	Performance Measures (“Measures”): These include the quantitative measures
used to determine the amounts of bonuses paid. Quantitative measures initially include:

	 	i)	 	Efficiency Ratio: The percentage of total non-interest expenses to total pre-tax
income.

	 	ii)	 	Net Income: The dollar amount of net after-tax earnings of the Company as
reported on the audited year-end income statement, with the following adjustments:

	 	(1)	 	Operating profits of businesses acquired during the year and not included
in the annual business plan shall be excluded;

	 	(2)	 	Operating profits of businesses divested during the period and not
included in the annual business plan as divestments or planned divestments will only
be included through the date of divestment.

	 	iii)	 	Return on Average Equity (“ROE”): The percentage of year-end Net Income divided
by the average of end-of-quarter total shareholders’ equity for the year.

	 	l.	 	Performance Weights (Weights”): The relative importance or value of each
Measure to the total value of all Measures of 100%.

	 	m.	 	Plan Participant (“Participant”): The CEO and CFO and other executives of the
Company who are designated from time to time by the Committee.

n. Plan Year: A calendar year, the same as the Company’s fiscal year.

IV. How the Plan Works

	 	a.	 	Establishing the Performance Matrix: The AIP follows an annual, fiscal-year
cycle. The cycle begins with the determination of annual business goals based on the
strategic plan. During the annual budgeting process, the CEO recommends Measures, Goals
and Weights to the Committee. The Committee approves the Target, Threshold and Superior
Performance Goals, as well as Measures and Weights. These are then converted to the
Performance Matrix and made a part of the Performance Agreement with the Participant.

	 	b.	 	Individual Awards: The incentive award or payout to each Participant is based
on Company performance for each Measure.

	 	i)	 	The Incentive Opportunity Target for each Measure is the product of (x) the
Measure’s Weight percentage, (y) the Participant’s total Incentive Opportunity Target
percentage, and (z) the Participant’s annual gross base salary on the first day of the
Plan Year. The Incentive Opportunity Range is 50% of Target for Threshold performance
and 150% of Target for Superior performance.

	 	ii)	 	The Committee may establish a minimum level of Net Income performance below which
no Measures are rewards, regardless of how well the Measure is performed. For example,
if Net Income falls below the minimum requirement (which would normally be below the
Threshold Goal), but Efficiency Ratio was achieved at Target, there would be no reward
for Efficiency Ratio performance.

	 	iii)	 	Other than in the circumstance of Net Income performance being below minimum,
each Measure is calculated independently. If performance falls between Threshold and
Superior, that level is interpolated and applied to the Incentive Opportunity Range.
This calculation determines the dollar value of the award for that measure to the
Participant.

	 	iv)	 	Performance below the Threshold Goal for a specific Measure results in no award
for that Measure. The award for performance above the Superior Goal, is limited to the
Superior incentive amount for that Measure.

	 	v)	 	The Committee in its sole discretion reserves the right to reduce the actual
incentive award below the amount calculated on the above formulas.

	 	c.	 	Incentive Distributions: Incentive awards will be distributed after the final,
but may be unaudited results have been approved by the Board and publicly announced, but no
later than 74 days after the end of the fiscal year.

V. Effect of Change in Employment Status

	 	a.	 	Voluntary Resignation: If a Participant resigns from the Company during a Plan
Year, the Participant loses eligibility for any potential award related to that year. If a
Participant resigns after a Plan Year but before the award distribution for that year, the
Participant shall be entitled to receive an incentive award.

	 	b.	 	Involuntary Termination for Cause: If a Participant is terminated by the
Company for Cause as defined in the Participant’s employment or severance agreement, the
Participant loses eligibility for any potential award related to that year.

	 	c.	 	Involuntary Termination without Cause: If a Participant is terminated by the
Company without Cause, the Participant is entitled to a portion of the incentive award for
the number of full quarters of participation, as calculated after the end of the fiscal
year.

	 	d.	 	New Participant or Other Status Change, including Death, Disability, Retirement and
Leave of Absence: Pro-rated bonus awards shall be considered for the number of full
quarters of participation for all other employment status changes.

VI. Plan Administration

	 	a.	 	Authorities: The AIP shall be administered by the Committee. The AIP may be
altered or discontinued at any time during or following a Plan Year, with the approval of
the full Board. The decisions of the Committee with respect to any issues concerning
individuals selected for participation, the amount, terms, form and time of payment of
awards, and interpretation of any Plan guidelines or requirements shall be final and
binding.

	 	b.	 	Employment Rights: The receipt of an award or the entry into a Performance
Agreement shall not give a Participant any right to continued employment, and the right and
power to dismiss any employee is specifically reserved to the Company. The receipt of an
award shall not entitle a Participant to an award with respect to any subsequent Plan Year.

	 	c.	 	Delegation: The Committee may delegate certain administrative responsibilities
to the CEO except that:

i) The Committee must approve any actions affecting the CEO and CFO;

	 	ii)	 	The Committee shall approve Company incentive Goals within the first quarter of
the Plan Year; and

iii) The Committee shall approve all definitions and terms for financial Measures.

Governing Law: Except to the extent pre-empted under federal law, the provisions of
the Plan shall be construed, administered, and enforced in accordance with the domestic internal
law of the Commonwealth of Pennsylvania.EX-10.1

Exhibit 10.1

AMENDMENT TO AMENDED AND RESTATED

ESCROW AGREEMENT

This Amendment to Amended and Restated Escrow Agreement (“Amendment”), dated as of the 24th
day of June, 2005 (the “Effective Date”) is by and among Far East Energy Corporation (“FEEC”),
ConocoPhillips China Inc. (“CPI”), and JP Morgan Trust Company (the “Escrow Agent”).

RECITALS

WHEREAS, the parties hereto are parties to that certain Amended and Restated Escrow Agreement
with an effective date of December 17, 2004 (“Amended Escrow Agreement”).

WHEREAS, Section 4 of the Amended Escrow Agreement provides that, in the event FEEC has not
completed drilling one Phase Two horizontal well by June 30, 2005, pursuant to that certain
Shouyang Amended Farmout Agreement and that certain Qinnan Amended Farmout Agreement, the amount
required to be held in escrow shall increase; and

WHEREAS, the parties hereto desire to postpone any such increase in the escrow amount under
the Amended Escrow Agreement.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:

1. In each instance where the Amended Escrow Agreement requires an increase in the amount held
in escrow after June 30, 2005, the date therefor shall be amended to August 31, 2005.

2. This Amendment shall not effect any other provision of the Amended Escrow Agreement other
than as expressly stated herein, and the parties otherwise ratify and affirm all other provisions
of the Amended Escrow Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the Effective Date
set forth above.

FAR EAST ENERGY CORPORATION

	 	 	 
	By:

	 	/s/ Bruce N. Huff
	
 
	 	 
	
 
	 	Bruce N. Huff

Chief Financial Officer

CONOCOPHILLIPS CHINA INC.

	 	 	 
	By:

	 	/s/ Steve Park
	
 
	 	 
	
 
	 	Steve Park

Vice President

JP MORGAN TRUST COMPANY, N.A.,

As Escrow Agent

	 	 	 
	By:

	 	/s/ May Ng
	
 
	 	 
	Name:

	 	May Ng
	
 
	 	 
	Title:

	 	Vice President, Trust Officer

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