Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is entered into to be effective as
of the date (the “Effective Date”) specified in Exhibit A to this Agreement
(“Ex. A”), which is incorporated herein by this reference, by and between the
employer identified on Ex. A (the “Company”) and the employee identified on Ex.
A. (“Executive”).  The Company and Executive are sometimes referred to
collectively in this Agreement as the “Parties” and individually as a “Party.”

 

RECITALS

 

WHEREAS, the Executive currently is employed by the Company on an at-will basis
without a written employment agreement; and

 

WHEREAS, the Company desires to continue to employ Executive, and Executive
desires to continue to be employed by the Company, subject to the terms and
conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree to the following
terms:

 

TERMS

 

1.                                      Defined Terms.  Capitalized terms used
in this Agreement have the meaning given to such terms in Exhibit B to this
Agreement (“Ex. B”), which is incorporated herein by this reference.

 

2.                                      Term.  Unless earlier terminated
pursuant to Section 5, the term of this Agreement (the “Term”) shall begin on
the Effective Date and automatically end on the date identified on Ex. A (the
“Expiration Date”), unless extended by the mutual written consent of the
Parties.  If the Parties have not entered into a written extension of this
Agreement before the Expiration Date, then Executive’s employment and this
Agreement shall terminate on the Expiration Date.  A termination of Executive’s
employment and this Agreement by reason of the occurrence of the Expiration Date
(or any extension thereof) shall not for any purposes be considered a
termination by the Company with Cause or without Cause or a termination by
Executive for Good Reason.

 

3.                                      Employment.

 

(a)                                  Position; Duties and Responsibilities;
Primary Work Location.  During the Term, Executive shall serve in the position
and with the title set out on Ex. A or in such other similar capacity or
capacities, and with such corresponding title or titles, for the Company or any
Affiliates as the Chief Executive Officer or Board may from time to time
designate in his or its sole discretion. In such capacity or capacities,
Executive shall (i) have the duties, responsibilities, and authorities
reasonably commensurate with such position(s), such other duties,
responsibilities, and authorities as may be assigned by the Chief Executive
Officer or Board from time to time; (ii) report to the

 

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individual, entity, committee, or board identified on Ex. A; (iii) comply with
and, where applicable, enforce the personnel, ethical, and operational policies
and procedures of the Company and its Affiliates, including without limitation
the Code of Business Conduct and Ethics; and (iv) cooperate with any
investigation or inquiry authorized by the Company or an Affiliate or conducted
by a governmental authority related to the Company’s or an Affiliate’s business
or Executive’s conduct.  Any obligations of the Company under this Agreement may
be satisfied by the Company’s delegation of such obligations to one or more of
its Affiliates.  Although Executive shall be expected to work at all of the
Company and Affiliate locations from time to time and travel as necessary to
perform his duties and responsibilities, Executive’s primary work location shall
be at the location identified on Ex. A.

 

(b)                                 Exclusive Services and Compensation.  During
the Term, Executive shall devote his full working time, skill, attention, and
best efforts to the business and affairs of the Company and its Affiliates, and
shall not engage in any activity inconsistent with the foregoing, whether or not
such activity is pursued for gain, profit, or other pecuniary advantage, unless
the Company consents in writing to Executive’s involvement in such activity upon
full disclosure by Executive; provided, however, that to the extent such
activities do not violate or interfere with Executive’s performance of his
duties and responsibilities under this Agreement or otherwise violate this
Agreement, Executive may(i) serve on corporate boards with advance written
approval of the Board; (ii) serve on civic or charitable boards; (iii) manage
his personal, financial, and legal affairs; and (iv) participate in professional
organizations.  All services that Executive may render to the Company or any of
its Affiliates in any capacity during the Term shall be deemed to be services
required by this Agreement and the consideration for such services is that
provided for in this Agreement.

 

(c)                                  Dodd-Frank Act and Other Applicable Law
Requirements.  Executive agrees (i) to abide by any compensation recovery,
recoupment, anti-hedging, or other policy applicable to executives of the
Company and its Affiliates, as may be in effect from time to time, as approved
by the Board or a duly authorized committee thereof, or as required by the
Dodd-Frank Act or other applicable law; and (ii) that the terms and conditions
of this Agreement shall be deemed automatically amended as may be necessary from
time to time to ensure compliance by Executive and this Agreement with such
policies, the Dodd-Frank Act, or other applicable law.

 

(d)                                 Fiduciary Duties.  Executive acknowledges
and agrees that Executive is a fiduciary of the Company and its Affiliates, and
has a duty of loyalty, fidelity, and allegiance to act at all times in the best
interests of the Company and its Affiliates and to do no act that could,
directly or indirectly, injure any such entity’s business, interests, or
reputation.  In furtherance of the foregoing, Executive shall present to the
Board business opportunities or ventures known to Executive, independently or
with others, that are within the purposes of the Company or its Affiliates,
including without limitation opportunities that may compete with the Company or
an Affiliate.

 

4.                                      Compensation; Benefits; and Related
Matters.

 

(a)                                  Base Salary.  During the Term, Executive
shall be paid an annual base salary, prorated for any partial period, in
installments in accordance with the general payroll practices of the Company
(the “Base Salary”).  Executive’s initial Base Salary (the “Initial Base
Salary”) is identified on Ex. A.  The Base Salary may be reviewed and/or
adjusted from time to time at the sole discretion

 

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of the Committee; provided, however, that in no event shall Executive’s Base
Salary be reduced below the Initial Base Salary without his consent.

 

(b)                                 Bonus.  During the Term, Executive shall be
eligible to participate in a bonus plan or program (the “Bonus Plan”) that is
generally applicable to similarly situated employees of the Company.  Any bonus
payable under the Bonus Plan (the “Bonus”) may be based upon the achievement of
certain performance goals and objectives during the applicable fiscal year (or
other performance period) as determined by the Committee in its sole
discretion.  Executive’s Bonus target (the “Bonus Target”) shall be determined
from time to time by the Committee in its sole discretion.  Executive’s Bonus
Target for 2012 is set out on Ex. A.  Before awarding any Bonus based on the
achievement of established performance goals and objectives, the Committee will
approve and certify the achievement of such performance goals and objectives. 
Notwithstanding the foregoing, except as otherwise provided in this Agreement
and/or the Company’s Bonus Plan or as otherwise approved by the Committee in its
sole discretion, Executive shall not be eligible for a Bonus unless Executive
remains employed by the Company as of the last day of the fiscal year (or other
performance period) with respect to which the Bonus relates, and any such Bonus
shall be paid to Executive no later than the fifteenth (15th) day of the third
(3rd) calendar month following the fiscal year (or other performance period)
with respect to which the Bonus relates.

 

(c)                                  Vacation.  For each calendar year during
the Term, Executive shall be entitled to the paid vacation set out on Ex. A,
prorated from the Effective Date and for any partial periods of employment, to
be accrued and used in accordance with the terms of the Company’s vacation
policy, provided, however, that Executive shall schedule his vacation at such
time or times as are (i) consistent with the proper performance of his duties
and responsibilities and (ii) mutually convenient for the Company and Executive,
and provided further, however, that notwithstanding any provision to the
contrary in the Company’s vacation policy, Executive may carry over up to a
maximum of five (5) weeks of accrued but unused vacation each calendar year
during the Term and any accrued but unused vacation in excess of the maximum
carry over amount shall be forfeited.

 

(d)                                 Other Employee Benefits.  During the Term,
Executive shall be eligible to participate in the employee benefit plans,
programs, perquisites, and arrangements, as may be effect from time to time,
that are offered generally to similarly situated employees of the Company, in
accordance with the terms of such plan, policy, program, perquisite, or
arrangement.  Such employee benefit plans, programs, perquisites, and
arrangements shall be governed by the applicable plan documents, insurance
policies, and/or employment policies, and may be modified, suspended, revoked,
or terminated in the Company’s sole discretion without violating this Agreement.

 

(e)                                  Expense Reimbursement.  The Company shall
reimburse Executive in accordance with its policies and practices for all
reasonable expenses incurred by Executive during the Term in carrying out
Executive’s duties and responsibilities.  Executive shall comply with such
policies and practices with respect to reimbursement for, and submission of
expense reports, receipts, or similar documentation of, such expenses, provided,
however, that in no event shall Executive submit any required documentation
later than sixty (60) days after the end of the calendar year in which such
expense was incurred.  No reimbursement of expenses shall be made later than the
fifteenth (15th) day of the third (3rd) month following the calendar year in
which the applicable expense was incurred.

 

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(f)                                    Other Compensation and Benefits.  During
the Term, the Company shall pay or provide Executive with the other compensation
and benefit-related items, if any, as set out on Ex. A.

 

5.                                      Termination Before Expiration Date.

 

(a)                                  Circumstances.  Executive’s employment and
this Agreement shall terminate before the Expiration Date upon the earliest to
occur of (i) the death of Executive; (ii) Executive’s Inability to Perform;
(iii) the termination by the Company for Cause; (iv) the termination by the
Company without Cause; (v) the termination by Executive for Good Reason; or
(vi) the termination by Executive without Good Reason.

 

(b)                                 Procedure for Termination by the Company for
Cause.  Before exercising its right to terminate Executive’s employment for
Cause (in whole or in part) under clauses (ii) or (iv) of the definition of that
term, the Company must provide written notice to Executive of its intent to do
so, and that notice shall describe in reasonable detail the
condition(s) believed to constitute Cause under such clause(s) and provide
Executive with a reasonable period of time to correct the condition(s) (the
“Correction Period”), unless the Company determines in its sole discretion that
such condition(s) are not reasonably capable of being corrected.  A ten (10)-day
Correction Period shall be presumptively reasonable.  Nothing in this
Section 5(b) precludes discussions between Executive and the Company, or
personnel actions by the Company short of termination of employment, regarding
such condition(s).

 

(c)                                  Procedure for Termination by Executive for
Good Reason.  To exercise his right to terminate employment for Good Reason,
Executive must provide written notice to the Company of his belief that Good
Reason exists within fifteen (15) days of the initial existence of the Good
Reason condition(s), and that notice shall describe in reasonable detail the
condition(s) believed to constitute Good Reason.  The Company then shall have
thirty (30) days to remedy the Good Reason condition(s).  If not remedied within
that thirty (30)-day period or if the Company notifies Executive that it does
not intend to cure such condition(s) before the end of that thirty (30)-day
period, Executive may submit a Notice of Termination pursuant to Section 5(d);
provided, however, that the Notice of Termination invoking Executive’s right to
terminate employment for Good Reason must be given no later than ten (10) days
after the end of such thirty (30)-day remedy period.  If Executive does not
either timely (i) provide written notice of his belief that Good Reason exists
or (ii) submit the Notice of Termination, then Executive is deemed to have
consented to the condition(s), or the Company’s correction of such condition(s),
that may have given rise to the existence of Good Reason.

 

(d)                                 Notice of Termination.  Any termination of
Executive’s employment pursuant to Section 5(a) (other than pursuant to
Section 5(a)(i)) shall be communicated by a Notice of Termination to the other
Party.  For purposes of this Agreement, a “Notice of Termination” shall mean a
written notice (i) indicating the specific termination provision relied upon;
(ii) in the case of a termination for Inability to Perform, Cause, or Good
Reason, set out in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision invoked; and (iii) set out
the Termination Date.  The failure by a Party to set out in the Notice of
Termination any fact or circumstances that contributes to a showing of Inability
to Perform, Cause, or Good Reason

 

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shall not waive any right of such Party or preclude either Party from asserting
such fact or circumstance in enforcing or defending their rights.

 

(e)                                  Investigation; Suspension.  The Company may
suspend Executive’s employment with pay pending an investigation authorized by
the Company or an Affiliate or a governmental authority or a determination
whether Executive has engaged in acts or omissions constituting Cause, and such
paid suspension shall not constitute Good Reason or a termination of Executive’s
employment.

 

6.                                      Rights and Obligations Upon Termination.

 

(a)                                  Termination for Any Reason.  Upon
Executive’s termination from employment with the Company for any reason, the
Company shall pay Executive (i) Executive’s Base Salary through the Termination
Date; (ii) business expenses incurred through the Termination Date that are
reimbursable pursuant to Section 4(e); (iii) any accrued but unused vacation
through the Termination Date if payable under the Company’s vacation policy; and
(iv) any Bonus awarded by the Committee pursuant to the Bonus Plan for the
fiscal year (or other performance period) preceding the year in which the
Termination Date occurs which remains unpaid as of the Termination Date.  The
amounts, if any, in clauses (i)-(iii) shall be paid at the time and in the
manner required by applicable law but in no event later than thirty (30)
business days after the Termination Date.  The amount, if any, in clause
(iv) shall be paid in the manner and at the time provided for in the Bonus Plan,
provided, however, that such payment shall be made no later than the fifteenth
(15th) day of the third (3rd) calendar month following the fiscal year (or other
bonus performance period) with respect to which the Bonus relates.

 

(b)                                 Termination by the Company without Cause or
by Executive for Good Reason.  In addition to the payments provided for in
Section 6(a) and contingent on Executive’s compliance with his continuing
obligations under Sections 8, 9, and 10, if Executive’s employment is terminated
by the Company without Cause pursuant to Section 5(a)(iv) or by Executive for
Good Reason pursuant to Section 5(a)(v), the Company shall:

 

(i)                                     Pay to Executive an amount equal to
(A) that portion or multiple set out on Ex. A of Executive’s Base Salary as of
the Termination Date or, if greater, Executive’s Initial Base Salary, plus
(B) that portion or multiple set out on Ex. A of Executive’s Bonus Target as of
the Termination Date (together, the “Severance Pay”), at the time and in the
manner provided in Section 6(c); and

 

(ii)                                  Should Executive timely elect to continue
coverage under a group health insurance plan sponsored by the Company or an
Affiliate under COBRA and timely make the premium payments, reimburse Executive
on a monthly basis for the cost of such continued coverage for Executive and any
of his eligible dependents until the earlier of (A) the date Executive, or any
such dependent, as applicable, is no longer entitled to continuation coverage
under COBRA or (B) the number of months set out on Ex. A following the
Termination Date (the “Severance Benefits Continuation”);

 

provided, however, that Executive shall not be entitled to receive either the
Severance Pay or the Severance Benefits Continuation unless (X) Executive
executes and returns to the Company a

 

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Release on or prior to the 50th day following the Termination Date or such
shorter time as may be prescribed in the Release; (Y) where applicable, such
Release shall not have been timely revoked by Executive; and (Z) the Termination
Date constitutes a Separation from Service; and provided further, however, that
if Executive violates his continuing obligations under Sections 8, 9, or 10,
Executive shall not be entitled to receive the Severance Pay or Severance
Benefits Continuation, and Executive shall immediately repay to the Company upon
written demand any Severance Pay or Severance Benefits Continuation that already
have been paid to him.  For purposes of clarification only, Executive is not
entitled to Severance Pay or Severance Benefits Continuation if his employment
is terminated by reason of death or Inability to Perform, by the Company for
Cause, by Executive without Good Reason, or by reason of the occurrence of the
Expiration Date.

 

(c)                                  Time and Manner of Payment of Severance
Pay.  The Severance Pay provided for under Section 6(b)(i) shall be paid in a
single lump sum no later the Company’s first regular payroll date that is at
least ten (10) days after the Release Effective Date, provided that in no event
shall the Severance Pay be paid more than seventy (70) days after the
Termination Date.

 

(d)                                 Parachute Payments.  Notwithstanding any
contrary provision in this Agreement, if Executive is a “disqualified
individual” (as defined in Section 280G of the Code), and any payments and
benefits described in this Agreement, together with any other payments which
Executive has the right to receive from the Company and its Affiliates, would
constitute a “parachute payment” (as defined in Section 280G of the Code), the
payments and benefits provided hereunder shall be either (i) reduced (but not
below zero) so that the aggregate present value of such payments and benefits
received by Executive from the Company and its Affiliates shall be $1.00 less
than three times Executive’s “base amount” (as defined in Section 280G of the
Code) and so that no portion of such payments received by Executive shall be
subject to the excise tax imposed by Section 4999 of the Code, or (ii) paid in
full, whichever produces the better net after-tax result for Executive (taking
into account any applicable excise tax under Section 4999 of the Code and any
applicable income tax). The determination as to whether any such reduction in
the amount of the payments and benefits is necessary shall be made by the
Company in good faith and such determination shall be conclusive and binding on
Executive.  If a reduced payment is made to Executive pursuant to clause
(i) above and through error or otherwise that payment, when aggregated with
other payments from the Company or its Affiliates used in determining if a
parachute payment exists, exceeds $1.00 less than three times Executive’s base
amount, Executive shall immediately repay such excess to the Company upon
notification that an overpayment has been made.

 

7.                                      Termination of Change of Control
Severance Agreement; Additional Rules Related to Payments.

 

(a)                                  Termination of Change of Control Severance
Agreement.  In consideration of the Company’s promises set out in
Section 6(b) and the other promises and undertakings of the Parties in this
Agreement, Executive and the Company agree that the Change of Control Severance
Agreement effective January 26, 2011 by and between Executive and the Company
shall be terminated as of the Effective Date without further liability or
obligation of Executive or the Company.

 

(b)                                 Exclusive Payments.  In all cases, the
amounts payable to Executive under this Agreement upon termination of the
employment relationship, along with the associated terms for

 

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payment, shall constitute all of the Company’s and its Affiliates’ obligations
to Executive with respect to the termination of the employment relationship. 
Nothing in this Agreement, however, is intended to limit any (i) earned, vested,
and indefeasible benefits (other than any entitlement to severance pay,
separation pay, change-in-control pay, or similar payments, if any) that
Executive may have under the applicable provisions of any benefit plan of the
Company in which Executive is participating at the time of the termination of
the employment relationship, (ii) any of Executive’s rights under the 2006 LTIP,
a predecessor plan or any other arrangement providing equity incentives,
(iii) any of Executive’s rights under any other long-term incentive or equity
compensation plan adopted on or after the Effective Date and in existence as of
the Termination Date, or (iv) any of Executive’s rights under any other written
agreement that the Parties may enter into after the Effective Date that provides
for payments or benefits on account of termination of employment and makes
specific reference to this Agreement.

 

(c)                                  Offsets.  Executive agrees that the Company
or an Affiliate may set off against, and Executive authorizes the Company or an
Affiliate to deduct from, any payments due to Executive, or to his estate,
heirs, legal representatives, or successors, any amounts which may be due and
owing to the Company or an Affiliate by Executive, whether arising under this
Agreement or otherwise; provided, however, that any such set off shall be made
only in a manner that complies with Section 409A of the Code.

 

(d)                                 Payments Upon Death.  If Executive’s
employment is terminated by reason of Executive’s death, the Company shall pay
to such person as Executive shall designate in a written notice to the Company
(or, if no such person is designated, to his estate) any unpaid portion of the
amounts described in Section 6(a).  In addition, in the event of Executive’s
death after he becomes entitled to payments pursuant to Section 6(b), any
remaining unpaid amounts shall be paid, at the time and in the manner such
payments otherwise would have been paid to Executive, to such person as
Executive shall designate in a written notice to the Company (or, if no such
person is designated, to his estate).

 

(e)                                  No Mitigation.  Executive shall not be
required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment
provided for in this Agreement be reduced by any compensation earned by
Executive as the result of employment by another company after the Termination
Date, or otherwise.

 

8.                                      Confidential Information.

 

(a)                                  Executive Acknowledgments.  Executive
acknowledges and agrees that (i) the Company is engaged in a highly competitive
business; (ii) as a result of Executive’s employment with the Company, Executive
has been granted, and may be granted further, equity or rights to acquire equity
in the Company or an Affiliate; (iii) the Company has expended considerable time
and resources to develop goodwill with its Business Partners and others, and to
create, protect, and exploit its Confidential Information; (iv) the Company must
continue to prevent the dilution of its goodwill and unauthorized use or
disclosure of its Confidential Information to avoid irreparable harm to its
legitimate business interests; (v) Executive’s participation in or direction of
the Company’s day-to-day operations and strategic planning is an integral part
of the Company’s continued success and goodwill; (vi) given his position and
responsibilities, Executive is a fiduciary

 

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of the Company and necessarily will be creating Confidential Information that
belongs to the Company and enhances the Company’s goodwill, and in carrying out
his responsibilities Executive in turn will be relying on the Company’s goodwill
and the disclosure by the Company to him of Confidential Information; and
(vii) Executive will have access to Confidential Information that could be used
by unauthorized third parties in a manner that would irreparably harm the
Company’s competitive position in the marketplace and dilute its goodwill.

 

(b)                                 Company Promises.  The Company acknowledges
and agrees that Executive must have and continue to have throughout the Term the
benefits and use of its goodwill and Confidential Information in order to
properly carry out Executive’s duties and responsibilities.  The Company
accordingly promises during the Term to provide the Executive immediate and
continuing access to Confidential Information and to authorize Executive to
engage in activities that will create new and additional Confidential
Information.

 

(c)                                  Further Acknowledgements.  The Company and
Executive thus acknowledge and agree that during the Term, and upon the
Effective Date, Executive will (i) receive Confidential Information that is
unique, proprietary, and valuable to the Company; (ii) create Confidential
Information that is unique, proprietary, and valuable to the Company; and
(iii) benefit, including without limitation by way of increased earnings and
earning capacity, from the goodwill the Company has generated and from the
Confidential Information.

 

(d)                                 Executive Promises.  Accordingly, Executive
acknowledges and agrees that at all times while employed by the Company and
thereafter:

 

(i)                                     all Confidential Information shall
remain and be the sole and exclusive property of the Company;

 

(ii)                                  he will protect and safeguard all
Confidential Information;

 

(iii)                               he will hold all Confidential Information in
strictest confidence and not, directly or indirectly, disclose or divulge any
Confidential Information to any person other than an officer, director, or
employee of, or legal counsel for, the Company, to the extent necessary for the
proper performance of his duties and responsibilities unless authorized to do so
by the Board (or Company officer to whom Executive reports if other than the
Board) or compelled to do so by law or valid legal process;

 

(iv)                              if he believes he is compelled by law or valid
legal process to disclose or divulge any Confidential Information (other than as
part of his specified duties as an employee or authorized representative of the
Company), he will notify the Company in writing sufficiently in advance of any
such disclosure to allow the Company the opportunity to defend, limit, or
otherwise protect its interests against such disclosure;

 

(v)                                 at the end of his employment with the
Company for any reason or at the request of the Company at any time, he will
immediately return to the Company all Confidential Information and all copies
thereof, in whatever tangible form or medium, including electronic;

 

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(vi)                              he will immediately notify the Company if he
learns of or suspects any unauthorized disclosure of Confidential Information;

 

(vii)                           absent the promises and representations of
Executive in this Section 8, the Company would require him immediately to return
any tangible Confidential Information in his possession, would not provide
Executive with new and additional Confidential Information, would not authorize
Executive to engage in activities that will create new and additional
Confidential Information, and would not enter or have entered into this
Agreement; and

 

(viii)                        Executive’s obligations under this Section 8 are
in addition to any applicable contractual, statutory, or common-law obligations
and survive the termination of this Agreement.

 

(e)                                  Affiliates of the Company.  As used in
Sections 8, 9, 10, 11, the term “Company” shall include the Company and any of
its Affiliates.

 

9.                                      Restricted Activities.

 

(a)                                  Executive Covenants.  In consideration of
the matters recited in and the Company’s promises set out in Section 8 and the
other promises and undertakings of the Company in this Agreement and the 2006
LTIP, Executive agrees that he shall not, directly or indirectly, including
through an Affiliate, Family Member, or Family Member Affiliate, and whether or
not for compensation, engage in any of the following activities (the “Restricted
Activities”) without the written consent of the Board:

 

(i)                                     Non-Competition While Employed.  While
employed by the Company, engage or prepare to engage in, or aid or advise
another person or entity who is engaging in or preparing to engage in, a
Competing Business as an employee, officer, director, agent, partner,
stockholder, owner, member, representative, consultant, lender, guarantor, or in
any other individual or representative capacity; provided, however, that this
Section 9(a)(i) does not prohibit Executive’s ownership of stock or other
securities listed on a national securities exchange or actively traded in the
over-the-counter market if he, his Family Members, and/or his Family Member
Affiliates do not, directly or indirectly, hold more than a total of five (5)%
of all such shares of stock or other securities issued and outstanding;

 

(ii)                                  Non-Competition During Restricted Period. 
During the Restriction Period set out on Ex. A, as an employee, officer,
director, agent, partner, stockholder, owner, member, representative,
consultant, lender, guarantor, or in any other individual or representative
capacity, (A) engage or prepare to engage in a Competing Business in the
Specified Geographical Area or (B) aid or advise another person or entity who is
engaging in or preparing to engage in, a Competing Business in the Specified
Geographical Area, provided, however, that this Section 9(a)(ii) does not
prohibit Executive from engaging or preparing to engage in activities for or on
behalf himself or another person or entity who is engaging in or preparing to
engage in a Competing Business if such activities (x) do not take place anywhere
in, or are not directed at any part of, the Specified Geographical Area or
(y) are not by their nature likely to lead to the use or disclosure of
Confidential Information;

 

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(iii)                               Non-Solicitation of Employees and Other
Service Parties.  While employed by the Company and during the Restriction
Period set out on Ex. A, and except in the proper performance of his duties for
the Company, solicit, induce, persuade, or entice, or endeavor to solicit,
induce, persuade, or entice, any person who is then, or was within the previous
six (6) months, employed by or otherwise engaged to perform services for the
Company (including without limitation a Business Partner) to leave that
employment or cease performing those services, whether on his own behalf or on
behalf of any other person or entity, or to become employed by or otherwise
perform services for a person or entity who is engaging or preparing to engage
in a Competing Business; and

 

(iv)                              Non-Solicitation of Business Partners.  While
employed by the Company and during the Restriction Period set out on Ex. A, and
except in the proper performance of his duties for the Company, solicit, induce,
persuade, or entice, or endeavor to solicit, induce, persuade, or entice, any
person or entity who is then a Business Partner to cease being a Business
Partner or to divert all or any part of such Business Partner’s business from
the Company, whether on his own behalf or on behalf of any other person or
entity.

 

(b)                                 Acknowledgements.  Executive acknowledges
and agrees that the restrictions in this Section 9 are ancillary to an otherwise
enforceable agreement, including without limitation the mutual promises and
undertakings set out in Section 8, this Agreement, and under the 2006 LTIP; that
the restrictions are reasonable and necessary, are valid and enforceable under
applicable law, and do not impose a greater restraint than necessary to protect
the Company’s goodwill, Confidential Information, and other legitimate business
interests; that he will immediately notify the Company in writing should he
believe or be advised that the restrictions are not, or likely are not, valid or
enforceable under the law of any state that he contends or is advised is
applicable; that he will not challenge the enforceability of such restrictions;
that absent the promises and representations made by Executive in Sections 8 and
9, the Company would require him immediately to return any tangible Confidential
Information in his possession, would not provide him with new and additional
Confidential Information, would not authorize him to engage in activities that
will create new and additional Confidential Information, and would not enter or
have entered into this Agreement; and his obligations under this Section are in
addition to any applicable statutory or common-law obligations and survive the
termination of this Agreement.

 

(c)                                  Definitions.  For purposes of this
Section 9,

 

(i)                                     “Competing Business” means (A) owning,
operating, leasing, acquiring, exploring, marketing, developing, producing,
gathering, distributing, or disposing of Mineral Interests; or (B) such other
business activities as the Company may engage in, prepare to engage in, or
investigate becoming engaged in during Executive’s employment with the Company
in the twelve (12)-month period before the Termination Date, and about which
Executive had Confidential Information.

 

(ii)                                  “Mineral Interest” means any royalty,
overriding royalty, working, leasehold, or other property interest in coalbed
methane, oil, or gas assets or related products, or any right to acquire such
interests.

 

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(iii)                               “Specified Geographical Area” means (A) the
Company’s Mineral Interests as of the Termination Date and the geographical area
within twenty-five (25) miles of any such Mineral Interests; and (B) the
geographical locations where the Company attempted to acquire, or was
investigating the acquisition of, Mineral Interests within twelve (12) months
before the Termination Date and about which Executive had access to or created
Confidential Information.

 

10.                               Inventions.

 

(a)                                  Ownership of Inventions.  Executive agrees
that any and all technology, software (including source code and object code),
inventions, discoveries, developments, concepts, processes, written materials,
methods, specifications, products, ideas, know-how, technical information,
patents and improvements thereof, copyrights, designs, marks, logos, trade
names, processes, trade secrets, and all other intellectual property conceived,
created, written, developed, or first reduced to practice by Executive, alone or
jointly, in the performance of Executive’s duties for the Company or within six
(6) months following the termination of Executive’s employment (“Inventions”)
are and shall be the sole and exclusive property of the Company.  Executive
acknowledges that all original works of authorship protectable by copyright that
are produced by Executive in the performance of Executive’s duties for the
Company are “works made for hire” as defined in the United States Copyright Act
(17 U.S.C. § 101). In addition, to the extent that any such works or Inventions
are not works made for hire under the United States Copyright Act, Executive
hereby assigns without further consideration all right, title, and interest in
such works and/or Inventions to the Company.

 

(b)                                 Disclosure, Assignment, Cooperation, and
Representations.  Executive (i) shall promptly and fully disclose to the Company
all Inventions, including Inventions previously conceived, created, written,
developed, or first reduced to practice during Executive’s employment with the
Company, if any; (ii) shall treat all Inventions as Confidential Information;
and (iii) hereby assigns (with respect to already-existing Inventions) and
agrees to immediately assign (with respect to not-yet-existing Inventions) to
the Company without further consideration all of Executive’s right, title, and
interest in and to such Inventions, whether or not copyrightable or patentable. 
While employed by the Company and following the termination of Executive’s
employment, Executive shall execute all papers, including without limitation all
applications, invention assignments, and copyright assignments, and shall
otherwise assist the Company as reasonably required, to memorialize, confirm,
and perfect in the Company the rights, title, and other interests granted to the
Company under this Agreement.  Executive represents that there are no
inventions, original works of authorship, developments, improvements or trade
secrets that (i) were made by Executive prior to his execution of this
Agreement; (ii) belong to Executive; (iii) relate to Company’s actual or
proposed business, products, or research and development; and (iv) are not
assigned to the Company hereunder.

 

(c)                                  Other Inventions; License.  Notwithstanding
the foregoing, Executive understands that the provisions of this Section 10
requiring assignment of Inventions to the Company do not apply to any Invention
that Executive has developed entirely on Executive’s own time without using the
Company’s equipment, supplies, facilities, trade secret information, or
Confidential Information (an “Other Invention”) except for those Other
Inventions that either (i) relate at the time of conception or reduction to
practice of such Other Invention to the Company’s business, or actual or
anticipated research or development of the Company or (ii) result from or relate
to any work that

 

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Executive performed for the Company or to any Confidential Information or
Inventions.  Executive will advise the Company promptly in writing of any
Invention that Executive believes constitutes an Other Invention.  Executive
agrees that he will not incorporate, or permit to be incorporated, any Other
Invention owned by him or in which he has an interest into a Company product,
process or service without the Company’s prior written consent.  Notwithstanding
the foregoing sentence, if, in the course of Executive’s employment, Executive
incorporates into a Company product, process, or service an Other Invention
owned by him or in which he has an interest, Executive hereby grants to the
Company a nonexclusive, royalty-free, fully paid-up, irrevocable, perpetual,
transferable, sub-licensable, worldwide license to reproduce, make derivative
works of, distribute, perform, display, import, make, have made, modify, use,
sell, offer to sell, and exploit in any other way such Other Invention as part
of or in connection with such product, process or service, and to practice any
method related thereto.

 

(d)                                 Survival.  Executive’s obligations under
this Section 10 survive the termination of this Agreement.

 

11.                               Remedies; Reformation.

 

(a)                                  Remedies.  Executive acknowledges and
agrees that the Company would not have an adequate remedy at law and would be
irreparably harmed in the event that any of the provisions of Sections 8, 9, or
10 were not performed in accordance with their specific terms or were otherwise
breached.  Accordingly, Executive agrees that the Company shall be entitled to
equitable relief, including temporary restraining order, temporary, and
permanent injunctions and specific performance, in the event Executive breaches
or threatens to breach any of the provisions of such Sections, without the
necessity of posting any bond or proving special damages or irreparable injury.
Such remedies shall not be deemed to be the exclusive remedies for a breach or
threatened breach of such Sections by Executive, but shall be in addition to all
other remedies available to the Company at law or equity.  Executive further
agrees that the Company (on behalf of itself and any of its Affiliates) and its
Affiliates may seek to enforce any of the provisions of Sections 8, 9, or 10 and
he will not assert that any such entity seeking to enforce such provisions is
not a proper party or that any remedy may not be awarded to such entity.

 

(b)                                 Reformation.  If any of the provisions of
Sections 8, 9, or 10 are ever deemed by a court to be unenforceable as written
under applicable law, such provisions shall be, and are, automatically reformed
to the maximum limitations permitted by applicable law.

 

(c)                                  No Defense to Enforcement.  Executive
agrees that the existence of a claim or cause of action against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of Executive’s obligations under
Sections 8, 9, or 10.

 

12.                               Cooperation in Litigation. During the term and
for the three (3)-year period after the Termination Date, Executive shall fully
and completely cooperate with the Company at its request to assist with existing
or future investigations, proceedings, litigation, examinations, or other
fact-finding or adjudicative proceedings, public or private, involving the
Company or any of its Affiliates. This obligation includes Executive promptly
meeting with the Company’s or its Affiliates’

 

12

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representatives at reasonable times upon their request, and providing
information and, where applicable, testimony, that is truthful, accurate, and
complete, according to information known to Executive.  From and after the
Termination Date, (i) the Company shall compensate Executive at the hourly rate
equivalent of his Base Salary in effective immediately before the Termination
Date for each hour that Executive provides such assistance at the Company’s
request, and Executive agrees to accept such rate; and (ii) upon presentment of
satisfactory documentation, the Company shall reimburse Executive for reasonable
out-of-pocket travel, lodging, and other incidental expenses (but not attorney’s
fees unless approved in advance by the Board) he incurs in providing such
assistance, provided the expenses have been approved in advance by a duly
authorized officer of the Company.  Any such reimbursement shall be made in
accordance with the Company’s policies and practices for the reimbursement of
reasonable business expenses.  If requested by the Company, Executive shall make
reasonable good faith efforts to travel to such locations as the Company may
reasonably request to provide such assistance.  Executive’s obligations under
this Section 12 survive the termination of this Agreement.

 

13.                               Assignment; Successors; Binding Agreement.

 

(a)                                  Assignment by the Company.  The Company may
assign or otherwise transfer this Agreement or any of its rights or obligations
under this Agreement without the written consent of Executive to any successor
(whether direct or indirect, by purchase of stock or assets, merger,
consolidation, or otherwise) to all or substantially all of the business and/or
assets of the Company.

 

(b)                                 Required Assumption.  The Company shall
require any successor (whether direct or indirect, by purchase of stock or
assets, merger, consolidation, or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place.

 

(c)                                  No Third-Party Beneficiaries.  Except with
respect to the Company’s Affiliates, nothing in this Agreement, express or
implied, is intended to or shall confer upon any person or entity other than the
Parties, and their respective heirs, legal representatives, successors, and
permitted assigns, any rights, benefits, or remedies of any nature whatsoever
under or by reason of this Agreement.

 

(d)                                 No Assignment by Executive.  Executive shall
not have any right to assign or otherwise transfer this Agreement or any of his
rights or obligations under this Agreement without the written consent of the
Company.  Executive further shall not have any right to pledge, hypothecate,
anticipate, or in any way create a lien upon any payments or other benefits
provided under this Agreement; and no benefits payable under this Agreement
shall be assignable in anticipation of payment either by voluntary or
involuntary acts, or by operation of law, except by will or pursuant to the laws
of descent and distribution.

 

(e)                                  Successors and Permitted Assigns.  This
Agreement shall be binding upon and inure to the benefit of the Company and its
Affiliates and Executive, and to their respective successors, permitted assigns,
personnel and legal representatives, executors, administrators, heirs,
distributes, devisees, and legatees, as applicable.

 

13

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14.                               Miscellaneous.

 

(a)                                  Deemed Resignation.  Any termination of
Executive’s employment shall constitute an automatic resignation of Executive
from all other positions as an employee, officer, director, manager, or other
service provider of the Company and each Affiliate of the Company, and an
automatic resignation of Executive from the Board (if applicable and unless
otherwise agreed in writing) and from the board of directors or similar
governing body of the Company and any Affiliate and from the board of directors
or similar governing body of any corporation, limited liability company, or
other entity in which the Company or any Affiliate holds an equity interest and
with respect to which board or similar governing body Executive serves as the
Company’s or such Affiliate’s designee or other representative, and as a
trustee, fiduciary, committee member or service provider in any other capacity
with respect to the Company’s and its Affiliates’ employee benefit plans,
programs, policies and arrangements.

 

(b)                                 Survival.  The termination of Executive’s
employment and this Agreement for any reason shall not impair the rights or
obligations of any Party that have accrued prior to such termination or that by
their nature or terms survive the termination, including without limitation
Executive’s obligations under Sections 8, 9, 10, 11, 12 and 14(f) and the
Company’s obligations under Sections 6, 12 and 14(f).

 

(c)                                  Employee Charges.  Executive authorizes the
Company to deduct from Executive’s Base Salary or business expense
reimbursements and to reduce the Severance Pay by the amount of any outstanding
Employee Charges.  Executive further agrees that if any Employee Charges remain
outstanding after such deduction or reduction, Executive shall be indebted to
the Company for such amount and shall promptly repay such amount.

 

(d)                                 Withholdings and Deductions.  With respect
to any payment to be made to Executive, the Company shall deduct, where
applicable, any amounts authorized by Executive (including without limitation
the Employee Charges) and permissible under applicable law, and shall withhold
and report all amounts required to be withheld and reported by applicable law. 
The Company shall be entitled to rely on an opinion of counsel if any questions
as to the amount or requirement of withholding shall arise.

 

(e)                                  Section 409A.

 

(i)                                     The severance payments and benefits to
be provided to Executive under this Agreement are intended to be exempt from
Code Section 409A, any ambiguous provision will be construed in a manner that is
compliant with or exempt from the application of Code Section 409A, and this
Agreement shall be administered and interpreted in a matter consistent with such
intent.  In particular, the severance pay and benefits are intended to
constitute a short-term deferral within the meaning of Treasury Regulation
Section 1.409A-1(b)(4), a payment or benefit described in paragraphs
(b)(9)(iv) and (v) of Treasury Regulation Section 1.409A-1, and/or severance pay
due to involuntary separation from service under Treasury Regulation
Section 1.409A-1(b)(9)(iii).  If a provision of the Agreement would result in
the imposition of an applicable tax under Code Section 409A, the Parties agree
that such provision shall be reformed to the extent permissible under Code

 

14

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Section 409A to avoid imposition of the applicable tax, with such reformation
effected in a manner that has the most favorable tax result to Executive. 
Notwithstanding the preceding, no persons connected with this Agreement in any
capacity, including but not limited to the Company and any Affiliate and their
respective directors, officers, agents and employees, makes any representation,
commitment, or guarantee that any tax treatment, including but not limited to,
federal, state, and local income, estate and gift tax treatment, will be
applicable with respect to any amounts payable under the Agreement or that such
tax treatment will apply to Executive.

 

(ii)                                  Notwithstanding any provision in this
Agreement to the contrary, if (A) Executive is a “specified employee,” as such
term is defined in Code Section 409A and the regulations thereunder and (B) any
payment due under this Agreement is subject to Code Section 409A and is required
to be delayed under Code Section 409A because Executive is a specified employee,
that payment shall be payable on the earlier of (X) the first business day that
is six months after Executive’s Separation from Service, (Y) the date of
Executive’s death, or (Z) the date that otherwise complies with the requirements
of Code Section 409A.  This Section shall be applied by accumulating all
payments that otherwise would have been paid within six months of Executive’s
Separation from Service and paying such accumulated amounts on the earliest
business day which complies with the requirements of Code Section 409A.  For
purposes of determining the identity of specified employees, the Company may
establish procedures as it deems appropriate in accordance with Code
Section 409A.  For purposes of Code Section 409A, each payment amount or benefit
due under this Agreement will be considered a separate payment and Executive’s
entitlement to a series of payments or benefits under this Agreement is to be
treated as an entitlement to a series of separate payments.  With respect to any
reimbursements that are subject to Code Section 409A, (i) the amount of expenses
eligible for reimbursement during a calendar year may not affect the expenses
eligible for reimbursement in any other calendar year, (ii) the reimbursement
must be made on or before the last day of the calendar year following the
calendar year in which the expense was incurred and (iii) the right to
reimbursement shall not be subject to liquidation or exchange for any other
benefit.

 

(f)                                    Governing Law; Venue; Jury-Trial Waiver. 
The Parties (including for this purpose each of the Company’s Affiliates)
(i) agree that this Agreement is governed by and shall be construed and enforced
in accordance with Texas law, excluding its choice-of-law principles, except
where federal law may preempt the application of state law; (ii) submit and
consent to the exclusive jurisdiction, including removal jurisdiction, of the
state and federal courts located in Harris County, Texas (or the county where
the Company’s principal executive offices are located if different) for any
action or proceeding relating to this Agreement or Executive’s employment;
(iii) waive any objection to such venue; (iv) agree that any judgment in any
such action or proceeding may be enforced in other jurisdictions; and
(v) irrevocably waive the right to trial by jury and agree not to ask for a jury
in any such proceeding.

 

(g)                                 Notices.  All notices under this Agreement
shall be in writing and shall be deemed to have been delivered on the date
personally delivered or five calendar days after begin deposited in the United
States mail if sent by registered or certified mail, postage prepaid, with
return receipt requested, addressed to the Company at its headquarters or
Executive at the last address reflected on the Company’s records.  Either Party
may designate a different address by providing written notice of such new
address to the other Party.

 

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(h)                                 Entire Agreement.  This Agreement
constitutes the entire agreement of the Parties concerning its subject matters
and supersedes all prior and contemporaneous agreements and understandings, both
written and oral, between the Parties; provided, however, that nothing in this
Section 14(h) is intended to limit any rights or obligations of the Parties
(i) under the 2006 LTIP, a predecessor plan or any other arrangement providing
equity incentives, (ii) under any other long-term incentive or equity
compensation plan adopted on or after the Effective Date and in existence as of
the Termination Date, (iii) under any other written agreement that the Parties
may entered into after the Effective Date, or (iv) under the Indemnification
Agreement dated March 28, 2012 between the Company and Executive.  Executive
acknowledges and agrees that neither the Company nor any Affiliate has made any
promise or representation to him concerning this Agreement that is not expressed
in this Agreement, and that, in signing this Agreement, he is not relying on any
prior oral or written statement or representation by the Company or an Affiliate
but is instead relying solely on his own judgment and his legal and tax
advisors, if any.

 

(i)                                     Modification; Waiver.  Other than
pursuant to Section 3(c), Section 5(c), and this Section 14(i), (i) no provision
of this Agreement may be amended, modified, or waived unless such amendment or
modification is agreed to in writing and signed by Executive and by a duly
authorized officer of the Company, and such waiver is set out in writing and
signed by the Party to be charged; and (ii) no waiver by a Party or failure to
enforce or insist on his or its rights under this Agreement shall constitute a
waiver or abandonment of any such rights or defense to enforcement of such
rights, and a waiver on one occasion shall not be deemed to be a waiver of the
same or any other type of breach on a future occasion.  Notwithstanding the
previous sentence, the Company may amend or modify this Agreement in its sole
discretion at any time without the further consent of Executive in any manner
necessary to comply with applicable law and regulations, including without
limitation the Dodd-Frank Act and the regulations thereunder, the listing or
other requirements of any stock exchange upon which the Company or an Affiliate
is listed, or with respect to Executive’s obligations under Section 8, provided,
however, that such amendment or modification of Section 8 shall not impose
additional or greater restrictions on Executive’s post-employment obligations. 
At the Company’s request, Executive shall consent to any amendment referred to
in the preceding sentence and shall execute and deliver to the Company a
counterpart signature page to such amendment.

 

(j)                                     Construction.  The Parties agree that
this Agreement shall be deemed to be drafted by both Parties and shall be
construed as a whole, according to its fair meaning, and not strictly for or
against any of the Parties.  The headings in this Agreement are only for
convenience and are not intended to affect construction or interpretation.  Any
references to paragraphs, subparagraphs, sections or subsections are to those
parts of this Agreement, unless the context clearly indicates to the contrary. 
Also, unless the context clearly indicates to the contrary, (a) the plural
includes the singular and the singular includes the plural; (b) “and” and “or”
are each used both conjunctively and disjunctively; (c) “any,” “all,” “each,” or
“every” means “any and all,” and “each and every”; (d) “includes” and
“including” are each “without limitation”; (e) “herein,” “hereof,” “hereunder”
and other similar compounds of the word “here” refer to the entire Agreement and
not to any particular paragraph, subparagraph, section or subsection; and
(f) all pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural as the identity of the entities

 

16

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or persons referred to may require.  All references in this Agreement to payment
or sums of money shall mean in U.S. currency only.  All references in this
Agreement to calendar year, month, week, or day shall mean the calendar and
parts thereof as observed in the U.S.  All references in this Agreement to date
and time shall mean U.S. central standard date and time.

 

(k)                                  Validity.  The invalidity or
unenforceability of any provision or provisions of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

 

(l)                                     Counterparts.  This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
and all of which together shall be considered one and the same agreement.  The
delivery of this Agreement in the form of a clearly legible facsimile or
electronically scanned version by e-mail shall have the same force and effect as
delivery of the originally executed document.

 

[Signature Page Follows]

 

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AGREED:

 

COMPANY

 

EXECUTIVE

 

 

 

 

 

By:

/s/ William C. Rankin

 

By:

/s/ Tony Oviedo

 

Name:

William C. Rankin

 

 

Name:

Tony Oviedo

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

Date Signed: May 14, 2012

 

Date Signed: May 14, 2012

 

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EXHIBIT A

 

Effective Date:

 

May 14, 2012

 

 

 

Employer/the Company:

 

GeoMet, Inc.

 

 

 

Executive Name:

 

Tony Oviedo

 

 

 

Position and Title:

 

Senior Vice President and Chief Financial Officer

 

 

 

Reporting to:

 

President and Chief Executive Officer

 

 

 

Primary Work Location(s):

 

Houston, Texas

 

 

 

Expiration Date:

 

Third anniversary of the Effective Date or such later date as may be mutually
agreed to in writing by the Parties.

 

 

 

Initial Base Salary:

 

$240,000.00

 

 

 

Bonus Target

 

50% of Initial Base Salary

 

 

 

Vacation:

 

Five (5) weeks per calendar year

 

 

 

Additional Compensation & Benefits:

 

Reasonable membership fees, dues and assessments for Executive’s membership to
one downtown Houston, Texas luncheon club.

 

Executive will be granted 50,000 shares of Restricted Stock pursuant to and
subject to the terms and conditions of the 2006 LTIP, with such grant to be made
within 30 days following the Effective Date. Such Restricted Stock will be
subject to a three-year graded vesting schedule (vesting 1/3 each year) and
other terms and conditions set out in an award agreement prescribed by the
committee responsible for administration of the 2006 LTIP.

 

 

 

Severance Pay:

 

1.75x Base Salary and

1.75x Bonus Target

 

 

 

Months of Severance Benefits Continuation (limited to applicable COBRA
continuation period):

 

18 months

 

 

 

Restriction Period:

 

21 months following the Termination Date.

 

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EXHIBIT B

 

The following terms, when used in this Agreement, shall have the following
meanings:

 

1.                                       “Affiliate” (i) when used in reference
to the Company means the Company and any other person or entity that, directly
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, the Company and (ii) when used in reference to
Executive and any Family Member, means any person or entity that, directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, Executive, any Family Member, or any Family Member
Affiliate, or any combination of Executive, any Family Member, or any Family
Member Affiliate; where for purposes of clauses (i) and (ii) “control”
(including, with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any entity or organization, shall
mean the possession, directly or indirectly, of the power (a) to vote ten (10)%
or more of the securities having ordinary voting power for the election of
directors, managers, general partners or other members of the governing body of
such entity, or (ii) otherwise direct or cause the direction of the management
and policies of such entity, whether through ownership of voting securities, by
contract or otherwise.

 

2.                                       “Agreement” means this Employment
Agreement.

 

3.                                       “Base Salary” has the meaning set out
in Section 4(a).

 

4.                                       “Board” means the Board of Directors of
the Company.

 

5.                                       “Bonus” has the meaning set out in
Section 4(b).

 

6.                                       “Bonus Plan” has the meaning set out in
Section 4(b).

 

7.                                       “Bonus Target” has the meaning set out
in Section 4(b).

 

8.                                       “Business Partners” means the Company’s
and its Affiliates’ vendors, suppliers, customers, investors, business partners,
and others with whom it or they have a business relationship.

 

9.                                       “Cause” means a finding by the Company
of acts or omissions of Executive (whether occurring before or during the Term)
constituting, in the Company’s reasonable judgment, any of the following:  (i) a
breach of duty involving fraud, dishonesty (other than inadvertent acts or
omissions), disloyalty, or a conflict of interest; (ii) a material violation of
Executive’s obligations under this Agreement, any other written agreement
between Executive and the Company, or at law; (iii) a material violation of, or
failure to enforce, the policies and procedures of the Company or an Affiliate
including without limitation the Code of Business Conduct and Ethics and
operational and other personnel policies; (iv) a material failure to comply with
the lawful directives of the Board or the officer to whom Executive reports;
(v) conduct that is materially detrimental to the Company or its Affiliates or
reflects unfavorably on the Company or Executive to such an extent that the
Company’s best interests reasonably require the termination of Executive’s
employment; (vi) the failure to cooperate with any investigation or inquiry
authorized by the Company or conducted by a governmental authority related to
the Company’s or an Affiliate’s business or Executive’s conduct

 

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related to the Company’s or an Affiliate’s business; (vii) the conviction of, or
entry of a plea agreement or similar arrangement with respect to, a felony or
other serious criminal offense; or (viii) the entry of a consent decree or
similar arrangement with respect to any material violation of federal or state
securities laws.

 

10.                                 “COBRA” means the Consolidated Omnibus
Budget Reconciliation Act of 1985 or other applicable law governing continuation
of insurance benefits.

 

11.                                 “Code” means the Internal Revenue Code of
1986, as amended.

 

12.                                 “Committee” means the Compensation Committee
of the Board or such other committee as the Board may designate to act as the
Committee for purposes of this Agreement.

 

13.                                 “Company” has the meaning set out in the
introductory paragraph of this Agreement.

 

14.                                 “Competing Business” has the meaning set out
in Section 9(c)(i).

 

15.                                 “Confidential Information” means any
confidential or proprietary information or trade secrets of or relating to the
Company and its Affiliates, its or their Business Partners, or otherwise
provided to the Company by a third party under an obligation or expectation of
confidential treatment, including without limitation all documents or
information, in whatever form or medium, concerning or evidencing the Company’s
operations; processes; products; services; business practices; finances;
principals; current, former, or potential Business Partners; marketing methods
and plans; costs; prices; contractual relationships; regulatory status;
personnel (including without limitation compensation, other terms of employment,
or performance, other than as concerns solely Executive); drilling and
production technology and maximization means, methods, and techniques;
geological and geophysical maps, data, interpretations, and analyses; project
and prospect locations and leads; well logs, interpretations, and analyses; and
production information, but excluding any such information that (i) is or
becomes generally available to the public other than as a result of any breach
of this Agreement, other written agreement or policy of the Company, or legal
obligation, or other unauthorized disclosure, by Executive or another or
(ii) becomes available to Executive after the termination of his employment on a
nonconfidential basis from a source other than the Company or its Affiliates who
is not bound by a duty of confidentiality, or other contractual, legal, or
fiduciary obligation, to the Company, its Affiliates, or its or their Business
Partners.

 

16.                                 “Correction Period” has the meaning set out
in Section 5(b).

 

17.                                 “Dodd-Frank Act” means the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010.

 

18.                                 “Effective Date” has the meaning set out in
the introductory paragraph of this Agreement.

 

19.                                 “Employee Charges” means any amounts
Executive owes to the Company or an Affiliate for advances, overpayments, and
any other charges due from Executive to the Company or an Affiliate, including
without limitation charges for personal telephone calls or travel expenses,
travel advances, personal courier and postal charges, personal copying charges,
personal charges on

 

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any company credit card issued to Executive, excess paid leave time taken, and
other charges that may arise out of the application of the Company’s or an
Affiliate’s policies or otherwise.

 

20.                                 “Executive” has the meaning set out in the
introductory paragraph of this Agreement.

 

21.                                 “Ex. A” has the meaning set out in the
introductory paragraph of this Agreement.

 

22.                                 “Ex. B” has the meaning set out in
Section 1.

 

23.                                 “Expiration Date” has the meaning set out in
Section 2.

 

24.                                 “Family Member” means (i) the spouse, lineal
descendants, siblings, parents and nieces and nephews of Executive and the
spouses of such Family Members and (ii) any trust whose primary beneficiary is
any one or more of the Family Members.

 

25.                                 “Family Member Affiliate” means any
Affiliate of Executive and any Affiliate of a Family Member of Executive.

 

26.                                 “Good Reason” means the existence of one or
more of the following conditions arising after the Effective Date without the
consent of Executive, as determined in a manner consistent with Treasury
Regulation § 1.409A-1(n)(2)(ii): (i) a material reduction in Executive’s Base
Salary; (ii) a permanent relocation of Executive’s principal place of employment
to a location that is more than fifty (50) miles from the location where he
performed services for the Company or an Affiliate immediately prior to the
relocation, provided such relocation is a material change in geographic location
at which Executive must provide services for purposes of Section 409A of the
Code and the regulations thereunder; (iii) a material reduction in Executive’s
authority, duties, or responsibilities; (iv) a material reduction in the
authority, duties, or responsibilities of the person to whom Executive reports,
including a requirement that such person report to an officer or employee of the
Company or an Affiliate instead of the Board; or (v) any other material breach
by the Company of this Agreement.  Neither a transfer of employment among the
Company and any of its Affiliates nor the Company or an Affiliate entering into
a co-employer relationship with a personnel services organization standing alone
constitutes Good Reason.  A suspension of Executive with pay pursuant to
Section 5(e) does not constitute Good Reason.

 

27.                                 “Inability to Perform” means and shall be
deemed to have occurred if Executive has been determined under the Company’s or
an Affiliates’ long-term disability plan to be eligible for long-term disability
benefits.  In the absence of the existence of such a plan or Executive’s
participation in or application for benefits under such a plan, “Inability to
Perform” means a finding by the Company in its sole judgment that Executive is,
despite any reasonable accommodation required by law, unable to perform the
essential functions of his position because of an illness or injury for
(i) sixty (60)% or more of the normal working days during six (6) consecutive
calendar months or (ii) forty (40)% or more of the normal working days during
twelve (12) consecutive calendar months.

 

28.                                 “Initial Base Salary” has the meaning set
out in Section 4(a).

 

29.                                 “Inventions” has the meaning set out in
Section 10(a).

 

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30.                                 “Mineral Interest” has the meaning set out
in Section 9(c)(ii).

 

31.                                 “Notice of Termination” has the meaning set
out in Section 5(d).

 

32.                                 “Other Invention” has the meaning set out in
Section 10(c).

 

33.                                 “Party” and “Parties” have the meaning set
out in the introductory paragraph of this Agreement.

 

34.                                 “Release” means a waiver and release of
claims by Executive in the form prescribed by the Company, which form may
include other provisions such as an agreement by Executive not to disparage the
Company, its Affiliates, and other related persons or entities and for certain
post-employment cooperation, but which form shall not include a release and
waiver of claims for earned, vested, and indefeasible benefits (other than any
entitlement to severance pay, separation pay, change-in-control pay, or similar
payments not provided for in this Agreement) under an employee benefit plan,
indemnification, or for coverage under officer and director liability policies,
if applicable.

 

35.                                 “Release Effective Date” means earliest date
following Executive’s Separation from Service that the Release described in
Section 6(b) has become fully enforceable and irrevocable.

 

36.                                 “Restricted Activities” has the meaning set
out in Section 9(a).

 

37.                                 “Restriction Period” is the time period set
out on Ex. A.

 

38.                                 “Separation from Service” means separation
from service (within the meaning of Code Section 409A and the regulations and
other guidance promulgated thereunder) with the group of companies that includes
the Company and each of its “409A Affiliates.” For this purpose, “409A
Affiliate” means any incorporated or unincorporated trade or business or other
entity or person, other than the Company, that along with the Company is
considered a single the Company under Code Section 414(b) or Code
Section 414(c), but (i) in applying Code Section 1563(a)(1), (2), and (3) for
the purposes of determining a controlled group of corporations under Code
Section 414(b), the phrase “at least 50 percent” shall be used instead of the
phrase “at least 80 percent” in each place the phrase “at least 80 percent”
appears in Code Section 1563(a)(1), (2), and (3), and (ii) in applying Treasury
Regulation Section 1.414(c)-2 for the purposes of determining trades or
businesses (whether or not incorporated) that are under common control for the
purposes of Code Section 414(c), the phrase “at least 50 percent” shall be used
instead of the phrase “at least 80 percent” in each place the phrase “at least
80 percent” appears in Treasury Regulation Section 1.414(c)-2.

 

39.                                 “Severance Benefits Continuation” has the
meaning set out in Section 6(b)(ii).

 

40.                                 “Severance Pay” has the meaning set out in
Section 6(b)(i).

 

41.                                 “Specified Geographical Area” has the
meaning set out in Section 9(c)(iii).

 

42.                                 “Term” has the meaning set out in the
Section 2.

 

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43.                                 “Termination Date” means (a) if Executive’s
employment is terminated by reason of his death, the date of death; (b) if
Executive’s employment is terminated by the Company pursuant to any of Sections
5(a)(ii), (iii), or (iv), the date specified in the Notice of Termination, which
date shall be no earlier than the date such notice is given; (c) if Executive’s
employment is terminated by Executive pursuant to Section 5(a)(v), the date
specified in the Notice of Termination, which date shall be no earlier than the
date such notice is given and no later than thirty (30) days after the date such
notice is given; and (d) if Executive’s employment is terminated by Executive
pursuant to Section 5(a)(vi), thirty (30) days after the date such notice is
given, provided, however, that in the event of a termination by Executive
pursuant to Sections 5(a)(v) or (vi), the Company may accelerate the Termination
Date by paying Executive his Base Salary for the period by which the Termination
Date is so accelerated and such acceleration shall not change the
characterization of the termination under such provision.

 

44.                                 “2006 LTIP” means the GeoMet, Inc. 2006
Long-Term Incentive Plan as it may be amended and any successor plan.

 

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