Exhibit 10.3

 

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

 

1

--------------------------------------------------------------------------------

 

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

 

2

--------------------------------------------------------------------------------

 

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.

 

3

--------------------------------------------------------------------------------

 

(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

 

4

--------------------------------------------------------------------------------

 

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

 

5

--------------------------------------------------------------------------------

 

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.             Additional Rules Related to Payments.

 

(a)           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 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,

 

6

--------------------------------------------------------------------------------

 

(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.

 

(b)           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.

 

(c)           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).

 

(d)           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 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.

 

7

--------------------------------------------------------------------------------

 

(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;

 

(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

 

8

--------------------------------------------------------------------------------

 

(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;

 

(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

 

9

--------------------------------------------------------------------------------

 

(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.

 

(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,

 

10

--------------------------------------------------------------------------------

 

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 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

 

11

--------------------------------------------------------------------------------

 

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’ 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

 

12

--------------------------------------------------------------------------------

 

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.

 

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

 

13

--------------------------------------------------------------------------------

 

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
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

 

14

--------------------------------------------------------------------------------

 

(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.

 

(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

 

15

--------------------------------------------------------------------------------

 

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 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.

 

16

--------------------------------------------------------------------------------

 

(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]

 

17

--------------------------------------------------------------------------------

 

AGREED:

 

COMPANY

EXECUTIVE

 

 

 

 

By:

/s/ William C. Rankin

 

By:

/s/ Brett S. Camp

 

Name: William C. Rankin

 

 

Name: Brett S. Camp

 

Title: President and Chief Executive Officer

 

 

 

 

 

Date Signed: May 14, 2012

Date Signed: May 14, 2012

 

18

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Effective Date:

 

May 14, 2012

 

 

 

Employer/the Company:

 

GeoMet, Inc.

 

 

 

Executive Name:

 

Brett S. Camp

 

 

 

Position and Title:

 

Senior Vice President-Operations

 

 

 

Reporting to:

 

President and Chief Executive Officer

 

 

 

Primary Work Location(s):

 

Birmingham, Alabama

 

 

 

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:

 

Use of a Company-owned vehicle for which Exectuive will recognize income for any
personal use.

 

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.

 

1

--------------------------------------------------------------------------------

 

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

 

1

--------------------------------------------------------------------------------

 

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

 

2

--------------------------------------------------------------------------------

 

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).

 

3

--------------------------------------------------------------------------------

 

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.

 

4

--------------------------------------------------------------------------------

 

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.

 

5

--------------------------------------------------------------------------------