Document:

Federal Income Tax Allocation Agreement

 EXHIBIT 10.4 
  
 TAX ALLOCATION AGREEMENT 
 AMONG THE MEMBERS OF THE GEOMET RESOURCES, INC. 
 CONSOLIDATED GROUP 
  
  
 THIS AGREEMENT is made as of the 1st day of
January 2001, by and among GeoMet Resources, Inc., a Delaware corporation, and the undersigned corporations. 
  
 RECITALS: 
  
 WHEREAS, GeoMet Resources, Inc. is the common parent of an affiliated group of corporations within the meaning of section 1504(a) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), and the undersigned
are members of such affiliated group (the “Group”); and 
  
 WHEREAS, the Group files and will file consolidated federal income tax returns (“Federal Returns”) as well as certain consolidated, combined, or unitary state franchise or income tax returns where allowed by law (“State
Returns”); and 
  
 WHEREAS, the parties desire to agree upon
the method for allocating the consolidated United States income tax liability and the unitary, combined, or consolidated state tax liabilities among them and to fairly preserve the economic rights and privileges that would have accrued to each of
them from the filing of separate returns, including benefit of losses and credits utilized in the Federal Returns and the State Returns; 
  
 NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows: 
  
 Article 1 - Method of Allocating Consolidated Federal Tax Liability

  
 1.1    If GeoMet Resources, Inc., or
its successor as the common parent within the meaning of section 1504(a) of the Code (the “Common Parent”), files a consolidated United States Corporation Income Tax Return, the total consolidated United States income tax liability after
all credits allowed in arriving at such tax liability (the “Consolidated Federal Tax Liability”) shall be allocated to each member of the Group in accordance with paragraph 1.2. The amount of liability so allocated to any member shall be
an obligation of each such member due and owing in accordance with Article 3. To the extent it is determined that a tax benefit is properly allocable to any member in accordance with the allocation prescribed in paragraph 1.2, the amount of benefit
so allocated shall be an obligation due and owing to each such member in accordance with Article 3. 

 1.2    The members of the Group shall determine and allocate the Consolidated Federal
Tax Liability among themselves in the following manner: 
  
 Step 1: Each member shall be allocated a portion of the Consolidated Federal Tax Liability equal to the Consolidated Federal Tax Liability multiplied by a fraction, the numerator of which is the taxable income of such member and the
denominator of which is the sum of the taxable incomes of all the members. A member’s taxable income shall be the separate taxable income of the member determined under Treasury regulation section 1.1502-12, adjusted for the following items
pursuant to Treasury regulation section 1.1552-1(a)(1)(ii): 
  
 (a)    the portion of the consolidated net operating loss deduction, the consolidated charitable contributions deduction, the consolidated dividends received deduction, the consolidated section 247
deduction, the consolidated section 582(c) net loss, and the consolidated section 922 deduction attributable to such member; 
  
 (b)    such member’s net capital loss and section 1231 net loss, reduced by the portion of the consolidated net
capital loss attributable to such member; and 
  
 (c)    the portion of any consolidated net capital loss carryover attributable to such member that is absorbed in the taxable year. 
  

Step 2: Pursuant to Treasury regulation section 1.1502-33(d)(3), an additional amount shall be allocated to each member equal to 100% of the
excess, if any, of (i) the “separate return tax liability” of such member for the taxable year, over (ii) the amount allocated in Step 1 of this paragraph 1.2. As provided more fully in Treasury regulation section
1.1552-1(a)(2)(ii), a member’s separate return tax liability shall equal the member’s tax liability computed as if it had filed a separate return for the year except that: 
  
 (a)    gain or loss on intercompany transactions shall be taken into account as provided
in Treasury regulation section 1.1502-13 as if a consolidated return had been filed for the year; 
  
 (b)    gain or loss relating to inventory adjustments shall be taken into account as provided in Treasury regulation
section 1.1502-18 as if a consolidated return had been filed for the year; 
  
 (c)    transactions with respect to stock, bonds or other obligations of members shall be reflected as provided in Treasury regulation section 1.1502-13(f) and (g) as if a consolidated return
had been filed for the year; 
  
 (d)    excess losses shall be included in income as provided in Treasury regulation section 1.1502-19 as if a consolidated return had been filed for the year; 
  

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 (e)    in the computation of the deduction under section 167,
property shall not lose its character as new property as a result of a transfer from one member to another member during the year; 
  
 (f)    a dividend distributed by one member to another member shall not be taken into account in computing the
deductions under sections 243(a)(1), 244(a), 245, or 247 (relating to deductions with respect to dividends received and dividends paid); 
  
 (g)    basis shall be determined under Treasury regulation sections 1.1502-31 and 1.1502-32, and earnings and profits
shall be determined under Treasury regulation section 1.1502-33 as if a consolidated return had been filed for the year; and 
  
 (h)    subparagraph (2) of Treasury regulation section 1.1502-3(f) shall apply as if a consolidated return had
been filed for the year. 
  
 Step 3: The additional amount
allocated to members pursuant to Step 2 of this paragraph 1.2 shall be paid by such members to the Common Parent on behalf of those other members that had items of income, deductions, net operating losses, or tax credits to which such total is
attributable pursuant to a consistent method that reasonably reflects such items of income, deductions, net operating losses, or tax credits, such consistency and reasonableness to be determined by the Chief Financial Officer of the Common Parent
(the “Chief Financial Officer”). In general, the amounts paid to members will be deemed to be consistent and reasonable if paid on a basis equal to the applicable federal corporate income tax rate of net operating losses used and 100% of
tax credits used unless such an allocation would be inequitable. 
  
 The method of allocation described in this paragraph 1.2 is intended to be consistent with Treasury regulation sections 1.1552-1(a)(1) and 1.1502-33(d)(3) as they currently exist and may hereinafter be amended. 
  
 Article 2 - Method of Allocating Consolidated or Combined State Tax
Liability 
  
 2        In the event the Common Parent files State Returns with any of its subsidiaries, the total state tax liability (“Consolidated State Tax Liability”) shall be allocated in a manner
consistent with the allocation provided in Article 1 of this Agreement for Consolidated Federal Tax Liability as if such State Returns were Federal Returns. 
  
 Article 3 - Authority to Administer Agreement 
  
 3        To effectuate the stated intent of the parties hereto as contained in this Agreement, the Chief Financial
Officer shall be authorized to: 
  
 (a)    determine the Consolidated Federal Tax Liability and the Consolidated State Tax Liability of the Group for each taxable period for which the Common Parent files a 

  

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Federal Return or a State Return by making the necessary elections and selecting the tax accounting methods that provide the maximum tax benefit for the
Group; 
  
 (b)    determine
and allocate to each member of the Group the appropriate liability or refund, if any, of the Consolidated Federal Tax Liability or the Consolidated State Tax Liability in accordance with paragraph 1.2; 
  
 (c)    prescribe any tax elections or tax
provisions that shall apply to each member of the Group; 
  
 (d)    prescribe the computer software, methods and procedures each member shall use to maintain such member’s tax records and to prepare its tax returns; and 
  
 (e)    do all other things necessary and
proper to effectuate the stated intent of the parties and the purposes of this Agreement. 
  
 Article 4 - Settlement of Allocations 
  
 4        The rights and obligations between and among the various members of the Group accruing under the provisions of this Agreement shall arise and be settled as follows:

  
 (a)    Each member shall
pay the Common Parent its allocated share of Consolidated Federal Tax Liability and Consolidated State Tax Liability, if applicable, under Step 1 of paragraph 1.2 promptly upon request by the Common Parent, and in no event later than 30 days after
the Common Parent files a Federal Return or State Return for any taxable period. 
  
 (b)    Each member benefitting from net operating losses, tax credits, or other tax attributes shall pay to the Common
Parent its additional allocation determined under Step 2 of paragraph 1.2 promptly upon request by the Common Parent, and in no event later than 30 days after the Common Parent files a Federal Return or State Return for any taxable period.

  
 (c)    The Common Parent
shall pay to each member with a net operating loss, tax credits, or other tax attributes during the taxable year, its allocable share of the total of the additional amounts due from other members as determined under Step 3 of paragraph 1.2 promptly
after receipt thereof, and in no event later than 30 days after the Common Parent files a Federal Return or State Return for any taxable period. 
  
 (d)    Notwithstanding any other provisions of this Article 4 to the contrary, the Common Parent may, solely at its
discretion, require each member to pay its allocated share of Consolidated Federal Tax Liability or Consolidated State Tax Liability pursuant to paragraph 4(a) and any additional allocation pursuant to paragraph 4(b) within 30 days after the end of
a taxable period, except that each member’s allocated share and any additional allocation shall be based on the Hypothetical Consolidated Federal Tax Liability or 

  

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Hypothetical Consolidated State Tax Liability. The Hypothetical Consolidated Federal Tax Liability and Hypothetical Consolidated State Tax Liability shall be
based on a reasonable estimate of the Group’s consolidated tax liability as determined by the Chief Financial Officer. The Common Parent may, solely in its discretion, pay each member with a net operating loss, tax credits, or other tax
attributes during the taxable period, its allocated share of amounts due from other members as soon as is practicable after the end of the taxable period or within 45 days after the end of the taxable period. The parties shall adjust the payments
under paragraphs 4(a), (b) and (c) to take into account payments made under this paragraph 4(d). 
  
 Article 5 - Adjustments 
  
 5    In the event the Consolidated Federal Tax Liability or Consolidated State Tax Liability is subsequently changed or otherwise adjusted by reason of an amended return, a claim for refund, a
final “determination” as that term is defined in section 1313(a) of the Code, or any of the events specified in section 6213(b) or (d) of the Code, or otherwise, the Chief Financial Officer shall adjust the allocations accordingly.
The amounts of any such adjustment shall become due and owing in accordance with Article 4 promptly upon request by the Common Parent, and in no event later than the 30th day following the date giving rise to the recomputation. In the case of any
refund, the Common Parent shall pay each member its share of the refund, determined in the same manner as in paragraph 1.2, promptly after receiving the refund and in no event later than 30 days thereafter, and in the case of an increase in tax
liability, each member shall pay the Common Parent its allocable share of such increased tax liability promptly after receiving notice of such liability from the Common Parent and in no event later than 30 days thereafter. If any interest is to be
paid or received as a result of a consolidated tax deficiency or refund, such interest will be allocated to the parties in the ratio each member’s change in tax liability bears to the total change in tax liability. Any penalty shall be
allocated upon such basis as the Chief Financial Officer deems just and proper in view of all applicable circumstances. 
  
 Article 6 - Miscellaneous Provisions 
  
 6.1    This Agreement supersedes all previous tax allocation agreements among GeoMet Resources, Inc. and the members of the Group and
other federal income tax allocation agreements or arrangements among the parties to this Agreement. 
  
 6.2    It is understood and acknowledged that, in accordance with Treasury regulation section 1.1502-77, the Common Parent will be the
agent for all members of the Group with respect to all matters referred to therein and the Common Parent has the power, without the consent of any member, to exercise the authority with respect to the matters set forth therein, including without
limitation, making or revoking any elections. The Common Parent will also be the agent for the Group with respect to State Returns if applicable state law so provides. 
 6.3    The parties hereto recognize that from time to time other companies may become members of the Group and hereby agree that such new members will become parties to this Agreement by the
signature of an officer of such new member on a document in the form attached 

  

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hereto as Annex A and it shall not be necessary that the existing members reexecute this Agreement or join with such new member in signing a counterpart of
Annex A. 
  
 6.4    This Agreement shall be
effective for all taxable years beginning on or after January 1, 2001, unless notice of termination of this Agreement is made by any party thereto to the Common Parent within the first 30 days of a taxable year or unless the Common Parent
otherwise agrees to the termination of the rights and obligations of any party hereunder under such terms and conditions as are mutually agreed upon by the Common Parent and the terminating party, which terms and conditions shall not inure to the
detriment of any other party hereto. Allocations to members of the Group that, at the time the allocation is made, have left the Group due to sale, merger, liquidation or otherwise shall be made to the member of the Group that received the proceeds
of sale or the assets of the former member unless another method of allocation is agreed to prior to the member leaving the Group. 
  
 6.5    The Common Parent shall have authority to amend this Agreement through a collateral agreement with any member to take into
account any special facts and circumstances of such member. The collateral agreement shall be effective upon execution by all affected parties and need not be executed by members whose rights and liabilities under this Agreement are not affected by
the collateral agreement. Any such amendment shall be consistent with the principles of this Agreement. 
  
 6.6    This Agreement may be unilaterally amended by the Common Parent in response to legislative or regulatory changes in the tax
law; provided that any such amendment shall be consistent with the principles of this Agreement. 
  
 6.7    Failure of one or more parties to qualify as a member of the Group shall not operate to terminate this Agreement with respect
to the other parties so long as two or more parties continue to so qualify. 
  
 6.8    This Agreement shall bind and inure to the benefit of the respective successors and assigns of the parties; but no assignment shall relieve any party’s obligations hereunder without the
written consent of the other parties except as otherwise provided in paragraph 6.4 
  
 6.9    This Agreement shall be governed by the laws of the State of Texas and the United States of America. 
  

6.10  Any matter not specifically covered by this Agreement shall be handled in the manner determined by the Common Parent in a manner
consistent with the principles of this Agreement. The Chief Financial Officer is authorized to interpret and apply the terms of this Agreement in any reasonable manner. 
  
 6.11  This Agreement contains the entire understanding of the parties with respect to the subject matter contained
herein. No alteration, amendment or modification of any of the terms of this Agreement shall be valid unless made by an authorized officer of each member of the Group that is a party hereto except as otherwise provided in paragraphs 6.5 and 6.6.

  

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 6.12  This Agreement may be executed simultaneously in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  
 [Remainder of page intentionally left blank.] 
  

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 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, effective as of
the date set forth in Section 5.4. 
  
  

			
	 GEOMET RESOURCES, INC.
 909 Fannin, Suite
3208
 Houston, Texas 77010

		
	By:	 	 /s/ William C. Rankin

		
	 Name:
	 	 William C. Rankin

	 Title:
	 	 Executive Vice President

  
  

			
	 GEOMET, INC.
 5336 Stadium Trace Pkwy., Suite
206
 Birmingham, Alabama 35244

		
	By:	 	 /s/ J. Darby Seré

		
	 Name:
	 	 J. Darby Seré

	 Title:
	 	 Chief Executive Officer & President

  
  

			
	 GEOMET OPERATING COMPANY, INC.
 5336 Stadium
Trace Pkwy., Suite 206
 Birmingham, Alabama 35244

		
	By:	 	 /s/ J. Neil Walden, Jr.

		
	 Name:
	 	 J. Neil Walden, Jr.

	 Title:
	 	 President

  

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 ANNEX A 
  
 ADMISSION OF NEW GROUP MEMBER 
  
 THIS AGREEMENT is made as of the      day of
                ,          between GeoMet Resources, Inc. (“Parent”), a Delaware corporation, and
                                     (the “New
Member”). 
  
 RECITALS: 
  
 WHEREAS, Parent is the common parent of an affiliated group of corporations
within the meaning of section 1504(a) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”); and 
  
 WHEREAS, Parent and the members of its affiliated group within the meaning of section 1504(a) of the Code (the “Group”) executed the Federal
Income Tax Allocation Agreement Among the Members of the GeoMet Resources, Inc. Consolidated Group (the “Agreement”) effective as of January 1, 2001, to allocate federal income tax liability among them; and 
  
 WHEREAS, the New Member has become a member of the Group since the Group
executed the Agreement; 
  
 NOW, THEREFORE, the parties hereto
agree as follows: 
  
 The New Member shall by its execution of
this Admission of New Group Member become subject to the terms of the Agreement effective as of the date first stated above. 
  

					
	[NAME OF NEW MEMBER]
		
	By:	 	  

	 	 	    Name:	 	 
	 	 	    Title:	 	 
	
	GEOMET RESOURCES, INC.
	909 Fannin, Suite 3208
	Houston, Texas 77010
		
	By	 	  

	 	 	    Name:	 	 
	 	 	    Title:	 	 

  

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	GEOMET, INC.
	5336 Stadium Trace Pkwy., Suite 206
	Birmingham, Alabama 35244
		
	By	 	  

	 	 	    Name:	 	 
	 	 	    Title:	 	 
	
	GEOMET OPERATING COMPANY, INC.
	5336 Stadium Trace Pkwy., Suite 206
	Birmingham, Alabama 35244
		
	By:	 	  

	 	 	    Name:	 	 
	 	 	    Title:	 	 

  

 –10–Incentive Bonus Pool Plan

 EXHIBIT 10.5 
  
 GEOMET, INC. 
 INCENTIVE BONUS POOL PLAN 
  
 THIS
INCENTIVE BONUS POOL PLAN, made and executed at Bessemer, Alabama, by GeoMet, Inc., an Alabama corporation (the “Company”), is being established to provide a performance incentive for certain key management, technical and professional
employees of the Company and its subsidiaries. 
  
  
 ARTICLE I. 
  
 DEFINITIONS 
  
 Section 1.1 Definitions. Unless the context clearly indicates otherwise, when used in this Plan: 
  
 (a)    “Award” means a grant of a Pool Unit under the Incentive Bonus Pool as evidenced by an Award
Agreement. 
  
 (b)    “Award Agreement” shall mean the written agreement between the Company and a Participant in the form attached hereto as Exhibit A evidencing the grant of an Award. 
  
 (c)    “Board” means the Board
of Directors of the Company. 
  
 (d)    “Change of Control” means a change of control of the Company after the date of this Agreement if (i) individuals who were directors of the Company immediately prior to a Control Transaction (as
defined below) shall cease, within one year of such Control Transaction, to constitute a majority of the Board or any successor to the Company or to a company which has acquired all or substantially all its assets or (ii) any entity, person or
group (other than a beneficial owner of Company securities as of the date hereof) acquires shares of the Company in a transaction or series of transactions that result in such entity, person or group directly or indirectly owning beneficially 50% or
more of the outstanding shares of common stock of the Company. As used in this definition, the term “Control Transaction” shall mean (A) any tender offer for or acquisition of capital stock of the Company, (B) any merger,
consolidation or sale of all or substantially all the assets of the Company, or (C) any combination of the foregoing that results in a change in voting power sufficient to elect a majority of the Board. 
  
 (e)    “Committee” means the
Compensation Committee of the Board or such other committee appointed pursuant to Section 2.1 to administer the Plan. 
  
 (f)    “Company” means GeoMet, Inc., an Alabama corporation, and if the context so permits, its
subsidiaries. 
  

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 (g)    “Distributable Net Income” means an amount equal to
2% (or such greater percentage as the Board may determine in its sole discretion for any particular Plan Year) of the Company’s consolidated pre-tax net income for a particular Plan Year, as determined by the Committee based upon the annual
unaudited financial statements of the Company. 
  
 (h)    “Incentive Bonus” means an amount equal to the aggregate amount of Distributable Net Income represented by a Participant’s Pool Units in an Incentive Bonus Pool for a Plan Year. 
  
 (i)    “Incentive Bonus Pool”
means an account established and maintained by the Committee pursuant to Section 4.2 below to record the Distributable Net Income available for distribution under the Plan for any particular Plan Year. 
  
 (j)    “Participant” means an
employee of the Company or its subsidiaries who has been granted an Award under this Plan in a particular Incentive Bonus Pool and whose interest therein has not been fully paid or forfeited. 
  
 (k)    “Permanent Disability”
means the total and permanent incapacity of a Participant to perform the usual duties of his or her employment with the Company or its subsidiaries as determined by the Committee. Such incapacity shall be deemed to exist when certified by a
physician who is acceptable to the Committee. 
  
 (l)    “Plan” means this GeoMet, Inc. Incentive Bonus Pool Plan as from time to time in effect. 
  
 (m)  “Plan Year” means the calendar year. The Company’s initial Plan Year shall be the calendar year ending
December 31, 2001. 
  
 (n)    “Pool Unit” means a fictional participation unit in a particular Incentive Bonus Pool for a Plan Year. 
  
 (o)    “Termination Date” means the effective date of termination of the Participant’s employment with
the Company or any of its subsidiaries, which date shall be (i) if the Participant’s employment is terminated by his death, the date of his death, (ii) if the Participant’s employment is terminated by his Permanent Disability,
the date that the Committee determines by written notice to the Participant that it has determined that the Participant has a Permanent Disability, and (iii) if the Participant’s employment is terminated for any other reason, the last day
of the Participant’s employment with the Company or any of its subsidiaries. 
  

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 ARTICLE II. 
  
 PLAN ADMINISTRATION 
  
 Section 2.1 Committee. This Plan shall be administered by the Compensation Committee of the Board or any other Committee composed of at least
two individuals appointed by the Board. Each member of the Committee so appointed shall serve in such office until his or her death, resignation or removal by the Board. The Board may remove any member of the Committee at any time by giving written
notice thereof to the members of the Committee. Vacancies shall likewise be filled from time to time by the Board. 
  
 Section 2.2 Committee Duties and Powers. Subject to the express terms and conditions set forth in the Plan, the Committee shall have all the
powers vested in it by the provisions of the Plan, including the exclusive authority to prescribe the terms and conditions (which need not be identical) of each Award, and to prescribe the form of any agreements, including but not limited to the
Award Agreements, to be entered into with any Participant and, whether a Participant’s employment has been terminated by the Company. In addition, the Committee shall have the exclusive authority to construe and interpret the Plan and any
Awards granted thereunder, to establish, amend and revoke rules and regulations and to make any other determinations for the administration of the Plan, including, but not limited to, correcting any defect or supplying any omission, or reconciling
any inconsistency in the Plan or any Award, in the manner and to the extent it shall deem necessary or advisable to make the Plan fully effective and to promote the best interests of the Company with respect thereto; provided, however, that, except
with a Participant’s consent, no such action by the Committee shall deprive a Participant of his right with respect to any Awards theretofore granted. 
  
 Section 2.3 Committee Indemnity. The Company shall indemnify and hold harmless each member of the Committee against any claim, cost, expense
(including attorneys’ fees), judgment or liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act as a member of the Committee under this Plan, except in the case of
willful misconduct. 
  
 Section 2.4 Committee
Determinations Final. Any and all decisions and determinations by the Committee or the Board in the exercise of its power shall be final and binding upon the Company, each Participant and each beneficiary designated pursuant to Section 6.

  
 ARTICLE III. 
  
 PLAN PARTICIPATION 
  
 Section 3.1 Eligible Employees. Each employee of the Company or
any of its subsidiaries (other than a Committee member) who is determined by the Committee to be a key managerial, technical or professional employee shall be eligible to receive an Award under this Plan. The Committee, subject to the review of the
Board, shall have full and final authority to select eligible employees of the Company to become Participants in the Plan. 
  

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 Section 3.2 Designation of Participants and Interests. Subsequent to the end of each Plan
Year, the Committee (subject to the review of the Board in its absolute discretion) (i) shall designate which of the eligible employees of the Company will participate in the Incentive Bonus Pool to be established for the immediately preceding
Plan Year pursuant to Section 4.2, and (ii) shall designate the number of Pool Units that each Participant will have in such Incentive Bonus Pool, not to exceed 1,000 Pool Units for all Participants in the aggregate. Nothing in this Plan
shall obligated the Committee to award all of the 1,000 Pool Units. An employee designated by the Board to be a Participant in a particular Incentive Bonus Pool shall participate in such Incentive Bonus Pool until the termination of his or her
interest therein as provided in this Plan. 
  
 ARTICLE IV.

  
 TERMS AND CONDITIONS OF INCENTIVE BONUS AWARDS 
  
 Section 4.1 Nature of Incentive Bonus Pool Units. Awards made
under the Plan shall be in the form of Pool Units which are fictional ownership units in the Incentive Bonus Pool. Each Pool Unit shall entitle the Participant to receive an amount equal to 1/1000 of an Incentive Bonus Pool, to be paid in cash to a
Participant in accordance with the Award Agreement and the rules set forth herein. Pool Units shall be evidenced by an Award Agreement as described in Section 4.4 below. Pool Units shall not entitle a Participant to any dividend, voting right
or other rights of a holder of shares of capital stock of the Company. 
  
 Section 4.2 Incentive Bonus Pool. The Committee shall establish an Incentive Bonus Pool for the Company’s initial Plan Year ending December 31, 2001, and a separate Incentive Bonus Pool for each subsequent Plan Year
commencing after December 31, 2001. Each Incentive Bonus Pool shall be designated by the year with respect to which it is established (e.g., the first Incentive Bonus Pool being designated the “2001 Incentive Bonus Pool”) and
shall continue in existence for accounting purposes until terminated in accordance with this Plan. 
  
 Section 4.3 Available New Pool Units. The maximum number of Pool Units that may be granted pursuant to the Plan with respect to any particular
Incentive Bonus Pool, shall not exceed 1,000 Units. 
  
 Section 4.4 Award of New Pool Units. Prior to March 15 next following the end of each Plan Year, the Committee may award Pool Units to those employees who it determines in its discretion satisfy the eligibility requirements
of Section 3.1. Such determinations will be subject to the review of the Board. Each Award Agreement issued pursuant to the Plan shall specify the applicable number of Pool Units being awarded and such other terms and conditions not
inconsistent with the provisions of the Plan as may be approved by the Committee in its discretion. As an example of the foregoing, with respect to the 2001 Incentive Bonus Pool, the Committee shall meet on or prior to March 15, 2002 in order
to award Pool Units for the 2001 Incentive Bonus Pool to eligible employees. No award of Pool Units for any particular Plan Year shall entitle such Participant to an award of an equal number of Pool Units for any succeeding Plan Year. 
  

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 Section 4.5 Payment of Incentive Bonus Amounts. The payment of any Incentive Bonus awarded
under the Plan with respect to any Plan Year shall occur over a three-year period. The first Incentive Bonus payment with respect to an Incentive Bonus Pool for a Plan Year shall be equal to fifty percent (50%) of the Incentive Bonus and shall
be paid on or prior to March 31 of the year next succeeding such Plan Year. The remaining Incentive Bonus amount for such Plan Year shall be paid in two equal installments on or before March 31 of each of the second and third succeeding
years, respectively, subject in each case to the provisions of Article V, including each Participant’s continuing employment by the Company. 
  
 ARTICLE V. 
  
 TERMINATION OF EMPLOYMENT AND FORFEITURE OF INCENTIVE BONUS POOL UNITS 
  
 5.1    Termination of Employment. An individual shall cease to be a Participant in the Plan on his Termination Date and all of
the Participant’s Pool Units covered by Incentive Bonus Awards shall be payable based upon the rules set forth herein. 
  
 5.2    Death or Disability. If a Participant dies or incurs a Permanent Disability, the Participant’s unpaid Incentive
Bonus shall not be forfeited or canceled, and the Company shall pay to the Participant or the Participant’s estate, as the case may be, the Participant’s Incentive Bonus (if any) payable in respect to any Incentive Bonus Pool for a prior
Plan Year for which the Participant was awarded Pool Units that has yet to be paid. Such amount shall be paid at such times as set forth in Section 4.5. 
  
 5.3    Change of Control. In the event of a Change of Control, each Participant’s unpaid Incentive Bonus as of the time of
such Change of Control shall become fully vested and not subject to termination in any event, and shall be paid at such times as set forth in Section 4.5 regardless of whether the Participant’s employment terminates for any reason after
such Change of Control. If a Change of Control event occurs during any particular Plan Year, the Board will have the discretion to determine whether any Incentive Bonus earned for such Plan Year shall become fully vested, pro rated (based on the
number of days in such Plan Year before and after the Change of Control) or subject to future termination on account of the termination of such Participant’s employment pursuant to Section 5.4. In the event that the Plan continues in
effect for subsequent Plan Years after the Change of Control, such subsequent Plan Years will be subject to the rules set forth herein as if such Change of Control had not occurred. 
  
 5.4    Voluntary Termination. If a Participant’s employment terminates for any reason other
than death or Permanent Disability and the provisions of Section 5.3 do not otherwise apply at any time after the execution of this Agreement, any remaining unpaid Incentive Bonus and any Pool Units for the current Plan Year shall be forfeited
and canceled. 
  

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 ARTICLE VI. 
  
 DESIGNATION OF BENEFICIARY 
  
 6.1    Designation of Beneficiary. A Participant may designate a person or persons to receive any benefits related to his Pool
Units or Incentive Bonus to which he would be entitled in respect of an Award in the event of his death. Such designation shall be made on a form to be provided by the Committee. A Participant may revoke or change his designation from time to time
in the same manner. If no designated beneficiary is living on the date on which any amount becomes payable, or, if a Participant fails effectively to designate a beneficiary, the term “beneficiary” as used in the Plan shall mean a
Participant’s estate. 
  
 ARTICLE VII. 
  
 AMENDMENT; TERMINATION 
  
 7.1    Amendment. The Plan may be amended at any
time and from time to time by the Board; provided, however, that no such amendment shall, without their consent, deprive Participants of their rights with respect to any Pool Units or Incentive Bonus theretofore granted; provided, that the Board
shall have the right to accelerate any outstanding payments to a Participant. 
  
 7.2    Termination. The Board may in its discretion terminate this Plan at any time; provided, however, that the administration of the Plan shall thereafter continue in connection with
outstanding and unpaid Incentive Bonus; and, provided, further, that the Board shall have the exclusive authority to determine, in its sole discretion, that all payments to Participants in respect of any outstanding and unpaid Incentive Bonus shall
be accelerated and paid to Participants in a lump sum cash payment as soon as practicable following the termination of the Plan. 
  
 ARTICLE VIII. 
  
 MISCELLANEOUS PROVISIONS 
  
 8.1    Employment Noncontractual. The establishment of the Plan shall not enlarge or otherwise affect the terms of any Participant’s employment with the Company and the Company may
terminate a Participant’s employment as freely and with the same effect as if this Plan had not been established. 
  
 8.2    Non-Assignability. A Participant’s rights and interest under the Plan or any Award Agreement may not be assigned,
transferred or alienated in whole or in part either directly or by operation of law or otherwise, including but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner and no such right or
interest of any Participant in the Plan or under any Award Agreement shall be subject to any debt, obligation or liability of such Participant. 
  

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 8.3    Unfunded Arrangement. The benefits to be paid pursuant to the Plan are
unfunded and unsecured and shall be payable from the general assets of the Company, and the Participants shall have no interest in the assets of the Company or in any account maintained by the Company for its own convenience by virtue of the Plan.
No fund or other assets will ever be set aside or segregated for the benefit of any Participant. The Plan merely grants the Participant a contractual right to receive future payments. If any funds are set aside by the Company for its convenience for
purposes of payment of benefits hereunder, such funds shall be solely the property of the Company and, notwithstanding such setting aside, shall remain subject to the claims of the Company’s general creditors. 
  
 8.4    Governing Law. Except where superseded by
federal law, this Plan and the rights of all individuals claiming benefits hereunder shall be governed by and construed in accordance with the internal laws of the State of Alabama without giving effect to the choice of law principles thereof.

  
 8.5    Acceptance. By accepting any
Award or other benefit under the Plan, each Participant and each person claiming under or through him shall be conclusively deemed to have indicated his acceptance and ratification of, and consent to, any action taken under the Plan by the Company,
the Board or the Committee. 
  
 IN WITNESS WHEREOF, this Plan has
been executed as of May     , 2001 to be effective as of the 2001 Plan Year. 
  

			
	GEOMET, INC.
		
	By:	 	 /s/ J. Darby Seré

		
	 Name:
	 	 J. Darby Seré

	 Title:
	 	 Chief Executive Officer & President

  

 -7- 

 Exhibit A 
  

Form of Award Agreement 
              Incentive Bonus Pool 
  
 This Award Agreement (this “Agreement”), made and entered into as of
                        , 200  , is by and between GeoMet, Inc., an Alabama corporation (the
“Company”), and                  (the “Participant”). 
  

WITNESSETH: 
  
 WHEREAS, the Company has adopted that certain Incentive Bonus Pool Plan (the “Plan”) for certain key management, technical and professional
employees of the Company and its subsidiaries; and 
  
 WHEREAS,
the Participant is an employee of the Company eligible to participate in the Plan; and 
  
 WHEREAS, the Committee has made a determination to make an Award to the Participant in the              Incentive Bonus Pool (the “Incentive
Bonus Pool”) pursuant to the Plan and upon the terms set forth herein; 
  
 NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the Company and Participant hereby agree as follows: 
  
 1.    Certain Definitions. Terms used in this
Agreement and not otherwise defined shall have the respective meanings assigned to such terms in the Plan. 
  
 2.    The Plan. The terms and provisions of the Plan are hereby incorporated into this Agreement as if set forth herein in
their entirety. In the event of a conflict between any provision of this Agreement and the Plan, the provisions of the Plan shall control. A copy of the Plan may be obtained from the Company by the Participant upon request. 
  
 3.    Grant of Pool Units. Subject to the terms
and conditions hereinafter set forth, the Company hereby irrevocably grants to the Participant              Pool Units in the Incentive Bonus Pool. 
  
 4.    Vesting. The payment of the Incentive Bonus,
if any, will be made over a three year period as set forth in the Plan. 
  
 5.    Dispute Resolution. In the event of any controversy, claim, dispute or question concerning this Agreement or the Plan in any respect (“Dispute”) between the Company and the Participant
(“Disputing Parties”), which cannot be otherwise informally resolved by the Disputing Parties themselves, the Disputing Parties will utilize the procedures specified in this paragraph (the “Procedure”) to resolve the dispute. The
Disputing Party seeking to initiate the Procedure (the “Initiating Party”) shall give written notice to the other party, describing in 

  

 -1- 

 
general terms the nature of the Dispute and the Initiating Party’s claim for relief. The Disputing Party receiving such notice (the “Responding
Party”) and the Initiating Party shall meet at the Company’s offices at a mutually acceptable time within ten (10) business days of such receipt to attempt to settle the Dispute. The Disputing Parties agree to participate in good
faith to resolve the Dispute. If the Dispute has not been resolved within five (5) business days from the date of their initial meeting, either of the Disputing Parties may submit the Dispute to arbitration in accordance with the Center for
Public Resources Rules for Non-Administered Arbitration of Business Disputes by three arbitrators, of whom each Disputing Party shall appoint one. The arbitration shall be governed by the United State Arbitration Act, 9 U.S.C. Sections 1-16, and
judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of the arbitration shall be in the Birmingham, Alabama area or such other place as the parties shall mutually agree. The Disputing
Parties shall equally bear and pay all costs of arbitration proceedings hereunder. 
  
 6.    Certain Rights Incident to Divorce. If an interest in the Incentive Bonus awarded hereby is required by law to be transferred to a spouse of the Participant pursuant to an order of a
court in a divorce proceeding, any interest of such spouse shall be subject to the rights of the Participant and shall be subject to vesting and forfeiture as described in the Plan. 
  
 7.    Tax Withholding. The Participant acknowledges that the Company shall withhold all required
federal, state and local withholding tax and employment tax requirements relating to payments of the Incentive Bonus. 
  
 8.    Participant’s Employment. Nothing contained in the Plan or in this Agreement shall confer upon the Participant any
right with respect to the continuation of his employment by or service with the Company or interfere in any way with the right of the Company (subject to the terms of any separate agreement to the contrary) at any time to terminate such employment
or service or to increase or decrease the compensation of the Participant from the rate in existence at the date of this Agreement. 
  
 9.    Notices. All notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been
given on the earlier of the date of receipt by the party to whom the notice is given or five days after being mailed by certified or registered United States mail, postage prepaid, addressed to the appropriate party at the address shown beside such
party’s signature below or at such other address as such party shall have theretofore designated by written notice given to the other party. 
  
 10.  Gender. Words used in this Agreement which refer to the Participant and denote the male gender shall also be deemed to include the
female gender or the neuter gender when appropriate. 
  
 11.  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ALABAMA (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE ALABAMA PRINCIPLES OF CONFLICTS
OF LAW). 
  

 -2- 

 12.  Counterparts. This Agreement may be signed in counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same agreement. 
  
 * * * * * * * * * * 
  

 -3- 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.

  
 Addresses: 

			
	THE COMPANY:
	
	GEOMET, INC.
		
	By:	 	  

	
	PARTICIPANT:
	
	  

  
 Pursuant to Section 6.1 of
the Plan, the Participant hereby designates the following person or persons as beneficiaries to receive any benefits related to his Pool Units in the event of his death: 
  

					
	  

	 	Percentage of Benefits:	 	  

			
	  

	 	Percentage of Benefits:	 	  

			
	  

	 	Percentage of Benefits:	 	  

  

 -4-

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