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
ea
