BASIC EARTH SCIENCE SYSTEMS,
INC.
DIRECTOR COMPENSATION
PLAN
1.1 Purpose
The purpose of this Basic Earth Science Systems, Inc. Director
Compensation Plan (this “Plan”) is to attract and
retain qualified individuals who are not employed by Basic Earth
Science Systems, Inc., or its subsidiaries, (the
“Company”) to serve as directors on the Company’s
Board of Directors (each a “Director” and collectively,
the “Directors”). Each Director is expected to remain
as a member of the Company’s Board of Directors for his or
her entire term and carry out, to the best of his or her abilities,
the duties of his or her position along with any committee
chairmanship and/or committee member assignments. This Plan is
intended to align the interests of such Directors with those of the
Company’s stockholders by providing that a significant
portion of such Directors’ compensation is directly linked to
increases in the value of the Company’s common stock, par
value $0.001 per share (the “Common Stock”).
1.2 Eligible
Participants Each Director that is not an employee of the
Company and is “independent” as that term is defined in
the rules and regulations of the NYSE Amex LLC (formerly known as
the American Stock Exchange) shall be eligible for compensation
under this Plan.
1.3 Plan
Administration, Amendment and Interpretation This Plan shall be
administered by the Compensation Committee of the Board of
Directors, which shall have the power to interpret this Plan and
amend it from time to time as it deems proper. The determination,
interpretations and other actions of the Compensation Committee
pursuant to the provisions of this Plan shall be binding and
conclusive for all purposes and on all persons.
II. ANNUAL
RETAINER AND MEETING FEES
2.1 Annual
Retainer Each Director shall be entitled to receive an annual
retainer consisting of (a) $16,000 payable in cash and
(b) restricted stock having a value as of the date of grant of
approximately $36,000 (together, the “Annual
Retainer”). The cash portion of the retainer shall be paid to
each Director no later than the first March 15
th following the end of the year to which such
Annual Retainer relates.
2.2 Annual
Restricted Stock Award As part of the Annual Retainer, each
Director will receive an award of shares of restricted stock on
April 1 st
of each year. The number of shares
of restricted stock so granted each year will be determined by
dividing $36,000 by the fair market value of the Common Stock. Fair
market value of the Common Stock shall be the average of the
closing price of the Common Stock (on the primary exchange on which
the Common Stock is then traded) during the ten trading days
immediately preceding each anniversary date of the restricted stock
grant. A fractional share resulting from such calculation will be
rounded to the nearest whole share. All grants of restricted stock
shall also be subject to the terms and conditions set forth in
Article III below.
2.3 Retainer
Fee for Committee Chairs Committee chairpersons of the Audit,
Compensation and Nominating Committees shall be paid additional
compensation of $5,500, $4,500 and $3,500 per year, respectively.
Such payment shall be made on October 1 st of
each year to which the payment relates, payable in cash.
2.4 Meeting
Fees Each Director shall receive a fee of $2,000, payable in
cash, for each quarterly regular meeting of the Board of Directors
that he or she attends and each all-day special meeting of the
Board of Directors that he or she attends. In addition, each
Director shall receive a fee of $500,
payable in
cash, for each meeting of a committee of the Board of Directors and
each half-day special meeting of the Board of Directors that he or
she attends. No committee meeting fees are payable with respect to
attendance by a Director at a committee meeting held in conjunction
with a regular quarterly or all-day special meeting of the Board of
Directors. Meeting fees shall be paid to each Director no later
than the first March 15 th following the end of the year in which the
meeting to which the payment relates was held.
2.5 Expense
Reimbursement Each Director shall be reimbursed for his or her
reasonable expenses incurred, if any, when attending meetings of
the Board of Directors and committee meetings. Such reimbursements
shall be paid to the Director no later than the first March
15 th
following the end of the year in
which the meeting to which the reimbursement relates was
held.
III.
RESTRICTED STOCK AWARDS
3.1 Annual
Retainer Grants of Restricted Stock Awards As part of the
Annual Retainer, at the close of business on April 1
st of each year, each Director shall receive
$36,000 payable in shares of restricted stock. The number of shares
of restricted stock to be granted shall be determined in the manner
provided in Section 2.2 of this Plan. In making yearly grants
of restricted stock, the Board of Directors expects each Director,
within three years of the date he or she becomes a member of the
Board of Directors, to own an amount of common stock equal to one
year of his or her average total board compensation. Common stock
received from grants made hereunder may be used to meet this
requirement.
3.2
Restrictions, Terms and C
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