Common use of Management Shares Clause in Contracts

Management Shares. (a) Each member of the Company's management named in Schedule I attached hereto (each a "Management Participant" and collectively the "Management Participants") shall have the right to receive as of the Effective Time (subject to Sections 1.13 and 1.6(b)) the number of Buyer Common Shares which have a Market Value equal to the excess, if any, of (x) such Management Participant's Bonus Pool Percentage of the Bonus Pool minus, (y) such Management Participant's Stockholder Payment (the "Management Shares"), it being understood that such calculation is dependent on the Common Conversion Ratio which is dependent on the definition of Management Shares and is an iterative calculation. (b) Of the Management Shares which each Management Participant shall have the right to receive as of the Effective Time pursuant to Section 1.6(a): (i) On the Closing Date the Buyer shall (A) deposit with the Escrow Agent the Indemnification Escrow Percentage of such Management Shares, calculated using the Closing Common Conversion Ratio, rounded up to the nearest whole number, which shares shall be designated as Indemnification Escrow Shares and deposited in escrow pursuant to Section 1.13(a) and (B) deliver the remainder of such Management Shares, calculated using the Closing Common Conversion Ratio, not deposited into escrow (the "Initial Management Shares") to the Exchange Agent for distribution to the Management Participants in accordance with 1.9. (ii) On the Asset Value Adjustment Date, if the Closing Net Asset Value Adjustment is positive, the Buyer shall (A) deposit with the Escrow Agent the Indemnification Escrow Percentage of such Management Shares, calculated using the Adjusted Common Conversion Ratio, rounded up to the nearest whole number, which shares shall be designated as Indemnification Escrow Shares and deposited in escrow pursuant to Section 1.13(a), and (B) deliver the remainder of such Management Shares not deposited into escrow to the Exchange Agent for distribution to the Management Participants in accordance with 1.9; in each case, less any Management Shares delivered to the Escrow Agent and the Management Participants, as the case may be, pursuant to Section 1.6(b)(i). (iii) On the date which is 18 months after the Closing Date, the Buyer shall (A) deposit with the Escrow Agent the Indemnification Escrow Percentage of any Management Shares not delivered pursuant to Section 1.6(b)(i) or 1.6(b)(ii), rounded up to the nearest whole number, which shares shall be designated as Indemnification Escrow Shares and deposited in escrow pursuant to Section 1.13(a), and (B) deliver the remainder of any such Management Shares not deposited into escrow (or delivered to the Management Participants pursuant to Sections 1.6(b)(i) or 1.6(b)(ii)) to the Exchange Agent for distribution to the Management Participants in accordance with Section 1.9; provided, however, that if any Management Participant has received (or has had deposited into Escrow) Buyer Common Shares pursuant to this Section 1.6(b) which exceeds such Management Participants' Management Shares, the Management Participant shall promptly return any such excess shares to the Buyer.

Management Shares. (a) Each member Immediately prior to the consummation of the Company's management named transactions contemplated by the Partnership Interests Purchase Agreement made and entered into as of July 5, 2005 by and among Capital C Energy, LP, Capital C Energy Partners, L.P. EnerVest Energy Institutional Fund X-A, L.P., EnerVest Energy Institutional Fund X-WI, L.P. and EnerVest Energy Institutional Fund X-B, L.P., (as amended, the “Purchase Agreement”), the Company will issue to Executive [17.1037] shares of its common stock, each with no par value, the “Management Shares.” The 1500 shares owned by Capital C Energy Operations, LP (the “Shareholder”) prior to such issuance will be referred to as the “Unrestricted Shares.” The transaction contemplated by the Purchase Agreement will be referred to as the “Transaction.” (b) Simultaneous “drag-along” and “tag-along” rights will automatically be deemed to be exercised in Schedule I attached hereto (each a "favor of both the Shareholder and Executive, respectively, compelling the inclusion of the Management Participant" Shares by Executive in the Transaction and collectively the "Management Participants") shall Executive will have the right to receive the same amount of consideration per share for the Management Shares as the Shareholder or Partners will receive for the direct or indirect sale of the Effective Time Unrestricted Shares (subject to Sections 1.13 and 1.6(b)) after taking into account the number of Buyer Common Shares which have a Market Value equal to the excess, if any, of (x) such Management Participant's Bonus Pool Percentage dilutive effect of the Bonus Pool minus, (y) such Management Participant's Stockholder Payment (issuance of the "Management Shares"), it being understood that such calculation is dependent on the Common Conversion Ratio which is dependent on the definition of Management Shares and is an iterative calculationless Management’s share of Transaction Expenses as described in the Purchase Agreement). (bc) Of Executive agrees that the Management Shares which each Management Participant shall have will not be issued if he has not signed the right Ratification Agreement in the form attached as Exhibit A. Furthermore, if Executive does not perform his obligations under the Ratification Agreement, the Shareholder and its partners will be entitled to receive as consummate the Transaction without inclusion of the Effective Time pursuant Management Shares, and such Management Shares will be deemed to Section 1.6(a):be automatically forfeited without consideration paid to Executive. (d) The Management Shares will be deemed automatically forfeited without consideration paid to Executive if (i) the Transaction is not consummated or (ii) Executive resigns other than due to death or disability prior to the consummation of the Transaction and such resignation is not made at the request of the Company. (e) Executive hereby designates, makes, constitutes and appoints the Shareholder as its proxy and attorney-in-fact to vote all or any of the Management Shares at all annual and special meetings of shareholders of the Company and to sign any unanimous written resolutions of the shareholders of the Company with the same force and effect as Executive might or could do and Executive hereby ratifies and confirms all that the Shareholder shall do or cause to be done by virtue hereof. This designation is coupled with an interest and is irrevocable and shall remain irrevocable as long as the Management Shares are owned by Executive. (f) Executive may not assign, transfer, mortgage, pledge or otherwise encumber the Management Shares without the prior written consent of the Company and the Shareholder, except (i) to the extent of any assignment or transfer under Executive’s will or under the laws of intestacy or (ii) upon and in connection with the closing of the Transaction as contemplated by the Ratification Agreement. (g) A certificate evidencing the Management Shares will be delivered by the Company to Riverstone Holdings LLC for safekeeping until either the certificate must be delivered in accordance with the closing of the applicable Transaction or the Management Shares are forfeited in accordance with the terms of this Compensation Agreement. (h) At the closing of the Transaction, Executive will reimburse the Company for the amount of any taxes required to be withheld by the Company in connection with the sale of the Management Shares. (i) On the Closing Date the Buyer shall (A) deposit with the Escrow Agent the Indemnification Escrow Percentage The Company represents and warrants to Executive that, upon issuance of such Management Shares, calculated using the Closing Common Conversion Ratio, rounded up to the nearest whole number, which shares shall be designated as Indemnification Escrow Shares and deposited in escrow pursuant to Section 1.13(a) and (B) deliver the remainder of such Management Shares, calculated using the Closing Common Conversion Ratio, not deposited into escrow (the "Initial Management Shares") to the Exchange Agent for distribution to the Management Participants in accordance with 1.9. Shares to Executive, (i) the Management Shares will be transferred to Executive free and clear of all Encumbrances (as defined below), (ii) On none of the Asset Value Adjustment Date, if the Closing Net Asset Value Adjustment is positive, the Buyer shall Management Shares issued to Executive will be subject to any restriction with respect to its transferability (A) deposit with the Escrow Agent the Indemnification Escrow Percentage of such Management Shares, calculated using the Adjusted Common Conversion Ratio, rounded up to the nearest whole number, which shares shall be designated other than as Indemnification Escrow Shares and deposited in escrow pursuant to Section 1.13(adescribed herein), and (Biii) deliver the remainder there will be no outstanding or authorized options, warrants, subscriptions, calls, puts, preemptive rights, subscription rights, “phantom” stock, rights of such Management Shares not deposited into escrow to the Exchange Agent for distribution to first refusal, conversion or other rights, contracts, agreements, commitments or understandings of any kind respecting the Management Participants in accordance with 1.9; in each case, less any Management Shares delivered to the Escrow Agent and the Management Participants, as the case may be, pursuant to Section 1.6(b)(i)Shares. (iii) On the date which is 18 months after the Closing Date, the Buyer shall (A) deposit with the Escrow Agent the Indemnification Escrow Percentage of any Management Shares not delivered pursuant to Section 1.6(b)(i) or 1.6(b)(ii), rounded up to the nearest whole number, which shares shall be designated as Indemnification Escrow Shares and deposited in escrow pursuant to Section 1.13(a), and (B) deliver the remainder of any such Management Shares not deposited into escrow (or delivered to the Management Participants pursuant to Sections 1.6(b)(i) or 1.6(b)(ii)) to the Exchange Agent for distribution to the Management Participants in accordance with Section 1.9; provided, however, that if any Management Participant has received (or has had deposited into Escrow) Buyer Common Shares pursuant to this Section 1.6(b) which exceeds such Management Participants' Management Shares, the Management Participant shall promptly return any such excess shares to the Buyer.

Management Shares. (a) Each member Immediately prior to the consummation of the Company's management named transactions contemplated by the Partnership Interests Purchase Agreement made and entered into as of July 5, 2005 by and among Capital C Energy, LP, Capital C Energy Partners, L.P. EnerVest Energy Institutional Fund X-A, L.P., EnerVest Energy Institutional Fund X-WI, L.P. and EnerVest Energy Institutional Fund X-B, L.P., (as amended, the “Purchase Agreement”), the Company will issue to Executive [17.1037] shares of its common stock, each with no par value, the “Management Shares.” The 1500 shares owned by Capital C Energy Operations, LP (the “Shareholder”) prior to such issuance will be referred to as the “Unrestricted Shares.” The transaction contemplated by the Purchase Agreement will be referred to as the “Transaction.” (b) Simultaneous “drag-along” and “tag-along” rights will automatically be deemed to be exercised in Schedule I attached hereto (each a "favor of both the Shareholder and Executive, respectively, compelling the inclusion of the Management Participant" Shares by Executive in the Transaction and collectively the "Management Participants") shall Executive will have the right to receive the same amount of consideration per share for the Management Shares as the Shareholder or the Partners will receive for the direct or indirect sale of the Effective Time Unrestricted Shares (subject to Sections 1.13 and 1.6(b)) after taking into account the number of Buyer Common Shares which have a Market Value equal to the excess, if any, of (x) such Management Participant's Bonus Pool Percentage dilutive effect of the Bonus Pool minus, (y) such Management Participant's Stockholder Payment (issuance of the "Management Shares"), it being understood that such calculation is dependent on the Common Conversion Ratio which is dependent on the definition of Management Shares and is an iterative calculationless Management’s share of Transaction Expenses as described in the Purchase Agreement). (bc) Of Executive agrees that the Management Shares which each Management Participant shall have will not be issued if he has not signed the right Ratification Agreement in the form attached as Exhibit A. Furthermore, if Executive does not perform his obligations under the Ratification Agreement, the Shareholder and its partners will be entitled to receive as consummate the Transaction without inclusion of the Effective Time pursuant Management Shares, and such Management Shares will be deemed to Section 1.6(a):be automatically forfeited without consideration paid to Executive. (d) The Management Shares will be deemed automatically forfeited without consideration paid to Executive if (i) the Transaction is not consummated or (ii) Executive resigns other than due to death or disability prior to the consummation of the Transaction and such resignation is not made at the request of the Company. (e) Executive hereby designates, makes, constitutes and appoints the Shareholder as its proxy and attorney-in-fact to vote all or any of the Management Shares at all annual and special meetings of shareholders of the Company and to sign any unanimous written resolutions of the shareholders of the Company with the same force and effect as Executive might or could do and Executive hereby ratifies and confirms all that the Shareholder shall do or cause to be done by virtue hereof. This designation is coupled with an interest and is irrevocable and shall remain irrevocable as long as the Management Shares are owned by Executive. (f) Executive may not assign, transfer, mortgage, pledge or otherwise encumber the Management Shares without the prior written consent of the Company and the Shareholder, except (i) to the extent of any assignment or transfer under Executive’s will or under the laws of intestacy or (ii) upon and in connection with the closing of the Transaction as contemplated by the Ratification Agreement. (g) A certificate evidencing the Management Shares will be delivered by the Company to Riverstone Holdings LLC for safekeeping until either the certificate must be delivered in accordance with the closing of the applicable Transaction or the Management Shares are forfeited in accordance with the terms of this Compensation Agreement. (h) At the closing of the Transaction, Executive will reimburse the Company for the amount of any taxes required to be withheld by the Company in connection with the sale of the Management Shares. (i) On the Closing Date the Buyer shall (A) deposit with the Escrow Agent the Indemnification Escrow Percentage The Company represents and warrants to Executive that, upon issuance of such Management Shares, calculated using the Closing Common Conversion Ratio, rounded up to the nearest whole number, which shares shall be designated as Indemnification Escrow Shares and deposited in escrow pursuant to Section 1.13(a) and (B) deliver the remainder of such Management Shares, calculated using the Closing Common Conversion Ratio, not deposited into escrow (the "Initial Management Shares") to the Exchange Agent for distribution to the Management Participants in accordance with 1.9. Shares to Executive, (i) the Management Shares will be transferred to Executive free and clear of all Encumbrances (as defined below), (ii) On none of the Asset Value Adjustment Date, if the Closing Net Asset Value Adjustment is positive, the Buyer shall Management Shares issued to Executive will be subject to any restriction with respect to its transferability (A) deposit with the Escrow Agent the Indemnification Escrow Percentage of such Management Shares, calculated using the Adjusted Common Conversion Ratio, rounded up to the nearest whole number, which shares shall be designated other than as Indemnification Escrow Shares and deposited in escrow pursuant to Section 1.13(adescribed herein), and (Biii) deliver the remainder there will be no outstanding or authorized options, warrants, subscriptions, calls, puts, preemptive rights, subscription rights, “phantom” stock, rights of such Management Shares not deposited into escrow to the Exchange Agent for distribution to first refusal, conversion or other rights, contracts, agreements, commitments or understandings of any kind respecting the Management Participants in accordance with 1.9; in each case, less any Management Shares delivered to the Escrow Agent and the Management Participants, as the case may be, pursuant to Section 1.6(b)(i)Shares. (iii) On the date which is 18 months after the Closing Date, the Buyer shall (A) deposit with the Escrow Agent the Indemnification Escrow Percentage of any Management Shares not delivered pursuant to Section 1.6(b)(i) or 1.6(b)(ii), rounded up to the nearest whole number, which shares shall be designated as Indemnification Escrow Shares and deposited in escrow pursuant to Section 1.13(a), and (B) deliver the remainder of any such Management Shares not deposited into escrow (or delivered to the Management Participants pursuant to Sections 1.6(b)(i) or 1.6(b)(ii)) to the Exchange Agent for distribution to the Management Participants in accordance with Section 1.9; provided, however, that if any Management Participant has received (or has had deposited into Escrow) Buyer Common Shares pursuant to this Section 1.6(b) which exceeds such Management Participants' Management Shares, the Management Participant shall promptly return any such excess shares to the Buyer.

Management Shares. (a) Each member of In the Company's management named in Schedule I attached hereto (each a "event that any Management Participant" and collectively Holder voluntarily resigns from the "Management Participants") Company without Good Reason on or before June 30, 1999, the Company shall have the right option, exercisable for a period of twelve (12) months, to receive as of the Effective Time (subject to Sections 1.13 and 1.6(b)) the number of Buyer acquire any or all Common Shares which have and any or all Common Share Equivalents beneficially owned by such Management Holder and such Management Holder's Permitted Management Holder Transferees. If the Company elects to exercise such option, it shall pay such resigning Management Holder a Market Value price for such Common Shares and/or Common Share Equivalents equal to the excess, if any, lesser of (xi) the price originally paid by such Management Participant's Bonus Pool Percentage of Person to acquire such Common Shares and/or Common Share Equivalents and (ii) the Bonus Pool minus, (y) such Management Participant's Stockholder Payment (the "Management Shares"), it being understood that such calculation is dependent on the Common Conversion Ratio which is dependent on the definition of Management Shares and is an iterative calculationFair Market Value thereof. (b) Of In the event that at any time the Company dismisses or terminates the employment of any Management Shares which each Management Participant Holder for Cause, the Company shall have the right option, exercisable for a period of twelve (12) months, to receive as acquire any or all Common Shares and any or all Common Share Equivalents beneficially owned by such Management Holder and such Management Holder's Permitted Management Holder Transferees at a price per share for such Common Shares or Common Share Equivalents equal to the lesser of (i) the Effective Time pursuant price originally paid by such Person to Section 1.6(a):acquire such Common Shares and/or Common Share Equivalents and (ii) the Fair Market Value thereof. (c) In the event that, prior to the consummation of a Qualified IPO, the Company dismisses or terminates the employment of any Management Holder without Cause, the Company shall have the option, exercisable for a period of twelve (12) months, to acquire any or all Common Shares and any or all Common Share Equivalents beneficially owned by such Management Holder and such Management Holder's Permitted Management Holder Transferees at a price per share for such Common Shares or Common Share Equivalents equal to the Fair Market Value thereof. (d) In the event that any Management Holder voluntarily resigns from the Company without Good Reason after June 30, 1999 and prior to the consummation of a Qualified IPO, the Company shall have the option, exercisable for a period of twelve (12) months, to acquire any or all Common Shares and any or all Common Share Equivalents beneficially owned by such Management Holder and such Management Holder's Permitted Management Holder Transferees. If the Company elects to exercise such option, it shall pay such resigning Management Holder a price for such Common Shares and/or Common Share Equivalents equal to the Fair Market Value thereof. (e) In the event that any Management Holder voluntarily resigns from the Company with Good Reason prior to the consummation of a Qualified IPO, the Company shall have the option, exercisable for a period of twelve (12) months, to acquire any or all Common Shares and any or all Common Share Equivalents beneficially owned by such Management Holder and such Management Holder's Permitted Management Holder Transferees. If the Company elects to exercise such option, it shall pay such resigning Management Holder a price for such Common Shares and/or Common Share Equivalents equal to the Fair Market Value thereof. (i) On In the Closing Date event that any Management Holder's employment by the Buyer shall (A) deposit with Company is terminated due to the Escrow Agent the Indemnification Escrow Percentage death or permanent disability of such Management Shares, calculated using the Closing Common Conversion Ratio, rounded up Holder prior to the nearest whole numberconsummation of a Qualified IPO, which shares the Company shall be designated as Indemnification Escrow have the option, exercisable for a period of twelve (12) months, to acquire any or all Common Shares and deposited in escrow pursuant to Section 1.13(a) and (B) deliver the remainder of any or all Common Share Equivalents beneficially owned by such Management SharesHolder and such Management Holder's Permitted Management Holder Transferees. If the Company elects to exercise such option, calculated using the Closing it shall pay such resigning Management Holder a price for such Common Conversion Ratio, not deposited into escrow (the "Initial Management Shares") Shares and/or Common Share Equivalents equal to the Exchange Agent for distribution to the Management Participants in accordance with 1.9Fair Market Value thereof. (ii) On In the Asset Value Adjustment Date, if event that any Management Holder's employment by the Closing Net Asset Value Adjustment Company is positive, terminated due to the Buyer shall (A) deposit with the Escrow Agent the Indemnification Escrow Percentage permanent disability of such Management Shares, calculated using the Adjusted Common Conversion Ratio, rounded up Holder prior to the nearest whole numberconsummation of a Qualified IPO, which shares such Management Holder shall be designated as Indemnification Escrow Shares and deposited in escrow pursuant have the option, exercisable for a period of twelve (12) months, to Section 1.13(a)require the Company to repurchase from such Management Holder and, and (B) deliver the remainder if applicable, any of such Management Holder's Permitted Management Holder Transferees all Common Shares not deposited into escrow and all Common Share Equivalents beneficially owned by such Management Holder and such Management Holder's Permitted Management Holder Transferees. If such Management Holder elects to exercise such option, the Company shall pay such resigning Management Holder a price for such Common Shares and/or Common Share Equivalents equal to the Exchange Agent for distribution Fair Market Value thereof on the date (the "Disability Put Exercise Date") of the exercise of such option (the "Disability Put Price") over a period of three (3) years, without interest, as follows: the Company shall pay one-third of the disability Put Price on the first anniversary of the Disability Put Exercise Date, the Company shall pay one-third of the disability Put Price on the second anniversary of the Disability Put Exercise Date and the Company shall pay the final one-third of the disability Put Price on the third anniversary of the Disability Put Exercise Date. (g) Notwithstanding anything to the Management Participants contrary in accordance with 1.9; this Section 3.9, in each case, less the event that any Management Holder voluntarily resigns from the Company prior to June 30, 2002 and, within the 24-month period thereafter, accepts employment in any capacity with any Adverse Person, then the Company shall have the option to acquire any or all Common Shares delivered and any or all Common Share Equivalents beneficially owned by such Management Holder and such Management Holder's Permitted Management Holder Transferees at a price per share for such Common Shares or Common Share Equivalents equal to the Escrow Agent lesser of the price originally paid by such Person to acquire such Common Shares and/or Common Share Equivalents and the Fair Market Value thereof, and if such Common Shares and Common Share Equivalents have previously been purchased by the Company pursuant to any other provision of this Section 3.9, then such Management ParticipantsHolder and such Management Holder's Permitted Management Holder Transferees shall immediately return to the Company any excess amounts received by such Management Holder or such Management Holder's Permitted Management Holder Transferees, respectively, pursuant to such provisions as compared to the amount receivable under this Section 3.9(g). (h) In the event that the Company elects to exercise any option granted pursuant to this Section 3.9 to acquire any Common Shares and/or any Common Share Equivalents beneficially owned by one or more Management Holders and/or Permitted Management Holder Transferees, the Company shall pay the purchase price for such Common Shares and/or Common Share Equivalents (less the principal amount of all promissory notes due to the Company from the respective Management Holder, all of which promissory notes shall be canceled insofar as the amount of such Management Holder's promissory note(s) is less than or equal to such purchase price) in cash, up to an aggregate maximum purchase price for all such purchases of $2,000,000; PROVIDED, HOWEVER, that if, with respect to any Management Holder, the amount of such Management Holder's promissory note(s) is greater than the purchase price for such Common Shares and/or Common Share Equivalents, as the case may be, the amount of such promissory note(s) that is in excess of such purchase price shall continue to be payable pursuant to Section 1.6(b)(i). (iii) On the date which is 18 months after the Closing Date, the Buyer shall (A) deposit with the Escrow Agent the Indemnification Escrow Percentage terms of any Management Shares not delivered pursuant to Section 1.6(b)(i) or 1.6(b)(iisuch promissory note(s), rounded up to which shall otherwise remain in full force and effect. If the nearest whole number, which shares shall be designated as Indemnification Escrow Shares and deposited in escrow pursuant to Section 1.13(a), and (B) deliver the remainder of any such Management Shares not deposited into escrow (or delivered aggregate amount paid to the Management Participants pursuant to Sections 1.6(b)(i) or 1.6(b)(ii)) to the Exchange Agent for distribution to the Holders and Permitted Management Participants in accordance with Section 1.9; provided, however, that if any Management Participant has received (or has had deposited into Escrow) Buyer Common Shares Holder Transferees pursuant to this Section 1.6(b3.9 (without taking into account the amounts of any such notes) equals $2,000,000, then the Company shall make any additional payments required under this Section 3.9 by delivery of promissory notes, each of which exceeds shall be subordinated to all debt of the Company, bearing interest at 7% per annum (which interest may be payable by delivery of notes of like tenor in principal amount equal to the interest then due) with a maturity one year beyond the maturity of Company's subordinated debt at the close of business on the date of this Agreement. (i) Notwithstanding anything to the contrary in this Section 3.9, in the event that (x) any Management Holder voluntarily retires from the Company and (y) the Board of Directors approves such retirement, then the provisions of Section 3.9(a), (d) and (e) shall not apply to such Management Participants' Management Shares, the Management Participant shall promptly return any such excess shares to the BuyerHolder.