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Executive Compensation Plan Agreement

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Governing Law: New York     Date: 8/22/2005

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Exhibit 10.4


This Compensation Agreement, dated as of August 16, 2005, is entered into between Belden & Blake Corporation (the “Company”) and James A. Winne III (“Executive”).

WHEREAS , Executive has acted as the Chairman of the Board of Directors and Chief Executive Officer of the Company since December 16, 2004; and

WHEREAS , the Company desires to enter into this Compensation Agreement with Executive in order to provide him with compensation for services rendered and for future services;

NOW THEREFORE , in consideration of the promises and mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Executive hereby agree as follows:




Management Shares

(a) Immediately prior to the consummation of the 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 favor of both the Shareholder and Executive, respectively, compelling the inclusion of the Management Shares by Executive in the Transaction and 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 Unrestricted Shares (after taking into account the dilutive effect of the issuance of the Management Shares and less Management’s share of Transaction Expenses as described in the Purchase Agreement).

(c) Executive agrees that the Management Shares will not be issued if he has not signed the 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 consummate the Transaction without inclusion of the Management Shares, and such Management Shares will be deemed to 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) The Company represents and warrants to Executive that, upon issuance of the Management Shares to Executive, (i) the Management Shares will be transferred to Executive free and clear of all Encumbrances (as defined below), (ii) none of the Management Shares issued to Executive will be subject to any restriction with respect to its transferability (other than as described herein), and (iii) there will be no outstanding or authorized options, warrants, subscriptions, calls, puts, preemptive rights, subscription rights, “phantom” stock, rights of first refusal, conversion or other rights, contracts, agreements, commitments or understandings of any kind respecting the Management Shares.

2.  Severance . In the event that Executive’s employment is terminated by the Company (or Executive resigns at the request of the Company) in connection with the consummation of the Transaction, Executive will promptly be paid $250,000.00, less applicable withholding taxes. Executive agrees that at the time of his resignation or termination, Executive will execute a Separation Agreement and Release substantially in the form of Exhibit B hereto.




Executive’s Representations

(a) The Executive is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the Securities Act of 1933.

(b) The Management Shares to be received by the Executive hereunder will be acquired for the Executive’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Executive has no present intention of selling, granting any participation in, or otherwise distributing the same other than as contemplated by the Transaction.

(c) The Executive acknowledges that he can bear the economic risk and complete loss of its investment in the Management Shares and has such knowledge and experience in financial or business matters that he is capable of evaluating the merits and risks of the investment contemplated hereby.

(d) The Executive has had an opportunity to receive documents related to the Company and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the issuance of the Management Shares.

4.  Entire Agreement; Amendment . This Compensation Agreement and the Ratification Agreement constitute the entire agreement and understanding between the parties relating to the subject matter hereof and supersede all prior representations, endorsements, premises, agreements, memoranda communications, negotiations, discussions, understandings and arrangements, whether oral, written or inferred, between the parties relating to the subject matter hereof. This Compensation Agreement (or any provision hereof) may not be modified, amended, rescinded, canceled, altered or supplemented, in whole or in part, except upon the execution and delivery of a written instrument executed by the parties hereto.

5.  Governing Law . This Agreement shall be governed by, construed and interpreted in accordance with the internal laws of the State of New York, without regard to choice of law rules.

6.  Waiver . The waiver of any breach of any term or condition of this Agreement shall not be deemed to constitute the waiver of any other breach of the same or any other term or condition.

7.  Severability . Any provision hereof that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the ex

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