SBOW SilverBow Resources Inc

How will SilverBow’s 2024 Annual Bonuses be treated in the transaction?

Under the merger agreement, Crescent has agreed to pay continuing SilverBow employees the amount of their 2024 bonus that is accrued through the closing of the transaction (with performance deemed achieved at the greater of target or actual performance through closing). Such bonuses will be paid at the earlier of (i) within 30 days following the employee’s termination without cause or (ii) when 2024 bonuses are otherwise paid (and by no later than March 15, 2025). Employees who are terminated for cause or who voluntarily resign prior to payment of such amounts will not receive such bonus payments. Details regarding anticipated compensation programs for the post-closing period will be shared in the coming months.

How will outstanding employee equity awards be treated in the transaction?

RSUs: Each outstanding SilverBow time-based RSU award will be become fully vested and be converted into the right to receive: (1) a cash payment equal to the product of $38.00 and 50% of the number of SilverBow shares subject to such award, and (2) a number of Crescent shares equal to the product of 3.125 and 50% of the number of SilverBow shares subject to such award. Payments on such awards will be made no later than the first regularly scheduled payroll date that is at least three calendar days following the closing.

PSUs: Each outstanding SilverBow PSU award will become fully vested at the maximum level of performance and be converted into the right to receive: (1) a cash payment equal to the product of $38.00 and 50% of the number of SilverBow shares subject to such award, and (2) a number of Crescent shares equal to the product of 3.125 and 50% of the number of SilverBow shares subject to such award. Payments on such awards will be made no later than the first regularly scheduled payroll date that is at least three calendar days following the closing.

Stock Options: Each SilverBow stock option will be cancelled and converted into the right to receive a cash payment equal to the product of (A) the number of SilverBow shares subject to such stock option multiplied by (B) the difference between $38.00 and the exercise price per share of SilverBow common stock subject to such stock option.

How will SilverBow common stock be treated under the transaction (including shares acquired under previously vested/exercised employee equity awards)?

Holders of SilverBow common stock can elect to receive one of the following for each share of SilverBow common stock outstanding immediately prior to closing:

A combination of cash and stock: (A) $15.31 in cash per SilverBow share and (B) 1.866 shares of Crescent Energy Class A common stock per SilverBow share;

Cash: $38.00 in cash per SilverBow share (subject to proration if the aggregate cash consideration elected by shareholders exceeds $400,000,000); or

Stock: Shares of Crescent Class A common stock based on a fixed exchange ratio of 3.125 Crescent shares for each SilverBow share.

For Carrizo Springs employees, how will outstanding Chesapeake retention agreements that are scheduled to vest on November 30, 2024 (one year following the closing of the Chesapeake transaction) be handled if closing occurs before such date?

SilverBow intends to provide that any outstanding Chesapeake Cash Retention Award will vest on the earlier of: (i) the originally scheduled November 30, 2024 vesting date; and (ii) the closing of the merger.

Does SilverBow have a change in control severance plan? What severance protections are available for SilverBow employees?

Yes, SilverBow’s Compensation Committee adopted a change in control severance plan that protects all SilverBow employees who are not otherwise entitled to severance benefits if terminated without “Cause” (as defined in the plan) within 1 year following closing. Severance benefits under the plan are subject to the delivery of a general release of claims and include a Base Payment (that considers base pay, target bonus and length of service), COBRA and Outplacement Services. SilverBow’s Human Resources Department will follow-up with each employee individually on the protections and benefits provided under the change in control severance plan.

How will the SilverBow Resources, Inc. Employee Savings Plan (the “SilverBow 401(k) Plan”) be treated in connection with the transaction?

For the time being, the SilverBow 401(k) Plan will continue to operate as is. No changes have yet been approved regarding the plan.

Under the merger agreement, Crescent may request that SilverBow terminate the SilverBow 401(k) Plan just prior to the closing of the transaction. If this is done, all plan participants will become fully vested in their SilverBow 401(k) Plan account balances and would become entitled to a distribution of their plan account balances. Crescent has also agreed that if the SilverBow 401(k) Plan is terminated in connection with the closing, Crescent will use commercially reasonable efforts to (i) allow continuing employees to enroll in Crescent’s 401(k) plan within 30 days following the closing and (ii) roll over their account balances (including any plan loans) into the Crescent 401(k) plan.

Note that even if a plan participant has been employed with SilverBow for less than the one year period generally required to fully vest in the Company matching contributions under the SilverBow 401(k) Plan, plan participants would fully vest in those contributions if the plan were terminated in connection with the transaction.

Should the SilverBow 401(k) Plan be terminated in connection with the transaction, any matching contributions would be made through the plan termination date (including any true-up matching contributions).

More information regarding post-closing employee benefits, including the anticipated treatment of the SilverBow 401(k) Plan will be provided in the coming months.

What will happen to my PTO in connection with the transaction?

How will compensation and benefits be maintained by Crescent?

Under the merger agreement, Crescent has committed to provide the following to continuing employees for at least one year following the closing (or any shorter period of continuing employment):

No less favorable base salary or hourly wage rate as provided just prior to closing;

No less favorable target short-term cash incentive opportunities as provided just prior to closing;

No less favorable severance and termination benefits as provided just prior to closing (see above discussion regarding the change in control severance plan); and

All other employee benefits (other than change in control, transaction and retention bonuses and payments, nonqualified deferred compensation benefits and defined benefit pension and/or post-termination and retiree medical benefits) that are substantially similar in the aggregate to the greater of (x) those provided by SilverBow immediately prior to closing and (y) those provided by Crescent to its similarly situated employees.

Crescent has generally agreed to recognize employees’ prior service with SilverBow (and any other predecessor or acquired entities) for all purposes under its benefit plans to the same extent service was recognized by SilverBow prior to closing, subject to applicable laws and certain exclusions, including, for example when recognizing an employee’s prior service would result in a duplication of benefits or for purposes of frozen Crecent benefit plans. Crescent has agreed to use commercially reasonable efforts to:

Ensure SilverBow continuing employees are immediately eligible to participate in Crescent’s employee benefit plans;

Waive pre-existing condition exclusions and actively-at-work requirements for continuing employees under Crescent’s employee benefit plans; and

Recognize the dollar amount of all out-of-pocket expenses incurred by SilverBow continuing employees under SilverBow benefit plans during portion of plan year during which SilverBow employees transition to Crescent employee benefit plans, for purposes of satisfying any deductible, maximum out-of-pocket requirements and similar expenses under Crescent plans (assuming a mid-year welfare plan transition).

What is the expected timeline for the transaction?

SilverBow expects to close the transaction with Crescent in the third quarter of 2024. Until then, it is business as usual.

An illustrative timeline of key events is provided directly below:

What if I have additional questions?

As always, please reach out to SilverBow’s HR Department or your supervisor or manager for any additional questions or concerns.