Item 5.02. Departure of Directors or Certain Officers; Election of Directors;


            Appointment of Certain Officers; Compensatory Arrangements of Certain
            Officers.

(b) Effective as of December 12, 2019, Bryan H. Lawrence retired as a director of Carbon Energy Corporation ("Carbon" or the "Company"). Mr. Lawrence had served as a director since 2005. Mr. Lawrence's decision to resign from the Carbon Board of Directors (the "Board") did not involve a disagreement with Carbon on any matter relating to Carbon's operations, policies or practices.

In accordance with the terms and conditions of various restricted stock agreements between Carbon and Mr. Lawrence, 28,000 restricted shares of our common stock vested immediately upon his retirement from the Board.

(d) On December 12, 2019, the Company appointed John A. Bailey to the Board to fill the vacancy created by Mr. Lawrence's resignation. The appointment of Mr. Bailey is effective immediately. Mr. Bailey is a member of Yorktown Partners LLC ("Yorktown"), a manager of private equity partnerships which invest in the energy industry. Certain funds of Yorktown, in the aggregate, hold a majority of our outstanding capital stock. Mr. Bailey will serve as a member of the Board's Compensation, Nominating and Governance Committee and its Audit Committee, effective immediately. As an employee of Yorktown Energy Partners, L.P., Mr. Bailey has elected not to be compensated in cash for his service on the Board, but will be eligible to receive restricted stock awards.

As a Member of Yorktown, Mr. Bailey has an indirect interest in the following transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K:

· On February 15, 2017, the Company issued to Yorktown Energy Partners XI, L.P. a


   warrant to purchase shares of the Company's Common Stock at an exercise price
   of $7.20 per share (the "Warrant"). The Warrant was issued in connection with
   the Company entering into the Limited Liability Company Agreement of Carbon
   California Company, LLC, a Delaware limited liability company ("Carbon
   California"), described in the Company's Current Report filed on Form 8-K on
   February 21, 2017, and Carbon California engaging in the transactions also
   described in such Current Report. The exercise price for the Warrant is payable
   exclusively with Class A Units of Carbon California and the number of shares of
   the Company Common Stock for which the Warrant is exercisable is determined, as
   of the time of exercise, by dividing (a) the aggregate unreturned capital of
   the Warrantholder's Class A Units of Carbon California by (b) the exercise
   price. On February 1, 2018, Yorktown Energy Partners XI, L.P. exercised its
   rights under the Warrant and was issued 1,527,778 shares of the Company's
   Common Stock as described in the Company's Current Report filed on Form 8-K on
   February 7, 2018. The exercise of the Warrant allowed the Company to increase
   its ownership stake in Carbon California without requiring the payment of cash.

· As described in the Company's Current Report filed on Form 8-K on April 9,


   2018, on April 6, 2018, the Company entered into a preferred stock purchase
   agreement with Yorktown Energy Partners XI, L.P. for the sale of 50,000 shares
   of the Company's Series B convertible preferred stock at a price of $100 per
   share, resulting in proceeds to the Company of $5,000,000. The Series B
   convertible preferred stock converts into shares of our common stock at the
   election of the holder of Series B convertible preferred stock shares and will
   automatically convert into shares of the Company's common stock if and when the
   Company completes a qualifying equity financing. The number of shares of common
   stock issuable upon conversion is dependent upon the price per share of common
   stock issued in connection with any such qualifying equity financing but has an
   initial floor conversion price equal to $8.00 per share. The number of shares
   of common stock issuable upon conversion is currently determined by dividing
   the issue price of the Series B convertible preferred stock ($100.00) by $8.00,
   which currently results in each share of Series B convertible preferred stock
   being convertible into 12.5 shares of common stock. The conversion price will
   be proportionately increased or decreased to reflect changes to the outstanding
   shares of common stock, such as the result of a combination, reclassification,
   subdivision, stock split, stock dividend or other similar transaction involving
   the common stock.

(e) See Item 5.02(b) above.

© Edgar Online, source Glimpses