EX-10.1


    Exhibit
      10.1

     

    


     

    


     

    PERFORMANCE
      SHARE AWARD CERTIFICATE

     

    THIS
      IS
      TO CERTIFY that KCS Energy, Inc., a Delaware corporation (the “Company”),
      has
      offered you (the “Participant”)
      the
      opportunity to receive Common Stock of the Company, contingent upon satisfaction
      of certain performance criteria (“Performance
      Shares”).
      If
      the minimum performance criteria are satisfied at the end of the Performance
      Period, the Performance Shares will be paid to you in the form of restricted
      stock (“Bonus
      Stock”)
      under
      the Company’s 2005 Employee and Directors Stock Plan (the “Plan”),
      as
      follows: 

     

    
      	
              Name
                of Participant:

            	
                   

            
	 	 
	
              Address
                of Participant:

            	
                   

            
	 	
               

            
	 	
               

            
	
              Target
                Number 

            	 
	
              of
                Performance Shares:

            	
               

            
	 	 
	
              Performance
                Period:

            	
              January
                1, 2006 through December 31, 2008

            
	 	 
	
              Offer
                Grant Date:

            	
               

            
	 	 
	
              Offer
                Expiration Date:

            	
              15
                Days after the Offer Grant Date

            


    

    


     

    By
      your
      signature and the signature of the Company’s representative below, you and the
      Company agree to be bound by all of the terms and conditions of the Performance
      Share Award Agreement, which is attached hereto as Annex I and the Plan (both
      incorporated herein by this reference as if set forth in full in this document).
      By executing this Certificate, you hereby irrevocably elect to accept the
      Performance Share Award rights granted pursuant to this Certificate and the
      related Performance Share Award Agreement and, contingent on satisfaction of
      the
      performance criteria in the Performance Share Award Agreement, to receive some
      or all of the shares of Bonus Stock of KCS Energy, Inc. designated above subject
      to the terms and restrictions of the Plan, this Certificate and the Award
      Agreement.

     

    


    
      	
              PARTICIPANT:

            	 	
              KCS
                ENERGY, INC.

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	 
	
              ,
                an individual

            	 	 	
              James
                W. Christmas, Chairman and Chief Executive Officer

            
	 	 	 	 	 
	
              Dated:

            	 	 	
              Dated:

            	 


    

    


    


     

     

    
      	KCS
              Energy, Inc. Performance Share Award Certificate 	 


    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    ANNEX
      I


    

    


     

    


    


    KCS
      ENERGY, INC.

    2005
      EMPLOYEE AND DIRECTORS STOCK PLAN

    PERFORMANCE
      SHARE AWARD AGREEMENT



    This
      Performance Share Award Agreement (this “Agreement”),
      is
      made and entered into on the execution date of the Performance Share Award
      Certificate to which it is attached (the “Certificate”),
      by and
      between KCS Energy, Inc., a Delaware corporation (the “Company”),
      and
      the individual (“Participant”)
      named
      in the Certificate. 

     

    Pursuant
      to the KCS Energy, Inc. 2005 Employee and Directors Stock Plan (the “Plan”),
      the
      Administrator of the Plan has authorized the grant to Participant of the right
      to earn Performance Shares payable in the form of restricted stock (“Bonus
      Stock”) of the Company’s Common Stock (the “Award”),
      upon
      the terms and subject to the conditions set forth in the Certificate, this
      Agreement and in the Plan. Capitalized terms not otherwise defined herein shall
      have the meanings ascribed to them in the Plan.

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and the benefits to be derived from the mutual
      observance of the covenants and promises contained herein and other good and
      valuable consideration, the sufficiency of which is hereby acknowledged, the
      parties hereto agree as follows:

     

    1.     Basis
      for Award. This
      Award is made pursuant to the Plan for valid consideration provided to the
      Company by the Participant. By your execution of the Certificate, you agree
      to
      accept the Performance Share Award rights granted pursuant to the Certificate
      and this Performance Share Award Agreement and, contingent on satisfaction
      of
      the performance criteria in this Performance Share Award Agreement, to receive
      some or all of the shares of Bonus Stock of KCS Energy, Inc. designated in
      the
      Certificate subject to the terms and restrictions of the Plan, the Certificate
      and this Performance Share Award Agreement. If the minimum performance criteria
      are not satisfied at the end of the Performance Period, your Performance Shares
      will be forfeited.

     

    2.     Performance
      Share Award.
      Pursuant to the Plan and subject further to the terms and conditions herein
      set
      forth, the Company and Participant enter into this Agreement pursuant to which
      Participant may earn between 0% and 200% of the target number of Performance
      Shares specified in the Certificate. Each Performance Share represents the
      value
      of one share of the common stock of the Company. Upon the Company's achievement
      of pre-determined objectives (“Performance Criteria) for the Performance Period
      specified in the certificate, the Company will pay out to Employee some or
      all
      of the Performance Shares in the form of Bonus Stock as hereinafter described.
      If the minimum Performance Criteria are not satisfied at the end of the
      Performance Period, your Performance Shares will be forfeited. This Award shall
      be administered by the Administrator of the Stock Plan, currently the
      Compensation Committee (the “Committee”) of the Board of Directors (the “Board”)
      of the Company, and shall operate on the basis of the designated Performance
      Period. The Committee is authorized to interpret the Performance Criteria and
      from time to time may adopt such rules, regulations, definitions and forms
      consistent with the provisions of the Performance Criteria as it may deem
      advisable to carry out the Performance Criteria. 

     

    3.    Vesting
      of Performance Share Awards.
      The
      Performance Share Awards will be paid in the form of Bonus Stock if the
      Performance Criteria are determined to be satisfied at the end of the
      Performance Period and the Participant has been continuously employed by the
      Company or a subsidiary through the end of the Performance Period. If the
      minimum Performance Criteria are not satisfied, the Performance Share Award
      will
      be forfeited at the end of the Performance Period. Any such Bonus Stock that
      is
      granted at the end of the Performance Period will be subject to additional
      forfeiture and transfer restrictions during the one-year period that begins
      after the end of the Performance Period. The restrictions on transfer shall
      lapse and the Bonus Stock shall become 100% vested if the
      participant

     

     

    
       

      
        
          	KCS
                  Energy, Inc. Performance Share Award Certificate 	
                   Page
                    1

                


        



    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    continues
      to be employed by the Company or a subsidiary for the additional one-year period
      after the end of the Performance Period. 

     

    4.     Calculation
      of Performance Share Awards.
      The
      potential range of Performance Share Awards for the designated Performance
      Period shall be determined and calculated as follows:

     

    (a)     The
      Performance Share Award shall be based upon the Company’s Total Stockholder
      Return as compared to the Total Stockholder Return of the Company’s Peer Group
      during the Performance Period. For this purpose, Total Stockholder Return will
      equal a percentage equal to the Change in Stock Value divided by the Beginning
      Stock Value as described further below. The percentage of the Target Number
      of
      Performance Shares specified in the Certificate that will be granted as Bonus
      Stock will be determined based on the Company’s Total Stockholder Return in
      comparison to the Total Stockholder Return of the Company’s Peer Group.


     

    (b)     The
      percentage of the Target Number of Performance Shares that is used to determine
      the Bonus Stock shall be determined based on the following
      schedule:

     

    
      	
               

               

              Company’s
                Percentile Rank in Peer Group

            	
              Percentage
                of Target Number of

               Performance
                Shares to be 

              Granted
                as Bonus Stock

            
	
              Less
                than 33rd
                Percentile Rank

            	
              0%

            
	 	 
	
              Minimum
                Threshold
                -
                Percentile Rank is equal to 

              or
                greater than 33rd
                percentile, but less than 54th

              percentile

            	
              50%

               

            
	 	 
	
              Target
                -
                Percentile Rank is equal to or greater 

              than
                54th
                percentile, but less than 80th
                percentile

            	
              100%

               

            
	 	 
	
              Maximum
                -
                Percentile Rank is equal to or greater

               than
                80th
                percentile

            	
              200%

               

            


    

     

    (c)     Notwithstanding
      Section 4(b), no Bonus Stock will be payable unless the Total Stockholder Return
      during the Performance Period equals or exceeds six percent (6%) per
      annum.

     

    (d)    For
      purposes of this Section 4: 

     

    1.     “Beginning
      Stock Value”
shall
      mean $100, invested in common stock at the average closing price on the New
      York
      Stock Exchange, American Stock Exchange or Nasdaq, as the case may be, of one
      share of common stock during each trading day in the 30 calendar day period
      immediately preceding the first day of the Performance Period. 

     

    2.     “Change
      in Stock Value”
shall
      mean the Ending Stock Value minus the Beginning Stock Value. 

     

    3.     “Ending
      Stock Value”
shall
      mean the average closing price on the New York Stock Exchange, American Stock
      Exchange or Nasdaq, as the case may be, of one share of common stock during
      each
      trading day in the 30 calendar day period immediately preceding the last day
      of
      the Performance Period, multiplied by the sum of the number of shares
      represented by the Beginning Stock Value initial $100 investment plus such
      additional shares resulting from all dividends paid on common stock during
      the
      Performance Period being treated as though they are reinvested on the applicable
      ex-dividend dates at the applicable closing price on such dates. Shares used
      in
      determining Total Stockholder Return shall be appropriately adjusted for stock
      splits and stock dividends during the Performance Period.

     

    
       

      
        	KCS
                Energy, Inc. Performance Share Award Certificate 	
                 Page
                  2

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    5.     Peer
      Companies.
      For the
      Performance Period, the following companies are the Peer Companies to be used
      to
      determine the Company’s Percentile Rank based on Total Stockholder Return:


     

    (a)     Comstock
      Resources (CRK)

     

    (b)     Encore
      Acquisition (EAC)

     

    (c)     Energy
      Partners Limited (EPL)

     

    (d)     Meridian
      Resource (TMR)

     

    (e)     Penn
      Virginia (PVA)

     

    (f)     St.
      Mary
      Land & Exploration (SM)

     

    (g)     Stone
      Energy Corporation (SGY)

     

    (h)     Swift
      Energy Company (SFY)

     

    (i)        
      Whiting
      Petroleum Company (WLL)

     

    (j)    
 Petrohawk
      Energy Corporation (HAWK)

     

    In
      the
      event that a company in the Peer Group is no longer in existence or does not
      have a class of common stock that is listed on the New York Stock Exchange,
      American Stock Exchange or Nasdaq on the last day of the Performance Period,
      such company shall be removed from the Peer Group; the Committee may, in its
      sole discretion, replace such company with another company of its choosing
      or
      reduce the size of the Peer Group. The Committee also may, in its sole
      discretion, remove or replace with another company of its choosing or reduce
      the
      size of the Peer Group in the event a company in the Peer Group merges with
      or
      is acquired by another company, including another Peer Group
      company.

     

    6.     Payout
      of Award.
      The
      payment of Bonus Stock in settlement of Performance Share Awards earned for
      the
      Performance Period will only be issued to Participant as soon as practicable
      following the Committee’s formal review and certification of the actual Total
      Stockholder Return and Percentile Rank performance results of the Company and
      the Peer Group for the Performance Period. 

     

    7.     Payments
      in Event of Termination.
      

     

    (a)     In
      the
      event Participant terminates employment with the Company for any reason (other
      than an event described in Section 7(b) hereof) prior to the end of the
      Performance Period and the date of payment of a Performance Share Award, no
      Bonus Stock shall be due hereunder. Any unvested Performance Share Award shall
      be forfeited and shall be added to the share reserve under the Stock Plan.
      

     

    (b)     Notwithstanding
      the provisions of Section 7(a), in the event Participant terminates employment
      with the Company prior to the last day of a Performance Period on account of
      death, Disability or Retirement or a Change in Control Termination, the
      Participant (or the Participant’s beneficiary or estate in the event of the
      Participant’s death) will be entitled to a fully vested Prorated Award without
      regard to any requirement that the participant continue to be employed through
      the one year period following the last day of the Performance Period. A
“Change
      in Control Termination”
means
      an involuntary termination of a participant’s employment by the Company, other
      than for Cause, that occurs following a Change in Control during either the
      Performance Period or the one year vesting period following the end of the
      Performance Period.



    (c)     For
      purposes of determining the percentage of the Target Number of Performance
      Shares that is used to determine a Prorated Award, the prorated actual
      performance will be 

     

    
       

      
        	KCS
                Energy, Inc. Performance Share Award Certificate 	
                 Page
                  3

              


      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    used
      for
      any full calendar year completed by the Participant and for the remaining period
      it shall be assumed that the Company’s Percentile Rank is equal to or greater
      than 54th
      percentile, but less than 80th
      percentile and that the Participant is entitled to Bonus Stock equal to 100%
      of
      the Target Grant Level for any calendar year portion of the Performance Period
      in which Participant is employed for less than the full calendar year. For
      example, in 2007 a Change in Control Termination occurs. The Percentile Rank
      for
      2006 will be determined based on 2006 Total Stockholder Return and the
      percentage of the Target Grant Level that is used to determine the Bonus Stock
      will be determined based on 2006 Percentile Rank multiplied by 1/3. The
      remaining percentage of the Target Grant Level that is used to determine the
      Bonus Stock will be calculated based on 100% of the Target Grant Level
      multiplied by 2/3. 

     

    (d)     If
      a
      Change in Control Termination occurs during the one-year vesting period that
      begins after the end of the Performance Period, then the Bonus Stock shall
      become fully vested and will not be subject to restrictions on
      transfer.

     

    8.     Compliance
      with Laws and Regulations.
      The
      issuance and transfer of Common Stock shall be subject to compliance by the
      Company and Participant with all applicable requirements of federal and state
      securities laws and with all applicable requirements of any stock exchange
      on
      which the Company’s Common Stock may be listed at the time of such issuance or
      transfer. 

     

    9.     Tax
      Withholding.
      

     

    (a)     Participant
      agrees that, no later than the first to occur of (i) the date as of which the
      restrictions on the Bonus Stock shares shall lapse or (ii) the date required
      by
Section
      5(b)
      below,
      Participant shall pay to the Company (in cash or to the extent permitted by
      the
      Administrator, by tendering Company Stock held by the Participant, including
      Bonus Stock held in escrow that becomes vested (“Share
      Withholding”),
      with
      a Fair Market Value on the date the Bonus Stock vests equal to the amount of
      Participant’s minimum statutory tax withholding liability, or to the extent
      permitted by the Administrator, a combination thereof) any federal, state or
      local taxes of any kind required by law to be withheld, if any, with respect
      to
      the Bonus Stock for which the restrictions shall lapse. The Company shall,
      to
      the extent permitted by law, have the right to deduct from any payment of any
      kind otherwise due to Participant any federal, state or local taxes of any
      kind
      required by law to be withheld with respect to the shares of such Company Stock.
      Payment of the tax withholding by a Participant who is an officer, director
      or
      other “insider” subject to Section 16(b) of the Exchange Act by tendering
      Company Stock or in the form of Share Withholding is subject to pre-approval
      by
      the Administrator, in its sole discretion, in a manner that complies with the
      specificity requirements of Rule 16b-3 under the Exchange Act. The information
      required to comply with the specificity requirements of Rule 16b-3 under the
      Exchange Act shall include the name of the Participant involved in the
      transaction, the nature of the transaction, the number of shares to be acquired
      or disposed of by the Participant and the material terms of the Award involved
      in the transaction.

     

    (b)     Participant
      may elect, within thirty (30) days of the transfer by the Company to the
      Participant of the Bonus Stock, to include in gross income for federal income
      tax purposes an amount equal to the Fair Market Value of the Bonus Stock granted
      hereunder pursuant to Section 83(b) of the Internal Revenue Code of 1986, as
      amended. In connection with any such Section 83(b) election, Participant shall
      pay to the Company, or make such other arrangements satisfactory to the
      Administrator to pay to the Company based on the Fair Market Value of the Bonus
      Stock on the transfer date (after the Committee certification), any federal,
      state or local taxes required by law to be withheld with respect to such Shares
      at the time of such election. If Participant fails to make such payments, the
      Company shall, to the extent permitted by law, have the right to deduct from
      any
      payment of any kind otherwise due to Participant any federal, state or local
      taxes required by law to be withheld with respect to such Bonus Stock.


     

    10.     No
      Right to Continued Service.
      Nothing
      in this Agreement shall be deemed by implication or otherwise to impose any
      limitation on any right of the Company to terminate the Participant’s service at
      any time. In the event Participant’s employment with the Company is terminated
      by the Company, by Participant or as a result of Participant’s death or
      disability (unless the acceleration provisions of Section 3 are applicable),
      no
      unvested shares of Common Stock shall become vested after such termination
      of
      employment.

     

    
      
         

        
          	KCS
                  Energy, Inc. Performance Share Award Certificate 	
                   Page
                    4

                


        

      

       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

     

    11.     Representations
      and Warranties of Participant.
      Participant represents and warrants to the Company that:

     

    (k)     Agrees
      to Terms of the Plan.
      Participant has received a copy of the Plan and has read and understands the
      terms of the Plan, the Certificate and this Agreement, and agrees to be bound
      by
      their terms and conditions. Participant acknowledges that there may be adverse
      tax consequences upon the vesting of Bonus Stock or disposition of the shares
      of
      Common Stock once vested, and that Participant should consult a tax advisor
      prior to such time.

     

    (l)     SEC
      Rule 144.
      Participant understands that Rule 144 promulgated under the Securities Act
      may
      indefinitely restrict transfer of the Common Stock awarded as Bonus Stock so
      long as Participant remains an “affiliate” of the Company or if “current public
      information” about the Company (as defined in Rule 144) is not publicly
      available.

     

    12.     Compliance
      with U.S. Federal Securities Laws.
      Participant understands and acknowledges that notwithstanding any other
      provision of the Agreement to the contrary, the vesting and holding of the
      Common Stock awarded as Bonus Stock is expressly conditioned upon compliance
      with the Securities Act and all applicable federal and state securities laws.
      Participant agrees to cooperate with the Company to ensure compliance with
      such
      laws.

     

    13.     Forfeiture
      of Unvested Stock.
      Unless
      otherwise provided in an employment agreement the terms of which have been
      approved by the Administrator, if unvested Common Stock (“Unvested
      Shares”)
      standing in the name of Participant on the books of the Company does not become
      vested on or before the expiration of the period during which the applicable
      vesting conditions must occur, such Unvested Shares shall be automatically
      forfeited and cancelled as outstanding shares of Common Stock immediately upon
      the occurrence of the event or time period after which such Unvested Shares
      may
      no longer become vested.

     

    14.     Restrictions
      on Unvested Shares.

     

    (m)     Deposit
      of the Unvested Shares.
      Participant shall deposit all of the Unvested Shares with the Company to hold
      until the Unvested Shares become vested, at which time such vested shares shall
      no longer constitute Unvested Shares. Participant shall execute and deliver
      to
      the Company, concurrently with the execution of this Agreement blank stock
      powers for use in connection with the transfer to the Company or its designee
      of
      Unvested Shares that do not become vested. The Company will deliver to
      Participant the Stock Certificate for the shares of Common Stock that become
      vested upon vesting of such shares. 

     

    (n)     Restriction
      on Transfer of Unvested Shares.
      Participant shall not transfer, assign, grant a lien or security interest in,
      pledge, hypothecate, encumber or otherwise dispose of any of the Unvested
      Shares, except as permitted by this Agreement.

     

    15.     Adjustments.
      The
      number of Performance Shares and Unvested Shares attributable to Bonus Stock
      shall be automatically adjusted to reflect any stock split, stock dividend,
      recapitalization, merger, consolidation, reorganization, combination or
      exchanges of shares or other similar event affecting the Company’s outstanding
      Common Stock subsequent to the date of this Agreement. If Participant becomes
      entitled to receive any additional shares of Common Stock or other securities
      (“Additional
      Securities”)
      in
      respect of the Unvested Shares, the total number of Unvested Shares shall be
      equal to the sum of (i) the initial Unvested Shares; and,
      (ii)
      the number
      of
      Additional Securities issued or issuable in respect of the initial Unvested
      Shares and any Additional Securities previously issued to Participant.


     

    
      16.     Restrictive
        Legends and Stop-Transfer Orders.

       

      (o)     Legends.
        Participant understands and agrees that the Company will place the legends
        set
        forth below or similar legends on any stock certificate(s) evidencing the
        Common
        Stock, together with any other legends that may be required by state or U.S.
        Federal securities 

    

    
      
         

        
          	KCS
                  Energy, Inc. Performance Share Award Certificate 	
                   Page
                    5

                


        

      

       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    laws,
      the
      Company’s Certificate of Incorporation or Bylaws, any other agreement between
      Participant and the Company or any agreement between Participant and any third
      party:

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
      ON
      PUBLIC RESALE AND TRANSFER, AS SET FORTH IN A PERFORMANCE SHARE AWARD AGREEMENT
      BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES. SUCH PUBLIC SALE
      AND
      TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE
      SHARES.

     

    (p)     Stop-Transfer
      Instructions.
      Participant agrees that, to ensure compliance with the restrictions imposed
      by
      this Agreement, the Company may issue appropriate “stop-transfer” instructions
      to its transfer agent, if any, and if the Company transfers its own securities,
      it may make appropriate notations to the same effect in its own
      records.

     

    (q)     Refusal
      to Transfer.
      The
      Company will not be required (i) to transfer on its books any shares of Common
      Stock that have been sold or otherwise transferred in violation of any of the
      provisions of this Agreement or (ii) to treat as owner of such shares, or
      to accord the right to vote or pay dividends to any purchaser or other
      transferee to whom such shares have been so transferred.

     

    17.     Modification.
      This
      Agreement may not be modified except in writing signed by both
      parties.

     

    18.     Plan.
      Except
      as otherwise provided herein, or unless the context clearly indicates otherwise,
      capitalized terms herein which are defined in the Plan have the same definitions
      as provided in the Plan. The terms and provisions of the Plan are incorporated
      herein by reference, and the Participant hereby acknowledges receiving a copy
      of
      the Plan. In the event of a conflict or inconsistency between the terms and
      provisions of the Plan and the provisions of this Agreement, the Plan shall
      govern and control.

     

    19.     Interpretation. Any
      dispute regarding the interpretation of this Agreement shall be submitted by
      Participant or the Company to the Plan Administrator for review. The resolution
      of such a dispute by the Plan Administrator shall be final and binding on the
      Company and Participant.

     

    20.     Entire
      Agreement.
      The
      Plan and the Certificate are incorporated herein by reference. This Agreement,
      the Certificate and the Plan constitute the entire agreement of the parties
      and
      supersede all prior undertakings and agreements with respect to the subject
      matter hereof. If any inconsistency should exist between the nondiscretionary
      terms and conditions of this Agreement, the Certificate and the Plan, the Plan
      shall govern and control.

     

    21.     Notices.
      Any
      notice required to be given or delivered to the Company under the terms of
      this
      Agreement shall be in writing and addressed to the Corporate Secretary of the
      Company at its principal corporate offices. Any notice required to be given
      or
      delivered to Participant shall be in writing and addressed to Participant at
      the
      address indicated on the signature page hereof or to such other address as
      such
      party may designate in writing from time to time to the Company. All notices
      shall be deemed to have been given or delivered upon: (a) personal delivery;
      (b)
      three (3) days after deposit in the United States mail by certified or
      registered mail (return receipt requested); (c) one (1) business day after
      deposit with any return receipt express courier (prepaid); or (d) one (1)
      business day after transmission by facsimile or telecopier.

     

    22.     Successors
      and Assigns.
      The
      Company may assign any of its rights under this Agreement. This Agreement shall
      be binding upon and inure to the benefit of the successors and assigns of the
      Company. Subject to the restrictions on transfer set forth herein, this
      Agreement shall be binding upon Participant and Participant’s heirs, executors,
      administrators, legal representatives, successors and assigns.

     

    
       

      
        	KCS
                Energy, Inc. Performance Share Award Certificate 	
                 Page 6

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    23.     Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Delaware without giving effect to its conflict of law principles.
      If
      any provision of this Agreement is determined by a court of law to be illegal
      or
      unenforceable, then such provision will be enforced to the maximum extent
      possible and the other provisions will remain fully effective and
      enforceable.

     

    24.     Acceptance.
      Participant hereby acknowledges receipt of a copy of the Plan and this
      Agreement. Participant has read and understands the terms and provisions
      thereof, and accepts the Award subject to all the terms and conditions of the
      Plan and this Agreement. Participant acknowledges that there may be adverse
      tax
      consequences upon exercise of the Award or disposition of the Bonus Stock and
      that Participant should consult a tax advisor prior to such exercise or
      disposition.

     

    25.     Prohibitions
      on Transfer and Hedging.
      Rights
      to
      acquire shares of Common Stock under this Agreement shall not be transferable
      by
      the Participant except by will or by the laws of descent and distribution.
      Notwithstanding the foregoing, the Participant may, by delivering written notice
      to the Company in a form satisfactory to the Company, designate a third party
      who, in the event of the death of the Participant, shall thereafter be entitled
      to any Bonus Stock to which the Participant would otherwise be entitled to
      under
      this Agreement. During the period that this Award is outstanding or Bonus Stock
      awarded hereunder is subject to restrictions, Participant covenants and agrees
      not to engage in any short sale, pledge, transfer, hedging or other derivative
      transaction involving the future right to Bonus Stock under this Agreement
      and
      hereby acknowledges that any violation of this covenant will result in a
      forfeiture of the Bonus Stock and the Company’s right to recover any profits
      recognized directly or indirectly in connection with such restricted
      transactions.

     

     

    
      
         

        
          	KCS
                  Energy, Inc. Performance Share Award Certificate 	
                   Page
                    7

                


        

      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      




    EXHIBIT
      A

    


    KCS
      Energy, Inc. 2005 Employee and Directors Stock Plan