Summary of CLAYTON WILLIAMS ENERGY INC /DE

Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e) The Compensation Committee of the Board of Directors of Clayton Williams Energy, Inc. (the "Company") has previously adopted an after-payout incentive plan, as amended (the "APO Incentive Plan") for officers, key employees and consultants who promote the Company's drilling and acquisition programs. Management's objective in adopting this plan is to further align the interests of the participants with those of the Company by granting the participants after-payout working interests in the production developed, directly or indirectly, by the participants. The plan provides for the creation of a series of limited partnerships or participation agreements creating tax partnerships to which the Company contributes a portion of its working interest in wells drilled within certain areas. The Company pays all costs and receives all revenues until payout of its costs, plus interest. After payout, the participants receive at least 99% of the partnership's subsequent revenues and pay at least 99% of its subsequent expenses.

On November 5, 2008, the Compensation Committee of the Board of Directors of the Company approved the formation of a participation agreement created pursuant to the APO Incentive Plan and approved participation awards to certain officers (including our principal executive officer, principal financial officer and certain other named executive officers), key employees and consultants. The Company entered into a participation agreement with the participants on November 19, 2008, to be effective as of November 5, 2008. The participation agreement is summarized as follows:

· Participation Agreement relating to East Texas Bossier-Sunny, to which the Company will contribute 7% of its working interest in Bossier wells to be drilled on certain acreage in Burleson County, Texas.

Participation awards under the participation agreement were granted to the Company's principal executive officer, principal financial officer and named executive officers as follows:

                                 Bonus Percentages Awarded to Named Officers
                            Clayton W.     L. Paul   Mel G.   Patrick C.   T. Mark
Participation Agreement    Williams, Jr.   Latham    Riggs      Reesby     Tisdale
East Texas Bossier-Sunny      28.57%        5.54%    5.54%        -         2.14%

Amounts payable under the participation agreement to the Company's principal executive officer, principal financial officer and named executive officers are not determinable at this time. Each participation award represents a working interest in one or more wells in a limited geographic area. Potentially, a participation award may never become payable, or it may become payable at an indeterminable future date.

The foregoing description is only a summary of, and is qualified in its entirety by reference to, the participation agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.