AMENDMENT TO EMPLOYMENT AGREEMENT
AMENDMENT
TO EMPLOYMENT AGREEMENT
This
AMENDMENT (the "Amendment") by and between Carrizo Oil & Gas, Inc., a
Texas corporation (the "Company"), and J. Xxxxxxx Xxxxxx (the "Executive"),
effective as of January 23, 2006, is an amendment to that certain Employment
Agreement by and between the Company and the Executive dated as of April
15,
1998 (the "Employment Agreement").
RECITALS
The
Company and the Executive have previously entered into the Employment Agreement
to provide for terms and conditions of the Executive's employment by the
Company; and
The
Company has agreed to grant to the Executive an award of restricted stock
in
exchange for the Executive's agreement to amend the Employment Agreement.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Section
3(c)(i) of the Employment Agreement is amended to read hereafter as
follows:
"(i) the
assignment to the Executive of any duties materially inconsistent in any
respect
with the Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by
Section 2 of this Agreement, or any other action by the Company which
results in a material diminution, in absolute terms, in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
the
Executive;"
2. Section
3(c) of the Employment Agreement is hereby amended by adding the following
to
the end thereof:
"Notwithstanding
any provision to the contrary, in order for any event(s) in subparagraph
(i)
through (v) above to constitute "Good Reason" for purposes of this Agreement,
(A) the Executive must notify the Company via Notice of Termination within
180
days following the occurrence of the event(s) that the Executive intends
to
terminate his employment with the Company because of the occurrence of Good
Reason (which event must be described by the Executive in reasonable detail
in
the Notice of Termination) and (B) within 60 days after receiving such Notice
of
Termination from the Executive, the Company must fail to reinstate the Executive
to the position he was in, or otherwise cure the circumstances giving rise
to
Good Reason."
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3. Section
3(d) of the Employment Agreement is amended to read hereafter as
follows:
"(d) Notice
of Termination.
Any termination by the Company for Cause, or by the Executive for Good Reason
or
without any reason during a Window Period, shall be communicated by Notice
of
Termination to the other party hereto given in accordance with Section 12(d)
of
this Agreement. The failure by the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Cause
shall not waive any right of the Company hereunder or preclude the Company
from
asserting such fact or circumstance in enforcing the Company's rights
hereunder."
4. Section
4(a)(i)(D) of the Employment Agreement is amended to read hereafter as
follows:
"D. Effective
as of the Date of Termination, (1) immediate vesting and exercisability of,
and
termination of any restrictions on sale or transfer (other than any such
restriction arising by operation of law) with respect to, each and every
stock
option, restricted stock award, restricted stock unit award and other
equity-based award and performance award (each, a "Compensatory Award") that
is
outstanding as of a time immediately prior to the Date of Termination and
(2)
unless a longer post-employment term is provided in the applicable award
agreement, the extension of the term during which each and every Compensatory
Award may be exercised by the Executive until the earlier of (x) the first
anniversary of the Date of Termination or (y) the date upon which the right
to
exercise any Compensatory Award would have expired if the Executive had
continued to be employed by the Company under the terms of this Agreement
until
the Final Expiration Date; and"
5. Section
4(b) of the Employment Agreement is amended to read hereafter as
follows:
"(b)
Death
(except during a Window Period).
If the
Executive's employment is terminated by reason of the Executive's death during
the Employment Period and other than during a Window Period in which event
the
provisions of Section 4(a) shall govern, this Agreement shall terminate without
further obligations to the Executive's legal representatives under this
Agreement, other than (i) the payment of Accrued Obligations (which shall
be
paid to the Executive's estate or beneficiary, as applicable, in a lump sum
in
cash within 30 days of the Date of Termination), (ii) the payment of an amount
equal to the Annual Salary that would have been paid to the Executive pursuant
to this Agreement during the Remaining Employment Period if the Executive's
employment had not terminated by reason of death (which shall be paid to
the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination) reduced by the amount payable in respect
of
Executive's death under any life insurance policy (other than accidental
death
and
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dismemberment
or travel accident policies) but only to the extent such amounts are
attributable to premiums paid by the Company, (iii) during the period beginning
on the Date of Termination and ending on the first anniversary thereof medical
benefits coverage determined as if Executive's employment had not terminated
by
reason of death, (iv) as soon as practicable following the fiscal year in
which
death occurs, payment of an amount equal to the product of (x) the Annual
Bonus
that would have been paid to Executive with respect to the year of termination
had the Date of Termination not occurred and (y) a fraction, the numerator
of
which is the number of days in the fiscal year through the Date of Termination
and the denominator of which is 365 and (v) effective as of the Date of
Termination, (A) immediate vesting and exercisability of, and termination
of any
restrictions on sale or transfer (other than any such restriction arising
by
operation of law) with respect to, each and every Compensatory Award outstanding
as of a time immediately prior to the Date of Termination and (B) the extension
of the term during which each and every Compensatory Award may be exercised
or
purchased by the Executive until the earlier of (1) the first anniversary
of the
Date of Termination or (2) the date upon which the right to exercise or purchase
any Compensatory Award would have expired if the Executive had continued
to be
employed by the Company under the terms of this Agreement until the Final
Expiration Date."
6. Section
6 of the Employment Agreement is amended to read hereafter as
follows:
"6. Full
Settlement; Resolution of Disputes.
(a) The
Company's obligation to make payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
setoff, counterclaim, recoupment, defense, mitigation or other claim, right
or
action which the Company may have against the Executive or others. In the
event
(i) prior to a Change in Control, the Executive's employment is terminated
for any reason other than Executive's voluntary termination (with or without
Good Reason), or (ii) within two years after a Change in Control,
the
Executive's employment is terminated by the Company or the Executive for
any
reason, the Company agrees to pay promptly as incurred, to the full extent
permitted by law, all legal fees and expenses which the Executive may reasonably
incur as a result of any arbitration pursuant to Section 6(b) (regardless
of the
outcome thereof) initiated by the Company, the Executive or others regarding
the
validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result
of any
contest by the Executive about the amount of any such payment pursuant to
this
Agreement), plus in each case interest on any delayed payment at the annual
percentage rate which is three percentage points above the interest rate
shown
as the Prime Rate in the Money Rates column in the then most recently published
edition of The Wall Street Journal (Southwest Edition), or, if such rate
is not
then so published on at least a weekly basis, the interest rate announced
by
Chase Manhattan Bank (or its successor), from time to time, as its Base Rate
(or
prime lending rate), from
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the
date those amounts were required to have been paid or reimbursed to the Employee
until those amounts are finally and fully paid or reimbursed; provided, however,
that in no event shall the amount of interest contracted for, charged or
received hereunder exceed the maximum non-usurious amount of interest allowed
by
applicable law ; provided, further, that if the Executive is not the prevailing
party in any such arbitration, then he shall, upon the conclusion thereof,
repay
to the Company any amounts that were previously advanced pursuant to this
sentence by the Company as payment of legal fees and expenses.
(b) Any
dispute arising out of or relating to this Agreement, including the breach,
termination or validity thereof, shall be finally resolved by arbitration
in
accordance with the CPR Institute for Dispute Resolution Rules for
Non-Administered Arbitration in effect on the date of this Agreement by a
single
arbitrator selected in accordance with the CPR Rules. The arbitration shall
be
governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16, and judgment on the
award rendered by the arbitrator may be entered by any court having jurisdiction
thereof. The place of arbitration shall be in Xxxxxx County, Texas. The
arbitrator's decision must be based on the provisions of this Agreement and
the
relevant facts, and the arbitrator's reasoned decision and award shall be
binding on both parties. Nothing herein is or shall be deemed to preclude
the
Company's resort to the injunctive relief prescribed in this Agreement,
including any injunctive relief implemented by the arbitrator pursuant to
this
Section 6(b). The parties will each bear their own attorneys' fees and costs
in
connection with any dispute, except in the circumstances in which the Company
is
required to advance the Executive's attorneys' fees in accordance with Section
6(a).
(c) If,
upon a termination within two years following a Change in Control, there
shall
be any dispute between the Company and the Executive concerning (i) in
the
event of any termination of the Executive's employment by the Company, whether
such termination was for Cause or Disability, or (ii) in the event
of any
termination of employment by the Executive, whether Good Reason existed or
whether such termination occurred during a Window Period, then, unless and
until
there is a final, determination by an arbitrator declaring that such termination
was for Cause or not for Disability or that the determination by the Executive
of the existence of Good Reason was not made in good faith or that the
termination by the Executive did not occur during a Window Period, the Company
shall pay all amounts, and provide all benefits, to the Executive and/or
the
Executive's family or other beneficiaries, as the case may be, that the Company
would be required to pay or provide pursuant to Section 4(a) hereof as though
such termination were by the Company without Cause or by the Executive with
Good
Reason or during a Window Period; provided, however, that the Company shall
not
be required to pay any disputed amounts pursuant to this paragraph except
upon
receipt of an undertaking by or on behalf of the Executive to repay all such
amounts to which the Executive is ultimately adjudged by such arbitrator
not to
be entitled.
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(d) Notwithstanding
any provision of Section 4, except in the case of a termination of employment
within two years following a Change in Control, the Company's obligation
to pay
the amounts due on any termination of employment under Section 4 (other
than the
Accrued Obligations) are conditioned on the Executive's execution (without
revocation during any applicable statutory revocation period) of a waiver
and
release of any and all claims against the Company and its affiliates in
such
form as may be prescribed by the Company."
7. Sections
10(a) and (b) of the Employment Agreement are hereby amended to read hereafter
as follows:
"10. Non-Compete
and Non-Solicitation
(a) The
Executive recognizes that in each of the highly competitive businesses in
which
the Company is engaged, personal contact is of primary importance in securing
new customers and in retaining the accounts and goodwill of present customers
and protecting the business of the Company. The Executive, therefore, agrees
that during the Employment Period and, if the Date of Termination occurs
by
reason of the Executive terminating his employment for reasons other than
Disability or Good Reason and other than during a Window Period, for a period
of
one year after the Date of Termination, he will not either within 20 miles
of
any geographic location with respect to which he has devoted substantial
attention to the material business interests of the Company or any of its
affiliated companies or with respect to any immediate geologic trends in
which
the Company or any of its affiliated companies is active as of the Date of
Termination, without regard, in either case, to whether the Executive has
worked
at such location (the "Relevant Geographic Area"), (i) accept employment
or
render service to any person that is engaged in a business directly competitive
with the business then engaged in by the Company or any of its affiliated
companies, (ii) enter into or take part in or lend his name, counsel or
assistance to any business, either as proprietor, principal, investor, partner,
director, officer, executive, consultant, advisor, agent, independent
contractor, or in any other capacity whatsoever, for any purpose that would
be
competitive with the business of the Company or any of its affiliated companies
or (iii) regardless of geographic area, directly or indirectly, either as
principal, agent, independent contractor, consultant, director, officer,
employee, employer, advisor, stockholder, partner or in any other individual
or
representative capacity whatsoever, either for his own benefit or for the
benefit of any other person or entity either (A) hire, contract or solicit,
or
attempt any of the foregoing, with respect to hiring any employee of the
Company
or its affiliated companies, or (B) induce or otherwise counsel, advise or
encourage any employee of the Company or its affiliated companies to leave
the
employment of the Company or its affiliated companies (all of the foregoing
activities described in (i), (ii) and (iii) are collectively referred to
as the
"Prohibited Activity"). For the avoidance of doubt, the provisions of this
Section 10 will not apply following a termination of the Executive's employment
by the Company with or without Cause, by the Executive due to Disability
or Good
Reason or by the Executive during a Window Period.
(b) In
addition to all other remedies at law or in equity which the Company may
have
for breach of a provision of this Section 10 by the Executive, it is agreed
that
in
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the
event of any breach or attempted or threatened breach of any such provision,
the
Company shall be entitled, upon application to any court of proper jurisdiction,
to a temporary restraining order or preliminary injunction (without the
necessity of (i) proving irreparable harm, (ii) establishing that monetary
damages are inadequate or (iii) posting any bond with respect thereto) against
the Executive prohibiting such breach or attempted or threatened breach by
proving only the existence of such breach or attempted or threatened breach.
If
the provisions of this Section 10 should ever be deemed to exceed the time,
geographic or occupational limitations permitted by the applicable law, the
Executive and the Company agree that such provisions shall be and are hereby
reformed to the maximum time, geographic or occupational limitations permitted
by the applicable law. "
8. Section
12(g) of the Employment Agreement is hereby amended to read hereafter as
follows:
"(g) The
Executive's or the Company's failure to insist upon strict compliance with
any
provision hereof or any other provision of this Agreement or the failure
to
assert any right the Executive or the Company may have hereunder shall not
be
deemed to be a waiver of such provision or right or any other provision or
right
of this Agreement; provided, however, that any claim for "Good Reason"
termination must be raised within 180 days following the occurrence of the
event
giving rise to the right to terminate for "Good Reason" as set forth in Section
3(c) hereof."
9. If
any provision provided herein or in the Employment Agreement results in the
imposition of an excise tax under the provisions of Section 409A of the Internal
Revenue Code and related regulations and Treasury pronouncements ("Section
409A"), the Executive and the Company agree that each will use good faith
efforts to reform any such provision to avoid imposition of any such excise
tax
in the manner that the Executive and the Company mutually determine are
appropriate to comply with Section 409A.
10. By
execution of this Amendment, Executive acknowledges and agrees that he has
no
present claim against the Company for a breach of the Employment Agreement
or
any right to terminate employment for Good Reason, and the Company acknowledges
and agrees that it has no present claim against the Executive for breach
of the
Employment Agreement and no present grounds in which to terminate Executive
for
Cause.
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IN
WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to
the
authorization from its Board of Directors, the Company has caused these presents
to be executed in its name on its behalf, all as of the day and year first
above
written.
CARRIZO
OIL & GAS, INC.
By:
/s/
Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title: Chief
Financial Officer, Secretary and
Treasurer
EXECUTIVE
/s/
J. Xxxxxxx Xxxxxx
J.
Xxxxxxx Xxxxxx
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