AMENDMENT TO EMPLOYMENT AGREEMENT
EXHIBIT
10.3
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 December 19, 2008, 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 and the Executive desire to make technical amendments to the Employment
Agreement to ensure that the Employment Agreement complies with the requirements
of Section 409A of the Internal Revenue Code.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. The first
paragraph of Section 3(c) of the Employment Agreement is hereby amended to read
as follows:
“(c) Good Reason; Window
Period. The Executive’s employment may be terminated during the
Employment Period by the Executive for Good Reason, or during a Window Period by
the Executive without any reason. For purposes of this Agreement, ‘Window
Period’ shall mean the 45-day period immediately following elapse of one year
after any Change of Control as defined in Section 9 of this Agreement. For
purposes of this Agreement, ‘Good Reason’ shall mean:”
2. The last
paragraph of Section 3(c) of the Employment Agreement is hereby amended to read
as follows:
“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 90
days following the initial 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 ‘Correction Period’), the Company must fail
to reinstate the Executive to the position he was
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in, or
otherwise cure the circumstances giving rise to Good
Reason. Executive’s termination for Good Reason may occur only within
60 days following the expiration of the Correction Period.”
3. Section
4(a)(i)(A) of the Employment Agreement is hereby amended to read as
follows:
“A. in
a lump sum in cash, within 10 days after the Date of Termination, an amount
equal to the sum of (1) the Executive’s Annual Base Salary through the Date of
Termination, (2) any deferred compensation previously awarded to or earned by
the Executive (together with any accrued interest or earnings thereon) subject
to the terms and conditions of any plan or arrangement providing such deferred
compensation and (3) any compensation for unused vacation time for which the
Executive is eligible in accordance with the most favorable plans, policies,
programs and practices of the Company and its affiliated companies, in each case
to the extent not theretofore paid (the sum of the amounts described in clauses
(1), (2) and (3) shall be hereinafter referred to as (the ‘Accrued
Obligation’);”
4. Section
4(a)(i)(E) of the Employment Agreement is hereby amended to read as
follows:
“E. as
soon as practicable following the calendar year of the date of termination, an
amount equal to the product of (x) the Annual Bonus that would have been paid to
the 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. Such amount shall be paid at the same
time as the annual bonuses are paid to other executives, but in no event later
than the end of the calendar year following the year in which such bonus is
earned.”
5. The
paragraph immediately following Section 4(a)(i)(E) of the Employment Agreement
is hereby amended to read as follows:
“Anything
in this Agreement to the contrary notwithstanding, if a Change of Control occurs
and if the Executive’s employment with the Company is terminated within 12
months prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment or
cessation of service as an officer (x) was at the request of a third party who
has taken steps reasonably calculated to effect the Change of Control or (y)
otherwise arose in connection with or anticipation of the Change of Control,
then for all purposes of this Agreement, the ‘date a Change of Control occurs’
shall mean the date immediately prior to the date of such termination of
employment; provided,
however, that the additional Change of Control severance will be paid
within 5 days following the occurrence of the Change of Control.”
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6. The last
sentence of Section 7(b) of the Employment Agreement is hereby amended to read
as follows:
“In the
event that the Company exhausts its remedies pursuant to the following
provisions of this Section 7 and the Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Company to or for the benefit of the Executive no later than the time
such tax is due.”
7. A new
Section 13 is hereby added to the Employment Agreement to read as
follows:
“13. Section
409A.
(a) This
Agreement is intended to provide payments that are exempt from or compliant with
the provisions of Section 409A of the Internal Revenue Code and related
regulations and Treasury pronouncements (‘Section 409A’), and the Agreement
shall be interpreted accordingly. Notwithstanding any provision of
this Agreement to the contrary, the parties agree that any benefit or benefits
under this Agreement that the Company determines are subject to the suspension
period under Code Section 409A(a)(2)(B) shall not be paid or commence until a
date following six months after the Executive’s termination date, or if earlier,
the Executive’s death.
(b) Each
payment under this Agreement is intended to be (i) excepted from Section 409A,
including, but not limited to, by compliance with the short-term deferral
exception as specified in Treasury Regulation § 1.409A-1(b)(4) and the
involuntary separation pay exception within the meaning of Treasury Regulation §
1.409A-1(b)(9)(iii), or (ii) in the event any Gross Up Payment is made pursuant
to Section 7(a) herein, in compliance with Section 409A, including, but not
limited to, being paid pursuant to a fixed schedule or specified date pursuant
to Treasury Regulation § 1.409A-3(i)(1)(v), and the provisions of this Agreement
will be administered, interpreted and construed accordingly (or disregarded to
the extent such provision cannot be so administered, interpreted, or
construed). In the event that any additional tax is imposed on the
Executive pursuant to Section 409A, the Company agrees to reimburse the
Executive for any such tax imposed by Section 409A, together with any taxes
imposed on such reimbursement. Such reimbursement shall be promptly
paid by the Company to or for the benefit of the Executive no later than the
time such tax is due.
(c) All
reimbursements or provision of in-kind benefits pursuant to this Agreement shall
be made in accordance with Treasury Regulation § 1.409A-3(i)(1)(iv) such that
the reimbursement or provision will be deemed payable at a specified time or on
a fixed schedule relative to a permissible payment
event. Specifically, the amount reimbursed or in-kind benefits
provided
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under
this Agreement during Executive’s taxable year may not affect the amounts
reimbursed or provided in any other taxable year (except that total
reimbursements may be limited by a lifetime maximum under a group health plan),
the reimbursement of an eligible expense shall be made on or before the last day
of Executive’s taxable year following the taxable year in which the expense was
incurred, and the right to reimbursement or provision of in-kind benefit is not
subject to liquidation or exchange for another benefit.”
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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/X.
X. Xxxxxxx, XX
Name:
X.X. Xxxxxxx, XX
Title: President
and CEO
EXECUTIVE
/s/J.
Xxxxxxx Xxxxxx
J.
Xxxxxxx Xxxxxx
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