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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
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TABLE OF CONTENTS
Page
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1. Employment Period . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Terms of Employment . . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) Position and Duties . . . . . . . . . . . . . . . . . . . . . 1
(b) Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 2
(i) Base Salary . . . . . . . . . . . . . . . . . . . . . . 2
(ii) Annual Bonus . . . . . . . . . . . . . . . . . . . . . 2
(iii) Incentive, Savings and Retirement Plans . . . . . . . . 2
(iv) Welfare Benefit Plans . . . . . . . . . . . . . . . . . 3
(v) Expenses . . . . . . . . . . . . . . . . . . . . . . . 3
(vi) Fringe Benefits and Perquisites . . . . . . . . . . . . 3
(vii) Office and Support Staff . . . . . . . . . . . . . . . 3
(viii) Vacation . . . . . . . . . . . . . . . . . . . . . . . 3
(ix) Stock Option Grant . . . . . . . . . . . . . . . . . . 3
3. Termination of Employment . . . . . . . . . . . . . . . . . . . . . . 4
(a) Death or Disability . . . . . . . . . . . . . . . . . . . . . 4
(b) Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Good Reason; Window Period . . . . . . . . . . . . . . . . . . 5
(d) Notice of Termination . . . . . . . . . . . . . . . . . . . . 6
(e) Date of Termination . . . . . . . . . . . . . . . . . . . . . 6
4. Obligations of the Company upon Termination . . . . . . . . . . . . . 6
(a) Disability, Good Reason or During a Window
Period; Other than for Cause . . . . . . . . . . . . . . . . . 6
(b) Death (except during a Window Period) . . . . . . . . . . . . 9
(c) Cause; Other than for Disability, Good
Reason or During a Window Period . . . . . . . . . . . . . . . 9
5. Non-exclusivity of Rights . . . . . . . . . . . . . . . . . . . . . . 10
6. Full Settlement; Resolution of Disputes . . . . . . . . . . . . . . . 10
7. Certain Additional Payments by the Company . . . . . . . . . . . . . 11
8. Confidential Information . . . . . . . . . . . . . . . . . . . . . . 13
9. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . 14
10. Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . . 18
11. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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EMPLOYMENT AGREEMENT
This AGREEMENT (the "Agreement") by and between Carrizo Oil &
Gas, Inc., a Texas corporation (the "Company"), and X. X. Xxxxxxx, XX (the
"Executive"), dated as of the 13th day of June, 1997 and to be effective as of
the Agreement Effective Date (as defined herein).
In entering into this Agreement, the Board of Directors of the
Company (the "Board") desires to provide the Executive with substantial
incentives to serve the Company as one of its senior executives performing at
the highest level of leadership and stewardship, without distraction or concern
over minimum compensation, benefits or tenure, to manage the Company's future
growth and development, and maximize the returns to the Company's stockholders.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. As of the Agreement Effective Date
(hereinafter defined), the Company hereby agrees to employ the Executive and
the Executive hereby agrees to accept employment with the Company, in
accordance with, and subject to, the terms and provisions of this Agreement,
for the period (the "Employment Period") commencing on the Agreement Effective
Date and ending on the third anniversary of the Agreement Effective Date;
provided, on the second anniversary of the Agreement Effective Date and on each
day thereafter, the Employment Period shall automatically be extended for an
additional one day without any further action by either the Company or the
Executive, it being the intention of the parties that there shall be
continuously a remaining term of not less than one year's duration of the
Employment Period until an event has occurred as described in, or one of the
parties shall have made an appropriate election pursuant to, the provisions of
Section 3.
2. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate in
all material respects with the most significant of those held, exercised
and assigned on the Agreement Effective Date, which shall in any event
include status as President and member of the Board of Directors of the
Company, and (B) the Executive's services shall be performed within the
Houston, Texas metropolitan area.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote full attention and time during normal
business hours to the business and affairs of the Company and, to the
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extent necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive's reasonable best efforts to
perform faithfully and efficiently such responsibilities. During the
Employment Period, it shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or teach
at educational institutions and (C) manage personal investments, so long
as such activities do not interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance
with this Agreement. It is expressly understood and agreed that to the
extent that any such activities have been conducted by the Executive
prior to the Agreement Effective Date, the continued conduct of such
activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the Agreement Effective Date shall not thereafter
be deemed to interfere with the performance of the Executive's
responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Executive
shall receive an annual base salary equal to the base salary in effect
immediately prior to the Agreement Effective Date ("Annual Base
Salary"), which shall be paid on a semimonthly basis. During the
Employment Period, the Annual Base Salary shall be reviewed at least
annually and shall be increased at any time and from time to time as
shall be substantially consistent with increases in base salary
generally awarded in the ordinary course of business to executives of
the Company and its affiliated companies. Any increase in Annual Base
Salary shall not serve to limit or reduce any other obligation to the
Executive under this Agreement. Annual Base Salary shall not be reduced
after any such increase and the term "Annual Base Salary," as utilized
in this Agreement, shall refer to Annual Base Salary as so increased.
As used in this Agreement, the term "affiliated companies" shall
include, when used with reference to the Company, any company controlled
by, controlling or under common control with the Company.
(ii) Annual Bonus. In addition to Annual Base Salary, the
Executive may be awarded, for each fiscal year or portion thereof during
the Employment Period, an Annual Bonus (the "Annual Bonus"), in an
amount comparable to the Annual Bonus Award to other Company executives,
taking into account Executive's position and responsibilities with the
Company, prorated for any period consisting of less than 12 full months.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans that are tax-qualified under
Section 401(a) of the Internal Revenue Code of 1986, as amended
("Code"), and all plans that are supplemental to any such tax-qualified
plans, in each case to the extent that such plans are applicable
generally to other executives of the Company and its affiliated
companies, but in no event shall such plans provide the Executive with
incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement
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benefit opportunities that are, in each case, less favorable to the
Executive, in the aggregate, than the most favorable plans of the
Company and its affiliated companies. As used in this Agreement, the
term "most favorable" shall, when used with reference to any plans,
practices, policies or programs of the Company and its affiliated
companies, be deemed to refer to the plans, practices, policies or
programs of the Company and its affiliated companies, as in effect at
any time during the Employment Period and provided generally to other
executives of the Company or its affiliated companies, which are most
favorable to the Executive.
(iv) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs provided by the
Company or its affiliated companies (including, without limitation,
medical, prescription, dental, vision, disability, salary continuance,
group life and supplemental group life, accidental death and travel
accident insurance plans and programs) to the extent applicable
generally to other executives of the Company or its affiliated
companies, but in no event shall such plans, practices, policies and
programs provide the Executive with benefits that are less favorable, in
the aggregate, than the most favorable such plans, practices, policies
and programs of the Company and its affiliated companies.
(v) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its affiliated
companies.
(vi) Fringe Benefits and Perquisites. During the Employment
Period, the Executive shall be entitled to fringe benefits and
perquisites in accordance with the most favorable plans, practices,
programs and policies of the Company and its affiliated companies
applicable to similarly situated executives.
(vii) Office and Support Staff. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to secretarial and other
assistance to the extent needed to fulfill his corporate
responsibilities, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated companies at
any time during the Employment Period.
(viii) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable
plans, policies, programs and practices of the Company and its
affiliated companies.
(ix) Stock Option Grant. On the IPO Closing Date as defined in
Section 4(a) of this Agreement, Executive will be granted stock options
on 100,000 shares of Company common stock, par value $.01 per share
("Common Stock"), at an exercise price equal to the
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IPO Price ("Initial Stock Option"). The Initial Stock Option has a
term of 10 years from the Date of Grant. The Initial Stock Option shall
vest and become exercisable in increments of one-third of the total
number of shares of Common Stock that are subject thereto (rounded
up to the nearest whole number) on the first and second anniversaries
of the Date of Grant and of all remaining shares of Common Stock that
are subject thereto on the third anniversary of the Date of Grant.
"IPO" shall mean the initial public offering of Common Stock pursuant
to which the Company receives payment in cash for shares of its Common
Stock that it sells pursuant to a registration statement on Form S-1
filed and declared effective under the Securities Act of 1933. "IPO
Price" shall mean the per share price to the public for the Common
Stock sold in the IPO, as set forth on the cover page of the final
prospectus for the IPO.
3. Termination of Employment.
(a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment
Period. If the Company determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to the definition
of Disability set forth below), it may give to the Executive written notice in
accordance with Section 11(d) of this Agreement of its intention to terminate
the Executive's employment. In such event, the Executive's employment with the
Company shall terminate effective on the 30th day after receipt of such notice
by the Executive (the "Disability Effective Date"), provided that, within the
30 days after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's
duties with the Company on a full-time basis for either (i) 180 consecutive
business days or (ii) in any two-year period 270 nonconsecutive business days
as a result of incapacity due to mental or physical illness which is determined
to be total and permanent by a physician selected by the Company or its
insurers and acceptable to the Executive or the Executive's legal
representative (such agreement as to acceptability not to be withheld
unreasonably).
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean for the Company's termination of the Executive's
employment for any of the following: (i) the Executive's final conviction of a
felony crime that enriched the Executive at the expense of the Company;
provided, however, that after indictment, the Company may suspend Executive
from the rendition of services, but without limiting or modifying in any other
way the Company's obligations under this Agreement; (ii) a material breach by
Executive of a material fiduciary duty owed to the Company; (iii) a material
breach by Executive of any of the covenants made by him in Sections 8 and 10
hereof; (iv) the willful and gross neglect by Executive of the material duties
specifically and expressly required by this Agreement; or (v) the Executive's
continuing failure to substantially perform his duties and responsibilities
hereunder (except by reason of the Executive's incapacity due to physical or
mental illness or injury) for a period of 45 days after the Required Board
Majority, as defined herein, has delivered to the Executive a written demand
for substantial performance hereunder which specifically identifies the bases
for the Required Board Majority's determination that the Executive has not
substantially performed his duties and responsibilities hereunder (that period
being the "Grace Period"); provided, that for purposes of this clause (v), the
Company shall not have Cause to terminate the Executive's employment unless (A)
at a meeting of the Board called
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and held following the Grace Period in the city in which the Company's
principal executive offices are located, of which the Executive was given not
less than 10 days' prior written notice and at which the Executive was afforded
the opportunity to be represented by counsel, appear and be heard, the Required
Board Majority shall adopt a written resolution which (1) sets forth the
Required Board Majority's determination that the failure of the Executive to
substantially perform his duties and responsibilities hereunder has (except by
reason of his incapacity due to physical or mental illness or injury) continued
past the Grace Period and (2) specifically identifies the bases for that
determination, and (B) the Company, at the written direction of the Required
Board Majority, shall deliver to the Executive a Notice of Termination for
Cause to which a copy of that resolution, certified as being true and correct
by the secretary or any assistant secretary of the Company, is attached.
"Required Board Majority" means at any time a majority of the members of the
Board at that time which includes at least a majority of the Directors, each of
whom has not been an employee of the Company or any subsidiary of the Company.
(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 60-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:
(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
diminution 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;
(ii) any material failure by the Company to comply with
any of the provisions of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(iii) the Company's requiring the Executive to be based
at any office outside the Houston metropolitan area;
(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this
Agreement;
(v) any failure by the Company to comply with and
satisfy the requirements of Section 11 of this Agreement, provided that
(A) the successor described in Section 11(c) has received, at least 10
days prior to the Date of Termination (as defined in
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subparagraph (e) below), written notice from the Company or the
Executive of the requirements of such provision and (B) such failure to
be in compliance and satisfy the requirements of Section 11 shall
continue as of the Date of Termination; or
(vi) any failure to reelect Executive as a member of the
Board.
(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 Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. For purposes of this Agreement, the
term "Date of Termination" means (i) if the Executive's employment is
terminated by the Company for Cause, or by the Executive during a Window Period
or for Good Reason, the date of receipt of the Notice of Termination or any
later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the
case may be.
4. Obligations of the Company upon Termination.
(a) Disability, Good Reason or During a Window Period; Other
than for Cause or Death (except during a Window Period). If, during the
Employment Period and after the date on which the Company first receives
payment for shares of its Common Stock that it sells pursuant to a registration
statement filed under the Securities Act of 1933 (the "IPO Closing Date"), (x)
the Company shall terminate the Executive's employment other than for Cause,
including a termination by reason of Disability (but not by reason of death),
or (y) the Executive shall terminate employment for Good Reason or (z) his
employment shall be terminated during a Window Period by the Company for Cause,
by the Executive without any reason, or by reason of death:
(i) the Company shall pay or provide to or in respect of the
Executive the following amounts and benefits:
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) and (3) any
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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");
B. in a lump sum in cash, discounted at 6%, within 10
days after the Date of Termination, an amount equal to 150% of
Annual Base Salary that would have been paid annually to the
Executive pursuant to this Agreement for the period (the
"Remaining Employment Period") beginning on the Date of
Termination and ending on the latest possible date of termination
of the Employment Period in accordance with the provisions of
Section 1 hereof (the "Final Expiration Date") if the Executive's
employment had not been terminated; provided if the termination
occurs after the date a Change of Control occurs 375% shall be
substituted for 150%;
C. continuation for the Remaining Employment Period of
life insurance and medical benefits coverages, but with the
Company's medical benefits coverages being secondary to any
coverages provided by another employer;
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, (2) 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 (3) at the sole election of Executive, in exchange for any or
all Compensatory Awards that are either denominated in or payable
in Common Stock, an amount in cash equal to the excess of (x) the
Highest Price Per Share (as defined below) over (y) the exercise
or purchase price, if any, of such Compensatory Awards. As used
herein, the term "Highest Price Per Share" shall mean the highest
price per share that can be determined to have been paid or
agreed to be paid for any share of Common Stock by a Covered
Person (as defined below) at any time during the Employment
Period or the six-month period immediately preceding the
Agreement Effective Date. As used herein, the term "Covered
Person" shall mean any Person other than an Exempt Person (in
each case as defined in Section 9 hereof) who (I) is the
Beneficial Owner (as defined in Section 9 hereof) of 10% or more
of the outstanding shares of Common Stock or 10% or more of the
combined voting power of the outstanding Voting Stock (as defined
in Section 9 hereof) of the Company at any time during the
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Employment Period, (II) is a Person who has any material
involvement in proposing or effectuating the Change of Control
(as defined in Section 9 hereof) or (III) is an assignee of or
has otherwise succeeded to any shares of Common Stock or Voting
Stock of the Company which were at any time during the Employment
Period "beneficially owned" (as defined in Section 9 hereof) by
any Person identified in clause (I) or (II) of this definition,
if such assignment or succession shall have occurred in the
course of a privately negotiated transaction rather than an open
market transaction. For purposes of determining whether a Person
is a Covered Person, the number of shares of Common Stock or
Voting Stock of the Company deemed to be outstanding shall
include shares of which the Person is deemed the Beneficial
Owner, but shall not include any other shares which may be
issuable pursuant to any agreement, arrangement or understanding,
or upon exercise of conversion rights, warrants or options. In
determining the Highest Price Per Share, the price paid or agreed
to be paid by a Covered Person will be appropriately adjusted to
take into account (W) distributions paid or payable in stock, (X)
subdivisions of outstanding stock, (Y) combinations of shares of
stock into a smaller number of shares and (Z) similar events; and
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 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;
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
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
(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.
(ii) for the Remaining Employment Period, or such longer period
as any plan, program, practice or policy may provide, the Company shall
continue benefits to the Executive and/or the Executive's family at
least equal to those which would have been provided to them in
accordance with the plans, programs, practices and policies described in
Sections 2(b)(iv) of this Agreement if the Executive's employment had
not been terminated in accordance with the most favorable plans,
practices, programs or policies of the Company and its affiliated
companies (such continuation of such benefits for the applicable period
herein set forth shall be hereinafter referred to as "Welfare Benefit
Continuation"). For purposes of determining eligibility of the
Executive for retiree benefits
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pursuant to such plans, practices, programs and policies, the Executive
shall be considered to have remained employed until the Final Expiration
Date and to have retired on such date.
(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 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, (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 and (C) at the sole
election of the Executive's legal representative, in exchange for any
Compensatory Award that is either denominated in or payable in Common Stock, an
amount in cash equal to the excess of (1) the Highest Price Per Share over (2)
the exercise or purchase price, if any, of such Compensatory Award.
(c) Cause; Other than for Disability, Good Reason or During a
Window Period. If the Executive's employment shall be terminated for Cause
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 other than for Accrued
Obligations. If the Executive terminates employment during the Employment
Period, excluding a termination for any of Disability, Good Reason or without
any reason 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, other than for the payment of Accrued Obligations. In such
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case, all Accrued Obligations shall be paid to the Executive in a lump sum in
cash within 30 days of the Date of Termination.
5. Non-exclusivity of Rights. Except as provided in Section
4 of this Agreement, nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any plan, program, policy or
practice provided by the Company or any of its affiliated companies and for
which the Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement
with the Company or any of its affiliated companies. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any
plan, policy, practice or program of or any contract or agreement with the
Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program or contract or agreement except as such plan, policy, practice or
program is superseded by this Agreement.
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. 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 contest (regardless of the outcome thereof)
by the Company, the Executive or others of 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 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 contest, 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) If 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, nonappealable
judgment by a court
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of competent jurisdiction declaring that such termination was for Cause or
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 court not to be entitled.
7. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 7 (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Code or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 7(c), all
determinations required to be made under this Section 7, including whether and
when Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by Xxxxxx Xxxxxxxx LLP (the "Accounting Firm"); provided, however, that the
Accounting Firm shall not determine that no Excise Tax is payable by the
Executive unless it delivers to the Executive a written opinion (the
"Accounting Opinion") that failure to report the Excise Tax on the Executive's
applicable federal income tax return would not result in the imposition of a
negligence or similar penalty. In the event that by Deloitte & Touche LLP has
served, at any time during the two years immediately preceding a Change in
Control Date, as accountant or auditor for the individual, entity or group that
is involved in effecting or has any material interest in the Change in Control,
the Executive shall appoint another nationally recognized accounting firm to
make the determinations and perform the other functions specified in this
Section 7 (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Within 15 business days of the receipt of notice from
the Executive that there has been a Payment, or such earlier time as is
requested by the Company, the Accounting Firm shall make all determinations
required under this
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Section 7, shall provide to the Company and the Executive a written report
setting forth such determinations, together with detailed supporting
calculations, and, if the Accounting Firm determines that no Excise Tax is
payable, shall deliver the Accounting Opinion to the Executive. Any Gross-Up
Payment, as determined pursuant to this Section 7, shall be paid by the Company
to the Executive within five days of the receipt of the Accounting Firm's
determination. Subject to the remainder of this Section 7, any determination
by the Accounting Firm shall be binding upon the Company and the Executive. As
a result of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that it is ultimately determined
in accordance with the procedures set forth in Section 7(c) that the Executive
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.
(c) The Executive shall notify the Company in writing of any
claims by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than 30 days after the Executive
actually receives notice in writing of such claim and shall apprise the Company
of the nature of such claim and the date on which such claim is requested to be
paid; provided, however, that the failure of the Executive to notify the
Company of such claim (or to provide any required information with respect
thereto) shall not affect any rights granted to the Executive under this
Section 7 except to the extent that the Company is materially prejudiced in the
defense of such claim as a direct result of such failure. The Executive shall
not pay such claim prior to the expiration of the 30-day period following the
date on which he gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is
due). If the Company notifies the Executive in writing prior to the expiration
of such period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim;
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company and
reasonably acceptable to the Executive;
(iii) cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) if the Company elects not to assume and control the
defense of such claim, permit the Company to participate in any
proceedings relating to such claim;
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provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this
Section 7(c), the Company shall have the right, at its sole option, to
assume the defense of and control all proceedings in connection with
such contest, in which case it may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim, and may either direct the
Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis, and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with
respect to such advance; and further provided, that any extension of the
statute of limitations relating to payment of taxes for the taxable year
of the Executive with respect to which such contested amount is claimed
to be due is limited solely to such contested amount. Furthermore, the
Company's right to assume the defense of and control the contest shall
be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 7(c) the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to the Company's complying with the requirements of Section 7(c)) promptly pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 7(c) a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim, and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
8. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement) (referred to herein as "Confidential Information"). After
termination of the Executive's employment with the Company,
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the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 8 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement. Also, within 14 days
of the termination of Executive's employment for any reason, Executive shall
return to Company all documents and other tangible items of or containing
Company information which are in Executive's possession, custody or control.
9. Change of Control.
As used in this Agreement, the terms set forth below shall have
the following respective meanings:
"Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in effect
on the date of this Agreement.
"Associate" shall mean, with reference to any Person, (a) any
corporation, firm, partnership, association, unincorporated organization or
other entity (other than the Company or a subsidiary of the Company) of which
such Person is an officer or general partner (or officer or general partner of
a general partner) or is, directly or indirectly, the Beneficial Owner of 10%
or more of any class of equity securities, (b) any trust or other estate in
which such Person has a substantial beneficial interest or as to which such
Person serves as trustee or in a similar fiduciary capacity and (c) any
relative or spouse of such Person, or any relative of such spouse, who has the
same home as such Person.
"Beneficial Owner" shall mean, with reference to any securities,
any Person if:
(a) such Person or any of such Person's Affiliates and
Associates, directly or indirectly, is the "beneficial owner" of (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act, as in effect on the date of this Agreement) such
securities or otherwise has the right to vote or dispose of such
securities, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subsection (a) as a result
of an agreement, arrangement or understanding to vote such security if
such agreement, arrangement or understanding: (i) arises solely from a
revocable proxy or consent given in response to a public (i.e., not
including a solicitation exempted by Rule 14a-2(b)(2) of the General
Rules and Regulations under the Exchange Act) proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange Act
and (ii) is not then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report);
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(b) such Person or any of such Person's Affiliates and
Associates, directly or indirectly, has the right or obligation to
acquire such securities (whether such right or obligation is exercisable
or effective immediately or only after the passage of time or the
occurrence of an event) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, other rights, warrants or options,
or otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to "beneficially own," (i) securities tendered
pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange or (ii) securities issuable upon
exercise of Exempt Rights; or
(c) such Person or any of such Person's Affiliates or
Associates (i) has any agreement, arrangement or understanding (whether
or not in writing) with any other Person (or any Affiliate or Associate
thereof) that beneficially owns such securities for the purpose of
acquiring, holding, voting (except as set forth in the proviso to
subsection (a) of this definition) or disposing of such securities or
(ii) is a member of a group (as that term is used in Rule 13d-5(b) of
the General Rules and Regulations under the Exchange Act) that includes
any other Person that beneficially owns such securities;
provided, however, that nothing in this definition shall cause a Person engaged
in business as an underwriter of securities to be the Beneficial Owner of, or
to "beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition. For purposes hereof,
"voting" a security shall include voting, granting a proxy, consenting or
making a request or demand relating to corporate action (including, without
limitation, a demand for a stockholder list, to call a stockholder meeting or
to inspect corporate books and records) or otherwise giving an authorization
(within the meaning of Section 14(a) of the Exchange Act) in respect of such
security.
The terms "beneficially own" and "beneficially owning" shall have
meanings that are correlative to this definition of the term "Beneficial
Owner."
"Change of Control" shall mean any of the following occurring on
or after the IPO Closing Date (and, without limiting the generality of any
other provision hereof, no Change of Control shall be deemed to have occurred
as a result of the consummation of any of the transactions contemplated by the
Combination Agreement among the Company, Carrizo Production, Inc., Encinitas
Partners, Ltd., La Xxxx Partners, Ltd., Carrizo Partners, Ltd. and the
shareholders of the Company):
(a) any Person (other than an Exempt Person) shall become the
Beneficial Owner of 40% or more of the shares of Common Stock then
outstanding or 40% or more of the combined voting power of the Voting
Stock of the Company then outstanding; provided, however, that no Change
of Control shall be deemed to occur for purposes of this subsection (a)
if such Person shall become a Beneficial Owner of 40% or more of the
shares of Common
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Stock or 40% or more of the combined voting power of the Voting Stock of
the Company solely as a result of (i) an Exempt Transaction or (ii) an
acquisition by a Person pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (i), (ii) and (iii)
of subsection (c) of this definition are satisfied;
(b) individuals who, as of the Agreement Effective Date,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Agreement Effective
Date whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board; provided,
further, that there shall be excluded, for this purpose, any such
individual whose initial assumption of office occurs as a result of any
actual or threatened election contest that is subject to the provisions
of Rule 14a-11 under the Exchange Act;
(c) approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless, following
such reorganization, merger or consolidation, (i) more than 85% of the
then outstanding shares of common stock of the corporation resulting
from such reorganization, merger or consolidation and the combined
voting power of the then outstanding Voting Stock of such corporation
beneficially owned, directly or indirectly, by all or substantially all
of the Persons who were the Beneficial Owners of the outstanding Common
Stock immediately prior to such reorganization, merger or consolidation
in substantially the same proportions as their ownership, immediately
prior to such reorganization, merger or consolidation, of the
outstanding Common Stock, (ii) no Person (excluding any Exempt Person or
any Person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly, 40% or
more of the Common Stock then outstanding or 40% or more of the combined
voting power of the Voting Stock of the Company then outstanding)
beneficially owns, directly or indirectly, 40% or more of the then
outstanding shares of common stock of the corporation resulting from
such reorganization, merger or consolidation or the combined voting
power of the then outstanding Voting Stock of such corporation and (iii)
at least a majority of the members of the board of directors of the
corporation resulting from such reorganization, merger or consolidation
were members of the Incumbent Board at the time of the execution of the
initial agreement or initial action by the Board providing for such
reorganization, merger or consolidation; or
(d) approval by the shareholders of the Company of (i) a
complete liquidation or dissolution of the Company unless such
liquidation or dissolution is approved as part of a plan of liquidation
and dissolution involving a sale or disposition of all or substantially
all of the assets of the Company to a corporation with respect to which,
following such sale or other disposition, all of the requirements of
clauses (ii)(A), (B) and (C) of this subsection (d) are satisfied, or
(ii) the sale or other disposition of all or substantially all of the
assets of the
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Company, other than to a corporation, with respect to which, following
such sale or other disposition, (A) more than 85% of the then
outstanding shares of common stock of such corporation and the combined
voting power of the Voting Stock of such corporation is then
beneficially owned, directly or indirectly, by all or substantially all
of the Persons who were the Beneficial Owners of the outstanding Common
Stock immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior
to such sale or other disposition, of the outstanding Common Stock, (B)
no Person (excluding any Exempt Person and any Person beneficially
owning, immediately prior to such sale or other disposition, directly or
indirectly, 40% or more of the Common Stock then outstanding or 40% or
more of the combined voting power of the Voting Stock of the Company
then outstanding) beneficially owns, directly or indirectly, 40% or more
of the then outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding Voting Stock of such
corporation and (C) at least a majority of the members of the board of
directors of such corporation were members of the Incumbent Board at the
time of the execution of the initial agreement or initial action of the
Board providing for such sale or other disposition of assets of the
Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exempt Person" shall mean the Company, any subsidiary of the
Company, any employee benefit plan of the Company or any subsidiary of the
Company, and any Person organized, appointed or established by the Company for
or pursuant to the terms of any such plan.
"Exempt Rights" shall mean any rights to purchase shares of
Common Stock or other Voting Stock of the Company if at the time of the
issuance thereof such rights are not separable from such Common Stock or other
Voting Stock (i.e., are not transferable otherwise than in connection with a
transfer of the underlying Common Stock or other Voting Stock) except upon the
occurrence of a contingency, whether such rights exist as of the Agreement
Effective Date or are thereafter issued by the Company as a dividend on shares
of Common Stock or other Voting Securities or otherwise.
"Exempt Transaction" shall mean an increase in the percentage of
the outstanding shares of Common Stock or the percentage of the combined voting
power of the outstanding Voting Stock of the Company beneficially owned by any
Person solely as a result of a reduction in the number of shares of Common
Stock then outstanding due to the repurchase of Common Stock or Voting Stock by
the Company, unless and until such time as (a) such Person or any Affiliate or
Associate of such Person shall purchase or otherwise become the Beneficial
Owner of additional shares of Common Stock constituting 1% or more of the then
outstanding shares of Common Stock or additional Voting Stock representing 1%
or more of the combined voting power of the then outstanding Voting Stock, or
(b) any other Person (or Persons) who is (or collectively are) the Beneficial
Owner of shares of Common Stock constituting 1% or more of the then outstanding
shares of Common Stock or Voting Stock representing 1% or more of the combined
voting power of the then outstanding Voting Stock shall become an Affiliate or
Associate of such Person.
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"Person" shall mean any individual, firm, corporation,
partnership, association, trust, unincorporated organization or other entity.
"Voting Stock" shall mean, with respect to a corporation, all
securities of such corporation of any class or series that are entitled to vote
generally in the election of directors of such corporation (excluding any class
or series that would be entitled so to vote by reason of the occurrence of any
contingency, so long as such continency has not occurred).
10. Covenant Not to Compete.
(a) 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 two years 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"), with
respect to only 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
or (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 (all of the
foregoing activities are collectively referred to as the "Prohibited
Activity").
(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 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.
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(c) The covenants of the Executive set forth in this Section
10 are independent of and severable from every other provision of this
Agreement; and the breach of any other provision of this Agreement by the
Company or the breach by the Company of any other agreement between the Company
and the Executive shall not affect the validity of the provisions of this
Section 10 or constitute a defense of the Executive in any suit or action
brought by the Company to enforce any of the provisions of this Section 10 or
seek any relief for the breach thereof by Executive.
(d) The Executive acknowledges, agrees and stipulates that:
(i) the terms and provisions of this Agreement are reasonable and constitute an
otherwise enforceable agreement to which the terms and provisions of this
Section 10 are ancillary or a part of as contemplated by TEX. BUS. & COM. CODE
XXX. Sections 15.50-15.52; (ii) the consideration provided by the Company
under this Agreement is not illusory; and (iii) the consideration given by the
Company under this Agreement, including, without limitation, the provision by
the Company of Confidential Information to the Executive as contemplated by
Section 8, gives rise to the Company's interest in restraining and prohibiting
the Executive from engaging in the Prohibited Activity within the Relevant
Geographic Area as provided under this Section 10, and the Executive's covenant
not to engage in the Prohibited Activity within the Relevant Geographic Area
pursuant to this Section 10 is designed to enforce the Executive's
consideration (or return promises), including, without limitation, the
Executive's promise to not disclose Confidential Information under this
Agreement.
11. Successors.
(a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
heirs, executors and other legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and may only be assigned to a successor described in
Section 11(c).
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
12. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without reference to principles
of conflict of laws that would require the application of the laws of any other
state or jurisdiction.
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(b) The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
(c) This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and heirs, executors and other legal representatives.
(d) All notices and other communications hereunder shall be in
writing and shall be given, if by the Executive to the Company, by telecopy or
facsimile transmission at the telecommunications number set forth below and, if
by either the Company or the Executive, either by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
X. X. Xxxxxxx, XX
Carrizo Oil & Gas, Inc.
00000 Xx. Xxxx'x Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
If to the Company:
Carrizo Oil & Gas, Inc.
00000 Xx. Xxxx'x Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telecommunications Number: (000) 000-0000
Attention: Corporate Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(e) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) The Company may withhold from any amounts payable under
this Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(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, including, without limitation, the right of the Executive to
terminate employment for Good Reason or during a Window Period pursuant to
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Section 3(c) of this Agreement, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.
(h) This agreement contains the complete and total
understanding of the parties concerning the subject matter hereof and expressly
supersedes any previous agreement between the parties relating to the subject
matter hereof.
(i) This Agreement shall become effective as of the date
hereof (the "Agreement Effective Date").
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. XXXX, XX.
---------------------------------
/s/ X. X. XXXXXXX XX
------------------------------------
X. X. Xxxxxxx, XX
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