STOCK APPRECIATION RIGHTS AGREEMENT PURSUANT TO THE CARRIZO OIL & GAS, INC. CASH-SETTLED STOCK APPRECIATION RIGHTS PLAN
Exhibit
10.11
STOCK APPRECIATION RIGHTS AGREEMENT PURSUANT TO THE
CARRIZO
OIL & GAS, INC.
CASH-SETTLED
STOCK APPRECIATION RIGHTS PLAN
THIS
AGREEMENT (“Agreement”) is made as of the 3rd day of June, 2009 (the “Grant
Date”), by and between Carrizo Oil & Gas, Inc., a Texas corporation (the
“Company”), and employee name (the “Grantee”).
The
Company has adopted the Carrizo Oil & Gas, Inc. Cash-Settled Stock
Appreciation Rights Plan, as established effective June 3, 2009 (the “Plan”), a
copy of which is appended to this Agreement as Exhibit A and by this
reference made a part hereof, for the benefit of certain individuals providing
services to the Company and its Subsidiaries, as set forth in the
Plan. Capitalized terms used and not otherwise defined herein shall
have the meaning ascribed thereto in the Plan.
Pursuant
to the Plan, the Committee, which has generally been assigned responsibility for
administering the Plan, has determined that it would be in the interest of the
Company and its stockholders to grant the stock appreciation rights provided
herein in order to provide Grantee with additional remuneration for services
rendered, to encourage Grantee to remain in the employ of the Company or its
Subsidiaries and to increase Grantee’s personal interest in the continued
success and progress of the Company.
The
Company and Grantee therefore agree as follows:
1. Grant of
SAR. Subject to the terms and conditions herein, the Company
grants to the Grantee during the period commencing on June 3rd, 2009 and
expiring at 0 x.x. Xxxxxxx, Xxxxx time (“Close of Business”) on
June 3rd, 2016 (the “SAR Term”), subject to earlier termination pursuant to
paragraph 6 below, a stock appreciation right with respect to the number of
shares of Company Common Stock (“Common Stock”) set forth on Schedule 1 hereto
(the “SAR Shares”) with an exercise price set forth on Schedule 1 (the
“Exercise Price”). The Exercise Price and SAR Shares are subject to
adjustment pursuant to paragraph 9 below. This stock
appreciation right is hereinafter referred to as the “SAR.”
2. Conditions of
Exercise. The SAR is exercisable only in accordance with the
conditions stated in this paragraph.
(a)
Except as otherwise provided in this subparagraph (a), the SAR may only be
exercised to the extent the SAR has become available for exercise in accordance
with the following schedule, provided, however, that the SAR shall not be
exercisable unless the average daily production of the Company for the calendar
quarter ended September 30, 2009 (“3Q09”) is at least (i) 54,764 thousand
standard cubic feet equivalent per day (“Mcfe/d”), if the Company’s weighted
average realized natural gas price (excluding the impact of cash settled xxxxxx)
for 3Q09 is greater than or equal to $3/Mcf or (ii) 43,811 Mcfe/d, if the
Company’s weighted average realized natural gas price (excluding the impact
of
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cash
settled xxxxxx) for 3Q09 is less than $3/Mcf:
Percentage
of SAR
Date_ Shares Available for
Exercise
May 28,
2010 33.3%
May 28,
2011 33.3%
May 28,
2012 33.3%
Notwithstanding
the foregoing, subject to the provisions of any applicable written employment
agreement between the Grantee and the Company or any Subsidiary, the SAR will
not be exercisable with respect to any additional SAR Shares if (i) Grantee has
not remained in the continuous employment of the Company and its Subsidiaries
through the applicable date. A change of employment is continuous
employment within the meaning of this paragraph 2 provided that, after
giving effect to such change, the Grantee continues to be an employee of the
Company or any Subsidiary.
(b) To the
extent the SAR becomes exercisable, the SAR may be exercised in whole or in part
(at any time or from time to time, except as otherwise provided herein) until
expiration of the SAR Term or earlier termination thereof.
3. Manner of
Exercise. The SAR shall be considered exercised (as to the
number of SAR Shares specified in the notice referred to in subparagraph (a)
below) on the latest of (i) the date of exercise designated in the written
notice referred to in subparagraph (a) below, (ii) if the date so designated is
not a business day, the first business day following such date or (iii) the
earliest business day by which the Company has received all of the
following:
(a) Written
notice, in such form as the Committee may require, designating, among other
things, the date of exercise and the number of SAR Shares with respect to which
the SAR is to be exercised; and
(b) Any other
documentation that the Committee may reasonably require.
4. Mandatory Withholding for
Taxes. Grantee acknowledges and agrees that the Company shall
deduct from the cash otherwise payable or deliverable upon exercise of the SAR
an amount of cash that is equal to the amount of all federal, state and local
taxes required to be withheld by the Company upon such exercise, as determined
by the Committee.
5. Payment by the
Company. As soon as practicable after receipt of all items
referred to in paragraph 3, and subject to the withholding referred to in
paragraph 4, the Company shall deliver to the Grantee an amount, in cash,
equal to the product of (i) the number of SAR Shares with respect to which the
SAR was exercised and (ii) the difference between (A) the Fair Market Value per
share of Common Stock on the date of exercise and (B) the Exercise
Price.
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6. Termination of
Employment. Unless otherwise determined by the Committee in
its sole discretion, the SAR shall terminate, prior to the expiration of the SAR
Term, at the time specified below:
(a) If
Grantee terminates employment with the Company and its Subsidiaries voluntarily
without Good Reason (as defined below), then the SAR shall terminate at the
Close of Business on the first business day following the expiration of the 90
day period which began on the date of termination of Grantee’s employment;
or
(b) If
Grantee’s employment with the Company and its Subsidiaries is terminated by the
Company or a Subsidiary for Cause (as defined below), then the SAR shall
terminate immediately upon termination of Grantee’s employment.
In any
event in which the SAR remains exercisable for a period of time following the
date of termination of Grantee’s employment, the SAR may be exercised during
such period of time only to the extent it is or becomes exercisable as provided
in paragraph 2. Notwithstanding any period of time referenced in this
paragraph 6 or any other provision of this paragraph that may be construed
to the contrary, the SAR shall in any event terminate upon the expiration of the
SAR Term.
“Cause”
for purposes of the Agreement shall mean cause as defined in any written
employment agreement between the Grantee and the Company or a Subsidiary in
effect at the time of the Grantee’s termination of employment or, in the absence
of any such employment agreement, any of the following: (a) conviction of
the Grantee by a court of competent jurisdiction of any felony or a crime
involving moral turpitude; (b) the Grantee’s knowing failure or refusal to
follow reasonable instructions of the Board or reasonable policies, standards
and regulations of the Company or its Subsidiaries; (c) the Grantee’s
continued failure or refusal to faithfully and diligently perform the usual,
customary duties of his employment with the Company or a Subsidiary;
(d) the Grantee continuously conducting himself in an unprofessional,
unethical, immoral or fraudulent manner; or (e) the Grantee’s conduct
discredits the Company or a Subsidiary or is detrimental to the reputation,
character and standing of the Company or a Subsidiary.
“Good
Reason” for purposes of the Agreement shall mean good reason as defined in any
written employment agreement between the Grantee and the Company or a Subsidiary
in effect at the time of the Grantee’s termination of employment or, in the
absence of any such employment agreement, shall be deemed to have occurred upon
the happening of any of the following:
(i) any
reduction in Grantee’s annual rate of salary;
(ii)
either (x) a failure of the Company to continue in effect any employee benefit
plan in which Grantee was participating or (y) the taking of any action by the
Company that would adversely affect Grantee’s participation in, or materially
reduce Grantee’s benefits under, any such employee benefit plan, unless such
failure or such taking of any action adversely affects the senior
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members
of the corporate management of the Company generally;
(iii) the
assignment to Grantee of duties and responsibilities that are materially more
oppressive or onerous than those attendant to Grantee’s position immediately
after the date hereof;
(iv) the
relocation of the office location as assigned to Grantee by the Company to a
location more than 20 miles from Grantee’s current location without Grantee’s
consent; or
(v) the
failure of the Company to obtain, prior to the time of any reorganization,
merger, consolidation, disposition of all or substantially all of the assets of
the Company or similar transaction effective after the date hereof, in which the
Company is not the surviving person, the unconditional assumption in writing or
by operation of law of the Company’s obligations to Grantee under this Agreement
by each direct successor to the Company in any such transaction.
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 Grantee must notify the Company within 90 days following the initial
occurrence of the event(s) that the Grantee 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) and (B) within 60 days after
receiving such notice from the Grantee (the “Correction Period”), the Company
must fail to reinstate the Grantee to the position he was in, or otherwise cure
the circumstances giving rise to Good Reason. The Grantee’s
termination for Good Reason may occur only within 60 days following the
expiration of the Correction Period.
7. Nontransferability of
SAR. During Grantee’s lifetime, the SAR is not transferable
(voluntarily or involuntarily) other than pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder (a “QDRO”), and, except as
otherwise required pursuant to a QDRO, is exercisable only by the Grantee or
Grantee’s court appointed legal representative. The Grantee may
designate a beneficiary or beneficiaries to whom the SAR shall pass upon
Grantee’s death and may change such designation from time to time by filing a
written designation of beneficiary or beneficiaries with the Committee on the
form annexed hereto as Exhibit B or such other form as may be prescribed by
the Committee, provided that no such designation shall be effective unless so
filed prior to the death of Grantee. If no such designation is made
or if the designated beneficiary does not survive the Grantee’s death, the SAR
shall pass by will or the laws of descent and distribution. Following
Grantee’s death, the SAR, if otherwise exercisable, may be exercised by the
person to whom such SAR passes according to the foregoing and such person shall
be deemed the Grantee for purposes of any applicable provisions of this
Agreement.
Notwithstanding
the foregoing, the SAR is transferable by the Grantee to (i) the children or
grandchildren of the Grantee (“Immediate Family Members”), (ii) a trust or
trusts for the exclusive benefit of such Immediate Family Members (“Immediate
Family Member Trusts”), or (iii) a partnership or partnerships in which such
Immediate Family Members have at least
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ninety‑nine percent (99%)
of the equity, profit and loss interests (“Immediate Family Member
Partnerships”). Subsequent transfers of a transferred SAR shall be
prohibited except by will or the laws of descent and distribution or pursuant to
a QDRO, unless such transfers are made to the original Grantee or a person to
whom the original Grantee could have made a transfer in the manner described
herein. No transfer shall be effective unless and until written
notice of such transfer is provided to the Committee, in the form and manner
prescribed by the Committee. Following transfer, the SAR shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, and, except as otherwise provided herein, the
term “Grantee” shall be deemed to refer to the transferee. The
consequences of termination of employment shall continue to be applied with
respect to the original Grantee, following which the SAR shall be exercisable by
the transferee only to the extent and for the periods specified in the Plan and
this Agreement.
8. No Stockholder
Rights. The Grantee shall not be deemed for any purpose to be,
or to have any of the rights of, a stockholder of the Company with respect to
any shares of Common Stock as to which this Agreement
relates. Furthermore, the existence of this Agreement shall not
affect in any way the right or power of the Company or its stockholders to
accomplish any corporate act, including, without limitation, the acts referred
to in Section 12 of the Plan.
9. Adjustments. As
provided in Section 12 of the Plan, certain adjustments may be made to the SAR
upon the occurrence of events or circumstances described in Section 12 of the
Plan.
10. Restrictions Imposed by
Law. Without limiting the generality of Section 13 of the
Plan, the Grantee agrees that Grantee will not exercise the SAR and that the
Company will not be obligated to deliver any payment, if counsel to the Company
determines that such exercise or payment would violate any applicable law or any
rule or regulation of any governmental authority or any rule or regulation of,
or agreement of the Company with, any securities exchange or association upon
which the Common Stock is listed or quoted. The Company shall in no
event be obligated to take any affirmative action in order to cause the exercise
of the SAR or the resulting payment to comply with any such law, rule,
regulation or agreement.
11. Notice. Unless the
Company notifies the Grantee in writing of a different procedure, any notice or
other communication to the Company with respect to this Agreement shall be in
writing and shall be (a) delivered personally to the following
address:
Carrizo
Oil & Gas, Inc.
0000
Xxxxxxxxx Xx., Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
or (b)
sent by first class mail, postage prepaid and addressed as follows:
Carrizo
Oil & Gas, Inc.
0000
Xxxxxxxxx Xx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Attention: Payroll/Benefits Manager
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Any
notice or other communication to the Grantee with respect to this Agreement
shall be in writing and shall be delivered personally, or shall be sent by first
class mail, postage prepaid, to Grantee’s address as listed in the records of
the Company on the Grant Date, unless the Company has received written
notification from the Grantee of a change of address.
12. Amendment. Notwithstanding
any other provisions hereof, this Agreement may be supplemented or amended from
time to time as approved by the Committee as contemplated by Section 5 of the
Plan. Without limiting the generality of the foregoing, without the
consent of the Grantee,
(a) this
Agreement may be amended or supplemented (i) to cure any ambiguity or to correct
or supplement any provision herein which may be defective or inconsistent with
any other provision herein, or (ii) to add to the covenants and agreements of
the Company for the benefit of Grantee or surrender any right or power reserved
to or conferred upon the Company in this Agreement, and, provided, in each
case, that such changes or corrections shall not adversely affect the rights of
Grantee with respect to the Award evidenced hereby without the Grantee’s
consent, or (iii) to make such other changes as the Company, upon advice of
counsel, determines are necessary or advisable because of the adoption or
promulgation of, or change in or of the interpretation of, any law or
governmental rule or regulation, including any applicable federal or state
securities laws; and
(b) subject
to Section 5 of the Plan, the Award evidenced by this Agreement may be canceled
by the Committee and a new Award made in substitution therefor, provided that the
Award so substituted shall satisfy all of the requirements of the Plan as of the
date such new Award is made and no such action shall adversely affect the SAR to
the extent then exercisable without the Grantee’s consent.
13. Grantee
Employment. Nothing contained in this Agreement, and no action
of the Company or the Committee with respect hereto, shall confer or be
construed to confer on the Grantee any right to continue in the employ of the
Company or any of its Subsidiaries or interfere in any way with the right of the
Company or any employing Subsidiary to terminate the Grantee’s employment at any
time, with or without cause; subject, however, to the
provisions of any employment agreement between the Grantee and the Company or
any Subsidiary.
14. Governing Law. This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of Texas.
15.
Construction. References in this Agreement to “this
Agreement” and the words “herein,” “hereof,” “hereunder” and similar terms
include all Exhibits and Schedules appended hereto, including the
Plan. This Agreement is entered into, and the Award evidenced hereby
is granted, pursuant to the Plan and shall be governed by and construed in
accordance with the Plan and the administrative interpretations adopted by the
Committee thereunder. All decisions of the
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Committee
upon questions regarding the Plan or this Agreement shall be
conclusive. Unless otherwise expressly stated herein, in the event of
any inconsistency between the terms of the Plan and this Agreement, the terms of
the Plan shall control. The headings of the paragraphs of this
Agreement have been included for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
or provisions hereof.
16. Duplicate
Originals. The Company and the Grantee may sign any number of
copies of this Agreement. Each signed copy shall be an original, but
all of them together represent the same agreement.
17. Rules by
Committee. The rights of the Grantee and obligations of the
Company hereunder shall be subject to such reasonable rules and regulations as
the Committee may adopt from time to time hereafter.
18. Entire
Agreement. Subject to the provisions of any applicable written
employment agreement between the Grantee and the Company or any Subsidiary,
Grantee and the Company hereby declare and represent that no promise or
agreement not herein expressed has been made and that this Agreement contains
the entire agreement between the parties hereto with respect to the SAR and
replaces and makes null and void any prior agreements, oral or written, between
Grantee and the Company regarding the SAR.
19. Grantee
Acceptance. Grantee shall signify acceptance of the terms and
conditions of this Agreement by signing in the space provided at the end hereof
and returning a signed copy to the Company.
ATTEST: CARRIZO
OIL & GAS, INC.
_________________________________ By:
_________________________________
Secretary
Name: X. X. Xxxxxxx
Title: President
ACCEPTED:
__________________________________________
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Schedule
1 to Stock Appreciation Rights
Agreement
dated as of June 3, 2009
Carrizo
Oil & Gas, Inc. Cash-Settled Stock Appreciation Rights Plan
Grantee: [Employee Name]
Grant
Date:
June 3, 2009
Exercise
Price: $20.22
per share
|
SAR
Shares:
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______ shares of Common Stock.
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Exhibit B
to Stock Appreciation Rights
Agreement dated as of June 3, 2009
Carrizo
Oil & Gas, Inc. Cash-Settled Stock Appreciation Rights Plan
Designation
of Beneficiary
I,
___________________________________________ (the “Grantee”), hereby declare that
upon my death
________________________________________________________________________
(the “Beneficiary”) of
Name
__________________________________________________________________________________________,
Street
Address City State Zip
Code
who is my
_________________________________________________, shall be entitled to the SAR
and all other rights
Relationship
to Grantee
accorded
the Grantee by the above-referenced agreement (the
“Agreement”).
It is
understood that this Designation of Beneficiary is made pursuant to the
Agreement and is subject to the
conditions
stated herein, including the Beneficiary’s survival of the Grantee’s
death. If any such condition is not satisfied,
such
rights shall devolve according to the Grantee’s will or the laws of descent and
distribution.
It is
further understood that all prior designations of beneficiary under the
Agreement are hereby revoked and that
this
Designation of Beneficiary may only be revoked in writing, signed by the
Grantee, and filed with the Company prior to the
Grantee’s
death.
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Date
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Grantee
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