Form 8-K 01.23.06

0001040593-06-000004.txt : 20060127 0001040593-06-000004.hdr.sgml : 20060127 20060127164620 ACCESSION NUMBER: 0001040593-06-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20060123 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060127 DATE AS OF CHANGE: 20060127 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARRIZO OIL & GAS INC CENTRAL INDEX KEY: 0001040593 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 760415919 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-29187-87 FILM NUMBER: 06558444 BUSINESS ADDRESS: STREET 1: 1000 LOUISIANA STREET STREET 2: SUITE 1500 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7133281000 MAIL ADDRESS: STREET 1: 1000 LOUISIANA STREET STREET 2: SUITE 1500 CITY: HOUSTON STATE: TX ZIP: 77002 8-K 1 form_8k.htm FORM 8-K 01.23.06 Form 8-K 01.23.06

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): January 23, 2006

CARRIZO OIL & GAS, INC.

(Exact name of registrant as specified in its charter)

Texas	000-29187-87	76-0415919
(State or other jurisdiction of incorporation)	(Commission File Number) Identification No.)	(I.R.S. Employer

1000 Louisiana Street Suite 1500 Houston, Texas	77002
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (713) 328-1000

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Amendments to Employment Agreements

On January 23, 2006, Carrizo Oil & Gas, Inc. (the “Company”) entered into amendments, effective January 23, 2006, to its employment agreements with each of S.P. Johnson IV, President and Chief Executive Officer, Paul F. Boling, Chief Financial Officer, Vice President, Treasurer and Secretary, Gregory E. Evans, Vice President of Exploration, and J. Bradley Fisher, Vice President and Chief Operating Officer. Each amendment modifies the executive’s employment agreement such that, among other things:

(1) In order for an event to constitute good reason (as defined in the employment agreement), the executive must provide the Company with notice within 180 days after the occurrence of the event giving rise to the claim for good reason and an opportunity to cure the event within 60 days after the receipt of such notice;

(2) The duration of the noncompete covenant is reduced from two years to one year after termination, and a one year nonsolicitation covenant is added; and

(3) In the event of a dispute following the executive’s termination, (a) the parties are required to submit the dispute to arbitration; (b) the Company is only required to pay the executive’s attorneys fees pending a dispute if the termination occurred within two years after a change in control (as defined in the employment agreement) or, in the case of a termination before a change in control, if the termination was not initiated by the executive (with or without good reason) ; and (c) the Company is only required to pay the executive severance pending resolution of a dispute in the case of a termination within two years after a change in control.

In addition, the amendment to the employment agreement with Mr. Fisher provides that, in the event the executive’s employment is terminated without cause, for good reason or upon his death, the executive will no longer be allowed to choose to receive a cash payment in lieu of his outstanding equity compensation awards valued at the highest price paid for a share of the Company’s common stock by specified persons during his term of employment or the period six months prior to the effective date of his employment agreement.

The amendment to the employment agreement with Mr. Evans also removes the provision that provided that, in the event the executive violates the noncompete covenant, the Company would have had the option to cancel all his outstanding stock options or any shares of restricted stock which otherwise would have vested on termination of employment.

Bayless Employment Agreement

On January 23, 2006, the Company entered into an employment agreement (the “New Agreement”) with Jack Bayless, Vice President of Land. Under the New Agreement, the executive will receive an annual base salary of $175,000 and an annual bonus in an amount comparable to the annual bonus of other Company executives, taking into account the executive’s position and responsibilities. The executive’s salary is subject to periodic review and the New Agreement provides for increases consistent with increases in base salary generally

awarded to other executives of the Company. The New Agreement entitles the executive to participate in all of the Company’s incentive, savings, retirement and welfare benefit plans in which other executive officers of the Company participate.

The New Agreement has an initial term of one year; provided that, on the effective date and on every day thereafter, the term of the New Agreement is automatically extended for one day, such that the remaining term of the New Agreement will never be less than one year. Both the Company and the executive may terminate the executive’s employment at any time. Upon termination of employment on account of disability or if employment is terminated by the Company for any reason (except under certain limited circumstances defined as “for cause” in the New Agreement), or if employment is terminated by the executive either (x) for any reason (including by reason of death) during a 60 day period following the elapse of one year after a change of control (as defined in the New Agreement) (the “Window Period”) or (y) with good reason (as defined in the New Agreement), the executive will generally be entitled to (i) an immediate lump sum cash payment equal to his annual base salary that would have been payable for the remainder of the term of the New Agreement discounted at 6%, (ii) continued participation in all the Company’s welfare benefit plans and continued life insurance and medical benefits coverage for the remainder of the term of the New Agreement, (iii) a pro-rated bonus for the year of termination, and (iv) the immediate vesting of any stock options or restricted stock previously granted to the executive and outstanding as of the time immediately prior to the date of his termination, and an extension of the period of exercisability of any such awards until the earlier of (A) one year following his date of termination or (B) the date such awards would have lapsed had the executive remained employed for the remaining term.

If the termination is after or in anticipation of a change of control, the assumed remaining employment period for purposes of calculating the lump sum described above in clause (i) shall be 18 months, and the executive will be entitled to a gross-up payment to offset the effect of any excise tax imposed under Section 4999 of the Internal Revenue Code. If the executive’s employment terminates upon his death and other than in a Window Period, the Company will pay a sum equal to his annual base salary for the remaining term of the New Agreement, reduced by the amount payable under any life insurance policies to the extent that such amounts are attributable to premiums paid by the Company, a prorated annual bonus for the year of death, continued welfare benefits for the executive’s dependents for one year following death and immediate vesting and extension of exercisability of equity awards as described above. Upon any termination of employment by the Executive without Good Reason and not during a Window Period, the executive has agreed to be subject to a noncompetition and nonsolicitation covenant for one year following termination.

In addition, the New Agreement includes the terms of the employment agreement amendments with other executives described above.

Restricted Stock Grants

On January 23, 2006, Messrs. Boling, Evans and Fisher received awards of 25,000, 25,000 and 35,000 shares of restricted stock, respectively, granted by the Compensation Committee of the Board of Directors pursuant to the Company’s Incentive Plan with the terms and conditions contained in the form of Employee Restricted Stock Award Agreement that is

attached to this Current Report on Form 8-K as Exhibit 10.6. The shares of restricted stock will vest in full on the date 30 months following the date of grant, provided that the executive has been in the continuous employment of the Company through such date (subject to the terms of the relevant employment agreement, which provides accelerated vesting in certain circumstances as described above). Also on January 23, 2006, Mr. Bayless received an award of 15,000 shares of restricted stock with the terms and conditions contained in the Restricted Stock Award Agreement that is attached to this Current Report on Form 8-K as Exhibit 10.7. The shares of restricted stock awarded to Mr. Bayless will vest in one-third increments on each of the first three anniversaries of his start date beginning on October 15, 2006, provided that he has been in the continuous employment of the Company through such date (subject to the terms of the employment agreement for Mr. Bayless, which provides accelerated vesting in certain circumstances as described above).

_____________________________

The foregoing descriptions of the amendments to the employment agreements, the New Agreement and the Employee Restricted Stock Award Agreements do not purport to be complete and are qualified in their entirety by reference to the full text of the agreements, which are filed as exhibits to this Current Report and incorporated by reference herein.

Item 9. 01 Financial Statements and Exhibits.

10.1

Amendment to Employment Agreement between Carrizo Oil & Gas, Inc. and S.P. Johnson IV effective January 23, 2006.

10.2

Amendment to Employment Agreement between Carrizo Oil & Gas, Inc. and Paul F. Boling effective January 23, 2006.

10.3

Amendment to Employment Agreement between Carrizo Oil & Gas, Inc. and Gregory E. Evans effective January 23, 2006.

10.4

Amendment to Employment Agreement between Carrizo Oil & Gas, Inc. and J. Bradley Fisher effective January 23, 2006.

10.5

Employment Agreement between Carrizo Oil & Gas, Inc. and Jack Bayless effective January 23, 2006.

10.6

Form of Employee Restricted Stock Award Agreement under the Incentive Plan of Carrizo Oil & Gas, Inc.

10.7

Employee Restricted Stock Award Agreement under the Incentive Plan of Carrizo Oil & Gas, Inc. granted to Jack Bayless effective January 23, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CARRIZO OIL & GAS, INC.

By: /s/ Paul F. Boling

Name: Paul F. Boling

Title: Vice President and Chief Financial Officer

Date: January 27, 2006

EXHIBIT INDEX

No. Description

10.1	Amendment to Employment Agreement between Carrizo Oil & Gas, Inc. and S.P. Johnson IV effective January 23, 2006.

10.2	Amendment to Employment Agreement between Carrizo Oil & Gas, Inc. and Paul F. Boling effective January 23, 2006.

10.3	Amendment to Employment Agreement between Carrizo Oil & Gas, Inc. and Gregory E. Evans effective January 23, 2006.

10.4	Amendment to Employment Agreement between Carrizo Oil & Gas, Inc. and J. Bradley Fisher effective January 23, 2006.

10.5	Employment Agreement between Carrizo Oil & Gas, Inc. and Jack Bayless effective January 23, 2006.

10.6	Form of Employee Restricted Stock Award Agreement under the Incentive Plan of Carrizo Oil & Gas, Inc.

10.7	Employee Restricted Stock Award Agreement under the Incentive Plan of Carrizo Oil & Gas, Inc. granted to Jack Bayless effective January 23, 2006.

EX-10.1 2 exhibit_101.htm SPJ EMPLOY AGMNT AMND SPJ Employ Agmnt Amnd

AMENDMENT TO EMPLOYMENT AGREEMENT

This AMENDMENT (the "Amendment") by and between Carrizo Oil & Gas, Inc., a Texas corporation (the "Company"), and S. P. Johnson, IV (the "Executive"), effective as of January 23, 2006, is an amendment to that certain Employment Agreement by and between the Company and the Executive dated as of June 13, 1997 (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 have agreed to make certain mutually beneficial changes to the Employment Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Section 3(c)(i) of the Employment Agreement is amended to read hereafter as follows:

"(i) the assignment to the Executive of any duties materially inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 2 of this Agreement, or any other action by the Company which results in a material diminution, in absolute terms, in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;"

2. Section 3(c) of the Employment Agreement is hereby amended by adding the following to the end thereof:

"Notwithstanding any provision to the contrary, in order for any event(s) in subparagraph (i) through (vi) above to constitute "Good Reason" for purposes of this Agreement, (A) the Executive must notify the Company via Notice of Termination within 180 days following the occurrence of the event(s) that the Executive intends to terminate his employment with the Company because of the occurrence of Good Reason (which event must be described by the Executive in reasonable detail in the Notice of Termination) and (B) within 60 days after receiving such Notice of Termination from the Executive, the Company must fail to reinstate the Executive to the position he was in, or otherwise cure the circumstances giving rise to Good Reason."

3. Section 3(d) of the Employment Agreement is amended to read hereafter as follows:

"(d) Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason or without any reason during a Window Period, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(d) of this Agreement. The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company's rights hereunder."

4. Section 4(a)(i)(D) of the Employment Agreement is amended to read hereafter as follows:

"D. Effective as of the Date of Termination, (1) immediate vesting and exercisability of, and termination of any restrictions on sale or transfer (other than any such restriction arising by operation of law) with respect to, each and every stock option, restricted stock award, restricted stock unit award and other equity-based award and performance award (each, a "Compensatory Award") that is outstanding as of a time immediately prior to the Date of Termination and (2) unless a longer post-employment term is provided in the applicable award agreement, the extension of the term during which each and every Compensatory Award may be exercised by the Executive until the earlier of (x) the first anniversary of the Date of Termination or (y) the date upon which the right to exercise any Compensatory Award would have expired if the Executive had continued to be employed by the Company under the terms of this Agreement until the Final Expiration Date; and"

5. Section 6 of the Employment Agreement is amended to read hereafter as follows:

"6. Full Settlement; Resolution of Disputes.

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 arbitration, then he shall, upon the conclusion thereof, repay to the Company any amounts that were previously advanced pursuant to this sentence by the Company as payment of legal fees and expenses.

(b) Any dispute arising out of or relating to this Agreement, including the breach, termination or validity thereof, shall be finally resolved by arbitration in accordance with the CPR Institute for Dispute Resolution Rules for Non-Administered Arbitration in effect on the date of this Agreement by a single arbitrator selected in accordance with the CPR Rules. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16, and judgment on the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The place of arbitration shall be in Harris County, Texas. The arbitrator's decision must be based on the provisions of this Agreement and the relevant facts, and the arbitrator's reasoned decision and award shall be binding on both parties. Nothing herein is or shall be deemed to preclude the Company's resort to the injunctive relief prescribed in this Agreement, including any injunctive relief implemented by the arbitrator pursuant to this Section 6(b). The parties will each bear their own attorneys' fees and costs in connection with any dispute, except in the circumstances in which the Company is required to advance the Executive’s attorneys’ fees in accordance with Section 6(a).

Company would be required to pay or provide pursuant to Section 4(a) hereof as though such termination were by the Company without Cause or by the Executive with Good Reason or during a Window Period; provided, however, that the Company shall not be required to pay any disputed amounts pursuant to this paragraph except upon receipt of an undertaking by or on behalf of the Executive to repay all such amounts to which the Executive is ultimately adjudged by such arbitrator not to be entitled.

(d) Notwithstanding any provision of Section 4, except in the case of a termination of employment within two years following a Change in Control, the Company's obligation to pay the amounts due on any termination of employment under Section 4 (other than the Accrued Obligations) are conditioned on the Executive's execution (without revocation during any applicable statutory revocation period) of a waiver and release of any and all claims against the Company and its affiliates in such form as may be prescribed by the Company."

6. Sections 10(a) and (b) of the Employment Agreement are hereby amended to read hereafter as follows:

"10. Non-Compete and Non-Solicitation

(a) The Executive recognizes that in each of the highly competitive businesses in which the Company is engaged, personal contact is of primary importance in securing new customers and in retaining the accounts and goodwill of present customers and protecting the business of the Company. The Executive, therefore, agrees that during the Employment Period and, if the Date of Termination occurs by reason of the Executive terminating his employment for reasons other than Disability or Good Reason and other than during a Window Period, for a period of one year after the Date of Termination, he will not either within 20 miles of any geographic location with respect to which he has devoted substantial attention to the material business interests of the Company or any of its affiliated companies or with respect to any immediate geologic trends in which the Company or any of its affiliated companies is active as of the Date of Termination, without regard, in either case, to whether the Executive has worked at such location (the "Relevant Geographic Area"), (i) accept employment or render service to any person that is engaged in a business directly competitive with the business then engaged in by the Company or any of its affiliated companies, (ii) enter into or take part in or lend his name, counsel or assistance to any business, either as proprietor, principal, investor, partner, director, officer, executive, consultant, advisor, agent, independent contractor, or in any other capacity whatsoever, for any purpose that would be competitive with the business of the Company or any of its affiliated companies or (iii) regardless of geographic area, directly or indirectly, either as principal, agent, independent contractor, consultant, director, officer, employee, employer, advisor, stockholder, partner or in any other individual or representative capacity whatsoever, either for his own benefit or for the benefit of any other person or entity either (A) hire, contract or solicit, or attempt any of the foregoing, with respect to hiring any employee of the Company or its affiliated companies, or (B) induce or otherwise counsel, advise or encourage any employee of the

Company or its affiliated companies to leave the employment of the Company or its affiliated companies (all of the foregoing activities described in (i), (ii) and (iii) are collectively referred to as the "Prohibited Activity"). For the avoidance of doubt, the provisions of this Section 10 will not apply following a termination of the Executive's employment by the Company with or without Cause, by the Executive due to Disability or Good Reason or by the Executive during a Window Period.

(b) In addition to all other remedies at law or in equity which the Company may have for breach of a provision of this Section 10 by the Executive, it is agreed that in 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. "

7. Section 12(g) of the Employment Agreement is hereby amended to read hereafter as follows:

"(g) The Executive's or the Company's failure to insist upon strict compliance with any provision hereof or any other provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement; provided, however, that any claim for "Good Reason" termination must be raised within 180 days following the occurrence of the event giving rise to the right to terminate for "Good Reason" as set forth in Section 3(c) hereof."

8. If any provision provided herein or in the Employment Agreement results in the imposition of an excise tax under the provisions of Section 409A of the Internal Revenue Code and related regulations and Treasury pronouncements ("Section 409A"), the Executive and the Company agree that each will use good faith efforts to reform any such provision to avoid imposition of any such excise tax in the manner that the Executive and the Company mutually determine are appropriate to comply with Section 409A.

9. By execution of this Amendment, Executive acknowledges and agrees that he has no present claim against the Company for a breach of the Employment Agreement or any right to terminate employment for Good Reason, and the Company acknowledges and agrees that it has no present claim against the Executive for breach of the Employment Agreement and no present grounds on which to terminate Executive for Cause.

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/ Paul F. Boling

Name: Paul F. Boling

Title: Chief Financial Officer, Secretary and Treasurer

EXECUTIVE

/s/ S.P. Johnson, IV

S.P. Johnson, IV

EX-10.2 3 exhibit_102.htm PFB EMPLOY AGMNT AMND PFB Employ Agmnt Amnd

AMENDMENT TO EMPLOYMENT AGREEMENT

This AMENDMENT (the "Amendment") by and between Carrizo Oil & Gas, Inc., a Texas corporation (the "Company"), and Paul F. Boling (the "Executive"), effective as of January 23, 2006, is an amendment to that certain Employment Agreement by and between the Company and the Executive dated as of August 12, 2003 (the "Employment Agreement").

RECITALS

The Company and the Executive have previously entered into the Employment Agreement to provide for terms and conditions of the Executive's employment by the Company; and

The Company has agreed to grant to the Executive an award of restricted stock in exchange for the Executive's agreement to amend the Employment Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Section 3(c)(i) of the Employment Agreement is amended to read hereafter as follows:

2. Section 3(c) of the Employment Agreement is hereby amended by adding the following to the end thereof:

"Notwithstanding any provision to the contrary, in order for any event(s) in subparagraph (i) through (iv) above to constitute "Good Reason" for purposes of this Agreement, (A) the Executive must notify the Company via Notice of Termination within 180 days following the occurrence of the event(s) that the Executive intends to terminate his employment with the Company because of the occurrence of Good Reason (which event must be described by the Executive in reasonable detail in the Notice of Termination) and (B) within 60 days after receiving such Notice of Termination from the Executive, the Company must fail to reinstate the Executive to the position he was in, or otherwise cure the circumstances giving rise to Good Reason."

3. Section 3(d) of the Employment Agreement is amended to read hereafter as follows:

4. Section 4(a)(i)(C) of the Employment Agreement is amended to read hereafter as follows:

"C. Effective as of the Date of Termination, (1) immediate vesting and exercisability of, and termination of any restrictions on sale or transfer (other than any such restriction arising by operation of law) with respect to, each and every stock option, restricted stock award, restricted stock unit award and other equity-based award and performance award (each, a "Compensatory Award") that is outstanding as of a time immediately prior to the Date of Termination and (2) unless a longer post-employment term is provided in the applicable award agreement, the extension of the term during which each and every Compensatory Award may be exercised by the Executive until the earlier of (x) the first anniversary of the Date of Termination or (y) the date upon which the right to exercise any Compensatory Award would have expired if the Executive had continued to be employed by the Company under the terms of this Agreement until the Final Expiration Date; and"

5. Section 6 of the Employment Agreement is amended to read hereafter as follows:

"6. Full Settlement; Resolution of Disputes.

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 arbitration, then he shall, upon the conclusion thereof, repay to the Company any amounts that were previously advanced pursuant to this sentence by the Company as payment of legal fees and expenses.

the Executive’s family or other beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to Section 4(a) hereof as though such termination were by the Company without Cause or by the Executive with Good Reason or during a Window Period; provided, however, that the Company shall not be required to pay any disputed amounts pursuant to this paragraph except upon receipt of an undertaking by or on behalf of the Executive to repay all such amounts to which the Executive is ultimately adjudged by such arbitrator not to be entitled.

6. Sections 10(a) and (b) of the Employment Agreement are hereby amended to read hereafter as follows:

"10. Non-Compete and Non-Solicitation

companies, or (B) induce or otherwise counsel, advise or encourage any employee of the Company or its affiliated companies to leave the employment of the Company or its affiliated companies (all of the foregoing activities described in (i), (ii) and (iii) are collectively referred to as the "Prohibited Activity"). For the avoidance of doubt, the provisions of this Section 10 will not apply following a termination of the Executive's employment by the Company with or without Cause, by the Executive due to Disability or Good Reason or by the Executive during a Window Period.

7. Section 12(g) of the Employment Agreement is hereby amended to read hereafter as follows:

CARRIZO OIL & GAS, INC.

By: /s/ S.P. Johnson IV

Name: /s/ S.P. Johnson IV

Title: President and Chief Executive

Officer

EXECUTIVE

/s/ Paul F. Boling

Paul F. Boling

EX-10.3 4 exhibit_103.htm GEE EMPLOY AGMNT AMNT Unassociated Document

AMENDMENT TO EMPLOYMENT AGREEMENT

This AMENDMENT (the "Amendment") by and between Carrizo Oil & Gas, Inc., a Texas corporation (the "Company"), and Gregory E. Evans (the "Executive"), effective as of January 23, 2006, is an amendment to that certain Employment Agreement by and between the Company and the Executive dated as of March 21, 2005 (the "Employment Agreement").

RECITALS

The Company and the Executive have previously entered into the Employment Agreement to provide for terms and conditions of the Executive's employment by the Company; and

The Company has agreed to grant to the Executive an award of restricted stock in exchange for the Executive's agreement to amend the Employment Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Section 3(c)(i) of the Employment Agreement is amended to read hereafter as follows:

2. Section 3(c) of the Employment Agreement is hereby amended by adding the following to the end thereof:

3. Section 3(d) of the Employment Agreement is amended to read hereafter as follows:

"(d) Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason or without any reason during a Window Period, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 13(d) of this Agreement. The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company's rights hereunder."

4. Section 4(a)(i)(C) of the Employment Agreement is amended to read hereafter as follows:

5. Section 6 of the Employment Agreement is amended to read hereafter as follows:

"6. Full Settlement; Resolution of Disputes.

6. Sections 10(a) and (b) of the Employment Agreement are hereby amended to read hereafter as follows:

"10. Non-Compete and Non-Solicitation

7. Section 13(g) of the Employment Agreement is hereby amended to read hereafter as follows:

CARRIZO OIL & GAS, INC.

By: /s/ Paul F. Boling

Name: Paul F. Boling

Title: Chief Financial Officer, Secretary and Treasurer

EXECUTIVE

/s/ Gregory E. Evans

Gregory E. Evans

EX-10.4 5 exhibit_104.htm JBF EMPLOY AGMNT AMNT Unassociated Document

AMENDMENT TO EMPLOYMENT AGREEMENT

This AMENDMENT (the "Amendment") by and between Carrizo Oil & Gas, Inc., a Texas corporation (the "Company"), and J. Bradley Fisher (the "Executive"), effective as of January 23, 2006, is an amendment to that certain Employment Agreement by and between the Company and the Executive dated as of April 15, 1998 (the "Employment Agreement").

RECITALS

The Company and the Executive have previously entered into the Employment Agreement to provide for terms and conditions of the Executive's employment by the Company; and

The Company has agreed to grant to the Executive an award of restricted stock in exchange for the Executive's agreement to amend the Employment Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Section 3(c)(i) of the Employment Agreement is amended to read hereafter as follows:

2. Section 3(c) of the Employment Agreement is hereby amended by adding the following to the end thereof:

"Notwithstanding any provision to the contrary, in order for any event(s) in subparagraph (i) through (v) above to constitute "Good Reason" for purposes of this Agreement, (A) the Executive must notify the Company via Notice of Termination within 180 days following the occurrence of the event(s) that the Executive intends to terminate his employment with the Company because of the occurrence of Good Reason (which event must be described by the Executive in reasonable detail in the Notice of Termination) and (B) within 60 days after receiving such Notice of Termination from the Executive, the Company must fail to reinstate the Executive to the position he was in, or otherwise cure the circumstances giving rise to Good Reason."

3. Section 3(d) of the Employment Agreement is amended to read hereafter as follows:

4. Section 4(a)(i)(D) of the Employment Agreement is amended to read hereafter as follows:

5. Section 4(b) of the Employment Agreement is amended to read hereafter as follows:

"(b) Death (except during a Window Period). If the Executive's employment is terminated by reason of the Executive's death during the Employment Period and other than during a Window Period in which event the provisions of Section 4(a) shall govern, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than (i) the payment of Accrued Obligations (which shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination), (ii) the payment of an amount equal to the Annual Salary that would have been paid to the Executive pursuant to this Agreement during the Remaining Employment Period if the Executive's employment had not terminated by reason of death (which shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination) reduced by the amount payable in respect of Executive's death under any life insurance policy (other than accidental death and

dismemberment or travel accident policies) but only to the extent such amounts are attributable to premiums paid by the Company, (iii) during the period beginning on the Date of Termination and ending on the first anniversary thereof medical benefits coverage determined as if Executive's employment had not terminated by reason of death, (iv) as soon as practicable following the fiscal year in which death occurs, payment of an amount equal to the product of (x) the Annual Bonus that would have been paid to Executive with respect to the year of termination had the Date of Termination not occurred and (y) a fraction, the numerator of which is the number of days in the fiscal year through the Date of Termination and the denominator of which is 365 and (v) effective as of the Date of Termination, (A) immediate vesting and exercisability of, and termination of any restrictions on sale or transfer (other than any such restriction arising by operation of law) with respect to, each and every Compensatory Award outstanding as of a time immediately prior to the Date of Termination and (B) the extension of the term during which each and every Compensatory Award may be exercised or purchased by the Executive until the earlier of (1) the first anniversary of the Date of Termination or (2) the date upon which the right to exercise or purchase any Compensatory Award would have expired if the Executive had continued to be employed by the Company under the terms of this Agreement until the Final Expiration Date."

6. Section 6 of the Employment Agreement is amended to read hereafter as follows:

"6. Full Settlement; Resolution of Disputes.

(a) The Company's obligation to make payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any setoff, counterclaim, recoupment, defense, mitigation or other claim, right or action which the Company may have against the Executive or others. In the event (i) prior to a Change in Control, the Executive's employment is terminated for any reason other than Executive's voluntary termination (with or without Good Reason), or (ii) within two years after a Change in Control, the Executive's employment is terminated by the Company or the Executive for any reason, the Company agrees to pay promptly as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any arbitration pursuant to Section 6(b) (regardless of the outcome thereof) initiated by the Company, the Executive or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any such payment pursuant to this Agreement), plus in each case interest on any delayed payment at the annual percentage rate which is three percentage points above the interest rate shown as the Prime Rate in the Money Rates column in the then most recently published edition of The Wall Street Journal (Southwest Edition), or, if such rate is not then so published on at least a weekly basis, the interest rate announced by Chase Manhattan Bank (or its successor), from time to time, as its Base Rate (or prime lending rate), from

the date those amounts were required to have been paid or reimbursed to the Employee until those amounts are finally and fully paid or reimbursed; provided, however, that in no event shall the amount of interest contracted for, charged or received hereunder exceed the maximum non-usurious amount of interest allowed by applicable law ; provided, further, that if the Executive is not the prevailing party in any such arbitration, then he shall, upon the conclusion thereof, repay to the Company any amounts that were previously advanced pursuant to this sentence by the Company as payment of legal fees and expenses.

(b) Any dispute arising out of or relating to this Agreement, including the breach, termination or validity thereof, shall be finally resolved by arbitration in accordance with the CPR Institute for Dispute Resolution Rules for Non-Administered Arbitration in effect on the date of this Agreement by a single arbitrator selected in accordance with the CPR Rules. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16, and judgment on the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The place of arbitration shall be in Harris County, Texas. The arbitrator's decision must be based on the provisions of this Agreement and the relevant facts, and the arbitrator's reasoned decision and award shall be binding on both parties. Nothing herein is or shall be deemed to preclude the Company's resort to the injunctive relief prescribed in this Agreement, including any injunctive relief implemented by the arbitrator pursuant to this Section 6(b). The parties will each bear their own attorneys' fees and costs in connection with any dispute, except in the circumstances in which the Company is required to advance the Executive's attorneys' fees in accordance with Section 6(a).

(c) If, upon a termination within two years following a Change in Control, there shall be any dispute between the Company and the Executive concerning (i) in the event of any termination of the Executive's employment by the Company, whether such termination was for Cause or Disability, or (ii) in the event of any termination of employment by the Executive, whether Good Reason existed or whether such termination occurred during a Window Period, then, unless and until there is a final, determination by an arbitrator declaring that such termination was for Cause or not for Disability or that the determination by the Executive of the existence of Good Reason was not made in good faith or that the termination by the Executive did not occur during a Window Period, the Company shall pay all amounts, and provide all benefits, to the Executive and/or the Executive's family or other beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to Section 4(a) hereof as though such termination were by the Company without Cause or by the Executive with Good Reason or during a Window Period; provided, however, that the Company shall not be required to pay any disputed amounts pursuant to this paragraph except upon receipt of an undertaking by or on behalf of the Executive to repay all such amounts to which the Executive is ultimately adjudged by such arbitrator not to be entitled.

7. Sections 10(a) and (b) of the Employment Agreement are hereby amended to read hereafter as follows:

"10. Non-Compete and Non-Solicitation

(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. "

8. Section 12(g) of the Employment Agreement is hereby amended to read hereafter as follows:

9. If any provision provided herein or in the Employment Agreement results in the imposition of an excise tax under the provisions of Section 409A of the Internal Revenue Code and related regulations and Treasury pronouncements ("Section 409A"), the Executive and the Company agree that each will use good faith efforts to reform any such provision to avoid imposition of any such excise tax in the manner that the Executive and the Company mutually determine are appropriate to comply with Section 409A.

10. By execution of this Amendment, Executive acknowledges and agrees that he has no present claim against the Company for a breach of the Employment Agreement or any right to terminate employment for Good Reason, and the Company acknowledges and agrees that it has no present claim against the Executive for breach of the Employment Agreement and no present grounds in which to terminate Executive for Cause.

CARRIZO OIL & GAS, INC.

By: /s/ Paul F. Boling

Name: Paul F. Boling

Title: Chief Financial Officer, Secretary and Treasurer

EXECUTIVE

/s/ J. Bradley Fisher

J. Bradley Fisher

EX-10.5 6 exhibit_105.htm JLB EMPLOY AGMNT Unassociated Document

EMPLOYMENT AGREEMENT

This AGREEMENT (the "Agreement") by and between Carrizo Oil & Gas, Inc., a Texas corporation (the "Company") and Jack L. Bayless (the "Executive"), to be effective as of the 23rd day of January, 2006 (the "Agreement Effective Date").

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 continue to employ the Executive and the Executive hereby agrees to accept continued 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 first anniversary of the Agreement Effective Date; provided, on 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 and notification pursuant to, the provisions of Section 3.

2. Terms of Employment.

(a) Position and Duties. As of October 15, 2005, the Executive became a full time employee and during the Employment Period, 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 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.

(b) Compensation.

(i) Base Salary. Commencing on the Agreement Effective Date and thereafter during his Employment Period, the Executive shall receive an annual base salary of $175,000 ("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. 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 the Executive's position, responsibilities, and accomplishments 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 salaried employees of the Company and its affiliated companies.

(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 salaried employees 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 policies, practices and procedures of the Company and its affiliated companies.

(vi) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the plans, policies, programs and practices of the Company and its affiliated companies.

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 13(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 the 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 the Executive from the rendition of services, but without limiting or modifying in any other way the Company's obligations under this Agreement; (ii) a breach by the Executive of a fiduciary duty owed to the Company; (iii) a breach by the Executive of any of the covenants made by him in Sections 8 and 10 hereof; (iv) the willful and gross neglect by the Executive of the 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 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 material diminution, in absolute terms, in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(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) any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement;

(iv) 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 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.

Notwithstanding any provision to the contrary, in order for any event(s) in subparagraph (i) through (iv) above to constitute "Good Reason" for purposes of this Agreement, (A) the Executive must notify the Company via Notice of Termination within 180 days following the occurrence of the event(s) that the Executive intends to terminate his employment with the Company because of the occurrence of Good Reason (which event must be described by the Executive in reasonable detail in the Notice of Termination) and (B) within 60 days after receiving such Notice of Termination from the Executive, the Company must fail to reinstate the Executive to the position he was in, or otherwise cure the circumstances giving rise to Good Reason.

(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 13 of this Agreement. The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company's rights hereunder.

(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, (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 compensation for unused vacation time for which the Executive is eligible in accordance with the 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 cash, discounted at 6%, within 10 days after the Date of Termination, an amount equal to 100% 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; (if the termination occurs after the date a Change of Control occurs the "Remaining Employment Period" will be a minimum of 18 months);

C. effective as of the Date of Termination, (1) immediate vesting and exercisability of, and termination of any restrictions on sale or transfer (other than any such restriction arising by operation of law) with respect to, each and every stock option, restricted stock award, restricted stock unit award and other equity-based award and performance award (each, a "Compensatory Award") that is outstanding as of a time immediately prior to the Date of Termination and (2) unless a longer post-employment term is provided in the applicable award agreement, the extension of the term during which each and every Compensatory Award may be exercised by the Executive until the earlier of (x) the first anniversary of the Date of Termination or (y) the date upon which the right to exercise any Compensatory Award would have expired if the Executive had continued to be employed by the Company under the terms of this Agreement until the Final Expiration Date; and

D. 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.

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 Section 2(b)(iv) of this Agreement if the Executive's employment had not been terminated in accordance with the 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"), but with the Company's medical benefits coverages being secondary to any coverages provided by another employer. For purposes of determining eligibility of the Executive for retiree benefits 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 the 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 the 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 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 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.

(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 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 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. Amount 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.

(b) Any dispute arising out of or relating to this Agreement, including the breach, termination or validity thereof, shall be finally resolved by arbitration in accordance with the CPR Institute for Dispute Resolution Rules for Non-Administered Arbitration in effect on the date of this Agreement by a single arbitrator selected in accordance with the CPR Rules. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16, and judgment on the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The place of arbitration shall be in Harris County, Texas. The arbitrator's decision must be based on the provisions of this Agreement and the relevant facts, and the arbitrator's reasoned decision and award shall be binding on both parties. Nothing herein is or shall be deemed to preclude the company's resort to the injunctive relief prescribed in this Agreement, including any injunctive relief implemented by the arbitrator pursuant to this Section 6(b). The parties will each bear

their own attorneys' fees and costs in connection with any dispute, except in the circumstances in which the Company is required to advance the Executive's attorneys' fees in accordance with Section 6(a).

7. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) 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, together with any interest or penalties imposed with respect to such excise tax ("Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross Up Payment") in an amount such that, after payment (whether through withholding at the source or otherwise) 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), employment taxes 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 this Section 7, all determinations required to be made under this Section 7, including whether and when a 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 Pannell Kerr Forster of Texas, P.C. (or such other nationally recognized certified public accounting firm that is providing audit services for the Company immediately prior to the date of a Change of Control in replacement of Pannell Kerr Forster of Texas, P.C.) (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive 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. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control or the Accounting Firm declines or is unable to serve, the Executive shall appoint another nationally recognized certified public accounting firm to make the determinations required hereunder (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. 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. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on the Executive's applicable federal income tax return would not result in the imposition of negligence or similar penalty. 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 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.

(c) The Executive shall notify the Company in writing of any claim 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 10 business days after the Executive is informed 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. The Executive shall not pay such claim prior to the expiration of the 30 day period following the date on which it 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 reasonably selected by the Company;

(iii) cooperate with the Company in good faith in order to effectively contest such claim; and

(iv) permit the Company to participate in any proceedings relating to such claim;

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, employment 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 of the foregoing provisions of this Section 7, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue 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 sue for a refund, the Company shall provide the amount of such payment to the Executive as an additional payment ("Supplemental Payment") (subject to possible repayment as provided in the next paragraph) and shall indemnify and hold the Executive harmless, on an after tax basis, from any Excise Tax, employment tax or income tax (including interest or penalties with respect thereto) imposed with respect to such payment or with respect to any imputed income with respect thereto; 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 control of the contest shall be limited to issues with respect to which a Gross Up Payment or Supplemental 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 provided by the Company pursuant to the foregoing provisions of this Section 7, the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company complying with the requirements of this Section 7) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto).

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, 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 the Executive's employment for any reason, the Executive shall return to Company all documents and other tangible items of or containing Company information which are in the 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);

(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 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 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:

(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 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; or

(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; or

(c) the Company engages in and completes 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 is 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) the Company engages in and completes (i) a complete liquidation or dissolution of the Company unless such liquidation or dissolution is approved a 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 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 or 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.

"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 contingency has not occurred).

10. Non-Compete and Non-Solicitation.

any person that is engaged in a business directly competitive with the business then engaged in by the Company or any of its affiliated companies, (ii) enter into or take part in or lend his name, counsel or assistance to any business, either as proprietor, principal, investor, partner, director, officer, executive, consultant, advisor, agent, independent contractor, or in any other capacity whatsoever, for any purpose that would be competitive with the business of the Company or any of its affiliated companies or (iii) regardless of geographic area, directly or indirectly, either as principal, agent, independent contractor, consultant, director, officer, employee, employer, advisor, stockholder, partner or in any other individual or representative capacity whatsoever, either for his own benefit or for the benefit of any other person or entity either (A) hire, contract or solicit, or attempt any of the foregoing, with respect to hiring any employee of the Company or its affiliated companies, or (B) induce or otherwise counsel, advise or encourage any employee of the Company or its affiliated companies to leave the employment of the Company or its affiliated companies (all of the foregoing activities described in (i), (ii) and (iii) are collectively referred to as the "Prohibited Activity"). Notwithstanding anything contained in this Section 10 to the contrary, the Prohibited Activity shall not be applicable to the state or federal waters of the Gulf of Mexico except as to the area covered by any state or federal oil and gas lease in which Company owns a working interest which was acquired by Company prior to or during the Employment Period and further limited to the depths in which Company owns such working or operating rights interest. For the avoidance of doubt, the provisions of this Section 10 will not apply following a termination of the Executive's employment by the Company with or without Cause, by the Executive due to Disability or Good Reason or by the Executive during a Window Period.

(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 the 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 ANN. 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 he 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, y 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. Section 409A. If any provision provided herein results in the imposition of an excise tax under the provisions of Section 409A of the Internal Revenue Code and related regulations and Treasury pronouncements ("Section 409A"), the Executive and the Company agree that any such provision will be reformed to avoid imposition of any such excise tax in the manner that the Executive and the Company determine are appropriate to comply with Section 409A.

13. 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.

(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:

Name: Jack L. Bayless

11530 Manor House Lane

Houston, Texas 77082

If to the Company:

Carrizo Oil & Gas, Inc.

1000 Louisiana Street , Suite 1500

Houston, Texas 77002

Fax Number: (713) 328-1060

Telephone Number: (713) 328-1000

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 shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement; provided, however, that any claim for "Good Reason" termination must be raised within 180 days following the occurrence of the event giving rise to the right to terminate for "Good Reason" as set forth in Section 3(c) hereof.

(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.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

CARRIZO OIL & GAS, INC.

By: /s/ Paul F. Boling

Name: Paul F. Boling

Title: Chief Financial Officer, Secretary and Treasurer

EXECUTIVE

/s/ Jack L. Bayless

Jack L. Bayless

EX-10.6 7 exhibit_106.htm FORM OF EMPLOYEE RESTRICTED STOCK AWARD AGREEMENT Form of Employee Restricted Stock Award Agreement

INCENTIVE PLAN

CARRIZO OIL & GAS, INC.

EMPLOYEE RESTRICTED STOCK AWARD AGREEMENT

THIS AGREEMENT ("Agreement") is made as of the ___of _____, ___ (the "Grant Date"), by and between Carrizo Oil & Gas, Inc., a Texas corporation (the "Company"), and ________ (the "Grantee").

The Company has adopted the Incentive Plan of Carrizo Oil & Gas, Inc. (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 eligible employees, directors and independent contractors of the Company and its Subsidiaries. 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 restricted stock 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 Restricted Stock. Subject to the terms and conditions herein, effective as of the Grant Date, the Company grants to the Grantee ______ shares of Common Stock of the Company, par value $.01 per share (the "Restricted Stock"). The Company will issue to the Grantee stock certificates evidencing the shares of Restricted Stock, which certificates will be registered in the name of the Grantee and will bear an appropriate legend referring to the terms, conditions, and restrictions applicable to the Restricted Stock, substantially in the following form:

The transferability of this certificate and the shares of Common Stock represented hereby are subject to the terms, conditions and restrictions (including forfeiture) contained in the Restricted Stock Award Agreement, effective as of ______, between Carrizo Oil & Gas, Inc. and the registered owner hereof. Copies of such Agreement are on file in the offices of Carrizo Oil & Gas, Inc., 1000 Louisiana Street, Suite 1500, Houston, Texas 77002.

The certificates evidencing the shares of Restricted Stock shall be held in custody by the Company or, if specified by the Committee, by a third party custodian or trustee, until the restrictions on such shares shall have lapsed, and, as a condition of this award of Restricted Stock, the Company may require that the Grantee deliver a stock power, duly endorsed in blank, relating to the shares of Restricted Stock.

2. Transfer Restrictions. Except as expressly provided herein, the shares of Restricted Stock are not transferable (voluntarily or involuntarily) other than by will or the laws of descent and distribution, and may not otherwise be assigned, pledged, hypothecated or otherwise disposed of and shall not be subject to execution, attachment or similar process. Upon any attempt to effect any such disposition, or upon the levy of any such process, the award provided for herein shall immediately become null and void, and the shares of Restricted Stock shall be immediately forfeited to the Company.

3. Restrictions. Subject to the provisions of paragraph 4 hereof, the restrictions on the shares of Restricted Stock shall lapse and such shares shall vest in the Grantee thirty months from the Grant Date on July 23, 2008; provided that the Grantee has been in the continuous employment of the Company and its Subsidiaries through the applicable date (subject to the provisions of any applicable written employment agreement between the Grantee and the Company or any Subsidiary). A change of employment is continuous employment within the meaning of this paragraph 3 provided that, after giving effect to such change, the Grantee continues to be an employee of the Company or any Subsidiary. Shares as to which restrictions shall have lapsed shall no longer be deemed Restricted Stock, and the Company shall deliver to the Grantee certificates representing such shares as described in paragraph 5 below.

4. Termination of Employment; Forfeiture. Upon termination of the Grantee's employment with the Company or any subsidiary of the Company (or the successor of any such company) for any reason, all shares of Restricted Stock as to which the restrictions thereon have not previously lapsed shall be immediately forfeited to the Company; subject, however, to the provisions of any employment agreement between the Grantee and the Company or any Subsidiary.

5. Distribution Following Termination of Restrictions. Upon the vesting and expiration of the restrictions as to any portion of the Restricted Stock, the Company will cause a new certificate evidencing such number of shares of Common Stock to be delivered to the Grantee, free of the legend regarding transferability; provided that the Company shall not be obligated to issue any fractional shares of Common Stock.

6. Voting and Dividend Rights. During the period in which the restrictions provided herein are applicable to the Restricted Stock, the Grantee shall have the right to vote the shares of Restricted Stock and to receive any cash dividends paid with respect thereto unless and until forfeiture thereof. Any dividend or distribution payable with respect to shares of Restricted Stock that shall be paid or distributed in shares of Common Stock shall be subject to the same restrictions provided for herein, and the shares so paid or distributed shall be deemed Restricted Stock subject to all terms and conditions herein. Any dividend or distribution (other than cash or Common Stock) payable or distributable on shares of Restricted Stock, unless otherwise determined by the Committee, shall be subject to the terms and conditions of this Agreement to the same extent and in the same manner as the Restricted Stock is subject; provided that the Committee may make such modifications and additions to the terms and conditions (including restrictions on transfer and the conditions to the timing and degree of lapse of such restrictions) that shall become applicable to such dividend or distribution as the Committee may provide in its absolute discretion.

7. Adjustments. As provided in Section 15 of the Plan, certain adjustments may be made to the Restricted Stock upon the occurrence of events or circumstances described in Section 15 of the Plan. Without limiting the generality of the foregoing, and except as otherwise provided in the Plan, in the event of any merger, consolidation, reorganization, recapitalization, reclassification or other capital or corporate structure change of the Company, the securities or other consideration receivable for or in conversion of or exchange for shares of Restricted Stock shall be subject to the terms and conditions of this Agreement to the same extent and in the same manner as the Restricted Stock is subject; provided that the Committee may make such modifications and additions to the terms and conditions (including restrictions on transfer and the conditions to the timing and degree of lapse of such restrictions) that shall become applicable to the securities or other consideration so receivable as the Committee may provide in its absolute discretion.

8. Mandatory Withholding of Taxes. Grantee acknowledges and agrees that the Company shall deduct from the cash or shares of Common Stock otherwise payable or deliverable hereunder or require payment by Grantee of an amount of cash and/or number of shares of Common Stock (valued at their Fair Market Value on the applicable date) that is equal to the amount of all federal, state and local taxes required to be withheld by the Company upon such payment or delivery, as determined by the Committee.

9. Restrictions Imposed by Law. Without limiting the generality of Section 16 of the Plan, the Grantee agrees that the Company will not be obligated to deliver any shares of Common Stock, if counsel to the Company determines that such delivery 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 issuance or delivery of shares of Common Stock to comply with any such law, rule, regulation or agreement.

10. 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.

1000 Louisiana Street , Suite 1500

Houston, Texas 77002

or (b) sent by first class mail, postage prepaid and addressed as follows:

Carrizo Oil & Gas, Inc.

1000 Louisiana Street , Suite 1500

Houston, Texas 77002

Attention: Payroll/Benefits Manager

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.

11. 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 6 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, subject, however, to any required approval of the Company's stockholders 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 6 of the Plan and any required approval of the Company's stockholders, 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 Restricted Stock to the extent then vested without the Grantee’s consent.

12. 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.

13. Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Texas.

14. 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 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.

15. 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.

16. 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.

17. 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 Restricted Stock and replaces and makes null and void any prior agreements, oral or written, between Grantee and the Company regarding the Restricted Stock.

18. 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: S.P. Johnson

Title: President

ACCEPTED:

______________
Employee

EX-10.7 8 exhibit_107.htm JLB EMPLOY RESTRICTED STOCK AWARD AGMNT Unassociated Document

INCENTIVE PLAN

CARRIZO OIL & GAS, INC.

EMPLOYEE RESTRICTED STOCK AWARD AGREEMENT

THIS AGREEMENT ("Agreement") is made as of the 23rd day of January, 2006 (the "Grant Date"), by and between Carrizo Oil & Gas, Inc., a Texas corporation (the "Company"), and Jack L. Bayless (the "Grantee"), who started with the Company on October 15, 2005 (the “Start Date”).

The Company and Grantee therefore agree as follows:

1. Grant of Restricted Stock. Subject to the terms and conditions herein, effective as of the Grant Date, the Company grants to the Grantee 15,000 shares of Common Stock of the Company, par value $.01 per share (the "Restricted Stock"). The Company will issue to the Grantee stock certificates evidencing the shares of Restricted Stock, which certificates will be registered in the name of the Grantee and will bear an appropriate legend referring to the terms, conditions, and restrictions applicable to the Restricted Stock, substantially in the following form:

The transferability of this certificate and the shares of Common Stock represented hereby are subject to the terms, conditions and restrictions (including forfeiture) contained in the Restricted Stock Award Agreement, effective as of January 23, 2006, between Carrizo Oil & Gas, Inc. and the registered owner hereof. Copies of such Agreement are on file in the offices of Carrizo Oil & Gas, Inc., 1000 Louisiana Street, Suite 1500, Houston, Texas 77002.

3. Restrictions. Subject to the provisions of paragraph 4 hereof, the restrictions on the shares of Restricted Stock shall lapse and such shares shall vest in the Grantee in three installments at the rate of thirty-three and one-third percent (33 1/3%) of the shares of Restricted Stock awarded hereunder (rounded up to the nearest whole number) on each of the first, second and third anniversary dates of the Start Date; provided that the Grantee has been in the continuous employment of the Company and its Subsidiaries through the applicable date (subject to the provisions of any applicable written employment agreement between the Grantee and the Company or any Subsidiary). A change of employment is continuous employment within the meaning of this paragraph 3 provided that, after giving effect to such change, the Grantee continues to be an employee of the Company or any Subsidiary. Shares as to which restrictions shall have lapsed shall no longer be deemed Restricted Stock, and the Company shall deliver to the Grantee certificates representing such shares as described in paragraph 5 below.

Carrizo Oil & Gas, Inc.

1000 Louisiana Street , Suite 1500

Houston, Texas 77002

or (b) sent by first class mail, postage prepaid and addressed as follows:

Carrizo Oil & Gas, Inc.

1000 Louisiana Street , Suite 1500

Houston, Texas 77002

Attention: Payroll/Benefits Manager

13. Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Texas.

15. 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.

ATTEST: Carrizo Oil & Gas, Inc.

/s/ Paul F. Boling By:/s/ S.P. Johnson IV

Secretary Name: S.P. Johnson IV

Title: President

ACCEPTED:

/s/ Jack L. Bayless

Jack L. Bayless

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