UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
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☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material under § 240.14a-12 |
Carrizo Oil & Gas, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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☒ | No fee required. | |||
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
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(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Notice of 2019 Annual Meeting
of Shareholders and Proxy Statement
Carrizo Oil & Gas, Inc.
Thursday, May 16, 2019 at 9:00 a.m., Central Daylight Time
Heritage Plaza, The Plaza Conference Room, 1111 Bagby Street, 1st Floor,
Houston, Texas 77002
Notice of 2019 Annual Meeting of Shareholders
April 2, 2019
Dear Shareholder:
You are cordially invited to attend the 2019 Annual Meeting of Shareholders of Carrizo Oil & Gas, Inc. to be held at 9:00 a.m., Central Daylight Time, on Thursday, May 16, 2019, at Heritage Plaza, The Plaza Conference Room, located at 1111 Bagby Street, 1st Floor, Houston, Texas 77002. The items of business for this meeting are as follows:
1. | Elect eight individuals to our Board of Directors; |
2. | Conduct an advisory vote to approve the compensation of our named executive officers; |
3. | Approve an amendment and restatement of our 2017 Incentive Plan to increase the shares authorized for issuance and make other changes; |
4. | Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2019; and |
5. | Transact such other business as may properly come before the meeting. |
Shareholders of record as of the close of business on March 20, 2019, or their proxy holders may vote at the meeting.
On or about April 5, 2019, we will mail to such shareholders of record this Notice of 2019 Annual Meeting of Shareholders, our proxy statement, which provides information concerning the items of business to be conducted at the meeting, form of proxy card, and our 2018 Annual Report to Shareholders, which provides financial and other information about Carrizo Oil & Gas, Inc.
As a shareholder of Carrizo Oil & Gas, Inc., you play an important role in our company by considering and taking action on these matters. We appreciate the time and attention you invest in making thoughtful decisions. It is important that your shares be represented and voted at the meeting and we encourage you to vote your shares as promptly as possible following the instructions provided in the proxy statement and on the proxy card. Thank you for your ongoing support and continued interest in Carrizo Oil & Gas, Inc.
By Order of the Board of Directors,
|
Marcus G. Bolinder
|
Corporate Secretary |
IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 16, 2019:
The Notice of Annual Meeting, Proxy Statement and Annual Report to Shareholders are available at www.proxypush.com/CRZO
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
|
1 | |||
CORPORATE GOVERNANCE AND BOARD MATTERS
|
5 | |||
5 | ||||
5 | ||||
6 | ||||
6 | ||||
Committees of the Board of Directors Meetings and Attendance |
7 | |||
9 | ||||
9 | ||||
10 | ||||
10 | ||||
10 | ||||
PROPOSAL 1. ELECTION OF DIRECTORS
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11 | |||
11 | ||||
12 | ||||
18 | ||||
|
20 | |||
|
22 | |||
22 | ||||
40 | ||||
41 | ||||
43 | ||||
44 | ||||
45 | ||||
46 | ||||
Potential Payments to the Named Executive Officers Upon Termination or Change in Control |
50 | |||
52 |
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I
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CARRIZO OIL & GAS
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2019 PROXY STATEMENT
|
II
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QUESTIONS AND ANSWERS ABOUT THE
ANNUAL MEETING AND VOTING
This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the Board or Board of Directors) of Carrizo Oil & Gas, Inc., a Texas corporation (the Company or Carrizo), for use at its 2019 Annual Meeting of Shareholders (the Annual Meeting), and any and all adjournments thereof, for the purposes set forth in the accompanying Notice of 2019 Annual Meeting of Shareholders (the Notice of Annual Meeting) and as described below. In this proxy statement, the terms we, us and our refer to the Company.
What is the purpose of the Annual Meeting?
What is a proxy statement?
What is a proxy?
Who is entitled to vote at the Annual Meeting?
2019 PROXY STATEMENT
|
1
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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
How many shares must be present or represented in order to transact business at the Annual Meeting?
What is the difference between a shareholder of record and a street name holder?
How do I vote my shares?
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2
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CARRIZO OIL & GAS
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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
What are abstentions and broker non-votes?
How does the Board of Directors recommend that I vote?
What vote is required for a proposal to be approved?
2019 PROXY STATEMENT
|
3
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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
If I submit a proxy, may I later revoke it and/or change my vote?
What happens if I provide my signed proxy but do not specify how I want my shares to be voted?
Where can I find the voting results of the Annual Meeting?
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4
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CARRIZO OIL & GAS
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CORPORATE GOVERNANCE AND BOARD MATTERS
Our Corporate Governance Practices
The Board of Directors and our Nominating and Corporate Governance Committee periodically review our governance practices and regulatory or legislative initiatives related thereto, and adopt practices that enhance our governance and risk profile, including:
2019 PROXY STATEMENT
|
5
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CORPORATE GOVERNANCE AND BOARD MATTERS
Committees of the Board of Directors Meetings and Attendance
The Board of Directors has an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. Directors are expected to attend meetings of committees on which they serve. Actions taken by these committees are reported to the Board at its next meeting. During 2018, each Director attended at least 75% of all meetings of the Board committees during the period in which they were a committee member. The table below provides the current composition of each standing committee of the Board:
Name | Audit | Compensation | Nominating and Corporate Governance |
|||||||||
F. Gardner Parker |
|
Chairman |
|
|
Member |
|
||||||
Frances Aldrich Sevilla-Sacasa |
|
Member |
|
|||||||||
Thomas L. Carter, Jr. |
|
Member |
|
|
Chairman |
| ||||||
Robert F. Fulton |
|
Member |
|
|
Member |
| ||||||
Roger A. Ramsey |
|
Member |
|
|
Chairman |
|
||||||
Frank A. Wojtek |
|
Member |
| |||||||||
Number of Committee Meetings Held in 2018 |
|
4 |
|
|
2 |
|
|
3 |
| |||
Number of Times Business Transacted by Unanimous Consent |
|
|
|
|
4 |
|
|
1 |
|
Audit Committee
2019 PROXY STATEMENT
|
7
|
CORPORATE GOVERNANCE AND BOARD MATTERS
Compensation Committee
Nominating and Corporate Governance Committee
|
8
|
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CARRIZO OIL & GAS
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PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors is responsible for determining the ultimate direction of the Company, determining the principles of our business strategy and policies, and promoting the long-term interests of our shareholders. The Board of Directors exercises oversight of the Company, but, subject to our governing documents and applicable law, delegates day-to-day management of the Company to our Chief Executive Officer and our executive management.
2019 PROXY STATEMENT
|
11
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PROPOSAL 1. ELECTION OF DIRECTORS
Board Recommendation
The Board of Directors recommends that shareholders vote FOR the election of the eight nominees for director.
2019 PROXY STATEMENT
|
13
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PROPOSAL 1. ELECTION OF DIRECTORS
|
14
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CARRIZO OIL & GAS
|
PROPOSAL 1. ELECTION OF DIRECTORS
2019 PROXY STATEMENT
|
15
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PROPOSAL 1. ELECTION OF DIRECTORS
|
16
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CARRIZO OIL & GAS
|
PROPOSAL 1. ELECTION OF DIRECTORS
2019 PROXY STATEMENT
|
17
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PROPOSAL 1. ELECTION OF DIRECTORS
2018-2019 Director Term - Annual Cash Retainers
Board of Directors |
Audit | Compensation | Nominating and Corporate Governance |
|||||||||||||
Board Member |
$80,000 | |||||||||||||||
Chairman of the Board of Directors |
|
120,000 |
|
|||||||||||||
Lead Independent Director |
|
27,500 |
|
|||||||||||||
Committee Chairman |
$ |
37,500 |
|
|
$30,000 |
|
|
$15,000 |
| |||||||
Committee Member |
|
27,500 |
|
|
20,000 |
|
|
7,500 |
|
2018-2019 Director Term - Annual Equity Retainers
Board of Directors
|
Audit
|
Compensation
|
Nominating and Corporate Governance
|
|||||||||||||
Board Member
|
|
$80,000
|
|
|||||||||||||
Chairman of the Board of Directors
|
|
120,000
|
|
|||||||||||||
Lead Independent Director
|
|
27,500
|
|
|||||||||||||
Committee Chairman
|
$
|
37,500
|
|
|
$30,000
|
|
|
$15,000
|
| |||||||
Committee Member
|
|
27,500
|
|
|
20,000
|
|
|
7,500
|
|
|
18
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CARRIZO OIL & GAS
|
PROPOSAL 1. ELECTION OF DIRECTORS
2018 Director Compensation
The following table summarizes the cash and equity-based compensation paid to Non-Employee Directors during 2018.
Name | Fees Earned or Paid in Cash(1) |
Stock Awards(2) |
Total | |||||||||
Steven A. Webster |
|
$198,750 |
|
|
$200,009 |
|
$ |
398,759 |
| |||
F. Gardner Parker |
|
160,000 |
|
|
165,020 |
|
|
325,020 |
| |||
Frances Aldrich Sevilla-Sacasa |
|
89,938 |
|
|
126,802 |
|
|
216,740 |
| |||
Thomas L. Carter, Jr. |
|
119,688 |
|
|
122,506 |
|
|
242,194 |
| |||
Robert F. Fulton |
|
104,875 |
|
|
107,514 |
|
|
212,389 |
| |||
Roger A. Ramsey |
|
132,875 |
|
|
137,526 |
|
|
270,401 |
| |||
Frank A. Wojtek |
|
86,563 |
|
|
87,516 |
|
|
174,079 |
|
(1) | Represents the portions of the annual cash retainers for the 2017-2018 director term and the 2018-2019 director term paid in 2018, except for Ms. Aldrich Sevilla-Sacasa who was paid $14,000 for her service on the Board from March 23, 2018, the date of her appointment, through May 22, 2018, the end of the 2017-2018 director term. |
(2) | Represents the aggregate grant date fair value of RSUs granted for the 2018-2019 director term, and for Ms. Aldrich Sevilla-Sacasa, also includes the aggregate grant date fair value of RSUs granted for her service on the Board from the date of her appointment through the end of the 2017-2018 director term. The grant date fair values, computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, are based on the closing stock price of our common stock on the NASDAQ Global Select Market on the grant dates. The number of RSUs granted to each Non-Employee Director during 2018 is presented in the table below. |
Name | Grant Date |
Number of Shares Granted (#) |
Grant Date Stock Price |
Grant Date Fair Value of Stock Awards ($) |
||||||||||||
Steven A. Webster |
|
7/2/2018 |
|
|
7,231 |
|
|
$27.66 |
|
|
$200,009 |
| ||||
F. Gardner Parker |
|
7/2/2018 |
|
|
5,966 |
|
|
27.66 |
|
|
165,020 |
| ||||
Frances Aldrich Sevilla-Sacasa |
|
4/4/2018 |
|
|
1,250 |
|
|
15.43 |
|
|
19,288 |
| ||||
Frances Aldrich Sevilla-Sacasa |
|
7/2/2018 |
|
|
3,887 |
|
|
27.66 |
|
|
107,514 |
| ||||
Thomas L. Carter, Jr. |
|
7/2/2018 |
|
|
4,429 |
|
|
27.66 |
|
|
122,506 |
| ||||
Robert F. Fulton |
|
7/2/2018 |
|
|
3,887 |
|
|
27.66 |
|
|
107,514 |
| ||||
Roger A. Ramsey |
|
7/2/2018 |
|
|
4,972 |
|
|
27.66 |
|
|
137,526 |
| ||||
Frank A. Wojtek |
|
7/2/2018 |
|
|
3,164 |
|
|
27.66 |
|
|
87,516 |
|
Stock Ownership Guidelines
2019 PROXY STATEMENT
|
19
|
The following table sets forth certain information as of March 20, 2019 with respect to the executive officers.
Executive Officer | Age | Position | ||
S.P. Johnson IV |
63 |
President and Chief Executive Officer | ||
Brad Fisher |
58 |
Vice President and Chief Operating Officer | ||
David L. Pitts |
52 |
Vice President and Chief Financial Officer | ||
Gerald A. Morton |
60 |
General Counsel and Vice President of Business Development | ||
Richard H. Smith |
61 |
Vice President of Land | ||
Gregory F. Conaway |
43 |
Vice President and Chief Accounting Officer |
Set forth below is certain background information of each of our executive officers (other than Mr. Johnson, whose background is described above under Proposal 1. Election of Directors).
|
20
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CARRIZO OIL & GAS
|
EXECUTIVE OFFICERS
2019 PROXY STATEMENT
|
21
|
Compensation Discussion and Analysis
This section describes the objectives and components of the compensation program for our Chief Executive Officer (CEO), Chief Financial Officer (CFO) and each of our three other most highly compensated executive officers as of December 31, 2018, whom we collectively refer to as our Named Executive Officers and were as follows:
| S.P. Johnson IV, President and Chief Executive Officer |
| Brad Fisher, Vice President and Chief Operating Officer |
| David L. Pitts, Vice President and Chief Financial Officer |
| Gerald A. Morton, General Counsel and Vice President of Business Development |
| Richard H. Smith, Vice President of Land |
This Compensation Discussion and Analysis is divided into four sections:
| Section 1 - Executive Summary |
| Section 2 - Executive Compensation Program Objectives |
| Section 3 - Executive Compensation Components |
| Section 4 - Tax Considerations of Executive Compensation |
Section 1 - Executive Summary
2018 Performance Highlights
|
22
|
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CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
2019 PROXY STATEMENT
|
23
|
EXECUTIVE COMPENSATION
Pay For Performance: Total Shareholder Return
Pay-for-Performance: Significant At-Risk Compensation
|
24
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
Effect of Company Share Price Performance on Chief Executive Officer Realizable Compensation
The following chart demonstrates how the Companys share price performance significantly impacts our CEOs realizable compensation.
Target Compensation vs. Realizable Compensation
(In thousands)
Target compensation is calculated as the sum of base salary, target annual incentive bonus, and the grant date fair value of long-term equity-based incentive awards. Realizable compensation is calculated as the sum of base salary, actual annual incentive bonus paid, and the intrinsic value of the long-term equity-based incentive awards based on the closing price of our common stock on the NASDAQ Global Select Market on December 31, 2018 of $11.29 per share. The intrinsic value of the long-term equity-based incentive awards is calculated as follows:
2019 PROXY STATEMENT
|
25
|
EXECUTIVE COMPENSATION
2018 Shareholder Advisory Vote on Executive Compensation
|
26
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
Executive Compensation Program and Corporate Governance Highlights
We believe our executive compensation for 2018 continued to align the interests of our executives with those of our shareholders. The following table summarizes the compensation best practices that we follow and the disfavored compensation practices that we avoid.
Compensation Best Practices That We Follow
| ||
✓ | Majority At-Risk or Variable Compensation. The majority of our executive compensation is at-risk or variable. Our annual incentive bonus is based on performance relative to key operational and financial metrics that drive both our short-term and long-term corporate strategy. The value delivered by our long-term equity-based incentive awards is tied to both absolute share price performance as well as share price performance relative to our peers.
| |
✓ | Stock Ownership Guidelines. Named Executive Officers and Non-Employee Directors are required to maintain meaningful ownership of our stock to ensure their interests are closely aligned with the interests of our shareholders.
| |
✓ | Independent Compensation Committee. Our Compensation Committee is comprised solely of independent directors.
| |
✓ | Independent Compensation Consultant. The Compensation Committee retains an independent compensation consultant who provides no other services to the Company.
| |
✓ | Compensation Benchmarking. The Compensation Committee annually reviews the composition of the peer group of companies and analysis of executive compensation prepared by its independent compensation consultant using market-based compensation data to ensure our executive compensation program is designed appropriately and takes into account market changes.
| |
✓ | Compensation Risk Assessment. There is an appropriate balance between long-term and short-term focus in our compensation programs and the Compensation Committee has the ability to exercise discretion to ensure risk mitigation occurs in management decision making.
| |
✓ | Clawback Policy. The Board of Directors is committed to adopting a clawback policy as required by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 when final regulations are adopted by the SEC and NASDAQ.
| |
✓ | Minimal Perquisites. We provide minimal perquisites to our Named Executive Officers that are not generally available to all other employees.
|
2019 PROXY STATEMENT
|
27
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EXECUTIVE COMPENSATION
Disfavored Compensation Practices That We Avoid
| ||
× | No Liberal Share Recycling. Neither the Prior Incentive Plan nor the 2017 Incentive Plan contains liberal share recycling.
| |
× | No Repricing. No repricing or exchange of underwater stock options or SARs or other awards is permitted without shareholder approval.
| |
× | No Payment of Dividends Prior to Vesting. No payment of dividends prior to the vesting of restricted stock or performance shares.
| |
× | No Hedging or Derivatives Trading of the Companys Securities. No hedging of the Companys securities, including publicly traded options, puts, calls and short sales by Named Executive Officers or Non-Employee Directors permitted.
| |
× | No Guaranteed Bonus. No guaranteed annual incentive bonus and no cash retention bonus for Named Executive Officers.
| |
× | No Agreements to Provide Tax Gross-ups. No employment or other agreements that contain provisions entitling employees to tax gross-up payments.
| |
× | No Single Trigger Cash Severance upon a Change in Control. The Companys Change in Control Severance Plan requires a double trigger for cash severance.
| |
× | No Supplemental Executive Retirement Benefits. We do not provide pensions or other supplemental executive retirement benefits to our Named Executive Officers.
|
Section 2 - Executive Compensation Program Objectives
|
28
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CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
Responsibilities of the Compensation Committee
Independent Compensation Consultant
Compensation Should Be Benchmarked
2019 PROXY STATEMENT
|
29
|
EXECUTIVE COMPENSATION
2017 Compensation Peer Group |
2018 Compensation Peer Group |
2019 Compensation Peer Group | ||||
Bill Barrett Corporation |
X |
|||||
Callon Petroleum Company |
X |
X | ||||
Centennial Resource Development, Inc. |
X |
X | ||||
Diamondback Energy, Inc. |
X |
X |
| |||
Energen Corporation |
X |
X | ||||
EP Energy Corporation |
X |
X |
X | |||
Gulfport Energy Corporation |
X |
| ||||
Halcón Resources Corporation |
X | |||||
Jagged Peak Energy Inc. |
X |
X | ||||
Laredo Petroleum, Inc. |
X |
X |
X | |||
Matador Resources Company |
X |
X |
X | |||
Oasis Petroleum Inc. |
X |
X |
X | |||
Parsley Energy, Inc. |
X |
X |
X | |||
PDC Energy, Inc. |
X |
X |
X | |||
QEP Resources, Inc. |
X |
X | ||||
Range Resources Corporation |
X |
| ||||
Resolute Energy Corporation |
X |
X | ||||
Rice Energy Inc. |
X |
| ||||
RSP Permian, Inc. |
X |
X |
X | |||
Sanchez Energy Corporation |
X |
X |
| |||
SM Energy Corporation |
X |
X |
X | |||
Whiting Petroleum Company |
X |
| ||||
WPX Energy, Inc. |
X |
X |
X | |||
Total Number of Peers in Compensation Peer Group |
16 |
17 |
16 |
|
30
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
Named Executive Officer | Number of Position Matches in 2018 Compensation Peer Group |
Proxy Data Weighting |
Survey Data Weighting | |||
S. P. Johnson IV |
17 |
100% |
0% | |||
Brad Fisher |
14 |
100% |
0% | |||
David L. Pitts |
15 |
100% |
0% | |||
Gerald A. Morton |
12 |
70% |
30% | |||
Richard H. Smith |
6 |
50% |
50% |
Section 3 - Executive Compensation Components
Our executive compensation program consists of the following components:
2019 PROXY STATEMENT
|
31
|
EXECUTIVE COMPENSATION
2018 Targeted Compensation Mix
Base Salary
Named Executive Officer | 2017 Base Salary |
2018 Base Salary |
% Change | |||||
S. P. Johnson IV |
|
$670,000 |
|
$670,000 |
0% | |||
Brad Fisher |
|
485,000 |
|
500,000 |
3% | |||
David L. Pitts |
|
430,000 |
|
475,000 |
10% | |||
Gerald A. Morton |
|
383,000 |
|
395,000 |
3% | |||
Richard H. Smith |
|
346,000 |
|
357,000 |
3% |
|
32
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
Annual Incentive Bonus
Named Executive Officer |
2018 Annual Incentive Bonus Target (% of Base Salary) |
|||
S.P. Johnson IV |
|
100% |
| |
Brad Fisher |
|
90% |
| |
David L. Pitts |
|
90% |
| |
Gerald A. Morton |
|
90% |
| |
Richard H. Smith |
|
80% |
|
2019 PROXY STATEMENT
|
33
|
EXECUTIVE COMPENSATION
2018 Operational and Financial Metrics |
Threshold (50%) |
Target (100%) |
Maximum (200%) |
Actual Results |
Weighting Factor |
Payout Achieved |
||||||||||||||||||
Daily Oil Production (Bbls/d) |
|
38,610 |
|
|
39,138 |
|
|
41,469 |
|
|
38,991 |
|
|
50% |
|
|
43% |
| ||||||
Drill-Bit Finding and Development Cost ($/Boe) |
|
$13.05 |
|
|
$12.05 |
|
|
$10.55 |
|
|
$12.02 |
|
|
30% |
|
|
30% |
| ||||||
Lease Operating Expense ($/Boe) |
|
$8.25 |
|
|
$7.88 |
|
|
$7.13 |
|
|
$7.19 |
|
|
15% |
|
|
29% |
| ||||||
Cash G&A Expense ($ in thousands) |
$ |
54,500 |
|
$ |
53,500 |
|
$ |
49,875 |
|
$ |
52,050 |
|
|
5% |
|
|
7% |
| ||||||
Total Payout Achieved |
|
109% |
|
2018 Annual Incentive Bonus | ||||||||
Named Executive Officer | Target | Actual | ||||||
S.P. Johnson IV |
$ |
670,000 |
|
$ |
710,200 |
| ||
Brad Fisher |
|
450,000 |
|
|
477,000 |
| ||
David L. Pitts |
|
427,500 |
|
|
453,150 |
| ||
Gerald A. Morton |
|
355,500 |
|
|
376,830 |
| ||
Richard H. Smith |
|
285,600 |
|
|
302,736 |
|
2019 Operational and Financial Metrics | Threshold (50%) |
Target (100%) |
Maximum (200%) |
Weighting Factor |
||||||||||||
Daily Oil Production (Bbls/d) |
|
42,084 |
|
|
42,399 |
|
|
44,850 |
|
|
50% |
| ||||
Drill-Bit Finding and Development Cost ($/Boe) |
|
$11.50 |
|
|
$10.50 |
|
|
$9.00 |
|
|
30% |
| ||||
Lease Operating Expense ($/Boe) |
|
$7.75 |
|
|
$7.38 |
|
|
$6.65 |
|
|
15% |
| ||||
Cash G&A Expense ($ in thousands) |
$ |
53,000 |
|
$ |
52,000 |
|
$ |
48,450 |
|
|
5% |
|
|
34
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
Considerations Regarding our Annual Incentive Bonus Program
Long-Term Equity-Based Incentive Awards
2019 PROXY STATEMENT
|
35
|
EXECUTIVE COMPENSATION
Grant Date Fair Value of 2018 Long-Term Equity-Based Incentive Awards(1) |
||||||||||||||||||||||||||||
Name Executive Officer | RSUs | Cash SARs |
Performance Shares |
Total | ||||||||||||||||||||||||
S.P. Johnson IV |
$ |
2,795,031 |
|
$ |
1,075,020 |
|
|
$430,919 |
|
$ |
4,300,970 |
| ||||||||||||||||
Brad Fisher |
|
1,722,507 |
|
|
662,523 |
|
|
265,561 |
|
|
2,650,591 |
| ||||||||||||||||
David L. Pitts |
|
1,428,741 |
|
|
549,523 |
|
|
220,280 |
|
|
2,198,544 |
| ||||||||||||||||
Gerald A. Morton |
|
874,259 |
|
|
536,268 |
(2) |
|
134,794 |
|
|
1,545,321 |
| ||||||||||||||||
Richard H. Smith |
|
596,732 |
|
|
229,504 |
|
|
91,995 |
|
|
918,231 |
|
(1) | The numbers of RSUs, Cash SARs, and performance shares granted presented in Grants of Plan-Based Awards were determined by dividing the grant date fair value of the awards by the respective grant date fair value per unit as described below. |
(2) | Included in the Cash SARs granted was a special award for Mr. Morton with a grant date fair value of $200,012 in recognition of his efforts related to the Delaware Basin acquisition in August 2017 and divestitures in late 2017 and early 2018. This special award is included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table for 2017 as this was an additional bonus that was paid with Cash SARs in lieu of cash. Further details of this special award are presented in Grants of Plan-Based Awards . |
|
36
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
2017 Stock Performance Peer Group |
2018 Stock Performance Peer Group |
2019 Stock Performance Peer Group | ||||
Antero Resources Corporation |
X |
|||||
Bill Barrett Corporation |
X |
|||||
Chesapeake Energy Corporation |
X |
X |
X | |||
Cimarex Energy Co. |
X |
X | ||||
Denbury Resources Inc. |
X(1) | |||||
Devon Energy Corporation |
X |
X |
X | |||
Encana Corporation |
X |
X | ||||
EOG Resources, Inc. |
X |
X |
X | |||
EP Energy Corporation |
X |
X |
X | |||
Gulfport Energy Corporation |
X |
| ||||
Laredo Petroleum, Inc. |
X |
| ||||
Marathon Oil Corporation |
X |
X |
X | |||
Matador Resources Company |
X |
X | ||||
Noble Energy, Inc. |
X |
X |
X | |||
Oasis Petroleum Inc. |
X |
X |
X | |||
PDC Energy, Inc. |
X |
X |
X | |||
QEP Resources, Inc. |
X |
| ||||
Range Resources Corporation |
X |
| ||||
Rice Energy Inc. |
X |
| ||||
Sanchez Energy Corporation |
X |
X |
| |||
SM Energy Corporation |
X |
X |
X | |||
Whiting Petroleum Corp. |
X |
| ||||
WPX Energy, Inc. |
X |
X | ||||
Total Number of Peers in Stock Performance Peer Group |
17 |
15 |
14 |
(1) | The Compensation Committee approved the addition of Denbury Resources Inc. (Denbury) to our 2019 Stock Performance Peer Group subject to the closing of Denburys previously announced agreement to acquire Penn Virginia Corporation. Subsequent to the approval of the 2019 Stock Performance Peer Group, Denbury announced that it had mutually agreed with Penn Virginia to terminate that agreement and accordingly, Denbury will be excluded from the 2019 Stock Performance Peer Group listed above. |
2019 PROXY STATEMENT
|
37
|
EXECUTIVE COMPENSATION
Severance and Change in Control Benefits
Perquisites and Other Benefits
Clawback Provisions
|
38
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
Stock Ownership Guidelines
To align the interests of our Named Executive Officers with the interests of the Companys other shareholders, our Named Executive Officers must comply with stock ownership guidelines as set forth in the table below:
Position | Stock Ownership Guidelines | |
Chief Executive Officer |
5x Base Salary | |
Chief Financial Officer |
5x Base Salary | |
All other Named Executive Officers |
3x Base Salary |
Section 4 - Tax Considerations of Executive Compensation
Tax Deductibility of Executive Compensation
2019 PROXY STATEMENT
|
39
|
EXECUTIVE COMPENSATION
Section 409A of the Code
The information contained in this Compensation Committee Report shall not be deemed to be soliciting material or to be filed with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 (the Securities Act), as amended, or the Exchange Act, except to the extent that the Company specifically incorporates such information by reference in such filing.
The Compensation Committee of the Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis. Based on that review and discussion, the Compensation Committee recommends the Compensation Discussion and Analysis be included in the Companys proxy statement for the 2019 Annual Meeting of Shareholders and incorporated by reference into the Companys Annual Report on Form 10-K for the year ended December 31, 2018.
The Compensation Committee of the Board of Directors
Roger A. Ramsey, Chairman
F. Gardner Parker
Robert F. Fulton
|
40
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
The following table sets forth the compensation of the Companys Named Executive Officers for 2018, 2017, and 2016.
Named Executive Officer and Principal Position
|
Year
|
Salary ($)
|
Stock Awards(1) ($)
|
Option Awards(1) ($)
|
Non-Equity Incentive Plan Compensation(2) ($)
|
All Other Compensation(4) ($)
|
Total ($)
|
|||||||||||||||||||||
S. P. Johnson IV
|
|
2018
|
|
|
$670,000
|
|
|
$3,225,950
|
|
|
$1,075,020
|
|
|
$710,200
|
|
|
$24,572
|
|
|
$5,705,742
|
| |||||||
President and Chief
|
|
2017
|
|
|
665,000
|
|
|
3,195,057
|
|
|
1,064,832
|
|
|
837,500
|
|
|
24,022
|
|
|
5,786,411
|
| |||||||
Executive Officer |
|
2016
|
|
|
650,000
|
|
|
2,698,156
|
|
|
899,062
|
|
|
812,500
|
|
|
23,695
|
|
|
5,083,413
|
| |||||||
Brad Fisher
|
|
2018
|
|
|
$496,000
|
|
|
$1,988,068
|
|
|
$662,523
|
|
|
$477,000
|
|
|
$20,544
|
|
|
$3,644,135
|
| |||||||
Vice President and
|
|
2017
|
|
|
481,000
|
|
|
1,815,090
|
|
|
604,896
|
|
|
545,625
|
|
|
19,994
|
|
|
3,466,605
|
| |||||||
Chief Operating Officer
|
|
2016
|
|
|
470,000
|
|
|
1,731,586
|
|
|
576,990
|
|
|
528,750
|
|
|
19,667
|
|
|
3,326,993
|
| |||||||
David L. Pitts
|
|
2018
|
|
|
$463,000
|
|
|
$1,649,021
|
|
|
$549,523
|
|
|
$453,150
|
|
|
$21,274
|
|
|
$3,135,968
|
| |||||||
Vice President and
|
|
2017
|
|
|
419,000
|
|
|
3,831,284
|
|
|
443,688
|
|
|
483,750
|
|
|
20,724
|
|
|
5,198,446
|
| |||||||
Chief Financial Officer
|
|
2016
|
|
|
376,154
|
|
|
884,565
|
|
|
294,748
|
|
|
438,750
|
|
|
20,397
|
|
|
2,014,614
|
| |||||||
Gerald A. Morton
|
|
2018
|
|
|
$392,000
|
|
|
$1,009,053
|
|
|
$336,256
|
|
|
$376,830
|
|
|
$25,180
|
|
|
$2,139,319
|
| |||||||
General Counsel and
|
|
2017
|
|
|
380,000
|
|
|
978,797
|
|
|
326,208
|
|
|
630,887
|
(3)
|
|
24,630
|
|
|
2,340,522
|
| |||||||
Vice President of Business Development |
|
2016
|
|
|
371,000
|
|
|
978,857
|
|
|
326,141
|
|
|
417,375
|
|
|
24,304
|
|
|
2,117,677
|
| |||||||
Richard H. Smith
|
|
2018
|
|
|
$354,000
|
|
|
$688,727
|
|
|
$229,504
|
|
|
$302,736
|
|
|
$21,411
|
|
|
$1,596,378
|
| |||||||
Vice President of Land
|
|
2017
|
|
|
343,000
|
|
|
668,352
|
|
|
222,744
|
|
|
346,000
|
|
|
20,861
|
|
|
1,600,957
|
| |||||||
|
2016
|
|
|
335,000
|
|
|
668,392
|
|
|
222,696
|
|
|
335,000
|
|
|
20,534
|
|
|
1,581,622
|
|
(1) | The amounts shown for Stock Awards reflect the aggregate grant date fair values of RSUs and performance shares and the amounts shown for Option Awards reflect the aggregate grant date fair values of Cash SARs each calculated in accordance with FASB ASC Topic 718. For a discussion of the valuation assumptions for each of these awards, see Note 11 of the Notes to our Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2018. See Grants of Plan-Based Awards Table for further details. |
(2) | Amounts reflect the annual incentive bonuses for 2018, 2017, and 2016 which were paid in the first quarter of 2019, 2018, and 2017, respectively. 75% of the 2016 annual incentive bonus was paid in cash and 25% was paid with grants of RSUs, which vested in a single installment substantially concurrent with the time of grant. |
(3) | In 2017, Mr. Mortons non-equity incentive plan compensation includes a special long-term Cash SAR with a grant date fair value of $200,012. These Cash SARs vest ratably over an approximate three-year period. See Grants of Plan-Based Awards for further details. |
(4) | The amounts shown as All Other Compensation for 2018 include the following: |
Named Executive Officer | Employer matching contributions under the Companys Employees 401(k) Profit Sharing Plan ($) |
Supplemental life ($) |
Other ($) |
Total ($) |
||||||||||||
S. P. Johnson IV |
|
$16,500 |
|
|
$4,572 |
|
|
$3,500 |
|
$ |
24,572 |
| ||||
Brad Fisher |
|
16,500 |
|
|
544 |
|
|
3,500 |
|
|
20,544 |
| ||||
David L. Pitts |
|
16,500 |
|
|
1,274 |
|
|
3,500 |
|
|
21,274 |
| ||||
Gerald A. Morton |
|
16,500 |
|
|
5,180 |
|
|
3,500 |
|
|
25,180 |
| ||||
Richard H. Smith |
|
16,500 |
|
|
1,411 |
|
|
3,500 |
|
|
21,411 |
|
2019 PROXY STATEMENT
|
41
|
EXECUTIVE COMPENSATION
Chief Executive Officer Pay Ratio
|
42
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
The table below contains information with respect to grants of plan-based awards to the Named Executive Officers during 2018.
Estimated Future Payouts Under Non- Equity Incentive Plan Awards (1) |
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
All Other Stock Awards: Number of Shares or Units (#)(3) |
All Other Option Awards: Number of Rights (#)(4) |
Grant Date Fair Value of Stock Awards ($)(5) |
||||||||||||||||||||||||||||||||
Named Executive Officer |
Grant Date |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
||||||||||||||||||||||||||||||
S.P. Johnson IV |
|
3/9/2018 |
|
$ |
670,000 |
|
$ |
1,340,000 |
|
|
190,527 |
|
|
$2,795,031 |
| |||||||||||||||||||||
3/9/2018 | 136,251 | 1,075,020 | ||||||||||||||||||||||||||||||||||
|
3/9/2018 |
|
|
|
|
|
22,573 |
|
|
45,146 |
|
|
430,919 |
| ||||||||||||||||||||||
Brad Fisher |
3/9/2018 | $ | 450,000 | $900,000 | 117,417 | $1,722,507 | ||||||||||||||||||||||||||||||
3/9/2018 | 83,970 | 662,523 | ||||||||||||||||||||||||||||||||||
|
3/9/2018 |
|
|
|
|
|
13,911 |
|
|
27,822 |
|
|
265,561 |
| ||||||||||||||||||||||
David L. Pitts |
|
3/9/2018 |
|
$ |
427,500 |
|
|
$855,000 |
|
|
97,392 |
|
|
$1,428,741 |
| |||||||||||||||||||||
3/9/2018 | 69,648 | 549,523 | ||||||||||||||||||||||||||||||||||
|
3/9/2018 |
|
|
|
|
|
11,539 |
|
|
23,078 |
|
|
220,280 |
| ||||||||||||||||||||||
Gerald A. Morton |
|
3/9/2018 |
|
$ |
355,500 |
|
|
$711,000 |
|
|
59,595 |
|
|
$874,259 |
| |||||||||||||||||||||
3/9/2018 | 42,618 | 336,256 | ||||||||||||||||||||||||||||||||||
3/9/2018 | 25,350 | (6) | 200,012 | |||||||||||||||||||||||||||||||||
|
3/9/2018 |
|
|
|
|
|
7,061 |
|
|
14,122 |
|
|
134,794 |
| ||||||||||||||||||||||
Richard H. Smith |
|
3/9/2018 |
|
$ |
285,600 |
|
|
$571,200 |
|
|
40,677 |
|
|
$596,732 |
| |||||||||||||||||||||
3/9/2018 | 29,088 | 229,504 | ||||||||||||||||||||||||||||||||||
|
3/9/2018 |
|
|
|
|
|
4,819 |
|
|
9,638 |
|
|
91,995 |
|
(1) | Represents the 2018 annual incentive bonus target and maximum 2018 annual incentive bonus, which is 200% of the target annual incentive bonus. |
(2) | Represents the number of target performance shares granted under the 2017 Incentive Plan that would vest upon the achievement of a threshold, target and maximum level of performance. The actual number of target performance shares that cliff vest on March 17, 2021 is based on the TSR of the Companys common stock relative to the TSR achieved by our 2018 Stock Performance Peer Group. If the relative TSR is below the 25th percentile, then the payout will be 0% of the target performance shares. If the relative TSR is at the 25th percentile or higher, then a payout between 50% and 200% of the target performance shares will be achieved. |
(3) | Represents RSUs granted under the 2017 Incentive Plan that vest ratably over an approximate three-year period on March 17, 2019, March 17, 2020 and March 17, 2021. |
(4) | Represents the number of Cash SARs granted under the 2017 Incentive Plan that vest ratably over an approximate three-year period on March 17, 2019, March 17, 2020 and March 17, 2021. These Cash SARs have an exercise price of $14.67, which was the March 9, 2018 closing price of our common stock on the NASDAQ Global Select Market, and expire on March 17, 2025. |
(5) | Represents the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. For a discussion of the valuation assumptions, see Note 11 of the Notes to our Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2018. The grant date fair value of RSUs granted under the 2017 Incentive Plan is based on the closing stock price of our common stock on the NASDAQ Global Select Market on the date of grant. The grant date fair values of Cash SARs and performance shares are based on a Black-Scholes-Merton option pricing model and a Monte Carlo simulation model, respectively. |
(6) | Represents the special award of Cash SARs granted under the 2017 Incentive Plan to Mr. Morton in recognition of his efforts related to the Delaware Basin acquisition in August 2017 and divestitures in late 2017 and early 2018. This award has an exercise price of $14.67, which was the March 9, 2018 closing price of our common stock on the NASDAQ Global Select Market, vests ratably over an approximate three-year period on March 17, 2019, March 17, 2020 and March 17, 2021, and expires on March 17, 2025. |
2019 PROXY STATEMENT
|
43
|
EXECUTIVE COMPENSATION
Outstanding Equity-Based Awards at Fiscal Year-End
The table below presents information on the outstanding equity-based awards held by the Named Executive Officers as of December 31, 2018.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||
Named Executive Officer |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested(#) |
Market Value of Shares or Units of Stock That Have Not Vested ($)(1) |
Equity Incentive Plan Awards: Number of Unearned Shares or Units of Stock That Have Not Vested(#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or Units of Stock That Have Not Vested ($)(1) |
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||
S. P. Johnson IV |
91,014 | | $27.30 | 3/17/2021 | ||||||||||||||||||||||||||||||||||||||||||||
44,368 | (2) | 44,368 | (2) | 26.94 | 3/23/2022 | |||||||||||||||||||||||||||||||||||||||||||
| 136,251 | (3) | 14.67 | 3/17/2025 | ||||||||||||||||||||||||||||||||||||||||||||
28,557 | (4) | $322,409 | ||||||||||||||||||||||||||||||||||||||||||||||
68,524 | (6) | 773,636 | ||||||||||||||||||||||||||||||||||||||||||||||
190,527 | (8) | 2,151,050 | ||||||||||||||||||||||||||||||||||||||||||||||
10,074 | (5) | $113,735 | ||||||||||||||||||||||||||||||||||||||||||||||
12,123 | (7) | 136,869 | ||||||||||||||||||||||||||||||||||||||||||||||
22,573 | (9) | 254,849 | ||||||||||||||||||||||||||||||||||||||||||||||
Brad Fisher |
58,410 | | $27.30 | 3/17/2021 | ||||||||||||||||||||||||||||||||||||||||||||
25,204 | (2) | 25,204 | (2) | 26.94 | 3/23/2022 | |||||||||||||||||||||||||||||||||||||||||||
| 83,970 | (3) | 14.67 | 3/17/2025 | ||||||||||||||||||||||||||||||||||||||||||||
18,327 | (4) | $206,912 | ||||||||||||||||||||||||||||||||||||||||||||||
38,928 | (6) | 439,497 | ||||||||||||||||||||||||||||||||||||||||||||||
117,417 | (8) | 1,325,638 | ||||||||||||||||||||||||||||||||||||||||||||||
6,465 | (5) | $72,990 | ||||||||||||||||||||||||||||||||||||||||||||||
6,887 | (7) | 77,754 | ||||||||||||||||||||||||||||||||||||||||||||||
13,911 | (9) | 157,055 | ||||||||||||||||||||||||||||||||||||||||||||||
David L. Pitts |
29,838 | | $27.30 | 3/17/2021 | ||||||||||||||||||||||||||||||||||||||||||||
18,487 | (2) | 18,487 | (2) | 26.94 | 3/23/2022 | |||||||||||||||||||||||||||||||||||||||||||
| 69,648 | (3) | 14.67 | 3/17/2025 | ||||||||||||||||||||||||||||||||||||||||||||
9,362 | (4) | $105,697 | ||||||||||||||||||||||||||||||||||||||||||||||
28,552 | (6) | 322,352 | ||||||||||||||||||||||||||||||||||||||||||||||
97,392 | (8) | 1,099,556 | ||||||||||||||||||||||||||||||||||||||||||||||
104,559 | (10) | 1,180,471 | ||||||||||||||||||||||||||||||||||||||||||||||
3,303 | (5) | $37,291 | ||||||||||||||||||||||||||||||||||||||||||||||
5,051 | (7) | 57,026 | ||||||||||||||||||||||||||||||||||||||||||||||
11,539 | (9) | 130,275 | ||||||||||||||||||||||||||||||||||||||||||||||
Gerald A. Morton |
33,016 | | $27.30 | 3/17/2021 | ||||||||||||||||||||||||||||||||||||||||||||
13,592 | (2) | 13,592 | (2) | 26.94 | 3/23/2022 | |||||||||||||||||||||||||||||||||||||||||||
| 42,618 | (3) | 14.67 | 3/17/2025 | ||||||||||||||||||||||||||||||||||||||||||||
| 25,350 | (11) | 14.67 | 3/17/2025 | ||||||||||||||||||||||||||||||||||||||||||||
10,360 | (4) | $116,964 | ||||||||||||||||||||||||||||||||||||||||||||||
20,992 | (6) | 237,000 | ||||||||||||||||||||||||||||||||||||||||||||||
59,595 | (8) | 672,828 | ||||||||||||||||||||||||||||||||||||||||||||||
3,655 | (5) | $41,265 | ||||||||||||||||||||||||||||||||||||||||||||||
3,714 | (7) | 41,931 | ||||||||||||||||||||||||||||||||||||||||||||||
7,061 | (9) | 79,719 | ||||||||||||||||||||||||||||||||||||||||||||||
Richard H. Smith |
22,544 | | $27.30 | 3/17/2021 | ||||||||||||||||||||||||||||||||||||||||||||
9,281 | (2) | 9,281 | (2) | 26.94 | 3/23/2022 | |||||||||||||||||||||||||||||||||||||||||||
| 29,088 | (3) | 14.67 | 3/17/2025 | ||||||||||||||||||||||||||||||||||||||||||||
7,074 | (4) | $79,865 | ||||||||||||||||||||||||||||||||||||||||||||||
14,334 | (6) | 161,831 | ||||||||||||||||||||||||||||||||||||||||||||||
40,677 | (8) | 459,243 | ||||||||||||||||||||||||||||||||||||||||||||||
2,496 | (5) | $28,180 | ||||||||||||||||||||||||||||||||||||||||||||||
2,536 | (7) | 28,631 | ||||||||||||||||||||||||||||||||||||||||||||||
4,819 | (9) | 54,407 |
(1) | Based on the closing price of our common stock on the NASDAQ Global Select Market on December 31, 2018 of $11.29 per share. |
(2) | Represents an award of Cash SARs that vested ratably over an approximate two-year period on March 17, 2018 and March 17, 2019, subject to a performance condition. On July 27, 2017, the Compensation Committee certified that the performance condition had been met. |
|
44
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
(3) | Represents an award of Cash SARs that vest ratably over a three year period on March 17, 2019, March 17, 2020 and March 17, 2021. |
(4) | Represents an award of RSUs that vest ratably over a three year period on March 17, 2017, March 17, 2018 and March 17, 2019, subject to a performance condition. On July 27, 2016, the Compensation Committee certified that the performance condition had been met. |
(5) | Represents performance shares that are presented at 100% of the target award that cliff vest on March 17, 2019, subject to a performance condition. On July 27, 2016, the Compensation Committee certified that the performance condition had been met. The number of shares of common stock issuable upon vesting range from zero to 200% of the targeted shares granted based upon the performance of the Companys TSR relative to our 2016 Stock Performance Peer Group at the end of an approximate three-year performance period. |
(6) | Represents an award of RSUs that vest ratably over a three year period on March 17, 2018, March 17, 2019 and March 17, 2020, subject to a performance condition. On July 27, 2017, the Compensation Committee certified that the performance condition had been met. |
(7) | Represents performance shares that are presented at 100% of the target award that cliff vest on March 17, 2020, subject to a performance condition. On July 27, 2017, the Compensation Committee certified that the performance condition had been met. The number of shares of common stock issuable upon vesting range from zero to 200% of the targeted shares granted based upon the performance of the Companys TSR relative to our 2017 Stock Performance Peer Group at the end of an approximate three-year performance period. |
(8) | Represents an award of RSUs that vest ratably over a three year period on March 17, 2019, March 17, 2020 and March 17, 2021. |
(9) | Represents performance shares that are presented at 100% of the target award that cliff vest on March 17, 2021, subject to a performance condition. The number of shares of common stock issuable upon vesting range from zero to 200% of the targeted shares granted based upon the performance of the Companys TSR relative to our 2018 Stock Performance Peer Group at the end of an approximate three-year performance period. |
(10) | Represents a special award of RSUs granted to Mr. Pitts to reflect a market adjustment to his compensation, recognize his significant individual achievements, and encourage the retention of his services to the Company. These RSUs cliff vest on March 17, 2020. |
(11) | Represents the special award of Cash SARs granted to Mr. Morton in recognition of his efforts related to the Delaware Basin acquisition in August 2017 and divestitures in late 2017 and early 2018. This award vests ratably over a three-year period on March 17, 2019, March 17, 2020 and March 17, 2021, and expires on March 17, 2025. |
Option Exercises and Stock Vested
The following table shows information concerning the amounts realized by the Named Executive Officers upon the exercise of Cash SARs and the vesting of RSUs and performance shares during 2018:
Option Awards | Stock Awards | |||||||||||||||
Named Executive Officer | Number of SARs Exercised (#) |
Value Realized on Exercise ($) |
Number of Shares Acquired on Vesting (#)(1) |
Value Realized on Vesting ($)(2) |
||||||||||||
|
||||||||||||||||
S.P. Johnson IV |
|
|
|
|
|
|
|
92,139 |
|
|
$1,440,133 |
| ||||
Brad Fisher |
|
|
|
|
|
|
|
56,651 |
|
|
885,455 |
| ||||
David L. Pitts |
|
|
|
|
|
|
|
33,360 |
|
|
521,417 |
| ||||
Gerald A. Morton |
|
|
|
|
|
|
|
31,303 |
|
|
489,266 |
| ||||
Richard H. Smith |
|
|
|
|
|
|
|
21,375 |
|
|
334,091 |
|
(1) | Represents the number of shares acquired upon vesting of RSUs and performance shares, without adjustment for the number of shares sold to satisfy applicable income tax withholding obligations. |
(2) | Represents the value realized on the vesting date based on the closing price of our common stock on the NASDAQ Global Select Market. |
2019 PROXY STATEMENT
|
45
|
EXECUTIVE COMPENSATION
Employment Agreements and Change in Control Severance Plan
The Company has entered into employment agreements with each of the Named Executive Officers listed below along with their annual base salary as of December 31, 2018.
Named Executive Officer and Current Position | Annual Base Salary |
|||
|
||||
S. P. Johnson IV |
|
$670,000 |
| |
President and Chief Executive Officer |
||||
Brad Fisher |
|
500,000 |
| |
Vice President and Chief Operating Officer |
||||
David L. Pitts |
|
475,000 |
| |
Vice President and Chief Financial Officer |
||||
Gerald A. Morton |
|
395,000 |
| |
General Counsel and Vice President of Business Development |
||||
Richard H. Smith |
|
357,000 |
| |
Vice President of Land |
Amended and Restated Employment Agreements
|
46
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
2019 PROXY STATEMENT
|
47
|
EXECUTIVE COMPENSATION
Change In Control Severance Plan
|
48
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
2019 PROXY STATEMENT
|
49
|
EXECUTIVE COMPENSATION
Potential Payments to the Named Executive Officers Upon Termination or Change in Control
The following table provides a summary of the potential payments to each of the Named Executive Officers in connection with certain termination events, including a termination related to a change in control of our company. Information in this table assumes a termination date of December 31, 2018 and a price per share of our common stock of $11.29, the closing market price per share on December 31, 2018. Amounts included in this table reflect the effects of the Amended and Restated Employment Agreements and the CIC Plan, both of which became effective in February 2019.
Named Executive Officer | Voluntary Termination (No Good Reason/ No Change in Control) or Involuntary For Cause Termination |
Good Reason/ Involuntary Not for Cause Termination |
Change in Control Termination (Involuntary, Good Reason, Voluntary) |
Death | Disability | |||||||||||||||
S.P. Johnson IV |
|
|
| |||||||||||||||||
Severance payments |
|
$ |
|
|
$1,641,500 |
|
|
$4,020,000 |
|
|
$ |
|
|
$1,641,500 |
| |||||
Cash SARs(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Restricted stock units(2) |
|
|
|
|
3,247,095 |
|
|
3,247,095 |
|
|
3,247,095 |
|
|
3,247,095 |
| |||||
Performance shares(3)(4)(5) |
|
|
|
|
571,114 |
|
|
505,453 |
|
|
230,535 |
|
|
230,535 |
| |||||
Life insurance benefits(6) |
|
|
|
|
|
|
|
|
|
|
2,085,000 |
|
|
|
| |||||
Benefits continuation |
|
|
|
|
37,380 |
|
|
25,920 |
|
|
37,380 |
|
|
37,380 |
| |||||
Total |
|
$ |
|
|
$5,497,089 |
|
|
$7,798,468 |
|
|
$5,600,010 |
|
|
$5,156,510 |
| |||||
Brad Fisher |
|
|
| |||||||||||||||||
Severance payments |
|
$ |
|
|
$1,175,000 |
|
|
$2,850,000 |
|
|
$ |
|
|
$1,175,000 |
| |||||
Cash SARs(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Restricted stock units(2) |
|
|
|
|
1,972,047 |
|
|
1,972,047 |
|
|
1,972,047 |
|
|
1,972,047 |
| |||||
Performance shares(3)(4)(5) |
|
|
|
|
349,367 |
|
|
307,799 |
|
|
141,145 |
|
|
141,145 |
| |||||
Life insurance benefits(6) |
|
|
|
|
|
|
|
|
|
|
1,450,000 |
|
|
|
| |||||
Benefits continuation |
|
|
|
|
44,404 |
|
|
44,106 |
|
|
44,404 |
|
|
44,404 |
| |||||
Total |
|
$ |
|
|
$3,540,818 |
|
|
$5,173,952 |
|
|
$3,607,596 |
|
|
$3,332,596 |
| |||||
David L. Pitts |
|
|
| |||||||||||||||||
Severance payments |
|
$ |
|
|
$888,250 |
|
|
$2,256,250 |
|
|
$ |
|
|
$888,250 |
| |||||
Cash SARs(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Restricted stock units(2) |
|
|
|
|
2,708,076 |
|
|
2,708,076 |
|
|
2,708,076 |
|
|
2,708,076 |
| |||||
Performance shares(3)(4)(5) |
|
|
|
|
270,141 |
|
|
224,592 |
|
|
100,483 |
|
|
100,483 |
| |||||
Life insurance benefits(6) |
|
|
|
|
|
|
|
|
|
|
1,402,500 |
|
|
|
| |||||
Benefits continuation |
|
|
|
|
30,709 |
|
|
24,689 |
|
|
30,709 |
|
|
30,709 |
| |||||
Total |
|
$ |
|
|
$3,897,176 |
|
|
$5,213,607 |
|
|
$4,241,768 |
|
|
$3,727,518 |
| |||||
Gerald A. Morton |
|
|
| |||||||||||||||||
Severance payments |
|
$ |
|
|
$738,650 |
|
|
$1,876,250 |
|
|
$ |
|
|
$738,650 |
| |||||
Cash SARs(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Restricted stock units(2) |
|
|
|
|
1,026,792 |
|
|
1,026,792 |
|
|
1,026,792 |
|
|
1,026,792 |
| |||||
Performance shares(3)(4)(5) |
|
|
|
|
181,641 |
|
|
162,915 |
|
|
75,094 |
|
|
75,094 |
| |||||
Life insurance benefits(6) |
|
|
|
|
|
|
|
|
|
|
1,290,000 |
|
|
|
| |||||
Benefits continuation |
|
|
|
|
41,254 |
|
|
44,106 |
|
|
41,254 |
|
|
41,254 |
| |||||
Total |
|
$ |
|
|
$1,988,337 |
|
|
$3,110,063 |
|
|
$2,433,140 |
|
|
$1,881,790 |
|
|
50
|
|
CARRIZO OIL & GAS
|
EXECUTIVE COMPENSATION
Named Executive Officer | Voluntary Termination (No Good Reason/ No Change in Control) or Involuntary For Cause Termination |
Good Reason/ Involuntary Not for Cause Termination |
Change in Control Termination (Involuntary, Good Reason, Voluntary) |
Death | Disability | |||||||||||||||
Richard H. Smith |
|
|
| |||||||||||||||||
Severance payments |
|
$ |
|
|
$631,890 |
|
|
$1,606,500 |
|
|
$631,890 |
|
|
$631,890 |
| |||||
Cash SARs(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Restricted stock units(2) |
|
|
|
|
700,939 |
|
|
700,939 |
|
|
700,939 |
|
|
700,939 |
| |||||
Performance shares(3)(4)(5) |
|
|
|
|
123,987 |
|
|
111,218 |
|
|
51,266 |
|
|
51,266 |
| |||||
Life insurance benefits(6) |
|
|
|
|
|
|
|
|
|
|
1,235,000 |
|
|
|
| |||||
Benefits continuation |
|
|
|
|
36,553 |
|
|
38,765 |
|
|
36,553 |
|
|
36,553 |
| |||||
Total |
|
$ |
|
|
$1,493,369 |
|
|
$2,457,422 |
|
|
$2,655,648 |
|
|
$1,420,648 |
|
(1) | Represents the value of accelerated vesting of Cash SARs that were unvested at December 31, 2018. As the exercise price was below the closing market price per share of our common stock on December 31, 2018, the value is zero. |
(2) | Represents the value of accelerated vesting of shares of RSUs that were unvested at December 31, 2018. |
(3) | Represents the value of accelerated vesting of performance shares that were unvested at December 31, 2018 for Good Reason/Involuntary Not for Cause termination based on the number of shares of common stock that would vest based upon the actual performance of the Companys TSR relative to our 2016 Stock Performance Peer Group, 2017 Stock Performance Peer Group, and 2018 Stock Performance Peer Group. |
(4) | Represents the value of accelerated vesting of performance shares that were unvested at December 31, 2018 for Change in Control termination. If a change in control occurs in the first half of the performance period, then the Named Executive Officer will receive a payment for the number of shares of common stock granted based upon 100% of the target award and the closing market price per share of our common stock on the termination date. If a change in control occurs in the second half of the performance period, then the Named Executive Officer will receive a payment for the number of shares of common stock granted based upon the greater of 100% of the target award or the percentage of shares to be awarded based upon the Companys TSR relative to the peer group (as defined in the award agreement) as of the termination date. Therefore, the value of the accelerated vesting of performance shares due to a change in control termination is based on 100% of the target award for the 2016, 2017, and 2018 performance shares. |
(5) | Represents the value of accelerated vesting of performance shares that were unvested at December 31, 2018 for Death or Disability termination based on the number of shares of common stock that would vest based upon the actual performance of the Companys TSR relative to our 2016 Stock Performance Peer Group, 2017 Stock Performance Peer Group, and 2018 Stock Performance Peer Group as of the date of termination, pro-rated for the number of completed months in the performance period. |
(6) | Represents the death benefit of Company provided supplemental life insurance and group term life insurance. |
2019 PROXY STATEMENT
|
51
|
EXECUTIVE COMPENSATION
Equity Compensation Plan Information
Information concerning our 2017 Incentive Plan and Prior Incentive Plan at December 31, 2018 is as follows:
Plan Category
|
Number of Securities to be Issued Upon Vesting of Options and Rights(1) (a)
|
Weighted- Average Exercise Price of Outstanding Options(2) (b)
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(3) (c)
|
|||||||||
Equity compensation plans approved by security holders |
|
2,448,876 |
|
|
N/A |
|
|
258,785 |
| |||
Equity compensation plans not approved by security holders |
|
|
|
|
|
|
|
|
| |||
Total |
|
2,448,876 |
|
|
N/A |
|
|
258,785 |
|
Information concerning our equity compensation plans at March 20, 2019 is as follows:
Plan Category
|
Number of Securities to be Issued Upon Vesting of Options and Rights(1) (a)
|
Weighted- Average Exercise Price of Outstanding (b)
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(3) (c)
|
|||||||||
Equity compensation plans approved by security holders |
|
1,680,851 |
|
|
N/A |
|
|
151,846 |
| |||
Equity compensation plans not approved by security holders |
|
|
|
|
|
|
|
|
| |||
Total |
|
1,680,851 |
|
|
N/A |
|
|
151,846 |
|
(1) | Amount includes number of shares issuable upon vesting of restricted stock awards, RSUs, and performance shares granted under the Prior Incentive Plan and 2017 Incentive Plan. Amount does not include awards of Cash SARs granted under the Cash SAR Plan and SARs to be settled in cash granted under the 2017 Incentive Plan. As of March 20, 2019, there were approximately 1,881,255 shares subject to unvested RSUs granted in February 2019, that we currently intend to settle in cash upon vesting and are not included in this table. As further described in Proposal 3Approval of the Amendment and Restatement of the 2017 Incentive Plan of Carrizo Oil & Gas, Inc., if the amendment and restatement of the 2017 Incentive Plan is approved, we intend to settle these awards in shares of common stock rather than cash upon vesting, which will reduce the number of shares available for grant, utilizing the remaining 151,846 shares available and an additional 1,729,409 of the shares requested, leaving approximately 5,020,591 shares remaining for future issuance. |
(2) | The weighted-average exercise price is not applicable because the shares issuable upon vesting of restricted stock awards, RSUs, and performance shares have no exercise price. |
(3) | The number of securities remaining available for future issuance under our equity compensation plans assumes all future grants will be full value stock awards. |
|
52
|
|
CARRIZO OIL & GAS
|
PROPOSAL 3. APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2017 INCENTIVE PLAN OF CARRIZO OIL & GAS, INC.
Best Practices
| ||
✓ | Independent Oversight. The Compensation Committee of our Board of Directors, composed solely of independent directors, will approve all grants made under the A&R 2017 Plan; provided, however, that the Compensation Committee may delegate to any committee of the Board, to the Chief Executive Officer and to any of our other senior officers its duties under the A&R 2017 Plan pursuant to such conditions or limitations as the Committee may establish; provided, however, that such delegation will not extend to the authority to make awards to participants who are subject to Section 16(a) of the Exchange Act. As with the 2017 Incentive Plan, the Compensation Committee has delegated to the special stock award committee of our Board of Directors, which committee consists solely of Mr. Johnson in his capacity as a director, the authority to grant awards or modify awards up to an aggregate grant date or modification date fair value not to exceed $250,000 per individual. See Committees of the Board of Directors for information regarding the special stock award committee.
| |
✓ | No Repricing of Options or SARs. The A&R 2017 Plan prohibits repricing, replacement, and regranting of stock options or SARs at lower prices unless approved by our shareholders.
| |
✓ | No Discounted Options or SARs. Stock options and SARs may not be granted with an exercise price below the closing price of our common stock on the date of grant. | |
✓ | No Dividends on Options or SARs. Dividends and dividend equivalents may not be paid or accrued on stock options or SARs.
| |
✓ | Limited Terms for Options and SARs. Stock options and SARs granted under the A&R 2017 Plan are limited to 10-year terms.
| |
✓ | Minimum Vesting. All awards will have a minimum vesting period of one year from the date of grant, subject to exceptions for up to 5% of the shares reserved as well as for director grants that vest at the next annual meeting of shareholders.
| |
✓ | No Liberal Share Counting. Shares that are tendered by a participant or withheld (1) as full or partial payment of withholding taxes related to the exercise or settlement of options, or (2) as payment for the option price, and shares repurchased in the open market with the proceeds of the payment of the option price will not become available again for awards under the A&R 2017 Plan.
| |
✓ | No Dividends or Dividend Equivalents on Unvested Awards. Any dividends or dividend equivalents will only be paid if the underlying shares vest pursuant to the terms of the award. | |
✓ | Annual Limitation on Director Awards and Compensation. The aggregate grant value of awards and cash compensation paid to any individual Non-Employee Director may not exceed $1,000,000 in any calendar year. | |
✓ | Awards May Be Subject To Future Clawback or Recoupment. All awards granted under the A&R 2017 Plan will be subject to any clawback policy required by applicable law. | |
✓ | No Transferability. Awards generally may not be transferred, except by will or the laws of descent and distribution or pursuant to a qualified domestic relations order. | |
✓ | No Evergreen Provisions. Shares authorized for issuance under the A&R 2017 Plan will not be replenished automatically. Any additional shares to be issued over and above the amount for which we are seeking authorization must be approved by our shareholders. | |
✓ | No Automatic Grants. There are no automatic grants to new participants or reload grants when outstanding awards are exercised, expire or are forfeited. | |
✓ | No Tax Gross-ups. Participants do not receive tax gross-ups under the A&R 2017 Plan. As discussed in the Compensation Discussion and Analysis section, there are no employment or other agreements that contain provisions entitling employees to tax gross-up payments. |
2019 PROXY STATEMENT
|
55
|
PROPOSAL 3. APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2017 INCENTIVE PLAN OF CARRIZO OIL & GAS, INC.
Summary of the A&R 2017 Plan
Eligibility
Shares Available for Awards
Administration
|
56
|
|
CARRIZO OIL & GAS
|
PROPOSAL 3. APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2017 INCENTIVE PLAN OF CARRIZO OIL & GAS, INC.
Amendment; Termination
Adjustment
Clawback
Awards
2019 PROXY STATEMENT
|
57
|
PROPOSAL 3. APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2017 INCENTIVE PLAN OF CARRIZO OIL & GAS, INC.
Options
Stock Appreciation Rights
Stock Awards
Shares/ Units |
Weighted Average Grant Date Fair Value |
|||||||
Unvested restricted stock awards and units and performance shares as of January 1, 2019 |
|
2,448,876 |
|
$ |
19.86 |
| ||
Granted |
|
130,302 |
|
$ |
14.20 |
| ||
Vested |
|
(874,964 |
) |
$ |
21.20 |
| ||
Performance shares that did not vest as a result of TSR calculation |
|
(10,407 |
) |
$ |
35.71 |
| ||
Forfeited |
|
(12,956 |
) |
$ |
17.16 |
| ||
Unvested restricted stock awards and units and performance shares as of March 20, 2019 |
|
1,680,851 |
|
$ |
18.64 |
|
|
58
|
|
CARRIZO OIL & GAS
|
PROPOSAL 3. APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2017 INCENTIVE PLAN OF CARRIZO OIL & GAS, INC.
Cash Awards
Minimum Vesting
Performance Awards
2019 PROXY STATEMENT
|
59
|
PROPOSAL 3. APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2017 INCENTIVE PLAN OF CARRIZO OIL & GAS, INC.
|
60
|
|
CARRIZO OIL & GAS
|
PROPOSAL 3. APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2017 INCENTIVE PLAN OF CARRIZO OIL & GAS, INC.
Change in Control
U.S. Federal Income Tax Consequences
Stock Awards
Options; Stock Appreciation Rights
2019 PROXY STATEMENT
|
61
|
PROPOSAL 3. APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2017 INCENTIVE PLAN OF CARRIZO OIL & GAS, INC.
Deductibility; Excise Taxes
|
62
|
|
CARRIZO OIL & GAS
|
PROPOSAL 3. APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2017 INCENTIVE PLAN OF CARRIZO OIL & GAS, INC.
A&R 2017 Plan Future Benefits
Board Recommendation
The Board of Directors recommends that shareholders vote FOR the approval of the Amended and Restated 2017 Incentive Plan of Carrizo Oil & Gas, Inc.
2019 PROXY STATEMENT
|
63
|
PROPOSAL 4. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board Recommendation
The Board of Directors recommends that shareholders vote FOR the ratification of the appointment of Ernst & Young LLP as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2019.
2019 PROXY STATEMENT
|
65
|
PROPOSAL 4. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Independent Registered Public Accounting Firms Fees
Description | 2018 | 2017 | ||||||
Audit Fees(1) |
$ |
1,007,941 |
|
$ |
1,012,059 |
| ||
Audit-Related Fees(2) |
|
25,000 |
|
|
|
| ||
Tax Fees(3) |
|
19,193 |
|
|
37,473 |
| ||
All Other Fees(4) |
|
6,843 |
|
|
97,141 |
| ||
Total |
$ |
1,058,977 |
|
$ |
1,146,673 |
|
(1) | Include $111,063 and $19,463 of fees associated with services rendered in connection with securities offerings and related SEC filings during 2018 and 2017, respectively. |
(2) | Consist of fees for the audit of the financial statements and supplemental schedules of the Companys 401(k) profit sharing plan. |
(3) | Consist of tax consulting services provided in connection with the preparation and review of the Companys Section 382 ownership change analysis. |
(4) | Include $95,048 of fees for acquisition due diligence services performed by EYs advisory services group during 2017 with the remaining fees for accounting research software licenses. |
Audit Committee Pre-Approval Policy
|
66
|
|
CARRIZO OIL & GAS
|
Security Ownership of Management and Certain Beneficial Owners
Amount and Nature of Beneficial Ownership |
||||||||
Name and Address of Beneficial Owner(1) | Number of Shares of Common Stock |
Percent of Common Stock (rounded) |
||||||
Directors and Named Executive Officers: |
||||||||
S. P. Johnson IV |
|
619,221 |
|
|
* |
| ||
Brad Fisher |
|
208,460 |
|
|
* |
| ||
David L. Pitts |
|
130,018 |
|
|
* |
| ||
Gerald A. Morton |
|
132,623 |
|
|
* |
| ||
Richard H. Smith |
|
99,945 |
|
|
* |
| ||
Steven A. Webster(2) |
|
2,964,941 |
|
|
3.2% |
| ||
F. Gardner Parker(2) |
|
79,428 |
|
|
* |
| ||
Frances Aldrich Sevilla-Sacasa(2) |
|
5,137 |
|
|
* |
| ||
Thomas L. Carter, Jr.(2) |
|
55,504 |
|
|
* |
| ||
Robert F. Fulton(2) |
|
22,387 |
|
|
* |
| ||
Roger A. Ramsey(2) |
|
46,622 |
|
|
* |
| ||
Frank A. Wojtek(2) |
|
31,172 |
|
|
* |
| ||
Directors and Executive Officers as a Group (13 persons)(2) |
|
4,425,010 |
|
|
4.8% |
| ||
BlackRock, Inc.(3) |
|
12,685,504 |
|
|
13.7% |
| ||
The Vanguard Group(4) |
|
10,789,959 |
|
|
11.7% |
| ||
State Street Corporation(5) |
|
6,414,738 |
|
|
6.9% |
| ||
Frontier Capital Management Co., LLC(6) |
|
4,854,877 |
|
|
5.2% |
|
* | Less than 1% |
(1) | Except as otherwise noted and pursuant to applicable community property laws, each shareholder has sole voting and investment power with respect to the shares beneficially owned. None of the shares beneficially owned by the Named Executive Officers or Non-Employee Directors are pledged as security, except for 42,228 shares that Mr. Parker has pledged as collateral for a line of credit and 40,650 shares that Mr. Ramsey has pledged to an investment firm as collateral for a portfolio loan account. The business address of each Named Executive Officer and Non-Employee Director is c/o Carrizo Oil & Gas, Inc., 500 Dallas Street, Suite 2300, Houston, TX 77002. |
(2) | This table includes shares of common stock related to RSUs that vest on the earlier to occur of (i) the date of the Annual Meeting and (ii) June 30, 2019 as follows: Mr. Webster 7,231, Mr. Parker 5,966, Ms. Aldrich Sevilla-Sacasa 3,887, Mr. Carter 4,429, Mr. Fulton 3,887, Mr. Ramsey 4,972, Mr. Wojtek 3,164, and all directors and executive officers as a group 33,536 |
|
68
|
|
CARRIZO OIL & GAS
|
OTHER ITEMS
(3) | Based solely on a Schedule 13G/A filed with the SEC on January 24, 2019, BlackRock, Inc. reported sole voting power over 12,463,105 shares and sole dispositive power over 12,685,504 shares. The address of the principal business office of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055. |
(4) | Based solely on a Schedule 13G/A filed with the SEC on February 11, 2019, The Vanguard Group reported sole voting power over 181,046 shares, shared voting power over 14,229 shares, sole dispositive power over 10,604,441 shares and shared dispositive power over 185,518 shares. The address of the principal business office of The Vanguard Group is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. |
(5) | Based solely on a Schedule 13G filed with the SEC on February 14, 2019, State Street Corporation reported shared voting power over 5,892,242 shares and shared dispositive power over 6,414,738 shares. The address of the principal business office of State Street Corporation is State Street Financial Center, One Lincoln Street, Boston, Massachusetts 02111. |
(6) | Based solely on a Schedule 13G/A filed with the SEC on February 11, 2019, Frontier Capital Management Co., LLC reported sole voting power over 2,833,794 shares and sole dispositive power over 4,854,877 shares. The address of the principal business office of Frontier Capital Management Co., LLC is 99 Summer Street, Boston, Massachusetts 02110. |
Section 16(a) Beneficial Ownership Reporting Compliance
Avista Marcellus Shale Joint Venture
2019 PROXY STATEMENT
|
69
|
OTHER ITEMS
Avista Utica Joint Venture
Our Relationship with Avista
Certain Matters Regarding Mr. Carter
|
70
|
|
CARRIZO OIL & GAS
|
2017 INCENTIVE PLAN OF
CARRIZO OIL & GAS, INC.
(As establishedamended and restated
effective May 16, 20172019)
1. Plan. This 2017 Incentive Plan of Carrizo Oil & Gas, Inc., as originally established effective May 16, 2017, and amended and restated effective May 16, 2019 (the Plan) was adopted by Carrizo Oil & Gas, Inc. to reward certain corporate officers and key employees of Carrizo Oil & Gas, Inc. and certain independent contractors and directors by enabling them to acquire shares of common stock of Carrizo Oil & Gas, Inc.
2. Objectives. This Plan is designed to attract and retain key employees of the Company and its Subsidiaries (as hereinafter defined), to attract and retain qualified directors of the Company, to attract and retain independent contractors, to encourage the sense of proprietorship of such employees, directors and independent contractors and to stimulate the active interest of such persons in the development and financial success of the Company and its Subsidiaries. These objectives are to be accomplished by making Awards (as hereinafter defined) under this Plan and thereby providing Participants (as hereinafter defined) with a proprietary interest in the growth and performance of the Company and its Subsidiaries.
3. Definitions. As used herein, the terms set forth below shall have the following respective meanings:
Authorized Officer means the Chairman of the Board or the Chief Executive Officer of the Company (or any other senior officer of the Company to whom either of them shall delegate the authority to execute any Award Agreement).
Award means an Employee Award, a Director Award or an Independent Contractor Award.
Award Agreement means the document (in written or electronic form) setting forth the terms, conditions and limitations applicable to an Award. Such agreement shall be written except that the Committee may, in its discretion, require or allow that the Participant electronically execute or accept such Award Agreement.
Board means the Board of Directors of the Company.
Cash Award means an Award denominated in cash.
Change in Control is defined in Attachment A.
Code means the Internal Revenue Code of 1986, as amended from time to time.
Committee means (i) the Compensation Committee of the Board or (ii) such other committee of the Board as is designated by the Board to administer this Plan or (iii) to the extent contemplated hereby, the Board.
Common Stock means the common stock, par value $.01 per share, of the Company.
2019 PROXY STATEMENT
|
A-1
|
APPENDIX A
Company means Carrizo Oil & Gas, Inc., a Texas corporation.
Director means an individual serving as a member of the Board.
Director Award means the grant of any Nonqualified Stock Option, SAR, Stock Award, Cash Award or Performance Award whether granted singly, in combination or in tandem, to a Participant in his or her capacity as a Nonemployee Director pursuant to such applicable terms, conditions and limitations as the Committee may establish in order to fulfill the objectives of this Plan.
Dividend Equivalents means, with respect to the shares of Common Stock subject to a Stock Award, an amount equal to all dividends and other distributions (or the economic equivalent thereof) that are payable to shareholders of record during the Restriction Period on a like number of shares of Common Stock.
Effective Date means May 16, 20172019, the
effective date of this amendment and restatement of the Plan.
Employee means an employee of the Company or any of its Subsidiaries.
Employee Award means the grant of any Option, SAR, Stock Award, Cash Award or Performance Award whether granted singly, in combination or in tandem, to a Participant who is an Employee pursuant to such applicable terms, conditions and limitations as the Committee may establish in order to fulfill the objectives of this Plan.
Exchange Act means the Securities Exchange Act of 1934, as amended from time to time.
Fair Market Value of a share of Common Stock means, as of a particular date, (i)(A) if the shares of Common Stock are listed or on a national securities exchange (including the NASDAQ Global Select Market), the closing price per share of the Common Stock on the consolidated transaction reporting system for the principal national securities exchange on which shares of Common Stock are listed on that date, or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported, or, at the discretion of the Committee, the price prevailing on the exchange at the time of exercise or other relevant event (as determined under procedures established by the Committee) including the average of the closing bid and asked price on that date, (B) if the shares of Common Stock are not so listed but are listed or quoted on another securities exchange or market, the closing price per share of Common Stock reported on the principal securities exchange or market on which the shares of Common Stock are traded (as determined by the Committee), or, if there shall have been no such sale so reported on that date, on the last preceding date on which such a sale was so reported or, at the discretion of the Committee, the price prevailing on such principal securities exchange or market at the time of exercise or other relevant event, including the average of the closing bid and asked price on that date, or, if there are no quotations available for such date, on the last preceding date on which such quotations shall be available, (C) if the shares of Common Stock are not publicly traded, the most recent value determined by an independent appraiser appointed by the Company for such purpose, or (D) if none of (A)-(C) are applicable, the fair market value of a share of Common Stock as determined in good faith by the Committee; or (ii) if applicable, the price per share as determined in accordance with the procedures of a third party administrator retained by the Company to administer this Plan and as approved by the Committee.
|
A-2
|
|
CARRIZO OIL & GAS
|
APPENDIX A
Incentive Option means an Option that is intended to comply with the requirements set forth in Section 422 of the Code.
Independent Contractor means a person providing services to the Company or any of its Subsidiaries, who is not an Employee. An Independent Contractor can include an individual who is serving as a Nonemployee Director.
Independent Contractor Award means the grant of any Nonqualified Stock Option, SAR, Stock Award, Cash Award or Performance Award whether granted singly, in combination or in tandem, to a Participant who is an Independent Contractor pursuant to such applicable terms, conditions and limitations as the Committee may establish in order to fulfill the objectives of this Plan.
Nonemployee Director means a Director who is not an Employee. A Nonemployee Director may, in the discretion of the Committee, receive an Award both in the capacity as a Nonemployee Director and Independent Contractor.
Nonqualified Stock Option means an Option that is not an Incentive Option.
Option means a right to purchase a specified number of shares of Common Stock at a specified price, which is either an Incentive Option or a Nonqualified Stock Option.
Participant means an Employee, Nonemployee Director or Independent Contractor to whom an Award has been made under this Plan.
Performance Award means an award made pursuant to this Plan to a Participant which is subject to the attainment of one or more Performance Goals.
Performance Goal means a standard established by the Committee, to determine in whole or in part whether a Performance Award shall be earned.
Prior Plan means the Incentive Plan of Carrizo Oil & Gas, Inc., as amended and restated effective as of May 15, 2014 and as thereafter amended.
Restricted Stock means any Common Stock that is restricted or subject to forfeiture provisions.
Restriction Period means a period of time beginning as of the date upon which a Stock Award is made pursuant to this Plan and ending as of the date upon which the Common Stock subject to such Award is deliverable or no longer restricted or subject to forfeiture provisions.
Rule 16b-3 means Rule 16b-3 promulgated under the Exchange Act, or any successor rule.
SAR means a right to receive a payment, in cash or Common Stock, equal to the excess of the Fair Market Value or other specified valuation of a specified number of shares of Common Stock on the date the right is exercised over a specified strike price, in each case, as determined by the Committee.
Stock Award means an award in the form of shares of Common Stock or units denominated in shares of Common Stock, including Restricted Stock. For the avoidance of doubt, a Stock Award does not include an Option or SAR.
2019 PROXY STATEMENT
|
A-3
|
APPENDIX A
Subsidiary means (i) in the case of a corporation, any corporation of which the Company directly or indirectly owns shares representing more than 50% of the combined voting power of the shares of all classes or series of capital stock of such corporation which have the right to vote generally on matters submitted to a vote of the stockholders of such corporation and (ii) in the case of a partnership or other business entity not organized as a corporation, any such business entity of which the Company directly or indirectly owns more than 50% of the voting, capital or profits interests (whether in the form of partnership interests, membership interests or otherwise).
4. Eligibility.
(a) Employees. All employees are eligible for Employee Awards under this Plan.
(b) Directors. All Nonemployee Directors are eligible for Director Awards under this Plan.
(c) Independent Contractors. All Independent Contractors are eligible for Independent Contractor Awards under this Plan.
5. Common Stock Available for Awards. Subject to the provisions of Section 15
hereof, there shall be available for Awards under this Plan granted wholly or partly in Common Stock (including rights or Options that may be exercised for or settled in Common Stock) an aggregate of
2,675,0009,425,000 shares of Common Stock, plus the shares remaining available for awards under the Prior Plan as of the Effective Date (the Maximum Share
Limit), all of which shall be available for Incentive Options. Each Stock Award (including Stock Awards granted as Restricted Stock or Performance Awards) granted under this Plan shall be counted against the Maximum Share Limit as 1.35 shares
of Common Stock. Each Option and SAR as to which it is possible to be settled in Common Stock shall be counted against the Maximum Share Limit as one share of Common Stock. The number of shares of Common Stock that are the subject of Awards under
this Plan or the Prior Plan, that are forfeited or terminated, expire unexercised, are settled in cash in lieu of Common Stock or are exchanged for Awards that do not involve Common Stock, shall again immediately become available for additional
Awards hereunder, and the Maximum Share Limit shall be increased by the same amount as such shares of Common Stock were counted against the Maximum Share Limit (under this Plan or the Prior Plan, as applicable). Notwithstanding the foregoing, the
following shares of Common Stock may not again be made available for issuance as Awards under this Plan: (i) shares of Common Stock not issued or delivered as a result of the net settlement of an outstanding stock-settled SAR or Option,
(ii) shares of Common Stock used to pay the exercise price or withholding taxes related to an outstanding Award, or (iii) shares of Common Stock repurchased on the open market with the proceeds of the option exercise price. For the
avoidance of doubt, cash-settled SARs shall not count against the Maximum Share Limit. The Board and the appropriate officers of the Company shall from time to time take whatever actions are necessary to file any required documents with governmental
authorities, stock exchanges and transaction reporting systems to ensure that shares of Common Stock are available for issuance pursuant to Awards.
6. Administration.
(a) This Plan shall be administered by the Committee. To the extent required in order for Employee Awards to be exempt from Section 16 of the Exchange Act by virtue of the provisions of Rule 16b-3, (i) the Committee shall consist of at least two members of the Board who meet the requirements of the definition of non-employee director set forth in Rule 16b-3 (b)(3)(i) promulgated under the Exchange Act or (ii) Awards may be granted by, and this Plan may be administered by, the Board.
|
A-4
|
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CARRIZO OIL & GAS
|
APPENDIX A
(b) Subject to the provisions hereof, the Committee shall have full and exclusive power and authority to administer this Plan and to take all actions that are specifically contemplated hereby or are necessary or appropriate in connection with the administration hereof. The Committee shall also have full and exclusive power to interpret this Plan and to adopt such rules, regulations and guidelines for carrying out this Plan as it may deem necessary or proper, all of which powers shall be exercised in the best interests of the Company and in keeping with the objectives of this Plan. The Committee may, in its discretion, provide for the extension of the exercisability of an Award, accelerate the vesting or exercisability of an Award, eliminate or make less restrictive any restrictions contained in an Award, waive any restriction or other provision of this Plan or an Award or otherwise amend or modify an Award in any manner that is either (i) not adverse to the Participant to whom such Award was granted or (ii) consented to by such Participant. Notwithstanding the foregoing, except in connection with a transaction involving the Company or its capitalization (as provided in Section 15), the terms of outstanding Awards may not be amended without approval of the shareholders of the Company to (i) reduce the exercise price of outstanding Options or SARs or (ii) cancel, exchange, substitute, buyout or surrender outstanding Options or SARs in exchange for cash or other Awards when the exercise price of the original Options or SARs exceeds the Fair Market Value of one share of Common Stock, (iii) take any other action with respect to an Option or SAR that would be treated as a repricing under the rules and regulations of the principal national securities exchange on which the shares of Common Stock are listed or (iv) permit the grant of any Options or SARs that contains a so-called reload feature under which additional Options, SARs or other Awards are granted automatically to the Participant upon exercise of the original Option or SAR. The Committee may make an Award to an individual who it expects to become an Employee, Nonemployee Director or Independent Contractor of the Company or any of its Subsidiaries within the next six months, with such award being subject to the individual actually becoming an Employee, Nonemployee Director or Independent Contractor, as applicable, within such time period, and subject to such other terms and conditions as may be established by the Committee. The Committee may correct any defect or supply any omission or reconcile any inconsistency in this Plan or in any Award in the manner and to the extent the Committee deems necessary or desirable to further the purposes of this Plan. Any decision of the Committee in the interpretation and administration of this Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned.
(c) No member of the Committee or officer of the Company to whom the Committee has delegated authority in accordance with the provisions of Section 7 of this Plan shall be liable for anything done or omitted to be done by him or her, by any member of the Committee or by any officer of the Company in connection with the performance of any duties under this Plan, except for his or her own willful misconduct or as expressly provided by statute.
7. Delegation of Authority. The Committee may delegate to the Chief Executive Officer, to other senior officers of the Company or to other committees of the Board its duties under this Plan pursuant to such conditions or limitations as the Committee may establish, except that the Committee may not delegate to any person the authority to grant Awards to, or take other action with respect to, Participants who are subject to Section 16 of the Exchange Act.
8. Employee and Independent Contractor Awards.
(a) The Committee shall determine the type or types of Employee Awards to be made under this Plan and shall designate from time to time the Employees who are to be the recipients of such Awards. Independent Contractor Awards shall be subject to the same terms and restrictions as are set forth herein with respect to Employee Awards (including, without limitation, restrictions on term, exercise price and per person limitations), and subject to such restrictions, the Committee shall have
2019 PROXY STATEMENT
|
A-5
|
APPENDIX A
the sole responsibility and authority to determine the type or types of Independent Contractor Awards to be made under this Plan and may make any such Awards as could be made to an Employee, other than Incentive Options. The term of Options and SARs shall not exceed ten years from the date of grant; provided, however, if the term of a Nonqualified Stock Option or SAR expires when trading in the Common Stock is prohibited by applicable law or at a time in which there is a blackout period or restriction period under the Companys insider trading policy or practices (as then in effect), then the term of such Nonqualified Stock Option or SAR shall expire on the 30th day after the expiration of such prohibition. Each Employee Award may be embodied in an Award Agreement, which shall contain such terms, conditions and limitations as shall be determined by the Committee in its sole discretion and shall be signed by the Participant to whom the Employee Award is made and by an Authorized Officer for and on behalf of the Company. Employee Awards may consist of those listed in this Section 8(a) and may be granted singly, in combination or in tandem. Employee Awards may also be made in combination or in tandem with, in replacement of, or as alternatives to, grants or rights under this Plan or any other employee plan of the Company or any of its Subsidiaries, including the plan of any acquired entity. All or part of an Employee Award may be subject to conditions established by the Committee, which may include, but are not limited to, continuous service with the Company and its Subsidiaries, achievement of specific business objectives, increases in specified indices, attainment of specified growth rates and other comparable measurements of performance. Upon the termination of employment by a Participant who is an Employee, any unexercised, deferred, unvested or unpaid Employee Awards shall be treated as set forth in the applicable Award Agreement.
(i) Stock Option. An Employee Award may be in the form of an Option. An Option awarded pursuant to this Plan may consist of an Incentive Option or a Nonqualified Option. The price at which shares of Common Stock may be purchased upon the exercise of an Option shall be not less than the Fair Market Value of the Common Stock on the date of grant. Subject to the foregoing provisions, the terms, conditions and limitations applicable to any Options awarded pursuant to this Plan, including the term of any Options and the date or dates upon which they become exercisable, shall be determined by the Committee.
(ii) Stock Appreciation Right. An Employee Award may be in the form of a SAR. The strike price for a SAR shall be not less than the Fair Market Value of the Common Stock on the date on which the SAR is granted. The terms, conditions and limitations applicable to any SARs awarded pursuant to this Plan, including the term of any SARs, whether the SAR will be settled in cash or stock and the date or dates upon which they become exercisable, shall be determined by the Committee.
(iii) Stock Award. An Employee Award may be in the form of a Stock Award. The terms, conditions and limitations applicable to any Stock Awards granted pursuant to this Plan shall be determined by the Committee.
(iv) Cash Award. An Employee Award may be in the form of a Cash Award. The terms, conditions and limitations applicable to any Cash Awards granted pursuant to this Plan shall be determined by the Committee.
(v) Performance Award. Without limiting the type or number of Employee Awards that may be
made under the other provisions of this Plan, an Employee Award may be in the form of a Performance Award. A Performance Award shall be paid, vested or otherwise deliverable solely on account of the attainment of one or more pre-established, objective Performance Goals, either individually or in any combination, established by the Committee prior to the earlier to occur of (x) 90 days after the commencement of the performance
period to which the Performance Goal relates and (y) the lapse of 25% of the performance period to which the Performance Goal relates (as scheduled in good
|
A-6
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CARRIZO OIL & GAS
|
APPENDIX A
faith at the time the goal is established), and in any
event while the outcome is substantially uncertain. A Performance Goal is objective if a third party having knowledge of the relevant facts could determine whether the goal is met. Such a Performance Goal may be based on one or more
business criteria applicable to the Participant, the Company as a whole, or one or more of the Companys business units, subsidiaries, business segments, divisions, or geographic regions measured either annually or over a period of years, on an
absolute basis or relative to a pre-established target, to results over a previous period or to a designated peer group, in each case as specified by the Committee in the Performance Award. The particular
performance-based objectives that may be imposed in connection with a Performance Award that qualifies as performance-based compensation under Code Section 162(m) are as
followsinclude the following and need not be the same for each Participant:
| revenue and income measures (which include revenues, revenues including the net cash impact of derivative settlements (Adjusted Revenues), gross margin, operating income, earnings before or after the effect of certain items such as interest, income taxes, depreciation, depletion and amortization, and non-cash or non-recurring items of income or expense (Adjusted EBITDA), net income before the effect of certain non-cash or non-recurring items of income or expense (Adjusted Net Income), net income and related per share amounts); |
| expense measures (which include operating expense, general and administrative expense and depreciation, depletion and amortization expense); |
| operating measures (which include production volumes, margin, drilling, completion, leasehold or seismic capital expenditures, results of drilling and completion activities and the number of wells drilled, brought on production or producing); |
| reserve measures (which include developed, undeveloped and total reserves, reserve replacement ratios, extensions and discoveries, revisions of previous estimates, PV-10 values, finding and development costs and other reserve measures); |
| cash flow measures (which include net cash flow flows from operating activities, discretionary cash flows from operating activities and working capital); |
| liquidity measures (which include Adjusted EBITDA, net debt to Adjusted EBITDA, working capital and the credit facility borrowing base); |
| leverage measures (which include debt-to-equity ratio, debt-to-total capitalization ratio, and net debt); |
| market measures (which include stock price, total shareholder return and market capitalization measures); |
| return measures (which include return on equity, return on assets and return on invested capital); |
| corporate value measures (which include compliance, safety, environmental and personnel matters); and |
| measures relating to acquisitions or dispositions. |
2019 PROXY STATEMENT
|
A-7
|
APPENDIX A
Unless otherwise stated, such a Performance Goal need not be
based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific business criteria). In
interpreting Plan provisions applicable to Performance Goals and Performance Awards, it is the intent of this Plan to conform with the standards of Section 162(m) of the Code and Treasury Regulation § 1.162-27(e)(2)(i), and the Committee in establishing such goals and interpreting this Plan shall be guided by such provisions. Prior to the payment of any compensation based on the achievement of
Performance Goals, the Committee must certify in writing that applicable Performance Goals and any of the material terms thereof were, in fact, satisfied. At the time it establishes the Performance Goals, the Committee may provide in any such
Performance Award that any evaluation of performance may include or exclude any of the following events that occurs during a performance period: (a) asset impairments, (b) litigation or claim judgments or settlements, (c) the effect
of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) unusual, infrequently occurring, nonrecurring or
one-time events affecting the Company or its financial statements as described in managements discussion and analysis of financial condition and results of operations appearing in the Companys
annual report to shareholders, Form 10-K or Form 10-Q for the applicable period, (f) acquisitions or divestitures, (g) foreign exchange gains and losses;
(h) derivative settlements or (i) such other objective adjustments as may be provided for connection with the establishment of the performance goal. The amount of cash or shares payable or vested pursuant to Awards that are
intended to be Performance Awards that are intended to satisfy the requirements of qualified performance-based compensation under Section 162(m) of the Code (Qualified Performance
Awards) may not be adjusted upward; provided, however, that the Committee may retain the discretion to adjust the amount of cash or shares payable or vested pursuant to such Qualified Performance Awards downward, either on a formula or
discretionary basis or any combination, as the Committee determines.Subject to the foregoing provisions, the terms, conditions and limitations applicable to any Performance Awards made pursuant to this Plan shall be determined by the
Committee.
(b) Notwithstanding anything to the contrary contained in this Plan, the following limitations shall apply to any Employee Awards made hereunder:
(i) no Participant may be granted, during
any calendar year, Employee Awards consisting of Options or SARs that are exercisable for or relate to more than 375,000600,000 shares of Common Stock;
(ii) no Participant may be granted, during any calendar year, Stock Awards covering or relating
to more than 375,000600,000 shares of Common Stock (the limitation set forth in this clause (ii), together with the limitation set forth in clause (i) above, being
hereinafter collectively referred to as the Stock Based Awards Limitations); and
(iii) no Participant may be granted Cash Awards (including Cash Awards that are granted as Performance Awards) in respect of any calendar year having a value determined on the date of grant in excess of $5,000,000.
In general, each Award is only subject to a single limitation set forth above in clauses (i), (ii), or (iii). However, a Participant may be granted Awards in combination such that portions of the Award are subject to differing limitations set out in the clauses of this Section 8(b), in which event each portion of the combination Award is subject only to a single appropriate limitation in clauses (i), (ii) or (iii). For example, if a Participant is granted an Award that is in part a Stock Award and in part a Cash
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A-8
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CARRIZO OIL & GAS
|
APPENDIX A
Award, then the Stock Award shall be subject only to the limitation in clause (ii) and the Cash Award shall be subject only to the limitation in clause (iii).
9. Director Awards.
(a) The Board or the Committee may, in its discretion, grant Director Awards from time to time in accordance with this Section 9. Director Awards may consist of the forms of Award described in Section 8, other than Incentive Options, and shall be granted subject to such terms and conditions as specified in Section 8. Any Director Award shall be embodied in an Award Agreement, which shall contain the terms, conditions and limitations of the Award, including without limitation those set forth in Section 8, and shall be signed by the Participant to whom the Director Award is granted and by an Authorized Officer for and on behalf of the Company.
(b) No Nonemployee Director may be granted during any calendar year Director Awards having a fair value determined on the date of grant when added to all cash compensation paid to the Nonemployee Director during the same calendar year in excess of $1,000,000.
10. Payment of Awards.
(a) General. Payment of Awards may be made in the form of cash or Common Stock, or a combination thereof, and may include such restrictions as the Committee shall determine, including, in the case of Common Stock, restrictions on transfer and forfeiture provisions. If payment of an Award is made in the form of Restricted Stock, the right to receive such shares shall be evidenced by book entry registration or in such other manner as the Committee may determine. Any statement of ownership evidencing such Restricted Stock shall contain appropriate legends and restrictions that describe the terms and conditions of the restrictions applicable thereto.
(b) Dividends and Interest. In the discretion of the Committee, rights to dividends or Dividend Equivalents may be extended to and made part of any Stock Award, but such dividends or Dividend Equivalents shall be accrued and held by the Company and paid, without interest, within 10 days following the lapse of the restrictions on the Stock Award. For the avoidance of doubt, dividends and dividend equivalents will not, in any event, be payable until the restrictions on the underlying Stock Award have lapsed. In the event the Stock Award is forfeited, dividends and Dividend Equivalents paid with respect to such shares during the Restriction Period shall also be forfeited. No Dividend Equivalents may be paid in respect of an Award of Options or SARs.
(c) Substitution of Awards. Subject to the provisions of Section 6(b), at the discretion of the Committee, a Participant may be offered an election to substitute an Award for another Award or Awards of the same or different type. No Option or SAR may be substituted for another Award without the approval of the shareholders of the Company (except in connection with a change in the Companys capitalization or as otherwise provided in Section 15 hereof).
(d) Minimum Vesting Period. Subject to Section 15 hereof, other than in the event of an earlier death or Disability, all Awards shall have a minimum Vesting Period of one year from the date of its grant and no portion or installment of an Award shall vest until one year from the date of grant; provided, however, that Awards with respect to up to five percent (5%) of the Shares authorized for grant pursuant to this Plan may have a Vesting Period of less than one year; provided, however, that awards to Directors who are not employees shall not count against the shares available for this exception even if the vesting period is less than one year from the grant date so long as such Awards are granted in connection with the regular annual meeting of stockholders and vest at the next regular annual meeting of stockholders following the grant.
2019 PROXY STATEMENT
|
A-9
|
APPENDIX A
11. Stock Option Exercise. The price at which shares of Common Stock may be purchased under an Option shall be paid in full at the time of exercise in cash or, if elected by the optionee, the optionee may purchase such shares by means of tendering Common Stock valued at Fair Market Value on the date of exercise, or any combination thereof. The Committee shall determine acceptable methods for Participants to tender Common Stock. The Committee may provide for procedures to permit the exercise or purchase of such Awards by use of the proceeds to be received from the sale of Common Stock issuable pursuant to an Award.
12. Taxes. The Company shall have the right to deduct applicable taxes from any Award payment and withhold, at the time of delivery or vesting of cash or shares of Common Stock under this Plan, an appropriate amount of cash or number of shares of Common Stock or a combination thereof for payment of taxes required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. The Committee may also permit withholding to be satisfied by (i) the transfer to the Company of shares of Common Stock theretofore owned by the holder of the Award or (ii) withholding from the shares otherwise deliverable under the Award, in either case with respect to which withholding is required, up to the maximum tax rate applicable to the Participant, as determined by the Committee. If shares of Common Stock are used to satisfy tax withholding, such shares shall be valued based on the Fair Market Value when the tax withholding is required to be made. To the extent allowed by law, the Committee may provide for loans, on either a short term or demand basis, from the Company to a Participant who is an Employee to permit the payment of taxes required by law.
13. Amendment, Modification, Suspension or Termination. The Board may amend, modify, suspend or terminate this Plan for the purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law, except that (i) no amendment or alteration that would adversely affect the rights of any Participant under any Award previously granted to such Participant shall be made without the consent of such Participant and (ii) no amendment or alteration shall be effective prior to its approval by the shareholders of the Company to the extent such approval is then required pursuant to Rule 16b-3 in order to preserve the applicability of any exemption provided by such rule to any Award then outstanding (unless the holder of such Award consents) or to the extent shareholder approval is otherwise required by applicable legal requirements.
14. Assignability. Unless otherwise determined by the Committee and provided in the Award Agreement, no Award or any other benefit under this Plan constituting a derivative security within the meaning of Rule 16a-1(c) under the Exchange Act shall be assignable or otherwise transferable except by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder. The Committee may prescribe and include in applicable Award Agreements other restrictions on transfer. Any attempted assignment of an Award or any other benefit under this Plan in violation of this Section 14 shall be null and void.
15. Adjustments.
(a) The existence of outstanding Awards shall not affect in any manner the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the capital stock of the Company or its business or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock (whether or not such issue is prior to, on a parity with or junior to the Common Stock) or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding of any kind, whether or not of a character similar to that of the acts or proceedings enumerated above.
|
A-10
|
|
CARRIZO OIL & GAS
|
APPENDIX A
(b) In the event of any subdivision or consolidation of outstanding shares of Common Stock, declaration of a dividend payable in shares of Common Stock or other stock split, then (i) the number of shares of Common Stock reserved under this Plan, (ii) the number of shares of Common Stock covered by outstanding Awards in the form of Common Stock or units denominated in Common Stock, (iii) the exercise or other price in respect of such Awards, (iv) the appropriate Fair Market Value and other price determinations for such Awards, and (v) the Stock Based Awards Limitations shall each be proportionately adjusted by the Board to reflect such transaction. In the event of any other recapitalization or capital reorganization of the Company, any consolidation or merger of the Company with another corporation or entity, the adoption by the Company of any plan of exchange affecting the Common Stock or any distribution to holders of Common Stock of securities or property (other than normal cash dividends or dividends payable in Common Stock), the Board shall make appropriate adjustments to (i) the number of shares of Common Stock covered by Awards in the form of Common Stock or units denominated in Common Stock, (ii) the exercise or other price in respect of such Awards, (iii) the appropriate Fair Market Value and other price determinations for such Awards, and (iv) the Stock Based Awards Limitations to give effect to such transaction shall each be proportionately adjusted by the Board to reflect such transaction; provided that such adjustments shall only be such as are necessary to maintain the proportionate interest of the holders of the Awards and preserve, without exceeding, the value of such Awards. In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Board shall be authorized to issue or assume Awards by means of substitution of new Awards, as appropriate, for previously issued Awards or to assume previously issued Awards as part of such adjustment.
(c) In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Board may make such adjustments to outstanding Awards or other provisions for the disposition of outstanding Awards as it deems equitable, and shall be authorized, in its discretion, (i) to provide for the substitution of a new Award or other arrangement (which, if applicable, may be exercisable for such property or stock as the Board determines) for an outstanding Award or the assumption of an outstanding Award, regardless of whether in a transaction to which Section 424(a) of the Code applies, (ii) to provide, prior to the transaction, for the acceleration of the vesting and exercisability of, or lapse of restrictions with respect to, the outstanding Award and, if the transaction is a cash merger, to provide for the termination of any portion of the Award that remains unexercised at the time of such transaction or (iii) to provide for the acceleration of the vesting and exercisability of an outstanding Award and the cancellation thereof in exchange for such payment of such cash or property as shall be determined by the Board in its sole discretion, which for the avoidance of doubt in the case of Options or SARs (whether stock- or cash-settled) shall be the excess, if any, of the Fair Market Value of the shares of Common Stock subject to the Option or SAR on such date over the aggregate exercise price of such Award; provided, however, that no such adjustment shall increase the aggregate value of any outstanding Award. No adjustment or substitution pursuant to this Section 15 shall be made in a manner that results in noncompliance with Section 409A of the Code, to the extent applicable.
16. Restrictions. No Common Stock or other form of payment shall be issued with respect to any Award unless the Company shall be satisfied based on the advice of its counsel that such issuance will be in compliance with applicable federal and state securities laws. It is the intent of the Company that grants of Awards under this Plan comply with Rule 16b-3 with respect to persons subject to Section 16 of the Exchange Act unless otherwise provided herein or in an Award Agreement and that any ambiguities or inconsistencies in the construction of such an Award or this Plan be interpreted to give effect to such intention. Certificates evidencing shares of Common Stock delivered under this Plan (to the extent that such shares are so evidenced) may be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements
2019 PROXY STATEMENT
|
A-11
|
APPENDIX A
of the Securities and Exchange Commission, any securities exchange or transaction reporting system upon which the Common Stock is then listed or to which it is admitted for quotation and any applicable federal or state securities law. The Committee may cause a legend or legends to be placed upon such certificates (if any) to make appropriate reference to such restrictions. The Committee may also impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by a Participant, other subsequent transfers by the Participant of any shares of Common Stock issued as a result of or under an Award, or the exercise of Options and SARs, including without limitation, restrictions under an insider trading policy.
17. Unfunded Plan. Insofar as it provides for Awards of cash, Common Stock or rights thereto, this Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Participants who are entitled to cash, Common Stock or rights thereto under this Plan, any such accounts shall be used merely as a bookkeeping convenience. The Company shall not be required to segregate any assets that may at any time be represented by cash, Common Stock or rights thereto, nor shall this Plan be construed as providing for such segregation, nor shall the Company, the Board or the Committee be deemed to be a trustee of any cash, Common Stock or rights thereto to be granted under this Plan. Any liability or obligation of the Company to any Participant with respect to an Award of cash, Common Stock or rights thereto under this Plan shall be based solely upon any contractual obligations that may be created by this Plan and any Award Agreement, and no such liability or obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company. Neither the Company nor the Board nor the Committee shall be required to give any security or bond for the performance of any obligation that may be created by this Plan.
18. Section 409A of the Code. All Awards under this Plan are intended either to be exempt from, or to comply with the requirements of Section 409A, and this Plan and all Awards shall be interpreted and operated in a manner consistent with that intention. Notwithstanding anything in this Plan to the contrary, if any Plan provision or Award under this Plan would result in the imposition of an applicable tax under Section 409A, that Plan provision or Award shall be reformed to avoid imposition of the applicable tax and no such action shall be deemed to adversely affect the Participants rights to an Award.
19. Governing Law. This Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by mandatory provisions of the Code or the securities laws of the United States, shall be governed by and construed in accordance with the laws of the State of Texas.
20. Clawback. To the extent required by applicable law or any applicable securities exchange listing standards, or as otherwise determined by the Committee, Awards and amounts paid or payable pursuant to or with respect to Awards shall be subject to the provisions of any clawback policy implemented by the Company, which clawback policy may provide for forfeiture, repurchase or recoupment of Awards and amounts paid or payable pursuant to or with respect to Awards. Notwithstanding any provision of this Plan or any Award Agreement to the contrary, the Company reserves the right, without the consent of any Participant, to adopt any such clawback policies and procedures.
21. No Right to Employment or Continued Service. Nothing in this Plan or an Award Agreement shall interfere with or limit in any way the right of the Company or a Subsidiary to terminate any Participants employment or other service relationship at any time, nor confer upon any Participant any right to continue in the capacity in which he or she is employed or otherwise serves the Company or any Subsidiary. Further, nothing in this Plan or an Award Agreement constitutes any assurance or obligation of the Board to nominate any Nonemployee Director for re-election by the Companys shareholders.
|
A-12
|
|
CARRIZO OIL & GAS
|
APPENDIX A
22. Successors. All obligations of the Company under this Plan with respect to Awards granted hereunder shall be binding on any successor to the Company by merger, consolidation or otherwise.
23. Effectiveness. This Plan, as approved by the Board on
April 7, 2017March 28, 2019, shall be effective as of the Effective Date, the date on which it was approved by the shareholders
of the Company. This Plan shall continue in effect for a term of ten years after the Effective Date, unless sooner terminated by action of the Board. Notwithstanding the foregoing, the adoption of this Plan is expressly conditioned upon the approval
by the holders of a majority of shares of Common Stock present, or represented, and entitled to vote at a meeting of the Companys shareholders at the Companys
20172019 annual shareholders meeting to be held on May 16, 20172019 or any adjournment or
postponement thereof. If the shareholders of the Company should fail to so approve this Plan on such date, this Plan shall not be of any force or effect and the Prior Plan shall continue in force and effect.
2019 PROXY STATEMENT
|
A-13
|
APPENDIX A
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly authorized officer.
CARRIZO OIL & GAS, INC. | ||
By: | ||
Title: |
|
A-14
|
|
CARRIZO OIL & GAS
|
APPENDIX A
ATTACHMENT A
CHANGE IN CONTROL
The following definitions apply regarding Change in Control provisions of the foregoing Plan:
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 Persons 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 Persons 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 Persons 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 Persons 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
2019 PROXY STATEMENT
|
A-15
|
APPENDIX A
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 Persons 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 in 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 in 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 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 Effective Date whose election, or nomination for election by the Companys 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; 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 is beneficially owned, directly or indirectly, by all or substantially all of the Persons who were the Beneficial Owners of the outstanding Common Stock immediately prior to such reorganization, merger, or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation, of the outstanding Common Stock, (ii) no Person (excluding any Exempt Person or any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 40% or more of the Common Stock then outstanding or 40% or more of the combined voting power of the Voting Stock of the Company then outstanding) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding Voting Stock of such corporation and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were
|
A-16
|
|
CARRIZO OIL & GAS
|
APPENDIX A
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 as part of a plan of liquidation and dissolution involving a sale or disposition of all or substantially all of the assets of the Company to a corporation with respect to which, following such sale or other disposition, all of the requirements of clauses (ii) (A), (B) and (C) of this subsection (d) are satisfied, or (ii) the sale or other disposition of all or substantially all of the assets of the 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 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.
2019 PROXY STATEMENT
|
A-17
|
APPENDIX A
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).
|
A-18
|
|
CARRIZO OIL & GAS
|
NON-GAAP FINANCIAL MEASURES
Reconciliation of Net Income Attributable to Common Shareholders (GAAP) to Unhedged EBITDA (Non-GAAP) to Net Cash Provided by Operating Activities (GAAP)
Unhedged EBITDA is a non-GAAP financial measure which excludes certain items that are included in net income attributable to common shareholders, the most directly comparable GAAP financial measure. Items excluded are interest, income taxes, depreciation, depletion and amortization, dividends and accretion on preferred stock, gain (loss) on derivatives, net and items that we believe affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring.
Unhedged EBITDA is presented because we believe it provides useful additional information to investors and analysts, for analysis of our financial and operating performance on a recurring basis and our ability to internally generate funds for exploration and development, and to service debt. In addition, we believe that unhedged EBITDA is used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry.
Unhedged EBITDA should not be considered in isolation or as a substitute for net income attributable to common shareholders, net cash provided by operating activities, or any other measure of a companys profitability or liquidity presented in accordance with GAAP. A reconciliation of net income attributable to common shareholders to unhedged EBITDA to net cash provided by operating activities is presented below. Because unhedged EBITDA excludes some, but not all, items that affect net income attributable to common shareholders, our calculation of unhedged EBITDA may not be comparable to similarly titled measures of other companies.
Years Ended December 31, |
||||||||
2018 | 2017 | |||||||
(In thousands, except per Boe amounts) |
||||||||
Net Income Attributable to Common Shareholders (GAAP) |
$ | 376,076 | $78,467 | |||||
Dividends on preferred stock |
18,161 | 7,781 | ||||||
Accretion on preferred stock |
3,057 | 862 | ||||||
Loss on redemption of preferred stock |
7,133 | | ||||||
Income tax expense |
5,173 | 4,030 | ||||||
Depreciation, depletion and amortization |
299,530 | 262,589 | ||||||
Interest expense, net |
62,413 | 80,870 | ||||||
(Gain) loss on derivatives, net |
(6,709 | ) | 59,103 | |||||
Non-cash general and administrative, net |
13,645 | 15,284 | ||||||
Loss on extinguishment of debt |
9,586 | 4,170 | ||||||
Non-recurring and other expense, net |
3,203 | 2,157 | ||||||
|
|
|
|
|||||
Unhedged EBITDA (Non-GAAP) |
$ | 791,268 | $ | 515,313 | ||||
Cash received (paid) for derivative settlements, net |
(96,307 | ) | 7,773 | |||||
Cash interest expense, net |
(59,846 | ) | (77,213 | ) | ||||
Dividends on preferred stock |
(18,161 | ) | (7,781 | ) | ||||
Changes in components of working capital and other |
36,601 | (15,111 | ) | |||||
|
|
|
|
|||||
Net Cash Provided By Operating Activities (GAAP) |
$ | 653,555 | $ | 422,981 | ||||
|
|
|
|
|||||
Unhedged EBITDA (Non-GAAP) |
$ | 791,268 | $ | 515,313 | ||||
Total barrels of oil equivalent |
22,040 | 19,639 | ||||||
|
|
|
|
|||||
Unhedged EBITDA Margin ($ per Boe) (Non-GAAP) |
$35.90 | $26.24 | ||||||
|
|
|
|
2019 PROXY STATEMENT
|
B-1
|
APPENDIX B
Reconciliation of Standardized Measure of Discounted Future Net Cash Flows (GAAP) to PV-10 (Non-GAAP)
PV-10 is a non-GAAP financial measure which excludes the present value of future income taxes discounted at 10% per annum, which is included in the standardized measure of discounted future net cash flows, the most directly comparable GAAP financial measure.
PV-10 is presented because management believes it provides greater comparability when evaluating oil and gas companies due to the many factors unique to each individual company that impact the amount and timing of future income taxes. In addition, management believes that PV-10 is widely used by investors and analysts as a basis for comparing the relative size and value of the Companys proved reserves to other oil and gas companies.
PV-10 should not be considered in isolation or as a substitute for the standardized measure of discounted future net cash flows or any other measure of a companys financial or operating performance presented in accordance with GAAP. A reconciliation of the standardized measure of discounted future net cash flows to PV-10 is presented below.
As of December 31, | ||||||||
2018 | 2017 | |||||||
(In millions) | ||||||||
Standardized measure of discounted future net cash flows (GAAP) |
$ | 3,635.6 | $ | 2,465.1 | ||||
Add: present value of future income taxes discounted at 10% per annum |
455.8 | 173.3 | ||||||
|
|
|
|
|||||
PV-10 (Non-GAAP) |
$ | 4,091.4 | $ | 2,638.4 | ||||
|
|
|
|
|
B-2
|
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CARRIZO OIL & GAS
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