Exhibit 10.7
 
INCENTIVE PLAN
OF
CARRIZO OIL & GAS, INC.
 
 
RESTRICTED STOCK UNIT AWARD AGREEMENT
 
 
THIS AGREEMENT (“Agreement”) is effective as of the 3rd day of June, 2009 (the
“Grant Date”), by and between Carrizo Oil & Gas, Inc., a Texas corporation (the
“Company”), and ______________ (the “Grantee”).
 
The Company has adopted the Incentive Plan of Carrizo Oil & Gas, Inc., as
amended and restated effective April 30, 2009 (the “Plan”), a copy of which is
appended to this Agreement as Exhibit A and by this reference made a part
hereof, for the benefit of eligible employees, directors and independent
contractors of the Company and its Subsidiaries.  Capitalized terms used and not
otherwise defined herein shall have the meaning ascribed thereto in the Plan.
 
Pursuant to the Plan, the Committee, which has generally been assigned
responsibility for administering the Plan, has determined that it would be in
the interest of the Company and its stockholders to grant the restricted stock
units provided herein in order to provide Grantee with additional remuneration
for services rendered, to encourage Grantee to remain in the employ of the
Company or its Subsidiaries and to increase Grantee’s personal interest in the
continued success and progress of the Company.
 
The Company and Grantee therefore agree as follows:
 
1. Grant of Restricted Stock Units.  Subject to the terms and conditions herein,
effective as of the Grant Date, the Company hereby awards to the Grantee,
pursuant to the Plan, a right to receive __________ shares of Common Stock of
the Company, par value $.01 per share, or the cash equivalent thereof
(“Restricted Stock Units”).
 
2. Transfer Restrictions.  Except as expressly provided herein, the Restricted
Stock Units are not transferable (voluntarily or involuntarily) other than 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 (a “QDRO”), and may not otherwise
be assigned, pledged, hypothecated or otherwise disposed of and shall not be
subject to execution, attachment or similar process.  Upon any attempt to effect
any such disposition, or upon the levy of any such process, the award provided
for herein shall immediately become null and void, and the Restricted Stock
Units shall be immediately forfeited.
 
Notwithstanding the foregoing, the Restricted Stock Units are transferable by
the Grantee to (i) the children or grandchildren of the Grantee (“Immediate
Family Members”), (ii) a trust or trusts for the exclusive benefit of such
Immediate Family Members (“Immediate Family Member Trusts”), or (iii) a
partnership or partnerships in which such Immediate Family Members have at least
ninety‑nine percent (99%) of the equity, profit and loss interests (“Immediate
Family Member Partnerships”).  Subsequent transfers of a transferred Restricted
 
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Stock Unit shall be prohibited except by will or the laws of descent and
distribution or pursuant to a QDRO, unless such transfers are made to the
original Grantee or a person to whom the original Grantee could have made a
transfer in the manner described herein.  No transfer shall be effective unless
and until written notice of such transfer is provided to the Committee, in the
form and manner prescribed by the Committee.  Following transfer, the Restricted
Stock Units shall continue to be subject to the same terms and conditions as
were applicable immediately prior to transfer, and, except as otherwise provided
herein, the term “Grantee” shall be deemed to refer to the transferee.  The
consequences of termination of employment shall continue to be applied with
respect to the original Grantee, following which the Restricted Stock Units
shall be exercisable by the transferee only to the extent and for the periods
specified in the Plan and this Agreement.
 
3. Restrictions; Payment Dates.  Subject to the provisions of paragraph 4
hereof, the restrictions on the Restricted Stock Units shall lapse in three
installments at the rate of thirty-three and one-third percent (33 1/3%) of the
Restricted Stock Units awarded hereunder (rounded up to the nearest whole
number) on each of May 28, 2010, May 28, 2011 and May 28, 2012 (each, a “Payment
Date”); provided that if the average daily production of the Company for the
calendar quarter ended September 30, 2009 (“3Q09”) is not at least (i) 54,764
thousand standard cubic feet equivalent per day (“Mcfe/d”), if the Company’s
weighted average realized natural gas price (excluding the impact of cash
settled hedges) for 3Q09 is greater than or equal to $3/Mcf or (ii) 43,811
Mcfe/d, if the Company’s weighted average realized natural gas price (excluding
the impact of cash settled hedges) for 3Q09 is less than $3/Mcf (the
“Performance Condition”).
 
Upon the occurrence of each Payment Date described above, the Company shall
deliver to the Grantee (i) certificates representing the applicable number
shares of Common Stock, (ii) cash equal to the Fair Market Value of the
applicable number of shares of Common Stock on such Payment Date, or (iii) any
combination of (i) or (ii).
 
Notwithstanding the foregoing, subject to the provisions of the applicable
written employment agreement between the Grantee and the Company or any
Subsidiary (the “Employment Agreement”): (i) no shares shall vest unless the
Grantee has been in the continuous employment of the Company and its
Subsidiaries through the applicable Payment Date above and (ii) no shares shall
vest unless the Performance Condition is satisfied as set forth above.  A change
of employment is continuous employment within the meaning of this paragraph 3
provided that, after giving effect to such change, the Grantee continues to be
an employee of the Company or any Subsidiary.
 
4. Termination of Employment; Forfeiture.  Upon termination of the Grantee’s
employment with the Company or any subsidiary of the Company (or the successor
of any such company) for any reason, all Restricted Stock Units as to which the
restrictions thereon have not previously lapsed shall be immediately forfeited
to the Company; subject, however, to the provisions of the Employment
Agreement.  Notwithstanding the provisions of the Employment Agreement, if (a) a
Change in Control has not occurred and (b) the Grantee (i) is terminated without
Cause (as defined in the Employment Agreement) or (ii) resigns for Good Reason
(as defined in the Employment Agreement) prior to the satisfaction of the
Performance Condition, then the restrictions on the Restricted Stock Units shall
not lapse unless and until the Performance Condition is satisfied.
 
5. No Ownership Rights Prior to Issuance of Shares of Common Stock; Dividend
Equivalents.  Neither the Grantee nor any other person shall become the
beneficial owner of the shares of Common Stock underlying the Restricted Stock
Units, nor have any rights
 
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of a shareholder (including, without limitation, dividend and voting rights)
with respect to any such shares of Common Stock, unless and until and after
certificates representing such shares of Common Stock have been delivered to the
Grantee.
 
6. Adjustments.  As provided in Section 15 of the Plan, certain adjustments may
be made to the Restricted Stock Units upon the occurrence of events or
circumstances described in Section 15 of the Plan.  Without limiting the
generality of the foregoing, and except as otherwise provided in the Plan, in
the event of any merger, consolidation, reorganization, recapitalization,
reclassification or other capital or corporate structure change of the Company,
the securities or other consideration receivable for or in conversion of or
exchange for Restricted Stock Units shall be subject to the terms and conditions
of this Agreement to the same extent and in the same manner as the Restricted
Stock Units are subject; provided that the Committee may make such modifications
and additions to the terms and conditions (including restrictions on transfer
and the conditions to the timing and degree of lapse of such restrictions) that
shall become applicable to the securities or other consideration so receivable
as the Committee may provide in its absolute discretion, subject to any
restrictions on acceleration or deferral of payment imposed by Section 409A of
the Code.
 
7. Mandatory Withholding of Taxes. Grantee acknowledges and agrees that the
Company shall deduct from the shares of Common Stock or cash otherwise payable
or deliverable an amount of cash and/or number of shares of Common Stock (valued
at their Fair Market Value) on the applicable date that is equal to the amount
of all federal, state and local taxes required to be withheld by the Company, as
determined by the Committee.  In the event the Company, in its sole discretion,
determines that the Grantee’s tax obligations will not be satisfied under the
methods otherwise expressly described above, the Grantee, subject to compliance
with the Company’s insider trading policies, authorizes the Company or the
Company’s Stock Plan Administrator, currently UBS Financial Services Inc., to
(i) sell a number of shares of Common Stock issued or outstanding pursuant to
the Award, which number of shares of Common Stock the Company determines has at
least the market value sufficient to meet the tax withholding obligations, plus
additional shares of Common Stock to account for rounding and market
fluctuations and (ii) pay such tax withholding to the Company.  The shares of
Common Stock may be sold as part of a block trade with other Participants such
that all Participants receive an average price.
 
8. Restrictions Imposed by Law.  Without limiting the generality of Section 16
of the Plan, the Grantee agrees that the Company will not be obligated to
deliver any shares of Common Stock if counsel to the Company determines that
such exercise or delivery would violate any applicable law or any rule or
regulation of any governmental authority or any rule or regulation of, or
agreement of the Company with, any securities exchange or association upon which
the Common Stock is listed or quoted.  The Company shall in no event be
obligated to take any affirmative action in order to cause the issuance or
delivery of shares of Common Stock to comply with any such law, rule, regulation
or agreement.
 
9. Notice.  Unless the Company notifies the Grantee in writing of a different
procedure, any notice or other communication to the Company with respect to this
Agreement shall be in writing and shall be (a) delivered personally to the
following address:
 
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Carrizo Oil & Gas, Inc.
1000 Louisiana Street , Suite 1500
Houston, Texas  77002
 
or (b) sent by first class mail, postage prepaid and addressed as follows:
 
Carrizo Oil & Gas, Inc.
1000 Louisiana Street , Suite 1500
Houston, Texas  77002
Attention: Payroll/Benefits Manager
 
Any notice or other communication to the Grantee with respect to this Agreement
shall be in writing and shall be delivered personally, or shall be sent by first
class mail, postage prepaid, to Grantee’s address as listed in the records of
the Company on the Grant Date, unless the Company has received written
notification from the Grantee of a change of address.
 
10. Amendment.  Notwithstanding any other provisions hereof, this Agreement may
be supplemented or amended from time to time as approved by the Committee as
contemplated by Section 6 of the Plan.  Without limiting the generality of the
foregoing, without the consent of the Grantee,
 
(a) this Agreement may be amended or supplemented (i) to cure any ambiguity or
to correct or supplement any provision herein which may be defective or
inconsistent with any other provision herein, or (ii) to add to the covenants
and agreements of the Company for the benefit of Grantee or surrender any right
or power reserved to or conferred upon the Company in this Agreement, subject,
however, to any required approval of the Company’s stockholders and, provided,
in each case, that such changes or corrections shall not adversely affect the
rights of Grantee with respect to the Award evidenced hereby without the
Grantee’s consent, or (iii) to make such other changes as the Company, upon
advice of counsel, determines are necessary or advisable because of the adoption
or promulgation of, or change in or of the interpretation of, any law or
governmental rule or regulation, including any applicable federal or state
securities laws; and
 
(b) subject to Section 6 of the Plan and any required approval of the Company’s
stockholders, the Award evidenced by this Agreement may be canceled by the
Committee and a new Award made in substitution therefor, provided that the Award
so substituted shall satisfy all of the requirements of the Plan as of the date
such new Award is made and no such action shall adversely affect the Restricted
Stock Units to the extent then vested without the Grantee’s consent.
 
11. Grantee Employment.  Nothing contained in this Agreement, and no action of
the Company or the Committee with respect hereto, shall confer or be construed
to confer on the Grantee any right to continue in the employ of the Company or
any of its Subsidiaries or interfere in any way with the right of the Company or
any employing Subsidiary to terminate the Grantee’s employment at any time, with
or without cause; subject, however, to the provisions of the Employment
Agreement.
 
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12. Governing Law.  This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Texas.
 
13. Construction.  References in this Agreement to “this Agreement” and the
words “herein,” “hereof,” “hereunder” and similar terms include all Exhibits and
Schedules appended hereto, including the Plan.  This Agreement is entered into,
and the Award evidenced hereby is granted, pursuant to the Plan and shall be
governed by and construed in accordance with the Plan and the administrative
interpretations adopted by the Committee thereunder.  All decisions of the
Committee upon questions regarding the Plan or this Agreement shall be
conclusive.  Unless otherwise expressly stated herein, in the event of any
inconsistency between the terms of the Plan and this Agreement, the terms of the
Plan shall control.  The headings of the paragraphs of this Agreement have been
included for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
 
14. Duplicate Originals.  The Company and the Grantee may sign any number of
copies of this Agreement.  Each signed copy shall be an original, but all of
them together represent the same agreement.
 
15. Rules by Committee.  The rights of the Grantee and obligations of the
Company hereunder shall be subject to such reasonable rules and regulations as
the Committee may adopt from time to time hereafter.
 
16. Entire Agreement.  Subject to the provisions the Employment Agreement
(modified as described below), Grantee and the Company hereby declare and
represent that no promise or agreement not herein expressed has been made and
that this Agreement contains the entire agreement between the parties hereto
with respect to the Restricted Stock Units and replaces and makes null and void
any prior agreements, oral or written, between Grantee and the Company regarding
the Restricted Stock Units.  The parties acknowledge and agree that to the
extent set forth in the last sentence of paragraph 4, the provisions of this
Agreement modify and supersede the terms of the Employment Agreement with
respect to the consequences to this award of Restricted Stock Units of a
termination of employment without Cause or a resignation for Good Reason prior
to a Change in Control.
 
17. Section 409A.  Payments under this Agreement are designed to be made in a
manner that is exempt from Section 409A of the Code as a “short-term deferral,”
and the provisions of this Agreement will be administered, interpreted and
construed accordingly (or disregarded to the extent such provision cannot be so
administered, interpreted, or construed).
 
18. Grantee Acceptance.  Grantee shall signify acceptance of the terms and
conditions of this Agreement by signing in the space provided at the end hereof
and returning a signed copy to the Company.
 
ATTEST:                                                                           CARRIZO
OIL & GAS, INC.
 
_________________________________                        By: 
_________________________________
Secretary                          Date                                          Name:  S.
P. Johnson             Date
   Title:    President

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ACCEPTED:

______________________________
_________________    Date
 
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