Exhibit 10.5
2020 OFFICER CASH INCENTIVE AWARD AGREEMENT
CALLON PETROLEUM COMPANY
2020 OMNIBUS INCENTIVE PLAN

THIS AGREEMENT (“Agreement”) is effective as of ____________________ (the
“Effective Date”), by and between Callon Petroleum Company, a Delaware
corporation (the “Company”), and ____________________ (the “Grantee”).
The Company has adopted the 2020 Callon Petroleum Company Omnibus Incentive Plan
(the “Plan”), which by this reference is 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. The Committee has determined that it
would be in the interest of the Company and its stockholders to grant the cash
bonus award provided herein to the Grantee 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.General. Pursuant to the Plan and subject further to the terms and conditions
herein, the Company and Grantee enter into this Agreement pursuant to which the
Grantee is eligible to receive a cash incentive award for each Performance
Period (as defined below), subject to the terms and conditions set forth herein
(each, a “Quarterly Cash Incentive Award”). “Performance Period” means each of
the following periods: ____________________.
2.Amount of Quarterly Cash Incentive Award. Each Quarterly Cash Incentive Award
shall be equal to [●]% (the “Applicable Percentage”) of the Levered Free Cash
Flow Pool; provided that the aggregate amount of Quarterly Cash Incentive Awards
payable hereunder to the Grantee shall not exceed the Aggregate Cap as set forth
in Section 4(d). “Levered Free Cash Flow Pool,” with respect to each Performance
Period, means _______________ percent (_____%) of the following: Adjusted EBITDA
(excluding non-recurring items) minus the sum of operational capital (accrual
basis), capitalized interest, capitalized cash G&A (excluding stock-based
compensation), and interest expense. The Chairman of the Committee shall affirm
the amount of the Levered Free Cash Flow Pool within five (5) business days
following the filing of the quarterly financial statements with the Securities
Exchange Commission for the applicable Performance Period (the “Calculation
Date”) and such determination shall be binding and final. For the sake of
clarity, if the Levered Free Cash Flow Pool is less than or equal to $0 for a
certain Performance Period, the Grantee will not be eligible to receive a
Quarterly Cash Incentive Award for such Performance Period.
3.Payment Terms. Except as otherwise provided in Section 4, each Quarterly Cash
Incentive Award shall be paid to the Grantee as soon as reasonably practicable
(but no later than the second regularly scheduled payroll period) following the
applicable Calculation Date, subject

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to the Grantee’s continued employment with the Company through the applicable
Calculation Date. For purposes of this Agreement, references to employment with
the Company include employment with any successor to the Company as well as
employment with any Subsidiary.
4.Termination of Employment; Forfeiture; Cap.
(a)Death and Disability. In the event the Grantee’s employment with the Company
is terminated as a result of the Grantee’s death or Disability (as defined
below) prior to the occurrence of a Change in Control, the Grantee will receive
the Quarterly Cash Incentive Award with respect to the Performance Period in
which such termination occurred (the “Termination Period”) and any remaining
Performance Periods. The amount of each such Quarterly Cash Incentive Award
following the Termination Period shall be calculated in accordance with Section
2; provided that the Levered Free Cash Flow Pool in respect of each Performance
Period to which the remaining Quarterly Cash Incentive Awards relate shall be
deemed to be equal to the average of the Leverage Free Cash Flow Pools with
respect to the Termination Period and each Performance Period completed prior to
the Termination Date. Any such Remaining Quarterly Cash Incentive Awards shall
be paid as soon as reasonably practicable (but no later than the second
regularly scheduled payroll period) following the Calculation Date for the
Termination Period.
(b)Change in Control Event. In the event of a Change in Control, the Grantee
will receive the Quarterly Cash Incentive Award with respect to the Performance
Period in which the consummation of such Change in Control occurred (the “CIC
Period”) and any remaining Performance Periods, subject to the Grantee’s
continued employment as described below. The amount of each such Quarterly Cash
Incentive Award shall be calculated in accordance with Section 2; provided that
the Levered Free Cash Flow Pool in respect of the CIC Period and any remaining
Performance Periods following the CIC Period shall be deemed to be equal to the
average of the Levered Free Cash Flow Pool with respect to each Performance
Period completed prior to the CIC Period (or, in the event only one Performance
Period was completed prior to the CIC Period, equal to Leverage Free Cash Flow
Pool with respect to such prior Performance Period). With respect to each
remaining Quarterly Cash Incentive Award, such Quarterly Cash Incentive Award
shall be paid as soon as reasonably practicable (but no later than the second
regularly scheduled payroll period) following the end of the applicable
Performance Period to which such Quarterly Cash Incentive Award relates subject
to Grantee’s continued employment with the Company or a Subsidiary through the
end of the applicable Performance Period; provided that in the event the
Grantee’s employment is terminated by the Company without Cause (as defined
below), as a result of the Grantee’s death or Disability, or by the Grantee for
Good Reason within the two-year period immediately following the effective date
of such Change in Control (a “Qualified Termination”), payment of the Quarterly
Cash Incentive Award in respect of the CIC Period and any Performance Period
following the CIC Period shall be accelerated, such that any remaining Quarterly
Cash Incentive Awards will be paid as soon as practicable (but no later than the
second regularly scheduled payroll period) following the Qualified Termination.
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(c)Definitions. For purposes of this Agreement, the following terms shall have
the meanings set forth below.
(i) For purposes hereof, “Cause” is defined as: (i) the conviction of the
Grantee by a court of competent jurisdiction as to which no further appeal can
be taken of a crime involving moral turpitude or a felony or entering the plea
of nolo contendere to such crime by the Grantee; (ii) the commission by the
Grantee of a material act of fraud upon the Company, any Subsidiary or
Affiliate; (iii) the material misappropriation by the Grantee of any funds or
other property of the Company, any Subsidiary or Affiliate; (iv) the knowing
engagement by the Grantee without the written approval of the Board of Directors
of the Company, in any material activity which directly competes with the
business of the Company, any Subsidiary or Affiliate, or which would directly
result in material injury to the business or reputation of the Company or any
Subsidiary or Affiliate; (v)(1) a material breach by the Grantee during the
Grantee’s employment with the Company of any of the restrictive covenants set
out in the Grantee’s employment agreement with the Company, if applicable, or
(2) the willful and material nonperformance of the Grantee’s duties to the
Company or any Subsidiary or Affiliate (other than by reason of the Grantee’s
illness or incapacity), and, for purposes of this clause (v), no act or failure
to act on Grantee’s part shall be deemed “willful” unless it is done or omitted
by the Grantee not in good faith and without his reasonable belief that such
action or omission was in the best interest of the Company, (vi) any breach of
the Grantee’s fiduciary duties to the Company, including, without limitation,
the duties of care, loyalty and obedience to the law; and (vii) the intentional
failure of the Grantee to comply with the Company’s Code of Business Conduct and
Ethics, or to otherwise discharge his duties in good faith and in a manner that
the Grantee reasonably believes to be in the best interests of the Company, and
with the care an ordinarily prudent person in a like position would exercise
under similar circumstances.
(ii) For purposes hereof, “Disability” shall mean the physical or mental
inability of Grantee to carry out the normal and usual duties of his position on
a full-time basis for an entire period of six (6) continuous months together
with the reasonable likelihood, as determined by the Committee, that Grantee,
upon the advice of a qualified physician, will be unable to carry out the normal
and usual duties of his position.
(d)Other Arrangements. The Carrizo Oil & Gas, Inc. Change in Control Severance
Plan (as may be amended from time to time) (the “Carrizo CIC Plan”), and any
other potential rights to equity acceleration benefits in connection with a
termination of employment set forth in any agreement (other than this Agreement)
between the Grantee and Carrizo Oil and Gas, Inc. (“Carrizo”), the Company, or a
Subsidiary of Callon or otherwise (the “Other Acceleration
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Benefits”) shall not apply to the Quarterly Cash Incentive Award granted
hereunder. As a condition of receiving this Award, the Grantee hereby expressly
acknowledges and agrees that, notwithstanding anything set forth in the Carrizo
CIC Plan to the contrary, the Change in Control Benefits (as defined in the
Carrizo CIC Plan), the Severance Benefits (as set forth in Section 3.02(e)(3) of
the Carrizo CIC Plan), and the Other Acceleration Benefits shall not apply to
the Quarterly Cash Incentive Award granted hereunder, and hereby waives any
right to any equity acceleration benefits provided for under the Carrizo CIC
Plan or the Other Acceleration Benefits with respect to this Quarterly Cash
Incentive Award. The Grantee further acknowledges and agrees that the Quarterly
Cash Incentive Award shall not constitute a “bonus” (or similar term) for
purposes of any other plan or agreement between the Grantee and Carrizo or the
Company (or a subsidiary thereof), including, for the avoidance of doubt, for
purposes of calculating severance benefits under any such agreement or plan.
(e)Aggregate Cap. For the avoidance of doubt, the amount of Quarterly Cash
Incentive Awards payable to the Grantee pursuant to this Section 4 is subject to
an aggregate limitation equal to the Applicable Percentage of _____________
dollars ($_____________) (the “Aggregate Cap”). In no event will the amounts
payable pursuant to this Agreement exceed the Aggregate Cap.
(f)Forfeiture. Notwithstanding anything herein to the contrary, but subject to
Section 4(a) and Section 4(b) herein, upon termination of the Grantee’s
employment with the Company (for any or no reason), each Quarterly Cash
Incentive Award (to the extent not yet paid) shall be immediately forfeited
without consideration.
5.Clawback Policy. The Grantee hereby acknowledges and agrees that all rights
with respect to the Quarterly Cash Incentive Award are subject to the Company’s
Clawback Policy, as may be in effect from time to time. The Grantee further
acknowledges and agrees that the Quarterly Cash Incentive Award and amounts
received with respect to the Quarterly Cash Incentive Award are subject to
recoupment pursuant to the terms of the Company Clawback Policy.
6.Mandatory Withholding of Taxes. Grantee acknowledges and agrees that the
Company shall deduct from the cash otherwise payable or deliverable an amount of
cash that is equal to the amount of all federal, state and local taxes required
to be withheld by the Company.
7.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 delivered personally or sent by first
class mail, postage prepaid to the following address:
Callon Petroleum Company
2000 W. Sam Houston Parkway South, Suite 2000
Houston, Texas 77042
Attention: Human Resources

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with a copy to:

Callon Petroleum Company
2000 W. Sam Houston Parkway South, Suite 2000
Houston, Texas 77042
Attention: Law Department

Any notice or other communication to the Grantee with respect to this Agreement
shall be in writing and shall be delivered personally, and (i) shall be sent by
first class mail, postage prepaid, to Grantee’s address as listed in the records
of the Company on the Effective Date, unless the Company has received written
notification from the Grantee of a change of address, or (ii) shall be sent to
the Grantee’s e-mail address specified in the Company’s records.
8.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
interfere in any way with the right of the Company to terminate the Grantee’s
employment at any time, with or without cause; subject, however, to the
provisions of the Grantee’s employment agreement, if applicable.
9.Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware. Any suit, action or
other legal proceeding arising out of this Agreement shall be brought in the
United States District Court for the Southern District of Texas, Houston
Division, or, if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Harris County, Texas. Each
of the Grantee and the Company consents to the jurisdiction of any such court in
any such suit, action, or proceeding and waives any objection that it may have
to the laying of venue of any such suit, action, or proceeding in any such
court.
10.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 hereunder. All decisions of the
Committee upon questions regarding this the Plan or this Agreement shall be
conclusive. Unless otherwise expressly stated herein, 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 sections 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.
11.Code Section 409A. The Quarterly Cash Incentive Award granted under this
Agreement is designed to be exempt from or comply with Section 409A of the
Internal Revenue Code of 1986, as amended from time to time (the “Code”) and the
related Treasury Regulations thereunder 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).
If the Grantee is identified by the Company as a “specified employee” within the
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meaning of Code Section 409A(a)(2)(B)(i) on the date on which the Grantee has a
“separation from service” (other than due to death) within the meaning of
Treasury Regulation § 1.409A-1(h), any amount payable or settled under this
Agreement on account of a separation from service that is deferred compensation
subject to Section 409A of the Code shall be paid or settled on the earliest of
(1) the first business day following the expiration of six months from the
Grantee’s separation from service, (2) the date of the Grantee’s death, or (3)
such earlier date as complies with the requirements of Section 409A of the Code.
12.Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if
the Grantee is a “disqualified individual” (as defined in Code Section 280G(c)),
and the payments and benefits provided for under this Agreement, together with
any other payments and benefits which the Grantee has the right to receive from
the Company or any of its affiliates or any party to a transaction with the
Company or any of its affiliates, would constitute a “parachute payment” (as
defined in Code Section 280G(b)(2)), then the payments and benefits provided for
under this Agreement shall be either (a) reduced (but not below zero) so that
the present value of such total amounts and benefits received by the Grantee
from the Company and its affiliates will be one dollar ($1.00) less than three
times the Grantee’s “base amount” (as defined in Code Section 280G(b)(3)) and so
that no portion of such amounts and benefits received by the Grantee shall be
subject to the excise tax imposed by Code Section 4999 or (b) paid in full,
whichever produces the better net after-tax position to the Grantee (taking into
account any applicable excise tax under Code Section 4999 and any other
applicable taxes). The reduction of payments and benefits hereunder, if
applicable, shall be made by reducing payments or benefits to be paid hereunder
in the order in which such payment or benefit would be paid or provided
(beginning with such payment or benefit that would be made last in time and
continuing, to the extent necessary, through to such payment or benefit that
would be made first in time). The determination as to whether any such reduction
in the amount of the payments and benefits provided hereunder is necessary shall
be made by a nationally recognized accounting firm selected by the Company. If a
reduced payment or benefit is made or provided and through error or otherwise
that payment or benefit, when aggregated with other payments and benefits from
the Company (or its affiliates) used in determining if a parachute payment
exists, exceeds one dollar ($1.00) less than three times the Grantee’s base
amount, then the Grantee shall immediately repay such excess to the Company upon
notification that an overpayment has been made.
13.Grantee Acceptance. By electronically accepting this Agreement the Grantee
hereby accepts the cash bonus award provided herein subject to the terms and
conditions provided herein.
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