<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 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)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[LOGO OF CARRIZO OIL & GAS, INC.]
April 30, 1999
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Carrizo Oil & Gas, Inc. (the "Company") to be held at 10:00 a.m. on Tuesday, May
25, 1999, at the Houston Marriott Westside, 13210 Katy Freeway, Houston, Texas.
This booklet includes the notice of the meeting and the proxy statement,
which contains information about the Board and its committees and personal
information about the nominees for the Board. Other matters on which action is
expected to be taken during the meeting are also described.
We hope you will find it convenient to attend in person. Whether or not you
expect to attend, to assure representation at the meeting and the presence of a
quorum, please date, sign and promptly mail the enclosed proxy in the return
envelope provided.
A copy of the Company's 1998 Annual Report to Shareholders is also
enclosed.
Sincerely,
/s/ S. P. Johnson IV
S. P. JOHNSON IV
Chief Executive Officer
<PAGE> 3
CARRIZO OIL & GAS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 1999
To The Shareholders of
Carrizo Oil & Gas, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Carrizo
Oil & Gas, Inc. (the "Company") will be held at the Houston Marriott Westside,
13210 Katy Freeway, Houston, Texas, on Tuesday, May 25, 1999, at 10:00 a.m. for
the following purposes:
(1) to elect five members to the Board of Directors for the ensuing year;
(2) to approve the appointment of Arthur Andersen LLP as independent public
accountants of the Company for the fiscal year ending December 31,
1999; and
(3) to transact such other business as may properly come before the
meeting.
The Company has fixed the close of business on April 28, 1999, as the
record date for determining shareholders entitled to notice of, and to vote at,
such meeting or any adjournment thereof.
You are cordially invited to attend the meeting in person. Even if you plan
to attend the meeting, you are requested to mark, sign, date and return the
accompanying proxy as soon as possible.
By Order of the Board of Directors
Frank A. Wojtek
FRANK A. WOJTEK
Secretary
April 30, 1999
14811 St. Mary's Lane, Suite 148
Houston, TX 77079
<PAGE> 4
CARRIZO OIL & GAS, INC.
14811 ST. MARY'S LANE, SUITE 148
HOUSTON, TEXAS 77079
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Carrizo Oil & Gas, Inc., a Texas
corporation (the "Company"), to be voted at the 1999 Annual Meeting of
Shareholders (the "Annual Meeting") to be held at the Houston Marriott Westside,
13210 Katy Freeway, Houston, Texas on Tuesday, May 25, 1999, at 10:00 a.m., and
any and all adjournments thereof.
This statement and the accompanying form of proxy are first being mailed to
shareholders on or about the week of May 3, 1999. In addition to the
solicitation of proxies by mail, regular officers and employees of the Company
may, without additional compensation, solicit the return of proxies by mail,
telephone, telegram or personal contact. The Company will pay the cost of
soliciting proxies in the accompanying form. The Company will reimburse brokers
or other persons holding stock in their names or in the names of their nominees
for their reasonable expenses in forwarding proxy material to beneficial owners
of stock.
VOTING SECURITIES
Shareholders of record as of April 28, 1999, the record date for
determining persons entitled to notice of, and to vote at, the Annual Meeting,
are entitled to vote on all matters at the Annual Meeting and at any
adjournments thereof. On that date, the issued and outstanding capital stock of
the Company consisted of 10,375,000 shares of Common Stock, par value $0.01 per
share (the "Common Stock"), and 334,624 shares of 9% Series A Preferred Stock,
par value $.01 per share (the "Series A Preferred Stock"). No other class of
stock is outstanding. Each share of Common Stock is entitled to one vote on each
matter submitted to a vote of shareholders. The Series A Preferred Stock will
not be entitled to vote at the Annual Meeting and generally has no right to vote
for directors or on other matters except in certain specified circumstances or
as required by law. Cumulative voting is not allowed. The holders of a majority
of the shares entitled to vote at the Annual Meeting, represented in person or
by proxy, constitute a quorum for the transaction of business at the Annual
Meeting.
All duly executed proxies received prior to the Annual Meeting will be
voted in accordance with the choices specified thereon and, in connection with
any other business that may properly come before the meeting, in the discretion
of the persons named in the proxy. As to any matter for which no choice has been
specified in the proxy, the shares represented thereby will be voted by the
persons named in the proxy, to the extent applicable, (1) for the election as a
director of each nominee listed herein; (2) for the appointment of Arthur
Andersen LLP as independent public accountants of the Company for the fiscal
year ending December 31, 1999; and (3) in the discretion of the persons named in
the proxy in connection with any other business that may properly come before
the meeting. A shareholder giving a proxy may revoke it at any time before it is
voted at the Annual Meeting by delivering written notice to the Secretary of the
Company or by delivering a properly executed proxy bearing a later date. A
shareholder who attends the Annual Meeting may, if he or she wishes, vote by
ballot at the Annual Meeting and that vote will cancel any proxy previously
given. Attendance at the Annual Meeting will not in itself, however, constitute
the revocation of a proxy.
Proxies indicating shareholder abstentions will be counted for purposes of
determining whether there is a quorum at the Annual Meeting, but will not be
voted on any matter and therefore will have the same effect as a vote against a
matter, except in the case of director elections, which are determined by a
plurality of votes cast, as to which those abstentions will have no effect.
Shares represented by "broker nonvotes" (i.e., shares held by brokers or
nominees for which instructions have not been received from the beneficial
owners or persons entitled to vote and for which the broker or nominee does not
have discretionary power to vote on a particular matter) will be counted for
purposes of determining whether there is a quorum at the Annual Meeting, but
will not be voted on any matter, and thus will be disregarded in the calculation
of "votes cast" with respect to that matter (even though those shares may be
considered as entitled to vote or be voted on
<PAGE> 5
other matters). Votes cast by proxy or in person at the Annual Meeting will be
counted by the persons appointed as election inspectors for the Annual Meeting.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The table below sets forth information concerning (i) the only persons
known by the Company, based on statements filed by such persons pursuant to
Section 13(d) or 13(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to own beneficially in excess of 5% of the Common Stock as of
March 31, 1999, and (ii) the shares of Common Stock beneficially owned, as of
March 31, 1999, by each director, the Chief Executive Officer and the three
other executive officers who were serving at the end of the Company's last
fiscal year and by all executive officers and directors collectively. Except as
indicated, each individual has sole voting power and sole investment power over
all shares listed opposite his name.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
--------------------------------
PERCENT
OF COMMON
STOCK(2)
NAME AND ADDRESS OF BENEFICIAL OWNER(1) NUMBER OF SHARES(2) (ROUNDED)
- --------------------------------------- ------------------- ---------
<S> <C> <C>
Directors and Executive Officers:
S. P. Johnson IV..................................... 816,418(3) 7.8%
Frank A. Wojtek...................................... 1,287,054(3) 12.4%
George Canjar........................................ 138,825 1.3%
Ken Trahan........................................... 83,295 *
Steven A. Webster.................................... 1,558,048(3)(4) 15.0%
Douglas A. P. Hamilton............................... 804,962(3)(5) 7.8%
Paul B. Loyd, Jr. ................................... 1,433,422(3) 13.8%
Executive Officers and Directors as a Group (7
persons).......................................... 6,122,024 57.4%
DAPHAM Partnership, L.P.............................. 395,960(3)(6) 3.8%
The Douglas A.P. Hamilton 1997 GRAT.................. 200,000(3)(7) 1.9%
Affiliates of Enron Corp............................. 1,000,000(3)(8) 8.8%
</TABLE>
- ---------------
* Less than one percent.
(1) Except as described in note 3 below or otherwise noted and pursuant to
applicable community property laws, each shareholder has sole voting and
investment power with respect to the shares beneficially owned. The business
address of each director and executive officer is c/o Carrizo Oil & Gas,
Inc., 14811 St. Mary's Lane, Suite 148, Houston, Texas 77079.
(2) The table includes shares of Common Stock that can be acquired through the
exercise of options, warrants or convertible securities within 60 days of
March 31, 1999 as follows: Mr. Johnson -- 33,333, Mr. Wojtek -- 13,333, Mr.
Canjar -- 138,825, Mr. Trahan -- 83,295, Mr. Webster -- 4,166, Mr.
Hamilton -- 4,166, Mr. Loyd -- 4,166, all executive officers and directors
as a group -- 281,284 and Enron Corp. -- 1,000,000. The percent of the class
owned by each person has been computed assuming the exercise of all options,
warrants and convertible securities deemed to be beneficially owned by that
person, and assuming that no options, warrants or convertible securities
held by any other person have been exercised.
(3) Pursuant to a Shareholders' Agreement dated January 8, 1998, among the
Company, S.P. Johnson IV, Frank A. Wojtek, Steven A. Webster, Douglas A.P.
Hamilton, Paul B. Loyd, Jr., DAPHAM Partnership, L.P., the Douglas A.P.
Hamilton 1997 GRAT, Enron Capital & Trade Resources Corp. and Joint Energy
Development Investments II Limited Partnership, certain shareholders of the
Company may be deemed to have formed a group pursuant to Rule 13d-5(b)(1)
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Nothing herein shall constitute an affirmance that any such
group exists; however, such group could be deemed to have beneficial
ownership, for purposes of Sections 13(d) and 13(g) of the Exchange Act, of
all equity securities of the Company beneficially owned by such parties.
Such parties would, as of March 31, 1999 be deemed to beneficially own an
2
<PAGE> 6
aggregate of 7,495,864 shares (65.6%). Each party to the Shareholders'
Agreement listed above disclaims beneficial ownership of any common stock
owned by the other parties to the Shareholders' Agreement.
(4) Shares shown include 1,497,016 shares of Common Stock owned by Mr. Webster
and 56,866 shares owned by Cerrito Partners, of which Mr. Webster is one of
three general partners and could be deemed to share voting and dispositive
power with the other general partners. However, Mr. Webster does not admit
to having such power and disclaims the beneficial ownership of the Common
Stock held by Cerrito Partners.
(5) Shares shown do not include (i) 395,960 shares of Common Stock beneficially
owned by DAPHAM Partnership, L.P., the limited partner of which is a
charitable remainder trust of which Mr. Hamilton, his wife and children are
among the beneficiaries, (ii) 200,000 shares of Common Stock beneficially
owned by the Douglas A.P. Hamilton 1997 GRAT, of which Mr. Hamilton is the
sole beneficiary until October 2002 and (iii) 14,472 shares of Common Stock
beneficially owned by certain trusts established for the benefit of Mr.
Hamilton's children, and for each of which Mr. Hamilton's wife serves as
trustee. Mr. Hamilton disclaims beneficial ownership of all of such shares.
(6) The address of DAPHAM Partnership, L.P. is 462 Broadway, Second Floor, New
York, New York 10013.
(7) The address of the Douglas A.P. Hamilton 1997 GRAT is 900 Third Avenue, New
York, New York 10022, and its trustee is Mr. Kim E. Baptiste.
(8) As disclosed in the Schedule 13D filed by Enron Corp. and certain of its
affiliates on March 3, 1998, as amended by Amendment No. 1 thereto filed on
January 6, 1999, shares shown represent 250,000 shares of Common Stock
issuable upon exercise of warrants reported to be held by Sundance Assets,
L.P. and 750,000 shares of Common Stock issuable upon exercise of warrants
reported to be held by Joint Energy Development Investments II Limited
Partnership. Each of these entities is an affiliate of Enron Corp. Enron
Corp. and certain of its other affiliates may be deemed to beneficially own
these warrants. Each of Enron Corp. and those affiliates disclaims
beneficial ownership of these warrants. The address of Enron Corp. is 1400
Smith Street, Houston, Texas 77002. Although the above referenced Amendment
No. 1 to Schedule 13D reports that 250,000 warrants were contributed to
Sundance Assets, L.P. by Enron Capital & Trade Resources Corp. as part of an
internal reorganization, they are currently registered on the books and
records of the Company as being owned by Enron Capital & Trade Resources
Corp.
PROPOSAL I
ELECTION OF DIRECTORS
The persons designated as proxies in the enclosed proxy card intend, unless
the proxy is marked with contrary instructions, to vote for the following
nominees as directors to serve until the 2000 Annual Meeting of Shareholders and
until their successors have been duly elected and qualified: Mr. S.P. Johnson
IV; Mr. Frank A. Wojtek; Mr. Steven A. Webster; Mr. Douglas A.P. Hamilton; and
Mr. Paul B. Loyd, Jr. The Board of Directors has no reason to believe that any
nominee for election as a director will not be a candidate or will be unable to
serve, but if for any reason one or more of these nominees is unavailable as a
candidate or unable to serve when election occurs, the persons designated as
proxies in the enclosed proxy card, in the absence of contrary instructions,
will in their discretion vote the proxies for the election of any of the other
nominees or for a substitute nominee or nominees, if any, selected by the Board
of Directors. The affirmative vote of a plurality of the votes cast by holders
entitled to vote in the election of directors at the Annual Meeting is required
for the election of each nominee for director. Following the resignation of
Roberto Marsella on February 6, 1999, the number of directors constituting the
Board was set at five.
NOMINEES
The following sets forth information concerning the five nominees for
election as directors at the Annual Meeting, including information as to each
nominee's age as of April 1, 1999, position with the Company and business
experience during the past five years.
3
<PAGE> 7
S. P. Johnson IV, age 43, has served as the President, Chief Executive
Officer and a director of the Company since December 1993. Prior to that, he
worked 15 years for Shell Oil Company. His managerial positions included
Operations Superintendent, Manager of Planning and Finance and Manager of
Development Engineering. Mr. Johnson is a Registered Petroleum Engineer and has
a B.S. in Mechanical Engineering from the University of Colorado.
Frank A. Wojtek, age 43, has served as the Chief Financial Officer, Vice
President, Secretary, Treasurer and a director of the Company since 1993. In
addition, from 1992 to 1997, Mr. Wojtek was the Assistant to the Chairman of the
Board of Reading & Bates Corporation ("Reading & Bates", an offshore drilling
company). Mr. Wojtek also holds the positions of Vice President and
Secretary/Treasurer for Loyd & Associates, Inc. (a private financial consulting
and investment banking firm). Mr. Wojtek held the positions of Vice President
and Chief Financial Officer of Griffin-Alexander Drilling Company from 1984 to
1987, Treasurer of Chiles-Alexander International Inc. from 1987 to 1989 and
Vice President and Chief Financial Officer of India Offshore Inc. from 1989 to
1992, all of which are companies in the offshore drilling industry. Mr. Wojtek
is a Certified Public Accountant and holds a B.B.A. in Accounting from the
University of Texas.
Steven A. Webster, age 47, has been the Chairman of the Board of the
Company since June 1997 and has been a director of the Company since 1993. Mr.
Webster is currently the President, Chief Executive Officer and a director of
R&B Falcon Corporation ("R&B Falcon"), an offshore drilling company that was
created by the merger of Falcon Drilling Company Inc. ("Falcon") and Reading &
Bates. Effective May 31, 1999, Mr. Webster will step down as President and Chief
Executive Officer of R&B Falcon, but will remain as a director and serve as Vice
Chairman. Mr. Webster was the Chairman and Chief Executive Officer of Falcon, an
offshore drilling company, and its predecessor companies from 1988 until such
merger in December 1997. Mr. Webster is also a director of Grey Wolf, Inc. (an
onshore drilling company), Crown Resources Corporation (a precious metals mining
company) and Geokinetics, Inc. (a seismic acquisition and geophysical services
company). He is a trust manager of Camden Property Trust (a real estate
investment trust). Mr. Webster holds an M.B.A. degree from Harvard Business
School.
Douglas A. P. Hamilton, age 52, has been a Director of the Company since
1993, Falcon from 1992 to 1997 and R&B Falcon since December 1997. Mr. Hamilton
has since 1979 been the President of Anatar Investments, Inc., a diversified
investment capital firm with active investments in oil and gas and offshore
contract drilling and is a co-owner of the French Culinary Institute, a cooking
school in New York City. Mr. Hamilton has a degree from the University of North
Carolina and completed the PMD program at Harvard Business School.
Paul B. Loyd, Jr., age 52, has been a Director of the Company since 1993.
Mr. Loyd is the Chairman of the Board of R&B Falcon. Effective May 31, 1999, Mr.
Loyd will become the President and Chief Executive Officer of R&B Falcon and
will continue to serve as its Chairman of the Board. Mr. Loyd was Chairman of
the Board and Chief Executive Officer of Reading & Bates from 1991 to 1997 and
President of Reading & Bates from 1993 to 1997. Mr. Loyd has been President of
Loyd & Associates, Inc., a financial consulting firm, since 1989. Mr. Loyd was
Chief Executive Officer and a director of Chiles-Alexander International, Inc.
from 1987 to 1989, President and a director of Griffin-Alexander Drilling
Company, from 1984 to 1987, and prior to that, a director and Chief Financial
Officer of Houston Offshore International, all of which are companies in the
offshore drilling industry. Mr. Loyd is also a director of Frontier Oil
Corporation. Mr. Loyd served as President of the Company from its inception in
September 1993 until December 1993. Mr. Loyd holds an M.B.A. degree from Harvard
Business School.
COMPENSATION OF NON-EMPLOYEE DIRECTORS
Directors not employed by the Company or any of its subsidiaries ("Outside
Directors") received an annual retainer of $7,500 through December 31, 1998.
Effective January 1, 1999, the Board of Directors suspended the payment of the
retainer. Directors who are also employees of the Company receive no payment for
serving as directors. All directors are reimbursed for travel and lodging
expenses of attending meetings. Under the Company's Incentive Plan (the
"Incentive Plan"), each current Outside Director was granted
4
<PAGE> 8
options to purchase 10,000 shares of Common Stock at an exercise price per share
of $11.00 in connection with the Company's initial public offering in August
1997 (the "IPO"). Thereafter, each additional Outside Director will be
automatically granted nonqualified options to purchase 10,000 shares of Common
Stock on the date that person first becomes an Outside Director of the Company.
In addition, each Outside Director serving on the day after the date of the
annual meeting of shareholders will automatically be granted options to purchase
an additional 2,500 shares of Common Stock, subject to the availability for
issuance of those shares under the Incentive Plan. During the fiscal year ended
December 31, 1998, options to purchase 2,500 shares were granted to each of
Messrs. Webster, Hamilton and Loyd at an exercise price per share of $6.4375. An
option to purchase 10,000 shares was granted to Roberto Marsella at an exercise
price per share of $6.875. However, these options have expired because on
February 6, 1999 Mr. Marsella resigned from the Board of Directors. Each option
granted to an Outside Director will (i) have a ten-year term, (ii) have an
exercise price equal to the fair market value of a share of Common Stock on the
date of grant and (iii) become exercisable in cumulative annual increments of
one-third of the total number of shares of Common Stock subject thereto,
beginning on the first anniversary of the date of grant.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company held two meetings during the fiscal
year ended December 31, 1998, and transacted business on 14 occasions during the
fiscal year by unanimous written consent.
The Board of Directors has an Audit Committee which, during the fiscal year
ended December 31, 1998, consisted of Messrs. Wojtek, Hamilton and Loyd. The
function of the Audit Committee is to meet with the internal financial staff of
the Company and the independent public accountants engaged by the Company to
review (i) the scope and findings of the annual audit, (ii) quarterly financial
statements, (iii) accounting policies and procedures and the Company's financial
reporting, and (iv) the internal controls employed by the Company. The Audit
Committee also recommends to the Board of Directors the independent public
accountants to be selected to audit the Company's annual financial statements,
and reviews the fees charged for audits and for any nonaudit engagements. The
Committee's findings and recommendations are reported to management and the
Board of Directors for appropriate action. The Audit Committee did not meet
during fiscal 1998.
The Board of Directors has a Compensation Committee which consists of
Messrs. Webster, Hamilton and Loyd whose function is to consider and act upon
management's recommendations to the Board of Directors on salaries, bonuses and
other forms of compensation for the Company's executive officers and certain
other key employees. The Compensation Committee has been appointed by the Board
of Directors to administer the Company's stock option plans. The Compensation
Committee held one meeting during fiscal 1998.
The Board of Directors does not have a standing Nominating Committee.
During the fiscal year ended December 31, 1998, each director attended at
least 75% of the aggregate of the total number of Board of Directors' meetings
and of meetings of committees of the Board of Directors on which he served.
SECTION 16(a) REPORTING DELINQUENCIES
Section 16(a) of the Exchange Act requires that the Company's executive
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, file reports of ownership
and changes of ownership with the Securities and Exchange Commission (the
"SEC"). Officers, directors and greater than 10% shareholders are required by
SEC regulation to furnish the Company with copies of all such forms they file.
Based solely on its review of the copies of such forms received by the
Company, and on written representations by the Company's officers and directors
regarding their compliance with the filing requirements, the Company believes
that during the fiscal year ended December 31, 1998, all reports required by
Section 16(a) to be filed by its directors, officers and greater than 10%
beneficial owners were filed on a timely
5
<PAGE> 9
basis, except that each of Messrs. Wojtek, Canjar and Trahan were late in filing
a Form 5 reporting the grant on August 1, 1998 of 10,000, 25,000 and 25,000
unvested options, respectively, with an exercise price of $6.4375 per share.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the annual, long-term and total compensation
for (i) the Company's Chief Executive Officer for the fiscal years ended
December 31, 1998, 1997 and 1996 and (ii) its other three executive officers,
for the fiscal years ended December 31, 1998 and 1997 (collectively, the "Named
Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------- ------------
NAME AND OTHER ANNUAL STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) OPTIONS(#) COMPENSATION($)(2)
- ------------------ ---- ---------- -------- ------------------ ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
S.P. Johnson IV 1998 $210,000 -- -- -- $2,615
President and 1997 $187,500 $ 500 -- 100,000 $3,000
Chief Executive 1996 $180,000 -- -- -- --
Officer
Frank A. Wojtek 1998 $150,000 -- -- 10,000 $2,573
Chief Financial 1997 $ 56,250 $ 500 -- 40,000 $ 750
Officer, Vice
President,
Secretary and
Treasurer
George Canjar 1998 $150,000 -- -- 25,000 $2,573
Vice President of 1997 $132,000 $4,500 -- 138,825(3) $2,430
Exploration
Development
Kendall A. Trahan 1998 $135,000 -- -- 25,000 $2,447
Vice President of 1997 $109,471 $ 500 -- 83,295(3) $1,350
Land
</TABLE>
- ---------------
(1) For the fiscal years 1996, 1997 and 1998, the Named Executives did not
receive any annual compensation not properly categorized as salary or bonus,
except for certain perquisites and other personal benefits which are not
shown because the aggregate amount of such compensation, if any, for each
Named Executive during each of those fiscal years did not exceed the lesser
of $50,000 or 10% or total salary and bonus reported for that Named
Executive.
(2) For the fiscal year 1998, other compensation consists of contributions of
$2,195, $2,195, $2,195 and $2,195 by the Company under its 401(k) plan for
Mr. Johnson, Mr. Wojtek, Mr. Canjar and Mr. Trahan, respectively, and life
insurance premiums of $420, $378, $378 and $252 for Mr. Johnson, Mr. Wojtek,
Mr. Canjar and Mr. Trahan, respectively. For the fiscal year 1997, all other
compensation consists of contributions of $3,000, $750, $2,430 and $1,350 by
the Company under its 401(k) Plan for Mr. Johnson, Mr. Wojtek, Mr. Canjar
and Mr. Trahan, respectively.
(3) As adjusted for the 521-for-1 stock split that occurred on June 5, 1997.
6
<PAGE> 10
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to stock options
granted during fiscal 1998 to the Named Executives.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUES AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM (1)
OPTIONS/SARS EMPLOYEES IN EXERCISE PRICE ----------------------
NAME GRANTED FISCAL YEAR ($/SHARE) EXPIRATION DATE 5% ($) 10% ($)
- ---- ------------ ------------ -------------- --------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
S. P. Johnson IV..... 0 0 -- -- 0 0
Frank A. Wojtek...... 10,000 5.2% $6.4375 8/01/08 0 35,525
George Canjar........ 25,000 12.9% $6.4375 8/01/08 0 88,813
Kendall A. Trahan.... 25,000 12.9% $6.4375 8/01/08 0 88,813
</TABLE>
- ---------------
(1) Potential realizable value of each grant assumes that the market price of
the underlying security (based upon the value of the Common Stock on the
date of grant) appreciates at annualized rates of 5% and 10% over the term
of the award. Actual gains, if any, on stock option exercises are dependent
on the future performance of Common Stock and overall market conditions.
There can be no assurance that the amounts reflected on this table will be
achieved.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information with respect to the unexercised
options to purchase the Common Stock held by the Named Executives at December
31, 1998. None of the Named Executives exercised any stock options during the
fiscal year ended December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED VALUE FISCAL YEAR-END FISCAL YEAR-END ($)(2)
ON REALIZED --------------------------- ---------------------------
NAME EXERCISE(#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
S. P. Johnson IV......... -- -- 33,333 66,667 -- --
Frank A. Wojtek.......... -- -- 13,333 36,667 -- --
George Canjar............ -- -- 138,825 25,000 -- --
Kendall A. Trahan........ -- -- 83,295 25,000 -- --
</TABLE>
- ---------------
(1) Value realized is calculated based on the difference between the option
exercise price and the closing market price of the Company's Common Stock on
the date of exercise, multiplied by the number of shares underlying the
options.
(2) Value of unexercised in-the-money options is calculated based upon the
difference between the option price and the closing price of the Company's
Common Stock at fiscal year-end, multiplied by the number of shares
underlying the options. The closing price of the Company's Common Stock, as
reported on the NASDAQ Stock Market on December 31, 1998, was $1.375.
CERTAIN TRANSACTIONS
Sale of Preferred Stock and Warrants
On January 8, 1998, the Company consummated the transactions contemplated
by the Stock Purchase Agreement dated January 8, 1998 (the "Purchase Agreement")
among the Company, Enron Capital & Trade Resources Corp., a Delaware corporation
("ECT"), and Joint Energy Development Investments II, a Delaware limited
partnership ("JEDI II"). ECT and JEDI II are affiliates of Enron Corp. Such
transactions included (i) the payment by ECT and JEDI II of an aggregate
purchase price of $30,000,000, which was determined through negotiations between
the Company (with the Company's Chief Executive Officer and
7
<PAGE> 11
Chief Financial Officer primarily representing the Company) and ECT and JEDI II,
(ii) the sale of 75,000 shares of Preferred Stock, the terms of which are set
forth in the Statement of Resolution Establishing Series of Shares designated 9%
Series A Preferred Stock, to ECT and 225,000 shares of Preferred Stock to JEDI
II, (iii) the grant of warrants (the "Warrants") to purchase 250,000 and 750,000
shares of Common Stock to ECT and JEDI II, respectively, and (iv) the execution
and delivery of the Shareholders' Agreement dated January 8, 1998 (the
"Shareholders' Agreement") among the Company, S.P. Johnson IV, Frank A. Wojtek,
Steven A. Webster, Paul B. Loyd, Jr., Douglas A.P. Hamilton, DAPHAM Partnership
L.P., the Douglas A.P. Hamilton 1997 GRAT, ECT and JEDI II. According to the
Schedule 13D filed by Enron Corp. and certain of its affiliates on March 3,
1998, as amended by Amendment No. 1 thereto filed on January 6, 1999, ECT
transferred warrants to purchase 250,000 shares of Common Stock and 80,027.63
shares of Preferred Stock (which includes 5,027.63 shares paid as dividends on
the Preferred Stock) to Sundance Assets, L.P., which is an affiliate of Enron
Corp., effective as of December 23, 1998; however, such shares and warrants are
currently registered on the books and records of the Company as being owned by
Enron Capital & Trade Resources Corp.
The Preferred Stock provides for annual cumulative dividends of $9.00 per
share, payable quarterly in cash or, at the option of the Company until January
15, 2002, in additional shares of Preferred Stock. The Preferred Stock is
required to be redeemed by the Company upon the occurrence of certain events.
The Preferred Stock also may be redeemed at the option of the Company at any
time in whole or in part. All redemptions are at a price per share, together
with dividends accumulated and unpaid to the date of redemption, decreasing over
time from an initial rate of $104.50 per share to $100.00 per share. Holders of
the Preferred Stock generally have no right to vote for directors or on other
matters except as otherwise required by law or in certain circumstances
described in the Statement of Resolution, including the right to elect
additional directors constituting up to a majority of the Board of Directors if
the Company fails to redeem the Preferred Stock when required to do so.
The Warrants are exercisable during the period beginning January 8, 1999
and ending January 8, 2005 for the purchase of an aggregate of 1,000,000 shares
of Common Stock (the "Warrant Shares") at an exercise price of $11.50 per share,
subject to certain adjustments. Each Warrant may be exercised by (i) paying the
exercise price (A) in cash or (B) by surrender to the Company of shares of
Preferred Stock or (ii) exercising the Warrant for a number of net Warrant
Shares equal to (x) the number of Warrant Shares issuable upon exercise of the
Warrant multiplied by the difference between the average market price of the
Common Stock during the 20 trading day period preceding the date of exercise and
the exercise price divided by (y) the average market price of the Common Stock
during the 20 trading day period preceding the date of exercise. In addition,
with the consent of the Company, the holder of the Warrant may receive a cash
payment equal to the number of Warrant Shares for which the Warrant is exercised
multiplied by the difference between the average market price of the Common
Stock during the 20 trading day period preceding the date of exercise and the
exercise price.
Pursuant to the Shareholders' Agreement, each of S.P. Johnson IV, Frank A.
Wojtek, Steven A. Webster, Paul B. Loyd, Jr., Douglas A.P. Hamilton, DAPHAM
Partnership L.P. and the Douglas A.P. Hamilton 1997 GRAT (the "Major
Shareholders") have agreed with the Company, Enron and JEDI II that it will not
(without the consent of ECT or, if ECT, JEDI II and their respective affiliates
do not beneficially own the largest outstanding amount of Preferred Stock that
is then beneficially owned by any shareholder, then only with the consent of the
holders of a majority of the shares of Preferred Stock) transfer any of the
Common Stock deemed under the Shareholders' Agreement to be beneficially owned
by it as of the date of the Shareholders' Agreement, subject to certain
exceptions, including the transfer during each calendar year beginning January
1, 1998 through and including 2001 up to 20% of the Common Stock held by such
Major Shareholder as of the date of the Shareholders' Agreement and any portion
of such shares permitted to be transferred in prior calendar years that were not
so transferred. In addition, upon redemption of shares of Preferred Stock, a
proportionate number of shares of Common Stock held by each Major Shareholder
will be released from all transfer restrictions imposed by the Shareholders'
Agreement. Notwithstanding the foregoing, each Major Shareholder has agreed to
retain the final 20% of his holdings of Common Stock until no shares of
Preferred Stock remain outstanding. In addition, the Major Shareholders
consented to certain transactions contemplated by the Stock Purchase Agreement.
8
<PAGE> 12
A more detailed description of the Preferred Stock, the Warrants, the
Shareholders' Agreement and the transactions relating to the Purchase Agreement
may be found in the Company's Current Report on Form 8-K dated January 8, 1998.
Guarantee of Term Loan
For a description of guarantees of and collateral for certain indebtedness
of the Company provided by certain of its directors, see "Compensation Committee
Interlocks and Insider Participation."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation programs are designed to attract and
retain highly qualified executives and to motivate them to maximize shareholder
returns. The Company's executive compensation program is intended to provide
competitive compensation levels and incentive pay levels that vary based on
corporate and individual performance.
There are three basic components to the Company's current compensation
system: base pay; annual incentive compensation in the form of a cash bonus; and
long-term equity-based incentive compensation. Each component is addressed in
the context of individual and Company performance and competitive conditions. In
determining competitive compensation levels, the Company analyzes data that
includes information regarding the general oil and natural gas exploration and
production industry.
Actual individual awards and changes in remuneration to the individual
executives are determined by the Compensation Committee. The Chief Executive
Officer works with the Compensation Committee in the design of the plans and
makes recommendations to the Committee regarding the salaries and bonuses of
Company employees that report directly to him. Grants or awards of stock,
including stock options, are individually determined and administered by the
Compensation Committee.
Base Pay. Base pay is designed to be competitive with salary levels for
comparable executive positions at other oil and natural gas exploration and
production companies and the Compensation Committee reviews such comparable
salary information as one factor to be considered in determining the base pay
for the Company's executive officers. Other factors the Compensation Committee
considers in determining base pay for each of the executive officers are that
officer's responsibilities, experience, leadership, potential future
contribution and demonstrated individual performance. The types and relative
importance of specific financial and other business objectives vary among the
Company's executives depending on their positions and the particular operations
and functions for which they are responsible. The Compensation Committee also
considers the Company's earnings levels and progress in implementing its
business strategy in establishing base salary increases for executives. The
employment contracts of the executive officers provide that base pay is to be
reviewed at least annually and will be increased at any time and from time to
time, and that any increase will be substantially consistent with increases in
base salary generally awarded in the ordinary course of business to executives
of the Company. The base salary for each of the executive officers increased in
1998 compared to 1997. This increase resulted from employment with the Company
for a full year in 1998 as compared to a partial year in 1997 for Messrs. Wojtek
and Trahan and from salary increases in October 1997 for Messrs. Johnson and
Canjar to take into account the length of their full-time employment with the
Company. Primarily as a result of the negative effect on the Company's financial
results of low oil and natural gas prices during 1998, each of the executive
officers' base salary was reduced by 10%, effective February 1, 1999.
Annual Bonus. The annual bonus is determined by the Compensation Committee.
The employment contracts with the executive officers contemplate annual bonus
awards in an amount comparable to the annual bonus of other Company executives,
taking into account the individual's position and responsibilities. In addition,
Mr. Canjar receives certain overriding royalty interests on prospects he
generates as a further incentive in his role as Vice President of Exploration
Development. No bonuses were awarded in 1998, primarily as a result of the
performance of the Company's stock, granting of stock options to executive
officers during 1997 and 1998 and the effect on the Company's financial results
of low oil and natural gas prices during 1998.
9
<PAGE> 13
Long-Term Equity-Based Compensation. To date, the Company has relied
primarily upon stock option awards to provide long-term incentives for
executives. Prior to the Company's IPO, the shareholders and the Board of
Directors of the Company approved the Company's Incentive Plan. The objectives
of the Incentive Plan are to (i) attract and retain the services of key
employees, qualified independent directors and qualified consultants and other
independent contractors and (ii) encourage a sense of proprietorship in and
stimulate the active interest of those persons in the development and financial
success of the Company by making awards designed to provide participants in the
Incentive Plan with proprietary interest in the growth and performance of the
Company. Long-term equity-based compensation is tied to shareholder return.
Under the Company's Incentive Plan, long-term incentive compensation
consists of stock options, which generally have a ten-year term and vest in
thirty-three percent increments in each of the three years following the date of
the grant. The exercise price of stock options granted is equal to or greater
than the fair market value of the Common Stock on the date of grant;
accordingly, executives receiving stock options are rewarded only if the market
price of the Common Stock appreciates. Stock options are thus designed to align
the interests of the Company's executives with those of its shareholders by
encouraging executives to enhance the value of the Company and, hence, the price
of the Common Stock and each shareholder's return.
On August 1, 1998, the Compensation Committee granted options to purchase
10,000 shares, 25,000 shares and 25,000 shares to Mr. Wojtek, Mr. Canjar and Mr.
Trahan, respectively, at an exercise price per share of $6.4375. These options
vest three years from the date of the grant.
The Company may periodically grant new options to provide continuing
incentive for future performance. In making the decision to grant additional
options, the Compensation Committee would expect to consider factors such as the
size of previous grants and the number of options held. In determining whether
to grant executive officers stock options under the Plan, the Compensation
Committee considers factors, including that executive's current ownership stake
in the Company, the degree to which increasing that ownership stake would
provide the executive with additional incentives for future performance, the
likelihood that the grant of those options would encourage the executive to
remain with the Company and the value of the executive's service to the Company.
Section 162(m) of the Internal Revenue Code. Section 162(m) of the Internal
Revenue Code of 1986, as amended, generally limits (to $1 million per covered
executive) the deductibility for federal income tax purposes of annual
compensation paid to a company's chief executive officer and each of its other
four most highly compensated executed officers. All options granted under the
Company's Incentive Plan in fiscal year 1998 are intended to qualify for an
exemption from the application of Section 162(m) of the Code, thereby preserving
the deductibility for federal income tax purposes of compensation that may be
attributable to the exercise of such options.
Compensation of the Chief Executive Officer. The Compensation Committee
based the compensation of the Company's Chief Executive Officer, Mr. Johnson, on
the same considerations described above for other executive officers. In
reviewing Mr. Johnson's performance for purposes of his annual bonus, the
Committee focused on factors including the performance of the Company's stock,
the adjustment in Mr. Johnson's salary in 1997, the stock options granted during
1997, and the effect on the Company's financial results of low oil and natural
gas prices during 1998, and took into account the Company's goal of seeking to
minimize general and administrative expenses so as to maximize funds available
for the development of its exploration projects. After considering these factors
and consistent with its decision not to award bonuses to the other executive
officers, the Compensation Committee determined not to award Mr. Johnson a bonus
during 1998. Mr. Johnson's base salary was higher in 1998 than 1997 as a result
of a salary increase in October 1997 to take into account the length of his full
time employment with the Company. Like the other executive officers, Mr.
Johnson's base salary was reduced by 10%, effective February 1, 1999.
Consistent with its determination as to the other executive officers, the
Compensation Committee determined not to make additional option grants in 1998
to Mr. Johnson because he was granted options to purchase 100,000 shares of
Common Stock at an exercise price of $11.00 per share and because of his current
ownership of Common Stock.
10
<PAGE> 14
Executive compensation is an evolving field. The Compensation Committee
monitors trends in this area, as well as changes in law, regulation and
accounting practices, that may affect either its compensation practices or its
philosophy. Accordingly, the Committee reserves the right to alter its approach
in response to changing conditions.
The Compensation Committee
Steven A. Webster
Douglas A.P. Hamilton
Paul B. Loyd, Jr.
EMPLOYMENT ARRANGEMENTS
The Company has entered into employment agreements with each executive
officer listed below. While the employment agreements were not amended, each of
the officers' base salary was reduced by 10%, effective February 1, 1999. The
following chart shows the annual base salaries that the executive officers
listed therein are currently being paid by the Company.
<TABLE>
<CAPTION>
NAME AND CURRENT POSITION ANNUAL SALARY
- ------------------------- -------------
<S> <C>
S. P. Johnson IV............................................ $189,000
President and Chief Executive Officer
Frank A. Wojtek............................................. $135,000
Chief Financial Officer
George Canjar............................................... $135,000
Vice President of Exploration &
Development
Kendall A. Trahan........................................... $121,500
Vice President of Land
</TABLE>
Each of the employment agreements also provided for the initial grants of
stock options for Messrs. Johnson and Wojtek and revisions to previously granted
stock options for Messrs. Canjar and Trahan. The agreement with Mr. Canjar also
includes a provision that entitles him to an undivided 0.5% overriding royalty
interest, proportionately reduced to the Company's working interest, in all oil,
gas and other minerals that may be produced and saved from prospects generated
by Mr. Canjar.
Each of the employment agreements of Mr. Johnson, Mr. Wojtek, Mr. Trahan
and Mr. Canjar has an initial three-year term provided that at the end of the
second year of such initial term and on every day thereafter, the term of each
such employment agreement will automatically be extended for one day, such that
the remaining term of the agreement shall never be less than one year. Under
each agreement, both the Company and the employee may terminate the employee's
employment at any time. Upon termination of employment on account of disability
or if employment is terminated by the Company for any reason (except under
certain limited circumstances defined as "for cause" in the agreement), or if
employment is terminated either (x) by the employee subsequent to a change of
control (as defined and including certain terminations prior to a change of
control if caused by a person involved in precipitating a change of control) or
(y) by reason of death during a sixty day period following the elapse of one
year after such a change of control ("window period") or with good reason (as
defined), under the agreement the employee will generally be entitled to (i) an
immediate lump sum cash payment equal to 150% (375% if termination occurs after
a change of control) of his annual base salary that would have been payable for
the remainder of the term of the applicable agreement discounted at 6%, (ii)
continued participation in all the Company's welfare benefit plans and continued
life insurance and medical benefits coverage and (iii) the immediate vesting of
any stock options or restricted stock previously granted to such employee and
outstanding as of the time immediately prior to the date of his termination, or
a cash payment in lieu thereof. If employment terminates due to death of the
employee and other than in a window period, the Company will pay a sum equal to
the amount of the employee's annual base salary for the remaining term of the
agreement, reduced by the amount payable under
11
<PAGE> 15
any life insurance policies to the extent that such amounts are attributable to
premiums paid by the Company. The salaries in each of these agreements are
subject to periodic review and provide for increases consistent with increases
in base salary generally awarded to other executives of the Company. Each
agreement entitles the employee to participate in all of the Company's
incentive, savings, retirement and welfare benefit plans in which other
executive officers of the Company participate. The agreements each provide for
an annual bonus in an amount comparable to the annual bonus of other Company
executives, taking into account the individual's position and responsibilities.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is comprised of
Messrs. Webster, Hamilton and Loyd.
Douglas A. P. Hamilton, Paul B. Loyd, Jr. and Steven A. Webster, each of
whom is a director of the Company, have guaranteed the term loan portion of the
credit facility with Compass Bank. As of March 31, 1999, the total outstanding
borrowings under the term loan were $9 million. These directors have also
provided an aggregate amount of $2 million in collateral, primarily in the form
of marketable securities, to secure the borrowing base portion of the Company's
credit facility. This collateral was provided in connection with the deferral of
principal payments due under the borrowing base facility until July 1, 1999.
12
<PAGE> 16
PERFORMANCE GRAPH
The following graph presents a comparison of the yearly percentage change
in the cumulative total return on the Common Stock over the period from August
6, 1997, the date of the Company's initial public offering, to December 31,
1998, with the cumulative total return of the S&P 500 Index and of the American
Stock Exchange Natural Resource Industry Index of publicly traded companies over
the same period. The graph assumes that $100 was invested on August 6, 1997, in
the Common Stock at its initial public offering price of $11.00 per share and in
each of the other two indices and the reinvestment of all dividends, if any.
The graph is presented in accordance with SEC requirements. Shareholders
are cautioned against drawing any conclusions from the data contained therein,
as past results are not necessarily indicative of future financial performance.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG CARRIZO OIL & GAS, INC., THE S&P
500 INDEX AND THE AMERICAN STOCK
EXCHANGE NATURAL RESOURCE
INDUSTRY INDEX
<TABLE>
<CAPTION>
AMEX
MEASUREMENT PERIOD NATURAL CARRIZO
(FISCAL YEAR COVERED) S&P 500 RES. OIL & GAS
<S> <C> <C> <C>
08/06/97 100 100 100
09/30/97 99 107 136
12/31/97 101 91 72
03/31/98 115 84 66
06/30/98 118 75 50
09/30/98 106 64 25
12/31/98 128 59 13
</TABLE>
* $100 Invested on August 6, 1997 in Stock or Index (Including Reinvestment of
Dividends).
PROPOSAL 2
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed, and recommends the approval of the
appointment of, Arthur Andersen LLP, who have been the Company's auditors since
1997, as independent public accountants for the fiscal year ending December 31,
1999. Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting and will be given the opportunity to make a statement, if they
desire to do so, and to respond to appropriate questions.
Unless shareholders specify otherwise in the proxy, proxies solicited by
the Board of Directors will be voted by the persons named in the proxy at the
Annual Meeting to ratify the selection of Arthur Andersen
13
<PAGE> 17
LLP as the Company's auditors for 1999. The affirmative vote of a majority of
the votes cast at the Annual Meeting will be required for ratification.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP.
OTHER BUSINESS
As of the date of this proxy statement, the Board of Directors is not
informed of any other matters, other than those above, that may be brought
before the meeting. The persons named in the enclosed form of proxy or their
substitutes will vote with respect to any such matters in accordance with their
best judgment.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Rule 14a-8 under the Securities Exchange Act of 1934, as amended, addresses
when a company must include a shareholder's proposal in its proxy statement and
identify the proposal in its form of proxy when the company holds an annual or
special meeting of shareholders. Under Rule 14a-8, proposals that shareholders
intend to have included in the Company's proxy statement and form of proxy for
the 2000 Annual Meeting of Shareholders must be received by the Company no later
than December 31, 1998. However, if the date of the 2000 Annual Meeting of
Shareholders changes by more than 30 days from the date of the 1999 Annual
Meeting of Shareholders, the deadline is a reasonable time before the Company
begins to print and mail its proxy materials, which deadline will be set forth
in a Quarterly Report on Form 10-Q or will otherwise be communicated to
shareholders. Shareholder proposals must also be otherwise eligible for
inclusion.
If a shareholder desires to bring a matter before an annual or special
meeting and the proposal is submitted outside the process of Rule 14a-8, the
shareholder must follow the procedures set forth in the Company's Bylaws. The
Company's Bylaws provide generally that shareholders who wish to nominate
directors or to bring business before a shareholders' meeting must notify the
Company and provide certain pertinent information at least 80 days before the
meeting date (or within ten days after public announcement pursuant to the
Bylaws of the meeting date, if the meeting date has not been publicly announced
more than 90 days in advance). If the date of the 2000 Annual Meeting of
Shareholders is the same as the date of the 1999 Annual Meeting of Shareholders,
shareholders who wish to nominate directors or to bring business before the 2000
Annual Meeting of Shareholders must notify the Company no later than March 6,
2000.
By Order of the Board of Directors
/s/ FRANK A. WOJTECK
Frank A. Wojtek,
Secretary
Dated: April 30, 1999
Houston, Texas
14
<PAGE> 18
<TABLE>
<S> <C>
CARRIZO OIL & GAS, INC.
P PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
O MAY 25, 1999
X
Y The undersigned hereby appoints S.P. Johnson IV and Frank A.
Wojtek, jointly and severally, proxies, with full power of
substitution and with discretionary authority, to vote all
shares of Common Stock that the undersigned is entitled to
vote at the Annual Meeting of Shareholders of Carrizo Oil &
Gas, Inc. (the "Company") to be held on Tuesday, May 25,
1999, at the Houston Marriott Westside, 13210 Katy Freeway,
Houston, Texas, at 10:00 a.m., or at any adjournment
thereof, hereby revoking any proxy heretofore given.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN. IN THE ABSENCE OF SPECIFIC
DIRECTIONS TO THE CONTRARY, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF EACH OF THE DIRECTORS NAMED BELOW AND FOR THE
APPROVAL OF ARTHUR ANDERSEN LLP AS THE COMPANY'S ACCOUNTANTS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
The undersigned hereby acknowledges receipt of the Notice
of, and Proxy Statement for, the aforesaid Annual Meeting.
1. ELECTION OF DIRECTORS, NOMINEES:
S.P. Johnson IV; Frank A. Wojtek; Steven A. Webster; Douglas
A.P. Hamilton; and Paul B. Loyd, Jr. as directors, except as
indicated below; or
[ ] FOR [ ] WITHHELD
For, except vote withheld from the following nominee(s):
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
</TABLE>
<PAGE> 19
2. APPROVAL OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER
31, 1999:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. With discretionary authority as to such other matters as may
properly come before the meeting.
Date:
-----------------------------,
1999
-----------------------------
(Signature)
-----------------------------
(Signature)
Sign exactly as name appears
hereon.
(Joint owners should each
sign. When signing as
attorney, executor, officer,
administrator, trustee, or
guardian, please give full
title as such.)
PLEASE SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.
