UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Carrizo Oil & Gas, Inc.
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Notice of 20162018 Annual Meeting
of Shareholders and Proxy Statement
Carrizo Oil & Gas, Inc.
Tuesday, May 17, 201622, 2018 at 9:00 a.m.1:30 p.m., Houston Time
Two Allen Center,Heritage Plaza, The Forum, 1200 SmithPlaza Conference Room, 1111 Bagby Street, 12th1st Floor,
Houston, Texas 77002
Carrizo Oil & Gas, Inc. 500 Dallas Street, Suite 2300 Houston, Texas 77002 |
April 4, 2016
23, 2018
Dear Fellow Shareholder:
You are cordially invited to attend the 20162018 Annual Meeting of Shareholders of Carrizo Oil & Gas, Inc. to be held at 9:00 a.m.1:30 p.m., Central time, on Tuesday, May 17, 2016,22, 2018, at Two Allen Center,Heritage Plaza, The Forum,Plaza Conference Room, located at 1200 Smith1111 Bagby Street, 12th1st Floor, Houston, Texas 77002.
For 2016, we are pleased to take advantage of the United States Securities and Exchange Commission rule allowing companies to furnish proxy materials to their shareholders over the Internet. We believe that this delivery process will expedite shareholders’ receipt of proxy materials, lower costs and reduce the environmental impact of our annual meeting. On or about April 4, 2016,23, 2018, we will mail to our shareholders of record, as of March 21, 2016,23, 2018, a Notice of Annual Meeting of Shareholders, as well as a Notice of Internet Availability of Proxy Materials containing instructions on how to access the proxy materials, including our proxy statement, form of proxy card and our 20152017 Annual Report to Shareholders. The Notice of Internet Availability of Proxy Materials also provides instructions on how to receive a paper copy of the proxy materials, including a proxy card, by mail and how to vote.
The Notice of Annual Meeting of Shareholders the Notice of Internet Availability of Proxy Materials and the proxy statement describe the matters to be acted upon during the meeting. We also encourage you to read our 20152017 Annual Report to Shareholders.
We urge you to participate in the annual meeting and hope you will find it convenient to attend in person. Whether or not you expect to attend, we encourage you to vote promptly. It is important to assure representation of your shares at the meeting and the presence of a quorum. You may vote your shares by internet, by telephone or by mail. Instructions regarding all three methods of voting are provided in the Notice of Internet Availability of Proxy Materialsour proxy statement and on the proxy card. If you hold your shares through an account with a broker, bank, nominee, fiduciary or other custodian, please follow the instructions you receive from them to vote your shares.
Thank you for your ongoing support and continued interest in Carrizo Oil & Gas, Inc.
Sincerely,
S.P. Johnson IV
President and Chief Executive Officer
Sincerely, |
S.P. Johnson IV |
President and Chief Executive Officer |
Notice of Annual Meeting of Shareholders of Carrizo Oil & Gas, Inc. | |
Date: | Time: | Place: | ||
Tuesday, May | 1:30 p.m., Central time | Heritage Plaza, The |
Items of Business
1. | To elect |
2. | To approve, in an advisory vote, the compensation of the Company’s named executive officers. |
3. | To approve, in accordance with NASDAQ Marketplace Rule 5635(d), the issuance of shares of the Company’s common stock (i) either as dividends on, or upon the redemption of, the Company’s 8.875% redeemable preferred stock and (ii) upon the exercise of common stock purchase warrants issued in connection with such preferred stock. |
4. | To ratify the appointment of |
To transact such other business as may properly come before the meeting. |
The Company has fixed the close of business on March 21, 2016,23, 2018, 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. However, even if you plan to attend the meeting, you are requested to read the proxy materials and to vote by internet, by telephone or by mail using the instructions on the Notice of Internet Availability of Proxy Materials and on the proxy card, or in the manner prescribed by your broker or other nominee, as soon as possible. The proxy materials were first made available to shareholders on or about April 4, 2016.23, 2018.
By Order of the Board of Directors, |
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Marcus G. Bolinder |
Corporate Secretary |
April |
Important Notice of Internet Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on May 22, 2018. Our proxy statement and the accompanying form of proxy are attached. Our financial and other information is contained in our 2017 Annual Report to Shareholders. This proxy statement and our 2017 Annual Report to Shareholders are also available at www.proxypush.com/CRZO.
Cast Your Vote Right Away
YOUR VOTE IS IMPORTANT: Whether you plan to attend the Annual Meeting or not, please vote your shares by the Internet, telephone or mail in order to ensure the presence of a quorum. If you attend in person, you may choose to vote your shares at that time even if you have previously voted your shares. Any proxy may be revoked by the submission of a later dated proxy or a written notice of revocation before close of the Annual Meeting.
Important Notice of Internet Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on May 17, 2016. Our
Even if you plan to attend the Annual Meeting, please read this proxy statement and the accompanying form of proxy are attached. Our financial and other information is contained in our 2015 Annual Report to Shareholders. If you received a Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials unless specifically requested. This proxy statement and our 2015 Annual Report to Shareholders are available at www.proxyvote.com. If you would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability of Proxy Materials. In addition, the Notice of Internet Availability of Proxy Materials provides instructions on how shareholders may request to receive either printed or email proxy materials for future annual meetings.
Cast Your Vote Right Away
YOUR VOTE IS IMPORTANT: Whether you plan to attend the Annual Meeting or not, please vote your shares by the Internet, telephone or mail in order to ensure the presence of a quorum. If you attend in person, you may choose to vote your shares at that time even if you have previously voted your shares. Any proxy may be revoked by the submission of a later dated proxy or a written notice of revocation before close of the Annual Meeting.
Even if you plan to attend the Annual Meeting, please read this Proxy Statement with care and vote right away using any of the following methods. In all cases, have your proxy card or voting instructions accessible and follow the instructions. If your shares are held in the name of a broker or other nominee, follow the voting instructions you receive from such broker or other nominee to vote your shares.
BY INTERNET USING YOUR COMPUTER | BY TELEPHONE | BY MAILING YOUR PROXY CARD | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Visit 24/7 www.proxypush.com/CRZO | Dial toll-free 24/7 1-866-895-6815 or the number provided by your broker or other nominee | Cast your sign your proxy card
CORPORATE GOVERNANCE AND BOARD MATTERS pre-approval of audit andnon-audit services. The Audit Committee also reviews and discusses the annual audited financial statements, the quarterly unaudited financial statements and internal control over financial reporting with management and the independent registered public accounting firm. A copy of the Audit Committee Charter may be found on our website atwww.carrizo.com under “AboutUs - Governance.” The Board has determined that all of the members of the Audit Committee satisfy the independence standards under the NASDAQ Listing Rules and Rule10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, the Board has determined that each member of the Audit Committee is an “audit committee financial expert,” as such term is defined in Item 407(d)(5)(ii) of RegulationS-K promulgated by the SEC. A description of the background and qualifications of each member of the Audit Committee is described above under “Proposal 1. Election of Directors.” Compensation Committee The primary responsibilities of the Compensation Committee are (i) to review and approve the compensation of our executive officers and directors, (ii) to oversee and advise the Board on the policies that govern our compensation programs, and (iii) to administer the Company’s incentive compensation plans. The Compensation Committee is composed entirely of independent directors. The Nominating and Corporate Governance Committee recommended the appointment of these directors to serve on the Compensation Committee after determining that they had the independence, knowledge and skills to accomplish the scope of responsibilities set out in the Compensation Committee’s Charter. The Compensation Committee has the authority to select, retain, terminate, and approve the fees and other retention terms of special counsel, compensation consultants or other experts or consultants, as it deems appropriate, without seeking approval of the Board of Directors or management. The Compensation Committee has historically retained an independent compensation consulting firm to provide the Compensation Committee with an analysis of competitive market data and recommendations regarding our executive and director compensation programs. The Compensation Committee has been appointed by the Board of Directors to administer the 2017 Incentive Plan of Carrizo Oil & Gas, Inc. (the “2017 Incentive Plan”), that was approved at the 2017 Annual Meeting of Shareholders, the Incentive Plan of Carrizo Oil & Gas, Inc., as amended and restated effective May 15, 2014 (the “Prior Incentive Plan”), and the Carrizo Oil & Gas, Inc. Cash-Settled Stock Appreciation Rights Plan (the “Cash SAR Plan”). The Board of Directors has designated a special stock award committee of the Board consisting solely of Mr. Johnson to determine whether and how much to award certain eligible participants, excluding “officers” (as defined in Rule16a-1 promulgated under Section 16 of the Exchange Act) andnon-employee directors, shares of restricted stock, restricted stock units (“RSUs”), options and stock appreciation rights (“SARs”) under the 2017 Incentive Plan, Prior Incentive Plan and the Cash SAR Plan, up to an aggregate grant date or modification date fair value not to exceed $250,000 per individual. A copy of the Compensation Committee Charter may be found on our website atwww.carrizo.com under “AboutUs - Governance.” Nominating and Corporate Governance Committee
The primary responsibilities of the Nominating and Corporate Governance Committee include (i) identifying, evaluating and recommending, for the approval of the entire Board of
CORPORATE GOVERNANCE AND BOARD MATTERS Directors, potential candidates to become members of the Board of Directors, (ii) recommending membership on standing committees of the Board of Directors, (iii) developing and recommending to the entire Board of Directors corporate governance principles and practices for the Company and assisting in the implementation of such policies, and (iv) assisting in the identification, evaluation and recommendation of potential candidates to become officers of the Company. The Nominating and Corporate Governance Committee reviews the Company’s Code of Ethics and Business Conduct and its enforcement and reviews and recommends to the Board whether waivers should be made with respect to such Code. A copy of the Nominating and Corporate Governance Committee Charter may be found on our website atwww.carrizo.com
The Board of Directors held five meetings during Non-employee directors ordinarily meet in executive session without management present at most regularly scheduled Board meetings. Additionally, the independent directors periodically meet without management ornon- independent directors present at regularly scheduled Board meetings and may meet at other times at the discretion of the Lead Independent Director, a majority of the independent directors, any committee of the Board of Directors or the entire Board of the Directors. The Company does not have a policy regarding director attendance at annual meetings of shareholders. All of the Company’s directors attended the
The Board’s Role in Risk Oversight
The Board of Directors generally oversees risk management, and the Chief Executive Officer and other members of executive management generally manage the material risks that we face. The Board of Directors focuses on the most significant risks facing the Company and the Company’s general risk management strategy, and also ensures that risks undertaken by the Company are consistent with the Board’s risk tolerance. Responsibility for risk oversight generally rests with the entire Board of Directors. Risks falling within this area would include but are not limited to business ethics, general business and industry risks, operating risks and financial risks. We have not concentrated responsibility for all risk management in a single risk management officer, but rather rely on various executive and other management personnel to understand, assess, mitigate and generally manage material risks that we face in various areas including capital expenditure plans, liquidity, operations and health, safety and environmental. These personnel report to the Board of Directors, as appropriate, regarding material risks and our management of those risks. The Board of Directors monitors the risk management information provided to it and provides feedback to management from time to time.
CORPORATE GOVERNANCE AND BOARD MATTERS The standing committees of the Board assist the Board of Directors in managing specific risk areas. The Audit Committee assists the Board of Directors in oversight of the integrity of the Company’s financial statements and various matters relating to our publicly available financial information and our internal auditors and independent our governance fall within the authority of the Nominating and Corporate Governance Committee, which is responsible for evaluating independence of directors and Board candidates. Risks associated with retaining and incentivizing management fall within the scope of the authority of the Compensation Committee, which assists the Board of Directors in reviewing and administering compensation, benefits, incentive and equity-based compensation plans. These committees receive reports from management periodically regarding management’s assessment of risks and report regularly to the full Board of Directors. Majority Vote in Uncontested Director Elections
serve as a director, whether by the Board of Directors or by shareholder, an incumbent director nominee will agree that if such incumbent director nominee fails to receive the required vote for election to the Board of Directors at the next meeting of the shareholders of the Company at which such nominee facesre-election, he or she will submit to the Board of Directors an irrevocable letter of resignation that would be effective upon, and only in the event that the Board of Directors accepts, such resignation. The Board of Directors will decide whether to accept or reject such resignation, or whether other action should be taken, taking into account the recommendation of the Nominating and Corporate Governance Committee of the Board of Directors and will publicly disclose (by a press release, a filing with the SEC or other broadly disseminated means of communication) its decision regarding the tendered resignation and the rationale behind the decision within 90 days from the date of the certification of the election results.
Code of Ethics and Business Conduct
The Nominating and Corporate Governance Committee developed and recommended to the Board a Code of Ethics and Business Conduct, which the Board has adopted. The Code of Ethics and Business Conduct is applicable to all employees, officers and directors and satisfies the requirements of NASDAQ Listing Rule 5610. Any waiver of, or
CORPORATE GOVERNANCE AND BOARD MATTERS amendment to, the Code of Ethics and Business Conduct of the Company may be approved only by the Board and will be promptly disclosed as required by law, the regulations of the SEC, and the NASDAQ Stock Market Rules. Such waivers will be disclosed promptly by posting to our website. The Nominating and Corporate Governance Committee also reviews and may recommend to the Board waivers of, or amendments to, the Code of Ethics and Business Conduct. The Code of Ethics and Business Conduct is available on the Company’s website atwww.carrizo.com Shareholder Communication with the Board of Directors
Shareholders may communicate with the Board by submitting their communications in writing, addressed to the Board as a whole or, at the election of the shareholder, to one or more specific directors, c/o Corporate Secretary, Carrizo Oil & Gas, Inc., 500 Dallas Street, Suite 2300, Houston, Texas 77002. The Audit Committee of the Board of Directors has established procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, or auditing matters. Shareholders who wish to submit a complaint under these procedures should submit the complaint in writing to: F. Gardner Parker, Chairman of the Audit Committee, Carrizo Oil & Gas, Inc., 500 Dallas Street, Suite 2300, Houston, Texas 77002. The Company also has a hotline by which employees can confidentially communicate illegal and unethical activities including concerns or complaints regarding the matters noted above. The phone number is877-888-0002.
Compensation Committee Interlocks and Insider Participation The members of the Compensation Committee during the last completed fiscal year were Messrs. Fulton, Parker and Ramsey. There are no matters relating to interlocks or insider participation that we are required to report.
11 |
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors is responsible for determining the ultimate direction of our business, determining the principles of our business strategy and policies and promoting the long-term interests of the Company. The Board of Directors possesses and exercises oversight authority over our business, but, subject to our governing documents and applicable law, delegatesday-to-day management of the Company to our Chief Executive Officer and our executive management.
In assessing the qualifications of candidates for director, the Nominating and Corporate Governance Committee considers, in addition to qualifications set forth in the Company’s bylaws, each potential nominee’s personal and professional integrity, experience, reputation, skills, ability and willingness to devote the time and effort necessary to be an effective board member, and commitment to acting in the best interests of the Company and its shareholders. The Nominating and Corporate Governance Committee also considers requirements under the listing standards of the NASDAQ Stock Market for a majority of independent directors, as well as qualifications applicable to membership on Board committees under the listing standards and various regulations. The Nominating and Corporate Governance Committee makes recommendations to the Board, which in turn makes the nominations for consideration by the shareholders.
Ms. Aldrich Sevilla-Sacasa was appointed to the Board in March 2018 and is standing for election by shareholders for the first time at the 2018 Annual Meeting. Ms. Aldrich Sevilla-Sacasa was recommended to the Nominating and Corporate Governance Committee by anon-employee director. After considering other candidates and finding that Ms. Aldrich Sevilla-Sacasa was independent under NASDAQ rules, the Nominating and Corporate Governance Committee recommended Ms. Aldrich Sevilla-Sacasa to the full Board, which in turn elected her as a director.
Suggestions for potential nominees for director can come to the Nominating and Corporate Governance Committee from a number of sources, including incumbent directors, officers, executive search firms and others. The extent to which the Nominating and Corporate Governance Committee dedicates time and resources to the consideration and evaluation of any potential nominee brought to its attention depends on the information available to the Nominating and Corporate Governance Committee about the qualifications and suitability of the individual, viewed in light of the needs of the Board of Directors, and is at the Nominating and Corporate Governance Committee’s discretion. Recognizing the contribution of incumbent directors who have been able to develop, over a period of time, increasing insight into the Company and its operations and, therefore, provide an increasing contribution to the Board as a whole, the Nominating and Corporate Governance Committee reviews each incumbent director’s qualifications to continue on the Board in connection with the selection of nominees to take office when that director’s term expires, and conducts a more detailed review of each director’s suitability to continue on the Board following expiration of the director’s term.
In addition, the Nominating and Corporate Governance Committee’s policy is that it will consider candidates for the Board recommended by shareholders. Any such recommendation
recommendation
12 | CARRIZO OIL & GAS |
PROPOSAL 1. ELECTION OF DIRECTORS
should include the candidate’s name and qualifications for Board membership and should be submitted in writing to the Corporate Secretary, Carrizo Oil & Gas, Inc., 500,500 Dallas Street, Suite 2300, Houston, Texas 77002, along with:
a signed statement of the proposed candidate consenting to be named as a candidate and, if nominated and elected, to serve as a director;
a statement that the writer is a shareholder of the Company and is proposing a candidate for consideration by the Nominating and Corporate Governance Committee;
a statement detailing any relationship between the candidate and any customer, supplier or competitor of the Company;
the financial and accounting background of the candidate, to enable the Nominating and Corporate Governance Committee to determine whether the candidate would be suitable for Audit Committee membership; and
detailed information about any relationship or understanding between the proposing shareholder and the candidate.
Although the Nominating and Corporate Governance Committee will consider candidates recommended by shareholders, it
may determine not to recommend that the Board, or the Board may determine not to, nominate those candidates for election to the Board of Directors.
Our Code of Ethics and Business Conduct provides that as a condition to being nominated to continue to serve as a director, whether by the Board or by a shareholder, an incumbent director nominee mustwill agree that if such incumbent director nominee fails to receive the required vote for election to the Board at the next meeting of the shareholders of the Company at which such nominee facesre-election, he or she will submit to the Board an irrevocable letter of resignation that would be effective upon, and only in the event that the Board accepts, such resignation.
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The Nominating and Corporate Governance Committee considers diversity in identifying nominees for director and endeavors to have a Board representing diverse experience in areas that will contribute to the Board’s ability to perform its roles relating to oversight of the Company’s business, strategy and risk exposure
worldwide. For example, the Nominating and Corporate Governance Committee takes into account, among other things, the diversity of business, leadership and personal experience of Board candidates and determines how that experience will serve the best interests of the Company.
The Board of Directors has nominated for election as directors at the annual meetingAnnual Meeting the seveneight nominees named below. If elected, each nominee will serve until the 20172019 Annual Meeting of Shareholders or until their successors have been elected and qualified or until their death, resignation or removal.
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 on the enclosed proxy card, in the absence of contrary instructions by shareholders, 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.
Each nominee brings a strong and unique background and set of skills to the Board of
2018 PROXY STATEMENT | 13 |
PROPOSAL 1. ELECTION OF DIRECTORS
Directors, giving the Board of Directors as a whole, competence and experience in a wide variety of areas, including corporate governance and board service, executive management, corporate finance and financial markets, investment, the oil and gas industry, and civic leadership. Information regarding the
business experience and qualifications of each nominee is provided below. All nominees are currently serving as directors and are standing for re-election.re-election by the shareholders, except in the case of Ms. Aldrich Sevilla-Sacasa, who joined our Board of Directors in March 2018 and is a first-time candidate for election.
Board Recommendation
The Board of Directors recommends that shareholders vote “FOR” the election of the seveneight nominees for director.
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CARRIZO OIL & GAS
PROPOSAL 1. ELECTION OF DIRECTORS
S.P. Johnson IV Age: Director Since: 1993 |
Principal Occupation
President and Chief Executive Officer, Carrizo Oil & Gas, Inc.
Recent Business Experience
Mr. Johnson has served as our President and Chief Executive Officer since December 1993. Prior to that, he worked for Shell Oil Company for 15 years, where his managerial positions included Operations Superintendent, Manager of Planning and Finance and Manager of Development Engineering. Mr. Johnson is a Registered Petroleum Engineer and holds a B.S. in Mechanical Engineering from the University of Colorado.
Principal Occupation President and Chief Executive Officer, Carrizo Oil & Gas, Inc. Recent Business Experience Mr. Johnson has served as our President and Chief Executive Officer since December 1993. Prior to that, he worked for Shell Oil Company for 15 years, where his managerial positions included Operations Superintendent, Manager of Planning and Finance and Manager of Development Engineering. Mr. Johnson is a Registered Petroleum Engineer and holds a B.S. in Mechanical Engineering from the University of Colorado. Other Current Public Company Directorships None Public Company Directorships Within the Past Five Years Basic Energy Services, Inc. Reasons for Nomination Mr. Johnson brings to the Board of Directors extensive experience in oil and gas exploration and production and the energy industry through his roles at the Company and other energy companies. He also brings to the Board extensive knowledge of the Company by virtue of his being a co-founder and long-time director and President and Chief Executive Officer of the Company. Mr. Johnson’s current employment agreement with the Company provides that he will be a director. For more information regarding his employment agreement, please read “Executive Compensation - Employment Agreements.” Steven A. Webster Age:66 Director Since: 1993 Principal Occupation Co-Managing Partner and Co-Chief Executive Officer, Avista Capital Holdings, LP Recent Business Experience Mr. Webster has been the Chairman of our Board of Directors since June 1997. Mr. Webster has served as Co-Managing Partner of Avista Capital Partners LP, a private equity firm focused on investments in the energy, healthcare and other business sectors, since he co-founded the firm in July 2005. From January 2000 until June 2005, Mr. Webster served as the Chairman of Global Energy Partners, Ltd., an affiliate of CSFB Private Equity, which made private equity investments in the energy business. From December 1997 to May 1999, Mr. Webster was the Chief Executive Officer and President of R&B Falcon Corporation, an offshore drilling contractor, and prior to that, was Chairman and Chief Executive Officer of Falcon Drilling Company, which he founded in 1988. Mr. Webster holds an M.B.A. from Harvard Business School where he was a Baker Scholar. He also holds a B.S. in Industrial Management and an Honorary Doctorate in Management from Purdue University. Other Current Public Company Directorships Camden Property Trust Era Group Inc. Oceaneering International, Inc. Public Company Directorships Within the Past Five Years Basic Energy Services, Inc. Geokinetics, Inc. Hercules Offshore, Inc. Hi-Crush Partners LP SEACOR Holdings, Inc. Reasons for Nomination Mr. Webster brings to the Board of Directors experience in, and knowledge of, the energy industry, knowledge of the Company as a co- founder and long-time director, business leadership skills from his tenure as chief executive officer of publicly traded companies and his over 30-year career in private equity and investment activities, and experience as a director of several other public and private companies. 2018 PROXY STATEMENT 15 PROPOSAL 1. ELECTION OF F. Gardner Parker Independent Age: Director Since:2000 Committees:Audit (Chair) and Compensation Principal Occupation Private Investor Recent Business Experience Mr. Parker has been the Lead Independent Director of our Board of Directors since May 2012. Mr. Parker has been a private investor since 1984. Prior to that, he worked with Ernst & Ernst (now Ernst & Young LLP) for 14 years, seven of which he served as a partner. In the private sector, Mr. Parker is Chairman of the Board of Edge Resources Ltd, an Energy capital fund, Enterprise Offshore Drilling LLC, an offshore drilling service provider, and Norton Ditto, a men’s clothing retailer. He is a graduate of The University of Texas at Austin and is board certified by the National Association of Corporate Directors. Mr. Parker is also a 2011 National Association of Corporate Directors (NACD) Board Leadership Fellow. He has demonstrated his commitment to boardroom excellence by completing NACD’s comprehensive program of study for experienced corporate directors-a rigorous suite of courses spanning leading practices for boards and committees- and he supplements his skill sets through ongoing engagement with the director community and access to leading practices. Other Current Public Company Directorships Sharps Compliance Corp. Solaris Oilfield Infrastructure, Inc. Public Company Directorships Within the Past Five Years Camden Property Trust Hercules Offshore, Inc. Reasons for Nomination Mr. Parker brings to the Board of Directors an extensive background in accounting and tax matters, experience as a director on the boards and audit committees of numerous public and private companies, and financial experience through his involvement in structuring private and venture capital investments for the past 30 years. Frances Aldrich Sevilla-Sacasa Independent Age: 62 Director Since: 2018 Principal Occupation Private Investor Recent Business Experience Ms. Aldrich Sevilla-Sacasa is a private investor and was Chief Executive Officer of Banco Itaú International, Miami, Florida, from April 2012 to December 2016. Prior to that time, she served as Executive Advisor to the Dean of the University of Miami School of Business from August 2011 to March 2012, Interim Dean of the University of Miami School of Business from January 2011 to July 2011, President of U.S. Trust, Bank of America Private Wealth Management from July 2007 to December 2008, President and Chief Executive Officer of US Trust Company from early 2007 until June 2007, and President of US Trust Company from November 2005 until June 2007. She previously served in a variety of roles with Citigroup’s private banking business, including President of Latin America Private Banking, President of Europe Private Banking, and Head of International Trust Business. Ms. Aldrich Sevilla- Sacasa holds a Bachelor of Arts Degree from the University of Miami and an M.B.A. from the Thunderbird School of Global Management. Other Current Public Company Directorships Camden Property Trust Delaware Funds by Macquarie Public Company Directorships Within the Past Five Years None Reasons for Nomination Ms. Sevilla-Sacasa brings to the Board of Directors considerable experience in financial services, banking and wealth management. In addition, her experience as a former president and chief executive officer of a trust and wealth management company, and as a director of other corporate and not-for-profit boards has provided her with expertise in the area of corporate governance. 16 CARRIZO OIL & GAS PROPOSAL 1. ELECTION OF DIRECTORS Thomas L. Carter, Jr. Independent Age: Director Since: 2005 Committees:Audit and Nominating and Corporate Governance (Chair) Principal Occupation President, Chairman and Chief Executive Officer, Black Stone Minerals, L.P. Recent Business Experience Mr. Carter has served as President, Chief Executive Officer and Chairman of the general partner of Black Stone Minerals, L.P., a publicly traded mineral acquisition and management company (“BSM”), since its formation in 2014. Mr. Carter is the founder of Black Stone Minerals Company, L.P. (“BSMC”), BSM’s predecessor, and has served as President, Chief Executive Officer and Chairman of its general partner since 1998. Mr. Carter served as Managing General Partner of W.T. Carter & Bro. from 1987 to 1992 and Black Stone Energy Company from 1980 to present, both of which preceded BSMC’s general partner. Mr. Carter founded Black Stone Energy Company, BSMC’s operating and exploration subsidiary, in 1980. From 1978 to 1980, Mr. Carter served as a lending officer in the Energy Department of Texas Commerce Bank in Houston, Texas, after serving in various other roles from 1975. He has served as a Trustee Other Current Public Company Directorships Black Stone Minerals, L.P. Public Company Directorships Within the Past Five Years None Reasons for Nomination Mr. Carter brings to the Board of Directors extensive knowledge of the oil and gas exploration and production business and knowledge of accounting and finance. Independent Age: Director Since: 2012 Committees: Compensation and Nominating and Corporate Governance Principal Occupation Retired Recent Business Experience Mr. Fulton served as President and Chief Executive Officer of Frontier Drilling ASA, an offshore oil and gas drilling and production contractor, from September 2002 through July 2010. From December 2001 to August 2002, Mr. Fulton managed personal investments. Prior to December 2001, Mr. Fulton spent most of his business career in the energy service and contract drilling industry. He served as Executive Vice President and Chief Financial Officer of Merlin Offshore Holdings, Inc. from August 1999 until November 2001. From 1998 to June 1999, Mr. Fulton served as Executive Vice President of Finance for R&B Falcon Corporation, during which time he was instrumental in effecting the merger of Falcon Drilling Company with Reading & Bates Corporation to create R&B Falcon Corporation and the merger of R&B Falcon Corporation with Cliffs Drilling Company. He graduated with a B.S. degree in Accountancy from the University of Illinois and an M.B.A. in finance from Northwestern University. Other Current Public Company Directorships None Public Company Directorships Within the Past Five Years Basic Energy Services, Inc. Reasons for Nomination Mr. Fulton brings to the Board of Directors extensive knowledge of the oil and gas exploration and production business and accounting and finance gained through his roles in executive positions at numerous public and private companies. 2018 PROXY STATEMENT 17 PROPOSAL 1. ELECTION OF DIRECTORS Roger A. Independent Age: Director Since: 2004 Committees:Audit and Compensation (Chair) Principal Occupation Retired Recent Business Experience Mr. Ramsey served as Managing Partner of Ramjet Capital Ltd., a private investment firm, from 1999 through January 2013. He served as the Chairman and Chief Executive Officer of MedServe, Inc., a privately held medical waste disposal and treatment company, from 2004 through December 2009. He served as Chairman of the Board of Allied Waste Industries, Inc., a waste recycling, transportation and disposal company, from October 1989 through his retirement in December 1998, and Chief Executive Officer of that company from October 1989 through July 1997. Beginning in 1960, Mr. Ramsey, a certified public accountant, was employed by the international accounting firm of Arthur Andersen LLP. In 1968, Mr. Ramsey co-founded Browning-Ferris Industries, Inc., a waste management company, and served as its Vice President and Chief Financial Officer until 1978. Mr. Ramsey also served as a director of WCA Waste Corporation, a waste management company, from June 2004 through March 2012 when the company was taken private. Mr. Ramsey is currently a member of the Board of Trustees at Texas Christian University. Other Current Public Company Directorships None Public Company Directorships Within the Past Five Years None Reasons for Nomination Mr. Ramsey brings to the Board of Directors experience and perspective as chief executive officer of several publicly traded and private companies and knowledge of accounting and finance as a director of several public and private companies. Independent Age: Director Since: 1993 Committees: Nominating and Corporate Governance Principal Occupation President and Director, A-Texian Compressor, Inc. Recent Business Experience Mr. Wojtek is a founder and currently the President and a Director of A-Texian Compressor, Inc., a natural gas compression services company, and has served in various capacities with that company since July 2004. In addition, Mr. Wojtek is a landowner and actively manages several ranch properties with oil and gas mineral rights, which total over 34,000 acres in South and West Texas. Mr. Wojtek served as our Chief Financial Officer, Vice President, Secretary and Treasurer from 1993 until August 2003. From 1992 to 1997, Mr. Wojtek was the Assistant to the Chairman of the Board of Reading & Bates Corporation, an offshore drilling company. Mr. Wojtek has also held the positions of Vice President, Secretary and Treasurer of Loyd & Associates, Inc., a private financial consulting firm, Other Current Public Company Directorships None Public Company Directorships Within the Past Five Years None Reasons for Nomination Mr. Wojtek brings to the Board of Directors knowledge of the Company and the energy industry by virtue of his service as 18 PROPOSAL 1. ELECTION OF DIRECTORS The The Compensation Committee engages Pearl Meyer & Partners, LLC (“Pearl Meyer”) as After considering Pearl Meyer’s 2017 review of Audit Compensation Audit Compensation Nominating 2017-2018 Director Term - Annual Cash Retainers and Meeting Attendance Fees Board of Directors Audit Compensation Nominating and Corporate Board Member Chairman of the Board of Directors Lead Independent Director Committee Chairman Committee Member Meeting Attendance Meeting Attendance via Teleconference Special Meeting Attendance Special Meeting Attendance via Teleconference 2017-2018 Director Term - Annual Equity Retainers (Fixed Number of RSUs) Board of Directors Audit Compensation Nominating and Corporate Governance Board Member Chairman of the Board of Directors Lead Independent Director Committee Chairman Committee Member 2018 PROXY STATEMENT 19 PROPOSAL 1. ELECTION OF DIRECTORS After considering Pearl Meyer’s 2018 review ofnon-employee director compensation, in March 2018, the Compensation Committee approved a number of changes to the Company’snon-employee director compensation program for the 2018-2019 director term which will reduce complexity and variability, enhance current and long-term competitiveness of program and align with peer and industry practices. These changes include converting from a fixed share approach to fixed value approach to grantingnon-employee director equity awards, eliminating board and committee meeting fees and increasing the equity component to 50% of total compensation. Thenon-employee director compensation for the 2018-2019 director term that was approved by the Compensation Committee in March 2018 is summarized below. 2018-2019 Director Term - Annual Cash Retainers Board of Directors Audit Compensation Nominating and Corporate Board Member Chairman of the Board of Directors Lead Independent Director Committee Chairman Committee Member 2018-2019 Director Term - Annual Equity Retainers (Fixed Value of RSUs) Board of Directors Audit Compensation Nominating and Corporate Board Member Chairman of the Board of Directors Lead Independent Director Committee Chairman Committee Member For the 2018-2019 director term, the number of RSUs to be granted tonon-employee directors will be based on the annual equity retainer amounts shown in the table above, divided by the closing stock price of our Common Stock on the NASDAQ Global Select Market on the grant date. 2017 Director Compensation The following table summarizes the cash and equity-based compensation Name Fees Earned or Paid in Cash Stock Awards(1) Total Steven A. Webster F. Gardner Parker Frances Aldrich Sevilla-Sacasa(2) Thomas L. Carter, Jr. Robert F. Fulton Roger A. Ramsey Frank A. Wojtek Represents the aggregate grant date fair value of CARRIZO OIL & GAS PROPOSAL 1. ELECTION OF DIRECTORS Ms. Aldrich Sevilla-Sacasa was not paid any compensation during 2017, but will receive a cash retainer of $14,000 and a equity retainer of 1,250 RSUs for her service on the Board from March 23, 2018, the date of her appointment through the end of the 2017-2018 director term. The RSUs were granted on April 4, 2018 and will vest on the earlier to occur of (i) the date of the Annual Meeting and (ii) June 30, 2018. Stock Ownership Guidelines Non-employee directors must own shares equal to three times their annual cash retainer. Upon appointment as anon-employee director, the individual has a five year period in which to comply with the ownership guidelines. As of March 23, 2018, allnon-employee directors were in compliance with the stock ownership guidelines. 2018 PROXY STATEMENT 21 The following table sets forth certain information as of March Executive Officer Age Position S.P. Johnson IV President, Chief Executive Officer and Director Brad Fisher Vice President and Chief Operating Officer David L. Pitts Vice President and Chief Financial Officer Gerald A. Morton General Counsel and Vice President of Business Development Richard H. Smith Vice President of Land Gregory F. Conaway Vice President and Chief Accounting Officer Set forth below is certain background information of each of our executive officers (other than Mr. Johnson, whose background is described above under “Proposal 1. Election of Directors”). Brad Fisher has served as Vice President and Chief Operating Officer since March 2005. Prior to that time, he served as Vice President of Operations since July 2000 and General Manager of Operations from April 1998 to June 2000. Prior to joining us, Mr. Fisher spent 14 years with Cody Energy and its predecessor Ultramar Oil & Gas Limited where he held various managerial and technical positions, last serving as Senior Vice President of Engineering and Operations. Mr. Fisher holds a B.S. degree in Petroleum Engineering from Texas A&M University. David L. Pitts has served as Vice President and Chief Financial Officer since August 2014. Mr. Pitts also served as Treasurer from August 2014 to March 2015 and Vice President and Chief Accounting Officer from January 2010 to September 2014. Prior to joining us, he served as an audit partner with Ernst & Young LLP. Prior to his employment at Ernst &Young LLP from 2002 to 2009, Mr. Pitts was a senior manager with Arthur Andersen. Mr. Pitts is a CPA and holds a B.S. in Accounting and Business from Southwest Baptist University. Gerald A. Morton has served as General Counsel and Vice President of Business Development of the Company since 2008. Prior to joining the Company, Mr. Morton spent 15 years with Pogo Producing Company, where he held various positions including Vice President – Law, Corporate Secretary, and Senior Vice President for Asia and Pacific operations. Mr. Morton began his oil industry career in 1982 working for Texaco as a geophysicist. Mr. Morton graduated from Brigham Young University with an Engineering Geology degree. He received his MBA in Finance in 1985 and a law degree in 1988, both from the University of Houston. Richard H. Smith has served as Vice President of Land since August 2006. Prior to joining us, Mr. Smith held the position of Vice President of Land for Petrohawk Energy Corporation from March 2004 through August 2006. Mr. Smith served with Unocal Corporation from April 2001 until March 2004 where he held the position of Land Manager 22 CARRIZO OIL & GAS EXECUTIVE OFFICERS Gregory F. Conaway has served as Vice President and Chief Accounting Officer since September 2014. Mr. Conaway joined the Company in July 2011 serving as Assistant Controller — Financial Reporting and served as Controller — Financial Reporting from May 2012 to September 2014. Prior to joining us, Mr. Conaway worked for Ernst & Young LLP, holding positions of increasing responsibility including senior manager. Mr. Conaway began his career with Arthur Andersen in 1998. Mr. Conaway is a CPA and holds a M.B.A. and B.B.A. in Accounting from Angelo State University. 23 Compensation Discussion and Analysis This section describes the objectives and components of the compensation program for our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and each of our three other most highly compensated executive officers as of December 31, 2017, whom we collectively refer to in this “Executive Compensation” section as our “Named Executive Officers” and were as follows: S.P. Johnson IV, President, Chief Executive Officer and Director Brad Fisher, Vice President and Chief Operating Officer David L. Pitts, Vice President and Chief Financial Officer Gerald A. Morton, General Counsel and Vice President of Business Development Richard H. Smith, Vice President of Land This Compensation Discussion and Analysis is divided into four sections: Section 1 - Executive Summary Section 2 - Executive Compensation Program Objectives Section 3 - Executive Compensation Components Section 4 - Tax Considerations of Executive Compensation Section 1 - Executive Summary Our executive compensation program is designed to pay our Named Executive Officers a significant amount of their compensation in equity of the Company in order to incentivize them to consistently build long-term shareholder value and to align the interests of our executives with those of our shareholders. The following Compensation Discussion and Analysis explains how the Compensation Committee has structured our executive compensation program to achieve these objectives. Although this section of the proxy statement specifically addresses the compensation program of our Named Executive Officers, we are focused on the compensation of all of our employees and structuring all of our compensation programs to reward behavior that we believe will ultimately increase shareholder value, and the Compensation Committee considers compensation programs of all of our employees with the focus of tying a substantial portion of compensation to the Company’s performance and creation of shareholder value. 2017 Performance Highlights 2017 was a transformational year for the Company as we acquired a large position in the core of the Delaware Basin and divested substantially all of our assets in the Marcellus and Utica and signed purchase and sale agreements to sell substantially all of our 24 CARRIZO OIL & GAS EXECUTIVE COMPENSATION assets in the Niobrara and a portion of our assets in the Eagle Ford, both of which closed in January 2018. Even considering the divestitures, our management team was able to deliver another year of significant production and reserve growth in 2017. Summarized below are Increased average daily oil production 34% year- over- year to 34,428 Bbls/d Increased our net acreage position in the Delaware Basin to 42,117 net acres atyear-end 2017, which included 16,508 net acres associated with an acquisition of properties from ExL Petroleum Management, LLC and ExL Petroleum Operating Inc.; Utilized cash proceeds from the divestitures discussed above to redeem $470.0 million of our 7.5% Senior Notes in late 2017 and early 2018 and $50.0 million of our outstanding preferred stock in early 2018; Exited 2017 with a record 261.7 MMBoe of proved reserves, of which 64% was crude oil, a 31% increase fromyear-end 2016; and Proved developed reserves atyear-end 2017 were 109.0 MMBoe, an increase of 19% compared toyear-end 2016. Pay For Performance: Total Shareholder Return The and Production 25 EXECUTIVE COMPENSATION position the Company for Pay-for-Performance: SignificantAt-RiskCompensation The Compensation Committee reviews and adjusts the compensation of term value creation for our shareholders. This has been accomplished by continuing to Effect of Company Performance on Chief Executive Officer Realizable Pay Our CEO’s variable,at-risk compensation consists of a annual incentive The following chart demonstrates how the Company’s performance and share price significantly impacts our CEO’s realizable compensation. 26 CARRIZO OIL & GAS EXECUTIVE COMPENSATION Target compensation is calculated as the sum of base salary, target annual incentive bonus, and the grant date fair value of long-term equity-based incentive awards. for RSUs, the closing share price on December 31, 2017 multiplied by the number of RSUs granted in each year; for performance shares, the closing share price on December 31, 2017 multiplied by the number of performance shares granted in each year and the applicable payout multiplier as if December 31 2017 was the end of the performance period; and for Cash SARs, the closing share price on December 31, 2017 minus the Cash SARs exercise price multiplied by number Cash SARs granted in 2016 and 2017 (no Cash SARs were granted in 2015). Because the closing share price on December 31, 2017 is less than the exercise prices of the Cash SARs granted in 2016 and 2017, the intrinsic value of the Cash SARs is zero for 2016 and 2017. We believe that the differences in our CEO’s target compensation and realizable compensation effectively illustrate the high correlation between the Company’s performance and share price and our CEO’s realizable compensation. At our 2017 Annual Meeting of Shareholders, holders of 96.4% of the information provided by its independent compensation consultant, including compensation decisions made by the 2018 PROXY STATEMENT 27 EXECUTIVE COMPENSATION Executive Compensation Program and Corporate Governance Highlights We believe our Compensation Best Practices That We Follow Stock Ownership Guidelines. Independent Compensation Committee. Our Compensation Committee is Independent Compensation Consultant. The Compensation Committee retains an independent compensation consultant who provides no other services to the CompensationBenchmarking. The Compensation Committee annually reviews an analysis of executive compensation prepared by its independent compensation consultant using market-based compensation data to ensure our executive compensation program is designed appropriately and takes into account market changes. Compensation Risk Assessment. There is an appropriate balance between long-term and short-term focus in our compensation programs and the Compensation Committee has the ability to exercise discretion to ensure risk mitigation occurs in management decision making. Clawback Policy.The 28 CARRIZO OIL & GAS EXECUTIVE COMPENSATION Disfavored Compensation Practices That We Avoid No Liberal Share No No Payment of Dividends Prior to Vesting. No payment of dividends prior to the vesting of restricted stock or performance shares. No Hedging or Derivatives Trading of the Company’s Securities.No hedging of the Company’s securities, including publicly traded options, puts, calls and short sales by No Guaranteed Bonus.No guaranteed annual incentive bonus and no cash retention bonus for No Future Agreements to Provide TaxGross-ups.The Board adopted a policy in May 2011 that employment agreements entered after the adoption of such policy would not contain provisions entitling employees to taxgross-up payments. No Supplemental Executive Retirement Section 2 - Executive Compensation Program Objectives Provide competitive total compensation opportunities that allow us to attract, retain, reward and motivate talented management.We evaluate the range of current industry compensation practices to provide external benchmarks that help to guide our executive compensation structure. Unless circumstances warrant otherwise, we generally target executive total direct compensation near the market median of executives in equivalent positions at comparable companies, considering individual performance, responsibilities, experience, leadership and contributions as well as the Company’s financial, operational and share price performance. Support a performance-based culture.Our executive compensation program is intended to provide the appropriate balance between fixed and variable compensation, cash and equity compensation, and short-term and long-term incentives with the majority of each executive’s total compensation “at risk” or variable based on a combination of attainment of short-term goals in support of our Company’s long-term strategy and long-term stock performance providing absolute and relative total shareholder returns. Our program is structured to require a commitment to performance because total compensation at the market is not guaranteed. Therefore, our program is designed to reward above-target compensation when performance is warranted and below-target compensation when performance does not meet expectations. Align our executives’ interests with those of our shareholders.We believe that we achieve alignment of executives’ and shareholders’ interests by providing a substantial portion of total compensation in the form of long-term equity-based incentives that tie executive pay to stock price performance and through stock ownership guidelines that ensure our executives have a meaningful ownership stake during their tenure. Encourage appropriate risk management.We believe that effective leadership requires taking prudent business risks while discouraging excessive risk-taking. To encourage this balance, we have structured our compensation programs to include three- year vesting schedules on long-term equity- 2018 PROXY STATEMENT 29 EXECUTIVE COMPENSATION based incentive awards and an annual incentive bonus using a combination of short-term financial and operational objectives. We also mitigate risk by exercising discretion in determining the payout of annual incentive bonuses rather than relying solely on a formula. We regularly review our compensation programs to ensure that our executives are not encouraged to take inappropriate or excessive risks. The Compensation Committee Compensation Committee’s Charter to make all the decisions regarding compensation for executives without ratification or other action by the Independent Compensation Consultant Pearl Meyer serves as independent compensation consultant for and reviewing executive compensation based on an analysis of market-based compensation data; reviewingnon-employee director compensation based on an analysis of market-based compensation data; analyzing the effectiveness of our executive compensation program evaluating how well our executive compensation To facilitate the Other than those services requested by Compensation Should Included in Compensation Peer The Compensation Committee prior year compensation peer group as the starting point, and expands the pool of potential peers by reviewing peers of peers, 30 CARRIZO OIL & GAS EXECUTIVE COMPENSATION peers identified by proxy advisory firms and other peers identified from analyst reports and independent research. Pearl Meyer refines their list of potential peers using criteria such as industry focus, corporate structure, operational similarity and financial size with a focus on identifying a peer group of15-20 domestic independent exploration and production companies with operations in the The compensation peer groups used for 2017 and 2018 are presented in the table below. From 2016 to 2017, one company was removed and one company was added in order to maintain a peer group of companies that met the financial size criteria discussed above. From 2017 to 2018, five companies were removed due to a lack of operational similarity as a result of the Company’s sale of its Utica, Marcellus and Niobrara assets. In order to maintain an appropriately sized peer group, six companies were added that met the operational similarity, financial size and other criteria discussed above. A separate peer group is used in connection with our performance share awards as described below under “Executive Compensation 2016 Compensation Peer Group 2017 Compensation Peer Group 2018 Compensation Peer Group Bill Barrett Corporation Bonanza Creek Energy, Inc. Callon Petroleum Company Centennial Resource Development, Inc. Diamondback Energy, Inc. Energen Corporation EP Energy Corporation Gulfport Energy Corporation Jagged Peak Energy Inc. Laredo Petroleum, Inc. Matador Resources Company Oasis Petroleum Inc. Parsley Energy, Inc. PDC Energy, Inc. QEP Resources, Inc. Range Resources Corporation Resolute Energy Corporation Rice Energy Inc. RSP Permian, Inc. Sanchez Energy Corporation SM Energy Corporation Whiting Petroleum Company WPX Energy, Inc. 2018 PROXY STATEMENT 31 EXECUTIVE COMPENSATION The Compensation Committee considers the results of Pearl Meyer’s executive compensation input from management except for explanations of position functions. The Number of Position Matches in 2017 Compensation Peer Group Survey Data Weighting President and CEO Vice President and COO Vice President and CFO General Counsel and Vice President of Business Development Vice President of Land Section 3 - Executive Compensation Components 32 CARRIZO OIL & GAS EXECUTIVE COMPENSATION 2017 Targeted Compensation Mix The charts below show the 2017 targeted total direct compensation mix of our Chief Executive Officer and other Named Executive Officers. As the charts illustrate, 88% and 83% of targeted total compensation for our Chief Executive Officer and other Named Executive Officers, respectively, is attributable to the performance-based annual incentive bonus and long-term equity-based incentive awards, and thus is variable and tied to performance (i.e. “at risk”). Base Salary Base salary is 2014 Base Salary 2015 Base Salary 2016 Base Salary S. P. Johnson IV Brad Fisher David L. Pitts Gerald A. Morton Richard H. Smith Effective May 1, 2016, 2018 PROXY STATEMENT 33 EXECUTIVECOMPENSATION Annual Incentive Bonus Annual incentive bonus targets, expressed as a percentage of base salary, are established for each executive. Each executive’s annual incentive After considering the recommendations of our CEO for adjustments to annual incentive bonus targets for executives other than himself and competitive market data provided by its independent compensation consultant, in March 2017, the Compensation Committee approved the 2017 annual incentive bonus targets of the Named Executive Officers as set forth below, which remained unchanged from 2016: S.P. Johnson IV Brad Fisher David L. Pitts Gerald A. Morton Richard H. Smith Each year, the Compensation Committee approves the annual incentive bonus performance metrics, weighting factors and targets after considering input from its independent compensation consultant, including a review of the annual incentive bonus performance metrics used by companies included in our compensation peer group. The table below sets forth the Company’s 2017 annual guidance included in its February 23, 2017 press release, except that the target for 34 CARRIZO OIL & GAS EXECUTIVE COMPENSATION Our 2017 target fordrill-bit finding and development cost was $13.00/Boe, which reflects a 14% increase from our 2016 actualdrill-bit finding and development cost of $11.40/Boe. This increase is primarily due to the impact of increased services costs in response to higher crude oil prices in 2017 as compared to 2016. 2017 Operational and Financial Metrics Daily Oil Production (Bbls/d) Drill-Bit Finding and Development Cost ($/Boe) Lease Operating Expense ($/Boe) Cash G&A Expense ($ in thousands) Total Payout Achieved Despite 2017 actual results payout to 125% of target. The actual 2017 annual incentive bonuses, S.P. Johnson IV Brad Fisher David L. Pitts Gerald A. Morton Richard H. Smith The The performance metric targets were based on the Company’s Our 2018 target for cash G&A is $53.5 million, 35% higher than the 2017 actual cash G&A of $39.7 million shown above. This is primarily due to excluding annual bonuses from our 2017 target for cash G&A (and therefore also excluding annual bonuses from the 2017 actual results shown above) as well as the impact of the Company’s August 2017 acquisition of properties in the Delaware Basin. This acquisition and associated increase in drilling and completion activity resulted in an increase in employee headcount in late 2017 with an additional increase in employee headcount expected in 2018. Daily Oil Production (Bbls/d) Drill-Bit Finding and Development Cost ($/Boe) Lease Operating Expense ($/Boe) Cash G&A Expense ($ in thousands) 2018 PROXY STATEMENT 35 EXECUTIVE COMPENSATION Considerations Regarding our Annual Incentive Bonus Program In determining the payout achieved for our annual incentive bonus, actual results and performance metric targets are adjusted to exclude the impacts of acquisitions and divestitures. This eliminates any benefit or detriment to the payout as a result of transactions that were not anticipated at the time the performance metric targets were established. In addition, because of such adjustments, actual results shown above may not agree with the related amounts included in the Company’s consolidated financial statements. While we do not include total shareholder return, return on capital employed or other return based performance metric in our annual incentive bonus program, we believe that the Company’s performance relative to target for oil production, operating costs and capital efficiency related performance metrics are key drivers of our share price performance. Although very few of the companies in our compensation peer group currently include return based performance metrics in their annual incentive bonus program, we will continue to monitor our compensation peer group to identify changes in practice. Long-Term The objectives of our long-term incentive plan are by granting awards designed to provide our One of the fundamental philosophies of our Determining the Amount of Long-Term Equity-Based Incentive Compensation Unless circumstances warrant otherwise, the amount of long-term incentives granted to each executive is generally based on the amount that results in targeted total direct compensation executives Allocating Amount of Long-Term Equity-Based Incentive Compensation Among Award Types In 2017, the amount of long-term equity-based incentive awards We believe this combination of long-term equity-based incentive awards provides incentives that capture absolute total shareholder return as well as total shareholder return relative to companies included in our stock performance peer group and are generally consistent with 36 CARRIZO OIL & GAS EXECUTIVE COMPENSATION 2017 Grants of Long-Term Equity-Based Incentives After considering the recommendations of our CEO for long-term equity based incentive awards for executives March 23, 2017, the Compensation Committee approved S.P. Johnson IV Brad Fisher David L. Pitts Gerald A. Morton Richard H. Smith All 2017 long-term equity-based incentives awarded to executives included a performance for performance shares, subject to the market condition described below. RSUs The RSUs were granted under the Company’s Prior Incentive Plan with a grant date fair value per RSU of $26.94, the average of the 2020. EXECUTIVE COMPENSATION long-term equity based incentive awards to Named Executive Officers are rare, with only three other such awards granted in the past 10 years. The Cash SARs were granted under the Company’s Cash SAR Plan at an exercise price of $26.94, the average of the high and low price of the Company’s Common Stock on the March 23, 2017 grant date with a grant date fair value per Cash SAR of $12.00, based on a Black-Scholes-Merton option pricing model. The Cash SARs vest ratably over a two year period,one-half of which vested and became exercisable on March 17, 2018 and the remainingone- half will vest on March 17, 2019. All of the Cash SARs expire March 23, 2022. Performance Shares The performance shares were granted under the Company’s Prior Incentive Plan with a grant date fair value per performance share of $35.14, based on a Monte Carlo simulation model calculated as of the March 23, 2017 grant date. The performance shares cliff vest on March 17, 2020, with the actual number of performance shares period. Linear interpolation 38 CARRIZO OIL & GAS EXECUTIVE COMPENSATION Company’s sale of its Utica, Marcellus and Niobrara assets or because the companies did not have operations in multiple basins similar to the Company. In order to maintain an appropriately sized peer group, Included in Stock Performance 2016 Stock Performance Peer Group 2017 Stock Performance Peer Group 2018 Stock Peer Group Antero Resources Corporation Bill Barrett Corporation Bonanza Creek Energy, Inc. Chesapeake Energy Corporation Cimarex Energy Co. Devon Energy Corporation Encana Corporation EOG Resources, Inc. EP Energy Corporation Gulfport Energy Corporation Laredo Petroleum, Inc. Marathon Oil Matador Resources Company Noble Energy, Inc. Oasis Petroleum Inc. PDC Energy, Inc. QEP Resources, Inc. Range Resources Corporation Rice Energy Inc. Sanchez Energy Corporation SM Energy Corporation Whiting Petroleum WPX Energy, Inc. Severance and Change of Control Benefits As described in more detail under “Executive Compensation—Employment Agreements” and “Executive Compensation—Potential Payments to the Named Executive Officers Upon Termination or Change of Control,” we have entered into employment agreements with the termination events after a change of control. The employment agreements contain pay and benefits provisions that we believe are comparable to similar provisions employed by a majority of the companies in our 2018 PROXY STATEMENT 39 EXECUTIVE COMPENSATION of control of the Company and during circumstances which indicate that a change of control Committee believes this program is important in maintaining strong leadership and in encouraging retention in these situations. Perquisites and Other Benefits We pay premiums for supplemental life insurance for the benefits as part of our overall compensation package is necessary to attract and retain highly qualified executives and that these benefits are comparable to those provided by our Clawback Provisions Other than legal requirements under the from the sale of securities they realized in a year following the issuance of financial statements that are later required to Stock Ownership Guidelines To align the interests of our Named Executive Officers with the interests of the Company’s other shareholders, our Named Executive Officers must comply with stock ownership guidelines as set forth in the table below: Chief Executive Officer Chief Financial Officer All other Named Executive Officers Upon becoming a Named Executive Officer or receiving a promotion to the CEO or CFO position, the individual has acquired upon vesting of RSUs and performance shares less the number of shares applied to satisfy tax withholding obligations. As of March 23, 2018, all Named Executive Officers were in compliance with the stock ownership guidelines. Section 4 - Tax Considerations of Executive Compensation Section 162(m) of the Internal Revenue Code covered employees included all of 40 CARRIZO OIL & GAS EXECUTIVE COMPENSATION performance conditions, performance shares and Cash SARs. The enactment of the Tax Cuts and Jobs Act on December 22, 2017 repealed the exemption from Section 162(m)‘s deduction limit for “performance based” compensation and the limitation on deductibility was expanded to include any individual who is a Named Executive Officer Despite the Section 409A of the Internal Revenue Code To the extent one or more elements of compensation provided to employees is subject to Section 409A of the Internal Revenue Code, the Company intends that these elements be compliant so that the employees are not subject to income inclusion at vesting and the additional income taxes imposed by Section 409A. Section 409A requires that “deferred compensation” either comply with certain deferral election, payment timing, and other rules or be subject to a 20% additional income tax and interest at a premium rate imposed on the person who is to receive the deferred compensation. The Company believes that if the adverse tax consequences of Section 409A become applicable to the Company’s compensation arrangements such arrangements would be less efficient and less effective in incentivizing and retaining employees. The Company intends to operate its compensation arrangements so that they are compliant with or exempt from Section 409A and therefore, in 2008, amended or modified its compensation programs and awards, including the employment agreements to the extent necessary to make them compliant or exempt. The employment agreements of the The information contained in this Compensation Committee Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 (the “Securities Act”), as amended, or the Exchange Act, except to the extent that the Company specifically incorporates such information by reference in such filing. The Compensation Committee of the Board of Directors Roger A. Ramsey, Chairman F. Gardner Parker Robert F. Fulton 41 EXECUTIVE COMPENSATION The following table sets forth the compensation Named Executive Officer and Principal Position Year Salary ($) Stock Awards(1) ($) Option Awards(1) ($) Non-Equity Incentive Plan Compensation(2) ($) All Other Compensation(3) ($) Total ($) S. P. Johnson IV President and Chief Executive Officer Brad Fisher Vice President and Chief Operating Officer David L. Pitts Vice President and Chief Financial Officer Gerald A. Morton General Counsel and Vice President of Business Development Richard H. Smith Vice President of Land The amounts shown for Amounts reflect the annual incentive bonuses for 2017, 2016 and 2015 which were paid in 2018, 2017 and 2016, respectively. 25% of the annual incentive bonuses for 2016 and 100% of the annual incentive bonuses for 2015 were paid with grants of RSUs each of which vested in a single installment substantially concurrent with the time of grant. The amounts shown as “All Other Compensation” include the following: Year Mr. Johnson Mr. Fisher Mr. Pitts Mr. Morton Mr. Smith Matching contributions under the 401(k) Plan Supplemental life insurance premiums Other compensation 42 CARRIZO OIL & GAS EXECUTIVE COMPENSATION Chief Executive Officer Pay Ratio As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and RegulationS-K, we are providing the following information about the relationship of the annual total compensation of our median employee to the annual total compensation of our CEO. The pay ratio calculated by the Company is a reasonable estimate calculated in accordance with SEC rules and methods for disclosure. Due to estimates, assumptions, adjustments and statistical sampling permitted under the rules, pay ratio disclosures may involve a degree of imprecision and may not be consistent with the methodologies used by other companies. the sum of the annual base salary as of the end of the year, overtime paid to the employee during the year, the actual annual incentive bonus for the year paid to the employee in the following year, and the grant date fair value of long-term Once we identified the median employee, we then determined the total compensation that would have been reported in the 2018 PROXY STATEMENT 43 EXECUTIVE COMPENSATION The table below contains information with respect to grants of plan-based awards to the Estimated Future Equity Incentive Estimated Future Payouts Under Equity Incentive Plan Awards All Other Stock Number of Shares (#) All Other Option Awards: (#)(5) Grant Value of ($)(6) Named Executive Officer Target ($)(1) Maximum ($)(2) Threshold (#) Target (#)(3) Maximum (#)(4) S.P. Johnson IV Brad Fisher David L. Pitts Gerald A. Morton Richard H. Smith Represents the 2017 annual incentive bonus target. Represents the maximum 2017 annual incentive bonus, which is 200% of the target annual incentive bonus. Represents performance shares (at target) granted under the Prior Incentive Plan that cliff vest on March 17, 2020 based on the TSR of the Company’s Common Stock relative to the TSR achieved by our 2017 Stock Performance Peer Group, subject to the satisfaction of a performance target. On July 27, 2017, the Compensation Committee certified that the performance condition had been met; however, the award remains subject to the TSR performance metrics, the results of which will not be known until following the end of the performance period. Represents the number of performance shares that would vest on March 17, 2020 assuming we achieve the maximum payout of 200%. Represents Cash SARs granted under the Cash SAR Plan that vest ratably over a two year period on March 17, 2018 and March 17, 2019, subject to the satisfaction of a performance condition and expire on March 23, 2022. On July 27, 2017, the Compensation Committee certified that the performance condition had been met. Represents the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. For a discussion of the valuation assumptions, see Note 44 CARRIZO OIL & GAS EXECUTIVE COMPENSATION Represents Represents RSUs granted under the Prior Incentive Plan that vest ratably over a three-year period on March 17, 2018, March 17, 2019 and March 17, 2020, subject to the satisfaction of a performance condition. On July 27, 2017, the Compensation Committee certified that the performance condition had been met. Represents a special award of RSUs granted under the 2017 Incentive Plan that cliff vest on March 17, 45 EXECUTIVE COMPENSATION Outstanding The table below presents information on the outstanding 2017. Named Executive Officer Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested(#) Market Value of Shares or Units of Stock That Have Not Vested ($) (1) Equity Incentive Plan Number of Unearned Shares or Units of That Have Vested(#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or Units of That Have Vested ($)(1) S. P. Johnson IV Brad Fisher David L. Pitts Gerald A. Morton Richard H. Smith 46 CARRIZO OIL & GAS EXECUTIVE COMPENSATION Option Exercises and Stock Vested The following table shows information concerning the amounts realized by the 2017: Number of Exercised (#) Value Realized on Exercise ($)(1) Number of Acquired on Vesting (#)(2) Value Realized on Vesting ($)(3) S.P. Johnson IV Brad Fisher David L. Pitts Gerald A. Morton Richard H. Smith Represents the number of shares acquired upon vesting of Represents the value realized based on the vesting date closing price per share of our Common Stock on the NASDAQ Global Select Market 47 EXECUTIVECOMPENSATION The Company has entered into employment agreements with each of the S. P. Johnson IV President and Chief Executive Officer Brad Fisher Vice President and Chief Operating Officer David L. Pitts Vice President and Chief Financial Officer Gerald A. Morton General Counsel and Vice President of Business Development Richard H. Smith Vice President of Land The employment agreements each have an initialone-year term; provided that at the date of the agreement and on every day thereafter, the term of such employment agreement is automatically extended for one day, such that the remaining term of the agreement shall never be less than one year until an event (as described in the applicable agreement) that gives rise to termination of employment occurs. Under each agreement, both the Company and the employee may terminate the employee’s employment at any time. Mr. Johnson’s employment agreement provides that he will serve as President, Chief Executive Officer and a member of the Board of Directors. Upon termination of employment on account of disability or by the Company for any reason (except under certain limited circumstances defined as “for cause” in the applicable agreement), or if employment is terminated either applicable agreement), under the agreements the employee will generally be entitled to the following: the date a change of control occurs, in either of which cases the lump sum is not prorated), 48 CARRIZO OIL & GAS EXECUTIVE COMPENSATION programs and policies (other than the Company’s medical and dental plans) for the remaining employment period (as defined in the applicable agreement), an immediate lump sum cash payment equal to 3% of the employee’s annual base salary, If employment terminates due to the death of the employee and other than during a window period, the Company will provide continued medical and dental benefits coverage for the employee’s dependents for one year following death and immediate vesting and extension of exercisability of will also provide the employee with supplemental term life insurance protection with a death benefit as shown in the table below. The salaries in each of these agreements are subject to periodic review and provide for increases generally consistent with increases in base salary 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 to the extent such plans are generally applicable to the other executive officers of the Company. The agreements each provide for an annual bonus in an amount generally comparable to the annual bonus of other Company executives, taking into account the individual’s position, responsibilities and accomplishments. In the event of a dispute regarding the employee’s rights upon termination of employment, two years after a change in control (as defined in the applicable agreement) or, in the case of a termination before a change in control, if the termination was not initiated by the employee (with or without good reason); and 49 EXECUTIVECOMPENSATION Potential Payments to the Named Executive Officers Upon Termination or Change of Control The following table provides a summary of the potential payments to each of the Named Executive Officer Voluntary Good Reason/ Involuntary Change of Control Death Disability Voluntary Termination (No Good Reason/ No Change of Control) or Involuntary For Cause Termination Good Reason/ Involuntary Not for Cause Termination Change of Control Termination (Involuntary, Good Reason, Voluntary) Death Disability Cash SARs(2) Restricted stock units(3) Cash SARs(2) Restricted stock units(3) David L. Pitts(1) Severance payments Cash SARs(2) Restricted stock units(3) Performance shares(4) (5) (6) Life insurance benefits(7) Benefits continuation Total Cash SARs(2) Restricted stock units(3) Richard H. Smith(1) Cash SARs(2) Restricted stock units(3) 50 CARRIZO OIL & GAS EXECUTIVECOMPENSATION Information in this table assumes a termination date of December 31, Represents the value of accelerated vesting of Represents the value of accelerated vesting of shares of Represents the value of accelerated vesting of performance Represents the value of accelerated vesting of performance Represents the value of accelerated vesting of performance Represents the death benefit of company provided supplemental life insurance and group term life insurance. 51 EXECUTIVECOMPENSATION Equity Compensation Information concerning our 2017 Incentive Plan and Prior Incentive Plan at December 31, 2017 is as follows: Plan Category Number of Securities to be Issued Upon Vesting of Options and Rights(1) (a) Weighted- Average Exercise Price of Outstanding Options(2) (b) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(3) (c) Equity compensation plans approved by security holders Equity compensation plans not approved by security holders Total Information concerning our equity compensation plans at Plan Category Number of Securities to be Issued Upon Vesting of Options and Rights(1) (a) Weighted- Average Exercise Price of Outstanding Options(2) (b) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(3) (c) Equity compensation plans approved by security holders Equity compensation plans not approved by security holders Total Plan Category Number of (a) Weighted- (b) Number of Securities Securities Reflected The number of securities remaining available for future issuance under our equity compensation plans assumes all future grants will be full value stock 52 CARRIZO OIL & GAS PROPOSAL 2. ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS The Board of Directors recognizes the interest the Company’s shareholders have in the compensation of our named executive officers. In recognition of that interest and in accordance with the requirements of SEC rules and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, this proposal, commonly known as a “say on pay” proposal, provides our shareholders with the opportunity to cast an advisory vote on the compensation of our named executive officers, as disclosed in this proxy statement pursuant to the SEC’s compensation disclosure rules, including the discussion of the Company’s compensation program and We encourage you to review the discussions and information presented in “Executive Compensation,” including the “Compensation Discussion and Analysis” and the compensation tables and associated narrative disclosure, in considering how to cast your vote. As described in the “Compensation Discussion and Analysis” included in this proxy statement, the performance-based shareholders and (iv) to encourage appropriate risk management. As an advisory vote, the shareholders’ vote on this proposal is not binding on our Board or the 2019. Management will present the following resolution at the Annual Meeting: “RESOLVED, that the compensation of the Company’s named executive officers, as disclosed in the Company’s proxy statement relating to the Board Recommendation The Board of Directors recommends that shareholders approve, on an advisory basis, the compensation of the named executive officers by voting “FOR” Proposal No. 2. 2018 PROXY STATEMENT 53 PROPOSAL 3. THE NASDAQ MARKETPLACE RULE PROPOSAL This proposal is referred to in this proxy statement as the “NASDAQ Marketplace Rule Proposal.” The shareholders of the Company are being asked to approve, in accordance with NASDAQ Marketplace Rule 5635(d), the issuance of shares of Common Stock that may exceed 20% of the number of shares of Common Stock outstanding on June 28, 2017, (i) either as dividends on, or upon redemption of, the Preferred Stock and (ii) upon the exercise of the Warrants issued in a private placement in August 2017. Background Private Placement and Preferred Stock Purchase Agreement On June 28, 2017, the Company entered into a Preferred Stock Purchase Agreement with certain funds managed orsub-advised by GSO Capital Partners LP and its affiliates (the “GSO Funds”) to issue and sell in a private placement (i) $250.0 million initial liquidation preference (250,000 shares) of Preferred Stock and (ii) Warrants for 2,750,000 shares of the Company’s Common Stock, with a term of ten years and an exercise price of $16.08 per share, exercisable only on a net share settlement basis, for a cash purchase price equal to $970.00 per share of Preferred Stock. The closing of the private placement occurred on August 10, 2017. Proceeds from the private placement were used to pay a portion of the $679.8 million aggregate cash consideration for 16,508 net acres located in the Delaware Basin in Reeves and Ward Counties, Texas purchased from ExL Petroleum Management, LLC and ExL Petroleum Operating Inc. (the “ExL Acquisition”). The Company also agreed to make a contingent payment to the sellers of $50.0 million per year if crude oil prices exceed specified thresholds for each of the years of 2018 through 2021 with a cap of $125.0 million. The Company funded the remaining portion of the ExL Acquisition through a public offering of 15.6 million shares of Common Stock for net proceeds of $222.4 million, and a public offering of $250.0 million aggregate principal amount of 8.25% Senior Notes due 2025 for net proceeds of $245.4 million, both of which public offerings were completed during the third quarter of 2017. On January 24, 2018, the Company redeemed 50,000 shares of Preferred Stock, representing 20% of the then issued and outstanding Preferred Stock. Following such redemption, there remains 200,000 shares of Preferred Stock outstanding. Warrants and Warrant Agreement Pursuant to the Preferred Stock Purchase Agreement, on August 10, 2017, in connection with the Closing, the Company entered into a Warrant Agreement with Wells Fargo Bank, N.A., as warrant agent, to, among other things, authorize and establish the terms of the Warrants to purchase 2,750,000 shares of Common Stock at an exercise price per share of $16.08, subject to certain adjustments. The Warrants are exercisable fora ten-year period and may only be exercised on a net share settlement basis. The exercise price and the number of shares of Common Stock for which a Warrant is exercisable are subject to adjustment from time to time upon the occurrence of certain events including: (i) payment of a dividend or distribution to holders of shares of Common Stock payable in Common Stock, (ii) the distribution of any rights, options or warrants to all holders of Common Stock entitling them for a period of not more than 60 days to purchase shares of Common Stock at a price per share less than the fair market value per share, (iii) a subdivision, combination, or reclassification of Common Stock, (iv) a distribution to all holders of Common Stock of cash, any shares of the Company’s capital stock (other than Common CARRIZO OIL & GAS Stock), evidences of indebtedness or other assets of the Company, and (v) any dividend of shares of a subsidiary of the Company ina spin-off transaction. Except as otherwise provided in the Warrant Agreement, the holders of the Warrants do not have the rights or privileges of holders of the Common Stock, including any voting rights, until they exercise the Warrants. Description of Preferred Stock Statement of Resolutions Establishing Series of 8.875% Redeemable Preferred Stock In connection with the issuance of the Preferred Stock, on August 10, 2017 (the “Preferred Stock Closing Date”), the Company filed with the Texas Secretary of State a Statement of Resolutions Establishing Series of 8.875% Redeemable Preferred Stock (the “Statement of Resolutions”), creating and providing for the establishment and issuance of a series of shares of Preferred Stock. The Preferred Stock ranks senior to the Common Stock with respect to the payment of dividends and distribution of assets upon liquidation, dissolution and winding up. Dividends and Maturity The Preferred Stock initially has a liquidation preference of $1,000 (the “liquidation preference”). The holders of the Preferred Stock (the “Holders”) are entitled to receive in cash quarterly cumulative dividends at an annual rate of 8.875% of the liquidation preference per share (equal to $88.75 per share annualized). The Company may, however, at its election, pay all or a portion of the Preferred Stock dividends by delivering a number of shares of Common Stock equal to the dividend amount divided by 97% of the trailingfive-trading-day volume weighted average price (“VWAP”) per Common Stock share as follows: (i) with respect to any dividend declared in respect of a quarter ending on December 15, 2017 and on or prior to September 15, 2018, up to 100% of the dividend; (ii) with respect to any dividend declared in respect of a quarter ending on December 15, 2018 and on or prior to September 15, 2019, up to 75% of the dividend; or (iii) with respect to any dividend declared in respect of a quarter ending on December 15, 2019 and on or prior to September 15, 2020, up to 50% of the dividend. If the Company fails to satisfy the Preferred Stock dividend on the applicable dividend payment date, then the unpaid dividend will be added to the liquidation preference until paid. If the Company fails to pay the quarterly dividend on the applicable dividend payment date and such failure continues for three months past the applicable payment date, then the Holders will be entitled to additional rights, as described below. The Preferred Stock has no stated maturity and will remain outstanding indefinitely unless repurchased or redeemed by the Company. Optional Redemption As described above, the Company exercised its right to redeem up to 50,000 shares of Preferred Stock at a redemption price equal to the liquidation preference, which included accrued and unpaid dividends. At any time, the Company may redeem all or part of the Preferred Stock at a price per share equal to the Secondary Company Redemption Price. The “Secondary Company Redemption Price” will be an amount per share equal to (x) if on or prior to the third anniversary of the Preferred Stock Closing Date, the present value on the redemption date of all quarterly dividends (except for currently accrued and unpaid dividends) that would be payable on such Preferred Stock from the redemption date through the third anniversary of the Preferred Stock Closing Date (assuming all such quarterly dividends are cash dividends and computed using a discount rate equal to the applicable treasury rate plus 50 basis points, discounted to the redemption date) plus the aggregate Secondary Company Redemption Price that would have been payable to the Holders had the redemption date occurred after 2018 PROXY STATEMENT the third anniversary of the Preferred Stock Closing Date but on or prior to the fourth anniversary of the Preferred Stock Closing Date, or (y) for all other periods, (i) $1,000 multiplied by the applicable premium set forth below (expressed as percentages) plus (ii) any accrued but unpaid dividends on such share. After August 10, 2020 but on or prior to August 10, 2021 After August 10, 2021 but on or prior to August 10, 2022 After August 10, 2022 Mandatory Redemption On or after the seventh anniversary of the Preferred Stock Closing Date, or at any time if the Company fails to pay a quarterly dividend and such failure is not cured within three months of such failure, a designated representative of the Preferred Stock (the “Holder Representative”), on behalf of the Holders, may elect to have the Company redeem all or a portion of the Preferred Stock at the Secondary Company Redemption Price then in effect. The Company may elect to satisfy any such redemption elected by the Holders by delivering cash, shares of Common Stock or a combination thereof. The number of shares of Common Stock to be delivered in the redemption, if applicable, will be determined using a price per share equal to 90% of the trailing10-trading-day VWAP per Common Stock share. In the event the Company elects to settle the redemption called by the Holder Representative in Common Stock, the Holder Representative, in its sole discretion on behalf of the Holders, may elect to revoke its redemption notice or reduce the number of shares to be redeemed. Change of Control Upon a change of control (as defined in the Statement of Resolutions), the Company may elect to redeem the Preferred Stock at a price per share of Preferred Stock equal to the Secondary Company Redemption Price then in effect. If a change of control occurs, and the Company does not elect to so redeem the Preferred Stock or provide for the Holders to receive the Secondary Company Redemption Price, and the Holders of a majority of the then-outstanding Preferred Stock do not agree with the Company to an alternative treatment, then the Holders of a majority of the then-outstanding Preferred Stock may elect on behalf of all the Holders to either (i) cause the Company to redeem all, but not less than all, of the outstanding Preferred Stock for cash in an amount per share equal to $1,010 plus any accrued but unpaid dividends or (ii) continue to hold the Preferred Stock, which may be in the form of a substantially equivalent security in the surviving or successor entity. In the event of a change of control in which the Company does not survive and there is no substantially equivalent security available or the change of control is primary for cash equivalents, unless the Company elects to redeem the Preferred Stock in accordance with the first sentence of this paragraph or the Company and the Holders of a majority of the then-outstanding Preferred Stock agree to an alternative treatment of the Preferred Stock, the Company will be required to redeem all, but not less than all, of the outstanding Preferred Stock for (or otherwise provide for the Holders of the Preferred Stock to receive) a price per share of Preferred Stock equal to the Secondary Company Redemption Price. However, any such redemption in cash will be tolled until a date that will not result in the Preferred Stock being characterized as “disqualified stock” or a similar concept under the Company’s debt instruments. Certain Covenants; Voting Rights So long as the GSO Funds and their affiliates beneficially own more than 50% of the outstanding Preferred Stock, the consent of the Holder Representative will be necessary for 56 CARRIZO OIL & GAS effecting: (i) the issuance of stock senior to or on parity with the Preferred Stock, (ii) the incurrence of indebtedness that would cause us to exceed a specified leverage ratio, (iii) any amendment, modification, alteration or supplement the Company’s articles of incorporation or the Statement of Resolutions in a manner that would adversely affect the rights, preferences or privileges of the Preferred Stock, (iv) any entry into or amendment of certain debt agreements that would be more restrictive on the payment of dividends on, or redemption of, the Preferred Stock than those existing on the Preferred Stock Closing Date and (v) any Prohibited Distributions that would cause the Company to exceed a specified leverage ratio. Holders of Preferred Stock have voting rights with respect to potential amendments to the Company’s articles of incorporation or the Statement of Resolutions that adversely affect the rights, preferences or privileges of the Preferred Stock and in certain other circumstances or as required by law. Additional Holder Rights The Statement of Resolutions provides that if any of the following occur: failure by the Company to redeem the Preferred Stock if the Holder Representative elects to redeem the Preferred Stock at any time after the seventh anniversary of the Preferred Stock Closing Date; failure by the Company to pay a quarterly dividend when due and such failure continues for three months past the applicable due date; or failure to redeem the Preferred Stock if required to do so in connection with a change of control then the Holders will be entitled to the following additional rights: The dividend rate will be increased to 12.0% per annum until the seventh anniversary of the Preferred Stock Closing Date. Thereafter, the dividend rate will equal the greater of (a) theone-month LIBOR rate plus 10.0% and (b) 12.0%. Additionally, the Holder Representative may require any subsequent quarterly dividend be paid in Common Stock at a price per share of 95% of the trailingfive-trading-day VWAP per Common Stock share; The Holder Representative, acting on behalf of the Holders of a majority of the outstanding shares of Preferred Stock, will have the exclusive right to appoint and elect up to two directors to the Board; and Approval of the Holder Representative will be required prior to incurring indebtedness subject to a leverage ratio, declaring or paying Prohibited Distributions or issuing equity of the Company’s subsidiaries to third parties. Limitation of Common Stock Issued The Statement of Resolutions provides that (i) the number of shares of Common Stock that may be issued thereunder, when combined with the number of shares of Common Stock into which each Warrant is settled pursuant to the Warrant Agreement, may not exceed the maximum number of shares of Common Stock that the Company may issue without shareholder approval under applicable law, including NASDAQ Rule 5635 and (ii) the Company will not issue any shares of Common Stock under the Statement of Resolutions, unless at the time of such issuance, either the maximum number of shares of Common Stock then issuable under the Warrants may be issued under such rules without any shareholder approval or the requisite shareholder approval has been obtained. Necessity of Shareholder Approval As a result of being listed for trading on the NASDAQ Global Market, issuances of the Company’s Common Stock are subject to the NASDAQ Stock Market Rules, including NASDAQ Marketplace Rule 5635(d). 2018 PROXY STATEMENT 57 NASDAQ Marketplace Rule 5635(d) requires shareholder approval in connection with a transaction other than a public offering involving the sale, issuance, or potential issuance by the issuer of common stock (or securities convertible into or exercisable for common stock) equal to 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance for a price that is less than the greater of book or market value of the stock, with market value determined by reference to the closing price immediately before the issuer enters into a binding agreement for the issuance of such securities. The issuance of shares of Common Stock (i) either as dividends on, or upon redemption of, the Preferred Stock and (ii) upon the exercise of the Warrants (together, the “Common Stock Issuances”) could in some circumstances be deemed to involve the issuance of more than 20% of the Company’s outstanding Common Stock. The price at which the shares of Common Stock may be issued in respect of the Preferred Stock will not be determined until a future time and it is possible that such issuances could be deemed to be at a price that is less than $16.08, which is the greater of the book or market value (as determined under applicable NASDAQ rules) of the Company’s Common Stock immediately before the Company entered into the binding agreement for the issuance of the Preferred Stock and the Warrants on June 28, 2017. Accordingly, we are requesting in this proposal that our shareholders approve, in accordance with NASDAQ Marketplace Rule 5635(d), the Common Stock Issuances. Although the GSO Funds have agreed that no shares of Common Stock issued in a Common Stock Issuance may be voted in favor of this proposal, no such shares have been issued as of the date of this proxy statement. Registration Rights Agreement Pursuant to the Preferred Stock Purchase Agreement, on August 10, 2017, the Company entered into a registration rights agreement with the GSO Funds (the “Registration Rights Agreement”). The Registration Rights Agreement grants the GSO Funds certain registration rights for the Preferred Stock and shares of Common Stock issued to the GSO Funds by the Company, including shares issuable upon the exercise of the Warrants and shares issued to pay dividends on or redeem the Preferred Stock. During the fourth quarter of 2017, the Company filed a registration statement with the SEC to register the resale of such securities. The Company may generally be required to effect registrations for up to three underwritten offerings; depending upon the amount of registrable securities, then held by the GSO Funds. The Company has generally agreed to pay the related registration expenses and has also agreed to indemnify the GSO Funds for certain liabilities arising from such registrations. Standstill and Voting Agreement In addition, pursuant to the Preferred Stock Purchase Agreement, on August 10, 2017, the Company and the GSO Funds entered into a Standstill and Voting Agreement (the “Standstill and Voting Agreement”). The GSO Funds agreed that, without the prior consent of the Company, the GSO Funds and their controlled affiliates will not, among other things, refrain from taking specified actions with respect to the Company (including its board, control and governance) and its securities. The GSO Funds also agreed to vote their equity interests in the Company in certain circumstances as either (i) recommended by the Board to the holders of voting securities (as defined in the Standstill and Voting Agreement) of the Company or (ii) consistent with, and in proportion to, the votes of the other shareholders of the Company. 58 CARRIZO OIL & GAS Additional Information For more information regarding the Preferred Stock and the terms thereof (including a copy of the Statement of Resolutions), the Warrants, the Registration Rights Agreement, the Standstill and Voting Agreement, please see the Current Report on Form8-K filed by the Company on August, 10, 2017. Potential Dilutive Effect to Existing Shareholders If this proposal is approved, the percentage ownership of the Company held by current shareholders who did not acquire Preferred Stock or Warrants could decline as a result of the Common Stock Issuances. This also means that current shareholders who did not acquire Preferred Stock or Warrants would therefore have less ability to influence significant corporate decisions requiring shareholder approval. Common Stock Issuances could also have a dilutive effect on book value per share and any future earnings per share. Dilution of equity interests could also cause prevailing market prices for our Common Stock to decline. Because the timing and price may vary at which shares of Common Stock may be deemed to be issued in respect of the Preferred Stock (including issuance of Common Stock at a time when the deemed per share amount in respect of which such issuances are made is less than $16.08 per share and because of potential adjustments to the number of shares issuable in a Common Stock Issuance, the exact magnitude of the dilutive effect of the Preferred Stock and Warrants cannot be conclusively determined. However, the dilutive effect may be material to current shareholders of the Company. Effect on Current Shareholders if this Proposal is Not Approved If our shareholders do not approve this proposal, then the aggregate number of shares of Common Stock issuable in a Common Stock Issuance will be limited to approximately 13,161,412 shares (i.e., less than 20% of the 65,807,064 shares of Common Stock outstanding on June 28, 2017, which will limit our ability to use shares of Common Stock as payment for dividends and for redemption of the Preferred Stock, which would, in turn, require us to satisfy such obligations with cash. Absent shareholder approval, we have agreed in the Statement of Resolutions and the Warrant Agreement to limit the number of shares of Common Stock as described above under“--Description of Preferred Stock--Limitation of Common Stock Issued.” We agreed with the GSO Funds to seek shareholder approval of this proposal and are also required to seek shareholder approval of the same proposal, at the Company’s expense, at the next two annual meetings (until obtained). We are not seeking shareholder approval to authorize the offering of the Preferred Shares or the Warrants, the entry into or the closing of the transactions, or the execution of the related transaction documents, as we have already entered into and closed the transactions and executed the related transaction documents, which are binding obligations on us. The failure of our shareholders to approve this proposal will not negate the existing terms of such transaction documents or any other documents relating to such transactions, although we are limited in our ability to issue shares of Common Stock as described under “--Description of Preferred Stock--Limitation of Common Stock Issued.” The Preferred Stock and Warrants issued at the closing of the offering will remain outstanding and the terms of the Preferred Stock and Warrants will remain binding obligations of the Company. Board Recommendation The Board of Directors recommends that shareholders vote “FOR” the approval of the NASDAQ Marketplace Rule Proposal. 2018 PROXY STATEMENT 59 PROPOSAL The Audit Committee has appointed, and recommends the approval of the appointment of, On July 19, 2017, the Audit Committee dismissed KPMG LLP On July 19, 2017, the Audit Committee engaged EY to serve as the Company’s independent registered public accounting firm for the year ending December 31, 2017, effective immediately. During the Company’s two most recent fiscal years and through July 19, 2017, neither the Company nor anyone acting on its behalf consulted EY regarding either (i) the application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of RegulationS-K and the related instruction to such item) or a “reportable event” (as defined in Item 304(a)(1)(v) of RegulationS-K). The Company provided KPMG with a copy of the disclosure set forth in Item 4.01 of the Company’s Current Report on Form8-K filed on July 24, 2017 and requested KPMG to furnish the Company with a letter addressed to the SEC stating whether it agrees with the statements by the Company in such disclosure and, if not, stating the respects in which it does not agree. KPMG’s letter is filed as Exhibit 16.1 to the Company’s Current Report on Form8-K filed on July 24, 2017. EY has served as the Company’s independent registered public accounting firm since July 19, 2017. KPMG served as the Company’s independent registered public accounting firm through July 19, 2017 and for the fiscal years ended December 31, Representatives of 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 60 CARRIZO OIL & GAS PROPOSAL 4. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM registered public accounting firm is not required to be submitted to a vote of shareholders, the Board of Directors recommended that the appointment be submitted to our shareholders for approval. If our shareholders do not approve the appointment of Board Recommendation The Board of Directors recommends that shareholders vote “FOR” the ratification of the appointment of 61 PROPOSAL Independent Registered Public Accounting Firm’s Fees The following table sets forth the fees billed to us by Annual Description 2017 Audit Fees(1) Audit-Related Fees Tax Fees(2) All Other Fees(3) Total The following table sets forth the fees billed to us by KPMG, the Company’s independent registered public accounting firm until July 19, 2017, for professional services rendered in connection with the audit of the Company’s annual financial statements included in the Company’s Annual Report on Form10-K for the year ended December 31, 2016, and the review of the Company’s quarterly financial statements included in the Company’s Quarterly Reports on Form10-Q for the quarters ended March 31, 2017 and 2016, June 30, 2016 and September 30, 2016. Description 2017 2016 Audit Fees(1) Audit-Related Fees Tax Fees(2) All Other Fees(3) Total Audit Committee Preapproval Policy The Audit Committee has adopted a policy that all audit, review or attest engagements and permissible regulation of the SEC) will be subject topre-approval of the Audit Committee. The Audit Committee has delegated authority topre-approve permitted services to certain members of management subject to the limitations set forth in thepre-approval policy. Such approval must be reported to the Audit Committee at the next scheduled meeting. 62 PROPOSAL The information contained in this Audit Committee Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates such information by reference in such filing. The Audit Committee’s purpose is to assist the Board of Directors in its oversight of the Company’s internal controls, financial statements and the audit process. The Board of Directors, in its business judgment, has determined that each member of the Audit Committee is “independent,” as required by applicable standards of the NASDAQ Stock Market. The Audit Committee operates pursuant to a written charter adopted by our Board of Directors. A copy of the Audit Committee Charter is available on the Company’s website atwww.carrizo.com under “AboutUs-Governance.” Management is responsible for the preparation, presentation and integrity of the Company’s financial statements, accounting and financial reporting principles and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for performing an independent audit of the consolidated financial statements and internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board. In connection with fulfilling its responsibilities under the Audit Committee Charter, the Audit Committee met with management and The Audit Committee reviewed and discussed with Based on the reports and discussions described in this report, and subject to the limitations on the role and responsibilities of the Audit Committee referred to below and in the Audit Committee Charter, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form10-K for the year ended December 31, 2017. Members of the Audit Committee rely, without independent verification, on the information provided to them and on the representations made by management and the independent registered public accounting firm. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions referred to above do not assure that the audit of the Company’s financial statements and internal control over financial reporting has been carried out in accordance with the standards of the Public Company Accounting Oversight Board, that the financial statements are presented in accordance with U.S. generally accepted accounting principles or that the independent registered public accounting firm is in fact “independent.” The Audit Committee of the Board of Directors F. Gardner Parker, Thomas L. Carter, Jr. Roger A. Ramsey 63 Security Ownership of Management and Certain Beneficial Owners The table below sets forth information as of March Financial Officer and the other named executive officers whose names appear in the “Summary Compensation Table,” and by all executive officers and directors as a group. Except as indicated, each individual has sole voting power and sole investment power over all shares listed opposite his name. As of March Number of Shares of Common Stock Percent of Common Stock (rounded) Directors and Named Executive Officers: S. P. Johnson IV Brad Fisher David L. Pitts Gerald A. Morton Richard H. Smith Steven A. Webster(2) F. Gardner Parker(2) Frances Aldrich Sevilla-Sacasa(3) Thomas L. Carter, Jr.(2) Robert F. Fulton(2) Roger A. Ramsey(2) Frank A. Wojtek(2) Directors and Executive Officers as a Group (13 persons)(2) BlackRock, Inc.(4) The Vanguard Group(5) Frontier Capital Management Co., LLC(6) NWQ Investment Management Company, LLC(7) State Street Corporation(8) Less than 1% Except as otherwise noted and pursuant to applicable community property laws, each shareholder has sole voting and investment power with respect to the shares beneficially owned. None of the shares beneficially owned by the named executive officers or directors are pledged as security, except for This table includes shares of Common Stock related to 64 CARRIZO OIL & GAS OTHER ITEMS Ms. Aldrich Sevilla-Sacasa was granted 1,250 RSUs on April 4, 2018 that vest on the earlier to occur of (i) the date of the Annual Meeting and (ii) June 30, 2018. Based solely on a Schedule 13G/A filed with the SEC on January Based solely on a Schedule 13G/A filed with the SEC on February Based solely on a Schedule 13G/A filed with the SEC on February Based solely on a Schedule 13G/A filed with the SEC on February 13, 2018, NWQ Investment Management Company, LLC reported sole voting and dispositive power over 5,953,077 shares. The address of the principal business office of NWQ Investment Management Company, LLC is 2049 Century Park East, 16th Floor, Los Angeles, California 90067. Based solely on a Schedule 13G filed with the SEC on February 14, 2018, State Street Corporation reported shared voting and dispositive power over 4,161,287 shares. The address of the principal business office of State Street Corporation is One Lincoln Street, Boston, Massachusetts 02111. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires that the Company’s named executive officers and directors, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, file reports of ownership and changes of ownership with 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, The Audit Committee Charter provides that the Audit Committee will review all related party transactions required to be disclosed pursuant to Item 404 of RegulationS-K for potential conflicts of interest. Transactions involving potential conflicts of interest may also be reviewed by special committee of the Company’s independent directors. In addition, our Code of Ethics and Business Conduct requires that directors and officers and other employees disclose possible conflicts of interest to their supervisor or other senior management personnel, if appropriate, so that necessary steps may be taken to eliminate the conflict or initiate other preventative or appropriate action. Avista Marcellus Shale Joint Venture Effective August 2008, our wholly-owned subsidiary, Carrizo (Marcellus) LLC, entered into a joint venture with ACP II Marcellus LLC (“ACP II”), an affiliate of Avista Capital Partners, LP, a private equity fund (Avista Capital Partners, LP, together with its affiliates, “Avista”). The Avista Marcellus joint venture continues and covers acreage primarily in West Virginia and New York. Pursuant to the terms of an amended participation agreement, the areas of mutual interest with Avista have been reduced to specified halos around existing Avista Marcellus joint venture properties. We serve as operator of the properties covered by the Avista Marcellus joint venture. We conducted no material activity under the Avista Marcellus joint venture during 2018 PROXY STATEMENT 65 OTHER ITEMS included in Avista Utica Joint Venture Effective September 2011, our wholly-owned subsidiary, Carrizo (Utica) LLC, entered into a joint venture in the Utica Shale with ACP II, which is also our joint venture partner in the Avista Marcellus Shale joint venture described above, and ACP III Utica LLC (“ACP III”), affiliates of Avista. During the term of the Avista Utica joint venture, the joint venture partners acquired and sold acreage and we exercised options under the Avista Utica joint venture agreements to acquire acreage from Avista. The Avista Utica joint venture agreements were terminated on October 31, 2013 in connection with our purchase of certain ACP III assets. After giving effect to this transaction, we and Avista Our Relationship with Avista Steven A. Webster, Chairman of our Board of Directors, serves asCo-Managing Partner and President of Avista Capital Holdings, LP, which entity has the ability to control Avista and its affiliates. As previously disclosed, we have been a party to prior arrangements with affiliates of Avista Capital Holdings LP. The terms of the joint ventures with Avista in the Utica Shale and the Marcellus Shale were approved by a special committee of the Certain Matters Regarding Mr. Carter Thomas L. Carter, Jr., a member of our board of directors, and his immediate family members collectively own interests directly and indirectly through entities (the “Black Stone Entities”), which are working interest or royalty owners in certain of the Company’s wells in the Eagle Ford. Mr. Carter also serves as an executive officer, general partner or controlling shareholder of the Black Stone Entities and, in some cases, he and his family hold substantial interests in these entities. independent directors of the As 66 CARRIZO OIL & GAS OTHER ITEMS Shareholder Proposals for the Next Annual Meeting Rule14a-8 under the Exchange Act 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 Rule14a-8, proposals that shareholders intend to have included in the Company’s proxy statement and form of proxy for the If a shareholder desires to bring a matter before an annual or special meeting of shareholders and the proposal is submitted outside the process of Rule14a-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 Company’s 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 March 3, 2019. A copy of the Company’s bylaws setting forth the requirements for the nomination of director candidates by shareholders and the requirements for proposals by shareholders may be obtained by submitting a request to the Company’s Corporate Secretary at the Company’s principal executive offices, 500 Dallas, Suite 2300, Houston, Texas 77002. A nomination or proposal that does not comply with the above procedures will be disregarded. Compliance with the above procedures does not require the Company to include the proposed nominee or proposal in the Company’s proxy materials. Certain Information Regarding Preferred Stock and Warrants The terms of the Preferred Stock provide that upon certain failures by the Company to redeem the Preferred Stock, or pay a quarterly dividend when due, then, among other things, a representative, acting on behalf of the holders of Preferred Stock, will have the exclusive right to appoint and elect up to two directors to the Board of Directors. The purchasers of the Preferred Stock and the Warrants have agreed to vote shares of Common Stock issued in respect of such Preferred Stock and Warrants in certain circumstances as either (i) recommended by the Board to the holders of voting securities of the Company or (ii) consistent with, and in proportion to, the votes of the other shareholders of the Company. No such Common Stock has been issued as of the date of this proxy statement. Proxy Solicitation and Expenses The accompanying proxy is being solicited on behalf of the Board of Directors. The expenses of preparing, printing and mailing the proxy materials will be borne by us. Proxies may be solicited by personal interview, mail, telephone, facsimile, internet or other means of electronic distribution by our directors, officers and employees, who will not receive additional 2018 PROXY STATEMENT 67 OTHER ITEMS compensation for those services. We have also retained Morrow CT 06902, to aid in the solicitation of proxies. We expect to pay Morrow nominees for the forwarding of proxy materials to the beneficial owners of shares held by those persons, and we will reimburse them for reasonable expenses incurred by them in connection with the forwarding of proxy materials. Delivery of One Proxy Statement and Annual Report to a Single Household to Reduce Duplicate Mailings The SEC permits a single set of the annual report and proxy statement or Notice of Internet Availability of Proxy Materials to be sent to any household at which two or more shareholders reside if they appear to be members of the same family. This procedure, referred to as householding, reduces the volume of duplicate information shareholders receive and reduces mailing and printing expenses. A number of brokers and other nominees have instituted householding. As a result, if you hold your shares through a broker or other nominee and you reside at an address at which two or more shareholders reside, you will likely be receiving only one set of the annual report and proxy statement or Notice of Internet Availability of Proxy Materials unless any shareholder at that address has given the broker or other nominee contrary instructions. However, if any such beneficial shareholder residing at such an address wishes to receive a separate set of the annual report and proxy statement or Notice of Internet Availability of Proxy Materials in the future, that shareholder should contact their broker or other nominee. Shareholders of record should send a request to the Company’s Corporate Secretary at the Company’s principal executive offices, 500 Dallas, Suite 2300, Houston, Texas 77002, telephone number This proxy statement contains statements, including in “Compensation Discussion and Analysis” concerning our intentions, expectations, projections, assessments of risks, beliefs, plans or predictions and underlying assumptions and other statements that are not historical facts that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking rely on assumptions and involve risks and uncertainties, many of which are beyond our control, including, but not limited to, those relating to a worldwide economic downturn, availability of financing, our dependence on our exploratory drilling activities, the volatility of and changes in oil and gas prices, the need to replace reserves depleted by production, operating risks of oil and gas operations, our dependence on our key personnel, and other factors detailed herein and under Part I, “Item 1A. Risk Factors” and in other sections of our most recent annual report on Form10-K and in other filings with the SEC. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. All subsequent written and oral 68 CARRIZO OIL & GASOther Current Public Company DirectorshipsPublic Company Directorships Within the Past Five YearsPinnacle Gas Resources, Inc.(nka Summit Gas Resources, Inc.)Steven A. WebsterAge: 64Director Since: 1993Principal OccupationCo-Managing Partner and Co-Chief Executive Officer, Avista Capital Holdings, LPRecent Business ExperienceMr. Webster has been the Chairman of our Board of Directors since June 1997. Mr. Webster has served as Co-Managing Partner of Avista Capital Partners LP, a private equity firm focused on investments in the energy, healthcare and other business sectors, since he co-founded the firm in July 2005. From January 2000 until June 2005, Mr. Webster served as the Chairman of Global Energy Partners, Ltd., an affiliate of CSFB Private Equity, which made private equity investments in the energy business. From December 1997 to May 1999, Mr. Webster was the Chief Executive Officer and President of R&B Falcon Corporation, an offshore drilling contractor, and prior to that, was Chairman and Chief Executive Officer of Falcon Drilling Company, which he founded in 1988. Mr. Webster holds an M.B.A. from Harvard Business School where he was a Baker Scholar. He also holds a B.S. in Industrial Management and an Honorary Doctorate in Management from Purdue University.Other Current Public Company DirectorshipsBasic Energy Services, Inc. (Chairman)Camden Property Trust Era Group Inc.Oceaneering International, Inc.Public Company Directorships Within the Past Five YearsGeokinetics, Inc.Hercules Offshore, Inc.Hi-Crush Partners LPSEACOR Holdings, Inc.Reasons for NominationMr. Webster brings to the Board of Directors experience in, and knowledge of, the energy industry, knowledge of the Company as a co-founder and long-time director, business leadership skills from his tenure as chief executive officer of publicly traded companies and his over 30-year career in private equity and investment activities, and experience as a director of several other public and private companies.13CARRIZO OIL & GASDIDIRECTORSRECTORS74
76Principal OccupationPrivate InvestorRecent Business ExperienceMr. Parker has been the Lead Independent Director of our Board of Directors since May 2012. Mr. Parker has been a private investor since 1984. Prior to that, he worked with Ernst & Ernst (now Ernst & Young LLP) for 14 years, seven of which he served as a partner. In the private sector, Mr. Parker is Chairman of the Board of Edge Resources Ltd, an Energy capital fund and Norton Ditto, a men’s clothing retailer. He is a graduate of The University of Texas at Austin and is board certified by the National Association of Corporate Directors. Mr. Parker is also a 2011 National Association of Corporate Directors (NACD) Board Leadership Fellow. He has demonstrated his commitment to boardroom excellence by completing NACD’s comprehensive program of study for experienced corporate directors-a rigorous suite of courses spanning leading practices for boards and committees-and he supplements his skill sets through ongoing engagement with the director community and access to leading practices.Other Current Public Company Directorships Camden Property TrustSharps Compliance Corp. (Chairman)Public Company Directorships Within the Past Five Years Hercules Offshore, Inc.Pinnacle Gas Resources, Inc(nka Summit Gas Resources, Inc.)
Triangle Petroleum Corporation64
66at Episcopal High School in Houston, Texas since 2004, and as a Trustee of St. Edward’s University since 2009. Mr. Carter has beenserved as a trustee of a nonprofit sincefrom 1998 and was elected to 2017, including a four-year term as president of the board of trustees from 2013 to 2017, and presently serves as trustee emeritus of the nonprofit in 2013.such nonprofit. Mr. Carter also serves on the University of Texas at Austin Internal Audit Committee and the University Lands Advisory Board, and the Ripley Foundation board.Board. Mr. Carter received M.B.A. and B.B.A. degrees from the University of Texas at Austin. 2016 PROXY STATEMENT14 PROPOSAL 1. ELECTION OF DIRECTORSRobert F. Fulton 64
66Basic Energy Services, Inc.NoneRamseyRamsay77
79WCA Waste Corporation 15CARRIZO OIL & GAS PROPOSAL 1. ELECTION OF DIRECTORSFrank A. Wojtek 60
62since 1989.from 1989 to 2013. 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 were companies in the offshore drilling industry. Mr. Wojtek holds a B.B.A. in Accounting with Honors from The University of Texas at Austin.ana prior executive officer orand director of the Company since its founding, experience in accounting and experience in financial executive positions at public and private companies.companies, management experience and knowledge in the oil and gas services industry, as well as knowledge and experience in the industry from a land and mineral owner perspective. 2016 PROXY STATEMENTCARRIZO OIL & GAS16 Company usesCompany’snon-employee director compensation, which is reviewed and approved annually by the Compensation Committee, consists of a combination of cash and equity-based compensation designed to attract and retain qualified candidatesindividuals to serve on the Board.Board and align the interests of directors with those of our shareholders. In determining the level ofnon-employee director compensation, the Compensation Committee considers the significant amount of time directors spend fulfilling their duties as well as the competitive market for skilled directors. The annual service period for our directors is the period from one shareholders meeting to the next with cash compensation generally paid on a quarterly basis and equity awards granted upon joining the Board and after each annual shareholder meeting. The Company also reimburses travel, meal and lodging expenses incurred by ournon-employee directors to attend Board and Board committee meetings. In setting directorcompensation, the Company considers the significant amount of time that directors expend in fulfilling their duties to the Company as well as the skill-level required by the Company of members of its Board. S. P.committee meetings and director education programs. Mr. Johnson, IV, our President and Chief Executive Officer receives noand only employee director, does not receive additional compensation for serving on the Board.a director.Forits independent compensation consultant to annually reviewnon-employee director compensation based on an analysis of the 2015-2016 director term, the annual cash retainer and additional annual amountscompensation paid to thenon-employee directors of companies included in respectthe same compensation peer group used to determine executive compensation. their roles as members or chairmen of committees, as Chairman ofnon-employee director compensation, in March 2017, the Board and as Lead Independent Director, and meeting attendance fees were as follows: Board of
DirectorsNominating
and Corporate
GovernanceAnnual Cash Retainer $60,000 Chairman of the Board of Directors 120,000 Lead Independent Director 26,500 Committee Chairman $20,000 $10,000 $10,000 Committee Member 9,000 5,000 3,000 Meeting Attendance 2,500 1,000 1,000 1,000 Meeting Attendance via Teleconference 1,000 500 500 500 Special Meeting Attendance 1,000 Special Meeting Attendance via Teleconference 500 The Compensation Committee approved the followingnon-employee directors’ cash director compensation for the 2016-20172017-2018 director term is expected to remain the same as for the 2015-2016 director term, except for the amount paid in respect of the role as chairman of the Compensation Committee, which will be increased to $15,000 per year.Under the Incentive Plan, non-employee directors may be granted stock options, restricted stock, restricted stockterm.units or any combination of such awards for their service to the Board at the discretion of the Board of Directors or the Compensation Committee. Awards may be made to non-employee directors in respect of their roles as members or chairmen of committees, as Chairman of the Board and as Lead Independent Director. Awards are also granted to non-employee directors upon joining the Board and after each annual shareholder meeting.For the 2015-2016 director term, non-employee directors were awarded the following shares of restricted stock units: Board of
Directors
and Corporate
GovernanceDirector 2,500 Chairman of the Board of Directors 3,900 Lead Independent Director 500 Committee Chairman 1,750 1,050 400 Committee Member 1,050 700 300 Because future awards are at the discretion of the Board and Compensation Committee, the number of shares subject to future awards could increase or decrease and the type and terms of future awards could change as well, in each case in accordance with the Incentive Plan. The vesting terms of any stock options or shares of restrictedstock and restricted stock units granted to directors are at the discretion of the Compensation Committee or the Board of Directors. Director awards for the 2016-2017 director term are currently expected to remain the same as for the 2015-2016 term.17CARRIZO OIL & GAS
Governance $70,000 120,000 26,500 $25,000 $17,500 $10,000 15,000 7,500 3,000 2,500 1,500 1,500 1,000 1,000 500 500 500 1,000 500 2,500 3,900 500 1,750 1,050 400 1,050 700 300
Governance $80,000 120,000 27,500 $37,500 $30,000 $15,000 27,500 20,000 7,500
Governance $80,000 120,000 27,500 $37,500 $30,000 $15,000 27,500 20,000 7,500 earned or paid to each of our non-employee directors during 2015 and stock awards granted for the 2015-2016 director term.2017. $196,750 $153,024 $349,774 144,437 130,310 274,747 — — — 102,500 94,445 196,945 90,313 83,685 173,998 116,063 109,986 226,049 80,750 66,948 147,698
NameFees Earned or
Paid in CashStock
Awards(1)Option
AwardsAll Other
Compensation
TotalSteven A. Webster $175,500 $327,584(2) $ — $ — $503,084 Thomas L. Carter, Jr. 86,125 202,181 — — 288,306 Robert F. Fulton 74,000 179,148 — — 253,148 F. Gardner Parker 113,563 278,958 — — 392,521 Roger A. Ramsey 85,125 235,451 — — 320,576 Frank A. Wojtek 68,125 143,318 — — 211,443 (1) restricted stock unitsRSUs granted on May 19, 201517, 2017 for the 2015-20162017-2018 director term computed in accordance with FASB ASC Topic 718. The grant date fair value of $51.19$23.91 per share is based on the average of the high and lowclosing stock price of our Common Stock on the NASDAQ Global Select Market on the May 19, 201517, 2017 grant date.(2)As of December 31, 2015, Mr. Webster held 41,672 exercisable stock appreciation rights, of which 18,332 were granted on June 3, 2009 and 23,340 were granted on July 13, 2010, that will be settled in cash.201620(2) 18 21, 201623, 2018 with respect to the executive officers.Executive OfficerAgePosition6062 5557 51 5759 David L. Pitts49Vice President and Chief Financial Officer5860 4042 Gerald A. Morton has served as General Counsel and Vice President of Business Development of the Company since 2008. Prior to joining the Company, Mr. Morton spent 15 years with Pogo Producing Company, where he held various positions including Vice President – Law, Corporate Secretary, and Senior Vice President for Asia and Pacific operations. Mr. Morton began his oil industry career in 1982 working for Texaco as a geophysicist. Mr. Morton graduated from Brigham Young University with an Engineering Geology degree. He received his MBA in Finance in 1985 and a law degree in 1988, both from the University of Houston.–— Gulf Region USA with areas of concentration in the Outer Continental Shelf, Onshore Texas and Louisiana and Louisiana State Waters. From September 1997 until March 2001 Mr. Smith held the position of Land Manager –— Gulf Coast Region with Basin Exploration, Inc. Mr. Smith held various land management positions with Sonat Exploration Company, Michel T. Halbouty Energy Co., Pend Oreille Oil & Gas Company and Norcen Explorer, Inc. from the time he began his career in 1980 until the time he joined Basin Exploration. Mr. Smith is a Certified Professional Landman with a B.B.A. in Petroleum Land Management from the University of Texas at Austin. 192018 PROXY STATEMENTCARRIZO OIL & GAS 2015The Compensation Committee oversees our compensation programs. Our compensation programs are designed to specifically address our desire to motivate and retain all of our employees.some of the many objectivesfurther details as well as additional key financial and operational highlights that we accomplished during 2015 that we believe will help us navigate a tough commodity price environment.2017.·Increased average daily oil production 22% year-over-year to 23,054 in 2015, exceeding our initial expectations of 17%, despite reducing capital expenditures by 37%;·Reduced average well costs in the Eagle Ford from $7.5 million at year-end 2014 to $4.6 million at year-end 2015;·Utilizing new Generation 3 rigs, reduced drilling days for long-lateral wells in the Eagle Ford from 16 in 2014 to an average of 9 by year-end 2015;·Maintained a strong balance sheet, exiting 2015 with a Net Debt to Adjusted EBITDA ratio of 2.7x and an undrawn $685.0 million revolving credit facility (borrowings subject to compliance with covenants);·Hedged approximately 60% of our estimated crude oil production for 2016 at a weighted-average floor price of approximately $57/Bbl, with an additional $44.8 million of cash flow during 2016 relating to the offsetting hedge transactions entered into during the first quarter of 2015; and·Reduced our annual interest expense by $11.1 million on a go-forward basis by replacing $600.0 million of 8.625% Senior Notes with $650.0 million of 6.25% Senior Notes, also extending the maturity of the notes from 2018 to 2023.Despite our achievements in 2015, the continued low commodity price environment negatively impacted our financial results and stock price. In light of the current commodity price environment, management recommended and the Compensation Committee approved, the following key actions in 2015:2017;·No change to base salaries of named executive officers; and·Reduced 2015 annual incentive bonus payouts to 50% of the target levels.See “Non-GAAP Financial Measures”Generated cash proceeds of approximately $197.6 million during 2017 fromnon-core asset divestitures with an additional $344.3 million received in Annex Aearly 2018, which focused our portfolio of assets in the Eagle Ford and Delaware Basin and provides us with a solid foundation from which to this proxy statement.generate long-term growth in reserves and production;2016 PROXY STATEMENT20EXECUTIVE COMPENSATIONoil and gas industry has experienced a continued low commodity price environment stemming in large part from the global oversupply of crude oil. While the Company has no control over commodity prices, we believe we have positioned the Company to better manage this challenging commodity price environment by controlling capital costs and maintaining financial flexibility, better than many of our industry peers,including many of those in our 2015 Compensation Peer Group, as defined below. The following graph displayspresents a comparison of one-year, three-year, and five-year total shareholder returns of the Company’s common stock with that ofCommon Stock, the average returns of our 2015 Compensation Peer Group2016 and 2017 compensation peer groups, and the S&P 500 and Dow Jones U.S. Exploration &Index.indexes, assuming an investment of $100 (with reinvestment of all dividends) was invested on December 31, 2012.One-YearThree-YearFive-Year(12/31/2014 - 12/31/2015)(12/31/2012 - 12/31/2015)(12/31/2010 - 12/31/2015)2018 PROXY STATEMENTAs shown above, forAlthough our total shareholder return declined during 2017, we continued to outperform our 2016 and 2017 compensation peer groups over the one-year, three-year andcumulative five-year periods, we have performed better than our 2015 Compensation Peer Group.period. We view this as a testament to management’s ability tosuccess during a challenging commodity pricing environmentsuccess. See “Executive Compensation Program Objectives—Compensation Should Be Benchmarked” for information about our 2016 and to have protected our investorsduring this period better than the majority of other companies in our 20152017 Compensation Peer Group. See also “Executive Compensation Objectives and Features—Compensation Should be Benchmarked” for more information on our 2015 Compensation Peer Group.Groups.21CARRIZO OIL & GASEXECUTIVE COMPENSATION Tying Payouts to PerformanceDespite a challenging commodity price environment during 2015, the leadership team was able to deliver on all operational and financial metrics used by our Committee to determine annual incentive bonuses. The following chart displays the Company’s performance relative to the target for each metric. Our leadership team executed beyond the average targeted performance levels for each metric, with an average of 114%. Despite actual results exceeding target performance levels, management recommended, andthe Compensation Committee approved, the exercise of negative discretion to reduce the payout of the annual incentive bonuses to 50% of the target level due to the continued depressed commodity price environment.Pay-for-Performance: Increased At-Risk Compensationthe executive officersour executives each year to ensure the programs aligncontinued alignment with the goals and objectives of the Company, as well as motivate executives to maximize long-termlong-implementweight a significant portion our executive compensation programs weighted toward towardsat-risk, performance-based variable compensation. As discussed in more detail under “Executive Compensation Components,” the metric-drivenperformance based annual incentive bonus, RSUs, Cash SARs, and performance shares. As such, our CEO’s realizable compensation varies significantly based on the Company’s share price as well as the Company’s performance relative to theprogrambonus performance metric targets. Realizable compensation is not a substitute for targeted compensation in evaluating our executive compensation, but we believe it is important to understand the impact the Company’s performance and total shareholder return (“TSR”) contingent equityshare price has on our realizable compensation.Although our restricted stock units have a production targetRealizable compensation is calculated as the sum of base salary, actual annual incentive bonus paid, and therefore contingent on operational accomplishments, we do not classify them as performance-based compensation for purposes of a pay-for-performance discussion even though these awards are designed to be qualified performance-based compensation within the meaning of Section 162(m)intrinsic value of the Internal Revenue Codelong-term equity-based incentive awards based on the closing price of 1986,our Common Stock on the NASDAQ Global Select Market on December 31, 2017 of $21.28 per share. The intrinsic value of the long-term equity-based incentive awards is calculated as amended (the “Code”).follows:2016 PROXY STATEMENT22 EXECUTIVECOMPENSATION20152017 Shareholder Advisory Vote on Executive Compensation Vote2015 annual meeting of shareholders, our shareholdersshares entitled to vote on the matter voted 92.8% in favor of the compensation of the named executive officersNamed Executive Officers as described in our 20152017 proxy statement. In considerationThe Compensation Committee interpreted this strong level of shareholder support as affirmation of the elements and objectives of the Company’s executive compensation program. Although the results of this advisory vote indicated that no change to our executive compensation program was necessary, the Compensation Committee acknowledgedalso consideredsupport received fromcompensation committees of companies included in our shareholders and viewed2017 compensation peer group, when determining whether changes to our executive compensation program were necessary in 2018. The Compensation Committee will continue to consider the results as a confirmation of the Company’s existingannual shareholder advisory vote on executive compensation when making future executive compensation decisions.compensation policiesdecisions. However, in efforts to continue improving on the compensation structures, the Compensation Committee reviewed actions taken by our 2015 Compensation Peer Group and public commentary by institutional investors in order to identify potential alterations to the 2015 compensation structure.annual incentive bonus and long-term equity-basedexecutive compensation for 2015 continue2017 continued to align our executives’ pay opportunities with the interests of our executives with those of our shareholders. Additionally, theThe following table summarizes the compensation best practices that we follow and the disfavored compensation practices that we avoid.þ✓ Pay for PerformanceMajority “at risk” or variable compensation..We tie pay to performance. A significant portion The majority of our executive paycompensation is “at risk” or variable. Our annual incentive bonus is based uponon performance relative to key operational and not guaranteed. We have established clear financial and operational goals for corporate performance and differentiate based on individual achievement. In establishing goals, we select performance metrics that drive both our short-term and long-term corporate strategy in accordance withstrategy. The value delivered by our strategic plan.long-term equity based incentive awards is tied to both absolute and relative total shareholder return.þMitigate Undue Risk.We mitigate undue risk associated with compensation, including utilizing retention provisions, multiple performance metrics and robust board and management processes to identify risk.þ✓ Minimal Perquisites.We provide only minimal perquisites to the named executive officers that are not generally available to all employees.þRegular Review of Share Utilization.We evaluate share utilization by reviewing overhang levels (dilutive impact of equity compensation on our shareholders) and annual run rates (the aggregate shares awarded as a percentage of total outstanding shares).þThe Company requires its Named Executive Officers andnon-employee directors and named executive officersare required to acquire and maintain prescribed levels ofmeaningful ownership of our stock in order to alignensure their interestinterests are closely aligned with thosethe interests of our shareholders. These guidelines require that within a five year period from the date a person✓ appointedcomprised solely of independent directors.✓ Board of Directors or becomes a named executive officer, they must hold Company common stock in value equal to three times their annual cash retainer for service on the Board of Directors for non-employee directors, five times their annual base salary for the Chief Executive Officer and Chief Financial Officer and three times their annual base salary for other named executive officers.Company.þ✓ ✓ ✓ Compensation CommitteeBoard of Directors is committed to institutingadopting a clawback policy as required by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 if and when final regulations are providedhave been adopted by the SEC and the NASDAQ Stock Market and become effective.NASDAQ.þ✓ Independent Compensation Consulting Firm.Minimal Perquisites.The Compensation Committee benefits from its utilization of an independent compensation consulting firm, Longnecker, which provides no We provide minimal perquisites to our Named Executive Officers that are not generally available to all other services to the Company.employees.☒× Counting.Recycling.Our Neither the Prior Incentive Plan does not containnor the 2017 Incentive Plan contains liberal share counting provisions whereby shares granted and exercised can, under certain circumstances, be added back to the plan reserve for future grants.recycling.☒× Re-Pricing.Repricing.No re-pricingrepricing or exchange of underwater stock options or stock appreciation rights.SARs or other awards is permitted without shareholder approval.☒× × named executive officersNamed Executive Officers ornon-employee directors permitted.☒× named executive officers.Named Executive Officers.☒× ☒× Plans.Benefits.We do not offer Supplemental Executive Retirement Plansprovide pensions or other supplemental executive retirement benefits to our executive officers.Named Executive Officers.23CARRIZO OIL & GAS EXECUTIVECOMPENSATIONOversightResponsibilities of the Compensation ProgramsCommitteeis composed entirely of independent, non-employee directors.oversees the Company’s compensation programs, administers the Company’s 2017 Incentive Plan, the Prior Incentive Plan, and the Cash SAR Plan, and reviews and approves all compensation decisions relating to our executives. The Compensation Committee has overall responsibility for settingis authorized by the Board of Directors and theChief Executive Officer and for approving the compensationBoard of the other executive officers, including the other named executive officers.Directors. The Compensation Committee also oversees and advises the Board of Directors on the adoption of policies that govern the Company’s compensation programsprograms.administersreports directly to the Company’s Incentive Plan and Cash- Settled Stock Appreciation Rights Plan. TheCompensation Committee. Representatives of Pearl Meyer attend Compensation Committee regularly meetsmeetings, as requested, and communicates with its independent executive compensation consultant, Longnecker, whothe Compensation Committee between meetings. Pearl Meyer assists and advises the Compensation Committee on all aspects of itsour executive compensation program. Longnecker provides no other services toServices provided by the Company. The services Longnecker providesindependent compensation consultant include:·analyzing the appropriateness of the 2015 Compensation Peer Group and 2015 Stock Performance Peer Group (discussed below);·providing and analyzing competitive market compensation data;·analyzing the effectiveness of executive compensation programs and making recommendations to the Compensation Committee, as necessary; and·evaluating how well our compensation programs adhere to the philosophies and principles of the Company.The Compensation Committee also receives data, advice and counsel from Longnecker on matters pertaining to director compensation.Executive Compensation Objectives and FeaturesObjectivesThe guiding philosophyreviewing the compensation and specific objectivesstock performance peer groups;are: (1) to alignand recommending changes, as necessary; anddesign and outcomes with our business strategy; (2)adheres to encourage management to create sustained value for our shareholders; (3) to attract, retain, and engage our executives; and (4) to support a performance-based culture for all of our employees. These primary objectives are evaluated annually by: (a) measuring and managing executive compensation; (b) aligning incentive plan goals with shareholder value-added measures; and (c) having an open and objective discussion between management andprogram objectives.Compensation Committee in setting goals for and measuring performance of the executive officers.We believe that eachdelivery of these objectives is important to our compensation program. Our compensation program is designed to reward our executives for meeting or exceeding short-term operational and financial targets and furthering the long-term strategy of the Company without subjecting the Company to excessive or unnecessary risk. Specifically, the components of our executives’ compensation, such as base salaries, annual incentive bonuses and long-term equity incentive awards, are evaluated and determined on a periodic basis to ensure the amount and type of compensation received by each executive corresponds to the executive’s performance and targets for the Company’s performance.Compensation PhilosophyWe target executive base salaries plus annual incentive bonus near the 50th percentile of market ranges for competitive performance and target total direct compensation near the 75th percentile, based on the Compensation Committee’s assessment of how the Company performed relative to the 2015 Compensation Peer Group. Total direct compensation is defined as base salary, plus annual incentive bonus, plus the three-year average of the grant date fair value of annual awards of restricted stock, performance share awards, and stock appreciation rights (of which all outstanding are expected to be settled in cash). Base salary is generally near the 50th percentile of base salary of executives with similar responsibilities at companies in our 2015Compensation Peer Group. Our management annually reviews each executive’s performance, the performance of the Company and information regarding base salary and annual incentive bonus of executives in comparable positions with our 2015 Compensation Peer Group and makes a recommendationservices to the Compensation Committee, regarding each executive’s base salaryPearl Meyer interfaces with our management, particularly our CFO and annual incentive bonus forour Vice President of Human Resources. In 2017, Pearl Meyer did not provide any services to the applicable year. The annual incentive bonus is tied to a percentage of the executive’s base salary, with a pre-determined target percentage. See also “Annual Incentive Bonus.”To determine the appropriate amount and mix of total compensation for each executive,Company other than those requested by the Compensation Committee reviewsand related to Pearl Meyer’s engagement as the recommendations madeindependent compensation consultant to the Compensation Committee.2016 PROXY STATEMENT24EXECUTIVECOMPENSATIONour management, information regarding total direct compensation paid by our 2015 Compensation Peer Group and other compensation survey information developed and provided by Longnecker. The Compensation Committee generally seeks to provide each executive total direct compensation with a target value near the 75th percentile of total direct compensation provided to executives with similar responsibilities within our 2015 Compensation PeerGroup. Based on its reviews of total direct compensation and such other factors, the Compensation Committee, believes thatPearl Meyer did not have any business or personal relationships with members of the total direct compensation paidCompensation Committee or executives of the Company, did not own any of the Company’s Common Stock and maintained policies and procedures designed to avoid such conflicts of interest. As such, the named executive officers isCompensation Committee determined the engagement of Pearl Meyer in line with the philosophy described above. However, compensation practices and philosophy are an evolving practice and future changes may be made to take into account changed circumstances, practices, competitive environments and other factors.2017 did not create any conflicts of interest.beBe BenchmarkedWe operate in an environment where competition for executive talent is highly competitive. The Compensation Committee engages Longnecker to conduct annual assessments of our industry peer group in order to ensure each peer company remains appropriate. In order to accomplish this and position the Compensation Committee to make informed decisions, Longnecker assessed over 50 potential peer companies based on several metrics, including oil and gas revenue, assets, market capitalization, enterprise value and operational similarity. Longnecker narrows down potential peer companies based on a size similarity process whereby the best choice of peer companies in the oil and gas industry are within a range of 0.5 to 3.0 times the Company for the various metrics. Final peer company selections were made from within this group through discussions with Longnecker and our management for presentation to the Compensation Committee. The CompensationCommittee approves any revisions to the peer group on an annual basis. During this process, Longnecker and our management proposed, and the Compensation Committee approved, revisions to the industry peer group used in 2014 in connection with executive compensation decisions for 2015. As presented in the table below, two companies were removed, one as a result of being acquired and the other because its financial position no longer aligned with the Company. The additional companies in the 2015 industry peer group better align with the Company with respect to the operational metrics described above. The table below presents the 13 companies which comprise the industry peer group used in 2015 (the “2015 Compensation Peer Group”) in connection with executive compensation decisions, as well as changes to the Compensation Peer Group from 2014 to 2015:
Group for Fiscal Year 2014 2015 Bill Barrett Corporation X X Bonanza Creek Energy, Inc. X X Comstock Resources, Inc. X X EXCO Resources, Inc. X Gulfport Energy Corporation X X Halcòn Resources Corporation X X Kodiak Oil & Gas Corp.(1) X Laredo Petroleum, Inc. X X Midstates Petroleum Company, Inc. X Northern Oil and Gas, Inc. X X Oasis Petroleum Inc. X X PDC Energy, Inc. X X Resolute Energy Corporation X Rosetta Resources Inc.(2) X X Swift Energy Company X X (1)Effective December 8, 2014, Kodiak Oil & Gas Corp. was acquired by Whiting Petroleum Corporation.(2)Effective July 20, 2015, Rosetta Resources, Inc. was acquired by Noble Energy, Inc.25CARRIZO OIL & GASEXECUTIVECOMPENSATIONuses this dataengages Pearl Meyer to annually review the compensation peer group used for executive compensation decisions. Pearl Meyer’s process considers the2015 Compensation Peer Groupsame basins and where the Company is within a reasonable range of the peer group median for revenues and/or market capitalization with final peer group selections made after considering input from management. The resulting compensation peer group, along with any changes in conjunction with published industry survey data to benchmark our executives’ base salary, targeted annual incentive bonus, total cash compensation, long-term equity incentive compensationthe composition of the peer group, are reviewed and total direct compensation. Additionally,approved by the Compensation Committee uses the data to evaluate how,Committee.each executive position, thecompensation decisions in 2016,Committee’sComponents—Long-Term Equity-Based Incentive Awards—Performance Shares.”X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X actionsreview to ensure that compensation decisions are appropriate, reasonable and consistent with the Company’s philosophy, practicescompensation program objectives and policies, considering the labor market incompetitive with executive compensation of companies against which we compete for business opportunities, investment dollars and executive talent. To maintain independence and objectivity, the input and interpretation of data sources, methodology of consolidating data, and marketplace statistics included in Pearl Meyer’s executive compensation review were compiled without anyCompanymarket-based compensation data included in Pearl Meyer’s executive compensation review is based on compensation peer group proxy compensation data and published industry compensation survey data. Proxy data is generally nearfavored over survey data with the medianweighting based on the number of its selected industryposition matches available in the compensation peer group in relation to oil and gas revenue and enterprise value.group. Pearl Meyer’s 2017 executive compensation review was based on the following weighting: Named Executive Officer Proxy Data
Weighting 16 100% 0% 12 70% 30% 16 100% 0% 12 70% 30% 3 50% 50% TheOur executive compensation of the named executive officersprogram consists of the following components:·base salary;·annual incentive bonus;·long-term equityequity-based incentive awards;·severance and change of control benefits; and·perquisites and other benefits.We believe that each of these components is necessary to achieve our objective of retaining highly qualified executives and motivating them to maximize shareholder return.designedintended to provide basic economic securitya foundation of executive compensation that recognizes the level of responsibility and authority of each individual executive and compensates the individual executive for day to day contributions to our executives and be competitive with salary levels for comparable executive positions at companies in our 2015 Compensation Peer Group. The Compensation Committee reviews comparable salary information provided by Longnecker as one factor to be considered in determining thesuccess. Unless circumstances warrant otherwise, we generally target base pay for the named executive officers and aims for base salary for our executives to besalaries near the 50th percentile of our industry peer group. Other factors the Compensation Committee considersexecutives in determining base pay for each of the named executive officers are the officer’s responsibilities, experience, leadership, potential future contribution and demonstrated individual performance. The relative importance of these factors varies among our executives depending on theirequivalent positions and the particular operations and functions for which they are responsible. In the past, the Compensation Committee has also taken into account positive financial results and drilling success in determining base salaries. The employmentat comparable companies.agreementsAfter considering the recommendations of the named executive officers provide that base salary will be reviewed at least annually and may be increased at any time and from timeour CEO for adjustments to time and that any increase will be substantially consistent with increases in the base salary generally awarded in the ordinary course of business to our other executives. Management may make recommendations regarding increases in base salaries to account for changesexecutives other than himself and competitive market data provided by its independent compensation consultant, in base salaries paid to comparable executives at the companies in our 2015 Compensation Peer Group. The Compensation Committee considers all of these factors and ultimately makes a decision regarding the base salary of the named executive officers in its discretion.In March 2016, due primarily to the continued low commodity price environment, management recommended, and2017, the Compensation Committee approved the 2017 base salaries of the named executive officers remained unchanged for 2016Named Executive Officers as compared to 2015. See also “Executive Compensation—Employment Agreements.”set forth below. Changes in base salaries are generally effective April 1 of each year, unless otherwise noted. S. P. Johnson IV $650,000 $650,000 $650,000 Brad Fisher 470,000 470,000 470,000 Gerald A. Morton 360,000 371,000 371,000 David L. Pitts 350,000 350,000 350,000 Richard H. Smith 335,000 335,000 335,000 Named Executive Officer 2016
Base
Salary 2017
Base
Salary $650,000 $670,000 470,000 485,000 390,000 (1) 430,000 371,000 383,000 335,000 346,000 (1) PROXY STATEMENT26Mr. Pitts’ base salary was increased to $390,000 from $350,000. BeginningExecutives are eligible for an annual incentive bonus which is designed to focus executives on achieving our annual corporate plan linked to our strategy. Execution against our annual corporate plan is important to drive long term shareholder value by improving financial strength, managing costs, and investing in 2014, the Compensation Committee determinedprojects that it should consider certainwill deliver future value. We employ balanced financial and operational and financialperformance metrics to determine thefurther specific objectives of our strategy, such crude oil production growth, cost management and capital efficiency.bonuses for executive officers. The targets for such metrics used by the Compensation Committee are calculated differently than what the Company may include in earnings guidance or public filings. The target levels for each metric were approved by the Compensationbonus payout opportunity rangesCommitteefrom zero to 200% of target based on the Company’s 2015 corporate plan and the Compensation Committee’s discussions with Longnecker. The bonus levelsactual results relative to performance metric targets. Actual annual incentive bonuses paid maycould be more or less than target levelsthe calculated payout as determined by the Compensation Committee in its discretion. Named Executive Officer 2017 Annual Incentive Bonus Target
(% of Base Salary)100% 90% 90% 90% 80% 2015 operationalperformance metrics, weighting factors and financial metrics, targets and actual performance.2015 Operational and Financial Metrics Target Actual % of Target Average Daily Oil Production (Bbls/d) 20,710 23,054 111% Drill-Bit Finding and Development Cost ($/Boe) $15.50 $13.54 113% Lease Operating and General and Administrative Expense ($/Boe) $12.81 $10.56 118% Targetfor executives’ 2017 annual incentive bonus, which were approved by the Compensation Committee in March 2017, along with the Company’s 2017 actual results and payout levels as a percentage of base salaryachieved. The performance metric targets were based on the Company’s 2017 corporate plan and consistent with the2015 were comparedcash G&A excluded annual bonuses due to the market and determined by our compensation consultantuncertainty, at the time the guidance was issued, regarding the portion of annual bonuses to be competitive: Mr. Johnson - 100%; Mr. Fisher - 90%; Mr. Morton - 90%; Mr. Pitts - 90%;paid with stock in lieu of cash. The 2017 performance metrics and Mr. Smith - 80%. For 2015, each executive’stargets set forth below are also consistent with those established fornon-executive employees’ 2017 annual incentive bonus opportunity ranged from zero(other than cash G&A which is not a performance metric fornon-executive employees). The Company separated cash G&A expense and lease operating expense performance metrics in 2017 to 100% of target depending onbe consistent with the Company’s 2017 annual guidance, as described above. Threshold
(50%) Target
(100%) Maximum
(200%) Actual
Results Weighting
Factor Payout
Achieved 31,400 31,650 33,495 32,784 50% 81% $14.00 $13.00 $11.40 $12.94 30% 31% $7.50 $7.13 $6.41 $7.30 15% 11% $ 44,000 $ 43,000 $ 39,900 $ 39,742 5% 10% 133% versusachieving 133% of targeted performance, considering the operational and financial metric targets and consideration of each individual’s achievements andCompany’s recent share price performance, during the year. The Company’s actual results exceeded the target for each metric presented above. In March 2016, while acknowledging that theactual results exceeded the operational and financial metrics targets, management recommended, and the Compensation Committee approved, the exercise of negative discretion to reduce theat only 50% ofwhich were paid to Named Executive Officers in March 2018, along with the target levels in recognition that we are operating in a challenging commodity pricing environment. Further, management proposed, and the Compensation Committee approved, the2017 annual incentive bonus be paid in restricted stock units that vested substantially concurrent with the time of grant. See “Executive Compensation—Summary Compensation Table” for further details of this grant. The target and actual payout for each named executive officertargets, are set forth below:Named Executive Officer Target Payout Actual Payout % of Target S.P. Johnson IV $650,000 $325,000 50% Brad Fisher 423,000 211,500 50% Gerald A. Morton(1) 334,000 166,950 50% David L. Pitts 315,000 157,500 50% Richard H. Smith 268,000 134,000 50% (1)Mr. Morton became an executive officer effective November 11, 2015. 2017 Annual-Incentive Bonus Named Executive Officer Target Actual $ 670,000 $ 837,500 436,500 545,625 387,000 483,750 344,700 430,875 276,800 346,000 Compensation Committee has determined thattable below sets forth the following operational and financialperformance metrics, weighting factors and targets will be considered in determining thefor executives’ 2018 annual incentive bonus, for executive officers in 2016 (which are currently expected to be paid in 2017). These metrics are substantially the same metrics used to determine annual incentive bonuses for all Carrizo employees.2016 Operational and Financial MetricsAverage Daily Oil Production (Bbls/d)Drill-Bit Finding and Development Cost ($/Boe)Lease Operating and General and Administrative Expense ($/Boe)The targets for each metricwhich were approved by the Compensation Committee in March 2018.20162018 corporate plan and consistent with the Compensation Committee’s discussionsCompany’s annual guidance included in its February 26, 2018 press release. The 2018 performance metrics and targets set forth below are also consistent with Longnecker.those established fornon-executive employees’ 2018 annual incentive bonus (other than cash G&A which is not a performance metric fornon-executive employees). 2018 Operational and Financial Metrics Threshold
(50%) Target (100%) Maximum
(200%) Weighting
Factor 38,610 39,138 41,649 50% $12.00 $11.00 $9.50 30% $8.25 $7.88 $7.13 15% $ 54,500 $ 53,500 $ 49,875 5% EquityEquity-Based Incentive Awards(1) to attract and retain the services of executive officers and (2) toexecutives, encourage a sense of proprietorship, in and stimulate the active interest in our development and financial success.success, and align their interests with those of our shareholders. We intend to achieve these objectivesexecutive officersexecutives with a meaningful proprietary interest in our growth and performance. Certainlong-term equity-based compensation granted to executive officersprogram is tied to shareholder return.27CARRIZO OIL & GASEXECUTIVECOMPENSATIONDetermining Award StructureIn recent years,that all of our full-time employees are eligible for grants of long-term equity incentive awards, which consist entirely of RSUs. The Compensation Committee believes that long-term equity-based incentive awards give employees a direct interest in the financial results and performance of the Company, furthering our goal of aligning the interests of each employee with those of our shareholders.program for near the market median ofhas utilized restricted stock unitin equivalent positions at comparable companies, considering individual performance, responsibilities, experience, leadership and contributions as well as the Company’s financial, operational and share price performance.stock appreciation right awards,granted to executives was allocated 65% to RSUs, 25% to SARs to be settled in cash (“Cash SARs”) and beginning in March 2014,10% to performance share awards.shares. In the Compensation Committee’s opinion, restricted stock unit awards of RSUs provide a morean effective retention incentive and therefore, the percent of long-term equity incentive awards for each executivecompensation has historically been weighted more towards restricted stock unit awardsRSUs than other types of awards. Through consultationLongnecker, it was determined that the 2015 program would includetypes of long-term equity-based incentive awards toused by companies included in our compensation peer group.of restricted stock unit awardsother than himself and performance share awards, both with a performance target. Thecompetitive market data provided by its independent compensation consultant, onfor our executives’the 2017 grants of long-term equity based incentive awards 75% restricted stock units and 25%to the Named Executive Officers as set forth below. Grant Date Fair Value of 2017 Long-Term Equity-Based
Incentive Awards(1) Name Executive Officer RSUs Cash
SARs Performance
Shares Total $ 2,769,055 $ 1,064,832 $426,002 $ 4,259,889 1,573,081 604,896 242,009 2,419,986 1,153,786 443,688 177,492 1,774,966 848,287 326,208 130,510 1,305,005 579,237 222,744 89,115 891,096 (1) The number of RSUs, Cash SARs, and performance shares granted are presented in “Grants of Plan-Based Awards” which were determined by dividing the grant date fair value of the awards by the respective grant date fair value per unit as described below. shares.Additionally, the Compensation Committee has over time increased its use of awards which vest only if certain Company performance targets are met, allowingcondition designed to allow the Company to avail itself of the benefits of an exemption to the deduction limits of Section 162(m) of the Internal Revenue Code, which is described below under “—Tax Considerations“Tax Deductibility of Executive Compensation—Section 162(m) of the Internal Revenue Code.Compensation.” The Compensation Committee ultimately makes a decision regarding the levels of awards granted to the named executive officers at its discretion. The awards generally vest in one-third increments over a three year period if the applicable performance target has been met, although the Compensation Committee has also granted awards that have different vesting schedules. The Compensation Committee may, however, determine to change the terms, types or mix of equity-based awards in the future.Setting the Award TargetEach year, the Compensation Committee establishes a targeted dollar value for long-term equity incentive awards for each named executive officer, taking into consideration market data obtained from Longnecker as previously described. The Compensation Committee grants annual long-term equity incentive awards after evaluating the Company’s operating and financial results for the prior year.The Compensation Committee has the discretion to increase or decrease the dollar value of a named executive officer’s long-term equity incentive award from the predetermined target based on an assessment of the officer’s individual contribution to the Company’s results. For named executive officers other than the Chief Executive Officer, the recommendations of the Chief Executive Officer are considered. The Compensation Committee also considers the potential dilutive effect on the Company’s outstanding shares of common stockin determining the equivalent dollar value available for long-term equity incentive awards, both at the individual named executive officer level and in the aggregate. The Compensation Committee evaluates shareholder dilution based on equity compensation “burn rates,” which refers to the annual rate at which shares are awarded under our shareholder approved plans compared to the total amount of the Company’s outstanding common stock.For reasons described above in “—Executive Compensation Program Objectives and Principles— Compensation Levels Should be Market Competitive,” we generally establish, and in 2015 did establish, long-term incentive awards at target levels that approximate an average of the 75th percentile of our 2015 Compensation Peer Group.Restricted Stock UnitsThe Compensation Committee has granted restricted stock units that vest ratably over a three year period to deliver a meaningful long-term incentive that balances risk and potential reward. These awards also serve as an effective incentive for our executive officers to remain with the Company.Restricted stock unit grants to the named executive officers in April 2015 represented 75% of the named executive officers’ total long-term equity incentive compensation for the year. The number of restricted stock units granted were determined by dividing this portion of the executive’s long-term incentive opportunity by the average of the high and low sale price of the Company’s common stock on the date of grant.Restricted stock unit awards are only earned if the individual continues to be employed by the Company until the applicable vesting dates of the awards. In addition to this service condition the restricted stock units awards were also subject to the achievement of a production target. The production target established by the Compensation Committee for the 2017 long-term equity based incentive awards was average daily production of the Company for the quarter ended SeptemberJune 30, 20152017 of at least (a) 18,92127,455 barrels of oil per day (“Bbl/Bbls/d”), if the Company’s average realized crude oil price was greater than or equal to $45$40 per Bbl for such quarter, or (b) 15,137 Bbl/21,964 Bbls/d, if the Company’s average realized crude oil price was less than $45$40 per Bbl for such quarter, in each case excluding the impacts of derivative settlements on the average realized prices and impacts of oil and gas property acquisitions and divestitures on daily production (the “2015“2017 Production Target”). On October 28, 2015,July 27, 2017, the Compensation Committee certified that the 20152017 Production Target was met as average daily production for the quarter ended SeptemberJune 30, 20152017 was 23,573 Bbl/33,629 Bbls/d. Because the 20152017 Production Target was met, one-thirdthe RSUs, Cash SARs and performance shares will vest as described below, subject to continued employment and,unitshigh and low price of the Company’s Common Stock on the March 23, 2017 grant date. The RSUs vest ratably over a three-year period,one-third of which vested on March 17, 2016,2018, and an additionalone-third of the units will vest on March 17, 20172019 and March 17, 2018, if the individual continues to be employed by Carrizo.2016 PROXY STATEMENT28EXECUTIVECOMPENSATIONThe following table sets forth the total number of restricted stock units awarded to each executive in April 2015.Named Executive Officer2015 Long-Term EquityIncentive Award(Number of RSUs Granted)S.P. Johnson IV51,267Brad Fisher32,975Gerald A. Morton18,267David L. Pitts16,999Richard H. Smith12,473Performance SharesThe Compensation Committee has granted performance share awards that will cliff vest approximately three years from the grant date based on relative TSR, described further below, and a production target. Similar to restricted stock units, these awards deliver a meaningful long-term incentive that balances risk and potential reward.Performance share grants to the named executive officers in April 2015 represented 25% of the named executive officers’ total long-term equity incentive compensation for the year. The number of performance shares granted was determined by dividing this portion of the executive’s long-term incentive opportunity by the fair value as determined by a Monte Carlo simulation on the date of grant.Performance share awards are only earned if the individual continues to be employed by the Company until the applicable vesting date of the awards. In addition, to this service condition, the performance share awards that will ultimately vest are subject to the relative TSR calculated at the end of the performance period as well as the Company’s achievement of the 2015 Production Target, as described above, whichon May 17, 2017, the Compensation Committee certified was metgranted to Mr. Pitts a special long-term equity-based incentive award of 104,559 RSUs with a grant date fair value of $2.5 million. The RSUs were granted under the 2017 Incentive Plan with a grant date fair value per RSU of $23.91, the closing price of the Company’s Common Stock on October 28, 2015. Because the 2015 Production Target was met, the performance sharesgrant date. The RSUs will cliff vest on March 17, 2018,2020, subject to Mr. Pitts’ continued employment with the ultimate number of shares determined by the relative TSR, as described below.The following table sets forth the target number of performance share amountsCompany. This special award was granted to each executive in April 2015.reflect a market adjustment to Mr. Pitts’ compensation, recognize his significant individual achievements and encourage the retention of his services to the Company. Grants of specialNamed Executive Officer2018 PROXY STATEMENT2015 Long-Term Equity37Incentive Award(Number of Target PSAs Granted)S.P. Johnson IV13,978Brad Fisher8,991Gerald A. Morton4,980David L. Pitts4,635Richard H. Smith3,401Relative TSR.Cash SARsthat willto vest can rangeranging from zero to 200% of target based on the Company’s TSRtotal shareholder return (“TSR”) relative to our 2015 StockPerformance Peer Group, defined below,2017 stock performance peer group over a three yearan approximate three-year performance period as set forth below.Relative TSR RankingPayout Multiplier100th Percentile200%75th Percentile150%50th Percentile100%25th Percentile50%<25thPercentile—%iswill be used to determine the payout multiplier for relative TSR that falls between the 25th and 100th percentiles.percentiles listed above.During the process for analyzing performance share awards for 2015, Longnecker and management recommended, and theThe Compensation Committee approved,engages Pearl Meyer to separateannually review the stock performance peer group used for purposesof determining theto determine relative TSR for the performance shares awarded in 2015 fromshares. Pearl Meyer follows a process similar to that used to review the industrycompensation peer group usedexcept that the selection of companies is not limited to those with a similar financial size and operational similarity is defined as companies with operations in connection with executive compensation decisions as well as make revisionsmultiple basins similar to the Company with final peer group selections made after considering input from management. The resulting stock performance peer group, along with any changes in the composition of the peer group, are reviewed and approved by the Compensation Committee.29 EXECUTIVECOMPENSATIONused for purposes of determiningThe companies that comprise the relative TSR. Both the separation of thestock performance peer groups for 2016, 2017, and 2018 are presented in the changes madetable below. From 2016 to 2017, one company was removed as a result of filing bankruptcy. From 2017 to 2018, seven companies were removed due to a lack of operational similarity either as a result of theused forfive companies were added with operations in multiple basins similar to the performance shares awarded in 2015 were made to include companies that better align the peer group with a broader representation of the exploration and production industry, rather than a peer group primarily comprised of smaller companies inCompany.the exploration and production industry. The table below presents the 17 companies which comprise the industry peer group used in 2015 (the “2015 Stock Performance Peer Group”) as well as the changes from the industry peer group used for purposes of determining the relative TSR for the performance shares awarded in 2014:
Peer Group for Fiscal Year 2014 2015 Antero Resources Corporation X Bill Barrett Corporation X X Bonanza Creek Energy, Inc. X X Chesapeake Energy Corporation X Comstock Resources, Inc. X Devon Energy Corporation X EOG Resources, Inc. X EP Energy Corporation X Gulfport Energy Corporation X X Halcòn Resources Corporation X Kodiak Oil & Gas Corp.(1) X Laredo Petroleum, Inc. X X Marathon Oil Corporation X Noble Energy, Inc. X Northern Oil and Gas, Inc. X X Oasis Petroleum Inc. X X PDC Energy, Inc. X X Resolute Energy Corporation X Rosetta Resources Inc.(2) X X Sanchez Energy Corporation X Swift Energy Company X Whiting Petroleum Corp. X (1)Effective December 8, 2014, Kodiak
Performance X X X X X X X X X X X X X X X X X X X X X X X & Gas Corp. was acquired byCorporationX X X X X X X X X X X X X X X X X X X X X X X X Corporation.Corp.X X (2)Effective July 20, 2015, Rosetta Resources, Inc. was acquired by NobleX Clawback ProvisionsUnder the Dodd-Frank Wall Street Reform and Consumer Protection Act, companies will be required to adopt a policy to recover certain compensation in the event of a restatement of all or a portion of our financial statements due to material noncompliance with financial reportingrequirements under securities laws. The Board of Directors has reaffirmed that the Company will adopt a policy as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act when final regulations have been adopted by the SEC and the NASDAQ Stock Market.named executive officersNamed Executive Officers that provide for specified severance pay and benefits upon certain termination events, including20152017 Compensation Peer Group. The Compensation Committee believes these agreements encourage executives to remain in our employment, including in the event of a changemightmay occur. The Compensation2016 PROXY STATEMENT30EXECUTIVECOMPENSATIONnamed executive officersNamed Executive Officers and make matching 401(k) contributions for the named executive officersNamed Executive Officers and all of our other employees. We believe providing these20152017 Compensation Peer Group. Inpast, we have awarded overriding royaltiesSarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), the Board of Directors has not adopted a formal clawback policy to recoup incentive based compensation in certain oilthe event of a financial statement restatement. Section 304 of Sarbanes-Oxley mandates that the CEO and gas properties (assigned legal interests)CFO reimburse the Company for any bonus or other incentive-based or equity-based compensation they received and any profitssomebe restated as a result of misconduct. The Board of Directors has reaffirmed that the Company will adopt a clawback policy as required by Section 954 of the named executive officers, butDodd-Frank Wall Street Reform and Consumer Protection Act of 2010 if and when final regulations have been adopted by the CompanySEC and NASDAQ. Position Stock Ownership Guidelines 5x Base Salary 5x Base Salary 3x Base Salary since adopted a policy that it will not grant any overriding royalty interestsfive year period in which to its named executive officers.comply with the stock ownership guidelines. Until the Named Executive Officer has reached their required ownership level, they must maintain at least 30% of the sharesSection 162(m)Tax Deductibility of the Internal Revenue CodeExecutive Compensationgenerally limits (toplaces a limit of $1.0 million per covered executive)on the deductibility for federal income tax purposesamount of compensation that we may deduct in any one year with respect to compensation paid to each covered employee. For years prior to 2018,the named executive officersour Named Executive Officers other than the Chief FinancialCFO, with an exception to the deduction limit for compensation qualified as “performance-based”, which included RSUs subject tounless suchin 2017 or any later calendar year. As a result, compensation qualifies as “performance-based compensation.” The Compensation Committeepaid to our Named Executive Officers in excess of $1 million will take deductibility or non-deductibility of compensation into account but has in the pastnot be deductible for yearsauthorized,subsequent to 2017, subject to limited transition relief for arrangements in place as of November 2, 2017, which includes unvested RSUs that were subject to performance conditions, unvested performance shares and will retainunvested or unexercised Cash SARs.discretionchange in the future to authorize, the payment of potentially nondeductible amounts. As noted above,law, the Compensation Committee took Section 162(m) into accountintends to continue to implement compensation programs that it believes are competitive and in 2015 inthe best interests of the Company and its use of performance-based equity compensation as well as the annual incentive bonus subject to operational and financial targets.shareholders. Company’snamed executive officersNamed Executive Officers provide that the Company will provide additional payments in the event that an additional tax is imposed under Section 409A.We, the membersThe Compensation Committee of the Compensation Committee, haveBoard of Directors has reviewed and discussed with management the section titled “CompensationCompensation Discussion and Analysis” included in this proxy statement.Analysis. Based on that review and discussion, we have recommended to the Company’s Board of DirectorsCompensation Committee recommends the inclusion of the “CompensationCompensation Discussion and Analysis” sectionAnalysis be included in the Company’s proxy statement for the 20162018 Annual Meeting of Shareholders.The Compensation CommitteeRoger A. Ramsey (Chair)F. Gardner ParkerRobert F. FultonPursuant to SEC Rules, the foregoing Compensation Committee Report is not deemed “filed” with the SECShareholders and is not incorporated by reference into the Company’s Annual Report on Form10-K for the year ended December 31, 2015.2017. 312018 PROXY STATEMENTCARRIZO OIL & GAS during 2015, 2014 and 2013 of the Company’s PrincipalNamed Executive Officer, the Company’s Principal Financial OfficerOfficers for 2017, 2016 and the three other most highly compensated named executive officers serving as of December 31, 2015. Stock Option All Other Named Executive Officer and Salary Bonus(1) Awards(2) Awards(2) Compensation(3) Total Principal Position Year ($) ($) ($) ($) ($) ($) S. P. Johnson IV 2015 $650,000 $325,000 $3,662,527 $ — $23,906 $4,661,433 President and Chief 2014 637,000 487,500 6,594,365 — 25,559 7,744,424 Executive Officer 2013 583,000 600,000 2,577,516 833,303 17,048 4,610,867 Brad Fisher 2015 $470,000 $211,500 $2,355,764 $ — $19,878 $3,057,142 Vice President and 2014 461,000 317,250 2,218,771 — 14,085 3,011,106 Chief Operating Officer 2013 423,000 391,500 4,194,047 547,800 12,670 5,569,017 Gerald A. Morton 2015 $368,000 $166,950 $1,304,965 $ — $24,514 $1,864,429 General Counsel and Vice President of Business Development David L. Pitts 2015 $350,000 $157,500 $1,214,426 $ — $20,608 $1,742,534 Vice President and 2014 345,000 236,250 2,029,659 — 30,141 2,641,050 Chief Financial Officer 2013 323,000 264,000 845,240 267,481 18,639 1,718,360 Richard H. Smith 2015 $335,000 $134,000 $891,089 $ — $20,225 $1,380,314 Vice President of Land 2014 330,000 201,000 825,015 — 29,388 1,385,403 2013 308,000 252,000 703,811 220,213 17,886 1,501,910 2017 $ 665,000 $ 3,195,057 $ 1,064,832 $837,500 $24,022 $ 5,786,411 2016 650,000 2,698,156 899,062 812,500 23,695 5,083,413 2015 650,000 3,662,527 — 325,000 23,906 4,661,433 2017 $ 481,000 $ 1,815,090 $604,896 $545,625 $19,994 $ 3,466,605 2016 470,000 1,731,586 576,990 528,750 19,667 3,326,993 2015 470,000 2,355,764 — 211,500 19,878 3,057,142 2017 $ 419,000 $ 3,831,284 $443,688 $483,750 $20,724 $ 5,198,446 2016 376,154 884,565 294,748 438,750 20,397 2,014,614 2015 350,000 1,214,426 — 157,500 20,608 1,742,534 2017 $ 380,000 $978,797 $326,208 $430,875 $24,630 $ 2,140,510 2016 371,000 978,857 326,141 417,375 24,304 2,117,677 2015 368,000 1,304,965 — 166,950 24,514 1,864,429 2017 $ 343,000 $668,352 $222,744 $346,000 $20,861 $ 1,600,957 2016 335,000 668,392 222,696 335,000 20,534 1,581,622 2015 335,000 891,089 — 134,000 20,225 1,380,314 (1) 2014 and 2013 include amounts earned with respect to 2014 and 2013, but paid in 2015 and 2014, respectively. The named executive officers’ annual incentive bonuses with respect to 2015 were paid in 2016 with grants of restricted stock units that vested substantially concurrent with the time of grant, with an aggregate grant date fair value of $27.30 per share.(2)RepresentsStock Awards reflect the aggregate grant date fair value computedvalues of RSUs and performance shares and the amounts shown for Option Awards reflect the aggregate grant date fair values of Cash SARs each calculated in accordance with FASB ASC Topic 718. For a discussion of the valuation assumptions for each of these awards, see Note 210 of the Notes to our Consolidated Financial Statements in our Annual Report on Form10-K for the year ended December 31, 2015.2017. The amount shown for Mr. Pitts’ 2017 Stock Awards includes the grant date fair value of a special long-term equity-based incentive award of RSUs that cliff vest on March 17, 2020. See “Grants of Plan-Based Awards Table” for information on restricted stock unitregarding the RSUs, performance shares, and performance share awardsCash SARs granted in 2015.2017.(2) (3) Year Mr. Johnson Mr. Fisher Mr. Morton Mr. Pitts Mr. Smith Matching contributions under the 401(k) Plan 2015 $15,900 $15,900 $15,900 $15,900 $15,900 2017 td6,200 td6,200 td6,200 td6,200 td6,200 2016 15,900 15,900 15,900 15,900 15,900 2015 15,900 15,900 15,900 15,900 15,900 2014 9,267 10,275 — 15,600 15,600 2013 11,958 10,590 — 15,300 15,300 Financial consulting services 2015 $ — $ — $ — $ — $ — 2014 10,000 — — 10,000 10,000 2017 $4,572 $544 td,274 $5,180 td,411 2016 4,572 544 1,274 5,180 1,411 2015 4,572 544 1,274 5,180 1,411 2013 — — — — — Other compensation 2015 $8,006 $3,978 $8,614 $4,708 $4,325 2017 $3,250 $3,250 $3,250 $3,250 $3,250 2014 6,292 3,810 — 4,541 3,788 2013 5,090 2,080 — 3,339 2,586 2016 3,223 3,223 3,223 3,224 3,223 2015 3,434 3,434 3,434 3,434 2,914 2016 PROXY STATEMENT32EXECUTIVE COMPENSATIONEffect of Company Performance on Chief Executive Officer Realizable PayThe Chief Executive Officer’s at-risk compensation consists of a metric-driven annual incentive bonus and performance share awards. Although we do not classify our restricted stock units and stock appreciation rights to be settled in cash as performance-based compensation, the actual amount realized or realizable to the Chief Executive Officer can and does vary significantly based on the Company’s stock price. Realizable compensationis not a substitute for reported compensation in evaluating our executive compensation programs, but we believe understanding the realizable compensation is important in understanding the impact of the Company’s performance and stock price on the value of what an executive could realize and the value of what an executive ultimately receives.The following chart demonstrates how the Company’s performance and stock price significantly impact the Chief Executive Officer’s realizable compensation. The amounts indicatedWe selected December 31, 2017 as Reported on the table above are calculateddate to identify our median employee. To identify the median employee, we utilized actual total direct compensation for the most recently completed calendar year as the consistently applied compensation measure, which is defined asequityequity-based incentive awards asgranted during the year.2015Summary Compensation Table if the employee had been a Named Executive Officer for 2017 which totaled $191,131. We determined the amount of the CEO’s annual total compensation to be $5,786,411 which represents the amount reported for the CEO in the total column for 2017 of our Summary Compensation Table. The amounts indicated as Realized are calculated asBased on the sum of actual base salary and annual incentive bonus earned each year as well asforegoing, the intrinsic valueratio of the long-term equity incentive awards usingCEO’s annual total compensation to the closing price of our Common Stock onmedian annual total compensation (for all employees other than the NASDAQ Global Select Market on December 31, 2015 of $29.58 per share. The intrinsic value of the long-term equity incentive awards is calculated as follows:CEO) for 2017 was 30 to 1.·for restricted stock unit awards, the closing stock price on December 31, 2015 multiplied by the number of restricted stock units granted in each year;·for performance share awards, the closing stock price on December 31, 2015 multiplied by the projected payout of performance shares as if the performance period ended on December 31, 2015 for each respective grant; and·for stock appreciation rights to be settled in cash, the difference between the closing stock price on December 31, 2015 less the exercise price multiplied by number rights granted.We believe that the decreases in the Chief Executive Officer’s realizable compensation and reported compensation effectively illustrate the high correlation between the change in the Company’s stock price and performance and the Chief Executive Officer’s compensation.33CARRIZO OIL & GASnamed executive officersNamed Executive Officers during 2015. 2017. All Other Estimated Future Payouts Under Equity Stock Awards: Grant Date Fair Incentive Plan Awards Number of Value of Stock Threshold Target Maximum Shares or Units Awards Named Executive Officer Grant Date (#) (#) (#) (#) ($)(1) S.P. Johnson IV 4/28/2015 51,267 (3) $2,746,886 4/28/2015 — 13,978 (2) 27,956 915,641 Brad Fisher 4/28/2015 32,975 (3) $1,766,800 4/28/2015 — 8,991 (2) 17,982 588,964 Gerald A. Morton 4/28/2015 18,267 (3) $978,746 4/28/2015 4,980 (2) 9,960 326,219 David L. Pitts 4/28/2015 16,999 (3) $910,806 4/28/2015 — 4,635 (2) 9,270 303,620 Richard H. Smith 4/28/2015 12,473 (3) $668,303 4/28/2015 — 3,401 (2) 6,802 222,786
Payouts Under Non-
Plan Awards
Awards:
or Units
Number
of Rights
Date Fair
Stock
Awards Grant
Date 3/23/2017 $ 670,000 $ 1,340,000 7,540 (7) $203,128 3/23/2017 102,786 (8) 2,769,055 3/23/2017 88,736 1,064,832 3/23/2017 — 12,123 24,246 426,002 3/23/2017 $ 436,500 $873,000 4,907 (7) $132,195 3/23/2017 58,392 (8) 1,573,081 3/23/2017 50,408 604,896 3/23/2017 — 6,887 13,774 242,009 3/23/2017 $ 387,000 $774,000 4,072 (7) $109,700 3/23/2017 42,828 (8) 1,153,786 3/23/2017 36,974 443,688 3/23/2017 — 5,051 10,102 177,492 5/17/2017 104,559 (9) 2,500,006 3/23/2017 $ 344,700 $689,400 3,874 (7) $104,366 3/23/2017 31,488 (8) 848,287 3/23/2017 27,184 326,208 3/23/2017 3,714 7,428 130,510 3/23/2017 $ 276,800 $553,600 3,109 (7) $83,756 3/23/2017 21,501 (8) 579,237 3/23/2017 18,562 222,744 3/23/2017 — 2,536 5,072 89,115 (1) (2) (3) (4) (5) (6) 210 of the Notes to our Consolidated Financial Statements in our Annual Report on Form10-K for the year ended December 31, 2015.2017. The grant date fair value of restricted stock unitsRSUs granted under the Prior Incentive Plan is based on the average high and low stock price of our Common Stock on the NASDAQ Global Select Market on the date of grant. The grant date fair value of RSUs granted under the 2017 Incentive Plan is based on the closing stock price of our Common Stock on the NASDAQ Global Select Market on the date of grant. The grant date fair value of Cash SARs is based on a Black-Scholes-Merton option pricing model. The grant date fair value of performance share awardsshares is based on a Monte Carlo valuationsimulation model.(2)(7) performance share awards (target amount)RSUs granted under the Prior Incentive Plan for payment of 25% of the 2016 annual incentive bonuses that vested in a single installment substantially concurrent with the time of grant.(8) (9) 2018 based on the TSR of the Company’s common stock relative to the TSR achieved by our 2015 Stock Performance Peer Group, subject to the satisfaction of a performance target. On October 28, 2015, the Compensation Committee certified that the performance target had been met.2020.(3)Represents restricted stock units granted under the Incentive Plan that vest in one-third increments on March 17, 2016, March 17, 2017 and March 17, 2018, subject to the satisfaction of a performance target. On October 28, 2015, the Compensation Committee certified that the performance target had been met.20162018 PROXY STATEMENT34 EXECUTIVE COMPENSATIONEquityEquity-Based Awards at FiscalYear-Endequityequity-based awards held by the named executive officersNamed Executive Officers as of December 31, 2015. Option Awards Stock Awards Equity Equity Incentive Incentive Plan Awards: Market Plan Awards: Market or Number of Number of Number Value of Number of Payout Value Securities Securities of Shares Shares or Unearned of Unearned Underlying Underlying Option or Units of Units of Shares or Shares or Named Unexercised Unexercised Exercise Option Stock That Stock That Units of Stock Units of Stock Executive Options (#) Options (#) Price Expiration Have Not Have Not That Have Not That Have Not Officer Exercisable(1) Unexercisable(1) ($) Date Vested(1)(#) Vested ($)(2) Vested(1)(#) Vested ($)(2) S. P. Johnson IV 133,062 (3) — $20.22 6/3/2016 27,848 (3) — 20.22 6/3/2016 219,279 (3) — 17.28 7/13/2017 41,582 (4) 20,791 (4) 28.68 6/18/2017 30,727 (5) $908,905 42,841 (7) 1,267,237 52,318 (8) 1,547,566 51,267 (10) 1,516,478 15,020 (9) $444,292 13,978 (11) 413,469 Brad Fisher 5,753 (3) — $25.56 5/18/2016 13,667 (4) 13,668 (4) 28.68 6/18/2017 20,199 (5) $597,486 67,880 (6) 2,007,890 23,215 (7) 686,700 32,975 (8) 975,401 8,140 (9) $240,781 8,991 (11) 265,954 Gerald A. Morton 28,500 (3) — $17.28 7/13/2017 16,826 (3) — 25.56 5/18/2016 16,415 (4) 8,207 (4) 28.68 6/18/2017 12,130 (5) $358,805 13,425 (7) 397,112 20,928 (8) 619,050 18,267 (10) 540,338 4,707 (9) $139,233 4,980 (11) 147,308 David L. Pitts 8,029 (3) — $25.56 5/18/2016 13,347 (4) 6,674 (4) 28.68 6/18/2017 9,863 (5) $291,748 10,773 (7) 318,665 20,928 (8) 619,050 16,999 (10) 502,830 3,777 (9) $111,724 4,635 (11) 137,103 Richard H. Smith 2,127 (3) — $25.56 5/18/2016 5,495 (4) 5,494 (4) 28.68 6/18/2017 8,120 (5) $240,190 8,632 (7) 255,335 12,473 (10) 368,951 3,027 (9) $89,539 3,401 (11) 100,602 35CARRIZO OIL & GASEXECUTIVE COMPENSATION Option Awards Stock Awards
Awards:
Stock
Not
Stock
Not 45,507 (2) 45,507 (2) $27.30 3/17/2021 — 88,736 (3) 26.94 3/23/2022 17,089 (4) $363,654 57,114 (6) 1,215,386 102,786 (8) 2,187,286 13,978 (5) $297,452 10,074 (7) 214,375 12,123 (9) 257,977 29,205 (2) 29,205 (2) $27.30 3/17/2021 — 50,408 (3) 26.94 3/23/2022 10,992 (4) $233,910 36,654 (6) 779,997 58,392 (8) 1,242,582 8,991 (5) $191,328 6,465 (7) 137,575 6,887 (9) 146,555 14,919 (2) 14,919 (2) $27.30 3/17/2021 — 36,974 (3) 26.94 3/23/2022 5,666 (4) $120,572 18,724 (6) 398,447 42,828 (8) 911,380 104,559 (10) 2,225,016 4,635 (5) $98,633 3,303 (7) 70,288 5,051 (9) 107,485 16,508 (2) 16,508 (2) $27.30 3/17/2021 — 27,184 (3) 26.94 3/23/2022 6,089 (4) $129,574 20,720 (6) 440,922 31,488 (8) 670,065 4,980 (5) $105,974 3,655 (7) 77,778 3,714 (9) 79,034 11,272 (2) 11,272 (2) $27.30 3/17/2021 — 18,562 (3) 26.94 3/23/2022 4,158 (4) $88,482 14,148 (6) 301,069 21,501 (8) 457,541 3,401 (5) $72,373 2,496 (7) 53,115 2,536 (9) 53,966 (1) Represents awards subject to a performance target, which the Compensation Committee certified that the performance target had been met.(2)Based on the closing price of our Common Stock on the NASDAQ Global Select Market on December 31, 2015 ($29.582017 of $21.28 per share).share.(3)(2)Represents an award of stock appreciation rightsCash SARs that vest ratably over a two year period on March 17, 2017 and March 17, 2018, subject to be settled in casha performance condition. On July 27, 2016, the Compensation Committee certified that were fully vested as of December 31, 2015.the performance condition had been met.(4)(3)Represents an award of stock appreciation rights to be settled in cashCash SARs that vest or vested in one-third incrementsratably over a two year period on May 29, 2014, May 29, 2015March 17, 2018 and May 29, 2016.March 17, 2019, subject to a performance condition. On July 27, 2017, the Compensation Committee certified that the performance condition had been met.(5)(4) Represents an award of restricted stock unitsRSUs that vest or vested in one-third increments on May 29, 2014, May 29, 2015 and May 29, 2016.(6)Represents an award of restricted stock units that cliff vest on September 25, 2016.(7)Represents an award of restricted stock units that vest or vested in one-third increments on March 17, 2015, March 17, 2016 and March 17, 2017.(8)Represents an award of restricted stock units that cliff vest on March 17, 2017.(9)Represents performance-based TSR awards that are presented at 100% of the target award that cliff vest on March 28, 2017. The number of shares of common stock issuable upon vesting range from zero to 200% of the targeted shares granted based upon the performance of the Company’s TSR relative to our 2014 Industry Peer Group at the end ofratably over a three year performance period.(10)Represents an award of restricted stock units that vest in one-third incrementsperiod on March 17, 2016, March 17, 2017 and March 17, 2018.2018, subject to a performance condition. On October 28, 2015, the Compensation Committee certified that the performance condition had been met.(11)(5)Represents performance-based TSR awards that are presented at 100% of the target award that cliff vest on March 17, 2018.2018, subject to a performance condition. On October 28, 2015, the Compensation Committee certified that the performance condition had been met. The number of shares of common stockCommon Stock issuable upon vesting range from zero to 200% of the targeted shares granted based upon the performance of the Company’s TSR relative to our 2015 Stock Performance Peer Group at the end of an approximate three-year performance period.(6) Represents an award of RSUs that vest ratably over a three year period on March 17, 2017, March 17, 2018 and March 17, 2019, subject to a performance condition. On July 27, 2016, the Compensation Committee certified that the performance condition had been met. (7) Represents performance-based TSR awards that are presented at 100% of the target award that cliff vest on March 17, 2019, subject to a performance condition. On July 27, 2016, the Compensation Committee certified that the performance condition had been met. The number of shares of Common Stock issuable upon vesting range from zero to 200% of the targeted shares granted based upon the performance of the Company’s TSR relative to our 2016 Stock Performance Peer Group at the end of an approximate three-year performance period. (8) Represents an award of RSUs that vest ratably over a three year period on March 17, 2018, March 17, 2019 and March 17, 2020, subject to a performance condition. On July 27, 2017, the Compensation Committee certified that the performance condition had been met. (9) Represents performance-based TSR awards that are presented at 100% of the target award that cliff vest on March 17, 2020, subject to a performance condition. On July 27, 2017, the Compensation Committee certified that the performance condition had been met. The number of shares of Common Stock issuable upon vesting range from zero to 200% of the targeted shares granted based upon the performance of the Company’s TSR relative to our 2017 Stock Performance Peer Group at the end of an approximate three-year performance period. (10) Represents a special award of RSUs that cliff vest on March 17, 2020. named executive officers onNamed Executive Officers upon the exercise of stock appreciation rights to be settled in cashCash SARs and the vesting of restricted stock unitsRSUs and performance shares during 2015: Option Awards Stock Awards Number of Shares Number of Shares Acquired on Acquired on Value Realized Exercise(1)/SARs Value Realized Vesting on Vesting Named Executive Officer Exercised (#) on Exercise ($) (#)(2) ($)(3) S.P. Johnson IV 44,762 $1,213,722 81,568 $3,987,564 Brad Fisher — — 50,712 2,487,415 Gerald A. Morton — — 29,901 1,467,281 David L. Pitts 2,145 25,783 24,046 1,180,020 Richard H. Smith — — 19,427 953,526 Option Awards Stock Awards Named Executive Officer
SARs
Shares 219,279 $2,055,744 151,503 $4,298,152 — — 59,153 1,675,544 — — 51,597 1,461,291 — — 55,666 1,577,427 — — 23,610 666,971 (1) All stock options were vestedRepresents the value realized based on the average of the high and exercised prior to 2015.low price per share of our Common Stock on the NASDAQ Global Select Market on the exercise date in excess of the Cash SAR exercise price times the number of Cash SARs exercised.(2) restricted stock units,RSUs and performance shares, without taking into account any shares sold to satisfy applicable income tax withholding obligations.(3) without taking into accounttimes the applicable tax obligations.number of shares acquired on vesting.20162018 PROXY STATEMENT36 named executive officersNamed Executive Officers listed below along with their annual base salary as of December 31, 2015.2017.Named Executive Officer and Current Position Annual Base
Salary$ 650,000670,000 485,000 Brad Fisher470,000430,000 383,000 Gerald A. Morton371,000346,000 David L. Pitts350,000Vice President and Chief Financial OfficerRichard H. Smith335,000 (x)(a) for any reason (including by reason of death) during the30-day period immediately following elapse of one year after any change of control (“window period”) or (y)(b) by the employee for good reason (as defined in the(1)(i) an immediate lump sum cash payment equal to145%to 145% for Messrs. Johnson and Fisher and 97% in the case of Messrs. Morton, Pitts and Smith (363% for Mr. Johnson, 266% for Mr. Fisher and 145% for Messrs. Morton, Pitts and Smith, if termination occurs after or in anticipation of a change of control) of his annual base salary,(2)(ii) in lieu of a prorated bonus for the year of termination, an immediate lump sum cash payment equal to 100% for Mr. Johnson, 90% for Mr. Fisher, and 80% in the case of Messrs. Morton, Pitts and Smith of his annual base salary prorated based on the number of days in the fiscal year in which he was employed (unless his employment is terminated as a result of disability or after(3)(iii) in lieu of continued participation in the Company’s welfare benefit plans, practices,(4)(iv) continued medical and dental benefits coverage for the employee and his dependents for one year following his termination of employment, and(5)(v) the immediate vesting of any stock options, restricted stock awards, restricted stock unit awardsRSUs and any other equity-basedequity- based awards previously granted to such employee and outstanding as of the time immediately prior to the date of his termination and an extension of the period of exercisability of any such awards until the earlier of (A) one year following his date of termination or (B) the date such awards would have lapsed had the employee remained employed for the remaining term. Notwithstanding this provision, each of the Company’s performance-based restricted stock units awardedlong-term equity-based incentives awards containing performance conditions granted to the named executive officersNamed Executive Officers since December14,December 14, 2008 through December 31, 2017, have provided that in no event would such accelerated vesting occur in the event of a termination without cause or for good reason prior to a change in control unless the performance condition underlying the awards has been satisfied.equityequity-based awards as described above. Under the employment agreements of Messrs. Johnson, Fisher, Morton, Pitts and Smith, the Company37CARRIZO OIL & GASEXECUTIVECOMPENSATION(1)(i) the parties are required to submit the dispute to arbitration; (2)(ii) the Company is only required to pay the employee’s attorneys’ fees pending a dispute if the termination occurred within(3)(iii) the Company is only required to pay the employee severance pending resolution of a dispute in the case of a termination within two years after a change in control. The employment agreements of each of the named executive officersNamed Executive Officers also provide that such employees will be entitled to agross-up payment to offset the effect of any excise tax imposed under Section 4999 of the Code in connection with payments contingent on a change of control as well as agross-up payment to offset the effect of any additional taxes imposed under Section 409A of the Code. However, the Company has since adopted a policy that employment agreements entered after the adoption of that policy would not provide taxgross-up payments. Upon a voluntary termination of employment, the employees have agreed to be subject toone-year noncompetition andone-year nonsolicitation covenants. 20162018 PROXY STATEMENT38 named executive officersNamed Executive Officers in connection with certain termination events, including a termination related to a change of control of our company.
Termination
(No Good Reason/
No Change of
Control)
or Involuntary For
Cause Termination
Not for Cause Termination
Termination (Involuntary,
Good Reason, Voluntary) S.P. Johnson IV(1) S.P. Johnson IV(1) Severance payments $ — $2,262,000 $3,679,000 $ — $2,262,000 $— $2,331,600 $3,792,200 $— $2,331,600 Stock appreciation rights(2) — 18,712 Restricted shares(3) — 5,240,186 — — — — — — 3,766,326 3,766,326 3,766,326 3,766,326 Performance shares(4) (5) (6) — 1,473,680 1,213,194 626,351 — 593,349 769,804 369,087 369,087 Life insurance benefits(7) — 2,085,000 — — — — 2,085,000 — Benefits continuation — 5,024 — 4,615 4,615 4,615 4,615 Total $ — $8,999,602 $10,156,116 $7,975,273 $8,152,273 $— $6,695,890 $8,332,945 $6,225,028 $6,471,628 Brad Fisher(1) Brad Fisher(1) Severance payments $ — $1,541,600 $2,110,300 $ — $1,541,600 $— $1,590,800 $2,177,650 $— $1,590,800 Stock appreciation rights(2) — 12,301 Restricted shares(3) — 4,267,477 — — — — — — 2,256,489 2,256,489 2,256,489 2,256,489 Performance shares(4) (5) (6) — 866,911 699,360 355,412 — 365,586 475,459 233,186 233,186 Life insurance benefits(7) — 1,393,000 — — — — 1,421,500 — Benefits continuation — 5,083 — 4,615 4,615 4,615 4,615 Total $ — $6,693,372 $7,094,521 $6,033,273 $6,181,873 $— $4,217,490 $4,914,213 $3,915,790 $4,085,090 $— $1,118,000 $1,324,400 $— $1,118,000 — — — — — — 3,655,415 3,655,415 3,655,415 3,655,415 — 214,295 276,406 126,776 126,776 — — — 1,274,000 — — 3,742 3,742 3,742 3,742 $— $4,991,452 $5,259,963 $5,059,933 $4,903,933 Gerald A. Morton(1) Gerald A. Morton(1) Severance payments $ — $964,600 $1,142,680 $ — $964,600 $— $995,800 $1,179,640 $— $995,800 Stock appreciation rights(2) — 7,386 Restricted shares(3) — 1,915,305 — — — — — — 1,240,561 1,240,561 1,240,561 1,240,561 Performance shares(4) (5) (6) — 490,732 397,928 203,048 — 201,622 262,787 129,232 129,232 Life insurance benefits(7) — 1,290,000 — — — — 1,290,000 — Benefits continuation — 5,083 — 4,615 4,615 4,615 4,615 Total $ — $3,383,106 $3,468,382 $3,420,822 $3,095,422 $— $2,442,598 $2,687,603 $2,664,408 $2,370,208 David L. Pitts(1) Severance payments $ — $910,000 $1,078,000 $ — $910,000 $— $899,600 $1,065,680 $— $899,600 Stock appreciation rights(2) — 6,007 Restricted shares(3) — 1,732,294 — — — — — — 847,092 847,092 847,092 847,092 Performance shares(4) (5) (6) — 424,581 338,206 170,135 — 137,685 179,454 88,254 88,254 Life insurance benefits(7) — 1,130,000 — — — — 1,235,000 — Benefits continuation — 4,151 — 4,615 4,615 4,615 4,615 Total $ — $3,077,033 $3,158,658 $3,042,587 $2,822,587 $— $1,888,992 $2,096,841 $2,174,961 $1,839,561 Richard H. Smith(1) Severance payments $ — $871,000 $1,031,800 $ — $871,000 Stock appreciation rights(2) — 4,945 Restricted shares(3) — 864,476 Performance shares(4) (5) (6) — 325,150 261,771 132,815 Life insurance benefits(7) — 1,235,000 — Benefits continuation — 5,083 Total $ — $2,070,654 $2,168,075 $2,242,319 $1,878,319 39 (1) 20152017 and a price per share of our Common Stock of $29.58 (the$21.28, the closing market price per share on December 31, 2015).2017.(2) stock appreciation rights to be settled in cashCash SARs that were unvested at December 31, 2015 based on the difference between2017. As the exercise price andwas below the closing market price per share of our common stockCommon Stock on December 31, 2015.2017, the value is zero.(3) restricted stock unitsRSUs that were unvested at December 31, 20152017 based on the closing market price per share of our common stockCommon Stock on December 31, 2015.2017.(4) share awardsshares that were unvested at December 31, 20152017 for Good Reason/Involuntary Not for Cause termination based on the number of shares of common stockCommon Stock granted upon vesting based upon the actual performance of the Company’s TSR relative to our 2014 Industry2015 Stock Performance Peer Group, 2016 Stock Performance Peer Group and 20152017 Stock Performance Peer Group and the closing market price per share of our common stockCommon Stock on December 31, 2015.2017.(5) share awardsshares that were unvested at December 31, 20152017 for Change of Control termination. If a change of control occurs in the first half of the performance period, then the named executive officer will receive a payment for the number of shares of common stockCommon Stock granted based upon 100% of the target award and the closing market price per share of our common stockCommon Stock on the termination date. If a change of control occurs in the second half of the performance period, then the named executive officer will receive a payment for the number of shares of common stockCommon Stock granted based upon the greater of 100% of the target award or the percentage of shares to be awarded based upon the Company’s TSR relative to the peer group (as defined in the award agreement) as of the termination date. Therefore, the value of the accelerated vesting of performance share awardsshares due to a change of control termination is based on the number of shares of common stock issuable upon vesting based upon the actual performance of the Company’s TSR relative to our 2014 Industry Peer Group and 100% of the target award for the 2015, 2016 and 2017 performance share awardsshares and the closing market price per share of our common stockCommon Stock on December 31, 2015.2017.(6) share awardsshares that were unvested at December 31, 20152017 for Death or Disability termination based on the number of shares of common stockCommon Stock granted upon vesting based upon the actual performance of the Company’s TSR relative to our 2014 Industry2015 Stock Performance Peer Group, 2016 Stock Performance Peer Group and 20152017 Stock Performance Peer Group as of the date of termination and the closing market price per share of our common stockCommon Stock on December 31, 2015,2017, prorated for the number of completed months in the performance period.(7) 20162018 PROXY STATEMENT40 PlansPlan Information 1,627,610 N/A 1,750,908 — — — 1,627,610 N/A 1,750,908 DecemberMarch 31, 20152018 is as follows: 2,445,014 N/A 313,284 — — — 2,445,014 N/A 313,284
Securities to be
Issued Upon
Vesting of
Restricted Stock
and Performance
Shares(1)
Average Exercise
Price of
Outstanding
Options(2)
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding
in Column (a))
(c)Equity compensation plans approved by security holders 1,154,856 $ — 3,861,389 Equity compensation plans not approved by security holders — — — Total 1,154,856 $ — 3,861,389 (1) ConsistsAmount includes number of shares of Common Stock that are issuable upon vesting of restricted stock awards, restricted stock unitsRSUs and performance shares granted under the Prior Incentive Plan and 2017 Incentive Plan. Amount does not include awards of stock appreciation rightsCash SARs granted under the Cash SAR Plan and SARs to be settled in cash.cash granted under the 2017 Incentive Plan.(2) ThisThe weighted-average exercise price doesis not reflectapplicable because the shares issuable upon vesting of restricted stock awards, restricted stock unitsRSUs and performance shares which have no exercise price and does not reflect the exercise priceprice.(3) appreciation rights to be settled in cash.awards. 41 philosophyobjectives and the compensation tables. This advisory vote is intended to give our shareholders an opportunity to provide an overall assessment of the compensation of the named executive officers rather than focus on any specific item of compensation.guiding philosophy and specific objectives of our executive compensation program are: (1)(i) to align executiveprovide competitive total compensation design and outcomes with our business strategy;(2) to encourage management to create sustained value for our shareholders; (3)opportunities that allow us to attract, retain, reward and engage our executives and (4)motivate talented management; (ii) to support aculture for allculture; (iii) to align our executives’ interests with those of our employees.Company and the Board could, if it concluded it was in the Company’s best interests to do so, choose not to follow or implement the outcome of the advisory vote.Company. However, we expect that the Compensation Committee will reviewgive consideration to the voting results on this proposal and give consideration to the outcome when making future decisions regarding compensation of the named executive officers.TheAt the 2017 Annual Meeting of Shareholders, our shareholders approved on anon-binding shareholder advisory vote on the frequency to hold annual advisory votes to approve our executive compensation. In consideration of the results of this advisory vote, the Board of Directors has adopted a policy providing for an annual advisory vote on executive compensation. Unless the Board of Directors modifies its policy on the frequency of holding such advisory votes, the next advisory vote following the vote on this Proposal No. 2 will occur in 2017.20162018 Annual Meeting pursuant to the executive compensation disclosure rules promulgated by the SEC, is hereby approved.”2016544255 Period Percentage 104.4375% 102.21875% 100% 3.4. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMKPMG LLPEY as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016.2018.served(“KPMG”) as its independent registered public accounting firm. The reports of KPMG on the Company’s financial statements as of and for the years ended December 31, 2015 and 2016 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles, except for the 2016 report, which included an explanatory paragraph regarding a change in method of accounting for deferred income taxes as a result of the Company’s adoption of Financial Accounting Standards Board Accounting Standards Update2015-17, Balance Sheet Classification of Deferred Taxes, as described in Note 2 to the financial statements. During the Company’s two most recent fiscal years and through July 19, 2017, there were (i) no disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, that if not resolved to the satisfaction of KPMG, would have caused KPMG to make reference to the subject matter of such disagreements in its reports on the Company’s financial statements for such periods, and (ii) no “reportable events” (as defined in Item 304(a)(1)(v) of RegulationS-K).2015, 20142016 and 2013. 2015.KPMG LLPEY 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. Representatives of KPMG are not expected to be present at the Annual Meeting.KPMG LLPEY as the Company’s independent registered public accounting firm for 2016.2018. Although the appointment of an independentKPMG LLP,EY, the Board of Directors may consider the appointment of another independent registered public accounting firm.KPMGErnst & Young LLP as the Company’s independent registered public accounting firm for the Company for 2016.fiscal year ending December 31, 2018. 432018 PROXY STATEMENTCARRIZO OIL & GAS 3.4. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMKPMG LLPEY, the Company’s current independent registered public accounting firm, for professional services rendered in connection with the audit of the Company’s annual financial statements included in the Company’sReportsReport on Form10-K for the yearsyear ended December 31, 2015 and2014,2017, and the review of the Company’s quarterly financial statements included in the Company’s Quarterly Reports on Form10-Q for the quarters ended March 31, 2015 and 2014, June 30, 2015 and 20142017 and September 30, 2015 and 2014.2017.Description 2015 2014 Audit Fees $1,068,403 (1) $847,408 (1) Audit-Related Fees — — Tax Fees 19,585 (2) 13,340 (2) All Other Fees 1,786 1,650 Total $1,089,774 $862,398 $978,880 — 38,500 97,141 $1,114,521 (1) Includes $136,290 and $141,452$19,463 of fees associated with services rendered in connection with securities offerings and related SEC filings during 2015 and 2014, respectively.2017.(2) The 2015 and 20142017 tax fees consist of tax consulting services provided in connection with the preparation and review of the Company’s Section 382 ownership change analysis.(3) Includes $95,048 of fees for acquisition due diligence services performed by EY’s advisory services group with the remaining fees for accounting research software licenses. $290,169 $966,649 — — 9,050 39,760 1,927 1,927 $301,146 $1,008,336 (1) Includes $81,600 and $113,119 of fees associated with services rendered in connection with securities offerings and related SEC filings during 2017 and 2016, respectively. (2) The 2017 and 2016 tax fees consist of tax consulting services provided in connection with the preparation and review of the Company’s Section 382 ownership change analysis. (3) Consist of fees for licenses for accounting research software. non-auditnon- audit services, including the fees and terms thereof, to be performed by the independent registered public accounting firm (subject to, and in compliance with, thedeminimisexception fornon-audit services described in Section 10A(i)(1)(B) of the Exchange Act and the applicable rules and No non-audit services were performed by KPMG LLP pursuant to thedeminimis exception in 2015 and 2014. 2016 PROXY STATEMENTCARRIZO OIL & GAS44 3.4. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.KPMG LLP,EY, our independent registered public accounting firm, and discussed and reviewed the Company’s audited financial statements as of and for the year ended December 31, 2015.2017. The Audit Committee also discussed with KPMG LLPEY the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 16,1301,Communications with Audit Committees.KPMG LLPEY the auditor’s independence from the Company and its management. As part of that review, KPMG LLPEY provided the Audit Committee the written disclosures and letter required by Public Company Accounting Oversight Board Rule 3526,Communication with Audit Committees Concerning Independence.2015.(Chair)
ChairmanPursuant to SEC Rules, the foregoing Audit Committee Report is not deemed “filed” with the SEC and is not incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015. 452018 PROXY STATEMENTCARRIZO OIL & GAS 31, 2016,23, 2018, unless otherwise indicated, concerning the number of shares of our Common Stock beneficially owned by (1)(a) the only persons known by the Company, based solely on statements filed by such persons pursuant to Section 13(d) or 13(g) of the Exchange Act, to own beneficially in excess of 5% of our Common Stock, and (2)(b) each director, the Chief Executive Officer, the Chief31, 2016,23, 2018, the Company had 58,778,28082,056,255 shares of Common Stock issued, outstanding, and eligible to vote. Amount and Nature of
Beneficial OwnershipName and Address of Beneficial Owner(1) Number of
Shares of
Common
Stock Percent of
Common
Stock
(rounded)Directors and Named Executive Officers: S. P. Johnson IV(2) 650,315 1.1 % Brad Fisher(2) 119,805 * Gerald A. Morton(2) 70,374 * David L. Pitts(2) 55,893 * Richard H. Smith(2) 60,667 * Steven A. Webster(2)(3) 2,552,180 4.3 % F. Gardner Parker(3) 62,562 * Roger A. Ramsey(3) 38,450 * Frank A. Wojtek(3) 29,758 * Thomas L. Carter, Jr.(3) 43,175 * Robert F. Fulton(3) 11,500 * Directors and Executive Officers as a Group (12 persons)(2)(3) 3,703,435 6.3 % BlackRock, Inc.(4) 6,556,312 11.2 % The Vanguard Group(5) 4,324,550 7.4 % Frontier Capital Management Co., LLC(6) 3,375,214 5.7 % Amount and Nature of
Beneficial Ownership Name and Address of Beneficial Owner(1) 655,076 * 209,936 * 99,547 * 111,864 * 81,621 * 3,072,710 3.7% 73,462 * — * 51,075 * 18,500 * 41,650 * 30,008 * 4,465,408 5.4% 10,062,580 12.3% 7,378,632 9.0% 7,040,815 8.6% 5,953,077 7.3% 4,161,287 5.1% * *.(1) 47,01668,477 shares that Mr. Smith has pledged to an investment firm as security for a portfolio loan account, 42,228 shares that Mr. Parker has pledged as collateral for a line of credit, and 19,95037,050 shares in a pledged account that Mr. Ramsey has pledged toat an investment firm as security for a portfolio loan account. The business address of each named executive officer and director is c/o Carrizo Oil & Gas, Inc., 500 Dallas Street, Suite 2300, Houston, Texas 77002.(2) The table includes shares of Common Stock related to restricted stock units that vest within 60 days of March 31, 2016 as follows: Mr. Johnson — 30,727, Mr. Fisher — 20,199, Mr. Morton — 12,130, Mr. Pitts — 9,863, Mr. Smith — 8,120, and all directors and executive officers as a group — 82,571.(3)restricted stock unitsRSUs that vest on the earlier to occur of (i) the date of the Annual Meeting and (ii) June 30, 20162018 as follows: Mr. Webster — 6,400, Mr. Parker — 5,450, Mr. Ramsey —4,600, Mr. Carter — 3,950, Mr. Fulton — 3,500, Mr. Ramsey — 4,600, and Mr. Wojtek — 2,800.(3) (4) 8, 2016,19, 2018, BlackRock, Inc. reported sole voting power over 6,433,6079,908,594 shares and sole dispositive power over 6,556,31210,062,580 shares. The address of the principal business office of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.(5) 10, 2016,8, 2018, The Vanguard Group reported sole voting power over 74,581152,909 shares, shared voting power over 2,6008,329 shares, sole dispositive power over 4,250,5697,225,435 shares and shared dispositive power over 73,981153,197 shares. The address of the principal business office of The Vanguard Group is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.(6) 12, 2016,7, 2018, Frontier Capital Management Co., LLC reported sole voting power over 1,992,8243,882,747 shares and sole dispositive power over 3,375,2147,040,815 shares. The address of the principal business office of Frontier Capital Management Co., LLC is 99 Summer Street, Boston, Massachusetts 02110.(7) 2016 PROXY STATEMENT46(8) OTHER ITEMS2015,2017, all reports required by Section 16(a) to be filed by its directors, named executive officers and greater than 10% beneficial owners of our Common Stock were filed on a timely basis.47CARRIZO OIL & GASOTHER ITEMS2015 and do not currently expect2017 nor at any time since 2014. The Company’s consolidated balance sheets to conduct any material activitythe financial statements2016.our Annual Report on Form 10-K for the year ended December 31, 2017 included a payable to ACP II of less than $0.1 million.remainremained working interest partners and wenow operate operated the jointly owned properties which are now subject to standard joint operating agreements. The joint operating agreements with Avista provide for limited areas of mutual interest around our remaining jointly owned acreage. The Company sold its interest in such jointly owned properties effective April 1, 2017.Related party receivables on the Company’s consolidated balance sheets to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015 included $2.4 million, representing the net amounts ACP II and ACP III owes the Company related to activity within the Avista Marcellus and Avista Utica joint ventures.of the Company’s independent directors. In determining whether to approve or disapprove a transaction, such special committee has generally in transactions since the beginning of the 2012 fiscal year, determined whether the transaction is desirable and in the best interest of the Company. The special committee has also applied standards under relevant debt agreements, if required.2016 PROXY STATEMENT48OTHER ITEMSCertain Other Matters Regarding Mr. WebsterWe paid Mr. Webster nothing in 2015 and $706 and $11,647 in 2014 and 2013, respectively, in overriding royalties relating to leases we had acquired from him in 2006 under a lease purchase option agreement that expired in 2006. The terms and conditions of the leasepurchase option agreement with Mr. Webster were consistent with similar lease purchase option agreements that we entered into with unrelated third parties around the same time as we entered into the agreement with Mr. Webster.Over a periodIn September 2017, the Company purchased 176 net acres from subsidiaries of timeBSM for approximately $3.4 million. Management believes this transaction was on an arm’s length basis and additionally received approval from October 2011 to January 2014, our wholly-owned subsidiary, Carrizo (Eagle Ford) LLC, acquired certain oil and gas properties in the Eagle Ford from an unrelated third party. Such third party is also a working interest mineral owner in certainCompany’s wells inBoard who determined that the Eagle Ford. In June 2015, the owner and lessor of such properties sold portions of its mineral and working interests to certain of the Black Stone Entities. Following such transaction, Carrizo (Eagle Ford) LLC acquired certain of such working interests andcertain oil and gas leases from the Black Stone Entities for an aggregate price of $1.8 million. The terms of the acquisition from the Black Stone Entities in the Eagle Ford Shaletransactions were approved by a special committee of the Company’s independent directors. In determining whether to approve or disapprove a transaction, such special committee determined whether the transaction was desirable and in the best interest of the Company.the successor owner of the oil and gas properties described above and as a working interest or royalty owner in certain other of the Company’s wells in the Eagle Ford, we paid the Black Stone Entities approximately $0.8$2.6 million and $2.5 million in 20152017 and 2016, respectively, in net working interest revenues and royalties attributable to wells owned by the Company. The terms and conditions of the lease agreements with the Black Stone Entities in which royalty payments are, or may become, due to the Black Stone Entities are generally consistent with the lease agreements that we have entered into with third parties. 49 20172019 Annual Meeting of Shareholders must be received by the Company no later than December 5, 2016.24, 2018. However, if the date of the 20172019 Annual Meeting of Shareholders changes by more than 30 days from the date of the 20162018 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 Form10-Q or will otherwise be communicated to shareholders. Shareholder proposals must also be otherwise eligible for inclusion.20172019 Annual Meeting of Shareholders is the same as the date of the 20162018 Annual Meeting of Shareholders, shareholders who wish to nominate directors or to bring business before the 20162019 Annual Meeting of Shareholders must notify the Company no later than February 26, 2017.& Co.,Sodali LLC, 470 West Ave., Stamford, Connecticut& Co.,Sodali LLC approximately $9,500, plus expenses. Arrangements also may be made with brokers, banks, fiduciaries, custodians, or other(713) 713-328-1000.2016 PROXY STATEMENT50OTHER ITEMS factorsforward-lookingforward- looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on our forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and, except as required by law, we undertake no duty to update or revise any forward-looking statement. 51 ANNEX AThis proxy statement contains measures which may be deemed “non-GAAP financial measures” as defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended. We present adjusted earnings before interest, income tax, depreciation, depletion and amortization, and other items (“Adjusted EBITDA”) for the years ended December 31, 2015 and 2014. We believe Adjusted EBITDA may provide investors and analysts useful information relative to the valuation, comparison, rating and investment recommendations of companies in the oil and gas industry. Adjusted EBITDA is a financial measure commonly used in the oil and gas industry and should not be considered in isolation or as a substitute forincome from continuing operations or any other measure of a company’s financial performance or profitability presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Because Adjusted EBITDA excludes some, but not all, items that affect income from continuing operations, the Adjusted EBITDA presented in this proxy statement may not be comparable to similarly titled measures of other companies. The most comparable GAAP financial measure, income from continuing operations, and information reconciling the GAAP and non-GAAP financial measures is provided in the table below.Reconciliation of Income From Continuing Operations (GAAP)to Adjusted EBITDA (Non-GAAP)(In thousands)For the Years Ended December 31, 2015 2014 Income (Loss) From Continuing Operations ($1,157,885 ) $222,283 Income tax expense (benefit) (140,875 ) 127,927 Income (loss) from continuing operations before income taxes (1,298,760 ) 350,210 Depreciation, depletion and amortization 300,035 317,383 Interest expense, net 69,195 53,171 Non-cash (gain) loss on derivatives, net 95,035 (215,436 ) Non-cash general and administrative expense, net 15,794 25,878 Impairment of oil and gas properties 1,224,367 — Loss on extinguishment of debt 38,137 — Other expense, net 11,276 2,150 Adjusted EBITDA $455,079 $533,356 2016 PROXY STATEMENTA-1