SEVERANCE PROTECTION PLAN
(As amended and restated effective as of May 6, 2015)
ESTABLISHMENT OF PLAN
As of the Effective Date, Denbury Resources Inc. (the “Company”) hereby amends and restates the severance plan known as the Denbury Resources Severance Protection Plan, which plan was originally adopted effective December 6, 2000, subsequently amended effective December 5, 2007, December 30, 2008, and December 31, 2010, amended and restated effective December 15, 2011 and December 13, 2012, and hereby further amended and restated effective May 6, 2015, and which as set forth in this document is hereinafter referred to as the (“Plan.”) For purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Company intends the Plan to continue to be a “Severance Plan” within the meaning of the applicable ERISA regulations.
As used herein, the following words and phrases shall have the following respective meanings unless the context clearly indicates otherwise.
Section 2.1Administrator. The Board or any committee thereof as may be appointed from time to time by the Board to supervise the administration of the Plan.
Section 2.2Affiliate. With respect to a specified person, a person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the specified person.
Section 2.3Base Salary. The amount a Participant is entitled to receive as wages or salary on an annualized basis, calculated on the basis of their salary rate on either the date immediately prior to a Change of Control or their Termination Date, whichever amount is higher.
Section 2.4Board. The Board of Directors of the Company.
Section 2.5Bonus Amount. An amount equal to fifty percent (50%) of the total amount of bonuses paid to a Participant related to the two most recent annual periods ending prior to the date of the Change of Control, such bonuses to consist of any discretionary bonuses and any annual incentive cash awards (or in the latter case, any successor performance-based bonus); provided that if a Change of Control occurs prior to the payment of two incentive cash awards, then the one incentive cash award which has been paid shall be counted twice in the determining the total amount of bonuses paid to the Participant.
Section 2.6Cause. An Employer shall have “Cause” to terminate a Participant if the Participant (i) willfully and continually fails to substantially perform his duties with the Employer (other than a failure resulting from the Participant's incapacity due to physical or mental illness), or (ii) willfully engages in conduct which is demonstrably and materially injurious to the Employer, monetarily or otherwise. No act, nor failure to act, on the Participant's part, shall be considered “willful” unless he has acted or failed to act with an absence of good faith and without a reasonable belief that his action or failure to act was in the best interest of the Employer. Notwithstanding anything contained in this Plan to the contrary, no failure to perform by the Participant after Notice of Termination is given by or to the Participant shall constitute Cause.
Section 2.7Change of Control. A “Change of Control” shall mean the occurrence of any one of the following with respect to the Company:
(a)“Continuing Directors” no longer constitute a majority of the Board; the term (i) “Director” shall mean a member of the Board, and (ii) “Continuing Director” shall mean any individual who has served as a Director for one year or more, together with any new Directors whose election by the Board or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the Directors then still in office who were either Directors at the beginning of such one-year period or whose election or nomination for election was previously so approved;
(b)any person or combination of persons acting as a group (as defined in Rule 13d-3 under the Securities Exchange Act of 1934 (as amended from time to time, including rules thereunder and successor provisions and rules thereto, the “Exchange Act”)) become the beneficial owners (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Common Shares representing thirty percent (30%) or more of the voting power of the Company’s then outstanding securities entitled generally to vote for the election of Directors;
(c)a merger or consolidation to which the Company is a party, regardless of the surviving entity in such transaction, if (i) the shareholders of the Company immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than fifty percent (50%) of the combined voting power to vote for the election of directors of the surviving corporation, or other entity following the effective date of such merger or consolidation, or (ii) following such merger or consolidation, fifty percent (50%) or more of the individuals who (on the date immediately prior to the date of execution of the agreement providing for such merger or consolidation) constitute the members of Senior Management do not, as of a date six months after such merger or consolidation, hold an officer’s position which would make them a member of senior management of the surviving corporation; or
(d)the sale of all, or substantially all, of the assets of the Company or the liquidation or dissolution of the Company.
Notwithstanding anything herein to the contrary, under no circumstances will a change in the constitution of the board of directors or managers of any Subsidiary, a change in the beneficial ownership of any Subsidiary, the merger or consolidation of a Subsidiary with any other entity, the sale of all or substantially all of the assets of any Subsidiary or the liquidation or dissolution of any Subsidiary (in each case which does not constitute and is not part of a sale of all or substantially all of the assets of the Company) constitute a “Change of Control” under this Plan.
Section 2.8Common Shares. “Common Shares” means shares of common stock, $.001 par value of Denbury Resources Inc.
Section 2.9Company. Denbury Resources Inc., a Delaware corporation.
Section 2.10Disability. “Disability” shall mean a Participant’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which, in the reasonable opinion of the Administrator based on such medical evidence as it deems necessary, can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; provided, however, that such Disability did not result, in whole or in part from: (i) a felonious undertaking or (ii) an intentional self-inflicted wound.
Section 2.11Effective Date. December 13, 2012.
Section 2.12Employee. An individual shall be an “Employee” only if the individual is shown as an employee of an Employer on the payroll records of such Employer. In addition, any person eligible for benefits under a severance plan not originally sponsored by the Company or Subsidiaries of the Company as of the date of adoption of this amended and restated Plan, including the EAP Properties Inc. Employee Severance Protection Plan (any such plan being an “Acquired Plan”), shall not be entitled to receive benefits under this Plan except to the extent and in the amount that benefits payable under this Plan are in excess of amounts payable to that person under such an Acquired Plan.
Section 2.13Employer. The Company and any Participating Employer. With respect to a Participant who is not an employee of the Company, any reference under this Plan to such Participant's “Employer” shall refer only to the employer of the Participant, and in no event shall be construed to refer to the Company as well.
Section 2.14Good Reason. “Good Reason” shall mean the occurrence of any of the following events or conditions:
(a)a material diminution in the Participant's authority, duties or responsibilities;
(b)a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Participant is required to report, including a requirement that a Participant report to an Officer or Employee instead of reporting directly to the Board of the Company;
(c)a material diminution in the Participant's base compensation;
(d)a material change in the geographic location at which the Participant must perform the services, or;
(e)any material breach by the Employer of any provision of this Plan.
The Participant is required to provide written notice to the Employer of the existence of the condition that would result in termination of employment for Good Reason within 90 days of the initial existence of the condition. Upon receipt of such written notice, the Employer has 30 days to remedy the condition (the “cure period”). If the Employer does not remedy the condition within the cure period, the Participant will meet the requirements for termination of employment for Good Reason, provided, however, that the Participant actually does terminate his employment not more than thirty (30) days after the expiration of the Employer’s cure period.
Section 2.15Notice of Termination. A notice which indicates the specific basis for any termination of employment; no purported termination of employment shall be effective without such Notice of Termination.
Section 2.16Officer. Each individual who at the time in question is a corporate officer of the Company and is so designated pursuant to the Company’s Bylaws, provided that solely for purposes of Section 6.1 hereof, “Officer” shall be confined to individuals who are (i) Participants, and (ii) a member or Senior Management (as defined below) or any Vice President of the Company.
Section 2.17Participant. A Participant who meets the eligibility requirements of Article III.
Section 2.18Participating Employer. Each Subsidiary of the Company shall be a Participating Employer in this Plan unless determined otherwise by the Company.
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