Exhibit 10.1

 
OFFICER RESIGNATION AGREEMENT

THIS OFFICER RESIGNATION AGREEMENT (“Agreement”) is entered into by and between
Denbury Resources Inc., a Delaware corporation (the “Company”), and Ronald T.
Evans (“Evans”) on September 29, 2011 and will become effective (the “Effective
Date”) on the eighth day thereafter.
 

W I T N E S S E T H:

WHEREAS, Evans has been employed by the Company since September 1999 and has
served as an officer of the Company for over ten years, currently serving as the
Company’s President and Chief Operating Officer;

WHEREAS, the Company and Evans have reached certain agreements as to the terms
and conditions of Evans’ resignation as Chief Operating Officer and President of
the Company and his continued employment related to engineering and technical
matters; and

WHEREAS, Evans has been in a position of special responsibility and trust with
the Company during his employment, with access to highly sensitive, valuable,
confidential  and propriety information regarding the Company’s methods of
operations, current and future  business plans and strategies, personnel and
finances, and other confidential and/or non-public information of the Company;

 
NOW, THEREFORE, in consideration of the premises and mutual covenants, herein,
and other valuable consideration, the sufficiency of which is hereby
acknowledged, the Company and Evans agree as follows:

1. Resignation as President and Chief Operating Officer.  Evans and the Company
agree that upon the Effective Date, he shall resign as (a) President and Chief
Operating Officer of the Company and (b) an officer and director of all other
Company subsidiaries, and shall not thereafter serve the Company or its
subsidiaries in an officer’s capacity, as a member of the Company’s Investment
Committee, or as a director, manager or officer of any Company subsidiary.
 
2. Resignation Consideration.  In consideration of Evans’ service to the Company
over more than twelve years and his role in the Company’s growth over that
period, the Company hereby agrees that, subject to appropriate withholding, as
provided below, on the Effective Date it will pay Evans $1,900,000 in cash,
provided that on or immediately prior to the date on which such payment is to be
made to Evans or, if earlier, the date on which an amount is required to be
included in the income of Evans as a result of such payments, Evans shall be
required to pay to the Company in cash the amount which the Company reasonably
determines to be necessary in order for the Company to comply with applicable
federal or state tax withholding requirements and the collection of employment
taxes.
 
3. Equity Awards; Cash Awards.  Those equity awards (consisting of an Incentive
Stock Option Agreement, a Performance Stock Award, Non-Qualified Stock Option
Agreements, Restricted Stock Awards, and Stock Appreciation Rights Agreements)
and cash awards (consisting of a Performance Cash Award) held by Evans
immediately prior to the Effective Date shall be treated, governed and
interpreted according to the terms of such awards, and as applicable, of the
Company’s equity compensation plans under which they have been issued, including
the vesting provisions thereof, and in a manner which accommodates both Evans’
transition from a full-time employee to a part-time employee under the terms of
Section 4 below, and under the terms of Section 1 above his no longer being a
member of the Company’s Investment Committee nor an officer of the Company or
any of its subsidiaries.
 
 
 

--------------------------------------------------------------------------------

 
 
4. Continued Employment.  Evans shall be employed by the Company on a part-time
basis for work on engineering and technical matters for the period commencing on
the Effective Date and ending April 1, 2014 (the “Employment Period”), and in
lieu of and in replacement of Evans’ current salary, during the Employment
Period Evans shall be paid a yearly salary at the rate of $48,000 per year in
accordance with, and subject to, the Company’s payroll policies that apply to
other employees of the Company, including Evans’ continuing participation in the
Company’s Christmas bonus program.  Evans’ employment shall not require him to
render services to the Company on a full-time basis, but consistent with the
provisions of Section 6(d) hereof, on a basis as requested from time to time by
the Chairman of the Company’s Board, or by the Company’s Chief Executive
Officer, at such places as may reasonably be agreed upon.  In the event that
Evans is requested to work more than five (5) days during any calendar month,
Evans shall be entitled to be paid an additional $2,000 per day for each
additional day worked.
 
In connection with Evans’ part-time employment by the Company during the
Employment Period, Evans shall be entitled to reimbursement for reasonable and
necessary expenses incurred in furtherance of the Company’s business in
accordance with the Company policies, and upon presentation of documentation in
accordance with the expense reimbursement policies of the Company as they may
exist from time to time, and submission to the Company of adequate documentation
in accordance with federal income tax regulations.
 
Commencing on the Effective Date, Evans and his qualified beneficiaries shall be
entitled to timely elect to continue medical, dental and vision insurance
benefits under and through the terms of the applicable COBRA law and
regulations, at the Company’s expense, through March 31, 2014.
 
5. Non-Eligibility for Company Plans.  Other than as set out above, after the
Effective Date Evans will not be eligible to receive awards under the Company’s
equity compensation plans made available to employees, nor will he be eligible
to receive a “Severance Benefit” under the terms of the Company’s Severance
Protection Plan.
 
6. Evans’ Non-Competition and Other Covenants and Agreements.  In consideration
of the compensation paid and to be paid to Evans, to which Evans acknowledges he
is not otherwise entitled, and the agreements to be performed which are
contained herein, Evans agrees to the following covenants as reasonable and
necessary for the protection of the Company's business interests:
 
(a)   Definitions:
 
“Competing Business” means any person or entity that competes with or would
compete with or displace, or that engages in any other activities so similar in
nature or purpose to those of the Company set forth below so as to compete with,
or displace or attempt to compete with or displace (i) in those geographic areas
where the Company currently has activities as of the Effective Date or where it
anticipates doing future business as part of the Company’s business plan
disclosed to or developed by Evans prior to the Effective Date, any of the
activities of the Company which involve or encompass the purchase, ownership or
development of CO2 reserves, CO2 pipelines, or the injection of CO2 into
previously producing oil fields for the purpose of tertiary recovery of
remaining oil, or (ii) in the Gulf Coast and Rocky Mountain regions where the
Company currently has activities as of the Effective Date, the purchase,
ownership or development of oil fields with remaining oil potentially
recoverable through CO2 enhanced oil recovery operations, provided that the
geographic areas and regions referenced in clauses (i) and (ii) above shall not
include areas or regions in Montana and North Dakota where the Company currently
has activities involving properties that are prospective for the Bakken
formation or play.
 
“Covered Persons” means any person employed by the Company either as an
employee, consultant or advisor, as of September 30, 2011, or hired by the
Company prior to April 1, 2014.
 
 
- 2 -

--------------------------------------------------------------------------------

 
 
(b)   No Unfair Competition; Non-Solicitation Agreement.  Evans agrees that for
a period extending until April 1, 2014 or an earlier date, if any, on which
there is or is deemed to be "change in control" as defined under the Company's
Omnibus Stock and Incentive Plan ("Non-Competition Termination Date"), Evans
will not, either directly or indirectly (whether personally or through another
business, entity or person):
 
(i)           work for, supervise, assist or participate in, a Competing
Business in any capacity (as owner, employee, consultant, advisor, contractor,
officer, director, lender, investor, agent, or otherwise) or otherwise engage in
any Competing Business, or
 
(ii)           either (1) recruit, solicit, or induce, (2) attempt to recruit,
solicit or induce, or (3) encourage others to recruit, solicit or induce, any
Covered Person to diminish, curtail, divert, or cancel its or their business
relationship with, or employment by, the Company, specifically including
providing directly or indirectly a reference to a recruiter, acquaintance or
competitor that an employee, consultant or advisor to the Company may be
amenable to recruitment from a third party.
 
This Section creates a narrowly tailored restraint in order to avoid unfair
competition and irreparable harm to the Company and is not intended or to be
construed as a general restraint from engaging in a lawful profession or a
general covenant against competition in the oil and gas industry through April
1, 2014.  To this end, within the constraints of the preceding paragraphs of
this Section 6(b), the Company agrees that Section 6(b) will not prohibit Evans’
work, engagement, or investment in the oil and gas industry (the “Activities”)
so long as (i) the Activities do not involve Evans or entities, persons or
groups for whom Evans works, consults or invests (x) competing with or
displacing the specified activities of the Company in those geographic areas or
regions enumerated above in Section 6(a), or (y) using the Company’s data or
non-public business plan disclosed or known to Evans during his employment by
the Company, in both cases provided that Evans provides notice to the Chief
Executive Officer of the Company of any such work, engagement or investment in
such Activities at least 10 business days prior to commencing same, or (ii)
Evans obtains the prior unanimous approval of the Company's Investment
Committee.
 
If Evans wishes to pursue the Activities prior to April 1, 2014 (or any earlier
Non-Competition Termination Date), he will present to Phil Rykhoek, or his
successor as Chief Executive Officer of the Company, a written description of
any such proposed Activities.  It is expected that any such proposal shall
include, among other things, (i) the geographical area within which Evans
desires to pursue the Activities, (ii) the terms of any proposed acquisition of
properties or leases, and (iii) if necessary, a complete geological review of
the proposal.  The Company agrees to respond in writing to Evans’s request
within 10 business days of receipt of such written description, at the address
provided in Section 11 below, stating the Company’s approval (which can only be
provided by the unanimous approval of its Investment Committee) or disapproval
of such Activities and the specific reasons for any disapproval to the extent
the Company can do so without disclosing to Evans otherwise non-public
information.  The Company agrees not to unreasonably withhold consent to Evans’s
request to engage in future Activities.  Further, nothing herein will prohibit
ownership of less than 10% of the publicly traded capital stock of an entity so
long as this is not a controlling interest, or prohibit ownership of mutual fund
investments.
 
(c)   No Personal Use of Company Oil and Gas Resources.  Evans agrees that in
conjunction with his continuing employment by the Company, he will not utilize
Company oil and gas resources, including, but not limited to, maps, seismic
information, feasibility studies, personnel, computers, software, books and
records, or any other corporate assets, in connection with the Activities for
his own account or the account of any entity, persons or groups for whom he
works or consults or in which he invests, unless the Company’s Investment
Committee provides its prior express written consent.
 
 
- 3 -

--------------------------------------------------------------------------------

 
 
(d)   Cooperation and Assistance. In exchange for the compensation, covenants,
and other good and valuable consideration provided by the Company herein, Evans
agrees that he will during the Employment Period, or an earlier date, if any, on
which there is or is deemed to be either a "change in control" as defined under
the Company's Omnibus Stock and Incentive Plan (“Non-Competition Termination
Date”) (i) make himself reasonably available to the Company to provide
assistance to the Company as deemed necessary by the Company from time to time
in its business operations; (ii) provide whatever cooperation and/or assistance
is needed for any legal matters, proceedings or issues, the Company may face;
and (iii) cooperate with and assist the Company and its employees in effecting
an orderly transition of all functions, duties and responsibilities of Evans as
Chief Operating Officer to one or more other employees of the Company, as the
Company shall reasonably request. Additionally, Evans agrees to provide such
assistance in a professional manner, and in no event take any action that does,
or could reasonably, create a conflict of interest between himself and the
Company, or that could subject either him or the Company to civil or criminal
liability or is contrary to the policies or procedures of the Company.
 
(e)   Nondisparagement.  The parties hereto agree that they will refrain from
engaging in any conduct, verbal or otherwise, that would disparage or harm the
reputation of the other or, insofar as this agreement pertains to the Company,
its former and present parents, subsidiaries, and/or affiliates, along with its
predecessors, successors and/or assigns, if any, as well as their respective
former and present officers, directors, managers, general or limited partners,
representatives, agents, employees and/or attorneys, if any, jointly and
severally (collectively, the “Released Parties”), and Evans further agrees that
he will not say anything of a disparaging nature about the operations,
management, or performance of the Company.  Such conduct shall include, but not
be limited to, any negative statements made orally or in writing by either of
the parties about the other or any of the Released Parties.
 
(f)   Confidential Information and Property.  Evans will be entitled to retain
the laptop computer, cellular telephone and iPad which he is currently
using.  Evans agrees that he has returned, or within three (3) days after the
Effective Date will return, to the Company any and all originals and/or copies
of documents relating to the business of the Company or any of the other
Released Parties, although in conjunction with his part-time employment under
the provisions of Section 4 above he may be provided with or have access to
Company “confidential information,” which he will return to the Company upon
request.  Evans further agrees that he will not directly or indirectly disclose
to anyone, or use for his own benefit or the benefit of anyone other than the
Company, any “confidential information” that he has received through his
employment with the Company.  “Confidential information” shall be information
that has been disclosed to, or created by, Evans, and which was at the time of
disclosure or creation confidential or proprietary to the Company, and involves
the Company's current and future business plans and strategies, methods of
operations or operational techniques, management and employee information,
information regarding the Company’s practices and processes, or other non-public
information.  Evans further agrees that in the event it appears that he will be
compelled by law or judicial process to disclose any such confidential
information to avoid potential liability, he will notify the Company in writing
immediately upon his receipt of a subpoena or other legal process.
 
7. Mutually Dependent.  The provisions of Section 4 above regarding Evans’
continued employment related to engineering and technical matters and the
Company’s continuing obligations to Evans which are related thereto, and the
covenants and agreements of Evans set forth in Section 6 above, are mutually
dependent, and Evans understands and agrees that a violation of any of the
provisions of Section 6 above will be considered a material breach of this
Agreement, and further acknowledges and agrees that irreparable harm to the
Company would result from breach by him of any such provisions.  Accordingly,
notwithstanding any provision of this Agreement to the contrary, Evans will
permanently forfeit any rights to continued employment by the Company as set out
under the provisions of Section 4 above, and the Company may immediately
terminate such employment, beginning on the date that either (i) Evans violates
any provision of Section 6 above, or (ii) all or any part of, or the application
of, Section 6 above is held or found invalid or unenforceable for any reason
whatsoever by a court of competent jurisdiction in an action between Evans and
the Company, and on such date any continuing obligations of the Company to Evans
tied to his continued employment shall be extinguished.
 
 
- 4 -

--------------------------------------------------------------------------------

 
 
8. Release and Waiver by Parties.  For and in consideration of the payments
provided to be made under the provisions of Section 2 above, and the continued
employment by Evans under the provisions of Section 4 hereof, as well as the
covenants contained herein, the receipt and sufficiency of which are hereby
acknowledged, Evans, on behalf of himself and his family, assigns,
representatives, agents, and/or heirs, if any, hereby covenants not to sue and
fully, finally and forever releases, acquits and discharges the Company, along
with its former and present parents, subsidiaries, and/or affiliates, along with
its predecessors, successors and/or assigns, if any, as well as their respective
former and present officers, directors, managers, agents, attorneys, and
employees, jointly and severally (collectively, the “Released Parties”), from
any and all claims, demands, actions, or liabilities of whatever kind or
character, whether known or unknown, which Evans or anyone on his behalf has or
might claim to have against the Released Parties for any and all injuries,
damages (actual or punitive), losses, attorneys’ fees, if any, incurred by Evans
arising out of or in connection with any occurrence which transpired prior to
the execution of this Agreement, including, without limitation:
 
(a) All claims and causes of action arising under contract, tort, statute, or
other common law, including, without limitation, breach of contract, fraud,
estoppel, misrepresentation, express or implied duties of good faith and fair
dealing, wrongful discharge, discrimination, retaliation, harassment,
negligence, gross negligence, false imprisonment, assault and battery,
conspiracy, intentional or negligent infliction of emotional distress, slander,
libel, defamation, refusal to perform an illegal act and invasion of privacy.
 
(b) All claims and causes of action arising under any federal, state, or local
law, regulation, or ordinance, including without limitation, claims under the
AGE DISCRIMINATION IN EMPLOYMENT ACT, as amended, the Civil Rights Act of 1964,
as amended, the Civil Rights Act of 1866, the Americans With Disabilities Act,
the Fair Labor Standards Act, the Family and Medical Leave Act, the Employee
Retirement Income Security Act as amended (except for vested benefits to which
he is entitled), the Texas Commission on Human Rights Act, the Texas Labor Code,
§ 451, the Texas Government Code, the Texas Pay Day Law, as well as any claims
for compensation of any nature whatsoever, employee benefits, vacation pay,
expense reimbursement, consulting, equity awards, severance pay, pension or
profit sharing benefits, health or welfare benefits, bonus compensation,
commissions, deferred compensation or other remuneration, or employment benefits
or compensation, except as specifically set forth in Paragraph 2, “Resignation
Consideration,” Paragraph 3, “Equity; Cash Awards,” and Paragraph 4, “Continued
Employment.”
 
(c) All claims and causes of action for past or future loss of pay or benefits,
expenses, damages for pain and suffering, mental anguish or emotional distress
damages, liquidated damages, punitive damages, compensatory damages, injunctive
relief, attorney's fees, interest, court costs, physical or mental injury,
damage to reputation, and any other injury, loss, damage or expense or any other
legal or equitable remedy of any kind whatsoever.
 
(d) All claims and causes of action arising out of or in any way connected with,
directly or indirectly, Evans’ employment with the Company, or any incident
thereof, including, without limitation his treatment by the Company, the terms
and conditions of his employment; the manner or amounts in which Evans was paid
or compensated by the Company; and the separation of Evans’ employment.
 
(e) All claims and causes of action of any kind or character which could have
been alleged in any lawsuit or administrative charge, claim or proceeding that
could have been filed against the Released Parties by Evans on his own behalf or
in behalf of any other person.
 
Evans acknowledges and agrees that the compensation referenced above in Section
2 above does not constitute monies to which he would otherwise be entitled as a
result of his prior or current employment with the Company, and that these
monies constitute fair and adequate compensation for the promises and covenants
of Evans set forth in this Agreement.  Evans agrees and acknowledges that no
further amounts are due to him for cash compensation of any nature whatsoever,
including salary, severance pay, or bonuses, or for equity awards, employee
benefits, deferred compensation, commissions, vacation pay, pension, profit
sharing benefits, health or welfare benefits, expense reimbursement, consulting,
outplacement services, attorneys' fees, pay in lieu of notice, or for any other
amounts, except as specifically set forth in Paragraph 2, “Resignation
Consideration,” Paragraph 3, “Equity; Cash Awards,” and Paragraph 4, “Continued
Employment.”
 
The Company also agrees not to sue and fully, finally and forever releases,
acquits and discharges Evans from any and all claims, demands, actions or
liabilities of whatever kind or character, whether known or unknown as of the
Effective Date, which the Company or anyone acting on its behalf has or might
claim to have against Evans for any and all injuries, damages (actual and
punitive), losses, attorneys’ fees, if any, incurred by the Company.
 
 
- 5 -

--------------------------------------------------------------------------------

 
 
9. Consultation with Attorney and Review Period.
 
(a) Evans is advised, and acknowledges that he has been advised, to consult with
an attorney prior to executing this Agreement concerning the meaning, import,
and legal significance of this Agreement. Evans acknowledges that he has read
this Agreement, as signified by his signature below, and is voluntarily
executing the same after, if sought, advice of counsel for the purposes and
consideration herein expressed.
 
(b) Evans affirms and agrees that he has read and understands the foregoing
terms of this Agreement; that he is over the age of eighteen (18) years and is
otherwise competent to execute this Agreement; that he was given this Agreement
on September 22, 2011, and has been given the opportunity to consider and accept
this Agreement until 10:00 a.m. on October 14, 2011 by signing it and returning
it to Phil Rykhoek, Chief Executive Officer of the Company at the address
provided in Section 11 below, after which time it shall expire and be void if
not received; that any changes to this Agreement from the one that was initially
presented as a result of negotiation between him and the Company, whether
material or immaterial, do not restart or extend the running of the applicable
21-day period of time in which he has to sign the Agreement, which date is more
than 21 days from the date it was first presented to him; that he is entering
into this Agreement knowingly and voluntarily and without any undue influence or
pressures; and that it is a full and final resolution of any and all claims, if
any, which he may have against the Company as defined above.
 
(c) Evans acknowledges that he shall be entitled to revoke this Agreement at any
time prior to the expiration of seven (7) days after the date he signs this
Agreement, by providing written notice of such revocation to Phil Rykhoek, Chief
Executive Officer of the Company at the address provided in Section 11 below.
 
10. Governing Law.  This Agreement shall be governed by and construed under the
laws of the State of Texas.
 
11. Notice.  Any notice, payment, demand or communication required or permitted
to be given by this Agreement shall be deemed to have been sufficiently given or
served for all purposes if delivered personally to and signed for by the party
or to any officer of the party to whom the same is directed or if sent by
registered or certified mail, return receipt requested, postage and charges
prepaid, addressed to such party at the address set forth below or to such other
address as shall have been furnished in writing by such party for whom the
communication is intended.  Any such notice shall be deemed to be given on the
date so delivered.
 
Denbury Resources Inc.
5320 Legacy Drive
Plano, TX 75024

 
Ronald T. Evans
[Redacted]
[Redacted]

 
- 6 -

--------------------------------------------------------------------------------

 
 
12. Severability.  In the event that any one or more of the provisions contained
in this Agreement is for any reason held to be unenforceable in any respect
under the laws of any state or of the United States of America, such
unenforceability will not affect any other provision of this Agreement, but with
respect only to the jurisdiction holding the provision to be unenforceable, this
Agreement will then be construed as if such unenforceable provision or
provisions had never been contained herein.
 
13. Entire Agreement.  This Agreement constitutes the sole agreement between the
parties and supersedes any and all other agreements, oral or written, relating
to the subject matter covered by the Agreement, with the exception of (i) any
indemnity agreement which may exist between the Company and Evans, and which
indemnity agreement shall remain in force independent of this Agreement, and
(ii) the terms of the Company’s equity compensation plans which are not
otherwise specifically addressed in this Agreement.
 
14. Waiver.  Any waiver or breach of any of the terms of this Agreement shall
not operate as a waiver of any other breach of such terms or conditions, or any
other terms or conditions, nor shall any failure to enforce any provisions
hereof operate as a waiver of such provision or any other provision hereof.
 
15. Assignment.  This Agreement is personal to Evans and the rights and
interests of Evans hereunder may not be sold, transferred, assigned or pledged.
 
16. Successors.  This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, representatives, successors
(including specifically any successor to the Company by merger, reorganization
or otherwise).
 
17. Disputes.
 
(a) If a dispute arises under this Agreement arising out of, related to or in
connection with, the payment of amounts provided hereunder to be paid by the
Company to Evans, the timing of such payments or their calculation or, questions
regarding the breach of the terms hereof or the issue of arbitrability (a
“Dispute”), and the dispute cannot be settled through direct discussions by the
parties within a reasonable amount of time, the Company and Evans agree that
such disputes shall be referred to and finally resolved by, binding arbitration
in accordance with the provisions of Exhibit A hereto.  The Company will pay the
actual fees and expenses of the arbitrators, and the parties shall bear equally
all other expenses of such arbitration, unless the arbitrators determine that a
different allocation would be more equitable.  The award of the arbitrators will
be the exclusive remedy of the parties for such disputes.
 
(b) Jurisdiction and venue of any action relating to this Agreement or Evans’s
employment by the Company (subject to the provisions of Section 17(a) hereof),
shall be in the state courts of Plano, Collin County, Texas.
 
IN WITNESS WHEREOF, the parties hereto affixed their signatures hereunder as of
the date first above written.

 

 
DENBURY RESOURCES, INC.
       
By:
/s/ Wieland Wettstein
 
Name:
Wieland Wettstein
 
Title:
Chairman of the Board of Directors

 
RONALD T. EVANS
       
/s/ Ronald T. Evans

 
- 7 -

--------------------------------------------------------------------------------

 

EXHIBIT A

DISPUTE RESOLUTION PROCEDURES

1. Applicable Law/Arbitration.  Venue for the arbitration provided under Section
17(b) of the Agreement shall be in Plano, Collin County, Texas.  Except for the
limited rights described in Paragraph 9 below, the parties waive their right to
file a lawsuit in a court of law to prosecute any Dispute.

2. Negotiation.  When a Dispute has arisen and negotiations have reached an
impasse, either party may give the other party written notice of the Dispute. In
the event such notice is given, the parties shall attempt to resolve the Dispute
promptly by negotiation.  Within ten (10) days after delivery of the notice, the
receiving party shall submit to the other a written response. Thereafter, the
parties shall promptly attempt to resolve the Dispute. All reasonable requests
for information made by one party to the other will be honored.

3. Confidentiality of Settlement Negotiations.  All negotiations and proceedings
pursuant to Paragraph 2 above are confidential and shall be treated as
compromise and settlement negotiations for purposes of applicable rules of
evidence and any additional confidentiality protections provided by applicable
law.

4. Commencement of Arbitration.  If the Dispute has not been resolved by
negotiation within fifteen (15) days of the disputing party’s notice, or if the
parties have failed to confer within fifteen (15) days after delivery of the
notice, either party may then initiate arbitration by providing written notice
of arbitration to the other party.  In order to be valid, the notice shall
contain a precise and complete statement of the Dispute. Within fifteen (15)
days of receipt of the notice initiating arbitration, the receiving party shall
respond by providing a written response which shall include its precise and
complete response to the Dispute, and which includes any counter Dispute that
the responding party may have.

5. Selection of Arbitrator(s).  The arbitration may be conducted and decided by
a single person that is mutually agreeable to the parties and knowledgeable and
experienced in the type of matter that is the subject of the Dispute if a single
arbitrator can be agreed upon by the parties.  If the parties cannot agree on a
single arbitrator within ten (10) days of the date of the response to the notice
of arbitration, then the arbitration shall be determined by a panel of three (3)
arbitrators.  To select the three arbitrators, each party shall, within ten (10)
days of the expiration of the foregoing ten day period, select a person that it
believes has the qualifications set forth above as its designated arbitrator,
and such arbitrators so designated shall mutually agree upon a similarly
qualified third person to complete the arbitration panel and serve as its
chairman.  In the event that the persons selected by the parties are unable to
agree upon a third member of the arbitration panel within ten (10) days after
the selection of the latter of the two arbitrators, then he/she shall be
selected from the CPR (as defined below) panel using the CPR rules.  Once
selected, no arbitrator shall have any ex parte communications with either
party.

6. Arbitration Process.  The arbitration hearing shall commence within a
reasonable time after the selection of the arbitrator(s), as set by the
arbitrator(s).  The arbitrator(s), shall allow the parties to engage in
pre-hearing discovery, to include exchanging (i) requests for and production of
relevant documents, (ii) up to fifteen (15) interrogatories, (iii) up to fifteen
(15) requests for admissions, and producing for deposition and at the
arbitration hearing, up to four (4) persons within each parties’ control.  Any
additional discovery shall only occur by agreement of the parties or as ordered
by the arbitrator(s) upon a finding of good cause.  The arbitration shall be
conducted under the rules of the CPR International Institute for Conflict
Prevention & Resolution (“CPR”) in effect on the date of notice of the Dispute
for dispute resolution rules for non-administered arbitration of business
disputes.  The parties may agree on such other rules to govern the arbitration
that are not set out in this provision as they may mutually deem necessary.

7. Arbitration Decision.  The arbitrator(s) shall have the power to award
interim relief, and to grant specific performance.  The arbitrator(s) may award
interest at the “prime rate” as listed under “Market Data” in the Wall Street
Journal on the date of any such award.  Except as may be specifically limited
elsewhere in this Exhibit A, the arbitrator’s decision may be based on such
factors and evidence as the arbitrator(s) deems fit.  The arbitrator(s) shall be
required to render a written decision to the parties no later than fifteen (15)
days after the completion of the hearing.

8. Arbitration Award.  The award of a majority of the arbitrator(s) shall be
final, conclusive and binding.  The award rendered by the arbitrator(s) may be
entered in any court having jurisdiction in respect thereof, including any court
in which an injunction may have been sought.

9. Injunctive Relief.  With respect to the Dispute, controversy or claim between
the parties, nothing in this Exhibit A shall prevent a party from immediately
seeking injunctive relief in a court to maintain the status quo during the
arbitration.

 

--------------------------------------------------------------------------------