Exhibit 10(n)
DENBURY RESOURCES
SEVERANCE PROTECTION PLAN
(As amended and restated effective December 30, 2008)
ARTICLE I
ESTABLISHMENT OF PLAN
     As of the Effective Date, Denbury Resources Inc. (the “Company”) hereby
establishes a severance compensation plan known as the Denbury Resources
Severance Protection Plan (the “Plan”), as set forth in this document. For
purposes of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), the Company intends the Plan to be a “Severance Plan” within the
meaning of the applicable ERISA regulations.
ARTICLE II
DEFINITIONS
     As used herein, the following words and phrases shall have the following
respective meanings unless the context clearly indicates otherwise.
     Section 2.1 Administrator. 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 2.2 Affiliate. 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 2.3 Base 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 in Control or their
Termination Date, whichever amount is higher.
     Section 2.4 Board. The Board of Directors of the Company.
     Section 2.5 Bonus Amount. An amount equal to fifty percent (50%) of the
total amount of bonuses awarded to the Participant during the twenty-four months
prior to the date of the Change in Control.
     Section 2.6 Cause. 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)
which failure continues for a period of at least thirty (30) days after a
written notice of demand for substantial performance has been delivered to the
Participant specifying the manner in which the Participant has failed to
substantially perform, or (ii) willfully engages in conduct which is
demonstrably and materially injurious to the Employer, monetarily or

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otherwise; provided, however, that no termination of the Participant’s
employment shall be for Cause until there shall have been delivered to the
Participant a copy of a written notice specifying in detail the particulars of
the Participant’s conduct which violates either (i) or (ii) above. 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 2.7 Change in Control. A “Change in Control” shall mean any one of
the following:
     (a) “Continuing Directors” no longer constitute a majority of the Board;
the term “Continuing Director” means any individual who has served in such
capacity for one year or more, together with any new directors whose election by
such Board or whose nomination for election by the stockholders of the Company
was approved by a vote of a majority of the Directors of the Company 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) after the date of adoption of the severance plan, any person or group
of persons acting together as an entity (other than the Texas Pacific Group and
its Affiliates) become (i) the beneficial owners (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended) directly or indirectly, of
shares of common stock 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 the Company’s directors, and (ii) the largest beneficial
owner directly or indirectly of the Company’s then outstanding securities
entitled generally to vote for the election of the Company’s directors;
     (c) the merger or consolidation to which the Company is a party if (i) the
stockholders 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 forty percent (40%) 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) fifty percent (50%) or more of the individuals constituting the members the
Investment Committee are terminated due to the Change in Control; or
     (d) the sale of all or substantially all, of the assets of the Company or
the liquidation or dissolution of the Company.
     Notwithstanding the foregoing provisions of this Section 2.6, if a
Participant’s employment with the Employer is terminated by the Employer other
than for “Cause” six months

 

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prior to the date on which a Change in Control occurs, such termination shall be
deemed to have occurred immediately following a Change in Control.
     Notwithstanding anything herein to the contrary, under no circumstances
will a change in the constitution of the board of directors 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 constitute a “Change in Control” under this Plan.
     Section 2.8 Common Shares. “Common Shares” means shares of common stock,
$.001 par value of Denbury Resources Inc.
     Section 2.9 Company. Denbury Resources Inc., a Delaware corporation.
     Section 2.10 Effective Date. The date the Plan is approved by the Board of
Directors of the Company, or such other date as the Board shall designate in its
resolution approving the Plan.
     Section 2.11 Employer. The Company and any Subsidiary of the Company which
adopts this Plan as a 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 2.12 Good 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 a corporate officer or employee instead
of reporting directly to the board of directors of a corporation 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 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
notice, the Employer has 30 days to remedy the

 

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condition. If the Employer does not remedy the condition within 30 days, the
Participant will meet the requirements for termination of employment for Good
Reason.
     Section 2.13 Investment Committee. Each employee of the Employer who has
been designated by his Employer as a member of the Investment Committee, as the
membership of such Committee may be changed from time to time. Members of the
Investment Committee as of the date of the Plan’s execution are listed on
Schedule B attached hereto.
     Section 2.14 Management Group Employee. Each employee of the Employer who
has been designated by his Employer as a “Management Group Employee”, as may be
designated from time to time by the Board. Management Group Employees as of the
date of the Plan’s execution are listed on Schedule C attached hereto.
     Section 2.15 Notice of Termination. A notice which indicates the specific
provisions in this Plan relied upon as the basis for any termination of
employment which sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Participant’s employment under
the provision so indicated; no purported termination of employment shall be
effective without such Notice of Termination.
     Section 2.16 Officer. Each employee of the Employer that is a corporate
officer and is so designated from time to time pursuant to the Company’s Bylaws.
Officers as of the date of the Plan’s execution are listed on Schedule A
attached hereto.
     Section 2.17 Participant. A Participant who meets the eligibility
requirements of Article III.
     Section 2.18 Participating Employer. A Subsidiary of the Company which
adopts this Plan in accordance with Section 8.4 below, and listed on Schedule D
attached hereto, and as may be amended from time to time pursuant to
Article VIII of the Plan.
     Section 2.19 Payment Date. For a Participant, the fifteenth (15th) day
after the event triggering the right of that Participant to a Severance Benefit.
     Section 2.20 Severance Benefit. The benefits payable in accordance with
Article IV of the Plan.
     Section 2.21 Severance Units. A Participant who is neither a member of the
Investment Committee, nor a Management Group Employee nor Officer shall receive
one (1) Severance Unit, to be used in calculating his Severance Benefit, for
(i) each ten thousand dollars ($10,000) of his Base Salary plus Bonus Amount,
and (ii) each twelve months of employment by the Company or an Employer; the sum
of any partial Severance Units under (i) and (ii) shall be rounded to the
nearest higher whole number of Severance Units. However, the maximum number of
Severance Units that may be granted to a Participant is eighteen (18), and each
Participant shall be granted at least four (4) Severance Units.

 

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     Section 2.22 Subsidiary. Any subsidiary of the Company, and any wholly or
partially owned partnership, joint venture, limited liability company,
corporation and other form of investment by the Company.
     Section 2.23 Termination Date. In the case of the Participant’s death, the
Participant’s Termination Date shall be his date of death. In all other cases,
the Participant’s Termination Date shall be the date specified in the Notice of
Termination subject to the following:

             (a) If the Participant’s employment is terminated by the Employer
for Cause, the date specified in the Notice of Termination shall be at least
thirty (30) days from the date the Notice of Termination is given to the
Participant; and            (b) If the Participant terminates his employment for
Good Reason, the date specified in the Notice of Termination shall not be more
than sixty (60) days from the date the Notice of Termination is given to the
Employer.

ARTICLE III
ELIGIBILITY AND PARTICIPATION
     Section 3.1 Participation. Once a person is employed by their Employer they
shall automatically become a Participant in the Plan.
     Section 3.2 Duration of Participation. A Participant shall cease to be a
Participant in the Plan upon the first to occur of: (i) the date he ceases to be
an employee of the Employer at any time six months prior to a Change in Control,
(ii) the date his employment is terminated following a Change in Control under
circumstances where he is not entitled to a Severance Benefit under the terms of
this Plan, or (iii) the date on which he has received all of the benefits to
which he is entitled under this Plan.
ARTICLE IV
SEVERANCE BENEFITS
     Section 4.1 Right to Severance Benefit.
     (a) After a Change in Control has occurred, a Participant shall be entitled
to receive from the Employer a Severance Benefit in the amount provided in
Sections 4.2 and 4.3 if his employment is terminated during the period beginning
six months prior to a Change of Control and ending two years after a Change of
Control, for any reason other than (i) termination by the Employer for Cause or
(ii) termination by the Participant for other than Good Reason.
     (b) A Participant shall be entitled to a Severance Benefit if that
individual satisfies all the conditions under the Plan required to qualify as a
Participant

 

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and he or she is not otherwise disqualified or excluded from eligibility under
the terms of the Plan.
     (c) Notwithstanding any other provision of the Plan, the sale, divestiture
or other disposition of a Subsidiary, shall not be deemed to be a termination of
employment of employees employed by such Subsidiary, and such employees shall
not be entitled to benefits from the Company or any Participating Employer under
this Plan as a result of such sale, divestiture, or other disposition, or as a
result of any subsequent termination of employment.
     Section 4.2 Amount of Severance Benefit. If a Participant is entitled to a
Severance Benefit under Section 4.1, the employer shall pay to the Participant,
on or before the Payment Date, an amount in cash equal to one of the following
amounts:
     (a) for the Company’s Chief Executive Officer and for all other members of
the Investment Committee, three (3) times the sum of the Participant’s Base
Salary and the Bonus Amount;
     (b) for all other Officers that are not members of the Investment
Committee, two and one-half (2-1/2) times the sum of the Participant’s Base
Salary and the Bonus Amount;
     (c) for all members of the Management Group, two (2) times the sum of the
Participant’s Base Salary and the Bonus Amount;
     (d) for all other employees, one-twelfth (1/12) of the sum of the
Participant’s Base Salary and Bonus Amount multiplied by the Participant’s
Severance Units.
     Section 4.3 Further Benefits. If a Participant is entitled to a Severance
Benefit under Section 4.1, such Participant shall also be entitled to:
     (a) Continuation at Employer’s expense, on behalf of the Participant and
his dependents and beneficiaries, all medical, dental, vision, and health
benefits and insurance coverage which were being provided to the Participant at
the time of termination of employment for a period of time subsequent to the
Participant’s termination of employment. This period of time shall be equal to
fifty percent (50%) of the number of months of compensation represented by the
Participants’ Severance Benefit, with the number of months of compensation to be
based upon the Participant’s monthly Base Salary immediately prior to the
Termination Date. The benefits provided in this Section 4.3(a) shall be no less
favorable to the Participant, in terms of amounts and deductibles and costs to
him, than the coverage provided the Participant under the plans providing such
benefits at the time of termination of Participant’s employment. An Employer may
pay the employee’s cost of benefits provided pursuant to Consolidated Omnibus
Budget Reconciliation Act of 1986 and allowed under the Employer’s benefit

 

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plans for the applicable period of time in order to satisfy its obligation under
this provision.
     (b) The Employer’s obligation hereunder to provide a benefit shall
terminate if the Participant obtains comparable coverage under a subsequent
employer’s benefit plan. For purposes of the preceding sentence, benefits will
not be comparable during any waiting period for eligibility for such benefits or
during any period during which there is a preexisting condition limitation on
such benefits. The Employer also shall pay a lump sum equal to the amount of any
additional income tax payable by the Participant and attributable to the
benefits provided under subparagraph (a) of this Section at the time such tax is
imposed upon the Participant. At the end of the period of coverage set forth
above, the Participant shall have the option to have assigned to him at no cost
to the Participant and with no apportionment of prepaid premiums, any assignable
insurance owned by the Employer and relating specifically to the Participant,
and the Participant shall be entitled to all health and similar benefits that
are or would have been made available to the Participant under law.
     Section 4.4 Mitigation or Set-off of Amounts Payable Hereunder. The
Participant shall not be required to mitigate the amount of any payment provided
for in this Article IV by seeking other employment or otherwise, nor shall the
amount of any payment provided for in this Article IV be reduced by any
compensation earned by the Participant as the result of employment by the
Company or any successor after the Payment Date or by another employer after the
Termination Date, or otherwise. The Employer’s obligations hereunder also shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Employer may have against the Participant.
     Section 4.5 Company Guarantee of Severance Benefit. In the event a
Participant becomes entitled to receive from the Employer a Severance Benefit
under this Article IV above and such Employer fails to pay such Severance
Benefit, the Company shall assume the obligation of such Employer to pay such
Severance Benefit. In consideration of the Company’s assumption of the
obligation to pay such Severance Benefit provided under this Plan, the Company
(as the source of payment of benefits under the Plan) shall be subrogated to any
recovery (irrespective of whether there is recovery from the third party of the
full amount of all claims against the third party) or right to recovery of
either a Participant or his legal representative against the Employer or any
person or entity. The Participant or his legal representative shall cooperate in
doing what is reasonably necessary to assist the Company in exercising such
rights, including but not limited to notifying the Company of the institution of
any claim against a third party and notifying the third party and the third
party’s insurer, if any, of the Company’s subrogation rights. Neither the
Participant nor his legal representative shall do anything after a loss to
prejudice such rights. In its sole discretion, the Company reserves the right to
prosecute an action in the name of the Participant or his legal representative
against any third parties potentially liable to the Participant. The Company
shall have the absolute discretion to settle subrogation claims on any basis it
deems warranted and appropriate under the circumstances. If a Participant or his
legal representative initiates a lawsuit against any third

 

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parties potentially liable to the Participant, the Company shall not be
responsible for any attorney’s fees or court costs that may be incurred in such
liability claim. The Company shall be entitled, to the extent of any payments
made to or on behalf of a Participant or a dependent of the Participant, to be
paid first from the proceeds of any settlement or judgment that may result from
the exercise of any rights of recovery asserted by or on behalf of a Participant
or his legal representative against any person or entity legally responsible for
the injury for which such payment was made. The right is also hereby given the
Company to receive directly from the Employer or any third party(ies),
attorney(s) or insurance company(ies) an amount equal to the amount paid to or
on behalf of the Participant.
     Section 4.6 Forfeiture of Severance Benefits. A Participant shall forfeit
any and all entitlement to any Severance Benefit if the Administrator determines
that the Participant has failed to fulfill any requirement of the Plan.
     Section 4.7 Payment after Death. If a Participant dies before his or her
Severance Benefits have been paid in full, the remaining Severance Benefits will
be paid to the beneficiaries named in such Participant’s last will and
testament, or if no will or beneficiary exist then to such Participant’s heirs
at law. The Plan shall be discharged fully and completely to the extent of any
payment made to any such beneficiaries or heirs at law.
ARTICLE V
TERMINATION OF EMPLOYMENT
     Section 5.1 Written Notice Required. Any purported termination of
employment, either by the Employer or by the Participant, shall be communicated
by written Notice of Termination to the other.
ARTICLE VI
ADDITIONAL PAYMENTS BY THE COMPANY
     Section 6.1 Gross-Up Payment. In the event it shall be determined that any
payment or distribution of any type by the Employer to or for the benefit of an
Officer, whether paid or payable or distributed or distributable pursuant to the
terms of this Plan or otherwise (the “Total Payments”), would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the “Code”) or any interest or penalties with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
collectively referred to as the “Excise Tax”, then the Officer shall be entitled
to receive an additional payment (a “Gross-Up Payment”) in an amount such that
at the time of payment by the Officer of all taxes (including additional excise
taxes under said Section 4999 and any interest, and penalties imposed with
respect to any taxes) imposed upon the Gross-Up Payment, the Officer shall have
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total
Payments. The Company shall pay the Gross-Up Payment to the Officer within
twenty (20) business days after the Payment Date or the Termination Date,
whichever is applicable.

 

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     Section 6.2 Determination By Accountant. All determinations required to be
made under this Article VI, including whether a Gross-Up Payment is required and
the amount of such Gross-Up Payment, shall be made by the independent accounting
firm retained by the Company on the date of Change in Control (the “Accounting
Firm”), which shall provide detailed supporting calculations both to the Company
and the Officer within fifteen (15) business days of the Payment Date or
Termination Date, whichever is applicable, or such earlier time as is requested
by the Company. If the Accounting Firm determines that no Excise Tax is payable
by the Officer, it shall furnish the Officer with an opinion that he has
substantial authority not to report any Excise Tax on his federal income tax
return. Any determination by the Accounting Firm shall be binding upon the
Company and the Officer. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that a Gross-Up Payment which will not
have been made by the Company should have been made (“Underpayment”), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 6.3 and the Officer thereafter
is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Officer.
     Section 6.3 Notification Required. The Officer shall notify the Company in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten (10) business days
after the Officer knows of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid.
The Officer shall not pay such claim prior to the expiration of the thirty
(30) day period following the date on which it gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Officer in writing
prior to the expiration of such period that it desires to contest such claim,
the Officer shall:
     (a) give the Company any information reasonably requested by the Company
relating to such claim,
     (b) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
     (c) cooperate with the Company in good faith in order to effectively
contest such claim,
     (d) permit the Company to participate in any proceedings relating to such
claim, provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Officer harmless,
on an after-tax basis, for any

 

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Excise Tax or income tax, including interest and penalties with respect thereto,
imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section 6.3, the Company
shall control all proceedings taken in connection with such contest and, at its
sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Officer to pay the tax
claimed and sue for a refund, or contest the claim in any permissible manner,
and the Officer agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Officer to pay such claim and sue for a refund, the Company
shall advance the amount of such payment to the Officer, on an interest-free
basis and shall indemnify and hold the Officer harmless, on an after-tax basis,
from any Excise Tax or income tax, including interest or penalties with respect
thereto, imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Officer with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company’s control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Officer shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
     Section 6.4 Repayment. If, after the receipt by the Officer of an amount
advanced by the Company pursuant to Section 6.3, the Officer becomes entitled to
receive any refund with respect to such claim, the Officer shall (subject to the
Company’s complying with the requirements of Section 6.3) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Officer of
an amount advanced by the Company pursuant to Section 6.3, a determination is
made that the Officer shall not be entitled to any refund with respect to such
claim and the Company does not notify the Officer in writing of its intent to
contest such denial of refund prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
ARTICLE VII
SUCCESSORS TO COMPANY
     Section 7.1 Successors. This Plan shall bind any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, in the same
manner and to the same extent that the Company would be obligated under this
Plan if no succession had taken place. In the case of any transaction in which a
successor would not, by the foregoing provision or by operation of law, be bound
by this Plan, the Company shall require such successor expressly and
unconditionally to

 

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assume and agree to perform the Company’s obligations under this Plan, in the
same manner and to the same extent that the Company would be required to perform
if no such succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a breach
hereof and shall entitle the Participant to compensation from the Company in the
same amount and on the same terms as the Participant would be entitled hereunder
if the Participant terminated his employment for Good Reason, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Termination Date. As used herein, “the
Company” shall mean the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 7.1 or which otherwise becomes bound by all the
terms and provisions hereof by operation of law.
ARTICLE VIII
DURATION, AMENDMENT, PLAN TERMINATION
AND ADOPTION BY SUBSIDIARIES
     Section 8.1 Duration. This Plan shall continue in effect until terminated
in accordance with Section 8.2. If a Change in Control occurs, this Plan shall
continue in full force and effect, and shall not terminate or expire, until
after all Participants who have become entitled to a Severance Benefit hereunder
shall have received all of such benefits in full.
     Section 8.2 Amendment and Termination. The Plan and its attached Schedules
may be terminated or amended in any respect by resolution adopted by two-thirds
of the Board; provided, however, that no such amendment or termination of the
Plan may be made if such amendment or termination would adversely affect any
right of a Participant who became a Participant prior to the later of (i) the
date of adoption of any such amendment or termination, or (ii) the effective
date of any such amendment or termination; and, provided further, that the Plan
no longer shall be subject to amendment, change, substitution, deletion,
revocation or termination in any respect whatsoever following a Change in
Control.
     Section 8.3 Form of Amendment. The form of any amendment or termination of
the Plan shall be a written instrument signed by a duly authorized officer or
officers of the Company, certifying that the amendment or termination has been
approved by the Board.
     Section 8.4 Adoption by Subsidiaries. Any Subsidiary of the Company may,
with the approval of the Board of Directors of the Company, adopt and become an
Employer under this Plan by executing and delivering to the Company an
appropriate instrument agreeing to be bound as an Employer by all of the terms
of the Plan with respect to its eligible employees. The adoptive instrument may
contain such changes and amendments in the terms and provisions of the Plan as
adopted by such Subsidiary as may be desired by such Subsidiary and acceptable
to the Company. The adoptive instrument shall specify the effective date of such
adoption of the Plan and shall become as to such adopting Subsidiary a part of
this Plan.

 

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ARTICLE IX
CLAIMS AND APPEAL PROCEDURES
     Section 9.1 Claims Procedure. With respect to any claim for Severance
Benefits under the Plan, the Administrator will issue a decision on whether the
claim is denied or granted within fifteen (15) days after receipt of the claim
by the Administrator, unless special circumstances require an extension of time
for processing the claim, in which case a decision will be rendered not later
than twenty (20) days after receipt of the claim. Written notice of the
extension will be furnished to the Participant prior to the expiration of the
initial fifteen (15) day period and will indicate the special circumstances
requiring an extension of time for processing the claim and will indicate the
date the Administrator expects to render its decision. If the claim is denied in
whole or in part, the decision in writing by the Administrator shall include the
specific reasons for the denial and reference to the Plan provisions on which
the denial is based. The decision also shall include a description of any
additional information which the Participant needs to submit in order to refile
the claim, along with an explanation of why such additional information is
necessary and how the procedure for reviewing claims works. If the notice of
denial is not furnished in accordance with the above procedure, the claim shall
be deemed denied and the Participant is permitted to proceed with the review
procedure.
     Section 9.2 Appeals Procedure. If his claim is denied in whole or in part,
an Participant may appeal in writing a denial of the claim, in part or in whole,
and request a review by the Administrator. The appeal must be submitted within
sixty (60) days after notice of the denial of the claim. The Participant may
request in writing to review copies of pertinent Plan documents in connection
with the appeal. The Administrator will review the appeal and notify the
Participant of the final decision within fifteen (15) days after receiving the
request for review unless the Administrator requires an extension due to special
circumstances, in which case the final decision will be made within twenty
(20) days after the Administrator receives the request for review. The notice of
the final decision must include the specific reasons for the decision and
specific references to the pertinent Plan provisions on which the
Administrator’s decision is based.
     Section 9.3 Exclusive Initial Remedy. No action may be brought for benefits
provided by this Plan or to enforce any right hereunder until after a claim has
been submitted to and determined by the Administrator and all appeal rights
under the Plan have been exhausted. Thereafter, the Participant may bring an
action for benefits provided by this Plan or to enforce any right hereunder. The
Participant’s beneficiary should follow the same claims procedure in the event
of the Participant’s death.
ARTICLE X
PLAN ADMINISTRATION
     Section 10.1 In General. The general administration of the Plan and the
duty to carry out its provisions shall be vested in the Administrator, which
shall be the “Plan Administrator” as that term is defined in section 3(16)(A) of
ERISA. The Plan and Severance Benefits under the

 

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Plan shall be administered by the Administrator appointed from time to time by
the Company. The Administrator may, in its discretion, secure the services of
other parties, including agents and/or employees to carry out the day-to-day
functions necessary to an efficient operation of the Plan. The Administrator’s
interpretations, decisions, requests and exercises of power and responsibilities
shall not be subject to review by anyone and shall be final, binding, and
conclusive upon all persons. The Administrator shall, in its sole and absolute
discretion, have the exclusive right to interpret all of the terms of the Plan,
to determine eligibility for coverage and benefits, to resolve disputes as to
eligibility, type, or amount of benefits, to correct any errors or omissions in
the form or operation of the Plan, to make such other determinations with
respect to the Plan, and to exercise such other powers and responsibilities as
shall be provided for in the Plan or as shall be necessary or helpful with
respect thereto. The Administrator under and pursuant to this Plan shall be the
named fiduciary for purposes of section 402(a) of ERISA with respect to all
powers and duties expressly or implicitly assigned to it hereunder. Any
determination or decision by the Company made under or with respect to any
provision of the Plan shall be in the Company’s sole and absolute discretion,
shall not be subject to review by anyone and shall be final, binding and
conclusive upon all persons.
     Section 10.2 Reimbursement and Compensation. The Administrator shall
receive no compensation for its services as Administrator, but it shall be
entitled to reimbursement for all sums reasonably and necessarily expended by it
in the performance of such duties.
     Section 10.3 Rulemaking Powers. The Administrator shall have the power to
make reasonable and uniform rules and regulations required in the administration
of the Plan, to make all determinations necessary for the Plan’s administration,
except those determinations which the Plan requires others to make, and to
construe and interpret the Plan wherever necessary to carry out its intent and
purpose and to facilitate its administration.
ARTICLE XI
SOURCE OF SEVERANCE PAYMENT
     Section 11.1 No Separate Fund Established All Severance Benefits shall be
paid in cash from the general funds of the Company or an Employer, and no
special or separate fund shall be established. Nothing contained in the Plan
shall create or be construed to create a trust of any kind, and nothing
contained in the Plan nor any action taken pursuant to the provisions of the
Plan shall create or be construed to create a fiduciary relationship between the
Company or an employer and a Participant, beneficiary, employee or other person.
To the extent that any person acquires a right to receive Severance Benefits
from the Company or an Employer under the Plan, such right shall be no greater
than the right of any unsecured general creditor of the Company or Employer. For
purposes of the Code, the Company intends this Plan to be an unfunded, unsecured
promise to pay on the part of the Company. For purposes of ERISA, the Company
intends the Plan to be a “severance plan” within the meaning of the applicable
ERISA regulations.

 

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ARTICLE XII
MISCELLANEOUS
     Section 12.1 Participant’s Legal Expenses. The Company agrees to pay, upon
written demand therefor by the Participant, fifty percent (50%) of all legal
fees and expenses which the Participant may reasonably incur in order to collect
amounts to be paid or obtain benefits to be provided to such Participant under
the Plan, plus in each case interest at the “applicable Federal rate” (as
defined in Section 1274(d) of the Code). In any such action brought by a
Participant for damages or to enforce any provisions hereof, he shall be
entitled to seek both legal and equitable relief and remedies, including,
without limitation, specific performance of the Company’s obligations hereunder,
in his sole discretion. However, in any instance where a Participant receives,
as the result of a final, nonappealable judgment of a court of competent
jurisdiction or a mutually agreed upon settlement with the Company, Severance
Benefits greater than those first offered by the Company or its successor to the
Participant, then the Company shall pay one hundred percent (100%) of all such
legal fees and expenses incurred by the Participant.
     Section 12.2 Employment Status. This Plan does not constitute a contract of
employment or impose on the Employer any obligation to retain a Participant as
an employee, to change the status of a Participant’s employment as a Management
Group Employee or in any other position, or to change any employment policies of
the Employer.
     Section 12.3 Validity and Severability. The invalidity or unenforceability
of any provision of the Plan shall not affect the validity or enforceability of
any other provision of the Plan, which shall remain in full force and effect,
and any prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
     Section 12.4 The Participant’s Heirs, etc. This Agreement shall inure to
the benefit of and be enforceable by the Participant’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Participant should die while any amounts would
still be payable to him hereunder as if he had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms hereof to his designee or, if there be no such designee, to his estate.
     Section 12.5 Governing Law. The validity, interpretation, construction and
performance of the Plan shall in all respects be governed by the laws of the
State of Texas.
     Section 12.6 Choice of Forum. A Participant shall be entitled to enforce
the provisions of this Plan in any state or federal court located in the Dallas
County, Texas, in addition to any other appropriate forum.
     Section 12.7 Notice. For the purposes hereof, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed to the
Company at its principal place of business and to the Participant at his address
as shown on the records of the Employer, provided that all notices to

 

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the Company shall be directed to the attention of the Chief Executive Officer of
the Company with a copy to the Secretary of the Company, or to such other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
     Section 12.8 Alienation. No benefit, right or interest of any person under
the Plan will be subject to alienation, anticipation, sale, transfer,
assignment, pledge, encumbrance or charge, seizure, attachment or legal,
equitable or other process or be liable for or subject to, the debts,
liabilities or other obligations of such persons, except as otherwise required
by law. No Participant, dependent or their beneficiary shall have any right or
claim to benefits from the Plan, except as specified in the Plan.
     Section 12.9 Pronouns. A pronoun or adjective in the masculine gender
includes the feminine gender, and the singular includes the plural, unless the
context clearly indicates otherwise.
     Section 12.10 Section 409A. If it is determined that Section 409A of the
Internal Revenue Code applies to any payments made on account of termination of
employment to specified employees (as defined under Section 409A of the Internal
Revenue Code) the payment shall occur no earlier than the expiration of the
six-month period following such termination of employment.

 

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SCHEDULE A
“Officers”, as of December 30, 2008
Gareth Roberts
Mark Allen
Dan Cole
Robert Cornelius
Brad Cox
Ray Dubuisson
Tracy Evans
Charlie Gibson
Phil Rykhoek
Barry Schneider
Jerry Ballard

 

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SCHEDULE B
“Investment Committee”, as of December 30, 2008
Gareth Roberts
Mark Allen
Robert Cornelius
Tracy Evans
Phil Rykhoek

 

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SCHEDULE C
“Management Group”, as of December 30, 2008
None

 

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SCHEDULE D
“Participating Employers”, as of December 30, 2008
None