exv4w2







	 	 	 	 	 



Exhibit 4.2




2004

OMNIBUS STOCK AND INCENTIVE PLAN

FOR

DENBURY RESOURCES INC.

(Updated as of December 29, 2010)








 









 






TABLE OF CONTENTS




	 	 	 	 	 

	1. Purpose
	 	 	1	 
	2. Definitions
	 	 	1	 
	(a)“Administrator”
	 	 	1	 
	(b)“Agreed Price”
	 	 	1	 
	(c)“Applicable Laws”
	 	 	1	 
	(d)“Award”
	 	 	1	 
	(e)“Board”
	 	 	1	 
	(f)“Broker Assisted Exercise”
	 	 	1	 
	(g)“Cause”
	 	 	2	 
	(h)“Change in Control”
	 	 	2	 
	(i)“Change in Control Price”
	 	 	3	 
	(j)“Code”
	 	 	3	 
	(k)“Committee”
	 	 	3	 
	(l)“Common Stock”
	 	 	3	 
	(m)“Company”
	 	 	3	 
	(n)“Date of Grant”
	 	 	3	 
	(o)“Director”
	 	 	3	 
	(p)“Disability”
	 	 	3	 
	(q)“Effective Date”
	 	 	3	 
	(r)“Eligible Person(s)”
	 	 	3	 
	(s)“Employee(s)”
	 	 	4	 
	(t)“Fair Market Value”
	 	 	4	 
	(u)“Holder”
	 	 	4	 
	(v)“Incentive Stock Option”
	 	 	4	 
	(w)“Investment Committee”
	 	 	4	 
	(x) Purposely Omitted
	 	 	4	 
	(y)“Non-Qualified Stock Option”
	 	 	4	 
	(z)“Option”
	 	 	4	 
	(aa)“Option Price”
	 	 	4	 
	(bb)“Parent”
	 	 	4	 
	(cc)“Performance Award”
	 	 	4	 
	(dd)“Performance Measures”
	 	 	5	 
	(ee)“Performance Period”
	 	 	5	 
	(ff)“Plan”
	 	 	5	 
	(gg)“Plan Year”
	 	 	5	 
	(hh)“Reserved Shares”
	 	 	5	 
	(ii)“Restriction(s)” “Restricted”
	 	 	5	 
	(jj)“Restricted Period”
	 	 	5	 
	(kk)“Restricted Shares”
	 	 	5	 
	(ll)“Restricted Share Award”
	 	 	6	 
	(mm)“Restricted Share Distributions”
	 	 	6	 
	(nn)“Retirement Vesting Date”
	 	 	6	 
	(oo)“SAR”
	 	 	6	 
	(pp)“Share(s)”
	 	 	6	 






 









 





TABLE OF CONTENTS




	 	 	 	 	 

	(qq)“Spread”
	 	 	6	 
	(rr)“Separation”
	 	 	6	 
	(ss)“Subsidiary”
	 	 	6	 
	(tt)“1933 Act”
	 	 	6	 
	(uu)“1934 Act”
	 	 	6	 
	(vv)“Vested”
	 	 	7	 
	(ww)“10% Person”
	 	 	7	 
	3. Award of Reserved Shares.
	 	 	7	 
	4. Conditions for Grant of Awards.
	 	 	7	 
	5. Grant of Options.
	 	 	8	 
	6. Option Price.
	 	 	9	 
	7. Exercise of Options
	 	 	9	 
	8. Vesting of Options.
	 	 	9	 
	9. Termination of Option Period.
	 	 	10	 
	10. Acceleration.
	 	 	11	 
	11. Adjustment of Reserved Shares.
	 	 	11	 
	12. Transferability of Awards
	 	 	13	 
	13. Issuance of Reserved Shares
	 	 	13	 
	14. Administration of the Plan.
	 	 	14	 
	15. Tax Withholding
	 	 	15	 
	16. Restricted Share Awards.
	 	 	16	 
	17. Performance Awards.
	 	 	17	 
	18. Stock Appreciation Rights
	 	 	18	 
	19. Section 83(b) Election
	 	 	19	 
	20. Vesting of Awards Upon Retirement
	 	 	20	 
	21. Interpretation
	 	 	20	 
	22. Amendment and Discontinuation of the Plan
	 	 	20	 
	23. Effective Date and Termination Date
	 	 	21	 
	24. Section 409A
	 	 	21	 







 











 






2004 OMNIBUS STOCK AND INCENTIVE PLAN FOR




DENBURY RESOURCES INC.




          1. Purpose. The purpose of this Plan is to advance the interests of Denbury Resources
Inc., a Delaware Corporation, and increase shareholder value by providing additional incentives to
attract, retain and motivate those qualified and competent employees and Directors, upon whose
efforts and judgment its success is largely dependent.




          2. Definitions. As used herein, the following terms shall have the meaning indicated:





     (a)
“Administrator” shall mean the person(s) designated by the Committee to carry out
nondiscretionary administrative duties with respect to the Plan and Awards.




     (b) “Agreed Price” shall relate to the grant of an Award in the form of a SAR, and shall
mean the value assigned to the Award’s Reserved Shares which will form the basis for
calculating the Spread on the date of exercise of the SAR, which assigned value shall be the
Fair Market Value of such Reserved Shares on the Date of Grant.




     (c) “Applicable Laws” means the requirements relating to the administration of stock
option plans under U.S. state corporate laws, U.S. federal and state securities laws, and the
Code; and the similar laws of any foreign country or jurisdiction where Options are, or will
be, granted.




     (d) “Award” shall mean either an Option, a SAR, a Restricted Share Award, or a
Performance Award, except that where it shall be appropriate to identify the specific type of
Award, reference shall be made to the specific type of Award; and provided, further, that
references to Award shall be deemed to be references to the written agreement evidencing such
Award, and provided, finally, without limitation, that unless expressly provided to the
contrary in the terms of the Award, in the event of a conflict between the terms of the Plan
and the terms of an Award, the terms of the Plan are controlling.




     (e) “Board” shall mean the Board of Directors of the Parent.




     (f) “Broker Assisted Exercise” shall mean a special sale and remittance procedure
pursuant to which the Holder of an Option shall concurrently provide irrevocable written
instructions to (a) an Administrator designated brokerage firm (“Broker”) to effect the
immediate sale of the Reserved Shares and remit to the Administrator, out of the sale
proceeds available on the settlement date, sufficient funds to cover the aggregate Option
Price plus all applicable Federal, state and local income and employment taxes required to be
withheld by the Company, and (b) the Administrator to deliver the certificates for the Shares
directly to such brokerage firm in order to complete the sale.




     (g) “Cause” shall mean either (i) a final, nonappealable conviction of a Holder for
commission of a felony involving moral turpitude, or (ii) Holder’s willful gross





 









 




misconduct
that causes material economic harm to the Company or that brings substantial discredit to the
Company’s reputation.




     (h) “Change in Control” shall mean any one of the following:



          (1) “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;




          (2) after the Effective Date, any person or group of persons acting together as an
entity 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;




          (3) 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 of the Investment Committee are terminated due to the Change in Control; or




          (4) the sale of all or substantially all, of the assets of the Company or the
liquidation or dissolution of the Company.




          (5) Notwithstanding the foregoing provisions of this Section 2(h), if a Holder’s
Separation is for a reason other than for Cause, and occurs not more than 90 days prior to
the date on which a Change in Control occurs, for purposes of Awards, such termination shall
be deemed to have occurred immediately following a Change in Control.




          (6) 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.




     (i) “Change in Control Price” shall mean the higher of (i) the highest price per Share
paid in any transaction reported on the NYSE or such other exchange or market as is





2









 






the
principal trading market for the Common Stock, or (ii) the highest price per share paid in
any bona fide transaction related to a Change in Control, at any time during the 60 day
period immediately preceding such occurrence; with such occurrence date to be determined by
the Committee and any payments of a change in control price to be made within the time limits
established under Section 10(b) hereof.




     (j) “Code” shall mean the Internal Revenue Code of 1986, as now or hereafter amended.




     (k)
“Committee” shall mean the Compensation Committee of the Board, provided, further,
that in granting Performance Awards, Committee shall refer to only those members of the
Compensation Committee who are “Outside Directors” within the meaning of Section 162(m) of
the Code.




     (l) “Common Stock” shall mean the common stock, $.001 par value, of the Parent.




     (m) “Company” shall mean, individually and collectively, the Parent and the
Subsidiaries, except that when it shall be appropriate to refer only to Denbury Resources
Inc., the reference will be to “Parent”.




     (n) “Date of Grant” shall mean shall mean the later of the date on which the Committee
takes formal action to grant an Award or the date specified as the Date of Grant in the
Committee’s formal action, provided, in either case, that it is followed, as soon as
reasonably practicable, by written notice to the Eligible Person receiving the Award.




     (o) “Director” shall mean a member of the Board.




     (p) “Disability” shall mean a Holder’s present incapacity resulting from an injury or
illness (either mental or physical) which, in the reasonable opinion of the Administrator
based on such medical evidence as it deems necessary, will result in death or can be expected
to continue for a period of at least twelve (12) months and will prevent the Holder from
performing the normal services required of the Holder by the Company; provided, however, that
such disability did not result, in whole or in part: (i) from chronic alcoholism; (ii) from
addiction to narcotics; (ii) from a felonious undertaking; or (iv) from an intentional
self-inflicted wound.




     (q) “Effective Date” shall mean May 12, 2004.




     (r) “Eligible Person(s)” shall mean those persons or entities, as applicable, who are
Employees, or non-employee Directors.




     (s) “Employee(s)” shall mean each person whose customary work schedule is a minimum of
thirty (30) hours per week, and who is designated as an employee on the books of the Company.





3









 






     (t) “Fair Market Value” per Share on the date of reference shall be the Closing Price on
such date, provided, further, that if the actual transaction involving the Shares occurs at a
time when the New York Stock Exchange is closed for regular trading, then it shall be the
most recent Closing Price; provided, further, that “Closing Price” means the closing price of
the Shares on the New York Stock Exchange as reported in any newspaper of general
circulation.




     (u) “Holder” shall mean, at each time of reference, each person with respect to whom an
Award is in effect; provided, further, that following the death of a Holder, it shall refer
to the person who succeeds to the rights of such Holder.




     (v) “Incentive Stock Option” shall mean an Option that is an incentive stock option as
defined in Section 422 of the Code.




     (w) “Investment Committee” shall mean the committee of that name established by the
Board, who shall be solely responsible for selecting its members, and
whose members on December 29, 2010, are Messrs. Mark C. Allen, Ronald T. Evans, Robert Cornelius and Phil Rykhoek.




     (x) Purposely Omitted




     (y) “Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock
Option.




     (z) “Option” (when capitalized) shall mean the grant of the right to purchase Reserved
Shares through the payment of the Option Price and taking the form of either an Incentive
Stock Option or a Non-Qualified Stock Option; except that, where it shall be appropriate to
identify a specific type of Option, reference shall be made to the specific type of Option;
provided, further, without limitation, that a single Option may include both Incentive Stock
Option and Non-Qualified Stock Option provisions.




     (aa) “Option Price” shall mean the price per Reserved Share which is required to be paid
by the Holder in order to exercise his or her right to acquire the Reserved Share under the
terms of the Option.




     (bb) “Parent” shall mean Denbury Resources Inc.




     (cc) “Performance Award” shall mean the award which is granted contingent upon the
attainment of the performance objectives during the Performance Period, all as described more
fully in Section 17.




     (dd) “Performance Measures” shall mean one or more of the following: (i) earnings per
share, (ii) return on average common equity, (iii) pre-tax income, (iv) pre-tax operating
income, (v) net revenue, (vi) net income, (vii) profits before taxes, (viii) book value per
share, (ix) changes in amounts of oil and gas reserves, (x) changes in production rates, (xi)
net asset value, (xii) net asset value per share, (xiii) sales, (xiv) finding costs,
or





4









 






(xv)
operating cost reductions or other operating cost measures, but shall not include remaining
in the employ of the Company for a specified period of time.




     (ee) “Performance Period” shall mean the period described in Section 17 with respect to
which the performance objectives relate.




     (ff) “Plan” shall mean this 2004 Omnibus Stock and Incentive Plan for Denbury Resources
Inc.




     (gg) “Plan Year” shall mean the calendar year.




     (hh) “Reserved Shares” shall mean, at each time of reference, the total number of Shares
described in Section 3 with respect to which the Committee may grant an Award, all of which
Reserved Shares shall be held in the Parent’s treasury or shall be made available from the
Parent’s authorized and unissued Shares.




     (ii) “Restriction(s)” “Restricted” and similar shall mean the restrictions applicable to
Reserved Shares subject to an Award which constitute “a substantial risk of forfeiture” of
such Reserved Shares within the meaning of Section 83(a)(1) of the Code.




     (jj) “Restricted Period” shall mean the period during which Restricted Shares are
subject to Restrictions.




     (kk) “Restricted Shares” shall mean the Reserved Shares granted to an Eligible Person
which are subject to Restrictions; provided that, subject to the provisions of Section 16(b),
the Committee may, in its sole discretion, determine that the Restrictions which otherwise
would have been imposed have been fully satisfied on the Date of Grant by reason of prior
service and/or other considerations, and thus provide that such Restricted Shares shall be
fully Vested on the Date of Grant.




     (ll) “Restricted Share Award” shall mean the award of Restricted Shares.




     (mm) “Restricted Share Distributions” shall mean any amounts, whether Shares, cash or
other property (other than regular cash dividends) paid or distributed by the Parent with
respect to Restricted Shares during a Restricted Period.




     (nn) “Retirement Vesting Date” shall mean the first birthday of a Holder on which that
Holder has attained the later of (i) his 60th birthday, and (ii) the birthday on which that
Holder attains an age equal to (x) 65 minus (y) the number which results from multiplying (A)
fifty percent (50%) times (B) that Holder’s full years of service as an Employee on such
birthday, with such product of (A) and (B) rounded down to the nearest whole number before
being deducted from 65. For example only, and without limiting the generality of the
foregoing, a Holder who has completed 70 months of service (i.e., 5 full years of service) as
an Employee on his 62nd birthday will not have attained his Retirement Vesting Date, whereas
a Holder who has completed 72 months of service (i.e., 6 full years of service) as an
Employee on his 62nd birthday will have attained his Retirement Vesting Date.





5









 






     (oo) “SAR” shall mean a stock appreciation right as defined in Section 18 hereof.




     (pp) “Share(s)” shall mean a share or shares of Common Stock.




     (qq) “Spread” shall mean the difference between the Option Price, or the Agreed Price,
as the case may be, of the Share(s) on the date of the Award, and the Fair Market Value of
such Share(s) on the date of reference.




     (rr) “Separation” shall mean the date on which a Holder ceases to have an employment
relationship with the Company for any reason, including death or Disability; and provided,
further, without limitation, such employment relationship will cease, in the case of a
non-Employee Director, upon his or her ceasing to be a Director; provided, however, that a
Separation will not be considered to have occurred while an Employee is on sick leave,
military leave, or any other leave of absence approved by the Company, if the period of such
leave does not exceed 90 days, or, if longer, so long as the Employee’s right to redeployment
with the Company is guaranteed either by statute or by contract. If an Award is subject to
Code Section 409A, “Separation” shall mean “separation from service” as defined in Treasury
Regulations issued under Code Section 409A whenever any payment or settlement of an Award
conferred under this Plan is to be made upon Separation and is subject to such Code
section. For such purposes, “separation from service” of an Employee shall be determined
based upon a reduction in the bona fide level of services performed to a level equal to
twenty percent (20%) or less of the average level of services performed by the Employee
during the immediately preceding 36-month period.




     (ss) “Subsidiary” shall mean, where the Award is an Incentive Stock Option, a
“subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of
the Code, and on the case of any other Award, shall mean any entity which would be a
subsidiary corporation as defined in Section 424(f) of the Code if it were a corporation.
Notwithstanding the foregoing, Genesis Energy, Inc. shall not be considered a Subsidiary for
purposes of this Plan.




     (tt) “1933 Act” shall mean the Securities Act of 1933, as amended.




     (uu) “1934 Act” shall mean the Securities Exchange Act of 1934, as amended.




     (vv) “Vested” and similar terms shall mean the number of Option Shares which have become
nonforfeitable and the number of Restricted Shares on which the Restrictions have lapsed;
provided, further, and without limitation, that the lapse of Restrictions based on the
attainment of performance objectives is also a Vesting event.




     (ww) “10% Person” shall mean a person who owns directly (or indirectly through
attribution under Section 424(d) of the Code) at the Date of Grant of an Incentive Stock
Option, stock possessing more than 10% of the total combined voting power of all classes of
voting stock (as defined in Section 424 of the Code) of the Parent on the Date of Grant.






6









 




     3. Award of Reserved Shares.




     (a) As of the Effective Date (as amended), 29,500,000 Shares shall automatically, and
without further action, become Reserved Shares. Notwithstanding the foregoing, not more than
22,200,000 Reserved Shares may be issued under the Plan as a result of the Vesting of
Restricted Stock or Performance Awards. To the extent any Award shall terminate, expire or be
canceled, the Reserved Shares subject to such Award (or with respect to which the Award is
measured), shall remain Reserved Shares. In addition, where an Award is settled on a basis
other than the issuance of all Reserved Shares subject to such Award (or with respect to
which the Award is measured), only the net number of Reserved Shares issued in settlement of
such Award shall be canceled and no longer considered Reserved Shares.




     (b) Notwithstanding any provision in this Plan to the contrary, no person whose
compensation may be subject to the limitations on deductibility under Section 162(m) of the
Code shall be eligible for a grant during a single calendar year of an Award with respect to,
or measured by, more than 500,000 Reserved Shares. The limitation under this Section 3(b)
shall be construed so as to comply with the requirements of Section 162(m) of the Code.




     4. Conditions for Grant of Awards.




     (a) Without limiting the generality of the provisions hereof which deal specifically
with each form of Award, Awards shall only be granted to such one or more Eligible Persons as
shall be selected by the Committee.




     (b) In granting Awards, the Committee shall take into consideration the contribution the
Eligible Person has made or may be reasonably expected to make to the success of the Company
and such other factors as the Committee shall determine. The Committee shall also have the
authority to consult with and receive recommendations from officers and other personnel of
the Company with regard to these matters. The Committee may from time to time in granting
Awards under the Plan prescribe such terms and conditions concerning such Awards as it deems
appropriate, including, without limitation, relating an Award to achievement of specific
goals established by the Committee or to the continued employment of the Eligible Person for
a specified period of time, provided that such terms and conditions are not inconsistent with
the provisions of this Plan.




     (c) Incentive Stock Options may be granted only to Employees, and all other Awards may
be granted to any Eligible Person.




     (d) The Plan shall not confer upon any Holder any right with respect to continuation of
employment by the Company, or any right to provide services to the Company, nor shall it
interfere in any way with his or her right or the Company’s right to terminate his or her
employment at any time.




     (e) The Awards granted to Eligible Persons shall be in addition to regular salaries,
pension, life insurance or other benefits (if any) related to their service to the Company,
and nothing herein shall be deemed to limit the ability of the Company to enter into any
other compensation arrangements with any Eligible Person.





7









 






     (f) The Administrator shall determine in each case whether periods of military or
government service shall constitute a continuation of employment or service for the purposes
of this Plan or any Award.




     (g) Notwithstanding any provision hereof to the contrary, each Award which in whole or
in part involves the issuance of Reserved Shares may provide for the issuance of such
Reserved Shares for consideration consisting of cash or cash equivalents, or such other
consideration as the Committee may determine, including (without limitation) as compensation
for past services rendered.




     (h) The Committee may delegate in writing to the Administrator the authority to grant
Awards to new Employees of the Company, provided that such authority contains limits on the
maximum amount or number of Awards (on both an individual basis and, if the Committee so
designates, on an aggregate basis) that the Administrator may grant under such authority.
Such authority shall also designate the terms and conditions for these grants.




     5. Grant of Options.




     (a) The Committee may grant Options to Eligible Persons from time to time, alone, in
addition to, or in tandem with, other Awards granted under the Plan. An Option granted
hereunder shall be either an Incentive Stock Option or a Non-Qualified Stock Option, and
shall clearly state whether it is (in whole or in part) an Incentive Stock Option or a Non-Qualified Stock Option;
provided, further, that failure of an Option designated as an Incentive Stock Option to
qualify as an Incentive Stock Option will not affect its validity, and the portion which does
not qualify as an Incentive Stock Option shall be a Non-Qualified Stock Option.




     (b) If both Incentive Stock Options and Non-Qualified Stock Options are granted to a
Holder, the right to exercise, to the full extent thereof, Options of either type shall not
be contingent in whole or in part upon the exercise of, or failure to exercise, Options of
the other type.




     (c) The aggregate Fair Market Value (determined as of the Date of Grant) of the Reserved
Shares with respect to which any Incentive Stock Option is exercisable for the first time by
a Holder during any calendar year under the Plan and all such plans of the Company (as
defined in Section 424 of the Code) shall not exceed $100,000; provided, further, without
limitation, that any portion of an Option designated as an Incentive Stock Option which
exceeds such $100,000 limit will, notwithstanding such designation, be a validly granted
Non-Qualified Stock Option.




     (d) The Committee may at any time offer to buy out for a payment in cash, an Option
previously granted, based on such terms and conditions as the Committee shall establish and
as communicated to the Holder by the Administrator at the time that such offer is made,
provided that no such offer or payment may be made in a manner that would violate the
prohibition of the New York Stock Exchange (or other national securities exchange upon which
the Company’s securities are listed for trading) against the repricing of “underwater”





8









 






options (options with an exercise price above the then-current price of the Company’s common
stock on the NYSE) without shareholder approval.




     6. Option Price.




     (a) The Option Price shall be any price determined by the Committee which is not less
than one hundred percent (100%) of the Fair Market Value per Share on the Date of Grant;
provided, however, that in the case of an Incentive Stock Option granted to a 10% Person the
Option Price shall not be less than 110% of the Fair Market Value per Share on the Date of
Grant. The Administrator shall determine the Fair Market Value per Share.




     (b) Unless further limited by the Committee in any Option, the Option Price may be paid
in cash, by certified or cashier’s check, by wire transfer, by money order, through a Broker
Assisted Exercise, with Shares (but with Shares only if expressly permitted by the terms of
the Option and only with Shares owned by the Holder for at least 6 months prior to the
exercise date), or by a combination of the above; provided, however, that the Administrator
may accept a personal check in full or partial payment. If the Option Price is permitted to
be, and is, paid in whole or in part with Shares, the value of the Shares surrendered shall
be the Shares’ Fair Market Value on the date delivered to the Administrator.



          7. Exercise of Options. An Option shall be deemed exercised when (i) the Administrator has
received written notice of such exercise in accordance with the terms of the Option, and (ii) full
payment of the aggregate Option Price plus required withholding tax amounts, if any, described in
Section 15, of the Reserved Shares as to which the Option is exercised has been made. Separate
stock certificates shall be issued by the Parent for any Reserved Shares acquired as a result of
exercising an Incentive Stock Option and a Non-Qualified Stock Option.




          8. Vesting of Options.




          (a) Without limitation, each Option shall Vest in whole or in part, and shall expire,
according to the terms of the Option. Unless otherwise expressly provided in an Option, each
Option which is not an Annual Option as described in Section 8(b) below, shall Vest, and
Reserved Shares subject to such Option shall become Vested Option Shares, on the dates set
forth in the following Vesting Schedule:





               (1) 25% of the Reserved Shares on the first anniversary of the Date of Grant;




               (2) 25% of the Reserved Shares on the second anniversary of the Date of Grant;




               (3) 25% of the Reserved Shares on the third anniversary of the Date of Grant; and




               (4) 25% of the Reserved Shares on the fourth anniversary of the Date of Grant.





9









 






     (b) Except as otherwise expressly provided in such Option, an Option which is expressly
designated as an “Annual” Option shall not Vest, and shall remain 100% forfeitable, until the
fourth (4th) anniversary of its Date of Grant, and on such fourth (4th)
anniversary of its Date of Grant such Annual Option shall become 100% Vested, and all
Reserved Shares subject to such Annual Option shall become Vested Option Shares.




     (c) The Committee, in its sole discretion, may accelerate the date on which all or any
portion of an otherwise unvested Option shall Vest or restrictions on Restricted Shares will
lapse.




     9. Termination of Option Period.




     (a) Unless the terms of an Option expressly provide for a different date of termination,
the unexercised portion of an Option shall automatically and without notice terminate and
become null and void at the time of the earliest to occur of the following:




               (1) on the 90th day following Holder’s Separation for any reason except death,
Disability or for Cause; or




               (2) immediately upon Separation as a result, in whole or in material part, of a
discharge for Cause; or




               (3) on the first anniversary of a Separation by reason of death or Disability;




               (4) in the case of a 10% Person, on the fifth (5th ) anniversary of the Date
of Grant; or




               (5)
on the tenth
(10th) anniversary of the Date of Grant.




     (b) Notwithstanding any provision of the Plan to the contrary, in the event of the
proposed dissolution or liquidation of the Parent, or in the event of a proposed sale of all
or substantially all of the assets of the Company, or the proposed merger of the Parent with
or into another corporation (collectively, the “Transaction”), unless otherwise expressly
provided (by express reference to this Section 9(b)) in the terms of an Option, after the
public announcement of the Transaction, the
Committee may, in its sole discretion, direct the Administrator to deliver a written
notice (“Cancellation Notice”) to any Holder of an Option, canceling the unexercised Vested
portion (including the portion which becomes Vested by reason of acceleration), if any, of
such Option, effective on the date specified in the Cancellation Notice (“Cancellation
Date”). Notwithstanding the foregoing, the Cancellation Date may not be earlier than the
last to occur of (i) the 15th day following delivery of the Cancellation Notice,
and (ii) the 60th day prior to the proposed date for the consummation of the
Transaction (“Proposed Date”). Without limitation, the Cancellation Notice will provide
that, unless the Holder elects in writing to waive, in whole or in part, a Conditional
Exercise, that the exercise of the Option will be a Conditional Exercise, provided that the
Holder will not be entitled to waive an exercise of an Option being a Conditional Exercise to
the extent such exercise covers a portion of an Option which





10









 






becomes Vested solely by virtue
of the applicable Transaction being proposed. A “Conditional Exercise” shall mean that in
the event the Transaction does not occur within 180 days of the Proposed Date, the exercising
Holder shall be refunded any amounts paid to exercise such Holder’s Option, such Option will
be reissued, and the purported exercise of such Option shall be null and void ab intitio.




     10. Acceleration.




     (a) Unless otherwise expressly provided in the Award, in the event the Holder’s
Separation is by reason of the Holder’s death, or Disability, all Awards granted to the
Holder shall become fully exercisable, Vested, or the Restricted Period shall terminate, as
the case may be (hereafter, in this Section 10, such Award shall be “accelerated”).




     (b) Unless otherwise expressly provided in an Award, in the event of a Change in Control
(i) all Awards shall be accelerated, and (ii) in the sole discretion of the Committee, the
value of some or all Awards may be cashed out on the basis of the Change in Control Price, at
any time during the 60 day period immediately preceding any bona fide transaction related to
a Change in Control; provided, further, that if a date prior to such occurrence is selected
for a cash out, any subsequent increase in the Change in Control Price will be paid to each
Holder on the date of such occurrence, or as soon thereafter as reasonably possible, but not
later than 2 1/2 months from the occurrence of the Change in Control.




     11. Adjustment of Reserved Shares.




     (a) If at any time while the Plan is in effect or Awards with respect to Reserved Shares
are outstanding, there shall be any increase or decrease in the number of issued and
outstanding Shares through the declaration of a stock dividend or through any
recapitalization resulting in a stock split-up, combination or exchange of Shares, then and
in such event:




     (i) appropriate adjustment shall be made in the maximum number of Reserved Shares
which may be granted under Section 3, and equitably in the Reserved Shares which are
then subject to each Award, so that the same proportion of the Parent’s issued and
outstanding Common Stock shall continue to be subject to grant under Section 3, and to
such Award, and




     (ii) in addition, and without limitation, in the case of each Award (including,
without limitation, Options) which requires the payment of consideration by the Holder
in order to acquire Reserved Shares, an appropriate equitable adjustment shall be made
in the consideration (including, without limitation the Option Price) required to be
paid to acquire the each Reserved



Share, so that (i) the aggregate consideration to acquire all of the Reserved
Shares subject to the Award remains the same and, (ii) so far as possible, (and
without disqualifying an Incentive Stock Option) the relative cost of acquiring each
Reserved Share subject to such Award remains the same.





11












 






All such determinations shall be made by the Board in its sole discretion.




     (b) The Committee may change, or may direct the Administrator to change, the terms of
Options outstanding under this Plan, with respect to the Option Price or the number of
Reserved Shares subject to the Options, or both, when, in the Committee’s judgment, such
adjustments become appropriate by reason of a corporate transaction (as defined in Treasury
Regulation § 1.424-1(a)(3)); provided, however, that if by reason of such corporate
transaction an Incentive Stock Option is assumed or a new Incentive Stock Option is
substituted therefor, the Committee, or at the direction of the Committee, the
Administrator, may only change the terms of such Incentive Stock Option such that (i) the
excess of the aggregate Fair Market Value of the Shares subject to the substituted Incentive
Stock Option immediately after the substitution or assumption, over the aggregate Option
Price of such Shares at such time, is not more than the excess of the aggregate Fair Market
Value of all Reserved Shares subject to the Incentive Stock Option immediately before such
substitution or assumption over the aggregate Option Price of such Reserved Shares at such
time, and (ii) the substituted Incentive Stock Option, or the assumption of the original
Incentive Stock Option does not give the Holder additional benefits which such Holder did
not have under the original Incentive Stock Option. Without limiting the generality of any
other provisions hereof, including, without limitation, Section 21, except to the minimum
extent, if any, required by Section 424(a) of the Code with respect to Incentive Stock
Options, no change made under the authority of this Section 11(b) in the terms of an Option
shall alter such Option’s material provisions in a way that makes such Option less valuable
to its Holder.




     (c) Except as otherwise expressly provided herein, the issuance by the Parent of shares
of its capital stock of any class, or securities convertible into shares of capital stock of
any class, either in connection with direct sale for adequate consideration, or upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Parent convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to, Reserved Shares
subject to Awards granted under the Plan.




     (d) Without limiting the generality of the foregoing, the existence of outstanding
Awards with respect to Reserved Shares granted under the Plan shall not affect in any manner
the right or power of the Parent to make, authorize or consummate (1) any or all
adjustments, recapitalizations, reorganizations or other changes in the Parent’s capital
structure or its business; (2) any merger or consolidation of the Parent; (3) any issue by
the Parent of debt securities, or preferred or preference stock which would rank above the
Reserved Shares subject to outstanding Awards; (4) the dissolution or liquidation of the
Parent; (5) any sale, transfer or assignment of all or any part of the assets or business of
the Company; or (6) any other corporate act or proceeding, whether of a similar character or
otherwise.


          12. Transferability of Awards. Each Award shall provide that such Award shall not be
transferable by the Holder otherwise than by will or the laws of descent and distribution, and that
so long as an Holder lives, only such Holder or his or her guardian or legal representative shall
have the right to exercise such Incentive Stock Option.




12









 







          13. Issuance of Reserved Shares. No Holder shall be, or have any of the rights or privileges
of, the owner of Reserved Shares subject to an Award unless and until certificates representing
such Common Stock shall have been issued and delivered to such Holder. As a condition of any
issuance of Common Stock, the Administrator may obtain such agreements or undertakings, if any, as
the Administrator may deem necessary or advisable to assure compliance with any such law or
regulation or shareholder agreement including, but not limited to, a representation, warranty or
agreement to be bound by any legends that are, in the opinion of the Administrator, necessary or
appropriate to comply with the provisions of any securities law deemed by the Administrator to be
applicable to the issuance of the Reserved Shares and which are endorsed upon the Share
certificates.


          Share certificates issued to the Holder receiving such Reserved Shares who is a party to any
shareholders agreement, voting trust, or any similar agreement shall bear the legends contained in
such agreements. Notwithstanding any provision hereof to the contrary, no Reserved Shares shall be
required to be issued with respect to an Award unless counsel for the Parent shall be reasonably
satisfied that such issuance will be in compliance with applicable federal or state securities
laws.


          In no event shall the Company be required to sell or issue Reserved Shares under any Award if
the sale or issuance thereof would constitute a violation of applicable federal or state securities
law or regulation or a violation of any other law or regulation of any governmental authority or
any national securities exchange. As a condition to any sale or issuance of Reserved Shares, the
Company may place legends on Reserved Shares, issue stop transfer orders, and require such
agreements or undertakings as the Company may deem necessary or advisable to assure compliance with
any such law or regulation.


          Without limitation, the Company shall use its best efforts to register the Reserved Shares
with the Securities and Exchange Commission under a Form S-8.




     14. Administration of the Plan.




     (a) The Plan shall be administered by the Committee and, except for the powers reserved
to the Board in Section 21 hereof, the Committee shall have all of the administrative powers
under Plan. Without limitation, all members of the Committee must be independent Directors
under applicable rules of the New York Stock Exchange.




     (b) The Committee, from time to time, may adopt rules and regulations for carrying out
the purposes of the Plan and, without limitation, may delegate all of what, in its sole
discretion, it determines to be primarily administrative or ministerial duties to the
Administrator. The determinations under, and the interpretations of, any provision of the
Plan or an Award by the Committee (or the Administrator in the exercise of his
administrative authority) shall, in all cases, be in its sole discretion, and shall be final
and conclusive.




     (c) Any and all determinations and interpretations of the Committee shall be made
either (i) by a majority vote of the members of the Committee at a meeting duly called,





13









 






with at least 2 days prior notice, or (ii) without a meeting, by the written approval
of all members of the Committee.




     (d) No member of the Committee, or the Administrator, shall be liable for any action
taken or omitted to be taken by such member or by any other member of the Committee or by
the Administrator with respect to the Plan, and to the extent of liabilities not otherwise
insured under a policy purchased by the Company, the Company does hereby indemnify and agree
to defend and save harmless any member of the Committee, and the Administrator, with respect
to any liabilities asserted or incurred in connection with the exercise and performance of
their powers and duties hereunder, unless such liabilities are judicially determined to have
arisen out of such person’s gross negligence, fraud or bad faith. Such indemnification
shall include attorney’s fees and all other costs and expenses reasonably incurred in
defense of any action arising from such act of commission or omission. Nothing herein shall
be deemed to limit the Company’s ability to insure itself with respect to its obligations
hereunder.




     (e) In particular, and without limitation, except for the authority granted to the
Administrator under Section 4(h) to make determinations described in subsections (i), (ii),
and (iii) below while carrying out the general delegation by the Committee with respect to
the grant of Awards to new Employees, the Committee shall have the sole authority,
consistent with the terms of the Plan:




     (i) to determine whether and to what extent Awards are to be granted hereunder
to one or more Eligible Persons;




     (ii) to determine the number of Reserved Shares to be covered by each such
Award granted hereunder;




     (iii) to determine the terms and conditions of any Award granted hereunder, and
to amend or waive any such terms and conditions except to the extent, if any,
expressly prohibited by the Plan;




     (iv) to determine whether and under what circumstances an Option may be settled
in Restricted Shares instead of Reserved Shares;




     (v) to determine whether, to what extent, and under what circumstances Awards
under the Plan are to be made, and operate, on a tandem basis with other Awards under
the Plan; and




     (vi) to determine (or to delegate to the Administrator the authority to
determine) whether to permit payment of tax withholding requirements in Shares.




     (f) Without limitation, Committee (and the Administrator in carrying out his
responsibilities under Section 4(h)) shall have the authority to adopt, alter, and repeal
any or all of its rules, guidelines, and practices with respect to the Plan, and all
questions of interpretation, with respect to the Plan or any Award shall be decided by the
Committee (or





14









 






by the Administrator in carrying out his duties under Section 4(h)), whose decision
shall be final, conclusive and binding upon the Company and each other affected party.




     (g) Without limitation, the Committee in its sole discretion may limit the authority
granted, or previously granted, hereunder by the Committee to the Administrator by notifying
the Administrator in writing of such change.


          15. Tax Withholding. On or immediately prior to the date on which a payment is made to a
Holder hereunder or, if earlier, the date on which an amount is required to be included in the
income of the Holder as a result of an Award, the Holder shall be required to pay to the Company,
in cash, or in Shares (but in Shares only if expressly permitted in the Award, or by written
authorization of the Administrator, and then only in the minimum amount required to satisfy the
minimum withholding requirements with respect to such Award), the amount (if any) 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; provided, further,
without limitation, that the Administrator may require that such payment be made in cash.




     16. Restricted Share Awards.




     (a) The Committee may grant Awards of Restricted Shares to any Eligible Person, for no
cash consideration, for such minimum consideration as may be required by applicable law, or
for such other consideration as may be specified in the grant. The terms and conditions of
Restricted Shares shall be specified in the Award. The Committee, in its sole discretion,
shall determine what rights, if any, the person to whom an Award of Restricted Shares is
made shall have in the Restricted Shares during the Restriction Period and the Restrictions
applicable to the particular Award, including whether the holder of the Restricted Shares
shall have the right to vote the Restricted Shares and the extent, if any, of Holder’s right
to receive Restricted Share Distributions. Unless otherwise provided in the Restricted
Share Award, upon the expiration of Restrictions, the Restricted Shares shall cease to be
Restricted Shares.




     (b) The Restrictions on Restricted Shares shall lapse in whole, or in installments,
over whatever Restricted Period shall be selected by the Committee, provided that the length
of the period over which the Restrictions shall lapse is not less than (i) three (3) years
for Awards of Restricted Shares which are not performance-based or (ii) one (1) year for
Awards of Restricted Shares which are performance-based.




     (c) Without limitations, the Committee may accelerate the date on which Restrictions
lapse, are waived or are accelerated with respect to Restricted Shares which comprise five
percent (5%) or less of the total number of Reserved Shares authorized for issuance under
this Plan under the first sentence of Section 3.




     (d) During the Restricted Period, the certificates representing the Restricted Shares,
and any Restricted Share Distributions, shall be registered in the Holder’s name and bear a
restrictive legend disclosing the Restrictions, the existence of the Plan, and the





15









 






existence of such Restricted Share Award. Such certificates shall be deposited by the Holder
with the Company, together with stock powers or other instruments of assignment, each
endorsed in blank, which will permit the transfer to the Company of all or any portion of
the Restricted Shares, and any assets constituting Restricted Share Distributions, which
shall be forfeited in accordance with the terms of such Restricted Share Award. Restricted
Shares shall constitute issued and outstanding Common Stock for all corporate purposes and
the Holder shall have all rights, powers and privileges of a holder of unrestricted Shares
except those that are expressly excluded under the terms of the Restricted Share Award, and
Holder will not be entitled to delivery of the stock certificates until all Restrictions
shall have terminated, and the Company will retain custody of all related Restricted Share
Distributions (which will be subject to the same Restrictions, terms, and conditions as the
related Restricted Shares) until the conclusion of the Restricted Period with respect to the
related Restricted Shares; and provided, further, that any Restricted Share Distributions
shall not bear interest or be segregated into a separate account but shall remain a general
asset of the Company, subject to the claims of the Company’s creditors, until the conclusion
of the applicable Restricted Period; and provided, finally, that any material breach of any
terms of the Restricted Share Award, as reasonably determined by the Administrator, will
cause a forfeiture of both Restricted Shares and Restricted Share Distributions.


          17. Performance Awards.


     (a) Performance Awards during a Plan Year may be granted to the Chief Executive Officer
and the four (4) highest paid employees as of the last day of such Plan Year (“Covered
Employees”) and shall in all events be specifically designated as Performance Awards, and
may also be granted to other Eligible Persons who are Employees. Performance Awards shall
be conditioned on the satisfaction of such criteria, including those comprising the
Performance Measures, as the Committee, in its sole discretion, may select.


     (b) Without limitation, the Committee’s grant of Performance Awards may, in its sole
discretion, be made in Reserved Shares or in cash, or in a combination of Reserved Shares
and cash, but the cash portion of such Award may not exceed $2,000,000 in a Plan Year.


     (c) The Committee shall select the Performance Measures which will be required to be
satisfied during the Performance Period in order to earn the Performance Award. Such
Performance Measures, and the duration of any Performance Period (provided that such
Performance Period is not less than one (1) year), may differ with respect to each Covered
Employee, or with respect to separate Performance Awards issued to the same Covered
Employee. The selected Performance Measures, the Performance Period(s), and any other
conditions to the Company’s obligation to pay a Performance Award shall be set forth in each
Performance Award on or before the first to occur of (i) the 90th day of the
selected Performance Period, (ii) the first date on which more than 25% of the Performance
Period has elapsed, and (iii) the first date, if any, on which satisfaction of the
Performance Measure(s) is no longer substantially uncertain.





16









 







          (d) Performance Awards shall be paid in a single payment, but will not be paid prior
to the date on which the Performance Measures are attained, except that such payment may be
accelerated upon the death or Disability of the Covered Employee, or as a result of a Change
in Control, it being understood that if such acceleration events occur prior to the
attainment of the Performance Measures, the Performance Award will not be exempt from
Section 162(m) of the Code. Any accelerated payment made upon death or Disability (as
defined in Section 409A of the Code or rules or regulations thereunder) or as a result of a
Change in Control (as defined in Section 409A of the Code or rules or regulations
thereunder) will be paid no later than March 15th of the calendar year following the end of
the taxable year in which the death or such disability of the Covered Employee occurs or in
which such Change in Control occurs.


          (e) The extent to which any applicable performance objective has been achieved shall be
conclusively determined by the Committee, but may be specifically delegated to the
Administrator. Without limitation, where a Covered Employee has satisfied the Performance
Measures with respect to a Performance Award, if permitted under the terms of such
Performance Award, the Committee, in its sole discretion, may reduce the maximum amount
payable under such Performance Award.


          18. Stock Appreciation Rights.


          (a) The Committee shall have authority to grant (i) a SAR with respect to Reserved
Shares, including, without limitation, Reserved Shares covered by any Option (“Related
Option”), or (ii) a SAR with respect to, or as to some or all of, a Performance Award
(“Related Performance Award”). A SAR granted with respect to a related Option or Related
Performance Award must be granted on the Date of Grant of such Related Option or Related
Performance Award.


          (b) For the purposes of this Section 18, the following definitions shall apply:




     (i) The term “SAR” shall mean a right granted under this Plan, including,
without limitation, a right granted in tandem with an Award, that shall entitle the
Holder thereof to an amount equal to the SAR Spread payable as described in Section
18(d).




     (ii) The term “SAR Spread” shall mean with respect to each SAR an amount equal
to the product of (1) the excess of (A) the Fair Market Value per Share on the date
of exercise, over (B) (y) if the SAR is granted in tandem with an Option, the Option
Price per Reserved Share of the Related Option, or (z) if the SAR is either granted
in tandem with a Performance Award or granted by itself with respect to a designated
number of Reserved Shares, the Agreed Price which, without limitation, is the Fair
Market Value of the Reserved Shares on the Date of Grant, in each case multiplied by
(2) the number of Reserved Shares with respect to which such SAR is being exercised;
provided, however, without limitation, that with respect to any SAR granted in
tandem with an Incentive Stock Option, in no event shall the SAR Spread exceed the
amount permitted to be treated as the SAR Spread under applicable





17









 






     Treasury Regulations or other legal authority without disqualifying the Option
as an Incentive Stock Option.




     (c) To exercise the SAR the Holder shall:




     (i) Give written notice thereof to the Company, specifying the SAR being
exercised and the number or Reserved Shares with respect to which such SAR is being
exercised, and




     (ii) If requested by the Company, deliver within a reasonable time the
agreement evidencing the SAR being exercised and, if applicable, the Related Option
agreement, or Related Performance Award agreement, to the Secretary of the Company
who shall endorse or cause to be endorsed thereon a notation of such exercise and
return all agreements to the Holder.




          (d) As soon as practicable, but within 2 1/2 months after the exercise of a SAR, the
Company shall transfer to the Holder Reserved Shares having a Fair Market Value on the date
the SAR is exercised equal to the SAR Spread; provided, however, without limiting the
generality of Section 15, that the Company, in its sole discretion, may withhold from such
transferred Reserved Shares any amount necessary to satisfy the Company’s minimum obligation
for federal and state withholding taxes with respect to such exercise.




          (e) A SAR may be exercised only if and to the extent that it is permitted under the
terms of the Award which, in the case of a Related Option, shall be only when such Related
Option is eligible to be exercised.




          (f) Upon the exercise or termination of a Related Option, or the payment or termination
of a Related Performance Award, the SAR with respect to such Related Option or Related
Performance Award likewise shall terminate.




          (g) A SAR shall be transferable (i) only to the extent, if any, provided in the
agreement evidencing the SAR, or (ii) if granted with respect to a Related Option, or
Related Performance Award, only to the extent, if any, that such Related Option, or Related
Performance Award, is transferable, and under the same conditions.




          (h) Each SAR shall be on such terms and conditions not inconsistent with this Plan as
the Committee may determine, provided that the term of a SAR may not extend beyond the tenth
(10th) anniversary of its Date of Grant.




          (i) The Holder shall have no rights as a stockholder with respect to the related
Reserved Shares as a result of the grant of a SAR.




          (j) With respect to a Holder who, on the date of a proposed exercise of a SAR is an
officer (as that term is used in Rule 16a-1 promulgated under the 1934 Act or any similar
rule which may subsequently be in effect), such proposed exercise may only occur as
permitted by Rule 16b-3, including without limitation paragraph (e)(3)(iii) (or any similar





18









 






rule which may subsequently be in effect promulgated pursuant to Section 16(b) of the
1934 Act).


          19. Section 83(b) Election. If as a result of receiving an Award, a Holder receives
Restricted Shares, then such Holder may elect under Section 83(b) of the Code to include in his or
her gross income, for his or her taxable year in which the Restricted Shares are transferred to
such Holder, the excess of the Fair Market Value (determined without regard to any Restriction
other than one which by its terms will never lapse), of such Restricted Shares at the Date of
Grant, over the amount (if any) paid for the Restricted Shares. If the Holder makes the Section
83(b) election described above, the Holder shall (i) make such election in a manner that is
satisfactory to the Administrator, (ii) provide the Administrator with a copy of such election,
(iii) agree to promptly notify the Company if any Internal Revenue Service or state tax agent, on
audit or otherwise, questions the validity or correctness of such election or of the amount of
income reportable on account of such election, and (iv) agree to pay the withholding amounts
described in Section 15.


          20. Vesting of Awards Upon Retirement. Unless otherwise expressly provided in the Award or in
the Plan, the unVested portion of each Award granted to a Holder in the form of Option Shares, SARs
and owned by that Holder on the date of that Holder’s Separation will vest 100% on the date of that
Holder’s Separation if, and only if, such Separation occurs on or after the date that Holder
attains their Retirement Vesting Date. Without limiting the generality of the foregoing, the
Vesting of the unVested portion of an Award granted to a Holder in the form of Restricted Shares
shall not accelerate as a result of that Holder’s Separation after attaining their Retirement
Vesting Date except to the extent, if any, that such Vesting is expressly provided for in the
Award.


          21. Interpretation.




     (a) If any provision of the Plan is held invalid for any reason, such holding shall not
affect the remaining provisions hereof, but instead the Plan shall be construed and enforced
as if such provision had never been included in the Plan.




     (b) THIS PLAN SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.




     (c) Headings contained in this Agreement are for convenience only and shall in no
manner be construed as part of this Plan.




     (d) Any reference to the masculine, feminine, or neuter gender shall be a reference to
such other gender as is appropriate.




     (e) Nothing contained in this Plan shall prevent the Board from adopting other or
additional compensation arrangements, subject to shareholder approval if such approval is
required; and such arrangements may be either generally applicable or applicable only in
specific cases.



          22. Amendment and Discontinuation of the Plan. The Board, or the Committee (subject to the
prior written authorization of the Board), may from time to time amend




19









 






the Plan or any Award; provided, however, that (except to the extent provided in Section 9(b)) no such amendment may,
without approval by the shareholders of the Parent, (a) increase the number of Reserved Shares or
change the class of Eligible Persons, (b) permit the granting of Awards which expire beyond the
maximum 10-year period described in Section 9(a)(5), or (c) make any change for which applicable
law or regulatory authority (including the regulatory authority of the NYSE or any other market or
exchange on which the Common Stock is traded) would require shareholder approval or for which
shareholder approval would be required for Awards to qualify as performance based awards under
Section 162(m) of the Code; and provided, further, that no amendment or suspension of the Plan or
any Award issued hereunder shall, except as specifically permitted in this Plan or under the terms
of such Award, substantially impair any Award previously granted to any Holder without the consent
of such Holder.



          23. Effective Date and Termination Date. The Plan shall be effective as of its Effective
Date, and shall terminate on the tenth anniversary of such Effective Date; provided, further,
without limitation, that unless otherwise expressly provided in an Award, the termination of the
Plan shall not terminate an Award which is outstanding on such date.


          24. Section 409A. It is the intention of the Company that no Award shall be “deferred
compensation” subject to Section 409A of the Code, unless and to the extent that the Committee
specifically determines otherwise, and the Plan and the terms and conditions of all Awards shall be
interpreted accordingly. The terms and conditions governing any Awards that the Committee
determines will be subject to Section 409A of the Code, including any rules for elective or
mandatory deferral of the delivery of cash or shares of Common Stock pursuant thereto and any rules
regarding treatment of such Awards in the event of a Change in Control, shall be set forth in the
applicable Award Agreement, deferral election forms and procedures, and rules established by the
Committee, and shall comply in all respects with Section 409A of the Code. The following rules
will apply to Awards intended to be subject to Section 409A of the Code (“409A Awards”):




     (a) If an Eligible Person is permitted to elect to defer an Award or any payment under
an Award, such election will be permitted only at times in compliance with Code Section
409A, including applicable transition rules thereunder.




     (b) The Company shall have no authority to accelerate distributions relating to 409A
Awards in excess of the authority permitted under Section 409A.




     (c) Any distribution of a 409A Award following a Separation that would be subject to
Code Section 409A(a)(2)(A)(i) as a distribution following a separation from service of a
“specified employee” as defined under Code Section 409A(a)(2)(B)(i), shall occur no earlier
than the expiration of the six-month period following such Separation.




     (d) In the case of any distribution of a 409A Award, if the timing of such distribution
is not otherwise specified in the Plan or an Award agreement or other governing
document, the distribution shall be made not later than the end of the calendar year
during which the settlement of the 409A Award is specified to occur.






20









 






     (e) In the case of an Award providing for distribution or settlement upon vesting or
the lapse of a risk of forfeiture, if the time of such distribution or settlement is not
otherwise specified in the Plan or an Award agreement or other governing document, the
distribution or settlement shall be made not later than March 15 of the year following the
year in which the Award vested or the risk of forfeiture lapsed.




     (f)
(i) Any adjustments made pursuant to Section 11 of the Plan to Awards that are
considered “deferred compensation” within the meaning of Section 409A of the Code shall be
made in compliance with the requirements of Section 409A of the Code; (ii) any adjustments
made pursuant to Section 11 of the Plan to Awards that are not considered “deferred
compensation” subject to Section 409A of the Code shall be made in such a manner as to
ensure that, after such adjustment, the Awards either continue not to
be subject to Section 409A of the Code or comply with the requirements of Section 409A of the Code; (iii) the
Administrator and the Committee shall not have the authority to make any adjustments
pursuant to Section 11 of the Plan to the extent that the existence of such authority would
cause an Award that is not intended to be subject to Section 409A of the Code to be subject
thereto; and (iv) if any Award is subject to Section 409A
of the Code, Section 10 of the
Plan shall be applicable only to the extent specifically provided in the Award agreement and
permitted pursuant to this Section 24 of the Plan in order to ensure that such Award
complies with Code Section 409A.



	 	 	 	 	 
	 	DENBURY RESOURCES INC.

 	 
	 	 	/s/
Mark C. Allen	 
	 	 	 	Mark C. Allen	 
	 	 	 	Senior Vice President and Chief Financial Officer	 
	 






21