Document:

exv10wa

Exhibit 10(a)

			
	 	 	 
	                                        Maximum Performance Shares
	 	Date of Grant: January 7, 2011

2011 PERFORMANCE STOCK AWARD

2004 OMNIBUS STOCK AND INCENTIVE PLAN

FOR DENBURY RESOURCES INC.

     PERFORMANCE STOCK AWARD (“Award”) made effective January 7, 2011 (“Date of Grant”) between
Denbury Resources Inc. (the “Company”) and                                          (“Holder”).

     WHEREAS, Section 17 of the 2004 Omnibus Stock and Incentive Plan For Denbury Resources Inc.
(“Plan”) authorizes the Committee to grant Performance based Awards;

     WHEREAS, the Committee desires to grant to Holder an Award under which Holder can earn a
maximum of                                         Performance Shares based on the performance based factors set
forth in this Award, and subject to all of the provisions, including without limitation the Vesting
provisions, of the Plan and this Award;

     WHEREAS, no Performance Shares will be issued or outstanding until they are delivered to
Holder or become Retained Earned Shares; and

     WHEREAS, the Company and Holder understand and agree that this Award is in all respects
subject to the terms, definitions and provisions of the Plan, and all of which are incorporated
herein by reference, except to the extent otherwise expressly provided in this Award.

     NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties agree as follows:

1. Performance Share Grant. The Company hereby grants Holder the right to earn, Vest in,
and receive delivery of, on the Delivery Date up to                                          Reserved Shares (“Performance
Shares”) subject to the terms and conditions set forth in the Plan and in this Award.

2. Definitions. All words capitalized herein that are defined in the Plan shall have the
meaning assigned them in the Plan; other capitalized words shall have the following meaning, or
shall be defined elsewhere in this Award:

     (a) “BOE” means Barrels of Oil Equivalent, and for all purposes hereof, will be
calculated using the ratio of one barrel of crude oil, condensate or natural gas liquids to 6 Mcf
of natural gas.

     (b) “Committee Percentage Point Reduction” means the number (if any) of Performance
Percentage Points (not in excess of the Committee Percentage Point Reduction Limitation) by which
the Committee reduces Holder’s Performance Percentage Points in accordance with Section 7 hereof.

     (c) “Committee Percentage Point Reduction Limitation” means the lesser of (i) forty
(40) Performance Percentage Points, and (ii) the product of (x) Holder’s Performance Percentage
Points earned during the Performance Period as determined prior to the application of the Committee
Percentage Point Reduction, multiplied by (y) twenty-five percent (25%).

 

 

     (d) “Delivery Date” means the date on which Vested Earned Shares (other than Retained
Earned Shares and Performance Shares delivered under 8(b)) are delivered to Holder, which shall be
any date selected by the Committee which is not later than 30 days after the Vesting Date or such
later date as may be caused by unusual circumstances beyond the reasonable control of the
Committee.

     (e) “Disability” means, without limitation, the same as it does in the Plan.

     (f) “Earned Performance Shares” means the number of Performance Shares which are
earned during the Performance Period as described and calculated in Section 8.

     (g) “Fiscal Year” means the 12 month period adopted by the Company for financial
reporting purposes.

     (h) “Performance Measure” means, collectively, changes in amounts of oil and gas
reserves, changes in production rates, and operating cost reductions, as determined based upon the
(i) the Tertiary Oil Production Measure, (ii) the Corporate Production Measure, (iii) LOE per BOE
Measure, and (iv) the Reserve Replacement Measure; provided, further, that when reference to a
specific Performance Measure is intended, reference will be made to such specific Performance
Measure.

     (i) “Performance Period” means the period beginning on January 1, 2011, and ending on
December 31, 2011.

     (j) “Performance Percentage” means the excess of (i) Holder’s aggregate Performance
Percentage Points, over (ii) the Committee Percentage Points Reduction, if any, determined as of
the last day of the Performance Period.

     (k) “Performance Percentage Points” means, collectively, the points, designated as
Performance Percentage Points, earned with respect to each Performance Measure during Performance
Period.

     (l) “Performance Shares” means the number of Reserved Shares subject to this Award, as
shown on the first page of this Award.

     (m) “Post Separation Change in Control” means a Change in Control which follows
Holder’s Separation, but results from the Commencement of a Change in Control that occurs prior to
Holder’s Separation. For all purposes of this Award, the term “Commencement of a Change in Control”
shall mean the date on which any material action, including without limitation through a written
offer, open-market bid, corporate action, proxy solicitation or otherwise, is taken by a “person”
(as defined in Section 13(d) or Section 14(d)(2) of the 1934 Act), or a “group” (as defined in
Section 13(d)(3) of the 1934 Act), or their affiliates, to commence efforts that, within 12 months
after the date of such material action, leads to a Change in Control as defined in Section 2(h)(2),
(3) or (4) of the Plan involving such person, group, or their affiliates.

     (n) “Target Performance Shares” means  of the Performance
Shares, which is the number of Performance Shares which will be Earned Performance Shares if
Holder’s Performance Percentage is 100%.

     (o)
“Vesting
Date” means March 31, 2012.

3. Performance Percentage Points Earned With Respect To The Tertiary Oil Production
Measure.

     (a) Tertiary Production Based Performance Percentage Points. The Performance
Percentage Points which will be credited to Holder with respect to the Tertiary Oil Production
Measure are set forth in the following Chart based on the Average Annual Tertiary Production
Percentage. The “Average Annual Tertiary Production Percentage” means the quotient (rounded to 3
decimal places and then expressed as a percentage) of (x) the Adjusted Tertiary Oil Production for
such Fiscal Year, divided by (y) the Tertiary Oil Production Forecast for such Fiscal Year.

	 	 	 	 	 
	 	 	 	 	Performance
	 	 	Average Annual Tertiary	 	Percentage
	 	 	Production Percentage	 	Points
	A.
	 	106.2% or more
	 	70
	B.
	 	103.1% to 106.1%
	 	56
	C.
	 	100% to 103.0%
	 	42
	D.
	 	96.9% to 99.9%
	 	28
	E.
	 	Less than 96.9%
	 	0

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     (b) Adjusted Tertiary Oil Production. For purposes of this Award, the “Adjusted
Tertiary Oil Production” shall be equal to (i) the actual tertiary oil production of the Company
for such Fiscal Year as reported in the Company’s Form 10-K, or if not specifically reported, then
as determined by the Committee from the underlying documents, minus (ii) the tertiary oil
production related to an oil property acquired during such Fiscal Year, such amount to be the
lesser of (a) the actual tertiary oil production for such Fiscal Year from the acquired property or
incremental property interest (if a material partial interest) or (b) the forecasted oil production
related thereto for such Fiscal Year for the property before any improvements made by the Company
following the acquisition of the property, plus (iii) that portion of the Tertiary Oil Production
Forecast, as defined below which is related to any oil property disposed or sold during such Fiscal
Year for the period during which the Company did not own the oil property.

     (c) Tertiary Oil Production Forecast. For purposes of this Award, “Tertiary Oil
Production Forecast” means for 2011, 32,500 barrels of oil per day.

4. Performance Percentage Points Earned With Respect To The Corporate Production Measure.
(

     (a) Corporate Production Based Performance Percentage Points. The Performance
Percentage Points which will be credited to Holder with respect to the Corporate Production Measure
are set forth in the following Chart based on the Average Annual Corporate Production Percentage.
The “Average Annual Corporate Production Percentage” means for such Fiscal Year, the quotient
(rounded to 3 decimal places and then expressed as a percentage) of (x) the Adjusted Corporate
Production of the Company for such Fiscal Year, divided by (y) the Corporate Production Forecast
for such Fiscal Year.

	 	 	 	 	 
	 	 	Average Annual	 	 
	 	 	Corporate Production	 	Performance
	 	 	Percentage	 	Percentage Points
	A.
	 	105.9% or more
	 	40
	B.
	 	103.0% to 105.8%
	 	32
	C.
	 	100% to 102.9%
	 	24
	D.
	 	97.0% to 99.9%
	 	16
	E.
	 	Less than 97.0%
	 	0

     (b) Adjusted Corporate Production. For purposes of this Award, “Adjusted Corporate
Production” means (i) the actual production of oil and natural gas (in BOEs) for the Fiscal Year as
reported in the Company’s Form 10-K (“Corporate Production”), minus (ii) the oil and natural gas
production (in BOEs) related to properties acquired during such Fiscal Year, such amount to be the
lesser of (a) the actual oil and natural gas production (in BOEs) for such Fiscal Year from the
acquired property or incremental property interest (if a partial interest) or (b) the forecasted
oil and natural gas production (in BOEs) related thereto for such Fiscal Year for the property
before any improvements made by the Company following the acquisition of the property, plus (iii)
that portion of the Corporate Production Forecast, as defined below, which is related to any oil or
natural gas property disposed or sold during such Fiscal Year for the period during which the
Company did not own the property.

     (c) Corporate Production Forecast. For purposes of this Award, “Corporate Production
Forecast” means for 2011, 67,400 BOE per day.

5. Performance Percentage Points Earned With Respect To Lease Operating Expense (“LOE”) Per BOE
Measure.

     (a) “Actual-to-Budget” LOE Per BOE Measure Performance Percentage Points. The
Performance Percentage Points which will be credited to Holder with respect to “Actual-to-Budget”
LOE Per BOE Measure are set forth in the following Chart as compared to the various budgeted levels
of LOE per BOE set forth in such Chart.

     (b) “Actual LOE Per BOE” for such Fiscal Year means (x) the actual LOE for the Fiscal Year as
reported in the Company’s Form 10-K for 2011 (less the cost for CO2 as per the Company’s detailed
LOE analysis) minus total LOE (including cost for CO2) related to properties acquired during such
Fiscal Year, plus for properties sold during such Fiscal Year, the originally budgeted LOE for that
portion of such Fiscal Year during which the results of operations of such properties are not
included in the Company’s financial results, divided by (y) the actual oil and natural gas
production (in BOEs) for such Fiscal Year as reported in the Company’s Form 10-K for 2011, minus
the actual oil and natural gas production (in BOEs) for such Fiscal Year from properties or
incremental property interests (if a partial interest) acquired during such Fiscal Year, plus for
properties sold during such Fiscal Year, the originally budgeted production for that portion of
such Fiscal Year during which the results of operations of such properties are not included in the
Company’s financial results.

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     (c) Performance Percentage Points. The Performance Percentage Points which will be
awarded Holder for the Performance Period with respect to the LOE per BOE Measure will be
calculated as of the last day of the Performance Period, and will be based the levels of Actual LOE
per BOE during the Fiscal Year as compared to the levels shown in the following Chart:

	 	 	 	 	 
	 	 	 	 	Performance
	 	 	Actual LOE Per	 	Percentage
	 	 	BOE	 	Points
	A.
	 	Less than $16.88
	 	50
	B.
	 	$16.88 to $17.37
	 	40
	C.
	 	$17.38 to $17.89
	 	30
	D.
	 	$17.90 to $18.43
	 	20
	E.
	 	Greater than $18.43
	 	0

6. Performance Percentage Points Earned With Respect To The Reserve Replacement Measure.

     The Performance Percentage Points Holder will earn with respect to the Reserve Replacement
Measure will be based on the Company’s Reserve Replacement Percentage for the entire Performance
Period. “Reserve Replacement Percentage” means the quotient (rounded up to 3 decimal places and
then expressed as a percentage) of (i) the Final Reserves less the Initial Reserves, divided by
(ii) Total Production for the Company.

     (a) Performance Percentage Points. The Performance Percentage Points which will be
awarded Holder for the Performance Period with respect to the Reserve Replacement Measure are set
forth in the following Chart:

	 	 	 	 	 
	 	 	 	 	Performance
	 	 	Reserve Replacement	 	Percentage
	 	 	Percentage	 	Points
	A.
	 	300% or more
	 	40
	B.
	 	200% to 299%
	 	32
	C.
	 	150% to 199%
	 	24
	D.
	 	100% to 149%
	 	16
	E.
	 	Less than 100%
	 	0

     (b) Initial Reserves. For purpose of this Award, “Initial Reserves” means the total
Company proved reserve quantities as of December 31, 2010 expressed in BOEs as estimated by
DeGolyer and MacNaughton, independent petroleum engineers and disclosed in the Company’s Form 10-K
Report for 2010.

     (c) Final Reserves. For purposes of this Award, “Final Reserves” means the sum of (i)
the total Company proved reserve quantities on the last day of the Performance Period expressed in
BOEs as estimated by DeGolyer and MacNaughton or the Company’s then current independent petroleum
engineer, determined using the same price deck as was used by the Company in calculating the
Initial Reserves, plus (ii) the Uneconomic Reserves, plus (iii) the Disposed Reserves, plus (iv)
Total Production. The “Uneconomic Reserves” are those proved undeveloped reserves expressed in BOEs
which were included in the Initial Reserves, but are not considered proved undeveloped reserves on
the last day of the Performance Period solely because the price deck used to price oil and natural
gas products and/or the prices used to estimate the capital costs required to develop the proved
undeveloped reserves as of the last day of the Performance Period have changed from those used in
the Initial Reserve report such that the extraction of such otherwise proved reserves is uneconomic
(i.e. Uneconomic Reserves cannot be reserves excluded from the Final Reserves because drilling
activity during the period changed the status or evaluation of the undeveloped reserves, or because
the Company no longer holds the acreage or interest, or because factors other than commodity prices
or changes in the estimated capital costs have made the project uneconomic). The “Disposed
Reserves” are those proved reserves quantities expressed in BOEs which were sold during the
Performance Period as reported as such in the Company’s Form 10-K SFAS 69 disclosures.

7. Committee’s Reduction of Performance Percentage Points.

     Notwithstanding any provision hereof to the contrary, the Committee, in its sole discretion,
by written notice to Holder prior to the Vesting Date, may reduce Holder’s otherwise earned
Performance Percentage Points by applying a Committee Percentage Point Reduction.

     (a) Performance Percentage Points Reduction. The Committee will make its determination
of the Committee Percentage Point Reduction amount (if any) based on the Committee’s subjective
evaluation of Company performance with respect to each of the four Additional Committee Evaluation
Factors listed in (b) below, which evaluation will determine the amount of the Performance
Percentage Points reduction for each such Additional Committee Evaluation Factor based on the Chart
below, and the sum of those reductions, but not in excess of the Committee Percentage Point
Reduction Limitation, will be Committee Percentage Point Reduction for the Performance Period:

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	 	 	Committee’s Determination of	 	Reduction in
	 	 	the Level of Performance With	 	Performance
	 	 	Respect to each Committee	 	Percentage
	 	 	Evaluation Factor	 	Points
	A.
	 	Above Average
	 	0
	B.
	 	Average
	 	5
	C.
	 	Below Average
	 	10

     (b) For purposes of this Award, the “Additional Committee Evaluation Factors” (each of which
may cause a reduction of up to 10 Performance Percentage Points) are:

     (i) the Company’s compliance with such corporate governance factors as the ability to obtain
an unqualified auditors’ opinion on the Company’s financial statements contained in its Form 10-K
for 2011, and avoid any financial restatements,

     (ii) the Company’s maintenance of a reasonable debt-to-capital and/or debt-to-cash flow
ratio,

     (iii) the Company’s record as to health, safety and environmental compliance and results,
and

     (iv) the increase in the net asset value per share of Company stock, determined after
excluding the effects, to the extent reasonably practical, caused by fluctuations in commodity
prices and capital and operating costs or other factors which are generally not controllable by
the Company.

8. Earning Performance Shares.

     (a) Earned Performance Shares. The number of Earned Performance Shares shall be equal
to the product of (i) the Target Performance Shares, multiplied by (ii) the Performance Percentage.
The Committee will determine, and the Administrator will advise Holder, of Holder’s Performance
Percentage as soon as reasonably possible after the last day of the Performance Period.

     (b) Change in Control. Notwithstanding the foregoing and any other provision hereof to
the contrary, if a Change in Control occurs during the Performance Period then, regardless of the
Performance Percentage at the date of the Change in Control, Holder will be entitled to receive
delivery of all of the Target Performance Shares (notwithstanding any provision hereof to the
contrary, none of which Target Performance Shares will be retained by the Company other than as
payment for withholding) as soon as reasonably possible following such Change in Control, but in no
event later than the 15th day of the third month after the end of the calendar year in which such
Change in Control occurs, and Holder permanently shall forfeit the right to receive any other
Performance Shares.

9. Vesting (and Forfeiture) of Earned Performance Shares.

     (a) No Separation Prior to the Vesting Date. If Holder does not Separate prior to the
Vesting Date, Holder will be 100% Vested in the Earned Shares.

     (b) Forfeiture. Except to the extent expressly provided in (i), (ii), (iii), or (iv)
below, Holder permanently will forfeit all rights with respect to all Performance Shares upon the
date of his Separation, if such Separation occurs prior to the Vesting Date.

     (i) Death. If Holder Separates by reason of death prior to the Vesting Date,
Holder’s Beneficiary will be entitled to receive Performance Shares in an amount equal to the
number of Target Performance Shares (and does not have any right to receive any other Performance
Shares) as soon as reasonably possible, but in no event more than 90 days after Holder’s death.

     (ii) Disability. If Holder Separates by reason of a Disability prior to the Vesting
Date, Holder will be entitled to receive Performance Shares in an amount equal to the number of
Target Performance Shares (and does not have any right to receive any additional Performance
Shares) as soon as reasonably possible, but in no event later than the 15th day of the third
month after the end of the calendar year following the Date on which the Committee determines
that Holder is Disabled.

     (iii) Post Separation Change in Control. If there is a Post Separation Change in
Control, Holder will be entitled to receive Performance Shares in an amount equal to the number
of Target Performance Shares (and does not have any right to receive any additional Performance
Shares) as soon as reasonably possible after the date of the Change in Control, but in no event
later than the 15th day of the third month after the end of the calendar year in which such
Change in Control occurs.

5

 

     (iv) Retirement. If Holder Separates after reaching Holder’s Retirement Vesting Date
and prior to the Vesting Date, Holder will be entitled to receive only that percentage (if any)
of the Performance Shares as shall be determined by the Committee in writing (and does not have
any right to receive any additional Performance Shares). In making its determination, the
Committee will take into account the percentage of the Performance Period completed by the date
of Holder’s Separation, and its best estimate of the Performance Percentage Points Holder has
earned by the date of Holder’s Separation and is expected to earn during the portion of the
Performance Period occurring after the date of Holder’s Separation. The Committee will make its
determination, and Holder will receive the Performance Shares (if any) as determined by the
Committee, within a reasonable time, but in no event later than the 15th day of the third month
after the end of the calendar year following Holder’s Separation.

10. Withholding. On the Vesting Date, the minimum federal income tax withholding required
to be made by the Company shall be paid by Holder (or Holder’s Beneficiary) to the Administrator in
cash, by delivery of Shares, or by authorizing the Company to retain Earned Shares, or a
combination thereof; provided, further, that where Shares or Earned Shares are delivered or
retained, the satisfaction of Holder’s obligation hereunder will be based on the Fair Market Value
on the Vesting Date of such delivered or retained Shares.

11. Issuance of Shares. Without limitation, Holder shall not have any of the rights and
privileges of an owner of any of the Performance Shares (including voting rights) until the Vesting
Date. The Administrator shall deliver the Vested Shares (reduced by the number of Vested Shares
delivered to the Administrator to pay required withholding under section 10 above) to the Holder as
soon as reasonably possible following vesting. The Holder agrees to hold and retain the required
number of Vested Shares as specified in the Company’s stock ownership guidelines, as potentially
modified from time to time.

12. Administration. Without limiting the generality of the Committee’s rights, duties and
obligations under the Plan, the Committee shall have the following specific rights, duties and
obligations with respect to this Award. Without limitation, the Committee shall interpret
conclusively the provisions of the Award, adopt such rules and regulations for carrying out the
Award as it may deem advisable, decide conclusively all questions of fact arising in the
application of the Award, certify the extent to which Performance Measures have been satisfied and
the number of Performance Percentage Points earned, exercise its right to reduce Performance
Percentage Points, and make all other determinations and take all other actions necessary or
desirable for the administration of the Award. The Committee is authorized to change any of the
terms or conditions of the Award in order to take into account any material unanticipated change in
the Company’s operations, corporate structure, assets, or similar change, but only to the extent
such action carries out the original purpose, intent and objectives of the Award. All decisions and
acts of the Committee shall be final and binding upon Holder and all other affected parties.

13. Beneficiary. Holder’s rights hereunder shall be exercisable during Holder’s lifetime
only by Holder or Holder’s legal representative. Holder may file with the Administrator a written
designation of beneficiary (such person(s) being his “Beneficiary”), on such form as may be
prescribed by the Administrator. Holder may, from time to time, amend or revoke a designation of
Beneficiary. If no designated Beneficiary survives Holder, the Holder’s estate shall be deemed to
be Holder’s Beneficiary.

14. Holder’s Access to Information. As soon as reasonably possible after the close of the
preceding Fiscal Year, the Committee (and the Administrator to the extent it shall have been
directed by the Committee) shall make all relevant annually determined calculations and
determinations hereunder, and shall communicate such information to the Administrator. The
Administrator will furnish all such relevant information to Holder as soon as reasonably possible
following the date on which all, or a substantial majority, of the information is available.

15. No Transfers Permitted. The rights under this Award are not transferable by the Holder
otherwise than by will or the laws of descent and distribution, and so long as Holder lives, only
Holder or his or her guardian or legal representative shall have the right to receive and retain
Vested Earned Shares.

16. No Right To Continued Employment. Neither the Plan nor this Award shall confer upon
Holder any right to continue to serve in the employ of the Company nor interfere in any way with
Holder’s right to resign.

17. Governing Law. Without limitation, this Award shall be construed and enforced in
accordance with and governed by the laws of Delaware.

18. Binding Effect. This Award shall inure to the benefit of and be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.

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19. Waivers. Any waiver of any right granted pursuant to this Award shall not be valid
unless it is in writing and signed by the party waiving the right. Any such waiver shall not be
deemed to be a waiver of any other rights.

20. Severability. If any provision of this Award is declared or found to be illegal,
unenforceable or void, in whole or in part, the remainder of this Award will not be affected by
such declaration or finding and each such provision not so affected will be enforced to the fullest
extent permitted by law.

IN WITNESS WHEREOF, the Company has caused this Award to be executed on its behalf by its duly
authorized representative and Holder has hereunto set his or her hand, all on the day and year
first above written.

Dated as of this 7th day of January, 2011.

	 	 	 	 	 	 	 	 	 

	 

	 	DENBURY RESOURCES INC.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 

Phil Rykhoek
	 	 	 	 

Mark C. Allen
	 	 
	 

	 	CEO
	 	 	 	Senior VP, CFO & Asst. Secretary	 	 

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ACKNOWLEDGMENT

     The undersigned hereby acknowledges (i) my receipt of this Award, (ii) my opportunity to
review the Plan, (iii) my opportunity to discuss this Award with a representative of the Company,
and my personal advisors, to the extent I deem necessary or appropriate, (iv) my understanding of
the terms and provisions of the Award and the Plan, and (v) my understanding that, by my signature
below, I am agreeing to be bound by all of the terms and provisions of this Award and the Plan.

     Without limitation, I agree to accept as binding, conclusive and final all decisions, factual
determinations, and/or interpretations (including, without limitation, all interpretations of the
meaning of provisions of the Plan, or Award, or both) of the Committee upon any questions arising
under the Plan, or this Award, or both.

Dated as of this                                          day of                                         , 2011.

	 	 	 	 	 

	 

	 	

 

Officer Name
	 	 

8exv10wb

Exhibit 10(b)

	 	 	 

	$ _________ Maximum Performance Cash

	 	Date of Grant: January 7, 2011

2011 PERFORMANCE CASH AWARD

2004 OMNIBUS STOCK AND INCENTIVE PLAN

FOR DENBURY RESOURCES INC.

     PERFORMANCE CASH AWARD (“Award”) made effective January 7, 2011 (“Date of Grant”) between
Denbury Resources Inc. (the “Company”) and «Officer_Name» (“Holder”).

     WHEREAS, Section 17 of the 2004 Omnibus Stock and Incentive Plan For Denbury Resources Inc.
(“Plan”) authorizes the Committee to grant Performance based Awards;

     WHEREAS, the Committee desires to grant to Holder an Award under which Holder can earn a
maximum of $__________ based on the performance based factors set forth in this Award, and subject
to all of the provisions, including without limitation the Vesting provisions, of the Plan and this
Award; and

     WHEREAS, the Company and Holder understand and agree that this Award is in all respects
subject to the terms, definitions and provisions of the Plan, all of which are incorporated herein
by reference, except to the extent otherwise expressly provided in this Award.

     NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties agree as follows:

1. Performance Share Grant. The Company hereby grants Holder the right to earn,
Vest in and be paid on the Payment Date, up to $________ (“Performance Cash”) subject to the terms
and conditions set forth in the Plan and in this Award.

2. Definitions. All words capitalized herein that are defined in the Plan shall
have the meaning assigned them in the Plan; other capitalized words shall have the following
meaning, or shall be defined elsewhere in this Award:

     (a) “BOE” means Barrels of Oil Equivalent, and for all purposes hereof, will
be calculated using the ratio of one barrel of crude oil, condensate or natural gas liquids to 6
Mcf of natural gas.

     (b) “Committee Percentage Point Reduction” means the number (if any) of
Performance Percentage Points (not in excess of the Committee Percentage Point Reduction
Limitation) by which the Committee reduces Holder’s Performance Percentage Points in accordance
with Section 7 hereof.

     (c) “Committee Percentage Point Reduction Limitation” means the lesser of
(i) forty (40) Performance Percentage Points, and (ii) the product of (x) Holder’s Performance
Percentage Points earned during the Performance Period as determined prior to the application of
the Committee Percentage Point Reduction, multiplied by (y) twenty-five percent (25%).

     (d) “Disability” means, without limitation, the same as it does in the
Plan.

     (e) “Earned Performance Cash” means the amount of Performance Cash earned
during the Performance Period as described and calculated in Section 8.

     (f) “Fiscal Year” means the 12 month period adopted by the Company for
financial reporting purposes.

A-1

 

     (g) “Payment Date” means the date on which Performance Cash Vested and
earned under this Award is paid to Holder, which shall be any date selected by the Committee which
is not later than 30 days after the Vesting Date or such later date as may be caused by unusual
circumstances beyond the reasonable control of the Committee.

     (h) “Performance Measure” means, collectively, changes in amounts of oil and
gas reserves, changes in production rates, and operating cost reductions, as determined based upon
the (i) the Tertiary Oil Production Measure, (ii) the Corporate Production Measure, (iii) LOE per
BOE Measure, and (iv) the Reserve Replacement Measure; provided, further, that when reference to a
specific Performance Measure is intended, reference will be made to such specific Performance
Measure.

     (i) “Performance Period” means the period beginning on January 1, 2011, and
ending on December 31, 2011.

     (j) “Performance Percentage” means the excess of (i) Holder’s aggregate
Performance Percentage Points, over (ii) the Committee Percentage Points Reduction, if any,
determined as of the last day of the Performance Period.

     (k) “Performance Percentage Points” means, collectively, the points,
designated as Performance Percentage Points, earned with respect to each Performance Measure during
Performance Period.

     (l) “Performance Cash” means the amount of cash subject to this Award, as
shown on the first page of this Award.

     (m) “Post Separation Change in Control” means a Change in Control which
follows Holder’s Separation, but results from the Commencement of a Change in Control that occurs
prior to Holder’s Separation. For all purposes of this Award, the term “Commencement of a Change
in Control” shall mean the date on which any material action, including without limitation through
a written offer, open-market bid, corporate action, proxy solicitation or otherwise, is taken by a
“person” (as defined in Section 13(d) or Section 14(d)(2) of the 1934 Act), or a “group” (as
defined in Section 13(d)(3) of the 1934 Act), or their affiliates, to commence efforts that, within
12 months after the date of such material action, leads to a Change in Control as defined in
Section 2(h)(2), (3) or (4) of the Plan involving such person, group, or their affiliates.

     (n) “Target Performance Cash” means $_______ of Performance Cash, which is
the amount of Performance Cash which will be Earned if Holder’s Performance Percentage is 100%.

     (o) “Vesting Date” means March 31, 2012.

3. Performance Percentage Points Earned With Respect To The Tertiary Oil Production
Measure.

     (a) Tertiary Production Based Performance Percentage Points. The Performance
Percentage Points which will be credited to Holder with respect to the Tertiary Oil Production
Measure are set forth in the following Chart based on the Average Annual Tertiary Production
Percentage. The “Average Annual Tertiary Production Percentage” means the quotient (rounded to 3
decimal places and then expressed as a percentage) of (x) the Adjusted Tertiary Oil Production for
such Fiscal Year, divided by (y) the Tertiary Oil Production Forecast for such Fiscal Year.

A-2

 

	 	 	 	 	 	 	 
	 	 	 	 	Performance	 
	 	 	Average Annual Tertiary	 	Percentage	 
	 	 	Production Percentage	 	Points	 
	A.
	 	106.2% or more	 	 	70	 
	B.
	 	103.1% to 106.1%	 	 	56	 
	C.
	 	100% to 103.0%	 	 	42	 
	D.
	 	96.9% to 99.9%	 	 	28	 
	E.
	 	Less than 96.9%	 	 	0	 

     (b) Adjusted Tertiary Oil Production. For purposes of this Award, the
“Adjusted Tertiary Oil Production” shall be equal to (i) the actual tertiary oil production of the
Company for such Fiscal Year as reported in the Company’s Form 10-K, or if not specifically
reported, then as determined by the Committee from the underlying documents, minus (ii) the
tertiary oil production related to an oil property acquired during such Fiscal Year, such amount to
be the lesser of (a) the actual tertiary oil production for such Fiscal Year from the acquired
property or incremental property interest (if a material partial interest) or (b) the forecasted
oil production related thereto for such Fiscal Year for the property before any improvements made
by the Company following the acquisition of the property, plus (iii) that portion of the Tertiary
Oil Production Forecast, as defined below which is related to any oil property disposed or sold
during such Fiscal Year for the period during which the Company did not own the oil property.

4. Tertiary Oil Production Forecast. For purposes of this Award, for 2011
“Tertiary Oil Production Forecast” means 32,500 barrels of oil per day.

5. Performance Percentage Points Earned With Respect To The Corporate Production
Measure.

     (a) Corporate Production Based Performance Percentage Points. The
Performance Percentage Points which will be credited to Holder with respect to the Corporate
Production Measure are set forth in the following Chart based on the Average Annual Corporate
Production Percentage. The “Average Annual Corporate Production Percentage” means for such Fiscal
Year, the quotient (rounded to 3 decimal places and then expressed as a percentage) of (x) the
Adjusted Corporate Production of the Company for such Fiscal Year, divided by (y) the Corporate
Production Forecast for such Fiscal Year.

A-3

 

	 	 	 	 	 	 	 
	 	 	Average Annual Corporate	 	Performance	 
	 	 	Production Percentage	 	Percentage Points	 
	A.
	 	105.9% or more	 	 	40	 
	B.
	 	103.0% to 105.8%	 	 	32	 
	C.
	 	100% to 102.9%	 	 	24	 
	D.
	 	97.0% to 99.9%	 	 	16	 
	E.
	 	Less than 97.0%	 	 	0	 

     (b) Adjusted Corporate Production. For purposes of this Award, “Adjusted
Corporate Production” means (i) the actual production of oil and natural gas (in BOEs) for the
Fiscal Year as reported in the Company’s Form 10-K (“Corporate Production”), minus (ii) the oil and
natural gas production (in BOEs) related to properties acquired during such Fiscal Year, such
amount to be the lesser of (a) the actual oil and natural gas production (in BOEs) for such Fiscal
Year from the acquired property or incremental property interest (if a partial interest) or (b) the
forecasted oil and natural gas production (in BOEs) related thereto for such Fiscal Year for the
property before any improvements made by the Company following the acquisition of the property,
plus (iii) that portion of the Corporate Production Forecast, as defined below, which is related to
any oil or natural gas property disposed or sold during such Fiscal Year for the period during
which the Company did not own the property.

     (c) Corporate Production Forecast. For purposes of this Award, for 2011
“Corporate Production Forecast” means 67,400 BOE per day.

6. Performance Percentage Points Earned With Respect To Lease Operating Expense
(“LOE”) Per BOE Measure.

     (a) “Actual-to-Budget” LOE Per BOE Measure Performance Percentage Points.
The Performance Percentage Points which will be credited to Holder with respect to
“Actual-to-Budget” LOE Per BOE Measure are set forth in the following Chart as compared to the
various budgeted levels of LOE per BOE set forth in such Chart.

     (b) “Actual LOE Per BOE” for such Fiscal Year means (x) the actual LOE for the
Fiscal Year as reported in the Company’s Form 10-K for 2011 (less the cost for CO2 as per the
Company’s detailed LOE analysis) minus total LOE (including cost for CO2) related to properties
acquired during such Fiscal Year, plus for properties sold during such Fiscal Year, the originally
budgeted LOE for that portion of such Fiscal Year during which the results of operations of such
properties are not included in the Company’s financial results, divided by (y) the actual oil and
natural gas production (in BOEs) for such Fiscal Year as reported in the Company’s Form 10-K for
2011, minus the actual oil and natural gas production (in BOEs) for such Fiscal Year from
properties or incremental property interests (if a partial interest) acquired during such Fiscal
Year, plus for properties sold during such Fiscal Year, the originally budgeted production for that
portion of such Fiscal Year during which the results of operations of such properties are not
included in the Company’s financial results.

     (c) Performance Percentage Points. The Performance Percentage Points which
will be awarded Holder for the Performance Period with respect to the LOE per BOE Measure will be
calculated as of the last day of the Performance Period, and will be based the levels of Actual LOE
per BOE during the Fiscal Year as compared to the levels shown in the following Chart:

A-4

 

	 	 	 	 	 	 	 
	 	 	 	 	Performance	 
	 	 	 	 	Percentage	 
	 	 	Actual LOE Per BOE	 	Points	 
	A.
	 	Less than $16.88	 	 	50	 
	B.
	 	$16.88 to $17.37	 	 	40	 
	C.
	 	$17.38 to $17.89	 	 	30	 
	D.
	 	$17.90 to $18.43	 	 	20	 
	E.
	 	Greater than $18.43	 	 	0	 

7. Performance Percentage Points Earned With Respect To The Reserve Replacement
Measure.

     The Performance Percentage Points Holder will earn with respect to the Reserve Replacement
Measure will be based on the Company’s Reserve Replacement Percentage for the entire Performance
Period. “Reserve Replacement Percentage” means the quotient (rounded up to 3 decimal places and
then expressed as a percentage) of (i) the Final Reserves less the Initial Reserves, divided by
(ii) Total Production for the Company.

     (a) Performance Percentage Points. The Performance Percentage Points which
will be awarded Holder for the Performance Period with respect to the Reserve Replacement Measure
are set forth in the following Chart:

A-5

 

	 	 	 	 	 	 	 
	 	 	 	 	Performance	 
	 	 	 	 	Percentage	 
	 	 	Reserve Replacement Percentage	 	Points	 
	A.
	 	300% or more	 	 	40	 
	B.
	 	200% to 299%	 	 	32	 
	C.
	 	150% to 199%	 	 	24	 
	D.
	 	100% to 149%	 	 	16	 
	E.
	 	Less than 100%	 	 	0	 

     (b) Initial Reserves. For purpose of this Award, “Initial Reserves” means
the total Company proved reserve quantities as of December 31, 2010 expressed in BOEs as estimated
by DeGolyer and MacNaughton, independent petroleum engineers and disclosed in the Company’s Form
10-K Report for 2010.

     (c) Final Reserves. For purposes of this Award, “Final Reserves” means the
sum of (i) the total Company proved reserve quantities on the last day of the Performance Period
expressed in BOEs as estimated by DeGolyer and MacNaughton or the Company’s then current
independent petroleum engineer, determined using the same price deck as was used by the Company in
calculating the Initial Reserves, plus (ii) the Uneconomic Reserves, plus (iii) the Disposed
Reserves, plus (iv) Total Production. The “Uneconomic Reserves” are those proved undeveloped
reserves expressed in BOEs which were included in the Initial Reserves, but are not considered
proved undeveloped reserves on the last day of the Performance Period solely because the price deck
used to price oil and natural gas products and/or the prices used to estimate the capital costs
required to develop the proved undeveloped reserves as of the last day of the Performance Period
have changed from those used in the Initial Reserve report such that the extraction of such
otherwise proved reserves is uneconomic (i.e. Uneconomic Reserves cannot be reserves excluded from
the Final Reserves because drilling activity during the period changed the status or evaluation of
the undeveloped reserves, or because the Company no longer holds the acreage or interest, or
because factors other than commodity prices or changes in the estimated capital costs have made the
project uneconomic). The “Disposed Reserves” are those proved reserves quantities expressed in
BOEs which were sold during the Performance Period as reported as such in the Company’s Form 10-K
SFAS 69 disclosures.

8. Committee’s Reduction of Performance Percentage Points.

     Notwithstanding any provision hereof to the contrary, the Committee, in its sole discretion,
by written notice to Holder prior to the Vesting Date, may reduce Holder’s otherwise earned
Performance Percentage Points by applying a Committee Percentage Point Reduction.

     (a) Performance Percentage Points Reduction. The Committee will make its
determination of the Committee Percentage Point Reduction amount (if any) based on the Committee’s
subjective evaluation of Company performance with respect to each of the four Additional Committee
Evaluation Factors listed in (b) below, which evaluation will determine the amount of the
Performance Percentage Points reduction for each such Additional Committee Evaluation Factor based
on the Chart below, and the sum of those reductions, but not in excess of the Committee Percentage
Point Reduction Limitation, will be Committee Percentage Point Reduction for the Performance
Period:

A-6

 

	 	 	 	 	 	 	 
	 	 	 	 	Reduction in	 
	 	 	Committee’s Determination of the	 	Performance	 
	 	 	Level of Performance With Respect	 	Percentage	 
	 	 	to each Committee Evaluation Factor	 	Points	 
	A.
	 	Above Average	 	 	0	 
	B.
	 	Average	 	 	5	 
	C.
	 	Below Average	 	 	10	 

     (b) For purposes of this Award, the “Additional Committee Evaluation Factors” (each
of which may cause a reduction of up to 10 Performance Percentage Points) are:

     (i) the Company’s compliance with such corporate governance factors as the
ability to obtain an unqualified auditors’ opinion on the Company’s financial statements
contained in its Form 10-K for 2011, and avoid any financial restatements,

     (ii) the Company’s maintenance of a reasonable debt-to-capital and/or
debt-to-cash flow ratio,

     (iii) the Company’s record as to health, safety and environmental compliance
and results, and

     (iv) the increase in the net asset value per share of Company stock,
determined after excluding the effects, to the extent reasonably practical, caused by
fluctuations in commodity prices and capital and operating costs or other factors which are
generally not controllable by the Company.

9. Earning Performance Cash.

     (a) Earned Performance Cash. The amount of Earned Performance Cash shall be
equal to the product of (i) the Target Performance Cash, multiplied by (ii) the Performance
Percentage. The Committee will determine, and the Administrator will advise Holder, of Holder’s
Performance Percentage as soon as reasonably possible after the last day of the Performance Period.

     (b) Change in Control. Notwithstanding the foregoing and any other
provision hereof to the contrary, if a Change in Control occurs during the Performance Period then,
regardless of the Performance Percentage at the date of the Change in Control, Holder will be
entitled to receive delivery of all of the Target Performance Cash (notwithstanding any provision
hereof to the contrary, none of which Target Performance Cash will be retained by the Company other
than as payment for withholding) as soon as reasonably possible following such Change in Control,
but in no event later than the 15th day of the third month after the end of the calendar year in
which such Change in Control occurs, and Holder permanently shall forfeit the right to receive any
other amounts of Performance Cash.

10. Vesting (and Forfeiture) of Earned Performance Cash.

     (a) No Separation Prior to the Vesting Date. If Holder does not Separate
prior to the Vesting Date, Holder will be 100% Vested in the Earned Cash.

     (b) Forfeiture. Except to the extent expressly provided in (i), (ii), (iii),
or (iv) below, Holder permanently will forfeit all rights with respect to any Performance Cash upon
the date of his Separation, if such Separation occurs prior to the Vesting Date.

A-7

 

     (i) Death. If Holder Separates by reason of death prior to the
Vesting Date, Holder’s Beneficiary will be entitled to receive Performance Cash in an
amount equal to the Target Performance Cash (and does not have any right to receive any
other amounts of Performance Cash) as soon as reasonably possible but in no event more than
90 days after Holder’s death.

     (ii) Disability. If Holder Separates by reason of a Disability
prior to the Vesting Date, Holder will be entitled to receive Performance Cash in an amount
equal to the Target Performance Cash (and does not have any right to receive any additional
amounts of Performance Cash) as soon as reasonably possible but in no event later than the
15th day of the third month after the end of the calendar year following the Date on which
the Committee determines that Holder is Disabled.

     (iii) Post Separation Change in Control. If there is a Post
Separation Change in Control, Holder will be entitled to receive Performance Cash in an
amount equal to the Target Performance Cash (and does not have any right to receive any
additional Performance Cash) as soon as reasonably possible after the date of the Change in
Control but in no event later than the 15th day of the third month after the end of the
calendar year in which such Change in Control occurs.

     (iv) Retirement. If Holder Separates after reaching Holder’s
Retirement Vesting Date and prior to the Vesting Date, Holder will be entitled to receive
only that percentage (if any) of the Performance Cash as shall be determined by the
Committee in writing (and does not have any right to receive any additional amounts of
Performance Cash). In making its determination, the Committee will take into account the
percentage of the Performance Period completed by the date of Holder’s Separation, and its
best estimate of the Performance Percentage Points Holder has earned by the date of
Holder’s Separation and is expected to earn during the portion of the Performance Period
occurring after the date of Holder’s Separation. The Committee will make its
determination, and Holder will receive the Performance Cash (if any) as determined by the
Committee, within a reasonable time but in no event later than the 15th day of the third
month after the end of the calendar year following Holder’s Separation.

11. Withholding. On the Vesting Date, the minimum federal income tax withholding
required to be made by the Company shall be paid by Holder (or Holder’s Beneficiary) to the
Administrator in cash, or by authorizing the Company to retain an amount of Performance Cash.

12. Administration. Without limiting the generality of the Committee’s rights,
duties and obligations under the Plan, the Committee shall have the following specific rights,
duties and obligations with respect to this Award. Without limitation, the Committee shall
interpret conclusively the provisions of the Award, adopt such rules and regulations for carrying
out the Award as it may deem advisable, decide conclusively all questions of fact arising in the
application of the Award, certify the extent to which Performance Measures have been satisfied and
the number of Performance Percentage Points earned, exercise its right to reduce Performance
Percentage Points, and make all other determinations and take all other actions necessary or
desirable for the administration of the Award. The Committee is authorized to change any of the
terms or conditions of the Award in order to take into account any material unanticipated change in
the Company’s operations, corporate structure, assets, or similar change, but only to the extent
such action carries out the original purpose, intent and objectives of the Award. All decisions
and acts of the Committee shall be final and binding upon Holder and all other affected parties.

13. Beneficiary. Holder’s rights hereunder shall be exercisable during Holder’s
lifetime only by Holder or Holder’s legal representative. Holder may file with the Administrator a
written designation of beneficiary (such person(s) being his “Beneficiary”), on such form as may be
prescribed by the Administrator. Holder may, from time to time, amend or revoke a designation of
Beneficiary. If no designated Beneficiary survives Holder, the Holder’s estate shall be deemed to
be Holder’s Beneficiary.

14. Holder’s Access to Information. As soon as reasonably possible after the
close of the preceding Fiscal Year, the Committee (and the Administrator to the extent it shall
have been directed by the

A-8

 

Committee) shall make all relevant annually determined calculations and
determinations hereunder, and shall communicate such information to the Administrator. The
Administrator will furnish all such relevant information to Holder as soon as reasonably possible
following the date on which all, or a substantial majority, of the information is available.

15. No Transfers Permitted. The rights under this Award are not transferable by
the Holder otherwise than by will or the laws of descent and distribution, and so long as Holder
lives, only Holder or his or her guardian or legal representative shall have the right to receive
and retain Vested Earned Shares.

16. No Right To Continued Employment. Neither the Plan nor this Award shall
confer upon Holder any right to continue to serve in the employ of the Company nor interfere in any
way with Holder’s right to resign.

17. Governing Law. Without limitation, this Award shall be construed and
enforced in accordance with and governed by the laws of Delaware.

18. Binding Effect. This Award shall inure to the benefit of and be binding upon
the heirs, executors, administrators, successors and assigns of the parties hereto.

19. Waivers. Any waiver of any right granted pursuant to this Award shall not be
valid unless it is in writing and signed by the party waiving the right. Any such waiver shall not
be deemed to be a waiver of any other rights.

20. Severability. If any provision of this Award is declared or found to be
illegal, unenforceable or void, in whole or in part, the remainder of this Award will not be
affected by such declaration or finding and each such provision not so affected will be enforced to
the fullest extent permitted by law.

     IN WITNESS WHEREOF, the Company has caused this Award to be executed on its behalf by its duly
authorized representative and Holder has hereunto set his or her hand, all on the day and year
first above written.

     Dated as of this 7th day of January, 2011.

	 	 	 	 	 	 	 

	 

	 	DENBURY RESOURCES INC.	 	 	 	 
	

By:

	 	 	 	 	 	 
	 

	 	 

Phil Rykhoek
	 	 

Mark C. Allen
	 	 
	 

	 	CEO
	 	Senior VP, CFO & Asst. Secretary	 	 

A-9

 

ACKNOWLEDGMENT

     The undersigned hereby acknowledges (i) my receipt of this Award, (ii) my opportunity to
review the Plan, (iii) my opportunity to discuss this Award with a representative of the Company,
and my personal advisors, to the extent I deem necessary or appropriate, (iv) my understanding of
the terms and provisions of the Award and the Plan, and (v) my understanding that, by my signature
below, I am agreeing to be bound by all of the terms and provisions of this Award and the Plan.

     Without limitation, I agree to accept as binding, conclusive and final all decisions, factual
determinations, and/or interpretations (including, without limitation, all interpretations of the
meaning of
provisions of the Plan, or Award, or both) of the Committee upon any questions arising under the
Plan, or this Award, or both.

     Dated as of this ________ day of ______________, 2011.

	 	 	 	 	 

	 

	 	

 

Officer Name
	 	 

A-10

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