Document:

DNR - 2015.03.31 - EX 10b

Exhibit 10(b)

DENBURY RESOURCES INC.
DIRECTOR DEFERRED COMPENSATION PLAN
As Amended and Restated on:
May 6, 2015

		
	1.
	ESTABLISHMENT OF PLAN

Denbury Resources Inc. (the “Company”) hereby amends and restates the Denbury Resources Inc. Director Compensation Plan (“Prior Plan”), which Prior Plan was originally adopted effective July 1, 2000, subsequently amended effective February 22, 2001, May 11, 2005, June 29, 2011 and December 13, 2012, and hereby further amended and restated as the Denbury Resources Inc. Director Deferred Compensation Plan (“Plan”) effective May 6, 2015.

		
	2.
	SCOPE AND PURPOSE OF PLAN

The purpose of this Plan is to provide a means by which the Company may attract, motivate and retain experienced and knowledgeable Persons to serve as Directors of the Company and to promote identification of such Directors' interests with those of the Company’s shareholders.

		
	3.
	DEFINITIONS

(a)“Account” means, respectively or collectively as the context requires, a Participant's Cash Deferred Account and Deferred Stock Unit Account or such other accounts or subaccounts which the Committee may establish under the Plan.  Each Account shall be maintained solely as a bookkeeping entry of the Company to evidence an unsecured and unfunded obligation of the Company with respect to any Participant.

(b)“Affiliate” means, with respect to the Company, a Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Company as determined by the Committee.

(c)“Board” means the Board of Directors of the Company.

(d)“Cash Deferred Account” means an Account established for each Participant by the Company with respect to the bookkeeping of such Participant’s Deferral Election attributable to Director Fees deferred as cash by the Participant, subject to and adjusted for dividend equivalents credited to such Account as provided under Section 8(c)(3).

(e)“Code” means the Internal Revenue Code of 1986, as amended.

(f)“Committee” means the Compensation Committee of the Board.

(g)“Common Stock” means shares of Common Stock, $.001 par value, of Denbury Resources Inc.

(h)“Deferral Election” means the submission by a Participant of an election to the Company, in such form and manner established by the Committee, indicating that a Participant wants to defer receipt of all or part of such Participant’s Director Fees and/or LTI.

(i)“Deferred Stock Unit” or “DSU” means each unit of phantom stock granted to a Participant under the Plan equal to the Fair Market Value of a single share of Common Stock.

(j)“Deferred Stock Unit Account” means an Account established for each Participant by the Committee with respect to the bookkeeping of such Participant’s Director Fees and/or LTI deferred as Deferred Stock Units by the Participant pursuant to a Deferral Election. 

(k)“Director” means a duly elected or appointed member of the Board.  

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(l)“Director Fees” means all amounts paid or to be paid by the Company to a Participant in consideration of the Participant's service as a member of the Board (excluding reimbursements for expenses of the Director), but including, and not limited to, the annual retainer fee, Board meeting fees, fees for special services performed by a Director, and any fees for serving on a committee of the Company, including serving as chairman of such committee.  Notwithstanding any provision of the Plan to the contrary, “Director Fees” do not include LTI.

(m)Purposely Omitted.

(n) “Distribution Event” means those events described in Section 10(a)(1) through Section 10(a)(6).

(o)“Dividend Equivalent” means the Participant’s right to a dollar amount equal to all or a specified portion of the amount of dividends (whether in stock or cash) paid or distributed, if any, in respect of a specified number of shares of Common Stock.
(p)“DSU Award” means each award of Deferred Stock Units granted to a Participant pursuant to the terms of the Incentive Plan, this Plan and such other terms and conditions set forth by the Committee, and which is credited to a Participant’s Deferred Stock Unit Account.  Notwithstanding any Plan provision to the contrary, a DSU Award may only be granted in whole numbers of Deferred Stock Units.

(q)“Effective Date” means July 1, 2000, with respect to the Prior Plan, and December 13, 2012, with respect to the Plan.

(r)“Fair Market Value” means, with respect to a share of Common Stock as of any Issue Date shall be the Closing Price on such date; provided however, (i) that if the actual transaction involving such shares of Common Stock occurs at a time when the New York Stock Exchange (“NYSE”) is closed, then Fair Market Value shall mean the most recent Closing Price; or (ii) “Closing Price” means the closing price of the shares of Common Stock on the NYSE as reported in any newspaper of general circulation on any such date.

(s)“Incentive Plan” means the 2004 Omnibus Stock and Incentive Plan for Denbury Resources Inc., as amended, or any successors to such plan.

(t)“Issue Date” means the date determined by the Board on which Director Fees are payable by the Company to a Participant.

(u)“LTI” means a Restricted Share Award (or any other form of equity Award) granted to Participants under the Incentive Plan, as determined by the Committee.

(v)“Participant” means each member of the Board who is not an employee, as shown on the payroll records, of the Company or any of its Affiliates.

(w)“Person” means: (i) an individual; (ii) a partnership; (iii) a Company, an incorporated association, an incorporated syndicate or any other incorporated organization; (iv) an unincorporated association, an unincorporated syndicate or any other unincorporated organization; (v) a trust; or (vi) a trustee, an executor, an administrator or any other legal representative.

(x)“Plan” means the Denbury Resources Inc. Director Deferred Compensation Plan, as amended.

(y)“Plan Year” means the period commencing on January 1, 2013 and ending on May 31, 2013 (this period may be referred to as the Short Plan Year), thereafter Plan Year means the 12-month period commencing on June 1st and ending on May 31st next following (or such other twelve [12] month period determined by the Committee). 

(z)“Separation” as used in this Plan, is defined as it is in the Incentive Plan.

(aa)“Service” means the United States Internal Revenue Service, or any successor or agent of such governmental agency.

(bb)    “Specified Payment Date” means a date certain, if any, specified in a Participant’s Deferral Election that is not later than the last day of the calendar year which includes the tenth (10th) anniversary of a Participant’s Deferral Election; provided, 

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however, that such date must become irrevocable immediately prior to the first day of the Plan Year to which such Deferral Election relates.

(cc)    “Stock Election” means the “Stock Election” by a Participant permitted by the Committee under Section 7(c) to currently receive any Director Fees in Common Stock in lieu of cash.

(dd)    “Unforeseeable Emergency” means (i) a severe financial hardship to the Participant resulting from an illness or accident of the Participant or the Participant's spouse, beneficiary or dependent (as defined in Code section 152(a)), (ii) loss of the Participant's property due to casualty, or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, each as determined to exist by the Committee, as determined under Code section 409A.

		
	4.
	SHARES SUBJECT TO PLAN

(a)Authorized Shares. The total number of shares of Common Stock available for issuance under the Plan is 400,000, subject to adjustment as provided in Section 7(f); provided, however, that the total number of shares of Common Stock that may be issued under this Plan may not exceed one percent of the number of shares of Common Stock outstanding before any given issuance under this Plan.  Shares available for issuance under the Plan may be authorized and unissued shares or treasury shares, or any combination thereof as the Company may determine from time to time.

(b)Participant Limitation. Notwithstanding anything in this Plan to the contrary, no Participant may acquire under this Plan Common Stock exceeding one percent (1%) of the Company's then outstanding Common Stock.

		
	5.
	ELIGIBILITY

Each Director elected or appointed shall be eligible to participate in the Plan as a Participant upon election or appointment to the Board as further described in Section 7(a) and Section 7(c).

		
	6.
	ADMINISTRATION

The Plan shall be administered by the Committee.  The Committee shall, subject to the provisions of the Plan, adopt such rules as it may deem appropriate in order to carry out the purpose of the Plan. All questions of interpretation, administration, and application of the Plan shall be determined by a majority of the members of the Committee, except that the Committee may authorize any one or more of its members, or any officer or employee of the Company, to execute and deliver documents on behalf of the Committee. Any determination under or related to the Plan by the Committee, the Company or their respective designees, as applicable, shall be: (i) in the sole and absolute discretion of the Committee, the Company or such designees; and (ii) final and binding in all matters relating to the Plan and shall not be subject to review by the Participant or any Person. The Committee may, from time to time, employ other agents and delegate to them such administration duties as it deems necessary, and may, from time to time, consult with counsel.  No member of the Committee or officer of the Company shall be liable for any act done or omitted to be done by such member or officer or by any other member of the Committee or officer of the Company in connection with the Plan, except for such member’s or officer’s own willful misconduct or as expressly provided by statute. All costs and expenses involved in administration of the Plan shall be borne by the Company.

		
	7.
	DIRECTOR COMPENSATION

(a)Director Fees. Each Participant shall receive from the Company as compensation for the Participant's service as a member of the Board Director Fees in such amounts determined by the Board. The portion of the Director Fees which consist of the annual retainer fee shall be pro-rated by the Company for Participants who are not in office for the entire Plan Year.

(b)Payment of Fees. Unless a Participant makes an election pursuant to Section 7(c), the Participant shall be paid in cash on the respective Issue Dates for all Director Fees earned in a given Plan Year; provided, however, that the Company may pay all Director Fees to a Participant in such form and manner as determined by the Company. 

(c)Election to Receive Common Stock in lieu of Cash.  Prior to the first day of each Plan Year, each Participant may make an election (“Stock Election”) to receive all or a portion (in increments determined by the Committee) of the Director Fees he or she will be paid for such Plan Year in Common Stock in lieu of cash. This Stock Election shall be in writing in such form and manner provided by the Committee and returned to the Committee prior to the beginning of the Plan Year in question. 

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Notwithstanding the foregoing, any Participant who is newly elected or appointed to the Board after the first day of a Plan Year may make a Stock Election with respect to Director Fees not yet earned in such Plan Year, no later than the earlier of: (i) thirty (30) days or (ii) the first Issue Date, on or after the date of such Participant’s election or appointment to the Board, such Director Fees to be prorated based upon months of Board service. If the Participant elects to receive any portion of his or her Director Fees in Common Stock pursuant to a Stock Election, the number of shares of Common Stock calculated in accordance with Section 7(d) shall be issued to the Participant on the Issue Date. 

(d)Calculation of Number of Shares Issued.  If a Participant makes a Stock Election, the number of whole shares of Common Stock to be issued shall be calculated as the quotient of Section 7(d)(1) divided by Section 7(d)(2), where:

(1)equals the amount of the Director Fees payable on any such Issue Date (the numerator); and 

(2)equals the Fair Market Value of one share of Common Stock on such Issue Date (the denominator). 

Notwithstanding any Stock Election to the contrary: 

(3)any fractional shares of Common Stock owed to the Participant on any such Issue Date shall be paid to the Participant by the Company in cash; and

(4)if on any Issue Date the number of shares of Common Stock otherwise issuable to all Participants hereunder shall exceed the number of reserved shares of Common Stock remaining available under the Plan, the available shares of Common Stock shall be allocated proportionally among the Participants, as determined by the Committee, in the ratio that the total number of shares of Common Stock a Participant is entitled to receive on such Issue Date bears to the total number of shares of Common Stock to be received by all Participants on such Issue Date. Any remaining unpaid Fees shall be payable in cash.

(e)Failure to Elect. Should a Participant fail to timely and properly make a Stock Election with respect to a particular Plan Year, the Participant shall be paid in cash as set forth in Section 7(b).

(f)Effect of Certain Changes in Capitalization. In the event of any recapitalization, stock split, reverse stock split, dividend, reorganization, merger, consolidation, spin-off, combination, repurchase or share exchange, or other similar corporate transaction or event affecting the Common Stock, the maximum number of shares available under the Plan, or the number of Deferred Stock Units awarded and held hereunder, the number or class of shares of Common Stock to be delivered hereunder shall be adjusted by the Committee to reflect any such change in the number or class of issued shares of Common Stock or securities into which the Common Stock is convertible or exchangeable. 

		
	8.
	DEFERRAL OF DIRECTOR FEES AND/OR LTI

(a)Opportunity to Defer.  

(1)Director Fees.  A Participant may elect to defer payment of the Director Fees otherwise payable to him or her for services to be rendered as a director of the Company during the next following Plan Year by entering into a Deferral Election deferring the receipt of some or all of his or her Director Fees for that Plan Year (subject to such limits and restrictions as to any dollar amount, percentage or otherwise as may be permitted by the Committee).  The amount of Director Fees subject to such a timely and proper Deferral Election will be credited to such Participant’s Account either: (a) in cash equivalents to a Cash Deferred Account or (b) as a DSU Award to be credited to the Deferred Stock Unit Account; or (c) or both, in such proportions as elected by the Participant in such Deferral Election and as permitted by the Committee.  As provided by the Committee, the Participant shall then receive a DSU Award in whole Deferred Stock Units in an amount substantially equal to the quotient of (i) divided by (ii), where:

(i)equals the amount of Participant’s Director Fees which is subject to a Deferral Election for a Plan Year (the numerator); and 

(ii)equals the Fair Market Value of one share of Common Stock on the Issue Date which would have been applicable to the Director Fees in the absence of the Deferral Election  (the denominator). 

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In the event Director Fees are deferred in the form of DSU Awards, and in the event the Company pays dividends on the underlying Common Stock represented by such Deferred Stock Units, all Dividend Equivalents credited to the Deferred Stock Unit Account shall be deferred with the DSU Award and paid at the same time as the DSU Award is paid.

(2)LTI.  A Participant may also elect to defer receipt of the LTI otherwise payable to him or her as restricted shares of Common Stock during the next following Plan Year by entering into a Deferral Election deferring some or all of such Participant’s LTI (subject to such limits and restrictions as to any dollar amount, percentage or otherwise as may be established from time to time by the Committee). If a Participant elects to defer receipt of all or a portion of an LTI for a Plan Year, the Company will pursuant to the Deferral Election instead grant the Participant a DSU Award substantially equal to the quotient of (i) divided by (ii), where:

(i)equals the number of shares of Common Stock covered by Awards of Restricted Stock to which the Participant would be entitled under the Incentive Plan (the numerator) which is subject to a Deferral Election for a Plan Year; and

(ii)equals the Fair Market Value of one share of Common Stock on the date of grant which would have been applicable to the LTI in the absence of the Deferral Election (the denominator). 

In the event LTI are deferred in the form of DSU Awards, and in the event the Company pays dividends on the underlying Common Stock represented by such Deferred Stock Units, all Dividend Equivalents credited to the Deferred Stock Unit Account shall be deferred with the DSU Award, be subject to the same restrictions and vesting requirements as the underlying Common Stock with respect to which the Dividend Equivalents are paid, and paid at the same time as the DSU Award is paid. 

(b)Deferral Elections.  

(1)Timing.  The initial Deferral Election of a new Participant with respect to Director Fees or LTI, as applicable, shall be made by written notice signed by the Participant and delivered to the Committee not later than thirty (30) days after the Participant first becomes eligible to participate in the Plan; provided, however, that such initial Deferral Election shall not apply to any portion of his or her Director Fees earned or LTI granted for service prior to the date such Deferral Election is properly filed with the Committee.  Any subsequent Deferral Elections (or revocations thereof) shall be made by the Participant and filed with the Committee not later than the last day of the calendar year before the beginning of next succeeding Plan Year and shall be effective on the first day of such succeeding Plan Year with respect to Director Fees to be earned or LTI to be granted in such subsequent Plan Year.  A Deferral Election with respect to Director Fees or LTI shall be an irrevocable election for the next following Plan Year (and shall become irrevocable immediately prior to the first day of the Plan Year to which such Deferral Election relates.) 

(2)Content.  A Deferral Election made pursuant to this Section 8 shall be made in a form and manner prescribed by the Committee, which Deferral Election may be effectuated as follows: 

(i)The Committee shall permit a Participant the right to defer the receipt of some or all of his or her Director Fees or LTI, stated as a whole percentage of either 50% or 100% (or such other amounts or percentages as may be permitted by the Committee) to be credited to the Participant’s Accounts under the Plan for the immediately following Plan Year.

(ii)A Participant’s Deferral Election of his or her Director Fees shall set forth the amount to be credited to the Cash Deferred Account and the portion to be credited to the Deferred Stock Unit Account with respect to any Director Fees or LTI, as appropriate.  If a Participant fails to properly allocate any Director Fees subject to the Deferral Election between any Accounts as determined by the Committee, the Committee may credit any and all of such Director Fees to one or more Accounts as the Committee determines is appropriate.

(iii)The Deferral Election may set forth a Specified Payment Date, if any, on which the Participant shall receive the distributions of his or her Accounts with respect to the Director Fees or LTI deferred under such Deferral Election (i.e., a Distribution Event).

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(c)Credits to a Participant’s Account.

(1)DSU Award.  Each DSU Award credited to a Deferred Stock Unit Account represents the Company’s commitment to issue such Participants a fixed number of shares of Common Stock upon a Distribution Event.  No actual shares of Common Stock shall be issued until a Distribution Event described in Section 10 occurs, with such shares to be issued by the Company under the Incentive Plan.  The Deferred Stock Units under any DSU Award shall not be considered issued and outstanding shares for purposes of shareholder voting rights or for purposes of receiving dividends and other distributions, if any (other than as provided in Section 8(c)(3) below.) 

(2)Cash.  Directors Fees deferred by Participants in cash shall be credited to a Cash Deferred Account, on the first business day coincident with or immediately following the Issue Date for such Director Fees, until a Distribution Event described in Section 10.  Cash Deferred Accounts shall not be credited with any earnings by the Company.

(3)Dividend Equivalents.  Each Dividend Equivalent credited to a vested DSU shall be credited to a Participant’s Deferred Stock Unit Account at the time actual dividends are paid by the Company in respect to its Common Stock.  Such credited Dividend Equivalents shall be converted to, and invested in, additional Deferred Stock Units, and shall be subject to the same restrictions as the underlying Common Stock with respect to which the Dividend Equivalents are paid.

(d)Participant Reports. At the end of each Plan Year (or on a more frequent basis as determined by the Committee), a report shall be issued to each Participant who has an Account, and such report will set forth the value of each such Account and, as applicable, the number of DSU Awards credited to a Participant’s Deferred Stock Unit Account.

(e)Suspension of Deferral Election.     Notwithstanding the provisions of Section 4(b), the Committee upon written application by a Participant, may authorize the suspension of a Participant's Deferral Election(s) in the event of an Unforeseeable Emergency. Any suspension authorized by the Committee shall become effective as soon as practicable after the Committee's receipt of a suspension application, but no later than the period beginning thirty (30) days after the receipt of such suspension application. Such suspension shall be effective for the remainder of the Plan Year and shall be deemed an annual election for each succeeding Plan Year unless a subsequent Deferral Election is filed with the Company pursuant to Section 4(b). 
 
(f)No Change in Specified Payment Date Permitted.  If a Participant has selected a Specified Payment Date with respect to a Deferral Election for a Plan Year, such election becomes irrevocable as of the last day of the Plan Year immediately preceding the Plan Year to which the Deferral Election relates.

		
	9.
	VESTING

Amounts attributable to deferred Director Fees in a Participant’s Cash Deferred Account or represented by Deferred Stock Units are 100% vested under the Plan immediately upon being credited to a Participant’s Account under the Plan and at all times thereafter.  

Deferred Stock Units attributable to deferral of receipt of LTI will vest, in whole or in installments, in accordance with the “Restricted Period” (as defined in the Incentive Plan) selected by the Committee with respect to the applicable LTI award, or such other period as shall be selected by the Committee and reflected in the DSU Award granted with respect to such Deferred Stock Units.

		
	10.
	DISTRIBUTIONS

(a)Distributions Generally. Notwithstanding any provision of this Section 10 or the Plan to the contrary, a Participant's Accounts shall be distributed in accordance with a Deferral Election made with respect to such Account. With respect to each Account, a Deferral Election shall provide for a distribution based upon the earliest to occur of the following:

(1)a Participant's Specified Payment Date (if any), 

(2)a Participant's Separation, 

(3)an Unforeseeable Emergency, 

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(4)a Change of Control, 

(5)inclusion of some or all of the Participant’s Account in the Participant’s income due to the failure to comply with Code section 409A (or as otherwise described below to pay certain taxes), or

(6)a Plan termination pursuant to Section 12(b), 

All payments due to a Specified Payment Date or Separation shall be made as soon as reasonably feasible following the Participant's earliest Distribution Event, but in no event later than thirty (30) days following the Distribution Event; provided, however, that, if such thirty (30) day period ends in the taxable year following the year in which such Distribution Event occurs, the Participant shall not have the right to designate the year of payment and the Distribution Event shall occur in the taxable year in which such thirty (30) day period ends.

(b)Distribution upon a Specified Payment Date.  If a Participant's Deferral Election provides for distributions based on the occurrence of a Specified Payment Date, upon such Specified Payment Date, that portion (or all) of the Account which is attributable to such Deferral Election shall be distributed to the Participant in a lump sum.

(c)Distribution upon Separation.   Upon a Separation, that portion (or all) of the Account which is attributable to such Deferral Election shall be distributed to the Participant in a lump sum.  

(d)Distribution upon Death. Upon the death of a Participant, the balance of his or her Account shall be paid to the Participant’s beneficiary(ies) as designed in Section 11.  Such payment shall be made in a lump sum with such payment to be made within sixty (60) days following the date of the Participant’s death; provided that, if such sixty-day period ends in the taxable year following the year in which the Participant's death occurs, neither the Participant nor the Participant’s beneficiary shall have the right to designate the year of payment and the payment shall occur in the taxable year in which such sixty (60) day period ends. 

(e)Distribution upon an Unforeseeable Emergency. A Participant may request a distribution of some or all of his or her Account due to an Unforeseeable Emergency by submitting a written request to the Committee accompanied by evidence to demonstrate that the circumstances being experienced qualify as an Unforeseeable Emergency. The Committee shall have the authority to require such evidence as it deems necessary to determine if a distribution is warranted. If an application for a distribution due to an Unforeseeable Emergency is approved, the distribution is limited to an amount sufficient to meet the need resulting from the Unforeseeable Emergency. The allowed distribution shall be payable in the form determined by the Committee as soon as possible after approval of such distribution. 

(f)Distribution upon Change of Control.  

(1)Upon a Change of Control of the Company, a Participant shall be paid the balance of his Account in a lump sum within sixty (60) days following the date on which the Change of Control occurs; provided that, if such sixty-day period ends in the taxable year following the year in which the Change of Control occurs, the Participant shall not have the right to designate the year of payment, and the payment shall occur in the taxable year in which such sixty (60) day period ends 

(2)For purposes of Section 10, “Change of Control” shall mean the occurrence of any one of the following with respect to the Company:

(i)“Continuing Directors” no longer constitute a majority of the Board; the term “Continuing Director” shall mean any individual who has served as a Director for one year or more, together with any new Directors whose election by the Board or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the Directors then still in office who were either Directors at the beginning of such one-year period or whose election or nomination for election was previously so approved;

(ii)Any person or combination of persons acting as a group (as defined in Rule 13d-3 under the Securities Exchange Act of 1934 (as amended from time to time, including rules thereunder and successor provisions and rules thereto, the “Exchange Act”)) become the beneficial owners (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 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 Directors;

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(iii)A merger or consolidation to which the Company is a party, regardless of the surviving entity in such transaction, if the shareholders of the Company immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than fifty percent (50%) of the combined voting power to vote for the election of directors of the surviving corporation, or other entity following the effective date of such merger or consolidation; or

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

(3)Notwithstanding the foregoing provisions of this Section 10(f), if a Participant’s Separation is for a reason other than for cause, and occurs not more than ninety (90) days prior to the date on which a Change of Control occurs, for purposes of the Plan, such termination shall be deemed to have occurred immediately following a Change of Control.

(4)Notwithstanding anything herein to the contrary, under no circumstances will a change in the constitution of the board of directors or managers of any subsidiary, a change in the beneficial ownership of any subsidiary, the merger or consolidation of a subsidiary with any other entity, the sale of all or substantially all of the assets of any subsidiary or the liquidation or dissolution of any subsidiary (in each case which does not constitute and is not part of a sale of all or substantially all of the assets of the Company) constitute a “Change of Control” under this Plan.

(g)Distribution in the Event of Taxation.  

(1)If, for any reason, it has been determined that the Plan fails to meet the requirements of Code section 409A, and the failure is not or cannot be corrected under a Service correction program for such failure, the Committee shall distribute to the Participant the portion of the Participant’s Account that is required to be included in income as a result of the failure of the Plan to comply with the requirements of Code section 409A.

(2)The Plan shall also pay to the Participant that portion of his Account necessary to satisfy:

(i)Any Federal Insurance Contributions Act (FICA) tax imposed under Code sections 3101, 3121(a), and 3121(v)(2), or the Railroad Retirement Act tax imposed under sections 3201, 3211, 3231(e)(1), and 3231(e)(8), where applicable, on compensation deferred under the Plan (the “FICA or RRTA Amount”); and

(ii)Any income tax at source on wages imposed under Code section 3401 or the corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of the FICA or RRTA Amount, and to pay the additional income tax at source on wages attributable to the pyramiding Code section 3401 wages and taxes; provided, however, that the total payment under this Section 10(g) must not exceed the aggregate of the FICA or RRTA Amount, and the income tax withholding related to such FICA or RRTA Amount. 

(h)Form of Distributions.  Distributions made to a Participant with respect to his or her Cash Deferred Account shall be determined on the date a distribution is processed by the Company and shall be paid in cash in a lump sum after the applicable Distribution Event.  Distributions made to a Participant with respect to his or her Deferred Stock Unit Account shall be paid in shares of Common Stock in a lump sum based on the number of Deferred Stock Units credited to the Deferred Stock Unit Account; provided, however, that the value of any fractional shares otherwise deliverable to the Participant shall be paid in cash. 

		
	11.
	BENEFICIARY DESIGNATION.  

Each Participant who elects to participate in this Plan may file with the Committee a notice in writing, on a form provided by the Committee, designating one or more beneficiaries to whom the distribution shall be made in the event of the Participant's death prior to receiving the entire distribution of the balance in the Participant Account.  If no beneficiary designation is made, or in the event that a beneficiary designated by such Participant predeceases the Participant, the distribution shall be made to the Participant's estate.

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	12.
	MISCELLANEOUS

(a)Amendment; Termination. The Board may at any time and from time to time alter, amend, or terminate the Plan, subject to NYSE rules that might require shareholder approval of such changes, in whole or in part; provided, however, that no such action shall, without the consent of a Participant, affect the rights of such Participant in any Common Stock issued to such Participant under the Plan.  

(b)Rights of Directors. Nothing contained in the Plan shall confer upon any Participant any right to continue in the service of the Company as a Director.

(c)Government and other Regulations. The obligations of the Company to deliver shares under the Plan shall be subject to all applicable laws, rules and regulations and such approvals by any government agency as may be required, including, without limitation, compliance with the Securities Act of 1933, as amended. The Committee may elect not to issue any Common Stock on an Issue Date if it determines in its sole discretion that to do so would be a violation of the Securities Act of 1933, as amended, or the securities laws of any state. 

(d)Nontransferability. The rights and benefits under the Plan shall not be transferable by a Director other than by the laws of descent and distribution or pursuant to a domestic relations order.

(e)Withholding. To the extent required by applicable federal, state, local or foreign law, a Participant shall make arrangements satisfactory to the Company for payment of any withholding tax obligations, if any, that arise in connection with the Plan. The Company shall not be required to issue any Common Stock under the Plan until such obligations, if any, are satisfied. A Participant may satisfy any such withholding obligation by (i) having the Company retain the number of shares of Common Stock or (ii) tendering the number of shares of Common Stock, in either case, whose Fair Market Value equals the amount required to be withheld.

(f)Code Section 409A. All Accounts under the Plan that are intended to be “deferred compensation” subject to Code section 409A shall be interpreted, administered and construed to comply with Code section 409A, and all Accounts under the Plan that are intended to be exempt from Code section 409A shall be interpreted, administered and construed to comply with and preserve such exemption. The Committee shall have full authority to give effect to the intent of the foregoing sentence. To the extent necessary to give effect to this intent, in the case of any conflict or potential inconsistency between the Plan and a provision of any Account or Deferral Election, the Plan shall govern. Notwithstanding the foregoing, neither the Company nor any Director shall have any liability to any Person in the event Code section 409A applies to any Account in a manner that results in adverse tax consequences for the Participant or any of his or her beneficiaries or transferees.

(g)Governing Law. To the extent that federal laws do not otherwise control, the Plan and all rights hereunder shall be construed in accordance with and governed by the laws of the State of Delaware. 

(h)Headings. The headings of sections herein are included solely for convenience of reference and shall not affect the meaning of any of the provisions of the Plan.

(i)Unfunded. The Plan shall be an unfunded and unsecured obligation of the Company. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of Common Stock and the issuance of Common Stock shall be an unsecured general obligation of the Company. 

9DNR - 2015.03.31 - EX 10c

Exhibit 10(c)

DENBURY RESOURCES
SEVERANCE PROTECTION PLAN 
(As amended and restated effective as of May 6, 2015)

ARTICLE I
ESTABLISHMENT OF PLAN

As of the Effective Date, Denbury Resources Inc. (the “Company”) hereby amends and restates the severance plan known as the Denbury Resources Severance Protection Plan, which plan was originally adopted effective December 6, 2000, subsequently amended effective December 5, 2007, December 30, 2008, and December 31, 2010, amended and restated effective December 15, 2011 and December 13, 2012, and hereby further amended and restated effective May 6, 2015, and which as set forth in this document is hereinafter referred to as the (“Plan.”)  For purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Company intends the Plan to continue to be a “Severance Plan” within the meaning of the applicable ERISA regulations.

ARTICLE II
DEFINITIONS

As used herein, the following words and phrases shall have the following respective meanings unless the context clearly indicates otherwise.

Section 2.1Administrator.  The Board or any committee thereof as may be appointed from time to time by the Board to supervise the administration of the Plan.

Section 2.2Affiliate.  With respect to a specified person, a person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the specified person.

Section 2.3Base Salary.  The amount a Participant is entitled to receive as wages or salary on an annualized basis, calculated on the basis of their salary rate on either the date immediately prior to a Change of Control or their Termination Date, whichever amount is higher.

Section 2.4Board.  The Board of Directors of the Company.

Section 2.5Bonus Amount.  An amount equal to fifty percent (50%) of the total amount of bonuses paid to a Participant related to the two most recent annual periods ending prior to the date of the Change of Control, such bonuses to consist of any discretionary bonuses and any annual incentive cash awards (or in the latter case, any successor performance-based bonus); provided that if a Change of Control occurs prior to the payment of two incentive cash awards, then the one incentive cash award which has been paid shall be counted twice in the determining the total amount of bonuses paid to the Participant.

Section 2.6Cause.  An Employer shall have “Cause” to terminate a Participant if the Participant (i) willfully and continually fails to substantially perform his duties with the Employer (other than a failure resulting from the Participant's incapacity due to physical or mental illness), or (ii) willfully engages in conduct which is demonstrably and materially injurious to the Employer, monetarily or otherwise.  No act, nor failure to act, on the Participant's part, shall be considered “willful” unless he has acted or failed to act with an absence of good faith and without a reasonable belief that his action or failure to act was in the best interest of the Employer.  Notwithstanding anything contained in this Plan to the contrary, no failure to perform by the Participant after Notice of Termination is given by or to the Participant shall constitute Cause.

Section 2.7Change of Control.  A “Change of Control” shall mean the occurrence of any one of the following with respect to the Company:

(a)“Continuing Directors” no longer constitute a majority of the Board; the term (i) “Director” shall mean a member of the Board, and (ii) “Continuing Director” shall mean any individual who has served as a Director for one year or more, together with any new Directors whose election by the Board or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the Directors then still in office who were either Directors at the beginning of such one-year period or whose election or nomination for election was previously so approved; 

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(b)any person or combination of persons acting as a group (as defined in Rule 13d-3 under the Securities Exchange Act of 1934 (as amended from time to time, including rules thereunder and successor provisions and rules thereto, the “Exchange Act”)) become the beneficial owners (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Common Shares representing thirty percent (30%) or more of the voting power of the Company’s then outstanding securities entitled generally to vote for the election of Directors;  

(c)a merger or consolidation to which the Company is a party, regardless of the surviving entity in such transaction, if (i) the shareholders of the Company immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than fifty percent (50%) of the combined voting power to vote for the election of directors of the surviving corporation, or other entity following the effective date of such merger or consolidation, or (ii) following such merger or consolidation, fifty percent (50%) or more of the individuals who (on the date immediately prior to the date of execution of the agreement providing for such merger or consolidation) constitute the members of Senior Management do not, as of a date six months after such merger or consolidation, hold an officer’s position which would make them a member of senior management of the surviving corporation; or

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

Notwithstanding anything herein to the contrary, under no circumstances will a change in the constitution of the board of directors or managers of any Subsidiary, a change in the beneficial ownership of any Subsidiary, the merger or consolidation of a Subsidiary with any other entity, the sale of all or substantially all of the assets of any Subsidiary or the liquidation or dissolution of any Subsidiary (in each case which does not constitute and is not part of a sale of all or substantially all of the assets of the Company) constitute a “Change of Control” under this Plan. 

Section 2.8Common Shares.  “Common Shares” means shares of common stock, $.001 par value of Denbury Resources Inc.

Section 2.9Company.  Denbury Resources Inc., a Delaware corporation. 

Section 2.10Disability.  “Disability”  shall mean a Participant’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which, in the reasonable opinion of the Administrator based on such medical evidence as it deems necessary, can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; provided, however, that such Disability did not result, in whole or in part from: (i) a felonious undertaking or (ii) an intentional self-inflicted wound.

Section 2.11Effective Date.  December 13, 2012.

Section 2.12Employee.  An individual shall be an “Employee” only if the individual is shown as an employee of an Employer on the payroll records of such Employer.  In addition, any person eligible for benefits under a severance plan not originally sponsored by the Company or Subsidiaries of the Company as of the date of adoption of this amended and restated Plan, including the EAP Properties Inc. Employee Severance Protection Plan (any such plan being an “Acquired Plan”), shall not be entitled to receive benefits under this Plan except to the extent and in the amount that benefits payable under this Plan are in excess of amounts payable to that person under such an Acquired Plan.

Section 2.13Employer.  The Company and any Participating Employer.  With respect to a Participant who is not an employee of the Company, any reference under this Plan to such Participant's “Employer” shall refer only to the employer of the Participant, and in no event shall be construed to refer to the Company as well.

Section 2.14Good Reason. “Good Reason” shall mean the occurrence of any of the following events or conditions:

(a)a material diminution in the Participant's authority, duties or responsibilities;

(b)a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Participant is required to report, including a requirement that a Participant report to an Officer or Employee instead of reporting directly to the Board of the Company; 

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(c)a material diminution in the Participant's base compensation;

(d)a material change in the geographic location at which the Participant must perform the services, or;

(e)any material breach by the Employer of any provision of this Plan.

The Participant is required to provide written notice to the Employer of the existence of the condition that would result in termination of employment for Good Reason within 90 days of the initial existence of the condition.  Upon receipt of such written notice, the Employer has 30 days to remedy the condition (the “cure period”).  If the Employer does not remedy the condition within the cure period, the Participant will meet the requirements for termination of employment for Good Reason, provided, however, that the Participant actually does terminate his employment not more than thirty (30) days after the expiration of the Employer’s cure period.

Section 2.15Notice of Termination.  A notice which indicates the specific basis for any termination of employment; no purported termination of employment shall be effective without such Notice of Termination.

Section 2.16Officer.  Each individual who at the time in question is a corporate officer of the Company and is so designated pursuant to the Company’s Bylaws, provided that solely for purposes of Section 6.1 hereof, “Officer” shall be confined to individuals who are (i) Participants, and (ii) a member or Senior Management (as defined below) or any Vice President of the Company.  

Section 2.17Participant.  A Participant who meets the eligibility requirements of Article III.

Section 2.18Participating Employer.  Each Subsidiary of the Company shall be a Participating Employer in this Plan unless determined otherwise by the Company.

Section 2.19Payment Date.  For a Participant entitled to payment under Section 4.1 as a result of a termination of employment other than for Cause during the period beginning six months prior to a Change of Control and ending on the Change of Control, the Payment Date is the first business day that is at least fifteen (15) days after the Change of Control.  For a Participant entitled to payment under Section 4.1 as a result of a termination of employment other than for Cause during the period beginning on the Change of Control and ending two years after the Change of Control, the Payment Date is the first business day that is at least fifteen (15) days after the Participant’s termination of employment.

Section 2.20Senior Management.  Shall mean that group of Participants composed of the Company’s Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Executive Vice Presidents, Senior Vice Presidents and General Counsel, as such specific positions exist and individuals are then serving in such positions at the time in question.

Section 2.21Severance Benefit.  The benefits payable in accordance with Article IV of the Plan.

Section 2.22Severance Units.  A Participant who is neither (x) a member of Senior Management nor (y) an Officer not a member of Senior Management, shall receive one (1) Severance Unit, to be used in calculating his Severance Benefit, for (i) each ten thousand dollars ($10,000) of the aggregate of his Base Salary plus Bonus Amount, and (ii) each twelve months of employment by the Company or an Employer; the sum of any partial Severance Units under (i) and (ii) shall be rounded to the nearest higher whole number of Severance Units.  However, the maximum number of Severance Units that may be granted to a Participant is eighteen (18), and each Participant shall be granted at least four (4) Severance Units.  

Section 2.23Subsidiary. Any corporation or other entity that is a member of a controlled group, as defined in Section 414(b) or (c) of the Internal Revenue Code of 1986, as amended (the “Code”), with the Company. 

Section 2.24Termination Date.  In the case of the Participant's death, the Participant’s Termination Date shall be his date of death.  In all other cases, the Participant's Termination Date shall be the date specified in the written Notice of Termination and as of which date the Participant does in fact terminate employment with his Employer.

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ARTICLE III
ELIGIBILITY AND PARTICIPATION

Section 3.1Participation.  Each Employee of the Company or of a Participating Employer during the time such employer is participating in this Plan shall be eligible to participate in the Plan, as amended from time to time hereafter.  An Employee of an Employer shall automatically cease being a Participant if his employment terminates more than six months prior to a Change of Control or more than two years after a Change of Control, or at any time for a reason that does not entitle the Participant to benefits under the Plan.  Without limitation, an Employee of an Employer shall be ineligible for benefits under the Plan if his employment terminates at any time due to death or Disability, or due to termination by the Employer for Cause or due to his terminating his employment for any reason other than Good Reason.  

Section 3.2Duration of Participation.  Once an Employee of an Employer becomes a Participant, a Participant shall cease to be a Participant in the Plan upon the first to occur of: (i) the date his employment is terminated under circumstances where he is not entitled to a Severance Benefit under the terms of this Plan, or (ii) the date on which he has received all of the benefits to which he is entitled under this Plan.

ARTICLE IV
SEVERANCE BENEFITS

Section 4.1Right to Severance Benefit.

(a)After a Change of Control has occurred, a Participant shall be entitled to receive from the Employer a Severance Benefit in the amount provided in Sections 4.2 and 4.3 if (i) his employment is terminated by the Company or a Participating Employer, during the period beginning six months prior to a Change of Control and ending two years after a Change of Control, for any reason other than for Cause or (ii) Participant terminates his employment for Good Reason; provided that a Participant shall not be entitled to receive such a Severance Benefit if the Participant’s employment is terminated due to Participant’s Disability or death.  

(b)A Participant shall be entitled to a Severance Benefit if that individual satisfies all the conditions under the Plan required to qualify as a Participant and he or she is not otherwise disqualified or excluded from eligibility under the terms of the Plan.

(c)Notwithstanding any other provision of the Plan, the sale, divestiture or other disposition of a Subsidiary, shall not be deemed to be a termination of employment of Employees employed by such Subsidiary, and such Employees shall not be entitled to benefits from the Company, any Participating Employer or any Subsidiary under this Plan as a result of such sale, divestiture, or other disposition, or as a result of any subsequent termination of employment.

Section 4.2Amount of Severance Benefit.  If a Participant is entitled to a Severance Benefit under Section 4.1, the Employer shall pay to the Participant, on the Payment Date, an amount in cash equal to one of the following amounts: 

(a)for members of Senior Management, three (3) times the sum of the Participant’s Base Salary and the Bonus Amount;

(b)for all other Officers that are not members of Senior Management, two and one-half (2-1/2) times the sum of the Participant's Base Salary and the Bonus Amount; and

(c)for all other Participants, one-twelfth (1/12) of the sum of the Participant’s Base Salary and Bonus Amount multiplied by the Participant’s Severance Units.

Section 4.3Further Benefits.  If a Participant is entitled to a Severance Benefit under Section 4.1, such Participant shall also be entitled to:

(a)Continuation at Employer’s expense, on behalf of the Participant and his dependents and beneficiaries, all medical, dental, vision, and health benefits and insurance coverage which were being provided to the Participant at the time of termination of  employment for a period of time subsequent to the Participant's termination of employment. This period of time shall be up to 18 months for members of Senior Management; up to 15 months for all other Officers that are not members of Senior Management; and up to 9 months for all other Participants (determined 

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based on no more than fifty percent (50%) of such Participants’ Severance Units).  The benefits provided in this Section 4.3(a) shall be no less favorable to the Participant, in terms of amounts and deductibles and costs to him, than the coverage provided the Participant under the plans providing such benefits at the time of termination of the Participant’s employment.  The payment by the Employer of the cost of such benefits shall be treated as additional taxable income to such Participants to the extent necessary to avoid a violation of the nondiscrimination provisions of Section 105(h) of the Code.  Should the continuation of any medical or similar coverages be through fully insured plans, and should such continuation violate the nondiscrimination requirements for such plans under the Patient Protection and Affordable Care Act (“Health Care Reform”), then such Participants shall receive additional cash severance benefits rather than continued coverage under such plans of Employer in an amount based on the premium cost of such coverage that the Employer would otherwise pay under this sentence. 

(b)The Employer's obligation hereunder to provide a benefit shall terminate if the Participant obtains comparable coverage under a subsequent employer's benefit plan. For purposes of the preceding sentence, benefits will not be comparable during any waiting period for eligibility for such benefits or during any period during which there is a preexisting condition limitation on such benefits.  The Employer also shall pay a lump sum equal to the amount of any additional income tax payable by the Participant and attributable to the taxability of the cost of the benefits provided under subparagraph (a) of this Section within the time limitations for reimbursing such tax under Section 12.11 hereof.  At the end of the period of coverage set forth above, the Participant shall be entitled to all health and similar benefits that are or would have been made available to the Participant pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) or other applicable law, as if the Participant then terminated employment or had a reduction in hours triggering a right to benefits under COBRA or other applicable law at the end of such period.  

Section 4.4Mitigation or Set-off of Amounts Payable Hereunder. The Participant shall not be required to mitigate the amount of any payment provided for in this Article IV by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Article IV be reduced by any compensation earned by the Participant as the result of employment by the Company or any successor after the Payment Date or by another employer after the Termination Date, or otherwise.  The Employer's obligations hereunder also shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Employer may have against the Participant.

Section 4.5Company Guarantee of Severance Benefit.  In the event a Participant becomes entitled to receive from the Employer a Severance Benefit under this Article IV above and such Employer fails to pay such Severance Benefit, the Company shall assume the obligation of such Employer to pay such Severance Benefit.  In consideration of the Company's assumption of the obligation to pay such Severance Benefit provided under this Plan, the Company (as the source of payment of benefits under the Plan) shall be subrogated to any recovery (irrespective of whether there is recovery from the third party of the full amount of all claims against the third party) or right to recovery of either a Participant or his legal representative against the Employer or any person or entity.  The Participant or his legal representative shall cooperate in doing what is reasonably necessary to assist the Company in exercising such rights, including but not limited to notifying the Company of the institution of any claim against a third party and notifying the third party and the third party's insurer, if any, of the Company's subrogation rights.  Neither the Participant nor his legal representative shall do anything after a loss to prejudice such rights.  In its sole discretion, the Company reserves the right to prosecute an action in the name of the Participant or his legal representative against any third parties potentially liable to the Participant.  The Company shall have the absolute discretion to settle subrogation claims on any basis it deems warranted and appropriate under the circumstances.  If a Participant or his legal representative initiates a lawsuit against any third parties potentially liable to the Participant, the Company shall not be responsible for any attorney's fees or court costs that may be incurred in such liability claim.  The Company shall be entitled, to the extent of any payments made to or on behalf of a Participant or a dependent of the Participant, to be paid first from the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery asserted by or on behalf of a Participant or his legal representative against any person or entity legally responsible for the injury for which such payment was made.  The right is also hereby given the Company to receive directly from the Employer or any third party(ies), attorney(s) or insurance company(ies) an amount equal to the amount paid to or on behalf of the Participant. 

Section 4.6Forfeiture of Severance Benefits.  A Participant shall forfeit any and all entitlement to any Severance Benefit if the Administrator determines that the Participant has failed to fulfill any requirement of the Plan.

Section 4.7Payment after Death.  If a Participant dies before his or her Severance Benefits have been paid in full, the remaining Severance Benefits will be paid to the beneficiaries named in such Participant’s last will and testament, or if no will or beneficiary exist then to such Participant’s heirs at law, and shall be paid within no more than 90 days following the Participant’s 

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death.  The Plan shall be discharged fully and completely to the extent of any payment made to any such beneficiaries or heirs at law.

ARTICLE V
TERMINATION OF EMPLOYMENT

Section 5.1Written Notice Required.  Subject to Section 12.10, any purported termination of employment, either by the Employer or by the Participant, shall be communicated by written Notice of Termination to the other.

ARTICLE VI
ADDITIONAL PAYMENTS BY THE COMPANY; NET BEST TREATMENT DETERMINATION

Section 6.1Gross-Up Payment.  In the event it shall be determined that any payment or distribution of any type by the Employer to or for the benefit of an Officer, whether paid or payable or distributed or distributable pursuant to the terms of this Plan or otherwise (the “Total Payments”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then the Officer shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that at the time of payment by the Officer of all income and “FICA” taxes (including any interest and penalties imposed with respect to such taxes) imposed upon the Gross-Up Payment, the Officer shall receive a net Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.  The Gross-Up Payment shall be made in the manner specified in Section 12.11.

Section 6.2Determination By Accountant.  All determinations required to be made under this Article VI, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be made by the independent accounting firm retained by the Company on the date of Change of Control, or such other independent qualified third party firm retained for such purpose (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Officer within fifteen (15) business days of the Payment Date or Termination Date, whichever is applicable, or such earlier time as is requested by the Company.  If the Accounting Firm determines that no Excise Tax is payable by the Officer, it shall furnish the Officer with an opinion that he has substantial authority not to report any Excise Tax on his federal income tax return.  Any determination by the Accounting Firm shall be binding upon the Company and the Officer.  As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that a Gross-Up Payment which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its remedies pursuant to Section 6.3 and the Officer thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Officer in the manner specified in Section 12.11.

Section 6.3Notification Required.  The Officer shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment.  Such notification shall be given as soon as practicable but no later than ten (10) business days after the Officer knows of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Officer shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due).  If the Company notifies the Officer in writing prior to the expiration of such period that it desires to contest such claim, the Officer shall:

(a)give the Company any information reasonably requested by the  Company relating to such claim,

(b)take such action in connection with contesting such claim as the  Company shall reasonably request in writing from time to time, including,  without limitation, accepting legal representation with respect to such  claim by an attorney reasonably selected by the Company, 

(c)cooperate with the Company in good faith in order to effectively  contest such claim,

(d)permit the Company to participate in any proceedings relating to such claim, provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Officer harmless, on an after-tax basis, for any 

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Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses.  Any such payments hereunder shall be made in the manner specified in Section 12.11.  Without  limitation on the foregoing provisions of this Section 6.3, the Company shall control all proceedings taken in connection with such contest and, at  its sole option, may pursue or forgo any and all administrative appeals,  proceedings, hearings and conferences with the taxing authority in respect  of such claim and may, at its sole option, either direct the Officer to  pay the tax claimed and sue for a refund, or contest the claim in any  permissible manner, and the Officer agrees to prosecute such contest to  a determination before any administrative tribunal, in a court of initial  jurisdiction and in one or more appellate courts, as the Company shall  determine; provided, however, that if the Company directs the Officer  to pay such claim and sue for a refund, the Company shall advance the  amount of such payment to the Officer, on an interest-free basis and  shall indemnify and hold the Officer harmless, on an after-tax basis,  from any Excise Tax or income tax, including interest or penalties with  respect thereto, imposed with respect to such advance or with respect to  any imputed income with respect to such advance; and further provided that  any extension of the statute of limitations relating to payment of taxes  for the taxable year of the Officer with respect to which such  contested amount is claimed to be due is limited solely to such contested  amount.  Furthermore, the Company's control of the contest shall be limited  to issues with respect to which a Gross-Up Payment would be payable  hereunder and the Officer shall be entitled to settle or contest, as  the case may be, any other issue raised by the Internal Revenue Service or  any other taxing authority.

Section 6.4Repayment.  If, after the receipt by the Officer of an amount advanced by the Company pursuant to Section 6.3, the Officer becomes entitled to receive any refund with respect to such claim, the Officer shall (subject to the Company's complying with the requirements of Section 6.3) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto).  If, after the receipt by the Officer of an amount advanced by the Company pursuant to Section 6.3, a determination is made that the Officer shall not be entitled to any refund with respect to such claim and the Company does not notify the Officer in writing of its intent to contest such denial of refund prior to the expiration of thirty days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

Section 6.5“Net Best” Treatment Determination.  Notwithstanding anything in this Agreement to the contrary, any Officer, who is not eligible for any payment under Section 6.1 because of their election as a corporate officer after January 1, 2011 (i.e., those Officers not named in attached Schedule A), is a “disqualified individual” (as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”)), and any compensation, payment or distribution by the Company to or for the benefit of such Officer, whether paid or payable or distributed or distributable pursuant to the terms of this Plan or otherwise, calculated in a manner consistent with Section 280G of the Code and the applicable regulations thereunder (collectively the “Severance Payments”), would be subject to Excise Taxes, the following provisions shall apply:  

(a)     If the Severance Payments, reduced by the sum of the Excise Tax and the total of the Federal, state, and local income and employment taxes payable by such Officer on the amount of the Severance Payments which are in excess of the Threshold Amount, are greater than or equal to the Threshold Amount, such Officer shall be entitled to the full Severance Benefits payable under this Plan.

(b)     If the Threshold Amount is less than (x) the Severance Payments, but greater than (y) the Severance Payments reduced by the sum of the Excise Tax and the total of the Federal, state, and local income and employment taxes on the amount of the Severance Payments which are in excess of the Threshold Amount, then the Severance Payments shall be reduced (but not below zero) to the extent necessary so that the sum of all Severance Payments shall not exceed the Threshold Amount.  In such event, the Severance Payments shall be reduced in the following order to the extent applicable:  (1) cash Severance Benefits not subject to Section 409A of the Code; (2) cash Severance Benefits subject to Section 409A of the Code; (3) equity-based Severance Benefits and any accelerated equity-based Severance Benefits; and (4) non-cash forms of Severance Benefits.  To the extent any Severance Benefits are to be made over time (e.g., in installments, etc.), then any such Severance Benefits shall be reduced in reverse chronological order.  If any reduced payment is made and through error or otherwise that payment exceeds the Threshold Amount, such Officer shall immediately repay such excess to the Company upon notification that any such overpayment has been made to the Officer. 

For the purposes of this Section 6.5, “Threshold Amount” shall mean three times the Officer’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00).  The determination as to which of the alternative provisions of this Section 6.5 shall apply to such Officer shall be made substantially in accordance with the procedure set forth in Section 6.2 as if the determination by the Accounting Firm were with respect to a Gross-Up Payment.  

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Any determination related to application of the foregoing provisions by the Accounting Firm shall be conclusive and binding upon the Company and any such Officer. 

ARTICLE VII
SUCCESSORS TO COMPANY

Section 7.1Successors.  This Plan shall bind any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, in the same manner and to the same extent that the Company would be obligated under this Plan if no succession had taken place.  As used herein, “the Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which otherwise becomes bound by all the terms and provisions hereof by operation of law.

ARTICLE VIII
DURATION, AMENDMENT, PLAN TERMINATION
 AND ADOPTION BY SUBSIDIARIES

Section 8.1Duration.  This Plan shall continue in effect until terminated in accordance with Section 8.2.  If a Change of Control occurs, this Plan shall  continue in full force and effect, and shall not terminate or expire, until after all Participants who have become entitled to a Severance Benefit hereunder shall have received all of such benefits in full.

Section 8.2Amendment and Termination.  The Plan and its attached Schedules may be terminated or amended in  any respect by resolution adopted by two-thirds of the Board; provided, however, that no such amendment or termination of the Plan may be made if such amendment or termination would adversely affect any right of a Participant who became a Participant prior to the later of (i) the date of adoption of any such amendment or termination, or (ii) the effective date of any such amendment or termination; and, provided further, that the Plan no longer shall be subject to amendment, change, substitution, deletion, revocation or termination which adversely affects any Participant in any respect whatsoever within two (2) years following a Change of Control.

Section 8.3Form of Amendment.  The form of any amendment or termination of the Plan shall be a written instrument signed by a duly authorized officer or officers of the Company, certifying that the amendment or termination has been approved by the Board.

ARTICLE IX
CLAIMS AND APPEAL PROCEDURES

Section 9.1Claims Procedure.  With respect to any claim for Severance Benefits under the Plan, the Administrator will issue a decision on whether the claim is denied or granted within ninety (90) days after receipt of the claim by the Administrator, unless special circumstances require an extension of time for processing the claim, in which case a decision will be rendered not later than ninety (90) days after receipt of the claim.  Written notice of the extension will be furnished to the Participant prior to the expiration of the initial ninety (90) day period and will indicate the special circumstances requiring an extension of time for processing the claim and will indicate the date the Administrator expects to render its decision.  If the claim is denied in whole or in part, the decision in writing by the Administrator shall include the specific reasons for the denial and reference to the Plan provisions on which the denial is based.  The decision also shall include: (i) a description of any additional material or information necessary for the Participant to perfect the claim, and an explanation of why the material or information is necessary and (ii) an explanation of the claims review procedure and the time limits applicable to such procedures, including a statement of the Participant’s right to bring a civil action under section 502(a) of ERISA following a denial upon review of the claim.  

Section 9.2Appeals Procedure.  If his claim is denied in whole or in part, a Participant may appeal in writing a denial of the claim, in part or in whole, and request a review by the Administrator.  The appeal must be submitted within sixty (60) days after notice of the denial of the claim.  The Administrator shall afford the Participant a full and fair review of the decision denying the claim and shall: (i) provide, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the claim; (ii) permit the Participant to submit to the Administrator written comments, documents, records and other information relating to the claim; and (iii) provide a review that takes into account all comments, documents, records and other information submitted by the Participant relating to the claim, without regard to whether such information was submitted or considered in the initial determination.   The Administrator will review the appeal and notify the Participant of the final decision within sixty (60) days after receiving the request for review unless the Administrator requires an extension due to special circumstances, in which case the final decision will be made within sixty (60) days after the Administrator receives the 

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request for review.  If special circumstances require an extension of time, the Participant shall be furnished written notice prior to the termination of the initial 60-day period which explains the special circumstances requiring an extension of time and the date by which the Administrator expects to render its decision on review.  The decision on review shall include:  (i) specific reasons for the decision, (ii) references to the specific Plan provisions on which the decision of the Administrator is based, (iii) a statement that the Participant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the Participant’s claim, and (iv) a statement describing any voluntary appeal procedures offered by the Plan and a statement of the Participant’s right to bring an action under Section 502(a) of ERISA.

Section 9.3Exclusive Initial Remedy.  No action may be brought for benefits provided by this Plan or to enforce any right hereunder until after a claim has been submitted to and determined by the Administrator and all appeal rights under the Plan have been exhausted.  Thereafter, the Participant may bring an action for benefits provided by this Plan or to enforce any right hereunder.  The Participant's beneficiary should follow the same claims procedure in the event of the Participant's death.

ARTICLE X
PLAN ADMINISTRATION

Section 10.1In General.  The general administration of the Plan and the duty to carry out its provisions shall be vested in the Administrator, which shall be the “Plan Administrator” as that term is defined in Section 3(16)(A) of ERISA.  The Plan and Severance Benefits under the Plan shall be administered by the Administrator appointed from time to time by the Company.  The Administrator may, in its discretion, secure the services of other parties, including agents and/or Employees to carry out the day-to-day functions necessary to an efficient operation of the Plan.  The Administrator's interpretations, decisions, requests and exercises of power and responsibilities shall not be subject to review by anyone and shall be final, binding, and conclusive upon all persons.  The Administrator shall, in its sole and absolute discretion, have the exclusive right to interpret all of the terms of the Plan, to determine eligibility for coverage and benefits, to resolve disputes as to eligibility, type, or amount of benefits, to correct any errors or omissions in the form or operation of the Plan, to make such other determinations with respect to the Plan, and to exercise such other powers and responsibilities as shall be provided for in the Plan or as shall be necessary or helpful with respect thereto.  The Administrator under and pursuant to this Plan shall be the named fiduciary for purposes of section 402(a) of ERISA with respect to all powers and duties expressly or implicitly assigned to it hereunder.  Any determination or decision by the Company made under or with respect to any provision of the Plan shall be in the Company's sole and absolute discretion, shall not be subject to review by anyone and shall be final, binding and conclusive upon all persons.  Benefits under this Plan will be paid only if the Administrator decides in its discretion that the applicant is entitled to them.

Section 10.2Reimbursement and Compensation.  The Administrator shall receive no compensation for its services as Administrator, but it shall be entitled to reimbursement for all sums reasonably and necessarily expended by it in the performance of such duties.

Section 10.3Rulemaking Powers.  The Administrator shall have the power to make reasonable and uniform rules and regulations required in the administration of the Plan, to make all determinations necessary for the Plan's administration, except those determinations which the Plan requires others to make, and to construe and interpret the Plan wherever necessary to carry out its intent and purpose and to facilitate its administration.

ARTICLE XI
SOURCE OF SEVERANCE PAYMENT

Section 11.1No Separate Fund Established   All Severance Benefits shall be paid in cash from the general funds of the Company or an Employer, and no special or separate fund shall be established.  Nothing contained in the Plan shall create or be construed to create a trust of any kind, and nothing contained in the Plan nor any action taken pursuant to the provisions of the Plan shall create or be construed to create a fiduciary relationship between the Company or an Employer and a Participant, beneficiary, Employee or other person.  To the extent that any person acquires a right to receive Severance Benefits from the Company or an Employer under the Plan, such right shall be no greater than the right of any unsecured general creditor of the Company or Employer.  For purposes of the Code, the Company intends this Plan to be an unfunded, unsecured promise to pay on the part of the Company.  For purposes of ERISA, the Company intends the Plan to be a “severance plan” within the meaning of the applicable ERISA regulations.

ARTICLE XII
MISCELLANEOUS

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Section 12.1Participant's Legal Expenses.  The Company agrees to pay, upon written demand therefor by the Participant, fifty percent (50%) of all legal fees and expenses which the Participant may reasonably incur in order to collect amounts to be paid or obtain benefits to be provided to such Participant under the Plan, plus in each case interest at the “applicable Federal rate” (as defined in Section 1274(d) of the Code). In any such action brought by a Participant for damages or to enforce any provisions hereof, he shall be entitled to seek both legal and equitable relief and remedies, including, without limitation, specific performance of the Company's obligations hereunder, in his sole discretion.  However, in any instance where a Participant receives, as the result of a final, nonappealable judgment of a court of competent jurisdiction or a mutually agreed upon settlement with the Company, Severance Benefits greater than those first offered by the Company or its successor to the Participant, then the Company shall pay one hundred percent (100%) of all such legal fees and expenses incurred by the Participant.  Any such payments hereunder shall be made in the manner specified in Section 12.11.

Section 12.2Employment Status.  This Plan does not constitute a contract of employment or impose on the Employer any obligation to retain a Participant as an Employee, to change the status of a Participant's employment, or to change any employment policies of the Employer.  

Section 12.3Validity and Severability.  The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision of the Plan, which shall remain in full force and effect, and any prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  

Section 12.4The Participant's Heirs, etc.  This Agreement shall inure to the benefit of and be enforceable by the Participant's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If the Participant should die while any amounts would still be payable to him hereunder as if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms hereof to his designee or, if there be no such designee, to his estate.  

Section 12.5Governing Law.  The validity, interpretation, construction and performance of the Plan shall in all respects be governed by the laws of the State of Texas.

Section 12.6Choice of Forum.  A Participant shall be entitled to enforce the provisions of this Plan in any state or federal court located in the Collin County, Texas, in addition to any other appropriate forum.

Section 12.7Notice.  For the purposes hereof, notices and all other communications  provided for herein shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed to the Company at its principal place of business and to the Participant at his address as shown on the records of the Employer, provided that all notices to the Company shall be directed to the attention of the Chief Executive Officer of the Company with a copy to the Secretary of the Company, or to such other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

Section 12.8Alienation.  No benefit, right or interest of any person under the Plan will be subject to alienation, anticipation, sale, transfer, assignment, pledge, encumbrance or charge, seizure, attachment or legal, equitable or other process or be liable for or subject to, the debts, liabilities or other obligations of such persons, except as otherwise required by law.  No Participant, dependent or their beneficiary shall have any right or claim to benefits from the Plan, except as specified in the Plan.

Section 12.9Pronouns. A pronoun or adjective in the masculine gender includes the feminine gender, and the singular includes the plural, unless the context clearly indicates otherwise.

Section 12.10Section 409A.  It is the intent of the parties that this Plan be interpreted and administered in compliance with the requirements of section 409A of the Code (“Section 409A”) to the extent applicable.  In this connection, the Administrator or Company shall have authority to take any action, or refrain from taking any action, with respect to this Plan that is reasonably necessary to ensure compliance with Section 409A (provided that the Administrator or Company shall choose the action that best preserves the value of the payments and benefits provided to any Participant under this Plan).  In the event a Participant is a “specified employee” within the meaning of Section 409A, payments which constitute a “deferral of compensation” under Section 409A and which would otherwise become due during the first six (6) months following such Participant’s termination of employment shall: (i) be delayed; (ii) all such delayed payments shall be paid in full in the seventh (7th) month after the Participant’s termination of employment (the date of payment within such seventh month being within the sole discretion of the Company); and (iii) all subsequent payments shall be paid in accordance with their original payment schedule; provided, however, that the above delay shall not apply to any payments that are excepted from coverage by Section 409A, including, but not limited to, those payments 

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covered by the short-term deferral exception described in Treasury Regulations section 1.409A-1(b)(4).  A termination of a Participant’s employment hereunder (and similar phrases used under the Plan), shall be interpreted as a “separation from service” within the meaning of Section 409A.  Notwithstanding the preceding, the Administrator, the Company and its Affiliates shall not be liable to any Participant or any other person if the Internal Revenue Service or any court or other authority having jurisdiction over such matter determines for any reason that any amount hereunder is subject to taxes, penalties or interest as a result of failing to comply with Section 409A.

Section 12.11Reimbursements.  With respect to the reimbursement of fees, taxes and expenses provided for herein, including payments made pursuant to indemnification provisions, and Gross Up Payments, the following shall apply:  (i) unless a specific time period during which such expense reimbursements and tax gross-up payments may be incurred is provided for herein, such time period shall be deemed to be Participant’s lifetime; (ii) the amount of expenses eligible for reimbursement hereunder in any particular year shall not affect the expenses eligible for reimbursement in any other year; (iii) the right to reimbursement of expenses shall not be subject to liquidation or exchange for any other benefit; and (iv) a Participant shall be entitled to a  reimbursement of an eligible expense or a Gross-Up Payment hereunder only if such claim or reimbursement request is made to the Employer on or before 15 days prior to  the last day of the calendar year following the calendar year in which the expense was incurred or the tax was remitted, as the case may be, and the reimbursement is made on or before the last day of such calendar year.

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