EXHIBIT 4
DENBURY RESOURCES INC.
DIRECTOR COMPENSATION PLAN
Scope and Purpose of Plan
The purpose of this Director Compensation Plan is to provide a means by
which Denbury Resources Inc. (the "Corporation") may attract, motivate and
retain experienced and knowledgeable persons to serve as directors of the
Corporation and to promote identification of such directors' interests with
those of the Corporation's shareholders.
SECTION 1: DEFINITIONS
1.01 "Affiliate" means, 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.
1.02 "Board" means the Board of Directors of the Corporation.
1.03 "Change of Control" means the occurrence of any of the following
events:
1.03.01 the purchase or acquisition of Common Shares or other securities
capable of becoming voting securities ("Convertible Securities") by
a Person (as hereinafter defined) which results in the Person
beneficially owning, or exercising control or direction over,
Common Shares or Convertible Securities such that, assuming only
the conversion of Convertible Securities beneficially owned or over
which control or direction is exercised by the Person, the Person
would beneficially own, or exercise control or direction over,
Common Shares carrying the right to cast more than 50% of the votes
attaching to all Common Shares; or
1.03.02 directors serving in such capacity for one (1) year or more ceasing
to constitute a majority of the Board of Directors; or
1.03.03 approval by the shareholders of the Corporation of: (i) an
amalgamation, arrangement, merger or other consolidation or
combination of the Corporation with another corporation pursuant to
which the shareholders of the Corporation immediately thereafter do
not own shares of the successor or continuing corporation which
would entitle them to cast more than 50% of the votes attaching to
all shares in the capital of the successor or continuing
corporation which may be cast to elect directors of that
corporation; (ii) the liquidation, dissolution or winding-up of the
Corporation; or (iii) the sale, lease or other disposition of all
or substantially all of the assets of the Corporation.
For the purposes of determining who has made an acquisition referred to in
this definition, the beneficial owner of the acquired Common Shares shall be
considered the acquirer of such Common Shares. For the purposes of this
definition, all Common Shares and Convertible Securities acquired by Persons
will include Common Shares and Convertible Securities held by their Affiliates.
Where Common Shares or Convertible Securities are acquired by any two or more
Persons act jointly or in concert, all such Common Shares or Convertible
Securities will be included in the calculation of a Change of Control. For the
purposes of determining when a Change of Control occurs by Persons acting
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jointly or in concert, a Change of Control will be deemed to occur when the
Persons first attempt to act, or in fact act, jointly or in concert.
1.04 "Change of Control Price" means the higher of: (i) the Fair Market
Value on the date of determination of the Change of Control or (ii) the highest
price per share actually paid for the Common Stock in connection with the Change
of Control of the Corporation.
1.05 "Committee" means the committee appointed by the Board of Directors of
the Corporation to administer the Plan.
1.06 "Common Stock" means shares of Common Stock, $.001 par value of
Denbury Resources Inc.
1.07 "Deferral Election" shall have the meaning set forth in Section 6
hereof.
1.08 "Deferral Period" shall have the meaning set forth in Section 6
hereof.
1.09 "Deferred Shares" shall have the meaning set forth in Section 6
hereof.
1.10 "Director Fees" means all amounts paid by the Corporation to a
Participant in consideration of the Participant's service as a member of the
Board of Directors of the Corporation, including the annual retainer fee, board
meeting fees and any fees for serving on a committee or as a committee chairman,
but not including reimbursements for expenses.
1.11 "Disability" shall mean the inability, in the judgment of the Board,
of a Participant to perform his or her duties due to mental or physical
impairment.
1.12 "Effective Date" of the Plan means July 1, 2000.
1.13 "Fair Market Value" of a share of Common Stock, as of any Issue Date,
shall be the average of the fair market value of a share of Common Stock on each
of the ten (10) trading dates immediately preceding such Issue Date. The fair
market value of the Corporation's Common Stock on a given date shall be the
closing price of such shares as reported by the New York Stock Exchange, or
reported on such other national exchange on which it may, from time to time, be
reported, on such date (or if there shall be no trading on such date, then on
the first previous day on which there is such trading), unless the Common Stock
ceases to be traded on a national exchange. If the Common Stock ceases to be
traded on a national exchange, its fair market value shall be determined by the
Board in its discretion.
1.14 "Issue Date" means the last day of each calendar quarter in a Plan
Year or any other date determined by the Board on which Director Fees are
payable.
1.15 "Participant" means each member of the Board of Directors of the
Corporation who is not: (i) a full- time employee of the Corporation or an
Affiliate of the Corporation, (ii) a holder of 10% or more of the outstanding
Common Stock or (iii) an officer or director of a holder of 10% or more of the
outstanding Common Stock.
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1.16 "Person" means: (i) an individual; (ii) a partnership; (iii) a
corporation, 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.
1.17 "Plan" means the Denbury Resources Inc. Director Compensation Plan.
1.18 "Plan Year" means the 12-month period beginning July 1 of each year
and ending the following June 30.
SECTION 2: SHARES SUBJECT TO PLAN
2.01 AUTHORIZED SHARES. The total number of shares of Common Stock
available for issuance under the Plan is 100,000, subject to adjustment as
provided in Section 6.06 hereof; 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 oustanding 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 Corporation may determine from time to time.
2.02 PARTICIPANT LIMITATION. Notwithstanding anything in this Plan to the
contrary, no Participant may acquire under this Plan Common Stock exceeding one
percent of the Corporation's outstanding Common Stock as of the Effective Date.
SECTION 3: ELIGIBILITY
Each Participant in office on the Effective Date of the Plan shall be
eligible to participate in the Plan. Each Participant elected or appointed after
the Effective Date of the Plan shall be eligible to participate in the Plan upon
election or appointment to the Board of Directors as further described in
Sections 5.01 and 5.03 hereof.
SECTION 4: 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
Corporation, to execute and deliver documents on behalf of the Committee. The
determination of such majority shall be final and binding in all matters
relating to the Plan. No member of the Committee shall be liable for any act
done or omitted to be done by such member or by any other member of the
Committee in connection with the Plan, except for such member'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 Corporation.
SECTION 5: DIRECTOR COMPENSATION
5.01 DIRECTOR FEES. Each Participant shall receive from the Corporation as
compensation for the Participant's service as a member of the Board of Directors
of the Corporation an annual retainer fee and a fee for
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attending meetings of the Board of Directors in amounts determined by the Board.
The annual retainer fee shall be pro- rated for Participants who are not in
office for the entire Plan Year. The Corporation may also in its sole discretion
pay Participants for serving as chairmen of committees of the Board and for any
other duties undertaken in the Participant's capacity as a member of the Board.
5.02 PAYMENT OF FEES. Unless a Participant makes an election pursuant to
Section 5.03, the Participant shall be paid in cash quarterly on the respective
Issue Dates for all Director Fees earned in the quarter ending on the Issue
Date. If the Board selects an Issue Date other than the last day of the quarter,
payment shall be made on such Issue Date for all fees earned since the
immediately preceding Issue Date.
5.03 ELECTION TO RECEIVE COMMON STOCK. Prior to the first day of each Plan
Year, each Participant may make an election to receive all or a portion (in
increments of 1%) of his or her Director Fees for such Plan Year in Common Stock
in lieu of cash. This election shall be in writing on a form provided by the
Committee and returned to the Committee prior to the beginning of the Plan Year
in question. The election, once made, shall be irrevocable for such Plan Year.
Notwithstanding the foregoing, any Participant who is newly elected or appointed
to the Board after the first day of a Plan Year may make the election under this
Section 5.03 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,
after the date of his or her election or appointment to the Board. If the
Participant elects to receive any portion of the Director Fees in Common Stock,
the number of shares of Common Stock calculated in accordance with Section 5.04
hereof shall be issued to the Participant on the Issue Date, unless the
Participant elects to defer receipt of all or any portion (in increments of 1%)
of such Common Shares under Section 6 hereof.
5.04 CALCULATION OF NUMBER OF SHARES ISSUED. If a Participant elects to
receive all or any portion of his or her Director Fees in Common Stock, the
number of shares to be issued shall be calculated by dividing the amount of the
Director Fees payable on such Issue Date by the Fair Market Value of the Common
Stock. The Fair Market Value of the Common Stock shall be determined as provided
in Section 1.13. If a fractional amount of shares results from the calculation
provided in this Section 5.04, cash in lieu of such fractional shares shall be
paid to the Participant. Notwithstanding anything to the contrary herein, if on
any Issue Date the number of shares of Common Stock otherwise issuable to all
Participants hereunder shall exceed the number of authorized shares of Common
Stock remaining available under the Plan, the available shares shall be
allocated among the Participants in proportion to the number of shares they
would otherwise be entitled to receive and the remainder of the Participant's
Director Fees shall be paid in cash.
5.05 FAILURE TO ELECT. If no election is made for the Plan Year beginning
July 1, 2000, the Participant will be deemed to have elected to receive all
Director Fees in cash. Thereafter, should an election form not be returned to
the Committee on time, the form of payment of Director Fees made in the previous
Plan Year will be deemed to be the election made for the Plan Year in which no
timely election was made.
SECTION 6: DEFERRALS
6.01 DEFERRED RECEIPT OF COMMON STOCK. Prior to the first day of each Plan
Year, any Participant who elects to receive all or any portion of his or her
Director Fees in Common Stock may also elect to defer ("Deferral Election") the
receipt of all or any portion (in increments of 1%) of such shares of Common
Stock ("Deferred Shares") for periods of one to five years (the "Deferral
Period") from each Issue Date in such Plan Year. In such event, the Corporation
shall credit to an account maintained on behalf of such Participant, as of the
Issue Date, the Deferred Shares.
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6.02 METHOD OF ELECTION. The Deferral Election shall be in writing on a
form provided by the Committee and returned to the Committee prior to the
beginning of the Plan Year in question. 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 Deferral 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, after the date of his or her election or
appointment to the Board. The Deferral Election shall state the percentage of
Common Stock to be deferred and the chosen Deferral Period(s) and shall
designate a primary and contingent beneficiary or beneficiaries who, upon the
Participant's death prior to receipt of the Deferred Shares, will receive the
Deferred Shares. The Participant may select more than one Deferral Period for
portions of Director Fees paid on the Issue Dates, but the Deferral Period(s)
selected may not differ for Issue Dates within the same Plan Year. The election,
once made, shall be irrevocable for that Plan Year, except that the
Participant's beneficiary designation may be changed at any time.
6.03 ISSUANCE OF DEFERRED SHARES. Except as set forth in Section 6.04,
Deferred Shares will be issued in whole shares of Common Stock and cash in lieu
of fractional shares at the end of the Deferral Period selected by the Director
for such Deferred Shares, regardless of whether the Participant's service as a
director terminates prior to the end of such Deferral Period.
6.04 DEATH OR DISABILITY. Notwithstanding the Deferral Period elected by a
Participant, however, a Participant's Deferred Shares shall be issued to the
Participant, or the Participant's beneficiary designated on the Deferral
Election, as the case may be, in a single lump sum within sixty (60) days in the
event the Participant's service as a director of the Corporation ceases by
reason of death or Disability at any time prior to issuance of the Participant's
Deferred Shares. If no beneficiary designation has been made or if all such
beneficiaries predecease the Participant, the Deferred Shares shall be issued to
the Participant's estate.
6.05 RIGHTS AS A SHAREHOLDER. A Participant shall have no rights as a
shareholder, including no right to vote, with respect to any Common Stock to be
issued under the Plan until he or she becomes the shareholder of record of such
shares. A Participant will not become a shareholder of record of Deferred Shares
until such shares are issued under Section 6.03 or 6.04 hereof.
6.06 EFFECT OF CERTAIN CHANGES IN CAPITALIZATION. In the event of any
recapitalization, stock split, reverse stock split, stock 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 or class of shares available under the Plan,
and 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.
6.07 CHANGE OF CONTROL. Notwithstanding anything to the contrary contained
herein, upon a Change of Control, all Deferred Shares, to the extent credited to
a Participant's account prior to the Change of Control, shall be issued
immediately, or if the Common Stock is no longer trading on a national stock
exchange, shall be paid immediately in cash. For purposes of this Section 6.07,
the cash equivalent value of a Deferred Share shall be the Change of Control
Price.
SECTION 7: MISCELLANEOUS
7.01 TERM OF PLAN. The Plan shall become effective on July 1, 2000, and
unless terminated earlier pursuant to Section 7.02, the Plan shall have a term
of 10 years. Notwithstanding the foregoing, any Deferral Elections made prior to
the termination of the Plan shall continue in accordance with the terms hereof.
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7.02 AMENDMENT; TERMINATION. The Board may at any time and from time to
time alter, amend, or terminate the Plan 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 or deferred by such
Participant under the Plan. No Participant may alter the terms of his or her
Deferral Election after the first day of the Plan Year to which such Deferral
Election relates.
7.03 RIGHTS OF DIRECTORS. Nothing contained in the Plan shall confer upon
any Participant any right to continue in the service of the Corporation as a
director.
7.04 GOVERNMENT AND OTHER REGULATIONS. The obligations of the Corporation
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 or the securities laws of any state.
7.05 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 qualified domestic relations order as defined in the Internal
Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
7.06 WITHHOLDING. To the extent required by applicable federal, state,
local, or foreign law, a Participant shall make arrangements satisfactory to the
Corporation for the payment of any withholding tax obligations that arise in
connection with the Plan. The Corporation shall not be required to issue any
Common Stock under the Plan until such obligations are satisfied. A Participant
may satisfy any such withholding obligation by (i) having the Corporation 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.
7.07 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.
7.08 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.
7.09 UNFUNDED. The Plan shall be unfunded. The Corporation shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the issuance of Deferred Shares and the issuance
of Deferred Shares shall be an unsecured general obligation of the Corporation.
IN WITNESS WHEREOF, the undersigned have executed this Plan on behalf of
Denbury Resources Inc. on this 24th day of May, 2000.
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Ron Greene, Chairman of the Board
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Phil Rykhoek, Secretary
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