DEF 14A 1 dnr-2015xproxy.htm DEFINITIVE PROXY STATEMENT DNR - 2015 - Proxy

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A
 
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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Soliciting Material Pursuant to §240.14a-12
 
Denbury Resources Inc.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, MAY 19, 2015

 
To our Stockholders:
 
You are hereby notified that the 2015 Annual Meeting of Stockholders of Denbury Resources Inc., a Delaware corporation (“Denbury” or the “Company”), will be held at the Company's corporate headquarters at 5320 Legacy Drive, Plano, Texas 75024, at 3:00 P.M. Central Daylight Time (CDT) on Tuesday, May 19, 2015, for the following purposes:

(1)
to elect eight directors, each to serve until their successor is elected and qualified;
(2)
to hold an advisory vote to approve named executive officer compensation;
(3)
to vote on the amendment and restatement of our 2004 Omnibus Stock and Incentive Plan, including to increase the number of reserved shares and for Internal Revenue Code Section 162(m) performance-based compensation qualification;
(4)
to ratify the Audit Committee's selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for 2015; and
(5)
to transact such other business as may properly come before the annual meeting or any adjournment or postponement thereof.

Only stockholders of record at the close of business on March 24, 2015 are entitled to notice of, and to vote at, the annual meeting.

Beginning on or about April 9, 2015, the Company mailed a Notice Regarding the Internet Availability of Proxy Materials to its stockholders containing instructions on how to access the proxy materials and vote via the Internet. Instructions for requesting a paper copy of the proxy materials are contained in the Notice Regarding the Internet Availability of Proxy Materials.
 

By order of the Board of Directors,
Mark C. Allen
Senior Vice President, Chief Financial Officer, Treasurer and Assistant Secretary

April 9, 2015

Stockholders of record are urged to vote their proxy promptly, whether or not they expect to attend the annual meeting in person.  

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 19, 2015:

We have elected to take advantage of the U.S. Securities and Exchange Commission rules that allow us to furnish proxy materials to our stockholders via the Internet. These rules allow us to provide information that our stockholders need while lowering the costs and accelerating the speed of delivery and reducing the environmental impact of our annual meeting. This proxy statement, along with the Company’s Annual Report to Stockholders, which includes our Annual Report on Form 10-K for the year ended December 31, 2014 are available via the Internet at www.proxydocs.com/DNR.




TABLE OF CONTENTS


i


2014 Named Executive Officer Resignation Payments and Estimated Potential Payments Upon Termination or Change in Control
A-1



ii


DENBURY RESOURCES INC.
5320 Legacy Drive
Plano, Texas  75024

PROXY STATEMENT

Annual Meeting of Stockholders
to be held on Tuesday, May 19, 2015

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (sometimes referred to herein as "our Board" or "the Board") of Denbury Resources Inc., a Delaware corporation ("Denbury" or "the Company") for use at the Company's annual meeting of stockholders to be held on Tuesday, May 19, 2015 at the Company's corporate headquarters at 5320 Legacy Drive, Plano, Texas 75024, at 3:00 P.M. Central Daylight Time (CDT), or at any adjournment or postponement thereof. This proxy statement, proxy card and our 2014 Annual Report to Stockholders are being first made available to stockholders on or about April 9, 2015.

INTERNET AVAILABILITY OF PROXY MATERIALS

As permitted under the rules of the Securities and Exchange Commission (the "SEC"), the Company is making its proxy materials available to its stockholders electronically via the Internet. On or about April 9, 2015, the Company is sending a Notice Regarding the Internet Availability of Proxy Materials (the "Notice") to its stockholders of record as of the close of business on March 24, 2015. The Notice includes (i) instructions on how to access the Company's proxy materials and vote via the Internet, (ii) the date, time and location of the annual meeting, (iii) a description of the matters intended to be acted upon at the annual meeting, (iv) a list of the materials being made available electronically, (v) instructions on how a stockholder can request paper copies of the Company's proxy materials, (vi) any control/identification numbers that a stockholder needs to access the proxy materials and (vii) information about attending the annual meeting and voting in person.

RECORD DATE AND COMMON STOCK OUTSTANDING

Our Board has fixed the record date for the annual meeting as of the close of business on March 24, 2015.  Only Denbury stockholders of record on the record date are entitled to receive notice of and to vote at the annual meeting.  If you are a holder of our common stock, you are entitled to one vote at the annual meeting for each share of common stock you held on the record date.  On the record date, there were approximately 356,598,862 shares of Denbury common stock issued and outstanding and entitled to vote at the annual meeting.

VOTING OF COMMON STOCK
Voting by Stockholders of Record

You are a stockholder of record if your shares are directly held by you and registered in your name with our transfer agent. If you are a stockholder of record, you may vote your shares via the Internet at www.proxydocs.com/DNR in accordance with the instructions in the Notice. If you have requested a paper copy of the proxy materials, you may also vote by touch-tone telephone from the United States by calling 1-866-206-5293, or by completing, signing and dating the proxy card and returning the proxy card in the prepaid envelope. In order to be valid and acted upon at the annual meeting, your proxy must be received before 11:59 P.M. Eastern Daylight Time (EDT) on May 18, 2015. Shares represented by proxy will be voted at the annual meeting and may be revoked at any time prior to the time at which they are voted by: (i) timely submitting a proxy with new voting instructions via the Internet or telephone; (ii) timely delivering a valid, later-dated executed proxy card; (iii) delivering a written notice of revocation that is received by our Secretary at 5320 Legacy Drive, Plano, Texas 75024, by 11:59 P.M. Eastern Daylight Time (EDT) on May 18, 2015; or (iv) voting in person at the annual meeting by completing a ballot (however, attending the annual meeting without completing a ballot will not revoke any previously submitted proxy). If you properly complete and sign your proxy card but do not indicate how your shares should be voted on a matter, the shares represented by your proxy will be voted in accordance with the recommendation of our Board as discussed below.



1


Voting by Beneficial Owners

You are considered a beneficial owner of shares held in "street name" if your shares are held by a broker, bank or other nominee (collectively referred to as a "broker") on your behalf. If you are a beneficial owner of shares, you will receive instructions from your broker describing how to vote your shares. As a beneficial owner of your shares, you are entitled to direct your broker how to vote your shares. You may instruct your broker how to vote by completing the voting instruction form provided to you by your broker. You may also vote by telephone or via the Internet if your broker makes such methods available, in which case applicable instructions will be provided to you by your broker. You may change your vote by submitting new voting instructions to your broker in accordance with your broker's procedures. If you do not instruct your broker how to vote your shares, they may vote your shares as they decide with respect to each matter for which they have discretionary authority. There are also non-discretionary matters for which brokers do not have discretionary authority to vote unless they receive timely instructions from you. A "broker non-vote" results when a broker does not have discretion to vote on a particular matter, you have not given timely instructions on how the broker should vote your shares and the broker indicates it does not have authority to vote such shares on its proxy. Brokers do not have discretionary voting authority with respect to Proposal One (the election of directors), Proposal Two (the nonbinding, advisory approval of named executive officer compensation) or Proposal Three (amendment and restatement of our 2004 Omnibus Stock and Incentive Plan). Brokers will have discretionary authority in the absence of timely instructions from the beneficial owners for Proposal Four (the ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm). As the beneficial owner of shares, you are invited to attend the annual meeting; however, you may not vote your shares in person at the annual meeting unless you obtain a written proxy from your broker.

Quorum; Required Vote; Treatment of Abstentions and Broker Non-Votes

We must have present in person or represented by proxy at least one-third of our issued and outstanding shares of common stock entitled to vote at the annual meeting in order to have a quorum.  Abstentions and broker non-votes are counted as present at the annual meeting for purposes of determining whether a quorum is present. With respect to Proposal One (the election of directors), you will not be allowed to cumulate your votes.  If you do not wish to vote for a particular nominee, you must clearly identify such nominee on your proxy card or voting instruction form. In order for a nominee to be elected as director, such nominee must receive the vote of the majority of the votes cast with respect to such nominee at the annual meeting. A majority of votes cast means that the number of shares voted “for” a nominee's election must exceed the number of shares voted as “withhold” for such nominee's election. Abstentions and broker non-votes will not be counted as votes cast for purposes of the election of directors. With respect to Proposals Two, Three and Four, a majority of the shares having voting power present in person or represented by proxy at the annual meeting is required for approval. Abstentions will be included in the vote total on Proposals Two, Three and Four, such abstentions having the same effect on each such proposal as a negative vote; however, if there is a broker non-vote with respect to Proposals Two or Three, it will not be included in the vote total and will not have any effect.

We will vote all properly executed proxies at the annual meeting in accordance with the direction on the proxy.  You should be aware that if no vote direction is indicated, the shares will be voted FOR the election of all of the director nominees under Proposal One; FOR Proposal Two (the nonbinding, advisory approval of named executive officer compensation); FOR Proposal Three (amendment and restatement of our 2004 Omnibus Stock and Incentive Plan); and FOR Proposal Four (the ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm).  Our Board has designated Wieland F. Wettstein and/or Phil Rykhoek to serve as proxies.  We do not know of any matters other than those matters listed in the Notice that will be presented for action at the annual meeting.  However, if any other matters are properly presented for action at the annual meeting, we intend for Messrs. Wettstein and Rykhoek, and each of them acting singly as proxies named in the proxy card, to vote at their discretion on such matters.



2


PERSONS MAKING THE SOLICITATION

We are soliciting this proxy and will bear all costs incurred in connection with such solicitation for the annual meeting, including those incurred for the preparation, printing and mailing of the proxy materials.  Our directors, officers or employees may solicit proxies by personal interviews, telephone or other means of communication.  If they do so, these individuals will not receive any additional compensation for these services.  We may also retain a proxy solicitor to assist us with the distribution and solicitation of proxies for the annual meeting at our expense.

Proposal One: Election of Directors

Our Second Amended and Restated Bylaws ("Bylaws") provide that our Board shall consist of a minimum of three and a maximum of fifteen directors.  Each of the directors is elected annually and holds office until the close of the next annual meeting of stockholders unless he or she resigns from that position or ceases to be a director by operation of law.  We presently have nine directors, all of whom are serving terms that expire at the annual meeting.  Ronald G. Greene has advised the Board that he will not stand for re-election at the annual meeting. As a result, only eight director nominees will be seeking re-election at the annual meeting. Unless you mark a proxy to the contrary, we plan to vote the proxies for the election of the eight nominees listed below as directors.  All eight of these individuals are current members of the Board.  We do not foresee any reason why any of these nominees would become unavailable, but if any of them should, your proxy may be voted for a substitute that is nominated by the Board, or we may reduce the size of our Board accordingly.

The name, age, Board committee membership, period of time served as a director of Denbury and the principal occupation of each person nominated for election as a director are as follows:
Name
 
Age
 
Board Committee
 
Director Since
 
Principal Occupation
Wieland F. Wettstein, Chairman
 
65
 
Audit Committee

Risk Committee
 
1990
 
President of Finex Financial Corporation Ltd.
Michael B. Decker
 
65
 
Compensation Committee

Nominating/Corporate Governance Committee
 
2007
 
Partner with Wingate Partners
John P. Dielwart
 
62
 
Reserves and HSE Committee

Risk Committee
 
2013
 
Vice-Chairman of ARC Financial Corp.

Gregory L. McMichael
 
66
 
Compensation Committee

Nominating/Corporate Governance Committee

Risk Committee
 
2004
 
Independent Consultant
Kevin O. Meyers
 
61
 
Audit Committee

Reserves and HSE Committee
 
2011
 
Independent Consultant
Phil Rykhoek
 
58
 
N/A
 
2010
 
President and Chief Executive Officer of Denbury Resources Inc.
Randy Stein
 
61
 
Audit Committee

Nominating/Corporate Governance Committee

Risk Committee
 
2005
 
Independent Consultant
Laura A. Sugg
 
54
 
Compensation Committee

Reserves and HSE Committee
 
2012
 
Independent Consultant


3


Our directors bring various skills, experience and insight to our Board.  Our Board consists of our current President and Chief Executive Officer (Mr. Rykhoek), a former chief executive officer of a public oil and gas company (Mr. Dielwart), two qualified financial experts (Messrs. Wettstein and Stein), a private equity investor and former chief operating officer (Mr. Decker), two engineers with executive industry experience (Mr. Meyers and Ms. Sugg) and a former oil and gas analyst (Mr. McMichael).  These Board members were selected in order to give the Board insight from various points of view, all of which relate to various aspects of our business. 

With the exception of Mr. Rykhoek, our President and Chief Executive Officer, all of our director nominees are independent. Including a large majority of independent directors on our Board helps ensure our Board provides independent oversight. For more information on director independence, please see Governance of the Company – Director Independence below. Our director nominees provide an effective mix of experience and fresh perspective. Including directors with a mix of tenure on the Board helps transition the knowledge of the more experienced directors while providing a broad set of perspectives and experiences. For more information on how director candidates are identified, please see Governance of the Company – Identification of Director Candidates below.



4


The narratives below provide more specific biographical information and outline the skills and qualifications for each of the Board nominees.
 
 
 
 
 
Wieland F. Wettstein
 
 
 
 
 
 
 
 
 
 
Joined the Board: 1990
 
 
Age: 65
 
 
Board Committees: Audit Committee, Risk Committee
 
 
Principal Occupation: President of Finex Financial Corporation Ltd.
 
 
 
 
 
 
 
 
 
Wieland F. Wettstein has been a director of Denbury since 1990 and Chairman of the Board since May 2008, including between June 2009 and October 2010 when he acted as Co-Chairman of the Board.  Mr. Wettstein was a founding stockholder and director of Denbury, and held the position of Chairman of the Board from its inception to 1995.  Mr. Wettstein is the President of Finex Financial Corporation Ltd. ("Finex"), an investment company in Calgary, Alberta which he also controls, a position he has held since November 2003. Prior to that, Mr. Wettstein was Executive Vice President of Finex since its founding in 1987.  Under his leadership, Finex developed into a diversified merchant banking operation with actively managed interests in real estate development, emerging energy companies, participation lending, infrastructure leasing and venture capital.  Mr. Wettstein has been a director of numerous Canadian public and private companies during the past 30 years and has been a founding shareholder, director and chairman of several oil and gas companies.  Mr. Wettstein currently serves as a director and member of the audit committee of Journey Energy Inc., a Canadian oil and gas company.
 
 
 
 
 
Skills and Qualifications:
 
 
Mr. Wettstein is a Chartered Accountant. Mr. Wettstein's long association with the Company and extensive industry knowledge allow him to provide valuable insights to the Board.  In addition, his financial background, leadership experience and service on the boards of several other oil and gas companies over his career provide him invaluable perspectives in the Board's oversight of the Company's execution of its long-term business strategy.
 
 
 
 

 
 
 
 
 
Michael B. Decker
 
 
 
 
 
 
 
 
 
 
Joined the Board: 2007
 
 
Age: 65
 
 
Board Committees: Compensation Committee, Nominating/Corporate Governance Committee
 
 
Principal Occupation: Partner with Wingate Partners
 
 
 
 
 
 
 
 
 
Michael B. Decker has been a director of Denbury since December 2007.  Mr. Decker has been a partner of Wingate Partners, a Dallas-based private equity investment company, since 1996.  Prior to joining Wingate Partners, Mr. Decker held the position of Chief Operating Officer of the Trammell Crow Company.  He previously was President of Huffco Group, Inc., an energy exploration company.  Mr. Decker currently serves as a board member for Sunrise Oilfield Supply and USA Environment LP.  Mr. Decker has served as a consultant for the Boston Consulting Group and has worked as an investment officer for the World Bank.
 
 
 
 
 
Skills and Qualifications:
 
 
Mr. Decker holds an MBA from the Harvard Business School, a Master of Arts from Oxford University and an Artium Baccalaureatus from Princeton University.  Mr. Decker's educational background and current and past roles provide him with significant financial, managerial and leadership experience.  Mr. Decker has significant experience in the oil and gas industry, as well as several other industries, which broadens the perspectives he brings to the Board.
 
 
 
 



5


 
 
 
 
 
John P. Dielwart
 
 
 
 
 
 
 
 
 
 
Joined the Board: 2013
 
 
Age: 62
 
 
Board Committees: Reserves and HSE Committee, Risk Committee
 
 
Principal Occupation: Vice-Chairman of ARC Financial Corp.
 
 
 
 
 
 
 
 
 
John P. Dielwart has been a director of Denbury since November 2013. Mr. Dielwart is a founder and former Chief Executive Officer, as well as a current member of the board of directors, of ARC Resources Ltd. ("ARC"), a Calgary, Canada-based public oil and gas company and a member of the board of directors of Tesco Corporation, an oilfield services company. Mr. Dielwart oversaw the growth of ARC, first as its President and then as Chief Executive Officer from its startup in 1996 until his retirement in January of 2013. Mr. Dielwart is currently the Vice-Chairman of ARC Financial Corp., Canada’s leading energy-focused private equity manager, a position he assumed after his retirement from ARC. Prior to joining ARC, Mr. Dielwart spent 12 years with a major Calgary-based oil and natural gas engineering consulting firm as Senior Vice President and Director. Mr. Dielwart began his career at a major Calgary-based oil and natural gas company, where he spent five years. Mr. Dielwart served two separate three-year terms as a Governor of the Canadian Association of Petroleum Producers (CAPP), including 18 months (2002 to 2004) as Chairman.
 
 
 
 
 
Skills and Qualifications:
 
 
Mr. Dielwart is a member of the Association of Professional Engineers and Geoscientists of Alberta (APEGA) and received a Bachelor of Science degree (with Distinction) in Civil Engineering from the University of Calgary. Mr. Dielwart’s background in the oil and gas industry, particularly as a founder and former Chief Executive Officer of ARC, provides the Board with extensive and relevant industry knowledge, as well as a managerial and leadership perspective.  Mr. Dielwart’s experience in overseeing the development of ARC into a successful growth and income company is an asset to both the Board and management as the Company develops its growth and income strategy.

 
 
 
 

 
 
 
 
 
Gregory L. McMichael
 
 
 
 
 
 
 
 
 
 
Joined the Board: 2004
 
 
Age: 66
 
 
Board Committees: Compensation Committee, Nominating/Corporate Governance Committee, Risk Committee
 
 
Principal Occupation: Independent Consultant
 
 
 
 
 
 
 
 
 
Gregory L. McMichael has been a director of Denbury since December 2004.  Mr. McMichael is currently a self-employed business consultant, having retired in 2004 from his position of Vice President and Group Leader – Energy Research of A.G. Edwards, where he was responsible for all of the firm's equity research in the energy sector.  Prior to his employment by A.G. Edwards, which commenced in 1998, Mr. McMichael was Director of Equity Research of Hanifen, Imhoff, Inc. ("Hanifen"), a regional investment banking firm based in Denver, Colorado, for eight years.  Prior to his employment by Hanifen, he worked directly in the oil and gas industry for 15 years, most recently as Chief Executive Officer of Point Resources Inc., a privately held oil and natural gas exploration and production company.  Mr. McMichael currently serves as a Special Advisor to the board of directors of Matador Resources Company, the successor to Matador Petroleum Corporation. Mr. McMichael has previously served as a director of Matador Petroleum Company, Quest Resource Corporation and Admiral Bay Resources Inc.  
 
 
 
 
 
Skills and Qualifications:
 
 
Mr. McMichael is a National Association of Corporate Directors Board Leadership Fellow. Mr. McMichael's experience in the oil and gas industry, coupled with his service on other boards and experience as an analyst covering the energy sector, provides the Board with broad and extensive analytical perspectives.  Mr. McMichael monitors the oil and gas industry and provides the Board with various analyses of relative industry performance.

 
 
 
 



6


 
 
 
 
 
Kevin O. Meyers
 
 
 
 
 
 
 
 
 
 
Joined the Board: 2011
 
 
Age: 61
 
 
Board Committees: Audit Committee, Reserves and HSE Committee
 
 
Principal Occupation: Independent Consultant
 
 
 
 
 
 
 
 
 
Kevin O. Meyers has been a director of Denbury since July 2011.  Mr. Meyers has more than 35 years of experience in the oil and gas industry, having retired from ConocoPhillips at the end of 2010. Mr. Meyers currently serves on the board of directors of Hornbeck Offshore Services, Inc., Precision Drilling Corporation, Bill Barrett Corporation and Hess Corporation. Mr. Meyers previously served on the board of directors of LUKOIL, the World Energy Council, the United States Energy Association, the Board of Regents of the University of Alaska and the Nature Conservancy of Alaska. For the ten years prior to retirement, Mr. Meyers was a senior executive with ConocoPhillips, most recently serving as Senior Vice President Exploration and Production, Americas.  Prior to that, he was President of ConocoPhillips Canada, President of ConocoPhillips Russia and Caspian Region, and President of ConocoPhillips Alaska.  For the twenty years prior to that, he served in engineering, technical and executive positions with ARCO, last serving as President of ARCO Alaska.
 
 
 
 
 
Skills and Qualifications:
 
 
Mr. Meyers holds a Ph.D. in Chemical Engineering from the Massachusetts Institute of Technology and Bachelor’s degrees in Chemistry and Mathematics from Capital University in Ohio. Mr. Meyers’ educational background and extensive industry and technical experience provide the Board with significant insight into the Company’s operations and technical matters.  His leadership experience with large oil and gas companies further broadens the perspectives he brings to the Board.
 
 
 
 
 

 
 
 
 
 
Phil Rykhoek
 
 
 
 
 
 
 
 
 
 
Joined the Board: 2010
 
 
Age: 58
 
 
Board Committees: N/A
 
 
Principal Occupation: President and Chief Executive Officer of Denbury Resources Inc.
 
 
 
 
 
 
 
 
 
Phil Rykhoek has been a director of Denbury since December 2010 and has been the President and Chief Executive Officer of Denbury since June 2009.  Since joining the Company in June 1995 through June 2009, Mr. Rykhoek served as Chief Financial Officer, last serving as Senior Vice President, Chief Financial Officer, Secretary and Treasurer.  Mr. Rykhoek led the effort to take Denbury public in the United States in 1995 and has been an integral part of senior management for the last 19 years. Before joining Denbury in June 1995, Mr. Rykhoek was co-founder and an executive officer of Petroleum Financial, Inc. ("PFI"), a private company formed in May 1991 to provide accounting, financial and management services on a contract basis to other entities.  While at PFI, Mr. Rykhoek was also an officer of Amerac Energy Corporation, where he had been employed in various positions for eight years, last as Vice President and Chief Accounting Officer.  Mr. Rykhoek also served as a director of the general partner of Encore Energy Partners L.P. between August 2010 and December 2010 and of the general partner of Genesis Energy, L.P. between May 2002 and February 2010.
  
 
 
 
 
 
 
Skills and Qualifications:
 
 
As Chief Executive Officer of the Company, Mr. Rykhoek is intimately knowledgeable of the day-to-day and strategic operations of the Company, providing the Board with a management perspective.
 
 
 
 



7


 
 
 
 
 
Randy Stein
 
 
 
 
 
 
 
 
 
 
Joined the Board: 2005
 
 
Age: 61
 
 
Board Committees: Audit Committee, Nominating/Corporate Governance Committee, Risk Committee
 
 
Principal Occupation: Independent Consultant
 
 
 
 
 
 
 
 
 
Randy Stein has been a director of Denbury since January 2005.  Mr. Stein is currently a self-employed business consultant, having retired from PricewaterhouseCoopers LLP, formerly Coopers & Lybrand LLP, in 2000.  Mr. Stein was employed for 20 years with PricewaterhouseCoopers LLP, most recently as principal in charge of the Denver, Colorado tax practice. Mr. Stein served as Audit Committee Chairman, Co-Chairman of the Nominating/Corporate Governance Committee and a member of the Compensation Committee of Westport Resources Corp., a Denver-based public oil and gas company, from 2000 until it was acquired in 2004.  Mr. Stein is currently a board member and Audit Committee Chairman of Bill Barrett Corporation, a Denver-based public oil and gas company, and also served on the board and audit committee of Koala Corporation, a Denver-based company engaged in the design, production and marketing of family convenience products, from 2001 through 2005.
 
 
 
 
 
Skills and Qualifications:
 
 
Mr. Stein's experience in public accounting with a major accounting firm provides our Board with insights into many aspects of the financial reporting and tax issues facing oil and gas companies.  Mr. Stein's background also brings additional financial, accounting and tax expertise to the Board through prior experience as a vice president of taxation for a publicly traded oil and gas company, and an expansive understanding of corporate governance and audit committee matters through his service on other boards.
 
 
 
 

 
 
 
 
 
Laura A. Sugg
 
 
 
 
 
 
 
 
 
 
Joined the Board: 2012
 
 
Age: 54
 
 
Board Committees: Compensation Committee, Reserves and HSE Committee
 
 
Principal Occupation: Independent Consultant
 
 
 
 
 
 
 
 
 
Laura A. Sugg has been a director of Denbury since January 2012.  Ms. Sugg currently serves on the board of directors of the Williams Companies, Inc. and Murphy Oil Corporation, and she previously served on the board of directors of Mariner Energy Inc., Huber Energy and Williams Partners L.P.  Ms. Sugg is a retired senior executive of ConocoPhillips, serving over 20 years in diverse roles of increasing responsibility, last serving as President of the Australasia Division.  In this role, Ms. Sugg was in charge of profit and loss and growth for ConocoPhillips’ operations in Australia and East Timor.  Prior to her role as President of the Australasia Division, Ms. Sugg served as ConocoPhillips’ General Manager E&P Human Resources, ConocoPhillips’ midstream executive responsible for the profit and loss, health, safety and environment, and operations for its gas gathering, processing, and fractionation business in the U.S., Canada and Trinidad and Vice President Worldwide Gas.
 
 
 
 
 
Skills and Qualifications:
 
 
Ms. Sugg has a Bachelor’s degree in Chemical Engineering from Oklahoma State University and is a member of the National Association of Corporate Directors.  Ms. Sugg’s background brings extensive industry, operational and technical experience to the Board.  Her experience also extends to human resources, compensation and financial matters, which combined with her leadership experience in a large oil and gas company, exemplifies the diverse perspectives she brings to the Board.
 
 
 
 



8


Vote Required

As described above, in order for a nominee to be elected as a director, such nominee must receive the affirmative vote of a majority of the votes cast with respect to such nominee. A majority of votes cast means that the number of shares voted “for” a nominee's election must exceed the number of shares voted as “withhold” for such nominee's election. Abstentions and broker non-votes will not be counted as votes cast for purposes of the election of directors. Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal.

Board of Directors' Recommendation

Our Board of Directors recommends that stockholders vote FOR election of each of the foregoing director nominees.


GOVERNANCE OF THE COMPANY

The business, properties and affairs of the Company are managed by the Chief Executive Officer under the direction of the Board.  The Board has responsibility for establishing broad corporate policies and for the overall performance and direction of the Company. Other than involvement by the Company's Chief Executive Officer, the Board is not involved in the day-to-day operations of the Company.  Board members keep informed of the Company's business by participating in Board meetings, attending committee meetings, reviewing regularly provided analyses and reports and engaging in thorough discussions with the Chief Executive Officer and other officers of the Company. Our Board and senior management spend significant time implementing corporate governance policies and practices that uphold our core values, align with our corporate governance commitments and support our business sustainability.

Board Leadership Structure

Wieland F. Wettstein serves as Chairman of our Board and Phil Rykhoek serves as our President and Chief Executive Officer. The separation of the positions of Chief Executive Officer and Chairman of the Board allows for our Chief Executive Officer to focus on the day-to-day leadership and performance of the Company and allows our Chairman of the Board to lead the Board in its fundamental role of providing advice and oversight to management. The Board recognizes that no single leadership structure is right for all companies, and depending on the circumstances, other leadership structures might be appropriate.  The Board believes the current leadership structure is effective and appropriate, creates a separation of executive powers by providing an experienced Chairman with whom the Chief Executive Officer can discuss issues facing the Company, and provides a significant voice to non-management directors.

Presiding Director

Wieland F. Wettstein, our Chairman of the Board, is the presiding director at the meetings of non-management directors.  To contact him, please address your letters to:
 
Denbury Resources Inc.
Attn: Chairman of the Board of Directors
5320 Legacy Drive
Plano, Texas 75024



9


Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines that address significant issues of corporate governance and set forth the procedures by which the Board carries out its responsibilities.  Among the areas addressed by the guidelines are director qualifications, director responsibilities, selection and election of directors, director compensation and tenure, Board committee responsibilities, director orientation and continuing education, director access to management and succession planning, the number of Board meetings, and Board and committee performance evaluations.  The Nominating/Corporate Governance Committee is responsible for assessing and periodically reviewing the adequacy of these guidelines.  In 2014, based on a recommendation from the Nominating/Corporate Governance Committee, the Board approved an expansion to its primary responsibility as memorialized in the guidelines. The primary responsibility language changed from overseeing the “maximization of long-term stockholder value for the Company’s stockholders” to “maximization of long-term stockholder value for the Company’s stockholders, with due regard for the Company’s employees and other stakeholders.” The Board believes that this change was necessary to help communicate that all of Denbury’s stakeholders are considered when the Board is making decisions and carrying out its oversight responsibilities. The guidelines are available on the Company's website at www.denbury.com, under the “About Denbury – Corporate Governance” link.

Risk Oversight

The Board takes an active role in overseeing management of the Company's risks through its review of risks associated with our operations and strategic initiatives, both as a Board and through Board committees.  For example, the Audit Committee reviews and discusses with management our guidelines and policies with respect to risk assessment and risk management, as well as our major financial reporting risk exposures.  Additionally, in December of 2013, the Board created a Risk Committee, which focuses on overseeing our principal business, financial and operational risks, and other material risks and exposures, and the actions, activities and initiatives of the Company to mitigate such risks and exposures. The Audit Committee and Risk Committee receive regular reports regarding enterprise risk from our Internal Audit Department and management and informs the Board on such matters through regular committee reports.  In addition to receiving regular reports from the Audit Committee, Risk Committee and other Board committees concerning our enterprise risk, the Board as a whole also routinely reviews and discusses enterprise risk management and receives updates throughout the year from the Director of Internal Audit.  The Board also reviews information concerning other risks through regular reports of its committees.

Identification of Director Candidates

The Nominating/Corporate Governance Committee is responsible for identifying and reviewing director candidates to determine whether they qualify and should be considered for membership on the Board.  The Nominating/Corporate Governance Committee has not established a specific minimum or maximum age, level of education, years of experience or specified types of skills for potential director candidates, but in general, consideration is given to the candidates’ business and professional backgrounds, and the committee seeks candidates with outstanding integrity, achievements, judgment and other skills and experience that will enhance the Board's ability to serve the long-term interests of the Company and its stockholders.  The Board and the Nominating/Corporate Governance Committee aim to assemble a diverse group of Board members and believe that no single criterion, such as gender or minority status, is determinative in obtaining diversity on the Board.  The Board defines diversity as differences of viewpoint, professional experience, education and skills, such as serving on other public company boards, the balance of business interest and experience of the candidate as compared to the incumbent or other nominated directors, and the need for any particular expertise on the Board or one of its committees.  Members of the Board will be asked to submit recommendations when there is an opening or anticipated opening for a director position.  The Nominating/Corporate Governance Committee may also use outside sources or third parties to find potential director candidates, and similarly may use the services of outside sources or third parties to evaluate or assist in evaluating nominees brought to their attention.
 


10


The Nominating/Corporate Governance Committee will also consider director candidates recommended by the stockholders in accordance with the Company’s Bylaws.  For information on how to recommend a director candidate, refer to Stockholder Proposals for Our 2016 Annual Meeting of Stockholders – Advanced Notice of Nominations or Proposed Business for Our 2016 Annual Meeting of Stockholders below.

Director Independence

The Company's Bylaws provide that at least two-thirds of the members of the Board will be independent under the rules of the New York Stock Exchange ("NYSE") and its corporate governance listing standards.  Additionally, each of the Board committee charters requires that members of that committee be independent. The Board has affirmatively determined that all nominees for director, with the exception of Mr. Rykhoek, the Company’s President and Chief Executive Officer, qualify as independent directors under these standards based on its review of all relevant facts and circumstances.

Code of Conduct and Ethics

The Company has a Code of Conduct and Ethics that applies to its officers, employees and directors.  This code assists employees in resolving ethical issues that may arise in complying with Denbury's policies.  In 2014, the Company adopted a new Code of Conduct and Ethics, which is a values-based document organized around Denbury’s five core values: Integrity, Teamwork, Innovation, Excellence and Respect. Our Code of Conduct and Ethics exemplifies Denbury's commitment to "Doing Right" in the conduct of its business.

The Company's Chief Executive Officer and Senior Financial Officers are also subject to the Code of Ethics for Principal Executive Officer and Senior Financial Officers.  The purpose of both codes is to promote, among other things:

ethical handling of actual or apparent conflicts of interest;
full, fair, accurate and timely disclosure in filings with the SEC and in other public disclosures;
compliance with the law and other regulations;
protection of the Company's assets;
compliance with insider trading policies; and
prompt internal reporting of violations of the codes.

Both of these codes are available on the Company's website at www.denbury.com, under the "About Denbury – Corporate Governance" link.  Any waiver of these codes with respect to executive officers and directors of the Company may be made only by the Board and will be disclosed to stockholders on the Company's website, along with any amendments to these codes, to the extent required by applicable law, NYSE rules or regulations.

Related Party Transactions

Related Party Transactions Policy and Process

Under the Company's Related Party Transactions Policy, the Nominating/Corporate Governance Committee is charged with reviewing and approving or ratifying all transactions, other than those non-material transactions specifically excluded in the policy, between the Company and a “Related Party.” Under the Company's Related Party Transactions Policy, “Related Parties” are the Company's directors and executive officers, as well as their immediate family members and beneficial owners that hold more than 5% of any class of the Company's voting securities, as well as their immediate family members. The Company's Related Party Transactions Policy is available on the Company's website at www.denbury.com, under the “About Denbury – Corporate Governance” link.



11


Certain Related Party Transactions

Tortuga Investment Corp. (“Tortuga”), a corporation solely owned by Ronald G. Greene (a director of the Company), purchased $2 million principal amount of 8¼% Senior Subordinated Notes Due 2020 (the “8¼% Notes”) on February 10, 2010, and $5 million principal amount of 6% Senior Subordinated Notes Due 2021 (the “6% Notes”) on February 17, 2011. In the year ended December 31, 2014, Tortuga received interest payments on the 6% Notes of $318,750 on the same terms as all other holders of the 6% Notes. On April 30, 2014, Tortuga received $116,875 (which amount included principal, redemption premium and accrued interest) upon the redemption of all 8¼% Notes that remained outstanding on the same terms as all other holders of the 8¼% Notes.

Communication with the Board
 

The Board has approved a process by which stockholders or other interested parties may contact the members of the Board.  All parties wanting to communicate with the Board should address letters to:

Denbury Resources Inc.
Attn: Corporate Secretary
5320 Legacy Drive
Plano, Texas 75024

In addition, interested parties may e-mail the Corporate Secretary and Board members at: secretary@denbury.com.  All such communications will be forwarded by the Corporate Secretary directly to the Board.



12


BOARD MEETINGS, ATTENDANCE AND COMMITTEES

The Board met nine times during the year ended December 31, 2014, including telephonic meetings. All directors attended 100% of the Board meetings held in 2014.  Mr. Wettstein, Chairman of the Board, acted as chairman of each Board meeting. The Board took all other actions by unanimous written consent during 2014 in accordance with the terms of the Company's Bylaws.  In addition, all directors attended at least 75% of all meetings of each of the committees on which they served.

At each in-person meeting, the Board holds an executive session with the non-management Board members.  Mr. Wettstein, Chairman of the Board, was chosen by the independent Board members to chair these executive sessions.

The Company encourages the directors to attend the annual meeting of stockholders, but does not have a policy that all of the directors must be present.  All of the directors attended last year's annual meeting of stockholders.

During 2014, the Board had an Audit Committee, Compensation Committee, Reserves and HSE Committee, Nominating/Corporate Governance Committee and Risk Committee. At each Board meeting in 2014, the Chairpersons of each committee provided a report on their committee's activities and findings from their most recent meetings. The Board committees had the following number of meetings during 2014, including telephonic meetings:
Committee
 
Number of Meetings in 2014
Audit
 
8
Compensation
 
4
Reserves and HSE
 
5
Nominating/Corporate Governance
 
4
Risk Committee
 
4

The table below shows the Committee memberships at March 31, 2015. Mr. Greene has notified the Board that he will not stand for re-election at the annual meeting. Effective with the annual meeting, the Board will be reduced from nine to eight members. At this time, we do not anticipate any other changes to our Committee memberships.
 
Name
Audit
Compensation
Reserves
and HSE
Nominating/Corporate Governance
Risk
 
 
Wieland F. Wettstein, Chairman
X
 
 
 
X
 
Michael B. Decker
 
X
 
Chairman
 
 
John P. Dielwart
 
 
X
 
X
 
Ronald G. Greene
 
X
X
 
 
 
Gregory L. McMichael
 
X
 
X
Chairman
 
Kevin O. Meyers
X
 
Chairman
 
 
 
Phil Rykhoek
 
 
 
 
 
 
Randy Stein
Chairman
 
 
X
X
 
Laura A. Sugg
 
Chairwoman
X
 
 




13


Audit Committee

The Audit Committee is comprised of three independent directors: Messrs. Meyers, Stein and Wettstein, with Mr. Stein acting as chairman.  The primary purpose of the Audit Committee, which is discussed in detail in its charter, is to (a) select, oversee and evaluate the Company's independent registered public accounting firm, (b) oversee and evaluate the Company's internal audit function and (c) provide assistance to the Board in fulfilling its oversight responsibility with respect to:

the integrity of the Company's financial statements;
the Company's compliance with legal and regulatory requirements;
the independence and qualifications of the Company's independent registered public accounting firm;
the performance of the Company's internal audit function and its independent registered public accounting firm;
the preparation of required disclosures for the Company's financial statement filings with the SEC; and
the evaluation as to whether the Company has effective processes for risk assessment and risk management.

The Audit Committee meets regularly with financial management, the Company's Director of Internal Audit and the independent registered public accounting firm to review financial accounting and reporting and financial controls of the Company.  The Audit Committee reviews and gives prior approval for audit and permitted non-audit services and related fees of the independent registered public accounting firm.  The Director of Internal Audit and the independent registered public accounting firm have unrestricted access to the Audit Committee and periodically meet with the Audit Committee without management representatives present to discuss the results of their examinations and their opinions.  The Audit Committee has the power to conduct internal audits and investigations, reviews recommendations or suggestions for changes in accounting procedures, and has the power to initiate or supervise any special investigations it may choose to undertake.  Each year, the Audit Committee recommends to the Board (for ratification by the stockholders) an independent registered public accounting firm (see Audit Matters – Proposal Four).

The NYSE and SEC have adopted standards with respect to independence and financial literacy of the members of audit committees of public companies (including our Audit Committee).  The standards require that all of the members of such audit committees be independent and that they all be able to read and understand fundamental financial statements, including balance sheets, income statements and cash flow statements.  Additionally, at least one member of the audit committee must qualify and be designated as an “audit committee financial expert.”  The financial expert must be knowledgeable in the application of generally accepted accounting principles, the understanding and preparation of financial statements, accounting for estimates, accruals and reserves, internal accounting controls and audit committee functions.  Such knowledge is to have been obtained through past education and experience in positions of financial oversight.  Both Messrs. Stein and Wettstein have such experience and have been designated as “audit committee financial experts.”  All members of the Audit Committee satisfy the criteria for both independence and financial literacy.

The Audit Committee charter is available on our website at www.denbury.com, under the “About Denbury – Corporate Governance” link.

Compensation Committee

The Compensation Committee is comprised of four independent directors: Messrs. Decker, Greene and McMichael and Ms. Sugg, with Ms. Sugg acting as chairwoman.  Mr. Greene has notified the Board that he will not stand for re-election at the annual meeting. Effective with the annual meeting, the Compensation Committee will be reduced from four to three members. The primary purpose of the Compensation Committee is to provide assistance to the Board in discharging its oversight responsibilities relating to the compensation and development of the Chief Executive Officer and other officers, and to oversee and administer the Company's equity and other compensation and benefit plans. The Compensation Committee's duties and responsibilities, which are discussed in detail in its charter, include:

recommending for adoption by the Board, a general compensation program and salary structure for the Company and reviewing the program annually, recommending to the Board overall salary increases, bonuses


14


and other annual compensation, and proposing modifications to the compensation program as deemed necessary;
reviewing and approving on at least an annual basis the corporate goals and objectives relevant to the compensation of the Chief Executive Officer, evaluating the Chief Executive Officer's performance in light of these goals and objectives, and, together with the other independent, non-employee, outside directors of the Board, determining and approving the Chief Executive Officer's compensation based on this evaluation, as well as, in consultation with the Chief Executive Officer, evaluating the performance of, and reviewing and recommending for adoption by the Board the compensation of, all other senior executives on an annual basis;
recommending to the Board the adoption of, or material modifications to, the Company's incentive compensation plans, deferred compensation plans and equity-based plans, granting awards under these plans, and administering these plans; and
reviewing and discussing with management the compensation discussion and analysis and preparing and approving the Compensation Committee Report, both of which are included in this proxy statement.

The Compensation Committee charter is available on the Company's website at www.denbury.com, under the “About Denbury – Corporate Governance” link.

Reserves and Health, Safety and Environmental (“Reserves and HSE”) Committee

The Reserves and HSE Committee is comprised of four independent directors: Ms. Sugg, Messrs. Dielwart, Greene and Meyers, with Mr. Meyers acting as chairman. Mr. Greene has notified the Board that he will not stand for re-election at the annual meeting. Effective with the annual meeting, the Reserves and HSE Committee will be reduced from four to three members. The primary purpose of the Reserves and HSE Committee is to provide assistance to the Board in discharging its oversight responsibilities relating to (a) the Company's independent reserves engineer, (b) information regarding the Company's reserves and (c) the Company’s health, safety and environmental policies, practices and procedures.  The Reserves and HSE Committee's duties and responsibilities, which are discussed in detail in its charter, include:

evaluating and recommending for selection by the Board, the Company's independent reserves engineer;
reviewing and monitoring the independence of the Company's independent reserves engineer;
reviewing with management and the independent reserves engineer the calculation and reporting of the Company's oil, natural gas, CO2 and helium reserves;
reviewing with management the Company’s health, safety and environmental policies, practices and procedures and assessments of relevant high risk areas of each;
reviewing the Company's strategy and initiatives in the area of corporate social responsibility; and
reviewing the Company's reports regarding corporate responsibility activities prior to publication.

The Reserves and HSE Committee charter is available on the Company's website at www.denbury.com, under the “About Denbury – Corporate Governance” link.

Nominating/Corporate Governance Committee

The Nominating/Corporate Governance Committee is comprised of three independent directors: Messrs. Decker, McMichael and Stein, with Mr. Decker acting as chairman.  The primary purpose of the Committee is to provide assistance to the Board in discharging its oversight responsibilities relating to effective corporate governance. The Nominating/Corporate Governance Committee's duties and responsibilities, which are discussed in detail in its charter, include:

identifying, recruiting, screening, interviewing and recommending for selection by the Board, individuals qualified to become members of the Board (see Governance of the Company – Identification of Director Candidates);
recommending to the Board and overseeing the evaluation by the Board of, the director nominees to be presented for stockholder approval at the annual meeting of stockholders or for appointment by the Board if a vacancy occurs between annual meetings;


15


developing and recommending to the Board for its approval an annual self-evaluation process of the Board and its committees;
monitoring the education, orientation and training needs of directors of the Board;
developing and recommending to the Board for its approval various codes of conduct and ethics and a set of corporate governance guidelines;
recommending to the Compensation Committee director compensation and benefits on an annual basis; and
reviewing, approving, or ratifying if appropriate, any related party transactions and any material amendments or modifications to such related party transactions pursuant to the Company's Related Party Transactions Policy.

The Nominating/Corporate Governance Committee charter is available on the Company's website at www.denbury.com, under the “About Denbury – Corporate Governance” link.

Risk Committee

The Risk Committee is comprised of four independent directors: Messrs. Dielwart, McMichael, Stein and Wettstein, with Mr. McMichael acting as chairman. The primary purpose of the Risk Committee is to provide assistance to the Board in discharging its oversight responsibilities relating to the Company's principal business, financial and operational risks, and other material risk exposures, and the actions, activities and initiatives of the Company to mitigate such risks and exposures, in each case to the extent such oversight is not otherwise the duty or responsibility of other committees of the Board. The Risk Committee's duties and responsibilities, which are discussed in detail in its charter, include:

reviewing and evaluating management’s identification of the major risks to the Company's business;
reviewing the principal financial risks, exposures and liabilities undertaken or assumed by the Company;
reviewing the Company’s hedging activities;
reviewing the Company’s insurance programs and policies; and
reviewing other material risk exposures as directed by the Board.

The Risk Committee charter is available on the Company's website at www.denbury.com, under the “About Denbury – Corporate Governance” link.



16


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
The following table presents information regarding the number of shares of Denbury common stock beneficially owned as of February 28, 2015 by (i) each stockholder known by the Company to beneficially own more than 5% of our issued and outstanding common stock, (ii) each executive officer of the Company named in the Summary Compensation Table (our named executive officers), (iii) each director of the Board and (iv) all directors and executive officers as a group. Unless otherwise indicated, each stockholder identified in the table is believed to have sole voting and investment power with respect to the shares beneficially held. The percent of outstanding shares is calculated on the basis of 356,617,145 shares of Denbury common stock outstanding (which excludes treasury shares) as of February 28, 2015.

 
Beneficial Ownership of
Common Stock as of
February 28, 2015
Name of Beneficial Owner
 
Shares
 
 
 
Percent of Shares Outstanding
Directors and Executive Officers:
 
 
 
 
 
 
  Wieland F. Wettstein
 
238,101

 
(1)(2)(3) 
 
*

  Michael B. Decker
 
97,629

 
(1)(2) 
 
*

  John P. Dielwart
 
21,635

 
(5) 
 
*

  Ronald G. Greene
 
3,606,163

 
(1)(2)(6) 
 
1.0%

  Gregory L. McMichael
 
45,451

 
(2)(4) 
 
*

  Kevin O. Meyers
 
43,102

 
(1) 
 
*

  Randy Stein
 
95,013

 
(1)(2) 
 
*

  Laura A. Sugg
 
30,002

 
(1) 
 
*

  Phil Rykhoek
 
1,093,360

 
(2)(7) 
 
*

  Mark C. Allen
 
729,687

 
(2)(7) 
 
*

  Jim Matthews
 
118,961

 
(7) 
 
*

  Brad Kerr
 
96,221

 
(7) 
 
*

  K. Craig McPherson
 
157,101

 
(7)(8) 
 
*

  Charlie Gibson
 
142,708

 
(2)(7)(8) 
 
 
  All of the executive officers and directors as a group (14 persons)
 
6,515,134

 
(9) 
 
1.8
%
5% or more Stockholders
 
 
 
 
 
 
   Artisan Partners Limited Partnership
 
31,658,736

 
(10) 
 
8.9
%
  Capital World Investors
 
30,400,000

 
(11) 
 
8.5
%
  The Vanguard Group, Inc.
 
26,729,263

 
(12) 
 
7.5
%
  Blackrock, Inc.
 
20,878,999

 
(13) 
 
5.9
%
  State Street Corporation
 
20,500,677

 
(14) 
 
5.7
%

*
Indicates less than 1%.
(1)
Includes 9,579 shares of unvested restricted common stock which will vest on May 31, 2015.  In addition to the foregoing vesting provisions, unvested awards will vest upon the holder’s death or disability or a change in control of the Company.
(2)
Does not include stock appreciation rights ("SARs") for which the closing price of Denbury common stock on February 27, 2015, was below the various strike prices.
(3)
Includes 90,072 shares of common stock held by Mr. Wettstein’s spouse.
(4)
Includes 9,579 shares of unvested deferred stock units which will vest, but still be subject to deferral, on May 31, 2015. In addition to the foregoing vesting provisions, these awards will vest upon the holder's death or disability or a change in control of the Company.
(5)
Includes 5,380 shares of unvested restricted common stock which will vest on May 31, 2015.


17


(6)
Includes 80,600 shares of common stock held by Mr. Greene's spouse in her retirement plan and 3,417,381 shares held by Tortuga, which is solely owned by Mr. Greene.
(7)
Includes the following shares of common stock (as shown in the table below) for each individual which they respectively have the right to acquire pursuant to: (a) shares of unvested restricted common stock which vest on the dates listed or at the time the executive (i) becomes retirement eligible and (ii) has held the restricted common stock for one year from the date of grant; (b) shares of unvested restricted common stock that vest ratably between January 31, 2015 and the date the officer becomes retirement eligible; (c) shares of unvested restricted common stock which vest on the date the executive (i) becomes retirement eligible and (ii) has held the restricted common stock for one year from the date of grant; and (d) shares related to the performance-based TSR (total shareholder return) award granted in 2012 and the capital efficiency performance-based operational award granted in 2014, which vested at 50% and 160%, respectively, of the targeted level on March 31, 2015 (see Results of Performance-Based Awards for Year-Ended 2014). The holders of the performance-based stock do not have voting rights with respect to such shares until such shares vest. In addition to the foregoing vesting provisions, all of these shares will vest upon a holder’s death or disability or a change in control of the Company. 
    
 
 
 
 
Phil
Rykhoek
 
Mark C.
Allen
 
Jim Matthews
 
Brad
Kerr
 
K. Craig McPherson
 
Charlie Gibson
Unvested Restricted Stock - Vested on March 31, 2015
 
(a)
 
43,910

 
26,053

 

 

 
17,487

 
11,291

Unvested Restricted Stock - Vesting on June 16, 2015
 
(a)
 

 

 

 
15,221

 

 

Unvested Restricted Stock - Vesting on July 1, 2015
 
(a)
 

 

 

 

 

 

Unvested Restricted Stock - Vesting on January 9, 2016
 
(a)
 
63,255

 
27,674

 
14,232

 
16,604

 

 

Unvested Restricted Stock - Vesting on March 31, 2016
 
(a)
 
79,308

 
34,436

 
16,665

 

 

 

Unvested Restricted Stock - Vesting on June 16, 2016
 
(a)
 

 

 

 
14,773

 

 

Unvested Restricted Stock - Vesting on January 9, 2017
 
(a)
 

 
26,860

 
13,814

 
16,116

 

 

Unvested Restricted Stock - Vesting on March 31, 2017
 
(a)
 

 
35,951

 
18,489

 

 

 

Unvested Restricted Stock - Vesting on June 16, 2017
 
(a)
 

 

 

 
14,773

 

 

Unvested Restricted Stock - Vesting on January 9, 2018
 
(a)
 

 
26,861

 
13,814

 
16,117

 

 

Unvested Restricted Stock - Ratably & Retirement Vesting
 
(b)
 
54,446

 
79,331

 

 

 

 

Unvested Restricted Stock - Retirement Vesting
 
(c)
 
204,966

 

 

 

 

 

Capital Efficiency Operational Performance-Based Awards - Vested on March 31, 2015
 
(d)
 
42,511

 
18,598

 
9,564

 

 
23,912

 
10,627

TSR Performance-Based Awards - Vested on March 31, 2015
 
(d)
 
9,910

 
5,880

 

 

 
3,946

 
2,548

Total
 
 
 
498,306

 
281,644

 
86,578

 
93,604

 
45,345


24,466

     
(8)
Does not include unvested restricted stock held by Messrs. McPherson and Gibson on February 28, 2015, but which was forfeited on April 1, 2015, in connection with their resignations.
(9)
Shares beneficially owned by these executive officers and directors as a group include 974,880 shares of restricted stock which vest over time and 127,496 performance-based awards, which vested on March 31, 2015. This amount does not include SARs held by certain executive officers for which the closing price of Denbury common stock on February 27, 2015, was below the various strike prices.
(10)
Information based on Schedule 13G filed with the SEC on January 30, 2015.  Artisan Partners Limited Partnership claims shared power to vote or direct the vote of 29,940,115 shares and shared power to dispose or direct the disposition of 31,658,736 shares. The address of Artisan Partners Limited Partnership is 875 East Wisconsin Avenue, Suite 800 Milwaukee, Wisconsin 53202.
(11)
Information based on Schedule 13G/A filed with the SEC on February 13, 2015.  Capital World Investors claims sole voting and dispositive power of 30,400,000 shares. The address of Capital World Investors is 333 South Hope Street, Los Angeles, California 90071.


18


(12)
Information based on Schedule 13G/A filed with the SEC on February 10, 2015.  The Vanguard Group, Inc. claims sole power to vote or direct the vote of 618,584 shares, sole power to dispose or direct the disposition of 26,155,326 shares and shared dispositive power of 573,937 shares. The address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
(13)
Information based on Schedule 13G/A filed with the SEC on February 9, 2015.  BlackRock, Inc. claims sole power to vote or direct the vote of 17,779,451 shares and sole power to dispose or direct the disposition of 20,878,999 shares. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10022.
(14)
Information based on Schedule 13G filed with the SEC on February 12, 2015. State Street Corporation claims shared voting power and shared dispositive power of 20,500,677 shares. The address of State Street Corporation is State Street Financial Center, One Lincoln Street, Boston, Massachusetts 02111.


MANAGEMENT

The names, ages and positions held by our officers are set forth below.  Each officer holds office until his or her successor is chosen and qualifies or until their earlier resignation or removal in accordance with our Bylaws. Set forth below the table is a description of the business experience of each of our current officers.
Name
 
Age
 
Position
Phil Rykhoek
 
58
 
Director, President and Chief Executive Officer
Mark C. Allen
 
47
 
Senior Vice President, Chief Financial Officer, Treasurer and Assistant Secretary
Jim Matthews
 
53
 
Senior Vice President, General Counsel and Secretary
Brad Kerr
 
55
 
Senior Vice President – Development, Technical and Innovation
Dan E. Cole
 
62
 
Vice President – Commercial Development and Governmental Relations
Matthew Dahan
 
51
 
Vice President – North Region
Matt Elmer
 
55
 
Vice President – Gulf Coast Region
John Filiatrault
 
49
 
Vice President – CO2 Supply and Pipelines
Jeff Marcel
 
53
 
Vice President – Drilling
Steve McLaurin
 
48
 
Vice President and Chief Information Officer
Alan Rhoades
 
50
 
Vice President and Chief Accounting Officer
Whitney Shelley
 
47
 
Vice President and Chief Human Resources Officer
Cory Weinbel
 
53
 
Vice President – Projects and Facilities

Phil Rykhoek is a director, President and Chief Executive Officer of Denbury.  Biographical information for Mr. Rykhoek is included under Proposal One – Election of Directors.

Mark C. Allen, Senior Vice President, Chief Financial Officer, Treasurer and Assistant Secretary, is a Certified Public Accountant (CPA).  Mr. Allen served as Vice President and Chief Accounting Officer until June 30, 2009.  Before joining Denbury in April 1999, Mr. Allen was Manager of Financial Reporting for ENSCO International Incorporated from November 1996 to April 1999.  Prior to November 1996, Mr. Allen was a manager in the accounting firm of Price Waterhouse LLP.  Mr. Allen also served as a director of Genesis Energy, L.P. between June 2006 and February 2010 and Encore Energy Partners GP LLC between August 2010 and December 2010.

Jim Matthews, Senior Vice President, General Counsel and Secretary, joined Denbury in January 2012.  Mr. Matthews was a partner with the law firm of Vinson & Elkins LLP from 2001 until joining Denbury in 2012, with a primary focus on representing companies in oil and gas finance transactions. Mr. Matthews served as Managing and Administrative Partner of Vinson & Elkins’ Tokyo office during his last three years with the firm.  Mr. Matthews holds a Bachelor of Arts degree from Vanderbilt University, a Master’s degree from Ohio University and a Juris Doctor degree from Emory University School of Law.

Brad Kerr, Senior Vice President – Development, Technical and Innovation, joined Denbury in June of 2014. Mr. Kerr has 31 years of oil and gas industry experience, serving in various roles at Royal Dutch Shell plc ("Shell") and at Exxon Mobil Corporation. His responsibilities included providing operational and technical leadership, new technology


19


implementation and reservoir engineering for diverse oil and gas exploration and development projects, including enhanced oil recovery and unconventional drilling projects in Alaska, West Texas, the Rockies, Europe, the Middle East, Africa and Asia. Prior to joining Denbury, Mr. Kerr was employed by Shell, where he held a variety of senior operational and technical leadership roles, most recently as Director, South China. Mr. Kerr received his Master of Science and Bachelor of Science degree in Chemical Engineering from Columbia University and Bachelor of Science in Chemistry from Davidson College.

Dan E. Cole, Vice President – Commercial Development and Governmental Relations, joined Denbury in October 2006.  Prior to joining Denbury, Mr. Cole was Director of the Mississippi/Alabama Business Unit for Plains Marketing, LP since April 2004, and Manager, Gulf Coast Region for EOTT Operating for the prior eight years before it was acquired by Plains Marketing.  Mr. Cole has more than 35 years of marketing, transportation and supply experience in the natural gas and crude oil industry.  Mr. Cole received his Bachelor of Business Administration degree from Texas A&M University.

Matthew Dahan, Vice President – North Region, joined Denbury in October 2010 and has over 30 years of oil and gas experience. Prior to being named Vice President in June 2014, Mr. Dahan served as Denbury’s Asset Manager for the Cedar Creek Anticline and as Reservoir Engineering Manager for the North Region. Before joining Denbury, Mr. Dahan served as Technical Director for Delta Hydrocarbons, BV in the Netherlands and Director of its affiliates Trefoil E&P S.L., Argentina and Delta Hydrocarbons Hungary Kft. Earlier in his career, Mr. Dahan also worked for Mobil Oil Corporation and Saudi Aramco in various engineering and supervisory roles, both domestically and internationally. Mr. Dahan earned his Bachelor of Science degree in Petroleum Engineering from the Colorado School of Mines.

Matt Elmer, Vice President – Gulf Coast Region, joined Denbury in July 2012 and has more than 30 years of experience in the oil and natural gas industry.  Mr. Elmer was previously employed at ConocoPhillips where he held a variety of leadership roles, most recently as the Operations Manager for the San Juan Business Unit.  Mr. Elmer previously held managerial roles in Alaska, South Texas, the Permian Basin and global Research & Development.  Mr. Elmer earned his Bachelor of Science degree in Petroleum Engineering from Marietta College and is a Professional Engineer in the state of Louisiana.

John Filiatrault, Vice President – CO2 Supply & Pipelines, joined Denbury in June 2010. Prior to joining the Company, Mr. Filiatrault's career spanned 23 years in the energy industry with Natural Gas Pipeline Company of America, El Paso Corporation and Kinder Morgan in a variety of assignments relating to engineering and operations. Mr. Filiatrault's most recent assignments were Director, Risk Engineering and Director of Gas Pipeline Operations with Kinder Morgan.  Mr. Filiatrault received his Bachelor of Science degree in Civil Engineering from Valparaiso University and his Master of Business Administration degree from Samford University.

Jeff Marcel, Vice President – Drilling, has over 30 years of oil & gas experience and joined Denbury in 1996. Mr. Marcel served in a variety of operational and management roles prior to being promoted to Vice President – Drilling in March 2010.  Before joining Denbury, Mr. Marcel worked for Hunt Petroleum Corporation, Rosewood Resources Inc. and Placid Oil Company in various onshore and offshore engineering and management positions.  Mr. Marcel received his Bachelor of Science degree in Petroleum Engineering from Louisiana State University.

Steve McLaurin, Vice President and Chief Information Officer, joined Denbury in January 2011.  Prior to joining Denbury, Mr. McLaurin was a partner with PricewaterhouseCoopers LLP, IBM and SolomonEdwardsGroup.  Mr. McLaurin has more than 25 years of experience working with leading organizations and helping them manage their information technology solutions.  He started his career as a systems analyst at General Dynamics.  Mr. McLaurin holds a Bachelor of Science degree in Computer Science from Evangel University and is a Certified Information Systems Auditor (CISA).

Alan Rhoades, Vice President and Chief Accounting Officer, is a Certified Public Accountant (CPA).  Mr. Rhoades has served as the Company's Chief Accounting Officer since July 2009. Before joining Denbury in July 2003, Mr. Rhoades was Assistant Controller for Amerada Hess Corporation from 2001 to 2003, and held that same position for Triton Energy Limited from 1996 until it was acquired by Amerada Hess Corporation in 2001.  Prior to joining Triton Energy Limited, Mr. Rhoades was a manager in the accounting firm of KPMG LLP. Mr. Rhoades received his Bachelor of Business Administration degree from the University of Texas at Arlington and is a licensed CPA in the state of Texas.



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Whitney Shelley, Vice President and Chief Human Resources Officer, joined Denbury in November 2009.  Prior to joining Denbury, Ms. Shelley was Executive Vice President of Human Resources for Bank of America from 2004 until 2008.  Ms. Shelley received her Microsoft Certified Systems Engineer (MCSE) certification in 1994 and graduated with a Bachelor of Science degree from the University of North Texas.

Cory Weinbel, Vice President – Projects and Facilities, joined Denbury in January 2014 and has over 20 years of oil and gas experience. Prior to being named Vice President in November of 2014, Mr. Weinbel served as Denbury’s General Manager of Projects and Facilities. Before joining Denbury, Mr. Weinbel served as Production Facilities Project Manager for Anadarko Petroleum on the Mozambique Onshore (LNG) and Offshore Deepwater Development Project, as well as the Jubilee Deepwater Development Project in Ghana, West Africa. Prior to Anadarko Petroleum, Mr. Weinbel spent over seven years working for Helix Energy Solutions Group as Deepwater Project Manager and General Manager of Production Facilities. Earlier in his career, Mr. Weinbel oversaw numerous offshore operations as a Project Manager for Pegasus International, Kvaerner Oil & Gas and Kerr-McGee Oil & Gas. Mr. Weinbel holds a Master of Science degree in Metallurgical Engineering and Bachelor of Science degree in Materials Engineering from Columbia University School of Engineering and Applied Science.




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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (this "CD&A") provides you with a detailed description of our executive compensation objectives, philosophy and programs, the compensation decisions we have made under those programs, and the rationale and details supporting specific compensation decisions. While this CD&A focuses on the compensation of our President and Chief Executive Officer, Chief Financial Officer and our four other most highly compensated executive officers for 2014 (our "named executive officers"), it also provides a description of our overall executive compensation program. Our named executive officers for 2014 were as follows:
Name
 
Title
Phil Rykhoek
 
President and Chief Executive Officer
Mark C. Allen
 
Senior Vice President, Chief Financial Officer, Treasurer and Assistant Secretary
Jim Matthews
 
Senior Vice President, General Counsel and Secretary
Brad Kerr (1)
 
Senior Vice President – Development, Technical and Innovation
K. Craig McPherson (2)
 
Former Senior Vice President and Chief Operating Officer
Charlie Gibson (3)
 
Former Senior Vice President – Production Operations

(1)
Mr. Kerr joined the Company in June 2014.
(2)
Mr. McPherson resigned from his position as Senior Vice President and Chief Operating Officer effective November 14, 2014.
(3)
Mr. Gibson resigned from his position as Senior Vice President – Production Operations effective November 14, 2014.

Consistent with the Company's overall emphasis on teamwork, our President and Chief Executive Officer and our Senior Vice Presidents (which includes our named executive officers) often function together as a committee, which we refer to as our "senior management team" or "senior management". This CD&A should be read in conjunction with the Summary Compensation Table on page 43 which details the compensation earned in 2014, 2013 and 2012 by our named executive officers, reported in accordance with SEC rules.

Executive Summary

2014 Performance

Our Compensation Committee has made performance-based compensation an increasingly important element of our executive compensation in recent years. Accordingly, it is important to review and understand our performance when looking at our 2014 executive compensation. The Company had a number of significant business developments in 2014, including the following:

Increased our average tertiary oil production to a new record level of 41,079 barrels per day, a 7% increase from average tertiary production in 2013.
Declared quarterly cash dividends of $0.0625 per common share during each quarter of 2014 (a rate of $0.25 per share on an annualized basis).
Repurchased a total of 12.4 million shares of Company stock for $200.4 million during the first quarter of 2014.
Reduced interest expense by refinancing the Company’s 8¼% Senior Subordinated Notes due 2020 in connection with the issuance of $1.25 billion of 5½% Senior Subordinated Notes due 2022; additional proceeds from the issuance of the 5½% Senior Subordinated Notes due 2022 were used to pay down approximately $150 million of outstanding borrowings on our bank credit facility.
Amended and restated our bank credit facility, effective as of December 9, 2014, to provide for a borrowing base of $3.0 billion, aggregate lender commitments of $1.6 billion, and an extended termination date of the facility from May 2016 to December 2019.


22


Created innovation and improvement teams to evaluate each of our assets with a goal of increasing the value of both existing assets and future projects by optimizing field operational and development plans, increasing CO2 flood recovery efficiency and reducing costs; these evaluations have continued into 2015.

Although, there were many positives in 2014, there were areas in which the Company's performance did not meet our desired results, specifically our tertiary and non-tertiary production targets.

In response to the decline in oil prices during the latter part of 2014, the Company announced a significant reduction in its capital spending plans, reducing projected 2015 capital spending to $550 million, or roughly half of 2014 levels. The Company also suspended its share repurchase program in order to protect its financial health and preserve liquidity amid a period of declining oil prices and overall oil price uncertainty.

Key Compensation Decisions for 2014

The table below summarizes the key compensation decisions made to or affecting our compensation components for 2014, and the Compensation Committee’s rationale behind such decisions. Each decision is discussed in greater detail throughout this CD&A and our four primary compensation components are described below under Compensation Components.
Compensation Component
Compensation Decision for 2014 Compensation
Compensation Committee Rationale
CD&A Discussion
Stock-based compensation
Eliminated SARs and increased the percentage of performance-based stock awards by 15%
Place a greater emphasis on performance-based awards to align the interests of senior management with those of our stockholders
See page 32
Performance-based compensation
Differentiated the performance-based operational equity award measures from the performance-based cash award measures; in past years, both types of performance-based awards had the same measures, weighting and achievement percentages
Allows the compensation program to incentivize for additional and more targeted corporate goals
See page 34
Increased the percentage of performance-based compensation by 8%
Place a greater emphasis on performance-based compensation
See page 24
Performance-based cash compensation
Changed the performance metrics to add a total cost measure
Better align the performance awards with one of the Company's overall corporate goals for 2014: cost control in supporting our growth and income strategy
See page 36
Performance-based equity compensation
Changed the performance-based operational award to add a new measure that compares the Company's production per share growth plus cash flow per share over a three-year period against the Company's long-term objectives
Better align the performance metrics in the performance awards with the Company’s overall corporate goals for 2014: value creation, growth and free cash flow
See page 35
Lengthened the overall vesting period for our performance-based operational awards from two years to one-third vesting after one year and two-thirds vesting after three years
Place a greater emphasis on long-term incentives
See page 33
Annual cash bonuses
Awarded a payout at 80% of target for the Company component and a range of 50% to 65% of target for the individual component for senior management
Recognize Company and individual performance during 2014 which warranted a payout of less than 100% of target
See page 31
Increased the individual performance component from 25% to 35% of the annual cash bonus mix
Place a greater emphasis on individual performance and the achievement of individual goals, while keeping the primary focus on Company results
See page 31
Modified the program to include certain operational performance measures in the award payout determination
Make the program less discretionary
See page 31
Peer group
Removed Plains Exploration & Production from the compensation peer group for 2014 and added Encana Corporation   
Plains Exploration & Production merged into another company in 2013
See page 29
Base salaries
Approved an increase in base salaries for members of senior management by approximately 4%
Maintain senior management’s targeted compensation levels at the 50th percentile of our peer companies
See page 30



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Summary Pay for Performance
   
In recent years, the Compensation Committee has made steady changes to our executive compensation program to increase the amount of performance-based compensation. When making compensation decisions for our senior management team, the Compensation Committee considers how much of total compensation is performance-based. The following table details the percentage of total compensation that is performance-based (in all cases at the targeted levels) for our named executive officers.

Percent of Performance-Based Compensation* 

*The amounts used to calculate the percent of performance-based compensation shown in the graph above exclude off-cycle grants, which are made from time to time in the event of new employment or a promotion, and use the base salaries in place as of January 1 of each year (versus base salary increases resulting from mid-year promotions). Additionally, the performance-based TSR award value used is based on the Company's stock price on the date of grant (versus the fair value calculated using the Monte-Carlo valuation model used in the Summary Compensation Table). These amounts were utilized in calculating the amount above because these are the amounts the Compensation Committee used to set target compensation for each year.

We believe that our compensation strategy aligns with both individual and Company performance. In reviewing 2014 performance results as related to compensation decisions, the Compensation Committee considered the Company's many positive business developments and goal achievements in 2014 and the areas in which the Company's performance did not meet desired results (see 2014 Performance above). The Compensation Committee believes that the payouts under our performance-based awards (see Results of Performance-Based Awards for Year-Ended 2014) and annual bonus program (see Compensation Components – Annual Cash Bonuses) reflect the Company's performance.

To help demonstrate the alignment of performance and compensation, the table below presents the amount of target compensation realized in 2014, 2013 and 2012 by Phil Rykhoek, our President and Chief Executive Officer, under each of our performance-based compensation elements: (1) annual cash bonus; (2) performance-based operational award; (3) performance-based TSR (total shareholder return) award; and (4) performance-based cash (each discussed in detail under Compensation Components below). When establishing targets for these compensation


24


elements, the Compensation Committee relied on its belief that it should be difficult to significantly exceed the targeted amounts and to do so would require the Company to perform well above target expectations. Similarly, the Compensation Committee believes that payouts below target are warranted when budgets or targets are not met or when the Company's performance does not otherwise meet desired results.

The table below reflects amounts realized by our President and Chief Executive Officer in each of 2014, 2013 and 2012 under performance-based awards that measured performance in each of those years, with the exception of the performance-based TSR award granted in 2012 that measured our relative total shareholder return over the three-year period of 2012 through 2014, with the target for that award and the amount actually realized under that award reflected in 2014, the ending year of that award’s performance period. The table excludes awards that have a remaining performance period. For example, the performance-based TSR awards granted in 2013 and 2014 are not included because their performance periods are not complete and no amounts have been realized. Additionally, for both the performance-based operational awards and TSR award, the dollar value shown in the table below reflects the value as of the date of vesting (as reflected in the footnotes to the table) of the stock actually realized.
 
President and CEO Realized Performance-Based Compensation Table
 
 
Annual Cash Bonus
 
Value of Performance-Based Operational Award Shares
 
Value of Performance-Based TSR Award Shares
 
Performance-Based Cash
 
Total
Year
 
Target
 
Realized
 
Target
 
Realized
 
Target
 
Realized
 
Target
 
Realized
 
Target
 
Realized
 
Percent of Target Realized
2014
 
$
780,000

 
$
542,100

 
$
439,998

 
$
309,905

(1)
 
$
379,167

 
$
72,244

(4)
 
$
600,000

 
$
648,000

 
$
2,199,165

 
$
1,572,249

 
71
%
2013
 
750,000

 
571,875

 
949,987

 
541,522

(2)
 

 

 
 
600,000

 
724,200

 
2,299,987

 
1,837,597

 
80
%
2012
 
624,000

 
744,120

 
379,163

 
556,870

(3)
 

 

 
 
550,000

 
748,000

 
1,553,163

 
2,048,990

 
132
%

(1)
Reflects the amount realized on March 31, 2015, the vesting date for the 2014 capital efficiency performance-based operational award, which had a performance period ending on December 31, 2014 and accounts for one-third of the total performance-based operational awards granted in 2014. This does not include the growth and income performance-based operational award granted in 2014, which accounts for two-thirds of the total performance-based operational awards granted in 2014, because it has a three-year performance period ending December 31, 2016.
(2)
Reflects the amount realized on January 4, 2015, the vesting date for the 2013 performance-based operational award, which had a performance period ending on December 31, 2013.
(3)
Reflects the amount realized on March 31, 2013, the vesting date for the 2012 performance-based operational award, which had a performance period ending on December 31, 2012.
(4)
Reflects the amount realized on March 31, 2015, the vesting date for the 2012 performance-based TSR award, which had a performance period ending on December 31, 2014. Additionally, the performance-based TSR award target value is based on the Company's stock price on the date of grant (versus the fair value calculated using the Monte-Carlo valuation model used in the Summary Compensation Table).

Following the compensation shown in our Summary Compensation Table (see page 43), we have presented a table that compares Summary Compensation Table amounts to compensation actually realized by our Chief Executive Officer (see page 46). When analyzing and setting compensation and considering pay-for-performance, our Compensation Committee believes it is important to consider what compensation is actually realized by the executive officers during a given fiscal year as opposed to the full potential compensation possibly earnable in future years. The primary difference between the President and CEO Realized Compensation Table values and the Summary Compensation Table values is the method and timing used to value equity awards. SEC rules require companies to report the grant-date fair value of all equity awards in the Summary Compensation Table for the year in which they were granted and to report performance-based equity (e.g., the performance-based operational awards and performance-based TSR awards) at the grant-date fair value at 100% of the target level. As a result, in 2014 approximately 67% of the total compensation amount reported in our Summary Compensation Table relates to equity grants that have not yet vested or been earned and for which the value is consequently uncertain.

Say on Pay Results 2014

In considering and making compensation decisions relative to senior management, the Compensation Committee noted that more than 96% of the stockholders who voted on the say-on-pay proposal at our 2014 annual meeting of stockholders voted in favor of the compensation of our named executive officers. Because of the support of this proposal, the Compensation Committee determined that no significant changes to our executive compensation policies


25


and decisions were necessary at this time but continued to make minor adjustments consistent with our compensation objectives and philosophy.

At the 2015 annual meeting of stockholders, we will again hold an annual advisory vote to approve executive compensation (see page 54). The Compensation Committee will continue to monitor and consider the outcomes of this year’s and future advisory votes on the Company's executive compensation program, as well as feedback from stockholders throughout the course of the year, when making compensation decisions for the Company's senior management.

Summary of Executive Compensation Practices

Below is a summary of certain executive compensation practices that we have implemented to drive performance and long-term stockholder value.
What We Do
þ Pay for Performance. A majority of senior management pay is performance-driven and not guaranteed. It must be earned every year based on objective and challenging operational and financial goals and individual contributions.

þ No Employment Agreements.  The Company does not have employment agreements with executive officers.
þ Stock Ownership Guidelines. All officers and directors are subject to stock ownership and retention guidelines that are in line with our peer group.

þ No Hedging.  The Company prohibits hedging and short sales by executive officers and directors.

þ Discourage Pledging.  The Company discourages pledging by executive officers and directors. Currently, no executive officers or directors pledge shares of the Company.

þ Risk Mitigation. The Company mitigates compensation risk through varied performance measures and targets, long-term equity incentives, an independent compensation consultant and Board and management processes to identify risks.

þ Independent Compensation Consultant. The Compensation Committee uses an independent compensation consultant that provides no other services to the Company.

þ Relevant Peer Group. The Company uses a representative and relevant peer group when making compensation decisions.

þ No Dividends on SARs or Unearned Performance Awards.  The Company pays time-vested dividends only on time-vested restricted stock after vesting of the underlying shares; it does not pay dividends on SARs or on unearned performance-based equity awards.

þ No New Tax Gross-Ups.  The Company has a policy of no new tax gross-up provisions in severance arrangements.

þ Severance Plan Double Trigger Change in Control. The Company has double trigger severance payments under its Severance Protection Plan. Severance protection benefits will become payable under the Severance Protection Plan only with the occurrence of both a change in control and a qualifying termination.



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Objectives and Philosophy

Our compensation policies are designed to ensure that salary levels and compensation incentives attract and retain top level individuals in key positions and are commensurate with each individual's level of executive responsibility, the type and scope of our operations, and our Company-wide financial condition and performance.
 
Our overall compensation philosophy is that we:
 
pay competitive base salaries at a level to attract and retain outstanding talent, generally targeted at the median level of salaries of comparable companies;
provide a proper balance and mix of compensation which places significant emphasis on long-term and performance-based incentives when determining executive compensation;
encourage all employees to be stockholders to better align their interests with those of our stockholders; and
reward employees primarily for the effort and results of the team or Company as a whole, rather than compensating only for individual performance; however, we believe it is important to differentiate compensation based on individual performance.

Annually the Compensation Committee sets target compensation for members of senior management. The Compensation Committee’s objective is to obtain an appropriate balance and mix of compensation. In setting target compensation, the Compensation Committee analyzes the following compensation elements for each company in our peer group:
 
base salary;
target and actual total cash;
long-term incentives; and
target and actual total direct compensation.

Based on the Compensation Committee's analysis of such data, and in consultation with Meridian Compensation Partners, LLC (“Meridian”), our independent compensation consultant, and in accordance with prior practice, the Compensation Committee determined that the compensation of senior management for 2014 should approximate the 50th percentile of total compensation of the peer group, with the primary focus on long-term and performance-based incentives. The Compensation Committee, with assistance from Meridian, also closely monitors industry trends and peer group data relative to executive compensation as a means to determine whether the mix of cash and equity is appropriate. Generally, base salaries are less than 25% of senior management's total compensation, so that a significant portion of the compensation is paid either through annual bonuses or long-term equity awards. This means that all compensation components other than executive base salaries will be based, to a significant degree, on Company performance.

When evaluating compensation, we compare the compensation of our senior management to that of our peer group and have always placed a significant emphasis on the aggregate compensation of our senior management as compared to the aggregate compensation of our peer's senior management. We believe this is an important consideration because (i) we want to make sure that our aggregate senior management compensation is reasonable compared to our peers, (ii) due to the unique nature of our business and our focus on enhanced oil recovery, it can be difficult to find an appropriate comparison for certain of our executives and (iii) our emphasis on a team approach supports evaluating our compensation in such a manner. While we believe that evaluating aggregate senior management compensation is appropriate, the Company's bonus compensation is evolving toward more of a balance between individual and team results. During the compensation review for 2014 compensation, we made a more significant distinction between the various senior management members to more appropriately compensate them for their respective duties and their individual performance and contribution.

We believe that our overall compensation program has proven to be an effective retention and motivational tool for our senior management and employees. We also believe that the 2014 combination of components of our senior management compensation provided a proper balance and mix of compensation, with a significant portion of the target compensation related to long-term and performance-based incentives. Our mix of compensation components and their general terms are discussed in greater detail below under Compensation Components.



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Roles in Setting Executive Officer Compensation

Role of the Compensation Committee
 
During the fourth quarter of each year, senior management reviews compensation for the entire Company based, in part, on recommendations from department and regional managers, and makes recommendations to the Compensation Committee. Final review of these recommendations is made by the Compensation Committee at its December Compensation Committee meeting, although depending on the magnitude of the anticipated changes, there may be several Compensation Committee meetings and discussions with management in advance of the December meeting. The Compensation Committee determines and approves the Chief Executive Officer's compensation and evaluates the performance of, and reviews and recommends for adoption by the Board, all compensation and long-term awards for other senior executives, considering, among other things, the recommendation of our Chief Executive Officer with regard to compensation for the other executives. The Compensation Committee also reviews and recommends for adoption by the Board our overall compensation programs for all employees or any significant changes to these programs. The Compensation Committee administers all of our compensation plans. Following approval of the entire compensation program, salary increases have typically been made effective January 1, bonuses under our cash bonus plan are typically paid in early January, and the recurring annual long-term equity awards are customarily granted in early January.

Role of the Independent Compensation Consultant
 
In the fourth quarter of each year, the Company and the Compensation Committee review compensation for senior management and all employees, with changes to compensation implemented early the following year. For 2013 and 2014 compensation reviews, the Compensation Committee engaged Meridian to serve as its independent compensation consultant and to advise the Compensation Committee on compensation-related matters. At the direction of the Compensation Committee, Meridian performed reviews related to the Company's executive compensation in relation to its peer group. Meridian's reports provided the Compensation Committee with comparative data, analyses, conclusions and recommendations that the Compensation Committee used in making its compensation decisions and recommendations in 2013 for compensation paid in 2014. The data provided by Meridian was primarily taken from its proprietary data, peer company proxy statements and other SEC filings. The ultimate compensation decisions for our senior management are made by the Compensation Committee or through recommendation to, and adoption by, the Board.

Other than Meridian's services mentioned herein and services performed at the request of the Compensation Committee, including an analysis of the compensation paid to the Company's directors and general educational presentations related to compensation-related matters, Meridian provided no other material services to the Company during 2014. The Compensation Committee has assessed the independence of Meridian pursuant to applicable SEC and NYSE rules and concluded that Meridian's work for the Compensation Committee does not raise any conflicts of interest.



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Use of Peer Survey Comparisons

In reviewing 2014 executive compensation decisions in December of 2013, the Compensation Committee considered compensation data from a selected group of peer companies. Based on consultation with Meridian, the Compensation Committee decided to use the same industry peer group in 2014 that was used in the prior year review, except that Encana Corporation was added in place of Plains Exploration & Production due to its merger into another company, as follows:
2014 Compensation Review Peer Group
Cabot Oil and Gas
Pioneer Natural Resources Company
Cimarex Energy
QEP Resources Inc.
Concho Resources, Inc.
Range Resources
Continental Resources, Inc.
SM Energy Company
Encana Corporation
Southwestern Energy Company
Newfield Exploration
Ultra Petroleum
Noble Energy
Whiting Petroleum Corporation

The peer companies were selected from a group of independent publicly traded oil and gas companies with similar operations using several criteria, such as market capitalization, revenues, assets, enterprise value and production volumes. We believe that the selected companies were the most appropriate for executive compensation comparisons for 2014 compensation decisions. The differences and similarities between us and the companies in our industry peer group are taken into consideration when considering peer group data for executive compensation. The Compensation Committee reviews the peer group composition annually.

Compensation Components

The Company's 2014 senior management compensation program is comprised of the following primary components:

base salaries;
annual cash bonuses;
stock-based compensation; and
performance-based cash awards.

In addition, senior management may participate in certain other Company plans that are available to all employees, which include a stock purchase plan, 401(k) plan and health and insurance plans. The Compensation Committee determined the appropriate level of each compensation component for senior management's 2014 compensation based on the Company's compensation objectives and philosophy and after evaluating the peer group data and setting target compensation. The following two charts detail the percentage each compensation component represents of the total 2014 targeted compensation considering the four primary compensation components for (1) our President and Chief Executive Officer (CEO) and (2) an average for our four named executive officers (NEOs) that were employed by the Company on January 1, 2014 (Messrs. Allen, Matthews, McPherson and Gibson).


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The following is a discussion of each of the compensation components outlined above.

Base Salaries

We strive to provide our senior management with a level of assured cash compensation in the form of base salaries, at appropriate levels given their positions, professional status and accomplishments. We believe that base salaries should be in the 50th percentile of the salaries of similar management positions at our peer companies and we have generally targeted that amount for many years. To align the base salaries of the members of our senior management with that of our peers, the Compensation Committee granted a base salary increase for 2014 to the executive officers of 4%. The base salary increases for the named executive officers resulted in base salaries that were slightly below the targeted 50th percentile of the base salaries of individual officers and groups of officers of our peers. The comparative base salaries for 2013 and 2014 and the percent base salary comprised of total targeted compensation in 2014 for our named executive officers were as follows:
Name
2013 Base Salary
2014 Base Salary
Percent of Total 2014 Target Compensation
Phil Rykhoek
$
750,000

$
780,000

13
%
Mark C. Allen
438,095

455,619

15
%
Jim Matthews
362,250

376,740

21
%
Brad Kerr (1)

315,000

20
%
K. Craig McPherson (2)
465,750

484,380

13
%
Charlie Gibson (3)

322,920

18
%

(1)
Mr. Kerr joined the Company in June 2014 and was paid $170,625 in salary in 2014.
(2)
Mr. McPherson resigned from his position as Senior Vice President and Chief Operating Officer effective November 14, 2014. Mr. McPherson was paid $426,833 in base salary in 2014 prior to his resignation.
(3)
Mr. Gibson resigned from his position as Senior Vice President – Production Operations effective November 14, 2014. Compensation information for Mr. Gibson is not provided for 2013 because Mr. Gibson was not a named executive officer of the Company during 2013. Mr. Gibson was paid $285,055 in base salary in 2014 prior to his resignation.



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Annual Cash Bonuses

The annual cash bonus program is an integral part of the overall compensation program for all employees at Denbury. It resonates with the employees and encourages and produces a team-oriented approach to meeting the Company's annual goals. The decision to pay bonuses, and in what amounts, is determined by the Compensation Committee on a Company-wide basis, and executive officers receive bonuses only if all other employees receive bonuses.

Our practice for paying cash bonuses to employees is subject to review and change each year by our senior management and the Compensation Committee and includes target levels of bonus compensation matched to an employee's job tier. The target bonus level for our named executive officers in 2014 was 100% of base salary for Messrs. Rykhoek, Allen and McPherson and 85% of base salary for Messrs. Matthews, Kerr and Gibson. Additionally, in 2014, the Compensation Committee established a minimum performance hurdle for our NEOs that must be achieved prior to their receiving any payout under the bonus program, which facilitates the Compensation Committee's intention that the annual cash bonus program qualify for tax deductibility under Section 162(m) of the Internal Revenue Code (the "Code"). The Compensation Committee established the 2014 minimum performance hurdle to be the achievement of cash flows from operations of at least $350 million for the year-ended December 31, 2014, which was achieved.
 
For 2014, cash bonuses for each employee were determined based on two factors: Company performance and individual performance. The Company performance factor, which comprised 65% of each employee's target bonus, was evaluated by the Compensation Committee with a potential range from 0% to 120% of target. The individual performance factor, which comprises 35% of each employee's target bonus, is evaluated by the employee's manager and supervisor with a potential range from 0% to 200% of target. For members of senior management, individual performance was evaluated by the Compensation Committee, considering recommendations by the Chief Executive Officer, other than for himself.

Historically, bonus determinations for the Company performance component of the cash bonus have been made by our Compensation Committee subjectively, based on an overall retrospective evaluation of our corporate results, taking into account a wide range of both non-numeric measures and financial and operational results, which measures and results are determined at year end. Any measure that might be considered to determine whether or not an oil and natural gas company had a successful year (or other measures of success or failure) is a possible factor for consideration by the Compensation Committee. The measures used have varied from year-to-year and have included, individually or in combination, an evaluation of production levels, cost levels, stock performance, safety and environmental performance, achievement of acquisition or disposition goals, completion of significant transactions and projects, operating and administrative expense levels, capital expenditures relative to budgeted levels, and reserves replacement percentages.

While this practice is still a prominent part of the bonus determination process, in 2014, the Compensation Committee integrated more specific targets into the bonus determination process. In particular, the Compensation Committee measured the Company's performance with regard to the following financial and operating performance metrics in the Company's operating budget: (i) total production (including separate targets for tertiary and non-tertiary production), (ii) lease operating expenses, (iii) capital expenditures and (iv) health, safety and environmental performance.
Annual Bonus Targets and Weighting
Target Points
Earned Points
Total Production
40
20
Lease Operating Expenses
20
20
Capital Expenditures
20
20
Health, Safety and Environmental Performance
20
20
Total
100
80

After evaluating the Company's overall 2014 performance, which is more fully discussed in the Executive Summary above, the Compensation Committee concluded (and recommended to the Board for adoption) that the portion of 2014 cash bonuses based upon Company performance should be awarded at a level of 80% of target. This decision was based on the Compensation Committee's assessment of the Company's overall performance during 2014, including


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that the Company generally performed at or slightly below targeted levels of the performance targets set forth above, and that with respect to targeted levels:

Although close, the Company did not meet its total target production goals, with tertiary production being closer to target compared to non-tertiary production;
The Company was close to its lease operating expenses target goals;
The Company stayed within its targeted capital expenditures budget; and
Performance with respect to the Company's health, safety and environmental goals improved, and the Compensation Committee specifically noted that there were no major environmental incidents in 2014.

Bonus determinations for the individual performance component with respect to senior management are also made by our Compensation Committee subjectively, based on an overall retrospective evaluation of the individual's personal performance during the year. The Compensation Committee considered, among other things, attainment of personal goals, leadership, teamwork and the role the individual played in significant projects or transactions. Again, because these decisions are subjectively made on an overall basis, it is not possible to determine precisely how these measures are weighted or evaluated by the Compensation Committee. The individual portions of the cash bonuses for our named executive officers for 2014 ranged from a low of 50% of target for Mr. Rykhoek, our President and Chief Executive Officer, to a high of 65% of target for other named executive officers. The Compensation Committee concluded that awards of less than 100% were appropriate in all circumstances partially due to the fact that the Company missed on several of the targets described above and the Compensation Committee felt that it was senior management’s responsibility to lead the Company in meeting those targets. This was particularly true with respect to the determination for Mr. Rykhoek, where the Compensation Committee awarded only 50% of his targeted individual cash bonus component. The 2014 individual cash bonus percentages for senior management were generally lower than those for 2013, when they ranged from a low of 50% of target to a high of 80% of target.

It is important to note that historically the Company and individual performance components of the annual cash bonus, as a percentage of target, have correlated to the Company’s overall performance for the fiscal year, considering important factors beyond only operational performance metrics. Our Compensation Committee believes that the unrestricted nature of our annual cash bonus plan allows the Compensation Committee to take into account unforeseen matters that are outside of a specific performance metric to appropriately compensate senior management. The Compensation Committee believes that the annual cash bonus program is an important part of the overall mix of compensation for our executives, as a completely formulaic performance-based compensation system leaves no mechanism to adjust compensation for unanticipated operational events (both favorable and unfavorable) which occur in our business and which may affect a metric not included (or insufficiently weighted) in performance measures set at the beginning of the year.

Stock-Based Compensation – Overall Program

Equity compensation is a significant focus of our total compensation program for all employees, and is an even higher level of focus for compensation of our senior management. All equity-based awards granted under our 2004 Incentive Plan are designed to motivate our employees to increase the value of the Company, which benefits not only the employees but the Company's stockholders. Our overall senior management equity compensation program for 2014 consisted of time-vested restricted stock and performance-based equity awards. For 2014, the performance-based equity awards were split equally between performance-based operational awards, which are earned based on the achievement of specific operational goals, and performance-based TSR awards, which are earned based on the performance of Denbury stock compared to the stock of our peers (each discussed in detail below).

As part of the review to determine 2014 compensation, all aspects of senior management compensation were evaluated and compared to the peer group compensation data, valuing the long-term awards using grant-date fair values as presented in the Summary Compensation Table below. With respect to stock-based compensation for 2014, we continued to place a great emphasis on performance-based awards to further align the interests of our executives with those of our stockholders.



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Based on all of the data, for 2014 it was determined that our long-term equity award grants to our named executive officers would be allocated as follows:
Percentage
 
Award Type
 
Terms
34%
 
Time-Vested Restricted Stock
 
Cliff vesting after the end of a three-year service period
33%
 
Performance-Based TSR Awards
 
Based on a three-year TSR and cliff vesting after 3.25 years
11%
 
Performance-Based Operational Awards-Capital Efficiency
 
Based on a one-year performance period and vesting after 1.25 years
22%
 
Performance-Based Operational Awards-Growth and Income
 
Based on a three-year performance period and vesting after 3.25 years

In 2014, we substantially modified certain parts of our performance-based compensation (both cash and equity). Previously, the performance-based cash and operational awards were based upon the same four operational performance metrics, which were slightly modified from year-to-year based upon then-current Company goals. In 2013, the four operational metrics used to measure performance were: (i) tertiary oil production, (ii) non-tertiary oil production, (iii) peer comparison capital efficiency and (iv) reserves replacement percentage. While we maintained these performance metrics for our performance-based cash awards in 2014, with some adjustments (as discussed below), we modified the performance metrics for our performance-based operational equity awards. In 2014, our performance-based operational awards were based one-third on a capital efficiency measure and two-thirds on a per share production growth and free cash flow measure. In recognition of the Company's transition to a growth and income company at the end of 2013, we felt it was appropriate to change the performance metrics of the performance-based operational awards to match this change in focus. With the exception of some changes in our TSR peer group, our 2014 performance-based TSR award remained substantially the same as in 2012 and 2013.

We have a mix of vesting parameters associated with our equity awards for our executive officers. Our annual time-vested restricted stock awards and performance-based TSR awards vest approximately three years from the date of grant and one-third of our performance-based operational awards vest approximately one year from the date of grant and two-thirds vests approximately three years from the date of grant. In recent years, we have increased the overall vesting periods of our total award mix by (1) instituting the performance-based TSR award in 2012, which has a three-year vesting period and (2) lengthening the vesting period of our performance-based operational awards, beginning with the 2013 grant, from an approximate one-year vesting period to a two-year vesting period and modifying it again for the 2014 grant, to an approximate (i) one-year vesting for one-third of the award and (ii) three-year vesting for two-thirds of the award.



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Performance-Based TSR Awards 

The TSR award is based on comparing the average of the Company's total shareholder return performance during each year within the three-year performance period, to that of the Company’s peers. The stock prices used to compare TSR are based on the increase or decrease in the average common stock price between the last ten trading days of each year. The peer group of 16 companies, as selected by the Compensation Committee, is primarily weighted toward oil production and oil reserves, and includes five of the 14 companies included in the Company's peer group used for the Compensation Committee's review for 2014 compensation. For this particular award, it was determined that having a peer group whose members were more aligned with the Company's heavily-weighted oil production and reserve mix, as opposed to natural gas, was more appropriate than a peer group based on the relative size of each member. The peer group of companies used for this award was as follows:
TSR Award Peer Group
Canadian Oil Sands Limited
Murphy Oil Corporation
Concho Resources, Inc.*
Oasis Petroleum, Inc.
ConocoPhillips
Occidental Petroleum Corporation
Continental Resources, Inc.*
Pioneer Natural Resources Company*
Crescent Point Energy Corp.
Sandridge Energy, Inc.
Devon Energy Corporation
SM Energy Company*
Marathon Oil Corporation
Vermilion Energy
MEG Energy Corporation
Whiting Petroleum Corporation*

*
Included in the Company's peer group used for the Compensation Committee's review for 2014 compensation.

Performance-Based Operational Awards

In order to create additional performance incentives, the second half of our executives' performance-based equity compensation is based on specific annual operational performance metrics. Our goal is to select performance objectives and measurement criteria that would not be significantly affected by commodity prices, or if so affected or influenced, our peer group would theoretically be similarly subjected to the same market influences on their performance.

The performance-based operational awards are earned during the performance period depending upon the Company's level of success in achieving specifically identified performance targets. Each year, the Compensation Committee considers the Company's goals and attempts to match executives' performance targets with such corporate goals. The performance targets for 2014 were based on a capital efficiency measure (our capital efficiency award) and a free cash flow measure (our growth and income award), which closely ties to the Company's transition at the end of 2013 from a Company that focused purely on growth to one that focuses on both growth and income.

Generally, one-half of the shares eligible to be earned under the performance-based operational awards are eligible to be earned for performance at the designated target levels (100% target vesting levels) and twice that number of shares will be earned if the higher maximum target levels are met. If performance is below designated minimum levels for all performance targets, no performance-based shares will be earned.

The performance target calculation is performed by reviewing each measure, determining the appropriate number of percentage points for each measure based on the actual results as indicated in each table below, and calculating the sum, which then must be approved by the Compensation Committee. In the aggregate, the potential percentage points earned range from zero to 200, which corresponds to a vesting percentage from 0% to 200% of the targeted shares. With respect to both performance-based operational awards, the Compensation Committee has the discretion to reduce the number of performance points otherwise earned by up to 25% based on other factors, such as its review and assessment of our corporate governance, environmental and safety compliance, debt levels and other discretionary factors. The Compensation Committee does not have the authority or discretion to increase the number of performance-based shares.



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Capital Efficiency Award. The capital efficiency award, which comprises one-third of our total performance-based operational awards, compares our creation of value through the deployment of capital in comparison to current year operating results as compared to that of our peers, by essentially measuring on a per-barrel-of-oil-equivalent basis adjusted pre-tax operating income to adjusted finding and development costs.  The capital efficiency award is based on a one-year performance period and vests after approximately one year.
 
Capital Efficiency Percentage — 33% of the Performance-Based Operational Awards
Performance
Percentage
Points
A.
>= 90% to 100%
66.7
B.
>= 70% and < 90%
53.3
C.
>= 50% and < 70%
40
D.
>= 30% and < 50%
26.7
E.
Less than 30%
0

The capital efficiency achievement levels will be based on how the Company ranks relative to the capital efficiency achievement of the other companies in the peer group. At the end of the performance period, the final capital efficiency achievement percentage of the Company will be determined based on the average of each peer’s and the Company’s relative capital efficiency achievement percentage for the performance year.

The peer group of 12 companies, as selected by the Compensation Committee, is primarily weighted toward oil production and oil reserves, and includes five of the 14 companies included in the Company's peer group used for the Compensation Committee's review for 2014 compensation. Similar to the TSR award, it was determined that having a peer group whose members were more aligned with the Company's heavily oil-weighted production and reserve mix, as opposed to natural gas (excluding Canadian companies, as their financial information does not contain the information necessary to calculate the metric properly), was more appropriate than a group based on the relative size of each member. The peer group of companies used for this award was as follows:
Capital Efficiency Award Peer Group
Concho Resources, Inc.*
Oasis Petroleum, Inc.
ConocoPhillips
Occidental Petroleum Corporation
Continental Resources, Inc.*
Pioneer Natural Resources Company*
Devon Energy Corporation
Sandridge Energy, Inc.
Marathon Oil Corporation
SM Energy Company*
Murphy Oil Corporation
Whiting Petroleum Corporation*

*
Included in the Company's peer group used for the Compensation Committee's review for 2014 compensation.

Growth and Income Award. The growth and income award, which comprises two-thirds of our total performance-based operational awards, is a measure of the Company’s average annual growth and income rate for a three-year period against its long-term objectives. The growth and income rate is equivalent to the sum of the production-per-share growth rate and an annual adjusted free cash flow per-share yield. The annual production-per-share growth rate is based on the Company’s annual production volume growth on a barrels-of-oil-equivalent basis, and the annual adjusted free cash flow per-share yield is based on cash flows from operations adjusted for commodity prices, commodity derivative settlements, working capital changes and development capital expenditures.  The growth and income award is based on a three-year performance period and vests shortly after such period. At the end of the three-year performance period in 2016, points will be earnable as follows:
 
Average Growth and Income Rate — 67% of the Performance-Based Operational Awards
Performance
Percentage Points
A.
>= 11.0%
133.3
B.
>= 10.0% and < 11.0%
106.7
C.
>= 9.0% and < 10.0%
80
D.
>= 7.0% and < 9.0%
53.3
E.
Less than 7.0%
0



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We believe that it should be difficult to exceed the targeted amounts of the performance measures in our performance-based operational awards, as to do so would require us to perform at or above 100% of our budgets or targets for production growth and free cash flow and above our peers for capital efficiency.  Since the performance measures cover focal points of our business including production growth, generation of free cash flow, and capital efficiency, exceeding our targets in all of these areas becomes even more difficult.  These targets are achievable, but require the Company to grow annual production and add proved oil and natural gas reserves and to focus on cost containment and efficiency to generate higher free cash flow and lower finding and development costs.  Even if we are able to exceed our targets, there could be an error in our projections, as certain factors like production are difficult to predict with absolute certainty.  However, in this case, we believe that our projections could be inaccurate in either direction with approximately the same probability.

Each of the target levels was determined and defined by the Compensation Committee at the time of grant of these performance awards in January 2014, based upon year-end targets and goals. Achievement of discretionary factors and confirmation of performance levels are determined by the Compensation Committee. Any portion of the performance shares which are not earned by the end of the measurement period are forfeited. In certain change-in-control events, the target level amount of performance-based shares would vest (see Potential Payments Upon Termination or Change in Control below).

The results of the 2014 performance-based operational awards are discussed below under Results of Performance-Based Awards for Year-Ended 2014.

Performance-Based Cash Awards

In addition to equity compensation, our executives are granted some level of cash awards in order to make their total compensation more consistent with that of our peers. For the members of senior management, this was in the form of a performance-based cash award.

The performance-based cash awards are earned during the performance period depending upon the Company's level of success in achieving the identified performance targets. Our goal is to select performance objectives and measurement criteria that would not be significantly affected by commodity prices, or if so affected or influenced, our peer group would theoretically be similarly subjected to the same market influences on their performance.
  
In 2014, the performance-based cash award was based upon the same performance metrics used to measure 2013 performance: (i) tertiary oil production and non-tertiary oil production (which have been combined into one metric (oil production)), (ii) peer comparison capital efficiency and (iii) reserves replacement percentage. Additionally, we added a total cost metric, which essentially measures capital expenditures, lease operating expense and general and administrative expense. The inclusion of a total cost metric was appropriate given the Company's increased emphasis on cost control. The measurement period was one-year and the awards vested on March 31, 2015. The weighting and targets for 2014 are outlined below.

The oil production performance measure compares our actual oil production, as adjusted for acquisitions and dispositions during the year, to the targeted amounts over the one-year measurement period.  The computation is measured as a percentage, computed by dividing the actual oil production by the mid-point of the 2014 targeted amount of 77,500 barrels of oil produced per day.  This award is 30% of the total weighting.  Points were earnable as follows for the awards granted in January 2014:
 
Average Annual Production Percentage  30% Weighting
Performance
Percentage Points
A.
103.87% or more of Target
60
B.
101.94% to 103.86%
48
C.
100% to 101.93%
36
D.
96.77% to 99.99%
24
E.
Less than 96.77%
0



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The second measure calculates total development capital expenditures, operating expenses and general and administrative expenses over the one-year measurement period.  The computation is measured as a total combined cost.  This award is 30% of the total weighting.  Points were earnable as follows for the awards granted in January 2014:
 
Total Cost  30% Weighting
Performance
Percentage Points
A.
Less than $1,950 million
60
B.
$1,951 million — $2,050 million
48
C.
$2,051 million — $2,150 million
36
D.
$2,151 million — $2,250 million
24
E.
More than $2,250 million
0

The third measure compares our creation of value through the deployment of capital in comparison to current year operating results as compared to that of our peers by essentially measuring on a per-barrel-of-oil-equivalent basis the ratio of adjusted pre-tax operating income to adjusted finding and development costs. This award is 30% of the total weighting. Points were earnable as follows for the awards granted in January 2014:
 
Capital Efficiency Percentage  30% Weighting
Performance
Percentage
Points
A.
>= 90% to 100%
60
B.
>= 70% and < 90%
48
C.
>= 50% and < 70%
36
D.
>= 30% and < 50%
24
E.
Less than 30%
0

The final measure compares our actual reserves replacement percentage (a measure of current year reserve additions relative to current year production) to targeted amounts. This award is 10% of the total weighting. Points were earnable as follows for the awards granted in January 2014:
 
Reserves Replacement Percentages  10% Weighting
Performance
Percentage
Points
A.
300% or more
20
B.
200% to 299%
16
C.
150% to 199%
12
D.
100% to 149%
8
E.
Less than 100%
0

Generally, one-half of the amount to be earned under the performance-based cash awards are eligible to be earned for performance at the designated target levels (100% target vesting levels) and twice that amount will be earned if the higher maximum target levels are met. If performance is below designated minimum levels for all performance targets, no amount will be earned.
  
The performance target calculation is performed by reviewing each measure, determining the appropriate number of percentage points for each measure based on the actual results as indicated in each table above, and calculating the sum, which then must be approved by the Compensation Committee. In the aggregate, the potential points earned range from zero to 200, which corresponds to a vesting percentage from 0% to 200% of the targeted shares. Similar to the performance-based equity awards, the Compensation Committee has the discretion to reduce the number of performance points otherwise earned by up to 25% based on other factors, such as its review and assessment of our corporate governance, environmental and safety compliance, debt levels and other discretionary factors. The Compensation Committee does not have the authority or discretion to increase the number of performance points.

Like all of our performance measures, we believe that it should be difficult to exceed the targeted amounts, as to do so would require us to perform at or above 100% of our budgets or targets in every area, and our forecasts assume a high level of efficiency. Since the performance measures cover the four primary focal points of our business, that


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being production, costs, capital efficiency and reserves, exceeding our targets in all four of these areas becomes even more difficult. These targets are achievable, but require that work be completed on schedule and within targeted amounts, and significantly exceeding these targets should not be considered likely, particularly in our current industry operating environment. Even if we are able to exceed our targets, there could be an error in our projections, as certain factors like production are difficult to predict with absolute certainty. However, in this case, we believe that our projections could be inaccurate in either direction with approximately the same probability.

Each of the target levels was determined and defined by the Compensation Committee at the time of grant of these performance awards in January 2014, based upon year-end targets or levels (for example, year-end 2013 reserves served as the baseline for the reserves replacement target for the awards granted in January 2014). Achievement of discretionary factors and confirmation of performance levels are determined by the Compensation Committee. Any portion of the cash awards which are not earned by the end of the measurement period are forfeited. In certain change-in-control events, the target level amount of performance-based cash awards would vest (see Potential Payments Upon Termination or Change in Control below).

The results of the 2014 performance-based cash awards are discussed below under Results of Performance-Based Awards for Year-Ended 2014.



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Results of Performance-Based Awards for Year-Ended 2014

On March 25, 2015, the Compensation Committee certified the performance results for the (i) performance-based TSR award granted in 2012, (ii) capital efficiency performance-based operational award granted in 2014 and (iii) performance-based cash award granted in 2014, all of which were also reviewed by the Company's Internal Audit Department. These awards were certified at 50%, 160% and 108%, respectively, of the targeted level (see (i) Compensation Components – Stock-Based Compensation – Overall Program and (ii) Compensation Components – Performance-Based Cash Awards).

Below are summaries of the performance points earned for each of the awards based on the Company's performance relative to the performance metrics, with the number of points equal to the percentage of the maximum amount eligible to be earned under each of these awards. The growth and income performance-based operational award granted in 2014 (which represents two-thirds of the 2014 performance-based operational awards granted) has a three-year performance period ending in 2016 and is therefore not included in the results below.

2012 Performance-Based TSR Award
Performance Target Metric
 
TSR Percentile Rank Compared to Peers
 
TSR Achievement Percentage
Average Three-Year TSR Rank
 
25%
 
50%

2014 Performance-Based Operational Awards – Capital Efficiency
Performance Target Metric
 
2014 Award Performance Points Earned
 
Capital Efficiency Achievement Percentage
Capital Efficiency Rate
 
53.3
 
160%

2014 Performance-Based Cash Awards
Performance Target Metric
 
2014 Award Potential Points at Maximum Payout
 
2014 Award Performance Points Earned
Oil Production
 
60
 
Total Cost
 
60
 
60
Capital Efficiency Rate
 
60
 
48
Reserves replacement percentage
 
20
 
Total Points Earned
 
200
 
108

Below is a summary of the performance-based equity and cash awards earned by our named executive officers in 2014, as outlined above, at the target and actual levels earned. 
 
 
TSR Performance-Based Shares (#)
 
Capital Efficiency Performance-Based Shares (#)
 
Performance-Based Cash
($)
Name
 
Target
 
Actual
 
Target
 
Actual
 
Target
 
Actual
Phil Rykhoek
 
19,820

 
9,910

 
26,586

 
42,511

 
600,000

 
648,000

Mark C. Allen
 
11,760

 
5,880

 
11,631

 
18,598

 
350,000

 
378,000

Jim Matthews
 

 

 
5,982

 
9,564

 
200,000

 
216,000

Brad Kerr
 

 

 

 

 

 

K. Craig McPherson
 
7,893

 
3,946

 
14,955

 
23,912

 
400,000

 
432,000

Charlie Gibson
 
5,096

 
2,548

 
6,646

 
10,627

 
175,000

 
189,000




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2015 Compensation Changes

This section describes compensation actions taken with respect to 2015 compensation. We include this disclosure because we believe such discussion enhances the understanding of our executive compensation disclosure and our objectives, philosophy and programs going forward. The table below summarizes the key compensation decisions or changes made to our compensation program for 2015 compensation and the Compensation Committee’s rationale behind such decisions or changes.
Compensation Subject
Compensation Decision/Change
Compensation Committee Rationale
Performance-based cash compensation
Combined the performance-based cash award and annual cash bonus program for senior management. The new cash bonus program for senior management will have defined performance measures with set weightings and multipliers. While the plan will be more performance-based than discretionary, it will retain a discretionary component.
Centralize performance-based cash compensation in one award and reduce the level of discretion in our annual incentive plan while retaining the flexibility required to appropriately reward high performers.
Performance-based equity compensation
Changed the vesting of our restricted stock awards from cliff vesting after three years to a three-year graded vesting (34%, 33%, 33%).
Align the vesting parameters of our restricted stock awards with our peer companies.
Peer group
Removed Encana Corporation and Ultra Petroleum from the compensation peer group for 2015 and added Linn Energy and Murphy Oil. 
Reflect a more accurate compensation peer group.
Base salaries
Approved market-based salary increases for members of senior management of approximately 3%, except for our Chief Executive Officer, who did not receive an increase.
Align senior management’s targeted compensation levels at the 50th percentile of our peer companies.

For 2015, the allocation of long-term equity-based awards granted to our named executive officers will be the same as 2014:
Percentage
 
Award Type
 
Terms
34%
 
Time-Vested Restricted Stock
 
Three-year graded vesting (34%, 33%, 33%)
33%
 
Performance-Based TSR Awards
 
Based on a three-year TSR and cliff vesting after 3.25 years
11%
 
Performance-Based Operational Awards-Capital Efficiency
 
Based on a one-year performance period and vesting after 1.25 years
22%
 
Performance-Based Operational Awards-Growth and Income
 
Based on a three-year performance period measured vesting after 3.25 years

Change in Control and Severance Benefits

Our senior management, together with all of our other employees, have built Denbury into the successful enterprise that it is today, and we believe that it is important to protect them in the event of a change in control. Further, it is our belief that the interests of stockholders will be best served if the interests of our senior management are aligned with theirs, and providing change-in-control benefits should eliminate, or at least reduce, possible reluctance of senior management to pursue potential change-in-control transactions that may be in the best interest of stockholders.  For more information on these potential benefits, please see Potential Payments Upon Termination or Change in Control below.



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Perquisites and Other Benefits

Our senior management participates in our benefit plans on the same terms as our other employees. These plans include medical, dental, vision, disability and life insurance, partial matching contributions to our 401(k) plan, matching contribution of up to $1,000 under our charitable gift program and partial matching contributions to our employee stock purchase plan. Beginning in 2011, the Compensation Committee decided to discontinue paying for monthly membership dues at golf and other clubs, whether or not considered perquisites, on an individual basis, and instead added a cash compensation component for each named executive officer. The amount paid to cover such items in 2014 was $25,000 for Messrs. Rykhoek and Allen, $20,000 for Mr. Matthews, $10,833 for Mr. Kerr, $21,875 for Mr. McPherson and $17,500 for Mr. Gibson. The cash compensation component was prorated for Messrs. Kerr, McPherson and Gibson based on the amount of time served as a named executive officer in 2014. Our only retirement benefits are our 401(k) plan and a retirement vesting provision included in most of our equity awards. We do not have any pension or post-retirement medical benefits.

Our stock purchase plan allows all employees, including senior management, to contribute up to 10% of their base salary in exchange for Company stock, with the Company matching 75% of such contributions, which is more generous with regard to company matching than the more typical plan that qualifies under Section 423 of the Code. The combined contributed funds are used at the end of each quarter to purchase common stock at the average of the fair market value of the common stock on each of the ten trading days immediately preceding the exercise date. Of the total stock purchase plan matching contributions made by the Company during 2014, the named executive officers received approximately 2.5%. The named executive officers have the same limitations and rights under the plan as do our other employees. The stock purchase plan was terminated by the Company effective at the end of the offering period ending on March 31, 2015 because we issued essentially all of the shares reserved under the plan.

Stock Ownership Guidelines

In 2013, our Board amended our stock ownership and retention guidelines for our directors and officers.  Our Compensation Committee hired Meridian to perform a review of our peer company stock ownership guidelines and to recommend changes based on such review. Based on the analysis prepared by Meridian, and recommendation from the Compensation Committee, our Board amended our stock ownership and retention guidelines to, among other changes for the officers, increase the stock ownership holding amount for our President and Chief Executive Officer from three to five times his base salary. Under our amended guidelines, all officers are expected to hold stock with the following values:
Officer Level
 
Ownership Guideline
President and/or Chief Executive Officer
 
5x annual base salary
Senior Vice President
 
3x annual base salary
Vice President
 
2x annual base salary

Stock that counts toward satisfaction of these guidelines includes shares of common stock owned directly by the officer or immediate family members plus restricted stock (vested and unvested). Until the guideline amount is achieved, officers are required to retain at least one-third of the shares obtained through the Company’s stock incentive plan other than awards of options or SARs.

Risk Assessment Related to Our Compensation Program

We do not believe that our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on the Company's risk profile. Although portions of our compensation program are performance-based, we believe that we have allocated our compensation among base salary and short- and long-term compensation opportunities in such a way as to discourage excessive risk taking. Further, one of the main factors we take into consideration in setting compensation is the performance of the Company as a whole, which we believe encourages decision making that is in the best long-term interests of the Company and our stockholders. Finally, the


41


time-based vesting over a multi-year period for certain of our equity awards, as well as our stock ownership guidelines for our directors and officers, ensures their interests align with those of our stockholders for the long-term performance of our Company.

Policy on Recovery of Compensation and Clawbacks

We do not currently have a policy providing for specific compensation penalties if we are required to restate our financial statements. The only specific impact of such an event relative to our compensation program would be a potential downward adjustment to our performance-based awards, not to exceed 25%, based on the subjective review by the Compensation Committee, although such an event would also likely affect the more subjective cash bonuses awarded by the Compensation Committee each year, which considers overall Company performance, and would likely affect the value of the equity awards granted to our employees. Section 954 of the Dodd-Frank Act requires the SEC to implement regulations requiring clawbacks of compensation from designated officers in the event of a financial restatement; however, the Company has deferred taking action on these clawback provisions pending promulgation by the SEC of regulations under these Dodd-Frank Act provisions.

Deductibility of Executive Compensation

We believe it is important to have flexibility in designing our compensation programs in a manner that achieves our objectives. Under U.S. federal income tax law, we cannot take a tax deduction for certain compensation in excess of $1,000,000 per year paid to any individual named executive officer. However, performance-based compensation, as defined in the Code, is fully deductible as long as the programs are approved by the stockholders and meet certain other requirements. We have designed and monitor certain aspects of our compensation programs to meet performance-based compensation criteria and maximize our tax deductible compensation. For example, in 2014, the Compensation Committee made changes to our annual bonus program intended to qualify a greater portion of our executive compensation for tax deductibility under Section 162(m) of the Code (see Compensation Components – Annual Cash Bonuses above). While we consider accounting and tax treatment of certain forms of compensation in the design of our compensation program, we choose to weigh all factors, and therefore we have not adopted a policy that limits our compensation options.

The previous CD&A contains statements regarding future individual and Company performance targets and goals. These targets and goals are disclosed in the limited context of Denbury's compensation programs and should not be understood to be statements of management's expectations or estimates of results or other guidance. Denbury specifically cautions investors not to apply these statements to other contexts.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the CD&A included in this proxy statement with management.  Based on such review and discussion, the Compensation Committee recommended to the Board that the CD&A be included in this proxy statement and incorporated by reference in the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
 
The Compensation Committee
Laura A. Sugg, Chairwoman
Michael B. Decker
Gregory L. McMichael
Ronald G. Greene



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Summary Compensation Table

The following table sets out a summary of executive compensation for our named executive officers for the years indicated below.
Name and Principal Position
 
Year
 
Salary
 
Bonus (1)
 
Stock Awards (2)
 
Option Awards (3)
 
Non-Equity Incentive Plan
Compensation(4)
 
All Other Compensation(5)
 
Total
Phil Rykhoek
 
2014
 
$
780,000

 
$
557,100

 
$
4,259,941

 
$

 
$
648,000

 
$
115,377

 
$
6,360,418

President and Chief Executive Officer
 
2013
 
750,000

 
586,298

 
3,417,264

 
569,983

 
724,200

 
116,351

 
6,164,096

2012
 
624,000

 
756,120

 
1,626,639

 
758,316

 
748,000

 
104,952

 
4,618,027

Mark C. Allen
 
2014
 
$
455,619

 
$
349,337

 
$
1,863,711

 
$

 
$
378,000

 
$
88,951

 
$
3,135,618

Senior Vice President, Chief Financial Officer, Treasurer and Assistant Secretary
 
2013
 
438,095

 
375,330

 
1,483,801

 
247,493

 
422,450

 
86,592

 
3,053,761

2012
 
423,280

 
449,409

 
965,126

 
449,926

 
476,000

 
82,391

 
2,846,132

Jim Matthews
 
2014
 
$
376,740

 
$
346,616

 
$
958,461

 
$

 
$
216,000

 
$
72,970

 
$
1,970,787

Senior Vice President, General Counsel and Secretary
 
2013
 
362,250

 
260,994

 
718,053

 
119,771

 
222,273

 
62,787

 
1,746,128

 
2012
 
323,526

 
296,410

 
900,000

 

 

 
40,443

 
1,560,379

Brad Kerr (6)

 
2014
 
$
170,625

 
$
314,635

 
$
799,986

 
$

 
$

 
$
72,403

 
$
1,357,649

Senior Vice President  Development, Technical and Innovation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
K. Craig McPherson (7)
 
2014
 
$
426,833

 
$

 
$
2,396,214

 
$

 
$
432,000

 
$
936,594

 
$
4,191,641

 
 
2013
 
465,750

 
375,735

 
1,686,065

 
281,230

 
452,625

 
90,278

 
3,351,683

 
2012
 
436,640

 
480,225

 
1,147,778

 
302,006

 
319,508

 
86,424

 
2,772,581

Charlie Gibson (8)
 
2014
 
$
285,055

 
$

 
$
1,064,955

 
$

 
$
189,000

 
$
594,090

 
$
2,133,100

 
(1)
Represents the amounts earned based on performance for the year indicated, regardless of when paid.
(2)
Amounts in this column include the grant-date fair value of (a) restricted common stock awards, (b) performance-based operational awards (at the target level of 100%) and (c) performance-based TSR awards (at the target level of 100%) granted during the year indicated as shown in the following table. The grant-date fair value of restricted common stock and performance-based operational awards is calculated using the closing price of Company common stock on the date of grant. The grant-date fair value of performance-based TSR awards is calculated using a Monte-Carlo simulation model.


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Name
 
Year
 
Restricted Common Stock
 
Performance-Based Operational Awards
 
Performance-Based TSR Awards
 
Total
Phil Rykhoek
 
2014
 
$
1,359,996

 
$
1,319,995

 
$
1,579,950

 
$
4,259,941

 
2013
 
1,329,995

 
949,987

 
1,137,282

 
3,417,264

 
2012
 
758,326

 
379,163

 
489,150

 
1,626,639

Mark C. Allen
 
2014
 
594,989

 
577,496

 
691,226

 
1,863,711

 
2013
 
577,492

 
412,492

 
493,817

 
1,483,801

 
2012
 
449,935

 
224,959

 
290,232

 
965,126

Jim Matthews
 
2014
 
305,993

 
296,990

 
355,478

 
958,461

 
2013
 
279,472

 
199,613

 
238,968

 
718,053

 
2012
 
900,000

 
n/a

 
n/a

 
900,000

Brad Kerr
 
2014
 
799,986

 

 

 
799,986

K. Craig McPherson
 
2014
 
764,991

 
742,499

 
888,724

 
2,396,214

 
2013
 
656,210

 
468,722

 
561,133

 
1,686,065

 
2012
 
801,990

 
150,992

 
194,796

 
1,147,778

Charlie Gibson
 
2014
 
339,987

 
329,990

 
394,978

 
1,064,955


These awards were made pursuant to our 2004 Incentive Plan.  Performance-based operational awards vested as follows: (i) one-third of the awards granted during 2014 were earned at 160% of target and vested on March 31, 2015 and two-thirds will not be earned until the end of the three-year performance period and will vest on March 31, 2017, (ii) awards granted during 2013 were earned at 120.7% of target and vested on January 4, 2015 and (iii) awards granted during 2012 vested at 136% of target on March 31, 2013. Performance-based TSR awards vest based upon a comparison of Company TSR to that of Company peers as follows: (i) awards granted in 2014 cliff vest on March 31, 2017, (ii) awards granted in 2013 cliff vest on March 31, 2016 and (iii) awards granted in 2012 cliff vested on March 31, 2015. Each performance-based award had a maximum payout of 200%. Further discussion regarding the underlying awards is included in Note 8 to the Company’s audited financial statements for the year ended December 31, 2014, included in the Company’s 2014 Annual Report on Form 10-K filed with the SEC on February 27, 2015.
(3)
Represents the fair value of stock-settled SARs granted during the year indicated using the Black–Scholes option pricing model as of the date of grant.  These awards were made pursuant to our 2004 Incentive Plan.  Further discussion regarding the underlying awards, including assumptions, is included in Note 8 to the Company’s audited financial statements for the year ended December 31, 2014, included in the Company’s 2014 Annual Report on Form 10-K filed with the SEC on February 27, 2015.
(4)
Represents the dollar value of performance-based cash awards granted during the year indicated.  Performance-based cash awards vested as follows: (i) awards granted during 2014 vested at 108% of target on March 31, 2015, (ii) awards granted during 2013 vested at 120.7% of target on March 31, 2014 and (iii) awards granted during 2012 vested at 136% of target on March 31, 2013.  Performance-based cash awards had a maximum payout of 200%. The basis of the values of performance-based cash awards in the above table differs from the basis of the values of performance-based equity awards (both operational and TSR) included in footnote 2 above in that performance-based cash awards are presented at the value of awards earned and performance-based equity awards are presented at the grant-date fair value of the awards at the 100% target level.
(5)
Amounts in this column include (a) matching contributions by the Company to the Employee Stock Purchase Plan on each named executive officer’s behalf, (b) matching contributions to the 401(k) Plan on each named executive officer’s behalf, (c) life and disability insurance premiums paid by the Company on each named executive officer’s behalf, (d) allocated discretionary funds for each named executive officer and (e) other compensation-related items as shown in the following table:


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Name
 
Year
 
Stock Purchase Plan
(a)
 
401(k) Plan
(b)
 
Insurance Premiums (c)
 
Cash Perquisites (d)
 
Other
(e)
 
Total
Phil Rykhoek
 
2014
 
$
58,500

 
$
15,600

 
$
10,088

 
$
25,000

 
$
6,189

 
$
115,377