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. )
Filed by the Registrant
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Denbury Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check all boxes that apply):
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No fee required. |
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Fee paid previously with preliminary materials. |
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Fee computed on table in exhibit required by Item 25(b) per
Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1)Title
of each class of securities to which transaction
applies:
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(2)Aggregate
number of securities to which transaction applies:
________________________________________________________________________________________
(3)Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
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(4)Proposed
maximum aggregate value of transaction:
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(5)Total
fee paid:
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing. |
(1)Amount
Previously Paid:
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(2)Form,
Schedule or Registration Statement No.:
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(3)Filing
Party:
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(4)Date
Filed:
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, JUNE 1, 2022
To
our Stockholders:
You are hereby notified that the 2022 Annual Meeting of
Stockholders of Denbury Inc., a Delaware corporation (“Denbury” or
the “Company”), will be held virtually at
www.virtualshareholdermeeting.com/DEN2022 at 8:00 A.M. Central
Daylight Time (CDT) on Wednesday, June 1, 2022, for the following
purposes:
a.to
elect eight directors, each to serve until
the next annual meeting of stockholders and until his or her
successor is elected and qualified, or until his or her earlier
resignation or removal;
b.to
hold an advisory vote to approve named executive officer
compensation;
c.to
approve the Denbury Inc. Employee Stock Purchase Plan;
d.to
ratify the Audit Committee’s selection of PricewaterhouseCoopers
LLP as the Company’s independent registered public accounting firm
for 2022;
and to transact such other business as may properly come before the
annual meeting or any adjournment or postponement
thereof.
Only stockholders of record as of April 4, 2022 are entitled to
notice of, and to vote at, the annual meeting. The annual meeting
will be held at www.virtualshareholdermeeting.com/DEN2022. To be
admitted to the annual meeting at
www.virtualshareholdermeeting.com/DEN2022, stockholders must enter
the control number found on their proxy card, voting instruction
form or notice. Once properly admitted to the annual meeting,
stockholders of record as of the record date may vote their shares
by following the instructions available on the meeting website
during the meeting and may also view the complete list of
stockholders entitled to vote at the annual meeting. To ask a
question pertaining to the business of the annual meeting,
stockholders must submit it in advance of the annual meeting by
visiting www.proxyvote.com. Questions may be submitted until 11:59
p.m., Eastern Time, on Monday, May 30, 2022. Each stockholder will
be limited to no more than one question.
Following the conclusion of the annual meeting, the Company will
answer questions submitted timely in advance that pertain to the
business of the annual meeting.
Technical support will be available on the meeting platform at
www.virtualshareholdermeeting.com/DEN2022 beginning at 7:30 A.M.
CDT on June 1, 2022 or by calling 800-586-1548 (US) or 303-562-9288
(International). The technical support offered through this service
is designed to address difficulties related to the virtual meeting
website, and it is recommended that you contact your broker should
you be unable to locate your control number.
Beginning on April 18, 2022, 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,
/s/ James S. Matthews
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James S. Matthews
Executive Vice President,
Chief Administrative Officer,
General Counsel and Secretary
April
18, 2022 |
Stockholders of record are urged to vote their proxy promptly,
whether or not they expect to virtually attend the annual
meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD VIRTUALLY ON JUNE 1,
2022:
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
costs, 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, 2021, are available via the Internet at
www.proxyvote.com.
TABLE OF CONTENTS
DENBURY INC.
PROXY STATEMENT
Annual Meeting of Stockholders
to be held on Wednesday, June 1, 2022
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors (“our Board” or
“the Board”) of Denbury Inc., a Delaware corporation (“Denbury” or
“the Company”), for use at the Company’s virtual annual meeting of
stockholders to be held on Wednesday, June 1, 2022 at
www.virtualshareholdermeeting.com/DEN2022, or at any adjournment or
postponement thereof. This proxy statement, proxy card and our 2021
Annual Report to Stockholders are being first made available to
stockholders on or about April 18, 2022.
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 18, 2022, 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 April 4,
2022. The Notice includes (i) instructions on how to access the
Company’s proxy materials and vote via the Internet, (ii) the date,
time and virtual 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 and
voting at the virtual annual meeting. Following the conclusion of
the annual meeting, the Company will answer questions submitted
timely in advance that pertain to the business of the annual
meeting.
RECORD DATE AND COMMON STOCK OUTSTANDING
The record date for the annual meeting was April 4,
2022. Only Denbury stockholders of record as of 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 as of the record date. As of
the record date, there were 50,207,886 shares of Denbury common
stock issued and outstanding and entitled to vote at the annual
meeting.
VOTING OF COMMON STOCK
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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, Broadridge
Corporate Issuer Solutions, Inc. If you are a stockholder of
record, you may vote your shares via the Internet at
www.proxyvote.com in accordance with the instructions in the
Notice. You may also vote by touch-tone telephone from the United
States by calling 1-800-690-6903, 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 31, 2022. Shares represented by proxy
will be voted at the annual meeting unless the proxy is revoked at
any time prior to the time at which the shares covered by proxy 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
5851 Legacy Circle, Suite 1200, Plano, Texas 75024, by 11:59 p.m.
Eastern Daylight Time (EDT) on May 31, 2022; or (iv) voting at the
virtual annual meeting by completing a ballot. Attending the annual
meeting virtually 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.
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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 on 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 on how to vote your shares, your broker may vote your
shares as it decides with respect to the matter for which it has
discretionary authority (Proposal Four (the ratification of the
selection of PricewaterhouseCoopers LLP as our independent
registered public accounting firm)) in the absence of timely
instructions from you. There are also non-discretionary matters for
which your broker does not have discretionary authority to vote
unless it receives timely instructions from you: Proposal One (the
election of directors), Proposal Two (the non-binding, advisory
approval of named executive officer compensation) and Proposal
Three (the approval of the Denbury Inc. Employee Stock Purchase
Plan). 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. As the beneficial owner of shares, you are invited to
attend the virtual annual meeting; however, you may not vote your
shares at the annual meeting unless you obtain a written proxy from
your broker.
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Quorum; Required Vote; Treatment of Abstentions and Broker
Non-Votes |
We must have present 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. You are entitled to vote “for” election of a
director nominee, “against” election of a director nominee, or you
may “abstain” from voting with respect to a director nominee. 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, where a quorum is present. A
majority of votes cast means that the number of shares voted “for”
a nominee’s election must exceed the number of shares voted
“against” such nominee’s election. Abstentions and broker non-votes
will not be counted as votes cast for purposes of the election of
directors. In accordance with our Fourth Amended and Restated
Bylaws (our “Bylaws”), each incumbent director nominee is required
to submit an irrevocable offer of resignation to the Board, which
resignation becomes effective if such nominee is not reelected at
the annual meeting and the offer of resignation is accepted by the
Board. With respect to Proposals Two, Three and Four, the
affirmative vote of a majority of the shares having voting power
present or represented by proxy at the annual meeting and entitled
to vote on the proposals, where a quorum is present, 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 Proposal 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 on an
executed proxy, the shares will be voted FOR the election of all of
the director nominees under Proposal One; FOR Proposal Two (the
non-binding, advisory approval of named executive officer
compensation); FOR Proposal Three (the approval of the Denbury Inc.
Employee Stock Purchase Plan); and FOR Proposal Four (the
ratification of the selection of PricewaterhouseCoopers LLP as our
independent registered public accounting firm). Our
Board has designated Kevin O. Meyers and/or Christian S. Kendall 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 Dr. Meyers and Mr. Kendall, and each of them acting
singly as proxies named in the proxy card, to vote at their
discretion on such matters.
PERSONS MAKING THE SOLICITATION
Our Board is soliciting this proxy. The Company 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.
OUR COMPANY
Denbury is an independent energy company with operations focused in
the Gulf Coast and Rocky Mountain regions of the United
States. We are differentiated by our focus on
CO2
enhanced oil recovery (“EOR”) and the emerging carbon capture, use
and storage (“CCUS”) industry, supported by our
CO2
EOR technical and operational expertise and our extensive
CO2
pipeline infrastructure. The utilization of captured
industrial-sourced CO2
in EOR significantly reduces the carbon footprint of the oil that
we produce, making our Scope 1 and 2 CO2
emissions negative today, with a goal to also fully offset Scope 3
CO2
emissions by 2030, primarily through increasing the amount of
captured industrial-sourced CO2
used in our operations.
Our Strategy
As part of our corporate strategy, we are committed to creating
long-term value for our stakeholders through the following key
principles:
•leverage
our extensive CO2
pipeline assets and CO2
EOR expertise to expand our operations and leadership position in
the emerging CCUS industry;
•seek
to expand the use of industrial-sourced CO2
in our tertiary recovery operations, with an ultimate objective of
producing oil with a negative carbon footprint;
•increase
the value of our assets by applying our technical expertise in
CO2
tertiary recovery and target specific regions where we either have,
or believe we can create, a competitive advantage;
•optimize
the timing and allocation of capital among our investment
opportunities to maximize the rates of return on our
investments;
•exercise
financial discipline and maintain a strong balance sheet;
and
•attract
and maintain a highly competitive team of experienced and
incentivized personnel.
As the only U.S. public company of scale where transporting and
injecting CO2
into the ground to produce oil has historically been our core
business, Denbury has meaningfully contributed to reducing
atmospheric CO2
emissions while at the same time providing a vital and secure
energy source.
While Denbury is immediately able to utilize additional
CO2
captured from industrial sources in our existing EOR fields under
current permits and regulations, we are also actively working to
develop storage sites outside of EOR to permanently sequester
captured CO2.
We believe that CCUS will be an essential means of significantly
reducing global CO2
emissions, and that Denbury is uniquely positioned to deliver value
to our stakeholders through leveraging our deep experience and
extensive CO2
infrastructure to lead in this evolving industry. Our highly
skilled, multi-disciplinary team is actively growing this business
and is engaged in multiple negotiations with industrial emitters to
transport and store their captured CO2
emissions.
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Proposal One: Election of Directors |
Our 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 next
annual meeting of stockholders and until his or her successor is
elected and qualified, or until his or her earlier resignation or
removal. We presently have eight directors, all of whom
are listed below and are serving terms that expire at the annual
meeting.
Unless you mark your executed proxy to the contrary, we plan to
vote all such proxies for the election of the eight nominees listed
below as directors. 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:
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Name |
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Current Board Committees |
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Director Since |
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Principal Occupation |
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Kevin O. Meyers, Chairman |
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68 |
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Audit Committee
Compensation
Committee
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2011 |
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Independent Consultant
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Anthony M. Abate |
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57 |
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Audit Committee
Compensation
Committee
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2020 |
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Independent Consultant |
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Caroline G. Angoorly |
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57 |
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Sustainability and Governance Committee
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2020 |
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Managing Partner of GreenTao LLC |
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James N. Chapman |
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59 |
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Compensation Committee
Sustainability
and Governance Committee
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2020 |
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Independent Consultant |
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Christian S. Kendall |
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55 |
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2017 |
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President and Chief Executive Officer of Denbury
Inc.
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Lynn A. Peterson |
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69 |
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Audit Committee
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2017 |
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Chief Executive Officer and President of Whiting Petroleum
Corporation |
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Brett R. Wiggs |
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56 |
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Audit Committee
Sustainability
and Governance Committee
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2020 |
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Chief Executive Officer of Oryx Midstream Services
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Cindy A. Yeilding |
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Compensation Committee
Sustainability
and Governance Committee
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2021 |
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Independent Consultant |
As shown below, our directors embody an effective and robust mix of
energy industry knowledge and skills, current or former
responsibilities as industry senior executives, financial
expertise, and senior leadership for sustainability programs and
climate change initiatives. These qualified individuals were
selected to give the Board insight from diverse points of view, all
of which relate to various aspects of our business.
With the exception of Mr. Kendall, our President and Chief
Executive Officer, all of our director nominees are independent,
which provides substantial independent oversight. For more
information on director independence, see
Governance of the Company – Director Independence
below. For more information on how director candidates are
identified, see
Governance of the Company – Identification of Director
Candidates
below.
The narratives below provide more specific biographical information
and outline the skills and qualifications for each of the Board
nominees.
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Kevin O. Meyers |
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Joined the Board:
2011
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Age:
68
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Board Committees:
Audit Committee, Compensation Committee
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Principal Occupation:
Independent Consultant
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Kevin O. Meyers has been a director of Denbury since July 2011 and
Chairman of the Board since September 2020. Dr. Meyers
has more than 40 years of experience in the oil and gas industry,
having retired from ConocoPhillips at the end of 2010. Dr. Meyers
currently serves on the board of directors of Precision Drilling
Corporation (NYSE: PDS), a provider of drilling equipment and
services, and Hess Corporation (NYSE: HES), an oil and natural gas
exploration and production company. For the ten years prior to
retirement, Dr. 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. Dr. Meyers previously served
on the board of directors of Hornbeck Offshore Services, Inc.
(NYSE: HOS), Bill Barrett Corporation (NYSE: BBG), 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. |
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Dr. 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. Dr.
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. |
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Anthony M. Abate |
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Joined the Board:
2020
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Age:
57
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Board Committees:
Audit Committee, Compensation Committee
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Principal Occupation:
Independent Consultant
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Anthony M. Abate has been a director of Denbury since September
2020. Mr. Abate served as Founder, Chief Operating Officer and
Chief Financial Officer of Echo360, Inc. (“Echo360”), an
educational technology company that provides a suite of learning
solutions to the higher education and continuing education markets
globally, from 2007 to 2021. Before Echo360, Mr. Abate served as a
private equity partner, most recently at Battery Ventures where he
initiated investments, retained active board responsibilities,
raised significant debt and equity capital, and managed exits via
initial public offering or sale. Prior to that, Mr. Abate served as
a consultant at McKinsey & Co. where he advised publicly traded
companies and venture-backed start-ups on how best to capitalize on
the ensuing business opportunities of digitization and convergence.
Mr. Abate began his career in the U.S. Air Force, where he
developed an advanced computer platform for the then-classified
stealth aircraft program. |
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Mr. Abate currently serves as Chairman of the Board of Southeastern
Grocers, a multi-brand grocery store business, and a board member
and Special Purpose Committee member of GTT Communication, Inc., a
global IP network provider. Previously, Mr. Abate served as an
independent director of Tops Markets, BroadView Networks, Looking
Glass Networks and CBeyond Communications. Mr. Abate graduated
summa cum laude with a Bachelor of Science degree in Electrical
Engineering from Duke University and holds an MBA, with
distinction, from Harvard Business School.
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Caroline G. Angoorly |
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Joined the Board:
2020
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Age:
57
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Board Committees:
Sustainability and Governance Committee
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Principal Occupation:
Managing Partner of GreenTao LLC
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Caroline G. Angoorly has been a director of Denbury since September
2020. Ms. Angoorly is a senior executive in the energy
and sustainable infrastructure sectors with more than 25 years of
domestic and international experience in business-building,
transformation, strategy, project development and financing, asset
management, operations, environmental, social and governance
strategy, investment, and mergers and acquisitions. Ms. Angoorly is
experienced in the energy, resources, sustainable infrastructure
and environmental sectors, especially energy and fuels markets and
projects across technologies and clean tech. She has particular
expertise in successfully developing and financing greenfield
projects, as well as building and running clean energy and
sustainable infrastructure businesses and
funds.
In
2010, Ms. Angoorly founded GreenTao LLC, a specialized business
growth, project development, financing, strategy and execution
firm. Her clients range from Fortune 500 companies to middle market
and start-ups. Ms. Angoorly returned to GreenTao as Managing
Partner in 2019 after over five years as the founding Chief
Operating Officer of NY Green Bank, where she was instrumental in
the establishment and evolution to full operations of a $1 billion
State-sponsored investment fund focused on clean energy and
sustainable infrastructure. As COO of NY Green Bank, Ms. Angoorly
was responsible for establishing, implementing and constantly
evolving all aspects of finance, strategy and operations, as well
as a member of the investment & risk committee. She also played
a leadership role at the New York State Research & Development
Authority (which manages the $5.3 billion Clean Energy Fund for the
State), including as a mentor and as founding Co-Chair of the
organization’s Diversity & Inclusion Initiative. Previously Ms.
Angoorly was Head of Environmental Markets, North America for J. P.
Morgan (focused on greenhouse gas, renewable energy and other
energy-related projects and businesses), SVP and Head of
Development, North East and VP, Environmental & New Business
for NRG Energy, General Counsel at EnelGreenPower and a partner in
the Global Project Finance Group at international firm Milbank.
Throughout her career, Ms. Angoorly has been involved in billions
of dollars of “first-of-their-kind” projects based on technology,
financing structures and other capital aspects. Ms. Angoorly’s
experience also includes being a Board Member of Cyrq Energy Inc.
(where she chairs the Development Committee) and Evolution Markets
Inc., a global commodity brokerage in energy and environmental
markets and products. |
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In 1999, Ms. Angoorly received the John Clemenger Memorial Medal
from Melbourne Business School as top of her MBA class. Ms.
Angoorly holds geology and law honors degrees from Monash
University and an MBA from Melbourne Business School (partly
undertaken at Columbia Business School). |
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James N. Chapman |
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Joined the Board:
2020
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Age:
59
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Board Committees:
Compensation Committee, Sustainability and Governance
Committee
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Principal Occupation:
Independent Consultant
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James N. Chapman has been a director of Denbury since September
2020. Mr. Chapman has more than 35 years of investment
banking experience in a wide range of industries including
aviation/airlines, metals/mining, natural resources/energy,
automotive/general manufacturing, financial services, real estate
and healthcare. Presently, he serves as the lead independent
director of California Resources Corporation (NYSE: CRC) and Arch
Resources, Inc. (NYSE: ARCH) and a member of the board of directors
of several private companies. Mr. Chapman also serves as a
non-executive Advisory Director of SkyWorks Capital, LLC
(“Skyworks”), an aviation and aerospace management consulting
services company based in Greenwich, Connecticut, which he joined
in December 2004. Prior to SkyWorks, he was associated with
Regiment Capital Advisors, LP (“Regiment”), an investment advisor
based in Boston specializing in high yield investments, which he
joined in January 2003. Prior to Regiment, Mr. Chapman acted as a
capital markets and strategic planning consultant with private and
public companies, as well as investment advisors and hedge funds
(including Regiment), across a range of industries. Prior to
establishing an independent consulting practice, Mr. Chapman
worked for The Renco Group, Inc. (“Renco”) (a multi-billion dollar
private corporation with diverse investment holdings located
throughout the world) from December 1996 to December 2001. Prior to
Renco, he was a founding principal of Fieldstone Private Capital
Group (“Fieldstone”) in August 1990 where he headed the Corporate
Finance and High Yield Finance Groups. Prior to joining Fieldstone,
Mr. Chapman worked for Bankers Trust Company from July 1985 to
August 1990, most recently in the BT Securities capital markets
area. In prior years, Mr. Chapman has served as director of
numerous other companies dating back to 1986. Mr. Chapman has
served on numerous committees for the various boards, including
audit committee, compensation committee, pricing committee,
portfolio management committee, treasury committee and corporate
governance and human resource/nomination committee
responsibilities. He has also served on special committees related
to “going-private” transactions and other strategic initiatives,
including mergers, acquisitions, restructurings, bankruptcies and
litigation. |
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Mr. Chapman received an MBA degree, with distinction, from
Dartmouth College in 1985 and was elected an Edward Tuck Scholar.
He received his Bachelor of Arts degree, with distinction, magna
cum laude, at Dartmouth College in 1984 and was elected to Phi Beta
Kappa, in addition to being a Rufus Choate Scholar. |
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Christian S. Kendall |
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Joined the Board:
2017
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Age:
55
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Principal Occupation:
President and Chief Executive Officer of Denbury Inc.
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Christian S. Kendall has been a director of Denbury and the Chief
Executive Officer since July 2017. Mr. Kendall joined Denbury
as Chief Operating Officer in September 2015 and was named
President in October 2016. Prior to joining Denbury,
Mr. Kendall was employed at Noble Energy, Inc. (“Noble”),
where he served as a member of Noble’s executive management and as
part of its operations leadership team as Senior Vice President,
Global Operations Services. Prior to that, Mr. Kendall served as
Vice President, Gulf of Mexico (2011-2014), and as Business Unit
Manager and Vice President, Noble Energy Mediterranean Ltd
(2007-2011), having been with Noble since 2001. Mr. Kendall
began his career with Mobil Oil Corporation in 1989 and, in total,
has more than 30 years of oil and gas industry experience in
domestic and international operations roles.
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Mr. Kendall holds a Bachelor of Science degree in Engineering,
Civil Specialty, from the Colorado School of Mines and is a
graduate of the Advanced Management Program at the Harvard Business
School. As President and Chief Executive Officer of Denbury, Mr.
Kendall is intimately knowledgeable of the day-to-day and strategic
operations of the Company, providing the Board with a management
perspective.
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Lynn A. Peterson |
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Joined the Board:
2017
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Age:
69
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Board Committees:
Audit Committee
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Principal Occupation:
Chief Executive Officer and President of Whiting Petroleum
Corporation
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Lynn A. Peterson has been a director of Denbury since 2017. Mr.
Peterson has been Chief Executive Officer and President of Whiting
Petroleum Corporation (NYSE: WLL) since September 2020. Previously,
he served as Chairman of the Board, President and Chief Executive
Officer of SRC Energy Inc. (“SRC”) from May 2015 until its
acquisition by PDC Energy in January 2020. Before joining SRC, he
was a co-founder of Kodiak Oil & Gas Corporation and served as
its Chairman of the Board, President and Chief Executive Officer
from 2001 until its acquisition by Whiting Petroleum Corporation in
December 2014. Mr. Peterson has served as a director of PDC Energy
(NASDAQ: PDCE) since January 2020. |
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Mr. Peterson graduated from the University of Northern
Colorado with a Bachelor of Science in Accounting and has more than
40 years of experience in the oil and gas industry. |
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Brett R. Wiggs |
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Joined the Board:
2020
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Age:
56
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Board Committees:
Audit Committee, Sustainability and Governance
Committee
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Principal Occupation:
Chief Executive Officer of Oryx Midstream Services
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Brett R. Wiggs has been a director of Denbury since September 2020.
Mr. Wiggs is the Chief Executive Officer of Oryx Midstream
Services. Mr. Wiggs has a long history as a successful leader in
the energy industry, both in the U.S. and abroad, and has a strong
record of creating value and growth. While continuing to lead it
today, Mr. Wiggs formed Oryx in late 2013 and grew the company
from a start-up to its sale to Stonepeak Energy Partners for $3.6
billion in 2019. In less than seven years, Oryx became the second
largest oil gathering and regional transport company in the Permian
Basin moving approximately 700,000 barrels of oil per day through
more than 1,500 miles of pipe and approximately 3 million barrels
of storage, the majority of which were developed and built as
greenfield assets. In late 2021, Oryx combined all of its assets
with the Permian Basin assets of Plains All American Pipeline, L.P.
to form the largest oil gathering and transport venture in the
Permian Basin. Mr. Wiggs continues to serve on the joint operating
committee and board for the new joint venture in addition to
continuing as the CEO of Oryx Midstream Services.
Most recently prior to founding Oryx in late 2013, Mr. Wiggs served
as a managing director for EnCap Flatrock Midstream. Previously,
Mr. Wiggs served as CEO of DFW Midstream Services, a natural gas
gathering company focused in the Barnett Shale. Within three years
of starting the company in 2008, Mr. Wiggs built a gathering system
with more than 80 miles of large and small diameter pipeline and
approximately 50,000 horsepower of compression in a dense urban
environment. Mr. Wiggs has also served as president and general
manager of Bolivia’s principal oil and gas pipeline company,
Transredes SA, and as president and CEO of the Cuiaba Integrated
Power Project, a power plant and natural gas pipeline project
located in western Brazil. Additionally, Mr. Wiggs has held various
business development and management positions at Enron and
TXU.
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Prior to beginning his business career, Mr. Wiggs served as an
artillery officer in the U.S. Army. He received a Bachelor of
Science degree from West Point and a Master of Business
Administration degree from the University of Texas. |
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Cindy A. Yeilding |
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Joined the Board:
2021
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Age:
61
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Board Committees:
Compensation Committee, Sustainability and Governance
Committee
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Principal Occupation:
Independent Consultant
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Cindy A. Yeilding has been a director of Denbury since March 2021.
Ms. Yeilding served as a technical expert and leader at British
Petroleum (“BP”) for more than 35 years, most recently serving as
Senior Vice President of BP, America from April 2016 to December
2020. While serving in that role, she chaired the coordinating
subcommittee of the U.S. National Petroleum Council’s study on
Carbon Capture, Use and Storage. During her career at BP, she held
various positions in oil and gas exploration, production,
geoscience and exploration technology. Ms. Yeilding currently
serves as the Board Chair for the Offshore Technology Conference
and on the board of directors of the Center for Houston’s Future.
She previously served on the board of directors and executive
committee of the Greater Houston Partnership.
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Ms. Yeilding has a Bachelor of Science degree in Geology from
Southern Methodist University and a Master of Science degree in
Geology from the University of North Carolina. She was one of the
founding members of BP’s American Association of Petroleum
Geologists women’s committee and initiated the women’s networking
session for Women in Science and Engineering at the Offshore
Technology Conference.
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As described above, in order for a nominee to be elected as a
director, where a quorum is present, such nominee must receive the
affirmative vote of a 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 “against” such nominee’s
election, with abstentions and broker non-votes not being 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.
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Board of Directors’ Recommendation |
Our Board of Directors recommends that stockholders vote
FOR
election of each of the foregoing director nominees.
COMPENSATION OF NON-EMPLOYEE DIRECTORS
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2021 Director Compensation |
We provide both cash and equity compensation to all of our
non-employee directors (all of our directors except our Chief
Executive Officer, who is not compensated as a director) so as to
attract, motivate and retain experienced and knowledgeable persons
to serve as our directors and to align the interests of our
directors with our stockholders.
The Compensation Committee engaged Lyons, Benenson & Company
Inc. (“LB&C”) to perform a director compensation review of the
peer group of companies utilized for the executive compensation
review (see
Executive Compensation – Compensation Discussion and Analysis –
Roles in Setting Executive Officer Compensation – Role of
Independent Compensation Consultant)
to help determine director compensation. Based on the
analysis prepared by LB&C and the recommendation of the
Compensation Committee, the Board approved the following director
compensation.
Our directors are paid an annual retainer fee of $80,000, except
for our Chairman of the Board, Dr. Meyers, who is paid an annual
retainer fee of $125,000. Additionally, the chairpersons and
members of our Board committees receive additional retainers, as
depicted in the table below. We also reimburse our non-employee
directors for out-of-pocket travel expenses in connection with
in-person Board meetings. Additionally, we encourage our directors
to seek continuing education opportunities, and we reimburse our
directors for out-of-pocket expenses associated with such
continuing education.
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Annual Chairperson Fee |
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Annual Member Fee |
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Board of Directors |
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$ |
125,000 |
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$ |
80,000 |
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Audit Committee |
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25,000 |
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12,500 |
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Compensation Committee |
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17,500 |
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8,750 |
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Sustainability and Governance Committee |
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17,500 |
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8,750 |
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2021 Director Compensation Table |
The total compensation earned by our non-employee directors during
2021 (regardless of when paid) is described in the following
table.
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Director |
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Fees Earned or Paid in Cash (1)
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Stock
Awards
(2)
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All Other Compensation
(3)
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Total |
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Kevin O. Meyers |
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$ |
142,500 |
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$ |
— |
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$ |
9,771 |
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$ |
152,271 |
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Anthony M. Abate |
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113,750 |
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— |
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— |
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113,750 |
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Caroline G. Angoorly |
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102,500 |
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— |
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— |
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102,500 |
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James N. Chapman |
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102,500 |
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— |
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— |
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102,500 |
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Lynn A. Peterson |
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106,875 |
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— |
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— |
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106,875 |
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Brett R. Wiggs |
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96,875 |
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— |
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— |
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96,875 |
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Cindy A. Yeilding |
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53,986 |
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401,684 |
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— |
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455,670 |
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(1)Represents
fees earned for services as a director during 2021, including the
annual base retainer fee and committee chairmanship and/or
membership fees. Ms. Yeilding was appointed to the Board on March
16, 2021.
(2)Represents
the fair value of restricted stock units (“RSUs”) granted in
connection with Ms. Yeilding’s appointment to the Board on March
16, 2021.
(3)Represents
costs paid for insurance coverage under the Company’s medical
benefit plan. Directors that participate in the Company’s medical
benefit plan pay the same premium costs as Denbury
employees.
Directors did not receive annual equity grants in 2021. On March 7,
2022, restricted stock units were granted to non-employee directors
as depicted in the table below.
These restricted stock units fully vest on March 7, 2023. Directors
may elect to defer receipt of their equity grants pursuant to a
written deferral election agreement.
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Director |
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2022 Grants of Restricted Stock Units |
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Kevin O. Meyers |
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3,179 |
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Anthony M. Abate |
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2,119 |
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Caroline G. Angoorly |
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2,119 |
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James N. Chapman |
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2,119 |
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Lynn A. Peterson |
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2,119 |
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Brett R. Wiggs |
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2,119 |
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Cindy A. Yeilding |
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2,119 |
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Director Stock Ownership and Retention Guidelines |
Under the stock ownership and retention guidelines for our
directors, all directors are expected to hold stock with a value of
five times the annual cash retainer paid to the directors
(specifically excluding fees paid for committee memberships and
chairmanships). Until the guideline amount is achieved, directors
are required to retain at least one-third of the shares obtained
through the 2020 Omnibus Stock and Incentive Plan (the “2020
Plan”). As of March 31, 2022, all directors were in compliance with
the ownership and retention guidelines.
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 employees of the
Company. Our Board and senior management spend significant time
implementing corporate governance guidelines, policies and
practices that uphold our core values, align with our corporate
governance commitments and support our business
sustainability.
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Board Leadership Structure |
Dr. Kevin O. Meyers serves as Chairman of the Board, and Christian
S. Kendall serves as our President and Chief Executive Officer. The
separation of the positions of Chief Executive Officer and Chairman
of the Board allows 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 believes
our leadership structure is effective and appropriate, creates a
separation of executive powers by providing a Chairman with whom
the Chief Executive Officer can discuss issues facing the Company,
and provides a significant voice to non-management
directors.
Dr. Kevin O. Meyers, 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 Inc.
Attn: Chairman of the Board of Directors
5851 Legacy Circle
Suite 1200
Plano, Texas 75024
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Corporate Governance Guidelines |
We have Corporate Governance Guidelines that address significant
issues of corporate governance and set forth the procedures by
which the Board carries out its responsibilities. The
primary responsibility of the Board, as memorialized in the
Corporate Governance Guidelines, is the maximization of long-term
stockholder value for the Company’s stockholders, with due regard
for the Company’s employees and other stakeholders. Among the areas
addressed by the guidelines are assessing risk, 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 independent advisors, succession
planning, the number of Board meetings, and Board and committee
performance evaluations. The Sustainability and
Governance Committee is responsible for assessing and periodically
reviewing the adequacy of these guidelines. The guidelines are
available on our website at www.denbury.com, under the “About
Denbury – Corporate Governance” link.
The Board is responsible for oversight of our risk assessment and
risk management. The Board strives to effectively oversee our
enterprise-wide risk management while maximizing the long-term
value for our stockholders, with due regard for our employees and
other stakeholders. The Board receives regular updates from, and
maintains an active dialogue with, members of our management team
and Internal Audit Department about existing risk management
processes and how management identifies, assesses and responds to
our most significant risk exposures. These interactions enable the
Board to evaluate whether management is appropriately managing our
most significant risks.
The Board also relies on, and has delegated certain aspects of its
oversight responsibility to, its committees to assist the Board
with its overall risk assessment and risk management
responsibilities. Each committee reviews and assesses with
management risk-related matters within the scope of its
responsibilities and reports regularly to the Board on such
risk-related matters. For example, the Audit Committee oversees our
guidelines and policies with respect to risk assessment and risk
management, as well as our financial reporting, cybersecurity and
regulatory compliance risk exposures and the steps management has
taken to monitor and control such exposures. The Sustainability and
Governance Committee oversees our high risk areas with respect to
our sustainability strategies, policies, position statements,
practices, procedures and targets, along with risks related to our
corporate governance matters, legislative affairs and activities
and matters related thereto. The Compensation Committee oversees
the extent to which risks arising from our compensation policies
and practices are reasonably likely to have a material adverse
effect on us.
Additionally, Denbury has a policy prohibiting hedging and short
sales of Denbury stock by our directors and employees, including
our named executive officers.
Oversight of ESG and Climate Change Initiatives
We remain committed to implementing sustainability programs to
better manage the risks and opportunities that arise from
environmental, social, governance (“ESG”) and climate-related
issues. The Sustainability and Governance Committee of the Board,
chaired by Ms. Angoorly who has more than 25 years of experience
managing sustainability programs and risks, oversees the
Committee’s ESG, sustainability and climate-related initiatives and
how such initiatives are linked to the Company’s strategic planning
decisions. The Sustainability and Governance Committee also
oversees the Company’s climate strategy, which includes emissions
reduction targets and initiatives.
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Identification of Director Candidates |
The Sustainability and 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 Sustainability and Governance Committee has
not established a specific minimum age, level of education, or
specified types of skills for potential director candidates, but in
general, consideration is given to the candidates’ business and
professional backgrounds, 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 (see
Proposal One: Election of Directors).
The Board and the Sustainability and Governance Committee aim
to assemble a diverse group of Board members and believe that no
single criterion is determinative in obtaining diversity on the
Board. The Board believes diversity affords the opportunity for a
variety of points of view, improving the quality of dialogue,
contributing to a more effective decision-making process, and
enhancing overall culture in the boardroom. The Board seeks diverse
perspectives and experiences, such as serving on other public
company boards, the balance of business interest and experience of
the candidate, and the need for any particular expertise on the
Board or one of its committees, among other
things.
Members of the Board will be asked to submit recommendations when
there is an opening or anticipated opening for a director
position. The Sustainability and 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 its attention.
The Sustainability and Governance Committee will also consider
nominees for election to the Board submitted to it by stockholders
using substantially the same criteria it applies to nominee
recommendations by directors, officers, employees and others. To
recommend a prospective nominee for the Sustainability and
Governance Committee’s consideration, submit the candidate’s name
and qualifications in writing to the following address: Denbury
Inc., Attention: Sustainability and Governance Committee,
5851 Legacy Circle,
Suite 1200, Plano, Texas 75024.
For information on how to nominate a director (as opposed to
recommending a candidate for consideration by the Sustainability
and Governance Committee), see
Stockholder Proposals for Our 2023 Annual Meeting of Stockholders –
Advanced Notice of Nominations or Proposed Business for Our 2023
Annual Meeting of Stockholders
below.
Our Bylaws provide that all members of the Board, other than the
Chief Executive Officer, will be independent as determined under
the rules of the New York Stock Exchange (the “NYSE”) and its
corporate governance listing standards. Additionally,
each of the Board committee charters requires that all members of
that committee be independent. The Board has affirmatively
determined that all nominees for director, with the exception of
Mr. Kendall, 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.
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Code of Conduct and Ethics |
We have a Code of Conduct and Ethics that applies to our officers,
employees and directors. This code assists employees in
resolving ethical issues that may arise in complying with Denbury’s
policies. Our Code of Conduct and Ethics is a
values-based document organized around our five core values:
Integrity, Teamwork, Innovation, Excellence and Respect. It
exemplifies our commitment to “Doing Right” in the conduct of our
business. Our Chief Executive Officer and Senior Financial Officers
are also subject to the Code of Ethics for 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 our website at
www.denbury.com, under the “About Denbury – Corporate Governance”
link. Any waiver of these codes with respect to our
executive officers and directors may be made only by the Board and
will be disclosed to stockholders on our website, along with any
amendments to these codes, to the extent required by applicable law
or NYSE rules.
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Related Party Transactions |
Under our Related Party Transactions Policy, the Sustainability and
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.” As defined in our Related Party
Transactions Policy, “Related Parties” are the Company’s directors
and executive officers, beneficial owners that hold more than 5% of
any class of our voting securities, as well as immediate family
members of any such directors, executive officers and beneficial
owners. Our Related Party Transactions Policy is available on our
website at www.denbury.com, under the “About Denbury – Corporate
Governance” link.
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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 Inc.
Attn: Corporate Secretary
5851 Legacy Circle
Suite 1200
Plano, Texas 75024
In addition, interested parties may email the Corporate Secretary
and Board members at: secretary@denbury.com. Such
communications will be forwarded by the Corporate Secretary
directly to the Board, as appropriate.
BOARD MEETINGS, ATTENDANCE AND COMMITTEES
The Board met 10 times in 2021, including telephonic meetings and
video conferences. All directors attended at least 75% of the Board
meetings. Dr. Meyers, Chairman of the Board, acted
as chairman of those meetings. The Board regularly held executive
sessions with the non-management Board members, which were chaired
by the Chairman of the Board. The Board took all other actions by
unanimous written consent in accordance with the terms of the
Company’s Bylaws. All directors attended at least 75% of all
meetings of each of the committees on which they
served.
Until December 2021, the Board had an Audit, Compensation,
Nominating/Corporate Governance and Sustainability Committee. The
Chairperson of each committee provided a report to the Board on
their committee’s activities and findings from their most recent
meetings. The Board committees had the following number of meetings
in 2021, including telephonic meetings:
|
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|
|
Board Committee |
|
Number of Meetings |
|
Audit |
|
8 |
|
Compensation |
|
5 |
|
Nominating/Corporate Governance |
|
4 |
|
Sustainability |
|
4 |
In December 2021, the Nominating/Corporate Governance Committee and
Sustainability Committee were combined to form the Sustainability
and Governance Committee. The table below shows the Committee
memberships as of March 31, 2022.
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Name |
|
Audit |
|
Compensation |
|
Sustainability and Governance |
|
|
Kevin O. Meyers, Chairman |
|
X |
|
X |
|
|
|
Anthony M. Abate |
|
Chairperson |
|
X |
|
|
|
Caroline G. Angoorly |
|
|
|
|
|
Chairperson |
|
James N. Chapman |
|
|
|
Chairperson |
|
X |
|
Lynn A. Peterson |
|
X |
|
|
|
|
|
Brett R. Wiggs |
|
X |
|
|
|
|
X |
|
Cindy A. Yeilding |
|
|
|
X |
|
X |
The Audit Committee is comprised of four independent directors: Dr.
Meyers and Messrs. Abate, Peterson and Wiggs, with Mr. Abate
acting as chairperson. The primary purpose of the Audit
Committee, which is discussed in detail in its charter, is to
assist with the Board’s oversight of the:
•integrity
of the Company’s financial statements;
•Company’s
compliance with legal and regulatory requirements related to
financial reporting;
•independence
and qualifications of the Company’s independent registered public
accounting firm;
•performance
of the Company’s internal audit function and independent registered
public accounting firm;
•preparation
of required disclosures for the Company’s financial statement
filings with the SEC;
•independence
of the Company’s independent reserves engineer;
•reporting
of the Company’s oil, natural gas and CO2
reserves; and
•evaluation
as to whether the Company has effective processes for risk
assessment and risk management.
The Audit Committee meets regularly with management, the Company’s
Internal Audit Representative, the independent registered public
accounting firm and the independent reserves engineer to review
financial accounting and reporting, reserves 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 Internal Audit Representative, independent
registered public accounting firm and independent reserves engineer
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, review recommendations or
suggestions for changes in accounting procedures, and 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
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, the Audit Committee charter
requires that at least one member of the Audit Committee must
qualify 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 controls over financial reporting
and audit committee functions in accordance with SEC
rules. Such knowledge is to have been obtained through
past education and experience in positions of financial
oversight. All members of the Audit Committee have such
experience and have been designated as “audit committee financial
experts.” Additionally, 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.
The Compensation Committee is comprised of four independent
directors: Dr. Meyers, Messrs. Abate and Chapman and Ms. Yeilding,
with Mr. Chapman acting as chairperson. These directors
are also independent under the additional independence requirements
of the NYSE applicable to compensation committee 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:
•reviewing
and approving a general compensation program and salary structure
for the Company, including overall salary increases, bonuses 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 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 approving
the compensation of, all other senior executives on an annual
basis;
•reviewing
the independent, non-employee, outside directors’ compensation
program for appropriateness, competitiveness and plan design, and
approving any changes to the amount and form of such compensation,
as appropriate;
•reviewing
and approving the adoption of, or material modifications to, the
Company’s incentive compensation plans (including the 2020 Plan),
deferred compensation plans, employee stock purchase plans and
equity-based plans, approving 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 our website at
www.denbury.com, under the “About Denbury – Corporate Governance”
link.
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|
Sustainability and Governance Committee |
In December 2021, the Nominating/Corporate Governance Committee and
Sustainability Committee were combined to form the Sustainability
and Governance Committee, which as further described below, has
assumed the responsibilities of the former Nominating/Corporate
Governance Committee. The Sustainability and Governance Committee
is comprised of four independent directors: Mses. Angoorly and
Yeilding and Messrs. Chapman and Wiggs, with Ms. Angoorly
acting as chairperson. The primary purpose of the
Sustainability and Governance Committee, which is discussed in
further detail in its charter, is to assist with the Board’s
oversight of:
•key
sustainability strategies, policies, position statements,
practices, procedures and targets, and assessments of relevant high
risk areas related thereto;
•the
Company’s performance with respect to health, safety, climate
change and sustainability targets, as well as compliance with
health, safety and environmental laws, rules and regulations, in
each case to the extent applicable to the Company’s
business;
•proposed
long-term targets and aspirations for environmental, social and
governance performance;
•significant
health, safety and environmental litigation and regulatory
proceedings in which the Company is, or is reasonably likely to
become, involved;
•human
capital management initiatives, including diversity, equity and
inclusion matters, workplace culture and talent
development;
•the
Company’s public reports regarding environmental, social and
governance responsibility activities prior to
publication;
•identifying,
recruiting, screening, interviewing and recommending individuals
qualified to become members of the Board (see
Governance of the Company – Identification of Director
Candidates);
•analyzing
each current or prospective director’s eligibility to be classified
as “independent” to serve on the Board and each committee of the
Board;
•recommending
and evaluating 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; and
•developing
and recommending to the Board for its approval various codes of
conduct and ethics and a set of corporate governance
guidelines.
The Sustainability and Governance Committee charter is available on
our website at www.denbury.com, under the “About Denbury –
Corporate Governance” link.
MANAGEMENT
The names, ages and positions held by our senior officers are set
forth below. Each senior 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 senior officers.
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|
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|
Name |
|
Age |
|
Position |
|
Christian S. Kendall |
|
55 |
|
Director, President and Chief Executive Officer
|
|
Mark C. Allen |
|
54 |
|
Executive Vice President, Chief Financial Officer, Treasurer and
Assistant Secretary
|
|
James S. Matthews |
|
60 |
|
Executive Vice President, Chief Administrative Officer, General
Counsel and Secretary
|
|
Jenny Cochran |
|
54 |
|
Senior Vice President – Business Services
|
|
Matthew Dahan |
|
58 |
|
Senior Vice President – Business Development and
Technology
|
|
David Sheppard |
|
50 |
|
Senior Vice President – Operations |
|
Nikulas J. Wood |
|
42 |
|
Senior Vice President – CCUS
|
Christian S. Kendall
is a Director, President and Chief Executive Officer of Denbury.
Biographical information for Mr. Kendall is included under
Proposal One – Election of Directors.
Mark C. Allen,
Executive Vice President, Chief Financial Officer, Treasurer and
Assistant Secretary, joined Denbury in 1999. Prior to serving in
his current role, Mr. Allen served as Vice President and Chief
Accounting Officer from the time he joined Denbury in April 1999
until June 2009 when he became Senior Vice President and Chief
Financial Officer. Before joining Denbury, 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. Mr. Allen holds a Bachelor of Business
Administration in Accounting degree from Evangel University. Mr.
Allen is a licensed Certified Public Accountant in the state of
Texas.
James S. Matthews,
Executive Vice President, Chief Administrative Officer, 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 earned his Bachelor of Arts degree from Vanderbilt
University, his Master’s degree from Ohio University and his Juris
Doctor degree from Emory University School of Law.
Jenny Cochran,
Senior Vice President – Business Services, joined Denbury in 2013.
Prior to serving in her current role, Ms. Cochran served as
Denbury’s Director of Compensation and Vice President – Human
Resources. Prior to joining Denbury, Ms. Cochran previously worked
in several leadership roles over 15 years at Temple-Inland, a
building products manufacturer with 10,000 employees, most recently
serving as Vice-President, Human Resources. Ms. Cochran
received a Bachelor of Science degree from Texas A&M University
and a Master of Business Administration from the University of
Texas at Austin.
Matthew Dahan,
Senior
Vice President – Business Development and Technology, joined
Denbury in October 2010 and has more than 35 years of industry
experience. Prior to being named Senior Vice President, Mr. Dahan
served as Denbury’s Vice President – North Region, and prior to
that 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.
David Sheppard,
Senior Vice President – Operations, joined Denbury in November 2015
and has more than 25 years of experience in the oil and natural gas
industry. Mr. Sheppard was previously employed at Noble Energy
where he held a variety of leadership roles, most recently as the
Director of Global Drilling. Mr. Sheppard’s experience and
responsibilities at Noble included onshore and offshore drilling,
development projects, and production engineering. Mr. Sheppard
earned his Bachelor of Science degree in Petroleum Engineering from
Texas A&M University.
Nikulas J. Wood,
Senior Vice President – CCUS, joined Denbury in 2005. Prior to
being named Senior Vice President in April 2021, Mr. Wood served as
Vice President – Rocky Mountain Region. During his tenure at
Denbury, Mr. Wood has served in progressive leadership roles across
the organization, including Director of Development Design, Gulf
Coast Region Asset Manager, Manager of Acquisitions and
Divestitures and Manager of Corporate Planning. Earlier in his
career, Mr. Wood served in various reservoir, production and
operations engineering roles including positions at Republic Energy
Inc. and Halliburton Energy Services. Mr. Wood earned his Bachelor
of Science in Industrial Engineering from Purdue University and his
Master of Business Administration from Southern Methodist
University.
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, 2022 (except as noted) 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 director
nominee and (iv) all directors and executive officers as a group.
The percent of outstanding shares is calculated on the basis of
50,204,723 shares of Denbury common stock outstanding (which
excludes treasury shares) as of February 28, 2022.
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|
|
|
|
|
Name of Beneficial Owner |
|
Shares of
Common Stock |
|
|
|
% of Shares Outstanding |
|
Directors and Named Executive Officers: |
|
|
|
|
|
|
|
Kevin O. Meyers |
|
748 |
|
|
(1) (2) |
|
* |
|
Anthony M. Abate |
|
— |
|
|
(2) |
|
* |
|
Caroline G. Angoorly |
|
— |
|
|
(2) |
|
* |
|
James N. Chapman |
|
— |
|
|
(2) |
|
* |
|
Lynn A. Peterson |
|
470 |
|
|
(1) (2) |
|
* |
|
Brett R. Wiggs |
|
— |
|
|
(2) |
|
* |
|
Cindy A. Yeilding |
|
— |
|
|
(2) |
|
* |
|
Christian S. Kendall |
|
3,569 |
|
|
(1) (2) |
|
* |
|
Mark C. Allen |
|
3,597 |
|
|
(1) (2) |
|
* |
|
James S. Matthews |
|
1,041 |
|
|
(1) (2) |
|
* |
|
All of the executive officers and directors as a group
(10 persons) |
|
9,425 |
|
|
(1) (2) |
|
* |
|
Stockholders owning 5% or more of issued and outstanding common
stock |
|
|
|
|
|
|
|
Fidelity Management & Research Company |
|
7,729,944 |
|
|
(3) |
|
15.4 |
% |
|
The Vanguard Group |
|
4,821,268 |
|
|
(4) |
|
9.6 |
% |
|
Silver Point Capital, L.P. |
|
3,819,800 |
|
|
(5) |
|
7.6 |
% |
|
William Blair Investment Management, LLC |
|
3,341,888 |
|
|
(6) |
|
6.7 |
% |
|
BlackRock, Inc. |
|
3,335,760 |
|
|
(7) |
|
6.6 |
% |
* Indicates
less than 1%.
(1)Represents
Series B Warrants, each of which may be exercised for one share of
the Company’s common stock at an exercise price of $35.41 per share
until September 18, 2023, at which time the Series B Warrants
expire.
(2)The
shares above do not include shares issuable in December 2023 upon
settlement of performance stock units (“PSUs”), which vested in
March 2021, and restricted stock units (“RSUs”), one-third of which
vested in December 2021. As of February 28, 2022, our executive
officers and directors owned the following number of PSUs, RSUs
(vested and unvested), each of which represents the right to
receive one share of the Company’s common stock, and Series B
Warrants:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Vested
PSUs |
|
Vested
RSUs |
|
Unvested
RSUs |
|
Series B Warrants |
|
Total |
|
Christian S. Kendall |
|
373,503 |
|
|
124,501 |
|
|
249,002 |
|
|
3,569 |
|
|
750,575 |
|
|
Mark C. Allen |
|
140,063 |
|
|
46,688 |
|
|
93,376 |
|
|
3,597 |
|
|
283,724 |
|
|
James S. Matthews |
|
73,533 |
|
|
24,511 |
|
|
49,023 |
|
|
1,041 |
|
|
148,108 |
|
|
Kevin O. Meyers |
|
— |
|
|
15,279 |
|
|
30,560 |
|
|
748 |
|
|
46,587 |
|
|
Anthony M. Abate |
|
— |
|
|
10,186 |
|
|
20,373 |
|
|
— |
|
|
30,559 |
|
|
Caroline G. Angoorly |
|
— |
|
|
10,186 |
|
|
20,373 |
|
|
— |
|
|
30,559 |
|
|
James N. Chapman |
|
— |
|
|
10,186 |
|
|
20,373 |
|
|
— |
|
|
30,559 |
|
|
Lynn A. Peterson |
|
— |
|
|
10,186 |
|
|
20,373 |
|
|
470 |
|
|
31,029 |
|
|
Brett R. Wiggs |
|
— |
|
|
10,186 |
|
|
20,373 |
|
|
— |
|
|
30,559 |
|
|
Cindy A. Yeilding |
|
— |
|
|
3,242 |
|
|
6,484 |
|
|
— |
|
|
9,726 |
|
|
All of the executive officers and directors as a group |
|
587,099 |
|
|
265,151 |
|
|
530,310 |
|
|
9,425 |
|
|
1,391,985 |
|
(3)Information
based on Schedule 13G/A filed with the SEC on February 9, 2022,
disclosing beneficial ownership information as of December 31,
2021. Fidelity Management & Research Company claims
sole voting power of 1,637,203 shares and sole dispositive power of
7,729,944 shares. The address of Fidelity Management & Research
Company is 245 Summer Street, Boston, Massachusetts
02210.
(4)Information
based on Schedule 13G filed with the SEC on February 9, 2022,
disclosing beneficial ownership information as of December 31,
2021. The Vanguard Group claims shared voting power of
96,129 shares, sole dispositive power of 4,685,202 shares and
shared dispositive power of 136,066 shares. The address of The
Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania
19355.
(5)Information
based on Schedule 13G filed with the SEC on February 14, 2022,
disclosing beneficial ownership information as of December 31,
2021. Silver Point Capital, L.P. claims shared voting
power and shared dispositive power of 3,819,800 shares. The address
of Silver Point Capital, L.P. is Two Greenwich Plaza, Greenwich,
Connecticut 06830.
(6)Information
based on Schedule 13G filed with the SEC on February 10, 2022,
disclosing beneficial ownership information as of December 31,
2021. William Blair Investment Management, LLC claims
sole voting power of 2,931,379 shares and sole dispositive power of
3,341,888 shares. The address of William Blair Investment
Management, LLC is 150 North Riverside Plaza, Chicago, Illinois
60606.
(7)Information
based on Schedule 13G filed with the SEC on February 4, 2022,
disclosing beneficial ownership information as of December 31,
2021. BlackRock, Inc. claims sole voting power of
3,299,428 shares and sole dispositive power of 3,335,760 shares.
The address of BlackRock, Inc. is 55 East 52nd Street, New York,
New York 10055.
COMPENSATION COMMITTEE REPORT
The goal of the Compensation Committee is to design compensation
policies and programs to attract and retain top level individuals
in key positions and provide incentives for those individuals to
increase the long-term value of the Company for our stakeholders.
Our stockholders’ views on our executive compensation program are
important to us, and we value and utilize the feedback and insights
that we have received, and continue to receive, from our
stockholders. To communicate with the Compensation Committee,
please follow the procedures outlined under
Governance of the Company – Communication with the
Board.
The following Compensation Discussion and Analysis (“CD&A”)
should be read in conjunction with the Summary Compensation Table,
as well as the related tables and narrative disclosures. We have
reviewed and discussed the CD&A included in this proxy
statement with management and have 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, 2021.
The Compensation Committee
James N. Chapman, Chairperson
Anthony M. Abate
Kevin O. Meyers
Cindy A. Yeilding
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
The members of the Compensation Committee listed above are
independent directors.
EXECUTIVE COMPENSATION – COMPENSATION DISCUSSION AND
ANALYSIS
This Compensation Discussion and Analysis (“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.
This CD&A focuses on the compensation of our named executive
officers (our “named executive officers” or “NEOs”) for 2021. We
review the roles and responsibilities of our officers and key
employees on an annual basis and determine which of those
individuals qualify as named executive officers by meeting the
definition of “executive officer” for purposes of Rule 405 under
the Securities Act of 1933, as amended (the “Securities Act”), Item
402(a)(3) of Regulation S-K and Rule 3b-7 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). In 2021, we
had three officers who met the definition of “named executive
officer” under SEC rules. The names and titles of our named
executive officers for 2021 are shown in the table
below.
|
|
|
|
|
|
|
|
|
|
Name |
|
Title |
|
Christian S. Kendall |
|
President and Chief Executive Officer |
|
Mark C. Allen |
|
Executive Vice President, Chief Financial Officer, Treasurer and
Assistant Secretary |
|
James S. Matthews |
|
Executive Vice President, Chief Administrative Officer, General
Counsel and Secretary |
This CD&A should be read in conjunction with the Summary
Compensation Table which details the compensation of our named
executive officers in 2021, 2020 and 2019, as reported in
accordance with SEC rules.
|
|
|
|
Summary of Executive Compensation Practices |
Our executive compensation policies and programs are designed
to:
•align
the interests of our named executive officers with those of our
stockholders through stock-based compensation;
•align
named executive officer compensation with the execution of our
strategy; and
•create
a compensation structure for our named executive officers that is
easily understood and measured.
|
|
|
|
Objectives and Philosophy |
Our compensation policies and programs 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 our peer companies;
•provide
a proper balance and mix of compensation, which places significant
emphasis on long-term and incentive-based compensation;
and
•tie
executive compensation to the performance of the Company as a
whole.
Each year, we evaluate the result of the say-on-pay vote cast by
our stockholders. We are committed to ensuring that our
stockholders fully understand our executive officer compensation
programs, including how such programs align the interests of our
named executive officers with those of our stockholders and how
such programs reward the achievement of our strategic objectives.
At our 2021 annual meeting of stockholders, approximately 76% of
shares having voting power present in person or represented by
proxy were voted in favor of the compensation of our named
executive officers, a lower approval percentage compared to 91% and
94% in 2020 and 2019, respectively. Our stockholders’ views on our
executive officer compensation program are important to us, and we
value and utilize the feedback and insights that we have received,
and continue to receive, from our stockholders. As further detailed
below, our Board recommends a vote FOR Proposal
Two, the non-binding, advisory vote to approve named executive
officer compensation.
We are committed to continuously maintaining an open dialogue with
our stockholders and engaging in a robust process to solicit
feedback from our stockholders. Stockholders involved in our
engagement efforts were invited to meet with members of our senior
management. Throughout 2021, we engaged with stockholders owning
more than 86% of our outstanding common stock as of December 31,
2021.
Additionally, as part of our semi-annual governance engagement
process, members of the Board, including the Chairperson, are
available to meet with our stockholders. As part of our stockholder
engagement, we reached out to our largest institutional
stockholders in an effort to obtain input on how our executive
officer compensation program, disclosure practices, sustainability
policies and corporate governance may be better aligned with
stockholder expectations.
The Board and our management carefully consider stockholder
feedback. Below is a chart summarizing the feedback that we
received from our stockholders and our responses. For more
information regarding our compensation policies and programs for
2022, see
Executive Compensation – Compensation Discussion and Analysis –
2022 Compensation.
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Stockholder Feedback |
Company Response |
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The
annual incentive bonus plan should include performance measures
tied to the Company’s CCUS business strategy and environmental,
social and governance metrics. |
Beginning in 2022, a total of 40% of the annual incentive bonus
will be tied to our CCUS business strategy and ESG metrics, as
described below.
•20%
will be tied to execution of our CCUS business strategy and
management of asset retirement obligations (“ARO”);
•15%
will be tied to health and safety goals; and
•5%
will be tied to an annual emissions reduction target.
For more information on the annual bonus program in 2022,
see
Executive Compensation – Compensation Discussion and Analysis –
2022 Compensation.
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|
Equity awards granted to named executive officers should be tied to
traditional performance measures. |
The Compensation Committee did not grant equity awards to our named
executive officers in 2021.
For 2022, the Compensation Committee determined that equity awards
granted to our named executive officers would consist of 60%
performance-based TSR awards (cliff vesting after a three-year
period based on relative TSR performance against a peer group of
companies) and 40% time-vested restricted stock (vesting ratably
over a three-year period). For more information on the equity
grants in 2022, see
Executive Compensation – Compensation Discussion and Analysis –
2022 Compensation.
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Denbury should disclose its goals with respect to capturing,
utilizing and storing carbon emissions. |
Through our CCUS efforts and our use of industrial-sourced
CO2,
we currently fully offset our Scope 1 and 2 emissions. Our goal is
to fully offset our Scope 3 emissions by 2030. Approximately 25% of
our production is Scope 3 carbon negative through the use of
industrial-sourced CO2,
and we plan to only use industrial-sourced CO2
for our Cedar Creek Anticline development. Additionally, beginning
in 2022, 5% of our annual incentive bonus will be tied to an annual
emissions reduction target.
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The Board should have direct oversight of human capital management
initiatives. |
In March 2021, the Sustainability and Governance Committee amended
its charter to include direct oversight of our human capital
management initiatives, including diversity, equity and inclusion
matters, workplace culture and talent development.
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The Board should continue to seek diverse, qualified directors to
serve as members of the Board. |
Cindy A. Yeilding was appointed to the Board in March 2021. In
December 2021, Caroline G. Angoorly was appointed chairperson of
the Sustainability and Governance Committee. Our Board has 25%
female representation and 13% ethnic minority
representation.
|
Additionally, at last year’s annual meeting of stockholders, we
believe some stockholders voted against the election of
Mr. Peterson to our Board due to overboarding concerns
regarding his service on other public company boards while also
serving as a CEO of a public company. Mr. Peterson currently serves
as CEO and a director at Whiting Petroleum Corporation (“Whiting”)
while also serving as an independent director at PDC Energy, Inc.
(“PDC”) and Denbury. On March 7, 2022, Whiting and Oasis Petroleum
Inc. (“Oasis”) announced the planned merger of the two companies
(the “Transaction”), expected to close in the second half of 2022.
Upon closing of the Transaction, Mr. Peterson will step down
as CEO of Whiting and is expected to serve as Executive Chair of
the Board of Directors of the combined company through December 31,
2023 or an earlier date if agreed upon. In this new role, Mr.
Peterson will no longer be a full-time employee of Whiting, but
instead will provide advice and guidance to the CEO and management
team as needed. We believe this anticipated change in Mr.
Peterson’s role will alleviate all previous overboarding
concerns.
To further alleviate any potential overboarding concerns, Mr.
Peterson stopped serving as a member of the Nominating/Corporate
Governance Committee of the Board in December 2021. We also
routinely evaluate any potential conflicts of interests of our
Board members, including employment and other directorships, and
have determined that no conflicts exist with respect to Mr.
Peterson’s positions with Whiting, Oasis or PDC, and Mr. Peterson
is an independent director of Denbury under SEC and NYSE rules and
corporate governance listing standards. Also, he is (and he will be
at the closing of the Transaction) in compliance with Denbury’s
internal overboarding policy. Mr. Peterson is a highly engaged
and committed Board member and actively participates in all Board
matters, demonstrating an ability to effectively manage the demands
on his time.
We believe that we have utilized the feedback that we received from
our stockholders to implement positive changes to our compensation,
governance and sustainability programs in 2021 and
2022.
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Roles in Setting Executive Officer Compensation |
Role of the Compensation Committee
The Compensation Committee, which consists of four independent
directors, provides assistance to the Board in discharging its
oversight responsibilities relating to the compensation of our
Chief Executive Officer and other executive officers. The
Compensation Committee is responsible for the review and approval
of all aspects of our executive compensation program. Among its
primary duties, the Compensation Committee reviews and approves, on
at least an annual basis, the corporate goals and objectives
relevant to the compensation of our Chief Executive Officer,
evaluates the Chief Executive Officer’s performance in light of
these goals and objectives, and determines and approves our Chief
Executive Officer’s compensation based on this evaluation.
Additionally, in consultation with the Chief Executive Officer, the
Compensation Committee evaluates the performance of, and reviews
and approves the compensation of, all other executive officers on
an annual basis.
Other duties of the Compensation Committee with respect to setting
executive officer compensation include:
•setting,
reviewing and certifying performance metrics and targets for
incentive-based compensation;
•evaluating
Company performance results with respect to the annual incentive
bonus;
•evaluating
and approving the Company’s compensation peer group;
•evaluating
the competitiveness of each executive officer’s total target
compensation; and
•approving
any changes to executive officer compensation, including but not
limited to, base salaries, annual incentive bonus target amounts
and equity and cash awards.
The Compensation Committee charter, which fully describes the
Compensation Committee’s duties and responsibilities, is available
on the Company’s website at www.denbury.com, under the “About
Denbury – Corporate Governance” link.
Role of the Chief Executive Officer
Within the framework of the compensation programs approved by the
Compensation Committee, each year our Chief Executive Officer
recommends the level of base salary, annual incentive bonus amounts
and equity and/or cash award amounts for our other executive
officers. These recommendations are based, in part, upon his
assessment of each executive officer’s performance, the performance
of the individual’s respective department or function, the
performance of the Company as a whole, and officer retention
considerations. The Compensation Committee reviews our Chief
Executive Officer’s recommendations and approves any compensation
changes affecting our executive officers as it determines in its
sole discretion. Our Chief Executive Officer is not involved in
setting or approving his own compensation.
Role of Independent Compensation Consultant
The Compensation Committee has engaged LB&C to serve as its
independent compensation consultant and to advise the Compensation
Committee on compensation-related matters. LB&C reports
directly to the Compensation Committee. The Compensation Committee
assessed the independence of LB&C pursuant to applicable SEC
and NYSE rules and concluded that no conflict of interest exists
that would prevent LB&C from serving as an independent
compensation consultant to the Compensation Committee. The
Compensation Committee retains sole authority to approve LB&C’s
compensation, determine the nature and scope of its services,
evaluate its performance, and terminate its engagement. LB&C
provides various executive compensation services to the
Compensation Committee pursuant to a written consulting agreement
with the Compensation Committee.
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Use of Peer Survey Comparisons |
In December 2020 (for the purpose of approving compensation for
2021), the Compensation Committee, in consultation with LB&C,
approved compensation peer companies from a group of independent
publicly traded oil and gas companies using several criteria, such
as market capitalization, revenues, assets, enterprise value and
production volumes. The Company’s compensation peer group is set
forth below. The Compensation Committee intends to review the peer
group composition annually in consultation with
LB&C.
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Compensation Peer Group |
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Berry Corporation |
Kosmos Energy Ltd. |
Range Resources Corporation |
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Bloom Energy Corporation |
Laredo Petroleum, Inc. |
SM Energy Company |
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Bonanza Creek Energy, Inc. |
Matador Resources Company |
Talos Energy Inc. |
|
Callon Petroleum Company |
Montage Resources Corporation |
Whiting Petroleum Corporation |
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Cimerex Energy Co. |
PDC Energy, Inc. |
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Comstock Resources, Inc. |
QEP Resources, Inc. |
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2021 Compensation Components |
Base Salaries
The Compensation Committee believes that base salaries should be
competitive with the salaries of similar management positions at
our compensation peer companies. Base salary rates for our named
executive officers at year-end 2021 are depicted in the table
below.
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Annual Base Salary |
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Christian S. Kendall |
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$772,000 |
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Mark C. Allen |
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$605,000 |
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James S. Matthews |
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$525,000 |
Annual Incentive Bonus
Annual incentive bonuses are paid in cash and are an integral part
of the overall compensation program for all of our employees. The
decision to pay annual incentive bonuses, and in what amounts, is
determined by the Compensation Committee on a Company-wide basis.
The annual incentive bonus target amounts are based on a percentage
of base salary. The target annual incentive bonus percentage
amounts for our named executive officers are depicted in the table
below.
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Target Annual Incentive Bonus Percentages |
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Christian
S. Kendall |
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130% |
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Mark C. Allen |
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120% |
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James S. Matthews |
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100% |
The 2021 annual incentive bonus was calculated for all of our
employees, including our named executive officers, as
follows:
2021 Annual Incentive Bonus Calculation
In February 2021, the Compensation Committee approved the annual
incentive bonus metrics, their respective weightings for 2021 and
the thresholds, targets and maximums for each metric. The annual
incentive bonus had a potential payout range from 0% to 200% of
target and was based entirely on quantitative metrics related to
Company performance. See
Results of Incentive-Based Compensation for Year-End 2021
below for a description of the results of the 2021 annual incentive
bonus.
No Equity Awards Granted in 2021
The Compensation Committee did not grant equity awards to our named
executive officers in 2021.
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Results of Incentive-Based Compensation for Year-Ended
2021 |
In the performance period ended 2021, our named executive officers
earned cash from the 2021 annual incentive bonus. Additionally, the
PSUs granted in December 2020 vested at a 100% level on March 3,
2021.
2021 Annual Incentive Bonus
The table below depicts the 2021 annual incentive bonus metrics,
their respective weightings and the thresholds, targets, maximums
and results for each metric.
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2021 Annual Incentive Bonus Metrics and Results ($ in
millions) |
|
Metric |
|
Target Points |
|
Threshold
(50%) |
|
Target
(100%) |
|
Maximum
(200%) |
|
Results |
|
Points Earned |
|
EBITDAX
(1)
|
|
40 |
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$210 |
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$260 |
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$320 |
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$316 |
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77 |
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Production
(2)
(BOE/d)
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20 |
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48,500 |
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50,000 |
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51,500 |
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48,770 |
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12 |
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HSE Performance |
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Serious Injury & Fatality Rate |
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5 |
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0.80 |
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0.67 |
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0.54 |
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0.35 |
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10 |
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Total Recordable Incident Rate |
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5 |
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0.93 |
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0.78 |
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0.63 |
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0.40 |
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10 |
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Significant Release Rate |
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5 |
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0.18 |
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0.16 |
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0.14 |
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0.17 |
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4 |
|
Lease Operating Expenses
(3)
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10 |
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$374 |
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$356 |
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$338 |
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$352 |
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12 |
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Reserves Replacement |
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10 |
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50% |
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100% |
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250% |
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397% |
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20 |
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General & Administrative Expenses
(4)
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5 |
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$79 |
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$73 |
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$67 |
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$71 |
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7 |
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Total |
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100 |
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152 |
(1) EBITDAX is defined as consolidated net
income excluding interest expense, tax expense (benefit),
depletion, depreciation, amortization and exploration expense,
non-cash items, net losses from disposed, abandoned or discontinued
operations and all other extraordinary or non-recurring losses and
charges. This is a non-GAAP measure and should not be considered as
a substitute for net income (loss), cash flow from operations
computed under GAAP or any other measure computed in accordance
with GAAP
(2) Production is calculated before
adjustments for any acquisitions and/or divestitures in barrels of
oil equivalent produced per day (BOE/d).
(3) Lease Operating Expenses excludes the
cost of CO2.
(4) General & Administrative Expenses
excludes annual incentive bonuses and any incentive-based equity
compensation earned above target levels.
In February 2022, the Compensation Committee certified the results
of the 2021 annual incentive bonus. Based on the Company’s results,
the Compensation Committee determined that a total of 152
percentage points were earned for the 2021 annual incentive bonus.
The chart below shows the 2021 annual incentive bonus amounts
earned by our named executive officers, as compared to
target.
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Name |
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Annual Incentive
Bonus Target |
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Annual Incentive
Bonus Earned |
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Christian S. Kendall |
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$1,003,600 |
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$1,525,472 |
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Mark C. Allen |
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726,000 |
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1,103,520 |
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James S. Matthews |
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525,000 |
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798,000 |
Performance Stock Units Vested in 2021
On December 4, 2020, the Board, in consultation with LB&C who
performed a thorough compensation review, granted PSUs as part of
emergence grants to certain recipients, including the grants below
to our named executive officers.
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PSUs |
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Christian S. Kendall |
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373,503 |
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Mark C. Allen |
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140,063 |
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James S. Matthews |
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73,533 |
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Each PSU represented a contingent right to receive one share of
Denbury common stock. The PSUs provided for vesting based on the
volume-weighted average price of a share of Denbury common stock
equaling or exceeding the pre-established levels for 60 consecutive
trading days during a three-year performance period beginning
December 4, 2020 (the “60-day VWAP”), and, subject to certain
conditions, provide for settlement in shares of common stock within
30 days following the end of the three-year performance period in
December 2023. On March 3, 2021, the preceding 60-day VWAP was
$32.53, and, as a result, all of the PSUs vested at a 100% level on
that date. These PSUs are not settled into shares of common stock
until December 2023.
This section describes certain compensation actions taken with
respect to 2022 compensation for our named executive officers. We
include this disclosure because we believe it enhances the
understanding of our executive compensation practices and our
objectives, philosophy and programs going forward.
Base Salaries
Base salary rates for our named executive officers in 2022 are
unchanged from 2021 rates and are depicted in the table
below.
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2022 Annual Base Salary Rate |
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Christian S. Kendall |
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$772,000 |
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Mark C. Allen |
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605,000 |
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James S. Matthews |
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525,000 |
2022 Annual Incentive Bonuses
The annual incentive bonus target amounts are based on a percentage
of base salary. The annual incentive bonus target percentages for
our named executive officers in 2022 are unchanged from 2021 target
percentages and are depicted in the table below.
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Target Annual Incentive Bonus Percentages |
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Christian S. Kendall |
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130% |
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Mark C. Allen |
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120% |
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James S. Matthews |
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100% |
In February 2022, the Compensation Committee approved the annual
incentive bonus metrics and their respective weightings for 2022,
as summarized in the table below. The annual incentive bonus has a
potential payout range from 0% to 200% of target. The 2022 annual
incentive bonus metrics, which underscore the Company’s strategic
focus on financial discipline, sustainability and CCUS initiatives,
include:
•operational
metrics (60 target points);
•health,
safety and environmental metrics (20 target points), which include
a new Total Emissions Reduction metric measuring direct and
indirect (Scope 1 and 2, including methane) greenhouse gas
emissions reduction targets; and
•a
qualitative metric (20 target points) related to execution of our
CCUS business strategy (i.e.,
contracted pore space, CO2
transportation and CO2
storage), together with ARO management.
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2022 Annual Incentive Bonus Metrics |
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Metric |
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Target Points |
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Operational |
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EBITDAX
(1)
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20 |
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Free Cash Flow
(2)
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15 |
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Production |
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10 |
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Lease Operating Expenses |
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5 |
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General and Administrative Expenses |
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5 |
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Reserves Replacement |
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5 |
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HSE Performance |
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Total Recordable Incident Rate |
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5 |
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Serious Injury and Fatality Rate |
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5 |
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Significant Release Rate |
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5 |
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Total Emissions Reduction |
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5 |
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Execution of our CCUS Business Strategy and ARO
Management |
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20 |
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Total |
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100 |
(1) This is a non-GAAP measure and should
not be considered as a substitute for net income (loss), cash flow
from operations computed under GAAP or any other measure computed
in accordance with GAAP.
(2) Free Cash Flow is a non-GAAP measure
that should not be considered as an alternative to cash flow from
operations, investing or financing activities computed under GAAP,
nor as a liquidity measure or indicator of cash flows.
2022 Equity Awards – Overall Program
Equity awards are a significant focus of our total compensation
program for our named executive officers in 2022 and are designed
to align the interests of our named executive officers with those
of our stockholders. For 2022, the Compensation Committee
determined that the equity awards granted to our named executive
officers would consist of 60% TSR awards and 40% time-vested
restricted stock, as summarized below.
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Percentage |
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Award |
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Terms |
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60% |
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Performance-Based TSR |
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Based on peer ranking over a three-year performance period and
cliff vesting after three years |
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40% |
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Time-Vested Restricted Stock |
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Vesting ratably over three years (34%, 33%, 33%) |
Each of the equity awards is discussed in greater detail
below.
TSR Award
On March 7, 2022, our named executive officers received a TSR award
grant as shown in the table below.
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TSR Award
(Shares @ 100% Target) |
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Christian S. Kendall |
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34,361 |
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Mark C. Allen |
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14,618 |
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James S. Matthews |
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7,121 |
The TSR award is based on comparing the average of the Company’s
total shareholder return during each year within a 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
Company’s or a peer company’s average common stock price (assuming
reinvestment of any dividends) between the last thirty trading days
of one calendar year and the last thirty trading days of the next
calendar year. The TSR peer group, which was selected by the
Compensation Committee in consultation with LB&C, includes 20
peer companies for the 2022 TSR award, as shown in the table below.
The TSR peer group includes companies that focus on (i) traditional
exploration and production and/or (ii) CCUS or clean
energy.
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|
TSR Award Peer Group |
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Aker Carbon Capture ASA |
Clean Energy Fuels Corp. |
Range Resources Corporation |
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Berry Corporation |
Comstock Resources, Inc. |
Renewable Energy Group, Inc. |
|
Bloom Energy Corporation |
Diamondback Energy, Inc. |
SM Energy Company |
|
Callon Petroleum Company |
Kosmos Energy Ltd. |
Southwestern Energy Company |
|
Centennial Resource Development, Inc. |
Laredo Petroleum, Inc. |
Talos Energy Inc. |
|
California Resources Corporation |
Matador Resources Company |
Whiting Petroleum Corporation |
|
Civitas Resources, Inc. |
PDC Energy, Inc. |
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The TSR award has a potential achievement percentage range of 0% to
200%. The TSR achievement percentage is determined based on where
the Company ranks relative to its peers at the end of the
three-year performance period, with each successive ranking place
accounting for 10% of the achievement percentage (subject to
interpolation). For example: (i) a TSR ranking of 21 out of the
peer group would result in an achievement percentage of 0%; (ii) a
TSR ranking of 11 out of the peer group would result in an
achievement percentage of 100%; and (iii) a TSR ranking of 1 out of
the peer group would result in an achievement percentage of 200%.
The TSR award contains a feature such that if the Company’s
three-year average TSR is negative, the award payout is capped at
100% of target regardless of the Company’s earned achievement
percentage, even if such earned achievement percentage is greater
than 100%.
In the event that a TSR peer company is acquired and ceases to have
its primary common equity security listed or publicly traded during
the three-year performance period, such company will be removed as
a peer company for the purposes of calculating the TSR achievement
percentage.
In the event that a peer company is forced to delist from the
securities exchange upon which it was traded due to low stock price
or other reasons or files for bankruptcy during the three-year
performance period, then that company will remain a peer company
and it shall occupy the last position (or positions, if there are
more than one such companies) in the TSR ranking.
Time-Vested Restricted Stock
The time-vested restricted stock grants vest ratably over a
three-year period. On March 7, 2022, our named executive officers
received grants of time-vested restricted stock as shown in the
table below.
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Restricted Stock |
|
Christian S. Kendall |
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22,907 |
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Mark C. Allen |
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9,745 |
|
James S. Matthews |
|
4,747 |
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Perquisites and Other Benefits |
Beginning in 2021, the Compensation Committee eliminated the
payment of perquisites to our named executive officers. Our named
executive officers participate in our benefit plans on the same
terms as our other employees. These plans include medical, dental,
vision, disability and life insurance and partial matching
contributions to our 401(k) plan. Our only retirement benefit is
our 401(k) plan. We do not offer any pension or post-retirement
medical benefits.
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Stock Ownership Guidelines |
Our Board has approved stock ownership and retention guidelines for
our officers. Under our stock ownership and retention guidelines,
all officers are expected to hold stock with the values described
below. Until the guideline amount is achieved, officers are
required to retain at least one-third of the shares obtained
through the 2020 Plan. As of March 31, 2022, all officers were in
compliance with the ownership and retention
guidelines.
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Officer Level |
|
Ownership Guideline |
|
President and/or Chief Executive Officer |
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5x annual base salary |
|
Executive Vice Presidents and/or Senior Vice Presidents |
|
3x annual base salary |
|
Vice Presidents |
|
2x annual base salary |
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Risk Assessment Related to Our Compensation Program |
We believe that our compensation policies and practices are
unlikely to have a material adverse effect on the Company’s risk
profile. Although portions of our compensation program are
incentive-based, we believe that we have allocated our compensation
among (i) base salary (ii) short-term compensation opportunities
and (iii) long-term compensation opportunities in such a way
as to discourage unreasonable 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.
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Policy on Recovery of Compensation and Clawbacks |
The Board has adopted a clawback policy under which it has broad
discretion to cause reimbursement by a Company executive officer of
certain incentive-based compensation (both annual bonus payments
and long-term incentive grants) under certain circumstances. Such
circumstances include, but are not limited to, actions where
compensation was predicated upon the achievement of certain
financial results or targets that were subsequently the subject of
a required restatement of the Company’s financial statements.
Further, the clawback policy encompasses other actions such as
officers engaging in fraudulent or intentional illegal conduct. The
clawback policy is reviewed annually and may be revised to reflect
evolving market conditions for governance matters. The policy will
also be revised, if appropriate, to conform to SEC regulatory
action or any final listing standards that may be adopted by the
NYSE under the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (the “Dodd-Frank Act”).
EXECUTIVE COMPENSATION – COMPENSATION TABLES
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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.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position |
|
Year |
|
Salary |
|
Bonus(1)
|
|
Stock Awards(2)
|
|
Non-Equity Incentive Plan
Compensation(3)
|
|
All Other Compensation(4)
|
|
Total |
|
Christian S. Kendall |
|
2021 |
|
$ |
772,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,525,472 |
|
|
$ |
28,038 |
|
|
$ |
2,325,510 |
|
|
President and Chief Executive Officer |
|
2020 |
|
743,416 |
|
|
3,400,000 |
|
|
18,249,357 |
|
|
— |
|
|
48,937 |
|
|
22,441,710 |
|
|
2019 |
|
823,750 |
|
|
— |
|
|
3,012,057 |
|
|
1,199,704 |
|
|
48,709 |
|
|
5,084,220 |
|
|
Mark C. Allen |
|
2021 |
|
$ |
605,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,103,520 |
|
|
$ |
29,050 |
|
|
$ |
1,737,570 |
|
|
Executive Vice President, Chief Financial Officer, Treasurer and
Assistant Secretary |
|
2020 |
|
580,000 |
|
|
2,146,000 |
|
|
6,843,503 |
|
|
— |
|
|
48,719 |
|
|
9,618,222 |
|
|
2019 |
|
565,000 |
|
|
— |
|
|
1,469,295 |
|
|
759,636 |
|
|
53,296 |
|
|
2,847,227 |
|
|
James S. Matthews |
|
2021 |
|
$ |
525,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
798,000 |
|
|
$ |
27,791 |
|
|
$ |
1,350,791 |
|
|
Executive Vice President, Chief Administrative Officer, General
Counsel and Secretary |
|
2020 |
|
500,000 |
|
|
1,550,000 |
|
|
3,592,847 |
|
|
— |
|
|
47,926 |
|
|
5,690,773 |
|
|
2019 |
|
487,500 |
|
|
— |
|
|
771,378 |
|
|
546,191 |
|
|
50,825 |
|
|
1,855,894 |
|
(1)Amounts
in this column represent incentive cash awards granted in June
2020, which were earned 50% based on a retention component and 50%
based on achieving certain specified performance metrics. The
incentive cash awards became vested and were earned at the 100%
level in September 2020.
(2)Amounts
in this column represent the grant-date fair value of equity-based
awards, as further detailed in the table below. No equity awards
were granted in 2021. The amounts for 2020 consist of emergence
grants of PSUs and RSUs. The amounts for 2019 consist of (a)
restricted common stock awards, (b) incentive-based
operational awards (at the target level of 100%) and (c) TSR awards
(at the target level of 100%). The grant-date fair value of the
RSUs, restricted common stock and incentive-based operational
awards is calculated using the closing price of our common stock on
the date of grant. The grant-date fair value of the PSUs and TSR
awards is calculated using a Monte-Carlo simulation
model.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Year |
|
Restricted Common Stock |
|
Incentive-Based Operational Awards |
|
TSR Awards |
|
2020 Emergence Grants of PSUs and RSUs |
|
Total |
|
Christian S. Kendall |
|
2021 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
2020 |
|
— |
|
|
— |
|
|
— |
|
|
18,249,357 |
|
|
18,249,357 |
|
|
2019 |
|
816,355 |
|
|
776,266 |
|
|
1,419,436 |
|
|
— |
|
|
3,012,057 |
|
|
Mark C. Allen |
|
2021 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
2020 |
|
— |
|
|
— |
|
|
— |
|
|
6,843,503 |
|
|
6,843,503 |
|
|
|
2019 |
|
398,222 |
|
|
378,665 |
|
|
692,408 |
|
|
— |
|
|
1,469,295 |
|
|
James S. Matthews |
|
2021 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2020 |
|
— |
|
|
— |
|
|
— |
|
|
3,592,847 |
|
|
3,592,847 |
|
|
2019 |
|
209,066 |
|
|
198,799 |
|
|
363,513 |
|
|
— |
|
|
771,378 |
|
(3)Amounts
in this column include amounts earned under the annual incentive
bonus plan for 2021 and 2019. As a condition to
receiving the incentive cash awards in June 2020, recipients were
required to waive participation in the 2020 annual incentive bonus
plan.
(4)Amounts
in this column include (a) matching contributions to the 401(k)
plan on each named executive officer’s behalf, (b) life and
disability insurance premiums paid by the Company on each named
executive officer’s behalf and (c) other compensation-related
items as shown in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Year |
|
401(k) Plan
(a) |
|
Insurance Premiums (b) |
|
Other (c) |
|
Total |
|
Christian S. Kendall |
|
2021 |
|
$ |
17,400 |
|
|
$ |
7,221 |
|
|
$ |
3,417 |
|
|
$ |
28,038 |
|
|
Mark C. Allen |
|
2021 |
|
17,400 |
|
|
7,003 |
|
|
4,647 |
|
|
29,050 |
|
|
James S. Matthews |
|
2021 |
|
17,400 |
|
|
6,210 |
|
|
4,181 |
|
|
27,791 |
|
|
|
|
|
2021 Grants of Plan-Based Awards |
The Compensation Committee did not grant equity awards to our named
executive officers in 2021.
|
|
|
|
2021 Outstanding Equity Awards at Fiscal Year-End |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock Awards |
|
|
Number of Securities Underlying Unexercised
Options (#) |
|
Option
Exercise Price |
|
Option
Expiration Date |
|
Number of Shares or Units of Stock That Have Not Vested (#)
(1)
|
|
Market Value of Shares or Units of Stock That Have Not Vested
($)
(1)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or
Other Rights That Have Not Vested (#)
(2)
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned
Shares, Units or Other Awards That Have Not Vested ($)
(2)
|
|
Name |
Exercisable |
|
Christian S. Kendall |
|
|
|
|
|
|
|
369,752 |
|
28,319,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
362,242 |
|
27,744,115 |
|
|
Mark C. Allen |
|
|
|
|
|
|
|
138,657 |
|
10,619,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
135,791 |
|
10,400,233 |
|
|
James S. Matthews |
|
|
|
|
|
|
|
72,795 |
|
5,575,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71,247 |
|
5,456,808 |
|
(1)Amounts
in this column represent RSUs. The RSUs vest ratably over a
three-year period on December 4, 2021, 2022 and 2023 and, subject
to certain conditions, including employment through the applicable
vesting date, are to be settled in shares of common stock in
December 2023.
(2)Amounts
in this column represent PSUs. The PSUs vested on March 3, 2021,
and, subject to certain conditions, are to be settled in shares of
common stock in December 2023.
|
|
|
|
Option Exercises and Stock Vested During 2021 |
The vested PSUs and RSUs required to be reported in the table below
are to be settled in shares of common stock in December 2023,
subject to certain conditions. As such, to date, the named
executive officers listed in the table below have not been issued
any shares of our common stock issuable under PSUs or RSUs and thus
they have not realized any value with respect to the PSUs and
RSUs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock Awards
(1)
|
|
Name |
|
Number of Shares Acquired on Exercise (#) |
|
Value Realized on Exercise ($) |
|
Number of Shares Acquired on Vesting (#) |
|
Value Realized on Vesting ($) |
|
Christian S. Kendall |
|
— |
|
|
— |
|
|
498,004 |
|
|
38,142,126 |
|
|
Mark C. Allen |
|
— |
|
|
— |
|
|
186,751 |
|
|
14,303,259 |
|
|
James S. Matthews |
|
— |
|
|
— |
|
|
98,044 |
|
|
7,509,190 |
|
(1) The PSUs granted in December 2020 vested
on March 3, 2021. Additionally, one-third of the RSUs granted in
December 2020 vested on December 4, 2021.
|
|
|
|
Potential Payments Upon Termination or Change in
Control |
We believe that it is important to protect our named executive
officers, together with all of our other employees, 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 named
executive officers are aligned with theirs, and providing change in
control benefits should eliminate, or at least reduce, possible
reluctance of our named executive officers to pursue potential
change-in-control transactions that may be in the best interests of
our stockholders.
We do not have any predefined severance benefits for our executive
officers, except in the event of a change in control. Under the
terms of our Severance Protection Plan, an employee is entitled to
receive a severance payment if a Change of Control (as defined in
the Severance Protection Plan) occurs and the employee incurs an
involuntary termination of employment within the six-month period
prior to, or within the two-year period following, that Change of
Control (i.e.,
a “double trigger” payment). An involuntary termination for
purposes of the Severance Protection Plan will mean a termination
by us without cause or due to the employee’s own decision to
terminate employment for good reason. Under the Severance
Protection Plan, an involuntary termination will not include any
termination of employment due to the participant’s death or
disability. If entitled to severance payments under the terms of
the Severance Protection Plan, members of our senior management
team (including each of our named executive officers) will receive
three times the sum of their annual base salary and bonus amounts,
which is calculated as an amount equal to fifty percent (50%) of
the total amount of all cash bonuses paid to the participant over
the two most recent annual periods ending prior to the Change of
Control. Our other officers will receive two-and-one-half times
their annual salary and bonus amount, and all other employees will
receive between one-third and one-and-one-half times their annual
salary and bonus amount depending on their salary level and length
of service with us. All employees that become entitled to a
severance benefit under the Severance Protection Plan will also
receive continuing medical and dental benefits, with the members of
our senior management team receiving such benefits up to an
eighteen-month period (such benefits would cease if the employee
became covered under a subsequent employer’s plans).
The Severance Protection Plan does not provide for excise tax
gross-ups. The Severance Protection Plan includes a “net-best”
provision, which we believe is a prevalent alternative to providing
a gross-up. Pursuant to the “net-best” provision, officers will
receive the greater after-tax benefit of either (i) their full
severance payment, for which the individual officer is responsible
for the payment of any applicable excise tax or (ii) a severance
payment capped at the safe harbor amount (generally $1 less than
three times the officer’s average annual compensation over the past
five years), for which no excise tax is due. This approach provides
the officer with a capped payment only if the officer would receive
a greater after-tax benefit than if the officer paid excise tax on
the full severance payment.
In addition to the Severance Protection Plan, awards granted under
our 2020 Plan have certain change in control protections as further
described under the 2020 Plan and the underlying award
agreements.
The following table shows, as of December 31, 2021, the estimated
potential payments and benefits that would be received by our named
executive officers based upon a hypothetical termination of
employment and/or a change in control in each of the three
circumstances indicated in the table (i.e.,
(1) a change in control with no termination of employment, (2) a
change in control with an involuntary termination of employment and
(3) death or disability). The fair value of accelerated equity
awards includes only those awards that were not currently vested or
settled as of December 31, 2021, using the closing stock price
of $76.59 per share. Actual amounts that may become payable to any
named executive officer can only be determined with any certainty
at the time of an actual termination of employment or upon a change
in control.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Severance Protection Plan Payment
($)
(1)
|
|
Healthcare and Other Insurance Benefits ($) |
|
Fair Value of Accelerated Equity Incentive Plan Compensation
($)
(2)
|
|
Non-Equity Incentive Plan Compensation ($)
|
|
Other ($)
|
|
Tax Gross Up ($) |
|
Total Value ($) |
|
Christian S. Kendall |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control with no termination of employment |
|
— |
|
|
— |
|
|
56,063,421 |
|
|
— |
|
|
— |
|
|
— |
|
|
56,063,421 |
|
|
Change in Control plus an involuntary termination of
employment |
|
6,761,081 |
|
|
105,471 |
|
|
56,063,421 |
|
|
— |
|
|
— |
|
|
— |
|
|
62,929,973 |
|
|
Death |
|
— |
|
|
— |
|
|
56,063,421 |
|
|
— |
|
|
— |
|
|
— |
|
|
56,063,421 |
|
|
Disability |
|
— |
|
|
— |
|
|
37,697,726 |
|
|
— |
|
|
— |
|
|
— |
|
|
37,697.726 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Allen |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control with no termination of employment |
|
— |
|
|
— |
|
|
21,019,973 |
|
|
— |
|
|
— |
|
|
— |
|
|
21,019,973 |
|
|
Change in Control plus an involuntary termination of
employment |
|
5,523,485 |
|
|
106,249 |
|
|
21,019,973 |
|
|
— |
|
|
— |
|
|
— |
|
|
26,649,707 |
|
|
Death |
|
— |
|
|
— |
|
|
21,019,973 |
|
|
— |
|
|
— |
|
|
— |
|
|
21,019,973 |
|
|
Disability |
|
— |
|
|
— |
|
|
14,132,819 |
|
|
— |
|
|
— |
|
|
— |
|
|
14,132.819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James S. Matthews |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control with no termination of employment |
|
— |
|
|
— |
|
|
11,032,177 |
|
|
— |
|
|
— |
|
|
— |
|
|
11,032,177 |
|
|
Change in Control plus an involuntary termination of
employment |
|
4,022,681 |
|
|
104,861 |
|
|
11,032,177 |
|
|
— |
|
|
— |
|
|
— |
|
|
15,159,719 |
|
|
Death |
|
— |
|
|
— |
|
|
11,032,177 |
|
|
— |
|
|
— |
|
|
— |
|
|
11,032,177 |
|
|
Disability |
|
— |
|
|
— |
|
|
7,416,401 |
|
|
— |
|
|
— |
|
|
— |
|
|
7,416,401 |
|
(1)The
Severance Protection Plan contains a “net best” provision, which
would reduce the parachute payments to the safe-harbor limit, as
defined under Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”), if it is more financially advantageous to the
named executive officer on an after-tax basis. The amount shown is
net of any applicable payment scale back if such a scale back would
be required under the Severance Protection Plan.
(2)The
amounts in this column represent accelerated vesting and/or
settlement of the PSUs and RSUs granted in December
2020.
As required by Section 953(b) of the Dodd-Frank Act and Item 402(u)
of Regulation S-K, we are providing the following reasonable
estimate of the relationship of the annual total compensation of
our employees and the annual total compensation of Mr. Kendall, our
Chief Executive Officer, as of December 31, 2021.
For 2021, our last completed fiscal year:
•the
median of the annual total compensation of all employees of the
Company (other than Mr. Kendall) was approximately
$153,334;
•the
annual total compensation of our Chief Executive Officer was
approximately $2,325,510; and
•the
ratio of the annual total compensation of our Chief Executive
Officer to the median of the annual total compensation of all
employees was approximately 15 to 1.
To identify the median of the annual total compensation of all
employees, as well as to determine the annual total compensation of
our median employee and our Chief Executive Officer, we took the
steps detailed below.
•We
determined that, as of December 31, 2021, our employee population
consisted of 716 individuals, with all of these employees located
in the United States. This population consisted of our full-time,
part-time and temporary employees.
•To
identify the “median employee” from our employee population, we
compared the amount of salary and wages of our employees as
reflected in our payroll records as reported to the Internal
Revenue Service on Form W-2 for 2021. In making this determination,
we annualized the compensation for permanent employees that were
hired in 2021 but did not work at Denbury for the entire fiscal
year.
•For
the annual total compensation of Mr. Kendall and our median
employee, we combined all of the elements of Mr. Kendall’s and such
employee’s compensation for 2021 in accordance with the
requirements of Item 402(c)(2)(x) of Regulation S-K.
|
|
|
Proposal Two:
Advisory Vote to Approve Named Executive Officer
Compensation |
The Dodd-Frank Act requires all public companies to solicit from
stockholders a non-binding, advisory vote to approve the
compensation of their named executive officers. In 2017,
based on stockholder approval, the Board determined to hold its
advisory vote to approve named executive officer compensation
annually until the Board determines, or the next frequency vote
provides, otherwise.
This proposal, commonly known as a “say-on-pay” proposal, grants
stockholders the opportunity to express their views on the
compensation of our named executive officers, the group of officers
whose compensation is reflected in our
Summary Compensation Table
contained herein. This vote is not intended to address
any specific item of compensation, but rather the overall
compensation of the named executive officers as described in this
proxy statement.
The Board is asking stockholders to approve, on an advisory basis,
the 2021 compensation of our named executive officers, as disclosed
in the CD&A, the compensation tables and related disclosures in
this proxy statement, which we urge you to review in voting on this
resolution. Although this vote is non-binding, the
Compensation Committee values your opinion and will consider the
voting results when making future decisions and recommendations
about executive compensation.
We always welcome feedback from our
stockholders. Stockholders can communicate directly with
members of the Compensation Committee on these matters by either
writing them in care of Denbury Inc., Attention: Compensation
Committee, at
5851 Legacy Circle,
Suite 1200, Plano, Texas 75024, or emailing them at:
compensationcommittee@denbury.com. Your correspondence
will be received by the Chairperson of the Compensation Committee
with a copy to our Chief Executive Officer and Chief Financial
Officer.
As described in the CD&A of this proxy statement, our executive
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. Additionally,
the Compensation Committee believes that incentive-based
compensation is an important part of executive compensation because
it aligns named executive officer compensation with Company
performance and the execution of our strategy.
The affirmative vote of a majority of shares having voting power
present or represented by proxy and entitled to vote on this
proposal at the annual meeting, where a quorum is present, will
constitute a non-binding, advisory approval of this Proposal Two.
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 a vote
FOR
approval of the following non-binding, advisory
resolution:
“RESOLVED, that the compensation of the Company’s named executive
officers in 2021, as disclosed in the Compensation Discussion and
Analysis, compensation tables and related disclosures contained in
the Company’s 2022 proxy statement, is hereby
approved.”
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information about Denbury’s equity
compensation plan as of December 31, 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities to be issued upon exercise of outstanding
options, warrants and rights |
|
Weighted average exercise price of outstanding options, warrants
and rights |
|
Number of securities remaining available for future issuance under
equity compensation plans |
|
Plan Category |
|
(a) |
|
(b) |
|
(c) |
|
Equity compensation plans approved by security holders |
|
|
|
|
|
|
|
2020 Omnibus Stock and Incentive Plan
(1)
|
|
— |
|
|
— |
|
|
3,893,151 |
|
(1)A
description of the 2020 Plan is included in Note 11 to the
Company’s audited financial statements for the year ended December
31, 2021, included in the Company’s Annual Report on Form
10-K.
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Proposal Three:
Approval of the Denbury Inc. Employee Stock Purchase
Plan |
On March 29, 2022, the Compensation Committee of the Board adopted,
subject to the approval of the Company’s stockholders, the Denbury
Inc. Employee Stock Purchase Plan (the “Employee Stock Purchase
Plan”). The following is a summary of the material features of the
Employee Stock Purchase Plan. This summary is qualified in its
entirety by reference to the complete text of the Employee Stock
Purchase Plan, which is contained in Appendix A to this proxy
statement.
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Purpose of the Employee Stock Purchase Plan |
The purpose of the Employee Stock Purchase Plan is to assist
employees of the Company and its participating subsidiaries in
acquiring a stock ownership interest in the Company pursuant to a
plan which is intended to qualify as an “employee stock purchase
plan” under Section 423 of the Code and to help such employees
provide for their future security and to encourage them to remain
in the employment of the Company and its participating
subsidiaries.
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Eligibility and Administration |
The Compensation Committee, as the administrator of the Employee
Stock Purchase Plan, administers and has authority to interpret the
terms of the Employee Stock Purchase Plan and determine eligibility
of participants. The administrator or the Board may designate
certain of the Company’s subsidiaries as participating “designated
subsidiaries” in the Employee Stock Purchase Plan and may change
these designations from time to time. The class of persons eligible
to participate in the Employee Stock Purchase Plan are employees of
the Company and its participating designated subsidiaries, and the
basis to participate is meeting the eligibility requirements under
the Employee Stock Purchase Plan established from time to time by
the administrator. However, an employee may not be granted rights
to purchase shares under the Employee Stock Purchase Plan if such
employee, immediately after the grant, would own (directly or
through attribution) shares possessing 5% or more of the total
combined voting power or value of all classes of stock of the
Company or any of its subsidiaries.
Eligible employees become participants in the Employee Stock
Purchase Plan by enrolling and authorizing payroll deductions by
the deadline established by the administrator prior to the first
day of the applicable offering period. Non-employee directors and
consultants are not eligible to participate in the Employee Stock
Purchase Plan. Employees who choose not to participate, or are not
eligible to participate at the start of an offering period but who
become eligible thereafter, may enroll in any subsequent offering
period.
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Shares Available for Awards |
A total of 2,000,000 shares of our common stock are reserved for
issuance under the Employee Stock Purchase Plan, which amount may
be increased by the Board, subject to the approval of the Company’s
stockholders not later than the annual stockholders’ meeting next
following such Board action. The number of shares subject to the
Employee Stock Purchase Plan may be adjusted for changes in our
capitalization and certain corporate transactions, as described
below under the heading “Adjustments.” We cannot precisely predict
the Company’s share usage under the Employee Stock Purchase Plan as
it will depend on a range of factors including the level of the
Company’s employee participation, the contribution rates of
participants, the trading price of our common stock and future
hiring activity by the Company.
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Participating in an Offering |
Offering Periods and Purchase Periods
Our common stock is offered to eligible employees under the
Employee Stock Purchase Plan during offering periods. Offering
periods under the Employee Stock Purchase Plan commence when
determined by the administrator. The length of an offering period
under the Employee Stock Purchase Plan is determined by the
administrator and may be up to 27 months long. Employee payroll
deductions are used to purchase shares of our common stock on the
exercise date of an offering period. The exercise date for each
offering period is the final trading day in the offering period.
The administrator may, in its discretion, modify the terms of
future offering periods.
Enrollment and Contributions
The Employee Stock Purchase Plan permits participants to purchase
our common stock through payroll deductions of up to 10% of their
eligible compensation as of each payroll date during an offering
period. The administrator will establish the maximum number of
shares that may be purchased by a participant during any offering
period. In addition, no employee is permitted to accrue the right
to purchase stock at a rate in excess of $25,000 worth of shares
during any calendar year.
Purchase Rights
On the first trading day of each offering period, each participant
is automatically granted an option to purchase shares of our common
stock. The option expires on the last trading day of the applicable
offering period and is exercised at that time to the extent of the
payroll deductions accumulated during the offering period. Any
remaining balance is carried forward to the next offering period
unless the participant has elected to withdraw from the Employee
Stock Purchase Plan, as described below, or has ceased to be an
eligible employee.
Purchase Price
The purchase price of the shares of our common stock under the
Employee Stock Purchase Plan, in the absence of a contrary
designation by the administrator, is 85% of the lower of the fair
market value of our common stock on the first trading day of the
offering period or on the final trading day of the offering period.
The fair market value per share of our common stock under the
Employee Stock Purchase Plan generally is the closing sales price
of our common stock on the date for which fair market value is
being determined, or if there is no closing sales price for a share
of our common stock on the date in question, the closing sales
price for a share of our common stock on the last preceding date
for which such quotation exists.
Withdrawal and Termination of Employment
Participants may voluntarily end their participation in the
Employee Stock Purchase Plan at any time during an offering period
prior to the end of the offering period by delivering written
notice to the Company and can elect to either (i) be paid their
accrued payroll deductions that have not yet been used to purchase
shares of our common stock or (ii) exercise their option at the end
of the applicable offering period, and then be paid any remaining
accrued payroll deductions. Participation in the Employee Stock
Purchase Plan ends automatically upon a participant’s termination
of employment and any remaining accrued payroll deductions in the
participant’s account will be paid to such participant following
such termination.
In the event of certain transactions or events affecting our common
stock, such as any stock split, reverse stock split, stock
dividend, combination or reclassification of our common stock, or
any other increase or decrease in the number of shares of our
common stock effected without receipt of consideration by the
Company, the administrator will make equitable adjustments to the
Employee Stock Purchase Plan and outstanding rights under the
Employee Stock Purchase Plan. In addition, in the event of a
proposed sale of all or substantially all of the assets of the
Company, the merger of the Company with or into another
corporation, or other transaction as set forth by the administrator
in an offering document, each outstanding option will be assumed or
an equivalent option will be substituted by the successor
corporation or a parent or subsidiary of the successor corporation.
If the successor corporation or a parent or subsidiary of the
successor corporation refuses to assume or substitute
outstanding
options, any offering periods then in progress will be shortened
with a new exercise date prior to the proposed sale or merger. The
administrator will notify each participant in writing at least 10
business days prior to such new exercise date that the exercise
date has been changed, and the participant’s option will be
automatically exercised on such new exercise date. Further, in the
event of a proposed dissolution or liquidation of the Company, any
offering periods then in progress will be shortened with a new
exercise date prior to the proposed dissolution or liquidation, and
the administrator will notify each participant in writing in a
similar manner as described above.
The administrator may provide special terms, establish supplements
to, or amendments, restatements or alternative versions of the
Employee Stock Purchase Plan, subject to the share limits described
above, in order to facilitate grants of awards subject to the laws
and/or stock exchange rules of countries outside of the United
States.
A participant may not transfer rights granted under the Employee
Stock Purchase Plan other than by will or the laws of descent and
distribution, and such rights are generally exercisable only by the
participant.
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Amendment and Termination |
The Board may amend, suspend or terminate the Employee Stock
Purchase Plan at any time and from time to time. However,
stockholder approval must be obtained for any amendment that
increases the aggregate number of shares that may be sold pursuant
to rights under the Employee Stock Purchase Plan, changes the
designation or class of employees who are eligible to participate
in the Employee Stock Purchase Plan or changes the Employee Stock
Purchase Plan in any way that would cause the Employee Stock
Purchase Plan to no longer be an “employee stock purchase plan”
under Section 423(b) of the Code.
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Material U.S. Federal Income Tax Consequences |
The U.S. federal income tax consequences of the Employee Stock
Purchase Plan under current income tax law are summarized in the
following discussion, which deals with the general tax principles
applicable to the Employee Stock Purchase Plan and is intended for
general information only. Other federal taxes and foreign, state
and local income taxes are not discussed and may vary depending on
individual circumstances and from locality to
locality.
The Employee Stock Purchase Plan, and the right of participants to
make purchases thereunder, is intended to qualify under the
provisions of Section 423 of the Code. Under the applicable Code
provisions, no income will be taxable to a participant until the
sale or other disposition of the shares purchased under the
Employee Stock Purchase Plan. This means that an eligible employee
will not recognize taxable income on the date the employee is
granted an option under the Employee Stock Purchase Plan. In
addition, the employee will not recognize taxable income upon the
purchase of shares. Upon such sale or disposition of shares, the
participant generally will be subject to tax in an amount that
depends upon the length of time such shares are held by the
participant prior to selling or disposing of them. If the shares
are sold or disposed of more than two years from the date of grant
and more than one year from the date of purchase, or if the
participant dies while holding the shares, the participant (or the
participant’s estate) will recognize ordinary income measured as
the lesser of (i) the excess of the fair market value of the shares
at the time of such sale or disposition (or death) over the
purchase price or (ii) the excess of the fair market value of the
shares at the time the option was granted over the purchase price.
Any additional gain will be treated as long-term capital gain. If
the shares are held for the holding periods described above but are
sold for a price that is less than the purchase price, there is no
ordinary income and the participating employee has a long-term
capital loss for the difference between the sale price and the
purchase price.
If the shares are sold or otherwise disposed of before the
expiration of the holding periods described above, the participant
will recognize ordinary income generally measured as the excess of
the fair market value of the shares on the date the shares are
purchased over the purchase price, and the Company will be entitled
to a tax deduction for compensation expense in the amount of
ordinary income recognized by the employee. Any additional gain or
loss on such sale or disposition will be long-term or short-term
capital gain or loss, depending on how long the shares were held
following the date they were purchased by the participant prior to
disposing of them. If the shares are sold or otherwise disposed of
before the expiration of the holding periods described above but
are sold for a price that is less than the purchase price, the
participant will recognize ordinary income equal to the excess of
the fair market value of the shares on the date of purchase over
the purchase price (and the Company will be entitled to a
corresponding deduction), but the participant generally will be
able to report a capital loss equal to the difference between the
sales price of the shares and the fair market value of the shares
on the date of purchase.
THE DISCUSSION ABOVE IS INTENDED ONLY AS A SUMMARY AND DOES NOT
PURPORT TO BE A COMPLETE DISCUSSION OF ALL POTENTIAL TAX EFFECTS
RELEVANT TO RECIPIENTS OF SHARES UNDER THE EMPLOYEE STOCK PURCHASE
PLAN. AMONG OTHER ITEMS THIS DISCUSSION DOES NOT ADDRESS ARE TAX
CONSEQUENCES UNDER THE LAWS OF ANY STATE, LOCALITY OR FOREIGN
JURISDICTION, OR ANY TAX TREATIES OR CONVENTIONS BETWEEN THE UNITED
STATES AND FOREIGN JURISDICTIONS. THIS DISCUSSION IS BASED UPON
CURRENT LAW AND INTERPRETATIONAL AUTHORITIES WHICH ARE SUBJECT TO
CHANGE AT ANY TIME.
Benefits under the Employee Stock Purchase Plan will depend on the
employees’ enrollment and contribution elections and the fair
market value of the shares at various future dates. Therefore, it
is not possible to determine the benefits that will be received in
the future by participants in the Employee Stock Purchase
Plan.
The affirmative vote of the holders of a majority of the shares
having voting power present in person or represented by proxy at
the annual meeting of stockholders, where a quorum is present, is
required for approval of the Employee Stock Purchase Plan. 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.
A properly executed proxy submitted without voting instructions
will be voted (except to the extent that the authority to vote has
been withheld) “FOR”
this Proposal Three.
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Board of Directors’ Recommendation |
Our Board of Directors recommends that stockholders vote
FOR
the Employee Stock Purchase Plan.
AUDIT MATTERS
The primary purpose of the Audit Committee, which is discussed in
detail in its charter, is to assist with the Board’s oversight of
the:
•integrity
of the Company’s financial statements;
•Company’s
compliance with legal and regulatory requirements related to
financial reporting;
•independence
and qualifications of the Company’s independent registered public
accounting firm;
•performance
of the Company’s internal audit function and independent registered
public accounting firm;
•preparation
of required disclosures for the Company’s financial statement
filings with the SEC;
•independence
of the Company’s independent reserves engineer;
•reporting
of the Company’s oil, natural gas and CO2
reserves; and
•evaluation
as to whether the Company has effective processes for risk
assessment and risk management.
All members of the Audit Committee meet the independence,
experience and financial literacy requirements of the NYSE, the
Sarbanes Oxley Act and any rules or regulations promulgated by the
SEC. The Board has adopted a written charter for the Audit
Committee, a copy of which is available on the Company’s website at
www.denbury.com and further described in this proxy (see
Board Meetings, Attendance and Committees – Audit Committee
above).
Management is responsible for the Company’s financial statements
and the financial reporting process, including the systems of
internal controls and disclosure controls and procedures. The
Company’s independent registered public accounting firm,
PricewaterhouseCoopers LLP, is responsible for performing an
independent audit of the Company’s financial statements in
accordance with generally accepted auditing standards and issuing a
report thereon. The Audit Committee’s responsibility is to monitor
and oversee these processes, and the Audit Committee uses the
Company’s internal audit department to assist with these
responsibilities. The internal audit department has
unrestricted access to the Audit Committee and regularly meets with
the Audit Committee in executive sessions without management
present.
The Audit Committee has reviewed and discussed the Company’s
audited financial statements and related opinion on internal
controls with management. It has also discussed with
PricewaterhouseCoopers LLP the matters required to be discussed
under the rules adopted by the Public Company Accounting Oversight
Board (the “PCAOB”), including Auditing Standard No. 16
(Communication with Audit Committees). Additionally,
PricewaterhouseCoopers LLP has provided to the Audit Committee the
written disclosures and the letter required by applicable
requirements of the PCAOB regarding the independent accountant’s
communications with the Audit Committee concerning independence,
and the Audit Committee discussed PricewaterhouseCoopers LLP’s
independence with management and the independent registered public
accounting firm. The Audit Committee has concluded that the
rendering of non-audit services by PricewaterhouseCoopers LLP to
the Company has not impaired the independence of
PricewaterhouseCoopers LLP.
Based on the Audit Committee’s discussions with management and
PricewaterhouseCoopers LLP, and its review of the representations
of management and the report of PricewaterhouseCoopers LLP to the
Audit Committee, the Audit Committee recommended to the Board that
the Company’s 2021 audited financial statements be included in the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2021, for filing with the SEC.
The Audit Committee
Anthony M. Abate, Chairperson
Kevin O. Meyers
Lynn A. Peterson
Brett R. Wiggs
The following table presents fees for professional services
rendered by PricewaterhouseCoopers LLP for the years ended December
31, 2021 and 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
2020 |
|
Audit Fees
(1)
|
|
$ |
1,722,732 |
|
|
$ |
3,897,000 |
|
|
Audit-Related Fees |
|
— |
|
|
— |
|
|
Tax Fees |
|
— |
|
|
— |
|
|
All Other Fees
(2)
|
|
6,709 |
|
|
6,731 |
|
|
Total |
|
$ |
1,729,441 |
|
|
$ |
3,903,731 |
|
(1)Audit
fees consisted of fees associated with the audit of the Company’s
consolidated financial statements, including the audit of the
effectiveness of the Company’s internal controls over financial
reporting, required quarterly reviews and consultations, as well as
work only the independent registered public accounting firm can
reasonably be expected to provide, such as comfort letters,
consents and review of documents filed with the
SEC.
(2)Fees
associated with a license for accounting research
software.
The Audit Committee charter stipulates that the Audit Committee
approve the fees to be paid to the independent registered public
accounting firm prior to the annual audit. Additionally,
all engagements for non-audit services by the independent
registered public accounting firm must be approved prior to the
commencement of services. All fees paid to the Company’s
independent registered public accounting firm were approved by the
Audit Committee prior to the commencement of services.
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|
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Proposal Four:
Ratify the Audit Committee’s Selection of PricewaterhouseCoopers
LLP as the Company’s Independent Registered Public Accounting Firm
for 2022 |
PricewaterhouseCoopers LLP has been our independent registered
public accounting firm for each of the last eighteen
years. It is the recommendation of our Audit Committee
to appoint PricewaterhouseCoopers LLP to serve as the independent
registered public accounting firm of the Company until the next
annual meeting of stockholders and to authorize the Audit Committee
to approve its remuneration as such. If the stockholders
do not ratify the selection of PricewaterhouseCoopers LLP, the
Audit Committee will reconsider the selection of that firm as the
Company’s independent registered public accounting
firm. The stockholders’ ratification of the Audit
Committee’s selection of PricewaterhouseCoopers LLP does not limit
the authority of the Audit Committee to change independent
registered public accounting firms at any time. A representative of
PricewaterhouseCoopers LLP is expected to be present at the annual
meeting, available to answer questions and afforded an opportunity
to make a statement, if desired.
The affirmative vote of the holders of a majority of the shares
having voting power present or represented by proxy at the annual
meeting of stockholders, where a quorum is present, is required for
approval of this Proposal Four. Brokers do have discretion to vote
on this proposal without your instruction.
A properly executed proxy submitted without voting instructions
will be voted “FOR”
this Proposal Four.
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|
Board of Directors’ Recommendation |
Our Board of Directors recommends that stockholders vote
FOR
the ratification of the Audit Committee’s selection of
PricewaterhouseCoopers LLP as our independent registered public
accounting firm.
STOCKHOLDER PROPOSALS FOR OUR 2023 ANNUAL MEETING OF
STOCKHOLDERS
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Proposals for Inclusion in Our 2023 Proxy Statement |
Pursuant to Rule 14a-8 promulgated under the Exchange Act, in
order for a stockholder proposal to be included in the Company’s
proxy materials for the 2023 annual meeting of stockholders, the
proposal must be in full compliance with applicable law, including
Rule 14a-8, and our Bylaws, and must be received by the Company at
the address below no later than December 19, 2022, unless the date
of our 2023 annual meeting is more than 30 days before or
after June 1, 2023, in which case the proposal must be received a
reasonable time before we begin to print and send our proxy
materials. All such proposals must be submitted in
writing to James S. Matthews, Executive Vice President, Chief
Administrative Officer, General Counsel and Secretary,
5851 Legacy Circle,
Suite 1200, Plano, Texas 75024.
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|
Advanced Notice of Nominations or Proposed Business for Our 2023
Annual Meeting of Stockholders |
Our Bylaws require advanced written notice from any stockholder
seeking to present nominations of persons for election to the Board
and other proposed business (other than proposals submitted in
accordance with Rule 14a-8 for inclusion in our proxy materials)
for consideration at our 2023 annual meeting of stockholders.
Notice of such proposals must be received by James S. Matthews,
Executive Vice President, Chief Administrative Officer, General
Counsel and Secretary,
5851 Legacy Circle,
Suite 1200, Plano, Texas 75024, no later than the close of business
on the 90th
day, and no earlier than the close of business on the
120th
day, before the date of the one-year anniversary of the immediately
preceding year’s annual meeting. Based on the anniversary date of
our 2022 annual meeting, a stockholder must send advanced written
notice of any such nomination or other business or proposals such
that the notice is received by us no earlier than February 1, 2023
and no later than March 3, 2023. In the event the 2023 annual
meeting of stockholders is convened on a date more than 30 days
before, or more than 30 days after, such anniversary date, such
notice must be received no earlier than the close of business on
the 120th
day before such annual meeting and no later than the close of
business on the later of the 90th
day before such annual meeting or the 10th
day following the day on which public announcement of the date of
the 2023 annual meeting is first made by the Company. Any such
proposal of business must include the information called for, and
follow the other requirements set forth, in our Bylaws about the
proposed business and the proposing stockholder. Additionally, any
such nomination must provide the reasons supporting a candidate’s
nomination, information regarding the candidate and their
qualifications, along with all other information about the
candidate required under SEC Rule 14A and the Company’s Bylaws, the
candidate’s consent to being considered as a nominee, and a way to
contact the candidate to verify his or her interest and to gather
further information, if necessary. In addition, the
stockholder making the nomination or proposal must submit
information regarding ownership of the Company’s securities and
related information specified in the Company’s
Bylaws. Stockholders must send recommendations for
director candidates to the address listed above under
Governance of the Company – Communication with the
Board. Stockholders
who wish to nominate an individual to the Board must also follow
the requirements of the Company’s Bylaws and applicable SEC and
NYSE rules and regulations.
OTHER MATTERS
The Board is not aware of any matter to be presented for action at
the 2022 annual meeting other than the proposals set forth in this
proxy statement. The form of proxy for the annual meeting of
stockholders grants authority to the persons designated therein as
proxies to vote in their discretion on any other matters that come
before the annual meeting, or any adjournment thereof, that are not
set forth in our proxy statement, except for those matters as to
which adequate notice is received.
All information contained in this proxy statement relating to the
occupations, affiliations and securities holdings of our directors
and officers and their relationship and transactions with us is
based upon information received from the individual directors and
officers. All information relating to any beneficial
owner of more than 5% of our common stock is based upon information
contained in reports filed by such owner with the
SEC. The information contained in this proxy statement
in the sections entitled
Compensation Committee Report
and
Audit Matters – Audit Committee Report
shall not be deemed incorporated by reference by any general
statement incorporating by reference any information contained in
this proxy statement into any filing under the Securities Act or
the Exchange Act, except to the extent that the Company
specifically incorporates by reference the information contained in
such sections, and shall not otherwise be deemed filed under the
Securities Act or the Exchange Act.
We have provided or otherwise made available to each person whose
proxy is solicited hereby a copy of our 2021 Annual Report to
Stockholders for the year ended December 31, 2021, which includes
the Annual Report on Form 10-K except for certain
exhibits. A copy of our Annual Report to Stockholders or
our Annual Report on Form 10-K filed with the SEC may be obtained
without charge by writing to Denbury Inc., ATTN: Investor
Relations,
5851 Legacy Circle,
Suite 1200, Plano, Texas 75024, or by e-mailing
ir@denbury.com.
By order of the Board of Directors,
/s/ James S. Matthews
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|
|
James S. Matthews
Executive Vice President,
Chief Administrative Officer,
General Counsel and Secretary |
APPENDIX A
DENBURY INC.
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE 1
PURPOSE, SCOPE AND ADMINISTRATION OF THE PLAN
1.1 Purpose
and Scope.
The purpose of the Denbury Inc. Employee Stock Purchase Plan, as it
may be amended from time to time, (the “Plan”)
is to assist employees of Denbury Inc., a Delaware corporation (the
“Company”),
and its Designated Subsidiaries in acquiring a stock ownership
interest in the Company pursuant to a plan which is intended to
qualify as an “employee stock purchase plan” under Section 423 of
the Code and to help such employees provide for their future
security and to encourage them to remain in the employment of the
Company and its Designated Subsidiaries.
ARTICLE II
DEFINITIONS
Whenever the following terms are used in the Plan, they shall have
the meaning specified below unless the context clearly indicates to
the contrary. The singular pronoun shall include the plural where
the context so indicates.
2.1 “Administrator”
shall mean the Committee, or such individuals to which authority to
administer the Plan has been delegated under
Section 7.1
hereof.
2.2 “Agent”
means the brokerage firm, bank or other financial institution,
entity or person(s), if any, engaged, retained, appointed or
authorized to act as the agent of the Company or an Employee with
regard to the Plan.
2.3 “Applicable
Law”
shall mean any applicable law, including without limitation: (a)
provisions of the Code, the Securities Act, the Exchange Act and
any rules or regulations thereunder; (b) corporate, securities, tax
or other laws, statutes, rules, requirements or regulations,
whether federal, state, local or foreign; and (c) rules of any
securities exchange or automated quotation system on which the
Common Stock is listed, quoted or traded.
2.4 “Board”
shall mean the Board of Directors of the Company.
2.5 “Code”
shall mean the Internal Revenue Code of 1986, as
amended.
2.6 “Committee”
shall mean the Compensation Committee of the Board.
2.7 “Common
Stock”
shall mean the common stock of the Company, par value $0.001 per
share.
2.8 “Company”
shall have such meaning as set forth in
Section 1.1
hereof.
2.9 “Compensation”
of an Employee shall mean, unless otherwise specified by the
Administrator in an Offering Document, the regular straight-time
earnings or base salary, bonuses and commissions, paid to the
Employee from the Company on each Payday as compensation for
services to the Company or any Designated Subsidiary, before
deduction for any salary deferral contributions made by the
Employee to any tax-qualified or nonqualified deferred compensation
plan, including overtime, shift differentials, vacation pay,
salaried production schedule premiums, holiday pay, jury duty pay,
funeral leave pay, paid time off, military pay, prior week
adjustments and weekly bonus, but excluding education or tuition
reimbursements, imputed income arising under any group insurance or
benefit program, travel expenses, business and moving
reimbursements, income received in connection with any stock
options, restricted stock, restricted stock units or other
compensatory equity awards and all contributions made by the
Company or any Designated Subsidiary for the Employee’s benefit
under any employee benefit plan now or hereafter established. Such
Compensation shall be calculated before deduction of any required
income or employment tax withholdings.
2.10 “Designated
Subsidiary”
shall mean each Subsidiary that has been designated by the Board or
Committee from time to time in its sole discretion as eligible to
participate in the Plan, including any Subsidiary in existence on
the Effective Date and any Subsidiary formed or acquired following
the Effective Date, in accordance with
Section 7.2
hereof.
2.11 “Effective
Date”
shall mean the date the Plan is adopted by the Board, subject to
approval of the Company’s stockholders within twelve (12) months of
such date of adoption.
2.12 “Eligible
Employee”
shall mean an Employee who is a U.S. taxpayer who after the
granting of the Option would not be deemed for purposes of Section
423(b)(3) of the Code to possess five percent (5%) or more of the
total combined voting power or value of all classes of stock of the
Company or any Subsidiary. For purposes of the foregoing sentence,
the rules of Section 424(d) of the Code with regard to the
attribution of stock ownership shall apply in determining the stock
ownership of an individual, and stock which an Employee may
purchase under outstanding options shall be treated as stock owned
by the Employee. Notwithstanding the foregoing, the Administrator
may provide in an Offering Document that an Employee is excluded
from participation in the Plan in an Offering Period if (i) such
Employee is a “highly compensated employee” of the Company or any
Designated Subsidiary (within the meaning of Section 414(q) of the
Code), or is such a “highly compensated employee” (A) with
compensation above a specified level, (B) who is an officer and/or
(C) is subject to the disclosure requirements of Section 16(a) of
the Exchange Act; (ii) such Employee has not met a service
requirement designated by the Administrator pursuant to Section
423(b)(4)(A) of the Code (which service requirement may not exceed
two years), (iii) such Employee is customarily scheduled to work
less than twenty (20) hours per week, (iv) such Employee’s
customary employment is for less than five (5) months in any
calendar year and/or (v) such Employee is a citizen or resident of
a foreign jurisdiction (without regard to whether they are also a
citizen of the United States or a resident alien (within the
meaning of Section 7701(b)(1)(A) of the Code)) if either (a) the
grant of the Option is prohibited under the laws of the
jurisdiction governing such Employee, or (b) compliance with the
laws of the foreign jurisdiction would cause the Plan or the Option
to violate the requirements of Section 423 of the Code;
provided
that any exclusion in clauses (i), (ii), (iii), (iv) or (v) shall
be applied in an identical manner under each Offering Period to all
Employees of the Company and all Designated Subsidiaries, in
accordance with Treasury Regulations § 1.423-2(e).
2.13 “Employee”
shall mean any person who renders services to the Company or a
Designated Subsidiary in the status of an employee within the
meaning of Section 3401(c) of the Code. “Employee” shall not
include any director of the Company or a Designated Subsidiary who
does not render services to the Company or a Designated Subsidiary
in the status of an employee within the meaning of Section 3401(c)
of the Code. For purposes of the Plan, the employment relationship
shall be treated as continuing intact while the individual is on
military leave, sick leave or other leave of absence approved by
the Company or Designated Subsidiary and meeting the requirements
of Treasury Regulations § 1.421-1(h)(2). Where the period of leave
exceeds three (3) months, or such other period specified in
Treasury Regulations § 1.421-1(h)(2), and the individual’s right to
reemployment is not guaranteed either by statute or by contract,
the employment relationship shall be deemed to have terminated on
the first day immediately following such three (3)-month period, or
such other period specified in Treasury Regulations §
1.421-1(h)(2).
2.14 “Enrollment
Date”
shall mean the first date of each Offering Period.
2.15 “Exchange
Act”
shall mean the Securities Exchange Act of 1934, as
amended.
2.16 “Exercise
Date”
shall mean the last Trading Day of each Offering Period, except as
provided in
Section 5.2
hereof.
2.17 “Fair
Market Value”
shall mean, as of any date, the value of Common Stock determined as
follows:
(a) If the Common Stock is (i) listed on any
established securities exchange (such as the New York Stock
Exchange, the NASDAQ Global Market and the NASDAQ Global Select
Market), (ii) listed on any national market system or (iii) listed,
quoted or traded on any automated quotation system, its Fair Market
Value shall be the closing sales price for a Share as quoted on
such exchange or system for such date or, if there is no closing
sales price for a Share on the date in question, the closing sales
price for a Share on the last preceding date for which such
quotation exists, as reported in
The Wall Street Journal
or such other source as the Administrator deems
reliable;
(b) If the Common Stock is not listed on an
established securities exchange, national market system or
automated quotation system, but the Common Stock is regularly
quoted by a recognized securities dealer, its Fair Market Value
shall be the mean of the high bid and low asked prices for such
date or, if there are no high bid and low asked prices for a Share
on such date, the high bid and low asked prices for a Share on the
last preceding date for which such information exists, as reported
in
The Wall Street Journal
or such other source as the Administrator deems reliable;
or
(c) If the Common Stock is neither listed on
an established securities exchange, national market system or
automated quotation system nor regularly quoted by a recognized
securities dealer, its Fair Market Value shall be established by
the Administrator in good faith.
2.18 “Grant
Date”
shall mean the first Trading Day of an Offering
Period.
2.19 “New
Exercise Date”
shall mean any new Exercise Date set by the Administrator, in its
sole discretion, in connection with the proposed (i) dissolution or
liquidation of the Company, or (ii) sale of all or substantially
all of the assets of the Company, the merger of the Company with or
into another corporation, or other transaction as set forth by the
Administrator in an Offering Document.
2.20 “Offering
Document”
shall have the meaning given to such term in
Section 3.2.
2.21 “Offering
Period”
shall mean such period of time commencing on such date(s) as
determined by the Administrator, in its sole discretion, and with
respect to which Options shall be granted to Participants,
following the Effective Date, except as otherwise provided
under
Section 5.3
hereof. The duration and timing of Offering Periods may be changed
by the Board or Committee, in its sole discretion. Notwithstanding
the foregoing, in no event may an Offering Period exceed
twenty-seven (27) months.
2.22 “Option”
shall mean the right to purchase Shares pursuant to the Plan during
each Offering Period.
2.23 “Option
Price”
shall mean the purchase price of a Share hereunder as provided
in
Section 4.2
hereof.
2.24 “Organizational
Documents”
shall mean, collectively, (a) the Company’s articles of
incorporation, certificate of incorporation, bylaws or other
similar organizational documents relating to the creation and
governance of the Company, and (b) the Committee’s charter or other
similar organizational documentation relating to the creation and
governance of the Committee.
2.25 “Parent”
shall mean any entity that is a parent corporation of the Company
within the meaning of Section 424 of the Code and the Treasury
Regulations thereunder.
2.26 “Participant”
shall mean any Eligible Employee who elects to participate in the
Plan.
2.27 “Payday”
shall mean the regular and recurring established day for payment of
Compensation to an Employee of the Company or any Designated
Subsidiary.
2.28 “Plan”
shall have such meaning as set forth in
Section 1.1
hereof.
2.29 “Plan
Account”
shall mean a bookkeeping account established and maintained by the
Company in the name of each Participant.
2.30 “Section
423 Option”
shall mean each right to purchase stock under any employee stock
purchase plan (as described in Section 423 of the Code) of the
Company and its Subsidiaries.
2.31 “Securities
Act”
shall mean the Securities Act of 1933, as amended.
2.32 “Share”
shall mean a share of Common Stock.
2.33 “Subsidiary”
shall mean any entity that is a subsidiary corporation of the
Company within the meaning of Section 424 of the Code and the
Treasury Regulations thereunder. In addition, with respect to any
sub-plans adopted under
Section 7.1(d)
hereof which are designed to be outside the scope of Section 423 of
the Code, Subsidiary shall include any corporate or noncorporate
entity in which the Company has a direct or indirect equity
interest or significant business relationship.
2.34 “Trading
Day”
shall mean a day on which the principal securities exchange on
which the Common Stock is listed is open for trading or, if the
Common Stock is not listed on a securities exchange, shall mean a
business day, as determined by the Administrator in good
faith.
2.35 “Withdrawal
Election”
shall have such meaning as set forth in
Section 6.1(a)
hereof.
ARTICLE III
PARTICIPATION
3.1 Eligibility.
(a) Any Eligible Employee who shall be
employed by the Company or a Designated Subsidiary on a given
Enrollment Date for an Offering Period shall be eligible to
participate in the Plan during such Offering Period, subject to the
requirements of
Articles IV
and
V
hereof, and the limitations imposed by Section 423(b) of the Code
and the Treasury Regulations thereunder.
(b) No Eligible Employee shall be granted an
Option under the Plan if such Option would permit such Eligible
Employee’s Section 423 Options to accrue at a rate that exceeds
$25,000 of the Fair Market Value of the Shares issuable under such
423 Options (determined at the time the Section 423 Option is
granted) for each calendar year in which any Section 423 Option
granted to the Eligible Employee is outstanding at any time. For
purposes of the limitation imposed by this subsection:
(i) the right to purchase Shares under a
Section 423 Option accrues when the Section 423 Option (or any
portion thereof) first becomes exercisable during the calendar
year,
(ii) the right to purchase Shares under a
Section 423 Option accrues at the rate provided in the Section 423
Option, but in no case may such rate exceed $25,000 of Fair Market
Value of such Shares (determined at the time such option is
granted) for any one calendar year, and
(iii) a right to purchase Shares which has
accrued under a Section 423 Option may not be carried over to any
other Section 423 Option;
provided
that Participants may carry forward amounts so accrued that
represent a fractional Share and were withheld but not applied
towards the purchase of Common Stock under an earlier Offering
Period, and may apply such amounts towards the purchase of
additional Shares under a subsequent Offering Period.
The limitation under this
Section 3.1(b)
shall be applied in accordance with Section 423(b)(8) of the Code
and the Treasury Regulations thereunder.
3.2 Offering
Document.
The terms and conditions applicable to each Offering Period shall
be set forth in an “Offering
Document”
adopted by the Administrator, which Offering Document shall be in
such form and shall contain such terms and conditions as the
Administrator shall deem appropriate and shall be incorporated by
reference into and made part of the Plan and shall be attached
hereto as part of the Plan. The provisions of separate Offering
Periods under the Plan need not be identical. Each Offering
Document with respect to an Offering Period shall specify (through
incorporation of the provisions of this Plan by reference or
otherwise): (i) the length of the Offering Period, which period
shall not exceed twenty-seven (27) months; (ii) the maximum number
of Shares that may be purchased by any Eligible Employee during
such Offering Period, which, in the absence of a contrary
designation by the Administrator, shall be 1,000 Shares; and (iii)
such other provisions as the Administrator determines are
appropriate, subject to the Plan.
3.3 Election
to Participate; Payroll Deductions
(a) Except as provided in
Section 3.4
hereof, an Eligible Employee may become a Participant in the Plan
only by means of payroll deduction. Each individual who is an
Eligible Employee as of an Offering Period’s Enrollment Date may
elect to participate in such Offering Period and the Plan by
delivering to the Company a payroll deduction authorization no
later than such period of time prior to the applicable Enrollment
Date as determined by the Administrator, in its sole
discretion.
(b) Subject to
Section 3.1(b)
hereof, payroll deductions (i) shall be equal to at least one
percent (1%) of the Participant’s Compensation as of each Payday of
the Offering Period following the Enrollment Date, but not more
than the lesser of ten-percent (10%) of the Participant’s
Compensation as of each Payday of the Offering Period following the
Enrollment Date or $25,000 per Offering Period; and (ii) may be
expressed by the Participant in the payroll deduction authorization
either as (A) a whole number percentage, or (B) a fixed dollar
amount. Amounts deducted from a Participant’s Compensation with
respect to an Offering Period pursuant to this
Section 3.3
shall be deducted each Payday through payroll deduction and
credited to the Participant’s Plan Account.
(c) Following at least one (1) payroll
deduction, a Participant may decrease (to as low as zero) the
amount deducted from such Participant’s Compensation from time to
time during an Offering Period upon ten
(10) calendar days’ prior written notice to the Company. A
Participant may not increase the amount deducted from such
Participant’s Compensation during an Offering Period.
(d) Notwithstanding the foregoing, upon the
termination of an Offering Period, each Participant in such
Offering Period shall automatically participate in the immediately
following Offering Period at the same payroll deduction percentage
as in effect at the termination of the prior Offering Period,
unless such Participant delivers to the Company a different
election with respect to the successive Offering Period in
accordance with
Section 3.1(a)
hereof, or unless such Participant becomes ineligible for
participation in the Plan.
3.4 Leave
of Absence.
During leaves of absence approved by the Company meeting the
requirements of Treasury Regulations § 1.421-1(h)(2) under the
Code, a Participant may continue participation in the Plan by
making cash payments to the Company on Participant’s normal payday
equal to Participant’s authorized payroll deduction.
ARTICLE IV
PURCHASE OF SHARES
4.1 Grant
of Option.
Each Participant shall be granted an Option with respect to an
Offering Period on the applicable Grant Date. Subject to the
limitations of
Section 3.1(b)
hereof, the number of Shares subject to a Participant’s Option
shall be determined by dividing (a) such Participant’s payroll
deductions accumulated prior to such Exercise Date and retained in
the Participant’s Plan Account on such Exercise Date by (b) the
applicable Option Price;
provided
that in no event shall a Participant be permitted to purchase
during each Offering Period more than 1,000 Shares (subject to any
adjustment pursuant to
Section 5.2
hereof). The Administrator may, for future Offering Periods,
increase or decrease, in its absolute discretion, the maximum
number of Shares that a Participant may purchase during such future
Offering Periods. Each Option shall expire on the Exercise Date for
the applicable Offering Period immediately after the automatic
exercise of the Option in accordance with
Section 4.3
hereof, unless such Option terminates earlier in accordance
with
Article VI
hereof.
4.2 Option
Price.
The Option Price per Share to be paid by a Participant upon
exercise of the Participant’s Option on the applicable Exercise
Date for an Offering Period shall be designated by the
Administrator in the applicable Offering Document (which Option
Price shall not be less than eighty five percent (85%) of the Fair
Market Value of a Share on the applicable Enrollment Date or on the
Exercise Date, whichever is lower);
provided,
however,
that, in the event no Option Price is designated by the
Administrator in the applicable Offering Document, the Option Price
for the Offering Periods covered by such Offering Document shall be
equal to eighty five percent (85%) of the Fair Market Value of a
Share on the applicable Enrollment Date or on the Exercise Date,
whichever is lower;
provided further
that in no event shall the Option Price per Share be less than the
par value per Share.
4.3 Purchase
of Shares.
(a) On the applicable Exercise Date for an
Offering Period, each Participant shall automatically and without
any action on such Participant’s part be deemed to have exercised
Participant’s Option to purchase at the applicable Option Price the
largest number of whole Shares which can be purchased with the
amount in the Participant’s Plan Account. Any balance less than the
Option Price per Share as of such Exercise Date shall be carried
forward to the next Offering Period, unless the Participant has
elected to withdraw from the Plan pursuant to
Section 6.1
hereof or, pursuant to
Section 6.2
hereof, such Participant has ceased to be an Eligible Employee. Any
balance not carried forward to the next Offering Period in
accordance with the prior sentence promptly shall be refunded to
the applicable Participant.
(b) As soon as practicable following the
applicable Exercise Date, the number of Shares purchased by such
Participant pursuant to
Section 4.3(a)
hereof shall be delivered (either in share certificate or book
entry form), in the Company’s sole discretion, to either (i) the
Participant or (ii) an account established in the Participant’s
name at a stock brokerage or other financial services firm
designated by the Company. If the Company is required to obtain
from any commission or agency authority to issue any such Shares,
the Company shall seek to obtain such authority. Inability of the
Company to obtain from any such commission or agency authority that
counsel for the Company deems necessary for the lawful issuance of
any such shares shall relieve the Company from liability to any
Participant except to refund to the Participant such Participant’s
Plan Account balance, without interest thereon.
4.4 Transferability
of Rights.
(a) An Option granted under the Plan shall
not be transferable, other than by will or the Applicable Laws of
descent and distribution, and is exercisable during the
Participant’s lifetime only by the
Participant. No option or interest or right to the Option shall be
available to pay off any debts, contracts or engagements of the
Participant or Participant’s successors in interest or shall be
subject to disposition by pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or
by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy),
and any attempt at disposition of the option shall have no
effect.
(b) Unless otherwise determined by the
Administrator, there shall be no holding period for the Shares
issued pursuant to the exercise of an Option. Any holding period
determined by the Administrator shall be subject to
Sections 5.2(b)
and
5.2(c)
below.
ARTICLE V
PROVISIONS RELATING TO COMMON STOCK
5.1 Common
Stock Reserved.
Subject to adjustment as provided in
Section 5.2
hereof, the maximum number of Shares that shall be made available
for sale under the Plan shall be 2,000,000 Shares; which amount may
be increased by the Board, subject to the approval of the Company’s
stockholders not later than the annual stockholders’ meeting next
following such Board action.
5.2 Adjustments
Upon Changes in Capitalization, Dissolution, Liquidation, Merger or
Asset Sale.
(a) Changes
in Capitalization.
Subject to any required action by the stockholders of the Company,
the number of Shares which have been authorized for issuance under
the Plan but not yet placed under Option, as well as the price per
share and the number of Shares covered by each Option under the
Plan which has not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or
any other increase or decrease in the number of Shares effected
without receipt of consideration by the Company;
provided, however,
that conversion of any convertible securities of the Company shall
not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Administrator,
whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or
price of Shares subject to an Option.
(b) Dissolution
or Liquidation.
In the event of the proposed dissolution or liquidation of the
Company, the Offering Period then in progress shall be shortened by
setting a New Exercise Date, and shall terminate immediately prior
to the consummation of such proposed dissolution or liquidation,
unless provided otherwise by the Administrator. The New Exercise
Date shall be before the date of the Company’s proposed dissolution
or liquidation. The Administrator shall notify each Participant in
writing (or electronically if determined by the Administrator), at
least ten (10) business days prior to the New Exercise Date, that
the Exercise Date for the Participant’s Option has been changed to
the New Exercise Date and that the Participant’s Option shall be
exercised automatically on the New Exercise Date, unless prior to
such date the Participant has withdrawn from the Offering Period as
provided in
Section 6.1
hereof.
(c) Merger
or Asset Sale.
In the event of a proposed sale of all or substantially all of the
assets of the Company, the merger of the Company with or into
another corporation, or other transaction as set forth by the
Administrator in an Offering Document, each outstanding Option
shall be assumed or an equivalent Option substituted by the
successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation or a
Parent or Subsidiary of the successor corporation refuses to assume
or substitute for the Option, any Offering Periods then in progress
shall be shortened by setting a New Exercise Date and any Offering
Periods then in progress shall end on the New Exercise Date. The
New Exercise Date shall be before the date of the Company’s
proposed sale, merger or other transaction. The Administrator shall
notify each Participant in writing (or electronically if determined
by the Administrator), at least ten (10) business days prior to the
New Exercise Date, that the Exercise Date for the Participant’s
Option has been changed to the New Exercise Date and that the
Participant’s Option shall be exercised automatically on the New
Exercise Date, unless prior to such date the Participant has
withdrawn from the Offering Period as provided in
Section 6.1
hereof.
5.3 Insufficient
Shares.
If the Administrator determines that, on a given Exercise Date, the
number of Shares with respect to which Options are to be exercised
may exceed the number of Shares remaining available for sale under
the Plan on such Exercise Date, the Administrator shall make a pro
rata allocation of the Shares available for issuance on such
Exercise Date in as uniform a manner as shall be practicable and as
it shall determine in its sole discretion to be equitable among all
Participants exercising Options to purchase Common Stock on such
Exercise Date, and unless additional shares are authorized for
issuance under the Plan, no further
Offering Periods shall take place and the Plan shall terminate
pursuant to
Section 7.5
hereof. If an Offering Period is so terminated, then the balance of
the amount credited to the Participant’s Plan Account which has not
been applied to the purchase of Shares shall be paid to such
Participant in one lump sum in cash within thirty (30) days after
such Exercise Date, without any interest thereon.
5.4 Rights
as Stockholders.
With respect to Shares subject to an Option, a Participant shall
not be deemed to be a stockholder of the Company and shall not have
any of the rights or privileges of a stockholder. A Participant
shall have the rights and privileges of a stockholder of the
Company when, but not until, Shares have been deposited in the
designated brokerage account following exercise of Participant’s
Option.
ARTICLE VI
TERMINATION OF PARTICIPATION
6.1 Cessation
of Contributions; Voluntary Withdrawal.
(a) A Participant may cease payroll
deductions during an Offering Period and elect to withdraw from the
Plan by delivering written notice of such election to the Company
in such form and at such time prior to the Exercise Date for such
Offering Period as may be established by the Administrator (a
“Withdrawal
Election”).
A Participant electing to withdraw from the Plan may elect to
either (i) withdraw all of the funds then credited to the
Participant’s Plan Account as of the date on which the Withdrawal
Election is received by the Company, in which case amounts credited
to such Plan Account shall be returned to the Participant in one
(1) lump-sum payment in cash within thirty (30) days after such
election is received by the Company, without any interest thereon,
and the Participant shall cease to participate in the Plan and the
Participant’s Option for such Offering Period shall terminate; or
(ii) exercise the Option for the maximum number of whole Shares on
the applicable Exercise Date with any remaining Plan Account
balance returned to the Participant in one (1) lump-sum payment in
cash within thirty (30) days after such Exercise Date, without any
interest thereon, and after such Exercise Date cease to participate
in the Plan. Upon receipt of a Withdrawal Election, the
Participant’s payroll deduction authorization and Participant’s
Option to purchase under the Plan shall terminate.
(b) A Participant’s withdrawal from the Plan
shall not have any effect upon Participant’s eligibility to
participate in any similar plan which may hereafter be adopted by
the Company or in succeeding Offering Periods which commence after
the termination of the Offering Period from which the Participant
withdraws.
(c) A Participant who ceases contributions
to the Plan during any Offering Period shall not be permitted to
resume contributions to the Plan during that Offering
Period.
6.2 Termination
of Eligibility.
Upon a Participant’s ceasing to be an Eligible Employee, for any
reason, such Participant’s Option for the applicable Offering
Period shall automatically terminate, Participant shall be deemed
to have elected to withdraw from the Plan, and such Participant’s
Plan Account shall be paid to such Participant or, in the case of
Participant’s death, to the person or persons entitled thereto
pursuant to Applicable Law, within thirty (30) days after such
cessation of being an Eligible Employee, without any interest
thereon.
ARTICLE VII
GENERAL PROVISIONS
7.1 Administration.
(a) The Plan shall be administered by the
Committee. The Committee may delegate administrative tasks under
the Plan to the services of an Agent and/or Employees to assist in
the administration of the Plan, including establishing and
maintaining an individual securities account under the Plan for
each Participant.
(b) It shall be the duty of the
Administrator to conduct the general administration of the Plan in
accordance with the provisions of the Plan. The Administrator shall
have the power, subject to, and within the limitations of, the
express provisions of the Plan:
(i) To establish Offering
Periods;
(ii) To determine when and how Options shall
be granted and the provisions and terms of each Offering Period
(which need not be identical);
(iii) To select Designated Subsidiaries in
accordance with
Section 7.2
hereof; and
(iv) To construe and interpret the Plan, the
terms of any Offering Period and the terms of the Options and to
adopt such rules for the administration, interpretation, and
application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. The Administrator, in
the exercise of this power, may correct any defect, omission or
inconsistency in the Plan, any Offering Period or any Option, in a
manner and to the extent it shall deem necessary or expedient to
make the Plan fully effect, subject to Section 423 of the Code and
the Treasury Regulations thereunder.
(c) The Administrator may adopt rules or
procedures relating to the operation and administration of the
Plan, including to accommodate the specific requirements of local
laws and procedures. Without limiting the generality of the
foregoing, the Administrator is specifically authorized to adopt
rules and procedures regarding handling of participation elections,
payroll deductions, payment of interest, conversion of local
currency, payroll tax, withholding procedures and handling of stock
certificates which vary with local requirements. In its absolute
discretion, the Board may at any time and from time to time
exercise any and all rights and duties of the Administrator under
the Plan.
(d) The Administrator may adopt sub-plans
applicable to particular Designated Subsidiaries or locations,
which sub-plans may be designed to be outside the scope of Section
423 of the Code. The rules of such sub-plans may take precedence
over other provisions of this Plan, with the exception of
Section 5.1
hereof, but unless otherwise superseded by the terms of such
sub-plan, the provisions of this Plan shall govern the operation of
such sub-plan.
(e) All expenses and liabilities incurred by
the Administrator in connection with the administration of the Plan
shall be borne by the Company. The Administrator may, with the
approval of the Committee, employ attorneys, consultants,
accountants, appraisers, brokers or other persons. The
Administrator, the Company and its officers and directors shall be
entitled to rely upon the advice, opinions or valuations of any
such persons. All actions taken and all interpretations and
determinations made by the Administrator in good faith shall be
final and binding upon all Participants, the Company and all other
interested persons. No member of the Board or Administrator shall
be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the
options, and all members of the Board or Administrator shall be
fully protected by the Company in respect to any such action,
determination, or interpretation.
To the extent permitted under Applicable Law and the Organizational
Documents, each member of the Administrator shall be indemnified
and held harmless by the Company from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by such
member in connection with or resulting from any claim, action,
suit, or proceeding to which such member may be a party or in which
such member may be involved by reason of any action or failure to
act pursuant to the Plan and against and from any and all amounts
paid by such member in satisfaction of judgment in such action,
suit, or proceeding against such member;
provided
such member gives the Company an opportunity, at its own expense,
to handle and defend the same before such member undertakes to
handle and defend it on such member’s own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights
of indemnification to which such persons may be entitled pursuant
to the Organizational Documents, as a matter of law, or otherwise,
or any power that the Company may have to indemnify them or hold
them harmless.
7.2 Designation
of Subsidiaries.
The Board or Committee shall designate from among the Subsidiaries,
as determined from time to time, the Subsidiary or Subsidiaries
that shall constitute Designated Subsidiaries. The Board or
Committee may designate a Subsidiary, or terminate the designation
of a Subsidiary, without the approval of the stockholders of the
Company.
7.3 Reports.
Individual accounts shall be maintained for each Participant in the
Plan. Statements of Plan Accounts shall be given to Participants at
least annually, which statements shall set forth the amounts of
payroll deductions, the Option Price, the number of shares
purchased and the remaining cash balance, if any.
7.4 No
Right to Employment.
Nothing in the Plan shall be construed to give any person
(including any Participant) the right to remain in the employ of
the Company, a Parent or a Subsidiary or to affect the right of the
Company, any Parent or any Subsidiary to terminate the employment
of any person (including any Participant) at any time, with or
without cause, which right is expressly reserved.
7.5 Amendment
and Termination of the Plan.
(a) The Board may, in its sole discretion,
amend, suspend or terminate the Plan at any time and from time to
time;
provided, however,
that without approval of the Company’s stockholders given within
twelve (12) months before or after action by the Board, the Plan
may not be amended to increase the maximum number of
Shares subject to the Plan or change the designation or class of
Eligible Employees; and
provided, further
that without approval of the Company’s stockholders, the Plan may
not be amended in any manner that would cause the Plan to no longer
be an “employee stock purchase plan” within the meaning of Section
423(b) of the Code.
(b) In the event the Administrator
determines that the ongoing operation of the Plan may result in
unfavorable financial accounting consequences, the Administrator
may, to the extent permitted under Section 423 of the Code, in its
discretion and, to the extent necessary or desirable, modify or
amend the Plan to reduce or eliminate such accounting consequence
including, but not limited to:
(i) altering the Option Price for any
Offering Period including an Offering Period underway at the time
of the change in Option Price;
(ii) shortening any Offering Period so that
the Offering Period ends on a new Exercise Date, including an
Offering Period underway at the time of the Administrator action;
and
(iii) allocating Shares.
Such modifications or amendments shall not require stockholder
approval or the consent of any Participant.
(c) Upon termination of the Plan, the
balance in each Participant’s Plan Account shall be refunded as
soon as practicable after such termination, without any interest
thereon.
7.6 Use
of Funds; No Interest Paid.
All funds received by the Company by reason of purchase of Common
Stock under the Plan shall be included in the general funds of the
Company free of any trust or other restriction and may be used for
any corporate purpose. No interest shall be paid to any Participant
or credited under the Plan.
7.7 Term;
Approval by Stockholders.
Subject to approval by the stockholders of the Company in
accordance with this
Section 7.7,
the Plan shall terminate on the tenth (10th) anniversary of the
date of its initial approval by the stockholder(s) of the Company,
unless earlier terminated in accordance with
Sections 5.3
or
7.5
hereof. No Option may be granted during any period of suspension of
the Plan or after termination of the Plan. The Plan shall be
submitted for the approval of the Company’s stockholder(s) within
twelve (12) months after the date of the Board’s initial adoption
of the Plan. Options may be granted prior to such stockholder
approval;
provided, however,
that such Options shall not be exercisable prior to the time when
the Plan is approved by the stockholders;
provided, further
that if such approval has not been obtained by the end of said
twelve (12)-month period, all Options previously granted under the
Plan shall thereupon terminate and be canceled and become null and
void without being exercised.
7.8 Effect
Upon Other Plans.
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Parent or any
Subsidiary. Nothing in the Plan shall be construed to limit the
right of the Company, any Parent or any Subsidiary (a) to establish
any other forms of incentives or compensation for Employees of the
Company or any Parent or any Subsidiary, or (b) to grant or assume
Options otherwise than under the Plan in connection with any proper
corporate purpose, including, but not by way of limitation, the
grant or assumption of options in connection with the acquisition,
by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or
association.
7.9 Conformity
to Securities Laws.
Notwithstanding any other provision of the Plan, the Plan and the
participation in the Plan by any individual who is then subject to
Section 16 of the Exchange Act shall be subject to any additional
limitations set forth in any applicable exemption rule under
Section 16 of the Exchange Act (including any amendment to Rule
16b-3 of the Exchange Act) that are requirements for the
application of such exemptive rule. To the extent permitted by
Applicable Law, the Plan shall be deemed amended to the extent
necessary to conform to such applicable exemptive
rule.
7.10 Notice
of Disposition of Shares.
Each Participant shall, if requested by the Company, give the
Company prompt notice of any disposition or other transfer of any
Shares acquired pursuant to the exercise of an Option, if such
disposition or transfer is made (a) within two (2) years after the
applicable Grant Date or (b) within one (1) year after the transfer
of such Shares to such Participant upon exercise of such Option.
The Company may direct that any certificates evidencing shares
acquired pursuant to the Plan refer to such
requirement.
7.11 Tax
Withholding.
The Company or any Parent or any Subsidiary shall be entitled to
require payment in cash or deduction from other compensation
payable to each Participant of any sums required by federal, state
or local tax law to be withheld with respect to any purchase of
Shares under the Plan or any sale of such shares.
7.12 Governing
Law.
The Plan and all rights and obligations thereunder shall be
construed and enforced in accordance with the laws of the State of
Delaware.
7.13 Notices.
All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at
the location, or by the person, designated by the Company for the
receipt thereof.
7.14 Conditions
to Issuance of Shares.
(a) Notwithstanding anything herein to the
contrary, the Company shall not be required to issue or deliver any
certificates or make any book entries evidencing Shares pursuant to
the exercise of an Option by a Participant, unless and until the
Board or the Committee has determined, with advice of counsel, that
the issuance of such Shares is in compliance with all Applicable
Laws, regulations of governmental authorities and, if applicable,
the requirements of any securities exchange or automated quotation
system on which the Shares are listed or traded, and the Shares are
covered by an effective registration statement or applicable
exemption from registration. In addition to the terms and
conditions provided herein, the Board or the Committee may require
that a Participant make such reasonable covenants, agreements, and
representations as the Board or the Committee, in its discretion,
deems advisable in order to comply with any such laws, regulations,
or requirements.
(b) All certificates for Shares delivered
pursuant to the Plan and all Shares issued pursuant to book entry
procedures are subject to any stop-transfer orders and other
restrictions as the Committee deems necessary or advisable to
comply with federal, state, or foreign securities or other laws,
rules and regulations and the rules of any securities exchange or
automated quotation system on which the Shares are listed, quoted,
or traded. The Committee may place legends on any certificate or
book entry evidencing Shares to reference restrictions applicable
to the Shares.
(c) The Committee shall have the right to
require any Participant to comply with any timing or other
restrictions with respect to the settlement, distribution or
exercise of any Option, including a window-period limitation, as
may be imposed in the sole discretion of the
Committee.
(d) Notwithstanding any other provision of
the Plan, unless otherwise determined by the Committee or required
by any Applicable Law, rule or regulation, the Company may, in lieu
of delivering to any Participant certificates evidencing Shares
issued in connection with any Option, record the issuance of Shares
in the books of the Company (or, as applicable, its transfer agent
or stock plan administrator).
7.15 Equal
Rights and Privileges.
Except with respect to sub-plans designed to be outside the scope
of Section 423 of the Code, all Eligible Employees of the Company
(or of any Designated Subsidiary) shall have equal rights and
privileges under this Plan to the extent required under Section 423
of the Code or the regulations promulgated thereunder so that this
Plan qualifies as an “employee stock purchase plan” within the
meaning of Section 423 of the Code or the Treasury Regulations
thereunder and all Administrator actions hereunder shall be
interpreted accordingly. Any provision of this Plan that is
inconsistent with Section 423 of the Code or the Treasury
Regulations thereunder shall, without further act or amendment by
the Company or the Board, be reformed to comply with the equal
rights and privileges requirement of Section 423 of the Code or the
Treasury Regulations thereunder.
7.16 Data
Privacy.
As a condition of receipt of an Option, each Participant explicitly
and unambiguously consents to the collection, use, and transfer, in
electronic or other form, of personal data as described in
this
Section 7.16
by and among, as applicable, the Company and its Designated
Subsidiaries, for the exclusive purpose of implementing,
administering, and managing the Plan and Options and the
Participant’s participation in the Plan. In furtherance of such
implementation, administration, and management, the Company and its
Designated Subsidiaries may hold certain personal information about
a Participant, including, but not limited to, the Participant’s
name, home address, telephone number, date of birth, social
security or insurance number or other identification number,
salary, nationality, job title(s), information regarding any
securities of the Company or any of its Designated Subsidiaries,
and details of all Options (the “Data”).
In addition to transferring the Data amongst themselves as
necessary for the purpose of implementation, administration, and
management of the Plan and Options and the Participant’s
participation in the Plan, the Company and its Designated
Subsidiaries may each transfer the Data to any third parties
assisting the Company in the implementation, administration, and
management of the Plan and Options and the Participant’s
participation in the Plan. Recipients of the Data may be located in
the Participant’s
country or elsewhere, and the Participant’s country and any given
recipient’s country may have different data privacy laws and
protections. By accepting an Option, each Participant authorizes
such recipients to receive, possess, use, retain, and transfer the
Data, in electronic or other form, for the purposes of assisting
the Company in the implementation, administration, and management
of the Plan and Options and the Participant’s participation in the
Plan, including any requisite transfer of such Data as may be
required to a broker or other third party with whom the Company or
the Participant may elect to deposit any shares of Common Stock.
The Data related to a Participant will be held only as long as is
necessary to implement, administer, and manage the Plan and Options
and the Participant’s participation in the Plan. A Participant may,
at any time, view the Data held by the Company with respect to such
Participant, request additional information about the storage and
processing of the Data with respect to such Participant, recommend
any necessary corrections to the Data with respect to the
Participant, or refuse or withdraw the consents herein in writing,
in any case without cost, by contacting his or her human resources
representative. The Company may cancel the Participant’s
eligibility to participate in the Plan, and in the Administrator’s
discretion, the Participant may forfeit any outstanding Options if
the Participant refuses or withdraws the consents described herein.
For more information on the consequences of refusal to consent or
withdrawal of consent, Participants may contact their human
resources representative.
7.17 Titles
and Headings, References to Sections of the Code or Exchange
Act.
The titles and headings of the Sections in the Plan are for
convenience of reference only and, in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall
control. References to sections of Applicable Law, including the
Code, the Securities Act or the Exchange Act shall include any
amendment or successor thereto.
* * * * *
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