exv99w2
EXHIBIT 99.2
CAUSE NO. 09-09061-D
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HARBOR POLICE RETIREMENT
SYSTEM, Derivatively on Behalf of
Nominal Defendant DENBURY RESOURCES, INC.,
Plaintiff,
v.
GARETH ROBERTS, WIELAND F.
WETTSTEIN, MICHAEL B. DECKER,
GREGORY L. MCMICHAEL, MICHAEL L.
BEATTY, RONALD G. GREENE, DAVID I. HEATHER, and RANDY
STEIN,
Defendants,
and
DENBURY RESOURCES, INC.,
Nominal Defendant.
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IN THE DISTRICT COURT OF
DALLAS COUNTY, TEXAS
95th-D JUDICIAL DISTRICT |
STIPULATION OF SETTLEMENT
This Stipulation of Settlement dated as of March 15, 2011 (the Stipulation), is made and
entered into by and among in the action captioned Harbor Police Retirement System, Derivatively on
Behalf of Nominal Defendant Denbury Resources, Inc. v. Gareth Roberts et al., Cause No. 09-09061
(the Action),1 now pending in the District Court, 95th Judicial District, Dallas
County, Texas (the Dallas Court). This Stipulation is intended to be and is a binding agreement
among all of the Parties (as defined in Paragraph 1.16 below) and shall be fully enforceable under
Tex. R. Civ. P. 11 and under ordinary principles of contract law. This Stipulation is intended by
the Parties to provide for the final resolution and dismissal of the Action in its entirety, with
prejudice.
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All capitalized terms shall have the meaning
ascribed herein. |
1 THE ACTION
On July 21, 2009, Harbor Police Retirement System (Plaintiff or Harbor Police) filed
its original Verified Shareholder Derivative Petition (the Original Petition), which asserted
putative shareholder derivative claims on behalf of Denbury Resources Inc. (Denbury or the
Company) against Gareth Roberts (Roberts), Wieland F. Wettstein (Wettstein), Michael B.
Decker (Decker) and Gregory L. McMichael (McMichael) (collectively, the Directors), which
alleged that the Directors breached their fiduciary duties in approving certain compensation awards
to Roberts (the Compensation Claims).
On September 29, 2009, following oral argument, the Dallas Court entered an order denying
Defendants Plea to the Jurisdiction and Special Exceptions to the Original Petition.
On December 1, 2009, the Fifth District Court of Appeals (the Appellate Court) issued a Writ
of Mandamus to the Dallas Court directing that the Original Petition be dismissed with leave to
replead.
On January 22, 2010, Plaintiff filed its First Amended Shareholder Derivative Petition, (the
First Amended Petition) against the Directors and Michael L. Beatty (Beatty), Ronald G. Greene
(Greene), David I. Heather (Heather), and Randy Stein (Stein) (collectively, the Other
Defendants) (together with the Directors, the Individual Defendants) (together with the
Directors and Denbury, the Denbury Defendants) (Plaintiff and the Denbury Defendants
collectively, the Parties), which reasserted, with additional allegations, the Compensation
Claims against the Directors and asserted additional putative derivative claims against the
Directors and Other Defendants regarding Denburys acquisition of Encore Acquisition Company (the
Merger) (the derivative claims related to the merger, the Merger Derivative Claims).
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On February 19, 2010, Plaintiff filed a motion in the Dallas Court for leave to file its
Second Amended Shareholder Derivative and Class Action Petition (the Second Amended Petition),
which reasserted the Compensation Claims as stated in the First Amended Petition against the
Directors and the Merger Derivative Claims against the Directors and Other Defendants, and which
asserted new putative class action claims against the Denbury Defendants for allegedly making
inadequate proxy disclosures regarding the Merger (the Merger Class Claims) (the Merger
Derivative Claims and Merger Class Claims collectively, the Merger Claims). At this time, the
Parties engaged in good faith, arms length settlement negotiations in an attempt to resolve the
Action, but were unsuccessful at this time in resolving the litigation.
On March 1, 2010, the Dallas Court granted Plaintiff leave to file the Second Amended
Petition, abated the Merger Claims in favor of litigation pending in the courts of Tarrant County,
Texas, and took the Directors Motion to Dismiss, Motion for Summary Judgment, and Special
Exceptions regarding the Compensation Claims under advisement.
On March 8, 2010, Plaintiff refiled the Merger Class Claims against the Denbury Defendants in
the District Court of Tarrant County, Texas (the Tarrant County Court), and the Denbury
Defendants thereafter filed a Motion for Summary Judgment, Special Exceptions, Motion to Disqualify
and Motion to Strike Class Action Allegations (the Tarrant Motion) with respect to Plaintiffs
claims in Tarrant County.
On June 24, 2010, the Tarrant County Court entered an order granting the Tarrant Motion.
On September 15, 2010, the Dallas Court held a status conference and heard renewed oral
argument from counsel on Defendants Motion to Dismiss, Motion for Summary Judgment, and Special
Exceptions regarding the Compensation Claims.
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On October 11, 2010, the Dallas Court entered an order overruling the Motion to Dismiss,
Motion for Summary Judgment, and Special Exceptions (the Motion) filed by the Directors and
Denbury with respect to the Compensation Claims and dismissing the Merger Claims without prejudice
as to the Denbury Defendants (the Dallas Order).
On October 20, 2010, Denbury and the Directors filed a Petition for Writ of Mandamus (the
Mandamus Petition) with the Appellate Court challenging the Dallas Courts decision on the
Motion. Following the filing of the Mandamus Petition, the Parties continued discussing a potential
settlement. The Parties engaged in good faith, arms-length negotiations concerning the possible
terms of resolution. The Mandamus Petition remains pending before the Appellate Court.
As a result of these discussions, the Parties entered into a Memorandum of Understanding (the
MOU) on January 10, 2011 setting forth the principal terms and conditions of an agreement in
principle to settle the Action. The MOU provided, inter alia, that the Parties shall use their
good faith best efforts to agree upon and execute an appropriate stipulation of settlement on terms
acceptable to all Parties, provide appropriate notice to Denburys stockholders, to the extent such
notice is ordered by the Dallas Court, and will use their individual and collective best efforts to
obtain Final Approval of the Settlement and the dismissal of the Action with prejudice as to all
claims asserted or which could have been asserted in the Action and without costs to any party,
except as expressly provided herein.
The MOU also provided for reasonable discovery for Plaintiff for the sole purpose of
confirming whether the Settlement is in the best interests of Denbury and its stockholders.
Plaintiff reserved the right not to agree to the Settlement following completion of this
confirmatory discovery.
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Upon completion of confirmatory discovery provided for in the MOU and following further arms
length negotiations, the Parties entered into this Stipulation, subject to notice to Denburys
shareholders and approval by this Court.
2 PLAINTIFFS RESEARCH AND INVESTIGATION
Plaintiff, through its counsel, conducted an extensive investigation during the
development and prosecution of the Action. This investigation has included, inter alia, (i)
inspecting, reviewing and analyzing the Companys financial filings and other publicly-available
documents; (ii) a detailed investigation into the sale of oil and gas wells announced by Denbury
contemporaneously with the announcement of Mr. Roberts resignation as Chief Strategy Officer and
Vice Chairman of the Board, (iii) researching the applicable law with respect to the claims
asserted in the Action and the potential defenses thereto; (iv) researching corporate governance
issues; and (v) participating in extensive discussions with Defendants counsel regarding the facts
of the case.
3 CLAIMS OF THE PLAINTIFF AND BENEFITS OF SETTLEMENT
Plaintiff believes that the claims asserted in the Action have merit. Defendants deny
that they breached any fiduciary duties or committed any wrongful acts. However, all Parties
recognize the time and expense that would be incurred by further litigation in the Action and the
uncertainties inherent in such litigation and that the interests of the Parties would best be
served by a settlement of the Action herein. Plaintiff is also mindful of the inherent problems of
proof and possible defenses to the claims asserted in the Action or which may be asserted. Based
on this evaluation, and the outcome of confirmatory discovery, Plaintiff and its counsel have
determined that the Settlement is fair, reasonable, adequate and is in the best interests of
Denbury and its stockholders.
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4 DEFENDANTS DENIALS OF LIABILITY
Each of the Parties has denied, and continues to deny, that they have committed or aided
and abetted in the commission of any breach of duty or violation of law or engaged in any of the
wrongful acts alleged in the Action, and expressly maintain that they diligently and scrupulously
complied with their fiduciary and other legal duties. Each of the Parties denies having committed
any violation of law or breach of duty, including breach of any duty to Denbury or its
stockholders; and there has been no admission or finding of facts or liability by or against any
party and nothing herein should be construed as such.
5 TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among the Parties, by and
through their respective counsel or attorneys of record that, subject to the approval of the Dallas
Court, the Action shall be dismissed with prejudice, upon and subject to the terms and conditions
of this Stipulation.
1. Definitions
As used in this Stipulation the following terms have the meanings specified below:
1.1 Action means the derivative action captioned Harbor Police Retirement
System, Derivatively on Behalf of Nominal Defendant Denbury Resources, Inc. v.
Gareth Roberts et al., Cause No. 09-09061, pending in the District Court, 95th
Judicial District, Dallas County, Texas.
1.2 Board means Denburys Board of Directors.
1.3 Dallas Court means District Court, 95th Judicial District, Dallas County,
Texas.
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1.4 Defendant Released Parties means each of the Denbury Defendants or any of
their respective present or former officers, directors, partners, principals,
employees, members, agents, attorneys, insurers, stockholders, financial advisors,
accountants, commercial bank lenders, investment bankers, representatives,
affiliates, associates, parents, subsidiaries, general and limited partners and
partnerships, heirs, executors, administrators, successors and assigns.
1.5 Defendant Settled Claims means any and all claims, rights, grounds for
sanctions, or causes of action or liabilities whatsoever, whether known or unknown
or suspected to exist, and whether based on federal, state or local statutory or
common law or any other law, rule or regulation, that have been or could have been
asserted in the Action against Plaintiff, Plaintiffs representatives, or
Plaintiffs counsel relating in any way to the Subject Matter, defined herein.
1.6 Denbury and the Company mean the nominal defendant Denbury Resources
Inc.
1.7 Denbury Defendants means Denbury and the Individual Defendants.
1.8 Directors means Roberts, Wettstein, Decker, and McMichael.
1.9 Final Approval means that the Dallas Court has entered an order approving
the Settlement in accordance with the Stipulation and the dismissal of the Action
with prejudice, and such order is finally affirmed on appeal or is no longer subject
to appeal and the time for any petition for re-argument, appeal or review, by leave,
petition, certiorari or otherwise, has expired.
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1.10 Effective Date means the date on which Final Approval is achieved.
1.11 Governance Changes means the covenants and governance changes set forth
in ¶¶2.2-2.9.
1.12 Individual Defendants means the Directors and the Other Defendants.
1.13 Judgment means the final order and judgment to be rendered by the Dallas
Court, substantially in the form attached hereto as Exhibit C.
1.14 Notice means the Notice of Proposed Settlement of the Action and of the
Settlement Hearing, substantially in the form attached hereto as Exhibit B.
1.15 Other Defendants means Beatty, Greene, Heather, and Stein.
1.16 Parties means Directors, Other Defendants, Denbury and Plaintiff.
1.17 Person means an individual, corporation, limited liability corporation,
professional corporation, partnership, limited partnership, limited liability
partnership, association, joint stock company, estate, legal representative, trust,
unincorporated association, government or any political subdivision or agency
thereof, and any business or legal entity and its respective spouses, heirs,
predecessors, successors, representatives, or assignees.
1.18 Plaintiff means Harbor Police Retirement System.
1.19 Plaintiff Releasing Parties means each of Plaintiffs respective present
or former officers, directors, principals, employees, members, agents, attorneys, owners, stockholders, advisors, representatives, affiliates,
associates, parents, subsidiaries, successors and assigns.
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1.20 Plaintiff Settled Claims means any and all claims, rights or causes of
action or liabilities whatsoever, whether asserted directly, individually,
derivatively, or in a representative capacity on behalf of Denbury or its
stockholders, whether known or unknown or suspected to exist, and whether based on
federal, state or local statutory or common law or any other law, rule or
regulation, that have been or could have been asserted in the Action at any time
against the Denbury Defendants or any of the Defendant Released Parties, which arise
out of or relate in any way to the Subject Matter, defined herein, including but not
limited to claims for breach of fiduciary duty, abuse of control, breach of Company
policies or procedures, waste, fraud, misrepresentation, inadequate disclosure,
mismanagement, gross mismanagement, unjust enrichment, violations of federal or
state law, money damages, or other relief related to the Subject Matter.
1.21 Preliminary Approval Order means the Preliminary Approval Order
substantially in the form of Exhibit A hereto, requesting preliminary approval of
the Settlement set forth in this Stipulation of Settlement.
1.22 Settled Claims means Defendant Settled Claims together with Plaintiff
Settled Claims.
1.23 Settlement Hearing means the hearing or hearings at which the Dallas
Court will review the adequacy, fairness and reasonableness of the Settlement.
1.24 Stipulation means this Stipulation of Settlement.
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1.25 Subject Matter means (i) the transactions, acts, facts, matters or
occurrences, representations or omissions alleged, described, set forth, or referred
to in the Second Amended Petition or any prior or future pleading in the Action;
(ii) Denburys compensation policies, practices, and procedures prior to the
Effective Date; and (iii) any agreement relating to Robertss compensation,
retirement, or status with the Company.
2. Settlement Consideration
2.1 The Parties agree that the Corporate Governance changes set forth below
were negotiated at arms length in good faith as a result of this litigation, are in
the best interests of Denbury and its shareholders, provide sufficient consideration
for the Settlement, reflect an agreement that was reached voluntarily and after
extensive consultation with competent legal counsel following more than a year of
vigorous litigation, and reflect a fair and reasonable resolution of the Action.
2.2 Compensation Advisory Vote: In connection with the annual meetings of its
stockholders to be held in May 2011 and May 2013, the Company will submit to its
stockholders a separate resolution subject to an advisory vote to approve the
matters contemplated by Securities and Exchange Commission Rule 14a-21(a), as such
requirement may exist at the time the Company delivers its proxy statement for each
annual meeting. The description of the proposal in the proxy statement may include
disclosure stating that the vote is advisory, will not affect any persons
compensation, and will not affect the approval of any compensation-related proposal
submitted for a vote of the stockholders at that or any other meeting of
stockholders.
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2.3 No Amendment of Stock Ownership Guidelines: As disclosed in the Companys
proxy statement for the annual meeting of stockholders held May 19, 2010, the
Company has in place stock ownership guidelines applicable to directors and
officers. The Company will not amend those current stock ownership guidelines to
materially reduce the obligations thereunder during the three-year period beginning
on December 16, 2010.
2.4 Board Composition: The Company will amend its bylaws to provide that at
least two-thirds of the members of the Companys board of directors will be
independent as defined by the New York Stock Exchange corporate governance listing
standards.
2.5 Compensation Study: The Company will adopt a policy providing that at
least once every three years the Compensation Committee of the board of directors
shall select and retain an independent consultant to conduct a comparative study of
the compensation paid by the Company to its executives relative to other, similar
public companies, and prepare and submit to the Compensation Committee a report
thereon.
2.6 Posting of Bylaws: The Company will post a copy of the Companys bylaws on
the Companys website.
2.7 Separation of Chairman and Chief Executive Officer Positions: The Company
will adopt a formal policy that the positions of Chairman of the Board (Chairman)
and Chief Executive Officer be held by two persons and that the Chairman not be a
Company executive.
2.8 Independent Director Status: The Company will revise the Annual Review of
Independence and Qualifications portion of its Corporate Governance Policies to provide that each independent director will annually certify in
writing that he or she is independent
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under the rules of the New York Stock Exchange
and that each independent director will inform the Board the earlier of (i) 45 days
after the director becomes aware of any change in his or her independent status or,
(ii) in advance of any Board or shareholder meeting occurring after the director
becomes aware of any change in his her independent status.
2.9 Related Party Transaction Policy Amendment: The Company will amend its
Related Party Transactions Policy relating to the Companys directors and executive
officers to require (i) the Boards independent directors (or a committee consisting
of independent directors) to approve or ratify any Related Party Transactions and
(ii) that the Company make timely disclosure on an annual basis of all such
transactions that exceed $120,000 in amount, this amount to be adjusted to conform
to any changes from time to time in the requirements under Item 404 of the
Securities and Exchange Commissions Regulation S-K. This policy change will apply
to all directors and executive officers of the Company, notwithstanding any other
agreement, as long as the individual is a director or executive officer.
3. Attorneys Fees and Expenses
3.1 Plaintiff and its counsel may apply to the Dallas Court for an award of
attorneys fees from Denbury of up to $400,000 (the Proposed Fee Award), which
shall be inclusive of all expenses. Plaintiff and its counsel shall not apply for
and shall not accept any fee award or other compensation from the Denbury Defendants
in excess of the Proposed Fee Award, and shall promptly repay to Denbury any funds
received from the Denbury Defendants in excess of
the Proposed Fee Award. The Denbury Defendants and their counsel shall not
oppose Plaintiffs application for the Proposed Fee Award and agree that the
Proposed Fee Award is fair and reasonable.
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3.2 The amount awarded by the Dallas Court shall be paid by Denbury to
Plaintiffs counsel within ten (10) business days after the date on which the Dallas
Court enters an order approving any award of attorneys fees and expenses, subject
to the obligations of Plaintiffs counsel to make refunds or repayments to the
Company if the Settlement does not obtain Final Approval or, as a result of any
appeal and/or further proceedings or remand, or successful collateral attack, the
respective fee or cost award is lowered by the Dallas Court.
4. Preliminary Order and Settlement Hearing
4.1 Promptly after execution of the Stipulation, the Parties shall submit the
Stipulation and its Exhibits to the Dallas Court and apply for entry of the
Preliminary Approval Order.
4.2 Within ten (10) days of the issuance of the Preliminary Approval Order,
Denbury shall provide notice of the Settlement to its shareholders by including as
an exhibit to a Current Report on Form 8-K the form attached as Exhibit B to the
Stipulation. The Form 8-K and Stipulation will be posted on the investor relations
page of Denburys corporate website and shall remain on the website until the date
of the Settlement Hearing. Denbury shall also cause notice of settlement to run, on
two occasions of its choosing, in the Investors Business Daily publication.
Denbury shall be responsible for issuing and paying for the Notice described in this
paragraph after approval of the form by the Dallas Court.
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4.3 The Parties will request that, after Notice is disseminated and after
Denburys stockholders have thereafter been provided with a reasonable time to
comment on the Settlement, the Dallas Court hold the Settlement Hearing and approve
the Settlement as set forth herein and enter the Judgment: (a) approving the terms
of the Settlement as fair, reasonable and adequate, including attorneys fees and
expenses in the amount negotiated by the Parties; and (b) dismissing with prejudice
the Action.
5. Effective Date of Settlement, Waiver, or Termination
5.1 The Effective Date of this Stipulation shall be conditioned on the
occurrence of all of the following events:
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entry of the Judgment by the Dallas Court in the Action
approving the Settlement and dismissing with prejudice the Action, as to the
Parties, without awarding costs to any party, except as provided herein; |
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payment of the Proposed Fee Award; |
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the passing of the date upon which the Judgment has Final
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5.2 If any of the conditions specified in ¶5.1 are not met, then the
Stipulation shall be canceled and terminated subject to ¶5.3 unless counsel for the
Parties mutually agree in writing to proceed with the Stipulation.
5.3 In the event the Dallas Court fails to enter an order of Final Approval of
the Settlement, or the Settlement is terminated for any reason, the Parties shall be
deemed to be in the position they were in prior to the execution of this Stipulation
and this Stipulation and the statements made therein shall not be deemed to
prejudice, compromise, or impact in any way any of the positions of the Parties with
respect to the Action, or to constitute an admission of fact or wrongdoing by any
Party, and shall not entitle any Party to recover any costs or expenses incurred in
connection with the implementation of this Stipulation. The Stipulation shall not be admissible against any of
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the Parties in any
proceeding for any purpose other than in an action to enforce the terms of the
Stipulation.
6. Releases
6.1 Release of Denbury Defendants: Plaintiff hereby forever releases and
relinquishes, individually, derivatively, and in a representative capacity on behalf
of Denbury and its shareholders, and on behalf of the Plaintiff Releasing Parties,
effective as of the Effective Date, the Plaintiff Settled Claims.
6.2 Release of Plaintiff: The Denbury Defendants, on behalf of themselves and
the Denbury Released Parties, hereby forever release and relinquish, effective as of
the Effective Date, the Defendant Settled Claims.
7. Miscellaneous Provisions
7.1 The Parties (a) acknowledge that it is their intent to consummate the
Settlement; and (b) agree to cooperate to the extent reasonably necessary to
effectuate and implement all terms and conditions of the Stipulation and to exercise
their best efforts to accomplish the foregoing terms and conditions of the
Stipulation.
7.2 The Parties intend this Settlement to be a final and complete resolution of
all disputes between them with respect to the Action. The Settlement compromises
claims that are contested and shall not be deemed an admission by any of the Parties
as to the merits of any claim, allegation or defense. The Parties further agree
that the claims are being settled voluntarily after consultation with competent
legal counsel.
7.3 The Exhibits to this Stipulation are material and integral parts hereof and
are fully incorporated herein by this reference.
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7.4 The Defendant Released Parties may file the Stipulation and/or the Judgment
in any action that may be brought against them in order to support a defense or
counterclaim based on principles of res judicata, collateral estoppel, full faith
and credit, release, good faith settlement, judgment bar or reduction or any other
theory of claim preclusion or issue preclusion or similar defense or counterclaim.
7.5 Covenants Not To Sue: Plaintiff and its counsel agree not to directly or
indirectly initiate, participate in, file, assert, or encourage any other person or
entity to file or assert, any action, proceeding, objection, or lawsuit against the
Denbury Defendants relating to any of the Settled Claims, other than an action to
enforce the terms of the Stipulation or Settlement. The Denbury Defendants agree
not to directly or indirectly initiate, participate in, file, assert, or encourage
any other person or entity to file or assert, any action, proceeding, objection, or
lawsuit against Plaintiff or its counsel relating to any of the Settled Claims,
other than an action to enforce the terms of the Stipulation or Settlement.
7.6 Stay of Litigation: The Parties agree that except as expressly provided
herein, the Action and all proceedings therein shall be stayed pending submission of
the proposed Settlement to the Dallas Court for its consideration. Counsel shall
enter into such documentation and file such motions as the Parties may agree to be
required or advisable to effectuate the stay. Notwithstanding the above, Counsel
shall jointly move the Appellate Court for dismissal of the Mandamus Petition upon
the execution of this Stipulation. The dismissal of the Mandamus Petition shall be
without prejudice to Defendants right to pursue mandamus relief (including reinstatement
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of the Mandamus Petition) if any of
the conditions specified in ¶5.1 are not met.
7.7 Broad Interpretation: The covenants, releases, and promises contained in
this Stipulation shall be given the broadest possible interpretation.
7.8 Binding Agreement: This Stipulation is an enforceable contract and is
binding on all of the Parties. The Parties agree that all of the covenants set forth
in this Stipulation are supported by adequate consideration. The Stipulation will
only become null and void and of no force and effect upon failure of the specific
conditions set forth in ¶5.1 above.
7.9 No Admission of Liability: The provisions contained in this Stipulation
shall not be deemed a presumption, concession or admission by any Party of any
fault, liability or wrongdoing as to any facts or claims that have been or might be
alleged in the Action or in any other action or proceeding.
7.10 Entire Agreement/No Third-Party Beneficiaries: Each Party severally
acknowledges that no promise, inducement or agreement not expressed herein has been
made to it or him or her, that this Stipulation contains the entire agreement
between or among the Parties concerning the matters described in this Stipulation,
and, except as expressly provided herein, that there are no third-party
beneficiaries to this Stipulation.
7.11 Counterparts: This Stipulation may be executed in counterparts by any of
the signatories hereto, including by telecopier or by email PDF, and as so executed
shall constitute one agreement.
7.12 Choice of Law and Forum: This Stipulation and the Settlement contemplated
by it shall be governed by and construed in accordance with the laws of the State of Texas without regard to conflict of laws principles. Any
action arising out of or relating to this Stipulation shall be brought exclusively
in the courts of the State of Texas in Dallas County, Texas.
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7.13 No Oral Modifications: This Stipulation may be modified or amended only
by a writing signed by all of the signatories hereto.
7.14 Representation of Authority: Each of the attorneys executing this
Stipulation has been duly empowered and authorized by his/her respective client(s)
to do so. This Stipulation shall be fully enforceable pursuant to the terms set
forth herein and shall constitute a binding agreement pursuant to Rule 11 of the
Texas Rules of Civil Procedure.
EXECUTED AND AGREED:
By: /s/ Roger L. Mandel
Roger L. Mandel
State Bar No. 12891750
Beckham & Mandel
3400 Carlisle, Suite 550
Dallas, Texas 75204
Telephone: 214-965-9300
Telecopier: 214-965-9301
Date: March 14, 2011
By: /s/ Lee Rudy
Lee Rudy
Michael Wagner
Ligaya Hernandez
Barroway Topaz Kessler Meltzer & Check, LLP
280 King of Prussia Road
Radnor, PA 19087
Telephone: 610-667-7706
Telecopier: 610-667-7056
Date: March 14, 2011
Counsel for Plaintiff Harbor Police
Retirement System
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By: /s/ Rodney Acker
Rodney Acker
State Bar No. 00830700
Ellen B. Sessions
State Bar No. 00796282
Fulbright & Jaworski L.L.P.
2200 Ross Avenue, Suite 2800
Dallas, Texas 75201
Telephone: 214-855-8000
Telecopier: 214-855-8200
Date: March 15, 2011
Peter A. Stokes
State Bar No. 24028017
Fulbright & Jaworski L.L.P.
600 Congress Avenue, Suite 2400
Austin, Texas 78701
Telephone: 512-474-5201
Telecopier: 512-536-4598
Counsel for Defendants Gareth Roberts,
Wieland F. Wettstein, Michael B. Decker,
and Gregory L. McMichael
By: /s/ Francis M. Munchinski
Francis M. Munchinski
State Bar No. 14663800
5320 Legacy Drive
Plano, Texas 75024
Telephone: 972-673-2077
Telecopier: 972-673-2460
Date: March 15, 2011
Counsel for Nominal Defendant
Denbury Resources Inc.
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Exhibit A
CAUSE NO. 09-09061-D
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HARBOR POLICE RETIREMENT
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IN THE DISTRICT COURT OF |
SYSTEM, Derivatively on Behalf of
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DALLAS COUNTY, TEXAS |
Nominal Defendant DENBURY
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RESOURCES, INC.,
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95th-D JUDICIAL DISTRICT |
Plaintiff,
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v.
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GARETH ROBERTS, WIELAND F.
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WETTSTEIN, MICHAEL B. DECKER,
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GREGORY L. MCMICHAEL, MICHAEL L.
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BEATTY, RONALD G. GREENE, DAVID I.
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HEATHER, and RANDY STEIN,
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Defendants,
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and
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DENBURY RESOURCES, INC.,
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Nominal Defendant.
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[PROPOSED] PRELIMINARY APPROVAL ORDER
WHEREAS, the Parties having made application, pursuant to Texas Business Organizations Code,
Section 21.560, for an order (i) preliminarily approving the settlement (the Settlement) of the
Action, in accordance with the Stipulation of Settlement dated March __, 2011 (the Stipulation),
which, together with the Exhibits annexed thereto, sets forth the terms and conditions for a
proposed Settlement and dismissal of the Action with prejudice, upon the terms and conditions set
forth therein; and (ii) approving distribution of the Notice of Settlement (attached to the
Stipulation as Exhibits B and C);
WHEREAS, all capitalized terms contained herein shall have the same meanings as set forth in
the Stipulation (in addition to those capitalized terms defined herein); and
WHEREAS, this Court, having considered the Stipulation and the Exhibits annexed thereto:
NOW THEREFORE, IT IS HEREBY ORDERED:
6 This Court does hereby preliminarily approve, subject to further consideration at the
Settlement Hearing described below, the Stipulation and the Settlement set forth therein, including
the terms and conditions for settlement and dismissal with prejudice of the Action and for
providing notice to the shareholders.
7 A hearing (the Settlement Hearing) shall be held before this Court on ________, 2011, at
_____ _.m., at the 95th District Court, 6th Floor New Tower, 600 Commerce Street, Dallas, Texas
75202, to determine whether the Settlement of the Action on the terms and conditions provided for
in the Stipulation is fair, reasonable and adequate to Denbury and its shareholders and should be
finally approved by the Court; whether a Final Judgment dismissing the Action with prejudice, with
each party to bear its, his or her own costs (unless expressly stated otherwise in the
Stipulation), and releasing and enjoining prosecution of any and all claims to be released pursuant
to the Stipulation should be entered herein; and whether to award attorneys fees and expenses (the
Proposed Fee Award) to Plaintiffs counsel in the amount provided in the Stipulation.
8 The Court approves, in form and content, the Notice (attached to the Stipulation as Exhibits
B and C) and finds that the distribution of the Notice and publication of the Notice substantially
in the manner and form set forth in ¶4.2 of the Stipulation, meets the requirements of the Texas
Business Organizations Code 21.560(b) and due process and all other applicable laws, is the best
notice practicable under the circumstances, and shall constitute due and sufficient notice of the
matters set forth therein for all purposes to all Persons entitled to such notice.
-2-
9 Within ten (10) days of the issuance of the Preliminary Approval Order, Denbury shall
provide notice of the Settlement to its shareholders by including as an exhibit to a Current Report
on Form 8-K the form attached as Exhibit B to the Stipulation. The Form 8-K and the Stipulation
will be posted on the investor relations page of Denburys corporate website and shall remain on
the website until the date of the Settlement Hearing. Denbury shall also cause notice of
settlement, in the form attached to the Stipulation as Exhibit C, to run, on two occasions of its
choosing, in the Investors Business Daily publication. Denbury shall be responsible for issuing
and paying for the Notice described in this paragraph after approval of the form by this Court.
10 At least ten days prior to the Settlement Hearing, Denburys counsel shall serve on counsel
for Plaintiff and file with the Court proof, by affidavit or declaration, of such publication and
filing.
11 All Denbury shareholders shall be bound by all orders, determinations and judgments in the
Action concerning the Settlement.
12 Pending final determination of whether the Settlement should be approved, no Denbury
shareholders, either directly, representatively, or in any other capacity, shall commence or
prosecute against any of the Denbury Defendants, any action or proceeding in any court or tribunal
asserting any of the Settled Claims.
13 All papers in support of the Settlement shall be filed with the Court and served at least
seven calendar days prior to the Settlement Hearing.
14 Any Denbury shareholder may appear and show cause, if he, she or it has any reason why the
terms of the Stipulation, the Settlement of the Action, and/or the Proposed Fee Award should not be
approved as fair, reasonable and adequate, or why a Judgment should not be entered thereon,
provided, however, unless otherwise ordered by the Court, no Denbury shareholder shall be heard or entitled to contest the approval of
-3-
all or any of the terms and
conditions of the Stipulation, the Settlement, and/or the Proposed Fee Award, or, if approved, the
Judgment to be entered thereon approving the same, unless that Person has, at least fourteen (14)
days prior to the Settlement Hearing, filed with the Clerk of the Court and served on the following
counsel (delivered by hand or sent by first class mail) appropriate proof of stock ownership, along
with written objections, including the basis therefore, signed as authorized by the objecting
shareholder, and copies of any papers and briefs in support thereof:
Michael Wagner
BARROWAY TOPAZ KESSLER
MELTZER & CHECK, LLP
280 King of Prussia Road
Radnor, PA 19087
Counsel for Plaintiff Harbor Police Retirement System
Rodney Acker
FULBRIGHT & JAWORSKI L.L.P.
2200 Ross Avenue, Suite 2800
Dallas, Texas 75201
Counsel for Gareth Roberts, Wieland F. Wettstein, Michael B. Decker, and Gregory L. McMichael
Francis M. Munchinski
5320 Legacy Drive
Plano, Texas 75024
Counsel for Nominal Defendant Denbury Resources Inc.
The written objections and copies of any papers and briefs in support thereof to be filed in Court shall be delivered by hand or sent by first class mail to:
-4-
CLERK OF THE COURT
95th District Court
George L. Allen, Sr. Courts Bldg.
600 Commerce St., Box 640
Dallas, Texas 75202
Any Denbury shareholder who does not make his, her or its objection in the manner provided herein
shall be deemed to have waived such objection and shall forever be foreclosed from making any
objection to the fairness, reasonableness, or adequacy of the Settlement as incorporated in the
Stipulation and to the Proposed Fee Award, unless otherwise ordered by the Court, but shall
otherwise be bound by the Final Order and Judgment to be entered and the releases to be given.
15 If the Stipulation is not approved by the Court, is terminated, rescinded, or fails to
become effective in accordance with its terms, the Action shall proceed, completely without
prejudice to any party as to any matter of law or fact, as if the Stipulation and the Memorandum of
Understanding had not been made and had not been submitted to the Court, and neither the
Stipulation or Memorandum of Understanding, any provision contained therein, any action undertaken
pursuant thereto, nor the negotiation thereof by any party, shall be deemed an admission or offered
or received in evidence at any proceeding in the Action or any other action or proceeding.
16 All proceedings in the Action, other than as may be necessary to carry out the terms and
conditions of the Settlement, are hereby stayed and suspended pending final determination of
whether the Settlement provided for in the Stipulation shall be approved. Plaintiff and Denbury
shareholders, or any of them, are barred and enjoined from commencing, prosecuting, instigating, continuing, or in any way participating in the commencement or prosecution of any
action, in any forum, asserting any Settled Claims against any of the Parties until further order
of the Court.
-5-
17 The Court reserves the right to adjourn the date of the Settlement Hearing or modify any
other dates set forth herein without further notice to Denburys shareholders, and retains
jurisdiction to consider all further applications arising out of or connected with the Settlement.
18 The Court may approve the Settlement, with such modifications as may be agreed to by the
Parties, if appropriate, without further notice to Denbury shareholders.
IT IS SO ORDERED.
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DATED: |
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THE HONORABLE KEN MOLBERG
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-6-
Exhibit B
CAUSE NO. 09-09061-D
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HARBOR POLICE RETIREMENT
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§
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IN THE DISTRICT COURT OF |
SYSTEM, Derivatively on Behalf of
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DALLAS COUNTY, TEXAS |
Nominal Defendant DENBURY
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RESOURCES, INC.,
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95th-D JUDICIAL DISTRICT |
Plaintiff,
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v.
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GARETH ROBERTS, WIELAND F.
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WETTSTEIN, MICHAEL B. DECKER,
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GREGORY L. MCMICHAEL, MICHAEL L.
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BEATTY, RONALD G. GREENE, DAVID I.
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HEATHER, and RANDY STEIN,
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Defendants,
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and
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DENBURY RESOURCES, INC.,
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Nominal Defendant.
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NOTICE OF PROPOSED DERIVATIVE SETTLEMENT
NOTICE OF PROPOSED SETTLEMENT OF DERIVATIVE ACTION,
HEARING THEREON, AND RIGHT TO APPEAR
TO: ALL HOLDERS OF THE COMMON STOCK OF DENBURY RESOURCES INC. (DENBURY OR THE COMPANY).
PLEASE READ THIS NOTICE CAREFULLY AND COMPLETELY. YOUR RIGHTS WILL BE AFFECTED. IF YOU HOLD
DENBURY COMMON STOCK FOR THE BENEFIT OF ANOTHER, PLEASE TRANSMIT THIS NOTICE TO SUCH BENEFICIAL
OWNER.
YOU ARE HEREBY NOTIFIED that a proposed settlement (the Settlement) has been reached with respect
to Harbor Police Retirement System, Derivatively on Behalf of Nominal Defendant Denbury Resources,
Inc. v. Gareth Roberts et al., Cause No. 09-09061, pending in the 95th Judicial District
Court of Dallas County, Texas (the Action), which arises out of allegations that certain current
and former officers and directors of Denbury breached their fiduciary duties by, among other
things, approving certain executive compensation awards. The terms of the proposed settlement of
the Action are set forth in a Stipulation of Settlement dated _______, 2011 (the Stipulation).
This summary should be read in conjunction with, and is qualified in its entirety by reference to,
the text of the Stipulation, which has been filed with the Court and is attached
hereto.3 If you own Denbury common stock, your rights may be affected by the
Settlement. Please note that because this is a derivative action and not a class action, no
individual stockholder has a right to be compensated as a result of the Settlement.
On July 21, 2009, Harbor Police Retirement System (Plaintiff or Harbor Police) filed its
original Verified Shareholder Derivative Petition (the Original Petition) in the 95th
District Court of Dallas County, Texas, which asserted putative shareholder derivative claims on
behalf of Denbury Resources Inc. (Denbury or the Company) against Gareth Roberts (Roberts),
Wieland F. Wettstein (Wettstein), Michael B. Decker (Decker) and Gregory L. McMichael
(McMichael) (collectively, the Directors), which alleged that the Directors breached their
fiduciary duties in approving certain compensation awards to Roberts (the Compensation Claims).
On September 29, 2009, following oral argument, this Court entered an order denying Defendants
Plea to the Jurisdiction and Special Exceptions to the Original Petition. Defendants sought
mandamus in the Fifth District Court of Appeals (the Appellate Court), and the Appellate Court
issued a Writ of Mandamus on December 1, 2009, directing that the Original Petition be dismissed
with leave to replead.
At this time, the Parties engaged in good faith, arms length settlement negotiations in an attempt
to resolve the Action. Unfortunately, these negotiations did not result in a resolution, although
counsel for the parties agreed to remain open to settlement discussions going forward.
On January 22, 2010, Plaintiff filed its First Amended Shareholder Derivative Petition, (the First
Amended Petition) against the Directors and Michael L. Beatty (Beatty), Ronald G. Greene
(Greene), David I. Heather (Heather), and Randy Stein (Stein) (collectively, the Other
Defendants) (together with the Directors, the Individual Defendants) (together with the
Directors and Denbury, the Denbury Defendants) (Plaintiff and the Denbury Defendants
collectively, the Parties), which, inter alia, reasserted the Compensation Claims against the Directors with additional allegations and asserted additional putative derivative claims against
the Directors and Other Defendants regarding Denburys acquisition of Encore Acquisition Company
(the Merger) (the derivative claims related to the merger, the Merger Derivative Claims).
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All capitalized terms herein have the same
meanings as set forth in the Stipulation. |
On February 19, 2010, Plaintiff filed a motion in this Court for leave to file its Second Amended
Shareholder Derivative and Class Action Petition, (the Second Amended Petition), which was
identical to the First Amended Petition with respect to the Compensation Claims and the Merger
Derivative Claims, and which asserted new putative class action claims against the Denbury
Defendants for allegedly making inadequate proxy disclosures regarding the Merger (the Merger
Class Claims) (the Merger Derivative Claims and Merger Class Claims collectively, the Merger
Claims). This Court granted Plaintiff leave to file the Second Amended Petition after a hearing
on March 1, 2010, abated the Merger Claims, and took the Directors Motion to Dismiss, Motion for
Summary Judgment, and Special Exceptions regarding the Compensation Claims under advisement.
On September 15, 2010, this Court held a status conference and heard renewed oral argument from
counsel on Defendants Motion to Dismiss, Motion for Summary Judgment, and Special Exceptions
regarding the Compensation Claims. This Court then, on October 11, 2010, entered an order
overruling the Motion to Dismiss, Motion for Summary Judgment, and Special Exceptions (the
Motion) filed by the Directors and Denbury with respect to the Compensation Claims and dismissing
the Merger Claims without prejudice as to the Denbury Defendants.
On October 20, 2010, Denbury and the Directors filed a Petition for Writ of Mandamus (the Mandamus
Petition) with the Appellate Court challenging this Courts decision on the Motion. Following the
filing of the Mandamus Petition, the Parties renewed discussions regarding a potential settlement.
The Parties engaged in good faith, arms-length negotiations concerning the possible terms of
resolution. The Mandamus Petition remains pending before the Appellate Court, and a decision
thereon has been held in abeyance as a result of the Settlement.
As a result of these discussions, the Parties entered into a Memorandum of Understanding (the
MOU) on January 10, 2011, setting forth the principal terms and conditions of an agreement to
settle the Action. The MOU provided that the Parties shall use their good faith best efforts to
agree upon and execute an appropriate stipulation of settlement on terms acceptable to all Parties,
provide appropriate notice to Denburys stockholders as approved by this Court, and will use their
best efforts to obtain Final Approval of the Settlement and the dismissal of the Action with
prejudice and without costs to any party, except as provided therein.
The MOU also provided for reasonable discovery for Plaintiff for the sole purpose of confirming
whether the Settlement is in the best interests of Denbury and its stockholders. Plaintiff reserved
the right not to agree to the Settlement following completion of this confirmatory discovery. Upon
satisfactory completion of confirmatory discovery provided for in the MOU and following further
arms length negotiations, the Parties entered into the Stipulation on February ___, 2011
Under the terms of the Settlement the Company has agreed to adopt certain corporate governance
measures. Pursuant to the Settlement, the Company shall, among other things, amend its Related Party Transactions Policy relating to the Companys directors and executive officers to
-2-
require (i)
the Board of Directors (the Board) independent directors (or a committee consisting of
independent directors) to approve or ratify any Related Party Transactions and (ii) that the
Company make timely disclosure on an annual basis of all such transactions that exceed $120,000 in
amount. Other corporate governance measures include, among other things, submitting to Denbury
stockholders an advisory vote on executive compensation at the 2011 and 2013 annual meetings;
amendments to the Companys documents and policies requiring that at least two-thirds of the Board
be independent and the certification of a directors independence; the adoption of a policy
requiring the periodic retention of independent consultants in connection with executive
compensation; and the requirement that the Company maintain its current stock ownership guidelines
for directors and executives. The Settlement also provides for Denbury to pay Plaintiffs counsels
attorneys fees and expenses in the amount of $400,000 (the Proposed Fee Award), subject to Court
approval.
On ___________, 2011, at ___ _.m., a hearing (the Settlement Hearing) will be held at the 95th
District Court, 6th Floor New Tower, 600 Commerce Street, Dallas, Texas 75202, to determine: (1)
whether the terms of the Settlement should be approved as fair, reasonable, and adequate; (2)
whether the Action should be dismissed with prejudice pursuant to the Settlement; (3) whether the
agreed-to Proposed Fee Award described above should be awarded, and (4) such other matters as may
be necessary or proper in the circumstances.
Any current Denbury shareholder that objects to the Settlement of the Action shall have a right to
appear and to be heard at the Settlement Hearing, and may enter an appearance through counsel of
such Persons own choosing and at such Persons own expense or may appear on their own. However,
no Person other than Plaintiffs counsel and counsel for the Defendants and the Company shall be
heard at the Settlement Hearing unless no later than fourteen (14) days prior to the date of the
Settlement Hearing, such Person has filed with the Court and delivered to counsel for the Parties a
written notice of objection, signed as authorized by the objecting shareholder, setting forth their
ground for opposing the Settlement, and proof of both their status as a current Denbury shareholder
and the dates of stock ownership in Denbury. Any objecting shareholder must also file with the
Court and deliver to all counsel in the Action (listed below), copies of any documents, exhibits,
affidavits, or other evidence the shareholder will rely upon in support of his or her objection.
Only current Denbury shareholders who have filed and delivered valid and timely written notices of
objection will be entitled to be heard at the Settlement Hearing unless the Court orders otherwise.
If you wish to object to the Settlement, you must file a written objection setting forth the
grounds for such an objection and providing proof of current ownership of Denbury stock with the
Court on or before ___________, 2011, with service on the following parties:
Michael Wagner
Barroway Topaz Kessler Meltzer & Check, LLP
280 King of Prussia Road
Radnor, PA 19087
-3-
Counsel for Plaintiff Harbor Police Retirement System
Rodney Acker
Fulbright & Jaworski L.L.P.
2200 Ross Avenue, Suite 2800
Dallas, Texas 75201
Counsel for Gareth Roberts, Wieland F. Wettstein, Michael B. Decker,
and Gregory L. McMichael
Francis M. Munchinski
5320 Legacy Drive
Plano, Texas 75024
Counsel for Nominal Defendant Denbury Resources Inc.
Any Person who fails to object in the manner described above shall be deemed to have waived the
right to object (including any right of appeal) and shall be forever barred from raising such
objection in this or any other action or proceeding, unless the Court orders otherwise.
Current Denbury shareholders who have no objection to the Settlement or the Proposed Fee Award do
not need to appear at the Settlement Hearing or take any other action. If you are a current
Denbury shareholder, you will be bound by the Final Order and Judgment of the Court, and you will
be deemed to have released any and all claims that have or could have been brought in the Action,
including any claim arising from: (i) the transactions, acts, facts, matters or occurrences,
representations or omissions alleged, described, set forth, or referred to in the Second Amended
Petition or any other pleading in the Action; (ii) Denburys compensation policies, practices, and
procedures prior to the Effective Date of the Settlement; and (iii) any agreement relating to
Gareth Robertss compensation, retirement, or status with the Company.
Inquiries may be made to Plaintiffs counsel: Michael Wagner, Barroway Topaz Kessler Meltzer &
Check, LLP, 280 King of Prussia Road, Radnor, PA 19087; telephone: 610-667-7706. Copies of the
Second Amended Petition and all other pleadings in this case can be accessed at the Dallas County
District Court website, http://www.dallascounty.org/public_access.html.
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DATED: , 2011
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BY ORDER OF THE COURT
DALLAS COUNTY, TEXAS |
DO NOT CONTACT THE CLERK OF THE COURT
REGARDING THIS NOTICE
-4-
Exhibit C
CAUSE NO. 09-09061-D
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HARBOR POLICE RETIREMENT
SYSTEM, Derivatively on Behalf of
Nominal Defendant DENBURY
RESOURCES, INC.,
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§
§
§
§
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IN THE DISTRICT COURT OF
DALLAS COUNTY, TEXAS |
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§
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95th-D JUDICIAL DISTRICT |
Plaintiff,
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v.
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§ |
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GARETH ROBERTS, WIELAND F.
WETTSTEIN, MICHAEL B. DECKER,
GREGORY L. MCMICHAEL, MICHAEL L.
BEATTY, RONALD G. GREENE, DAVID
I. HEATHER, and RANDY STEIN,
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§
§
§
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Defendants,
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and
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DENBURY RESOURCES, INC.,
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Nominal Defendant.
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PUBLICATION NOTICE OF PROPOSED DERIVATIVE SETTLEMENT
NOTICE OF PROPOSED SETTLEMENT OF DERIVATIVE ACTION,
HEARING THEREON, AND RIGHT TO APPEAR
TO: ALL HOLDERS OF THE COMMON STOCK OF DENBURY RESOURCES INC. (DENBURY OR THE COMPANY).
PLEASE READ THIS NOTICE CAREFULLY AND COMPLETELY. YOUR RIGHTS WILL BE AFFECTED. IF YOU HOLD
DENBURY COMMON STOCK FOR THE BENEFIT OF ANOTHER, PLEASE TRANSMIT THIS NOTICE TO SUCH BENEFICIAL
OWNER.
YOU ARE HEREBY NOTIFIED that a proposed settlement (the Settlement) has been reached with respect
to Harbor Police Retirement System, Derivatively on Behalf of Nominal Defendant Denbury Resources,
Inc. v. Gareth Roberts et al., Cause No. 09-09061, pending in the 95th Judicial District
Court of Dallas County, Texas (the Action), which arises out of allegations that certain current
and former officers and directors of Denbury breached their fiduciary duties by, among other
things, approving certain executive compensation awards. The terms of the proposed settlement of
the Action are set forth in a Stipulation of Settlement dated _______, 2011 (the Stipulation).
This summary should be read in conjunction with, and is qualified in its entirety by reference to,
the text of the Stipulation, which has been filed with the Court.1 If you own Denbury
common stock, your rights may be affected by the Settlement. Please note that because this is a
derivative action and not a class action, no individual stockholder has a right to be compensated
as a result of the Settlement.
Under the terms of the Settlement, the Company has agreed to adopt certain corporate governance
measures. Pursuant to the Settlement, the Company shall, among other things, amend its Related
Party Transactions Policy relating to the Companys directors and executive officers to require (i)
the Board of Directors (the Board) independent directors (or a committee consisting of
independent directors) to approve or ratify any Related Party Transactions and (ii) that the
Company make timely disclosure on an annual basis of all such transactions that exceed $120,000 in
amount. Other corporate governance measures include, among other things, submitting to Denbury
stockholders an advisory vote on executive compensation at the 2011 and 2013 annual meetings;
amendments to the Companys documents and policies requiring that at least two-thirds of the Board
be independent and the certification of a directors independence; the adoption of a policy
requiring the periodic retention of independent consultants in connection with executive
compensation; and the requirement that the Company maintain its current stock ownership guidelines
for directors and executives. The Settlement also provides for Denbury to pay Plaintiffs
counsels attorneys fees and expenses in the amount of $400,000 (the Proposed Fee Award),
subject to Court approval.
On ___________, 2011, at ___ .m., a hearing (the Settlement Hearing) will be held at the 95th
District Court, 6th Floor New Tower, 600 Commerce Street, Dallas, Texas 75202, to determine: (1)
whether the terms of the Settlement should be approved as fair, reasonable, and adequate; (2)
whether the Action should be dismissed with prejudice pursuant to the Settlement; (3) whether the
agreed-to Proposed Fee Award described above should be awarded, and (4) such other matters as may
be necessary or proper in the circumstances.
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All capitalized terms herein have the same
meanings as set forth in the Stipulation. |
Any current Denbury shareholder that objects to the Settlement of the Action shall have a right to
appear and to be heard at the Settlement Hearing, and may enter an appearance through counsel of
such Persons own choosing and at such Persons own expense or may appear on their own. However,
no Person other than Plaintiffs counsel and counsel for Defendants and the Company in the Action
shall be heard at the Settlement Hearing unless no later than fourteen (14) days prior to the date
of the Settlement Hearing, such Person has filed with the Court and delivered to counsel for the
Parties a written notice of objection, signed as authorized by the objecting shareholder, setting
forth their ground for opposing the Settlement, and proof of both their status as a current Denbury
shareholder and the dates of stock ownership in Denbury. Any objecting shareholder must also file
with the Court and deliver to all counsel in the Action (listed below), copies of any documents,
exhibits, affidavits, or other evidence the shareholder will rely upon in support of his or her
objection. Only current Denbury shareholders who have filed and delivered valid and timely written
notices of objection will be entitled to be heard at the Settlement Hearing unless the Court orders
otherwise.
If you wish to object to the Settlement, you must file a written objection setting forth the
grounds for such an objection and providing proof of current ownership of Denbury stock with the
Court on or before ___________, 2011, with service on the following parties:
Michael Wagner
Barroway Topaz Kessler Meltzer & Check, LLP
280 King of Prussia Road
Radnor, PA 19087
Counsel for Plaintiff Harbor Police Retirement System
Rodney Acker
Fulbright & Jaworski L.L.P.
2200 Ross Avenue, Suite 2800
Dallas, Texas 75201
Counsel for Gareth Roberts, Wieland F. Wettstein, Michael B. Decker,
and Gregory L. McMichael
Francis M. Munchinski
5320 Legacy Drive
Plano, Texas 75024
Counsel for Nominal Defendant Denbury Resources Inc.
Any Person who fails to object in the manner described above shall be deemed to have waived the
right to object (including any right of appeal) and shall be forever barred from raising such
objection in this or any other action or proceeding, unless the Court orders otherwise.
-2-
Current Denbury shareholders who have no objection to the Settlement or the Proposed Fee Award do
not need to appear at the Settlement Hearing or take any other action. If you are a current
Denbury shareholder, you will be bound by the Final Order and Judgment of the Court, and you will
be deemed to have released any and all claims that have or could have been brought in the Action,
including any claim arising from: (i) the transactions, acts, facts, matters or occurrences,
representations or omissions alleged, described, set forth, or referred to in Plaintiffs Second
Amended Shareholder Derivative and Class Action Petition (the Second Amended Petition) or any
other pleading in the Action; (ii) Denburys compensation policies, practices, and procedures prior
to the Effective Date of the Settlement; and (iii) any agreement relating to Gareth Robertss
compensation, retirement, or status with the Company.
A copy of the Stipulation is included with the Form 8-K filed by the Company on ______, 2011, and
can be accessed at the Securities and Exchange Commission (SEC) website, www.sec.gov. Copies of
the Second Amended Petition and all other pleadings in this case can be accessed at the Dallas
County District Court website, http://www.dallascounty.org/public_access.html. Inquiries may be
made to Plaintiffs counsel: Michael Wagner, Barroway Topaz Kessler Meltzer & Check, LLP, 280 King
of Prussia Road, Radnor, PA 19087; telephone: 610-667-7706.
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DATED: , 2011
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BY ORDER OF THE COURT
DALLAS COUNTY, TEXAS |
DO NOT CONTACT THE CLERK OF THE COURT
REGARDING THIS NOTICE
-3-
Exhibit D
CAUSE NO. 09-09061-D
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HARBOR POLICE RETIREMENT
SYSTEM, Derivatively on Behalf of
Nominal Defendant DENBURY
RESOURCES, INC.,
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§
§
§
§
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IN THE DISTRICT COURT OF
DALLAS COUNTY, TEXAS |
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§
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95th-D JUDICIAL DISTRICT |
Plaintiff,
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v.
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§ |
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GARETH ROBERTS, WIELAND F.
WETTSTEIN, MICHAEL B. DECKER,
GREGORY L. MCMICHAEL, MICHAEL L.
BEATTY, RONALD G. GREENE, DAVID
I. HEATHER, and RANDY STEIN,
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§
§
§
§
§ |
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Defendants,
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and
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DENBURY RESOURCES, INC.,
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Nominal Defendant.
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FINAL ORDER AND JUDGMENT
This matter came before the Court for hearing pursuant to the Order of this Court, dated
______________, 2011 (Order), on the application of the Parties for approval of the proposed
derivative settlement (Settlement) set forth in the Stipulation of Settlement dated __________,
2011 and the Exhibits thereto (the Stipulation).
The Court has reviewed and considered all documents, evidence, objections (if any) and
arguments presented in support of or against the Settlement; the Court being fully advised of the
premises and good cause appearing therefore, the Court enters this Final Order and Judgment.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED this _________day of ________________ 2011 that:
1. This Judgment incorporates by reference the definitions in the Stipulation, and all
capitalized terms used herein shall have the same meanings as set forth in the Stipulation.
2. This Court has jurisdiction over the subject matter of the Action, including all matters
necessary to effectuate the Settlement, and over all Parties.
3. The Court finds that the Notice provided to Denbury shareholders through the Current Report
on Form 8-K filed by Denbury on ______, 2011, the publication of the notice of settlement on two
occasions in Investors Business Daily, and the posting of the Notice and Stipulation on Denburys
website until the date of the Settlement Hearing fully satisfied the requirements of Texas Business
Organizations Code 21.560(b), due process and all other applicable laws, and constitutes due and
sufficient notice to all persons entitled thereto.
4. The Court finds that, during the course of the litigation of the Action, the Parties and
their respective counsel at all times complied with the requirements of Tex. R. Civ. P. 13 and all
other similar laws.
5. The Court finds that the terms of the Stipulation and Settlement are fair, reasonable and
adequate as to each of the Parties, and hereby finally approves the Stipulation and Settlement in
all respects, and orders the Parties to perform its terms to the extent the Parties have not
already done so.
6. The Action and all claims contained therein, as well as all of the Settled Claims, are
dismissed with prejudice. The Parties are to bear their own costs, except as otherwise provided in
the Stipulation.
7. Upon the Effective Date, as defined in the Stipulation, Plaintiff hereby forever releases
and relinquishes, individually, derivatively, and in a representative capacity on behalf of
Denbury and its shareholders, and on behalf of the Plaintiff Releasing Parties, the Plaintiff
Settled Claims.
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8. Upon the Effective Date, as defined in the Stipulation, Denbury Defendants, on behalf of
themselves and the Denbury Released Parties, hereby forever release and relinquish, the Defendant
Settled Claims.
9. Nothing herein shall in any way impair or restrict the rights of any Party to enforce the
terms of the Stipulation.
10. The Court hereby approves the Proposed Fee Award in accordance with the Stipulation and
finds that such fee is fair and reasonable.
11. This Judgment shall not be deemed a presumption, concession or admission by any Party of
any fault, liability or wrongdoing as to any facts or claims that have been or might be alleged in
the Action or in any other action or proceeding. The Defendant Released Parties may file the
Stipulation and/or the Judgment in any action that may be brought against them in order to support
a defense or counterclaim based on principles of res judicata, collateral estoppel, full faith and
credit, release, good faith settlement, judgment bar or reduction or any other theory of claim
preclusion or issue preclusion or similar defense or counterclaim; and any of the Parties may file
the Stipulation and documents executed pursuant and in furtherance thereto in any action to enforce
the Settlement.
12. Without affecting the finality of this Judgment in any way, this Court hereby retains
continuing jurisdiction with respect to implementation and enforcement of the terms of the
Stipulation.
13. In the event that the Settlement does not become effective in accordance with the terms of
the Stipulation, this Judgment shall be vacated, and all Orders entered and releases delivered in connection with the Stipulation and this Final Order and Judgment shall be null and void, except as otherwise provided for in the Stipulation.
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14. This Judgment is a final, appealable judgment that resolves all issues in this litigation
and should be entered forthwith by the Clerk in accordance with Tex. R. Civ. P. 301 and all other
similar laws.
IT IS SO ORDERED
This _________ day of ______________ 2011.
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THE HONORABLE KEN MOLBERG
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