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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
FORM 11-K
(Mark One)
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Annual report pursuant to section 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended December 31, 2006
OR
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Transition report pursuant to section 15(d) of the Securities Exchange Act of
1934 |
For
the Transition Period from
to
Commission File Number 1-12935
A. |
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Full title of the plan and the address of the plan, if different from that of the issuer
named below: |
DENBURY RESOURCES INC. EMPLOYEE STOCK PURCHASE PLAN
B. |
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Name of issuer of the securities held pursuant to the plan and the address of its
principal executive office: |
Denbury Resources Inc.
5100 Tennyson Parkway
Suite 1200
Plano, TX 75024
Report of Independent Registered Public Accounting Firm
To the Participants and Administrator of
Denbury Resources Inc. Employee Stock Purchase Plan:
In our
opinion, the accompanying statements of plan assets and the related
statements of changes in plan assets present fairly, in all material respects,
the plan assets of Denbury Resources Inc. Employee Stock Purchase Plan (the
Plan) at December 31, 2006 and 2005, and the changes
in plan assets for each of
the three years in the period ended December 31, 2006 in conformity with accounting principles
generally accepted in the United States of America. These financial statements are the
responsibility of the Plans management. Our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these statements in
accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Dallas, Texas
April 16, 2007
-3-
DENBURY RESOURCES INC. EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS
OF PLAN ASSETS
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December 31, |
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2006 |
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2005 |
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Assets cash |
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$ |
9,487 |
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$ |
4,656 |
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Plan assets |
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$ |
9,487 |
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$ |
4,656 |
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See Notes to Financial Statements.
-4-
DENBURY RESOURCES INC. EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS
OF CHANGES IN PLAN ASSETS
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Year Ended December 31, |
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2006 |
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2005 |
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2004 |
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Additions: |
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Employee
contributions, net |
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$ |
2,266,561 |
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$ |
1,566,717 |
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$ |
1,389,873 |
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Employer contributions |
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1,698,662 |
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1,175,074 |
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1,043,063 |
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Total additions |
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3,965,223 |
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2,741,791 |
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2,432,936 |
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Deductions: |
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Purchases of Denbury Resources Inc. |
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common stock
allocated to plan participants |
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3,960,392 |
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2,740,884 |
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2,430,970 |
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Increase in
plan assets |
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4,831 |
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907 |
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1,966 |
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Plan assets: |
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Beginning of period |
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4,656 |
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3,749 |
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1,783 |
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End of period |
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$ |
9,487 |
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$ |
4,656 |
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$ |
3,749 |
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See Notes to Financial Statements.
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NOTES TO FINANCIAL STATEMENTS
The following description of the Denbury Resources Inc. Employee Stock Purchase Plan (Plan)
provides only general information. Participants should refer to the Plan prospectus for a more
complete statement of the Plans provisions.
General
The Plan is an employee stock purchase plan that allows participants to purchase shares of common
stock (Stock) of Denbury Resources Inc. (Company). The Plans fiscal year ends on December 31
and is divided into four three-month periods (Offering Periods) for the purposes of stock
offerings under the Plan. The Offering Periods begin on the first day of each January, April, July
and October.
The Plan covers substantially all full-time employees of the Company, who are employed on or before
the first day of the Offering Period. Eligible employees not yet participating in the Plan may
enroll in the Plan at any time, but their election will only become active at the beginning of the
next Offering Period. Once an election is made, the participant will automatically participate in
all subsequent Offering Periods, unless the participant makes a new election or withdraws from an
Offering Period or from the Plan in accordance with the procedures set forth in the Plan
prospectus. An employee who elects not to continue the participation in the Plan must wait for a
period of six months before participating again. The Company initially issued new, previously
unissued Stock to its employees under the Plan. Since September 2003, the Company has purchased
shares of its Stock on the open market and reissued them to employees under the Plan.
The Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974,
as amended (ERISA), nor is it qualified under Section 401(a) of the Internal Revenue Code of
1986, as amended (Code).
Contributions and Stock Purchases
The participants may elect to contribute up to 10% of their base salary to the Plan either by
payroll deductions or by making cash payment prior to the end of each Offering Period. At the end
of each Offering Period, the Company contributes an amount equal to 75% of the participants
contributions and uses the combined funds to issue shares of the Companys Stock into the account
of the participant. The number of shares is calculated by using the market price of the Companys
Stock at the end of the applicable quarter. The market price is defined as the average closing
price on the NYSE for the ten trading days prior to the issue date. In addition, the Company pays
the income tax on the Companys matching portion for employees that are below a certain salary
threshold.
Shares purchased by the participants are immediately distributed in the name of each participant at the end of each Offering Period. The
shares issued have all rights of ownership such as voting and dividend rights, but the Plan
requires
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that the participant retain the shares for one year after issuance before the shares may be sold or
transferred. For convenience, each participants shares are initially issued into their account at
American Stock Transfer (AST), the Companys transfer agent.
If an employee is terminated for any reason prior to the end of the Offering Period or makes an
election to withdraw during the Offering Period, any contributions made by such employee during the
Offering Period are refunded, without interest, and such employee does not receive the Companys
matching contribution.
As the shares are fully vested upon issuance, there are no provisions for a change of control in
the Plan.
The maximum number of shares of the Companys Stock available for sale under the Plan is 3,500,000,
of which 3,184,894 shares have been purchased by and distributed to participants as of December 31,
2006. Participants of the Plan purchased 137,265, 130,381, and 230,180 shares of the Companys
Stock during the years ended December 31, 2006, 2005 and 2004, respectively. As of December 31,
2006, there were 315,106 authorized shares of the Companys Stock remaining to be issued under the
Plan.
Fractional shares of the Companys Stock are not purchased and distributed to participants. Cash
held by the Plan represents participant funds which were not sufficient to purchase a whole share
of the Companys Stock.
Plan Amendment
The Plan was amended in May 2005 to extend the life of the Plan by five years, from August 2005 to
August 2010.
Plan Administration
This plan is administered by the Compensation Committee of the Companys Board of Directors.
Administrative Expenses
All expenses for Plan administration are paid by the Company and are not reflected in the
financial statements of the Plan. If shares purchased under the Plan
are subsequently sold by the participant, the participant is
responsible for all fees, commissions and other costs incurred in
such transactions.
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Summary of Significant Accounting Policies |
Basis of Accounting
The accompanying financial statements of the Plan are presented on the accrual basis of accounting
in accordance with accounting principles generally accepted in the United States of America.
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Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect
the reported amounts and disclosures. Accordingly, actual results may differ from those estimates.
Participants Accounts
Plan participants accounts, although provided for by the Plan as a convenience to the
participants, are not included in the assets of the Plan as the Plan does not retain any ownership
or have any right to the shares once they are issued. As a result, participants sales of shares
are not included in the Plans Statement of Changes in Plan Assets.
The Plan does not fulfill the requirements of an employee stock purchase plan as defined in Section
423 of the Code. As such, the Plan is not required to file income tax returns or pay income taxes.
Contributions made to the Plan by the employer on behalf of the participants are taxable to the
participant as ordinary income. Upon the disposition of the shares by the participant, the
participant will generally be subject to tax for any appreciation in the share value.
4. |
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Termination of the Plan |
Although it has not expressed any intent to do so, the Board of Directors of the Company has the
right, subject to certain restrictions under the Plan, to amend or terminate the Plan at any time.
The Plan will, unless amended by the Board of Directors, terminate at the earliest of August 9,
2010 or the date on which all shares available for issuance under the Plan have been sold pursuant
to the purchase rights exercised under the Plan. Upon termination of the Plan, any cash held by
the Plan will be refunded, without interest, to the participants who originally contributed the
funds.
The Plans cash is maintained by the Company on behalf of the Plan. The cash is
non-interest-bearing.
6. Stock Split
On October 19, 2005, stockholders of the Company approved an amendment to the Companys Restated
Certificate of Incorporation to split the Companys Stock on a two-for-one basis. Stockholders of
record as of October 31, 2005 received one additional share of the Companys Stock for each share
of Stock held on that record date. Information pertaining to shares has been retroactively
adjusted in the accompanying financial statements to reflect the stock split.
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On February 22, 2007, the Board of Directors of the Company approved an amendment to increase the
number of shares that may be sold under the Plan by 200,000. This amendment requires approval by
the Companys stockholders and will be voted on at the Companys 2007 Annual Meeting of
Stockholders on May 15, 2007.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Compensation
Committee, acting as the administrator of the Denbury Resources Inc. Employee Stock Purchase Plan,
has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
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Date: April 13, 2007
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Denbury Resources Inc. |
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Employee Stock Purchase Plan |
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/s/ Gregory L. McMichael
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Gregory L. McMichael, the Chairman of the |
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Compensation Committee |
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/s/ Donald D. Wolf
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Donald D. Wolf, a member of the |
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Compensation Committee |
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-10-
EXHIBIT INDEX
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Exhibit |
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No. |
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Description |
23
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Consent of PricewaterhouseCoopers LLP |
-11-