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

SCHEDULE 14A

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

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April 27, 2016

Dear Stockholder:

              You are cordially invited to join us for our 2016 Annual Meeting of Stockholders to be held on Monday, June 6, 2016 at 11:00 a.m. at 410 17^th Street, Suite 220, Denver, Colorado 80202.

              The materials following this letter include the formal Notice of Annual Meeting of Stockholders and the proxy statement. The proxy statement describes the business to be conducted at the meeting, including the election of two directors; the ratification of the appointment of Hein & Associates LLP as our independent auditors for the 2016 fiscal year; and the approval on a non-binding advisory basis of the 2015 compensation of our named executive officers.

              Whether you own a few or many shares of our stock, it is important that your shares be represented. Regardless of whether you plan to attend the Annual Meeting in person, please take a moment now to vote your proxy by completing and signing the enclosed proxy card and promptly returning it in the envelope provided, or by granting a proxy and giving voting instructions by telephone or the internet. Instructions on how to vote your shares are located on your proxy card or on the voting instruction card provided by your broker.

              The officers and directors of Bonanza Creek appreciate and encourage stockholder participation. We look forward to seeing you at the Annual Meeting.

		Sincerely,
		Richard J. Carty President and Chief Executive Officer

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BONANZA CREEK ENERGY, INC.
410 17^th Street
Suite 1400
Denver, Colorado 80202

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders of Bonanza Creek Energy, Inc.:

              Notice is hereby given that the Annual Meeting of Stockholders of Bonanza Creek Energy, Inc. (the "Company") will be held at the Sheraton Denver Downtown Hotel, 1550 Court Place,410 17^th Street, Suite 220, Denver, Colorado 80202, on Thursday,Monday, June 6, 2013, 9:2016, 11:00 a.m. local time (the "2013"2016 Annual Meeting"). The 20132016 Annual Meeting is being held for the following purposes:

              1)  To elect the Class I directors named in this proxy statement to our board of directors;

              2)  To ratify the selection of Hein & Associates LLP as the Company's independent registered public accountant for 2013;2016;

              3)  To approve, on an advisory basis, the compensation of our named executive officers; and

              4)  To transact such other business as may properly come before the 20132016 Annual Meeting.

              These proposals are described in the accompanying proxy materials. You will be able to vote at the 20132016 Annual Meeting only if you were a stockholder of record at the close of business on April 29, 2013.22, 2016.

		By Order of the Board of Directors,
		Christopher I. HumberCyrus D. Marter IV Senior Vice President, General Counsel & Secretary

Denver, Colorado
April 30, 201327, 2016

YOUR VOTE IS IMPORTANT

              Please sign, date and promptly return the enclosed proxy card in the envelope provided, or grant a proxy and give voting instructions by telephone or the internet, so that you may be represented at the meeting.2016 Annual Meeting. Instructions are on your proxy card or on the voting instruction card provided by your broker.

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BONANZA CREEK ENERGY, INC.
410 17^th Street
Suite 1400
Denver, Colorado 80202

PROXY STATEMENT
20132016 ANNUAL MEETING OF STOCKHOLDERS

              The Board of Directors (the "Board") of Bonanza Creek Energy, Inc. ("we," "us," "our," "Bonanza Creek" or the "Company") requests your proxy for the 20132016 Annual Meeting of Stockholders (the "2013"2016 Annual Meeting"), which will be held on Thursday,Monday, June 6, 2013, 9:2016, 11:00 a.m. local time, at the Sheraton Denver Downtown Hotel, 1550 Court Place,410 17^th Street, Suite 220, Denver, Colorado 80202. Distribution of these proxy solicitation materials is scheduled to begin on or about May 3, 2013.2, 2016. By granting the proxy, you authorize the persons named in the proxy to represent you and vote your shares at the 20132016 Annual Meeting. Those persons will also be authorized to vote your shares to adjourn the 20132016 Annual Meeting from time to time and to vote your shares at any adjournments or postponements of the 20132016 Annual Meeting. If any other business properly comes before the stockholders for a vote at the 2016 Annual Meeting, your shares will be voted in accordance with the discretion of the holders of the proxy.

GENERAL INFORMATION

              If you attend the 20132016 Annual Meeting, you may vote in person. If you are not present at the 20132016 Annual Meeting, your shares may be voted only by a person to whom you have given a proper proxy. You may revoke the proxy in writing at any time before it is exercised at the 20132016 Annual Meeting by delivering to the Company's Secretary of the Company a written notice of the revocation, by submitting your vote electronically through the internet or by phone after the grant of the proxy or by signing and delivering to the Company's Secretary of the Company a proxy with a later date. Your attendance at the 20132016 Annual Meeting will not revoke the proxy unless you give written notice of revocation to the Secretary of the Company before the proxy is exercised or unless you vote your shares in person at the 20132016 Annual Meeting.

Stockholders of Record and Beneficial Owners

              Most of the Company's stockholders hold their shares through a broker, bank or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

              Stockholders of Record.    If your shares are registered directly in your name with the Company's transfer agent, you are considered the stockholder of record with respect to those shares, and proxy materials are being sent by our transfer agent directly to you by our agent.you. As a stockholder of record, you have the right to vote by proxy or to vote in person at the 20132016 Annual Meeting. The proxy materials include a proxy card or a voting instruction card for the 20132016 Annual Meeting.

              Beneficial Owners.    If your shares are held in a brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in "street name," and proxy materials will be forwarded to you by your broker or nominee. The broker or nominee is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker how to vote. The proxy materials should include a proxy card or a voting instruction card for the 20132016 Annual Meeting.

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Quorum and Voting

              Voting Stock.    The Company's common stock, par value $0.001 per share, is the only class of securities that entitles holders to vote generally at meetings of the Company's stockholders. Each share of common stock outstanding on the record date is entitled to one vote.

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              Record Date.    The record date for stockholders entitled to notice of and to vote at the 20132016 Annual Meeting was the close of business on April 29, 2013.22, 2016. As of the record date, 40,263,31649,621,879 shares of the Company's common stock were outstanding and are entitled to be voted at the 20132016 Annual Meeting.

              Quorum and Adjournments.    The presence, in person or by proxy, of the holders of a majority of the outstanding shares entitled to vote at the 20132016 Annual Meeting is necessary to constitute a quorum at the 20132016 Annual Meeting.

              If a quorum is not present, the chair of the meeting or a majority of the stockholders entitled to vote who are present in person or by proxy at the 20132016 Annual Meeting have the power to adjourn the 20132016 Annual Meeting from time to time, without notice other than an announcement at the 20132016 Annual Meeting, until a quorum is present. At any adjourned 20132016 Annual Meeting at which a quorum is present, any business may be transacted that might have been transacted at the 20132016 Annual Meeting as originally notified.

              Vote Required.    DirectorsThe directors will be elected (Item One) by the affirmative votea plurality of the holders of a pluralityvotes of the shares present, in person or by proxy, and entitled to vote on the election of the directors. Ratification of the selection of the Company's independent registered public accountant for 2016 (Item Two) and approval, on an advisory basis, of the compensation of the Company's named executive officers (Item Three) will require the affirmative vote of the holders of a majority of the shares present and entitled to vote with respect to the matter. An automated system will tabulate the votes.votes cast by proxy for the 2016 Annual Meeting, and the inspector of elections will tabulate votes cast in person at the 2016 Annual Meeting. Brokers who hold shares in street name for customers are required to vote shares in accordance with instructions received from the beneficial owners. Brokers are permitted to vote on discretionary items if they have not received instructions from the beneficial owners, but they are not permitted to vote (a "broker non-vote") on non-discretionary items absent instructions from the beneficial owner. Brokers do not have discretionary voting authority with respect toNon-discretionary items include the election of directors orand approval, on an advisory basis of the compensation of the Company's named executive officers. For ratification of the selection of the Company's independent registered public accountant, brokers will have discretionary authority in the absence of timely instructions from their customers. Abstentions and broker non-votes will count in determining whether a quorum is present at the 20132016 Annual Meeting. Broker non-votes will not have any effect on the outcome of voting on the director electionselection or the advisory vote on compensation of our named executive officers. For purposes of voting on the ratification of the selection of the Company's independent registered public accountant for 2016 and the advisory vote on compensation of our named executive officers, abstentions will be included in the number of shares voting and will have the effect of a vote against the proposal.

              Default Voting.    A proxy that is properly completed and submitted will be voted at the 20132016 Annual Meeting in accordance with the instructions on the proxy. If you properly complete and submit a proxy, but do not indicate any contrary voting instructions, your shares will be voted as follows:

•

FOR the nominees for director named in this proxy statement and their classification as Class I Directors, as indicateddirectors named in this proxy statement;



•

FOR the ratification of the selection of Hein & Associates LLP as the Company's independent registered public accountant for 2013;2016; and

Society of Certified Public Accountants.Global Quantitative Equity investment teams. Prior to Mr. Carty's 14 years at Morgan Stanley, he was a partner at Gordon Capital Corp for five years. We believe that Mr. Raih'sCarty's in-depth engagement with the Company since its formation in 2010, his experience in finance, accounting, and risk management, experience managing significant capital resources as an institutional investor in the oil and gas industry and experience on the boards of public companies, bring substantial leadership and skills to our Board.

Marvin M. Chronister was elected to our Board in March 2011 and appointed by the Board on January 31, 2014 to serve as the Company's Interim President and Chief Executive Officer from January 31, 2014 through November 10, 2014. Mr. Chronister has over 36 years' experience in the oil and gas industry. From 2006 to the present, Mr. Chronister has been an independent investor, energy finance and operations consultant and owner of Enfield Companies. From 2004 until 2006, Mr. Chronister was the Financial Operations Practice Director of Jefferson Wells International, Inc. He served as Managing Director of Corporate Finance for Deloitte & Touche from 1990 to 2003, with previous positions in the oil and gas industry and investment banking. He has also served on several public and private company boards and held leadership positions with numerous industry organizations. Mr. Chronister holds a Bachelor of Business Administration degree from Stephen F. Austin State University and has attended multiple executive development programs. We believe Mr. Chronister's qualification as an audit committee financial expert and accountinghis extensive operations and strategic experience in the oil and gas industry, as well as his broadfinance and accounting experience within the oil and gas industry, brings important and valuable skills to our Board.

              Michael R. StarzerKevin A. Neveu is a member ofwas elected to our Board andin March 2011. Mr. Neveu is our President and Chief Executive Officer. Mr. Starzer served as a member of the board of managers and President and Chief Executive Officer and a director of our predecessor, Bonanza Creek Energy, LLC ("BCEC"),Precision Drilling Corporation and has held these positions since BCEC's formationjoining the company in 2006.2007. Mr. StarzerNeveu has over 2934 years of experience in the oiloilfield services sector holding technical, marketing, management and gas industry.senior leadership positions over his career. Previously, Mr. Starzer has served in numerous positions in the oil and gas industry evaluating and developing oil, gas, electricity and geothermal resources. From 1983 to 1991, Mr. StarzerNeveu was employed by Unocal Corporation in various engineering and supervisory positions. From 1991 until 1993, Mr. Starzer served with the California State Lands Commission as Statewide Petroleum Reservoir Engineer and worked as a private consultant to the energy industry supervising operations and appraisals of oil, gas and geothermal resources on properties throughout the United States. In 1993, Mr. Starzer returned to Unocal Corporation as an Asset Manager, assisting them with the sale and management of certain assets. Starting in 1995, Mr. Starzer served as an Officer, Manager and Vice President of Berry Petroleum Corporation until co-founding Bonanza Creek Oil Company, LLC ("BCOC"),the Rig Solutions Group of National Oilwell Varco in Houston and has held senior management positions with it and its predecessor companies in London, Moscow, Houston, Edmonton and Calgary. Mr. Neveu currently serves on the board of directors of Finning International and is a predecessor, in 1999.former board member of Rig Net. He is also a member of the Advisory Board for The Heart and Stroke Foundation of Alberta and an advisor for the University of Calgary's School of Public Policy. Mr. StarzerNeveu is a director and member of the Executive Committee for the International Association of Drilling Contractors. Mr. Neveu holds a degree in Petroleum Engineering from the Colorado School of Mines and a MasterBachelor of Science degree inand is a graduate of the

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Faculty of Engineering Management fromat the University of Alaska andAlberta, is a registered professional engineer in petroleum engineering.the province of Alberta, and has also completed the Harvard Advanced Management Program in Boston, Massachusetts. We believe Mr. Starzer'sNeveu's extensive experience in the oil and gas industry, as well as his experience on the boards of directors and serving as management of public energy companies, bring substantial leadership and experience to our Board.

Jeff E. Wojahn was elected as a member of our Board on November 10, 2014. Mr. Wojahn brings over 30 years of oil and gas industry experience to our Board. From 2003 to 2013, Mr. Wojahn served as Executive Vice President of EnCana Corporation and was President of Encana Oil & Gas (USA) Inc. from 2006 to 2013. Beginning in 1985, Mr. Wojahn held senior management and operational positions atin Canada and the United States and has extensive experience in unconventional resource play development. He currently serves as a Strategic Advisory Board member for Morgan Stanley Energy Partners. We believe Mr. Wojahn's significant operational and development experience as an executive of other oil and gas companies brings essential skills and his knowledge regarding our business and operations bring important experience and leadershipperspectives to our company and our Board.

              Gary A. GroveAnthony G. Buchanon is a member of our Board and is our Executive Vice President—Engineering and Planning and Interim Chief Operating Officer. Mr. Grove joined BCOC in March 2003 and served as a member of the board of managers and aswas named Executive Vice President and Chief Operating Officer of BCEC. Mr. Groveon August 12, 2013. He joined the Company in August 2012 as Vice President—Rocky Mountain Engineering. He has over 30more than 31 years of experience in theexploration and production operations, including reservoir, completion and production engineering and unconventional oil and gas industry serving in reservoir engineering and management positions with Unocal Corporation and Nuevo Energyexploitation. Immediately prior to joining us. Mr. Grove graduated from Marietta CollegeBonanza Creek, he served as Production Operations Manager for Noble Energy, Inc. and was part of the Wattenberg Business Unit leadership team that was responsible for developing Noble's Wattenberg assets. Before that, he served in 1982 witha variety of management level engineering and operations roles for companies such as Rosetta Resources Inc. (from 2008-2010), Burlington Resources Inc. (now ConocoPhillips) (from 2004-2008), Trend Exploration Company and Mobil Exploration and Production (now ExxonMobil Corporation). He holds a Bachelor of Science degree in Petroleum Engineering. Mr. Grove is an active member with the Society of Petroleum Engineers and has served in various capacities for student and local chapters since 1979. We believe Mr. Grove's extensive experience in the oil and gas industry and his knowledge regarding our business and operations brings important experience and leadership to our Board.

Patrick A. Graham joined BCOC in November 2001, served as a Senior Vice President of BCEC and currently serves as our Executive Vice President—Corporate Development. From 1995 to 2001, Mr. Graham was employed by Berry Petroleum Company where he evaluated acquisition opportunities in California, the Rocky Mountain region and Canada. Mr. Graham gained experience working with major and independent oil companies while employed with Dowell Schlumberger from 1986 to 1995. Mr. Graham received his Bachelors of Science degree in Petroleum Engineering from Texas A&M University and has held various technical positions in Utah, Colorado, New Mexico, California and Alaska.

Christopher I. Humber has served as Senior Vice President, General Counsel and Secretary of the Company since January 1, 2012. Before joining us, Mr. Humber was a practicing attorney focusing on mergers and acquisitions and corporate finance matters for public and private companies, most recently as a partner with the law firm Kendall, Koenig & Oelsner PC in Denver, Colorado, where he served as our outside counsel since 2006. Prior to that, he was an associate with the law firm Hogan & Hartson LLP (now Hogan Lovells) in Denver, Colorado and with the law firm Arnold & Porter LLP in Washington, D.C. and McLean, Virginia. Mr. Humber graduated with high honors from Emory University School of Law where he was Editor-in-Chief of the Emory Law Journal and holds a B.A. in Biology from the University of Colorado at Boulder.

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Lynn E. Boone joined us as Senior Vice President—Reservoir Engineering in July 2012. Ms. Boone has worked in the oil and gas industry for 28 years and has significant experience and accomplishments in reserves determination and reporting, compliance, acquisitions and divestitures and corporate planning and reservoir engineering management. Ms. Boone supervises our reservoir engineering activities as it relates to the development and evaluation of oil and gas reserves and resources and is responsible for reserves estimating, reporting and compliance with federal securities regulation. Ms. Boone holds a BS in Chemical and Petroleum Refining Engineering from the Colorado School of Mines and a M.S. in Petroleum Engineering from the University of Oklahoma. Ms. Boone began her career at Unocal Corporation and has worked in lead engineering and reservoir engineering roles with the U.S. Geological Survey, HS Resources and Cody Energy. Most recently, she served as Senior Vice President—Planning and Reserves at Bill Barrett Corporation from 2003 to 2011. Ms. Boone is a co-founder of the Denver Reserves Roundtable Group established for the purpose of sharing "best practices" for reserves estimating and SEC reporting.Marietta College.

              Wade E. Jaques serves as the Company's Vice President and Chief Accounting Officer, Controller and Treasurer and performs the duties of principal financial officer.Officer. Mr. Jaques joined Bonanza Creek inon December 8, 2010 as its Controller, was promoted to Chief Accounting Officer in September 2011 and was elected Treasurera Vice President in MarchNovember 2012. Prior to joining Bonanza Creek, Mr. Jaques was the Controller and Assistant Corporate Secretary for Ellora Energy Inc., a Colorado based independent oil and gas company, from October 2005 until shortly after its merger with Exxon Mobil Corporation in August 2010. Prior to joining Ellora Energy, Mr. Jaques was an audit manager at Deloitte & Touche's Denver office serving oil and gas clients. Mr. Jaques holds both a Bachelor's and Master's degree in Accountancy from Utah State University and is a certified public accountant in Texas and Colorado.

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CORPORATE GOVERNANCE

              Bonanza Creek Energy, Inc. is an independent energy company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids-rich natural gas in the United States. Our oil and liquids-weighted assets are concentrated primarily in the Wattenberg Field in Colorado, (Rockywhich we have designated the Rocky Mountain region)region, and the Dorcheat Macedonia Field in southern Arkansas, (Mid-Continent region). Our management team has extensive experience acquiringwhich we have designated the Mid-Continent region. In addition, we own and operatingoperate oil producing assets in the North Park Basin in Colorado and the McKamie Patton Field in southern Arkansas. The Wattenberg Field is one of the premiere oil and natural gas propertiesresource plays in the United States benefiting from a low cost structure, strong production efficiencies, established reserves and significant expertise in horizontalprospective drilling opportunities, which allows for predictable production and fracture stimulation, which we believe contributes significantly to the developmentreserve growth.

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Corporate Governance Guidelines

              The Board believes that sound governance practices and policies provide an important framework to assist it in fulfilling its duty to stockholders. The Company's Corporate Governance Guidelines cover the following principal subjects:

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Qualifications and Responsibilities of Directors;



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Committees of the Board;



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Director Access to Management and Independent Advisors;



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Director Compensation;



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Director Orientation and Continuing Education;



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Chief Executive Officer Evaluation and Management Succession;



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Annual Performance Evaluations;



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The Company's Code of Ethics (a copy of the current "Code of Business Conduct and Ethics" is posted on the Company's website at www.bonanzacrk.com);Ethics;



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Term Limits for Directors; and



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Changed Circumstances.Circumstances of the Company's Directors.

              Our Corporate Governance Guidelines, including a copy of the current "Code of Business Conduct and Ethics," are posted on our website at www.bonanzacrk.com. Our Corporate Governance Guidelines are reviewed periodicallyannually and as necessary by our Nominating and Corporate Governance Committee, and any proposed additions to or amendments of the Corporate Governance Guidelines will beare presented to the Board for its approval.

              The NYSENew York Stock Exchange (the "NYSE") has adopted rules that require listed companies to adopt governance guidelines covering certain matters. The Company believes that theour Corporate Governance Guidelines comply with the NYSE rules.

Board Leadership

              Our Board has separated the chairmanChairman and chief executive officerChief Executive Officer roles. This leadership structure permits the chief executive officerChief Executive Officer to focus his attention on managing our business and allows the chairmanChairman to function as an important liaison between management and the Board, enhancing the ability of the Board to provide oversight of the Company's management and affairs. Our chairmanChairman provides input to the chief executive officerour Chief Executive Officer and is responsible for presiding over the meetings of the Board and executive sessions of the non-employee directors. In 2013,directors, which we expect that an executive session will be held at every regularly scheduled Board meeting.meeting in 2016. Our chief executive officerChief Executive Officer is responsible for setting the Company's strategic direction and for the day-to-day leadership performance of the Company. Based on the current circumstances and direction of the Company and the

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experienced membership of our Board, our Board believes that separate roles for our chairmanChairman and our chief executive officer,Chief Executive Officer, coupled with a majority of independent directors and strong corporate governance guidelines, is the most appropriate leadership structure for our Company and its stockholders at this time.

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Communications with the Board

              Stockholders or other interested parties can contact any director (including Mr. Carty,Watt, the Chairman of the Board), any committee of the Board, or our non-employee directors as a group, by writing to them at 410 17^th Street, Suite 1400, Denver, Colorado 80202, Attention: Secretary. All such communications will be forwarded to the appropriate member(s) of the Board. Comments or concerns relating to the Company's accounting, internal accounting controls or auditing matters will also be referred to members of the Audit Committee.

Director Independence

              The Company's standards for determining director independence require the assessment of our directors' independence each year.year and periodically as circumstances change. A director cannot be considered independent unless the Board affirmatively determines that he or shesuch director does not have any material relationship with management or the Company, that may interfere with the exercise of his or her independent judgment, including any of the relationships that would disqualify the director from being independent under the rules of the NYSE. The Board assesses the independence of each non-employee director and each non-employee nominee for director under the Company's guidelines and the independence standards of the NYSE. During 2012, the BoardNYSE and has determined that Messrs. Chronister, Neveu, Raih, Watt and Raih were independent, but thatWojahn are independent. As the Company's President and Chief Executive Officer, Mr. Carty wasis not considered an independent based on such standards. Upon his election to our Board in August 2012, the Board determined that Mr. Watt was independent.director.

              The NYSE rules require that allAll members of ourthe Company's Audit Committee, be independent within one year following the completion of our IPO. Under the applicable NYSE and SEC phase-in requirements, Mr. Carty served as a member of the Audit Committee until December 14, 2012. Effective December 14, 2012, Mr. Carty was replaced on the Audit Committee by Mr. Watt, who met the independence standards of the NYSE and SEC.

        During 2012, West Face Capital, Inc. beneficially owned approximately 53% of our company stock and, therefore, we were a "controlled company" under the listing standards of the NYSE and exempt from the NYSE's corporate governance requirements that all members of our Compensation Committee and Nominating and Corporate Governance Committee be independent.

        In January 2013, West Face Capital, Inc. sold 13,000,000 shares of our common stock and reduced its beneficial ownership from approximately 53% to approximately 20%. As a result, we are no longer a controlled company. In April 2013, our Nominating and Corporate Governance Committee and the Board determined that Mr. Carty was independent. Therefore, as of April 2013, all members of our Compensation Committee and Nominating and Corporate Governance Committee are considered independent, and we satisfy thethus satisfying NYSE listing standards.

              Our Board believes that individuals who serve as directors should have demonstrated notable or significant achievements in business, education or public service; should possess the requisite intelligence, education and experience to make a significant contribution to the Board and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the Company's stockholders. The following are qualifications, experience and skills for Board members which are important to the Company's business and its future:

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Leadership Experience—The Company seeks directors who demonstrate extraordinary leadership qualities. Strong leaders bring vision, strategic agility, diverse and global perspectives, and broad business insight to the Company. They demonstrate practical management experience, skills for managing change, and deep knowledge of industries, geographies, and risk management strategies relevant to the Company. They have experience in identifying and developing the Company's current and future leaders. The relevant leadership experience the Company seeks includes a past or current leadership role in a major public company or recognized privately held entity; a past or current leadership role at a prominent educational institution or senior faculty position in an area of study important or relevant to the Company; a past elected or appointed senior government position; or a past or current senior managerial or advisory position with a highly visible nonprofit organization.



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Independent Director Share Ownership Requirements
Finance Experience—The Company believes that all directors should possess an understanding of finance and related reporting processes. The Company also seeks directors who qualify as an "audit committee financial expert" as defined in the SEC's rules.



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Industry Experience—The Company seeks directors who have relevant oil and gas industry experience.

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Diversity of Backgrounds—Although the Board has not established any formal diversity policy to be used to identify director nominees, it recognizes that a current strength of the Board stems from the diversity of perspective and understanding that arises from discussions involving individuals of diverse backgrounds and experience. When assessing a Board candidate's background and experience, the Nominating and Corporate Governance Committee takes into consideration a broad range of relevant factors, including a candidate's ethnic status, gender, professional, cultural, political and geographic background.

              Our Board has adopted stock ownership guidelines for our independent directors to further align the interests of our independent directors with the interests of our stockholders. Independent directors are required to hold shares of our common stock with a value equal to five times the amount of the annual cash retainer paid to such director for service on our Board. Independent directors are required to achieve the applicable level of ownership within five years of the date on which such independent director was appointed or elected and began participating in our Long-TermAmended and Restated 2011 Long Term Incentive Plan (the "LTIP").

Table Upon reaching the required ownership level based on the then-current closing price of Contentsour common stock, independent directors are not required to accumulate any shares in excess of shares held as of the determination date, regardless of changes in the price of our common stock. All of our independent directors are in compliance with the stock ownership requirements other than Mr. Wojahn who has until 2019 to satisfy such requirement.

Financial Literacy

              While the Board oversees our risk management processes, with particular focus on the most significant risks we face, management is responsible for day-to-day risk management. We believe this division of Audit Committeeresponsibilities is the most effective approach for addressing the risks we face, and Designationthat the current Board leadership structure, with Mr. Watt serving as our Chairman of Financial Experts

the Board and Mr. Carty serving as our Chief Executive Officer, supports this approach by facilitating communication between management and the Board regarding risk management issues. We also believe that this design places the Board in a better position to evaluate the performance of management, more efficiently facilitates communication of the views of the independent directors and contributes to effective corporate governance. The Board evaluated the members of the Audit Committee for financial literacy and the attributes of a financial expert. The Board determinedrealizes, however, that each of the Audit Committee membersit is financially literatenot possible or desirable to eliminate all risk and that Mr. Raihappropriate risk-taking is an audit committee financial expert underessential in order to achieve the standards of the NYSE and SEC regulations.

Oversight of Risk Management
Company's objectives.

              Except as discussed below, the Board as a whole oversees the Company's assessment of major risks and the measures taken to manage such risks. For example:example, the Board:

•

the Board provides governance and oversight for the financial and commodity risks assumed by the Company and approves the policies and periodically reviews and discusses with the members of management the procedures and systems in place to identify, review and mitigate the Company's exposure to such risks;



•

the Board reviews the Company's commodity price risk and hedging strategy with executive management at least quarterly and provides oversight of the Company's hedging policy; and



•

the Board reviews management's capital spending plans, approves the Company's capital budget and requires that management present for Board review significant departures from those plans.

              The Company's Audit Committee is responsible for overseeing the Company's assessment and management of financial reporting and internal control risks, as well as other financial risks, such as the credit

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risks associated with counterparty exposure. Management and the Company's independent registered public accountants report regularly to the Audit Committee on those subjects.

              The Company's Compensation Committee periodically reviews our compensation programs to ensure that they do not encourage excessive risk-taking and reports its significant findings to the full Board.

Meetings and Committees of Directors

              TheDuring 2015, the Board held 12 meetings during 2012,eight regular and its non-employeefour special meetings. Our independent directors metroutinely meet in executive session immediately before or after each regularly scheduled meeting of the Board or as otherwise deemed necessary and met nine times during 2012.2015. During 2015, each of our directors attended more than 90% of the Board meetings and no director attended fewer than 75% of the total number of meetings of the Board and his appointed committee meetings.

              The Board has five standing committees:following table identifies the Audit Committee,members of each committee and sets forth the Compensation Committee, the Nominating and Corporate Governance Committee, the Reserve Committee and the Environmental Safety and Regulatory Compliance Committee.number of meetings held in 2015:

Name of Director		Audit Committee		Compensation Committee		Nominating & Corporate Governance Committee		Environmental, Health, Safety and Regulatory Compliance Committee		Reserves Committee
Independent Directors
Marvin M. Chronister
Kevin A. Neveu
Gregory P. Raih
James A. Watt
Jeff E. Wojahn
Inside Director
Richard J. Carty
Number of Meetings in 2015		6		7		4		2		2

Legend
Chairman of the Board
Chairperson
Member
Financial Expert

              Each standing committee has adopted a formal charter detailing such committee's duties, functions and responsibilities. The charters for the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are posted on the Company's website, www.bonanzacrk.com, and such charters are drafted in a manner consistent with the regulations of the SEC and standards of the NYSE.

        In addition The information on our website is not, and shall not be deemed to the five standing committees, the Board formedbe, a Special Litigation Committee in July 2011 to conduct an investigationpart of allegations made by Frank H. Bennett, a co-manager of BCOC, against our President and CEO, Michael Starzer. The Board has also established a Key Employee Search Committee on anad hoc basis, which meets periodically as necessary, to assist management with searches for key membersthis proxy statement or incorporated herein or into any of our management team.

        During 2012, each director attended at least 90% ofother filings with the meetings of the Board held after such director's appointment. All directors attended all meetings of each committee on which such directorSEC.

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served held after such director's appointment. The table below provides information regarding 2012 meetings of the Board and its committees.

Audit Committee

        The members of our Audit Committee are Messrs. Raih (Chairman), Chronister and Watt.              Our Board has determined all three members of the Audit Committee to be financially literate and independent under the standards of the NYSE and SEC regulations and has also determined that Mr.each of Messrs. Chronister, Raih and Watt qualifies as an audit"audit committee financial expert.expert" as defined in SEC regulations. The Audit Committee oversees, reviews, acts on and reports on various auditing and accounting matters to our Board, including: the selection of our independent registered public accountants, the scope of our annual audits, fees to be paid to our independent accountants, the performance of our independent accountants and our accounting and reporting practices and processes. The Board has delegated to the Audit Committee all authority of the Board as may be required or advisable to fulfill the purposes of the Audit Committee as set forth in the Audit Committee's charter. The Audit Committee may form and delegate authority to subcommittees comprised of members of the Audit Committee. In addition, the Audit Committee oversees our compliance programs relating to legal and regulatory requirements and the Company's assessment and management of financial reporting and internal control risks. Additional information regarding the functions performed by the Audit Committee is set forth in the "Audit"Audit Committee Report"Report" included herein.

        Mr. Raih also attends all meetings of the Company's Disclosure Committee, which is comprised of Company employees, in order to assist our principal executive officer and principal financial officer in ensuring that all disclosures made by the Company are (i) accurate, complete and fairly present the Company's financial condition and results of operations in all material respects and (ii) made on a timely basis as required by applicable laws and stock exchange requirements.

Compensation Committee

        The members of our Compensation Committee are Messrs. Watt (Chairman), Carty and Neveu. Mr. Watt replaced Mr. Carty as Chairman of the Compensation Committee effective April 19, 2013. The Board has determined that all current members of our Compensation Committee are independent under SEC regulations and the standards of the NYSE.

              The Compensation Committee reviews and approves the goals and objectives relevant to the Company's chief executive officer's compensation, and, based on the Compensation Committee's own evaluation of the chief executive officer's performance in light of approved goals and objectives, recommends to the independent directors of the Board for their approval the total compensation of the chief executive officer. In addition,Chief Executive Officer based on the Compensation Committee annually reviewsCommittee's evaluation of the chief executive officer'sChief Executive Officer's performance in light of goals and objectives set and approved by the Nominating and Corporate Governance Committee. The Chief Executive Officer makes compensation recommendations regarding the compensation offor all other executive officers, and recommends the compensation, including salary and annual cash and equity incentive compensation, of such officers to the Board forCompensation Committee. The Compensation Committee then reviews such recommendations and makes its approval.own compensation recommendations to the Board. The Compensation Committee also oversees our compensation and benefit plans. The Board has delegated to the Compensation Committee all authority of the Board as may be required or advisable to fulfill the purposes of the Compensation Committee as set forth in the Compensation Committee's charter. The Compensation Committee may form and delegate authority to subcommittees comprised of members of the Compensation Committee. The Compensation Committee has sole authority to retain and dismiss compensation consultants and other advisors that provide objective advice, information and analysis regarding executive and director compensation. These consultants report directly to and may meet separately with the Compensation Committee and may consult with the Compensation Committee Chairman between meetings. Meetings may, at the discretion of the Compensation Committee, include members of the Company's management, other

members of the Board, consultants or advisors, and such other persons as the Compensation Committee or its Chairman may determine. Additional information regarding the functions performed by the Compensation Committee is set forth in the "Compensation"Compensation Discussion and Analysis"Analysis" section and the "Compensation"Compensation Committee Report"Report" included herein.

Nominating and Corporate Governance Committee

        The members of our Nominating and Corporate Governance Committee are Messrs. Neveu (Chairman), Carty and Raih. Effective April 19, 2013, Mr. Chronister stepped off the Nominating and Corporate Governance Committee and Mr. Neveu joined the Nominating and Corporate Governance Committee and replaced Mr. Carty as its chairman. Our Board has determined that all current members of the Nominating and Corporate Governance Committee are independent under SEC regulations and the standards of the NYSE.

              The Nominating and Corporate Governance Committee identifies, evaluates and recommends qualified nominees to serve on our Board, develops and oversees our internal corporate governance processes and maintains a management succession plan. Our Board, through itsthe Nominating and Corporate Governance Committee, evaluates itself annually. The Nominating and Corporate Governance Committee endeavors to achieve an overall balance of diversity of experiences, skills, attributes and viewpoints among our directors. It does not discriminate based upon race, religion, sex, national origin, age, disability, citizenship or any other legally protected status. The Nominating and Corporate Governance Committee is also primarily responsible for reviewing and approving the goals and objectives relevant to the Company's Chief Executive Officer's performance and coordinating the annual evaluation of the Chief Executive Officer's performance based on such goals and objectives. The Board has delegated to the Nominating and Corporate Governance Committee all authority of the

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Board as may be required or advisable to fulfill the purposes of the Nominating and Corporate Governance Committee as set forth in the Nominating and Corporate Governance Committee's charter. The Nominating and Corporate Governance Committee may form and delegate authority to subcommittees comprised of members of the Nominating and Corporate Governance Committee. Additional information regarding the functions performed by the Nominating and Corporate Governance Committee is set forth in the "Other Matters—"Other Matters—Stockholder Proposals; Identification of Director Candidates"Candidates" section included herein.

Reserve Committee

              The members of the Reserve Committee are Messrs. Chronister (Chairman), Carty and Watt. Our ReserveReserves Committee oversees, reviews, acts on and reports to the Board on matters regarding our reserve engineering reports and reserve engineers. Our ReserveReserves Committee is responsible foroversees (i) the integrity of our reserve reports, (ii) determinations regarding the qualifications and independence of our independent reserve engineers, (iii) the performance of our independent reserve engineers and (iv) our compliance with certain legal and regulatory requirements.requirements relating to reserve reporting.

Environmental Safety and Regulatory Compliance Committee

              The members of the Environmental Safety & Regulatory Compliance ("ES&RC") Committee are Messrs. Chronister (Chairman), Grove and Neveu. Our ESEHS&RC Committee's primary purpose is to assist our Board in fulfilling our responsibilities to provide global oversight and support of the Company's environmental, health, safety and regulatory and compliance policies, programs and initiatives. In carrying out its responsibilities, the ESEHS&RC Committee reviews the status of our health, safety and environmental performance, including processes monitoring and reporting on compliance with internal policies and goals and applicable laws and regulations.

Special Litigation Committee

        In July 2011, our Board formed a Special Litigation Committee comprised of three non-employee directors—Messrs. Carty (Chairman), Chronister and Neveu—to conduct an investigation of the allegations of Frank H. Bennett, a co-manager of BCOC, against Michael R. Starzer, our President and Chief Executive Officer. During 2011, the Special Litigation Committee concluded that the allegations against Mr. Starzer were unsubstantiated and lacked merit. This matter was sent to arbitration in July 2011, and in November 2012, an arbitration panel found in favor of Mr. Starzer on all of Mr. Bennett's claims.

              The Board encourages all directors to attend all annual meetings of stockholders, if practicable. All of our directors attended last year's annual meetingthe 2015 Annual Meeting of stockholders.Stockholders (the "2015 Annual Meeting"). We anticipate that all of our directors will attend the 20132016 Annual Meeting.

Stockholder Rights

        We do not have a "poison pill" or stockholder rights plan. If we were to adopt a stockholder rights plan, the Board would seek prior stockholder approval of the plan unless, due to timing constraints or other reasons, a majority of independent directors of the Board determines that it would be in the best interests of stockholders to adopt a plan before obtaining stockholder approval.

        Any stockholder of the Company who desires to submit a proposal for action at the 2014 annual meeting of stockholders and wishes to have such proposal included in the Company's proxy materials, must submit such proposal to the Company at its principal executive offices no later than January 3, 2014, unless the Company notifies the stockholders otherwise.

        The vote of stockholders required to amend our certificate of incorporation and bylaws is a simple majority vote.

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COMPENSATION DISCUSSION AND ANALYSIS

              This compensation discussion and analysis ("CD&A") provides a general description of our executive compensation program and information about its various components. This CD&A is intended to place in perspective the information contained in the executive compensation tables that follow this discussion.

Executive Summary

              Throughout this discussion, theThe following individuals are referred to as the "named executive officers" for fiscal year 2015 and are included in the Summary Compensation Table:

•

Michael R. Starzer,Richard J. Carty, President and Chief Executive Officer;



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Gary A. Grove,Anthony G. Buchanon, Executive Vice President—EngineeringPresident and Planning and Interim Chief Operating Officer;



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Patrick A. Graham,William J. Cassidy, the Company's former Executive Vice President—Corporate Development;President and Chief Financial Officer;



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Christopher I. Humber, Seniorthe Company's former Executive Vice President, General Counsel and Secretary;



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Wade E. Jaques, Vice President, Chief Accounting Officer, Controller and Treasurer; and



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James R. Casperson, former ExecutiveWade E. Jaques, Vice President and Chief FinancialAccounting Officer.

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              In March 2016, as part of a corporate reorganization and total workforce reduction, Messrs. Cassidy and Humber departed the Company. Further discussion regarding these executive departures and payments made in connection with terminations of their employment agreements can be found under "2015 and Selected 2016 Compensation Actions—Executive Departures."

              Although the information presented in this CD&A focuses on our fiscal year 2012,2015, we also describe compensation actions taken before or after fiscal year 20122015 to the extent such discussion enhances the understanding of our executive compensation disclosure.

              Strong Operating2015 Financial and FinancialOperational Results.    DespiteBeginning in 2014, the uncertainty surrounding the global economyoil and continued volatilitynatural gas industry began to experience a sharp decline in commodity prices. Caused in part by global supply and demand imbalances and an oversupply of natural gas in the United States, the pricing declines have extended through 2015 and into 2016 and the timing of any rebound is uncertain. Low commodity prices in 2015 resulted in impairments and a reduction of our Company achieved strong operatingrevenues, profitability, cash flows, proved reserve values and stock price.

              Our 2015 financial and operational results, for 2012, including the following:some of which were impacted by depressed oil, natural gas and natural gas liquid ("NGL") prices, included:

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Increased net income to $46.5Total liquidity of $405.3 million (including approximately $44.6 million from continuing operations),at December 31, 2015, consisting of year-end cash balance plus funds available under our revolving credit facility, as compared with $12.7$544.6 million at December 31, 2014;



•

Cash operating costs, which consist of lease operating expense, severance and ad valorem taxes, and the cash portion of general and administrative expense, per barrel decreased by $6.80 per barrel of oil equivalent ("Boe") to $14.61 per Boe in 2015 from $21.41 per Boe in 2014;



•

Rocky Mountain region drilling and completion costs decreased 29% from 2014 for standard reach lateral wells;



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Lease operating expense per Boe was down 12% from 2014 due to stricter cost controls across all areas and the Company's decision to temporarily shut down the McKamie Patton Plant in the Mid-Continent region;



•

Cash flows provided by operating activities of $95.0 million, as compared with $327.7 million in 2014;



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Net loss of $745.5 million, as compared with $20.3 million net income (including approximately $14.6$17.0 million from continuing operations) for 2011;2014;



•

Increased cash flows provided by operating activitiesImpairment of oil and gas properties of $740.5 million due to $156.9 million in 2012 from $57.6 million in 2011;



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Incurred capital expenditures of $340.9 million, as compared with $165.5 million in 2011;depressed commodity prices;



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Increased production from continuing operations by 121%over 20% to 3,387.9 MBoeapproximately 28,272 Boe per day, slightly lower than the Company's expectations for 2015;



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Increased sales volumes by 20% to 10.3 million gross barrels of oil equivalents ("MMBoe") in 2012,2015 from 8.6 MMBoe in 2014, with oil and NGL production representing 73%76% of total production;



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Decreased average production costs per Boe by 24% to $9.06 per Boe in 2012 from $11.90 per Boe in 2011;sales volumes (excludes discontinued operations);



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Increased proved reserves 21% to 53101.3 MMBoe as of December 31, 2012;2015 from 89.5 MMBoe as of December 31, 2014, an increase of 13%;



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Drilled our first horizontal Codell, Niobrara "C" Bench and extended reach Niobrara "B" Bench wells in the Wattenberg Field;



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Increased the amountproved developed producing reserves to 49.7 MMBoe as of our credit facilityDecember 31, 2015, an increase of 26% from $300 million to $600 million and our borrowing base from $245 million to $325 million;



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Completed a bolt-on acquisition in the Wattenburg Field for $57 million, payable over four years, to enhance our existing operations and capitalize on our technical advantage in the field;



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Sold non-core properties in California to focus on the Wattenburg Field in the Rocky Mountains and the Dorcheat-Madeconia field in Arkansas;December 31, 2014;

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Completed an expansion ofDrilled 84 and completed 95 gross wells within our gas processing facilities in Arkansas, expandingRocky Mountain region and drilled 24 and completed 21 gross wells within our total processing capacity to approximately 40 MMcf per day;Mid-Continent region during 2015;



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Recruited key finance and other corporate staff and built the necessary infrastructure to focus on safe, reliable and efficient business operations;



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Generated total shareholder returns (based on share price appreciation during 2012)Executed upon produced undeveloped reserve conversions at a rate of 122%16%;



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Amended certain marketing contracts resultingManaged capital expenditures of approximately $404.2 million ($16.0 million lower than our mid-year guidance of $420.0 million), as compared with $650.8 million in better wellhead realizations;2014, which resulted in average capital efficiency for produced developed producing reserves of $16.00 per Boe, exceeding the Company's 2015 expectations;



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Improved completion techniquesTogether with a third-party midstream entity, completed pipeline infrastructure that allowed for connectivity in our east and reduced cycle times from spud to spud horizontal wells;west legacy acreage in the Wattenberg Field relieving line pressure constraints and allowing more operational flexibility; and



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Became Sarbanes Oxley compliantGenerated a total shareholder return percentile ranking (based on share price during 2015 as compared to our first year as a public company, successfully establishing, implementing2013, 2014 and testing internal controls2015 peer groups) of 55.6%, 45.5% and documenting numerous processes during 2012.15.4%, respectively.

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              2016 Outlook and Business Strategies.    Despite the current depressed commodity pricing environment, our management is committed to preserving value by maximizing the cash flows from our existing production, optimizing the Company's liquidity position and positioning existing leasehold for increased development activity when increased commodity prices are observed. Business strategies for 2016 include:

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              Features of Our Compensation Program.Program in 2015.    We strive to create a compensation program that encourages long-term value creation by tying individual compensation to the attainment of our annual performance targets and the long-term performance of our stock while acknowledging and fostering the unique qualifications, skills, experience and responsibilities of each individual. Key features include:

        The following table summarizes the key features of our executive compensation program.Practices that We Engaged in or Allowed in 2015

Best Practices in Our Executive Compensation Program

ü

Pay for Performance—Our executives' total compensation is substantially weighted on performance-based pay. Our annual cash incentive awards are based on performance against key financial, operational and strategic metrics and individual performance against pre-set objectives.



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Robust Stock Ownership—We have adopted robust stock ownership guidelines for our executives and directors.



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External Benchmarking—Our Compensation Committee reviews competitive compensation data based on an appropriate group of exploration and production peer companies prior to making annual compensation decisions.



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Double-Trigger Equity Acceleration upon a Change in Control—Under our new Executive Change in Control and Severance Plan, vesting acceleration of equity incentives following a change in control only occurs if the employee is terminated within 18 months following a change in control.



ü

Independent Compensation Consultant—We have engaged an independent executive compensation advisor who reports directly to the Compensation Committee and provides no other services to the Company.



ü

Review of Total Compensation—Our Compensation Committee reviews spreadsheets of total compensation prior to making annual executive compensation decisions.



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Mitigation of Undue Risk—We conduct a risk assessment annually to carefully consider the degree to which compensation plans and decisions affect risk taking. We do not believe that any of the compensation arrangements in place are reasonably likely to have a material adverse impact on the Company.

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Practices that We DoDid Not Engage in or Allow
in 2015

×

No Excise Tax Gross-Ups—Neither our new Executive Change in Control and Severance Plan nor our employment agreements provide for excise tax gross-ups.



×

No Hedging or Derivative Transactions in Company Stock—We prohibit our executives from engaging in any short-term trading, short sales, option trading and hedging transactions related to our common stock. We also prohibit our executives from purchasing our common stock on margin.

				No Excise Tax Gross-Ups—Neither our Severance Plan nor our employment agreements provide for excise tax gross-ups.
				No Repricing or Backdating—Our LTIP prohibits the repricing, backdating or buyouts of stock options or stock appreciation rights.
				No Hedging or Derivative Transactions in Company Stock—We prohibit our executives from engaging in any short-term trading, short sales, option trading or hedging transactions related to our common stock. We also prohibit our executives from purchasing our common stock on margin.
				Minimal Perquisites—We offer minimal perquisites to the Company's executives, few of which are not offered to all of the Company's employees. The Company believes executive salary and short-term incentive program ("STIP") payments, as well as LTIP grants, fully compensate our executives.

              Compensation Committee Consideration of 20122015 Stockholder Advisory VotesVote on Our Compensation Program.    Our Compensation Committee is continuously mindful of our stockholders' views on executive compensation. We believe our stockholders' strong support of our executive compensation program at our 20122015 Annual Meeting of Stockholders reaffirmed our compensation program. At our 20122015 Annual Meeting, ninety-nineapproximately seventy five percent (99%(75%) of the advisory votes cast on the question of whethervoted to approve our named executive compensation voted in favor of approving it, and (94%) of the advisory votes cast on the question of the frequency with which we should include advisory proposals regarding executive compensation voted to have such advisory votes every year. In light of these voting results, theofficer compensation. The Company determined that it will hold an advisory vote on executive compensation every year until the next required advisory vote with respect to the frequency of advisory votes on executive compensation, which will occur no later thanat the Company's annual meeting of stockholders in 2018.

              Recent ChangesHighlights of 2015 Compensation Actions.    As a result of depressed oil and gas commodity prices, discussions with our investors and ongoing deliberations by our Compensation Committee (with input from the Compensation Consultant), we made changes to our executive compensation program in 2015. The table below summarizes key actions taken in 2015:

              2016 Compensation Program.    Our Board and Compensation Committee remainsremain focused on structuring our compensation program to ensure proper alignment of pay with performance. During 2012As the Board and the first quarter

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Compensation Committee continue to evaluate the impact of the severely depressed market conditions on the Company, the only decision made to date with respect to 2016 compensation is that relating to base salary. Our Board and the Compensation Committee have decided to keep base salaries for the named executive officers at their 2015 levels with no increases. No decisions have yet been made regarding our 2016 STIP metrics or our long-term incentive compensation, however, we made a number ofexpect to make changes to our executivelong-term incentive compensation program includingin 2016 due to the adoptionlimited number of shares available under our LTIP and the following:

•

stock ownership guidelines for our independent directors and executive officers, to further align their interests with the interestsdecreased value of our stockholders;share price as compared to 2014 and 2015. See "



•

a short-term incentive program based on key one-year financialCompensation Discussion and operational metrics and achievementAnalysis—Securities Authorized for Issuance Under Equity Compensation Plans" for more information regarding the number of strategic goals that drive long-term stockholder value;



•

an Executive Changesecurities available under our LTIP as of December 31, 2015. The Compensation Committee expects to make such compensation decisions in Control and Severance Plan and a related new form of employment agreement, with a double-trigger severance payment on a change in control; andsecond quarter 2016.



•

a Performance Share Agreement, which provides vesting of performance shares only upon the achievement of certain specified performance goals and under which 25% of our executives' 2013 LTIP grants were granted.

Compensation Program Philosophy and Objectives

              At Bonanza Creek, we view our employees as an investment for the future. We invest in our people for the future opportunity to continue to grow our business and deliver more value to our stockholders. The objectives of our compensation program are:

•

to attract, retain and motivate the most qualified individuals in the oil and gas industry whom we can identify and recruit;



•

to provide total compensation that aligns compensation levels with performance and that is flexible enough to respond to changing market conditions and that also aligns compensation levels with performance;conditions; and



•

to align the interests of our executives with our stockholders' interests.

              We design our compensation program to reward employees for performance that creates stockholder value, in that incentive compensation is only earned by successfully implementing our long-term strategy andor by achieving our short-term

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goals. We strive to create aOur compensation program, that rewards performance while acknowledgingincluding review of benefits and fostering the unique qualifications, skills, experience and responsibilities of each individual.perquisites, is reviewed by our Compensation Committee annually.

Executive Compensation Risk

              The Compensation Committee has designed our short-2015 short-term and long-term compensation programs with features that reduce the likelihood of excessive risk-taking, including a balancedan appropriate mix of cash and equity and short-short-term and long-term incentives, caps on short-term bonus program payouts, an appropriate balanceweighting of fixed and at-risk compensation components, an appropriatea balance of operating, financial and financialstrategic execution performance measures, significant stock ownership requirements for officers, extended vesting schedules on equity grants caps on incentive awards and prohibitions on engaging in derivative transactions in our common stock. We do not believe that our current or proposed compensation policies and practices encourage excessive or unnecessary risk-taking and have determined that risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on us. We do not believe that our current or proposed compensation policies and practices encourage excessive or unnecessary risk-taking.

Setting Executive Officer Compensation

              Role of Our Board and Compensation Committee.    Our Compensation Committee (i) oversees our compensation programs on behalf of our Board; (ii) is responsible for proposing programs for approval by our Board that attract, retain and motivate qualified executive-level talent; (iii) monitors our compensation programs and strives to ensure that the total compensation paid to our executive officers is fair, reasonable and competitive with thattotal compensation provided to executive officers serving in similar roles and with similar responsibilities in other U.S. publicly traded energy companies; and (iv) makes proposals to our independent directors regarding the compensation of our chief executive officer.Chief Executive Officer. Our chief executive officerChief Executive Officer makes proposals to our Compensation

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Committee regarding the compensation of our other executive officers. The Compensation Committee has the sole authority to retain, amend the engagement with and terminate any compensation consultant to be used to assist in the evaluation of director or executive officer compensation. The Compensation Committee has sole authority to approve the Compensation Consultant'scompensation consultant's fees and other retention terms and has authority to cause the Company to pay the fees and expenses of the compensation consultant. Following receipt and review of compensation recommendations from our Compensation Consultant.Committee, the Board, together with the Compensation Committee, approves executive officer compensation.

              Role of the Compensation Consultant.    The Compensation Committee first engagedhas selected Longnecker & Associates (the "Compensation Consultant") in 2011 and again engagedto serve as a consultant to the Compensation ConsultantCommittee on compensation-related issues for 2012. Our Compensation Committee continues to believe it is beneficial to have an independent third-party analysis to assisteach year since the Company's initial public offering in evaluating and setting executive compensation.2011. Our Compensation Committee chose the Compensation Consultant because our Compensation Committee believes the Compensation Consultant has extensive experience in providing executive compensation advice, including specific experience in the oil and gas industry. TheOur Compensation Committee continues to believe it is beneficial to have an experienced, independent third party assist it in evaluating and setting executive compensation. On an annual basis and when otherwise required, the Compensation Consultant providedprovides our Compensation Committee with an analysis of our executive compensation programs, including total direct compensation comprised of base salary, annual incentives and long-term incentive compensation, in order to assess the competitiveness of our programs and to provide conclusions and recommendations. TheAdditionally, the Compensation Consultant attends meetings with the Compensation Committee and the Board, reviews Company public disclosures and serves as a resource for the Chairman of our Compensation Committee on an as-needed basis. Each year, in making a determination to retain the Compensation Consultant, the Compensation Committee assesses the independence of the Compensation Consultant pursuant to SEC rules and considers, among other things, whether the Compensation Consultant provides any other services to us, the policies of the Compensation Consultant that are designed to prevent any conflict of interest between the Compensation Consultant, the Compensation Committee and us, any personal or business relationships between the Compensation Consultant and a member of the Compensation Committee or one of our executive officers and whether the Compensation Consultant owns any shares of our common stock. Based, in part, on representations made by the Compensation Consultant, the Compensation Committee has concluded that the Compensation Consultant does not provide to ushave any services or advice on matters unrelated to executive and non-employee director compensation and reports to and takes direction from our Compensation Committee. Our Compensation Committee has determined thatconflicts of interest in the advice provided by the Compensation Consultant relating to executive compensation was free from any relationships that could impair the professional advice or compromise the integrityrepresentation of the information, data, conclusions or recommendations provided to our Compensation Committee. While the Compensation Consultant makes recommendations to our Compensation Committee on compensation, our Compensation Committee and Board make and implement compensation decisions and have full discretion to act and implement compensation decisionsdo so independent of the Compensation Consultant's recommendations. The Compensation Committee also has the right to terminate the services of the Compensation Consultant and appoint a new compensation consultant at any time. For fiscal 2012,2015, our Compensation Committee took into consideration the discussions, guidance and compensation studies produced by the Compensation Consultant to make compensation decisions.

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              Competitive Benchmarking and Peer Group.    Our Compensation Committee considers competitive industry data in making executive pay determinations. In 2011, our Compensation Committee decided to maintainFor 2015, as a formal peer group for compensation purposes. For 2012, in viewresult of evolving industry and competitive conditions, the Compensation Consultant proposed certain revisions to the peer group companies for our Compensation Committee's review. After discussions with the Compensation Consultant and reviewing the Compensation Consultant's recommendation of a peer group based on companies with annual revenue, assets, net income, market capitalization and growth profileprofiles similar to ours, taking into account geographic footprint and employee count and location, our Compensation Committee revised the composition of the peer group (the "2015 Peer Group") for determining compensation levels and performance stock units in 20122015 to include the following companies:

​BONANZA CREEK ENERGY, INC.2016 Proxy Statement

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Name		Ticker		Revenue ($MM)				Market Capitalization ($MM)				Enterprise Value ($MM)
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Bill Barrett Corporation		BBG		338				196				871
Carrizo Oil & Gas, Inc.		CRZO		623				1,725				2,938
Diamondback Energy, Inc.		FANG		592				4,469				5,177
Gulfport Energy Corporation		GPOR		709				2,661				3,495
Halcon Resources Corporation		HK		990				154				3,449
Newfield Exploration Co.		NFX		2,062				5,323				7,785
Northern Oil and Gas, Inc.		NOG		275				244				1,088
PDC Energy, Inc.		PDCE		631				2,143				2,785
QEP Resources, Inc.		QEP		2,480				2,369				4,212
Rex Energy Corporation		REXX		228				59				846
Rosetta Resources, Inc.		ROSE		—				—				—
SM Energy Company		SM		1,514				1,338				3,856
Synergy Resources Corporation		SYRG		155				896				840
WPX Energy, Inc.		WPX		1,888				1,581				5,083
25th Percentile				331				220				979
Median				631				1,581				3,449
75th Percentile				1,701				2,515				4,647
Bonanza Creek Energy, Inc.		BCEI		546				262				1,126
BCEI Percentile Rank				34	%			29	%			29	%

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•*

Approach Resources Inc.;



•

Carrizo Oil & Gas, Inc.;



•

Gulfport Energy Corporation;



•

Kodiak Oil & Gas Corp.;



•

Magnum Hunter Resources Corp.;



•

Oasis Petroleum Inc.;



•

PDC Energy, Inc.;



•

Resolute Energy Corporation;



•

Swift Energy Company;Data source—Bloomberg. Revenue, market capitalization (total value of issued and



•

Venoco, Inc. outstanding shares) and enterprise value (market capitalization plus outstanding debt, minority interests and preferred shares but excluding cash and cash equivalents) as of December 31, 2015.

              The Compensation Committee's annual review of the Company's peer group resulted in the removal of Brigham Exploration Company, as it was acquiredEPL Oil & Gas, Inc. and no longer operatedKodiak Oil & Gas Corp. as a separate public company.result of their respective corporate acquisitions. Additionally, four former peers including Approach Resources, Inc., Goodrich Petroleum Corporation, Resolute Energy Corporation and Swift Energy Company, were removed as a result of the application of a market capitalization filter targeting companies with market capitalizations closely aligned with the then-current market capitalization and enterprise value of the Company. The Compensation Committee also removedadded six companies to the Company's 2015 Peer Group that did not(i) fit our geographic footprint, employee count or growth profile (Endeavor International Corporation, Contango Oil and Gas Company and GeoResources, Inc.) or with significantly lowerwithin the Company's market capitalization (PetroQuest Energy, Inc.filter, (ii) were over two years past their initial public offering, (iii) exercised similar core competencies and (iv) in two circumstances, were considered local hiring competitors. These new peer companies for 2015 included: Halcon Resources Corporation, Newfield Exploration Co., Ram Energy Resources and Warren Resources, Inc.) to replace them with the following companies, which are similarly sized to us and thus more appropriate with respect to executive compensation benchmarking: ApproachQEP Resources, Inc., Carrizo Oil & Gas, Inc., Kodiak Oil & Gas, Magnum Hunter Resources Corp., Petroleum Development Corporation, SwiftSM Energy Company, Synergy Resources Corporation and Venoco,WPX Energy, Inc.

              The Compensation Consultant compiled compensation data for the peer group2015 Peer Group from a variety of sources, including proxy statements and other publicly filed documents, and also compiled published survey compensation data from multiple sources, including the Economic Research Institute, Mercer and Towers Watson. The compensation of our executive officers and the Company's total shareholder returns for purposes of determining awards of performance stock units was then compared with this 2015 Peer Group and survey data.

              Utilizing data obtained from the Compensation Consultant, we establish formal compensation standards for our executive officers using compensation levels at or near the market midpoint, or 50^th percentile, as a guideline or

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starting point, and adjust such benchmarkbenchmarks as appropriate for individual considerations such as experience, performance, tenure and job responsibilities. The Compensation Consultant determines the market benchmarkbenchmarks by the average of (i) compensation data for our current peer group and (ii) compensation data from published surveys in our industry. Notwithstanding the 50^th percentile benchmarking, the 2015 targeted total direct compensation of our named executive officers was between the 25^th and 50^th percentile of the 2015 Peer Group and survey data.

              Role of CEO and Other Executive Officers in Determining Executive Compensation.    The Compensation Committee, after reviewing the information provided by the Compensation Consultant and considering other factors, determines each element of compensation for our chief executive officer.assessed against the Company's rigorous goals. When making determinations about each element of compensation for the other executive officers, the

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Compensation Committee also considers recommendations from our chief executive officer.Chief Executive Officer. Additionally, at the Compensation Committee's request, our executive officers may assess the design of, and make recommendations related to, our compensation and benefit programs, including recommendations related to the performance measures used in our incentive programs. The Compensation Committee is under no obligation to use these recommendations.recommendations and is conscious of the need for the evaluation and incorporation of an effective independent and stockholder-focused compensation review process.

Elements of Our Compensation and Why We Pay Each Element

              Our Compensation Committee, assisted by the Compensation Consultant and executive management, continues to develop compensation programs that provide our executive officers with an overall compensation package suitabletailored to executives of a similarly situated publicly traded company,our Company, subject to ratification and/or approval by our Board. With respect to our named executive officers in 2015, our Compensation Committee designsdesigned these programs to consist of five elements: base salary, annual performance-based cash incentive compensation (STIP), long-term equity-based compensation (LTIP), severance and change-in-control benefits and other employee benefits.benefits and perquisites as set forth below.

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              Pay-for-Performance.    Our pay-for-performance philosophy is demonstrated in the mix of compensation that we provide forto our named executive officers. A significant portion of our named executive officers' compensation isin 2015 was in the form of annual cash incentives and long-term equity-based incentives under the LTIP. Each of these incentives plays a role in aligning pay with the Company's performance and aligning the long-term financial interests of our named executive officers with those of our stockholders. In addition, compensation that is paid in the form of restricted stock instead of cash is at-risk, because its value varies with changes in the stock price.price and because it is forfeitable if the executive voluntarily terminates employment prior to vesting. With a considerable percentage of their compensation paid in equity during 2015, our named executive officers have a significant stake in the long-term success of the Company along with all other stockholders. The chartfollowing charts illustrate the mix of pay for both our current President and Chief Executive Officer as well as our other named executive officers in 2015 (percentages are based on each named executive officer's current base salary and target amounts of compensation with respect to STIP and LTIP awards). Additionally, as the charts below identifiesfurther illustrate, 82% and 77% of total target compensation for our Chief Executive Officer and other named executive officers, respectively, is attributable to the at-risk pay (incentives) relativeperformance-based STIP and LTIP, and thus is variable and tied to fixed pay (base salary, excluding payoutperformance of accrued vacation amounts) for the 2012 compensation period.Company (i.e. "at-risk").

		Fixed Pay			At-Risk Pay
Name		Annual Base Salary			Annual Cash Incentive			Long-Term Equity-Based Incentive (Restricted Stock)			Total At-Risk
Mr. Starzer			22	%		12	%		66	%		78	%
Mr. Grove			23	%		18	%		59	%		77	%
Mr. Graham			23	%		18	%		59	%		77	%
Mr. Humber			28	%		21	%		51	%		72	%
Mr. Jaques			27	%		22	%		51	%		73	%

              Base Salary.    Base salary is the fixed annualintended to provide a guaranteed amount of compensation we pay to each of our named executive officers for carrying out their specific job responsibilities. Base salaries are a major component of the total annual cash compensation paid to our named executive officers and are an important element in the recruitment and retention of all of our employees including our named executive officers. Base salaries are determined after taking into account many factors, including the following:

•

the responsibilities of the officer,that recognizes the level of experienceresponsibility and expertise requiredauthority of each individual executive and compensates for the positionindividual executive's day-to-day contributions to the Company's success. As a result of severely depressed commodity prices in 2015 which have continued into 2016, our Board and the strategic impact of the position;



•

the need to recognize each officer's unique value and demonstrated individual contribution, as well as future contributions;



•

the need to provide executives with sufficient, regularly-paid income; and



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salaries paid for comparable positions in similarly-situated companies.

        In 2012, the Compensation Consultant provided our Compensation Committee with an analysis ofelected to not increase the base salaries paid to our named executive officers in 2011 in comparison to comparable marketsalary

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salaries. Based on the Compensation Consultant's analysis, our Compensation Committee concluded that the basefor any named executive officer in 2015 or 2016. Base salaries of certain offor our named executive officers were below the market benchmark. In order to remain market competitive with our peers, our Compensation Committee recommended,in 2015 and our Board approved, a 7.4% increase in the base salary of Mr. Starzer from $326,000 to $350,000 and a 10.5% increase in the base salary of Mr. Graham from $215,000 to $237,800, both effective2016 are as of March 6, 2012.follows:

              Annual Cash Incentive Awards.    All of our employees, including our named executive officers, are eligible to receive annual cash incentive awards tied to both the Company's performance and individualthe underlying individual's performance. We believe the annual cash incentive awards help us to:

•

attract and retain executive talent;



•

motivate management to achieve key short-term corporate goals; and



•

align executives' interests with stockholders' interests.

              2012 Awards.    In 2012, our Compensation Committee adopted short-term incentive program guidelines (the "2012 STIP Guidelines"), which provided a framework for 2012 annual cash incentive awards to reward our named executive officers for their (i) performance in helping the Company achieve its 2012 operational and financial goals and (ii) achievement of certain individual goals and objectives approved by the Compensation Committee.

        When considering the 2012 short term incentives for the named executive officers, including our chief executive officer, the Compensation Committee considered specific operational key performance indicators ("KPI's"), financial KPI's, organizational development objectives, investor relations activities, employee development objectives and certain process development and implementation objectives relevant to the transition from a privately held company to a publicly traded corporation. The operational KPI's included oil and gas production growth, lease operating expenses and reserve growth. Financial KPI's included revenue growth, Adjusted EBITDAX growth and total capital spending and efficiency.

        20132015 STIP.    Our LTIP (discussed below) contemplatesSTIP, providing for the award of annual cash incentive bonuses to certain of our employees, including our named executive officers, to reward employees for their performance in helping the Company achieve its short term goals. In March 2013,short-term goals, is issued under our Board reviewed the 2012 STIP Guidelines and approved a short term incentive program for fiscal years beginning with 2013 (the "STIP"), pursuant to the terms of our LTIP.

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The STIP provides that the aggregate pay-outpayout of awards, as well as each individual award,awards for our named executive officers, must be approved by the Compensation Committee prior to the payment. The Compensation Committee has the authority to adjust STIP awards upward or downward in its discretion, but may notonly make upwarddownward adjustments for named executive officers and other "covered" employees. Target payouts are 100% of base salary for our president and chief executive officer and 75% of base salary for all other named executive officers. Under the STIP, an employee'sa named executive officer's annual cash incentive is determined by the Company achievingCompany's achievement of certain key performance indicators ("KPIs"), divided into Company-wide KPIs, and regional KPIs, and the employee achieving certain goals and objectives, set and communicated to each employeeexecutive prior to or at the beginning of each performance period, although payouts toperiod.

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              For the 2015 STIP, the named executive officers areofficer KPIs were consistent with the Company's 2015 operating plan and included the following metrics as they relate to the Company's core assets in the Rocky Mountain and Mid-Continent regions:

              Pursuant to the 2015 STIP, target payouts were set at 100% of base salary for our President and Chief Executive Officer, 90% of base salary for our Executive Vice Presidents and ranging from 40% to 75% of base salary for our other executive officers. For purposes of calculating the STIP, base salary is the named executive officer's effective salary as of the end of the 2015 fiscal year. For 2015, the actual payouts were subject to a range generally based solely on Company-wide KPIs. Thethe following categories: threshold (50% of target), target performance (100% of target) and exceptional performance (200% of target), with performance between such ranges interpolated on a linear basis. Exceptional performance is a "stretch" goal that, while achievable, removes all of the risk from our operating expectations and requires operational performance consistently at the high end of the range for each project. To prevent undue risk taking, the maximum payout under the STIP in 2015 for named executive officers iswas capped at two times each such officer's target payout, i.e., 200% of base salary for our presidentPresident and chief executive officer andChief Executive Officer, 180% of base salary for our Executive Vice Presidents, 150% of base salary for our Senior Vice Presidents and 80% for our Vice Presidents.

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              The following table summarizes the otherCompany's 2015 performance in the areas considered by our Compensation Committee as they applied to our named executive officers.

              The 2015 STIP payment was then subject to adjustment by up to 10% (positive or negative) as a result of the 2015 Adjusted G&A (the "G&A Adjustment") based on the following:

              The Company's 2015 Adjusted G&A was $5.69/Boe which resulted in an increase of 5% to the total STIP payout such that the aggregate STIP payout totaled an implied percentage of target bonus payout of 139% to our named executive officers.

              Following the end of 2015, our Compensation Committee reviewed our performance for 2015 with members of management and our full Board to determine the cash incentive award amounts to be awarded to our named executive officers pursuant to the 2015 STIP KPIs. While actual averaged results we attained with respect

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to the Company performance metrics for 2015 resulted in a 139% target bonus payment, our Compensation Committee, applying its negative discretion, instead awarded each named executive officer a bonus at 90% of target given the current commodity pricing environment. The 2015 bonus amounts that were earned by our named executive officers together with the actual 2015 bonus amounts paid in March 2016 were as follows:

              Long-Term Equity-Based Incentives.    Our long-term incentives are designedBeginning in 2013, our Compensation Committee began to reward the achievement of our Company's long-term strategic objectivesgrant both restricted stock awards and performance stock units to provide our named executive officers with a significant incentive to maximize stockholder value.

        Long Term Incentive Plan.    Our Board and stockholders approved the LTIP in November 2011. The LTIP provides for grants of equity incentives to attract, motivate and retain the best available personnel for positions of substantial responsibility; to provide additional incentives to our employees, directors and consultants; and to promote the success and growth of our business. Equity-incentives that may be granted under our LTIP include: (i) incentive stock options qualified as such under U.S. federal income tax laws; (ii) stock options that do not qualify as incentive stock options; (iii) stock appreciation rights ("SARs"), (iv)key employees. We believe restricted stock awards; (v) restrictedawards and performance stock units; (vi) unrestricted stock awards; (vii) dividend equivalent rights; (viii) performance awards;units have retentive attributes and (ix) annual incentive awards.

        Our Compensation Committee believes long-term incentive-based equity compensation is an important component ofeffectively align our overall compensation program because it:

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rewards the achievement of our long-term goals;



•

aligns our named executive officers' interests with the long-term interests of our stockholders;



•

aligns compensationstockholders on a long-term basis. Performance stock units also have an additional performance-based component that compares our performance with sustained long-term value creation;



•

encourages executive retention with vesting of awards over multiple years; and



•

conserves our cash resources.

        Our LTIP is administered by our Compensation Committee, subject to the ultimate authoritythat of our Board, which has full power and authority to take all actions and to make all determinations required or provided for under the LTIP, including designationpeer companies. We believe this combination of grantees, determination of types oflong-term equity awards determination of the number of shares of common stock subject an award and establishment of the terms and conditions of awards. Our Board may amend, modify or supplement any award, providedappropriately provides incentives that the grantee of such award must consent to any such amendment, modification or supplement that impairs the grantee's rights under the award. Awards under our LTIP may be made to (i) any employees, officers, directors or certain consultants of us or our affiliates, as our Board or Compensation Committee may designate; (ii) any director who is not an officer or employee of the Company; and (iii) any other individual whose participation in our LTIP is determined by our Board or Compensation Committee to be in our best interests. An eligible person may receive more than one award.

        Under our LTIP, which was established in 2011, 2,500,000 sharescapture absolute total return performance of our common stock were originally available for issuance. Asas well as awards that also capture variable performance relative to the performance of December 31, 2012, 1,824,770 shares were available for issuance.other oil and gas companies of our peer group. The number of shares issued Compensation Committee may determine in the future that different and/or reserved pursuant to our LTIP is subject to adjustment as a result of

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certain mergers, exchanges or other changes in our common stock. For so long as weadditional award types are a reporting company and after the reliance period under Section 162(m) of the Code has expired, we may award per calendar year up to (i) 250,000 shares of common stock subject to stock options or SARs and (ii) 250,000 shares of common stock other than pursuant to stock options or SARs to any single grantee. We may award to any single grantee up to $2.5 million per calendar year as an annual incentive award and up to $2.5 million per performance period as a performance award or other cash award.appropriate.

              In determining 20122015 awards under our LTIP, our Compensation Committee reviewed Mr. Starzer'sthe market analysis provided by the Compensation Consultant. In addition, the Compensation Committee reviewed recommendations from our Chief Executive Officer for awards to named executive officers other than himself and made its own determination with respect to Mr. Starzer.himself. The Compensation Committee compared such recommendations against the Compensation Consultant's market analysis to determineassist in determining the appropriate amount of equity to grant to each named executive officer based on market data, while also taking into consideration the Company's performance as well as individual performance and retention concerns. The Compensation Committee also considered the successful effortsobjectives.

              In 2015, each of our named executive officers received 50% of his LTIP award in completing our initial public offering in December 2011.

        In June 2012, the Compensation Committee madeform of shares of restricted stock grants as set forthand 50% of his LTIP award in the table below. Theseform of performance stock units. The amount and type of equity granted to our named executive officers in 2015 were as follows:

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              Restricted Stock.    The 2015 restricted stock awards vest subject to continued employment, over a three-year period, commencing February 15, 2012,provided the award recipient remains continuously employed through the applicable vesting dates. Subject to continued employment, the first¹/3 tranche vested in March 2016, the second¹/3 tranche will vest in March 2017 and the final¹/3 tranche will vest in March 2018. The vesting of these awards will accelerate in full if such named executive officer's employment is terminated without cause or due to a resignation for good reason or death or disability, and the awards are subject to the accelerated vesting provisions contained in their respective employment agreements and the Company's Severance Plan. These accelerated vesting provisions are described in greater detail below in the section entitled "Severance Plan." While a named executive officer holds unvested restricted shares, he is entitled to vote and receive dividends, if any, on the shares.

              Performance Stock Units.    The 2015 performance stock units are subject to a designated three-year performance cycle beginning on January 1, 2015 and ending on December 31, 2017. Satisfaction of the performance conditions for the performance stock units granted during 2015 are determined at the end of each annual measurement period over the course of the three-year performance cycle in an amount up to two-thirds of the target number of performance stock units that are eligible for vesting (such that an amount equal to 200% of the target number of performance stock units may be earned during the performance cycle) although no stock is actually awarded to the participant until the end of the entire three-year performance cycle. Any performance stocks units that have not vested at the end of the applicable measurement period are forfeited. The performance criterion for the performance stocks units are based on a comparison of the Company's total shareholder return ("TSR") for the annual measurement period compared with one-third vestingthe TSRs of a group of peer companies for the same annual measurement period. The TSR for the Company and each of the peer companies is determined by dividing (A)(i) the average share price for the last 30 trading days of the applicable measuring period, minus (ii) the average share price for the 30 trading days immediately preceding the beginning of the applicable measuring period, by (B) the average share price for the 30 trading days immediately preceding the beginning of the applicable measuring period. The number of earned shares of our common stock will be calculated based on each anniversarywhich quartile our TSR percentage ranks as of February 15, 2012.the end of the annual measurement period relative to the other companies in the comparator group as follows:

              If the Company is ranked between any of these payout levels, the percentage multiple will be interpolated on a linear basis based on the actual percentile ranking of the Company. All earned 2015 performance stocks units will be settled in shares of the Company's common stock following the end of the three-year performance cycle.

              Realized Pay: Chief Executive Officer Actual Compensation.    In reviewing our Chief Executive Officer's compensation included in the Summary Compensation Table, it is important to note that realized and realizable pay is often substantially different than the compensation that is reported in the Summary Compensation Table. The primary reason for the differences between reported pay in the Summary Compensation Table and realized pay and realizable pay is the method and timing used to value long-term equity awards. SEC rules require companies to report the grant date fair value of all equity awards in the Summary Compensation Table for the year in which they were granted. However, a substantial portion of our Chief Executive Officer's total compensation is in the form of long-term equity-based awards, which vest over a three-year period, precluding its

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immediate realization at the grant date and correlating its realizable value to our future stock performance. Information related to realized pay and realizable pay is meant to supplement, rather than to replace the information found in the Summary Compensation Table.

              Below is a table that compares Summary Compensation Table amounts to compensation actually realized and compensation realizable by Richard J. Carty for 2014 and 2015, the years in which he has served as our Chief Executive Officer: