Exhibit 10.13
Employment
Agreement
This Employment Agreement (the
“Agreement”) is made and entered into this 31st day of
December, 2008, effective as of January 1, 2008, by and between
Petroleum Development Corporation, a Nevada Corporation (the
“Company”), and Daniel W. Amidon (the
“Employee”).
WHEREAS, on July 2, 2007, the Company employed
Employee in the capacity of General Counsel and Corporate
Secretary;
WHEREAS, the Company desires to employ the
Employee to perform the duties and services incident to such
position for the Company, and the Employee wishes to be so employed
by the Company, all upon the terms and conditions set forth in this
Agreement;
NOW THEREFORE, in consideration of the premises
and mutual covenants and obligations set forth herein and for other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged and accepted, the parties hereto,
intending to be legally bound, agree as follows:
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Initial
Term. The
effective date of this Agreement will be January 1, 2008 (the
“Effective Date”), and the initial term will be for the
period beginning on the Effective Date and ending December 31,
2009.
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Automatic
Extensions. The Term of this Agreement will be
extended for an additional twelve (12) months beginning on December
31, 2008 and on each successive December 31 unless either party
provides the other with at least thirty (30) days prior written
notice, or unless the contract has been terminated by the parties
in accordance with the provisions of Section 7 of this
Agreement. The period of time from the Effective Date
until the Termination Date, as defined in Section 7.b., will be the
“Term.”
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Change of
Control. In
the event of a Change of Control, the Term of this Agreement will
automatically be extended to the date that is twenty-four (24)
months after the date of the Change of Control without any action
on the part of the Company or the Employee. Thereafter,
the date of the Change of Control will be treated as the Effective
Date for purposes of further automatic 12-month extensions of the
Agreement under this section. "Change of Control" of the
Company will occur on the earliest of the following
events:
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Change in
Ownership : A change in
ownership of the Company occurs on the date that any one person, or
more than one person acting as a group, acquires ownership of stock
of the Company that, together with stock held by such person or
group, constitutes more than 50% of the total fair market value or
total voting power of the stock of the Company, excluding the
acquisition of additional stock by a person or more than one person
acting as a
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group who is
considered to own more than 50% of the total fair market value or
total voting power of the stock of the Company.
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Change in
Effective Control : A
change in effective control of the Company occurs on the date that
either:
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Any one person,
or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) ownership of stock of
the Company possessing 30% or more of the total voting power of the
stock of the Company; or
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A majority of
the members of the Board of Directors of the Company (the
“Board”) is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a
majority of the members of the board of directors before the date
of the appointment or election; provided, that this paragraph (B)
will apply only to the Company if no other corporation is a
majority shareholder.
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Change in
Ownership of Substantial Assets : A change in the ownership of a substantial
portion of the Company's assets occurs on the date that any one
person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value equal to or more
than 40% of the total gross fair market value of the assets of the
Company immediately before such acquisition or acquisitions. For
this purpose, “gross fair market value” means the value
of the assets of the Company, or the value of the assets being
disposed of, determined without regard to any liabilities
associated with such assets.
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It is the
intent that this definition be construed consistent with the
definition of “Change of Control” as defined under
Internal Revenue Code Section 409A and the applicable Treasury
Regulations, as amended from time to time.
The place of
employment will be the Company’s headquarters building in
Bridgeport, West Virginia or Denver, Colorado unless the Employee
and the Company agree to an alternative location.
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Position and
Responsibilities
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Position. The Employee will serve as the
General Counsel and Corporate Secretary and shall report to the
Chief Executive Officer or President of
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the Company
(“Chief Executive Officer”) and be under the general
direction and control of the Chief Executive Officer or
President.
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Responsibilities. The Employee will have obligations,
duties, authority and power to do such acts as are customarily done
by a person holding the same or equivalent position in corporations
of similar size to the Company. The Employee shall perform such
managerial duties and responsibilities for the Company as may be
reasonably be assigned to him by the Chief Executive Officer or
President and, at no additional compensation, shall serve on the
Board and in other such positions with any subsidiary corporation
of the Company, or any partnership, limited liability company or
other entity in which the Company has an interest (herein
collectively called “Affiliates”), as the Chief
Executive Officer or President may from time to time
determine.
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Dedication
of Professional Services. The Employee shall devote
substantially all of his business time, best efforts and attention
to promote and advance the business of the Company and its
Affiliates to perform diligently and faithfully all the duties,
responsibilities and obligations of his position with the Company.
Employee shall not be employed in any other business activity,
other than with the Company and its Affiliates, during the Term,
whether or not such activity is pursued for gain, profit or other
pecuniary advantage without approval by the Compensation Committee
of the Board (“Compensation Committee”); provided,
however, that this restriction will not be construed as preventing
Employee from investing his or her personal assets in a business
which does not compete with the Company or its Affiliates, where
the form or manner of such investment will not require services of
any significance on the part of Employee in the operation of the
affairs of the business in which such investment is made and in
which his participation is solely that of a passive
investor.
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Adherence to
Standards. Employee shall comply with the
written policies, standards, rules and regulations of the Company
from time to time established for all officers of the Company
consistent with Employee's position and level of
authority.
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Minimum
Stock Ownership. Employee shall make a good faith effort to
comply with the minimum stock ownership requirements for executive
officers of the Company (other than the Chief Executive Officer),
such requirement being that by the fifth anniversary of the
Effective Date and until his Termination Date, Employee shall have
a minimum stock ownership equal to two (2) times the
Employee’s Base Salary, as defined in Section 4.a.
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Base
Salary. The
Company shall pay the Employee an annual base salary of $227,500
(the “Base Salary”) commencing on the Effective Date
and ending on the Termination Date. The Base Salary will
be payable in accordance with the ordinary payroll practices of the
Company. The Compensation Committee shall review the
Base Salary annually, and the Base Salary may be changed by the
Compensation Committee in its sole discretion, taking into account
the base salaries, aggregate annual cash compensation, and other
compensation of individuals holding similar positions at other
comparable companies and the performance of the Employee and the
Company.
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Performance
Bonus. In
addition to his Base Salary, the Employee will be eligible to earn
an annual performance bonus (the “Bonus”) during the
Term based on the achievement of corporate performance objectives
as determined by the Compensation Committee in its sole discretion
each year, to be paid by March 15 of the following
year. The “Target Bonus” will be a specified
percentage of the Base Salary, as set forth in the Petroleum
Development Corporation Short-Term Incentive Compensation Plan for
a given year which may be earned if the Employee meets all of the
criteria established by the Compensation
Committee. However, the Bonus may be less than or more
than the Target Bonus based on the level of performance of the
Employee and the criteria established by, and at the sole
discretion of, the Compensation Committee. For 2008, the
Target Bonus shall be equal to 50% of the Employee’s Base
Salary and the maximum percentage will be 100% of the
Employee’s Base Salary. The Bonus will be paid in
cash no later than March 15 of the following year. To
the extent practicable, the Bonus will meet the requirements for
qualified performance-based compensation under Internal Revenue
Code Section 162(m).
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Equity
Compensation Grant. In addition to cash compensation,
the Employee will be eligible to earn equity compensation during
the Term. The amounts and form of all equity
compensation awards shall be determined at the sole discretion of
the Board or its designee and only in accordance with shareholder
approved stock compensation plans. As of the Effective
Date, under the Company’s Long-Term Equity Compensation Plan,
the Employee will receive an award equal in value to $227,500, 50%
of which will be awarded as restricted stock and 50% of which will
be awarded as long-term incentive performance (“LTIP”)
shares. For this purpose, the value of the restricted
stock and the LTIP shares will be determined by the Company’s
compensation consultants and will be based on the average closing
price of the stock of the Company for the month of December,
2007. The restricted stock will vest at the rate of 25%
for each complete year worked by the Employee, beginning on March
7, 2008 and on each anniversary thereof. The
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performance
shares will vest in accordance with the timing and performance
targets set forth in the documentation for such LTIP
shares. Future awards will vest on the schedule
specified by the Board or its designee at the time of the
award
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Succession-Related Grant . The Employee will receive a
one-time award of restricted stock equal in value to
$250,000. For this purpose, the value of the restricted
stock will be determined by the Company’s compensation
consultants and will be based on the average closing price of the
stock of the Company for the month of December,
2007. The restricted stock will vest at the rate of 20%
for each complete year worked by the Employee under this Agreement,
beginning from the Effective Date.
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Other
Compensation. The Employee will continue to be
eligible to participate in all other cash or stock compensation
plans or programs maintained by the Company, as in effect from time
to time, in which other senior officers of the Company are allowed
to participate.
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Recoupment
of Certain Compensation. If the Company has to restate all or
a portion of its financial statements due to the material
noncompliance of the Company with any financial reporting
requirement under the securities laws, the Employee shall, for the
affected years, reimburse the Company for any excess bonus paid to
the Employee pursuant to Section 4.b. The reimbursements
shall be equal to the difference between the bonus paid to him for
the affected years and the bonus that would have been paid to the
Employee had the financial results been properly
reported. Such reimbursement shall be paid to the
Company within ninety days after the Company notifies the Employee
of the amount owed to the Company.
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Participation in Company Benefit
Plans. During
the Term, the Company shall provide the Employee with coverage
under all employee pension and welfare benefit programs, plans and
practices commensurate with his positions in the Company and to the
extent permitted under the respective employee benefit
plan.
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Vacation. The Employee will be entitled to
twenty (20) days of paid vacation in each calendar year, to be
taken at such times as is reasonably determined by the Employee to
be consistent with the Employee’s responsibilities under this
Agreement.
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Expense
Reimbursement . The Employee is authorized to incur
reasonable expenses in carrying out his duties and responsibilities
under this Agreement, including, without limitation, expenses
related to travel, meals, entertaining, professional development
and certification
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requirements,
health club membership and similar items related to such duties and
responsibilities. The Company shall reimburse the
Employee for all such expenses on presentation by Employee from
time to time of appropriately itemized and approved (consistent
with the Company’s policy) accounts of such
expenditures. The Company shall reimburse the Employee
for reasonable dues and expenses of membership in such club or
clubs as the Board reasonably deems necessary for the Employee to
entertain on behalf of the Company and for costs associated with
continuing education and professional dues if approved in advance
by the Chief Executive Officer. All expense
reimbursements for a calendar year will be paid in the normal
course, but no later than March 15 of the following calendar
year.
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Life and
Disability Insurance. The Company will reimburse the
Employee for the cost of life insurance on the Employee in the face
amount of one million dollars ($1,000,000) with a person or persons
named by the Employee as either the owner or the beneficiary as the
Employee directs, and for the cost of a disability policy
consistent with what is provided to other officers of the
Company. All reimbursements for a calendar year will be
paid in the normal course, but no later than March 15 of the
following calendar year.
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Health
Insurance. The Company agrees that it will
include the Employee under any hospital, surgical, or group health
plan or policy adopted generally for the benefit of its
employees. The payment of the premiums for the Employee
and his dependents will be determined in accordance with the rules
and regulations adopted by the Company for its
employees. In addition to including the Employee and his
dependents in such plan, the Company shall pay all reasonable
hospital, surgical, medical, dental, and prescription expenses of
the Employee and his dependents not covered by such a
plan. In the event the Company has no group health plan,
the Company agrees to pay all reasonable premiums on any health
insurance policy obtained by the Employee to provide such
coverage.
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Automobile . During the Term, the Employee will
be entitled to use of a Company automobile or payment of a car
allowance in accordance with a plan approved by the Board or its
designee.
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Confidential
Material and Employee Obligations.
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Confidential
Material. The
Employee shall not, directly or indirectly, either during the Term
or thereafter, disclose to anyone (except in the regular course of
the Company's business or as required by law), or use in any
manner, any information acquired by the Employee during his
employment by the Company with respect to any clients or customers
of the Company or any confidential, proprietary or secret aspect of
the Company's operations or affairs unless such information has
become
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public
knowledge other than by reason of actions, direct or indirect, of
the Employee. Information subject to the provisions of this
paragraph will include, without limitation:
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Brokers,
broker/dealer firms, law firms used to prepare Company and
partnership registration statements, due diligence investigations,
or other parties involved with the registration, review, or
offering of the Company’s securities and drilling
programs;
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Names,
addresses, and other information regarding investors in the
Company’s drilling programs;
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Names,
addresses and other information regarding investors who participate
with the Company in the drilling, completion or operation of oil
and gas wells as joint venture partners, working interest owners,
or in any other form of ownership;
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Lists of or
information about personnel seeking employment with or who are
currently employed by the Company;
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Maps, logs,
drilling reports and any other information regarding past, planned
or possible future leasing, drilling, acquisition, or other
operations that the Company has completed or is investigating or
has investigated for possible inclusion in future
activities;
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Any other
information or contacts relating to the Company's drilling,
development, fund-raising, purchasing, engineering, marketing,
merchandising, and selling activities.
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Return of
Confidential Material. All maps, logs, data, drawings and
other records and written and digital material prepared or compiled
by the Employee or furnished to the Employee during the Term will
be the sole and exclusive property of the Company and none of such
material may be retained by the Employee upon termination of his
employment. The aforementioned materials include
materials on the Employee&rsq
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