Exhibit 10.22
Separation
Agreement
This Separation Agreement (the
“Agreement”) is made and entered into this 8
th day of February, 2008 by and between Petroleum
Development Corporation, a Nevada Corporation (the
“Company”), and Thomas E. Riley (the
“Employee”) (collectively, the
“Parties”).
WHEREAS, the
Parties acknowledge that on December 20, 2007 the Board of
Directors of the Company (the “Board”) selected a
successor for Steven R. Williams upon his retirement as Chief
Executive Officer and authorized the successor to determine what
changes he wanted to make to the executive leadership team of the
Company.
WHEREAS, after
further evaluation of these changes, the Company has determined
that the Employee would best serve the Company in the role of
Executive Vice President;
WHEREAS, the
Parties acknowledge that the Employee does not wish to serve in the
capacity of Executive Vice President of the Company;
WHEREAS,
Employee desires to terminate his employment with the Company
pursuant to the “Good Reason” provisions of his
Employment Agreement and has given written notice of his intention
to terminate his employment with the Company unless he continues in
the capacity of President of the Company;
WHEREAS, the
Company has advised the Employee that it does not intend to
reconsider the actions taken with respect to Employee;
WHEREAS, the
Parties desire to entire into a definitive agreement to set forth
the terms of Employee’s separation from the
Company;
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:
1.
Termination Date. Employee resigns his employment and
his position as President and as a member of the Board effective as
of March 9, 2008 (the “Termination Date”). The Parties
acknowledge that his resignation is due to “Good
Reason” as defined under his Employment Agreement.
2.
Nondisparagement. Employee agrees not to make
negative comments or otherwise disparage the Company or its
officers, directors, employees, shareholders or agents, in any
manner likely to be harmful to them or their business, business
reputation or personal reputation. The Company agrees that the
members of the Board and officers of the Company as of the date
hereof will not, while employed by the Company or serving as a
director of the Company, as the case may be, make negative comments
about the Employee or otherwise disparage the Employee in any
manner that is likely to be harmful to the Employee’s
business or personal reputation. The foregoing shall not be
violated by truthful statements in response to legal process or
required governmental testimony or filings, and the foregoing
limitation on the Company’s directors and officers will not
be violated by statements that they in good faith believe are
necessary or
appropriate to
make in connection with performing their duties for or on behalf of
the Company. Either Party will be entitled to execute the
remedies provided for in Section 6.e. of the Employment
Agreement.
3.
References. The President of the Company shall
provide employment references when requested by Employee and all
such references shall characterize Employee’s separation as
voluntary.
4.
Compensation and Benefits.
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The Company
shall pay to Employee the following amounts:
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Separation
Compensation. Within
thirty (30) days after the Termination Date or seven (7) days after
the Revocation Date (as defined in Section 11 below) without
revocation, whichever is greater, the Company shall pay to the
Employee a lump sum amount of $1,877,343, such amount is
acknowledged by the Parties as being in full satisfaction of the
amount due to Employee pursuant to Section 7(d) of his Employment
Agreement; providing for three times the sum of: (a) the
Employee’s highest Base Salary during the previous two years
of employment immediately preceding the Termination Date, plus (b)
the highest Bonus paid to the Employee during the same two year
period.
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Compensation
and Bonus .
Employee will be entitled to receive his full compensation earned
in 2008 prior to the Termination Date paid in accordance with the
Company’s normal payroll practices. Such payment
is based on a Base Salary of $315,000 for 2008. Employee
will also be entitled to receive the benefit earned by him under
the Short-Term Incentive Compensation program for
2007. The parties agree that such amount under the
Short-Term Incentive Compensation program shall be $310,781,
payable at the same time as the amounts noted in Section 4(a)(1)
above. If the earnings part of the 2007 bonus calculation under the
percent (50%) for the other executive officers (“Excess
Amount”), Employee will receive a lump sum payment within
thirty days after such determination, equal to four (4) times the
amount of the additional bonus amount attributable to the Excess
Amount.
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Expense
Reimbursement.
Company shall pay to the Employee any unpaid expense reimbursement
for periods on or prior to the Termination Date upon presentation
by the Employee of an accounting of such expenses in accordance
with normal Company practices. Employee agrees to submit all unpaid
expense reimbursements to the Company by April 10, 2008. In no
event shall such expense reimbursements be made later than April
30, 2008. The Parties acknowledge that Employee will not be
entitled to any expense reimbursements (including, but not limited
to, reimbursements for costs of premiums on Employee’s one
million dollar life insurance policy
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and
reimbursements for the cost of the Employee’s current
disability policy) for any expenses incurred on or after the
Termination Date.
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Option to
Purchase Automobile and Computer. Employee shall have an option to purchase
the automobile and computer currently furnished to him by the
Company for $13,185 and $500, respectively. The computer shall be
cleaned of all Company information by Company’s IT department
prior to delivery. Full payment shall be due to the Company on or
before February 28, 2008.
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Stock
Options and Restricted Stock. Company agrees that all unvested Company
stock options and restricted stock shall be vested on the
Termination Date. Company acknowledges that Four
Thousand Six Hundred and Seventy Eight (4,678) stock options shall
become fully vested and Sixteen Thousand One Hundred Twenty Three
(16,123) shares of restricted stock shall become fully
vested.
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Performance
Shares. Company
shall deliver to Employee as soon as practicable after the
Termination Date, Three Thousand Seventy Eight (3,078) shares of
Company stock in satisfaction of amounts due to Employee under
Section 2.3 of the Company’s 2007 Long-Term Incentive
Program. Employee acknowledges that such shares are his full
entitlement from the Seven Thousand Six Hundred Ninety-Four (7,694)
performance shares award under the 2007 Long-Term Incentive
Program.
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