Employment Agreement
Exhibit
10.14
\
\
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 Xxxxxx X.
Xxxxx (the “Employee”).
WHEREAS,
the Company employs the Employee as Chief Accounting Officer 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:
1.
|
Effective Date and
Term
|
a.
|
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.
|
b.
|
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.”
|
c.
|
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:
|
(i)
|
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
|
1
|
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.
|
(ii)
|
Change in Effective
Control: A change in effective control of the Company occurs on the
date that either:
|
(A)
|
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
|
(B)
|
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 prior to 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.
|
(iii)
|
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 prior to 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.
|
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.
2.
|
Place of
Employment
|
The place
of employment will be the Company’s headquarters building in Bridgeport, West
Virginia unless the Employee and the Company agree to an alternative
location.
3.
|
Position and
Responsibilities
|
a.
|
Position. The
Employee shall serve as the Chief Accounting Officer of the Company and
shall report to the Chief Financial Officer of the
|
2
|
Company
and be under the general direction and control of the Chief Financial
Officer of the Company.
|
b.
|
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 an 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 Financial Officer of
the Company 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 Financial Officer of the Company may from time
to time determine.
|
c.
|
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; 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.
|
d.
|
Adherence to
Standards. Employee shall comply with the written
policies, standards, rules and regulations of the Company from time to
time established for all executive officers of the Company consistent with
Employee's position and level of
authority.
|
e.
|
Minimum Stock
Ownership. Employee shall comply with the minimum stock
ownership requirements for executive officers of the Company by March 9,
2009 (the fifth anniversary of the date such minimum stock ownership
requirements were adopted by the Board) and until his Termination Date,
Employees shall have a minimum stock ownership equal to two (2) times the
Employee’s Base Salary, as defined in Section 4.a. (or such level as
adjusted from time to time).
|
3
4.
|
Compensation
|
a.
|
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.
|
b.
|
Performance
Bonus. In addition to his Base Salary, the Employee will
be eligible to earn an annual performance bonus (the “Bonus”) during the
Term as determined by the Compensation Committee in its sole
discretion. The Bonus shall be paid in cash no later than March
15 of the following year.
|
c.
|
Retirement
Compensation. Pursuant to prior employment agreements,
the Employee, as of the Effective Date has earned a right to ten (10)
annual payments of $30,000 (total $300,000). For each
additional complete year of employment with the Company, commencing on
January 1, 2008 the Employee will earn and be entitled to receive an
annual retirement payment equal to $7,500 (the “Retirement
Payment”). The Retirement Payment will be payable to the
Employee, or in the event of the Employee’s death, to his estate,
beneficiaries, or designees, on each of the first ten anniversary dates
following the date the Employee leaves the service of the
Company. The Retirement Payment will be in addition to any
deferred compensation, pension, or other payments the Employee has earned
under this and any other previous and subsequent agreements with the
Company and any other payments he may be due under the Company’s employee
benefit plans.
|
d.
|
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.
|
e.
|
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 executives of the Company are allowed to
participate.
|
f.
|
Recoupment of Certain
Compensation. If the Company has to restate all or a
portion of its financial statements due to the material
noncompliance
|
4
|
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.
|
5.
|
Employee
Benefits
|
a.
|
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.
|
b.
|
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.
|
c.
|
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, 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 Financial Officer and Treasurer of the Company. 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.
|
d.
|
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 the Employee's current disability policy with
scheduled adjustments. All reimbursements for a calendar year
will be paid in the normal course, but no later than March 15 of the
following calendar year.
|
5
e.
|
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.
|
f.
|
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.
|
6.
|
Confidential Material
and Employee Obligations.
|
a.
|
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
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:
|
(i)
|
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;
|
(ii)
|
Names,
addresses, and other information regarding investors in the Company’s
drilling programs;
|
(iii)
|
Names,
addresses and other information regarding investors who participate with
the Company in the drilling, completion or operation of oil and gas xxxxx
as joint venture partners, working interest owners, or in any other form
of ownership;
|
(iv)
|
Lists
of or information about personnel seeking employment with or who are
currently employed by the Company;
|
(v)
|
Maps,
logs, drilling reports and any other information regarding past, planned
or possible future leasing, drilling, acquisition, or
|
6
|
other
operations that the Company has completed or is investigating or has
investigated for possible inclusion in future
activities;
|
(vi)
|
Any
other information or contacts relating to the Company's drilling,
development, fund-raising, purchasing, engineering, marketing,
merchandising, and selling
activities.
|
b.
|
Return of Confidential
Material. All maps, logs, data, drawings and other
records, electronic data and written 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. Notwithstanding the foregoing, the Employee will be
under no obligation to return public
information.
|
c.
|
Non-Compete. The
Employee shall not directly, either during the Term or for a period of one
(1) year thereafter, engage in any Competitive Business in West Virginia,
Pennsylvania, Colorado, Utah, Wyoming, North Dakota, Michigan, Ohio,
Kentucky, Texas and Tennessee; provided, however, that the ownership of
less than five percent (5%) of the outstanding capital stock of a
corporation whose shares are traded on a national securities exchange or
on the over-the-counter market shall not be deemed engaging any
Competitive Business. "Competitive Business" shall mean the oil
and natural gas industry, including oil and gas leasing, drilling, and
other operations, syndication and marketing of partnership or other
investments related to oil and natural gas operations, or any other
business activities that are the same as or similar to the Company’s
business operations as its business exists on the Effective Date or on the
Termination Date.
|
d.
|
No
Solicitation. The Employee shall not, directly or
indirectly, either during the Term or for a period of one (1) year
thereafter (i) solicit, directly or indirectly, the services of any person
who was a full-time employee of the Company, its subsidiaries, divisions,
or affiliates, or otherwise induce such employee to terminate or reduce
employment, or (ii) solicit the business of any person who was a client or
customer of the Company, its subsidiaries, divisions, or affiliates, in
each case at any time during the last year of the Term. For purposes of
this Agreement, the term "person" includes natural persons, corporations,
business trusts, associations, sole proprietorships, unincorporated
organizations, partnerships, joint ventures, limited liability companies
or partnerships, and governments, or any agencies, instrumentalities, or
political subdivisions thereof.
|
e.
|
Remedies. Employee
acknowledges and agrees that the Company's remedy at law for a breach or a
threatened breach of the provisions herein would be inadequate, and in
recognition of this fact, in the event of a
|
7
|
breach
or threatened breach by Employee of any of the provisions of this
Agreement, it is agreed that the Company will be entitled to equitable
relief in the form of specific performance, a temporary restraining order,
a temporary or permanent injunction or any other equitable remedy which
may then be available, without posting bond or other
security. Employee acknowledges that the granting of a
temporary injunction, a temporary restraining order or other permanent
injunction merely prohibiting Employee from engaging in any business
activities would not be an adequate remedy upon breach or threatened
breach of this Agreement, and consequently agrees upon any such breach or
threatened breach to the granting of injunctive relief prohibiting
Employee from engaging in any activities prohibited by this
Agreement. No remedy herein conferred is intended to be
exclusive of any other remedy, and each and every such remedy will be
cumulative and will be in addition to any other remedy given hereunder now
or hereinafter existing at law or in equity or by statute or
otherwise.
|
7.
|
Termination of the
Agreement
|
a.
|
Notice of
Termination. Either the Employee or the Board may
terminate this Agreement at any time and in his or their sole discretion
upon no less than thirty (30) days written Notice of Termination to the
other party. "Notice of Termination" means a written notice
which shall indicate the specified termination provision in this Agreement
relied upon (Section 7.c., Section 7.d., Section 7.e., Section 7.f,
Section 7.g. or Section 7.h.) and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of
Employee's employment under the provision so indicated; provided, however,
no such purported termination will be effective without such Notice of
Termination; provided further, however, any purported termination by the
Company or by Employee will be communicated by a Notice of Termination to
the other party hereto in accordance with Section 9 (“Notices”)
of this Agreement.
|
b.
|
Termination
Date. The "Termination Date" shall mean the date
specified in the Notice of Termination. The Termination Date shall not be
less than thirty (30) days from the date such Notice of Termination is
given; provided, however, that if within fifteen (15) days after any
Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date finally determined
by either mutual written agreement of the parties or by the final
judgment, order or decree of a court of competent jurisdiction (the time
for appeal there from having expired and no appeal having been
taken).
|
8
c.
|
Termination by the
Company for Just Cause.
|
(i)
|
The
Company may terminate the Employee for “Just Cause” (as defined in Section
7.c.ii), provided that the Company
shall:
|
(A)
|
Give
the Employee Notice of Termination as specified in Section 7.a.,
and
|
(B)
|
Pay
the Employee, within thirty (30) days after his Termination Date, his Base
Salary through the Termination Date at the rate in effect at the time the
Notice of Termination is given plus any Bonus (only for periods completed
and accrued, but not paid), incentive, deferred, or other compensation,
and provide any other benefits, which have been earned or become payable
as of the Termination Date, pursuant to the terms of this or any other
agreement, or compensation or benefit plan, but which have not yet been
paid or provided.
|
(ii)
|
For
purposes of this Agreement “Just Cause” means a good faith determination
of the Board that the Employee:
|
(A)
|
Failed
to substantially perform his duties with the Company (other than a failure
resulting from his incapacity due to physical or mental illness) after a
written demand for substantial performance has been delivered to him by
the Board, which demand specifically identifies the manner in which the
Board believes he has not substantially performed his
duties;
|
(B)
|
Has
engaged in conduct the consequences of which are materially adverse to the
Company, monetarily or otherwise;
or
|
(C)
|
Has
pleaded guilty to or been convicted of a felony;
or
|
(D)
|
Has
materially breached the terms of this
Agreement.
|
No act,
or failure to act, on the Employee's part shall be grounds for termination with
Just Cause unless he has acted or failed to act with an absence of good faith or
without a reasonable belief that his action or failure to act was in or at least
not opposed to the best interests of the Company. The Employee will
not be deemed to have been terminated with Just Cause under (ii)(B), (C) or (D),
unless there will have been delivered to the Employee a letter setting forth the
reasons for the Company’s termination of the Employee for Just Cause and the
Employee has failed to cure such reason for termination within thirty (30) days
of the receipt of such notice.
9
d.
|
Termination by the
Company Without Just Cause. If the Company terminates
this Agreement prior to its expiration (including extensions as provided
in Section 1.b.) for any reason other than for Just Cause or the death or
Disability (as defined in Section 7.e.) of the Employee, the Company
shall:
|
(i)
|
Within
thirty (30) days of the Termination Date, pay to the Employee a lump sum
severance payment equal to three (3) 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 for a year within the same two year period of employment
immediately preceding the Termination
Date,
|
(ii)
|
Pay
to the Employee any unpaid expense reimbursement upon presentation by the
Employee of an accounting of such expenses in accordance with normal
Company practices, but no later than March 15 of the year following the
year of termination,
|
(iii)
|
Immediately
vest any unvested Company stock options and restricted stock (excluding
all LTIP shares),
|
(iv)
|
Pay
any deferred income or Retirement Compensation (under Section 4.c.) or
other benefit payments due under this or any other agreements or plans,
provided such payments shall be made under the schedule originally
contemplated in the agreement under which they were
granted,
|
(v)
|
Make
any other payments or provide any benefits earned under this or any other
employment agreement or plan, including the Company’s Long-Term Incentive
Plan, and
|
(vi)
|
Continue
coverage of the Employee and any dependents covered at the time of
termination under the Company’s group health plans at the Company’s cost
for a period equal to the lesser of (i) 18 months or (ii) such period as
the Employee is eligible to participate in another employer’s health
plan.
|
e.
|
Termination in the
Event of Death or Disability. This Agreement will be
terminated by the Company in the event of the death of Employee and may be
terminated by the Company in the event of the Disability (as hereinafter
defined) of the Employee upon proper notification to the Employee (or his
estate in the event of his death), provided the Company shall pay to the
Employee (or to the estate of the Employee in the event of termination due
to the death of the Employee) the compensation and other benefits
described in Section 4.a. of this Agreement which would have been earned
for (6) months after the Termination Date and any amounts
|
10
|
earned
under Section 4.b. of this Agreement pro-rated for the period up to the
Termination Date. “Disability” means being eligible to receive
a disability benefit under the Federal Social Security Act. All
amounts payable under this Section 7.e. will be paid in a lump sum as soon
as practicable, but no later than two and one-half (2-1/2) months
following the close of the calendar year in which the death or Disability
occurred.
|
f.
|
Termination by the
Employee for Good Reason.
|
(i)
|
If
the Employee terminates this Agreement for Good Reason (as defined in
Section 7.f.ii), provided that such Employee’s termination occurs within
two years of the Good Reason, the Company
shall:
|
(A)
|
Within
thirty (30) days of the Termination Date, pay to the Employee a lump sum
severance payment equal to three (3) 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 for a year within the same two year period of employment
immediately preceding the Termination
Date,
|
(B)
|
Pay
to the Employee any unpaid expense reimbursement upon presentation by the
Employee of an accounting of such expenses in accordance with normal
Company practices, but no later than March 15 of the year following the
year of termination,
|
(C)
|
Immediately
vest any unvested Company stock options and restricted stock (excluding
all LTIP shares),
|
(D)
|
Pay
any deferred income or Retirement Compensation (under Section 4.c.) or
other benefit payments due under this or any other agreements or plans,
provided such payments shall be made under the schedule originally
contemplated in the agreement under which they were
granted,
|
(E)
|
Make
any other payments or provide any benefits earned under this or any other
employment agreement or plan, including the Company’s Long-Term Incentive
Plan, and
|
(F)
|
Continue
coverage of the Employee and any dependents covered at the time of
termination under the Company’s group health plans at the Company’s cost
for a period equal to the lesser of (i) 18 months or (ii) such period as
the
|
11
|
Employee
is eligible to participate in another employer’s health
plan.
|
(ii)
|
"Good
Reason" means the occurrence of any of the following events without
Employee's prior express written
consent:
|
(A)
|
A
material diminution in the Employee’s Base
Salary;
|
(B)
|
A
material diminution in the Employee’s authority, duties or
responsibilities;
|
(C)
|
A
material diminution in the authority, duties or responsibilities of the
supervisor to whom the Employee is required to report, including a
requirement that the Employee report to a corporate officer or employee
instead of reporting directly to the
Board;
|
(D)
|
A
material diminution in the budget over which the Employee retains
authority;
|
(E)
|
A
material diminution in reward opportunities under the annual Performance
Bonus of Section 4.b. of this
Agreement;
|
(F)
|
A
material change in the geographic location at which the Employee must
perform services; or
|
(G)
|
Any
other action or inaction that constitutes a material breach by the Company
of this Agreement.
|
Employee
must provide notice to the Company of the condition described in paragraphs
(A)-(G) of this section within ninety (90) days, upon the notice of which the
Company will have a period of thirty (30) days during which it may remedy the
condition and not be required to pay the amount.
g.
|
Termination by the
Employee for other than Good Reason. The Employee may
terminate this Agreement for other than Good Reason upon proper
notification as provided in Section 7.a. In such event the
Company shall pay to the Employee:
|
(i)
|
Within
thirty (30) days after this Termination Date, in a lump sum, the
compensation provided in Section 4 at the rate in effect at the time of
the Notice of Termination. The Base Salary and Bonus will be prorated for
the portion of the year that the Employee is employed by the Company;
provided, however, that if the Employee’s termination occurs prior to
March 31 of the year the Employee will not be entitled to a prorated Bonus
for the year;
|
12
(ii)
|
Any
incentive, deferred or other compensation which has been earned or has
become payable pursuant to the terms of this or any other agreement or
compensation or benefit plan as of the Termination Date, but which has not
yet been paid, provided such payments will be made under the schedule
originally contemplated in the agreement under which they were
granted;
|
(iii)
|
Any
unpaid expense reimbursement upon presentation by the Employee of an
accounting of such expenses in accordance with normal Company practices,
but not later than March 15 of the year following the year of termination;
and
|
(iv)
|
Any
other payments for benefits earned under this or any other employment
agreement or plan.
|
h.
|
Termination by the
Employee following Change of
Control.
|
(i)
|
If
the Employee terminates this Agreement within two years following a Change
of Control of the Company (as defined in Section 1.c.) the Company
shall:
|
(A)
|
Within
thirty (30) days of the Termination Date, pay to the Employee a lump sum
severance payment equal to 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 for a year within the same two year period of employment
immediately preceding the Termination
Date,
|
(B)
|
Pay
to the Employee any unpaid reimbursement upon presentation by the Employee
of an accounting of such expenses in accordance with normal Company
practices, but not later than March 15 of the year following the year of
termination,
|
(C)
|
Immediately
vest any unvested Company stock options and restricted stock (excluding
all LTIP shares),
|
(D)
|
Pay
any deferred income or Retirement Compensation (under Section 4.c.) or
retirement payment or other benefit payments due under this or any other
agreements or plans, provided such payments will be made under the
schedule originally contemplated in the agreement under which they were
granted,
|
13
(E)
|
Make
any other payments or provide any benefits earned under this or any other
employment agreement or plan, including the Company’s Long-Term Incentive
Plan, and
|
(F)
|
Continue
coverage of the Employee under the Company’s group health plans at the
Company’s cost for a period equal to the lesser of (i) 18 months or (ii)
such period as the Employee is receiving COBRA health continuation
coverage from the Company.
|
i.
|
Code Section 409A
Compliance. Except with respect to amounts paid pursuant
to a schedule in a plan or arrangement outside of this Employment
Agreement, it is intended that amounts payable under this Section 7 not be
considered non-qualified deferred compensation subject to Internal Revenue
Code Section 409A. Employee is a Specified Employee under
Internal Revenue Code Section 409A, therefore, to the extent such amounts
are considered non-qualified deferred compensation payable upon a
separation from service under Internal Revenue Code Section 409A, payment
of those amounts so deferred under Internal Revenue Code Section 409A may
not be made until at least six (6) months following the Employee’s
separation from service of the Company (or, if earlier, the date of death
of Employee).
|
8.
|
Life
Insurance. The Company may, at any time after the
execution of this Agreement, maintain any outstanding life insurance
policies and apply for and procure as owner and for its own benefit new
life insurance on Employee, in such amounts and in such form or forms as
the Company may determine. Employee shall, at the request of
the Company, submit to such medical examinations, supply such information,
and execute such documents as may be required by the insurance company or
companies to whom the Company has applied for such
insurance. Employee hereby represents that to his knowledge he
is in excellent physical and mental
condition.
|
9.
|
Notices. For
the purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and will be deemed to
have been duly given when personally delivered, by facsimile transmission
or sent by certified mail, return receipt requested, postage prepaid, or
by expedited (overnight) courier with established national
reputation, shipping prepaid or billed to sender, in either case addressed
to the respective addresses last given by each party to the
other (provided that all notices to the Company must be
directed to the attention of the Secretary of the Company ) or to such
other address as either party may have furnished to the other in writing
in accordance herewith. All notices and
communication will be deemed to have been received on the date of delivery
thereof, or on the second day after deposit thereof with an expedited
courier service, except that notice of change of address will be effective
only upon receipt.
|
14
Company
at: Petroleum
Development Corporation
Attention:
Chairman of the Board
000
Xxxxxxx Xxxxxxxxx
X.X. Xxx
00
Xxxxxxxxxx,
XX 00000
Employee
at: Xxxxxx
Xxxxx
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
10.
|
Successors.
This Agreement will be binding on the Company and any successor to any of
its businesses or assets. Without limiting the effect of the
prior sentence, the Company shall use its best efforts to require any
successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession or assignment had taken
place. As used in this Agreement, "Company" means the Company as
hereinbefore defined and any successor or assign to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement or
which is otherwise obligated under this Agreement by the first sentence of
this Section, entitled Successors, by operation of law or
otherwise.
|
11.
|
Binding
Effect. This Agreement will inure to the benefit of and
be enforceable by Employee's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Employee should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, will be paid in accordance with the
terms of this Agreement to Employee's
estate.
|
12.
|
Integration,
Modification and Waiver. This Agreement constitutes the
sole employment agreement between the parties, and any prior employment
agreement, written or oral, is terminated. No provision of this
Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by Employee
and such officer of the Company as may be specifically designated by the
Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party will be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent
time.
|
13.
|
Headings. Headings
used in this Agreement are for convenience only and will not be used to
interpret or construe its
provisions.
|
14.
|
Waiver of
Breach. The waiver of either the Company or Employee of
a breach of any provision of this Agreement will not operate or be
construed as a waiver of any subsequent breach by either the Company or
Employee.
|
15
15.
|
Amendments. No
amendments or variations of the terms and conditions of this Agreement
will be valid unless the same is in writing and signed by all of the
parties hereto.
|
16.
|
Survival of
Obligations. The provisions of Section 6 of this
Agreement will continue to be binding upon the Employee and Company in
accordance with their terms, notwithstanding the termination of the
Employee’s employment with the Company for any reason or the expiration of
this Agreement.
|
17.
|
Severability. The
invalidity or unenforceability of any provision of this Agreement, whether
in whole or in part, shall not in any way affect the validity and/or
enforceability of any other provision contained herein. Any
invalid or unenforceable provision shall be deemed severable to the extent
of any such invalidity or unenforceability. It is expressly
understood and agreed that while the Company and Employee consider the
restrictions contained in this Agreement reasonable for the purpose of
preserving for the Company the good will, other proprietary rights and
intangible business value of the Company, if a final judicial
determination is made by a court having jurisdiction that the time or
territory or any other restriction contained in this Agreement is an
unreasonable or otherwise unenforceable restriction against Employee, the
provisions of such clause will not be rendered void but will be deemed
amended to apply as to maximum time and territory and to such other extent
as such court may judicially determine or indicate to be
reasonable.
|
18.
|
Governing
Law. This Agreement will be construed and enforced
pursuant to the laws of the State of West
Virginia.
|
19.
|
Arbitration. Any
controversy or claim arising out of or relating to this Agreement or any
transactions provided for herein, or the breach thereof, other than a
claim for injunctive relief, will be settled by arbitration in accordance
with the commercial Arbitration Rules of the American Arbitration
Association (the "Rules") in effect at the time demand for arbitration is
made by any party. The evidentiary and procedural rules in such
proceedings will be kept to the minimum level of formality that is
consistent with the Rules. The Company shall name one arbitrator, Employee
shall name a second and the two arbitrators so chosen shall name a
neutral, third arbitrator, who will serve as the sole arbitrator of the
controversy or claim. The third arbitrator must be experienced
in the matters in dispute. If the third and sole arbitrator is
not agreed upon, the American Arbitration Association will name him or
her. Arbitration will occur in Bridgeport, West Virginia, or
such other location agreed to by the Company and Employee. The
award made by the third arbitrator will be final and binding, and judgment
may be entered in any court of law having competent jurisdiction. The
award is subject to confirmation, modification, correction, or vacation
only as explicitly provided in Title 9 of the United States
Code. The prevailing party will be entitled to an award of pre-
and post-award interest as well as reasonable attorneys' fees incurred in
connection with the arbitration and any judicial proceedings related
thereto.
|
16
20.
|
Executive Officer
Status. Employee acknowledges that he may be deemed to
be an "executive officer" of the Company for purposes of the Securities
Act of 1933, as amended (the "1933 Act"), and the Securities Exchange Act
of 1934, as amended (the "1934 Act") and, if so, he shall comply in all
respects with all the rules and regulations under the 1933 Act and the
1934 Act applicable to him in a timely and non-delinquent manner. In order
to assist the Company in complying with its obligations under the 1933 Act
and 1934 Act, Employee shall provide to the Company such information about
Employee as the Company shall reasonably request including, but not
limited to, information relating to personal history and
stockholdings. Employee shall immediately report to the General
Counsel of the Company or other designated officer of the Company all
changes in beneficial ownership of any shares of the Company Common Stock
deemed to be beneficially owned by Employee and/or any members of
Employee's immediate family.
|
21.
|
Pronouns. All
pronouns and any variations thereof will be deemed to refer to the
masculine, feminine, neuter, singular, or plural, as the identity of the
person or entity may require. As used in this Agreement: (1) words of the
masculine gender shall mean and include corresponding neuter words or
words of the feminine gender, (2) words in the singular shall mean and
include the plural and vice versa, and (3) the word "may" gives sole
discretion without any obligation to take any
action.
|
22.
|
Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, but all of which together will constitute but
one document.
|
23.
|
Exhibits. Any
Exhibits attached hereto are incorporated herein by reference and are an
integral part of this Agreement.
|
17
IN
WITNESS WHEREOF, the Company and the Employee have duly executed this Employment
Agreement as of the date first above written.
Company
|
Executive
|
|||
Petroleum
Development Corporation
|
||||
By:
|
/s/ Xxxxxxxx Xxxxx | /s/ Xxxxxx X. Xxxxx | ||
Xxxxxxxx
Xxxxx
|
Xxxxxx
X. Xxxxx
|
|||
Position:
|
Chair
of the
|
|||
Compensation
Committee
|
18