PETROLEUM DEVELOPMENT CORPORATION
2007 LONG-TERM INCENTIVE PROGRAM
(as amended for 2008)

ARTICLE 1
INTRODUCTION
 1.1 2004 Petroleum Development Corporation Long-Term Equity Compensation
Plan.  Petroleum Development Corporation, a Nevada Corporation (hereinafter
referred to as the "Company") has established an incentive compensation plan
known as the "2004 Petroleum Development Corporation Long-Term Equity
Compensation Plan" (hereinafter referred to as the "Plan").  The Plan permits
the grant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares and Performance Units
(individually an "Award" and collectively "Awards").  The Plan became effective
as of April 27, 2004.  Awards may be granted under the Plan until April 25,
2014.
 
 1.2 Committee Authority.  The Plan is administered by the Compensation
Committee of the Board (hereinafter referred to as the "Committee").  Under the
Plan, the Committee has, among its other powers, the authority to select
Employees who shall participate in the Plan, determine the size and types of
Awards, and determine the terms and conditions of the Awards in a manner
consistent with the Plan.
 
 1.3 Objectives of the Program.  Pursuant to the authority granted to the
Committee under Article 9 and Article 10 of the Plan concerning the grant of
Performance Shares, the Committee established, effective as of January 1, 2007,
the Petroleum Development Corporation 2007 Long-Term Incentive Program
(hereinafter referred to as the "Program") for the benefit of its Covered
Employees.  The Program has been updated to list the 2008 Performance Share
Awards and the share price thresholds for the three year, four year, and five
year performance periods ending on December 31, 2010, December 31, 2011, and
December 31, 2012 respectively.
 
ARTICLE 2                                
PERFORMANCE SHARE AWARD
 2.1 Grant to Covered Employees.  Each Covered Employee listed in the table
below shall receive an Award of Performance Shares as indicated below.  Such
Performance Shares shall be subject to the terms and conditions specified in
this Program.  The amount of Performance Shares awarded to the Covered Employee
shall be determined by dividing the Compensation Target for such Covered
Employee by the Estimated Risk Adjusted Expected Value of a Performance Share.
 
 
 

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Covered Employee
 
Estimated Risk Adjusted Expected Value of a Performance Share
 
Compensation Target
 
Performance
Shares Awarded
Steven R. Williams
 
$ 30.76
 
$700,000
 
22,757
Rick McCullough
 
$ 30.76
 
$255,000
 
 8,290
Eric R. Stearns
 
$ 30.76
 
$221,125
 
 7,189
Bart Brookman
 
$ 30.76
 
$125,000
 
 3,698
Dan Amidon
 
$ 30.76
 
$113,750
 
 2,773

 2.2 Performance Metric.  With regard to Covered Employees employed on the last
day of a Performance Period, the performance measure to be used for purposes of
the Program shall be the Share Price at the end of a Performance Period.  For
this purpose, the “Share Price” shall be the average daily closing price of the
Shares on the NASDAQ Global Select Market (or such successor market) as reported
in the Wall Street Journal during the months of December 2010, December 2011,
and December 2012, as the case may be.
 
Except as provided in Section 2.3 and Section 2.6, Performance Shares awarded
shall vest only if (i) the Covered Employee is employed by the Company on the
last day of a given Performance Period, and (ii) certain minimum thresholds of
Share Price Performance, as set forth in the table below, are attained as of the
last day of the three year Performance Period, the four year Performance Period
or the five year Performance Period, as the case may be:
 
Share Price
3 Year Period
Ending 12/31/10
 
Share Price
4 Year Period
Ending 12/31/11
 
Share Price
5 Year Period
Ending 12/31/12
 
 
 
Vested Percentage
$ 80.00
 
$90.00
 
$100.00
 
50%
$ 90.00
 
$102.50
 
$120.00
 
75%
$100.00
 
$117.50
 
$142.50
 
100%

There shall be no interpolation of a vested percentage for a Share Price result
between price levels.  By way of example, if the Share Price is $83.75 at the
end of the three year Performance Period, the Covered Employees shall be fifty
percent (50%) vested in the Performance Shares.
 
Performance Shares vested for a Performance Period shall not be subject to
divestment in the event the Share Price subsequently decreases below the
threshold for a subsequent Performance Period or if the Covered Employee
subsequently ceases to be employed by the Company for any reason.  By way of
example, if the Share Price is $90.00 at the end of the three year Performance
Period and $95.00 at the end of the four year Performance Period, Covered
Employees shall be seventy-five percent (75%) vested in the Performance Shares
as of December 31, 2010 and shall be entitled to payment as provided in Section
2.5.  No adjustment or recapture of the Performance Shares already vested shall
occur at December 31, 2011, despite the fact that Performance Shares would
otherwise be considered at a fifty percent (50%) vested level as of December 31,
2011.  Performance Shares which are not vested at December 31, 2012 shall be
forfeited.
 
 
 
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If a minimum threshold is attained for a Performance Period, no further
Performance Shares shall be vested unless a higher vested percentage is achieved
for the Performance Shares in a subsequent Performance Period.  By way of
example, assume the Covered Employee is employed with the Company through
December 31, 2012.  If the Share Price is $80 as of December 31, 2010, the
Covered Employee is fifty percent (50%) vested as of such date (and therefore
paid fifty percent (50%) of his Performance Shares).  If the Share Price is
$100.00 as of December 31, 2011, the Covered Employee is not entitled to any
further Performance Shares as of that date because neither the seventy-five
percent (75%) nor one hundred percent (100%) thresholds have been met as of that
date nor shall the Covered Employee be entitled to any further Performance
Shares as of December 31, 2012 unless the Share Price at December 31, 2012 is at
the 75% ($120.00) or 100% ($142.50) threshold as of the end of that year.
 
 2.3 Termination of Employment Due to Death, Disability, By the Company For a
Reason Other Than Cause or By the Covered Employee for Good Reason.  In the
event there is a termination of employment of the Covered Employee prior to
December 31, 2012 due to death, Disability, by the Company for a reason other
than Cause or by the Covered Employee for Good Reason, the Company shall
determine (i) the vested percentage associated with the compound annualized
growth rate (CAGR) for the Performance Shares as of such date of termination,
based on the table below (the “Vested Percentage”); and (ii) the percentage
associated with employment for Performance Shares, derived by dividing the
number of completed calendar quarters of employment by the Covered Employee with
the Company after December 31, 2007 by twenty (20) (the “Time-Based Vested
Percentage”).
 
The Vested Percentage shall be based on the following table:
 
CAGR
 
Vested Percentage
12%
 
50%
16%
 
75%
20%
 
100%

 
 The Performance Shares shall be multiplied by the product of the Vested
Percentage and the Time-Based Vested Percentage.  From such result, there shall
be subtracted any previously paid Shares in order to determine the amount
payable to the Covered Employee.  If such calculation results in a positive
amount, such amount shall be paid in Shares to the Covered Employee as soon as
practicable following such determination.  For purposes of determining the
Vested Percentage as of the date of termination, the CAGR shall be derived from
(i) the Share Price as of the date of termination, being the average daily
closing price of the Shares on the NASDAQ Global Select Market (or such
successor market) as reported in the Wall Street Journal during the thirty (30)
day calendar period preceding the date of termination compared to (ii) $57.25
(which was the average daily closing price of the Shares on the NASDAQ Global
Select Market as reported in the Wall Street Journal for December 2007).  There
shall be no interpolation of a Vested Percentage for a Share Price result
between price levels.
 
 
 
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By way of example, assume a Covered Employee is awarded 10,000 Performance
Shares and terminates due to Disability on January 30, 2010.  If the Share Price
is determined to be $110 at the date of termination it will equate to a CAGR
of over 20% as of such date of termination and will result in a 100% Vested
Percentage.  The Time-Based Vested Percentage will be 8/20 or 40%.  The
Performance Shares awarded to the Covered Employee will be 10,000 X (100% x 40%)
or 4,000 Performance Shares.
 
As a further example, assume a Covered Employee is awarded 10,000 Performance
Shares, is 75% vested as of December 31, 2010, and receives 7,500
Shares.  Further assume that the Covered Employee incurs Disability at July 1,
2010 at which point the Vested Percentage is determined to be 75%.  The
Time-Based Vested Percentage at July 1, 2011 is 14/20 or 70%.  The Covered
Employee is not entitled to any portion of the remaining 2,500 unvested
Performance Shares because 10,000 Performance Shares x (70% x 75%) is 5,250
Performance Shares which is less than the 7,500 Performance Shares previously
paid to the Covered Employee.
 
For purposes of this Program, "Cause" shall mean a good faith determination of
the Board that the Covered 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, and the Covered Employee
has failed to cure such deficiency within thirty (30) days of the receipt of
such notice;
 
(b)           Has engaged in conduct the consequences of which are materially
adverse to the Company, monetarily or otherwise;
 
(c)           Has pleaded guilty to or been convicted of a felony or a crime
involving moral turpitude or dishonesty;
 
(d)           Had engaged in conduct which demonstrates the Covered Employee's
gross unfitness to serve the Company in his current position (that is not
remedied by the Covered Employee within fourteen (14) days of written notice of
such unfitness from the Board); or
 
(e)           Has materially breached the terms of his Employment Agreement.
 
For purposes of this Program, "Good Reason" shall mean the occurrence of any of
the following events without the Covered Employee's prior express written
consent:
 
(a)           The Covered Employee is assigned any duties materially and
adversely inconsistent with his position, duties, responsibilities and status
with the Company as in effect at the effective date of his Employment Agreement
or as may be assigned to the Covered Employee pursuant to his Employment
Agreement;
 
(b)           The title or offices in effect as of the date of this Program or
as the Covered Employee may be appointed to or elected to in accordance with his
Employment Agreement are materially and adversely changed;
 
 
 
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(c)           There is a reduction in the base salary  (as such base salary
shall have been increased from time to time) payable to the Covered Employee
pursuant to his Employment Agreement;
 
(d)           The Company fails to continue in effect any material employee
benefit plan (including any medical, hospitalization, life insurance or
disability benefit plan in which Employee participates), or any material fringe
benefit or perquisite enjoyed by him unless either an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to the failure to continue such plan or the Covered Employee is not
materially and adversely damaged, or the failure by the Company to continue
Covered Employee's participation therein, or any action by the Company which
would directly or indirectly materially reduce his participation therein or
reward opportunities thereunder, or the failure by the Company to provide him
with the benefits to which he is entitled under his Employment Agreement;
provided, however, that the Covered Employee continues to meet all
eligibility  requirements thereof and has not otherwise been terminated in
accordance with his Employment Agreement;
 
(e)           The Company requires or attempts to require the Covered Employee
to be based anywhere more than 60 miles outside of Bridgeport, West Virginia,
except reasonably required travel in connection with the Company’s business
(Denver, CO in the case of Barton Brookman);
 
(f)           The Company fails to obtain a satisfactory agreement from any
successor or assign of the Company to assume and agree to perform his Employment
Agreement;
 
(g)           Any material breach by the Company of any material provision of
his Employment Agreement; or
 
(h)           Any purported Termination of the Covered Employee’s employment by
the Company for Just Cause that does not comply with the terms of "Just Cause"
under his Employment Agreement.
 
 2.4 Voluntary Termination of Employment By the Covered Employee or Termination
of Employment by the Company For Cause.  In the event the Covered Employee
voluntarily terminates his employment prior to December 31, 2012 or the Company
terminates the Covered Employee for Cause prior to December 31, 2012, the
non-vested Shares of the Covered Employee shall be forfeited upon termination.
 
 2.5 Payment of Performance Shares at the End of a Performance
Period.  Performance Shares vested pursuant to Section 2.2 and payable to a
Covered Employee following the last day of a Performance Period shall be paid to
the Covered Employee in Shares within seventy-five (75) days after the last day
of the Performance Period in which such vesting occurs.
 
 2.6 Change in Control.  In the event of a Change in Control of the Company
triggered by the sale of Shares, the sales price of a Share in the subject
Change in Control shall be the Share Price for purposes of this Section.  In the
event of a Change of Control triggered by an event other than the sale of
Shares, the Share Price for purposes of this Section shall be determined in good
faith by the Committee, in its sole discretion.  The determination of the Share
Price by the Committee shall be conclusive and binding on all parties.  The
vested percentage of the Covered Employees shall be determined by comparing such
Share Price with the Share Price thresholds in Section 2.2 at the end of the
then current Performance Period.
 
 
 
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 2.7 Share Withholding.  The Committee may withhold such amount of Shares from
Shares paid to Covered Employees as is necessary to satisfy any tax withholding
obligations.
 
 2.8 Dividends.  No dividends shall be paid or accrued on any Performance Shares
prior to the date such Performance Shares are vested.  Dividends declared on
vested Performance Shares prior to the date that such vested Performance Shares
are paid to the Covered Employee, shall be payable to the Covered Employees,
without interest.
 
 2.9 Voting Rights.  A Covered Employee shall not have any voting rights on any
Performance Shares prior to the date such Performance Shares are vested.
 
 2.10 Fractional Shares.  The Company will not be required to issue any
fractional Shares pursuant to this Program.  The Committee may provide for the
elimination of fractions or for the settlement of fractions in cash.
 
ARTICLE 3
GENERAL
 3.1 Capitalized Terms.  All capitalized terms shall have the meaning ascribed
to them under this Program or, if not otherwise defined in this Program, then
such capitalized terms shall have the meaning ascribed to them under the Plan.
 
 3.2 Construction.  The provisions of this Program shall be construed in a
manner consistent with the Plan.  In the event of any inconsistency between the
terms of the Program and the terms of the Plan, the terms of the Plan shall
control.
 
 3.3 Compliance with Section 409A of the Internal Revenue Code.  Notwithstanding
anything in this Program to the contrary, to the extent that this Agreement
constitutes a nonqualified deferred compensation plan to which Internal Revenue
Code Section 409A applies, the administration of this Program (including time
and manner of payments under the Program) shall comply with Section 409A.
 

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