Document:

ex10.htm

    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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              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.

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    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.

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    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;

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (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.

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

     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.

     

    6exhibit106.htm

    February
18, 2007

    

    

    Mr. Erik
F. Johnsen

    P.O. Box
160

    Covington,
LA  70434

    

    Reference:
Erik F. Johnsen Consulting Agreement

    

    

    This
letter will confirm that International Shipholding Corporation has agreed to
retain you as a consultant for a period of time commencing May 1, 2007, and
ending December 31, 2008.  Your consulting compensation will be annual
fee of $250,000, payable pro-rata in monthly installments of $20,833.34, plus
reasonable out-of-pocket expenses.  At the end of the agreed period of
time, this Agreement is automatically extended month-by-month with a
continuation of said pro-rata monthly installments of $20,833.34.

    

    This
Agreement may be cancelled by either party on giving a 90-day notice of
cancellation.

    

    Please
sign below to acknowledge your agreement and acceptance of this Consulting
Agreement.

    

    Sincerely,

    

    

    

    N. M. Johnsen

    Chairman of the Board

    

    

    AGREED
AND ACCEPTED:

    

        /s/ Erik F.
Johnsen

    ___________________________________

    Erik. F.
Johnsen

     

    
    April 30,
2007

    __________________________________

    Date

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