Document:

Exhibit 10.1

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (the “Agreement”) is entered into by and between American
Reprographics Company, a Delaware corporation (“ARC”) as the employer; and John Toth, a resident of
California, an individual (“Executive”), as the employee, on July 18, 2011 (the “Effective Date”).
ARC and Executive may be referred to collectively in this Agreement as the “Parties” and
individually as a “Party.”

RECITALS

ARC has agreed to employ Executive and Executive has agreed to accept such employment, subject
to the terms and conditions set forth herein.

Now, therefore, in consideration of the promises, covenants and agreements set forth in this
Agreement, the Parties agree as follows:

1. Position and Duties 

(a) ARC hereby employs Executive as its Chief Financial Officer (“CFO”), and Executive agrees
to serve ARC in such capacity, upon the terms and conditions set forth herein.

(b) Executive shall report to ARC’s Chief Executive Officer (“CEO”). Executive’s primary
responsibilities shall be to keep or cause to be kept the books of account of ARC in a thorough and
proper manner and shall render statements of the financial affairs of ARC in such form and as often
as required by the Board of Directors or ARC’s CEO. Executive, in his capacity as CFO, subject to
the order of the Board of Directors, shall have the custody of all funds and securities of ARC, and
shall attest to financial statements, shall be responsible for ARC’s compliance with financial
reporting and disclosure laws and rules, and shall perform other duties commonly incident to the
office of CFO, and shall also perform such other duties and have such other powers as the Board of
Directors or ARC’s CEO shall designate from time
to time. Executive shall have the authority generally incident and necessary to perform such
duties. Executive will be a member of the executive team.

 

 

 

(c) During the term of this Agreement, Executive will devote all of his employment time and
attention to the affairs of ARC and use his best efforts to promote the business and interests of
ARC. Executive owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in
the best interests of ARC, and not to do any act which would injure the business, interests, or
reputation of ARC or any of its subsidiaries or affiliates.

2. Term 

The term of this Agreement and of Executive’s employment hereunder shall commence on the
Effective Date hereof and continue until the third (3rd) anniversary of the Effective Date unless
otherwise terminated in accordance with the provisions hereof; provided, however, that this
Agreement will automatically be extended on a year-to-year basis on the terms and conditions set
forth herein, including the bonus provisions of Section 3(b), unless either party gives written
notice to the other at least one hundred twenty (120) days prior to the expiration of the term of
this Agreement, which includes any extensions, that this Agreement shall terminate at the end of
such term, or extension thereof.

3. Direct Compensation 

In consideration of the services to be provided by Executive, Executive shall receive
compensation, less all applicable taxes, social security payments and other items that ARC is
required by law to withhold or deduct therefrom, as follows:

(a) Base Salary. Executive’s annual Base Salary shall be $300,000, paid in
installments in accordance with ARC’s customary payroll procedures.

 

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(b) Incentive Bonus. During the term of this Agreement, Executive shall be eligible
to receive an annual Incentive Bonus (“Incentive Bonus”) in an amount not exceeding
eighty percent (80%) of Executive’s Base Salary per year under performance criteria to be
established by ARC’s CEO in consultation with Executive and approved by the Compensation Committee
of ARC’s Board of Directors. The value of the Incentive Bonus shall be paid in cash no later than
the 60th day after the close of each fiscal year.

(c) Additional Bonuses. ARC may from time to time, in its absolute discretion,
establish additional bonus programs for Executive.

4. General Benefits

During the term of this Agreement, Executive shall be entitled to other benefits provided by
ARC to its senior executives from time to time, including but not limited to, 401(k) and other
retirement plans, deferred compensation, paid holidays, sick leave and other similar benefits.
Executive shall be entitled to four (4) weeks paid vacation each calendar year accrued and vested
in accordance with ARC’s vacation policy applicable to senior management.

5. Stock Plans

Executive shall be granted a one-time grant of 30,000 restricted shares of ARC common stock,
to be approved by the Compensation Committee of ARC’s Board of Directors. The restricted shares of
ARC common stock shall vest in equal installments of twenty-five percent (25%) on each of the first
four anniversaries of the date of grant, subject to Executive’s continued employment with ARC on
each vesting date. In addition, in the sole discretion of the Board of Directors of ARC,
Executive shall be eligible to participate in stock option, stock purchase, stock bonus and similar
plans of ARC established from time to time by ARC.

6. Group Insurance or Benefit Plans

During the term of this Agreement, Executive shall be automatically covered by ARC group
insurance programs (including any self-insured programs sponsored by ARC), including medical,
dental, vision, disability, and life, if any. Executive’s spouse and children
who are eligible for coverage may join the insurance programs, subject to ARC’s policies and
applicable laws. The premiums for all insurance programs for Executive and Executive’s spouse and
eligible children shall be paid by ARC.

 

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7. Reimbursement of Business Related Expenses

Executive shall be entitled to receive prompt reimbursement for reasonable expenses incurred
by him in performing services hereunder during the term of this Agreement in accordance with the
policies and procedures then in effect and established by ARC for its employees. Executive shall
also be entitled to reimbursement of Executive membership dues and related ongoing costs of
appropriate professional organizations which are approved by ARC’s CEO. 

8. Obligations and Restrictive Covenants.

(a) Obligations. During the term of this Agreement, Executive shall not engage in any
other employment, occupation or consulting activity for any direct or indirect remuneration. This
obligation shall not preclude Executive from: (i) serving in any volunteer capacity with any
professional, community, industry, civic, educational or charitable organization; (ii) serving as a
member of corporate boards of directors, provided that ARC’s CEO has given written consent, and
these activities or services do not materially interfere or conflict with Executive’s
responsibilities or ability to perform his duties under this Agreement; or (iii) engaging in
personal investment activities for himself and his family which do not interfere with the
performance of his duties and obligations hereunder.

 

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(b) Non-Competition; Non-Solicitation. The Parties hereto recognize that Executive’s
services are unique and the restrictive covenants set forth in this Section 8 are essential to
protect the business (including trade secret and other confidential information disclosed by ARC
to, learned by, or developed by, Executive during the course of employment
by ARC) and the goodwill of ARC. For purposes of this Section 8, all references to “ARC”
shall include ARC’s predecessors, subsidiaries and affiliates. As part of the consideration for
the compensation and benefits to be paid to Executive hereunder, during the term of this Agreement
Executive shall not:

(i) Engage in any business similar or related to or competitive with the business conducted by
ARC described from time to time in ARC’s Annual Report on Form 10-K to its shareholders and Board
of Directors (the “Core Business of ARC”);

(ii) Render advice or services to, or otherwise assist, any other person, association,
corporation, or other entity that is engaged, directly or indirectly, in any business similar or
related to, or competitive with, the Core Business of ARC;

(iii) Transact any business in any manner with or pertaining to suppliers or customers of ARC
which, in any manner, would have, or is likely to have, an adverse effect upon the Core Business of
ARC; or

(iv) Induce any employee of ARC to terminate his or her employment with ARC, or hire or assist
in the hiring of any such employee by any person or entity not affiliated with ARC.

For purposes of this Agreement, “affiliate” shall mean any entity which owns or controls, is owned
or controlled by, or is under common ownership or control, with ARC.

9. Confidentiality 

Executive acknowledges that it is the policy of ARC to maintain as secret and confidential all
valuable and unique information heretofore or hereafter acquired, developed or used by ARC relating
to the business, operations, employees and customers of ARC, which information gives ARC a
competitive advantage in the industry, and which information includes technical knowledge, know-how
or trade secrets and information concerning operations, sales,
personnel, suppliers, customers, costs, profits, markets, pricing policies, and other
confidential information and materials (the “Confidential Information”).

 

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(a) Non-Disclosure. Executive recognizes that the services to be performed by
Executive are special and unique, and that by reason of his duties he will be given, acquire or
learn Confidential Information. Executive recognizes that all such Confidential Information is the
sole and exclusive property of ARC. Executive shall not, either during or after his employment by
ARC, disclose the Confidential Information to anyone outside ARC or use the Confidential
Information for any purpose whatsoever, other than for the performance of his duties hereunder,
except as authorized by ARC in connection with performance of such duties.

(b) Return of Confidential Information. Executive shall deliver promptly upon
termination of employment with ARC, or at any time requested by ARC, all memos, notes, records,
reports, manuals, drawings, and any other documents, whether in electronic form or otherwise,
containing any Confidential Information, including without limitation all copies of such materials
in any format which Executive may then possess or have under his control.

(c) Ownership of Inventions; Assignment of Rights. Executive agrees that all
information, inventions, intellectual property, trade secrets, copyrights, trademarks, content,
know-how, documents, reports, plans, proposals, marketing and sales plans, client lists, client
files and materials made by him or by ARC (the “Work Product”) are the property of ARC and shall
not be used by him in any way adverse to the interests of ARC. Executive assigns to ARC any and
all rights of every nature which Executive may have in any such Work Product; provided, however,
that such assignment does not apply to any right which qualifies fully under California Labor Code
Section 2870. This section shall survive any termination of this Agreement and the employment
relationship between Executive and ARC. Executive shall not deliver, reproduce or in any way allow
such documents or things to be delivered or used by any
third party without specific direction or consent of the Board of Directors. Likewise,
Executive shall not disclose to ARC, use in ARC’s business, or cause ARC to use, any information or
material that is a trade secret of others.

 

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(d) Predecessors, Subsidiaries and Affiliates. For purposes of this Section 9,
references to ARC include its predecessors, subsidiaries and affiliates.

10. Termination. 

Notwithstanding any other term or provision contained in this Agreement, this Agreement and
the employment hereunder will terminate prior to the expiration of the term of this Agreement under
the following circumstances:

(a) Death. Upon Executive’s death.

(b) Disability. Upon Executive becoming “Permanently Disabled”, which, for purposes
of this Agreement, shall mean Executive’s incapacity due to physical or mental illness or cause,
which, in the written opinion of Executive’s regular licensed physician, results in the Executive
being unable to perform his duties on a full-time basis for six (6) months during a period of
twelve (12) months.

(c) Termination by ARC for Cause. Upon written notice to Executive, ARC may terminate
this Agreement for “Cause,” which, for purposes of this Agreement, shall mean termination by ARC in
its reasonable discretion because of Executive’s:

(i) willful refusal without proper cause to perform (other than by reason of physical or
mental disability or death) the duties set forth in this Agreement or delegated from time to time
in writing by the Board of Directors or ARC’s CEO, which remains uncorrected for thirty (30) days
following written notice to Executive by ARC’s CEO; or

 

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(ii) gross negligence, self dealing or willful misconduct of Executive in connection with the
performance of his duties hereunder, including, without limitation,
misappropriation of funds or property of ARC or its affiliates, securing or attempting to
secure personally any profit in connection with any transaction entered into on behalf of ARC or
its affiliates, or any willful act or gross negligence having the effect of injuring the
reputation, business or business relationships of ARC or its affiliates; or

(iii) fraud, dishonesty or misappropriation of ARC business and assets that harms the business
of ARC or its affiliates; or

(iv) habitual insobriety, abuse of alcohol, abuse of prescription drugs, or use of illegal
drugs; or

(v) engaging in any criminal activity involving moral turpitude; or

(vi) indictment or being held for trial in connection with a misdemeanor involving moral
turpitude or any felony; or

(vii) conviction of a felony or entry into a guilty plea that negatively reflects on
Executive’s fitness to perform the duties or harms the reputation or business or ARC or its
affiliates; or

(viii) any material breach of any covenants under this Agreement or other material policy of
ARC, other than under clauses (i) through (vii) of this Section 10(c), which remains uncorrected
for thirty (30) days following written notice to Executive by ARC’s CEO.

(d) Termination by ARC without Cause. Upon written notice to Executive, ARC may
terminate this Agreement at any time without any Cause or reason whatsoever.

 

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(e) Termination by Executive with Good Reason. Upon written notice to ARC of any of
the following “Good Reasons,” and the failure of ARC to correct the reduction,
change or breach within thirty (30) days after receipt of such notice, Executive may terminate
this Agreement after the occurrence of:

(i) a material change by ARC in the nature of Executive’s title, duties, authorities and
responsibilities set forth in this Agreement without Executive’s express consent; or

(ii) a reduction in Executive’s compensation as established under this Agreement, other than
as expressly permitted in this Agreement, without Executive’s express consent; or

(iii) a change in the officers (other than a change in the persons who occupy such positions)
to whom Executive reports without Executive’s express consent; or

(iv) a material breach by ARC of any material sections of this Agreement, other than as set
forth in clauses (i) through (iii) of this Section 10(e); or

(v) a Change of Control, as defined in Section 10(g), as a result of which Executive is not
offered the same or comparable position in the surviving company, or is offered such position but
within twelve (12) months after Executive accepts such position, Executive’s employment is
terminated either without Cause or for a Good Reason described in subsections (i), (ii), (iii) of
this Section 10(e) or in subsection (iv) as to the employment agreement then applicable to
Executive.

(f) Termination by Executive without Good Reason. Upon forty-five (45) days prior
written notice to ARC, Executive may terminate this Agreement and resign from Executive’s
employment hereunder without any Good Reason.

 

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(g) Change of Control.

(i) For purposes of this Agreement, “Change of Control” shall mean:

(A) ARC merges or consolidates with any other corporation (other than one of ARC’s
affiliates), as a result of which ARC is not the surviving company, or the shares of ARC voting
stock outstanding immediately after such transaction do not constitute, become exchanged for or
converted into, more than fifty percent (50%) of the Voting Shares of the merged or consolidated
company (as defined below);

(B) ARC sells or otherwise transfers or disposes of all or substantially all of its assets;

(C) Any third person or entity shall become the Beneficial Owner, as defined by Rule 13(d)-3
under the Securities Exchange Act of 1934, in one transaction or a series of related transactions
within any twelve (12) month period, of at least fifty percent (50%) of the Voting Shares of ARC’s
then outstanding voting securities.

(ii) For purposes of this Agreement, “Voting Shares” shall mean the combined voting securities
entitled to vote in the election of directors of a corporation, including ARC, or the merged,
consolidated or surviving company, if other than ARC.

(h) Expiration. For purposes of this Agreement, the expiration of this Agreement at
the end of its term, including any extensions, does not constitute a termination.

11. Severance Benefits 

(a) Basic Benefits. Upon expiration or termination of this Agreement for any reason,
and subject to the provisions of Section 11(e), Executive will be entitled to: (i) payment for all
Base Salary and unused vacation accrued and prorated, but unpaid, provided that such payment will
be made no later than 30 days after the effective date of termination, (ii) payment, when due, of
any earned but unpaid Incentive Bonus for the preceding fiscal year, (iii) any unreimbursed
business expenses authorized by this Agreement, provided that such reimbursement will be paid to
Executive no later than 30 days after the effective date of
termination, (iv) continuation of any benefits under Section 6 as required by applicable law
(e.g., COBRA), and (v) such rights as then exist with respect to then vested stock options,
restricted stock or other rights under similar plans.

 

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(b) Termination by ARC for Cause or by Executive without Good Reason. If this
Agreement and Executive’s employment hereunder is terminated by ARC for Cause pursuant to Section
10(c), or by Executive without Good Reason pursuant to Section 10(f), Executive shall not be
entitled to any additional payments or benefits hereunder.

(c) Termination by ARC without Cause; Termination by Executive with Good Reason. If
this Agreement and Executive’s employment hereunder is terminated by ARC without Cause pursuant to
Section 10(d), or by Executive for Good Reason as defined in Section 10(e), subject to Executive’s
compliance with the provisions of Section 14 below, Executive shall receive the following
additional payments or benefits:

(i) Executive’s Base Salary for twelve (12) months following the effective date of such
termination, paid as and when due as if this Agreement had not been terminated;

(ii) Continuation of coverage and premium payments by ARC under ARC’s group insurance programs
for Executive and his eligible family members under Section 6 for the period during which Base
Salary is paid under Section 11(c)(i) above;

(iii) In the event such termination occurs less than twelve (12) months following Executive’s
commencement of employment hereunder, all unvested stock options, restricted stock or similar
rights granted to Executive that would have vested as of the first anniversary of Executive’s
employment shall accelerate and become vested and exercisable immediately as of the effective date
of termination;

 

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(iv) In the event such termination occurs more than twelve (12) months following Executive’s
commencement of employment hereunder, all unvested stock options, restricted stock or similar
rights granted to Executive shall accelerate and become vested and exercisable immediately as of
the effective date of termination.

(d) Termination because of Death or Disability of Executive. If this Agreement and
Executive’s employment hereunder is terminated under Sections 10(a) or (b) by reason of Executive’s
death or by reason of being Permanently Disabled, Executive or his family shall be entitled to
continuation of coverage and premium payments by ARC under ARC’s group insurance programs for
Executive and his eligible family members under Section 6 for a period of twelve (12) months after
the termination of employment.

(e) Parachute Payments. In the event that the severance, acceleration of stock
options and other benefits provided for in this Agreement or otherwise payable to Executive (i)
constitute “parachute payments” within the meaning of Section 280G (as it may be amended or
replaced) of the Internal Revenue Code of 1986, as amended or replaced (the “Code”), and (ii) but
for this Section 11(e), would be subject to the excise tax imposed by Section 4999 (as it may be
amended or replaced) of the Code (the “Excise Tax”), then Executive’s benefits hereunder shall be
either:

(i) provided to Executive in full; or

(ii) provided to Executive only as to such lesser extent which would result in no portion of
such benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into
account the applicable federal, state and local income taxes and the Excise Tax, results in the
receipt by Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding
that all or some portion of such benefits may be taxable under the Excise Tax. Unless ARC and
Executive otherwise agree in writing, any determination required under this
Section 11(e) shall be made in writing in good faith by ARC’s independent public accountants

 

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(the “Accountants”). In the event of a reduction in benefits hereunder, Executive shall be given
the choice of which benefits to reduce. For purposes of making the calculations required by this
Section 11(e), the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations concerning the application
of the Code. ARC and Executive shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make a determination under this Section 11(e).
ARC shall bear all costs the Accountants may reasonably incur in connection with any calculations
contemplated by this Section 11(e).

(f) 409A Compliance. 

(i) 6-Month Delay Rule. Except as provided in paragraph (ii) below, in the event that
Executive is a “specified employee” (as defined in Section 409A(a)(2)(B)(i) of the Code and
regulations thereunder) at the time of the termination of his employment with ARC, payment of all
amounts subject to Section 409A of the Code that would otherwise be made under Section 11 of this
Agreement, including any installments, may not be paid before a date that is six (6) months and two
(2) days after the date of termination from employment (including death). Such amounts that
otherwise would have been paid during such six- (6-) month period will be paid as of the date that
is six (6) months and two (2) days after the date of employment termination.

(ii) Exception. In the event that payment of amounts under Section 11 of this
Agreement at the time(s) of payment specified under its terms (without regard to this Section
11(f)) does not cause any amount of the payment to fail to comply with the provisions of Section
409A, and does not result in any excise tax or additional tax penalty under Section 409A, then the
six- (6-) month delay rule of paragraph (i) above will not apply and payment of such
amounts will be made at the time(s) specified under the applicable terms of Section 11 of this
Agreement without regard to this Section 11(f).

 

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(iii) General Compliance. During the term of this Agreement, ARC and Executive agree
to modify and administer the Agreement to the extent possible to comply with Section 409A and to
avoid incurring any excise and other additional tax liability that might be imposed on Executive or
ARC.

12. Arbitration and Equitable Relief

(a) Arbitration. In consideration of Executive’s employment with ARC, its promise to
arbitrate all employment-related disputes, and Executive’s receipt of the compensation paid to
Executive by ARC, at present and in the future, Executive agrees that any and all controversies,
claims, or disputes with anyone (including ARC and any employee, officer, director, shareholder or
benefit plan of ARC in their capacity as such or otherwise) arising out of, relating to, or
resulting from Executive’s employment with ARC or the termination of that employment with ARC,
including any provision of this Agreement, shall be subject to binding arbitration under the
arbitration rules set forth in the California Code of Civil Procedure Sections 1280 through 1294.2,
including section 1283.05 collectively (the “Rules”) and pursuant to California law. Disputes
which Executive agrees to arbitrate, and hereby agrees to waive any right to a trial by jury,
include without limitation, any common law claims, statutory claims under Title VII of the Civil
Rights Act of 1964, the Americans With Disabilities Act of 1990, the Age Discrimination In
Employment Act of 1967, the Older Workers Benefit Protection Act, the California Fair Employment
And Housing Act, the California Labor Code (except for workers compensation or unemployment
insurance claims), or ERISA, claims of harassment, discrimination or wrongful termination and any
other statutory claims under state or federal law.

 

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(b) Procedure. Any arbitration will be administered by JAMS and a neutral arbitrator
will be selected in a manner consistent with its rules for the resolution of employment disputes.
The arbitrator shall have the power to decide any motions brought by any party to the arbitration,
including motions for summary judgment and/or adjudication and motions to dismiss and demurrers,
prior to any arbitration hearing. The arbitrator shall have the power to award any remedies,
including attorneys’ fees and costs, available under applicable law. ARC will pay for any
administrative or hearing fees charged by the arbitrator or JAMS except that Executive shall pay
the first $200.00 of any filing fees associated with any arbitration Executive initiates. The
arbitrator shall administer and conduct any arbitration in a manner consistent with the Rules. To
the extent that the JAMS rules for the resolution of employment disputes conflict with the Rules,
the Rules shall take precedence. The decision of the arbitrator shall be in writing.

(c) Remedy. Except as provided by the Rules and this Agreement, arbitration shall be
the sole, exclusive and final remedy for any dispute between ARC and Executive. Accordingly,
except as provided for by the Rules and this Agreement, neither ARC nor Executive will be permitted
to pursue court action regarding claims that are subject to arbitration. The arbitrator will not
have the authority to disregard or refuse to enforce any lawful ARC policy, and the arbitrator
shall not order or require ARC to adopt a policy not otherwise required by law which ARC has not
adopted.

(d) Availability of Injunctive Relief. In addition to the right under the Rules to
petition the court for provisional relief, ARC may also petition the court for injunctive relief,
notwithstanding any provision in this Agreement requiring arbitration, where ARC alleges or claims
a violation of this Agreement, or any separate agreement between Executive and ARC regarding trade
secrets, confidential information or non-solicitation, or California Labor Code Section 2870. No
bond shall be required of ARC. Executive understands and agrees that any
breach or threatened breach of this Agreement or of any such separate agreement will cause
irreparable injury to ARC or its affiliates and that money damages will not provide an adequate
remedy therefore, and Executive hereby consents to the issuance of an injunction. In the event
either Party seeks injunctive relief, the prevailing Party shall be entitled to recover reasonable
costs and attorneys’ fees related thereto.

 

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(e) Administrative Relief. This Agreement does not prohibit Executive from pursuing
an administrative claim with a local, state or federal administrative body such as the Department
of Fair Employment and Housing, the Equal Employment Opportunity Commission or the Workers’
Compensation Board. This Agreement does, however, preclude Executive from pursuing court action
regarding any such claim.

(f) Voluntary Nature of Agreement. Executive acknowledges and agrees that he is
executing this Agreement voluntarily and without any duress or undue influence by ARC or anyone
else. Executive further acknowledges and agrees that he has carefully read this Agreement, that he
has asked any questions needed for him to understand the terms, consequences and binding effect of
this Agreement, and that he fully understands this Agreement, including that he is waiving his
right to a jury trial. Finally, Executive acknowledges that he has been provided an
opportunity to seek the advice of an attorney of his choice before signing this Agreement.

13. Governing Law

This Agreement shall be governed by and construed and interpreted in accordance with the laws
of the State of California without regard to California conflict of laws principles.

 

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14. Release

In exchange for the benefits and other consideration under this Agreement to which Executive
would not otherwise be entitled, Executive shall enter into and execute a release
substantially in the form attached hereto as Exhibit A (the “Release”) upon his
termination of employment. Unless the Release is executed by Executive and delivered to ARC within
thirty (30) days after the termination of Executive’s employment with ARC, Executive shall receive
only the basic severance benefits provided under Section 11(a) of this Agreement and no additional
benefits under Section 11.

15. Notices

Any notices or other communications desired or required under this Agreement shall be in
writing, signed by the Party making the same, and shall be deemed delivered when personally
delivered or on the second business day after the same is sent by certified or registered mail,
postage prepaid, addressed as follows (or to such other address as may be designated by like
written notice):

	 	 	 	 	 
	 

	 	If to Executive:
	 	At the last residential address known by ARC
	 
	 	 	 	 
	 

	 	If to ARC:
	 	American Reprographics Company
	 

	 	 	 	1981 North Broadway, Suite 385
	 

	 	 	 	Walnut Creek, California 94596
	 

	 	 	 	Attn.: Chief Executive Officer

16. Severability

In the event that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full
force and effect without said provision.

17. Assignment

Except as otherwise specifically provided herein, neither Party shall assign this Agreement or
any rights hereunder without the consent of the other Party, and any attempted or purported
assignment without such consent shall be void; provided that Executive’s consent under this
Agreement shall not be required hereby for any of the transactions involving a Change of Control.
This Agreement shall otherwise bind and inure to the benefit of the Parties hereto
and their respective successors, assigns, heirs, legatees, devisees, executors, administrators
and legal representatives.

 

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18. Entire Agreement 

This Agreement contains the entire agreement of the Parties and supersedes all prior or
contemporaneous negotiations, correspondence, understandings and agreements between the Parties
regarding the subject matter of this Agreement. Any prior employment agreement, bonus agreement or
other compensation agreement between Executive and ARC or any predecessor, or affiliate of ARC, is
hereby terminated on and as of the Effective Date. This Agreement may not be amended or modified
except in writing signed by both Parties.

19. Waiver

If either Party waives any breach of any provisions of this Agreement, he or it shall not
thereby be deemed to have waived any preceding or succeeding breach of the same or any other
provision of this Agreement.

20. Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first
hereinabove set forth.

	 	 	 	 	 	 	 	 	 	 	 
	AMERICAN REPROGRAPHICS COMPANY, a Delaware corporation	 	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Kumarakulasingam Suriyakumar
 

Kumarakulasingam Suriyakumar
	 	 	 	By:
	 	/s/ John Toth
 

John Toth
	 	 
	Title:

	 	President and Chief Executive Officer
	 	 	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

 

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EXHIBIT A

RELEASE AGREEMENT

I understand that my position with American Reprographics Company (“ARC”) terminated effective
                     (the “Separation Date”). ARC has agreed that if I choose to sign this Agreement,
ARC will pay me severance benefits (minus the standard withholdings and deductions) pursuant to the
terms of the Executive Employment Agreement entered into on July
 _____, 2011 between myself and ARC
(the “Severance Benefits”). I understand that I am not entitled to the Severance Benefits unless I
sign this Agreement. I understand that in addition to the Severance Benefits, ARC will pay me all
of my accrued salary and vacation, to which I am entitled by law.

In consideration for the Severance Benefits I am receiving under this Agreement, I agree not
to use or disclose any of ARC’s proprietary information without written authorization from ARC, to
immediately return all Company property and documents (including all embodiments of proprietary
information) and all copies thereof in my possession or control, and to release ARC and its
officers, directors, agents, attorneys, employees, shareholders, and affiliates from any and all
claims, debts, liabilities, demands, causes of action, attorneys’ fees, damages, or obligations of
every kind and nature, whether they are known or unknown, arising at any time prior to the date I
sign this Agreement. This general release includes, but is not limited to: all federal and state
statutory and common law claims, claims related to my employment or the termination of my
employment or related to breach of contract, tort, wrongful termination, discrimination, wages or
benefits, or claims for any form of compensation. This release is not intended to release any
claims I have or may have against any of the released parties for (a) indemnification as a
director, officer, agent or employee under applicable law, charter document or agreement, (b)
severance and other termination benefits under my employment agreement and any related
written documents, (c) health or other insurance benefits based on claims already submitted or
which are covered claims properly submitted in the future, (d) vested rights under pension,
retirement or other benefit plans, or (e) in respect of events, acts or omissions occurring after
the date of this Release Agreement.

 

19

 

In releasing claims unknown to me at present, I am waiving all rights and benefits under
Section 1542 of the California Civil Code, and any law or legal principle of similar effect in any
jurisdiction:

“A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his
settlement with the debtor.”

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have
under the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”). I also
acknowledge that the consideration given for the waiver in the above paragraph is in addition to
anything of value to which I was already entitled. I have been advised by this writing, as
required by the ADEA that: (a) my waiver and release do not apply to any claims that may arise
after my signing of this Agreement; (b) I should consult with an attorney prior to executing this
release; (c) I have twenty-one (21) days within which to consider this release (although I may
choose to voluntarily execute this release earlier); (d) I have seven (7) days following the
execution of this release to revoke the Agreement; (e) this Agreement will not be effective until
the eighth (8th) day after this Agreement has been signed both by me and by ARC; and I
will not be paid any of the Severance Benefits until this Agreement has become effective.

 

20

 

This Agreement constitutes the complete, final and exclusive embodiment of the entire
agreement between ARC and me with regard to the subject matter hereof I am not relying on any
promise or representation by ARC that is not expressly stated herein. This Agreement may only
be modified by a writing signed by both me and a duly authorized officer of ARC. I accept and
agree to the terms and conditions stated above:

	 	 	 	 	 	 	 	 	 	 	 
	AMERICAN REPROGRAPHICS COMPANY, a Delaware corporation	 	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

John Toth
	 	 
	 

	 	 	 	 	 	Address:	 	 	 	 
	Title:

	 	 

	 	 	 	 	 	 

	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

 

21exv10w1

Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL RELEASE

     This Separation Agreement and General Release (the “Agreement”) is between Petroleum
Development Corporation, a Nevada corporation (the “Company”), and Richard W. McCullough (the
“Executive”) (collectively, the “Parties” and each a “Party.”).

     WHEREAS, Executive was employed by the Company in the position of Chief Executive Officer
pursuant to the terms and conditions set forth in that certain Employment Agreement, dated as of
April 19, 2010, between Executive and the Company (the “Employment Agreement”), which Employment
Agreement provided for an employment term through December 31, 2011; and

     WHEREAS, Executive also served as Chairman of the board of directors (the “Board”) of the
Company; and

     WHEREAS, on June 10, 2011 (the “Termination Date”), Executive resigned from any and all
positions (as an officer, director, employee or otherwise) with the Company and any and all
subsidiaries and affiliated entities of the Company including, but not limited to, PDC Mountaineer,
LLC (collectively, the “PDC Affiliates”) in exchange for a promise by the Company that such
resignation will be considered, for all purposes, a “Termination by the Company Without Just Cause”
under Section 7(d) of his Employment Agreement and under any and all benefit and compensation plans
applicable to Executive, to negotiate in good faith this Agreement and to pay all amounts and
benefits required by Section 7(d) of the Employment Agreement; and

     WHEREAS, pursuant to the terms of his Employment Agreement, Executive is required to release
all Claims (as hereinafter defined), actions or causes of action against the Company and each of
its subsidiaries and affiliates and each of their respective officers, employees, directors,
successors and assigns in any way related to his employment with the Company or the termination
thereof and make certain commitments in exchange for certain separation benefits; and

     WHEREAS, the Company and Executive agree that it is in the best interests of each party that
the terms and conditions of Executive’s separation from employment be expressly set forth in a
definitive 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. Recitals. The foregoing recitals are true and correct and incorporated herein.

     2. Separation Benefits. In consideration for the Executive’s resignation as the
Company’s Chief Executive Officer, Chairman of the Board and all other positions he holds (as an
officer, director, employee or otherwise) with the Company and any and all subsidiaries and
affiliated entities, the early termination of the Employment Agreement, the covenants described

 

 

in Sections 5 through 10 of this Agreement, the general release described in Section 3 of this
Agreement and other consideration described herein, the receipt and adequacy of which are hereby
acknowledged, the Company agrees to pay or provide to or for the Executive the following payments
and benefits, provided Executive executes this Agreement without revocation:

     (a) Separation Compensation. Within forty (40) days after the Termination
Date, the Company shall pay to the Executive a lump sum cash payment in the amount of Four
Million One Hundred Twenty-Five Thousand Dollars ($4,125,000), less required withholdings
(equal to 35%);

     (b) Accrued and Unpaid Compensation. Executive shall be entitled to receive
any compensation earned but not yet paid prior to the Termination Date in accordance with
the Company’s normal payroll practices.

     (c) Expense Reimbursement. Company shall pay to the Executive any unpaid
expense reimbursement for periods on or prior to the Termination Date upon presentation by
the Executive of an accounting of such expenses in accordance with normal Company practices.
All unpaid expense reimbursements shall be paid by the Company within thirty (30) days of
delivery to the Company of such accounting and receipts and no later than March 15, 2012.

     (d) Qualified Retirement Plan. As of the date hereof, Executive had a vested
account balance in the Company’s qualified retirement plan. Executive shall be entitled to
such vested account balance under the Company’s qualified retirement plan upon processing
the appropriate distribution forms following his separation in accordance with the terms of
the qualified retirement plan. Such vested account balance shall include Executive’s vested
portion of the 2010 Company contribution (remitted to the qualified retirement plan in March
2011) and Executive’s 401(k) deferrals through his Termination Date, all as adjusted for
earnings to the date of distribution.

     (e) Supplemental Retirement Benefit. On June 10th (or in the event June 10th
is not a business day, the following business day) in each of the years 2012 through 2021,
inclusively, Executive shall be entitled to receive an annual nonqualified deferred
supplemental retirement benefit equal to $30,000, less required withholdings.

     (f) COBRA Coverage. Provided the Executive timely elects COBRA coverage,
continued coverage of the Executive and any dependents covered as of the Termination Date
under the Company’s group health plans at the Company’s cost for a period equal to the
lesser of (i) 18 months from the Termination Date or (ii) such period ending as of the date
the Executive is eligible to participate in another employer’s group health plan. To the
extent required by law, Executive will receive compensation equal to this benefit and shall
pay all associated taxes. The COBRA continuation period for health care benefits provided
pursuant to this Agreement shall be deemed to run concurrent with the continuation period
federally mandated by COBRA (generally 18 months), or any other legally mandated and
applicable federal, state, or local coverage

2

 

period for benefits provided to terminated
employees under the Company’s health care plan(s).

     (g) Stock Appreciation Rights (“SARs”): The Parties agree that the following
is a complete list of all of the Executive’s outstanding SAR Awards as of the Termination
Date and that such awards shall be treated as described below:

     (1) SAR Award for 25,371 shares granted to the Executive on April 19, 2010
shall become fully vested.

     (2) SAR Award for 12,992 shares granted to the Executive on March 12, 2011
shall become fully vested.

     (h) Stock Options: The Parties agree that the following is a complete list of
all of the Executive’s outstanding Stock Option Awards as of the Termination Date and that
such award shall be treated as described below:

     (1) Stock Option Award for 3,333 shares granted to the Executive on November
14, 2006 became fully exercisable as of November 14, 2010.

     (i) Restricted Stock: The Parties agree that the following is a complete list
of all of the Executive’s outstanding Restricted Stock Awards as of the Termination Date and
that such awards shall be treated as described below:

     (1) Restricted Stock Award for 5,056 shares granted to Executive on March 7,
2008 shall become fully vested;

     (2) Restricted Stock Award for 13,878 shares granted to Executive on March 7,
2008 shall become fully vested;

     (3) Restricted Stock Award for 27,306 shares granted to Executive on March 4,
2009 shall become fully vested;

     (4) Restricted Stock Award for 43,566 shares granted to Executive on April 19,
2010 shall become fully vested; and

     (5) Restricted Stock Award for 14,928 shares granted to Executive on March 12,
2011 shall become fully vested.

     (j) Performance Shares: The Parties agree that the following is a complete
list of all of the Executive’s outstanding Performance Share Awards as of the Termination
Date and that such awards shall be treated as described below:

     (1) Performance Share Award for 12,175 shares (at target) granted to Executive
on March 4, 2009 shall vest to the extent of 4,109 shares (determined by multiplying
(i) 12,175 shares by (ii) the product of (x) 9/20 (the percentage of time vested) by
(y) 75% (the percent of

3

 

goal achieved)), to be issued within seven (7) days of the
Effective Date (as hereinafter defined), less required withholdings.

     (2) The Executive acknowledges that he is not entitled to any shares or other
compensation related to the performance share award for 8,290 shares (at target)
granted to him on March 7, 2008.

     (3) The Executive acknowledges that the performance share award for 5,571
shares (at target) granted to him on March 12, 2011 shall be forfeited pursuant to
the terms of the performance share agreement evidencing such award.

     (k) Vested SARs and Stock Options. The Executive shall have three months from
the Termination Date to exercise any SARs or stock options held by the Executive as of the
Termination Date that have vested but remain unexercised as of that date. Any SARs or stock
options that are not exercised within this time frame shall be forfeited and in accordance
with terms and conditions covering such SARs or stock options, as applicable.

     (l) Tax Withholding. The Company will be entitled to withhold from the
benefits and payments described in this Agreement, all income and employment taxes as
directed by the Executive, as long as such request meets the minimum required to be withheld
under applicable law. For all vested equity awards, the Company will withhold the
designated income and employment tax amount in shares of Company Stock.

     (m) Section 409A Compliance. The provisions of this Agreement will be
administered, interpreted and construed in a manner intended to comply with Section 409A of
the Code (“Section 409A”), the regulations issued thereunder or any exception thereto. For
purposes of this Agreement, each payment is intended to be excepted from Section 409A to the
maximum extent provided under Section 409A as follows: (i) each payment that is scheduled to
be made following Executive’s Termination Date and within the applicable 21/2 month period
specified in Treas. Reg. § 1.409A-1(b)(4) is intended to be excepted under the short-term
deferral exception as specified in Treas. Reg. § 1.409A-1(b)(4); and (ii) post-termination
medical benefits are intended to be excepted under the medical benefits exception as
specified in Treas. Reg. § 1.409A-1(b)(9)(v)(B), and (iii) each payment that is not
otherwise excepted under the short-term deferral exception or medical benefits exception is
intended to be excepted under the involuntary separation pay exception as specified in
Treas. Reg. § 1.409A-1(b)(9)(iii). Each payment under this Agreement, including each
installment payment, shall be treated as a separate payment and Executive shall have no
right to designate the date of any payment hereunder. With respect to any payment subject to
Section 409A of the Code (and not excepted therefrom), if any, it is intended that each such
payment is paid on permissible distribution event and at a specified time consistent with
Section 409A of the Code. Notwithstanding any provision of this agreement to the contrary,
Executive acknowledges and agrees that the Released Parties shall not be liable for, and
nothing provided or contained in this Agreement will be construed to obligate or cause the
Released Parties to be liable for, any tax, interest or penalties imposed on Executive
related to or arising with respect to any violation of Section 409A.

4

 

     (n) D&O Insurance Coverage. The Company shall use commerically reasonable
efforts to obtain or maintain in effect D&O liability insurance which
policy(ies) shall (i) cover and include Executive in all capacities in which Executive
served for the Company (including as an officer, director, or manager) for the PDC
Affiliates during all periods prior the Termination Date; and (ii) be effective for a
period of six years after the Termination Date.

     (o) Issuance of Shares. All shares of the equity interests described herein
shall be issued within seven (7) days of the Effective Date.

     3. General Release. In consideration of the Company’s obligations, Executive hereby
releases, acquits and forever discharges Company and each of its subsidiaries and affiliates and
each of their respective officers, employees, directors, successors and assigns from any and all
claims, actions or causes of action in any way related to his employment with the Company or the
termination thereof, whether arising from tort, statute or contract, including but not limited to,
claims of defamation, claims arising under the Employee Retirement Income Security Act of 1974, as
amended, the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit
Protection Act of 1990, Title VII of the Civil Rights Act of 1964, as amended, the Americans with
Disabilities Act, the Family and Medical Leave Act, the discrimination and wage payment laws of
Colorado and any other federal, state or local statutes or ordinances of the United States, it
being Executive’s intention and the intention of the Company to make this release as broad and as
general as the law permits. Executive understands that this Agreement does not waive any rights or
claims that may arise after his execution of it and does not apply to claims arising under the
terms of this Agreement.

     This release is intended to be a general release, and excludes only those claims under any
statute or common law that Executive is legally barred from releasing. Executive is advised to
seek independent legal counsel if Employee seeks clarification on the scope of this release.
Signing this Agreement does not waive Employee’s right to seek a judicial determination of the
validity of Employee’s release of rights arising under the Age Discrimination in Employment Act.
Nothing herein is intended to or shall preclude Employee from filing a charge with any appropriate
federal, state, or local government agency and/or cooperating with said agency in its
investigation. Employee, however, explicitly waives any right to file a personal lawsuit or receive
monetary damages that the agency may recover against Releasees, without regard as to who brought
any said complaint or charge.

     4. Consult With an Attorney. The Company hereby advises Executive to consult with an
attorney of Executive’s choice (at Executive’s expense) before Executive signs this Agreement. If
Executive has any questions regarding the scope of the release, including those rights that are not
released, the Company advises Executive to address that subject with Executive’s own attorney
before Executive signs this Agreement. The Company will rely on Executive’s signature on this
Agreement as Executive’s representation that Executive read this Agreement carefully before signing
it, and that Executive has a full and complete understanding of its terms.

5

 

     5. SEC Required Filings; Press Release. The Executive hereby acknowledges that the
Company is required to file this Agreement with the U.S. Securities and Exchange Commission
pursuant to the rules of the Securities Exchange Act of 1934, as amended. No Party shall issue any
press release relating, directly or indirectly, to this Agreement, the Employment Agreement or
Executive’s employment with the Company without the other Party’s prior written consent, which
consent shall not be unreasonably withheld.

     6. Confidential Information. Through the Effective Date, Executive has not and agrees
not to in the future, directly or indirectly, disclose to any third parties, or use in any manner,
any information acquired by the Executive 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 Executive. Information subject to the provisions of
this Section 6 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 wells 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 other operations that the Company has
completed or is investigating or has investigated for possible inclusion in future
activities; and

     (vi) Any other information or contacts relating to the Company’s drilling, development,
fund-raising, purchasing, engineering, marketing, merchandising, and selling activities.

     7 Non-Compete. Executive has not and agrees not to for a period of one (1) year
following the Termination Date, directly engage in any Competitive Business within any county or
parish or adjacent to any county or parish in which the Company or any affiliate owns any oil and
gas interests; 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 in a Competitive Business.
“Competitive Business” shall mean typical oil and gas exploration and production activities
including oil and gas leasing, drilling or any other business activities that are the same

6

 

as or similar to the Company’s or an affiliate’s business operations as its business exists on
the Termination Date.

     8. Non-Solicitation. Executive has not and agrees not to, directly or indirectly,
for a period of one (1) year following the Termination Date (i) solicit the services of any person
who is a full-time employee of the Company, its subsidiaries, divisions, or affiliates, or
otherwise induce such employee to terminate or reduce employment with the Company, or (ii) solicit
the business of any person who is a client or customer of the Company, its subsidiaries, divisions,
or affiliates. 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.

     9. Nondisparagement. Since the Termination Date Executive has not made and agrees not
to make, following the Effective Date, any 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 has not made, and will not
make, while employed by the Company or serving as a director of the Company, as the case may be,
any negative comments about Executive or otherwise disparage Executive in any manner that is likely
to be harmful to the Executive’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. Promptly after the Effective Date,
the Company shall deliver to Executive a letter of recommendation as mutually agreed upon by the
Parties prior to the Execution Date.

     10. Cooperation in Litigation. At the Company’s reasonable request, Executive shall
use his good faith efforts to cooperate with the Company, its affiliates, and each of its and their
respective attorneys or other legal representatives (“Attorneys”) in connection with any claim,
litigation or judicial or arbitral proceeding which is material to the Company and is now pending
or may hereinafter be brought against the Released Parties by any third party; provided, that,
Executive’s cooperation is essential to the Company’s case. Executive’s duty of cooperation will
include, but not be limited to (a) meeting with the Company’s and/or its affiliates’ Attorneys by
telephone or in person at mutually convenient times and places in order to state truthfully
Executive’s knowledge of matters at issue and recollection of events; (b) appearing at the
Company’s, its affiliates’ and/or their Attorneys’ request (and, to the extent possible, at a time
convenient to Executive that does not conflict with the needs or requirements of Executive’s
then-current employer or Executive’s professional engagements or obligations) as a witness at
depositions or trials, without necessity of a subpoena, in order to state truthfully Executive’s
knowledge of matters at issue; and (c) signing at the Company’s, its affiliates’ and/or their
Attorneys’ request declarations or affidavits that truthfully state matters of which Executive has
knowledge. The Company shall reimburse Executive for the reasonable costs and expenses incurred by
him in the course of his cooperation hereunder, including reasonable attorney’s fees and costs, and
shall pay to Executive per diem compensation in an amount equal

7

 

to the daily prorated portion of the Executive’s base salary immediately prior to the
Termination Date. The obligations set forth in this Section 10 shall survive any termination or
revocation of this Agreement.

     11. Representations. By signing below, Executive represents and agrees that (a)
Executive has fully and carefully read this Agreement prior to signing it and understands its
terms; (b) Executive has been, or has had the opportunity to be, advised by independent legal
counsel of Executive’s own choice as to the legal effect and meaning of each of the terms and
conditions of this Agreement, and is entering into this Agreement freely and voluntarily and not in
reliance on any promises or representations other than as set forth in this Agreement; (c) except
for Executive’s Blackberry cell phone (and related phone number) and Apple iPad computer, all of
which items shall be deemed assigned to, and owned by, Executive as of the Termination Date
(provided that Executive shall deliver the Blackberry cell phone and Apple iPad to the Company
within three (3) days after the Effective Date for a 48-hour period so that the Company can ensure
no Company data remains on those devices), Executive has returned to the Company all Company
property (other than personal information, files or documents of, belonging to or regarding
Executive) including, without limitation, all computers, maps, logs, data, drawings and other
records and written and digital material prepared or compiled by the Executive or furnished to the
Executive during his employment with the Company (including, without limitation, materials located
on the Executive’s personal computer), unless such information has become public knowledge other
than by reason of actions, direct or indirect, of the Executive; and (d) except for any vested
benefits Executive may have under Company sponsored plans, the Company does not owe Executive any
other wages, compensation, or benefits of any kind or nature.

     12. Breach. Executive agrees and recognizes that should Executive breach any of the
obligations or covenants set forth in this Agreement or otherwise revoke this Agreement, the
Company will have no further obligation to provide Executive with the consideration set forth
herein, and will have the right to seek repayment of all consideration paid up to the time of any
such breach or revocation. Further, Executive acknowledges in the event of a breach of this
Agreement, the Released Parties may seek any and all appropriate relief for any such breach,
including equitable relief and/or money damages, reasonable attorney’s fees and costs; provided,
that (i) the Company has notified Executive in writing within 30 days of the date of the failure of
Executive to perform such material obligation and (ii) such failure remains uncorrected and/or
uncontested by Executive for 15 days following the date of such notice. Notwithstanding the
foregoing, in the event the Company fails to perform any material obligation under this Agreement,
including, without limitation, the failure of the Company to make timely payments of monies due to
Executive hereunder, this Agreement shall be null and void and Executive shall have the right to
pursue any and all appropriate relief for any such failure, including equitable relief and/or
monetary damages, attorneys’ fees and costs; provided, that (i) Executive has notified the Company
in writing within 30 days of the date of the failure of the Company to perform such material
obligation and (ii) such failure remains uncorrected and/or uncontested by the Company for 15 days
following the date of such notice.

     13. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Colorado applicable to agreements

8

 

negotiated, entered into and wholly to be performed therein, without giving effect to the
principles of conflicts of law.

     14. Severability. Each of the respective rights and obligations of the Parties
hereunder will be deemed independent and may be enforced independently irrespective of any of the
other rights and obligations set forth herein. If any provision of this Agreement should be held
by any court of competent jurisdiction to be illegal or invalid, such illegality or invalidity will
not affect in any way other provisions hereof, all of which will continue, nevertheless, in full
force and effect.

     15. Entire Agreement; Modification. This Agreement constitutes the entire
understanding between the Parties with respect to the subject matter hereof and may not be modified
without the express written consent of both Parties. This Agreement supersedes all prior written
and/or oral and all contemporaneous oral agreements, understandings and negotiations regarding its
subject matter, including the Employment Agreement, effective as of the Effective Date. Nothing in
this Agreement shall be construed or deemed to terminate or otherwise amend or modify the
Indemnification Agreement, which agreement shall remain in full force and effect in accordance with
its terms. This Agreement may not be modified or canceled in any manner except by a writing signed
by both Parties.

     16. Non-Admission of Liability. Nothing in this Agreement will be construed as an
admission of liability by Executive or the Released Parties; rather, Executive and the Released
Parties are resolving all matters arising out of the employer-employee relationship between
Executive and the Company and all other relationships between Executive and the Released Parties.

     17. Counterparts. This Agreement may be executed in one or more counterparts, each of
which will be considered an original instrument and all of which together will be considered one
and the same agreement and will become effective when all executed counterparts have been delivered
to the respective Parties. Delivery of executed pages by facsimiles transmission or e-mail will
constitute effective and binding execution and delivery of this Agreement.

     18. Binding Effect. This Agreement will be binding upon the Parties and their
respective heirs, administrators, representatives, executors, successors and assigns, and will
inure to the benefit of the Parties and their respective heirs, administrators, representatives,
executors, successors and assigns.

     19. Acceptance, Revocation and Effective Date.

     (a) Executive has twenty-one (21) days from the date Executive receives this Agreement to
consider its terms and conditions. Any changes to this Agreement during that period, whether
material or not, will not extend the 21-day period.

     (b) Executive may confirm his acceptance of the terms and conditions of this Agreement by
signing and returning two (2) original copies of this Agreement to the Company’s

9

 

General Counsel and Secretary at the address listed below no later than 5:00 p.m. Mountain
Time twenty-one (21) days after Executive’s receipt of this Agreement.

Daniel W. Amidon

General Counsel and Secretary

Petroleum Development Corporation

1775 Sherman Street

Denver, CO 80203

     (c) If Executive signs this Agreement, Executive may still revoke Executive’s acceptance of
the Agreement for up to seven (7) days after the Executive signs it by notifying the Company in
writing before the expiration of that seven-day period. The written notice should be delivered in
person or, if sent by mail, postmarked no later than the 7th day and mailed to the Company’s
General Counsel and Secretary at the address provided in Section 19(b) above.

     (d) If not revoked, this Agreement will become effective on the later of (i) the 8th day after
Executive signs this Agreement or (ii) the date the Company signs this Agreement, which cannot be
later than fourteen (14) days after the Executive signs this Agreement (the “Effective Date”). If
Executive does not sign this Agreement within the twenty-one-day period, or if Executive timely
revokes this Agreement during the seven-day revocation period, this Agreement will not become
effective and Executive will not be entitled to the Separation Benefits provided for in Section 2.

[Remainder of Page Intentionally Left Blank — Signature Page Follows]

10

 

     IN WITNESS WHEREOF, the Parties hereto have executed and delivered this Separation Agreement
and General Release as of the date first above written.

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Jeffrey C. Swoveland
 	 
	 	 	  	Jeffrey C. Swoveland 	 
	 	 	Title:  	Chairman of the Board 	 

	 	 	 	 	 
	 	 	 
	 	/s/ Richard W. McCullough
 	 
	 	Richard W. McCullough 	 
	 

[Signature Page to Separation Agreement and General Release]

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