Document:

ex10_14.htm

    
      

    

     Exhibit
10.14
\

    Employment
Agreement

    

    This
Employment Agreement (the “Agreement”) is made and entered into this 31st day of
December, 2008, effective as of January 1, 2008, by and between Petroleum
Development Corporation, a Nevada Corporation (the “Company”), and Darwin L.
Stump (the “Employee”).

     

    WHEREAS,
the Company employs the Employee as Chief Accounting Officer to perform the
duties and services incident to such position for the Company, and the Employee
wishes to be so employed by the Company, all upon the terms and conditions set
forth in this Agreement;

     

    NOW
THEREFORE, in consideration of the premises and mutual covenants and obligations
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged and accepted, the parties hereto,
intending to be legally bound, agree as follows:

     

    
      	
              1.  

            	
              Effective Date and
      Term

            

    

     

    
      	
              a.  

            	
              Initial
      Term.  The effective date of this Agreement will be
      January 1, 2008 (the “Effective Date”), and the initial term will be for
      the period beginning on the Effective Date and ending December 31,
      2009.

            

    

     

    
      	
              b.  

            	
              Automatic
      Extensions.  The Term of this Agreement will be extended
      for an additional twelve (12) months beginning on December 31, 2008 and on
      each successive December 31 unless either party provides the other with at
      least thirty (30) days prior written notice, or unless the contract has
      been terminated by the parties in accordance with the provisions of
      Section 7 of this Agreement.  The period of time from the
      Effective Date until the Termination Date, as defined in Section 7.b.,
      will be the “Term.”

            

    

     

    
      	
              c.  

            	
              Change of
      Control.  In the event of a Change of Control, the Term
      of this Agreement will automatically be extended to the date that is
      twenty-four (24) months after the date of the Change of Control without
      any action on the part of the Company or the
      Employee.  Thereafter, the date of the Change of Control will be
      treated as the Effective Date for purposes of further automatic 12-month
      extensions of the Agreement under this section.  "Change of
      Control" of the Company will occur on the earliest of the following
      events:

            

    

     

    
      	
              (i)  

            	
              Change in
      Ownership: A change in ownership of the Company occurs on the date
      that any one person, or more than one person acting as a group, acquires
      ownership of stock of the Company that, together with stock held by such
      person or group, constitutes more than 50% of the total fair market value
      or total voting power of the stock of the Company, excluding the
      acquisition of additional stock by a person or more than one person acting
      as a 

            

    

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
       

      
        	
                 

              	
                group
      who is considered to own more than 50% of the total fair market value or
      total voting power of the stock of the
Company.

              

      

       

    

    
      	
              (ii)  

            	
              Change in Effective
      Control: A change in effective control of the Company occurs on the
      date that either:

            

    

     

    
      	
              (A)  

            	
              Any
      one person, or more than one person acting as a group, acquires (or has
      acquired during the 12-month period ending on the date of the most recent
      acquisition by such person or persons) ownership of stock of the Company
      possessing 30% or more of the total voting power of the stock of the
      Company; or

            

    

     

    
      	
              (B)  

            	
              A
      majority of the members of the Board of Directors of the Company (the
      “Board”) is replaced during any 12-month period by directors whose
      appointment or election is not endorsed by a majority of the members of
      the board of directors prior to the date of the appointment or election;
      provided, that this paragraph (B) will apply only to the Company if no
      other corporation is a majority
shareholder.

            

    

     

    
      	
              (iii)  

            	
              Change in Ownership of
      Substantial Assets: A change in the ownership of a substantial
      portion of the Company's assets occurs on the date that any one person, or
      more than one person acting as a group, acquires (or has acquired during
      the 12-month period ending on the date of the most recent acquisition by
      such person or persons) assets from the Company that have a total gross
      fair market value equal to or more than 40% of the total gross fair market
      value of the assets of the Company immediately prior to such acquisition
      or acquisitions. For this purpose, “gross fair market value” means the
      value of the assets of the Company, or the value of the assets being
      disposed of, determined without regard to any liabilities associated with
      such assets.

            

    

     

    It is the
intent that this definition be construed consistent with the definition of
“Change of Control” as defined under Internal Revenue Code Section 409A and the
applicable Treasury Regulations, as amended from time to time.

     

    
      	
              2.  

            	
              Place of
      Employment

            

    

     

    The place
of employment will be the Company’s headquarters building in Bridgeport, West
Virginia unless the Employee and the Company agree to an alternative
location.

     

    
      	
              3.  

            	
              Position and
      Responsibilities

            

    

     

    
      	
              a.  

            	
              Position.   The
      Employee shall serve as the Chief Accounting Officer of the Company and
      shall report to the Chief Financial Officer of the
  

            

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
       

      
        	
                 

              	
                 Company
      and be under the general direction and control of the Chief Financial
      Officer of the Company.

              

      

       

    

    
      	
              b.  

            	
              Responsibilities.  The
      Employee will have obligations, duties, authority and power to do such
      acts as are customarily done by a person holding the same or an equivalent
      position in corporations of similar size to the Company. The Employee
      shall perform such managerial duties and responsibilities for the Company
      as may be reasonably be assigned to him by the Chief Financial Officer of
      the Company and, at no additional compensation, shall serve on the Board
      and in other such positions with any subsidiary corporation of the
      Company, or any partnership, limited liability company or other entity in
      which the Company has an interest (herein collectively called
      “Affiliates”), as the Chief Financial Officer of the Company may from time
      to time determine.

            

    

     

    
      	
              c.  

            	
              Dedication of
      Professional Services.  The Employee shall devote
      substantially all of his business time, best efforts and attention to
      promote and advance the business of the Company and its Affiliates to
      perform diligently and faithfully all the duties, responsibilities and
      obligations of his position with the Company.  Employee shall
      not be employed in any other business activity, other than with the
      Company and its Affiliates, during the Term, whether or not such activity
      is pursued for gain, profit or other pecuniary advantage without approval
      by the Compensation Committee of the Board; provided, however, that this
      restriction will not be construed as preventing Employee from investing
      his or her personal assets in a business which does not compete with the
      Company or its Affiliates, where the form or manner of such investment
      will not require services of any significance on the part of Employee in
      the operation of the affairs of the business in which such investment is
      made and in which his participation is solely that of a passive
      investor.

            

    

     

    
      	
              d.  

            	
              Adherence to
      Standards.  Employee shall comply with the written
      policies, standards, rules and regulations of the Company from time to
      time established for all executive officers of the Company consistent with
      Employee's position and level of
authority.

            

    

     

    
      	
              e.  

            	
              Minimum Stock
      Ownership.  Employee shall comply with the minimum stock
      ownership requirements for executive officers of the Company by March 9,
      2009 (the fifth anniversary of the date such minimum stock ownership
      requirements were adopted by the Board) and until his Termination Date,
      Employees shall have a minimum stock ownership equal to two (2) times the
      Employee’s Base Salary, as defined in Section 4.a. (or such level as
      adjusted from time to time).

            

    

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              4.  

            	
              Compensation

            

    

     

    
      	
              a.  

            	
              Base
      Salary.  The Company shall pay the Employee an annual
      base salary of $227,500 (the “Base Salary”) commencing on the Effective
      Date and ending on the Termination Date.  The Base Salary will
      be payable in accordance with the ordinary payroll practices of the
      Company.  The Compensation Committee shall review the Base
      Salary annually, and the Base Salary may be changed by the Compensation
      Committee in its sole discretion, taking into account the base salaries,
      aggregate annual cash compensation, and other compensation of individuals
      holding similar positions at other comparable companies and the
      performance of the Employee and the
Company.

            

    

     

    
      	
              b.  

            	
              Performance
      Bonus.  In addition to his Base Salary, the Employee will
      be eligible to earn an annual performance bonus (the “Bonus”) during the
      Term as determined by the Compensation Committee in its sole
      discretion.  The Bonus shall be paid in cash no later than March
      15 of the following year.

            

    

     

    
      	
              c.  

            	
              Retirement
      Compensation.  Pursuant to prior employment agreements,
      the Employee, as of the Effective Date has earned a right to ten (10)
      annual payments of $30,000 (total $300,000).  For each
      additional complete year of employment with the Company, commencing on
      January 1, 2008 the Employee will earn and be entitled to receive an
      annual retirement payment equal to $7,500 (the “Retirement
      Payment”).  The Retirement Payment will be payable to the
      Employee, or in the event of the Employee’s death, to his estate,
      beneficiaries, or designees, on each of the first ten anniversary dates
      following the date the Employee leaves the service of the
      Company.  The Retirement Payment will be in addition to any
      deferred compensation, pension, or other payments the Employee has earned
      under this and any other previous and subsequent agreements with the
      Company and any other payments he may be due under the Company’s employee
      benefit plans.

            

    

     

    
      	
              d.  

            	
              Equity Compensation
      Grant.  In addition to cash compensation, the Employee
      will be eligible to earn equity compensation during the
      Term.  The amounts and form of all equity compensation awards
      shall be determined at the sole discretion of the Board or its designee
      and only in accordance with shareholder approved stock compensation
      plans.

            

    

     

    
      	
              e.  

            	
              Other
      Compensation.  The Employee will continue to be eligible
      to participate in all other cash or stock compensation plans or programs
      maintained by the Company, as in effect from time to time, in which other
      senior executives of the Company are allowed to
    participate.

            

    

     

    
      	
              f.  

            	
              Recoupment of Certain
      Compensation.  If the Company has to restate all or a
      portion of its financial statements due to the material
      noncompliance

            

    

     

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      
        	
                 

              	
                of
      the Company with any financial reporting requirement under the securities
      laws, the Employee shall, for the affected years, reimburse the Company
      for any excess bonus paid to the Employee pursuant to Section
      4.b.  The reimbursements shall be equal to the difference
      between the bonus paid to him for the affected years and the bonus that
      would have been paid to the Employee had the financial results been
      properly reported.  Such reimbursement shall be paid to the
      Company within ninety days after the Company notifies the Employee of the
      amount owed to the Company.

              

      

       

    

    
      	
              5.  

            	
              Employee
      Benefits

            

    

     

    
      	
              a.  

            	
              Participation in
      Company Benefit Plans.  During the Term, the Company
      shall provide the Employee with coverage under all employee pension and
      welfare benefit programs, plans and practices commensurate with his
      positions in the Company and to the extent permitted under the respective
      employee benefit plan.

            

    

     

    
      	
              b.  

            	
              Vacation.  The
      Employee will be entitled to twenty (20) days of paid vacation in each
      calendar year, to be taken at such times as is reasonably determined by
      the Employee to be consistent with the Employee’s responsibilities under
      this Agreement.

            

    

     

    
      	
              c.  

            	
              Expense
      Reimbursement.  The Employee is authorized to incur
      reasonable expenses in carrying out his duties and responsibilities under
      this Agreement, including, without limitation, expenses related to travel,
      meals, entertaining, and similar items related to such duties and
      responsibilities.  The Company shall reimburse the Employee for
      all such expenses on presentation by Employee from time to time of
      appropriately itemized and approved (consistent with the Company’s policy)
      accounts of such expenditures.  The Company shall reimburse the
      Employee for reasonable dues and expenses of membership in such club or
      clubs as the Board reasonably deems necessary for the Employee to
      entertain on behalf of the Company and for costs associated with
      continuing education and professional dues if approved in advance by the
      Chief Financial Officer and Treasurer of the Company.  All
      expense reimbursements for a calendar year will be paid in the normal
      course, but no later than March 15 of the following calendar
      year.

            

    

     

    
      	
              d.  

            	
              Life and Disability
      Insurance.  The Company will reimburse the Employee for
      the cost of life insurance on the Employee in the face amount of one
      million dollars ($1,000,000) with a person or persons named by the
      Employee as either the owner or the beneficiary as the Employee directs,
      and for the cost of the Employee's current disability policy with
      scheduled adjustments.  All reimbursements for a calendar year
      will be paid in the normal course, but no later than March 15 of the
      following calendar year.

            

    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              e.  

            	
              Health
      Insurance.  The Company agrees that it will include the
      Employee under any hospital, surgical, or group health plan or policy
      adopted generally for the benefit of its employees.  The payment
      of the premiums for the Employee and his dependents will be determined in
      accordance with the rules and regulations adopted by the Company for its
      employees.  In addition to including the Employee and his
      dependents in such plan, the Company shall pay all reasonable hospital,
      surgical, medical, dental, and prescription expenses of the Employee and
      his dependents not covered by such a plan.  In the event the
      Company has no group health plan, the Company agrees to pay all reasonable
      premiums on any health insurance policy obtained by the Employee to
      provide such coverage.

            

    

     

    
      	
              f.  

            	
              Automobile.  During
      the Term, the Employee will be entitled to use of a Company automobile or
      payment of a car allowance in accordance with a plan approved by the Board
      or its designee.

            

    

     

    
      	
              6.  

            	
              Confidential Material
      and Employee Obligations.

            

    

     

    
      	
              a.  

            	
              Confidential
      Material.  The Employee shall not, directly or
      indirectly, either during the Term or thereafter, disclose to anyone
      (except in the regular course of the Company's business or as required by
      law), or use in any manner, any information acquired by the Employee
      during his employment by the Company with respect to any clients or
      customers of the Company or any confidential, proprietary or secret aspect
      of the Company's operations or affairs unless such information has become
      public knowledge other than by reason of actions, direct or indirect, of
      the Employee. Information subject to the provisions of this paragraph will
      include, without limitation:

            

    

     

    
      	
              (i)  

            	
              Brokers,
      broker/dealer firms, law firms used to prepare Company and partnership
      registration statements, due diligence investigations, or other parties
      involved with the registration, review, or offering of the Company’s
      securities and drilling programs;

            

    

     

    
      	
              (ii)  

            	
              Names,
      addresses, and other information regarding investors in the Company’s
      drilling programs;

            

    

     

    
      	
              (iii)  

            	
              Names,
      addresses and other information regarding investors who participate with
      the Company in the drilling, completion or operation of oil and gas 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
  

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
       

      
        	
                 

              	
                other
      operations that the Company has completed or is investigating or has
      investigated for possible inclusion in future
  activities;

              

      

       

    

     

    
      	
              (vi)  

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

            

    

     

    
      	
              b.  

            	
              Return of Confidential
      Material.  All maps, logs, data, drawings and other
      records, electronic data and written material prepared or compiled by the
      Employee or furnished to the Employee during the Term will be the sole and
      exclusive property of the Company and none of such material may be
      retained by the Employee upon termination of his
      employment.  Notwithstanding the foregoing, the Employee will be
      under no obligation to return public
  information.

            

    

     

    
      	
              c.  

            	
              Non-Compete.  The
      Employee shall not directly, either during the Term or for a period of one
      (1) year thereafter, engage in any Competitive Business in West Virginia,
      Pennsylvania, Colorado, Utah, Wyoming, North Dakota, Michigan, Ohio,
      Kentucky, Texas and Tennessee; provided, however, that the ownership of
      less than five percent (5%) of the outstanding capital stock of a
      corporation whose shares are traded on a national securities exchange or
      on the over-the-counter market shall not be deemed engaging any
      Competitive Business.  "Competitive Business" shall mean the oil
      and natural gas industry, including oil and gas leasing, drilling, and
      other operations, syndication and marketing of partnership or other
      investments related to oil and natural gas operations, or any other
      business activities that are the same as or similar to the Company’s
      business operations as its business exists on the Effective Date or on the
      Termination Date.

            

    

     

    
      	
              d.  

            	
              No
      Solicitation.  The Employee shall not, directly or
      indirectly, either during the Term or for a period of one (1) year
      thereafter (i) solicit, directly or indirectly, the services of any person
      who was a full-time employee of the Company, its subsidiaries, divisions,
      or affiliates, or otherwise induce such employee to terminate or reduce
      employment, or (ii) solicit the business of any person who was a client or
      customer of the Company, its subsidiaries, divisions, or affiliates, in
      each case at any time during the last year of the Term. For purposes of
      this Agreement, the term "person" includes natural persons, corporations,
      business trusts, associations, sole proprietorships, unincorporated
      organizations, partnerships, joint ventures, limited liability companies
      or partnerships, and governments, or any agencies, instrumentalities, or
      political subdivisions thereof.

            

    

     

    
      	
              e.  

            	
              Remedies.  Employee
      acknowledges and agrees that the Company's remedy at law for a breach or a
      threatened breach of the provisions herein would be inadequate, and in
      recognition of this fact, in the event of a

            

    

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
       

      
        	
                 

              	
                breach
      or threatened breach by Employee of any of the provisions of this
      Agreement, it is agreed that the Company will be entitled to equitable
      relief in the form of specific performance, a temporary restraining order,
      a temporary or permanent injunction or any other equitable remedy which
      may then be available, without posting bond or other
      security.  Employee acknowledges that the granting of a
      temporary injunction, a temporary restraining order or other permanent
      injunction merely prohibiting Employee from engaging in any business
      activities would not be an adequate remedy upon breach or threatened
      breach of this Agreement, and consequently agrees upon any such breach or
      threatened breach to the granting of injunctive relief prohibiting
      Employee from engaging in any activities prohibited by this
      Agreement.  No remedy herein conferred is intended to be
      exclusive of any other remedy, and each and every such remedy will be
      cumulative and will be in addition to any other remedy given hereunder now
      or hereinafter existing at law or in equity or by statute or
      otherwise.

              

      

       

    

    
      	
              7.  

            	
              Termination of the
      Agreement

            

    

     

    
      	
              a.  

            	
              Notice of
      Termination.  Either the Employee or the Board may
      terminate this Agreement at any time and in his or their sole discretion
      upon no less than thirty (30) days written Notice of Termination to the
      other party.  "Notice of Termination" means a written notice
      which shall indicate the specified termination provision in this Agreement
      relied upon (Section 7.c., Section 7.d., Section 7.e., Section 7.f,
      Section 7.g. or Section 7.h.) and shall set forth in reasonable detail the
      facts and circumstances claimed to provide a basis for termination of
      Employee's employment under the provision so indicated; provided, however,
      no such purported termination will be effective without such Notice of
      Termination; provided further, however, any purported termination by the
      Company or by Employee will be communicated by a Notice of Termination to
      the other party hereto in accordance with  Section 9 (“Notices”)
      of this Agreement.

            

    

     

    
      	
              b.  

            	
              Termination
      Date.  The "Termination Date" shall mean the date
      specified in the Notice of Termination. The Termination Date shall not be
      less than thirty (30) days from the date such Notice of Termination is
      given; provided, however, that if within fifteen (15) days after any
      Notice of Termination is given the party receiving such Notice of
      Termination notifies the other party that a dispute exists concerning the
      termination, the Date of Termination shall be the date finally determined
      by either mutual written agreement of the parties or by the final
      judgment, order or decree of a court of competent jurisdiction (the time
      for appeal there from having expired and no appeal having been
      taken).

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
              c.  

            	
              Termination by the
      Company for Just Cause.

            

    

     

    
      	
              (i)  

            	
              The
      Company may terminate the Employee for “Just Cause” (as defined in Section
      7.c.ii), provided that the Company
shall:

            

    

     

    
      	
              (A)  

            	
              Give
      the Employee Notice of Termination as specified in Section 7.a.,
      and

            

    

     

    
      	
              (B)  

            	
              Pay
      the Employee, within thirty (30) days after his Termination Date, his Base
      Salary through the Termination Date at the rate in effect at the time the
      Notice of Termination is given plus any Bonus (only for periods completed
      and accrued, but not paid), incentive, deferred, or other compensation,
      and provide any other benefits, which have been earned or become payable
      as of the Termination Date, pursuant to the terms of this or any other
      agreement, or compensation or benefit plan, but which have not yet been
      paid or provided.

            

    

     

    
      	
              (ii)  

            	
              For
      purposes of this Agreement “Just Cause” means a good faith determination
      of the Board that the Employee:

            

    

     

    
      	
              (A)  

            	
              Failed
      to substantially perform his duties with the Company (other than a failure
      resulting from his incapacity due to physical or mental illness) after a
      written demand for substantial performance has been delivered to him by
      the Board, which demand specifically identifies the manner in which the
      Board believes he has not substantially performed his
    duties;

            

    

     

    
      	
              (B)  

            	
              Has
      engaged in conduct the consequences of which are materially adverse to the
      Company, monetarily or otherwise;
or

            

    

     

    
      	
              (C)  

            	
              Has
      pleaded guilty to or been convicted of a felony;
  or

            

    

     

    
      	
              (D)  

            	
              Has
      materially breached the terms of this
Agreement.

            

    

     

    No act,
or failure to act, on the Employee's part shall be grounds for termination with
Just Cause unless he has acted or failed to act with an absence of good faith or
without a reasonable belief that his action or failure to act was in or at least
not opposed to the best interests of the Company.  The Employee will
not be deemed to have been terminated with Just Cause under (ii)(B), (C) or (D),
unless there will have been delivered to the Employee a letter setting forth the
reasons for the Company’s termination of the Employee for Just Cause and the
Employee has failed to cure such reason for termination within thirty (30) days
of the receipt of such notice.

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              d.  

            	
              Termination by the
      Company Without Just Cause.  If the Company terminates
      this Agreement prior to its expiration (including extensions as provided
      in Section 1.b.) for any reason other than for Just Cause or the death or
      Disability (as defined in Section 7.e.) of the Employee, the Company
      shall:

            

    

     

    
      	
              (i)  

            	
              Within
      thirty (30) days of the Termination Date, pay to the Employee a lump sum
      severance payment equal to three (3) times the sum of: a) the Employee’s
      highest Base Salary during the previous two years of employment
      immediately preceding the Termination Date, plus b) the highest Bonus paid
      to the Employee for a year within the same two year period of employment
      immediately preceding the Termination
Date,

            

    

     

    
      	
              (ii)  

            	
              Pay
      to the Employee any unpaid expense reimbursement upon presentation by the
      Employee of an accounting of such expenses in accordance with normal
      Company practices, but no later than March 15 of the year following the
      year of termination,

            

    

     

    
      	
              (iii)  

            	
              Immediately
      vest any unvested Company stock options and restricted stock (excluding
      all LTIP shares),

            

    

     

    
      	
              (iv)  

            	
              Pay
      any deferred income or Retirement Compensation (under Section 4.c.) or
      other benefit payments due under this or any other agreements or plans,
      provided such payments shall be made under the schedule originally
      contemplated in the agreement under which they were
    granted,

            

    

     

    
      	
              (v)  

            	
              Make
      any other payments or provide any benefits earned under this or any other
      employment agreement or plan, including the Company’s Long-Term Incentive
      Plan, and

            

    

     

    
      	
              (vi)  

            	
              Continue
      coverage of the Employee and any dependents covered at the time of
      termination under the Company’s group health plans at the Company’s cost
      for a period equal to the lesser of (i) 18 months or (ii) such period as
      the Employee is eligible to participate in another employer’s health
      plan.

            

    

     

    
      	
              e.  

            	
              Termination in the
      Event of Death or Disability.  This Agreement will be
      terminated by the Company in the event of the death of Employee and may be
      terminated by the Company in the event of the Disability (as hereinafter
      defined) of the Employee upon proper notification to the Employee (or his
      estate in the event of his death), provided the Company shall pay to the
      Employee (or to the estate of the Employee in the event of termination due
      to the death of the Employee) the compensation and other benefits
      described in Section 4.a. of this Agreement which would have been earned
      for  (6) months after the Termination Date and any amounts
      

            

    

     

    
       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      
        	
                 

              	
                earned
      under Section 4.b. of this Agreement pro-rated for the period up to the
      Termination Date.  “Disability” means being eligible to receive
      a disability benefit under the Federal Social Security Act.  All
      amounts payable under this Section 7.e. will be paid in a lump sum as soon
      as practicable, but no later than two and one-half (2-1/2) months
      following the close of the calendar year in which the death or Disability
      occurred.

              

      

       

    

    
      	
              f.  

            	
              Termination by the
      Employee for Good Reason.

            

    

     

    
      	
              (i)  

            	
              If
      the Employee terminates this Agreement for Good Reason (as defined in
      Section 7.f.ii), provided that such Employee’s termination occurs within
      two years of the Good Reason, the Company
shall:

            

    

     

    
      	
              (A)  

            	
              Within
      thirty (30) days of the Termination Date, pay to the Employee a lump sum
      severance payment equal to three (3) times the sum of: a) the Employee’s
      highest Base Salary during the previous two years of employment
      immediately preceding the Termination Date, plus b) the highest Bonus paid
      to the Employee for a year within the same two year period of employment
      immediately preceding the Termination
Date,

            

    

     

    
      	
              (B)  

            	
              Pay
      to the Employee any unpaid expense reimbursement upon presentation by the
      Employee of an accounting of such expenses in accordance with normal
      Company practices, but no later than March 15 of the year following the
      year of termination,

            

    

     

    
      	
              (C)  

            	
              Immediately
      vest any unvested Company stock options and restricted stock (excluding
      all LTIP shares),

            

    

     

    
      	
              (D)  

            	
              Pay
      any deferred income or Retirement Compensation (under Section 4.c.) or
      other benefit payments due under this or any other agreements or plans,
      provided such payments shall be made under the schedule originally
      contemplated in the agreement under which they were
    granted,

            

    

     

    
      	
              (E)  

            	
              Make
      any other payments or provide any benefits earned under this or any other
      employment agreement or plan, including the Company’s Long-Term Incentive
      Plan, and

            

    

     

    
      	
              (F)  

            	
              Continue
      coverage of the Employee and any dependents covered at the time of
      termination under the Company’s group health plans at the Company’s cost
      for a period equal to the lesser of (i) 18 months or (ii) such period as
      the

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
       

      
        	
                 

              	
                Employee
      is eligible to participate in another employer’s health
    plan.

              

      

       

    

    
      	
              (ii)  

            	
              "Good
      Reason" means the occurrence of any of the following events without
      Employee's prior express written
consent:

            

    

     

    
      	
              (A)  

            	
              A
      material diminution in the Employee’s Base
  Salary;

            

    

     

    
      	
              (B)  

            	
              A
      material diminution in the Employee’s authority, duties or
      responsibilities;

            

    

     

    
      	
              (C)  

            	
              A
      material diminution in the authority, duties or responsibilities of the
      supervisor to whom the Employee is required to report, including a
      requirement that the Employee report to a corporate officer or employee
      instead of reporting directly to the
Board;

            

    

     

    
      	
              (D)  

            	
              A
      material diminution in the budget over which the Employee retains
      authority;

            

    

     

    
      	
              (E)  

            	
              A
      material diminution in reward opportunities under the annual Performance
      Bonus of Section 4.b. of this
Agreement;

            

    

     

    
      	
              (F)  

            	
              A
      material change in the geographic location at which the Employee must
      perform services; or

            

    

     

    
      	
              (G)  

            	
              Any
      other action or inaction that constitutes a material breach by the Company
      of this Agreement.

            

    

     

    Employee
must provide notice to the Company of the condition described in paragraphs
(A)-(G) of this section within ninety (90) days, upon the notice of which the
Company will have a period of thirty (30) days during which it may remedy the
condition and not be required to pay the amount.

     

    
      	
              g.  

            	
              Termination by the
      Employee for other than Good Reason.  The Employee may
      terminate this Agreement for other than Good Reason upon proper
      notification as provided in Section 7.a.  In such event the
      Company shall pay to the Employee:

            

    

     

    
      	
              (i)  

            	
              Within
      thirty (30) days after this Termination Date, in a lump sum, the
      compensation provided in Section 4 at the rate in effect at the time of
      the Notice of Termination. The Base Salary and Bonus will be prorated for
      the portion of the year that the Employee is employed by the Company;
      provided, however, that if the Employee’s termination occurs prior to
      March 31 of the year the Employee will not be entitled to a prorated Bonus
      for the year;

            

    

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
              (ii)  

            	
              Any
      incentive, deferred or other compensation which has been earned or has
      become payable pursuant to the terms of this or any other agreement or
      compensation or benefit plan as of the Termination Date, but which has not
      yet been paid, provided such payments will be made under the schedule
      originally contemplated in the agreement under which they were
      granted;

            

    

     

    
      	
              (iii)  

            	
              Any
      unpaid expense reimbursement upon presentation by the Employee of an
      accounting of such expenses in accordance with normal Company practices,
      but not later than March 15 of the year following the year of termination;
      and

            

    

     

    
      	
              (iv)  

            	
              Any
      other payments for benefits earned under this or any other employment
      agreement or plan.

            

    

     

    
      	
              h.  

            	
              Termination by the
      Employee following Change of
Control.

            

    

     

    
      	
              (i)  

            	
              If
      the Employee terminates this Agreement within two years following a Change
      of Control of the Company (as defined in Section 1.c.) the Company
      shall:

            

    

     

    
      	
              (A)  

            	
              Within
      thirty (30) days of the Termination Date, pay to the Employee a lump sum
      severance payment equal to three times the sum of: a) the Employee's
      highest Base Salary during the previous two years of employment
      immediately preceding the Termination Date, plus b) the highest Bonus paid
      to the Employee for a year within the same two year period of employment
      immediately preceding the Termination
Date,

            

    

     

    
      	
              (B)  

            	
              Pay
      to the Employee any unpaid reimbursement upon presentation by the Employee
      of an accounting of such expenses in accordance with normal Company
      practices, but not later than March 15 of the year following the year of
      termination,

            

    

     

    
      	
              (C)  

            	
              Immediately
      vest any unvested Company stock options and restricted stock (excluding
      all LTIP shares),

            

    

     

    
      	
              (D)  

            	
              Pay
      any deferred income or Retirement Compensation (under Section 4.c.) or
      retirement payment or other benefit payments due under this or any other
      agreements or plans, provided such payments will be made under the
      schedule originally contemplated in the agreement under which they were
      granted,

            

    

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
              (E)  

            	
              Make
      any other payments or provide any benefits earned under this or any other
      employment agreement or plan, including the Company’s Long-Term Incentive
      Plan, and

            

    

     

    
      	
              (F)  

            	
              Continue
      coverage of the Employee under the Company’s group health plans at the
      Company’s cost for a period equal to the lesser of (i) 18 months or (ii)
      such period as the Employee is receiving COBRA health continuation
      coverage from the Company.

            

    

     

    
      	
              i.  

            	
              Code Section 409A
      Compliance.  Except with respect to amounts paid pursuant
      to a schedule in a plan or arrangement outside of this Employment
      Agreement, it is intended that amounts payable under this Section 7 not be
      considered non-qualified deferred compensation subject to Internal Revenue
      Code Section 409A.  Employee is a Specified Employee under
      Internal Revenue Code Section 409A, therefore, to the extent such amounts
      are considered non-qualified deferred compensation payable upon a
      separation from service under Internal Revenue Code Section 409A, payment
      of those amounts so deferred under Internal Revenue Code Section 409A may
      not be made until at least six (6) months following the Employee’s
      separation from service of the Company (or, if earlier, the date of death
      of Employee).

            

    

     

    
      	
              8.  

            	
              Life
      Insurance.  The Company may, at any time after the
      execution of this Agreement, maintain any outstanding life insurance
      policies and apply for and procure as owner and for its own benefit new
      life insurance on Employee, in such amounts and in such form or forms as
      the Company may determine.  Employee shall, at the request of
      the Company, submit to such medical examinations, supply such information,
      and execute such documents as may be required by the insurance company or
      companies to whom the Company has applied for such
      insurance.  Employee hereby represents that to his knowledge he
      is in excellent physical and mental
condition.

            

    

     

    
      	
              9.  

            	
              Notices. For
      the purposes of this Agreement, notices and all other communications
      provided for in the Agreement shall be in writing and will be deemed to
      have been duly given when personally delivered, by facsimile transmission
      or sent by certified mail, return receipt requested, postage prepaid, or
      by expedited  (overnight) courier with established national
      reputation, shipping prepaid or billed to sender, in either case addressed
      to the respective addresses last given by each party to the
      other  (provided that all notices to the Company must be
      directed to the attention of the Secretary of the Company ) or to such
      other address as either party may have furnished to the other in writing
      in accordance  herewith.  All notices and
      communication will be deemed to have been received on the date of delivery
      thereof, or on the second day after deposit thereof with an expedited
      courier service, except that notice of change of address will be effective
      only upon receipt.

            

    

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Company
at:                          Petroleum
Development Corporation

    Attention:
Chairman of the Board

    120
Genesis Boulevard

    P.O. Box
26

    Bridgeport,
WV 26330

    

    Employee
at:                          Darwin
Stump

    206 Ruffed Grouse Drive

    Bridgeport, WV 26330

    

    
      	
              10.  

            	
              Successors.
      This Agreement will be binding on the Company and any successor to any of
      its businesses or assets.  Without limiting the effect of the
      prior sentence, the Company shall use its best efforts to require any
      successor or assign (whether direct or indirect, by purchase, merger,
      consolidation or otherwise) to all or substantially all of the business
      and/or assets of the Company to expressly assume and agree to perform this
      Agreement in the same manner and to the same extent that the Company would
      be required to perform it if no such succession or assignment had taken
      place. As used in this Agreement, "Company" means the Company as
      hereinbefore defined and any successor or assign to its business and/or
      assets as aforesaid which assumes and agrees to perform this Agreement or
      which is otherwise obligated under this Agreement by the first sentence of
      this Section, entitled Successors, by operation of law or
      otherwise.

            

    

     

    
      	
              11.  

            	
              Binding
      Effect.  This Agreement will inure to the benefit of and
      be enforceable by Employee's personal and legal representatives,
      executors, administrators, successors, heirs, distributees, devisees and
      legatees.  If Employee should die while any amounts would still
      be payable to him hereunder if he had continued to live, all such amounts,
      unless otherwise provided herein, will be paid in accordance with the
      terms of this Agreement to Employee's
estate.

            

    

     

    
      	
              12.  

            	
              Integration,
      Modification and Waiver.  This Agreement constitutes the
      sole employment agreement between the parties, and any prior employment
      agreement, written or oral, is terminated.  No provision of this
      Agreement may be modified, waived or discharged unless such waiver,
      modification or discharge is agreed to in writing and signed by Employee
      and such officer of the Company as may be specifically designated by the
      Board.  No waiver by either party hereto at any time of any
      breach by the other party hereto of, or compliance with, any condition or
      provision of this Agreement to be performed by such other party will be
      deemed a waiver of similar or dissimilar provisions or conditions at the
      same or at any prior or subsequent
time.

            

    

     

    
      	
              13.  

            	
              Headings.  Headings
      used in this Agreement are for convenience only and will not be used to
      interpret or construe its
provisions.

            

    

     

    
      	
              14.  

            	
              Waiver of
      Breach.  The waiver of either the Company or Employee of
      a breach of any provision of this Agreement will not operate or be
      construed as a waiver of any subsequent breach by either the Company or
      Employee.

            

    

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	
              15.  

            	
              Amendments.  No
      amendments or variations of the terms and conditions of this Agreement
      will be valid unless the same is in writing and signed by all of the
      parties hereto.

            

    

     

    
      	
              16.  

            	
              Survival of
      Obligations.  The provisions of Section 6 of this
      Agreement will continue to be binding upon the Employee and Company in
      accordance with their terms, notwithstanding the termination of the
      Employee’s employment with the Company for any reason or the expiration of
      this Agreement.

            

    

     

    
      	
              17.  

            	
              Severability.  The
      invalidity or unenforceability of any provision of this Agreement, whether
      in whole or in part, shall not in any way affect the validity and/or
      enforceability of any other provision contained herein.  Any
      invalid or unenforceable provision shall be deemed severable to the extent
      of any such invalidity or unenforceability.  It is expressly
      understood and agreed that while the Company and Employee consider the
      restrictions contained in this Agreement reasonable for the purpose of
      preserving for the Company the good will, other proprietary rights and
      intangible business value of the Company, if a final judicial
      determination is made by a court having jurisdiction that the time or
      territory or any other restriction contained in this Agreement is an
      unreasonable or otherwise unenforceable restriction against Employee, the
      provisions of such clause will not be rendered void but will be deemed
      amended to apply as to maximum time and territory and to such other extent
      as such court may judicially determine or indicate to be
      reasonable.

            

    

     

    
      	
              18.  

            	
              Governing
      Law.  This Agreement will be construed and enforced
      pursuant to the laws of the State of West
  Virginia.

            

    

     

    
      	
              19.  

            	
              Arbitration.  Any
      controversy or claim arising out of or relating to this Agreement or any
      transactions provided for herein, or the breach thereof, other than a
      claim for injunctive relief, will be settled by arbitration in accordance
      with the commercial Arbitration Rules of the American Arbitration
      Association (the "Rules") in effect at the time demand for arbitration is
      made by any party.  The evidentiary and procedural rules in such
      proceedings will be kept to the minimum level of formality that is
      consistent with the Rules. The Company shall name one arbitrator, Employee
      shall name a second and the two arbitrators so chosen shall name a
      neutral, third arbitrator, who will serve as the sole arbitrator of the
      controversy or claim.  The third arbitrator must be experienced
      in the matters in dispute.  If the third and sole arbitrator is
      not agreed upon, the American Arbitration Association will name him or
      her.  Arbitration will occur in Bridgeport, West Virginia, or
      such other location agreed to by the Company and Employee.  The
      award made by the third arbitrator will be final and binding, and judgment
      may be entered in any court of law having competent jurisdiction. The
      award is subject to confirmation, modification, correction, or vacation
      only as explicitly provided in Title 9 of the United States
      Code.  The prevailing party will be entitled to an award of pre-
      and post-award interest as well as reasonable attorneys' fees incurred in
      connection with the arbitration and any judicial proceedings related
      thereto.

            

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	
              20.  

            	
              Executive Officer
      Status.  Employee acknowledges that he may be deemed to
      be an "executive officer" of the Company for purposes of the Securities
      Act of 1933, as amended (the "1933 Act"), and the Securities Exchange Act
      of 1934, as amended (the "1934 Act") and, if so, he shall comply in all
      respects with all the rules and regulations under the 1933 Act and the
      1934 Act applicable to him in a timely and non-delinquent manner. In order
      to assist the Company in complying with its obligations under the 1933 Act
      and 1934 Act, Employee shall provide to the Company such information about
      Employee as the Company shall reasonably request including, but not
      limited to, information relating to personal history and
      stockholdings.  Employee shall immediately report to the General
      Counsel of the Company or other designated officer of the Company all
      changes in beneficial ownership of any shares of the Company Common Stock
      deemed to be beneficially owned by Employee and/or any members of
      Employee's immediate family.

            

    

     

    
      	
              21.  

            	
              Pronouns.  All
      pronouns and any variations thereof will be deemed to refer to the
      masculine, feminine, neuter, singular, or plural, as the identity of the
      person or entity may require. As used in this Agreement: (1) words of the
      masculine gender shall mean and include corresponding neuter words or
      words of the feminine gender, (2) words in the singular shall mean and
      include the plural and vice versa, and (3) the word "may" gives sole
      discretion without any obligation to take any
  action.

            

    

     

    
      	
              22.  

            	
              Counterparts.   This
      Agreement may be executed in one or more counterparts, each of which shall
      be deemed to be an original, but all of which together will constitute but
      one document.

            

    

     

    
      	
              23.  

            	
              Exhibits.  Any
      Exhibits attached hereto are incorporated herein by reference and are an
      integral part of this Agreement.

            

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    IN
WITNESS WHEREOF, the Company and the Employee have duly executed this Employment
Agreement as of the date first above written.

     

    
       

       

      
        
          
            
              
                
                  
                    	 
      	 
      	 
      	 
      	 
      
	
                            Company

                          	 
      	 
      	
                            Executive

                          	 
      
	 
      	
                            Petroleum
      Development Corporation

                          	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                            By:

                          	 /s/
      Kimberly Wakim 	 
      	 
      	 /s/
      Darwin L. Stump
	 
      	
                            Kimberly
      Wakim

                          	 
      	 
      	
                            Darwin
      L. Stump

                          
	
                            Position:

                          	
                            Chair
      of the

                          	 
      	 
      	 
      
	 
      	
                            Compensation
      Committee

                          	 
      	 
      	 
      

                  

                

              

            

          

        

         

         

        18ex10_22.htm

    
      

    

    Exhibit 10.22

    

    Separation
Agreement

    

    This
Separation Agreement (the “Agreement”) is made and entered into this 8th day of
February, 2008 by and between Petroleum Development Corporation, a Nevada
Corporation (the “Company”), and Thomas E. Riley (the “Employee”) (collectively,
the “Parties”).

    

    WHEREAS, the Parties acknowledge that
on December 20, 2007 the Board of Directors of the Company (the “Board”)
selected a successor for Steven R. Williams upon his retirement as Chief
Executive Officer and authorized the successor to determine what changes he
wanted to make to the executive leadership team of the Company.

    

    WHEREAS, after further evaluation of
these changes, the Company has determined that the Employee would best serve the
Company in the role of Executive Vice President;

    

    WHEREAS, the Parties acknowledge that
the Employee does not wish to serve in the capacity of Executive Vice President
of the Company;

    

    WHEREAS, Employee desires to terminate
his employment with the Company pursuant to the “Good Reason” provisions of his
Employment Agreement and has given written notice of his intention to terminate
his employment with the Company unless he continues in the capacity of President
of the Company;

    

    WHEREAS, the Company has advised the
Employee that it does not intend to reconsider the actions taken with respect to
Employee;

    

    WHEREAS, the Parties desire to entire
into a definitive agreement to set forth the terms of Employee’s separation from
the Company;

    

    NOW THEREFORE, in consideration of the
premises and mutual covenants and obligations set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged and accepted, the parties hereto, intending to be legally bound,
agree as follows:

    

    1.   Termination
Date.  Employee resigns his employment and his position as President
and as a member of the Board effective as of March 9, 2008 (the “Termination
Date”). The Parties acknowledge that his resignation is due to “Good Reason” as
defined under his Employment Agreement.

    

    2.   Nondisparagement. 
Employee agrees not to make negative comments or otherwise disparage the Company
or its officers, directors, employees, shareholders or agents, in any manner
likely to be harmful to them or their business, business reputation or personal
reputation. The Company agrees that the members of the Board and officers of the
Company as of the date hereof will not, while employed by the Company or serving
as a director of the Company, as the case may be, make negative comments about
the Employee or otherwise disparage the Employee in any manner that is likely to
be harmful to the Employee’s business or personal reputation. The foregoing
shall not be violated by truthful statements in response to legal process or
required governmental testimony or filings, and the foregoing limitation on the
Company’s directors and officers will not be violated by statements that they in
good faith believe are necessary or 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    appropriate
to make in connection with performing their duties for or on behalf of the
Company.  Either Party will be entitled to execute the remedies provided
for in Section 6.e. of the Employment Agreement.

    

    3.   References.  The
President of the Company shall provide employment references when requested by
Employee and all such references shall characterize Employee’s separation as
voluntary.

    

    4.   Compensation and
Benefits.

    

    
      	
              (a)  

            	
              The
      Company shall pay to Employee the following
  amounts:

            

    

    

    
      	
              (1) 
       

            	
              Separation
      Compensation. Within thirty (30) days after the Termination Date or
      seven (7) days after the Revocation Date (as defined in Section 11 below)
      without revocation, whichever is greater, the Company shall pay to the
      Employee a lump sum amount of $1,877,343, such amount is acknowledged by
      the Parties as being in full satisfaction of the amount due to Employee
      pursuant to Section 7(d) of his Employment Agreement; providing
      for three times the sum of: (a) the Employee’s highest Base Salary
      during the previous two years of employment immediately preceding the
      Termination Date, plus (b) the highest Bonus paid to the Employee during
      the same two year period.

            

    

    

    
      	
              (2) 
       

            	
              Compensation and
      Bonus.  Employee will be entitled to receive his full
      compensation earned in 2008 prior to the Termination Date paid in
      accordance with the Company’s normal payroll practices.  Such
      payment is based on a Base Salary of $315,000 for
      2008.  Employee will also be entitled to receive the benefit
      earned by him under the Short-Term Incentive Compensation program for
      2007.  The parties agree that such amount under the Short-Term
      Incentive Compensation program shall be $310,781, payable at the same time
      as the amounts noted in Section 4(a)(1) above. If the earnings part of the
      2007 bonus calculation under the percent (50%) for the other executive
      officers (“Excess Amount”), Employee will receive a lump sum payment
      within thirty days after such determination, equal to four (4) times the
      amount of the additional bonus amount attributable to the Excess
      Amount.

            

    

    

    
      	
              (3) 
       

            	
              Expense
      Reimbursement.  Company shall pay to the Employee any unpaid
      expense reimbursement for periods on or prior to the Termination Date upon
      presentation by the Employee of an accounting of such expenses in
      accordance with normal Company practices. Employee agrees to submit all
      unpaid expense reimbursements to the Company by April 10, 2008. In no
      event shall such expense reimbursements be made later than April 30, 2008.
      The Parties acknowledge that Employee will not be entitled to any expense
      reimbursements (including, but not limited to, reimbursements for costs of
      premiums on Employee’s one million dollar life insurance
      policy

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    and
reimbursements for the cost of the Employee’s current disability policy) for any
expenses incurred on or after the Termination Date.

    

    
      	
              (4) 
       

            	
              Option to Purchase
      Automobile and Computer.  Employee shall have an option to
      purchase the automobile and computer currently furnished to him by the
      Company for $13,185 and $500, respectively. The computer shall be cleaned
      of all Company information by Company’s IT department prior to delivery.
      Full payment shall be due to the Company on or before February 28,
      2008.

            

    

    

    
      	
              (5) 
       

            	
              Stock Options and
      Restricted Stock.  Company agrees that all unvested Company
      stock options and restricted stock shall be vested on the Termination
      Date.  Company acknowledges that Four Thousand Six Hundred and
      Seventy Eight (4,678) stock options shall become fully vested and Sixteen
      Thousand One Hundred Twenty Three (16,123) shares of restricted stock
      shall become fully vested.

            

    

    

    
      	
              (6) 
       

            	
              Performance
      Shares.  Company shall deliver to Employee as soon as
      practicable after the Termination Date, Three Thousand Seventy Eight
      (3,078) shares of Company stock in satisfaction of amounts due to Employee
      under Section 2.3 of the Company’s 2007 Long-Term Incentive Program.
      Employee acknowledges that such shares are his full entitlement from the
      Seven Thousand Six Hundred Ninety-Four (7,694) performance shares award
      under the 2007 Long-Term Incentive
Program.

            

    

    

    
      	
              (7) 
       

            	
              Retirement
      Payment.  Company shall pay Employee the Retirement Payment
      earned under Section 4.c. of the Employment Agreement. The Retirement
      Payment shall be paid in ten (10) annual installments on the first
      business day of January each year, beginning January 2, 2009. The annual
      retirement payment shall be $37,500, which amount is acknowledged by the
      Parties as being equal to $7,500 times the number of completed years of
      service under his Employment Agreement with credit for a full year of
      service for 2008 (i.e., five
years).

            

    

    

    
      	
              (8) 
       

            	
              COBRA
      Coverage.  Company shall continue coverage of the Employee and
      any dependents covered at the time of termination under the Company’s
      group health plans at the Company’s cost for a period equal to the lesser
      of (i) 18 months or (ii) such period as the Employee is eligible to
      participate in another employer’s health
plan.

            

    

    

    
      	
              (9) 
       

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

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              (10) 
       

            	
              Stock
      Purchase.  The Company shall purchase from the Employee Fifty
      Thousand (50,000) shares of Employee’s Company Stock. Such stock purchase
      will be made on the Termination Date. The amount paid for such shares will
      be based on the closing market price of the shares on February 8, 2008. In
      order to comply with the Exchange Act exemption provided by Rule 16b-3,
      the Board shall adopt a resolution providing that the repurchase of the
      shares will be in accordance with the terms set forth in this Section and
      expressly providing that this resolution has been adopted to comply with
      Rule 16b-3.

            

    

    

    
      	
              (b)  

            	
              Code Section 409A
      Compliance.  Company represents that this Agreement is
      complaint with Internal Revenue Code Section 409A (“Code Section 409A”)
      and shall be construed to amend the Employment Agreement entered into
      between the Parties in December, 2003 to comply with Code Section 409A.
      For purposes of this Agreement and the Employment
    Agreement:

            

    

     

    
      	
              
                (1)  

              

            	
              "Change of Control"
      shall have the meaing provided under Treas. Reg. §
      1.409-A-3(i)(5).

            

    

     

    
      	
              (2)  

            	
              “Good
      Reason” shall have the meaning provided under Treas.
      Reg. § 1.409A-1(n). However, the Parties acknowledge
      that the Company’s thirty (30) day cure period is waived due to the fact
      that the Company does not intend to reconsider the actions taken with
      respect to Employee.

            

    

    

    
      	
              (3)  

            	
              Employee
      is considered a “specified employee” as such term is defined under Code
      Section 409A(a)(2)(B). Payment of those amounts considered nonqualified
      deferred compensation under Code Section 409A, including those amounts
      payable under Section 4(a)(7) of this Agreement, shall not be made until
      at least six (6) months following the Employee’s separation from service
      of the Company (or, if earlier, the date of death of
      Employee).

            

    

    

    
      	
              (4)  

            	
              It
      is intended that amounts payable under paragraphs (1), (2), (3), (5), (6)
      and (8) of Section 4(a) shall not be considered nonqualified deferred
      compensation under Code Section
409A.

            

    

    

    5.   Qualified Retirement
Plan.  As of the date hereof, Employee had a vested account balance
in the Company’s qualified retirement plan. Employee shall be entitled to such
vested account balance under the Company’s qualified retirement plan upon
processing the appropriate distribution forms following his separation. Such
vested account balance shall include Employee’s share of the 2007 Company
contribution and Employee’s 401(k) deferrals through his Termination Date, all
as adjusted for earnings to the date of distribution.

     

    6.   Confidential Material and
Employee Obligations.  Employee acknowledges the validity of the
confidentiality, non-solicitation and non-compete provisions found in Section 6
of his Employment Agreement and the remedies called for therein. Employee agrees
to abide by the terms of Section 6 of his Employment Agreement, provided that
if, during the period specified in

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    Section
6d. of his Employment Agreement Employee notifies the Company of either an
employment or business opportunity he intends to pursue, the Company has five
(5) days to object. If the Company fails to object within the five (5) day
period, Employee is free to pursue the employment or business opportunity,
provided further that any objection by the Company shall not be
unreasonable.

     

    7.   Return of
Property.  On or before the Termination Date, Employee will return
to the Company all of the Company’s property in his possession. The Company’s
property includes, without limitation, privileged information, reports, files,
memoranda, correspondence, door and file keys, identification cards, credit
cards, computer access codes, computer programs, software and hardware, customer
and client lists or information and other property or material which he prepared
or helped to prepare or to which he had access including any reproductions
thereof.

     

    8.   Cooperation with
Investigations.  Employee agrees to cooperate fully with the Company
and its attorneys in connection with any investigation or litigation relating to
any Company matter in which Employee was involved, provided advice or has
knowledge and will be reimbursed for Employee’s expenses and time at a mutually
agreed rate. The Company will consult with Employee and make reasonable
efforts to schedule any of Employee’s time required under this Section 8 so as
not to materially disrupt Employee’s business and personal affairs, and the
Company will reimburse Employee for reasonable direct expenses incurred by him
in so complying. The Company agrees to promptly notify Employee, unless
precluded by law, in the event the Company has knowledge that Employee is named
or will be involved in any legal or regulatory proceeding, and the Company will
designate an individual at the Company who will serve as Employee’s point of
contact in the matter.

     

    9.   Other.

    

    
      	
              (a)  

            	
              This
      Agreement shall be construed and enforced pursuant to the laws of the
      State of West Virginia without giving effects to its conflict of laws. If
      any provision hereof is declared to be unenforceable by a court of law,
      such provision shall be fully severable, and this Agreement shall be
      construed and enforced as if such unenforceable provision had never
      comprised a part hereof, the remaining provisions hereof shall remain in
      full force and effect, and the court construing the Agreement shall add as
      a part hereof a provision as similar in terms and effect to such
      unenforceable  provision as may be enforceable, in lieu of the
      unenforceable provision.

            

    

    

    
      	
              (b)  

            	
              This
      Agreement sets forth the entire agreement between the parties hereto, and
      fully supersedes any and all prior oral or written agreements between the
      parties pertaining to the subject matter
hereof.

            

    

    

    
      	
              (c)  

            	
              All
      notices, requests, demands or other communications under the Agreement
      will be in writing and shall be deemed to have been duly given when
      delivered in person or deposited in the United States mail, postage
      prepaid, by registered or certified mail, return receipt requested, to the
      party to whom such notice is being given as
  follows:

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      
        	 	
                As
      to Thomas E. Riley:

              	 
      	
                Thomas
      E. Riley

                P.
      O.  Box 4471

                Clarksburg,
      West Virginia 26302

              
	 	 
      	 
      	 
      
	 	
                As
      to the Company:

              	 
      	
                Petroleum
      Development Corporation

                120
      Genesis Boulevard

                Bridgeport,
      West Virginia 26330

              

      

    

    

    10.   Waiver and
Release.  In consideration of the Company’s obligations as set forth
above.  Employee 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 her 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 West Virginia and any
other federal, state or local statutes or ordinances of the United States, it
being Employee’s intention and the intention of the Company to make this release
as broad and as general as the law permits.  Employee 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.

    

    11.    Knowing and Voluntary
Consent.   Employee agrees that the consideration to which he
is entitled as a result of this Agreement exceeds the consideration to which
Employee would otherwise have been entitled, and is sufficient to make this
Agreement fully enforceable.

    

    Employee
acknowledges that he was provided a period of at least twenty-one (21) days to
consider this Agreement and that his signature on this Agreement prior to the
expiration of the twenty-one (21) days shall constitute a waiver of the
remainder of the twenty-one (21) day consideration period. Employee further
acknowledges that he has a period of seven days following the date that he
signs below to revoke this Agreement by delivering a written revocation to the
Company at the address below by the end of business on the seventh day of the
revocation period (“Revocation  Date”).  In the event of
revocation, the Company’s obligations under this Agreement will be
void.

    

    Employee
acknowledges that he has been encouraged, and has had a full opportunity, to
consult with an attorney of his choosing in reviewing this Agreement, and
Employee has had a reasonable time within which to review and consider it.
Employee acknowledges that: (a) this Agreement is written in terms and set,
forth conditions in a manner which he understands; (b) he has carefully read and
understands all of the terms and conditions of this Agreement; (c) he agrees
with the terms and conditions of this Agreement; (d) the payment to be made to
him pursuant to this Agreement is not something to which he is entitled except
as consideration for this Agreement; and (e) he enters into this Agreement
knowingly and voluntarily.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEROF, the Company and the Employee have duly executed this Separation
Agreement as of this 8th day of
February, 2008.

    

    
      	
              Company

            	 
      	
              Employee

            
	 
      	 
      	 
      
	
              Petroleum
      Development Corporation

            	 
      	 
      
	
              By:  /s/
      Steven R. Williams

            	 
      	
              /s/
      Thomas E. Riley

            
	 
      	 
      	
              Thomas
      E. Riley

            

    

     

     

    7

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