WASHINGTON,
DC 20549
_______________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): March 1, 2009
Petroleum Development
Corporation
(Exact
Name of Registrant as Specified in Charter)
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Nevada
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0-7246
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95-2636730
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State
or Other Jurisdiction of Incorporation
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Commission
File Number
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IRS
Employer Identification No.
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1775 Sherman Street, Suite
3000, Denver, CO 80203
(Address
of Principal Executive Offices)
Registrant's
telephone number, including area code 303-860-5800
120 Genesis Boulevard,
Bridgeport, WV 26330
(Former
Address, Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
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[ ]
Written communications pursuant to Rule 425 under Securities Act (17 CFR
230.425)
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[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02. Entry into a Material Definitive Agreement.
On March
1, 2009, the Board of Directors of Petroleum Development Corporation ("Company")
set the compensation for non-employee members of the Board of Directors for
the Board year commencing on July 1, 2009. Additionally, on March 4,
2009, the Compensation Committee ("Committee") of the Board of Directors after a
review of performance and competitive market data, finalized the following 2009
compensation matters for the Company's current executive
officers: base salaries, target annual bonuses, and Long-Term
Incentive Plan grants.
The
following table sets forth the previous and new annual compensation levels of
the non-employee directors:
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BOARD
MEMBER COMPENSATION
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YEAR
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COMPENSATION
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Annual
retainer
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2009
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$ 55,000
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2008
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$ 55,000
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Lead
director
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2009
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$ 27,500
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2008
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$ 27,500
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Stock
compensation
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2009
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4,000
shares
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2008
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2,000
shares
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COMMITTEE
MEMBER FEES
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Executive
committee
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2009
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$ 5,000
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2008
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$ 5,000
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Audit
committee
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Chair
member
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2009
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$ 27,500
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2008
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$ 22,500
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Other
member
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2009
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$ 10,000
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2008
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$ 10,000
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Compensation
committee
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Chair
member
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2009
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$ 10,000
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2008
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$ 10,000
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Other
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2009
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$ 5,000
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2008
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$ 5,000
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Nominating
committee
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Chair
member
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2009
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$ 7,500
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2008
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$ 7,500
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Other
member
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2009
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$ 2,500
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2008
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$ 2,500
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Planning
& finance committee
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Chair
member
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2009
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$ 7,500
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2008
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$ 7,500
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Other
member
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2009
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$ 2,500
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2008
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$ 2,500
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New stock
compensation in the form of restricted stock for the Board year 2009-2010 to be
issued on July 1, 2009, and vests on July 1, 2010.
The
following table sets forth the previous and new annual base salary for each of
the executive officers:
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Name
and Position
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Year
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Base
Salary
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Richard
W. McCullough
Chairman
and Chief Executive Officer
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2009
2008
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$450,000
$340,000
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Eric
R. Stearns
Executive
Vice President
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2009
2008
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$320,250
$305,000
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Barton
R. Brookman
Senior
Vice President
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2009
2008
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$270,000
$250,000
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Daniel
W. Amidon
General
Counsel and Secretary
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2009
2008
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$245,700
$227,500
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Darwin
L. Stump
Chief
Accounting Officer
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2009
2008
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$236,658
$227,500
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Gysle
R. Shellum
Chief
Financial Officer
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2009
2008
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$235,0001
$235,0002
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1previously
determined and disclosed per Mr. Shellum’s November 2008 contract.
2annualized,
based on two months
The
Committee also established the metrics for the Company's Short-Term Incentive
cash bonus program for 2009. These represent the threshold, target
and stretch amounts that an executive officer can achieve if he meets the
Committee's established performance criteria. The Committee has not
yet determined the particular performance criteria for 2009.
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Executive
Officer
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Threshold
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Target
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Stretch
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Richard
W. McCullough
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0%
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100%
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200%
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Eric
R. Stearns
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0%
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62
½%
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125%
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Barton
R. Brookman
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0%
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50%
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100%
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Daniel
W. Amidon
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0%
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50%
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100%
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Gysle
R. Shellum1
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0%
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50%
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100%
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1previously
determined and disclosed per Mr. Shellum’s November 2008 contract.
The bonus
amount for Mr. Stump for 2009 performance will be discretionary.
The
Committee also determined executive officer Awards of performance shares under
the 2009 Long Term Incentive Program and restricted stock under the Company's
2004 Long-Term Equity Compensation Plan ("2004 Equity Plan"). Awards
under the 2009 Long-Term Incentive Program include performance shares that may
be earned if established performance criteria are satisfied. The
grants of restricted stock were established with four year ratable vesting on
March 4th of each year with first vesting on March 4, 2010.
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Executive
Officer
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Restricted
Stock
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Performance
Shares
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Richard
W. McCullough
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27,306
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12,175
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Eric
R. Stearns
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16,101
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7,179
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Barton
R. Brookman Jr.
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10,298
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4,597
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Daniel
W. Amidon
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9,371
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4,179
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Gysle
Shellum was previously awarded equity grants pursuant to his November 2008
contract, as previously disclosed at that time.
The
performance shares may be earned in whole or in part on December 31 of 2011,
2012, and 2013 if the average closing price of the Company's common stock during
the preceding December exceeds a specified price established by the
Committee.
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Performance
Target for the Performance Period Ending on December 31
of:
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Percentage
of Award Vested
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2011
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2012
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2013
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$30.50
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$34.00
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$38.00
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50%
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$34.00
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$39.00
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$45.50
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75%
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$37.50
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$45.00
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$54.00
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100%
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Other
restrictions and conditions of the awards include:
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·
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Awards
may be not sold, transferred, pledged, assigned or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, awards granted to an executive officer
will be exercisable during his lifetime only by such executive or the
executive's legal representative.
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·
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Performance
shares not earned at December 31, 2013 will be
forfeited.
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Executives
will not have voting rights for non-vested restricted stock or for
unearned performance shares.
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·
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Executives
will not be entitled to receive dividends for restricted stock that has
not vested or for performance shares that have not been
earned.
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·
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Vesting
of any unvested restricted stock will be accelerated in the event of
termination of employment resulting from the death or disability of the
executive; performance shares will be accelerated in accordance with the
terms of the 2009 Long Term Incentive
Program.
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·
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Termination
of employment for any reason other than death, disability, by the Company
for a reason other than cause or by the executive for good reason will
result in termination of the right of the executive to any remaining
rights to unvested shares of restricted stock or unearned performance
shares.
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·
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In
the event of a "Change in Control" as defined in the 2009 Long Term
Incentive Program:
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o
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If
triggered by the sale of shares, the sales price of a share in the subject
change in control will be the share price for purposes of this section;
and
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o
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If
triggered by an event other than the sale of shares, the share price for
purposes of this section will be determined in good faith by the
Committee, in its sole discretion.
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Item
9.01. Financial Statements and Exhibits.
(d) Exhibits.
10.1 Petroleum
Development Corporation 2009 Long-Term Incentive Program
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Petroleum
Development Corporation
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Date:
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March 5, 2009
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By:
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/s/ Richard W.
McCullough
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Richard
W. McCullough
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Chairman
and
Chief
Executive Officer
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