SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
March 31,
2009
Date
of report (Date of earliest event reported)
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
Number
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1775
Sherman Street, Suite 3000, Denver, CO 80203
Address
of Principal Executive Offices
303-860-5800
Registrant's
telephone number, including area code
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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[
]
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Written
communications pursuant to Rule 425 under Securities Act (17 CFR
230.425)
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[
]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
]
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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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[
]
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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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No
Change
Former
Name or Former Address, if Changed Since Last Report
Item
5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On March
31, 2009, the Compensation Committee of Petroleum Development Corporation
determined the short-term incentive compensation terms (“STI”) for the 2009 year
for the CEO and other executive officers of the Company. The short-term
incentive plan provides the potential for an annual bonus to each of the
executive officers based on both Company and personal performance
criteria. Forty percent of the bonus will be determined by the Company's
minimum liquidity target, as defined below; twenty percent of the bonus will be
determined by cash flow per share; and the remaining forty percent of the bonus
will be determined by the Compensation Committee in its discretion based upon an
evaluation by the Committee of the performance of each respective executive
during the year. Bonus determinations between the milestones will be
calculated pro-rata. The following table summarizes the criteria to be used in
determining the bonus amounts:
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Criteria
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Lower
Threshold Amount
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Target
Bonus
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Maximum
Bonus
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Percent
of Total Maximum Bonus
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Minimum
Liquidity
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$10
million below
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Minimum
Liquidity
Target
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$20
million above
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40%
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Cash
Flow per Share
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$6.50
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$7.80
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$9.00
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20%
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Discretionary
evaluation
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Compensation
Committee Determination
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40%
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||
Minimum
Liquidity will be measured at December 31, 2009. The formula for measuring
Minimum Liquidity is as follows: net cash provided by operating
activities; minus capital expenditures; plus cash generated from dispositions;
plus the actual unused revolving commitment as of December 31, 2009 on the
Company’s revolving bank line of credit. The Minimum Liquidity Target will be
the revolving commitment under the Company’s revolving bank line
of credit (after redetermination of the Company’s borrowing
base expected in the near future and the related change in the
Company’s aggregate revolving commitment, if any), minus the outstanding
revolving credit loan amount on December 31, 2008 ($194.5 million).
The lower threshold amount will be $10 million below the Minimum
Liquidity Target and the Maximum Bonus will be $20 million above the Minimum
Liquidity Target.
Notwithstanding
the above, for Darwin L. Stump, a named executive officer, 100% of his STI for
2009 will be at the discretion of the Compensation Committee.
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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April
6, 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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