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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.  )

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PDC ENERGY, INC.

1775 Sherman Street, Suite 3000

Denver, Colorado 80203

(303) 860-5800

April 14, 2021

Dear Stockholder of PDC Energy, Inc.:

You are cordially invited to attend the 2021 Annual Meeting of PDC Energy, Inc. to be held via virtual web conference at www.virtualshareholdermeeting.com/PDCE2021 on May 26, 2021, at 8:00 a.m. Mountain Time (the “Annual Meeting”).

The accompanying Notice of Annual Meeting and Proxy Statement provide information concerning the matters to be considered at the Annual Meeting. The Annual Meeting will cover only the business contained in the Proxy Statement.

We hope you will join us at the Annual Meeting online. Your vote is extremely important this year regardless of the number of shares you own. We value your opinion and encourage you to participate by voting your proxy card. Whether or not you plan to attend virtually, it is important that your shares be represented at the Annual Meeting. You may vote your shares by using the telephone or Internet voting options described in the attached Notice of Annual Meeting and proxy card. If you receive a proxy card by mail, you may cast your vote by completing, signing and returning it promptly. This will ensure that your shares are represented at the Annual Meeting even if you are unable to virtually attend.

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON

Wednesday, May 26, 2021

April 14, 2021

To the stockholders of PDC Energy, Inc.:

The 2021 Annual Meeting of PDC Energy, Inc. (the “Company”) will be held via the Internet through a virtual web conference at www.virtualshareholdermeeting.com/PDCE2021 on May 26, 2021, at 8:00 a.m. Mountain Time. You will be able to attend the meeting online by visiting the website above, and submit questions to be answered at the Annual Meeting prior to the meeting. You will also be able to vote your shares electronically at the Annual Meeting. The meeting will be held online only, and will be held for the following purposes:

The Board has fixed the close of business on March 30, 2021 as the record date for determining the stockholders having the right to receive notice of, to attend virtually and to vote at the Annual Meeting or any adjournment or postponement thereof. A list of these stockholders will be open for examination by any stockholder for any purpose germane to the Annual Meeting for a period of 10 days prior to the Annual Meeting at our principal executive offices at 1775 Sherman St., Suite 3000, Denver, CO 80203, and electronically during the Annual Meeting at www.virtualshareholdermeeting.com/PDCE2021 when you enter your control number. The presence in person, virtually or by proxy of the holders of a majority of the outstanding shares of the Company’s common stock entitled to vote is required to constitute a quorum.

If you are a record holder of shares, or an owner who owns shares in “street name” and obtains a “legal” proxy from your broker, bank, trustee or nominee, you still may attend the Annual Meeting and vote your shares or revoke your prior voting instructions.

Your vote is especially important to us at this Annual Meeting. Regardless of the number of shares of our common stock that you own, your vote will be very important. Thank you for your continued support, interest and investment in the Company.

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PDC ENERGY, INC.

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

To be held on May 26, 2021

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The accompanying proxy is being solicited by the Board of Directors (“Board”) of PDC Energy, Inc. (“PDC,” the “Company,” “we,” “us” or “our”) to be voted at the annual meeting of the stockholders of the Company (the “Annual Meeting”) to be held on May 26, 2021, at 8:00 a.m. Mountain Time and at any and all adjournments or postponements of the meeting, for the purposes set forth in this Proxy Statement and the accompanying Notice of Annual Meeting. On or about April 14, 2021, we began mailing proxy materials to stockholders. For information on how to vote your shares, see the instructions included on the proxy card or instruction form described under “Information About Voting and the Meeting” herein.

IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY

OF PROXY MATERIALS FOR THE ANNUAL MEETING

TO BE HELD ON MAY 26, 2021

The Notice of Annual Meeting, the Proxy Statement for the 2021 Annual Meeting, and the 2020 Annual Report, which is the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, are available at www.proxyvote.com.

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Virtual Meeting Admission

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Stockholders of record as of March 30, 2021 will be able to participate in the Annual Meeting by visiting our Annual Meeting website at www.virtualshareholdermeeting.com/PDCE2021. To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials.

The Annual Meeting will begin promptly at 8:00 a.m. Mountain Time on Wednesday, May 26, 2021. Online check-in will begin at 7:45 a.m. Mountain Time, and you should allow approximately 15 minutes for the online check-in procedures.

Voting

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Whether or not you plan to virtually attend the Annual Meeting and regardless of the number of shares that you own, please cast your vote, at your earliest convenience, as instructed in the proxy card. Your vote is very important. Your vote before the Annual Meeting will ensure representation of your shares at the Annual Meeting even if you are unable to virtually attend. You may submit your vote by the Internet, telephone, mail or in person by participating virtually in the meeting. Voting over the Internet or by telephone is fast and convenient, and your vote is immediately confirmed and tabulated. By using the Internet or telephone, you help us reduce postage, printing and proxy tabulation costs. We encourage all holders of record to vote in accordance with the instructions on the proxy card and/or voting instruction form prior to the Annual Meeting even if they plan on virtually attending the meeting. Submitting a vote before the Annual Meeting will not preclude you from voting your shares at the meeting should you decide to virtually attend.

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PDC ENERGY, INC. - PROXY STATEMENT

PROXY STATEMENT SUMMARY

This Proxy Statement Summary highlights information contained elsewhere in this document. Please read the entire Proxy Statement carefully before voting.

Annual Meeting of Stockholders

VOTING

Stockholders as of the record date are entitled to vote. To vote via the Internet, by telephone, mail or virtually at the Annual Meeting, please refer to the instructions on your proxy card in the postage paid envelope provided.

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Voting Matters

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PDC ENERGY, INC. - PROXY STATEMENT

PROPOSAL NO. 1—ELECTION OF SEVEN DIRECTORS

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE ON THE PROXY CARD AND VOTING INSTRUCTION FORM “FOR” THE ELECTION OF THE SEVEN DIRECTORS NOMINATED BY THE BOARD. PROPERLY SUBMITTED PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.

You are asked to consider seven nominees for election to the Board. Each nominee would serve for a one-year term until the 2022 annual meeting of the stockholders of the Company and until his or her successor is duly elected and qualified.

ACCORDINGLY, THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH AND ALL OF THE BOARD NOMINEES.

The appointed proxies will vote your shares in accordance with your instructions on the proxy card and for the election of all of the Director nominees unless you withhold your authority to vote for one or more of them. The Board does not contemplate that any of the Director nominees will become unavailable for any reason; however, if any Director is unable to stand for election, the Board may reduce the size of the Board or select a substitute. Your proxy cannot otherwise be voted for a person who is not named in this Proxy Statement as a candidate for Director or for a greater number of persons than the number of Director nominees named. The Directors will be elected by an affirmative vote of a plurality of the outstanding common shares. “Withhold votes” and broker non-votes will have no effect on the election of Directors.

BOARD OF DIRECTORS

As of the Annual Meeting, the composition of the Board is expected to be as follows:

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All of the Director nominees named hereafter will be standing for election to serve a one-year term. The Board, based on the recommendation of the Nominating and Governance Committee (the “N&G Committee”), has recommended Mr. Brookman, Mr. Ellis, Mr. Korus, Mr. Parke, and Mr. Peterson for re-election and Mr. Sabater and Ms. Sands for election as directors. All of the director nominees are current members of the board, other than Mr. Sabater, who is nominated for election to the Board for the first time. Ms. Sands was appointed to the Board on February 18, 2021 and is also seeking election for the first time.

NAME, PRINCIPAL OCCUPATION FOR PAST FIVE YEARS AND OTHER DIRECTORSHIPS

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The seven Director nominees will be elected by an affirmative vote of a plurality of the outstanding common shares. Broker non-votes will have no effect on the election of Directors.

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PDC ENERGY, INC. - PROXY STATEMENT

DIRECTOR COMPENSATION

We compensate Directors with a combination of cash and equity-based incentives to attract and retain qualified candidates to serve on our Board and to align Directors’ interests with those of our stockholders. In determining how to compensate our Directors, we consider the significant amount of time they spend fulfilling their duties, as well as the competitive market for skilled directors. Cash payments are paid quarterly. No compensation is paid to our CEO for his service on the Board.

Compensation for our non-employee Directors (“Non-Employee Directors”) is reviewed annually by the Compensation Committee and is approved by the Board. The Compensation Committee uses its independent compensation consultant to conduct this annual review, which includes board and committee retainers, meeting fees and equity-based awards using the same peer group used to determine executive compensation. See “Compensation Policies and Practices” and “Role of Independent Compensation Consultant” in the Compensation Discussion and Analysis section of this Proxy Statement. Based on this review for 2020, the Compensation Committee recommended maintaining the same compensation amounts and structure as 2019, with the exception of the N&G Committee Chair which it recommended be increased from $10,000 to $15,000 given the increased focus on corporate governance by investors generally and the resulting increased time commitment by the N&G Committee Chair. However, Director compensation was temporarily decreased as detailed below following voluntary reductions to cash compensation in response to the precipitous drop in commodity prices and negative impacts to our business during the first quarter of 2020 as a result of the COVID-19 pandemic.

CASH COMPENSATION

Annual Board and Committee Retainers

Subject to the 2020 pay reductions described below, each Non-Employee Director receives an annual cash retainer for service on the Board, which covers attendance at all Board and committee meetings. In addition, Non-Employee Directors receive an additional cash retainer to compensate them for the extra responsibilities associated with their roles. The 2020 Board and committee retainers are reflected in the following table (which does not give effect to the pay reductions described below).

Compensation Actions in Response to COVID-19

As a result of the COVID-19 pandemic and the precipitous drop in commodity prices that followed, each Non-Employee Director took a voluntary 15% reduction in his or her annual cash retainer and any additional cash retainer beginning on April 1, 2020 and continuing through September 30, 2020. Further, our Non-Executive Chairman did not receive his additional chair retainer beginning on April 1, 2020 through September 30, 2020, resulting in a cumulative 50% reduction in his chair retainer for 2020.

EQUITY COMPENSATION

On February 19, 2020, Mr. Ellis, the Non-Executive Chairman, was granted an award with an intended value of $175,000 in restricted stock units (“RSUs”) and the remaining Non-Employee Directors each received an award with an intended value of $140,000 in RSUs for their service on the Board. The RSUs were granted

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under our 2010 Equity Incentive Plan. The actual number of RSUs granted was determined based on the five-day average closing stock price ending the day prior to the date of grant. The RSUs vest on the one-year anniversary of the grant date (subject, generally, to the director not resigning or being removed for cause prior to the vesting date).

DEFERRED COMPENSATION

Prior to 2018, each Non-Employee Director had the option to defer all or a portion of his or her annual cash compensation and all or a portion of his or her eligible RSUs pursuant to the Non-Employee Director Deferred Compensation Plan (the “Deferred Comp Plan”). Effective December 31, 2017, the Compensation Committee amended the Deferred Comp Plan to prohibit future deferral elections of cash and/or RSUs into the plan, and no further amounts have been contributed to the Deferred Comp Plan. All compensation that was previously deferred pursuant to the Deferred Comp Plan will continue to be credited with hypothetical earnings and losses as if invested in common stock of the Company until such amounts are distributed. As of December 31, 2020, two Directors and our Director Emeritus had balances resulting from prior deferrals of cash director fees and/or equity compensation. The Board voted to terminate the Deferred Comp Plan on May 26, 2020. In connection with the termination, and in order to liquidate all funds remaining in the Deferred Comp Plan, the Company will make distributions to each of the two Directors and Director Emeritus with outstanding balances on or about June 1, 2021.

Compensation paid to the Non-Employee Directors for 2020 was as follows:

2020 DIRECTOR COMPENSATION

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PDC ENERGY, INC. - PROXY STATEMENT

DIRECTOR STOCK OWNERSHIP REQUIREMENTS AND PROHIBITION ON CERTAIN TRANSACTIONS

Each Non-Employee Director is expected to hold shares of Company stock in an amount equal to at least five times his or her annual cash retainer ($500,000 for 2020). Compliance with ownership requirements is reviewed annually. Qualifying stock holdings include directly-owned shares and unvested RSUs, as well as stock equivalents held in the Deferred Comp Plan. Directors are expected to comply with the ownership guidelines within five years of their election to the Board. As of December 31, 2020, all of the Directors met or exceeded the ownership expectations under the guidelines, with the exception of Messrs. Nickerson and Korus and Ms. Ibrahim, each of whom are still within their respective compliance grace period. The Stock Ownership Guidelines can be reviewed on the Company’s website at www.pdce.com under “Corporate Governance.”

The Company’s Insider Trading Policy expressly prohibits Directors from short-term trading (purchasing and selling Company securities within a six-month period), short sales of Company securities, hedging or monetization transactions through financial instruments (such as prepaid variable forwards, equity swaps, collars and/or exchange funds), holding securities in margin accounts or pledging securities as collateral for loans, or engaging in other transactions that are intended to hedge against the economic risk of owning Company stock.

DIRECTOR QUALIFICATIONS AND SELECTION

The Board has adopted Director Nomination Procedures that describe the process the N&G Committee will use to evaluate nominees for election to the Board. The Director Nomination Procedures can be viewed on the Company’s website at www.pdce.com under “Corporate Governance.” The N&G Committee evaluates each candidate based on his or her level and range of experience and knowledge (industry-specific and general), skills, education, reputation, integrity, professional stature and diversity in terms of race, gender and ethnicity, as well as other factors that may be relevant depending on the particular candidate.

Additional factors considered by the N&G Committee include the size and composition of the Board at the time, and the benefit to the Company of a broad mixture of skills, experience and perspectives on the Board. The Director nomination process also includes consideration of the diversity provided by each candidate, and diversity is considered as part of the overall assessment of the Board’s functioning and needs. The N&G Committee also considers tenure and prioritizes continuous Board refreshment initiatives in the Director nomination process. One or more of these factors may be given more weight in a particular case at a particular time, although no single factor is viewed as determinative. The N&G Committee has not specified any minimum qualifications that it believes must be met by any particular nominee.

Most recently, the N&G Committee identifies potential Director nominees primarily through recommendations made by independent third-party search firms. The N&G Committee also considers recommendations made by Non-Employee Directors, employees, stockholders and others. All recommendations, regardless of the source, are evaluated on the same basis against the criteria contained in the Director Nomination Procedures. In November 2020, the Board engaged Russell Reynolds Associates to conduct a Director search, which resulted in the appointment of Ms. Sands and nomination of Mr. Sabater.

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PDC ENERGY, INC. - PROXY STATEMENT

STANDING COMMITTEES OF THE BOARD

BOARD MEETINGS AND ATTENDANCE

The Board has a standing Audit Committee, Compensation Committee and N&G Committee. Actions taken by these committees are reported to the Board at its next meeting. During 2020, each Director attended at least 75% of all meetings of the Board and committees of which he or she was a member. As specified in the Corporate Governance Guidelines, Directors are strongly encouraged, but not required, to attend the Annual Meeting. All of the Directors, who were directors of the Company at such time, attended the 2020 Annual Meeting by phone held on May 26, 2020.

The Non-Employee Directors generally meet in “executive session” in connection with each regularly scheduled Board meeting—i.e., without Mr. Brookman, the Company’s President and CEO, or other members of management present. The Non-Executive Chairman of the Board chairs these sessions; however, the other Non-Employee Directors may, in the event of his absence, select another Director to preside over the executive session.

The following table identifies the members of each committee of the Board and the chair of each committee, and the number of meetings held in 2020.

2020 BOARD AND COMMITTEE MEMBERSHIPS

Chairperson       Member       Chairman of the Board

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PDC ENERGY, INC. - PROXY STATEMENT

AUDIT COMMITTEE

The Audit Committee is composed entirely of persons whom the Board has determined to be independent under NASDAQ Listing Rule 5605(a)(2), Section 301 of the Sarbanes-Oxley Act of 2002, Section 10A(m)(3) of the Exchange Act and the relevant provisions of the Audit Committee Charter. The Board has adopted the Audit Committee Charter, which was most recently amended and restated on February 20, 2020 and is posted on the Company’s website at www.pdce.com under “Corporate Governance.” The Board has determined that all members of the Audit Committee qualify as “financial experts” as defined by Securities and Exchange Commission (“SEC”) regulations. The Company’s website materials are not incorporated by reference into this Proxy Statement.

NOMINATING AND GOVERNANCE COMMITTEE

The Board has determined that all members of the N&G Committee are independent of the Company under NASDAQ Listing Rule 5605(a)(2). The Board has adopted a N&G Committee Charter, which was most recently amended and restated on September 20, 2019 and is posted on the Company’s website at www.pdce.com under “Corporate Governance.” The Company’s website materials are not incorporated by reference into this Proxy Statement.

COMPENSATION COMMITTEE

The Board has determined that all members of the Compensation Committee are independent of the Company under NASDAQ Listing Rules 5605(a)(2) and 5605(d)(2). The Board has adopted a Compensation Committee Charter, which was most recently amended and restated on September 20, 2019 and is posted on the Company’s website at www.pdce.com under “Corporate Governance.” The Company’s website materials are not incorporated by reference into this Proxy Statement.

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee is or has been an officer of the Company, nor did any of them have any relationships requiring disclosure by the Company under Item 404 of Regulation S-K in 2020. During 2020, none of our executive officers served as a director or member of the Compensation

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Committee (or other committee serving an equivalent function) of any other entity whose executive officers served on our Compensation Committee or the Board.

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BOARD LEADERSHIP STRUCTURE

Although the Board has no specific policy with respect to the separation of the offices of Chairman and CEO, the Board believes that our current leadership structure, under which Mr. Brookman serves as President and CEO and Mr. Swoveland through February 2020, and Mr. Ellis thereafter, serves as Non-Executive Chairman of the Board, is the appropriate structure for our Board at this time. Since June 2011, the roles of Chairman and CEO have been held by separate individuals. We currently believe that it continues to be beneficial to have an independent, separate Chairman who has the responsibility of leading the Board, allowing the CEO to focus on leading the Company. We believe our CEO and Chairman have an excellent working relationship, which, given the separation of their positions, provides strong Board leadership while positioning our CEO as the leader of the Company in front of our employees and stockholders. The Board evaluates this separated structure at least annually.

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PDC ENERGY, INC. - PROXY STATEMENT

STOCKHOLDER RECOMMENDATIONS

The N&G Committee will consider Director candidates recommended by stockholders of the Company on the same basis as those recommended by other sources. Any stockholder who wishes to recommend a prospective Director nominee should notify the N&G Committee by writing to the N&G Committee at the Company’s headquarters or by email to board@pdce.com. All recommendations will be reviewed by the N&G Committee. A submission recommending a nominee should include:

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STOCKHOLDER NOMINATIONS

Stockholders may nominate candidates for election to the Board. The Company’s Bylaws require that stockholders who wish to submit nominations for election to the Board at a meeting of stockholders follow certain procedures. See “Stockholder Nominations and Proposals—Advance Notice Procedures under the Company’s Bylaws” for a description of these procedures.

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CORPORATE GOVERNANCE

GOVERNANCE HIGHLIGHTS

We believe that the Board has implemented a sound structure for the governance of the Company, including as a result of the following:

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PDC ENERGY, INC. - PROXY STATEMENT

CORPORATE GOVERNANCE GUIDELINES

The Board has adopted Corporate Governance Guidelines that govern the structure and function of the Board and establish the Board’s policies on a number of corporate governance issues. Among other matters, the Corporate Governance Guidelines address:

The Corporate Governance Guidelines were most recently amended as of May 26, 2020 and can be viewed on the Company’s website at www.pdce.com under “Corporate Governance.”

UNCONTESTED ELECTIONS POLICY

The Corporate Governance Guidelines include an Uncontested Elections Policy (the “Policy”). Under the Policy, any nominee for Director in an uncontested election who receives a greater number of “withhold” votes than “for” votes will submit to the Board a letter of resignation for consideration by the N&G Committee. The N&G Committee will promptly consider the tendered resignation and will recommend to the Board whether or not to accept the tendered resignation or to take other action, such as rejecting the tendered resignation and addressing the apparent underlying causes of the “withhold” votes in a different way.

In making this recommendation, the N&G Committee will consider all factors deemed relevant by its members. These factors may include the underlying reasons for stockholders’ withholding of votes from such Director nominee (if ascertainable), the length of service and qualifications of the Director whose resignation has been tendered, the Director’s contributions to the Company, whether the Company will remain in compliance with applicable laws, rules, regulations and governing documents if it accepts the resignation and, generally, whether or not accepting the resignation is in the best interests of the Company and its stockholders. In considering the N&G Committee’s recommendation, the Board will take into account the factors considered by the N&G Committee and such additional information and factors as the Board believes to be relevant.

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PDC ENERGY, INC. - PROXY STATEMENT

CODE OF BUSINESS CONDUCT AND ETHICS

The Company has a Code of Business Conduct and Ethics (the “Code of Conduct”) that applies to all Directors, officers, employees, agents, consultants and representatives of the Company and is reviewed at least annually by the N&G Committee. The Company’s principal executive officer, principal financial officer and principal accounting officer are subject to additional specific provisions under the Code of Conduct. The Code of Conduct is reviewed and acknowledged annually by the Board and can be viewed on the Company’s website at www.pdce.com under “Corporate Governance.” In the event the Board approves an amendment to or a waiver of any provisions of the Code of Conduct, the Company will disclose the information on its website.

FAMILY RELATIONSHIPS AND OTHER ARRANGEMENTS

There is no family relationship among any Directors or executive officers of the Company. There are no arrangements or understandings among any Directors or officers and any other person pursuant to which the person was selected as an officer or Director of the Company, except with respect to Paul J. Korus and Lynn A. Peterson who were appointed to the Board following the closing of the merger with SRC in January 2020 pursuant to the related merger agreement.

DIRECTOR INDEPENDENCE

In affirmatively determining whether a Director is “independent,” the Board analyzes and reviews NASDAQ listing standards, which set forth certain circumstances under which a director may not be considered independent. Mr. Brookman, the President and CEO of the Company, is not independent under such standards. Audit Committee and Compensation Committee members are subject to additional, more stringent independence requirements.

The Board has reviewed the business and charitable relationships between the Company and each Non-Employee Director to determine compliance with the NASDAQ listing standards and to evaluate whether there are any other facts or circumstances that might impair a Non-Employee Director’s independence. The Board has affirmatively determined that each of the Non-Employee Directors was independent under NASDAQ Listing Rule 5605, the Exchange Act, and our Board committee charter requirements at all times while serving as a Non-Employee Director.

THE BOARD’S ROLE IN RISK MANAGEMENT

In the normal course of its business, the Company is exposed to a variety of risks. The Company operates an enterprise risk management program which is designed to strengthen the consistency of risk consideration in making business decisions. The Board understands that it is not possible or desirable to eliminate all risk and that appropriate risk-taking is essential in order to achieve the Company’s objectives.

The Board is responsible for general oversight of the risks of the Company, including overseeing risks related to the Company’s key strategic goals. While the entire Board is responsible for Company-wide risk oversight, individual committees also have roles in risk review. The Audit Committee is the primary committee overseeing the risk management process and specifically reviews risks and related controls in areas that it considers fundamental to the integrity and reliability of the Company’s financial statements. The Compensation Committee considers the structure and size of the Company’s compensation plans to ensure the incentives therein are appropriately aligned with the Company’s risk management strategy, as described in this Proxy Statement. The Company believes the Board leadership structure supports its risk oversight function. Among other things, there is open and continuous communication between the Company’s management and the Directors.

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PDC ENERGY, INC. - PROXY STATEMENT

TRANSACTIONS WITH RELATED PARTIES

During 2020, there was no transaction or series of transactions, nor is there any currently proposed transaction, involving an amount exceeding $120,000 in which the Company is or was a participant and in which any Director, executive officer, known holder of more than five percent of the Company’s voting securities, or any member of the immediate family of any of the foregoing persons, had or has a direct or indirect material interest for which disclosure is required under Item 404 of Regulation S-K.

POLICIES AND PROCEDURES WITH RESPECT TO TRANSACTIONS WITH RELATED PARTIES

The Board has adopted a written policy for the review, approval and ratification of transactions that involve related parties and potential conflicts of interest. The related-party transaction policy applies to each Director and executive officer of the Company, any nominee for election as a Director, any security holder who is known to own more than five percent of the Company’s voting securities, any immediate family member of any of the foregoing persons and any corporation, firm or association in which one or more of the Company’s Directors or executive officers have a substantial interest.

Under our related-party transaction policy, a related-party transaction is a transaction or arrangement involving a related party in which the Company is a participant or that would require disclosure in the Company’s filings with the SEC as a transaction with a related party. The related party must disclose to the Audit Committee any potential related-party transactions and must disclose all material facts with respect to such transaction and relationship. All related-party transactions so disclosed will be reviewed by the Audit Committee. In determining whether to approve or ratify a transaction, the Audit Committee will consider the relevant facts and circumstances of the transaction, which may include factors such as the relationship of the related party to the Company, the materiality or significance of the transaction to the Company and the business purpose and reasonableness of the transaction, whether the transaction is comparable to a transaction that could be available to the Company from an unrelated party and the impact of the transaction on the Company’s business and operations.

OTHER CORPORATE GOVERNANCE DOCUMENTS

The Company’s website includes the following governance documents:

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COMMUNICATION WITH THE COMPANY BY STOCKHOLDERS

The Company values comprehensive engagement with its stockholders. Stockholders may communicate with the Company’s management by writing to the Company’s corporate headquarters or by emailing to IR@pdce.com, or with the Board or a committee of the Board by emailing to board@pdce.com with “Board Communication” or the appropriate Board committee indicated in the subject line.

ADDITIONAL INFORMATION

The Company files annual, quarterly and current reports, proxy statements and other information with the SEC. Copies of the Company’s SEC filings are available at http://www.sec.gov and through a link from the Company’s website at www.pdce.com. The Company’s website materials are not incorporated by reference into this Proxy Statement.

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PDC ENERGY, INC. - PROXY STATEMENT

PROPOSAL NO. 2—APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RESOLUTION SET FORTH IN THIS PROPOSAL NO. 2. PROPERLY SUBMITTED PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.

The stockholders of the Company are entitled to cast a non-binding advisory vote at the Annual Meeting on the compensation of the Company’s Named Executive Officers. While this vote is non-binding, the Board and the Compensation Committee value the opinions of our stockholders and take into consideration the outcome of the vote in connection with their ongoing evaluation of the Company’s executive compensation program. The Company has determined to hold this advisory, “say-on-pay” vote annually, consistent with the stated preferences of our stockholders and with the results of our 2017 Annual Meeting of Stockholders where the majority of the votes cast were in favor of an annual advisory vote. The next non-binding advisory vote regarding such frequency will be held at the 2023 Annual Meeting of Stockholders, in accordance with SEC rules.

As described more fully under “Compensation Discussion and Analysis” below, the Company’s executive compensation program is designed to attract, motivate and retain individuals with the skills required to formulate and drive the Company’s strategic direction and achieve the annual and long-term performance necessary to create stockholder value. The program also seeks to align executive compensation with stockholder value on an annual and long-term basis through a combination of base pay, annual incentives and long-term incentives.

The Company’s practice of targeting the median in compensation and placing a significant portion of each Named Executive Officer’s compensation at-risk demonstrates its pay-for-performance philosophy. In 2020, 87% of our CEO’s compensation and 82% of the compensation of our CFO, EVP – Corporate Development and Strategy, and General Counsel was made up of “at-risk” components.

Each of the Named Executive Officers has been granted significant equity awards, including awards subject to annual vesting over a three-year period and performance share units subject to a three-year performance period, to provide a stake in the Company’s long-term success. The Company also has demanding Stock Ownership Guidelines applicable to its Named Executive Officers. The Company believes that this “tone at the top” guides the Company’s other officers and management personnel to obtain and maintain meaningful ownership stakes in the Company.

The Compensation Committee considers the results of the non-binding “say on pay” vote of our stockholders in making prospective compensation decisions. At our 2020 Annual Meeting, over 95% of the votes cast approved, on an advisory basis, the compensation of our Named Executive Officers. Notwithstanding the positive support for our compensation program, in response to shareholder feedback received throughout 2019 and early 2020 we further modified the program in 2020 to (i) increase the portion of our annual incentive program for our Named Executive Officers that is determined strictly by formula metrics from 50% to 75%, (ii) adjust the weighting of our long-term incentive program weighting for our CEO from 50% performance stock units (“PSUs”) and 50% time-based RSUs to 60% PSUs and 40% RSUs, and (iii) add an absolute total stockholder return modifier to our 2020 PSU grants. In addition, in response to the precipitous drop in commodity prices and negative impacts to our business during the first quarter of 2020 as a result of the COVID-19 pandemic, the Board instituted a 15% reduction in base salary for our Named Executive Officers beginning May 16, 2020 and continuing through October 3, 2020.

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In light of the foregoing, the Company believes that the compensation of the Named Executive Officers is appropriate and reasonable, and that its compensation programs and practices are sound and in the best interests of the Company and its stockholders. Stockholders are being asked to vote on the following resolution:

RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the “Compensation Discussion and Analysis,” compensation tables and narrative disclosure in this Proxy Statement for the Company’s 2021 Annual Meeting.

This advisory vote will be approved if it receives the affirmative vote of a majority of shares of common stock of the Company present or represented at the Annual Meeting and entitled to vote on this proposal. Abstentions will be counted as votes against this proposal. Broker non-votes will not affect the outcome of this proposal.

EXECUTIVE COMPENSATION

EXECUTIVE OFFICERS

The current executive officers of the Company, their principal occupations for the past five years and additional information is set forth below.

BARTON R. BROOKMAN, 58, joined the Company in 2005 and currently serves as Director, President and CEO. See biographical information concerning Mr. Brookman on page 3.

LANCE A. LAUCK, 58, joined the Company in August 2009 as Senior Vice President Business Development and was named Executive Vice President Corporate Development and Strategy in January 2015. Mr. Lauck has overall responsibility for PDC’s business development, acquisitions and divestitures, strategic planning, corporate reserves and midstream and marketing. Previously, Mr. Lauck served as Vice President—Acquisitions and Business Development for Quantum Resources Management LLC from 2006 to 2009. From 1988 until 2006, Mr. Lauck worked for Anadarko Petroleum Corporation, where he initially held production, reservoir and acquisition engineering positions before being promoted to various management level positions in the areas of acquisitions and business development, ending his service as General Manager, Corporate Development. From 1984 to 1988, Mr. Lauck worked as a production engineer for Tenneco Oil Company. Mr. Lauck graduated from the University of Missouri-Rolla in 1984 with a Bachelor of Science degree in Petroleum Engineering.

R. SCOTT MEYERS, 46, a CPA, joined the Company in March 2009, and was named Chief Accounting Officer in April 2009 and Chief Financial Officer in January 2018. Prior to joining the Company, Mr. Meyers served as a Senior Manager with Schneider Downs Co., Inc., an accounting firm based in Pittsburgh, Pennsylvania, from 2008 to 2009, and PricewaterhouseCoopers LLP from 2002 to 2008. Mr. Meyers holds a Bachelor of Science degree in Accounting from Grove City College, Pennsylvania.

NICOLE L. MARTINET, 44, joined the Company in March 2011 as Associate General Counsel and Vice President, serving in that position for eight years. In January 2019, Ms. Martinet was named General Counsel, Senior Vice President and Corporate Secretary. Prior to joining PDC, she served as an associate in the Corporate Finance and Acquisitions group at Davis Graham & Stubbs LLP in Denver from 2006 to 2011. Ms. Martinet received her Juris Doctor from the University of Denver, Sturm College of Law, where she graduated in 2005 with Order of St. Ives and served on the Denver University Law Review. Ms. Martinet has over 22 years of professional experience and holds a

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Bachelor of Science in Economics and French and Francophone Studies from Santa Clara University in California.

DAVID J. LILLO, 56, was appointed as a member of the Senior Management Team for the Company in September 2020. He was promoted to Senior Vice President, Operations in March 2019 after joining the Company as Vice President, Operations in September 2015. Mr. Lillo has over 32 years of experience in exploration, production, and operations engineering management. Prior to joining the Company, Mr. Lillo was with Bonanza Creek Energy from 2013-2015 serving as Senior Vice President of Production & Operations, after being promoted from VP, Rocky Mountain Asset Management over the Rocky Mountain and Mid-Continent assets. From 2005-2013, Mr. Lillo held numerous positions with Noble Energy, Inc. including Development and Operations Manager, Manager of Major Projects and Infrastructure, and District Manager for the DJ Basin. Prior to that, he was with Patina Oil and Gas Corporation from 1998-2005, serving in positions of increasing responsibility, including Operations Manager and District Production Manager overseeing Wattenberg operations. Prior to 1998, Mr. Lillo held several operational and technical positions for various companies with operations in Kansas, North Dakota, and California. Mr. Lillo holds a Bachelor of Science degree in Petroleum Engineering from the Colorado School of Mines.

Messrs. Brookman and Lauck were executive officers of the Company in September 2013, when each of twelve partnerships for which the Company was the managing general partner filed for bankruptcy in the federal bankruptcy court, Northern District of Texas, Dallas Division. Messrs. Brookman, Lauck and Reasoner were executive officers of the Company in September 2016, when two other partnerships, for which the Company also served as the managing general partner, filed for bankruptcy in the same federal bankruptcy court. With the exception of Ms. Martinet and Mr. Lillo, each of the above were executive officers of the Company in October 2018, when two additional partnerships, for which the Company also served as managing general partner, filed for bankruptcy in the same federal bankruptcy court. All partnerships for which the Company was the managing general partner have been settled.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors of the Company has reviewed and discussed the following Compensation Discussion and Analysis with management and, based on its review and discussions, recommends its inclusion in this Proxy Statement.

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COMPENSATION DISCUSSION AND ANALYSIS

During 2020, the COVID-19 pandemic presented unprecedented challenges, including the resulting drop in commodity prices which forced the Company to quickly shift its operational and strategic focus. The Company implemented new health and safety protocols, including adjusting to a full time remote work program for most employees. Despite these challenges, the Company successfully met its 2020 financial, operational and strategic goals as highlighted in more detail throughout this Compensation Discussion and Analysis (“CD&A”). As such, the Compensation Committee (referred to in this section as the “Committee”) decided to appropriately compensate its employees, including our Named Executive Officers, as further described below.

In establishing the Company’s compensation program, the Committee continuously considers feedback from the Company’s stockholders and its compensation consultant and strives to adhere to compensation best practices. As such, this CD&A illustrates the evolution of the Company’s compensation program and provides stockholders with an understanding of our compensation philosophy, objectives, policies and practices in place during 2020, as well as the factors considered by the Committee in making compensation decisions. This CD&A focuses on the 2020 compensation of our President and Chief Executive Officer (“CEO”), our Chief Financial Officer (“CFO”), and our three other most highly compensated executive officers. This CD&A also includes our former Senior Vice President, Chief Operating Officer who would have been among the most highly compensated executive officers had he still been employed by the Company at year end. The individuals described above are identified by name and title in the chart below and are collectively referred to throughout this Proxy Statement as our “Named Executive Officers,” or “NEOs”:

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EXECUTIVE SUMMARY

Response to COVID-19 Pandemic

In response to the COVID-19 pandemic and precipitous drop in commodity prices, resulting in negative impacts to our business during the first quarter of 2020, the Committee took the following actions:

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2020 Business Highlights

Despite the numerous challenges in 2020 due to the COVID-19 pandemic, the Company successfully integrated the assets, people and processes of SRC, while continuing to develop its two premier U.S. onshore assets in the core Wattenberg Field and Delaware Basin. The Company generated significant free cash flow in 2020 improving our balance sheet through the reduction of our absolute debt level. The Company also further enhanced its focus on ESG initiatives and commitment to best-in-class environmental and safety practices and consistent stakeholder engagement.

Key highlights and achievements in 2020 are illustrated and further described below:

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2020 Key Compensation Actions and Outcomes

In 2020, the Committee implemented the following key design changes to our executive compensation program design:

The Committee made the following pay outcome determinations for our NEOs for fiscal year 2020:

In February 2021, our Compensation Committee evaluated the Company’s 2020 financial, operational and strategic accomplishments in determining the following pay outcomes:

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Compensation Best Practices

We believe our executive compensation program is aligned with current governance trends, and contains stockholder-friendly features as outlined below:

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Responsiveness to Stockholder Interests and Market Environment

At our 2020 Annual Meeting, over 95% of the votes cast approved, on an advisory basis, the compensation of our Named Executive Officers. Based on stockholder feedback and our analysis of market and business trends, we have made a number of changes over the years to ensure our compensation program remains responsive to stockholder feedback and evolving market conditions. We also continue to move towards a more formulaic bonus program, eliminating discretion, to establish a methodology strictly tied to achievement of performance metrics.

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EXECUTIVE COMPENSATION PHILOSOPHY

The principal tenets of our compensation philosophy are as follows:

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2020 COMPENSATION PROGRAM DESIGN AND DECISIONS

Components and Purpose of Executive Compensation Program

Our executive compensation program is comprised of the following primary compensation elements:

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2020 Compensation Mix

By design, a significant portion of our executive officers’ compensation is performance-based. The following graphic shows the targeted fixed and variable or “at-risk” components of compensation awarded to our NEOs as a percentage of their total direct compensation for 2020. Eighty-seven percent of our CEO’s compensation and 82% of our other NEOs’ (excluding Mr. Lillo and Mr. Reasoner) compensation was made up of variable or “at-risk” components.

The charts above are based on 2020 base salaries, target bonus amounts with respect to 2020 annual cash incentive awards and the target values of the 2020 grants of performance-based PSUs and time-based RSUs. The amounts actually realized by our NEOs with respect to these awards will depend on a variety of factors including the level of attainment of the relevant performance metrics and the extent of vesting of PSUs and RSUs and the value of our stock when the PSUs and RSUs vest. Mr. Lillo is excluded from the Named Executive Officer compensation calculation due to the fact he was promoted to the Company’s Senior Management Team in September 2020 and did not receive PSUs or additional RSUs in connection with his promotion, making it such that his 2020 compensation mix is not reflective of our executive compensation program design. Mr. Reasoner is also excluded from the Named Executive Officer compensation calculation due to his retirement from the Company in September 2020. These charts are not a substitute for the “Summary Compensation Table” below, which includes amounts supplemental to target total direct compensation.

Pay for Performance

Our executive compensation program is designed to align Company performance with the interests of our stockholders. The majority of our executives’ pay is tied to the short- and long-term performance of the Company and our absolute and relative stock price performance. The following table illustrates the alignment

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of pay and performance by comparing our CEO’s targeted compensation opportunity awarded in each of the last three years against the realizable value of those opportunities as of December 31, 2020.

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Base Salaries

In determining base salary adjustments for 2020, the Committee considered the market data provided by its independent compensation consultant (see “Role of Independent Compensation Consultant” below), the role of each individual NEO, inflation and the recommendations of the CEO based on individual and Company performance. Based on the foregoing, for 2020, the Committee held NEO salaries flat except for Ms. Martinet whose base salary was increased to reflect the Committee’s determination to bring her base salary closer to the market median over time, as the number of years in her role increases.

However, given the severe downturn in commodity prices and anticipated impacts to the Company’s business in the early part of 2020 due to the COVID-19 pandemic, we implemented a salary reduction for a majority of our employees, including our NEOs who took a voluntary 15% reduction to their base salaries from May 16, 2020 through October 3, 2020. End of year base salaries and reduced 2020 base salaries for our NEOs are as follows:

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Annual Incentive Awards

Bonuses under the Company’s 2020 annual incentive program were based 75% on a strict formulaic determination of the level of achievement of quantitative operational and financial metrics established by the Compensation Committee and 25% based on the Compensation Committee’s assessment of the Company’s achievement of qualitative corporate goals. See “2020 Performance Metrics – Quantitative and Qualitative.”

Throughout the year, the Committee reviews the Company’s progress toward meeting the quantitative metrics and qualitative goals for the year. Following the end of the fiscal year, the Committee determines an overall Company performance rating based on the metrics and goals. Individual awards may be adjusted upward or downward at the Committee’s discretion based on individual performance. Such individual adjustments are anticipated to have a maximum range of +/−20%.

Target Bonus Amounts

The Committee sets a target annual cash incentive award for each NEO expressed as a percentage of base salary. Actual awards can range from 0% - 200% of the targets depending on the payout percentage achieved and any individual performance adjustment. In February 2020, based upon its review of peer compensation data, the Committee decided to increase the target annual cash incentive for Mr. Meyers and Ms. Martinet to bring their target awards closer to the market median for their respective positions. The 2020 target annual cash incentive award levels for each NEO are as follows:

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2020 PERFORMANCE METRICS – QUANTITATIVE AND QUALITATIVE

In 2020, we established specific quantitative targets and weightings for the operational and financial metrics used for the formulaic portion of the annual incentive program based on our 2020 budget and operating plans, as revised in response to the COVID-19 pandemic as described below. These metrics are used to ensure we balance operational objectives with capital discipline. During 2020, we also developed the qualitative corporate performance goals that we used for the qualitative portion of the annual incentive plan. The quantitative performance metrics and qualitative performance goals used in 2020 were as follows:

2020 Corporate Metrics Methodology

In February 2020, the Committee originally approved the 2020 quantitative metrics to be used in our 2020 short-term incentive program; however, in response to the COVID-19 pandemic, in May 2020, the Committee modified the quantitative metrics by removing four metrics previously approved for 2020 (free cash flow margin, LOE and G&A per BOE, production, and capital efficiency) and replacing them with three new metrics that were more appropriate for measuring performance in light of the COVID-19 pandemic, our drastic cut in capital spending, lower commodity prices, and our overall changed operational plans (absolute free cash flow, absolute LOE and G&A, and leverage ratio). The Committee also reduced short-term incentive payout opportunities for 2020 from 100% to 50% for target performance and 200% to 100% for above target performance. At that time, given the unforeseen impacts on the economy due to the COVID-19 pandemic and the precipitous drop in commodity prices, the Committee also reserved the right to award no bonuses for 2020 even if quantitative and qualitative metrics were achieved.

The Committee generally reserves the right to adjust the quantitative metrics for certain categories of adjustments that are pre-approved by the Committee at the time the 2020 quantitative metrics are established, including but not limited to, unexpected business events such as acquisitions/dispositions, capital markets transactions, legal settlements or similar events, as further described in “2020 Results on Quantitative Metrics” below. We believe that the NEOs are compensated for stock price performance through the Company’s long-term equity incentive program and not through their annual bonus; however, the Committee may also consider absolute stock price performance in determining the qualitative portion of the annual incentive program for the year.

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2020 Results on Quantitative and Qualitative Metrics

2020 Assessment on Quantitative Corporate Metrics

In early 2021, the Committee reviewed the Company’s 2020 performance relative to the quantitative operational and financial metrics described above, and determined that the metrics were achieved at well above target level (and in most cases above the maximum level), corresponding to a payout at 96% of target, as follows:

Actual performance was modified for certain categories of adjustments approved by the Committee at the time the 2020 quantitative metrics were established, as follows:

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2020 Assessment on Qualitative Corporate Metrics

The Committee establishes qualitative metrics tied to the Company’s strategic priorities, which include additional environmental, health and safety goals; building a best-in-class organization through streamlined communications and efficient processes; technological innovations; top-tier performance and financial metrics; maintaining competitive high-value inventory; and delivery of sustainable, peer-competitive results. Based on its review and measurement of the Company’s 2020 qualitative goals, the Committee determined that the Company achieved all of its 2020 qualitative goals, demonstrating significant accomplishments during the year, including the following:

Based on the Company’s quantitative and qualitative achievements, the Committee awarded an overall Payout Percentage under the annual incentive plan of 96% of target.

2020 Bonus Awards

In determining the individual cash incentive awards, the Committee generally felt that management achieved the results as a team and each was instrumental in the overall accomplishments of the Company. Therefore, no individual performance adjustments were made to the awards. Actual cash bonus amounts paid for 2020 performance were as follows:

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LONG-TERM INCENTIVE AWARDS

To align our long-term incentives with the interests of our stockholders over the long term and with our pay-for-performance philosophy, we award equity-based incentives to our NEOs on an annual basis. These awards ensure that a meaningful portion of our NEOs’ compensation is at risk based on stock price performance and provides NEOs with significant equity ownership in the Company. In 2020, equity grants were allocated 60% to PSUs and 40% to time-based RSUs for our CEO and 50% to PSUs and 50% to time-based RSUs for all other NEOs. In addition, in 2020 the Company adopted an absolute stock price modifier to its PSUs to better align with absolute stock performance.

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2020 Award Types and Terms

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2020 Long-Term Incentive Awards

We typically determine the dollar value of the long-term incentive awards we want to deliver to the NEO to place total target compensation at the appropriate level for that position, based on market data, individual performance, and other relevant factors. While we consider long-term incentives to be primarily forward-looking, we may consider the Company’s and the NEOs’ performance in the prior year in determining the size of the awards. For 2020, the Committee adjusted long-term incentive values for Mr. Meyers and Ms. Martinet to further align the value of the long-term incentives with the market competitive range. The table below shows the grants and corresponding value awarded to each NEO in February 2020.

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The award values shown above differ from the accounting values reported in the Summary Compensation Table. In determining the number of RSUs and PSUs awarded, we used the five-day average closing stock price ending the day prior to the date of grant. The accounting value reflected in the Summary Compensation Table and 2020 Grants of Plan-Based Awards table is based on the grant date fair value of the awards on the date of grant.

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2018-2020 Performance Share Unit (PSU) Payout

In 2018, we granted PSUs covering the three-year period from January 1, 2018 through December 31, 2020. The Company’s relative TSR for the performance period ranked at the 65th percentile of its peers, which would generally correlate to a payout of 138% of target; however the payout was reduced by the terms of the PSU grant agreement to 100% of target due to the negative absolute stock price performance over the three-year measurement period. See the “Option Exercises and Stock Vested” table below for the actual amounts received by each NEO. Due to the decline in stock price over the three-year period, the value earned at vesting was 40% of the original target value (based on a 2020 year-end stock price of $20.53). The chart below shows the members of the peer group used for the 2018 grant, each company’s TSR performance and their relative rankings at the end of the period.

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OTHER ELEMENTS OF COMPENSATION

In addition to the elements of total target direct compensation described above, our executive compensation program includes other elements of compensation that are designed primarily to attract and retain executives critical to our long-term success and to provide an overall compensation and benefits program that is competitive with other companies in our industry.

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2021 COMPENSATION PROGRAM AND BOARD CHANGES

For 2021, the Company made additional changes to its compensation program and Board composition, including the following:

COMPENSATION POLICIES AND PRACTICES

Process for Determining Executive Compensation

Annually, we review and approve our compensation program design, determine target total direct compensation, establish performance metrics under our annual and long-term incentive programs and determine award payouts based on achievement of Company and individual results. These discussions usually span numerous meetings and involve significant deliberation among the Committee, management and the Consultant before approval. With respect to equity programs, we also consider the tax and accounting effect of the awards, dilution and stock burn rates (based on total outstanding shares).

In determining target total direct compensation for our NEOs, we consider the following:

Our view is that an executive’s target compensation should reflect the current market value for that position provided the executive has performed well in the prior year. We may adjust the mix of cash and long-term incentives, but we generally target around the median of the market in total direct compensation taking into account the factors listed above, although it often takes time for newly-promoted executives’ compensation to reach the market median.

Assessing the Effectiveness of Our Compensation Programs

Annually, we review summaries of each NEO’s compensation history, as well as all compensation payable upon each NEO’s termination of employment, including upon a change of control of the Company. We also do a “look-back” of realized pay relative to our peers and our share price performance to assess whether our

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programs as designed are truly paying for performance. The Committee uses these tools in addition to feedback from our stockholders, to determine whether changes to our program are needed.

Compensation Peer Group

In September 2019, the Committee approved the composition of the peer group of companies used for determining 2020 compensation. In selecting the peer group, the Committee considered whether changes to the previous year’s peer group are warranted based upon changes in the size, operations and/or capital structure of either the Company and/or the current or potential peer companies, including the following:

Once identified, the Committee typically utilizes this peer group for the following:

Peer group compensation practices are determined using a combination of compensation data disclosed in the peers’ proxy statements and survey data for the peer group from Meridian Compensation Partners LLC’s “North America Oil and Gas Exploration and Production Survey.” The Company also uses this same survey as well as other industry surveys for determining compensation practices for the broader industry. The table below shows the peer groups for 2019 and 2020.

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Role of Independent Compensation Consultant

The Committee has engaged Meridian Compensation Partners as an independent compensation consultant (the “Consultant”) to help ensure that executive compensation programs are competitive and consistent with the Company’s compensation philosophy and policies. In retaining the Consultant, the Committee considers the following:

The Committee determines the scope of the Consultant’s engagement, which includes:

The Consultant’s interactions with the Committee and management include the following:

The Committee annually reviews the engagement of the Consultant, and as a part of that process, reviews a summary of all services provided by the Consultant and related costs. Except as set forth above, the Consultant did not perform any material services for the Company. The Consultant did not have any business or personal relationships with Committee members or executive officers of the Company, and did not own any stock of the Company. The Consultant maintains policies and procedures designed to avoid such conflicts of

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interest. Accordingly, the Committee determined that the Consultant was not subject to any significant conflicts of interest.

Role of Management

Our CEO plays a significant role in determining the compensation levels of our NEOs, which includes:

At the Committee’s request, the CEO and other NEOs may also play a role in determining the following:

The Committee determines each element of the CEO’s compensation with input from the Consultant. The Committee also determines each element of compensation for the other NEOs with input from the Consultant and the CEO. The CEO is not present during voting or deliberations concerning his own compensation.

Other Policies and Considerations

Tax and Accounting Considerations

With respect to compensation paid under the Company’s plans, arrangements and agreements, we consider the impact of the applicable tax laws and accounting rules, including but not limited to Section 409A, Section 280G and Section 4999 of the Code. Currently, none of our severance arrangements or agreements provide for a gross-up for excise tax under Code Section 280G and Section 4999 and all of our programs are intended to be either exempt from or to comply with Code Section 409A. We note that Section 162(m) of the Code limits the amount of compensation that we may deduct in any year to $1,000,000 per person with respect to our CEO and certain other highly compensated executive officers whose compensation is or has been included in the Company’s proxy statement. We may be permitted to deduct certain historic items of compensation in excess of the $1,000,000 per person annual limit under certain 162(m) grandfathering rules, although such deductibility is not guaranteed, and the focus of our programs is on driving Company performance, irrespective of whether compensation may be non-deductible because of the application of Code Section 162(m).

Clawback Policy

The NEOs are currently either covered under our clawback policy or, in the case of Mr. Lauck, a clawback provision in his grandfathered employment contract. Currently, the clawback policy and contractual provisions are identical and require the executive to reimburse all or a portion of their annual bonus, as described below, if the Company is required to restate its financial statements due to material noncompliance by the Company with any financial reporting requirement under applicable securities laws. The reimbursements are equal to the difference between the bonus paid to the executive for the affected year(s) and the bonus that would have

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been paid to the executive had the financial results been properly reported. These clawback requirements are in addition to any clawback requirements contained in applicable statutes or regulations and are subject to revision based on the SEC clawback rules under Section 954 of the Dodd-Frank Act, when finalized.

Stock Ownership

We have established Stock Ownership Guidelines for NEOs that are reviewed annually when compensation decisions are made. In satisfying the Stock Ownership Guidelines, NEOs are expected to:

As of December 31, 2020, all of our NEOs exceeded the minimum stock ownership requirements, except Ms. Martinet and Mr. Lillo who became NEOs in 2019 and 2020, respectively, and are still within their compliance grace periods, as set forth in the table below.

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