SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Berry Petroleum Company
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BERRY PETROLEUM COMPANY
5201 Truxtun Avenue, Suite 300
Bakersfield, California 93309
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 16, 2002
To the Shareholders of Berry Petroleum Company:
The Annual Meeting of Shareholders of Berry Petroleum Company (the
"Company") will be held at the Doubletree Hotel Bakersfield at 3100 Camino Del
Rio Ct., Bakersfield, on Thursday May 16, 2002 at 3:00 p.m. (see map on back
cover) for the following purposes:
1. To elect a board of eleven directors to serve until the next Annual
Meeting of Shareholders and until their successors are elected and
qualified; and
2. To approve the Second Amendment to the Company's Restated and
Amended 1994 Stock Option Plan; and
3. To transact such other business as may be properly brought before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 11, 2002
as the record date for determination of shareholders entitled to notice of, and
to vote at, the Annual Meeting or any adjournment thereof.
YOU ARE INVITED TO ATTEND THIS MEETING IN PERSON. WHETHER OR NOT YOU PLAN
TO ATTEND, IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING.
THEREFORE, YOU ARE URGED TO PROMPTLY SIGN AND RETURN THE ACCOMPANYING PROXY CARD
IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED
STATES. YOU MAY ALSO VOTE YOUR PROXY BY EITHER CALLING THE 800-NUMBER OR VIA THE
WEB SITE SHOWN ON YOUR PROXY CARD. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR
TO ITS EXERCISE BY GIVING WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY. IF YOU
RETURN AN EXECUTED PROXY AND THEN ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY
AND VOTE IN PERSON. ATTENDANCE AT THE MEETING WILL NOT BY ITSELF REVOKE A PROXY.
By Order of the Board of Directors
/s/ Kenneth A. Olson
Kenneth A. Olson
Corporate Secretary/Treasurer
April 12, 2002
Bakersfield, California
BERRY PETROLEUM COMPANY
5201 Truxtun Avenue, Suite 300
Bakersfield, California 93309
PROXY STATEMENT
April 12, 2002
---------------
This Proxy Statement is furnished by the Board of Directors of Berry
Petroleum Company (respectively the Board and the Company or Berry) in
connection with the solicitation of proxies for use at the Annual Meeting of
Shareholders to be held on May 16, 2002, or at any adjournment thereof (the
Annual Meeting or Meeting) pursuant to the Notice of said Meeting. This Proxy
Statement and the proxies solicited hereby are being first mailed to
shareholders of the Company on or about April 12, 2002.
SHAREHOLDERS ARE URGED, WHETHER OR NOT THEY EXPECT TO ATTEND THE ANNUAL
MEETING, TO COMPLETE, SIGN AND DATE THE ACCOMPANYING PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE. You may revoke your proxy at any time prior
to its exercise by giving written notice to the Secretary of the Company. If you
return an executed proxy and then attend the Annual Meeting, you may revoke your
Proxy and vote in person. Attendance at the Annual Meeting will not by itself
revoke a proxy.
Unless otherwise directed in the accompanying Proxy, persons named therein
will vote FOR the election of the eleven director nominees listed below and for
the approval of the Second Amendment to the Company's Restated and Amended 1994
Stock Option Plan. As to any other business that may properly come before the
Meeting, the proxy holders will vote in accordance with the recommendation of
the Board of Directors.
VOTING SECURITIES
March 11, 2002 has been fixed as the record date for determination of
shareholders entitled to notice of, and to vote at, the Annual Meeting or any
adjournment thereof. As of February 15, 2002 there were 20,832,996 and 898,892
shares, respectively, of Class A Common Stock (Common Stock) and Class B Stock
(Class B Stock), par value $.01 per share, issued and outstanding, referred to
collectively as the Capital Stock.
Berry's Certificate of Incorporation provides that, except for proposed
amendments to Berry's Certificate of Incorporation adversely affecting the
rights of a particular class (which must be approved by the affected class
voting separately), the Common Stock and the Class B Stock will vote as a single
class on all matters upon which the Capital Stock is entitled to vote. Each
share of Common Stock is entitled to one vote and each share of Class B Stock is
entitled to 95% of one vote. The Certificate of Incorporation also provides for
certain adjustments to the Capital Stock in the event a separate class vote is
imposed by applicable law. Holders of the Capital Stock are entitled to
cumulative voting rights for election of directors. Cumulative voting rights
entitle a shareholder to cast as many votes as is equal to the number of
directors to be elected multiplied by the number of shares owned by such
shareholder. A shareholder may cast all of such shareholder's votes as
calculated above for one candidate or may distribute the votes among two or more
candidates. Unless otherwise instructed, the shares represented by proxies will
be voted in the discretion of the proxy holders so as to elect the maximum
number of management nominees which may be elected by cumulative voting.
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of Berry's Capital Stock as of February 15, 2002 by (i)
each of its directors who own Berry Capital Stock, and (ii) all directors and
officers as a group.
Amount and Nature of
Beneficial
Ownership (1) (2)
Name and Address --------------------
of Beneficial Owner* Position Shares Percent
-------------------- -------------------------------- ------ -------
Jerry V. Hoffman Chairman of the Board, President 311,855(3) 1.4%
and Chief Executive Officer
William F. Berry Director 1,686,923(4) 7.8%
Ralph B. Busch, III Director 303,729(5) 1.4%
William E. Bush, Jr. Director 495,700(6) 2.3%
Stephen L. Cropper Director -- **
J. Herbert Gaul, Jr. Director 15,000(7) **
John A. Hagg Director 48,000(8) **
Robert F. Heinemann Director -- **
Thomas J. Jamieson Director 44,100(9) **
Roger G. Martin Director 37,000(10) **
Martin H. Young, Jr. Director 25,000(11) **
All Directors and
Officers as a group
(17 persons) 3,414,265(12) 15.25%
----------
* All directors and beneficial owners listed above can be contacted at Berry
Petroleum Company, 5201 Truxtun Avenue, Suite 300 Bakersfield, CA 93309.
** Represents beneficial ownership of less than 1% of the Company's
outstanding Capital Stock.
(1) Unless otherwise indicated, shares shown as beneficially owned are those
as to which the named person possesses sole voting and investment power.
(2) All shares indicated are Common Stock and percent calculations are based
on total shares of Capital Stock outstanding, including the 898,892 shares
of Class B Stock outstanding which can be converted, at the request of the
shareholder, to Class A Common Stock.
(3) Includes 38,105 shares held directly and 273,750 shares which Mr. Hoffman
has the right to acquire under the Company's 1994 Stock Option Plan.
2
(4) Includes 1,618,201 shares held directly and 34,722 shares held in the
Berry Children's Trust as to which Mr. Berry has voting and investment
power and 34,000 shares which Mr. Berry has the right to acquire under the
Company's 1994 Stock Option Plan.
(5) Includes 76,324 shares held directly, 75,805 shares held in the B Group
Trust at Union Bank of California which Mr. Busch votes and 128,600 shares
held in a family trust for which Mr. Busch shares voting and investment
power as co-trustee. Also includes 23,000 shares which Mr. Busch has the
right to acquire under the Company's 1994 Stock Option Plan.
(6) Includes 150,700 shares held directly and 330,000 shares held in the
William E. Bush Trust as to which Mr. Bush shares voting power with other
trustees and 15,000 shares which Mr. Bush has the right to acquire under
the Company's 1994 Stock Option Plan.
(7) Includes of 15,000 shares which Mr. Gaul has the right to acquire under
the Company's 1994 Stock Option Plan.
(8) Includes 14,000 shares held directly and 34,000 shares which Mr. Hagg has
the right to acquire under the Company's 1994 Stock Option Plan.
(9) Includes 10,100 shares held indirectly by Mr. Jamieson through Jaco Oil
Company, a corporation, and 34,000 shares which Mr. Jamieson has the right
to acquire under the Company's 1994 Stock Option Plan.
(10) Includes 3,000 shares held directly and 34,000 shares which Mr. Martin has
the right to acquire under the Company's 1994 Stock Option Plan.
(11) Includes 10,000 shares held directly and 15,000 shares which Mr. Young has
the right to acquire under the Company's 1994 Stock Option Plan.
(12) Includes 23,745 shares held directly by officers, 4,876 shares held
indirectly by officers in the Company's 401(k) Thrift Plan and 418,337
shares which the Company's officers have the right to acquire upon the
exercise of options granted under the Company's 1994 Stock Option Plan.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of December 31, 2001, information
regarding the voting securities of the Company owned beneficially, within the
meaning of the rules of the Securities and Exchange Commission, by persons,
other than directors or officers, known by the Company to own beneficially more
than 5% of the indicated class:
Name and Address Amount and Nature Percent
Title of Class of Beneficial Owner of Beneficial Ownership of Class
-------------------- ----------------------------------- ----------------------- --------
Class A Common Stock Union BanCal Corporation 1,718,733 (1) 8.3%
445 South Figueroa St., Third Floor
Los Angeles, CA 90017
Class A Common Stock Winberta Holdings, Ltd. 1,088,220 (2) 5.2%
c/o Berry Petroleum Company
5201 Truxtun Avenue, Suite 300
Bakersfield, CA 93309
Class B Stock Winberta Holdings, Ltd. 898,892 (2) 100%
c/o Berry Petroleum Company
5201 Truxtun Avenue, Suite 300
Bakersfield, CA 93309
3
(1) As reflected in Schedule 13G, dated January 25, 2002, and filed with the
Securities and Exchange Commission by UnionBanCal Corporation (Union
Bank). According to the Schedule 13G, Union Bank is the trustee of certain
trusts to which the trustors retain voting and investment power and Union
Bank has shared dispositive power on the shares indicated. In addition,
Union Bank holds 30,000 shares included above for which it has sole voting
and dispositive power.
(2) As reflected in Schedule 13G, dated January 28, 2002, and filed with the
Securities and Exchange Commission. According to the Schedule 13G,
Winberta Holdings, Ltd. has sole voting and dispositive power on all of
the shares indicated. The Class B Stock shares are convertible into Class
A Common Stock at the request of Winberta Holdings, Ltd. The Class A
Common Stock and Class B Stock are voted as a single class, as noted on
Page 1 of this Proxy Statement. Winberta Holdings, Ltd. combined shares
comprise 9.1% of the total Capital Stock outstanding for the Company.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 and related
Securities and Exchange Commission rules require that directors, executive
officers and beneficial owners of 10% or more of any class of equity securities
report to the Securities and Exchange Commission changes in their beneficial
ownership of the Company's Capital Stock and that any late filings be disclosed.
Based solely on a review of the copies of such forms furnished to the Company,
or written representations that no Form 5 was required, the Company believes in
2001 that there has been compliance with all Section 16(a) filing requirements.
4
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Nominees for Election
The Company's directors are elected at each Annual Meeting of
Shareholders. At the Annual Meeting, eleven directors, constituting the
authorized number of directors, will be elected to serve until the next Annual
Meeting of Shareholders and until their successors are elected and qualified.
The nominees receiving the greatest number of votes at the Annual Meeting up to
the number of authorized directors will be elected.
The nominees for election as directors at the Annual Meeting set forth in
the table below are all incumbent directors who were elected at the May 2001
Annual Meeting of Shareholders, except for Mr. Cropper and Mr. Heinemann who
were appointed to the Board in March 2002. Each of the nominees has consented to
serve as a director if elected. Unless authority to vote for any director is
withheld in a proxy, it is intended that each proxy will be voted FOR such
nominees. In the event that any of the nominees for director should, before the
Meeting, become unable to serve, it is intended that shares represented by
proxies which are executed and returned will be voted for such substitute
nominees as may be recommended by the Company's existing Board of Directors,
unless other directions are given in the proxies. To the best of the Company's
knowledge, all the nominees will be available to serve.
Director
Nominee Age Position Since
-------------------- --- -------------------------------- --------
Jerry V. Hoffman 52 Chairman of the Board, President 1992
and Chief Executive Officer
William F. Berry 61 Director 1985
Ralph B. Busch, III 42 Director 1996
William E. Bush, Jr. 55 Director 1986
Stephen L. Cropper 52 Director 2002
J. Herbert Gaul, Jr. 58 Director 1999
John A. Hagg 54 Director 1994
Robert F. Heinemann 48 Director 2002
Thomas J. Jamieson 59 Director 1993
Roger G. Martin 64 Director 1985
Martin H. Young, Jr. 49 Director 1999
Set forth below is information concerning each of the nominee directors of
Berry.
Mr. Hoffman has been the Chairman of the Board of Directors since March
1997 and has been the President and Chief Executive Officer since May 1994. Mr.
Hoffman was President and Chief Operating Officer from 1992 to 1994 and was the
Senior Vice President and Chief Financial Officer of the Company from 1985 until
1992.
Mr. Berry is a member of the Nominating and Corporate Governance
Committee. Mr. Berry is a private investor and was involved in investment
banking for a major California bank for over 20 years. Mr. Berry is a cousin to
William E. Bush, Jr., and Ralph B. Busch, III.
Mr. Busch is a member of the Compensation Committee. Mr. Busch is
currently Executive Vice President and Chief Operating Officer for Aon Risk
Services of Central California. Prior to his position with Aon Risk Services,
Mr. Busch was President of Central Coast Financial from 1986 to 1993. Mr. Busch
was a director of Eagle Creek Mining & Drilling Company from 1985 to 1996. Mr.
Busch is a cousin to William F. Berry and William E. Bush, Jr.
Mr. Bush is a member of the Nominating and Corporate Governance Committee.
Mr. Bush is an independent marketing and seed treatment consultant. Mr. Bush was
formerly the Plant Manager of California Planting Cotton Seed Distributors from
1987 to 2000. Prior to 1987, Mr. Bush was the Area Manager/Technical
Representative of Gustafson, Inc. (a division of Uniroyal) for Arizona and
California for nine years. Mr. Bush was a director of Eagle Creek Mining &
Drilling from 1985 to 1998. Mr. Bush is a cousin to William F. Berry and Ralph
B. Busch, III.
5
Mr. Cropper is a member of the Audit Committee. Mr. Cropper is a private
investor. Mr. Cropper retired in 1998 after 25 years with The Williams
Companies, most recently serving as the President and CEO of Williams Energy
Services. Williams Energy Services is involved in natural gas E&P, mid-stream
natural gas, downstream petroleum and energy marketing and trading. Mr. Cropper
is also a director of two public corporations, Heritage Propane and Rental Car
Finance Corporation which is a subsidiary of Dollar Thrifty Automotive Group.
Mr. Cropper also serves as a Trustee for Oklahoma State University - Tulsa and
is on the board of several community and industry associations.
Mr. Gaul is the Chairman of the Nominating and Corporate Governance
Committee and a member of the Audit Committee. Mr. Gaul is a private investor.
Mr. Gaul was the Chief Financial Officer for Gentek Building Products from 1995
to 1997 and served from 1983 to 1993 in senior treasury or finance positions
with various other companies. Mr. Gaul also served from 1979 to 1983 as the
Treasurer for Natomas Company and from 1969 to 1979 with J. P. Morgan where he
had responsibility for financial consulting to the energy industry.
Mr. Hagg is a member of the Compensation Committee. Mr. Hagg is a private
investor. He is a director of Peak Energy Services Ltd, Nevis Energy Services
Inc., The Toronto Stock Exchange Inc. and its subsidiary, The Canadian Venture
Exchange Inc. and also a number of private companies, including Tristone Capital
Advisors Inc. Mr. Hagg was the Chairman of the Board of Northstar Energy
Corporation from 1985 until 2001 and President and Chief Executive Officer from
1985 until 1999. Mr. Hagg was also a director of Devon Energy Corp. from 1998 to
2000, subsequent to Devon's merger with Northstar.
Mr. Heinemann is a member of the Nominating and Corporate Governance
Committee. Since 1997, Mr. Heinemann has served as the Vice President and Chief
Technology Officer of Halliburton Company and is the Chairman of the Halliburton
Technology Advisory Committee. He was previously with Mobil Oil Corporation
where he served in a variety of positions for Mobil and its various affiliate
companies in the energy and technical fields from 1981 to 1997, most recently as
the Vice President of Mobil Technology Company and the General Manager of the
Mobil Exploration and Producing Technical Center. Mr. Heinemann has his Ph.D. in
Chemical Engineering.
Mr. Jamieson is the Chairman of the Compensation Committee and a member of
the Audit Committee. Mr. Jamieson is the Chief Executive Officer, President and
founder, in 1970, of Jaco Oil Company and the majority owner and founder, in
1983, of Wholesale Fuels, Inc. Jaco Oil Company, based in Bakersfield,
California, is one of the largest independent gasoline marketers in the Western
United States. Mr. Jamieson is also involved in real estate and oil and gas
properties.
Mr. Martin is a member of the Audit and Compensation Committees. Mr.
Martin is an independent oil and gas consultant. Mr. Martin retired in 1996 as
the Manager of Special Projects at the Wilmington Field for the City of Long
Beach, California. From 1975 to 1981, Mr. Martin was the officer in charge of
the Elk Hills Naval Petroleum Reserve, Kern County, California.
Mr. Young is the Chairman of the Audit Committee. Mr. Young has been the
Senior Vice President and Chief Financial Officer of Falcon Seaboard Holdings,
L.P. and its predecessor Falcon Seaboard Resources, Inc. (Falcon) since 1992.
Falcon is a private energy company involved in power production, power demand
management, natural gas exploration and production, real estate and private
investments. Mr. Young is also the Chairman of the Board of the Texas Mutual
Insurance Company, the largest provider of workers' compensation insurance in
the State of Texas. Mr. Young has 13 years of banking experience, the last 10
working for a major California bank as the Vice President/Area Manager for the
corporate banking group from 1981 to 1991.
6
Committees and Meetings
The Board of Directors has an Audit Committee, Compensation Committee and
Nominating and Corporate Governance Committee.
Effective March 28, 2002, the Audit Committee of the Board of Directors
consists of Messrs. Cropper, Gaul, Jamieson, Martin and Young. The Audit
Committee reviews, acts on and reports to the Board of Directors with respect to
auditing performance and practices, risk management, financial and credit risks,
accounting policies, tax matters, financial reporting and financial disclosure
practices of the Company. The Committee reviews the selection of the Company's
independent accountants, the scope of the annual audit, the nature of non-audit
services, the fees to be paid to the independent accountants, the performance of
the Company's independent accountants and the accounting practices of the
Company.
Effective March 28, 2002, the Compensation Committee of the Board of
Directors consists of Messrs. Busch, Hagg, Jamieson and Martin. The Compensation
Committee is responsible for recommending total compensation for executive
officers and board members of Berry to the Board of Directors, for reviewing
general plans of compensation for employees and for reviewing and approving
awards under Berry's Bonus Plan (Bonus Plan). In addition, the Committee is
charged with the full responsibility of administering the Company's 1994 Stock
Option Plan.
Effective March 28, 2002, the Nominating and Corporate Governance
Committee of the Board of Directors consists of Messrs. Berry, Bush, Gaul and
Heinemann. The Nominating and Corporate Governance Committee is responsible for
the development of governance guidelines and practices for the effective
operation of the Board in fulfilling its responsibilities; the review and
assessment of the performance of the Board; and the nomination of prospective
directors for the Company's Board of Directors and Board committee membership.
The Nominating and Corporate Governance Committee unanimously recommended the
addition of Mr. Cropper and Mr. Heinemann to the Board after an extensive search
for potential director additions conducted by Korn Ferry International, an
international executive search firm. The potential directors' resumes were
reviewed by the Committee and interviews were conducted of certain potential
directors. If a shareholder wishes to recommend a nominee for the Board of
Directors, the shareholder should write to the Corporate Secretary of the
Company specifying the name of the nominee and the qualifications of such
nominee for membership on the Board of Directors. All such recommendations will
be brought to the attention of the Nominating and Corporate Governance
Committee.
During 2001, the Board of Directors met six times, the Audit Committee met
four times, the Compensation Committee met two times and the Nominating and
Corporate Governance Committee met once. All of the nominees holding office
attended at least 75% of the board meetings and meetings of committees of which
they were members.
Effective January 1, 2002, non-employee directors are paid a quarterly fee
of $5,000, plus $1,000 per day for each board meeting day attended and $1,000
per day for each committee meeting attended which is not held on the same day as
the board meeting. From December 2000 to December 2001, the quarterly fee was
$4,625 and meeting fees were $1,000. From August 1999 to December 2000, the
quarterly fees were $4,375 and meeting fees were $500.
The Company's 1994 Stock Option Plan provides for a formula grant of 5,000
options annually to each non-employee director holding office on December 2nd of
each year. 5,000 options were issued on December 2, 2001 at $15.45, 5,000
options were issued on December 2, 2000 at $15.6875 and 5,000 options were
issued December 2, 1999 at $14.0625 to each of the non-employee directors
holding office on those dates. The exercise price of the options is the closing
price of Berry Petroleum Company Class A Common Stock as reported by the New
York Stock Exchange for the date of grant. The maximum option exercise period is
ten years from the date of the grant. The options issued to the directors vest
immediately.
7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table discloses compensation for the three fiscal years
ended December 31, 2001 received by the Company's Chairman, President and Chief
Executive Officer and each of the Company's four other most highly compensated
executive officers:
Long-Term
Compensation
Annual # of Shares All Other
Name and Compensation Underlying Options Compensation
Principal Position Year Salary (1) Bonus (2) Granted (3)
-------------------------- ---- ---------- --------- ------------------ ------------
Jerry V. Hoffman 2001 $ 350,000 $ 125,000 50,000 $ 14,021
Chairman, President and 2000 $ 303,636 $ 150,000 75,000 $ 15,756
Chief Executive Officer 1999 $ 292,400 $ 75,000 -- $ 10,143
Ralph J. Goehring 2001 $ 185,000 $ 60,000 30,000 $ 12,758
Senior Vice President and 2000 $ 175,513 $ 75,000 35,000 $ 14,498
Chief Financial Officer 1999 $ 167,666 $ 55,000 -- $ 10,868
Brian L. Rehkopf 2001 $ 155,000 $ 50,000 20,000 $ 11,583
Vice President of 2000 $ 143,287 $ 60,000 20,000 $ 13,325
Engineering 1999 $ 128,333 $ 35,000 -- $ 8,941
George T. Crawford 2001 $ 135,000 $ 45,000 20,000 $ 9,923
Vice President of 2000 $ 111,906 $ 50,000 20,000 $ 9,820
Production 1999 $ 106,666 $ 15,000 30,000 $ 4,108
Donald A. Dale 2001 $ 106,000 $ 18,000 4,500 $ 7,973
Controller 2000 $ 100,162 $ 25,000 6,000 $ 9,308
1999 $ 97,333 $ 25,000 -- $ 6,922
(1) Does not include the value of perquisites and other personal benefits
because the aggregate amount of such compensation, if any, does not exceed
the lesser of $50,000 or 10 percent of the total amount of annual salary
and bonus for any named individual.
(2) Cash bonuses shown for 2001, were declared in December 2001 and paid in
January 2002.
(3) Includes Company contributions under the 401(k) Thrift Plan of $13,592,
$15,300 and $9,600 for Mr. Hoffman, $12,512, $14,210 and $10,614 for Mr.
Goehring, $11,238, $12,937 and $8,600 for Mr. Rehkopf, $9,788, $9,675 and
$3,983 for Mr. Crawford and $7,685, $9,045 and $6,507 for Mr. Dale,
respectively, for 2001, 2000 and 1999. Also includes split dollar life
insurance compensation of $429, $456 and $543 for Mr. Hoffman, $246, $288
and $254 for Mr. Goehring, $345, $388 and $341 for Mr. Rehkopf, $135, $145
and $125 for Mr. Crawford and $288, $263 and $415 for Mr. Dale
respectively for 2001, 2000 and 1999.
8
OPTION GRANTS IN 2001
Potential Realizable Value
Percent of At Assumed Annual Rates
Number Total Of Stock Price Appreciation
of Securities Options For Option Term(1)
Underlying Granted to Exercise (Dollars) (3)
Options Employees Price per Expiration ---------------------------
Name Granted(1) In 2001 Share (2) Date 5% 10%
-------------- ------------- ---------- --------- ---------- ------------- -----------
Mr. Hoffman 50,000 25% $ 16.30 Dec. 7, 2011 $ 512,549 $ 1,298,900
Mr. Goehring 30,000 15% $ 16.30 Dec. 7, 2011 $ 307,529 $ 779,340
Mr. Rehkopf 20,000 10% $ 16.30 Dec. 7, 2011 $ 205,020 $ 519,560
Mr. Crawford 20,000 10% $ 16.30 Dec. 7, 2011 $ 205,020 $ 519,560
Mr. Dale 4,500 2% $ 16.30 Dec. 7, 2011 $ 46,129 $ 116,901
Assumed Price Appreciation
----------------------------
5% 10%
------------ ------------
Assumed price per share on Dec. 7, 2011 $ 26.55 $ 42.28
Gain on one share valued at $16.30 on Dec. 7, 2001 $ 10.25 $ 25.98
Gain on all shares (based on 21,731,986 shares
outstanding at Dec. 31, 2001 $222,774,208 $564,553,578
Gain for all 2001 optionees (based on 199,500 options) $ 2,045,071 $ 5,182,611
Optionee gain as a percentage of total shareholder gain .92% .92%
(1) Option holders vest in the granted options at the rate of 25% per year,
commencing on the first anniversary of the grant date.
(2) All options were granted at the Company's Class A Common Stock market
value on the date of grant.
(3) These columns present hypothetical future values of the stock obtainable
upon exercise of the options net of the option's exercise price, assuming
that the market price of the Company's Common Stock appreciates at a five
and ten percent compound annual rate over the ten year term of the
options. The five and ten percent rates of stock price appreciation are
presented as examples pursuant to the Securities and Exchange Commission
Rules and do not necessarily reflect management's assessment of the
Company's future stock price performance. The potential realizable values
presented are NOT intended to indicate the value of the options.
AGGREGATED OPTION EXERCISES IN 2001
AND DECEMBER 31, 2001 OPTION VALUES
Number of Securities Value of Unexercised In-the-
Underlying Unexercised Money Options at
Shares Options at 12-31-2001 12-31-2001 (A)
Acquired on Value --------------------------- -----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
------------ ----------- -------- ----------- ------------- ----------- -------------
Mr. Hoffman -- $ -- 273,750 126,250 $ 519,984 $ 64,703
Mr. Goehring -- $ -- 175,837 71,250 $ 315,190 $ 48,328
Mr. Rehkopf -- $ -- 95,000 45,000 $ 104,063 $ 32,188
Mr. Crawford -- $ -- 27,500 42,500 $ 72,063 $ 24,188
Mr. Dale -- $ -- 71,000 16,500 $ 190,169 $ 24,056
(A) The December 31, 2001 New York Stock Exchange closing price of $15.70, the
last trading day of the year, was used to value options.
9
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement, in
whole or in part, the following report of the Audit Committee, the report of the
Compensation Committee and the performance graph shall not be incorporated by
reference into any such filings.
Audit Committee Report
To the Board of Directors
The Audit Committee consists of the following members of the Board of
Directors: Thomas J. Jamieson (Chairman), J. Herbert Gaul, Jr., Roger G. Martin
and Martin H. Young, Jr. Each of the members is independent as defined under the
rules of the New York Stock Exchange.
We have reviewed and discussed with management the Company's audited
financial statements as of and for the year ended December 31, 2001.
We have discussed with the independent auditors, PricewaterhouseCoopers
LLP (PWC), the matters required to be discussed by Statement on Auditing
Standards No. 61, Communication with Audit Committees, as amended, by the
Auditing Standards Board of the American Institute of Certified Public
Accountants.
We have received and reviewed the written disclosures and the letter from
PWC required by Independence Standard No. 1, Independence Discussions with Audit
Committees, as amended, by the Independence Standards Board, and have discussed
with the auditors the auditors' independence. All fees billed by PWC for
non-audit services are compatible with maintaining the principal accountant's
independence.
Based on the reviews and discussions referred to above, we recommend to
the Board of Directors that the financial statements referred to above be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001 for filing with the Securities and Exchange Commission.
Audit Committee of the Board of Directors
March 1, 2002 Thomas J. Jamieson (Chairman) J. Herbert Gaul, Jr. Roger G. Martin Martin H. Young, Jr.
Auditor Independence Report
In conjunction with recent SEC releases on auditor independence, the
following items are disclosed herein:
Audit Fees
For the year ended December 31, 2001, the Company was billed $204,750 by
PWC, its independent accountant, for the audit and quarterly reviews completed.
Financial Information Systems Design and Implementation Fees
No fees were billed for Financial Information Systems Design and
Implementation.
All Other Fees
The Company was billed $10,343 for all other non-audit services provided
by PWC, its principal accountant.
PWC has represented to the Company that none of the work performed for the
Company was by persons other than PWC's full-time permanent employees.
10
Board Compensation Committee Report on Executive Compensation
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. During 2001 the Committee was
composed of four non-employee directors. The Committee is committed to a strong,
positive link between business performance, strategic goals, and compensation
and benefit programs.
Report of Compensation Committee on Executive Compensation Policy
The Company's compensation policy is designed to support the overall
objective of maximizing the return to our shareholders by:
- Attracting, developing, rewarding, and retaining highly qualified
and productive individuals.
- Directly aligning compensation to both Company and individual
performance.
- Ensuring compensation levels that are externally competitive and
internally equitable.
- Encouraging executive stock ownership to enhance a mutuality of
interest with the Company's shareholders.
The following is a description of the elements of executive compensation
and how each relates to the objectives and policy outlined above.
Base Salary
The Committee reviews each executive officer and certain other management
employees' salaries annually. In determining appropriate salary levels, we
consider the level and scope of responsibility, experience, Company and
individual performance, internal equity, as well as pay practices of other
companies relating to executives of similar responsibility. By design, we strive
to set executives' salaries at competitive market levels.
Short-Term Incentive Plan Compensation
The Short-Term Incentive Plan (Bonus Plan) awards cash bonuses to
executives and other employees to recognize and reward corporate and individual
performance. Subject to the Board's discretion to vary the targets, the Bonus
Plan was restructured in early 2001 to focus on three specific Company targets,
these being: production volume, reserve replacement and operating costs. Based
on the Company's net income, the Bonus Plan provides an annual incentive fund
for eligible employees involved in decision-making roles which effect the
Company's growth and profitability goals. Bonuses may also be awarded for
discretionary performance by the Chief Executive Officer for other employees
whose efforts and performance are judged to be exceptional. The Company
anticipates that future annual bonuses, if any, will be determined in December
of each year. Cash bonuses paid in 2001, 2000 and 1999 were $0, $1,033,000 and
$465,000, respectively. Cash bonuses of $669,000 were declared in December 2001
and paid in January 2002 for 2001 performance.
The amount individual executives may earn is directly dependent upon the
individual's position, responsibility, and ability to impact the Company's
financial success. External market data is reviewed periodically to determine
the competitiveness of the Company's incentive programs for individual
executives.
11
Long-Term Incentive Plan Compensation
Non-Statutory Stock Option Plan (Stock Option Plan)
The purpose of this plan is to provide additional incentives to employees
to stay focused on the long-term goal of maximizing shareholder value and to
encourage management to own and hold the Company's stock and tie their long-term
economic interests directly to those of the Company's shareholders. The Stock
Option Plan was restructured in early 2001 to link the quantity of options
allowable for grant with the Company's stock performance measured in comparison
to a select peer group of other U.S. based exploration and production companies.
The Stock Option Plan utilizes vesting periods to encourage key employees to
continue in the employ of the Company and grants options which have an exercise
price at market value on the date of grant. The Compensation Committee is
charged with responsibility for administering and granting non-statutory stock
options. At December 31, 2001, an aggregate of 287,675 options are available for
issuance from the 1994 Stock Option Plan. Options granted in 2001, 2000 and 1999
to employees were 199,500, 262,000 and 0, respectively.
Chief Executive Officer
The Committee believes Mr. Hoffman has done an excellent job of leading
and managing the Company during a volatile and rapidly-changing period for the
energy industry as witnessed over the last several years and specifically in
2001 with the California electricity crisis and its impact on the Company. Mr.
Hoffman has positioned the Company favorably for continued growth. Mr. Hoffman,
as Chief Executive Officer, has also demonstrated a keen ability in redirecting
the Company's resources to higher profitability projects and growth
opportunities. Mr. Hoffman's compensation incentives are primarily derived from
the Bonus Plan and the Stock Option Plan. The value of the options are directly
related to the Company's stock performance.
Compensation Committee of the Board of Directors
March 1, 2002 William E. Bush (Chairman) John A. Hagg Thomas J. Jamieson Roger G. Martin
Severance Agreements
The Company has entered into salary continuation agreements with Mr.
Hoffman, Mr. Goehring, Mr. Rehkopf and Mr. Crawford which guarantees their
salary, as defined, plus an amount equal to the average cash bonus received by
the employee for the prior two years, will be paid in one lump sum for two years
for Mr. Hoffman and one year for Mr. Goehring, Mr. Rehkopf and Mr. Crawford
following a sale of all or substantially all of the oil producing properties of
Berry or a merger or other reorganization between Berry and a non-affiliate
which results in a change of ownership or operating control (a Change of
Control). Salary continuation agreements for Mr. Dale and certain other
executives provide for the payment of six months' salary, upon a termination of
employment in connection with a Change of Control.
Life Insurance Coverage
The Company provides certain individuals who are officers or other
high-level executives with life insurance coverage in addition to that available
to employees under the Company's group-term life insurance plan. The amount of
this life insurance coverage is $500,000 for Mr. Hoffman, $470,000 for Mr.
Goehring, $398,500 for Mr. Rehkopf, $307,000 for Mr. Crawford and $270,000 for
Mr. Dale. Depending on certain variables, an executive or beneficiary may be
entitled to insurance benefits exceeding the amount of term insurance that could
otherwise have been purchased with the portion of the premium payments that are
imputed to the executive as taxable income.
12
PERFORMANCE GRAPH
The following Performance Graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
Total returns assume $100 invested on December 31, 1996 in shares of Berry
Petroleum Company, the Dow Jones Secondary Oil Companies Index, the Russell 2000
and the Standard & Poors 500 Index (S&P 500) assuming reinvestment of dividends
for each measurement period. The Company added the Russell 2000 in 1999 and
believes it is a good comparison index for the Company's proxy graph based on
the smaller market capitalization and broader base of companies in the Russell
2000. The information shown is historical and is not necessarily indicative of
future performance.
Berry Petroleum Company
Stock Price Performance
December 31, 1996 - December 31, 2001
[LINE CHART OMITTED]
--------------------------------------------------------------------------------------------------------
Total Return Analysis
12/31/1996 12/31/1997 12/31/1998 12/31/1999 12/31/2000 12/31/2001
--------------------------------------------------------------------------------------------------------
Berry Petroleum $ 100.00 $ 124.09 $ 103.81 $ 113.59 $ 103.45 $ 124.53
--------------------------------------------------------------------------------------------------------
Dow Jones Total Market Oil $ 100.00 $ 98.25 $ 66.35 $ 75.30 $ 118.32 $ 107.27
Secondary Index
--------------------------------------------------------------------------------------------------------
Russell 2000 $ 100.00 $ 122.06 $ 119.31 $ 144.50 $ 140.37 $ 143.95
--------------------------------------------------------------------------------------------------------
S&P 500 $ 100.00 $ 133.10 $ 170.82 $ 206.50 $ 187.85 $ 165.59
--------------------------------------------------------------------------------------------------------
13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Eagle Creek Mining & Drilling, Inc.
Eagle Creek Mining & Drilling, Inc. (Eagle Creek), a California
corporation, was a wholly-owned subsidiary of the Company's predecessor, Berry
Holding Company, until it was spun off to the majority shareholders of the
predecessor in 1984. On November 30, 1989, Eagle Creek purchased the assets of
S&D Supply Company (S&D), a California partnership. S&D, a retail distributor of
oilfield parts and supplies, is now a division of Eagle Creek. The five-year
contract whereby the Company purchased oilfield parts and supplies from S&D at
competitive prices expired November 30, 1999 and was not renewed. Even though
the contract expired, based on competitive pricing, the Company continues to
purchase oilfield parts and supplies from S&D. The amounts paid to S&D in 2001,
2000 and 1999 were $332,000, $713,000 and $785,000, respectively. Mr. Ralph B.
Busch, III and his immediate family are significant beneficial owners of the
stock of Eagle Creek.
Halliburton Energy Services
During 2001, the Company paid Halliburton Energy Services $705,701 for
services and equipment provided by Halliburton to the Company. The Company has
used Halliburton's services for in excess of 10 years and anticipates using
Halliburton's services in the future, including in 2002. All contracts awarded
to Halliburton are based on competitive bid circumstances unless a particular
service is in management's judgement best provided by Halliburton due to its
experience, expertise or availability considering all circumstances. Mr.
Heinemann serves as Vice President and Chief Technology Officer of Halliburton
Company. The compensation paid by Halliburton to him and the compensation paid
to him as a director of the Company are not affected by any payments from Berry
Petroleum Company to Halliburton or its affiliates or subsidiaries.
Tristone Capital Advisors
The Company entered into a letter agreement dated January 21, 2002 (the
Agreement) with Tristone Capital Advisors (Tristone) terminable by the Company
on 30 days notice, whereby Tristone is receiving a consulting fee of $25,000
monthly until the earlier of June 30, 2002 or 30 days following notice of
termination given by Berry Petroleum Company for services rendered between
January 21, 2002 and June 30, 2002 by Tristone to provide the Company assistance
in evaluation of potential acquisitions in Canada. In addition, Tristone will
receive a "success fee" of .625% to 1.2% of the "Enterprise Value" of the
transaction should the Company complete an acquisition covered by the Agreement
for a period of nine months following the contract termination. The Agreement
requires that the Company indemnify and hold harmless Tristone and its officers,
partners, directors, employees, agents and affiliates to the full extent
permitted by law for "Losses" that arise under Tristone's engagement under the
Agreement. Mr. John A. Hagg, a director of Berry Petroleum Company, became a
shareholder and director of Tristone in February 2002, in which capacity Mr.
Hagg's compensation could be affected by a successful transaction under the
Agreement.
Victory Settlement Trust
In connection with the reorganization of the Company in 1985, a
shareholder of Berry Holding Company (BHC), Victory Oil Company (Victory), a
California partnership, brought suit against Berry Holding Company (one of
Berry's predecessor companies prior to the reorganization in 1985) and all of
its directors and officers and certain significant shareholders seeking to
enjoin the reorganization. As a result of the reorganization, Victory's shares
of BHC stock were converted into shares of Berry Common Stock representing
approximately 9.7% of the shares of Berry Common Stock outstanding immediately
subsequent to the reorganization. In 1986, Berry and Victory, together with
certain of its affiliates, entered into the Instrument for Settlement of Claims
and Mutual Release (the Settlement Agreement).
The Settlement Agreement provided for the exchange (and retirement) of all
shares of Common Stock of Berry held by Victory and certain of its affiliates
for certain assets (the Settlement Assets) conveyed by Berry to Victory. The
Settlement Assets consisted of (i) a 5% overriding royalty interest in the
production removed or sold from certain real property situated in the
Midway-Sunset field which is referred to as the Maxwell property (Maxwell
Royalty) and (ii) a parcel of real property in Napa, California.
14
Victory Settlement Trust (Cont'd)
The shares of BHC originally acquired by Victory and the shares of Berry
Stock issued to Victory in exchange for the BHC Stock in the reorganization (the
Victory Shares) were acquired subject to a legend provision designed to carry
out certain provisions of the Will of Clarence J. Berry, the founder of Berry's
predecessor companies. The legend enforces an Equitable Charge (the Equitable
Charge) which requires that 37.5% of the dividends declared and paid on such
shares from time to time be distributed to a group of lifetime income
beneficiaries (the B Group).
As a result of the Settlement Agreement, the B Group was deprived of the
distributions related to the stock that they would have received on the Victory
Shares under the Equitable Charge. In order to adequately protect the interests
of the B Group, Berry executed a Declaration of Trust (the Victory Settlement
Trust). In recognition of the obligations of Berry and Victory with respect to
the Equitable Charge, Victory agreed in the Settlement Agreement to pay to Berry
in its capacity as trustee under the Victory Settlement Trust, 20% of the 5%
Maxwell Royalty (Maxwell B Group Payments). The Maxwell B Group Payments will
continue until the death of the last surviving member of the B Group, at which
time the payments will cease and the Victory Settlement Trust will terminate.
There is one surviving member of the B Group.
Under the Settlement Agreement, Berry agreed to guarantee that the B Group
will receive the same distributions under the Equitable Charge that they would
have received had the Victory shares remained as issued and outstanding shares.
Accordingly, when Berry declares and pays dividends on its capital stock, it is
obligated to calculate separately the applicable distribution (the Trust
Payment). Berry will make payments from the Victory Settlement Trust to the
surviving member of the B Group which may constitute all or a part of the Trust
Payment in March and September of each year. Such payments will be made to the
surviving member of the B Group for the remainder of his life. The B Group
survivor is a significant shareholder of Berry. Typically, the Maxwell B Group
Payments have contributed to a portion or all of the Trust Payment. Pursuant to
the Settlement Agreement, Berry paid $ 36,525 to the Victory Settlement Trust in
2001.
Wholesale Fuels Inc.
The Company bid out its lubrication business in 2001 to various vendors.
The bid was awarded to Wholesale Fuels Inc., who was the low bidder, for a
period of two years beginning July 15, 2001 and ending July 15, 2003. The
Company paid $25,387 to Wholesale Fuels Inc. in 2001 under the terms of the bid.
Mr. Thomas J. Jamieson, a director of Berry Petroleum Company, is the majority
owner and founder of Wholesale Fuels Inc.
15
PROPOSAL NO. 2 APPROVAL OF THE SECOND AMENDMENT TO THE
RESTATED AND AMENDED 1994 STOCK OPTION PLAN
Introduction
The Board of Directors has approved, subject to shareholder approval, the
Second Amendment to the Restated and Amended 1994 Stock Option Plan (the Amended
Stock Option Plan). A complete copy of the Amended Stock Option Plan, reflecting
the proposed amendment, is set forth as Exhibit A to this Proxy Statement. The
following summary of the proposed amendment is qualified in its entirety by
reference to the complete text of the Amended Stock Option Plan.
Description of Proposed Amendment
The Proposed Amendment would (i) increase the number of shares available
for issuance under the Company's 1994 Stock Option Plan and (ii) provide that
the Option exercise price shall be not less than the Fair Market Value on the
date of grant. The original Stock Option Plan approved by the shareholders
authorized 1,000,000 shares of Class A Common Stock (the 1994 Plan). In 1998,
the shareholders authorized an amendment to the 1994 Plan (the Amended Plan) to
increase the number of shares that could be issued under the Plan to 2,000,000
(and to increase the number of options granted annually to non-employee
directors to 5,000 options). The Proposed Second Amendment would (i) increase
the number of shares available for issuance, upon exercise of an option, under
the Amended Stock Option Plan by 1,000,000, increasing the total number of
shares available from 2,000,000 to 3,000,000 shares of Class A Common Stock and
(ii) modify Section 7.1 to provide that the Option exercise price shall be not
less than the Fair Market Value on the date of grant. Upon shareholder approval
of the Proposed Amendment, a total of 1,192,500 shares of Class A Common Stock
will be available for issuance under the Amended Stock Option Plan, after
allowing for the additional 40,000 shares granted to the new Vice President of
Corporate Development effective February 1, 2002. As of February 15, 2002,
options to purchase 1,514,962 shares are outstanding and options to purchase
1,010,712 shares are exercisable.
Since the inception of the original 1987 Stock Option Plan, the Company
has issued 2,886,500 options, of which 1,514,962 options are currently
outstanding. The Company, by utilizing an optional internal program on option
exercises of issuing only the net options as new shares, has issued 244,472
shares of Class A Company Stock for 992,488 options exercised. Therefore,
historically the Company has a ratio of one share of stock being issued for
every four stock options exercised.
In addition to the increase in the total number of shares authorized by
the Plan, the Proposed Amendment would amend Article VII Section 7.1 whereby the
Option exercise price for shares to be issued under the Plan would be increased
from not less than 80% of the Fair Market Value on the date of grant to not less
than 100% of the Fair Market Value on the date of grant. All Options previously
granted under the 1994 Plan have been granted at 100% of Fair Market Value on
the date of grant. All other terms and conditions of the 1994 Plan (as amended
in 1998), shall remain in full force and effect.
The Class A Common Stock and the Class B Common Stock shall vote as a
single class on the Amended Stock Option Plan. Each share of Class A Common
Stock is entitled to one vote and each share of Class B Stock is entitled to 95%
of one vote. Approval of the Second Amendment to the Company's Restated and
Amended 1994 Stock Option Plan requires a majority of the eligible votes cast in
person or by proxy at the Annual Meeting. The Board of Directors recommends that
you vote FOR Proposal No. 2. Proxies solicited hereby will be voted for approval
of the Second Amendment to the Company's Restated and Amended 1994 Stock Option
Plan unless a vote against the proposal or abstention is specifically indicated.
16
SHAREHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING
Any proposal of a shareholder intended to be presented at the next Annual
Meeting of Shareholders, expected to be held on May 15, 2003, must be received
at the office of the Secretary of the Company by December 13, 2002, if such
proposal is to be considered for inclusion in the Company's proxy statement and
form of proxy relating to that meeting.
ANNUAL REPORT
The Company's 2001 Annual Report to Shareholders has been mailed to
shareholders concurrently herewith, but such report is not incorporated in this
Proxy Statement and is not deemed to be a part of this proxy solicitation
material.
On March 14, 2002, the Company filed its Annual Report on Form 10-K with
the Securities and Exchange Commission. This Report contains detailed
information concerning the Company and its operations and supplementary
financial information which, except for exhibits, are included in the Annual
Report to Shareholders. A COPY OF THE EXHIBITS WILL BE FURNISHED TO SHAREHOLDERS
WITHOUT CHARGE UPON WRITTEN REQUEST TO: INVESTOR RELATIONS, BERRY PETROLEUM
COMPANY, 5201 TRUXTUN AVENUE, SUITE 300, BAKERSFIELD, CA 93309.
EXPENSES OF SOLICITATION
The total cost of this solicitation will be borne by the Company. In
addition to use of the mails, certain officers, directors and regular employees
of the Company, without receiving additional compensation, may solicit proxies
personally by telephone, e-mail or facsimile. The Company may reimburse persons
holding shares in their own names or in the names of their nominees for expenses
they incur in obtaining instructions from beneficial owners of such shares.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent accountants are PricewaterhouseCoopers LLP.
PricewaterhouseCoopers LLP or its predecessors have audited the Company's books
since 1991, and is expected to have a representative at the Annual Meeting who
will have the opportunity to make a statement if they desire to do so and be
available at that time to respond to appropriate questions. The Company
anticipates that it will use PricewaterhouseCoopers LLP to audit the Company's
financial statements for the year ending December 31, 2002 but has not yet
executed the engagement letter.
OTHER MATTERS
Management knows of no other business to be presented at the Meeting, but
if other matters do properly come before the Meeting, it is intended that the
persons named on the Form of Proxy will vote on said matters in accordance with
the recommendations of the Board of Directors.
The above Notice, Proxy Statement and Form of Proxy are sent by Order of
the Board of Directors.
KENNETH A. OLSON
Corporate Secretary
April 12, 2002
17
EXHIBIT A
BERRY PETROLEUM COMPANY
RESTATED AND AMENDED
1994 STOCK OPTION PLAN
ARTICLE I
PURPOSE OF PLAN
The purpose of this Plan is to promote the growth and profitability of the
Company and other Participating Companies by providing, through the ownership of
Options, incentives to attract and retain highly talented persons to provide
managerial, administrative and other specialized services to the Company and
other Participating Companies and to motivate such persons to use their best
efforts on behalf of the Company and other Participating Companies.
ARTICLE II
DEFINITIONS
For purposes of this Plan, the following terms shall have the meanings set
forth in this Article II:
2.1 Accrued installment. The term "Accrued installment" shall mean any
vested installment of an Option.
2.2 Board. The term "Board" shall mean the Board of Directors of the
Company.
2.3 Committee. The term "Committee" shall mean the Compensation Committee,
or a successor committee, appointed by the Board and constituting not less than
two members of the Board, each of whom is a Disinterested Person.
2.4 Company. The term "Company" shall mean Berry Petroleum Company, a
Delaware corporation, or any successor thereof.
2.5 Director. The term "Director" shall mean a member of the Board, or a
member of the board of directors of any Participating Company.
2.6 Disinterested Person. The term "Disinterested Person" shall mean any
person defined as a Disinterested Person in Rule 16b-3 of the Securities and
Exchange Commission as amended from time to time and as promulgated under the
Exchange Act.
2.7 Effective Date. The term "Effective Date" shall mean December 2, 1994.
2.8 Eligible Person. The term "Eligible Person" shall mean, except as
provided in Section 3.1, any full-time or part-time employee, officer or
Director of any Participating Company.
2.9 Exchange Act. The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
2.10 Fair Market Value. The term "Fair Market Value" shall mean the
closing sale price on the trading day in question of the Shares on the Composite
Tape for New York Stock Exchange Listed Stocks, or, if the Shares are not quoted
on the Composite Tape, on the New York Stock Exchange, or, if the Shares are not
listed on such Exchange, on the principal United States securities exchange on
which the Shares are listed, or, if the Shares are not listed on any such
exchange, the closing bid quotation with respect to the Shares on the trading
day in question on the National Association of Securities Dealers, Inc.
Automated Quotations Systems or any similar system then in use, or if no such
quotation is available, the fair market value on the date in question of the
Shares as determined in good faith by the Committee. If the day in question is
not a trading day, the determination of Fair Market Value shall be made as of
the nearest preceding trading day.
A-1
2.11 Option. The term "Option" shall mean a nonstatutory option to acquire
Shares granted under this Plan.
2.12 Optionee. The term "Optionee" shall mean an Eligible Person who has
been granted an Option.
2.13 Parent Corporation. The term "Parent Corporation" shall mean a
corporation as defined in Internal Revenue Code Section 424(e) or any successor
thereto.
2.14 Participating Company. The term "Participating Company" shall mean
the Company and any Parent Corporation or Subsidiary Corporation of the Company.
2.15 Plan. The term "Plan" shall refer to the Company's 1994 Stock Option
Plan.
2.16 Shares. The term "Shares" shall mean shares of the Company's Class A
Common Stock, $.01 par value, and may be unissued shares or treasury shares or
shares purchased for purposes of this Plan.
2.17 Subsidiary Corporation. The term "Subsidiary Corporation" shall mean
a corporation as defined in Internal Revenue Code Section 424(f) or any
successor thereto.
2.18 Terminating Transaction. The term "Terminating Transaction" shall
mean any of the following events: (a) the dissolution or liquidation of the
Company; (b) a reorganization, merger or consolidation of the Company with one
or more other corporations as a result of which the Company goes out of
existence or becomes a subsidiary of another corporation (which shall be deemed
to have occurred if another corporation shall own, directly or indirectly, over
eighty percent (80%) of the aggregate voting power of all outstanding equity
securities of the Company); (c) a sale of all or substantially all of the
Company's assets; or (d) a sale of the equity securities of the Company
representing more than eighty percent (80%) of the aggregate voting power of all
outstanding equity securities of the Company to any person or entity, or any
group of persons and entities acting in concert.
2.19 Termination Date. The term "Termination Date" shall mean December 2,
2004.
2.20 Total Disability. The term "Total Disability" shall mean a permanent
and total disability as that term is defined in Internal Revenue Code Section
22(e)(3) or any successor thereto.
ARTICLE III
ADMINISTRATION OF PLAN; GRANT TO DIRECTORS
3.1 Administration by the Committee. This Plan shall be administered by
the Compensation Committee of the Board, or its successor (the "Committee").
Subject to the provisions of this Plan document, the Committee shall have full
and absolute power and authority in its sole discretion to (i) determine which
Eligible Persons shall receive Options, (ii) determine the time when Options
shall be granted, (iii) determine the terms and conditions, not inconsistent
with the provisions of this Plan, of any Option granted hereunder, (iv)
determine the number of shares subject to or covered by each Option, and (v)
interpret the provisions of this Plan and of any Option granted under this Plan.
A member of the Committee shall not be an Eligible Person, and shall not have
been an Eligible Person at any time within one (1) year prior to appointment to
the Committee. Except as otherwise provided herein or otherwise permitted by
Rule 16b-3(c)(3) of the Exchange Act, during said one (1) year prior to such
appointment, no member of the Committee shall have been eligible to acquire
stock, stock options or stock appreciation rights under any plan of the Company.
3.2 Grant to Non-employee Directors. All non-employee Directors of the
Company holding office on December 2nd of each year shall automatically receive
a grant of 5,000 Options.
A-2
The above referenced Options to non-employee Directors shall be granted upon the
following terms and conditions:
(a) The exercise price of the Options shall be Fair Market Value on the
date of grant.
(b) The Options shall vest immediately upon grant.
(c) This "formula" grant to non-employee Directors shall not be amended
more than once every (6) six months, other than to comport with changes in the
Internal Revenue Code, the Employee Retirement Income Security Act or the rules
thereunder.
3.3 Rules and Regulations. The Committee may adopt such rules and
regulations as the Committee may deem necessary or appropriate to carry out the
purposes of this Plan and shall have authority to take all action necessary or
appropriate to administer this Plan.
3.4 Binding Authority. All decisions, determinations, interpretations, or
other actions by the Committee shall be final, conclusive, and binding on all
Eligible Persons, Optionees, Participating Companies and any
successors-in-interest to such parties.
ARTICLE IV
NUMBER OF SHARES AVAILABLE UNDER THIS PLAN
The maximum aggregate number of Shares which may be optioned and sold
under this Plan is 3,000,000 Shares. In the event that Options granted under
this Plan shall for any reason terminate, lapse, be forfeited, or expire without
being exercised, the Shares subject to such unexercised Options may again be
subjected to Options under this Plan. In any event, however, no Option may be
granted hereunder if the sum of Shares subject to such Option and the number of
Shares subject to unexpired Options previously granted hereunder (or subject to
unexercised options or stock appreciation rights under any other stock option or
stock appreciation right plan of the Company) would exceed twenty percent (20%)
of the total shares of voting stock outstanding at such time.
ARTICLE V
TERM OF PLAN
This Plan shall be effective as of the Effective Date and shall terminate
on the Termination Date. No Option may be granted hereunder after the
Termination Date.
ARTICLE VI
OPTION TERMS
6.1 Form of Option Agreement. Any option granted under this Plan shall be
evidenced by an agreement ("Option Agreement") in such form as the Committee, in
its discretion, may from time to time approve. Any Option Agreement shall
contain such terms and conditions as the Committee may deem, in its sole
discretion, necessary or appropriate and which are not inconsistent with the
provisions of this Plan.
6.2 Vesting and Exercisability of Options. Subject to the limitations set
forth herein and/or in any applicable Option Agreement entered into hereunder,
Options granted under this Plan shall vest and be exercisable in accordance with
the rules set forth in this Section 6.2:
a. General. Subject to the other provisions of this Section 6.2, Options
shall vest and become exercisable at such times and in such installments as the
Committee shall provide in each individual Option Agreement. Notwithstanding the
foregoing, the Committee may in its sole discretion accelerate the time at which
an Option or installment thereof may be exercised. Unless otherwise provided in
this Section 6.2 or in the Option Agreement pursuant to which an Option is
granted, an Option may be exercised when Accrued Installments accrue as provided
in such Option Agreement and at any time thereafter until, and including, the
Option Termination Date (as defined below).
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b. Termination of Options. All installments and Options shall expire and
terminate on such date as the Committee shall determine ("Option Termination
Date"), which in no event shall be later than ten (10) years from the date on
which such Option was granted.
c. Termination of Eligible Person Status Other Than by Reason of Death or
Disability. In the event that the employment of an Eligible Person with a
Participating Company is terminated for any reason (other than by reason of
death or Total Disability), any installments under an Option held by such
Eligible Person which have not accrued as of such termination date shall expire
and become unexercisable as of such termination date. Except as otherwise
provided herein, in the event that an Eligible Person who is a Director
terminates his directorship or otherwise ceases to be a Director for any reason
(other than by reason of death or Total Disability), any installments under an
Option held by such Eligible Person which have not accrued as of the
directorship termination date shall expire and become unexercisable as of the
directorship termination date. All Accrued installments as of the employment
termination date and/or the directorship termination date shall remain
exercisable only within such period of time as the Committee may determine, but
in no event shall any Accrued installments remain exercisable for a period in
excess of three (3) months following such termination date or for a period in
excess of the original Option Termination Date, whichever is earlier. For
purposes of this Plan, an Eligible Person who is an employee or Director of any
Participating Company shall not be deemed to have incurred a termination of his
employment or his directorship (whichever may be applicable) so long as such
Eligible Person is an employee or Director (whichever may be applicable) of any
Participating Company.
d. Leave of Absence. In the case of any employee on an approved leave of
absence, the Committee may make such provision respecting continuance of any
Options held by the employee as the Committee deems appropriate in its sole
discretion, except in no event shall an Option be exercisable after the original
Option Termination Date.
e. Death or Total Disability of Eligible Person. In the event that the
employment or directorship of an Eligible Person with a Participating Company is
terminated by reason of death or Total Disability, any unexercised Accrued
installments of Options granted hereunder to such Eligible Person shall expire
and become unexercisable as of the earlier of:
(1) The applicable Option Termination Date, or
(2) The first anniversary of the date of termination of the employment or
directorship of such Eligible Person by reason of the Eligible Person's death or
Total Disability. Any such Accrued Installments of a deceased Eligible Person
may be exercised prior to their expiration only by the person or persons to whom
the Eligible Person's Option rights pass by will or the laws of descent and
distribution. Any Option installments under such a deceased or disabled Eligible
Person's Option that have not accrued as of the date of the termination of
employment, or directorship due to death or Total Disability shall expire and
become unexercisable as of such termination date.
f. Termination of Affiliation of Participating Company. Notwithstanding
the foregoing provisions of this section, in the case of an Eligible Person who
is an employee or Director of a Participating Company other than the Company,
upon an Affiliation Termination (as defined herein) of such Participating
Company such Eligible Person shall be deemed (for all purposes of this Plan) to
have incurred a termination of his employment or directorship with such
Participating Company for reasons other than death or Total Disability, with
such termination to be deemed effective as of the effective date of said
Affiliation Termination. As used herein the term "Affiliation Termination" shall
mean, with respect to a Participating Company, the termination of such
Participating Company's status as a Participating Company (as defined herein)
with respect to the Company.
6.3 Options Not Transferable. Options granted under this Plan may not be
sold, pledged, hypothecated, assigned, encumbered, gifted or otherwise
transferred or alienated in any manner, either voluntarily or involuntarily or
by operation of law, other than by will or the laws of descent and distribution,
and (except as specifically provided to the contrary in Section 6.2(e) hereof)
may be exercised during the lifetime of an Optionee only by such Optionee.
6.4 Restrictions on Issuance of Shares.
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a. No Shares shall be issued or delivered upon exercise of an Option
unless and until there shall have been compliance with all applicable
requirements of the Securities Act of 1933, all applicable listing requirements
of any market or securities exchange on which the Company's Common Stock is then
listed, and any other requirements of law or of any regulatory body having
jurisdiction over such issuance and delivery. The inability of the Company to
obtain any required permits, authorizations or approvals necessary for the
lawful issuance and sale of any Shares hereunder on terms deemed reasonable by
the Committee shall relieve the Company, the Board, and the Committee of any
liability in respect of the nonissuance or sale of such Shares as to which such
requisite permits, authorizations or approvals shall not have been obtained.
b. As a condition to the granting or exercise of any Option, the Committee
may require the person receiving or exercising such Option to make any
representations and warranties to the Company as may be required or appropriate
under any applicable law or regulation, including, but not limited to, a
representation that the Option or Shares are being acquired only for investment
and without any present intention to sell or distribute such Option or Shares,
if such a representation is required under the Securities Act of 1933 or any
other applicable law, rule or regulation.
c. The exercise of any Option under this Plan is conditioned on approval
of this Plan, within twelve (12) months of the adoption of this Plan by the
Board, by (i) the vote of the holders of a majority of the outstanding
securities of the Company present, or represented, and entitled to vote at a
meeting duly held in accordance with applicable law, or (ii) the written consent
of the holders of a majority of the securities of the Company entitled to vote
if the requirements of Rule 16b-3(b)(2) promulgated under the Exchange Act are
otherwise satisfied. In the event such shareholder approval is not obtained
within such time period, any Options granted hereunder shall be void.
6.5 Option Adjustments.
a. If the outstanding Shares are increased, decreased, changed into or
exchanged for a different number or kind of shares of the Company through
reorganization, recapitalization, reclassification, stock dividend, stock split
or reverse stock split, an appropriate and proportionate adjustment shall be
made in the number or kind of shares, and the per-share Option price thereof
which may be issued in the aggregate and to any individual Optionee under this
Plan upon exercise of Options granted under this Plan; provided, however, that
no such adjustment need be made if, upon the advice of counsel, the Committee
determines that such adjustment may result in the receipt of federally taxable
income to holders of Options granted hereunder or the holders of Shares or other
classes of the Company's securities.
b. Upon the occurrence of a Terminating Transaction (as defined in Article
II hereof), as of the effective date of such Terminating Transaction, this Plan
and any then outstanding Options (whether or not vested) shall terminate unless
(i) provision is made in writing in connection with such transaction for the
continuance of this Plan and for the assumption of such Options, or for the
substitution of such Options of new options covering the securities of the
successor or surviving corporation in the Terminating Transaction or an
affiliate thereof, with appropriate adjustments as to the number and kind of
securities and prices, in which event this Plan and such outstanding Options
shall continue or be replaced, as the case may be, in the manner and under the
terms so provided; or (ii) the Committee otherwise shall provide in writing for
such adjustments as it deems appropriate in the terms and conditions of the then
outstanding Options (whether or not vested), including without limitation (A)
accelerating the vesting of outstanding Options, and/or (B) providing for the
cancellation of Options and their automatic conversion into the right to receive
the securities or other properties which a holder of the Shares underlying such
Options would have been entitled to receive upon consummation of such
Terminating Transaction had such Shares been issued and outstanding (net of the
appropriate option exercise prices). If this Plan or the Options shall terminate
pursuant to the foregoing provisions of this paragraph (b) because neither (i)
nor (ii) is satisfied, any Optionee holding outstanding Options shall have the
right, at such time immediately prior to the consummation of the Terminating
Transaction as the Company shall designate, to exercise his or her Options to
the full extent not theretofore exercised, including any installments which have
not yet become Accrued installments.
c. In all cases, the nature and extent of adjustments under this Section
6.5 shall be determined by the Committee in its sole discretion, and any such
determination as to what adjustments shall he made, and the extent thereof,
shall be final, binding and conclusive. No fractional shares of stock shall be
issued under this Plan pursuant to any such adjustment.
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6.6 Taxes. The Committee shall make such provisions and take such steps as
it deems necessary or appropriate for the withholding of any federal, state,
local and other tax required by law to be withheld with respect to the grant or
exercise of an Option under this Plan, including, but without limitation, the
withholding of the number of Shares at the time of the grant or exercise of an
Option the Fair Market Value of which would satisfy any withholding tax on said
exercise or grant, the deduction of the amount of any such withholding tax from
any compensation or other amounts payable to an Optionee by any member of the
Participating Companies, or requiring an Optionee (or the Optionee's beneficiary
or legal representative) as a condition of granting or exercising an Option to
pay to any member of the Participating Companies any amount required to be
withheld, or to execute such other documents as the Committee deems necessary or
appropriate in connection with the satisfaction of any applicable withholding
obligation.
6.7 Legends. Each Option Agreement and each certificate representing
Shares acquired upon exercise of an Option shall be endorsed with all legends,
if any, required by applicable federal and state securities laws to be placed
thereon. The determination of which legends, if any, shall be placed upon Option
Agreements and/or said Share certificates shall be made by the Committee in its
sole discretion and such decision shall be final, binding and conclusive.
ARTICLE VII
SPECIAL OPTION TERMS UNDER THIS PLAN
7.1 Option Exercise Price. The Option exercise price for Shares to be
issued under this Plan shall be determined by the Committee in its sole
discretion, but shall not be less than one hundred percent (100%) of the Fair
Market Value of the Shares on the date of grant. The date of grant shall be
deemed to be the date on which the Committee authorizes the grant of the Option,
unless a subsequent date is specified in such authorization.
7.2 Exercise of Options. An Option may be exercised in accordance with
this Section 7.2 as to all or any portion of the Shares covered by an Accrued
installment of the Option from time to time during the applicable Option period,
except that an Option shall not be exercisable with respect to fractions of a
Share. Options may be exercised, in whole or in part, by giving written notice
of exercise to the Company, which notice shall specify the number of Shares to
be purchased and shall be accompanied by payment in full of the purchase price
in accordance with Section 7.3. An Option shall be deemed exercised when such
written notice of exercise and payment has been received by the Company. No
Shares shall be issued until full payment has been made and the Optionee has
satisfied such other conditions as may be required by this Plan, as may be
required by applicable law, rules, or regulations, or as may be adopted or
imposed by the Committee. Until the stock certificates have been issued, no
right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to optioned Shares notwithstanding the exercise of the
Option. No adjustment will be made for a dividend or other rights for which the
record date is prior to the date the stock certificate is issued, except as
provided in Section 6.5.
7.3 Payment of Option Exercise Price.
a. Except as otherwise provided in Section 7.3(b), the entire Option
exercise price shall be paid in cash at the time the Option is exercised.
b. In the discretion of the Committee, an Optionee may elect to pay for
all or some of the Optionee's Shares with Common Stock of the Company previously
acquired and owned at the time of exercise by the Optionee, subject to all
restrictions and limitations of applicable laws, rules and regulations, and
subject to the satisfaction of any conditions the Committee may impose,
including, but not limited to, the making of such representations and warranties
and the providing of such other assurances that the Committee may require with
respect to the Optionee's title to the Company's Common Stock used for payment
of the exercise price. Such payment shall be made by delivery of certificates
representing the Company's Common Stock, duly endorsed or with duly signed stock
power attached, such Common Stock to be valued at its Fair Market Value on the
date notice of exercise is received by the Company.
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ARTICLE VIII
AMENDMENT OR TERMINATION OF PLAN
8.1 Board Authority. The Board may amend, alter, and/or terminate this
Plan at any time; provided, however, that unless required by applicable law,
rule, or regulation or unless no longer required to satisfy the requirements of
Rule 16b-3 promulgated under the Exchange Act, the Board shall not amend this
Plan without the approval of stockholders (as obtained in accordance with the
provisions of Section 6.4(c) hereof) if the amendment would (A) materially
increase the benefits accruing to participants under this Plan, (B) materially
increase the number of securities which may be issued under this Plan, or (C)
materially modify the requirements as to eligibility for participation in this
Plan. In determining whether a given amendment is within the scope of (A), (B)
or (C), the Company may rely, without limitation, upon the regulations
promulgated and the advice provided by the Securities and Exchange Commission
with respect to Rule 16b-3. No amendment of this Plan or of any Option Agreement
shall affect in a material and adverse manner Options granted prior to the date
of any such amendment without the consent of any Optionee holding any such
affected Options.
8.2 Contingent Grants Based on Amendments. Options may be granted in
reliance on and consistent with any mendment adopted by the Board alone which is
necessary to enable such Options to be granted under this Plan, even though such
amendment requires future stockholder approval; provided, however, that any such
contingent Option by its terms may not be exercised prior to stockholder
approval of such amendment and provided, further, that in the event stockholder
approval is not obtained within twelve (12) months of the date of grant of such
contingent Option, then such contingent Option shall be deemed canceled and no
longer outstanding.
ARTICLE IX
GENERAL PROVISIONS
9.1 Availability of Plan. A copy of this Plan shall be delivered to the
Secretary and Assistant Secretary of the Company and shall be shown by the
Secretary or Assistant Secretary to any Eligible Person making reasonable
inquiry concerning this Plan.
9.2 Notice. Any notice or other communication required or permitted to be
given pursuant to this Plan or under any Option Agreement must be in writing and
shall be deemed to have been given when delivered to and actually received by
the party to whom addressed. Notice shall be given to Optionees at their most
recent addresses shown in the Company's records. Notice to the Company shall be
addressed to the Company at the address of the Company's principal executive
offices, to the attention of the Secretary of the Company.
9.3 Titles and Headings. Titles and headings of sections of this Plan are
for convenience of reference only and shall not affect the construction of any
provision of this Plan.
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The Board of Directors Recommends a Vote FOR Proposal 1 and 2.
Please mark ---
your votes as X
indicated in ---
this example
FOR all nominees WITHHOLD AUTHORITY
(except as marked TO VOTE FOR
to the contrary below) all nominees listed below
1. ELECTION OF DIRECTORS
----- -----
Nominess: 01 W. Berry 02 R. Busch III
03 W. Bush 04 S. Cropper ----- -----
05 J. Gaul 06 J. Hagg
07 R. Heinemann 08 J. Hoffman
09 T. Jamieson 10 R. Martin
11 M. Young
(Instruction: To withhold authority to vote for any nominee, strike a line
through that nominee's name in the list above).
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this proxy will be voted
FOR Proposal 1 and Proposal 2 and in accordance with the recommendations of the
Board of Directors on any other matters that may properly come before the
meeting.
FOR AGAINST ABSTAIN
----- ----- -----
2. Approve the Second Amendment to
the Company's Restated and Amended ----- ----- -----
1994 Stock Option Plan.
3. The Proxies are authorized to vote upon such other business as may
properly come before the meeting.
By checking the box to the right, I consent to future delivery of ----
annual reports, proxy statements, prospectuses and other materials and
shareholder communications electronically via the Internet at a ----
webpage which will be disclosed to me. I understand that the Company
may no longer distribute printed materials to me from any future
shareholder meeting until such consent is revoked. I understand that I
may revoke my consent at any time by contacting the Company's transfer
agent, Mellon Investor Services LLC, Ridgefield Park, NJ and that
costs normally associated with electronic delivery, such as usage and
telephone charges as well as any costs I may incur in printing
documents, will be my responsibility.
Signature(s)_________________________________________ Dated ______________, 2002
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person. If a limited
liability company, please sign in limited liability company name by authorized
person.
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Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 4PM Eastern Time
the business day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies
to vote your shares in the same manner as if you marked,
signed and returned your proxy card.
------------------------------ ----------------------------- ----------------------
Internet Telephone Mail
http://www.eproxy.com/bry 1-800-435-6710
Mark, sign and date
Use the Internet to vote your Use any touch-tone telephone your proxy card
proxy. Have your proxy card in to vote your proxy. Have your and
hand when you access the web OR proxy card in hand when you OR return it in the
site. You will be prompted to call. You will be prompted to enclosed postage-paid
enter your control number, enter your control number, envelope.
located in the box below, to located in the box below, and
create and submit an then follow the directions
electronic ballot. given.
------------------------------ ----------------------------- ----------------------
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
PROXY
BERRY PETROLEUM COMPANY
Proxy for the Annual Meeting of Shareholders
The undersigned shareholder of Berry Petroleum Company, a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement and hereby appoints Jerry V. Hoffman and Ralph
J. Goehring, or either of them, as proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as designated
below, all the shares of the Common Stock or Class B Stock of Berry Petroleum
Company held of record by the undersigned on March 11, 2002 at the Annual
Meeting of Shareholders to be held May 16, 2002 or any adjournment thereof.
(Continued and to be signed on reverse side)
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