UNITED STATES
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. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-12
BERRY PETROLEUM COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------------------
BERRY PETROLEUM COMPANY
5201 Truxtun Avenue, Suite 300
Bakersfield, California 93309
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 19, 2003
To the Shareholders of Berry Petroleum Company:
The Annual Meeting of Shareholders of Berry Petroleum Company (the
"Company") will be held at the Stockdale Towers at 5060 California Avenue, 2nd
Floor in Bakersfield, California on Monday May 19, 2003 at 3:30 p.m. (see map on
back cover) for the following purposes:
1. To elect a board of ten directors to serve until the next Annual Meeting
of Shareholders and until their successors are elected and qualified; and
2. 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 12, 2003
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 10, 2003
Bakersfield, California
BERRY PETROLEUM COMPANY
5201 Truxtun Avenue, Suite 300
Bakersfield, California 93309
PROXY STATEMENT
April 10, 2003
---------------
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 19, 2003, 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 10, 2003.
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 ten director nominees listed below. 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 12, 2003 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 14, 2003 there were 20,860,070 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.
1
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 14, 2003 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 310,800(3) 1.4%
and Chief Executive Officer
William F. Berry Director 1,624,748(4) 7.5%
Ralph B. Busch, III Director 285,417(5) 1.3%
William E. Bush, Jr. Director 500,700(6) 2.3%
Stephen L. Cropper Director 5,000(7) **
J. Herbert Gaul, Jr. Director 20,000(8) **
John A. Hagg Director 53,000(9) **
Robert F. Heinemann Director 5,000(10) **
Thomas J. Jamieson Director 49,100(11) **
Martin H. Young, Jr. Director 30,000(12) **
All Directors and
Officers as a group
(16 persons) 3,368,320(13) 15.04%
- ----------
* 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 50,800 shares held directly and 260,000 shares which Mr. Hoffman
has the right to acquire under the Company's 1994 Stock Option Plan.
(4) Includes 1,557,026 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 33,000 shares which Mr. Berry has the right to acquire under the
Company's 1994 Stock Option Plan.
2
(5) Includes 76,324 shares held directly, 72,493 shares held in the B Group
Trust at Union Bank of California which Mr. Busch votes and 108,600 shares
held in a family trust for which Mr. Busch shares voting and investment
power as co-trustee. Also includes 28,000 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 20,000 shares which Mr. Bush has the right to acquire under
the Company's 1994 Stock Option Plan.
(7) Includes 5,000 shares which Mr. Cropper has the right to acquire under the
Company's 1994 Stock Option Plan.
(8) Includes of 20,000 shares which Mr. Gaul has the right to acquire under
the Company's 1994 Stock Option Plan.
(9) Includes 14,000 shares held directly and 39,000 shares which Mr. Hagg has
the right to acquire under the Company's 1994 Stock Option Plan.
(10) Includes 5,000 shares which Mr. Heinemann has the right to acquire under
the Company's 1994 Stock Option Plan.
(11) Includes 10,100 shares held indirectly by Mr. Jamieson through Jaco Oil
Company, a corporation, and 39,000 shares which Mr. Jamieson has the right
to acquire under the Company's 1994 Stock Option Plan.
(12) Includes 10,000 shares held directly and 20,000 shares which Mr. Young has
the right to acquire under the Company's 1994 Stock Option Plan.
(13) Includes 28,102 shares held directly by officers, 5,703 shares held
indirectly by officers in the Company's 401(k) Thrift Plan and 450,750
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, 2002, 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 UnionBanCal Corporation 1,672,405 (1) 8.0%
445 South Figueroa St., Third Floor
Los Angeles, CA 90017
Class A Common Stock Kennedy Capital Management, Inc. 1,167,100 (2) 5.4%
10829 Olive Blvd.
St. Louis, MO 63141
Class A Common Stock Winberta Holdings, Ltd. 1,088,220 (3) 5.2%
c/o Berry Petroleum Company
5201 Truxtun Avenue, Suite 300
Bakersfield, CA 93309
Class B Stock Winberta Holdings, Ltd. 898,892 (3) 100%
c/o Berry Petroleum Company
5201 Truxtun Avenue, Suite 300
Bakersfield, CA 93309
3
(1) As reflected in Schedule 13G, dated January 29, 2003, 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 20,000 shares included above for which it has sole voting
and dispositive power.
(2) As reflected in Schedule 13G, dated February 14, 2003, and filed with the
Securities and Exchange Commission. According to the Schedule 13G, Kennedy
Capital Management, Inc. has sole voting power on 1,140,400 shares and
sole dispositive power on 1,167,100 shares.
(3) As reflected in Schedule 13G, dated January 27, 2003, 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
2002 that there was compliance with all Section 16(a) filing requirements except
for Mr. Busch who filed three late Form 4's for the sale of shares from a trust
at Union Bank.
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, ten 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 are set forth
in the table below and are all incumbent directors who were elected at the May
2002 Annual Meeting of Shareholders. 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 53 Chairman of the Board, President 1992
and Chief Executive Officer
William F. Berry 62 Director 1985
Ralph B. Busch, III 43 Director 1996
William E. Bush, Jr. 56 Director 1986
Stephen L. Cropper 53 Director 2002
J. Herbert Gaul, Jr. 59 Director 1999
John A. Hagg 55 Director 1994
Robert F. Heinemann 49 Director 2002
Thomas J. Jamieson 60 Director 1993
Martin H. Young, Jr. 50 Director 1999
4
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 Corporate Governance and Nominating
Committee. Mr. Berry is the designated director to preside at periodic sessions
of the Board of Directors in the absence of the Chairman of the Board. 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 Corporate Governance and Nominating 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.
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, which is involved in various energy related businesses. Mr. Cropper is
also a director of three public entities, Sunoco Logistics Partners LP, 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 Corporate Governance and Nominating
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 for over 25 years in senior treasury or finance positions
with various other companies.
Mr. Hagg is a member of the Compensation Committee. Mr. Hagg is a private
investor. He is a director of Peak Energy Services Ltd., TSX Group 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 (Northstar) from
1982 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 Corporate Governance and Nominating
Committee. Mr. Heinemann is an energy consultant. From 2000 until 2002, Mr.
Heinemann served as the Senior Vice President and Chief Technology Officer of
Halliburton Company and as 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 1999, most recently as the Vice President of
Mobil Technology Company and the General Manager of the Mobil Exploration and
Producing Technical Center.
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 of Jaco Oil Company in 1970 and the majority owner and founder of
Wholesale Fuels, Inc. in 1983. 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.
5
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.
Retirement
Mr. Roger G. Martin announced his retirement from the Board of Directors
effective January 2, 2003. Mr. Martin was originally appointed to the Board of
Directors of our predecessor company, Berry Holding Company, in 1984 and to
Berry Petroleum Company in 1985. We wish to thank Mr. Martin for his dedication,
leadership and 18 years of service to the shareholders and management of Berry
Petroleum Company.
Committees and Meetings
The Board of Directors has an Audit Committee, Compensation Committee and
Corporate Governance and Nominating Committee.
The Audit Committee of the Board of Directors consists of Messrs. Cropper,
Gaul, Jamieson, and Young. Mr. Young serves as the Chairman of the Committee.
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 is responsible for
reviewing and selecting 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.
The Compensation Committee of the Board of Directors consists of Messrs.
Busch, Hagg and Jamieson. Mr. Jamieson serves as Chairman of the Committee. 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.
The Corporate Governance and Nominating Committee of the Board of
Directors consists of Messrs. Berry, Bush, Gaul and Heinemann. Mr. Gaul serves
as Chairman of the Committee. The Corporate Governance and Nominating 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
memberships. The Company regularly monitors developments in the areas of
corporate governance.
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 Corporate Governance and Nominating Committee.
During 2002, the Board of Directors held four meetings, the Audit
Committee held six meetings, the Compensation Committee held one meeting and the
Corporate Governance and Nominating Committee held three meetings. All of the
nominees holding office attended at least 75% of the board meetings and meetings
of committees of which they were members.
6
Additional Information Concerning Directors
Effective January 1, 2003, non-employee directors are paid a quarterly fee
of $5,500, plus $1,100 per day for each board meeting day attended and $1,100
per day for each committee meeting attended which is not held on the same day as
the board meeting. From January 2002 to December 2002, the quarterly fee was
$5,000 and meeting fees were $1,000. From December 2000 to December 2001, the
quarterly fees were $4,625 and meeting fees were $1,000. The Company reimburses
all directors for their expenses in connection with their activities as
directors of the Company.
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, 2002 at $16.14, 5,000
options were issued on December 2, 2001 at $15.45 and 5,000 options were issued
December 2, 2000 at $15.69 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.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table discloses compensation for the three fiscal years
ended December 31, 2002 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 2002 $375,000 $ 65,000 25,000 $ 12,458
Chairman, President and 2001 $350,000 $125,000 50,000 $ 14,021
Chief Executive Officer 2000 $303,636 $150,000 75,000 $ 15,756
Ralph J. Goehring 2002 $200,000 $ 40,000 15,000 $ 13,931
Senior Vice President and 2001 $185,000 $ 60,000 30,000 $ 12,758
Chief Financial Officer 2000 $175,513 $ 75,000 35,000 $ 14,498
Brian L. Rehkopf 2002 $165,000 $ 30,000 15,000 $ 11,667
Vice President of 2001 $155,000 $ 50,000 30,000 $ 11,583
Engineering 2000 $143,287 $ 60,000 20,000 $ 13,325
George T. Crawford 2002 $150,000 $ 25,000 15,000 $ 10,402
Vice President of 2001 $135,000 $ 45,000 20,000 $ 9,923
Production 2000 $111,906 $ 50,000 20,000 $ 9,820
Michael Duginski 2002 $160,417 $ 30,000 55,000 $ 5,441
Vice President of 2001 $ -- $ -- -- $ --
Corporate Development 2000 $ -- $ -- -- $ --
(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 2002 and 2001, were declared in December of that
year and paid in January of the following year.
7
(3) Includes Company contributions under the 401(k) Thrift Plan of $12,000,
$13,592 and $15,300 for Mr. Hoffman, $13,667, $12,512 and $14,210 for Mr.
Goehring, $11,275, $11,238 and $12,937 for Mr. Rehkopf, $10,250, $9,788
and $9,675 for Mr. Crawford and $5,250, $ - and $ - for Mr. Duginski,
respectively, for 2002, 2001 and 2000. Also includes split dollar life
insurance compensation of $458, $429 and $456 for Mr. Hoffman, $264, $246
and $288 for Mr. Goehring, $392, $345 and $388 for Mr. Rehkopf, $152, $135
and $145 for Mr. Crawford and $191, $ - and $ - for Mr. Duginski
respectively for 2002, 2001 and 2000.
OPTION GRANTS IN 2002
Potential Realizable Value
Number Percent of At Assumed Annual Rates
of Total Of Stock Price Appreciation
Securities Options For Option Term(1)
Underlying Granted to Exercise (Dollars) (4)
Options Employees Price per Expiration ------------------------------------
Name Granted(1) In 2002 Share (2) Date 5% 10%
- ------------ ---------- ---------- --------- ------------ ------------- --------------
Mr. Hoffman 25,000 13% $ 16.50 Dec. 6, 2012 $ 259,419 $ 657,419
Mr. Goehring 15,000 8% $ 16.50 Dec. 6, 2012 $ 155,651 $ 394,451
Mr. Rehkopf 15,000 8% $ 16.50 Dec. 6, 2012 $ 155,651 $ 394,451
Mr. Crawford 15,000 8% $ 16.50 Dec. 6, 2012 $ 155,651 $ 394,451
Mr. Duginski 55,000 29% (3) (3) $ 570,721 $ 1,446,321
Assumed Price Appreciation
--------------------------------------
5% 10%
------------- --------------
Assumed price per share on Dec. 6, 2012 $ 26.88 $ 42.80
Gain on one share valued at $16.50 on Dec. 6, 2002 $ 10.38 $ 26.30
Gain on all shares (based on 21,751,587 shares
outstanding at Dec. 31, 2002 $ 225,711,028 $ 571,996,058
Gain for all 2002 optionees (based on 191,200 options) $ 1,984,037 $ 5,027,939
Optionee gain as a percentage of total shareholder gain .88% .88%
(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) Mr. Duginski's Option Grants include 40,000 Options at $14.89 which were
granted to him as of February 1, 2002, his date of hire, and 15,000
Options at $16.30 issued on December 6, 2002.
(4) 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.
8
AGGREGATED OPTION EXERCISES IN 2002
AND DECEMBER 31, 2002 OPTION VALUES
Number of Securities Value of Unexercised In-the-
Underlying Unexercised Money Options at
Shares Options at 12-31-2002 12-31-2002 (A)
Acquired on Value ------------------------------ ------------------------------
Name Exercise (B) Realized (B) Exercisable Unexercisable Exercisable Unexercisable
- ------------ ------------ ------------ ----------- ------------- ----------- -------------
Mr. Hoffman 9,985 $269,750 280,000 75,000 $699,469 $ 92,969
Mr. Goehring 5,721 $158,129 180,000 40,000 $455,469 $ 48,969
Mr. Rehkopf -- $ -- 115,000 25,000 $261,375 $ 33,125
Mr. Crawford -- $ -- 45,000 25,000 $153,875 $ 33,125
Mr. Duginski -- $ -- -- 55,000 $ -- $ 94,650
(A) The December 31, 2002 New York Stock Exchange closing price of $17.05, the
last trading day of the year, was used to value options.
(B) The value realized is thegrossamount of gainupon exercise the
holder'soptions. The shares realized of acquired are the number of shares
issued after taxes are withheld on the value realized.
TABLE OF EQUITY COMPENSATION PLAN INFORMATION
As of December 31, 2002
=====================================================================================================================
Number of securities remaining
Number of securities to Weighted-average available for future issuance
be issued upon exercise exercise price of under equity compensation
of outstanding options, outstanding options, plans (excluding securities
warrants and rights (1)(3) warrants and rights reflected in column (a)) (2)(3)
Plan Category (a) (b) (c)
- ---------------------------------------------------------------------------------------------------------------------
Equity compensation
plans approved by
security holders 1,644,034 $ 15.17 1,216,174
Equity compensation
plans not approved by
security holders -0- N/A -0-
Total 1,644,034 $ 15.17 1,216,174
=====================================================================================================================
(1) Includes 39,459 shares earned and reserved for issuance from the
Non-Employee Directors Deferred Compensation Plan and 1,604,575 shares for
outstanding options from the Company's 1994 Non-Statutory Stock Option
Plan.
(2) Includes 209,074 shares available and reserved for future issuance from
the Non-Employee Directors Deferred Compensation Plan and 1,007,100 shares
reserved for future option issuance from the Company's 1994 Non-Statutory
Stock Option Plan.
(3) Based on historical averages, the actual shares issued from the 1994
Non-Statutory Stock Option Plan have been at a ratio of approximately four
options exercised for each share of Common Stock issued.
Severance Agreements
The Company has entered into salary continuation agreements with Mr.
Hoffman, Mr. Goehring, Mr. Rehkopf, Mr. Crawford and Mr. Duginski which
guarantees their salary and bonus, as defined, will be paid in one lump sum for
two years for Mr. Hoffman and one year for Mr. Goehring, Mr. Rehkopf, Mr.
Crawford and Mr. Duginski 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 certain other
executives provide for the payment of six months' salary upon a termination of
employment in connection with a Change of Control. The Company entered into an
agreement with Mr. Duginski, at his date of hire, whereby he is guaranteed a 12
month notice of termination or his base salary will continue for a period of 12
months, should his services be terminated by the Company prior to February 1,
2004.
9
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, $500,000 for Mr.
Goehring, $412,500 for Mr. Rehkopf, $375,000 for Mr. Crawford and $437,500 for
Mr. Duginski. 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. The Company has had policies of this
type and in these relative amounts in place for certain executives for over 20
years.
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: Martin H. Young, Jr. (Chairman), Stephen L. Cropper, J. Herbert Gaul,
Jr., and Thomas J. Jamieson. Mr. Martin was a member of the Audit Committee for
all of 2002, prior to his retirement on January 2, 2003. 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, 2002.
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. The Audit Committee has reviewed
the services provided by the independent auditors and has specifically
pre-approved the provision of tax and hedge accounting services by the auditor
and determined that all fees billed by PWC for non-audit services are compatible
with maintaining the auditor'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, 2002 for filing with the Securities and Exchange Commission.
Audit Committee of the Board of Directors
March 1, 2003 Martin H. Young, Jr. (Chairman), Stephen L. Cropper, J. Herbert
Gaul, Jr. Thomas J. Jamieson
10
Auditor Independence Report
In conjunction with recent SEC releases on auditor independence, the
following items are disclosed herein:
Audit Fees
For the audit for the year ended December 31, 2002, the Company was billed
$188,760 by PWC, its principal 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 $39,190 for all other non-audit services provided
by PWC, its principal accountant and by Qbyte, an affiliate of PWC for the year
ended December 31, 2002. Qbyte was sold in October 2002 and is no longer
affiliated with PWC.
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 and that
such employees were independent from the Company.
Board Compensation Committee Report on Executive Compensation
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. Currently, the Committee is
composed of three non-employee directors, however, prior to Mr. Martin's
retirement in January 2003, the Committee was composed of four non-employee
directors for all of 2002. The Committee is committed to a strong, positive link
between business performance and the attainment of strategic goals and the
overall 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 Berry's 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.
11
Short-Term Incentive Plan Compensation
The Short-Term Incentive Plan (Bonus Plan) awards cash bonuses to
executives and other employees to recognize and reward Company 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 non-steam 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 business performance and the attainment of established
strategic 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 2002, 2001 and 2000 were $669,000, $1,033,000 and $465,000, respectively.
Cash bonuses of $465,000 were declared in December 2002 and paid in January 2003
for 2002 performance.
The amount an individual 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 eligible
individuals.
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. While the
Compensation Committee maintains substantial flexibility in the operation of the
Stock Option Plan, it was restructured in early 2001 to consider the link of 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, 2002, an aggregate of
1,007,100 options are available for issuance from the 1994 Stock Option Plan.
Options granted in 2002, 2001 and 2000 to employees were 191,200, 199,500 and
262,000, respectively.
Chief Executive Officer
The Committee believes Mr. Hoffman has done a good 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 has restored the
Company's oil production to its pre-California electricity crisis levels.
Additionally, Mr. Hoffman was successful in recruiting talented individuals in
2002 to assist the Company in meeting its strategic goals and being positioned
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 ultimate value of the stock options received are directly
related to the Company's current and future stock performance.
Compensation Committee of the Board of Directors
March 1, 2003 Thomas J. Jamieson (Chairman) Ralph B. Busch, III John A. Hagg
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, 1997 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.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG BERRY PETROLEUM COMPANY, THE S & P 500 INDEX,
THE RUSSELL 2000 INDEX
AND THE DOW JONES US OIL COMPANIES, SECONDARY INDEX
[PERFORMANCE CHART OMITTED]
* $ 100 invested on 12/31/97 in stock or index-including reinvestment of
dividends. Fiscal year ending December 31.
Copyright(C)2002, Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. All rights reserved. www.researchdatagroup.com/S&P.htm
- -------------------------------------------------------------------------------------------------------------------
Cumulative Total Return
- -------------------------------------------------------------------------------------------------------------------
12/97 12/98 12/99 12/00 12/01 12/02
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
BERRY PETROLEUM COMPANY 100.00 83.81 92.17 83.55 100.79 112.19
- -------------------------------------------------------------------------------------------------------------------
S & P 500 100.00 128.58 155.64 141.46 124.65 97.10
- -------------------------------------------------------------------------------------------------------------------
RUSSELL 2000 100.00 97.45 118.17 114.60 117.45 93.39
- -------------------------------------------------------------------------------------------------------------------
DOW JONES US OIL COMPANIES, SECONDARY 100.00 68.61 79.18 126.46 116.10 118.62
- -------------------------------------------------------------------------------------------------------------------
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 2002,
2001 and 2000 were $396,067, $332,000 and $713,000, respectively. Mr. Ralph B.
Busch, III and his immediate family are significant beneficial owners of the
stock of Eagle Creek.
Halliburton Energy Services
During 2002, the Company paid Halliburton Energy Services $1,418,578 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 2003. 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 served as Senior Vice President and Chief Technology Officer of
Halliburton Company from 2000 until his resignation in December 2002. The
compensation paid by Halliburton to him and the compensation paid to him as a
director of the Company were not affected by any payments from Berry Petroleum
Company to Halliburton or its affiliates or subsidiaries.
Tristone Capital Advisors
During 2002, the Company paid Tristone Capital Advisors (Tristone)
$134,325 under the terms of a letter agreement dated January 21, 2002 (the
Agreement). Under the Agreement, Tristone received a consulting fee of $25,000
monthly for services rendered between January 21, 2002 and June 30, 2002 by
Tristone for providing the Company assistance in evaluation of potential
acquisitions in Canada. In addition, Tristone was to 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 and for a period of nine months
following the contract termination. No such success fee was paid or is payable
under the Agreement. The Agreement expired on June 30, 2002 and was not renewed.
Mr. John A. Hagg, a director of Berry Petroleum Company, became a shareholder
and director of Tristone in February 2002.
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
Common 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 payments 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.
Typically, the Maxwell B Group Payments have contributed to a portion or all of
the Trust Payment. Pursuant to the Settlement Agreement, Berry paid $ 115,675 to
the Victory Settlement Trust in 2002.
Wholesale Fuels Inc.
The Company bid out its lubrication business in 2001 to various vendors.
The bid was awarded to Wholesale Fuels Inc., as it was the low bidder, for a
period of two years beginning July 15, 2001 and ending July 15, 2003. The
Company paid $72,409 to Wholesale Fuels Inc. in 2002 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
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 21, 2004, must be received
at the office of the Secretary of the Company by December 11, 2003, 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 2002 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 12, 2003, 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, 2003 but has not yet
executed an 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.
/s/ KENNETH A. OLSON
KENNETH A. OLSON
Corporate Secretary
April 10, 2003
16
[MAP OMITTED]
The Board of Directors Recommends a Vote FOR Proposal 1. Please
Mark Here
for Address |_|
Change or
Comments
SEE REVERSE SIDE
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 M. Young
FOR all nominees WITHHOLD AUTHORITY
(except as marked to TO VOTE FOR
the contrary below) all nominees listed below
|_| |_|
(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 in accordance with the recommendations of the Board of
Directors on any other matters that may properly come before the meeting.
2. 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.
I PLAN TO ATTEND THE MEETING |_|
Signature(s)____________________________________________ Dated____________, 2003
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.
- --------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11PM 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
Use the Internet to vote your proxy. Use any touch-tone telephone to Mark, sign and date
Have your proxy card in hand when vote your proxy. Have your proxy your proxy card
you access the web site. You will be OR card in hand when you call. You will OR and
prompted to enter your control be prompted to enter your control return it in the
number, located in the box below, to number, located in the box below, enclosed postage-paid
create and submit an electronic and then follow the directions envelope.
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 12, 2003 at the Annual
Meeting of Shareholders to be held May 19, 2003 or any adjournment thereof.
(Continued and to be signed on reverse side)
________________________________________________________________________________
Address Change/Comments (Mark the corresponding box on the reverse side)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
- --------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^