UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported): June 26, 2006 (June 23, 2006)
BERRY
PETROLEUM COMPANY
(Exact
Name of Registrant as Specified in its Charter)
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DELAWARE
(State
or Other Jurisdiction of
Incorporation
or Organization)
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1-9735
(Commission
File Number)
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77-0079387
(IRS
Employer
Identification
Number)
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5201
TRUXTUN AVE., STE. 300, BAKERSFIELD, CA
(Address
of Principal Executive Offices)
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93309
(Zip
Code)
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Registrant’s
telephone number, including area code: (661)
616-3900
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry
Into A Material Definitive Agreement
On
June
23, 2006, Berry Petroleum Company (the “Company”) and Mr. Robert F. Heinemann
entered into an Amended and Restated Employment Agreement effective as of
June
23, 2006 (the “Amended and Restated Employment Agreement”) that amends and
restates Mr. Heinemann’s existing employment agreement filed as Exhibit 10.1 to
the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004.
The Amended and Restated Employment Agreement extends the term of Mr.
Heinemann's employment until January 31, 2010 and provides that the Company
may
annually elect to extend the term for an additional year by giving two years
prior notice. It provides for an annual salary of $500,000 and for eligibility
for a discretionary annual bonus with a target of 100% of the base salary,
provided that the bonus may range from 50% to 200% of the base salary and
in
certain circumstances may be less. The Amended and Restated Employment Agreement
further provides for a grant of restricted stock units representing 161,300
shares of common stock which shall vest on January 31, 2010 assuming Mr.
Heinemann's continuing service as CEO on that date. In the event the Company
terminates Mr. Heinemann’s employment without cause, or Mr. Heinemann terminates
employment for good reason, Mr. Heinemann will be entitled to severance in
an
amount equal to two times his (1) annual base salary, (2) highest annual
bonus
in the last two years, and (3) the then maximum annual Company matching
contribution to the Company's 401(k) plan, plus certain other benefits for
a two
year period. Mr. Heinemann 's unvested stock options and restricted stock
units
will also fully vest upon such an event, and he will have additional time
to
exercise stock options granted under the Company’s 1994 Stock Option Plan. In
the event the Company terminates Mr. Heinemann’s employment without cause, or
Mr. Heinemann terminates employment for good reason within two years after
(or
in certain cases within six months before) a change in control, as defined,
Mr.
Heinemann will be entitled to the above benefits with respect to his stock
options and restricted stock units, and enhanced severance representing a
three
times multiple of the above payment base, and continuing other benefits for
periods of approximately three years. The Company also agrees to pay Mr.
Heinemann for any taxes on “parachute payments” imposed as a result of the
foregoing benefits. If Mr. Heinemann resigns or if the Company terminates
his
employment for cause, Mr. Heinemann is not eligible for any separation benefits
and will forfeit all unvested stock options and restricted share units when
his
employment ends. The independent Directors acted unanimously to approve the
Amended and Restated Employment Agreement, including the current restricted
stock unit grant, upon the recommendation of the Compensation Committee,
and as
an inducement and incentive to Mr. Heinemann to continue in his employment
with
the Company. A copy of the Amended and Restated Employment Agreement is attached
as Exhibit 99.1 and is incorporated herein by reference.
On
June
23, 2006, pursuant to the terms of the Amended and Restated Employment
Agreement, the Company entered into a Stock Award Agreement with Mr. Heinemann.
The Stock Award Agreement provides for the grant of stock units described
above.
A copy of Mr. Heinemann’s Stock Award Agreement is attached as Exhibit 99.2 and
is incorporated herein by reference.
On
June
23, 2006, the Company approved an amendment to the Company’s Restated and
Amended 1994 Stock Option Plan originally filed as Exhibit 4 to Form S-8
dated
August 20, 2002. The first amendment to the Restated and Amended 1994 Stock
Option Plan amended Section 6.2(c) to permit the Company to extend the
exercisability of stock options beyond three months following termination
of
service. A copy of the first amendment to the Restated and Amended 1994 Stock
Option Plan is attached as Exhibit 99.3 and incorporated herein by reference.
On
June
23, 2006, the Company approved a revised form of Stock Award Agreement for
restricted stock unit grants to be used for grants under the Company’s 2005
Equity Incentive Plan. The revised form of Stock Award Agreement clarifies
certain provisions in the form relating to termination of service. The 2005
Equity Incentive Plan was submitted to the SEC on Form S-8 on July 29, 2005.
An
earlier version of the Stock Award Agreement form was filed on a Form 8-K
on
December 22, 2005. The form being filed herewith replaced the December 22,
2005
submittal. A copy of the form of Stock Award Agreement is attached as Exhibit
99.4 and incorporated herein by reference.
Item 1.02
Termination
of A Material Definitive Agreement
On
June
23, 2006, as a result of including certain terms and conditions, as amended,
in
the Amended and Restated Employment Agreement described in Item 1.01 above,
the
Salary Continuation Agreement dated as of June 16, 2004 by and between
the
Company and Mr. Heinemann (filed as Exhibit 10.2 to the Company’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2004) was
terminated.
Item
7.01 Regulation FD
Disclosure
On
June
23, 2006, the Company distributed a news release stating that the Company
had
entered into an Amended and Restated Employment Agreement with Mr. Robert
F.
Heinemann.
The
information in this Item 7.01 on Exhibit 99.5 is being furnished and shall
not
be deemed "filed" for the purposes of Section 18 of the Securities Exchange
Act
of 1934, as amended, or otherwise subject to the liabilities of that Section.
Item 9.01 Financial
Statements and Exhibits
(d)
Exhibits
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Exhibit
No.
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Description
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99.1
99.2
99.3
99.4
99.5
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Amended
and Restated Employment Agreement with Robert F. Heinemann
Stock
Award Agreement with Robert F. Heinemann
Amendment
to the Company’s 1994 Stock Option Plan
Berry
Petroleum Company Form of Stock Award Agreement
News
Release by Berry Petroleum Company dated June 23, 2006, titled "Berry
Petroleum Enters into an Amended Employment Agreement with its
President/CEO”
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereto
duly authorized.
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BERRY
PETROLEUM COMPANY
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By:
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/s/
Kenneth A. Olson
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Kenneth
A. Olson
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Corporate
Secretary
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Date:
June 26, 2006
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AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is entered into by
and
between Berry Petroleum Company, a Delaware corporation ("Company"), and
Robert
F. Heinemann, an individual ("Executive") (collectively the "Parties"), with
respect to the following facts:
A. The
Company and Executive have entered into an employment agreement dated as
of June
16, 2004 and the Salary Continuation Agreement dated June 16, 2004 (the "Prior
Agreements").
B. The
Company has issued to Executive certain equity awards listed on Exhibit
A
hereto
(the "Outstanding Awards").
C. The
Company and Executive wish to amend and restate the Prior Agreements in their
entirety with this Agreement, and modify certain Outstanding
Awards.
D. The
Company desires to continue to employ Executive in the position of President
and
Chief Executive Officer ("CEO") on the terms and conditions, and for the
consideration hereinafter set forth, and Executive desires to continue to
be
employed by the Company on such terms and conditions and for such
consideration.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter
contained, the Parties hereto do hereby agree as follows:
ARTICLE
1
EMPLOYMENT
AND DUTIES
1.1 Employment
Relationship.
The
Company hereby agrees to employ Executive for the Term of Employment, as
defined
in Section 3.1, to perform the duties and undertake the responsibilities
for the
Company as described herein. During the term of this Agreement, Executive
shall
serve as an employee and shall hold the position of President and CEO of
the
Company. Executive shall report directly to the Chairman of the Board of
Directors of the Company. Executive shall perform the duties of the President
and CEO as prescribed in the agreed upon job description and those additional
duties as are common for similar positions in similar industries.
1.2 Scope
of Duties.
Executive
shall perform diligently and use all of his best efforts during the Term
of
Employment, as defined in Section 3.1, to protect, encourage, and promote
the
interests of the Company. During the Term of Employment, Executive shall
also
perform such other duties consistent with the position of President and CEO
as
may be assigned to Executive from time to time by the Board of Directors
(the
"Board") and will devote substantial time and attention to such
duties.
1.3 Other
Activities.
Subject
to the following sentence, Executive agrees to devote substantially all of
his
business time and attention to the business of the Company. During the term
of
this Agreement, Executive shall not be precluded from devoting a limited
amount
of time to outside activities, provided that:
1
1.3.1 Such
activity does not interfere with Executive's duties under this Agreement
and is
not in conflict with the interests of the Company;
1.3.2 Executive's
obligations to the Company are not compromised; and
1.3.3 Executive
makes a full written disclosure to the Chairman of the Board or his or her
designee of the nature, extent, and duration of all such activities prior
to
beginning any such activities, and Executive obtains the approval of the
Board
or a duly authorized committee thereof prior to beginning any such
activity.
1.4 Passive
Investments in Non-Competitive Enterprises.
It
is
expressly understood that neither Section 1.3 nor any other provision of
this
Agreement shall be construed to prohibit or restrict Executive from making
any
passive investment in an enterprise not competitive with the Company. In
addition, nothing contained in this Agreement shall be construed to prohibit
or
restrict Executive from engaging in any activities on his own time which
are not
competitive with nor in conflict with the Company.
ARTICLE
2
COMPENSATION
AND BENEFITS
2.1 Base
Salary.
The
Company shall pay Executive an annual base salary of Five Hundred Thousand
Dollars ($500,000) ("Base Salary"). The Base Salary shall be payable in
semi-monthly installments or otherwise, in accordance with the normal payroll
procedures of the Company. The Compensation Committee of the Board, either
itself or together with the other independent directors (the subset of directors
so authorized by the Board, the "Compensation Administrator"), will review
Executive's performance and Base Salary on an annual basis. The annual Base
Salary during the contract term may be increased from time to time by the
Compensation Administrator. The annual Base Salary during the contract term
shall not be decreased, except in connection with and commensurate with an
across-the-board salary reduction applicable generally to the Company's
executive level employees as determined by the Board.
2.2 Annual
Bonus.
In
addition to his Base Salary, Executive may be eligible to receive an annual
bonus ("Annual Bonus"). The Annual Bonus shall have a target of one hundred
percent (100%) of Base Salary, but may range between fifty percent (50%)
and two
hundred percent (200%) of Base Salary. The Annual Bonus shall be determined
and
approved by the Compensation Administrator with reference to corporate goals
and
objectives established by the Compensation Committee and a review of Executive's
performance in light of those goals and objectives. The Compensation
Administrator may, at its discretion, reduce the Annual Bonus to below the
range
set forth above, in any given fiscal year if during such fiscal year: (i)
the
Company reduces the annual dividend compared to the annual dividend declared
and
paid in the prior year (without giving effect to special dividends); (ii)
the
Company experiences a material environmental, health and safety (EH&S)
event; (iii) the Company reduces or eliminates bonuses and/or salaries generally
to the executive level employees as determined by the Board (in which case
the
Annual Bonus as otherwise determined may be reduced in the same percentage
as
the percentage applied generally to the executive level employees); or (iv)
the
Board has determined that Executive has committed an act during the fiscal
year
which would
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permit
termination for Cause. Any bonus approved by the Board will be paid to Executive
by the fifteenth (15th)
day of
the third (3rd)
month
following the end of the fiscal year in which such bonus was earned. Subject
to
the provisions of this Agreement, the determination and payment of the Annual
Bonus shall be at the sole discretion of the Compensation
Administrator.
2.3 Equity
Awards.
The
Compensation Administrator will review no less than annually the Executive's
eligibility for awards pursuant to the Company's 2005 Equity Incentive Plan
(the
"2005 Plan"), or any subsequent equity compensation plan for which Executive
is
eligible, and based on such review, may in its sole discretion grant Executive
further awards. Each such award shall provide:
2.3.1 Upon
termination of Executive's employment without Cause or due to death or
Disability, or Executive's resignation for Good Reason, all unvested portions
of
such award shall be deemed to be fully vested upon execution and timely delivery
by Executive or the administrator of his estate, without revocation, of a
full
general release of claims (excluding claims for amounts payable under this
Agreement), substantially in the form of Exhibit
B
attached
hereto. Delivery of such general release shall not be considered timely,
and
Executive shall not be entitled to the acceleration of vesting as set forth
in
this Section 2.3.1, if not made by the later of (A) thirty (30) calendar
days
after the Termination Date, or (B) twenty-one (21) days after receipt by
Executive or the administrator of his estate of the final form general release
to be executed. The acceleration of vesting as set forth in this Section
2.3.1
shall also be expressly conditioned on Executive's resignation from the Board
as
provided in Section 3.10.
2.3.2 If
such
award is a stock option or stock appreciation right, it shall remain exercisable
upon termination of Executive's employment for any reason, until the earliest
of
(i) eight (8) months following the Termination Date (as defined below), and
(ii)
the latest date on which such option could otherwise be exercised without
giving
effect to a termination of service.
2.4 Special
Award of Restricted Stock Units.
On
the
Effective Date, Executive shall receive an award of 161,300 Stock Units,
pursuant to the terms of the 2005 Plan. The Stock Units shall vest in one
installment on January 31, 2010, subject to Executive continuing to serve
as CEO
on such date. In addition, upon termination of Executive's employment without
Cause or due to death or Disability, or Executive's resignation for Good
Reason,
the unvested portion of such award shall be deemed to be fully vested upon
execution and timely delivery by Executive or the administrator of his estate,
without revocation, of a full general release of claims (excluding claims
for
amounts payable under this Agreement), substantially in the form of Exhibit
B
attached
hereto. Delivery of such general release shall not be considered timely,
and
Executive shall not be entitled to the acceleration of vesting as set forth
in
this Section 2.4, if not made by the later of (A) thirty (30) calendar days
after the Termination Date, or (B) twenty-one (21) days after receipt by
Executive or the administrator of his estate of the final form general release
to be executed. The acceleration of vesting as set forth in this Section
2.4
shall also be expressly conditioned on Executive's resignation from the Board
as
provided in Section 3.10. The other terms of such award shall be substantially
as set forth in the form of Stock Award Agreement approved by the Compensation
Administrator for
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awards
to
executive level employees as of the Effective Date, which form is attached
hereto as Exhibit
C.
2.5 Health
and Welfare Benefits.
Executive
shall be eligible to participate in all benefit programs (including welfare
plans, retirement plans, disability plans, leave programs and educational
reimbursement programs) provided by the Company to its employees, in accordance
with terms of the applicable plans.
2.6 Equipment,
Supplies and Services.
The
Company shall provide Executive with equipment, supplies, and professional
and
administrative support services that, in the judgment of the Company, are
reasonably necessary for Executive to efficiently perform the duties required
hereunder.
2.7 Tax
Liability.
Subject
to the Company's obligations in Sections 3.4.9, 3.7.9 and 3.9, Executive
shall
take full and complete responsibility for, and shall hold the Company harmless
from any and all tax liability relating to his receipt of benefits, including
but not limited to, withholding, social security, SUI/SDI, federal, state
or
local taxes, and any interest or penalties incurred in connection with receipt
of such benefits.
ARTICLE
3
TERM
AND
TERMINATION OF EMPLOYMENT
3.1 Term
of Employment.
As
used
in this Agreement, the phrase "Term of Employment" shall mean the period
commencing with the Effective Date (as defined herein) of this Agreement
and
until January 31, 2010 ("Expiration Date"). The Compensation Administrator
may
annually elect in its sole discretion to extend the Expiration Date by an
additional year beyond the then-existing Expiration Date by notice given
to
Executive not less than thirty (30) days prior to the date which is two (2)
years before the then-existing Expiration Date. The Term of Employment may
end
prior to the Expiration Date pursuant to Section 3.2, Section 3.3, Section
3.4,
Section 3.5 or Section 3.6.
3.2 Death
and Disability.
Executive's
employment under this Agreement shall terminate automatically upon Executive's
death. Additionally, the Company may terminate Executive's employment under
this
Agreement, in compliance with all state and federal workers' compensation,
disability, and family and medical leave laws, if Executive is absent from
work
or is unable to discharge the essential functions of Executive's position,
with
or without reasonable accommodation, due to legal, physical or mental incapacity
for a period of at least sixty (60) days (whether or not consecutive) in
any
three hundred and sixty-five (365) consecutive day period (a
"Disability").
3.3 The
Company's Right to Terminate For Cause.
The
Company may terminate Executive's employment under this Agreement at any
time
for Cause. For purposes of this Agreement, the term "Cause" shall mean as
reasonably determined by the Board: (i) Executive's conviction of, or plea
of no contest with respect to, any felony, or any other crime involving moral
turpitude; (ii) Executive's conduct that results in or is reasonably likely
to
result in material harm to the business or reputation of the Company and,
if
capable of cure, Executive has not cured such conduct within sixty (60) days
following receipt of written notice by the
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Board;
(iii) Executive's material violation of any contract or agreement between
Executive and the Company, including but not limited to this Agreement, or
any
policy of the Company applicable to Executive; or (iv) Executive knowingly
and
deliberately acting in a manner contrary to express lawful and reasonable
limitations or instructions imposed on Executive by the Board. A failure
or
refusal by the Company to exercise its right to terminate Executive's employment
under this Agreement as a result of the existence of Cause or any other factor
shall not constitute nor be construed as a waiver of its right to terminate
Executive's employment under this Agreement at a later time for such Cause
or
other factor under this Section, or without Cause under Section
3.4.
3.4 The
Company's Right to Terminate Without Cause.
The
Company may terminate Executive's employment under this Agreement at will,
at
any time during the Term of Employment, without Cause. In the event that
the
Company exercises its right to terminate Executive's employment under this
Agreement pursuant to this provision, then Executive will be entitled to
the
following benefits, in addition to all amounts and benefits to which Executive
shall be entitled as a result of his employment and all acts up to and including
the date of termination of Executive's employment (the "Termination
Date"):
3.4.1 Cash
in
the amount of two (2) times the Base Salary in effect on the Termination
Date,
payable in one lump sum upon the Severance Payment Date (as defined in Section
3.13 below).
3.4.2 Cash
in
the amount of two (2) times the highest Annual Bonus paid to Executive over
the
prior two (2) fiscal years (which amount Executive agrees will be paid in
lieu
of any Annual Bonus for the fiscal year in which termination occurs), payable
upon the Severance Payment Date.
3.4.3 Cash
in
the amount of two (2) times the maximum annual Company matching contribution
to
the Company's 401(k) plan that would otherwise be made to Executive's account
for the plan year in which termination occurs, calculated without regard
to
Executive's contribution or limits imposed under the Internal Revenue Code
of
1986, as amended (the "Code"), payable upon the Severance Payment
Date.
3.4.4 A
car
allowance equal to $750.00 per month for a period of two (2) years following
the
Termination Date, payable on the tenth (10th)
day of
each calendar month following the Termination Date, except that all payments
which would otherwise have been required to be paid prior to the Severance
Payment Date shall be paid on the Severance Payment Date rather than in monthly
installments prior to the Severance Payment Date.
3.4.5 If
Executive elects to continue to participate in the Company’s standard medical
and dental benefits as provided under COBRA and/or Cal-COBRA, then to the
extent
that such benefits are provided pursuant to a plan described in Section
1.409A-1(a)(5) of the Proposed Treasury Regulations and any successor thereto
("Welfare Benefits"), the Company will continue to pay a portion of the cost
thereof equal to the portion paid by the Company prior to the Termination
Date
for up to two (2) years following the Termination Date, if: (1) Executive
provides written notice of such election to Company within the time prescribed
in the "COBRA Notice"; and (2) Executive pays the Company monthly an amount
equal to Executive’s
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contribution
for such benefits as was in effect at the Termination Date, if any. The benefit
set forth in this Section 3.4.5 shall cease upon Executive becoming eligible
for
reasonably comparable medical and dental benefits through a successor
employer.
3.4.6 The
Company will continue Executive's term life insurance coverage at the level
in
effect on the Termination Date, or obtain similar coverage at the Company's
expense, for a period of two (2) years following the Termination Date, provided
that Executive must, prior to the due date for such premium costs, pay to
the
Company or to the life insurance carrier, as applicable, all premium costs
which
are due prior to the Severance Payment Date, and, on the Severance Payment
Date,
the Company will reimburse Executive for all costs so paid; and provided
further
that if the premiums of such life insurance coverage are increased for any
reason, Executive shall pay the amount of such increase in
premiums.
3.4.7 All
unvested stock options and restricted stock units of the Company held by
Executive on the Termination Date shall be deemed to be fully vested upon
the
effectiveness, without further right of revocation, of the release described
in
the last paragraph of this Section 3.4. Executive shall be responsible and
shall
make appropriate provisions for any withholding taxes associated with such
accelerated vesting in accordance with Section II.I. of the Stock Award
Agreement dated December 15, 2005. Such award shall settle in accordance
with
Section II.C. thereof, giving effect to the accelerated vesting.
3.4.8 Each
stock option issued to Executive under the Restated and Amended 1994 Stock
Option Plan (the "1994 Plan") shall remain exercisable until the later of
(i)
the end of the calendar year in which it would otherwise terminate based
on the
provisions contained in the applicable stock option agreement and the 1994
Plan
as of the date of grant (the "Existing Termination Date"); and (ii) the
fifteenth (15th)
day of
the third (3rd)
month
after the Existing Termination Date; provided that, if such option is not
exercisable on the later of such dates because an exercise of the option
would
violate applicable securities laws, then the option shall remain exercisable
for
30 days after the first date that the exercise of the stock option would
no
longer violate applicable securities laws. Notwithstanding the foregoing,
no
such stock option may be exercised after the applicable original Option
Termination Date (as defined in the 1994 Plan).
3.4.9 Cash
in
the amount determined as set forth in Section 3.9, payable upon the later
of the
Severance Payment Date and thirty (30) days after the Change in
Control.
Except
as
set forth herein or in Section 3.7, no additional benefits will be earned
by
Executive following the last day of actual work. Notwithstanding anything
in
this Agreement to the contrary, the Company's obligation to provide the benefits
set forth in this Section 3.4 is expressly conditioned upon (A) Executive's
execution and timely delivery, without revocation, of a full general release
of
claims (excluding claims for amounts payable under this Agreement),
substantially in the form of Exhibit
B
attached
hereto, and (B) Executive's resignation from the Board as provided in Section
3.10. Delivery of such general release shall not be considered timely, and
Executive's entitlement to the benefits set forth in this Section 3.4 shall
be
extinguished, if not made by the later of (A) thirty (30) calendar days after
the Termination Date, or (B) twenty-one (21) days after Executive's receipt
of
the final form general release to be executed.
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3.5 Resignation
by Executive for Good Reason.
Executive
may terminate Executive's employment under this Agreement at will, at any
time
during the Term of Employment, for Good Reason. In the event that Executive
exercises his right to terminate Executive's employment under this Agreement
pursuant to this provision, Executive shall be entitled to all of the benefits
specified in Section 3.4 and its subsections, subject to all of the terms
thereof, including without limitation, the requirements in the last paragraph
thereof. For purposes of this Agreement, the term "Good Reason" shall include
any of the following: (i) reduction in the Base Salary which is not
permitted pursuant to Section 2.1; (ii) the Company's refusal to allow Executive
to participate in its benefit programs (including welfare plans, retirement
plans, disability plans, leave programs and educational reimbursement programs)
provided by the Company to its employees, in accordance with terms of the
applicable plans; (iii) failure to pay an Annual Bonus as required in Section
2.2; (iv) a significant reduction of Executive's duties, title, position
or
responsibilities, including Executive no longer reporting directly to the
Board
or the Chairman of the Board, that is effected without Executive's written
consent; or (v) a required relocation of Executive's residence by more than
thirty five (35) miles. Notwithstanding the foregoing, Executive must provide
the Company with advance written notice of the Company’s conduct giving rise to
Good Reason within thirty (30) days following the occurrence of such conduct
and
not less than thirty (30) days prior to the proposed date of such resignation
for Good Reason (the "Cure Period") and during the Cure Period, the Company
may
attempt to rescind or correct the matter giving rise to Good Reason. Only
if
such notice is given and the Company does not rescind or correct the matter
giving rise to Good Reason during the Cure Period may Executive terminate
his
employment for Good Reason.
3.6 Resignation
by Executive.
Executive
may terminate Executive's employment under this Agreement at will, at any
time
during the Term of Employment, for any reason or no reason. In the event
Executive resigns for any reason other than Good Reason, the Company shall
pay
Executive only the compensation and benefits earned by Executive as of the
last
day of work, and no additional compensation or sums shall be owed to Executive.
Executive agrees and acknowledges that the Annual Bonus will be based on
the
Company's and Executive's overall performance for the entire fiscal year,
and no
portion of such bonus will be deemed earned unless Executive remains employed
by
the Company for the entire fiscal year covered by the Annual Bonus.
3.7 Change
in Control.
In
the
event of a Change in Control (as defined below) and the occurrence of any
one of
the following events within six (6) months before (subject to the provisions
set
forth in the penultimate paragraph of this Section 3.7) or two (2) years
after
such Change in Control: (i) termination of Executive's employment without
Cause,
or (ii) Executive resigns his employment for Good Reason, then Executive
will be
entitled to the following benefits, in addition to all amounts and benefits
to
which Executive shall be entitled as a result of his employment and all acts
up
to and including the Termination Date:
3.7.1 Cash
in
the amount of three (3) times the Base Salary in effect on the Termination
Date,
payable in one lump sum upon the Severance Payment Date.
3.7.2 Cash
in
the amount of three (3) times the highest Annual Bonus paid to Executive
over
the prior two (2) fiscal years (which amount Executive agrees will be
paid
7
in
lieu
of any Annual Bonus for the fiscal year in which termination occurs), payable
upon the Severance Payment Date.
3.7.3 Cash
in
the amount of three (3) times the maximum annual Company matching contribution
to the Company's 401(k) plan that would otherwise be made to Executive's
account
for the plan year in which termination occurs, calculated without regard
to
Executive's contribution or limits imposed under the Code, payable upon the
Severance Payment Date.
3.7.4 A
car
allowance equal to $750.00 per month for a period of three (3) years following
the Termination Date, payable on the tenth (10th)
day of
each calendar month following the Termination Date, except that all payments
which would otherwise have been required to be paid prior to the Severance
Payment Date shall be paid on the Severance Payment Date rather than in monthly
installments prior to the Severance Payment Date.
3.7.5 If
Executive elects to continue to participate in Company’s standard medical and
dental benefits through COBRA and/or Cal-COBRA, then to the extent that such
benefits constitute Welfare Benefits the Company will continue to pay its
portion of the cost thereof until December 31 of the second calendar year
following the year after the Termination Date, if: (1) Executive provides
written notice of such election to Company within the time prescribed in
the
"COBRA Notice"; and (2) Executive pays the Company monthly an amount equal
to
Executive’s contribution for such benefits as was in effect at the Termination
Date, if any. The benefit sets forth in this Section 3.7.5 shall cease upon
Executive becoming eligible for reasonably comparable medical and dental
benefits through a successor employer.
3.7.6 The
Company will continue Executive's term life insurance coverage at the level
in
effect on the Termination Date, or obtain similar coverage at the Company's
expense, for a period of three (3) years following the Termination Date,
provided that Executive must, prior to the due date for such costs, pay to
the
Company or to the life insurance carrier, as applicable, all premium costs
which
are due prior to the Severance Payment Date, and, on the Severance Payment
Date,
the Company will reimburse Executive for all costs so paid; and provided
further
that if the premiums of such life insurance coverage are increased for any
reason, such coverage shall be reduced to the level required to maintain
the
same premium rates as in effect on the Termination Date.
3.7.7 All
unvested stock options and restricted stock units of the Company held by
Executive on the Termination Date shall be deemed to be fully vested upon
the
effectiveness, without further right of revocation, of the release described
in
the last paragraph of this Section 3.7. Executive shall be responsible and
shall
make appropriate provisions for any withholding taxes associated with such
accelerated vesting in accordance with Section II.I. of the Stock Award
Agreement dated December 15, 2005. Such award shall settle in accordance
with
Section II.C. thereof, giving effect to the accelerated vesting. The provisions
in this Section 3.7.7 shall be in lieu of those provisions of Section II.B.1
of
the Stock Option Agreement dated December 15, 2005 that address exercisability
in the event of a Change in Control and Involuntary Termination (as such
terms
are defined in such agreement).
8
3.7.8 Each
stock option issued to Executive under the 1994 Plan shall remain exercisable
until the latest of (i) the end of the calendar year in which the Existing
Termination Date occurs; and (ii) the fifteenth (15th)
day of
the third (3rd)
month
after the Existing Termination Date; provided that, if such option is not
exercisable on the later of such dates because an exercise of the option
would
violate applicable securities laws, then the option shall remain exercisable
for
30 days after the first date that the exercise of the stock option would
no
longer violate applicable securities laws. Notwithstanding the foregoing,
no
such stock option may be exercised after the applicable original Option
Termination Date (as defined in the 1994 Plan).
3.7.9 Cash
in
the amount determined as set forth in Section 3.9, payable upon the Severance
Payment Date.
In
the
event the Termination Date occurs within six (6) months before a Change in
Control, then, notwithstanding any provisions to the contrary set forth in
Section 3.4 or 3.7, (a) Executive will be entitled to receive on the later
of
the Severance Payment Date or the date which is thirty (30) days following
the
Change in Control the difference between amounts payable under Sections 3.7.1,
3.7.2 and 3.7.3, and amounts actually paid under Sections 3.4.1, 3.4.2 and
3.4.3; (b) Executive will receive the benefits set forth in Sections 3.7.4,
3.7.5 and 3.7.6 in lieu of any further benefits under Sections 3.4.4, 3.4.5
and
3.4.6; (c) Executive will receive no benefits under Sections 3.7.7 and 3.7.8,
as
such benefits will have already been received under Sections 3.4.7 and 3.4.8;
and (d) Executive will be entitled to the benefits set forth in Section 3.7.9
on
the later of the Severance Payment Date or the date which is thirty (30)
days
following the Change in Control. Notwithstanding anything to the contrary
in
this Section 3.7, no benefits will be payable under this Section 3.7 in
connection with a Change in Control that occurs after the Termination Date
if it
is reasonably demonstrated by the Company that such termination of employment
(x) was not at the request of a third party who had at the Termination Date
taken steps reasonably calculated to effect the Change in Control and (y)
otherwise did not arise in connection with or anticipation of the Change
in
Control.
Except
as
otherwise set forth in the preceding paragraph, the benefits set forth in
this
Section 3.7 are in lieu of any benefits that would otherwise be available
to
Executive under Section 3.4, and no additional benefits will be earned by
Executive following the last day of actual work. Notwithstanding anything
in
this Agreement to the contrary, the Company's obligation to provide the benefits
set forth in this Section 3.7 is expressly conditioned upon (A) Executive's
execution and timely delivery, without revocation, of a full general release
of
claims (excluding claims for amounts payable under this Agreement),
substantially in the form of Exhibit
B
attached
hereto, and (B) Executive's resignation from the Board as provided in Section
3.10. Delivery of such general release shall not be considered timely, and
Executive's entitlement to the benefits set forth in this Section 3.7 shall
be
extinguished, if not made by the later of (A) thirty (30) calendar days after
the Termination Date, or (B) twenty-one (21) days after Executive's receipt
of
the final form general release to be executed.
3.8 Definition
of Change in Control.
For
purposes of this Agreement, a "Change in Control" of the Company shall mean
and
shall be deemed to have occurred if and when any one of the following four
events occurs: (i) within the meaning of Section 13(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"), any person or group becomes
a
9
beneficial
owner, directly or indirectly, of securities of the Company representing
35% or
more of the combined voting power of the Company's then outstanding securities,
without the prior approval of the Company; (ii) an election of Directors
not in
accord with the recommendations of the majority of the Directors who were
in
office prior to the pending election; (iii) the stockholders of the Company
approve an agreement to merge or consolidate, or otherwise reorganize, with
or
into one or more entities which are not subsidiaries, as a result of which
less
than 50% of the outstanding securities of the surviving or resulting entity
are,
or are to be, owned by former stockholders of the Company (excluding from
the
term "former stockholders" a stockholder who is, or as a result of the
transaction in question, becomes an "affiliate," as that term is used in
the
Exchange Act and the rules promulgated thereunder, of any party to such merger,
consolidated or reorganization); or (iv) the stockholders of the Company
approve
the sale of substantially all of the Company's business and/or assets (in
one
transaction or a series of related transactions) to a person or entity which
is
not a subsidiary.
3.9 280G
Reimbursement.
In
the
event any of the benefits provided for in this Agreement or any other benefits
approved at any time by the Compensation Administrator and otherwise payable
to
Executive constitute "parachute payments" within the meaning of Section 280G
of
the Code, and will be subject to the excise tax imposed by Section 4999 of
the
Code, then, subject to the provisions Section 3.9.2 below, the Company shall
pay
Executive (A) a cash payment equal to such excise tax, and (B) an additional
cash payment equal to the excise tax and federal and state income and employment
taxes arising from the payments made by the Company to Executive pursuant
to
this sentence, payable upon the Severance Payment Date. For purposes of part
(B)
of the preceding sentence, federal and state income taxes shall be assumed
to be
at the highest applicable rates for ordinary income as of the Termination
Date.
3.9.1 The
determination of Executive's excise tax liability and the amount required
to be
paid to Executive by the Company under this Section 3.9 shall be made in
writing
by a national accounting firm chosen by the Company (the "Accountants").
For
purposes of making the calculations required by this Section 3.9.1, the
Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Company
and Executive must furnish to the Accountants such information and documents
as
the Accountants may reasonably request in order to make a determination under
this Section 3.9.1. The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
Section 3.9.1. The Accountants' written determination pursuant to this Section
3.9.1 shall be conclusive and binding on the Parties.
3.9.2 In
the
event any of the benefits provided for in this Agreement or any other benefits
approved at any time by the Compensation Administrator and otherwise payable
to
Executive constitute "parachute payments" within the meaning of Section 280G
of
the Code and will be subject to the excise tax imposed by Section 4999 of
the
Code, then Executive may, at its sole option and discretion, elect to waive,
not
receive and/or reduce such benefits to such lesser extent as will result
in no
portion of such benefits being subject to the excise tax imposed by Section
4999
of the Code, and in that case the Company's obligation to make a payment
to
Executive pursuant to the provisions of Section 3.9 will be correspondingly
reduced.
10
3.10 Resignation
from Board.
Unless
otherwise requested by the Board, upon the termination of Executive's employment
for any reason, Executive shall immediately resign from the Board and Executive
agrees that he shall be treated as so resigned upon termination of
employment.
3.11 Obligation
Upon Termination for Cause or Termination by Executive Without Good
Reason.
.
If
Executive's employment under this Agreement is terminated under Sections
3.3 or
3.6 above, then neither Executive nor Executive's estate shall be entitled
to
receive any compensation, benefits, or other remedies under or in relation
to
this Agreement or otherwise, other than the payment of Executive's Base Salary
and benefits earned up to the date of termination, except as otherwise
specifically provided.
3.12 Obligation
Upon Termination for Death or Disability.
If
Executive's employment under this Agreement is terminated under Section 3.2
above, then all unvested stock options and restricted stock units of the
Company
held by Executive on the Termination Date shall immediately be deemed to
be
fully vested. Executive or the administrator of Executive's estate shall
be
responsible and shall make appropriate provisions for any withholding taxes
associated with such accelerated vesting in accordance with Section II.I.
of the
Stock Award Agreement dated December 15, 2005. Such award shall settle in
accordance with Section II.C. thereof, giving effect to the accelerated vesting.
Notwithstanding anything in this Section 3.12 to the contrary, the Company's
obligation to provide the benefits set forth in this Section 3.12 is expressly
conditioned upon execution and timely delivery by Executive or the administrator
of Executive's estate, without further right of revocation, of a full general
release of claims (excluding claims for amounts payable under this Agreement),
substantially in the form of Exhibit B attached hereto. Delivery of such
general
release shall not be considered timely, and Executive's entitlement to the
benefits set forth in this Section 3.12 shall be extinguished, if not made
by
the later of (A) thirty (30) calendar days after the date of death or
disability, or (B) twenty-one (21) days after receipt by Executive of the
administrator of his estate of the final form general release to be
executed.
3.13 Severance
Payment Date.
The
Severance Payment Date shall be the date that is thirty (30) days following
the
Termination Date; provided, however, that if the Executive is reasonably
determined by the Company to be a "specified employee" within the meaning
of
section 409A(a)(2)(b)(i) of the Code, the Severance Payment Date shall be
the
date that is six (6) months after the Termination Date.
ARTICLE
4
INDEMNITY
The
Company and Executive entered into an Indemnification Agreement on March
28,
2002, which remains in full force and effect.
Executive
agrees to fully indemnify and hold the Company harmless from and against
any and
all liability, loss, damage, claim or cause(s) of action (whether or not
well-founded) which may result, directly or indirectly, from any actions
of
Executive which are not within the course and scope of Executive's employment
as
authorized or required hereunder.
11
ARTICLE
5
MISCELLANEOUS
5.1 Confidential
Information; Prohibited Misappropriation.
Executive
hereby recognizes and acknowledges that during the course of his employment
by
the Company, the Company has disclosed and will furnish, disclose, or make
available to Executive confidential and proprietary information related to
the
Company's business including, without limitation, business records, personnel
information, financial information, ideas, processes, inventions, and devices
and other technical or related documentation, whether or not patentable or
entitled to trademark (the "Confidential Information"), that such Confidential
Information has been developed and will be developed through the expenditure
by
the Company of substantial time and money and that all such Confidential
Information, except to the extent it is in the public domain, shall constitute
valuable, special and unique assets of the Company and trade secrets protected
under applicable law. Executive further agrees to use such Confidential
Information only for the purpose of carrying out his duties with the Company
and
agrees that he will not, for a period of two (2) years after his last day
of
employment with the Company, misappropriate for himself or others or disclose
to
any third party, either directly or indirectly, any Confidential Information.
It
is expressly understood that Executive shall not be in breach of this Section
5.1 for any disclosure he is required to make by virtue of a final unappealable
order by a court of competent jurisdiction. It is further expressly agreed
that
Executive shall return to the Company at the time of termination of employment
and not retain any property belonging to the Company, including, without
limitation, any and all originals and copies of documents referencing or
containing any Confidential Information.
5.2 Prohibited
Solicitation: Employees.
Either
during or for two years after employment, Executive agrees not to directly
or
indirectly encourage or solicit any individual to leave the Company's employ
for
any reason or interfere in any other manner, except with respect to disciplinary
or other employment actions Executive may undertake in Executive's role as
a
supervisor, with the employment relationship at the time existing between
the
Company and its current or prospective employees.
5.3 Prohibited
Solicitation: Third Parties.
During
employment, Executive agrees not to directly or indirectly induce or attempt
to
induce any member, payor, contractor, supplier, distributor, licensee or
other
affiliate of the Company to cease its relationship with the Company or in
any
way interfere with the existing relationship between any such member, payor,
contractor, supplier, distributor, licensee or other affiliate and the Company.
After employment, Executive agrees not to use Confidential Information to
directly or indirectly induce or attempt to induce any member, payor,
contractor, supplier, distributor, licensee or other affiliate of the Company
to
cease its relationship with the Company or in any way interfere with the
existing relationship between any such member, payor, contractor, supplier,
distributor, licensee or other affiliate and the Company.
5.4 No
Competition.
During
the term of his employment, Executive shall not, without the prior written
consent of the Board or a duly authorized committee thereof, directly or
indirectly, own, enter into, engage in, operate, manage, control, participate
in, advise, assist, finance, be employed by or render services to or consult
with, or have a financial or other interest in, any business that competes
with
the Company (or any segment thereof), or take any
12
preliminary
steps to do any of the foregoing; provided, however, that anything above
to the
contrary notwithstanding, Executive may own, as a passive investor, securities
of any publicly-traded entity, so long as Executive's holdings in any one
such
entity, do not in the aggregate constitute more than one percent (1%) of
the
voting stock of such entity and securities of any non-publicly traded entity,
so
long as Executive's holdings in any one such entity do not in the aggregate
constitute more than five percent (5%) of the voting stock of such
entity.
5.5 Recourse
for Breach of Restrictive Covenants.
Executive
acknowledges that monetary damages may not be sufficient to compensate the
Company for any economic loss, which may be incurred by reason of Executive's
breach of the foregoing restrictive covenants. Accordingly, in the event
of any
such breach, the Company is relieved from paying any remaining payments or
providing any remaining benefits required under this Agreement, it may pursue
any remedies available at law, and it will be entitled to obtain equitable
relief in the form of an injunction precluding Executive from continuing
to
engage in such breach. Such relief may be sought as provided in Section
5.9.
5.6 Consideration.
Executive
acknowledges that the restrictions placed upon him by Sections 5.1, 5.2,
5.3 and
5.4 are reasonable, given the nature of his position, and that there is
sufficient consideration promised him pursuant to this Agreement to support
these restrictions.
5.7 Survival
of Restrictive Covenants.
The
restrictions of Sections 5.1, 5.2 and the specified portion of 5.3 shall
survive
Executive's last day of employment by the Company and shall be in addition
to
any restrictions imposed upon Executive by statute or at common
law.
5.8 Applicability.
Sections
5.1 (except as to personnel information), 5.2, and 5.3 shall not apply should
the Company cease to exist altogether.
5.9 Dispute
Resolution.
Except
as
the Parties may otherwise agree in writing, all claims, demands, causes of
action or controversies - past, present or future - that Executive may have
against the Company, its officers, directors, employees, independent contractors
or agents - past, present or future - or that the Company may have against
Executive, shall be resolved by final and binding arbitration pursuant to
the
provisions of Exhibit
D
hereto.
PLEASE READ CAREFULLY. BY SIGNING THIS AGREEMENT, YOU ARE GIVING UP YOUR
RIGHT
TO FILE A LAWSUIT IN A COURT OF LAW AND TO HAVE YOUR CASE HEARD BY A JUDGE
AND/OR JURY.
5.10 Amendment
and Modifications.
This
Agreement and the March 28, 2002 Indemnification Agreement referenced in
Article
4 of this Agreement contain a complete statement of all rights and obligations
between the Parties with respect to Executive's employment by the Company.
This
Agreement supersedes all prior and existing negotiations and agreements between
the Parties concerning Executive's employment, including without limitation
the
Salary Continuation Agreement dated June 16, 2004 between Executive and the
Company, and can only be changed or modified pursuant to a written instrument
duly executed by each of the Parties hereto.
13
5.11 Severability.
If
any
provision of this Agreement or any portion thereof is declared invalid, illegal
or incapable of being enforced by an arbitrator or any Court of competent
jurisdiction, the remainder of such provisions and all of the remaining
provisions of this Agreement shall continue in full force and effect. Without
limiting the generality of the foregoing, in the event that any provision
of
this Agreement stating that an alternative amount is due in lieu of an Annual
Bonus for a partial fiscal year, or that no Annual Bonus is due for a partial
fiscal year, is found not to be enforceable by an arbitrator or any Court
of
competent jurisdiction, the Company and Executive agree that the earned bonus
for any partial fiscal year shall be presumed to be fifty percent (50%) of
Base
Salary, prorated for the number of days during the year for which Executive
was
employed by the Company, absent clear and convincing evidence that Executive
would have had a legally enforceable right to a higher bonus (excluding the
effect of proration) if he had remained employed for the entire year.
5.12 Withholdings.
All
amounts payable hereunder shall be subject to such withholdings as may be
required by law.
5.13 Successors
and Assigns.
This
Agreement shall inure to the benefit of the successors and assigns of the
Company. Except as expressly provided in this Agreement, Executive may neither
sell, transfer, assign, nor pledge any of Executive's rights or interests
pursuant to this Agreement. The Company may sell, transfer or assign this
Agreement or any of the Company's rights under this Agreement in connection
with
any transaction involving the sale, assignment or transfer of the stock or
assets of the Company, or a merger or other reorganization involving the
Company
(whether or not the Company is the surviving entity in such transaction),
or any
transaction involving a Change in Control.
5.14 Copyright,
Publication and Use of Data.
All
work
developed by Executive under this Agreement shall be the sole and exclusive
property of the Company. Executive shall not have the right to use, distribute
or otherwise disseminate such work without the express written permission
of the
Company.
5.15 Notices.
Whenever
notice is to be served hereunder, service shall be made personally, by facsimile
transmission, by overnight courier or by registered or certified mail, return
receipt requested. All postage and other delivery charges shall be prepaid
by
the party sending the notice. Notice shall be effective only upon receipt
by the
Party being served, except notice shall be deemed received seventy two (72)
hours after posting by the United States Post Office, by any method described
above. Confirmation of receipt of any facsimile sent must be received in
order
to presume that the transmission was received. All notices shall be sent
to the
addresses described below unless changed by written notice pursuant to the
terms
of this Section.
|
If
to the Company:
|
Berry
Petroleum Company
5201
Truxtun Ave., Suite 300
Bakersfield,
CA 93309-0640
Facsimile
No. - 661-616-3881
Attn:
Martin H. Young, Jr., Chairman of the
Board
|
14
|
Copy
to (which shall not constitute notice):
|
Laura
K. McAvoy, Esq.
Musick
Peeler & Garrett LLP
2801
Townsgate Road, Suite 200
Westlake
Village, CA 91361
Facsimile
No. - 805-418-3101
|
|
If
to Executive:
|
Robert
F. Heinemann
5201
Truxtun Ave., Suite 300
Bakersfield,
CA 93309
[or
current address as listed in the Company's
records.]
|
5.16 Waiver.
No
waiver
of any term, provision or condition of this Agreement, whether by conduct
or
otherwise, in any one or more instances, shall be deemed to be or be construed
as a further or continuing waiver of any such term, provision or condition
or as
a waiver of any other term, provision or condition of this
Agreement.
5.17 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
constitute an original instrument and all of which together shall constitute
the
same instrument.
5.18 Authority.
The
individuals signing below represent that each has full authority to enter
this
Agreement and that each Party hereto will be bound by the respective
signatories.
5.19 IRC
Section 409A.
To
the
extent that this Agreement or any part thereof is deemed to be a nonqualified
deferred compensation plan subject to Section 409A of the Code and the
regulations and guidance promulgated thereunder, (i) the provisions of this
Agreement shall be interpreted in a manner to comply in good faith with Section
409A of the Code, and (ii) the parties hereto agree to amend this Agreement,
if
necessary, for the purposes of complying with Section 409A of the Code promptly
upon issuance of any regulations or guidance thereunder.
5.20 Captions
and Construction.
The
captions used herein as headings of the various sections hereof are for
convenience only, and the Parties agree that such captions are not to be
construed to be part of this Agreement or to be used in determining or
construing the intent, context or meaning of this Agreement. The Parties
further
agree that no term of this Agreement shall be construed against any party
because of such party's role or input in drafting this Agreement.
5.21 Governing
Law.
This
Agreement shall be deemed to have been executed and delivered within the
State
of California, and the rights and obligations of the Parties hereunder shall
be
construed and enforced in accordance with, and governed by, the laws of the
State of California without regard to its conflicts of law
principles.
15
IN
WITNESS WHEREOF this Agreement, the Parties to this Agreement have executed
this
Agreement to be effective as of June 23, 2006 ("Effective Date").
|
BERRY
PETROLEUM COMPANY
By:
/s/Martin H. Young
Martin
H. Young, Jr.
Chairman
of the Board
Date:
June 23, 2006
|
|
|
EXECUTIVE
/s/ Robert F. Heinemann
Robert
F. Heinemann
Date:
June 23, 2006
|
|
--
|
||
16
EXHIBIT
A
OUTSTANDING
AWARDS
|
Date
Issued
|
Award
Type
|
Number
of Shares
|
Plan
|
|
December
2, 2002
|
NSO
|
5,000
|
1994
Plan
|
|
December
2, 2003
|
NSO
|
5,000
|
1994
Plan
|
|
June 16, 2004
|
NSO
|
100,000
|
1994
Plan
|
|
November
23, 2004
|
NSO
|
65,000
|
1994
Plan
|
|
December
15, 2005
|
NSO
|
75,000
|
2005
Plan
|
|
December
15, 2005
|
RSU
|
10,000
|
2005
Plan
|
NSO
refers to a stock option not intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated
thereunder.
RSU
refers to an award of Stock Units under the 2005 Plan.
|
--
|
||
EXHIBIT
B
GENERAL
RELEASE OF CLAIMS
This
General Release ("Release") is entered into as of this ____ day of _________,
20___, by and between Berry Petroleum Corporation (the "Company"), and Robert
F.
Heinemann, an employee of the Company ("Executive") (collectively, the
"Parties").
RECITALS
WHEREAS,
Executive and the Company are parties to an Amended and Restated Employment
Agreement (the "Agreement") dated _________________, 2006, governing the
terms
and conditions applicable if Executive's employment is terminated for various
reasons;
WHEREAS,
pursuant to the terms of the Agreement, the Company has agreed to provide
Executive certain benefits and payments under the terms and conditions specified
therein, provided that Executive has executed and not revoked a general release
of claims in favor of the Company;
WHEREAS,
Executive's employment with the Company is being terminated effective [date];
and
WHEREAS,
the
Parties wish to terminate their relationship amicably and to resolve, fully
and
finally, all actual and potential claims and disputes relating to Executive's
employment with and termination from the Company and all other relationships
between Executive and the Company, up to and including the date of execution
of
this Release.
NOW,
THEREFORE,
in
consideration of these Recitals and the promises and mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are expressly acknowledged, the Parties, intending to
be
legally bound, agree as follows:
AGREEMENT
1. Termination
of Employment.
Executive's employment with the Company shall terminate on [date] (the
"Termination Date").
2. Severance
Benefits.
Pursuant to the terms of the Agreement, and in consideration of Executive's
release of claims and the other covenants and agreements contained herein
and
therein, and provided that Executive has signed this Release and delivered
it to
the Company and has not exercised any revocation rights as provided in Section
6
below, the Company shall provide the severance benefits described in Section
_____ of the Agreement (the "Benefits") in the time and manner provided therein;
provided, however, that the Company's obligations shall be excused if Executive
breaches any of the provisions of this Agreement including, without limitation,
Sections 7, 8 and 9 hereof. Executive acknowledges and agrees that the Benefits
constitute consideration beyond that which, but for the mutual covenants
set
forth in this Release and the covenants contained in the Agreement, the Company
otherwise would not be obligated to provide, nor would Executive otherwise
be
entitled to receive.
3. Effective
Date.
Provided that it has not been revoked pursuant to Section 6 hereof, this
Release
will become effective on the eighth (8th) day after the date of its execution
by
Executive (the "Effective Date").
4. Effect
of Revocation.
Executive acknowledges and agrees that, in the event that Executive revokes
this
Release pursuant to Section 6 hereof, Executive shall have no right to receive
the Benefits.
5. General
Release.
(a) In
consideration of the Benefits and the Company's other covenants contained
herein
and in the Agreement, Executive hereby forever releases and discharges the
Company and its parent, subsidiary(ies), related and/or affiliated companies
("Affiliates") and each of its and their past and present officers, directors,
managers, employees, agents, attorneys and insurers, and each of its and
their
respective successors and assigns (collectively, the "Released Parties")
from
any and all claims, charges, complaints, liens, demands, causes of action,
obligations, damages and liabilities, known or unknown, suspected or
unsuspected, that Executive had, now has, or may hereafter claim to have
against
the Released Parties, arising out of or relating in any way to Executive
's
hiring by, employment with, or separation from the Company, from the beginning
of time through the date Executive executes this Release (the "Released
Claims"). This release specifically extends to, without limitation, claims
for
wrongful termination, breach of an express or implied contract, breach of
the
covenant of good faith and fair dealing, breach of fiduciary duty, fraud,
misrepresentation, defamation, slander, infliction of emotional distress,
disability, loss of future earnings, and claims under the California
Constitution, the United States Constitution, and applicable state and federal
statutes and regulations, including, but not limited to, the Civil Rights
Act of
1964, the Fair Labor Standards Act, the National Labor Relations Act, the
Labor-Management Relations Act, the Worker Retraining and Notification Act
of
1988, the Rehabilitation Act of 1973, as amended, the Americans With
Disabilities Act, the Employee Retirement Income Security Act of 1974, the
Age
Discrimination in Employment Act of 1967, the California Fair Employment
and
Housing Act, the California Labor Code, California Civil Code, the California
Business and Professions Code, and the Sarbanes-Oxley Act (all as amended
from
time to time).
(b) Executive
acknowledges and agrees that it is his intention to forever bar every claim
described in Section 5(a) herein, whether known or unknown to the Executive
at
this time or discovered later. Executive understands and acknowledges that
there
are laws which may invalidate releases of claims which are unknown to the
releasing party. Executive hereby expressly waives any protection to which
he
may otherwise be entitled hereunder by virtue of any such law. In particular,
and not by way of limitation, Executive represents and acknowledges that
he is
familiar with Section 1542 of the California Civil Code, which
provides:
A
GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.
Executive
hereby waives and relinquishes any rights and/or benefits which he has or
may
have under California Civil Code Section 1542 or any similar applicable law
of
any state.
(c) Executive
hereby represents that no claim, complaint, charge or other action of any
kind
on Executive's behalf is pending against any of the Released Parties. Executive
further represents and hereby agrees that Executive shall not institute a
claim,
complaint, charge or other action of any kind with any governmental agency
or
court against any of the Released Parties concerning any of the released
claims.
Executive further agrees not to aid or assist any other person in pursuing
any
claim, charge or action against the Released Parties unless compelled to
do so
by law or court order.
6. Review
and Revocation Period.
Executive acknowledges that the Company has advised Executive that Executive
may
consult with an attorney of Executive's own choosing (and at Executive's
expense) prior to signing this Release and that Executive has been given
at
least twenty-one (21) days during which to consider the provisions of this
Release, although Executive may sign and return it sooner. Executive further
acknowledges that Executive has been advised by the Company that after executing
this Release, Executive will have seven (7) days to revoke this Release,
and
that this Release shall not become effective or enforceable until such seven
(7)
day revocation period has expired. Executive acknowledges and agrees that
if
Executive wishes to revoke this Release, Executive must do so in writing,
and
that such revocation must be signed by Executive and received by the Chairman
of
the Board of the Company (or the Chairman of the Compensation Committee)
no
later than 5:00 p.m. Pacific Time on the seventh (7th) day after Executive
has
executed this Release. Executive acknowledges and agrees that, in the event
that
Executive revokes this Release, Executive will have no right to receive any
benefits hereunder, including the Benefits. Executive represents that Executive
has read this Release and understands its terms and enters into this Release
freely, voluntarily and without coercion.
7. Confidentiality
and Non-Solicitation.
Executive reaffirms his commitments in Sections 5.1, 5.2 and 5.3 of the
Agreement.
8. Cooperation
in Litigation.
At the
Company's reasonable request, Executive shall use his good faith efforts
to
cooperate with the Company, its Affiliates, and each of its and their respective
attorneys or other legal representatives ("Attorneys") in connection with
any
claim, litigation or judicial or arbitral proceeding which is material to
the
Company and is now pending or may hereinafter be brought against the Released
Parties by any third party; provided, that, Executive's cooperation is essential
to the Company's case. Executive's duty of cooperation shall include, but
not be
limited to (a) meeting with the Company's and/or its Affiliates' Attorneys
by
telephone or in person at mutually convenient times and places in order to
state
truthfully Executive's knowledge of matters at issue and recollection of
events;
(b) appearing at the Company's, its Affiliates' and/or their Attorneys' request
(and, to the extent possible, at a time convenient to Executive that does
not
conflict with the needs or requirements of Executive's then-current employer)
as
a witness at depositions or trials, without necessity of a subpoena, in order
to
state truthfully Executive's knowledge of matters at issue; and (c) signing
at
the Company's, its Affiliates' and/or their Attorneys' request declarations
or
affidavits that truthfully state matters of which Executive has knowledge.
The
Company shall reimburse Executive for the reasonable expenses incurred by
him in
the course of his cooperation hereunder and shall pay
to
Executive per diem compensation in an amount equal to the daily prorate portion
of the Executive's base salary immediately prior to the Termination Date.
The
obligations set forth in this Section 8 shall survive any termination or
revocation of this Release.
9. Non-Admission
of Liability.
Nothing
in this Release shall be construed as an admission of liability by Executive
or
the Released Parties; rather, Executive and the Released Parties are resolving
all matters arising out of the employer-employee relationship between Executive
and the Company and all other relationships between Executive and the Released
Parties.
10. Binding
Effect.
This
Release shall be binding upon the Parties and their respective heirs,
administrators, representatives, executors, successors and assigns, and shall
inure to the benefit of the Parties and their respective heirs, administrators,
representatives, executors, successors and assigns.
11. Governing
Law.
This
Release shall be governed by and construed and enforced in accordance with
the
laws of the State of California applicable to agreements negotiated, entered
into and wholly to be performed therein.
12. Severability.
Each of
the respective rights and obligations of the Parties hereunder shall be deemed
independent and may be enforced independently irrespective of any of the
other
rights and obligations set forth herein. In the event any provision of this
Release should be held illegal or invalid, such illegality or invalidity
shall
not affect in any way other provisions hereof, all of which shall continue,
nevertheless, in full force and effect.
13. Counterparts.
This
Release may be signed in counterparts and each counterpart shall be deemed
to be
an original but together all such counterparts shall be deemed a single
agreement.
14. Entire
Agreement; Modification.
This
Release constitutes the entire understanding between the Parties with respect
to
the subject matter hereof and may not be modified without the express written
consent of both Parties. This Release supersedes all prior written and/or
oral
and all contemporaneous oral agreements, understandings and negotiations
regarding its subject matter. This Release may not be modified or canceled
in
any manner except by a writing signed by both Parties.
15. Acceptance.
Executive may confirm his acceptance of the terms and conditions of this
Release
by signing and returning two (2) original copies of this Release to the Chairman
of the Board of the Company, no later than 5:00 p.m. Pacific Time twenty-one
(21) days after Executive's receipt of notice of termination.
EXECUTIVE
ACKNOWLEDGES AND REPRESENTS THAT EXECUTIVE HAS FULLY AND CAREFULLY READ THIS
RELEASE PRIOR TO SIGNING IT AND UNDERSTANDS ITS TERMS. EXECUTIVE FURTHER
ACKNOWLEDGES AND AGREES THAT EXECUTIVE HAS BEEN, OR HAS HAD THE OPPORTUNITY
TO
BE, ADVISED BY INDEPENDENT LEGAL COUNSEL OF EXECUTIVE'S OWN CHOICE AS TO
THE
LEGAL EFFECT AND MEANING OF EACH OF THE TERMS AND CONDITIONS OF
THIS
RELEASE,
AND IS ENTERING INTO THIS RELEASE FREELY AND VOLUNTARILY AND NOT IN RELIANCE
ON
ANY PROMISES OR REPRESENTATIONS OTHER THAN AS SET FORTH IN THIS
RELEASE.
IN
WITNESS WHEREOF,
the
Parties have executed this Release as of the day and year set forth
above.
Robert
F.
Heinemann Berry
Petroleum Corporation
_______________________________ _______________________________
By: ______
____________________
Its: __________________________
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EXHIBIT
C
FORM
OF STOCK AWARD AGREEMENT
BERRY
PETROLEUM COMPANY
2005
EQUITY INCENTIVE PLAN
STOCK
AWARD AGREEMENT
Unless
otherwise defined herein, the terms defined in the Berry Petroleum Company
2005
Equity Incentive Plan shall have the same defined meanings in this Stock
Award
Agreement.
I. NOTICE
OF RESTRICTED STOCK UNIT GRANT
You
have
been granted restricted Stock Units, subject to the terms and conditions
of the
Plan and this Stock Award Agreement, as follows:
Name
of
Awardee:
Total Number of Stock
Units Granted:
Grant
Date:
Vesting Commencement Date:
Vesting Schedule: The
first
25% of the Stock Units subject to this Stock Award Agreement shall vest on
the
Vesting Commencement Date, and 25% of the Stock
Units subject to this Stock Award Agreement
shall
vest each year thereafter, subject to the Awardee continuing to be a Service
Provider on such dates.
II. AGREEMENT
A. Grant
of Stock Units.
Pursuant to the terms and conditions set forth in this Stock Award Agreement
(including Section I above) and the Plan, the Administrator hereby grants
to the
Awardee named in Section I above, on the Grant Date set forth in Section
I
above, the number of Stock Units set forth in Section I above.
B. Purchase
of Stock Units.
No
payment of cash is required for the Stock Units.
C. Vesting/Delivery
of Shares.
The
Awardee shall vest in the granted Stock Units in accordance with the vesting
schedule provided for in Section I above. Within 60 days following the date
on
which the Awardee becomes vested in a Stock Unit and subject to Subsection
I
below,
the Company shall deliver to the Awardee one share of Common Stock for each
Stock Unit the Awardee becomes vested in and such Stock Unit shall then
terminate.
D. Forfeiture
of Stock Units.
The
unvested Stock Units shall automatically be forfeited upon the Awardee's
Termination of Service.
E. No
Interest in Company Assets.
The
Awardee shall not have any interest in any fund or specific asset of the
Company
by reason of the Stock Units.
F. No
Rights as a Stockholder Prior to Delivery.
Except
as set forth in Subsection C above, the Awardee shall not have any right,
title
or interest in, or be entitled to vote in respect of, or otherwise be considered
the owner of, any of the shares of Common Stock covered by the Stock Units.
Except as provided for in Subsection G below, the Awardee shall not be entitled
to receive distributions from the shares of Common Stock covered by the Stock
Units.
G. Dividends.
The
Awardee will be entitled to dividends on the shares of Common Stock covered
by
the Stock Units payable in the same amount and at the same time as any other
stockholder. However, dividends that are received on Stock Units prior to
vesting are taxable as compensation, rather than as dividend
income.
H. Regulatory
Compliance.
The
issuance of Common Stock pursuant to this Stock Award Agreement shall be
subject
to full compliance with all applicable requirements of law and the requirements
of any stock exchange or interdealer quotation system upon which the Common
Stock may be listed or traded.
I. Withholding
Tax.
The
Company's obligation to deliver any Shares upon vesting of Stock Units shall
be
subject to the satisfaction of all applicable federal, state, local and foreign
income, and employment tax withholding requirements. The Awardee shall pay
to
the Company an amount equal to the withholding amount (or the Company may
withhold such amount from the Awardee's salary) in cash. At the Administrator's
election, the Awardee may pay the withholding amount with Shares; provided,
however, that payment in Shares shall be limited to the withholding amount
calculated using the minimum statutory withholding rates.
J. Plan.
This
Stock Award Agreement is subject to all of the terms and provisions of the
Plan,
receipt of a copy of which is hereby acknowledged by the Awardee. The Awardee
hereby agrees to accept as binding, conclusive, and final all decisions and
interpretations of the Administrator upon any questions arising under the
Plan
and this Stock Award Agreement.
K. Successors.
This
Stock Award Agreement shall inure to the benefit of and be binding upon the
parties hereto and their legal representatives, heirs, and permitted successors
and assigns.
L. Restrictions
on Transfer.
Except
as otherwise provided for in Subsection K above, and the Plan, the Stock
Units
may not be sold, assigned, transferred, pledged or otherwise encumbered,
whether
voluntarily or involuntarily, by operation of law or otherwise. No right
or
benefit under this Agreement shall be subject to transfer, anticipation,
alienation, sale, assignment, pledge, encumbrance or charge, whether voluntary,
involuntary, by operation of law or otherwise, and any attempt to transfer,
anticipate, alienate, sell, assign, pledge, encumber or
charge
the same shall be void. No right or benefit hereunder shall in any manner
be
liable for or subject to any debts, contracts, liabilities or torts of the
person entitled to such benefits. Any assignment in violation of this Subsection
L shall be void.
M. Restrictions
on Resale.
The
Awardee agrees not to sell any Shares that have been issued pursuant to the
vested Stock Units at a time when Applicable Laws, Company policies or an
agreement between the Company and its underwriters prohibit a sale. This
restriction shall apply as long as the Awardee is a Service Provider and
for
such period of time after the Awardee's Termination of Service as the
Administrator may specify.
N. Entire
Agreement; Governing Law.
This
Stock Award Agreement and the Plan constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Awardee
with respect to the subject matter hereof, and may not be modified adversely
to
the Awardee's interest except by means of a writing signed by the Company
and
the Awardee. This Stock Award Agreement is governed by the internal substantive
laws, but not the choice of law rules, of California.
O. NO
GUARANTEE OF CONTINUED SERVICE.
THE
AWARDEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE STOCK UNITS PURSUANT
TO
THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER
AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED STOCK UNITS). THE AWARDEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS
STOCK AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING
SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE
OF
CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY
PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH AWARDEE'S RIGHT OR THE COMPANY'S
RIGHT TO TERMINATE AWARDEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME,
WITH OR WITHOUT CAUSE.
By
the
Awardee's signature and the signature of the Company's representative below,
the
Awardee and the Company agree that this Award is granted under and governed
by
the terms and conditions of this Stock Award Agreement and the Plan. The
Awardee
has reviewed this Stock Award Agreement and the Plan in their entirety, has
had
an opportunity to obtain the advice of counsel prior to executing this Stock
Award Agreement and fully understands all provisions of this Stock Award
Agreement and the Plan. The Awardee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator
upon
any questions relating to this Stock Award Agreement and the Plan.
The
Awardee further agrees that the Company may deliver by email all documents
relating to the Plan or this Award (including, without limitation, prospectuses
required by the Securities and Exchange Commission) and all other documents
that
the Company is required to deliver to its security holders (including, without
limitation, annual reports and proxy statements). The Awardee also agrees
that
the Company may deliver these documents by
posting
them on a web site maintained by the Company or by a third party under contract
with the Company.
|
AWARDEE:
Signature
Printed
Name
Residence
|
BERRY
PETROLEUM COMPANY
By:
Title:
|
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EXHIBIT
D
ARBITRATION
The
provisions of this Exhibit D are incorporated into and made a part of the
Amended and Restated Employment Agreement dated June 23, 2006 (the "Agreement")
by and between Berry Petroleum Corporation (the "Company") and Robert F.
Heinemann ("Executive"). Capitalized terms used and not defined herein have
the
same meaning as set forth in the Agreement.
(a) Waiver
of Right to Trial.
The
Company and Executive (the "parties")
understand that they are waiving any right they may have to file a lawsuit
or
other civil action or proceeding against each other, and are voluntarily
waiving
any right they may have to resolve disputes between the parties through trial
by
judge or jury. Any and all claims or disputes arising out of or relating
to the
employment relationship and/or the termination of the employment relationship
between the parties that are not resolved by their mutual agreement shall
be
resolved exclusively by confidential, final and binding arbitration. The
parties
have the right to be represented by counsel in any arbitration proceeding
commenced pursuant to the Agreement.
(b) Claims
Subject to Arbitration.
Except
as the parties may otherwise agree in writing, all claims, demands, causes
of
action or controversies - past, present or future - that Executive may have
against the Company, its officers, directors, employees, independent contractors
or agents - past, present or future - or that the Company may have against
Executive (collectively the "Claims") shall be resolved by final and binding
arbitration. The Claims include but are not limited to any claims or disputes
in
connection with: (1) the recruiting and hiring process; (2) the
employment relationship between the parties; (3) the termination of the
employment relationship; (4) any contracts between the parties; or
(5) any and all Claims arising under any federal, state or local law or
regulation, including, but not limited to, those relating to employment,
compensation, wages, stock options, benefits (except where an employee benefit
or pension plan specifies that its claims procedure shall culminate in a
dispute
resolution procedure different from this one), discrimination, harassment,
wrongful termination, wrongful demotion, breach of contract, breach of the
implied covenant of good faith and fair dealing, interference with contract
or
prospective economic advantage, intentional or negligent infliction of emotional
distress, violation of public policy, retaliation, fraud, promissory estoppel,
defamation, unfair business practices, invasion of privacy, negligence, assault
or battery. (The Claims for discrimination and harassment include but are
not
limited to those based on race, color, sex, sexual orientation, religion,
national origin, ancestry, citizenship, age, marital status, registered domestic
partner status, physical disability, pregnancy, mental disability, medical
condition, veteran status, and any claims arising under the California Fair
Employment and Housing Act, the California Family Rights Act, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, the
Equal
Pay Act, the Civil Rights Act, the Family and Medical Leave Act, the Employee
Retirement Income Security Act of 1974, Title VII of the Civil Rights Act
of 1964 as amended, the California Labor Code, and any other local, state,
federal or common law concerning employment or employment discrimination
or
harassment.)
This
Exhibit D does not affect Executive's right to seek administrative relief
from the United States Equal Employment Opportunity Commission or the California
Department of Fair Employment and Housing. Further, this Exhibit D does not
cover claims Executive may have for workers' compensation, state disability
benefits, unemployment compensation benefits or disputes covered by a collective
bargaining agreement. Nothing in this Exhibit D shall prohibit or limit the
parties from seeking provisional relief pursuant to California Code of Civil
Procedure § 1281.8 or any similar statute of an applicable
jurisdiction.
(c) The
Arbitration Process.
Either
Executive or the Company may commence the arbitration process by filing a
written demand for arbitration with the American Arbitration Association
("AAA"), and sending a copy by personal delivery or certified mail to the
other
party. If the Company initiates arbitration, it will send the notice to
Executive's last known home address as reflected in the Company's personnel
records. If Executive initiates arbitration, Executive will send notice to
the
Chairman of the Board of the Company (or the Chairman of the Compensation
Committee). Demands for arbitration must be made within the applicable statute
of limitations.
Any
arbitration between the parties shall be conducted pursuant to the AAA
procedures for the arbitration of employment disputes that are in effect
at the
time of the commencement of arbitration, except as otherwise agreed in writing
by the parties. The arbitration shall be conducted in the County of Kern,
California, unless the parties mutually agree to conduct the arbitration
elsewhere. The arbitration shall be conducted by a neutral Arbitrator (the
"Arbitrator") selected by mutual agreement of the parties, or if no mutual
agreement can be reached, selected from a list of arbitrators provided by
AAA,
as specified in the AAA's procedures. The parties will cooperate in scheduling
the arbitration proceedings. Absent a subsequent contrary written agreement
between the parties, the arbitration hearing shall be scheduled for a date
that
is within 180 days after the commencement of the arbitration. As for discovery,
the parties will comply with California Code of Civil Procedure § 1283.05
or any other discovery required by California law. Should a non-party witness
refuse to comply with a subpoena issued by the Arbitrator and the Arbitrator
is
unable to enforce compliance with the subpoena, the parties agree to submit
the
subpoena to a court of competent jurisdiction for enforcement of the
subpoena.
The
Arbitrator shall apply the applicable substantive law, and the applicable
law of
remedies, for the State of California, or federal law, or both. The Arbitrator
is without jurisdiction to apply any different substantive law or law of
remedies. The Arbitrator is authorized to award any remedies allowed by
applicable law. The Arbitrator cannot modify any of the provisions of the
Agreement. The Arbitrator shall issue a written and signed statement of the
basis of its decision, including findings of fact and conclusions of law.
The
statement and award, if any, shall be based on the terms of the Agreement,
the
findings of fact and the statutory and decisional case law applicable to
this
dispute. Proceedings to confirm, correct or vacate an award or decision rendered
by the Arbitrator will be controlled by and conducted in conformity with
applicable state law, including California Code of Civil Procedure
§ 1285.8, et seq. The arbitration shall be final and binding upon the
parties, except as provided in this Exhibit D. Neither the parties nor the
Arbitrator may disclose the existence, content, or results of any arbitration
without the prior written consent of both parties.
(d) Arbitration
Fees, Costs and Awards.
If
Executive initiates arbitration against the Company, Executive must pay a
filing
fee to AAA equal to the current filing fee in the appropriate court had
Executive's claim been brought there, and the Company shall bear the remaining
costs of the arbitration forum, including Arbitrator fees. If the Company
initiates arbitration against Executive, the Company shall bear the entire
cost
of the arbitration forum, including Arbitrator fees. (Such costs do not include
costs of attorneys, discovery, expert witnesses, or other costs which Executive
would have been required to bear had the matter been filed in a court.) The
Arbitrator may award attorneys' fees and costs to the prevailing party as
authorized by law. If there is any dispute as to whether the Company or
Executive is the prevailing party, the Arbitrator will decide that issue.
Any
postponement or cancellation fee imposed by the arbitration service will
be paid
by the party requesting the postponement or cancellation, unless the Arbitrator
determines that such fee would cause undue hardship on the party. At the
conclusion of the arbitration, each party agrees to promptly pay any arbitration
award imposed against that party.
(e) Failure
To Use Arbitration Process.
Should
either party pursue any dispute subject to this Exhibit D by any method
other than set forth herein, the responding party shall be entitled to recover
from the initiating party all damages, costs, expenses and attorneys' fees
incurred as a result of appearing in, dismissing, staying or litigating such
action.
(f) Complete
Agreement.
This
Exhibit D is the complete agreement of the parties on the subject of
arbitration of claims or disputes. This Exhibit D supersedes any prior or
contemporaneous oral or written understanding on the subject. No party is
relying on any representations, oral or written, on the subject of the effect,
enforceability or meaning of this Exhibit D, except as specifically set forth
in
this Exhibit D.
PLEASE
READ CAREFULLY. BY SIGNING THE AGREEMENT, YOU ARE GIVING UP YOUR RIGHT TO
FILE A
LAWSUIT IN A COURT OF LAW AND TO HAVE YOUR CASE HEARD BY A JUDGE AND/OR
JURY.
BERRY PETROLEUM COMPANY
2005
EQUITY INCENTIVE PLAN
STOCK
AWARD AGREEMENT
Unless
otherwise defined herein, the terms defined in the Berry Petroleum Company
2005
Equity Incentive Plan shall have the same defined meanings in this Stock Award
Agreement.
I. NOTICE
OF RESTRICTED STOCK UNIT GRANT
You
have
been granted restricted Stock Units, subject to the terms and conditions of
the
Plan and this Stock Award Agreement, as follows:
Name
of
Awardee: Robert
F.
Heinemann
Total Number of Stock
Units Granted: 161,300
Grant
Date: June
23,
2006
Vesting Commencement Date: Not
applicable
Vesting Schedule: The
Stock
Units subject to this Stock Award Agreement shall vest in accordance with
Section 2.4 of the Amended and Restated Employment
Agreement
dated June 23, 2006, between the Company and the Awardee.
II. AGREEMENT
A. Grant
of Stock Units.
Pursuant to the terms and conditions set forth in this Stock Award Agreement
(including Section I above) and the Plan, the Administrator hereby grants to
the
Awardee named in Section I above, on the Grant Date set forth in Section I
above, the number of Stock Units set forth in Section I above.
B. Purchase
of Stock Units.
No
payment of cash is required for the Stock Units.
C. Vesting/Delivery
of Shares.
The
Awardee shall vest in the granted Stock Units in accordance with the vesting
schedule provided for in Section I above. Within 60 days following the date
on
which the Awardee becomes vested in a Stock Unit and subject to Subsection
I
below, the Company shall deliver to the Awardee one share of Common Stock for
each Stock Unit the Awardee becomes vested in and such Stock Unit shall then
terminate.
1
D. Forfeiture
of Stock Units.
Stock
Units which do not vest in accordance with the Vesting Schedule set forth above
shall automatically be forfeited.
E. No
Interest in Company Assets.
The
Awardee shall not have any interest in any fund or specific asset of the Company
by reason of the Stock Units.
F. No
Rights as a Stockholder Prior to Delivery.
Except
as set forth in Subsection C above, the Awardee shall not have any right, title
or interest in, or be entitled to vote in respect of, or otherwise be considered
the owner of, any of the shares of Common Stock covered by the Stock Units.
Except as provided for in Subsection G below, the Awardee shall not be entitled
to receive distributions from the shares of Common Stock covered by the Stock
Units.
G. Dividends.
The
Awardee will be entitled to dividends on the shares of Common Stock covered
by
the Stock Units payable in the same amount and at the same time as any other
stockholder. However, dividends that are received on Stock Units prior to
vesting are taxable as compensation, rather than as dividend
income.
H. Regulatory
Compliance.
The
issuance of Common Stock pursuant to this Stock Award Agreement shall be subject
to full compliance with all applicable requirements of law and the requirements
of any stock exchange or interdealer quotation system upon which the Common
Stock may be listed or traded.
I. Withholding
Tax.
The
Company's obligation to deliver any Shares upon vesting of Stock Units shall
be
subject to the satisfaction of all applicable federal, state, local and foreign
income, and employment tax withholding requirements. The Awardee shall pay
to
the Company an amount equal to the withholding amount (or the Company may
withhold such amount from the Awardee's salary) in cash. At the Administrator's
election, the Awardee may pay the withholding amount with Shares; provided,
however, that payment in Shares shall be limited to the withholding amount
calculated using the minimum statutory withholding rates.
J. Plan.
This
Stock Award Agreement is subject to all of the terms and provisions of the
Plan,
receipt of a copy of which is hereby acknowledged by the Awardee. The Awardee
hereby agrees to accept as binding, conclusive, and final all decisions and
interpretations of the Administrator upon any questions arising under the Plan
and this Stock Award Agreement.
K. Successors.
This
Stock Award Agreement shall inure to the benefit of and be binding upon the
parties hereto and their legal representatives, heirs, and permitted successors
and assigns.
L. Restrictions
on Transfer.
Except
as otherwise provided for in Subsection K above, and the Plan, the Stock Units
may not be sold, assigned, transferred, pledged or otherwise encumbered, whether
voluntarily or involuntarily, by operation of law or otherwise. No right or
benefit under this Agreement shall be subject to transfer, anticipation,
alienation, sale, assignment, pledge, encumbrance or charge, whether voluntary,
involuntary, by operation of law or otherwise, and any attempt to transfer,
anticipate, alienate, sell, assign, pledge, encumber or charge the same shall
be
void. No right or benefit hereunder shall in any manner be liable for or subject
to any debts, contracts, liabilities or torts of the person entitled to such
benefits. Any assignment in violation of this Subsection L shall be
void.
2
M. Restrictions
on Resale.
The
Awardee agrees not to sell any Shares that have been issued pursuant to the
vested Stock Units at a time when Applicable Laws, Company policies or an
agreement between the Company and its underwriters prohibit a sale. This
restriction shall apply as long as the Awardee is a Service Provider and for
such period of time after the Awardee's Termination of Service as the
Administrator may specify.
N. Entire
Agreement; Governing Law.
This
Stock Award Agreement and the Plan constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Awardee
with respect to the subject matter hereof, and may not be modified adversely
to
the Awardee's interest except by means of a writing signed by the Company and
the Awardee. This Stock Award Agreement is governed by the internal substantive
laws, but not the choice of law rules, of California.
O. NO
GUARANTEE OF CONTINUED SERVICE.
THE
AWARDEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE STOCK UNITS PURSUANT
TO
THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER
AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED STOCK UNITS). THE AWARDEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS
STOCK AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING
SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY
PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH AWARDEE'S RIGHT OR THE COMPANY'S
RIGHT TO TERMINATE AWARDEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME,
WITH OR WITHOUT CAUSE.
By
the
Awardee's signature and the signature of the Company's representative below,
the
Awardee and the Company agree that this Award is granted under and governed
by
the terms and conditions of this Stock Award Agreement and the Plan. The Awardee
has reviewed this Stock Award Agreement and the Plan in their entirety, has
had
an opportunity to obtain the advice of counsel prior to executing this Stock
Award Agreement and fully understands all provisions of this Stock Award
Agreement and the Plan. The Awardee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator
upon
any questions relating to this Stock Award Agreement and the Plan.
The
Awardee further agrees that the Company may deliver by email all documents
relating to the Plan or this Award (including, without limitation, prospectuses
required by the Securities and Exchange Commission) and all other documents
that
the Company is required to deliver to its security holders (including, without
limitation, annual reports and proxy statements). The Awardee also agrees that
the Company may deliver these documents by posting them on a web site maintained
by the Company or by a third party under contract with the Company.
|
AWARDEE:
Signature
/s/
Robert F. Heinemann
Printed
Name:
Robert
F. Heinemann
Residence
|
BERRY
PETROLEUM COMPANY
By:
/s/ Martin H. Young, Jr.
Title:
Chairman
of the Board
|
3
FIRST
AMENDMENT
TO
THE BERRY PETROLEUM COMPANY
RESTATED
AND AMENDED 1994 STOCK OPTION PLAN
Berry
Petroleum Company (the "Company") hereby amends the Berry Petroleum Company
Restated and Amended 1994 Stock Option Plan (the "Plan"), effective June 23,
2006, as follows:
Section
6.2(c) is amended by replacing the phrase "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" with the following:
"for
three (3) months following such termination date, or such longer period of
time
as the Committee may determine, but in no event beyond the original Option
Termination Date."
The
Company has caused this Amendment to be signed on the date indicated below,
to
be effective as indicated above.
|
Dated:
June 23, 2006
|
BERRY
PETROLEUM COMPANY
By:
/s/ Kenneth A. Olson
Its:
Corporate Secretary
|
1
BERRY
PETROLEUM COMPANY
2005
EQUITY INCENTIVE PLAN
STOCK
AWARD AGREEMENT
Unless
otherwise defined herein, the terms defined in the Berry Petroleum Company
2005
Equity Incentive Plan shall have the same defined meanings in this Stock Award
Agreement.
I. NOTICE
OF RESTRICTED STOCK UNIT GRANT
You
have
been granted restricted Stock Units, subject to the terms and conditions of
the
Plan and this Stock Award Agreement, as follows:
Name
of
Awardee:
Total Number of Stock
Units Granted:
Grant
Date:
Vesting Commencement Date:
Vesting Schedule:
II. AGREEMENT
A. Grant
of Stock Units.
Pursuant to the terms and conditions set forth in this Stock Award Agreement
(including Section I above) and the Plan, the Administrator hereby grants to
the
Awardee named in Section I above, on the Grant Date set forth in Section I
above, the number of Stock Units set forth in Section I above.
B. Purchase
of Stock Units.
No
payment of cash is required for the Stock Units.
C. Vesting/Delivery
of Shares.
The
Awardee shall vest in the granted Stock Units in accordance with the vesting
schedule provided for in Section I above. Within 60 days following the date
on
which the Awardee becomes vested in a Stock Unit and subject to Subsection
I
below, the Company shall deliver to the Awardee one share of Common Stock for
each Stock Unit the Awardee becomes vested in and such Stock Unit shall then
terminate.
1
D. Forfeiture
of Stock Units.
The
unvested Stock Units shall automatically be forfeited upon the Awardee's
Termination of Service.
E. No
Interest in Company Assets.
The
Awardee shall not have any interest in any fund or specific asset of the Company
by reason of the Stock Units.
F. No
Rights as a Stockholder Prior to Delivery.
Except
as set forth in Subsection C above, the Awardee shall not have any right, title
or interest in, or be entitled to vote in respect of, or otherwise be considered
the owner of, any of the shares of Common Stock covered by the Stock Units.
Except as provided for in Subsection G below, the Awardee shall not be entitled
to receive distributions from the shares of Common Stock covered by the Stock
Units.
G. Dividends.
The
Awardee will be entitled to dividends on the shares of Common Stock covered
by
the Stock Units payable in the same amount and at the same time as any other
stockholder. However, dividends that are received on Stock Units prior to
vesting are taxable as compensation, rather than as dividend
income.
H. Regulatory
Compliance.
The
issuance of Common Stock pursuant to this Stock Award Agreement shall be subject
to full compliance with all applicable requirements of law and the requirements
of any stock exchange or interdealer quotation system upon which the Common
Stock may be listed or traded.
I. Withholding
Tax.
The
Company's obligation to deliver any Shares upon vesting of Stock Units shall
be
subject to the satisfaction of all applicable federal, state, local and foreign
income, and employment tax withholding requirements. The Awardee shall pay
to
the Company an amount equal to the withholding amount (or the Company may
withhold such amount from the Awardee's salary) in cash. At the Administrator's
election, the Awardee may pay the withholding amount with Shares; provided,
however, that payment in Shares shall be limited to the withholding amount
calculated using the minimum statutory withholding rates.
J. Plan.
This
Stock Award Agreement is subject to all of the terms and provisions of the
Plan,
receipt of a copy of which is hereby acknowledged by the Awardee. The Awardee
hereby agrees to accept as binding, conclusive, and final all decisions and
interpretations of the Administrator upon any questions arising under the Plan
and this Stock Award Agreement.
K. Successors.
This
Stock Award Agreement shall inure to the benefit of and be binding upon the
parties hereto and their legal representatives, heirs, and permitted successors
and assigns.
L. Restrictions
on Transfer.
Except
as otherwise provided for in Subsection K above, and the Plan, the Stock Units
may not be sold, assigned, transferred, pledged or otherwise encumbered, whether
voluntarily or involuntarily, by operation of law or otherwise. No right or
benefit under this Agreement shall be subject to transfer, anticipation,
alienation, sale, assignment, pledge, encumbrance or charge, whether voluntary,
involuntary, by operation of law or otherwise, and any attempt to transfer,
anticipate, alienate, sell, assign, pledge, encumber or charge the same shall
be
void. No right or benefit hereunder shall in any manner be liable for or subject
to any debts, contracts, liabilities or torts of the person entitled to such
benefits. Any assignment in violation of this Subsection L shall be
void.
2
M. Restrictions
on Resale.
The
Awardee agrees not to sell any Shares that have been issued pursuant to the
vested Stock Units at a time when Applicable Laws, Company policies or an
agreement between the Company and its underwriters prohibit a sale. This
restriction shall apply as long as the Awardee is a Service Provider and for
such period of time after the Awardee's Termination of Service as the
Administrator may specify.
N. Entire
Agreement; Governing Law.
This
Stock Award Agreement and the Plan constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Awardee
with respect to the subject matter hereof, and may not be modified adversely
to
the Awardee's interest except by means of a writing signed by the Company and
the Awardee. This Stock Award Agreement is governed by the internal substantive
laws, but not the choice of law rules, of California.
O. NO
GUARANTEE OF CONTINUED SERVICE.
THE
AWARDEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE STOCK UNITS PURSUANT
TO
THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER
AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED STOCK UNITS). THE AWARDEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS
STOCK AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING
SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY
PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH AWARDEE'S RIGHT OR THE COMPANY'S
RIGHT TO TERMINATE AWARDEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME,
WITH OR WITHOUT CAUSE.
By
the
Awardee's signature and the signature of the Company's representative below,
the
Awardee and the Company agree that this Award is granted under and governed
by
the terms and conditions of this Stock Award Agreement and the Plan. The Awardee
has reviewed this Stock Award Agreement and the Plan in their entirety, has
had
an opportunity to obtain the advice of counsel prior to executing this Stock
Award Agreement and fully understands all provisions of this Stock Award
Agreement and the Plan. The Awardee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator
upon
any questions relating to this Stock Award Agreement and the Plan.
3
The
Awardee further agrees that the Company may deliver by email all documents
relating to the Plan or this Award (including, without limitation, prospectuses
required by the Securities and Exchange Commission) and all other documents
that
the Company is required to deliver to its security holders (including, without
limitation, annual reports and proxy statements). The Awardee also agrees that
the Company may deliver these documents by posting them on a web site maintained
by the Company or by a third party under contract with the Company.
|
AWARDEE:
Signature
Printed
Name
Residence
|
BERRY
PETROLEUM COMPANY
By:
Title:
|
4
|
|
News
Release
Berry
Petroleum Company
Phone
(661) 616-3900
5201
Truxtun Avenue, Suite
300 E-mail:
ir@bry.com
Bakersfield,
California
93309-0640 Internet:
www.bry.com
|
 |
|
Contacts:
Robert F. Heinemann, President and CEO - - Ralph J. Goehring, Executive
Vice President and CFO
|
||
BERRY
PETROLEUM COMPANY ENTERS INTO AN
AMENDED
EMPLOYMENT AGREEMENT WITH ITS PRESIDENT/CEO
Bakersfield,
California - June 23, 2006 - Berry Petroleum Company (NYSE:BRY)
(the “Company”) announced that it has entered into an amended and restated
employment agreement with Mr. Robert F. Heinemann, president and chief
executive
officer of the Company. The amended and restated agreement extends
the term of
the original employment agreement through January 31, 2010 along with
modifying
other provisions.
About
Berry Petroleum Company
Berry
Petroleum Company is a publicly traded independent oil and gas production
and
exploitation company with its headquarters in Bakersfield, California
and a
regional office in Denver, Colorado.
# # #