<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
BERRY PETROLEUM COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
BERRY PETROLEUM COMPANY
28700 HOVEY HILLS ROAD
P.O. BIN X
TAFT, CALIFORNIA 93268
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 17, 1996
To the Shareholders of Berry Petroleum Company:
The Annual Meeting of Shareholders of Berry Petroleum Company (the
"Company"), will be held at the Company's corporate headquarters at 28700 Hovey
Hills Road, Taft, California on May 17, 1996 at 10:00 a.m. for the following
purposes:
1. To elect a board of twelve directors to serve until the next annual
meeting of shareholders and until their successors are elected and
qualified;
2. To ratify the selection of Coopers & Lybrand L.L.P. as the Company's
independent accountants for the year 1996; and
3. To transact such other business as may be properly brought before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 25, 1996 as
the record date for determination of shareholders entitled to notice of and to
vote at the Annual Meeting or any adjournment thereof.
YOU ARE INVITED TO ATTEND THIS MEETING IN PERSON. WHETHER OR NOT YOU PLAN
TO ATTEND, IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING.
THEREFORE, YOU ARE URGED TO PROMPTLY SIGN AND RETURN THE ACCOMPANYING PROXY CARD
IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED
STATES. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO ITS EXERCISE BY GIVING
WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY. IF YOU RETURN AN EXECUTED PROXY
AND THEN ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
ATTENDANCE AT THE MEETING WILL NOT BY ITSELF REVOKE A PROXY.
By Order of the Board of Directors
/s/ KENNETH A. OLSON
----------------------------------
Kenneth A. Olson
Corporate Secretary/Treasurer
April 8, 1996
Taft, California
<PAGE> 3
BERRY PETROLEUM COMPANY
28700 HOVEY HILLS ROAD
TAFT, CALIFORNIA 93268
PROXY STATEMENT
APRIL 8, 1996
------------------------
This Proxy Statement is furnished by the Board of Directors of Berry
Petroleum Company (respectively the "Board" and the "Company" or "Berry") in
connection with the solicitation of proxies for use at the Annual Meeting of
Shareholders to be held on May 17, 1996, or at any adjournment thereof (the
"Annual Meeting" or "Meeting") pursuant to the Notice of said Meeting. This
Proxy Statement and the proxies solicited hereby are being first mailed to
shareholders of the Company on or about April 8, 1996.
SHAREHOLDERS ARE URGED, WHETHER OR NOT THEY EXPECT TO ATTEND THE ANNUAL
MEETING, TO COMPLETE, SIGN AND DATE THE ACCOMPANYING PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE. You may revoke your proxy at any time prior
to its exercise by giving written notice to the Secretary of the Company. If you
return an executed proxy and then attend the Annual Meeting, you may revoke your
Proxy and vote in person. Attendance at the Annual Meeting will not by itself
revoke a proxy.
Unless otherwise directed in the accompanying Proxy, persons named therein
will vote FOR the election of the twelve director nominees listed below and FOR
the ratification of the selection of Coopers & Lybrand L.L.P. as the Company's
independent accountants for the year 1996. As to any other business that may
properly come before the Meeting, the proxyholders will vote in accordance with
the recommendation of the Board of Directors.
VOTING SECURITIES
March 25, 1996 has been fixed as the record date for determination of
shareholders entitled to notice of, and to vote at, the Annual Meeting or any
adjournment thereof. As of March 8, 1996 there were 21,032,987 and 898,892
shares, respectively, of Class A Common Stock ("Common Stock") and Class B Stock
("Class B Stock"), par value $.01 per share, issued and outstanding, referred to
collectively as the "Capital Stock".
Berry's Certificate of Incorporation provides that, except for proposed
amendments to Berry's Certificate of Incorporation adversely affecting the
rights of a particular class (which must be approved by the affected class
voting separately), the Common Stock and the Class B Stock will vote as a single
class on all matters upon which the Capital Stock is entitled to vote. Each
share of Common Stock is entitled to one vote and each share of Class B Stock is
entitled to 95% of one vote. The Certificate of Incorporation also provides for
certain adjustments to the Capital Stock in the event a separate class vote is
imposed by applicable law. Holders of the Capital Stock are entitled to
cumulative voting rights for election of directors. Cumulative voting rights
entitle a shareholder to cast as many votes as is equal to the number of
directors to be elected multiplied by the number of shares owned by such
shareholder. A shareholder may cast all of such shareholder's votes as
calculated above for one candidate or may distribute the votes among two or more
candidates. Unless otherwise instructed, the shares represented by proxies to
management will be voted in the discretion of management so as to elect the
maximum number of the management nominees which may be elected by cumulative
voting.
<PAGE> 4
PRINCIPAL SHAREHOLDERS AND OWNERSHIP BY MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Berry's Capital Stock as of March 8, 1996 by (i) each of its
directors who own Berry Capital Stock, (ii) all directors and officers as a
group, and (iii) each shareholder who beneficially owns more than 5% of Berry's
outstanding Capital Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL
OWNERSHIP(1)(2)
NAME AND ADDRESS --------------------
OF BENEFICIAL OWNER* POSITION SHARES PERCENT
- ----------------------- --------------------- -------- -------
<S> <C> <C> <C>
Harvey L. Bryant Chairman of the
Board and
Director 35,020(3) **
Jerry V. Hoffman President, Chief
Executive Officer
and Director 100,905(4) **
Benton Bejach Director 828,264(5) 3.8%
William F. Berry Director 1,717,251(6) 7.9%
Gerry A. Biller Director 15,000(7) **
Ralph B. Busch, III Nominee for Director 403,823(8) 1.8%
William E. Bush, Jr. Director 570,900(9) 2.6%
William B. Charles Director 570,174(10) 2.6%
Richard F. Downs Director 16,000(11) **
John A. Hagg Director 16,000(12) **
Thomas J. Jamieson Director 6,100(13) **
Roger G. Martin Director 9,000(14) **
All Directors and
Officers as a group
(18 persons) 4,372,965(15) 19.7%
C.J. Bennett 1,553,397(16) 7.1%
Winifred Lowell 1,987,112(17) 9.1%
Bank of California 2,058,604(18) 9.4%
</TABLE>
- ---------------
* All directors and beneficial owners listed above can be contacted at Berry
Petroleum Company, P.O. Bin X, Taft, CA 93268.
** Represents beneficial ownership of less than 1% of the Company's
outstanding Capital Stock.
(1) Unless otherwise indicated, shares shown as beneficially owned are those as
to which the named person possesses sole voting and investment power.
(2) All shares indicated are Common Stock, except 898,892 shares beneficially
owned by Winifred Lowell, which are Class B Stock. Percent calculations are
based on total shares of Capital Stock outstanding.
(3) Includes 11,220 shares held directly and 23,800 shares which Mr. Bryant has
the right to acquire under the Company's 1987 and 1994 Stock Option Plans.
(4) Includes 18,931 shares held directly, 58,600 shares which Mr. Hoffman has
the right to acquire upon the exercise of options granted under the
Company's 1987 and 1994 Stock Option Plans and 23,374 shares held by the
Company's 401(k) Thrift Plan which Mr. Hoffman votes as Chief Executive
Officer of Berry.
(5) Includes 822,264 shares held of record by Mr. Bejach's wife, Wanlyn Berry
Bejach. Mr. Bejach does not exercise voting or investment power and
disclaims beneficial ownership as to these shares. Also includes 6,000
shares which Mr. Bejach has the right to acquire under the Company's 1994
Stock Option Plan.
2
<PAGE> 5
(6) Includes 1,676,529 shares held directly and 34,722 shares held in the Berry
Children's Trust as to which William F. Berry has voting and investment
power and 6,000 shares which Mr. Berry has the right to acquire under the
Company's 1994 Stock Option Plan.
(7) Includes 5,000 shares held directly, 4,000 shares held in the Michael J.
Basso Trust for which Mr. Biller shares voting and investment power with
the Trustors and 6,000 shares which Mr. Biller has the right to acquire
under the Company's 1994 Stock Option Plan.
(8) Includes 95,568 shares held directly, 83,255 shares held in the B Group
Trust at Bank of California which Mr. Busch votes and 225,000 shares held
in a family trust for which Mr. Busch shares voting and investment power as
co-trustee.
(9) Includes 234,700 shares held directly, 200 shares held by Mr. Bush's wife
as Trustee for their children and 330,000 shares held in the William E.
Bush Trust as to which Mr. Bush shares voting power with other trustees and
6,000 shares which Mr. Bush has the right to acquire under the Company's
1994 Stock Option Plan.
(10) Includes 520,714 shares as to which Mr. Charles shares voting and
investment power with his wife, Jaqueline Charles, as Trustee under the
Charles Family Trust and 6,000 shares which Mr. Charles has the right to
acquire under the Company's 1994 Stock Option Plan. Also includes 43,460
shares held of record by Jaqueline Charles as Trustee for their
grandchildren.
(11) Includes 10,000 shares held directly and 6,000 shares which Mr. Downs has
the right to acquire under the Company's 1994 Stock Option Plan.
(12) Includes 10,000 shares held directly and 6,000 shares which Mr. Hagg has
the right to acquire under the Company's 1994 Stock Option Plan.
(13) Includes 100 shares held indirectly by Mr. Jamieson through Jaco Oil
Company, a corporation and 6,000 shares which Mr. Jamieson has the right to
acquire under the Company's 1994 Stock Option Plan.
(14) Includes 3,000 shares held directly and 6,000 shares which Mr. Martin has
the right to acquire under the Company's 1994 Stock Option Plan.
(15) Includes 137,641 shares which the Company's Officers have the right to
acquire upon the exercise of options granted under the Company's 1987 and
1994 Stock Option Plans.
(16) Includes 1,313,516 shares held directly by the C.J. Bennett Trust of 1987
and 239,881 shares held in three trusts for the benefit of his son, nephew
and niece. C.J. Bennett shares voting and investment power under the
aforementioned trusts with two other trustees.
(17) Held of record by Winberta Holdings, Ltd.; 898,892 shares are Class B Stock
and 1,088,220 shares are Common Stock.
(18) Bank of California is the trustee of certain trusts to which the trustors
retain the voting power.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and Directors and persons beneficially owning greater than
ten percent of the outstanding Shares, to file reports of ownership and changes
in ownership with the Securities and Exchange Commission. Based solely on a
review of the copies of such forms furnished to the Company, or written
representations that no Form 5 was required, the Company believes that all
Section 16(a) filing requirements were complied with, except that one report for
one transaction was filed late by Mr. Chester L. Love, an executive officer of
the Company.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
The Company's directors are elected at each annual meeting of shareholders.
At the Annual Meeting, twelve directors, constituting the authorized number of
directors, will be elected to serve until the next annual meeting of
shareholders and until their successors are elected and qualified. The nominees
receiving the greatest numbers of votes at the Annual Meeting up to the number
of authorized directors will be elected.
3
<PAGE> 6
The nominees for election as directors at the Annual Meeting set forth in
the table below are all incumbent directors who were elected at the 1995 Annual
Meeting of Shareholders except for Ralph B. Busch, III who was nominated to
stand for election by the Board of Directors to replace Dr. Ralph B. Busch, Jr.,
who is not seeking reelection. Each of the nominees has consented to serve as a
director if elected. Unless authority to vote for any director is withheld in a
proxy, it is intended that each proxy will be voted FOR such nominees. In the
event that any of the nominees for director should before the Meeting become
unable to serve, it is intended that shares represented by proxies which are
executed and returned will be voted for such substitute nominees as may be
recommended by the Company's existing Board of Directors, unless other
directions are given in the proxies. To the best of the Company's knowledge, all
the nominees will be available to serve.
<TABLE>
<CAPTION>
DIRECTOR
NOMINEE AGE POSITION SINCE
------- --- -------- --------
<S> <C> <C> <C>
Harvey L. Bryant 66 Chairman of the Board and Director 1985
Jerry V. Hoffman 46 President, Chief Executive Officer and 1992
Director
Benton Bejach 73 Director 1985
William F. Berry 55 Director 1985
Gerry A. Biller 63 Director 1989
Ralph B. Busch, III 36 Director Nominee --
William E. Bush, Jr. 49 Director 1986
William B. Charles 68 Director 1985
Richard F. Downs 64 Director 1985
John A. Hagg 48 Director 1994
Thomas J. Jamieson 53 Director 1993
Roger G. Martin 58 Director 1985
</TABLE>
Set forth below is information concerning each of the nominee Directors of
Berry.
Mr. Bryant was named Chairman of the Company's Board of Directors in March
1992 and is the Chairman of the Executive Committee. Mr. Bryant held the Chief
Executive Officer position from December 1985 until May 1994, at which time he
retired, and was the President of the Company from December 1985 until March
1992. Mr. Bryant performs other engineering and exploration consulting.
Mr. Hoffman was named President and Chief Executive Officer in May 1994 and
was President and Chief Operating Officer from March 1992 to May 1994. Mr.
Hoffman, a CPA, is a member of the Executive Committee and was the Senior Vice
President and Chief Financial Officer of the Company from 1985 until March 1992.
Mr. Bejach is a member of the Compensation Committee. Mr. Bejach is
retired, but has real estate investments in Hawaii and Tennessee. Mr. Bejach's
wife is a sister of William F. Berry and a cousin of William B. Charles, William
E. Bush, Jr. and Ralph B. Busch, III.
Mr. Berry is the Chairman of the Investment Committee and a member of the
Executive Committee. Mr. Berry is currently a private investor and was involved
in investment banking for a major California bank for over 20 years. Mr. Berry
is a brother-in-law to Benton Bejach, a cousin to William B. Charles, William E.
Bush, Jr., and Ralph B. Busch, III.
Mr. Biller is a member of the Investment and Audit Committees. Mr. Biller
is a senior partner of Vance, Thrift & Biller, a CPA firm in Ventura and has
been with that firm since 1957.
Mr. Ralph B. Busch, III is currently an Executive Vice President and Chief
Operating Officer for Rollins Hudig Hall of Central California. Prior to his
position with Rollins Hudig Hall, Mr. Busch was President of Central Coast
Financial from 1986 to 1993. Mr. Busch has also been a Director of Eagle Creek
Mining and Drilling Company since July of 1985 and past President from 1990 to
1992. Mr. Busch graduated in 1982 with a Bachelor of Arts degree in geology from
Miami University. Mr. Busch also holds numerous civic and non-profit Board
positions. Mr. Busch is the son of Dr. Ralph B. Busch, Jr. who is retiring from
the Board of
4
<PAGE> 7
Directors on May 17, 1996. Mr. Busch is also a cousin to William F. Berry,
William B. Charles, William E. Bush, Jr. and Benton Bejach's wife.
Mr. Bush is a member of the Compensation Committee. Mr. Bush is the General
Manager of Acala Seeds Ltd., formerly Kleen-Seed Delinting Company, Inc. Prior
to May 1987, Mr. Bush was the Area Manager/Technical Representative of
Gustafson, Inc. (a division of Uniroyal) for Arizona and California for nine
years. Mr. Bush is also a Director of Eagle Creek Mining & Drilling, Inc. Mr.
Bush is a cousin to William F. Berry, William B. Charles, Ralph B. Busch, III
and Benton Bejach's wife.
Mr. Charles is a private investor and is the Chief Executive Officer of
Winton Development Co., Inc., doing business as "Mt. Shasta Ski Park". Mr.
Charles is also General Manager of Mt. Shasta Ski Park. Mr. Charles is a cousin
to William F. Berry, William E. Bush, Jr., Ralph B. Busch, III and Benton
Bejach's wife.
Mr. Downs is Chairman of the Audit Committee and a member of the Investment
Committee. Mr. Downs has been the President of Lyndow Financial, a privately
held company, since February 1991. Mr. Downs was Chief Financial Officer of
Duncan Enterprises, a manufacturer and marketer of hobby ceramic products, from
1973 to July 1990.
Mr. Hagg has been the Chairman, President and Chief Executive Officer of
Northstar Energy Corporation ("Northstar") since 1985. Northstar is an
intermediate Canadian oil and gas producer, based in Calgary, Alberta with its
common shares listed on The Toronto Stock Exchange.
Mr. Jamieson is a member of the Executive Committee. Mr. Jamieson is the
Chief Executive Officer, President and founder of Jaco Oil Company and the
majority owner and founder of Wholesale Fuels, Inc. which was started in 1983.
Founded in 1970, Jaco Oil Company, based in Bakersfield, California, has become
one of the largest independent gasoline marketers in the western United States.
Mr. Jamieson is a Director of Superior National Insurance Company and is also
involved in real estate, oil and gas properties and insurance.
Mr. Martin is a member of the Audit, Compensation and Executive Committees.
Mr. Martin has been the Manager of Special Projects at the Wilmington Field for
the city of Long Beach, California since August 1991 and prior to that, served
as an independent oil and gas consultant. From 1984 to September 1985, Mr.
Martin served as the Manager, Unit Operations (Wilmington Field), with the city
of Long Beach. Mr. Martin was employed in 1982 and 1983 as the General Manager
of Technical Services for Diamond Shamrock Corporation, the principal business
of which was oil and gas exploration, production, refining and marketing. From
January 1975 to June 1981, Mr. Martin was the officer in charge of Elk Hills
Naval Petroleum Reserve.
RETIREMENT
Dr. Ralph B. Busch, Jr. has announced that he is retiring from the Board of
Directors on May 17, 1996. Dr. Busch served Berry Petroleum Company and its
predecessor companies for many years and his service and advice have been much
appreciated. Dr. Busch was originally elected to the Board of Directors of Berry
& Ewing on May 4, 1966 and became Chairman of Berry & Ewing on May 7, 1978. Dr.
Busch was also elected to the Board of Directors of Berry Oil Company on May 9,
1980. Dr. Busch served on the Boards of both companies until they merged into
Berry Petroleum Company on December 16, 1985. We wish to thank Dr. Busch for his
30 years of service to the Shareholders and Management of the Berry companies
and wish him well in the future.
5
<PAGE> 8
COMMITTEES AND MEETINGS
The Board of Directors has an Audit Committee, Compensation Committee,
Executive Committee and Investment Committee.
The Audit Committee of the Board of Directors currently consists of Messrs.
Biller, Downs and Martin. The Audit Committee reviews, acts on and reports to
the Board of Directors with respect to various auditing, risk management,
accounting and tax matters, including the selection of the Company's independent
accountants, the scope of the annual audit, the nature of non-audit services,
the fees to be paid to the independent accountants, the performance of the
Company's independent accountants and the accounting practices of the Company.
The Compensation Committee of the Board of Directors currently consists of
Messrs. Bejach, Martin, William E. Bush, Jr. and Dr. Ralph B. Busch, Jr. The
Compensation Committee is responsible for recommending total compensation for
executive officers of Berry to the Board of Directors, for reviewing general
plans of compensation for employees and for reviewing and approving awards under
Berry's Bonus Plan. In addition, the Committee is charged with the full
responsibility of administering the Company's 1994 Stock Option Plan, 1987
Nonstatutory Stock Option Plan and 1987 Stock Appreciation Rights Plan. Dr.
Busch is not seeking reelection to the Board of Directors and will resign from
the Compensation Committee on May 17, 1996.
The Executive Committee of the Board of Directors currently consists of
Messrs. Berry, Bryant, Hoffman, Jamieson, Martin and Dr. Ralph B. Busch, Jr. The
Executive Committee was formulated to provide for the orderly and smooth
transition of the Chief Executive Officer position from Mr. Bryant to Mr.
Hoffman and to provide additional resources to assist management in making
strategic decisions, consult with management on technical, strategic,
organizational and administrative matters, acquisitions and dispositions,
exploration, mergers and policy regarding the long-term growth of the Company.
Dr. Busch is not seeking reelection to the Board of Directors and will resign
from the Executive Committee on May 17, 1996.
The Investment Committee of the Board of Directors currently consists of
Messrs. Berry, Biller and Downs. The Investment Committee is responsible for
providing management with investment guidelines, monitoring investment
performance and acting as a liason between management and the Board of Directors
on banking and investment matters.
During 1995, the Board of Directors met four times, the Audit Committee met
three times, the Compensation Committee met twice, the Executive Committee met
once and the Investment Committee met once. All of the nominees holding office
attended at least 75% of the board meetings and meetings of committees of which
they were members.
Non-employee directors are currently paid a quarterly fee of $3,750, plus
$400 for each board meeting and $400 for each committee meeting attended which
is not held on the same day as the board meeting. The Company does not have a
Nominating Committee.
The Company's 1994 Option Plan provides for a "formula" grant of 3,000
options annually to each non-employee director holding office on December 2nd of
each year. 3,000 options were issued on December 2, 1994 and December 2, 1995 to
each of the eleven non-employee directors holding office on those dates. The
options were issued at the closing prices of $10.75 and $10.625 at December 2,
1994 and 1995, respectively. The exercise price of the options is the closing
price of Berry Petroleum Company Class A Common Stock as reported by the New
York Stock Exchange for the date of grant. The maximum option exercise period is
ten years from the date of the grant. The options issued to the directors vest
immediately.
6
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table discloses compensation for the three fiscal years ended
December 31, 1995 received by the Company's Chief Executive Officer and other
executive officers who received in excess of $100,000 in compensation in 1995.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1) ALL OTHER
NAME AND ---------------------- COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(2)
------------------ - ---- --------- -------- ------------
<S> <C> <C> <C> <C>
Jerry V. Hoffman 1995 225,000 -- 10,108
President and Chief Executive Officer 1994 180,250 -- 11,327
1993 191,250 30,000 11,956
Chester L. Love 1995 103,000 -- 7,621
Vice President of Engineering 1994 -- -- --
1993 -- -- --
</TABLE>
- ---------------
(1) Does not include the value of perquisites and other personal benefits
because the aggregate amount of such compensation, if any, does not exceed
the lesser of $50,000 or 10 percent of the total amount of annual salary and
bonus for any named individual. Mr. Love's compensation levels for 1993 and
1994 do not meet the disclosure requirements for this table.
(2) Includes Company contributions under the 401(k) Thrift Plan for 1995, 1994
and 1993, respectively, of $9,650, $10,800 and $11,475 for Mr. Hoffman and
$6,970 for Mr. Love for 1995. Also includes split dollar life insurance
compensation for 1995, 1994 and 1993, respectively, of $458, $527 and $481
for Mr. Hoffman and $651 for Mr. Love for 1995.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement, in
whole or in part, the following report shall not be incorporated by reference
into any such filings.
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. During 1995 the Committee was
composed of four nonemployee Directors. The Committee is committed to a strong,
positive link between business performance, strategic goals, and compensation
and benefit programs.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION POLICY
The Company's compensation policy is designed to support the overall
objective of enhancing value for our shareholders by:
-- Attracting, developing, rewarding, and retaining highly qualified and
productive individuals.
-- Directly relating compensation to both Company and individual
performance.
-- Ensuring compensation levels that are externally competitive and
internally equitable.
-- Encouraging executive stock ownership to enhance a mutuality of
interest with other shareholders.
The following is a description of the elements of executive compensation
and how each relates to the objectives and policy outlined above.
7
<PAGE> 10
BASE SALARY
The Committee reviews each executive officer and certain other management
employees' salary annually. In determining appropriate salary levels, we
consider the level and scope of responsibility, experience, Company and
individual performance, internal equity, as well as pay practices of other
companies relating to executives of similar responsibility. By design, we strive
to set executives' salaries at competitive market levels.
We believe maximum performance can be encouraged through the use of
appropriate incentive programs. Incentive programs for executives are as
follows:
ANNUAL INCENTIVES
Annual incentive awards are made to executives to recognize and reward
corporate and individual performance. The plan in effect provides an incentive
fund of up to 2% of net earnings after taxes. A portion of the available bonus
is reserved for discretionary performance awards by the Chief Executive Officer
for other employees whose efforts and performance are judged to be exceptional.
Due to operating results, no incentive cash bonuses were paid in 1994 or 1995
based on the prior years results. The cash bonuses paid in 1996, based on 1995
results were $188,500.
The amount individual executives may earn is directly dependent upon the
individual's position, responsibility, and ability to impact the Company's
financial success. External market data is reviewed periodically to determine
competitive incentive opportunities for individual executives.
LONG-TERM INCENTIVE PLANS COMPENSATION
Non-Statutory Stock Option ("NSO") and Stock Appreciation Rights ("SAR") Plans
The purpose of these plans is to provide additional incentives to employees
to work to maximize shareholder value. The NSO and SAR plans generally utilize
vesting periods to encourage key employees to continue in the employ of the
Company. The Compensation Committee is charged with responsibility for
administering and granting non-statutory stock options and stock appreciation
rights. The remaining SARs available for issuance were canceled by the Board of
Directors on December 2, 1994 with the adoption of the 1994 Stock Option Plan.
An aggregate of 39,740 previously issued SARs remain exercisable by the
Executive Officers of the Company at December 31, 1995. No Options were issued
and no Options or SARs were exercised by the Executive Officers in 1995. At
December 31, 1995, an aggregate of 827,800 Options are available for issuance
from the 1994 Stock Option Plan.
CHIEF EXECUTIVE OFFICER
Mr. Hoffman replaced Mr. Bryant as the Chief Executive Officer in May 1994.
The Committee believes Mr. Hoffman has done a good job of managing the Company
and redirecting the Company's resources to higher profitability projects and
growth opportunities during his first two years as Chief Executive Officer of
Berry Petroleum Company. Mr. Hoffman's compensation incentives are primarily
derived from the Bonus Plan and the Option and SAR Plans. The value of the
Options and SARs are directly related to the Company's stock performance.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
<TABLE>
<S> <C> <C>
Dr. Ralph B. Busch, Jr. William E. Bush, Jr. March 15, 1996
Benton Bejach Roger G. Martin
</TABLE>
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SEVERANCE AGREEMENTS
The Company has entered into a salary continuation agreement with Mr.
Hoffman and other executives which guarantees their salary will be paid in one
lump sum, or, at their option, be continued for one year for Mr. Hoffman or six
months for the other executives, following a sale of all or substantially all of
the oil producing properties of Berry or a merger or other reorganization
between Berry and a non-affiliate which results in a change of ownership or
operating control.
LIFE INSURANCE COVERAGE
The Company provides certain individuals who are officers or other
high-level executives with life insurance coverage in addition to that available
to employees under the Company's group-term life insurance plan. The amount of
this life insurance coverage is $472,000 for Mr. Hoffman and $248,000 for Mr.
Love. Depending on certain variables, an executive or beneficiary may be
entitled to insurance benefits exceeding the amount of term insurance that could
otherwise have been purchased with the portion of the premium payments that are
imputed to the executive as taxable income.
NON-QUALIFIED RETIREMENT PLAN
Berry's Board of Directors adopted a non-qualified retirement plan in
December 1988. This plan was designed to make up the difference in retirement
benefits which certain employees could not receive due to limitations imposed by
the Internal Revenue Code. The Company's Defined Benefit Retirement Plan was
terminated as of December 31, 1991. The non-qualified retirement plan is
administered by the Board of Directors which determines the obligation and
required funding for the plan. Mr. Bryant is the only participant covered by
this plan. This plan provides monthly retirement payments beginning at age 65
and continuing for life with a 10 year period term certain. Mr. Bryant's
benefit, which began November 1, 1994 at age 65, is $4,805 per month. No
additional expense was incurred to fund this plan for 1995.
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PERFORMANCE GRAPH
The following Performance Graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
Total returns assume $100 invested on December 31, 1990 in shares of Berry
Petroleum Company, the Standard & Poors ("S&P") 500 Index and the Dow Jones
Secondary Oil Company Index (which includes 13 companies) assuming reinvestment
of dividends for each measurement period. During 1995, the Company
underperformed the peer group by 7% and significantly underperformed the S&P 500
which was up 37% for the year. The information shown is historical and is not
necessarily indicative of future performance.
<TABLE>
<CAPTION>
Dow Jones
Measurement Period Berry Petro- Secondary Oil
(Fiscal Year Covered) leum Company Cos. # S&P 500
<S> <C> <C> <C>
12/31/90 100.00 100.00 100.00
12/31/91 76.43 92.99 130.00
12/31/92 88.38 102.24 139.67
12/31/93 74.60 115.51 153.55
12/31/94 74.91 114.94 155.52
12/30/95 83.14 135.59 213.24
</TABLE>
Source: Carl Thompson Associates, Boulder, CO (303) 494-5472
* S&P 500 Total Return provided by Bloomberg Financial Markets
# Dow Jones Secondary Oil Cos. total return calculated by Carl Thompson
Associates
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
EAGLE CREEK MINING & DRILLING, INC.
Eagle Creek Mining & Drilling, Inc. ("Eagle Creek"), a California
corporation, was a wholly-owned subsidiary of the Company's predecessor until it
was spun off to the majority shareholders of the predecessor. On November 30,
1989, Eagle Creek purchased the assets of S&D Supply Company, a California
partnership. S&D Supply Company, a retail distributor of oilfield parts and
supplies ("S&D"), is now a division of Eagle Creek. The Company renewed its five
year contract in 1994 with S&D, whereby the Company will purchase oilfield parts
and supplies from S&D at competitive prices through November 30, 1999. The
amounts paid to S&D under this contract in 1995, 1994 and 1993 were $240,000,
$286,000 and $597,000, respectively.
Mr. Ralph B. Busch III and Mr. William E. Bush, Jr. are Directors of Eagle
Creek. Also, Mr. Charles and Mr. Bejach are Directors of Berry and Mr. Charles,
Mr. Bejach's wife, and Mr. Busch and their immediate families, are significant
beneficial owners of the stock of Eagle Creek. In addition, certain family
members are directors and executive officers of Eagle Creek.
VICTORY SETTLEMENT TRUST
In connection with the reorganization of the Company in 1985, a shareholder
of Berry Holding Company, Victory Oil Company, a California partnership
("Victory"), brought suit against Berry Holding Company (one of Berry's
predecessor companies prior to the reorganization in 1985) and all of its
directors and officers and certain significant shareholders seeking to enjoin
the reorganization. As a result of the reorganization, Victory's shares of Berry
Holding Company stock were converted into shares of Berry Common Stock
representing approximately 9.7% of the shares of Berry Common Stock outstanding
immediately subsequent to the reorganization. In 1986, Berry and Victory,
together with certain of its affiliates, entered into the Instrument for
Settlement of Claims and Mutual Release (the "Settlement Agreement").
The Settlement Agreement provided for the exchange (and retirement) of all
shares of Common Stock of Berry held by Victory and certain of its affiliates
for certain assets (the "Settlement Assets") conveyed by Berry to Victory. The
Settlement Assets consisted of (i) a 5% overriding royalty interest in the
production removed or sold from certain real property situated in the
Midway-Sunset field which is referred to as the Maxwell property ("Maxwell
Royalty") and (ii) a parcel of real property in Napa, California.
The shares of Berry Holding Company (BHC) originally acquired by Victory
and the shares of Berry Stock issued to Victory in exchange for the BHC Stock in
the reorganization (the "Victory Shares") were acquired subject to a legend
provision designed to carry out certain provisions of the Will of Clarence J.
Berry, the founder of Berry's predecessor companies. The legend enforces an
Equitable Charge (the "Equitable Charge") which requires that 37.5% of the
dividends declared and paid on such shares from time to time be distributed to a
group of lifetime income beneficiaries (the "B" Group).
As a result of the Settlement Agreement, the "B" Group was deprived of the
dividend income they would have received on the Victory Shares under the
Equitable Charge. In order to adequately protect the interests of the "B" Group,
Berry executed a Declaration of Trust (the "Victory Settlement Trust"). In
recognition of the obligations of Berry and Victory with respect to the
Equitable Charge, Victory agreed in the Settlement Agreement to pay to Berry in
its capacity as trustee under the Victory Settlement Trust, 20% of the 5%
Maxwell Royalty ("Maxwell "B" Group Payments"). The Maxwell "B" Group Payments
will continue until the death of the last surviving member of the "B" Group, at
which time the payments will cease and the Victory Settlement Trust will
terminate. There is one surviving member of the "B" Group.
Under the Settlement Agreement, Berry agreed to guarantee that the "B"
Group will receive the same dividend income under the Equitable Charge that they
would have received had the Victory shares remained as issued and outstanding
shares. Accordingly, when Berry declares and pays dividends on its capital
stock, it is obligated to calculate separately the amount of dividends that
would have been paid to the "B" Group had the Victory Shares not been retired
(the "Deemed Dividend Payments"). Berry will make payments from the Victory
Settlement Trust to the surviving member of the "B" Group which may constitute
all or a part of the
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<PAGE> 14
Deemed Dividend Payment in March and September of each year. Such payments will
be made to the surviving member of the "B" Group for the remainder of his life.
Typically, the Maxwell "B" Group Payments have contributed to a portion or
all of the payment of the Deemed Dividend Payments. Pursuant to the Settlement
Agreement, Berry agreed to make up any deficiency in such Deemed Dividend
Payments. The Company paid $15,200 in 1995 to meet its obligations under the
Settlement Agreement to the B Group survivor. The B Group survivor and his
sister, Ethel D. Busch, are significant shareholders of Berry. Ethel D. Busch's
husband, Dr. Ralph Busch, Jr. is retiring as a Director of Berry on May 17,
1996.
PROPOSAL NO. 2 -- RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, after consideration of the recommendation of the
Audit Committee, has selected the certified public accounting firm of Coopers &
Lybrand L.L.P. as the Company's independent accountants for the year 1996.
Shareholders will be asked to ratify the selection of Coopers & Lybrand L.L.P.
at the Annual Meeting. Ratification will require the favorable vote of the
holders of a majority of the Capital Stock represented and voting at the
Meeting. Although ratification of the accountants by shareholders is not legally
required, the Company's Board of Directors believes such ratification to be in
the best interest of the Company and its shareholders. If the shareholders do
not ratify this appointment, other firms of certified public accountants will be
considered by the Board of Directors upon recommendation of the Audit Committee.
Coopers & Lybrand L.L.P. has been the Company's independent accountants since
1991. One or more representatives of Coopers & Lybrand L.L.P. are expected to
attend the Annual Meeting with the opportunity to make a statement if they
desire to do so and be available at that time to respond to appropriate
questions.
SHAREHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING
Any proposal of a shareholder intended to be presented at the next annual
meeting of shareholders, expected to be held on May 16, 1997, must be received
at the office of the Secretary of the Company by December 9, 1996, if such
proposal is to be considered for inclusion in the Company's proxy statement and
form of proxy relating to that meeting.
ANNUAL REPORT
The Company's 1995 Annual Report to Shareholders has been mailed to
shareholders concurrently herewith, but such report is not incorporated in this
Proxy Statement and is not deemed to be a part of this proxy solicitation
material.
On or about March 18, 1996, the Company filed with the Securities and
Exchange Commission its Annual Report on Form 10-K. This Report contains
detailed information concerning the Company and its operations and supplementary
financial information which, except for exhibits, are included in the Annual
Report to Shareholders. A COPY OF THE EXHIBITS WILL BE FURNISHED TO SHAREHOLDERS
WITHOUT CHARGE UPON WRITTEN REQUEST TO: INVESTOR RELATIONS, BERRY PETROLEUM
COMPANY, 28700 HOVEY HILLS ROAD, P.O. BIN X, TAFT, CA 93268.
EXPENSES OF SOLICITATION
The total cost of this solicitation will be borne by the Company. In
addition to use of the mails, certain officers, directors and regular employees
of the Company, without receiving additional compensation, may solicit proxies
personally by telephone or facsimile. The Company may reimburse persons holding
shares in their own names or in the names of their nominees for expenses they
incur in obtaining instructions from beneficial owners of such shares.
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<PAGE> 15
OTHER MATTERS
Management knows of no other business to be presented at the Meeting, but
if other matters do properly come before the Meeting, it is intended that the
persons named in the proxy will vote on said matters in accordance with their
best judgment.
The above Notice, Proxy Statement and Form of Proxy are sent by Order of
the Board of Directors.
/s/ KENNETH A. OLSON
-------------------------------
KENNETH A. OLSON
Corporate Secretary
April 8, 1996
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<PAGE> 16
PROXY
BERRY PETROLEUM COMPANY
Proxy for the Annual Meeting of Shareholders
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Berry Petroleum Company, a Delaware
Corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement and hereby appoints Harvey L. Bryant and Jerry
V. Hoffman as proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of the Common Stock or Class B Stock of Berry Petroleum Company held of
record by the undersigned on March 25, 1996 at the annual meeting of
shareholders to be held May 17, 1996 or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted FOR Proposals 1 and 2 and in accordance with the recommendations of
the Board of Directors on any other matters that may properly come before the
meeting.
(Continued and to be signed on reverse side)
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- FOLD AND DETACH HERE -
<PAGE> 17
Please mark
your votes as
indicated in
this example. /X/
The Board of Directors Recommends a Vote FOR Proposals 1 and 2
FOR all nominees WITHHOLD
listed below (except AUTHORITY
as marked to the TO VOTE for all
contrary below) nominees listed below.
1. ELECTION OF DIRECTORS / / / /
Nominees: B. Bejach W. Charles
W. Berry R. Downs
G. Biller J. Hagg
H. Bryant J. Hoffman
R. Busch III T. Jamieson
W. Bush R. Marlin
(Instruction: To withhold authority to vote for any nominee, strike a line
through that nominee's name in the list above).
2. PROPOSAL TO RATIFY THE SELECTION OF FOR AGAINST ABSTAIN
Coopers & Lybrand L.L.P. as the independent / / / / / /
accountants of the corporation
3. The Proxies are authorized to vote upon such other business as may properly
come before the meeting.
Dated: ________________________________, 1996
_____________________________________________
Signature
_____________________________________________
Signature if held jointly
Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign. When signing as attorney, as
executor, administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full corporate
name by President or other authorized officer.
If a partnership, please sign in partnership
name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
