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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