ROBERT F. HEINEMANN
SALARY CONTINUATION AGREEMENT
THIS SALARY CONTINUATION AGREEMENT (this "Agreement") is
made and entered into effective as of June ___, 2004, by and between BERRY
PETROLEUM COMPANY, a
A. Employee is currently serving as the Interim President and Interim Chief
Executive Officer of Berry and is a valuable employee of
B. Effective June ___, 2004, Employee is being named the full-time President and Chief Executive Officer of Berry and Employee and Berry are hereby entering into this Salary Continuation Agreement as recommended by the Compensation Committee of the Board of Directors and adopted by the Board of Directors.
NOW, THEREFORE, in consideration of the mutual promises and obligations contained herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. Salary Continuation Provision.
(a) In the event of a Change of Control of Berry, Berry agrees to pay to Employee on the effective date of such Change of Control a single payment in an amount equal to his Salary (as defined herein) multiplied by two (2).
(b) For purposes of this Agreement, a "Change of Control" of Berry shall mean and shall be deemed to have occurred if and when any one of the following four events occurs: (a) within the meaning of Section 13(d) of the Securities Exchange Act of 1934, any person or group becomes a beneficial owner, directly or indirectly, of securities of Berry representing 20% or more of the combined voting power of Berry's then outstanding securities, without the prior approval of Berry; (b) individuals who were members of the Board of Directors immediately prior to a meeting of the stockholders of Berry involving a contest for the election of Directors shall not constitute a majority of the Board of Directors following such election; (c) the stockholders of Berry 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 Berry (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 Securities Exchange Act of 1934 and the Rules promulgated thereunder, of any party to such merger, consolidated or reorganization); or (d) the stockholders of Berry approve the sale of substantially all of Berry's business and/or assets (in one transaction or a series of related
transactions) to a person or entity which is not a subsidiary.
to Employment Agreement
(c) For purposes of this Agreement, Employee's "Salary" shall mean (i) Employee's regular base annual salary in effect as of the effective date of a Change of Control (as reportable on Employee's IRS Form W-2, including the amount of any voluntary deferrals of salary, and excluding any gain from exercise of stock options or any other similar non-recurring payments), plus (ii) an amount equal to the average of the annual discretionary cash bonuses received by Employee for the two (2) fiscal years immediately prior to the Change of Control.
2. Employment Status. No assurance is given to Employee that
after a Change of Control he will in fact be retained by
3. No Contract of Employment. Nothing in this Agreement shall
be construed or interpreted as creating any contract or agreement of employment
or any right to continued employment with
4. General Provisions.
(a) Neither this Agreement nor any interest herein may be assigned by Employee.
(b) This Agreement shall be binding upon and shall be enforceable against
(c) This Agreement and Paragraph 3.9 of the Employment Agreement between the parties constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether oral or written, between them regarding the subject matter hereof.
(d) Any claim, dispute or controversy arising out of or relating to this Agreement, including a claim for declaratory relief, will be covered by Paragraph 5.9 of the Employment Agreement between the parties.
(e) This Agreement shall be construed and governed by the laws, without
regard to the laws as to choice or conflict of laws, of the State of
to Employment Agreement
delivery of this Agreement, the parties hereto
agree and accept that any legal action or proceeding shall be brought in the
federal or state courts for the State of
IN WITNESS WHEREOF, the parties have executed this Agreement effective the date and year first above written.
BERRY PETROLEUM COMPANY,
MARTIN H. YOUNG, JR.
Chairman of the Board
ROBERT F. HEINEMANN