ITEM
10 Directors and Executive Officers of the Registrant
All
directors of the Company serve one year terms from the time of their election to
the time their successor is elected and qualified. The following information is
furnished with respect to each director and executive officer:
Year
First
Became
Director or
Position
With
Name
of Director
Age
Executive
Officer
Company
F.
Lynn Blystone
69
1974
President,
CEO, Director, TVC
CEO
and Director, TVOG
President,
CEO, Director, TVPC
Dennis
P. Lockhart
(1)
57
1982
Director
Milton
J. Carlson
(1)
74
1985
Director
Harold
J. Noyes
(2)
56
2002
Director
Loren
J. Miller
(1)
59
1992
Director
C.
Chase Hoffman
(2)
81
2000
Director
Thomas
J. Cunningham
62
1997
Treasurer,
Chief Financial Officer and
Secretary,
TVC, TVOG, and TVPC
Joseph
R. Kandle
62
1999
President,
TVOG
(1)-
Member of Audit Committee
(2)
Member of Compensation Committee
F.
Lynn Blystone - 69
President
and Chief Executive Officer of Tri-Valley Corporation and Tri-Valley Power
Corporation, CEO of Tri-Valley Oil & Gas Company and Select Resources
Corporation, which are three wholly owned subsidiaries of Tri-Valley
Corporation, Bakersfield, California, Chairman of Alpha Minerals &
Chemicals. LLC
1974
Mr.
Blystone became president of Tri-Valley Corporation in October, 1981, and
was nominally vice president from July to October, 1981. His background
includes institution management, venture capital and various management
functions for a mainline pipeline contractor including the Trans Alaska
Pipeline Project. He has founded, run and sold companies in several fields
including Learjet charter, commercial construction, municipal finance and
land development. He is also president of a family corporation, Bandera
Land Company, Inc., with real estate interests in Kern, Riverside and
Orange Counties California. A graduate of Whittler College, California, he
did graduate work at George Williams College, Illinois in organization
management. He gives full time to Tri-Valley.
Dennis
P. Lockhart - 57
Director
1982
Mr.
Lockhart is a professor at Georgetown University. He was previously
Managing Partner of Zephyr Management L.P., an international private
equity investment fund sponsor/manager headquartered in New York. He
remains a partner in this firm. He is also (non-executive) Chairman of the
Small Enterprise Assistance Funds (SEAF),a not-for-profit operator of
emerging markets venture capital funds focused on the small and mid-sized
company sector. He is a director of CapitalSource Inc. (NYSE) and SMELoan
Asia/Maveo Systems (private, Hong Kong based). In 2002 and 2003 he was an
Adjunct Professor at the Johns Hopkins University School of Advanced
International Studies. From 1988 to 2001, he was President of Heller
International Group Inc., a non-bank corporate and commercial finance
company operating in 20 countries, and a director of the group’s parent,
Heller Financial Inc. From 1971 to 1988 he held a variety of international
and domestic positions at Citibank/Citicorp (now Citigroup) including
assignments in Lebanon, Saudi Arabia, Greece, Iran and the bank’s Latin
American group in New York. In 1999, he was Chairman of the Advisory
Committee of the U.S. Export Import Bank. He is a graduate of Stanford
University and The John Hopkins University School of Advanced
International Studies. He also attended the Senior Executive Program at
the Sloan School of Management, Massachusetts Institute of Technology. Mr.
Lockhart is an independent member of our Board of
Directors.
Milton
J. Carlson - 74
Director
1985
Since
1989, Mr. Carlson has been a principal in Earthsong Corporation, which, in
part, consults on environmental matters and performs environmental audits
for government agencies and public and private concerns. Mr. Carlson
attended the University of Colorado at Boulder and the University of
Denver. Mr. Carlson is an independent member of our Board of
Directors.
Loren
J. Miller, CPA - 59
Director
1992
Mr.
Miller has served in a treasury and other senior financial capacities at
the Jankovich Company since 1994. Prior to that he served successively as
vice president and chief financial officer of Hershey Oil Corporation from
1987 to 1990 and Mock Resources from 1991 to 1992. Prior to that he was
vice president and general manager of Tosco Production Finance Corporation
from 1975 to 1986 and was a senior auditor the accounting firm of Touche
Ross & Company from 1968 to 1973. He is experienced in exploration,
production, product trading, refining and distribution as well as
corporate finance. He holds a B.S. in accounting and a M.B.A. in finance
from the University of Southern California. Mr. Miller is an independent
member of our Board of Directors.
Harold
J. Noyes - 56
Director,
President of Select Resources Corporation, a wholly owned subsidiary of
Tri-Valley Corporation, Director of Tri-Valley Corporation, Director of
Alpha Minerals & Chemicals, LLC
2002
Since
January 2005 he has been president of Select Resources Corporation, a
newly formed wholly owned subsidiary of Tri-Valley Corporation. Prior to
that he was the president of H.J. Noyes and Associates, Inc., a firm that
provides consulting and business development services to the minerals
industry. Dr. Noyes is currently a senior program manager with Pacific
Northwest National Laboratory. He served October 2001 through October 2002
as vice president, marketing and business development for Blake Street
Investments, Inc., a money management and investment advisory firm. From
1997 to 2000 he was president of North Star Exploration, Inc. He was
manager, resource development for Doyon Limited from 1983 to 1997. Dr.
Noyes graduated from the University of Minnesota Magna Cum Laude in
geology and took his Ph.D. in geology and geochemistry at the
Massachusetts Institute of Technology. Later he earned a Masters in
Business Administration at the University of Chicago. In 2004, Mr. Noyes
was an independent member of our board of directors.
C.
Chase Hoffman - 81
Director
2000
Since
1965 Mr. Hoffman has owned and operated a milk cow dairy and farmed 4,000
acres of land. Additionally, he has been a commercial and residential land
developer in California and Hawaii since 1978. From 1973 to 1978 he was a
senior vice president and general manager for Knudsen for the State of
California. Mr. Hoffman also sits as a director for two companies whose
shares are listed on the Canadian Venture Exchange: Seine River Resources,
Inc., Vancouver, British Columbia, with California gold operations and
Guatemala oil properties, and International Powerhouse Energy Corporation,
a British Columbia, Canada, hydroelectric project. He is a graduate of
Stanford University with a degree in Economics and Business Administration
from Graduate School of Business. Mr. Hoffman is an independent member of
our Board of Directors.
Thomas
J. Cunningham - 62
Secretary,
Treasurer and Chief Financial Officer of Tri-Valley Corporation, and its
wholly owned subsidiaries, Tri-Valley Oil & Gas Company, Tri-Valley
Power Corporation and Select Resources Corporation, Bakersfield,
California,
CFO
and Director of Alpha Minerals & Chemicals
1997
Named
as Tri-Valley Corporation’s treasurer and chief financial officer in
February 1997, and as corporate secretary on December 1998. From 1987 to
1997 he was a self employed management consultant in finance, marketing
and human resources. Prior to that he was executive vice president, chief
financial officer and director for Star Resources from 1977 to 1987. He
was the controller for Tucker Drilling Company from 1974 to 1977. He has
over 25 years experience in corporate finance, Securities Exchange
Commission public company reporting, shareholder relations and employee
benefits. He received his education from Angelo State University,
Texas.
Joseph
R. Kandle - 62
President
and Chief Operating Officer Tri-Valley Oil & Gas Company, wholly owned
subsidiary of Tri-Valley Corporation Bakersfield,
California
1998
Mr.
Kandle was named as president of Tri-Valley Oil & Gas Co. February
1999 after joining the Company June 1998 as vice president - engineering.
From 1995 to 1998 he was employed as a petroleum engineer for R & R
Resources, self-employed as a consulting petroleum engineer from 1994 to
1995. He was vice president - engineering for Atlantic Oil Company from
1983 to 1994. From 1981 to 1983 he was vice president for Star Resources.
He was vice president and chief engineer for Great Basins Petroleum from
1973 to 1981. He began his career with Mobil Oil (from 1965 to 1973) after
graduating from the Montana School of Mines in
1965.
Audit
Committee
The
independent directors that serve on the audit committee are Loren J. Miller,
Dennis P. Lockhart and Milton J. Carlson. The board of directors has determined
that Loren J. Miller is considered to be the audit committee financial expert.
Please see his biography above.
Compliance
with Section 16(a) of the Exchange Act
Section
16(a) of the Securities Exchange Act of 1934 and Securities and Exchange
Commission regulations require that the Company's directors, certain officers,
and greater than 10 percent shareholders file reports of ownership and changes
in ownership with the SEC and must furnish the Company with copies of all such
reports they file. Based solely on the information furnished to the Company, we
believe that no person failed to file required Section 16(a) reports on a timely
basis during or in respect of 2001.
Code
of Ethics
We have
adopted a code of ethics that applies to our chief executive officer and chief
financial officer. A copy of the code of ethics is attached to this 10-K Report
as and exhibit.
ITEM
11 Executive Compensation
The
following table summarizes the compensation of the chairman of the board and the
president of the Company and its subsidiaries, F. Lynn Blystone (the "Named
Officer"), for the fiscal year ended December 31, 2004, 2003, and
2002.
Independent
directors C. Chase Hoffman and Harold J. Noyes served as the compensation
committee for fiscal year 2004.
Long
Term
Compensation
Annual
Compensation
Awards
(a)
(b)
( c
)
(d)
(e)
Other
Securities
Name
Period
Covered
Salary
Compensation
Underlying
Options
F.
Lynn
FYE
12/31/04
$108,900
$25,000
Blystone,
CEO
FYE
12/31/03
$
99,000
$50,000
FYE
12/31/02
$
99,000
$50,000
Employment
Agreement with Our President
We have
an employment agreement with F. Lynn Blystone, our President and Chief Executive
Officer, which ended in August 2002, and was automatically renewable for three
one-year periods after 2002, unless terminated by giving 90 days written notice.
The base salary amount is $99,000 per year plus 5,000 shares of our common stock
at the end of each year of service. Mr. Blystone is also entitled to a bonus
(not to exceed $25,000) equal to 10% of net operating cash flow before taxes,
including interest income and excluding debt service. Mr. Blystone is also
entitled to a bonus of 4% of the company's annual net after-tax income. The
total of the bonuses from cash flow and net income may not exceed $50,000 per
year.
The
employment agreement also provides a severance payment to Mr. Blystone if he is
terminated within 12 months after a sale of control of Tri-Valley. The severance
payment equals $150,000. For purposes of the severance provision, a sale of
control is deemed to be the sale of ownership of 30% of the outstanding stock of
Tri-Valley or the acquisition by one person of enough stock to appoint a
majority of the board of directors of the company.
We carry
key man life insurance of $500,000 on Mr. Blystone's life.
Compensation
Committee Report
The
Compensation Committee Report will be filed with the proxy statement for the
annual shareholders meeting.
Aggregated
200
4
Option Exercises and Year-End Values
The
following table summarizes the number and value of all unexercised stock options
held by the Named Officer and the Directors at the end of 2004.
(
a )
(b)
(c)
(d)
(e)
Number
of Securities
Value
of Unexercised In-
Underlying
Unexercised
The-Money
Options/SARs
Options/SARs
at FY-End (#)
at
FY-End ($)*
Shares
Acquired
On
Exercise (#)
Name
Value
Realized ($)
Exercisable/Unexercisable
Exercisable/Unexercisable
F.
Lynn Blystone
17,000
$41,970
857,600/0
$9,414,148/0
C.
Chase Hoffman
200,000
$1,049,000
Loren
J.Miller
220,000
$1,324,500
50,000
$490,000
*Based on
a fair market value of $12.23 per share, which was the closing price of the
Company's Common Stock on the American Stock Exchange on December 31,
2004.
No
additional stock options were granted in 2004.
Compensation
of Directors
The
Company compensates non-employee directors for their service on the board of
directors.
The
following table sets forth information regarding the cash compensation paid to
outside directors in 2004.
(a)
(b)
(c)
Name
Fees
Restricted
Shares
Harry
J. Noyes
$5,650
4,000
Milton
Carlson
$6,600
4,000
Dennis
P. Lockhart
$6,350
4,000
Loren
J. Miller
$7,000
4,000
C.
Chase Hoffman
$6,050
4,000
Performance
Graph
The
following stock price performance graph is included in accordance with the SEC's
executive compensation disclosure rules and is intended to allow stockholders to
review our executive compensation policies in light of corresponding stockholder
returns, expressed in terms of the appreciation of our common stock relative to
two broad-based stock performance indices. The information is included for
historical comparative purposes only and should not be considered indicative of
future stock performance.
The graph
compares the yearly percentage change in the cumulative total stockholder return
on our common stock with the cumulative total return of Royale Energy, Inc.,
Parallel Petroleum Corporation and Equity Oil Company from December 31, 2000
through December 31, 2004. On July 20, 2004, Whiting Petroleum Corporation and
Equity Oil Company completed their merger, resulting in Equity becoming a
wholly-owned subsidiary of Whiting.
Total
returns assume $100 invested on December 31, 2000 in shares of Tri-Valley
Corporation,
Royale
Energy Inc., Parallel Petroleum Corporation, and Equity Oil Company, assuming
reinvestment of dividends for each measurement period.
Total
Return Analysis
12/31/2000
12/31/2001
12/31/2002
12/31/2003
12/31/2004
Tri-Valley
Corp
$
100.00
$
98.77
$
86.42
$
271.60
$
754.94
Royale
Energy, Inc.
$
100.00
$
101.18
$
92.34
$
241.06
$
141.45
Parallel
Petroleum Corp.
$
100.00
$
83.46
$
71.92
$
114.17
$
141.47
Equity
Oil Co.
$
100.00
$
51.43
$
57.14
$
112.29
$
864.29
ITEM
12 Security Ownership of Certain Beneficial Owners and
Management
As of
December 31, 2004, there were 21,836,052 shares of the Company's common stock
outstanding. The following persons were known by the Company to be the
beneficial owners of more than 5% of such outstanding common stock:
Number
of
Percent
of
Name
and Address
Shares
Total
F.
Lynn Blystone
P.O.
Box 1105
Bakersfield,
CA 93302
1,295,603
(1)
5.7%
Includes
857,600 shares of stock Mr. Blystone has the right to acquire upon the exercise
of options.
The
following table sets forth the beneficial ownership of the Company's common
stock as of December 31, 2004 by each director, by each of the executive
officers named in Item 11, and by the executive officer named in Item 10 and
directors as a group:
Number
of
Percent
of
Directors
Shares
(1)
Total
(2)
F.
Lynn Blystone
1,295,603
5.7%
Dennis
P. Lockhart
345,191
1.6%
Milton
J. Carlson
349,000
1.6%
Loren
J. Miller
309,300
1.4%
Harold
J. Noyes
114,000
0.5%
C.
Chase Hoffman
271,500
1.2%
Total
group
(all directors and
Executive
officers - 6 persons)
2,684,594
12.0%
(1)
Includes
shares which the listed shareholder has the right to acquire from options
as follows: Dennis P. Lockhart 270,000; Milton J. Carlson 268,000; Loren
J. Miller 50,000, Harold J. Noyes 100,000; F. Lynn Blystone
857,600.
(2)
Based
on total outstanding shares of 21,836,052 as of December 31, 2004. The
persons named herein have sole voting and investment power with respect to
all shares of common stock shown as beneficially owned by them, subject to
community property laws where applicable.
ITEM
14 Principal Accountant Fees and Services
YEAR
AUDIT
SERVICES
TAX
SERVICES
SEC
SERVICES
2004
$50,832.68
$14,392.72
$
5,182.60
2003
$45,509.82
$16,784.18
$
6,286.00
ITEM
15 Exhibits and Financial Statement Schedules
Exhibit
Number
Description
of Exhibit
3.1
Amended
and Restated Certificate of Incorporation, incorporated by reference to
Exhibit A of the Company’s 2000 Proxy Statement and Definitive Schedule
14A, filed with the SEC on July 26, 2000.
3.2
Amended
and Restated Bylaws, incorporated by reference to Exhibit 3.3 of the
Company's Form 10-KSB for the year ended December 31, 1999, filed with the
SEC on March 24, 2000.
4.1
Rights
Agreement, incorporated by reference to Exhibit 99.1 of the Company’s Form
10-KSB for the year ended December 31, 1999, filed with the SEC on March
24, 2000.
10.1
Employment
Agreement with F. Lynn Blystone, incorporated by reference to Exhibit 10.1
of the Company's Form 10-KSB/A, Amendment No. 3 to Form 10-KSB for the
year ended December 31, 2000, filed with the SEC on December 14, 2001.
10.2
Tri-Valley
Corporation 1999 Stock Option Plan, as amended, incorporated by reference
to Exhibit B of the Company’s 1999 Proxy Statement and Definitive Schedule
14A, filed with the SEC on October 1, 1999.
14.1
Code
of Business Conduct & Ethics
21.1
Subsidiaries
of the Registrant
31.1
Certification
Pursuant to Rule 13a-14(a) / 15d-14(a)
31.2
Certification
Pursuant to Rule 13a-14(a) / 15d-14(a)
Next Section
Previous Section