-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CFlIqTIjsyD7V6Nqw7htMJA/9DDR9ZdMrrB1Es3Um6QXZP0bbIaU/EWOTLDb3aE4 2cpTMp+xDUiAXlM0hV/NfA== 0000081318-07-000001.txt : 20070116 0000081318-07-000001.hdr.sgml : 20070115 20070116131813 ACCESSION NUMBER: 0000081318-07-000001 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070109 ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers FILED AS OF DATE: 20070116 DATE AS OF CHANGE: 20070116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PYRAMID OIL CO CENTRAL INDEX KEY: 0000081318 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 940787340 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-32989 FILM NUMBER: 07531400 BUSINESS ADDRESS: STREET 1: 2008 21ST ST CITY: BAKERSFIELD STATE: CA ZIP: 93301 BUSINESS PHONE: 6613251000 MAIL ADDRESS: STREET 1: P O BOX 832 CITY: BAKERSFIELD STATE: CA ZIP: 93302 8-K 1 form8kstock.txt PYRAMID OIL COMPANY FORM 8-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: January 15, 2007 Date of Earliest Event Reported: January 9, 2007 Commission File Number 0-5525 PYRAMID OIL COMPANY (Exact name of registrant as specified in its charter) CALIFORNIA 94-0787340 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 2008 - 21ST. STREET BAKERSFIELD, CALIFORNIA 93301 (Address of principal executive offices) (Zip Code) (661) 325-1000 (Registrant's telephone number, including area code) 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: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.14e-4(c)) 2 Item 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. On January 9, 2007, Pyramid Oil Company (the 'Company') and John Alexander entered into a Severance Award Agreement pursuant to which the Company awarded Mr. Alexander a supplemental payment in connection with his future severance of employment with the Company. Mr. Alexander serves as the Company's Chief Executive Officer. Pursuant to the Severance Award Agreement and following the termination of Mr. Alexander's employment, he will be entitled to receive (at the Company's option) 20,000 shares of the Company's common stock or the then-fair market value of the shares. The closing price of a share of the Company's common stock on January 12, 2007 was $3.99. On January 9, 2007, the Company's Board of Directors adopted an Incentive and Retention Plan pursuant to which the Company's officers and other employees selected by the Company's Compensation Committee are entitled to receive payments if they are employed by the Company as of the date of a 'Corporate Transaction,' as defined in the Incentive and Retention Plan. A 'Corporate Transaction' includes certain mergers involving the Company, sales of Company assets, and other changes in the control of the Company, as specified in the Incentive and Retention Plan. In general, the amount that is payable to each plan participant will equal the number of plan units that have been granted to him or her, multiplied by the increase in the value of the Company between January 9, 2007 and the date of a Corporate Transaction. The preceding discussion is not a complete summary of either the Severance Award Agreement, a complete copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K, or of the Incentive and Retention Plan, a complete copy of which is filed as Exhibit 99.2 to this Current Report on Form 8-K. Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS Exhibit 99.1 Severance Award Agreement dated as of January 9, 2007 between Pyramid Oil Company and John Alexander. Exhibit 99.2 Incentive and Retention Plan of Pyramid Oil Company. 3 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 hereunto duly authorized. PYRAMID OIL COMPANY (Registrant) Dated: January 15, 2007 JOHN H. ALEXANDER By: ------------------- John H. Alexander President and Chief Executive Officer EX-99 2 severance.txt EXHIBIT 99.1 SEVERANCE AWARD 1 EXHIBIT 99.1 SEVERANCE AWARD AGREEMENT This Severance Award Agreement (this 'Agreement') is dated as of January 9, 2007, by and between and Pyramid Oil Company, a California corporation (the 'Company'), and John Alexander ('Executive') and together, the 'Parties.' 1. AWARD. In consideration of the many years of service that Executive has performed for and on behalf of the Company, the Company hereby awards to Executive a supplemental payment in connection with his future severance of employment with the Company which is in addition to any other benefits under any plans or agreements with the Company or which he has the right to receive or which the Company may elect to grant to him at such time. 2. NATURE OF AWARD. On the Payment Date, as hereafter defined, Executive shall receive at the option of the Company 20,000 shares of the Company common stock (the 'Stock') or the fair market value of the Stock at the Payment Date. However, if the Company's outstanding stock or substantially all of its property is acquired by another Company (the 'Purchaser') for cash or property other than stock, the amount to be paid on the Payment Date shall be that amount that is paid or distributed in the transaction with respect to 20,000 shares of the Company common stock. If the Company is acquired for the stock of the Purchaser or for both stock and other property, the Stock shall consist of the shares of the Purchaser issued in the transaction with respect to 20,000 shares of the Company common stock and the amount payable on the Payment Date shall be such Purchaser's shares or their fair market value in cash and any other property issued in the transaction in which the Purchaser acquired the Company. 3. PAYMENT DATE. The Payment Date shall be either the date that is the first day after six months have elapsed from the date of the severance of Executive's employment with the Company or, if the Executive dies prior to end of such period, the seventh day after the date of his death, whichever is shorter. 4. EXISTENCE OF THE COMPANY. If the Company shall not be in existence on the Payment Date or if the Purchaser has not assumed the obligations of the Company to Executive under this Agreement, the amount of cash and/or securities that Executive is entitled to receive on the Payment Date shall be placed in escrow for the benefit of Executive. 5. ELECTION TO ISSUE STOCK; EXECUTIVE'S OPTION. If the Company elects to issue the Stock to the Executive rather than to pay the fair market value of the Stock to the Executive, such Stock shall be registered at the Company expense before the issuance of the Stock or, if that is not possible for any reason, as soon as may be practicable. Notwithstanding the forgoing, if the Stock is not registered within 90 days from the date of its issuance, the Executive will have the option to sell the Stock to the Company at its fair market value on the date that the Executive gives notice of the exercise of the option. 6. DETERMINATION OF FAIR MARKET VALUE. For purposes of this Agreement, the fair market value of the Stock shall be determined as follows: 2 a. If the stock of the Company is listed on a securities exchange or is regularly quoted by a recognized securities dealer, and selling prices are reported, its fair market value shall be the closing price of such stock on the date the value is to be determined, but if selling prices are not reported, its fair market value shall be the mean between the high bid and low asked prices for such stock on the date the value is to be determined (or if there are no quoted prices for the date of grant, then for the last preceding business day on which there were quoted prices). b. In the absence of an established market for the stock, the fair market value thereof shall be determined in good faith by the Board of Directors of the Company, with reference to the Company's net worth, prospective earning power, dividend-paying capacity, and other relevant factors, including the goodwill of the Company, the economic outlook in the Company's industry, the Company's position in the industry, the Company's management, and the values of stock of other corporations in the same or a similar line of business. 7. GENERAL PROVISIONS. a. SEVERABILITY. If any provision of this Agreement or any part of any such provision is held under any circumstances to be invalid or unenforceable in any jurisdiction, then (i) such provision or part thereof shall, with respect to such circumstances and in such jurisdiction, be deemed amended to conform to applicable laws so as to be valid and enforceable to the fullest possible extent, (ii) the invalidity or unenforceability of such provision or part thereof under such circumstances and in such jurisdiction shall not affect the validity or enforceability of such provision or part thereof under any other circumstances or in any other jurisdiction, and (iii) the invalidity or unenforceability of such provision or part thereof shall not affect the validity or enforceability of the remainder of such provision or the validity or enforceability of any other provision of this Agreement. Each provision of this Agreement is separable from every other provision of this Agreement, and each part of each provision of this Agreement is separable from every other part of such provision. b. GOVERNING LAW; VENUE. This Agreement shall be construed in accordance with, and governed in all respects by, the laws of the State of California (without giving effect to principles of conflicts of laws). Any legal action or other legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement may be brought or otherwise commenced in any state or federal court located in the County of Kern in the State of California. c. WAIVER OF JURY TRIAL. THE PARTIES IRREVOCABLY WAIVE THE RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR THE ENFORCEMENT OF ANY PROVISION OF THIS AGREEMENT. d. WAIVER. No failure of any of the Parties to exercise any power, right or privilege under this Agreement, and no delay on the part of any of the Parties in exercising any power, right or privilege under this Agreement, shall operate as a waiver of such power, right or privilege; and no 3 single or partial exercise of any such power, right or privilege shall preclude any other or further exercise thereof or of any other power, right or privilege. Neither of the Parties shall be deemed to have waived any claim arising out of this Agreement, or any power, right or privilege under this Agreement, unless the waiver of such claim, power, right or privilege is expressly set forth in a written instrument duly executed and delivered, and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given. e. NONTRANFERABILITY. The rights of the Executive under this Agreement are not transferable except by will or the laws of descent and distribution unless the prior written consent of the Company is obtained. f. CAPTIONS. The captions contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement. g. AMENDMENT. This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of the Parties. h. NOTICES. Any notice, demand or request required or permitted to be given by either of the Parties pursuant to the terms of this Agreement shall be given in writing by hand delivery, by facsimile (at the telephone number set forth below) or three days after sending such notice by certified or registered mail to address set forth below, Attention: Corporate Secretary, in the case of notice to the Company. COMPANY EXECUTIVE Pyramid Oil Company John Alexander By: Name: JOHN ALEXANDER --------------------------- -------------- Name: Address: P O Box 832 ------------------------- Bakersfield, CA 93302 Title: Tel: (661) 325-1000 ------------------------- Fax: (661) 325-0100 Address: 2008 21 Street - P O Box 832 Bakersfield, CA 93302 Tel: (661) 325-1000 Fax: (661) 325-0100 EX-99 3 incentive.txt EXHIBIT 99.2 INCENTIVE AND RETENTION PLAN 1 EXHIBIT 99.2 PYRAMID OIL COMPANY INCENTIVE AND RETENTION PLAN 1. NAME AND GENERAL PURPOSE The name of the Plan is The Pyramid Oil Company Incentive and Retention Plan (the 'Plan'). The purpose of the Plan is to advance the interests of the Company and shareholders by providing officers and employees with incentive compensation linked to a Corporate Transaction and thereby retain them until a Corporate Transaction is consummated. 2. DEFINITIONS 2.1 "ACCOUNT" means the account established on the books and records of the Company for each Participant to which is credited the Plan Units. 2.2 "BASE VALUE" shall mean an amount representing the value of a share of Company Stock as determined by the Committee at the time of the adoption of the Plan. 2.3 "BENEFICIARY" means the person or persons designated to be the Beneficiary by the Participant in writing to the Committee in the event of the death of Participant after vesting of the Plan Units. In the event a married Participant designates someone other than his or her spouse as Beneficiary, such initial designation or subsequent change shall be invalid unless the spouse provides a signed consent that is notarized or witnessed by a Plan representative. If a Participant fails to designate a Beneficiary or no designated Beneficiary survives the Participant, the Committee shall direct that payment of the Participant's distribution be made to the Participant's estate. 2.4 "BOARD" means the Board of Directors of the Company. 2.5 "CODE" means the Internal Revenue Code of 1986, as amended and includes all Regulations promulgated pursuant thereto. 2.6 "COMMITTEE" means the Compensation Committee of the Board as from time to time constituted and appointed by the Board. 2.7 "COMPANY" means Pyramid Oil Company, a California corporation. 2.8 "COMPANY STOCK" means the Common Stock of the Company. 2.9 "CORPORATE TRANSACTION' has the meaning set forth in Section 11. 2.10 "EFFECTIVE DATE" means January 9, 2007. 2 2.11 "VALUE IN A CORPORATE TRANSACTION" means the value of the Company divided by the number of shares of Company Stock outstanding (on a fully diluted basis) at the time of a Corporate Transaction. 2.12 "PARTICIPANT" means each of the Company's named officers (who shall automatically be Participants) and any employee who is selected by the Committee to participate in the Plan provided that each automatic or designated Participant signs a copy of the Plan acknowledging that he or she has read it and agrees to it and delivers such signed Plan to the Company. 2.13 "PLAN" means The Pyramid Oil Company Incentive and Retention Plan adopted by the Board as of the Effective Date. 2.14 "PLAN UNIT" OR "PLAN UNITS" means an award credited to a Participant's Account under this Plan which is stated in Units and where each Unit represents the value of a share of Company Stock upon a Corporate Transaction. The award of Plan Units under the Plan is not an award of Company Stock but merely the right to a distribution that will be earned when the following conditions are both met: A Corporate Transaction occurs and the Participant is employed by the Company at the time. The award of a Plan Unit shall not entitle a Participant to any dividend or voting rights or any other rights of a shareholder with respect to such Plan Units. 2.15 "PLAN YEAR" means the calendar year (or the portion thereof in which the Plan is in effect for its commencement year or its termination year). 3. ADMINISTRATION OF THE PLAN The Plan shall be administered by the Committee which shall be responsible for the implementation and interpretation of the Plan. The good faith interpretation of the Plan by the Committee shall be conclusive and binding upon the Participants. 4. NUMBER OF PLAN UNITS RESERVED The Committee under this Plan may grant a maximum one hundred and twenty five thousand (125,000) Plan Units. Such number shall be adjusted in the case of stock dividends in the form of Company Stock and splits of Company Stock. 5. ELIGIBILITY TO PARTICIPATE Any executive or employee shall be eligible to participate in the Plan and shall become a Participant only if designated by the Committee. 6. VESTING OF PLAN UNITS; REISSUANCE OF FORFEITED PLAN UNITS Plan Units shall vest at the date of a Corporate Transaction provided that the Participant is employed by the Company on such date. Any Plan Units which have not vested as of the time of termination of a Participant's employment shall be forfeited and shall be available for reissuance by the 3 Committee. 7. AWARDS OF PLAN UNITS; STATEMENT OF ACCOUNTS AND ADJUSTMENT FOR SPLITS OF COMPANY STOCK, ETC. The Committee shall make awards of Plan Units to Participants from time to time in its sole and absolute discretion. The Committee shall furnish each Participant with the number of Plan Units in his account and the Base Value. The Committee shall make appropriate adjustments to the Plan Units (and the Base Value) in a Participant's Account in the case of dividends distributed by the Company in the form of Company Stock and splits of Company Stock. 8. AMOUNT OF THE DISTRIBUTION A Participant's distribution shall be an amount equal to the Value in a Corporate Transaction in excess of the Base Value multiplied by the number of Plan Units in the Participant's Account. A Participant's distribution under the Plan shall not be earned and shall have no value prior to the occurrence of a Corporate Transaction. 9. NATURE OF THE DISTRIBUTION The distribution shall be made in cash. 10. TIME OF DISTRIBUTION The distribution shall be payable within two weeks after the closing of a Corporate Transaction. 11. CORPORATE TRANSACTION A Corporate Transaction shall mean (i) a merger or other business combination with another corporation (other than a subsidiary of the Company) in which the Company is not the survivor and the Company's shareholders immediately before the transaction own less than 50% of the outstanding stock of the survivor; (ii) a sale or other disposition of substantially all of the assets of the Company in a single transaction or a series of related transactions; (iii) the existing shareholders' (including their transferees without consideration) ownership of Company Stock being reduced to less than 50% of the outstanding Company Stock in a single transaction or a series of transactions in which consideration is paid for Company Stock; or (iv) a majority of the directors of the Board are not elected from the slate of nominees selected by the Board as constituted prior to the election. In the case of a merger with a subsidiary of the Company, the surviving corporation shall be deemed the Company for purposes of the Plan. A subsidiary shall include only an entity whose voting stock is owned 60% or more by the Company. 12. WITHHOLDING The Company shall have the right to deduct from a distribution under the Plan any required income or payroll taxes. 4 13. UNFUNDED PLAN Nothing contained in this Plan and no action taken pursuant to the provisions of the Plan shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and the Participant, or any other person. To the extent that any person acquires a right to receive a distribution under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company. 14. PROHIBITION AGAINST ASSIGNMENT The right of a Participant or any Beneficiary to a distribution under this Plan shall not be assigned, transferred, pledged or encumbered. 15. RIGHT TO TERMINATE EMPLOYMENT Nothing contained in this Plan shall be construed to be a contract of employment and the Company reserves the right to discharge a Participant with or without cause. 16. EFFECT ON OTHER PLANS OR BENEFITS Any distribution accrued or paid under the Plan shall not be deemed salary or other compensation to a Participant for the purpose of computing any other benefit to which a Participant may be entitled under any pension or profit sharing plan of the Company. 17. AMENDMENT The Company reserves the right to amend the Plan from time to time except that no amendment shall reduce the Plan Units in a Participant's Account as it existed on the day preceding the date the amendment was adopted. 18. NONQUALIFIED PLAN The Plan is not a qualified plan under Section 401(a) of the Code and is generally exempt from the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Consequently, benefits and protections afforded by the Code and ERISA to qualified plans are not applicable to the Plan. 19. TERMINATION OF PLAN OR EMPLOYMENT Upon the termination of the Plan by the Board, no further awards of Plan Units will be made for the benefit of a Participant or added to any Participant's Account. Upon the termination of employment of a Participant for any reason or for no reason prior to a Corporate Transaction, all Plan Units in the Participant's Account will be forfeited. 5 20. GOVERNING LAW All questions pertaining to the administration, construction, validity and effect of the provisions of the Plan shall be determined in accordance with the law of the State of California. ACKNOWLEDGED, READ AND AGREED: Participant ----------------------------- Date Name ---------------- -----END PRIVACY-ENHANCED MESSAGE-----