8-K

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): September 30, 2013

Pyramid Oil Company

(Exact name of registrant as specified in its charter)

California	001-32989	94-0787340
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)
2008 – 21st Street Bakersfield, California		93301
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (661) 325-1000

Not Applicable

Former name or former address, if changed since last report

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 240.13e-4(c)) 

Item 1.01. Entry into a Material Definitive Agreement.

Reference is made to Item 5.02 of this Current Report on Form 8-K, which is incorporated by reference into this Item 1.01.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On September 30, 2013, (1) John H. Alexander resigned as the President and Chief Executive Officer, and as a director, of Pyramid Oil Company, a California corporation (“Pyramid Oil”), (2) John E. Turco resigned as a director of Pyramid Oil, and (3) Michael D. Herman, currently the Chairman of the Board of Directors of Pyramid Oil, was appointed as the Interim President and Chief Executive Officer of Pyramid Oil.

Mr. Herman, age 56, has served as Pyramid Oil’s Chairman of the Board of Directors since 2005 and, following his purchases of Pyramid Oil common stock from Messrs. Alexander and Turco that are described below, owns approximately 39.5% of the outstanding common stock of Pyramid Oil (not including the 100,000 shares that Mr. Herman will acquire in April 2014). Mr. Herman has extensive experience in the oil and gas industry. Since July 27, 2010, Mr. Herman has served as the Chairman of the Board of Directors and Chief Executive Officer of Denver-based energy services company Enservco Corporation, whose common stock is registered under the Securities Exchange Act of 1934, and which provides various energy-related services such as water hauling and disposal, acidizing, frac heating and hot oil services to customers in North Dakota, Kansas, Oklahoma, Colorado, Utah, Wyoming, Pennsylvania and New Mexico. In July 2010, Enservco acquired Mr. Herman’s interest (and the interests of the other equity owners) in Heat Waves Oil Service, LLC and Dillco Fluid Services, Inc. Mr. Herman has been active in private oil and gas exploration and production businesses since the mid-1980s.

Pyramid Oil has a commenced a search for two independent directors to replace Messrs. Alexander and Turco.

As part of this Board of Directors and management transition, Mr. Herman purchased 243,579 shares of Pyramid Oil common stock from Mr. Turco at a purchase price of $6.00 per share. In addition, Mr. Herman purchased 95,592 shares of Pyramid Oil common stock from Mr. Alexander at a purchase price $6.00 per share, and will purchase an additional 100,000 of Mr. Alexander's shares by April 5, 2014, at the same price.

In connection with Mr. Alexander’s resignation, Mr. Alexander and Pyramid Oil entered into a Settlement Agreement and General Release of Claims, dated as of September 30, 2013 (the “Settlement Agreement”). Pursuant to the Settlement Agreement, among other things:

· Mr. Alexander’s existing employment agreement terminated effective as of September 30, 2013;

· Pyramid Oil agreed to pay an aggregate amount of $967,329.08 to Mr. Alexander in satisfaction of amounts that are owed to Mr. Alexander under his employment agreement, with such amount to be paid in three equal installments of $322,443 each, on April 5, 2014, January 5, 2015, and January 5, 2016;

· Pyramid Oil agreed to secure these payments owed to Mr. Alexander in a “rabbi trust” pursuant to a Trust Agreement, dated as of October 1, 2013 between Pyramid Oil and Gilbert Ansolabehere, as trustee (the “Trust Agreement”);

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· Mr. Alexander agreed to resign as a director and officer of Pyramid Oil;

· Pyramid Oil and Mr. Alexander entered into a Consulting Agreement, dated as of October 1, 2013 (the “Consulting Agreement”), pursuant to which Mr. Alexander will serve as a consultant to Pyramid Oil on a part-time basis through September 30, 2014 for a fee of $10,000 per month;

· Pyramid Oil and Mr. Alexander waived known and unknown claims against each other;

· Mr. Herman agreed to purchase shares of Pyramid Oil common stock held by Messrs. Alexander and Turco, as described above; and

· Pyramid Oil and Mr. Alexander entered into an Indemnity Agreement, dated as of September 30, 2013 (the “Indemnity Agreement”), pursuant to which Pyramid Oil agreed to indemnify Mr. Alexander against certain claims, losses, costs and expenses that may result in the future from lawsuits and other proceedings in connection with his service as a director and an officer of Pyramid Oil.

The Settlement Agreement states that certain members of the Board of Directors of Pyramid Oil, including Mr. Herman (Pyramid Oil’s largest shareholder), have views that conflict with Mr. Alexander’s views regarding Pyramid Oil’s acquisition policies, and that Pyramid Oil and Mr. Alexander desired to resolve those disputes by entering into the Settlement Agreement, one term of which includes Mr. Alexander’s resignation. Pyramid Oil has provided Mr. Alexander with a copy of this Current Report on Form 8-K, and Mr. Alexander has advised Pyramid Oil that he agrees with the statements that are contained in this Current Report on Form 8-K. Mr. Turco did not advise Pyramid Oil that his resignation as a director was a result of a disagreement with the company on any matter relating to the company’s operations, policies or practices.

The preceding summary does not purport to be complete and is qualified in its entirety by reference to the Settlement Agreement, the Trust Agreement, the Consulting Agreement and the Indemnity Agreement, which are filed as Exhibits 10.1, 10.2, 10. 3 and 10.4, respectively, and which are incorporated herein by reference.

On October 1, 2013, Pyramid Oil issued a press release regarding certain of the matters which are discussed in this Item 5.02. A copy of the press release is filed as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

10.1	Settlement Agreement and General Release of All Claims, dated as of September 30, 2013, between Pyramid Oil Company and John H. Alexander.
10.2	Trust Agreement, dated as of October 1, 2013, between Pyramid Oil Company and Gilbert Ansolabehere, as trustee.
10.3	Consulting Agreement, dated as of October 1, 2013, between Pyramid Oil Company and John H. Alexander.
10.4	Indemnity Agreement, dated as of September 30, 2013, between Pyramid Oil Company and John H. Alexander.
99.1	Press Release of Pyramid Oil Company dated October 1, 2013.

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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 hereunto duly authorized.

	PYRAMID OIL COMPANY
October 3, 2013	By:	/s/ Michael D. Herman
		Name: Michael D. Herman
		Title: Interim President and Chief Executive    Officer

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EX-10.1

Exhibit 10.1

SETTLEMENT AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS

This Settlement Agreement and General Release of All Claims (“Agreement”) is entered into as of this 30th day of September, 2013 (the “Effective Date”), by and between John H. Alexander, an individual (“Alexander”) on the one hand, and Pyramid Oil Company, a California corporation (“PDO”) on the other hand.

RECITALS

This Agreement is made with reference to the following facts (which facts are agreed to by the parties):

A. Certain members of the Board of Directors of PDO have conflicting views with Alexander, a director and CEO of PDO, on the path that PDO should follow with respect to its acquisition policies. As a result, there has been a deadlock on the Board that has resulted in PDO’s not taking decisive action with respect to acquisition matters;

B. Michael Herman, a director and largest shareholder of PDO, also has views different from Alexander’s with respect to PDO’s acquisition policies;

C. Alexander disputes Herman’s assessment and feels that the policies and business plans pursued by PDO over the past several years have been responsible and prudent and have placed PDO in a very sound financial position; and

D. PDO and Alexander entered into an Employment Agreement effective as of February 21, 2002 and certain amendments to the same (collectively the “Employment Agreement"); and the parties now wish to resolve all disputes relating to the Employment Agreement and the acquisition policies of PDO (collectively, the “Disputes”) by terminating the Employment Agreement and by agreeing to the terms and conditions set forth below.

AGREEMENT

NOW, THEREFORE, the Parties, for good and adequate consideration, receipt of which is hereby acknowledged, agree as follows:

1.Settlement Terms. The following terms are each material and required consideration for the execution and performance of this Agreement by the Parties.

1.1.Termination of the Employment Agreement. Upon the full execution of this Agreement, the Employment Agreement shall be terminated and be of no further force and effect.

1.2.Alexander’s Resignation. Concurrently with this Agreement, Alexander shall tender his resignation as a director and officer of PDO.

1.3.Payout Under the Employment Agreement. PDO will pay to Alexander all amounts owing to Alexander under the Employment Agreement in the total aggregate sum of $967,329.08. Such sum shall be paid in three (3) equal installments of $322,443 each; the first due on April 5, 2014, the second due on January 5, 2015, and the third due on January 5, 2016. Concurrently with this Agreement, PDO shall secure these amounts by placing the total funds necessary for the full payout in an irrevocable “Rabbi Trust” (the “Trust”) in the form attached as Exhibit “A” hereto. All appropriate deductions and withholdings will be made by PDO in accordance with PDO’s normal payroll practices in calculating the total amount to be paid to Alexander from the Trust.

1.4.Assignment of Automobile. Upon the full execution of this Agreement, PDO shall assign to Alexander unencumbered title to his PDO automobile.

1.5.Consulting Agreement. Concurrently with this Agreement, PDO and Alexander shall enter into a Consulting Agreement in the form attached as Exhibit “B” hereto.

1.6.Directors and Officers Liability Insurance. Concurrently with this Agreement, PDO shall use its best reasonable efforts to continue its presently existing Directors and Officers Liability Insurance Policy or a policy substantially similar thereto, provided such policy can be obtained or maintained at a commercially reasonable cost for a period of five (5) years providing continuing insurance coverage for Alexander and John Turco (“Turco”) as insureds under such policy.

1.7.Indemnity Agreement. Concurrently with this Agreement, PDO shall provide an Indemnity Agreement for Alexander and Turco in the form attached hereto as Exhibit “C” hereto.

1.8.Stock Purchase Agreement. Concurrently with this Agreement, Michael Herman shall purchase all shares of common stock of PDO presently held by Alexander and shares to be issued to Alexander pursuant to PDO’s Severance and Award Agreements, pursuant to a Stock Purchase Agreement, in the form attached as Exhibit “D” hereto.

2.Releases.

2.1.Release by Alexander - Age Discrimination Waiver. In consideration of and in return for the promises and covenants undertaken herein, and for other good and valuable consideration, receipt of which is hereby acknowledged, Alexander, for himself, for his heirs, beneficiaries, successors, assigns, agents, employees, executors, administrators, and representatives, and for anyone who has or obtains rights or claims from his, hereby releases and absolutely forever discharges PDO, its predecessors, shareholders, successors, parents, subsidiaries, affiliates, agents, assigns, insurers, representatives, officers, members, directors, principals and attorneys from any and all claims, demands, debts, liabilities, obligations, and causes of action of every kind and nature whatsoever, whether now known or unknown, suspected or unsuspected, which Alexander may have or ever may have had pertaining to the Disputes or otherwise, including claims relating to wrongful discharge in violation of public policy or any legal restrictions on PDO’s right to terminate employees, or any federal, state, or other governmental statute, regulation or ordinance, including without limitation: ( i) Title VII of the Civil Rights Act of 1964 (race, color, religion, sex, and national origin discrimination); (ii) 42 U.S.C. Section 1981 (discrimination); ( iii) 29 U.S.C. Section 206(d)(1) (equal pay); (iv) 29 U.S.C. Section 621 et seq. (age discrimination); (v) the California Fair Employment and Housing Act (discrimination including race, color, national origin, ancestry, physical handicap, medical condition, marital status, sex or age); (vi) Executive Order 11246 (race, color , religion, sex and national origin discrimination); (vii) Executive Order 11141 (age discrimination;’ (viii) Sections 503 and 504 of the Rehabilitation Act of 1973 (handicap discrimination); (ix) California Labor Code (wages, hours and other regulations of employment); and (x) the Employee Retirement Income Security Act of 1974 (ERISA) (denial of employee benefits). Notwithstanding the foregoing, nothing in this Agreement is intended to release, waive, or discharge any obligations or claims arising out of this Agreement.

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Alexander understands and hereby agrees that, by entering into this Agreement, he is expressly waiving any and all claims he may have arising under the Age Discrimination in Employment Act of 1967, as amended, in existence on or before the date hereof. Alexander expressly acknowledges and agrees he: (i) will receive compensation beyond that which he was already entitled to receive before entering into this Agreement; (ii) has been represented by an attorney of his choice in negotiating this Agreement; (iii) is hereby advised in writing to consult with an attorney before signing this Agreement; (iv) was given a copy of this Agreement on September __, 2013 and informed that he has twenty-one days within which to consider the Agreement; and (v) was informed that he has even (7) days following the date of execution of the Agreement in which to revoke the Agreement.

2.2.PDO’s Release. In consideration of and in return for the promises and covenants undertaken herein, and for other good and valuable consideration, receipt of which is hereby acknowledged, PDO hereby releases and absolutely forever discharges Alexander, his predecessors, successors, parents, affiliates, agents, assigns, insurers, representatives, and attorneys from any and all claims, lawsuits, proceedings, complaints, demands, debts, liabilities, obligations, attorneys’ fees, and causes of actions of every kind and nature whatsoever, whether now known or unknown, suspected or unsuspected, which PDO may have or ever may have had pertaining to the Disputes or otherwise. Notwithstanding the foregoing, nothing in this Agreement is intended to release, waive, or discharge any obligations or claims arising out of this Agreement.

2.3.Waiver of Civil Code §1542. The Parties agree that the releases contained hereinabove are full and final releases covering all known as well as all unknown or unanticipated injuries, debts, claims, or damages. The Parties waive any and all rights or benefits that he or it may now have, or in the future may have, under the terms of §1542 of the California Civil Code that provides as follows:

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

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3.Representations and Warranties:

3.1.Factual Investigation: Each of the Parties has made such investigation of the facts pertaining to the terms set forth herein and of all the matters pertaining thereto as he or it deems necessary.

3.2.Knowledge and Consent of Parties: The Parties mutually warrant and represent that they have read and understand this Agreement and that this Agreement is executed voluntarily and without duress or undue influence on the part of or on behalf of any of the Parties. The Parties hereby acknowledge that they are fully aware of the contents of this Agreement and of the legal effect of each and every provision thereof.

3.3.No Prior Assignment or Transfer. Neither of the Parties has heretofore assigned, transferred, or granted, or purported to assign, transfer, or grant, any of the rights at issue in this Agreement.

3.4.Authority. Each of the Parties who signs this Agreement warrants that he or it has full authority to enter into the Agreement and will defend, indemnify, and hold harmless all other Parties if that authority is later challenged.

3.5.Agreement to Cooperate. The Parties agree to use their best efforts to cooperate with each other in accomplishing the intent of this Agreement and agree to execute any additional documents or take any actions that are reasonably necessary or desirable in order to effectuate the transactions contemplated hereby.

4.No Admissions of Liability. The Parties expressly deny any violation of any international, federal, state, or local statute, ordinance, rule, regulation, policy, order, or other law. This Agreement is the compromise of disputed claims and nothing contained herein is to be construed as an admission of liability on the part of the parties hereby released, or any of them, by whom liability is expressly denied. Moreover, neither this Agreement nor anything in it shall be construed to be admissible in any proceeding as evidence of or an admission by the released parties of any violation of any international, federal, state or local statute, ordinance, rule, regulation, policy, order or other law, or of any liability. This Agreement may be introduced, however, in any proceeding to enforce the Agreement. Such introduction shall be pursuant to an order protecting its confidentiality if one is available.

5.Nondisparagement. The Parties hereby agree not to make any disparaging statements about the other Party to any of the other Party’s past, present, or future customers, employees, clients, contractors, vendors, or other partners, or to the media or any other person (orally or by any other medium of communication, including Internet communications such as e-mails, messaged boards, “chat rooms” and Web postings). As used herein, the term “disparaging statement” means any communication, oral, written, or otherwise, that would cause or tend to cause humiliation, embarrassment, or harm (economic or otherwise), or to cause a recipient of such communication to question the business condition, integrity, product, service, quality, confidence, or good character of any of these persons or entities. The only explanation for Alexander’s separation from PDO shall be that “It was amicable.”

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6.General Provisions. This Agreement sets forth the entire agreement between the Parties and fully supersedes any and all prior agreements or understandings, whether oral or in writing, between the Parties pertaining to the subject matter of this Agreement. No promise or representation has been made by any Party or Party representative, other than those contained in this Agreement. No breach of any provision of this Agreement may be waived unless in a writing signed by the party waiving such breach; and any such waiver is not a waiver of other acts or provisions. This Agreement may be amended only by written agreement of all the Parties. This Agreement may be signed in counterparts, each of which shall be deemed an original. Each provision of this Agreement shall be construed as jointly drafted. Each party shall pay its or his/or its own attorneys’ fees and costs incurred due to the negotiation or signing of this Agreement and the matters released in the Agreement. To the extent that this Agreement benefits persons or entities not signatory hereto, this Agreement hereby is declared to be made for each of their express benefits and uses.

7.Interpretation. This Agreement shall be governed by the laws of the State of California, without regard to the principles of conflicts of law.

PLEASE READ CAREFULLY. THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

The Parties have read the foregoing Agreement and accept and agree to the provisions it contains and hereby execute it voluntarily with full understanding of its consequences. Should there be prelitigation and/or litigation efforts to enforce or interpret this Agreement, the prevailing party shall be entitled to its attorneys’ fees and costs.

8.Incorporation of Exhibits by Reference. True and correct copies of all Exhibits referred to in this Agreement are attached and incorporated into this Agreement by reference as though fully set out in this Agreement.

9.Integration. This Agreement constitutes the entire understanding between the Parties and supersedes all prior written and oral communications and agreements.

10.Separate Counsel. The Parties acknowledge, represent, and warrant that they have had the advice of separate counsel in negotiating and entering into this Agreement and do so of their own free will.

11.Confidentiality. Except as otherwise required by the Federal Securities laws, the terms of this Agreement shall remain strictly confidential by the Parties. If inquiries are made the Parties shall state “the matter has been resolved to everyone’s satisfaction.”

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12.Disputes; Attorney’s Fees; Law; Venue. If any legal proceeding or litigation instituted by a party against the other arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable attorney’s fees and costs as determined by the arbitrator, arbitrators, or court, in addition to any judgment awarded. This Agreement is executed in Kern County, California and California law shall govern as to the construction, interpretation, and enforcement of this Agreement and the rights and obligations of the parties to this Agreement; without reference to conflicts of law principles. Proper venue for any legal proceeding, arbitration, or other litigation arising out of this Agreement shall be in Bakersfield, California, only, and the parties waive any right to a change of venue. The parties waive their respective rights to a jury trial, it being the parties’ intent that the dispute be heard by a judge only.

(Signatures on the Following Page)

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THE FOREGOING IS AGREED TO AS OF THE DATES INDICATED BELOW:

Dated: September 30, 2013	Pyramid Oil Company, a California corporation By: /s/ Michael Herman                             Michael Herman, Its Chairmen By: /s/ John Alexander                              John Alexander , Its President
Dated: September 30, 2013	John H. Alexander By: /s/ John H. Alexander                           John Alexander, an individual

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ENDORSEMENT

I, John H. Alexander, hereby acknowledge that I was given or took 21 days to consider the foregoing Settlement Agreement and Mutual General Release (“Agreement”) and voluntarily chose to sign the Agreement prior to the expiration of the 21-day period.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Executed this 30th day of September, 2013 in Bakersfield, California.

/s/ John H. Alexander
      John H. Alexander

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CONSENT OF SPOUSE

I, Deborah Alexander, acknowledge that I have read the foregoing Settlement Agreement and Mutual General Release (“Agreement”) and that I know its contents. I am aware that by its provisions my spouse, John H. Alexander, agrees to waive and release certain claims against PDO and others, including my community interest, if any, in such claims. I am aware that my spouse was given or took 21 days to consider the foregoing Agreement and voluntarily chose to sign the Agreement prior to the expiration of the 21-day period. I hereby consent to my spouse’s waiver and release of the released claims and to my spouse’s execution of the Agreement prior to the expiration of the 21-day period and agree that the released claims and my interest in them are subject to the provisions of the Agreement and that I will take no action at any time to hinder operation of the Agreement or to assert any of the released claims.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Executed this 30th day of September,. 2013 in Bakersfield, California.

/s/ Deborah Alexander
     Deborah Alexander

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EX-10.2

Exhibit 10.2

TRUST AGREEMENT

This Agreement (“Trust Agreement”) is effective as of October 1, 2013, by and between Pyramid Oil Company ( “Company”) and Gilbert Ansolabehere (“Trustee”).

The parties, for good and valuable consideration, receipt of which is hereby acknowledged, agree as follows:

Recitals

WHEREAS, Company has incurred liability under the terms of a Settlement Agreement entered into with John Alexander (“Alexander”), effective as of even date (the “Settlement”);

WHEREAS, Company wishes to establish a trust (hereinafter called the "Trust") and to contribute to the Trust assets that shall be held therein, subject to the claims of Company's creditors in the event of Company's Insolvency, as herein defined, until paid to Alexander (or his heirs or estate in the event of his death; and the reference to Alexander hereafter is intended to include his heirs or estate) at such times as specified in the Settlement;

WHEREAS, it is the intention of Company to make a single contribution to the Trust to provide a source of funds to satisfy such liability;

NOW, THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised, held and disposed of as follows:

Section 1. Establishment of Trust

(a) Company hereby deposits with Trustee in trust $967,329 in cash, which shall be the principal of the Trust to be held, administered and disposed of by Trustee as provided in this Trust Agreement.

(b) The Trust hereby established shall be irrevocable.

(c) The Trust is intended to be a grantor trust, of which Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly.

(d) The principal of the Trust, and any earnings thereon shall be held separate and apart from other funds of Company and shall be for the uses and purposes of Alexander or general creditors of Company as herein set forth. Alexander shall be the sole beneficiary of this Trust. Any rights created under this Trust Agreement shall be mere unsecured contractual rights of Alexander against the Company. Any assets held by the Trust will be subject to the claims of the Company's general creditors under federal and state law in the event of Insolvency, as defined in Section 3(a) hereof.

Section 2. Payments to Alexander. Trustee shall make the following payments, as provided under the Settlement, to Alexander or his heirs: $322,443 on each of April 5, 2014, January 5, 2015 and January 5, 2016. The Company shall advise Trustee of the amount to be withheld from each such payment to make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld from each such payment and shall distribute to the Company such amount solely for remittance by Company to the appropriate taxing authorities.

Section 3. Trustee’s Responsibility Regarding Payments to Trust Beneficiary

When Company is Insolvent.

(a) Trustee shall cease payment of benefits to Alexander or his heirs if the Company is Insolvent. The Company shall be considered "Insolvent" for purposes of this Trust if (i) the Company is unable to pay its debts as they become due, or (ii) the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code.

(b) At all times during the continuance of this Trust, as provided in Section 1(d) hereof, the principal and income of the Trust shall be subject to claims of general creditors of Company under federal and state law as set forth below.

(1) The Board of Directors and the Chief Executive Officer of the Company shall have the duty to inform Trustee in writing of the Company's Insolvency. If a person claiming to be a creditor of Company alleges in writing to Trustee that the Company has become Insolvent, Trustee shall determine whether the Company is Insolvent and, pending such determination, Trustee shall discontinue payments to Alexander.

(2) Unless Trustee has actual knowledge of Company's Insolvency, or has received notice from Company or a person claiming to be a creditor alleging that Company is Insolvent, Trustee shall have no duty to inquire whether Company is Insolvent. Trustee may in all events rely on such evidence concerning Company's solvency as may be furnished to Trustee and that provides Trustee with a reasonable basis for making a determination concerning the Company's solvency.

(3) If at any time Trustee has determined that the Company is Insolvent, Trustee shall discontinue payments to Alexander or his heirs and shall hold the assets of the Trust for the benefit of Company's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of Alexander or his heirs from pursuing the rights provided under the Settlement as general creditors of Company.

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(4) Trustee shall resume the payment of benefits to Alexander or his heirs in accordance with Section 2 of this Trust only after Trustee has determined that the Company is not Insolvent (or is no longer Insolvent).

(c) Provided that there are sufficient assets, if Trustee discontinues the payments to Alexander pursuant to Section 3 hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Alexander or his heirs under the Settlement for the period of such discontinuance.

Section 4. No Payments to Company. Except as otherwise provided herein, Company shall have no right or power to direct Trustee to return to Company or to divert to others any of the Trust assets before all payments have been made to Alexander.

Section 5. Investment Authority.

(a) All rights associated with assets of the Trust shall be exercised by Trustee or the person designated by Trustee, and shall in no event be exercisable by or rest with Alexander.

(b) In no event may Trustee invest in securities (including stock or rights to acquire stock) or obligations issued by Company. Trustee shall deposit the funds held in the Trust in one or more banks, each of which shall have a minimum of $10 billion in assets, and in one or more interest bearing federally insured accounts in such banks.

Section 6. Disposition of Income. During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and paid first to Alexander in satisfaction of the amounts due to him (if otherwise diminished because of the Insolvency of the Company) or second to the Trustee as part of the fee for Trustee’s services.

Section 7. Accounting by Trustee. On behalf of Trustee and subject to Trustee’s review, the accountant for the Company, shall, at the Company’s expense, maintain and keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions of the Trust. Within 90 days following the close of each calendar year and within 60 days after the removal or resignation of Trustee, such accountant shall deliver to Company a written account of the administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all transactions effected by it and showing all cash, and other property, if any, held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be.

Section 8. Responsibility of Trustee.

(a) Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, provided, however, that Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by the Company which is contemplated by, and in conformity with, the terms of the Settlement or this Trust Agreement and is given in writing by Company. In the event of a dispute between the Company and any party as it relates to the Trust, Trustee may apply to a court of competent jurisdiction to resolve the dispute.

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(b) If Trustee undertakes or defends any litigation arising in connection with the Trust, Company agrees to indemnify Trustee against Trustee's costs, expenses and liabilities (including, without limitation, attorneys' fees and expenses) relating thereto and to be primarily liable for such payments.

(c) Trustee may consult with legal counsel (who may also be counsel for Company) with respect to any of its duties or obligations hereunder.

(d) Trustee may hire, at Company’s expense, agents, accountants, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder.

(e) Trustee shall have, without exclusion, all powers conferred on Trustees by applicable law, unless expressly provided otherwise herein.

(f) Notwithstanding any powers granted to Trustee pursuant to the Trust Agreement or to applicable law, Trustee shall not have any power that could give the Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code.

Section 9. Compensation and Expenses of Trustee. Except as otherwise provided, Company shall pay all administrative and Trustee's fees and expenses.

Section 10. Resignation and Removal of Trustee.

(a) Trustee may resign at any time by written notice to Company, which shall be effective 30 days after receipt of such notice unless Company and Trustee agree otherwise. Trustee shall select a successor Trustee prior to the effective date of Trustee's resignation

(b) Trustee may be removed by the Company, only on the basis of Trustee’s incapacity on 30 days’ notice or upon shorter notice accepted by Trustee. The Company shall apply to a court of competent jurisdiction for the appointment of a successor Trustee or for instructions.

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Section 11. Amendment or Termination.

(a) This Trust Agreement may be amended by a written instrument executed by Trustee and the Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Settlement or shall make the Trust revocable.

(b) The Trust shall not terminate until the final payment is made as provided herein unless there are no assets remaining in the Trust. Upon termination of the Trust any assets remaining in the Trust shall be returned to Company.

Section 12. Disputes; Attorneys’ Fees; Law; Venue. If any legal proceeding or litigation instituted by a party against the other arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable attorney’s fees and costs as determined by the arbitrator, arbitrators, or court, in addition to any judgment awarded. This Agreement is executed in Kern County, California and California law shall govern as to the construction, interpretation, and enforcement of this Agreement and the rights and obligations of the parties to this Agreement; without reference to conflicts of law principles. Proper venue for any legal proceeding, arbitration, or other litigation arising out of this Agreement shall be in Bakersfield, California, only, and the parties waive any right to a change of venue. The parties waive their respective rights to a jury trial, it being the parties’ intent that the dispute be heard by a judge only.

Section 13. Miscellaneous.

(a) Any provision of the Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions thereof.

(b) Payments to Alexander under this Trust may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process.

(c) This Trust Agreement shall be governed by and construed in accordance with the laws of the State of California.

Signatures on following page

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EXECUTED on the date above written at Los Angeles, California.

Pyramid Oil Company

By: /s/ Michael Herman

Michael Herman

Trustee

/s/ Gilbert Ansolabehere

      Gilbert Ansolabehere

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EX-10.3

Exhibit 10.3

CONSULTING AGREEMENT

This Consulting Agreement (this “Agreement”), dated as of October 1, 2013 is entered into by and between Pyramid Oil Company, a California corporation (the “Company”), and John H. Alexander.

WHEREAS, the Consultant resigned, as of the end of business on the date hereof, from all positions he held with the Company, including his positions as an officer and director of the Company; and

WHEREAS, the Company desires to retain the Consultant and the Consultant desires to serve the Company on a part-time basis to assist in the transition to new management upon the terms and provisions set forth herein;

NOW, THEREFORE, in consideration of the mutual promises set forth herein, the Company and the Consultant hereby agree as follows:

1.Consulting Relationship. Beginning as of the date of this Agreement and continuing through September 30, 2014, the Consultant shall be available to provide to the Company, on a part-time basis, but in no event greater than 5 hours per week, the following consulting services (the “Services”): (i) managing transactional matters; (ii) advising with respect to the development or disposition of the Company’s assets and properties; and (iii) any other consulting services as the Company shall determine. The Services shall be rendered by Consultant primarily in Bakersfield, California.

2.Fees. In consideration of the Services to be rendered hereunder, the Company shall pay to the Consultant $10,000 per month through September 30, 2014, payable $5,000 on the 10th day of each month and $5,000 on the 25th of each month, in accordance with the Company’s payroll practices.

3.Expenses. The Company shall reimburse the Consultant within 30 days following receipt of appropriate documentation for necessary and reasonable out-of-pocket business expenses incurred by the Consultant in the performance of the Services; provided, however, that the Consultant shall not be authorized to incur on behalf of the Company any expenses in excess of $1,000 without the prior consent of the Company.

4.Term and Termination. The Consultant shall serve as a consultant to the Company and shall render the Services to the Company for a period commencing on October 1, 2013 and terminating September 30, 2014, unless earlier terminated by either party hereto as set forth in this Section 4. This Agreement and the Consultant’s rights and obligations hereunder shall, under any of the following circumstances, terminate in advance of the time specified in this Section 4, and the Consultant shall have the right to receive only his Fees that shall be accrued hereunder through the effective date of such termination and shall have no right to receive any further compensation hereunder from and after the time of such termination:

(a)Death. This Agreement and the Consultant’s duties hereunder shall terminate immediately upon the Consultant’s death.

(b)Termination by the Company. In the event that the Consultant shall become either physically or mentally incapacitated so as to be incapable of performing his duties as required hereunder, and if such incapacity shall continue for a period of 30 consecutive days, the Company may, at its option, terminate this Agreement and the Consultant’s duties hereunder by written notice to the Consultant at that time or at any time thereafter while such incapacity continues. The Company may terminate this Agreement for Cause (as hereinafter defined) at any time upon written notice to the Consultant. “Cause” as used in this Agreement means that (i) the Consultant has materially breached any of the material terms or conditions of this Agreement, or (ii) the Consultant has been charged with a felony or with any intentionally fraudulent act that materially damages the business or reputation of the Company.

(c)Termination by the Consultant. The Consultant may terminate this Agreement at any time upon written notice to the Company if the Company shall have materially breached any of the provisions of this Agreement. In the event that this Agreement is terminated by the Company for any reason other than as described in (a) or (b) above, the Company shall pay to the Consultant all remaining amounts owed to the Consultant under the full term of this Agreement in one lump sum payment within thirty days of such termination.

5.Independent Contractor. The Consultant’s relationship with the Company shall be that of an independent contractor and not that of an employee of the Company.

(a)No Authority to Bind Company. Neither the Consultant, nor any partner, agent or employee of the Consultant, has authority to enter into contracts that bind the Company or create obligations on the part of the Company without the prior written authorization of the Company.

(b)No Benefits. The Consultant acknowledges and agrees that the Consultant will not be eligible for any Company employee benefits and, to the extent the Consultant otherwise would be eligible for any Company employee benefits but for the express terms of this Agreement, the Consultant hereby expressly declines to participate in such Company employee benefits.

(c)Withholding; Indemnification. The Consultant shall have full responsibility for applicable withholding taxes for all compensation paid to the Consultant under this Agreement, and for compliance with all applicable labor and employment requirements with respect to the Consultant’s self-employment, sole proprietorship or other form of business organization. The Consultant agrees to indemnify, defend and hold the Company harmless from any liability for, or assessment of, any claims or penalties with respect to such withholding taxes, labor or employment requirements, including any liability for, or assessment of, withholding taxes imposed on the Company by the relevant taxing authorities with respect to any compensation paid to the Consultant.

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6.Proprietary Rights. All work performed and all materials developed or prepared for the Company by the Consultant in rendering the Services are the property of the Company and all title and interest therein shall vest in the Company and shall be deemed to be works made for hire and made in the course of the services rendered hereunder. To the extent that title to any such works may not, by operation of law, vest in the Company or such works may not be considered works made for hire, all rights, title and interest therein are hereby irrevocably assigned to the Company. The Consultant agrees to give the Company and any person designated by the Company such reasonable assistance, at the Company’s expense, as is required to perfect the rights defined in this Section 6.

7.Indemnification. The Consultant agrees to indemnify and hold the Company harmless from and against any and all claims, demands, causes of action, losses, damages, liabilities, costs and expenses, including attorneys' fees and costs, arising from a breach of any of the Consultant’s representations and warranties herein or attributable to or resulting from the Consultant's gross negligence or willful misconduct in rendering the Services to the Company. The Consultant warrants and represents that the Consultant has full power and authority to enter into and perform this Agreement. The Company agrees to indemnify and hold the Consultant harmless from and against any and all claims, demands, causes of action, losses, damages, liability, costs and expenses, including attorneys' fees and costs, arising out of the Consultant's Services hereunder, other than those arising from the Consultant's breach of any of his representations and warranties hereunder or the Consultant's gross negligence or willful misconduct.

8.Miscellaneous.

(a)Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the parties.

(b)Sole Agreement. This Agreement constitutes the sole agreement of the parties and supersedes all oral negotiations and prior writings with respect to the subject matter hereof.

(c)Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, 48 hours after being deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, if such notice is addressed to the party to be notified at such party’s address or facsimile number as set forth below, or as subsequently modified by written notice.

(d)Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws.

(e)Dispute Resolution. Any dispute arising out of or relating to this Agreement shall be decided by binding arbitration by the American Arbitration Association and shall be held in Bakersfield, California. The ruling of the arbitrator shall be final and may be enforced by any party to such arbitration in any court of competent jurisdiction located in Bakersfield, California.

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(f)Attorneys’ Fees; Law; Venue. If any legal proceeding or litigation instituted by a party against the other arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable attorney’s fees and costs as determined by the arbitrator, arbitrators, or court, in addition to any judgment awarded. This Agreement is executed in Kern County, California and California law shall govern as to the construction, interpretation, and enforcement of this Agreement and the rights and obligations of the parties to this Agreement; without reference to conflicts of law principles. Proper venue for any legal proceeding, arbitration, or other litigation arising out of this Agreement shall be in Bakersfield, California, only, and the parties waive any right to a change of venue. The parties waive their respective rights to a jury trial, it being the parties’ intent that the dispute be heard by a judge only.

(g)Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(h)Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

(i)Effect on Successors in Interest; Assignment. This Agreement shall inure to the benefit of and be binding upon the heirs, administrators, executors, and successors of each of the parties hereto. The services to be rendered under this Agreement are personal to and may not be delegated by the Consultant.

(Signatures on following page)

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The parties have executed this Agreement on the respective dates set forth below.

PYRAMID OIL COMPANY

By: /s/ Michael Herman

Michael Herman, Chairman

Date: October 1, 2013

Address:

Pyramid Oil Company
P.O. Box 832

Bakersfield, CA 93302

JOHN H. ALEXANDER

By: /s/ John H. Alexander
John H. Alexander

Date: October 1, 2013

Address:

Pryamid Oil Company

P.O. Box 832
Bakersfield, CA 93302

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EX-10.4

Exhibit 10.4

INDEMNITY AGREEMENT

This Indemnity Agreement (the “Agreement) is made as of the __ day of September 2013, by and between Pyramid Oil Company , a California corporation (the “Corporation”), and John H. Alexander (the “Indemnitee”), a director and officer of the Corporation.

The parties agree that the following recitals are true and accurate in every respect:

RECITALS

A.The Corporation and the Indemnitee recognize that the interpretation of statutes, regulations, court opinions and the Corporation’s Articles of Incorporation and Bylaws is too uncertain to provide the Corporation’s officers and directors with adequate guidance with respect to the legal risks and potential liabilities to which they may become personally exposed as a result of performing their duties in good faith for the Corporation.

B.The Corporation and the Indemnitee are aware of the substantial increase in the number of lawsuits filed against corporate officers and directors.

C.The Corporation and the Indemnitee recognize that the cost of defending against such lawsuits, whether or not meritorious, may impose substantial economic hardship upon the Corporation’s officers and directors.

D.The Corporation and the Indemnitee recognize that the legal risks, potential liabilities and expenses of defense associated with litigation against officers and directors arising or alleged to arise from the conduct of the affairs of the Corporation are frequently excessive in view of the amount of compensation received by the Corporation’s officers and directors.

E.Section 317 of the California General Corporation Law, which sets forth certain provisions relating to the indemnification of officers and directors (among others) of a California corporation by such corporation, is specifically not exclusive of other rights to which those indemnified thereunder may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise.

F.Indemnitee is resigning in all capacities as an officer and director of the Corporation and the Corporation has agreed that Indemnitee should be secure in the knowledge that certain expenses and liabilities that may be incurred by him following his resignation will be borne by the Corporation, and the Board of Directors of the Corporation has determined that the following Agreement is in the best interests of the Corporation and its shareholders.

G.The Corporation understands that the Indemnitee’s decision to resign his positions with the Corporation was conditioned on his being furnished with the indemnity set forth below.

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A G R E E M E N T

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the Corporation and the Indemnitee agree as follows:

1.Resignation. The Indemnitee is simultaneously resigning in all capacities as a director and officer of the Corporation.

2.Definitions.

(a)The term “Proceeding” shall include any threatened, pending, or completed action, suit or proceeding, whether brought in the name of the Corporation, against the Corporation, or otherwise; and whether of a civil, criminal, or administrative or investigative nature, including, but not limited to, actions, suits, or proceedings brought under or predicated upon the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, their respective state counterparts or any rule or regulation promulgated thereunder, in which the Indemnitee may be or may have been involved as a party or otherwise by reason of the fact that the Indemnitee is or was a director and/or officer of the Corporation, by reason of any action taken by him or of any inaction on his part while acting as such director and/or officer, or by reason of the fact that he is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, whether or not he is serving in such capacity at the time any indemnified liability or reimbursable expense is incurred.

(b)The term “Expenses” shall include, but shall not be limited to all damages, judgments, fines, settlements and charges, attorneys’ fees and costs, expenses of investigation, expenses of defense of legal actions, suits, proceedings, claims, and appeals therefrom; as well of all like expenses of appeal, attachment, and bonds. “Expenses” shall not include any judgments, fines or penalties actually levied against the Indemnitee which the Corporation is prohibited by applicable law from paying.

3.Indemnity in Third-Party Proceedings. Subject to Paragraph 8, the Corporation shall defend and indemnify the Indemnitee and his successors, assigns, heirs, beneficiaries, and agents against and hold the same harmless from any and all Expenses and all other costs, claims, losses, recoveries, deficiencies, injuries, Proceedings, other legal and administrative proceedings, and penalties, including attorney's fees and costs, arising from or related to any and all of Indemnitee’s acts or omissions taken in connection with his positions as a Director, Officer, or Employee of the Corporation to the fullest extent of the law; provided that it is determined, pursuant to Paragraph 7 or by the court before which such action was brought, that the Indemnitee acted in good faith and in a manner that he reasonably believed to be in the best interests of the Corporation. Such defense, indemnification, and hold harmless obligations of the Corporation shall also extend to a criminal proceeding where Indemnitee had no reasonable cause to believe that his conduct was unlawful. The termination of any such Proceeding by judgment, order of court, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the Indemnitee did not act in good faith or in a manner that he reasonably believed to be in the best interests of the Corporation, and with respect to any criminal proceeding, that such person had reasonable cause to believe that his conduct was unlawful.

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4.Indemnity in Proceedings by or in the Name of the Corporation. Subject to Paragraph 8, the Corporation shall defend, indemnify, and hold harmless the Indemnitee to the same extent set out in Section 3 in connection with the prosecution, defense, or settlement of any Proceeding by or in the name of the Corporation to procure a judgment in its favor by reason of the fact that the Indemnitee was or is a director and/or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise; provided, however, that no indemnification for Expenses shall be made under this Paragraph 4 with respect to any claim, issue, or matter as to which the Indemnitee shall have been adjudged to be liable to the Corporation, unless and only to the extent that any court in which such Proceeding is brought shall determine upon application that despite the adjudication of liability, but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to a defense, indemnity, and to be held harmless for such expenses as such court shall deem proper.

5.Indemnification of Expenses of Successful Party. Notwithstanding any other provisions of this Agreement, to the extent that the Indemnitee has been successful on the merits or otherwise in defense of any Proceeding or in defense of any claim, issue, or matter therein, including the dismissal of an action without prejudice, the Indemnitee shall be indemnified against all Expenses incurred in connection therewith.

6.Advances of Expenses. Expenses incurred by the Indemnitee pursuant to Paragraphs 3 and 4 in any Proceeding shall be paid by the Corporation in advance of the determination of such Proceeding at the written request of the Indemnitee, if the Indemnitee shall undertake to repay such amount to the extent that it is ultimately determined that the Indemnitee is not entitled to a defense or indemnification.

7.Right of Indemnitee to Defense and Indemnification Upon Application; Procedure Upon Application. Any defense, indemnification, or advance under Paragraph 3, 4, or 6 shall be made by the Corporation no later than 30 days after receipt of the written request of the Indemnitee therefore, unless a determination is made within said 30-day period by (a) the Board of Directors of the Corporation by a majority vote of a quorum thereof consisting of directors who were not parties to such Proceedings, or (b) independent legal counsel in a written opinion (which counsel shall be appointed if such a quorum is not obtainable) that the Indemnitee has not met the relevant standards for indemnification set forth in Paragraphs 3 and 4.

The right to a defense and indemnification or advances as provided by this Agreement shall be enforceable by the Indemnitee in any court of competent jurisdiction. The Corporation shall bear the burden of proving that a defense, indemnification, or advances are not appropriate. The failure of the Corporation to have made a determination that a defense, indemnification, or advances are proper in the circumstances shall not be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct. The Indemnitee’s Expenses incurred in connection with successfully establishing his right to a defense, indemnification, or advances, in whole or in part, in any such Proceeding shall also be indemnified by the Corporation.

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8.Indemnification Hereunder Not Exclusive.

(a)Notwithstanding any other provision of this Agreement, the Company shall not indemnify Indemnitee for any act or omission or transactions for which indemnification is expressly prohibited by Section 204(a)(11) of the California General Corporation Law.

(b)The right to indemnification provided by this Agreement shall not be exclusive of any other rights to which the Indemnitee may be entitled under the Corporation’s Articles of Incorporation, bylaws, any agreement, any vote of shareholders or disinterested directors, the California General Corporation Law or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The indemnification under this Agreement shall continue as to the Indemnitee even though he may have ceased to be a director or officer, and shall inure to the benefit of the heirs and personal representatives of the Indemnitee.

9.Partial Indemnification. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for a portion of his Expenses actually and reasonably incurred by him in any Proceeding but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify the Indemnitee for the portion of such Expenses to which the Indemnitee is entitled.

10.Severability. If any provision of this Agreement or the application of any provision hereof to any person or circumstance is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be revised to the extent (and only to the extent) necessary to make it enforceable, valid and legal. 

11.Disputes; Attorneys’ Fees; Law; Venue. If any legal proceeding or litigation instituted by a party against the other arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable attorney’s fees and costs as determined by the arbitrator, arbitrators, or court, in addition to any judgment awarded. This Agreement is executed in Kern County, California and California law shall govern as to the construction, interpretation, and enforcement of this Agreement and the rights and obligations of the parties to this Agreement; without reference to conflicts of law principles. Proper venue for any legal proceeding, arbitration, or other litigation arising out of this Agreement shall be in Bakersfield, California, only, and the parties waive any right to a change of venue. The parties waive their respective rights to a jury trial, it being the parties’ intent that the dispute be heard by a judge only.

12.Notices. The Indemnitee shall, as a condition precedent to his right to be indemnified under this Agreement, give to the Corporation written notice as soon as practicable of any claim made against him for which a defense or indemnity will or could be sought under this Agreement. Notice to the Corporation shall be directed to Pyramid Oil Company, P.O. Box 832, Bakersfield, California 93302 (or at such other address or to the attention of such other person as the Corporation shall designate in writing to the Indemnitee). Notices to the Indemnitee shall be sent to the Indemnitee at the address set forth after his name on the signature page of this Agreement (or at such other addresses the Indemnitee shall designate in writing to the Corporation).

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PYRAMID OIL COMPANY

/s/ Michael Herman                                    

(Signature)

By: Michael Herman

Title: Chairman

INDEMNITEE

/s/ John H. Alexander                                   

(Signature)

John H. Alexander

Address:
8216 Portsmouth Street
Bakersfield, California 93311

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EX-99.1

Exhibit 99.1

press release

Oct. 1, 2013, 8:03 a.m. EDT

Pyramid Oil Company Announces Retirement of President and CEO John Alexander; Chairman Mike Herman Named Interim President & CEO

BAKERSFIELD, CA, Oct 01, 2013 (Marketwired via COMTEX) -- Pyramid Oil Company (nyse mkt:PDO) today announced that John Alexander has retired as president and CEO, a position he has held since 2004. Mike Herman, chairman and the Company's largest shareholder, has assumed the role as interim president and CEO.

Mr. Herman, who has served as chairman since 2005, joins the executive management team with extensive experience in the oil and gas industry. He currently is chairman and CEO of Denver-based energy services company ENSERVCO Corporation, a publicly traded provider of well enhancement and fluid management services. He also has been active in private oil and gas exploration and production businesses since the mid 1980s.

Mr. Alexander, who joined Pyramid as vice president and a director in 1986, will also step down from the board. However, he will continue to serve the Company as a consultant during the coming year.

"John has committed more than a quarter century to the operation of Pyramid, and the Company has been fortunate for his leadership." Mr. Herman said. "We intend to work closely together to ensure a smooth transition."

Mr. Herman added, "I believe Pyramid has a very bright future and I look forward to working with management and our directors as we endeavor to create shareholder value through organic growth, as well as potential joint ventures or acquisitions. Our previously announced plan to re-enter and deepen three wells to the Monterrey formation on our Delaney Tunnell property in Santa Maria, California remains a top priority."

The Company also announced that John Turco has retired as a director after serving on the Pyramid board since 1996.

As part of the board and management transition, Mr. Herman has purchased 243,579 shares of Pyramid common stock from Mr. Turco at a price of $6.00 per share. In addition, Mr. Herman has purchased 95,592 shares from Mr. Alexander at $6.00 per share, and will buy an additional 100,000 of Mr. Alexander's shares by May 1, 2014, at the same price.

Herman said the Company also has commenced a search for two independent directors to replace Mr. Alexander and Mr. Turco on the Pyramid board.

About Pyramid Oil Company Pyramid Oil Company has been in the oil and gas business continuously since incorporating in 1909. Pyramid acquires interests in land and producing properties through acquisition and lease, and then drills and/or operates crude or natural gas wells in an effort to discover or produce oil and/or natural gas. More information about the Company can be found at: http://www.pyramidoil.com.

Safe Harbor Statement Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995, including statements regarding the completion and testing of wells. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. Factors that could cause or contribute to such differences include, but are not limited to the value of crude oil or the performance of wells.

CONTACTS:

Geoff High

Principal

Pfeiffer High Investor Relations, Inc.

303-393-7044

SOURCE: Pyramid Oil Company

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