Exhibit 10.4 EXECUTIVE RETIREMENT AGREEMENT AND GENERAL RELEASE

 

 6.5 Certain Rights Not Affected. Nothing in this Agreement shall affect (1) Executive Officer’s right to file claims for workers’ compensation or unemployment insurance benefits, (2) applicable state or federal law that creates rights that may not be waived, (3) Executive Officer’s vested retirement or pension benefits, if any, and (4) any of Executive Officer’s rights under COBRA.

 

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 6.6 Indemnification Agreement Not Affected. Nothing in this Agreement is intended or should be construed to contradict, modify, or alter the terms of that certain Indemnification Agreement dated January 29, 2010, between Company and Executive Officer.

 

 6.7 No Actions. Executive Officer warrants and represents that he has not filed any actions, suits, complaints, arbitrations, charges, claims, or any other proceedings against any of the Tri-Valley Releasees. If any lawsuit, administrative charge, or other proceeding is commenced that involves a Released Claim in a court, arbitration, government agency or other forum, Executive Officer waives and agrees not to accept any award of money or other damages as a result of such charge, lawsuit, or proceeding.

 

 6.8 Cooperation. Executive Officer agrees to fully and faithfully cooperate and assist Tri-Valley Entities in connection with any actions, prosecutions, or any other legal proceedings in which Tri-Valley Entities may require Executive Officer’s cooperation. Executive Officer’s full assistance and cooperation with Tri-Valley Entities shall include, by way of example and without limitation, making himself available for interview by Tri-Valley Entities, reviewing and analyzing documents from Tri-Valley Entities, providing declarations, affidavits or sworn statements at the request of a Tri-Valley Entity, testifying for Tri-Valley Entities in deposition, trial, or other proceedings in matters at the request of a Tri-Valley Entity.

 

 6.9 No Reliance. Executive Officer represents and warrants that in executing this Agreement, Executive Officer does not rely and has not relied upon any representation or statement not set forth herein made by any of the Tri-Valley Releasees or by any of the Tri­Valley Releasees’ agents, representatives, or attorneys with regard to the subject matter, basis, or effect of this Agreement or otherwise.

 

 

 7.1 Compromise. The Parties acknowledge that this Agreement is made as a compromise of any claims, that Tri-Valley and TVOG specifically deny liability for any such claims, and that no act with respect to this Agreement, including the giving of consideration for the Agreement shall be construed as an admission of liability or responsibility to any person or that any of the Tri-Valley Releasees engaged in any form of wrongdoing or violated any legal obligation owed to Executive Officer. Neither this Agreement nor anything contained herein shall be admissible in any proceeding as evidence of or an admission by Tri-Valley, TVOG, or Tri-Valley Releasees of any violation of any law or regulation or of any liability whatsoever. Notwithstanding the foregoing, this Agreeme nt may be introduced into a proceeding solely for the purpose of enforcing this Agreement.

 

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 7.2 Governing Law; Venue. This Agreement is to be construed in accordance with and governed by the internal laws of the State of California without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties. Each of the parties hereto (a) agrees that any action arising out of or relating to this Agreement shall be brought solely in the State of California, (b) submits to the jurisdiction of the United States District Court for the Central District of California and of the Kern County Superior Court, and (c) irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the layi ng of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

 

 7.3 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

 7.4 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

 7.5 Notices. All notices, requests, waivers, and other communications made pursuant to this Agreement shall be in writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the other parties; (b) when sent by facsimile if sent between 8:00 a.m. and 5:00 p.m. recipient’s local time on a business day, or on the next business day if sent by facsimile other than between 8:00 a.m. and 5:00 p.m. recipient’s local time on a business day; (c) three business days after deposit in the U.S. mail with first class or certified mail receipt requested postage prepaid and addressed to the other parties; or (d) the next business day after deposit with a national overnight delivery service, delivery fees prepaid, addressed to the other pa rties with next business day, delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider. All notices, requests, waivers and other communications made pursuant to this Agreement shall be addressed as follows:

 

If to Tri-Valley:

 

Tri-Valley Corporation Attn: President

4550 California Avenue Suite 600

Bakersfield, CA 93309

 

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If to TVOG:

 

Tri-Valley Oil & Gas Co. Attn: President

 

4550 California Avenue Suite 600

Bakersfield, CA 93309

 

If to Executive Officer:

 

F. Lynn Blystone

P.O. Box 1105

Bakersfield, CA 93302

 

A Party may change or supplement their addresses, or designate additional addresses, for purposes of this Section 7.5 by giving the other Party written notice of the new address in the manner set forth above.

 

7.6 Amendments and Waivers. This Agreement may not be modified except in writing signed by all Parties. No provision of this Agreement may be waived unless in writing signed by all the parties. No course of dealing or delay on the part of a Party in exercising any right shall operate as waiver thereof or otherwise prejudice the rights of a Party, and no consent or waiver shall extend beyond the particular case and purpose involved.

 

 7.7 Expenses. Each party shall pay its own costs and expenses that it incurs with respect to the negotiation, execution, delivery, and performance of this Agreement. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement or the Warrant, the prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled.

 

 7.8 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 

 7.9 Construction. For purposes of this Agreement, whenever the context requires, the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include the masculine and feminine genders.

 

7.10 Entire Agreement; Conflicts Between Documents. This Agreement and the Warrant constitute the entire agreement among the parties with respect to the subject matter hereof and thereof, and no party shall be liable or bound to any other party in any manner by

 

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any warranties, representations, or covenants except as specifically set forth herein or therein. In case of a conflict between this Agreement, on the one hand, and the Warrant, on the other hand, this Agreement will govern.

 

7.11 Acknowledgment. Each Party to this Agreement acknowledges that: (a) it has read this Agreement; (b) it has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of its own choice; and (c) it understands the terms and consequences of this Agreement and is fully aware of the legal and binding effect of this Agreement.

 

7.12 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. An executed copy of this Agreement may be delivered by facsimile or electronic means.

 

 

 

8.1            OWBPA of 1990. In accordance with the Older Workers’ Benefit Protection Act of 1990, Executive Officer is aware of the following:

 

a. Executive Officer specifically intends knowingly and voluntarily that the Released Claims shall include the federal Age Discrimination in Employment Act of 1967, as amended by the Older Workers’ Benefit Protection Act of 1990 (“ADEA”), except that Executive Officer is not waiving any claim under the ADEA that may arise after the date that Executive Officer signs this Agreement.

 

b. Neither Section 6.1 (Confidential Terms) nor any other provision in this Agreement shall restrict Executive Officer bringing any proceeding to challenge Executive Officer’s release and waiver of any ADEA claims in this Agreement; in any such circumstance, the Tri-Valley Releasees may recover costs and attorneys’ fees specifically authorized by federal law.

 

c. Executive Officer agrees that the promises in this Agreement by Tri­Valley and TVOG represent obligations by Tri-Valley and TVOG that are in addition to anything of value to which Executive Officer otherwise is entitled from Tri-Valley or TVOG and that, absent entering into this Agreement, Executive Officer is not entitled to receive the Settlement Payment specified in Article 3 of this Agreement or the Warrant specified in Article 4 of this Agreement.

 

d. Executive Officer is hereby advised to consult with an attorney prior to signing this Agreement because Executive Officer is giving up significant legal rights. Executive Officer acknowledges that he has been so advised and has in fact consulted with an attorney of his choosing prior to executing this Agreement.

 

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Executive Officer has twenty-one (21) days from the date this Agreement is provided to him to consider whether to accept the terms of this Agreement. If Executive Officer has not signed and returned the Agreement to Tri-Valley and TVOG on or before the twenty-first day following Executive Officer’s receipt of this Agreement, this offer shall be null and void. If Executive Officer chooses to sign and return this Agreement sooner than twenty-one days, Executive Officer’s signature below shall be deemed a waiver of the balance of the consideration period.

 

e. Executive Officer may revoke this Agreement as provided in Section 8.2 below. If Executive does so, the entire Agreement becomes invalid. If Executive Officer does not revoke this Agreement, this Agreement becomes effective on the eighth day (“Effective Date”) after Executive Officer signs this Agreement. Following Executive Officer’s execution of this Agreement, Executive Officer agrees to return this Agreement to Tri-Valley Corporation, Attn: John E. Durbin, Chief Financial Officer, 4550 California Avenue, Suite 600, Bakersfield, CA 93309.

 

f. Executive Officer understands the terms and consequences of this Agreement and of the release it contains.

 

g. Executive Officer is fully aware of the legal and binding effect of this Agreement.

 

8.2. Revocation. This Agreement may be revoked by Executive Officer providing written notice of revocation to Tri-Valley Corporation, Attn: John E. Durbin, Chief Financial Officer, 4550 California Avenue, Suite 600, Bakersfield, CA 93309. Any revocation must be in writing and delivered by the close of business on the seventh (7th) day from the date that Executive Officer signs this Agreement. This Agreement shall not be effective until the seven-day revocation period set forth in this Section 8.2 has expired.

 

 

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DATED:  5 March, 2010                                      EXECUTIVE OFFICER

F. Lynn Blystone

DATED:  5 March, 2010                                      TRI-VALLEY CORPORATION

A Delaware corporation

G. Thomas Gamble

Director and Vice Chairman

Board of Directors

Tri-Valley Corporation

DATED:  5 March, 2010                                       /s/ Henry Lowenstein

Director

Chairman of Personnel and Compensation

Committee

Board of Directors

Tri-Valley Corporation

DATED:  March 5, 2010                                      TRI-VALLEY OIL & GAS CO.

A California Corporation

John E. Durbin

Chief Executive Officer

 

 

EXHIBIT A

 

 

TO

 

 

EXECUTIVE RETIREMENT AGREEMENT

 

 

AND

 

 

GENERAL RELEASE

 

FORM OF WARRANT

 

 

TRI-VALLEY CORPORATION -

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND SAID STATE SECURITIES LAWS OR AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT AND SAID STATE SECURITIES LAWS.

 

 

 

 

Tri-Valley Corporation, a Delaware corporation ("Company"), certifies that F. Lynn Blystone ("Holder") is entitled to purchase from the Company, at any time during the period set forth in Section 2.1 hereof, all or any portion of the Warrant Shares (as hereafter defined) for a price per Warrant Share equal to the Purchase Price (as hereafter defined).

 

This Warrant and the Warrant Shares issuable upon exercise of this Warrant are subject to the terms and conditions hereinafter set forth:

 

1. Definitions. As used in this Warrant, the following terms shall mean:

 

1.1           “Agreement and Release” – As defined in Section 7.9 of this Warrant. 1.2 “Common Stock” – The Company’s Common Stock.

1.3           “Issuance Date” – March 5, 2010, the effective date of the original issuance of this Warrant.

 

1.4           “Purchase Price” – An amount equal to ___ Dollars ($ ____) for each share of the Company’s Common Stock.1

 

1.5           “Subscription Form” – The form attached to this Warrant as Exhibit 1.

 

 

1 Section 4.2 of the Executive Retirement Agreement and General Release provides that the Purchase Price will be at the higher of: (i) the closing price for Tri-Valley Common Stock on the New York Stock Exchange/American Stock Exchange on the Separation Date as set forth in the Wall Street Journal for the closing price for Tri-Valley Common Stock on the Separation Date, or (ii) $1.85 per share.

 

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1.6           “Warrant” – This Warrant or any warrant delivered in substitution or exchange therefor as provided herein.

 

1.7            “Warrant Shares” – SEVEN HUNDRED THOUSAND (700,000) shares of the Company’s Common Stock.

 

2. Exercise.

 

 2.1 Time of Exercise. This Warrant may be exercised at the principal executive offices of the Company in California in whole or part at any time commencing on the Issuance Date and terminating at 5:00 p.m., Pacific Standard Time, on March 5, 2015 (“Termination Date”).

 

 2.2 Manner of Exercise. This Warrant is exercisable at the Purchase Price for each Warrant Share issuable hereunder payable: (a) in cash or by check payable to the order of Company; (b) by cancellation of any then existing indebtedness owed by the Company to the Holder; (c) in the manner described in Section 2.3 hereof; or (d) in any combination of the foregoing. Upon surrender of this Warrant with the annexed Subscription Form duly executed, together with payment of the Purchase Price for the Warrant Shares to be purchased, at the Company's principal executive offices in California, the Holder shall be entitled to receive a certificate or certificates for the Warrant Shares so purchased. The purchase rights represented by this Warrant are exercisable at the option of the Holder hereof, in whole or part, during any period in which this Warrant may be exercised as set forth above.

 

 2.3 Cashless Exercise. The Holder may elect to receive, without the payment by the Holder of any cash, that number of Warrant Shares equal to the value of this Warrant, or any portion hereof, by the surrender of this Warrant, or such portion, to the Company at the principal executive offices of the Company in California. Thereupon, the Company shall issue to the Holder such number of fully paid and nonassessable Warrant Shares as is computed using the following formula:

 

X = Y(A-B)  A

 

where X = the number of Warrant Shares to be issued to the Holder pursuant to this Section 2.3;

 

Y =

the number of Warrant Shares covered by this Warrant in respect of which the cashless exercise election is made;

 

A =

the "fair market value" of one share of Common Stock at the time the cashless exercise election is made; and

 

B =

the Purchase Price in effect under this Warrant at the time the cashless exercise election is made.

 

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The term "fair market value" of one share of Common Stock on any date shall mean the average of the daily closing prices for a share of Common Stock on the ten consecutive trading days commencing 10 days before the date upon which the cashless exercise election is made. The closing price for each day shall be: (i) the average of the last reported sales prices on the specified days (or if there is no reported sale on any such trading date, the average of the closing bid and asked prices on such trading date) if such Common Stock shall be listed or admitted to trading on any national securities exchange; (ii) the average of the last reported sales prices on the specified days (or if there is no reported sale on any such trading date, the average of the closing bid and asked prices on such trading date) if such Common Stock shall be listed or admitted to trading on the NYSE-Amex US Exchange; (iii) the closing price, if reported, or if the closing price is not reported, the average of the closing bid and asked prices, as reported by the Nasdaq National Market, the Nasdaq SmallCap Market or similar source or, if no such source exists, as furnished by two members of the National Association of Securities Dealers, Inc., selected by the Company for that purpose, on the specified date if such Common Stock is publicly traded but is not traded or admitted to trading on any national securities exchange; or (iv) the fair market value of such a share of such Common Stock on such dates as determined in good faith by the Company's Board of Directors if such Common Stock is not publicly traded. In the event that clause (iv) in the immediately preceding sentence is applicable, the Company's Board of Directors shall promptly respond in writing to any inquiry by the Holder hereof as to the fair market value of one share of such Common Stock.

 

 2.4 Delivery of Stock Certificates. As soon as practicable, but not exceeding 15 business days after exercise of this Warrant, the Company, at its expense, shall cause to be issued in the name of the Holder and deliver to the Holder a certificate for the number of fully paid and nonassessable Warrant Shares so purchased.

 

 2.5 Record Date of Transfer of Warrant Shares. Irrespective of the date of issuance and delivery of certificates for any Warrant Shares or other securities issuable upon the exercise of this Warrant, each person in whose name any such certificate is to be issued shall for all purposes be deemed to have become the holder of record of the Warrant Shares or other securities represented thereby immediately prior to the close of business on the date on which a duly executed Subscription Form containing notice of exercise of this Warrant and payment for the number of Warrant Shares as to which this Warrant shall have been exercised shall have been delivered to the Company.

 

3. Adjustments. In the event that the outstanding shares of Common Stock are at any time increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation through reorganization, merger, consolidation, liquidation, recapitalization, stock split, combination of shares, or stock dividends payable with respect to such shares of Common Stock, appropriate adjustments in the number, kind and price of such securities then subject to this Warrant shall be made effective as of the date of such occurrence so that the position of the Holder upon exercise of this Warrant will be the same as it would have been had the Holder owned immediately prior to the occurrence of such event the number of sha res of Common

 

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Stock subject to this Warrant. Such adjustment shall be made successively whenever any event listed above shall occur, and the Company will notify the Holder of each such adjustment. Any fraction of a share resulting from any adjustment shall be eliminated and the price per share of the remaining Warrant Shares subject to this Warrant adjusted accordingly.

 

4.       Transfer of Warrant and Warrant Shares.

 

 4.1 Restrictions on Transfer. The Holder, by the Holder's acceptance hereof, represents, warrants, covenants, and agrees that: (a) the Holder is an “accredited investor” as such term is defined in Rule 501(a) promulgated pursuant to the Securities Act; (b) the Holder has knowledge of the business and affairs of Company; (c) this Warrant and the Warrant Shares issuable upon the exercise of this Warrant are being acquired for investment and not with a view to the distribution hereof; and (c) absent an effective registration statement under the Securities Act of 1933, as amended ("1933 Act"), covering the disposition of this Warrant or the Warrant Shares issued or issuable upon exercise of this Warrant, this Warrant and/or the Warrant Shares issued or issuable upon exercise of this Warrant will not be sold, transferred, assigned, hypothecated, or otherwise disposed of without first providing the Company, if the Company so requests, with an opinion of counsel, reasonably satisfactory to the Company, to the effect that such sale, transfer, assignment, hypothecation, or other disposal will be exempt from the registration and prospectus delivery requirements of the 1933 Act. The Holder consents to the Company making a notation in its records or giving to any transfer agent of the Warrant or the Warrant Shares an order to implement such restriction on transferability. Subject to the foregoing, this Warrant is transferable and may be assigned or hypothecated from and after the date hereof. Upon surrender of this Warrant to the Company at its principal executive offices in California with the Subscription Form annexed hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee(s) named in such instrument of assignment, and this Warrant shall promptly be canceled.

 

 4.2 Payment of Warrant Exercise Taxes. All Warrant Shares issued upon the exercise of this Warrant shall be validly issued, fully paid, and nonassessable, and the Company shall pay all taxes and other governmental charges, if any, that may be imposed in respect of the issue or delivery thereof (other than taxes based upon income). The Company shall not be required, however, to pay any applicable tax or other charge imposed in connection with any transfer of any Warrant Shares into any name other than that of the Holder, and in such case the Company shall not be required to issue or deliver any stock certificate until such tax or other charge, if any, has been paid, or it has been established to the Company's satisfaction that no tax or other charge is due.