1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
PYRAMID OIL COMPANY
(Name of Registrant as Specified in its Charter)
(Name of Person Filing Proxy Statement if Other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously by written preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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PYRAMID OIL COMPANY
2008 21st Street - P.O. Box 832
Bakersfield, California 93302
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 5, 2008
To the shareholders:
NOTICE is hereby given that the Annual Meeting of Shareholders (the
"Annual Meeting") of Pyramid Oil Company (the "Company") will be held at the
Corporate Offices of Pyramid Oil Company, 2008-21st Street, Bakersfield,
California 93301, on Thursday, June 5, 2008 at 10:30 A.M. Pacific
Daylight Time, for the following purposes:
1. To elect a Board of Directors for the ensuing year;
2. To approve the selection of Singer Lewak Greenbaum & Goldstein, LLP
as independent auditors for the Company for the year ending December 31, 2008;
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Information concerning these matters, including the names of the nominees
for the Board of Directors of the Company (the "Board"), is set forth in the
attached Proxy Statement for the Annual Meeting. Holders of record of the
Company's Common Stock at the close of business on April 30, 2008, the record
date fixed by the Board, are entitled to notice of and to vote at the Annual
Meeting. The Board urges that all shareholders of record exercise their right
to vote personally at the meeting or by proxy.
A copy of the Company's Annual Report to Shareholders containing
financial statements and other information of interest to shareholders is
enclosed herewith. You are urged to read the Annual Report.
All shareholders are requested to read the enclosed Proxy Statement and
to sign, date and complete the enclosed proxy and return it promptly in the
accompanying postage prepaid, pre-addressed envelope, whether or not they
attend the meeting, to assure that their shares will be represented. Any
shareholder giving a proxy has the right to revoke it at any time before it is
voted by following the procedures outlined in the Proxy Statement. Your
prompt response will be appreciated.
By Order of the Board of Directors
Lee G. Christianson, Secretary
Bakersfield, California
May 10, 2008
PLEASE SIGN AND DATE THE ENCLOSED FORM OF PROXY AND MAIL IT PROMPTLY IN THE
ENCLOSED RETURN ENVELOPE, IN ORDER TO ASSURE THAT YOUR VOTES ARE COUNTED.
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PYRAMID OIL COMPANY
2008 21st Street
P.O. Box 832
Bakersfield, California 93302
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
June 5, 2008
PROXY SOLICITATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of Pyramid Oil Company (the "Company")
of proxies to be used at the Annual Meeting of Shareholders of the Company
(the "Annual Meeting") to be held on June 5, 2008, and at any postponement or
adjournment thereof. This Proxy Statement, together with the accompanying
proxy, is first being mailed to shareholders on or about May 10, 2008. You
are requested to sign, date and return the enclosed proxy card in order to
ensure that a majority of the outstanding shares of Common Stock of the
Company (the "Common Stock") are represented at the meeting.
Any proxy given by a shareholder of the Company may be revoked at any
time before it is voted by attending the Annual Meeting and voting in person
or by filing with the Secretary of the Company an instrument revoking the
proxy or a duly executed proxy bearing a later date. If the enclosed form of
proxy is properly executed and returned, the Common Stock represented thereby
will be voted in accordance with the instructions given by the proxy. IF NO
INSTRUCTIONS ARE GIVEN, THE COMMON STOCK WILL BE VOTED "FOR" (1) APPROVAL OF
THE ELECTION OF THE NOMINEES FOR DIRECTORS NAMED HEREIN; AND (2) THE
RATIFICATION OF THE COMPANY'S SELECTION OF SINGER LEWAK GREENBAUM & GOLDSTEIN,
LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31,
2008; If any other matters are properly presented at the meeting, or any
adjournment thereof, the persons voting the proxies will vote according to
their best judgment.
Solicitation of proxies will be primarily by mail, although some
solicitation will be by telephone, telegraph or personal interview. Proxies
may be solicited by officers, directors and regular employees of the Company.
The Company will not pay any additional compensation for such solicitations.
Arrangements may be made with brokerage houses and with the Company's transfer
agent, U.S. Stock Transfer, Glendale, California, to send notices, proxy
statements, proxies and other materials to shareholders. The cost for such
services is expected to be nominal and will be borne by the Company.
Approval of the selection of Singer Lewak Greenbaum & Goldstein, LLP
requires the affirmative vote of the holders of a majority of the shares
represented in person or by proxy and voting on the item, provided that the
shares voting affirmatively must also constitute a majority of the required
quorum for the Annual Meeting. With regard to the election of directors, the
five nominees receiving the greatest number of votes will be elected.
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RECORD DATE AND VOTING
Only holders of record of the Company's Common Stock at the close of
business on April 30, 2008 shall be entitled to notice of and to vote at the
Annual Meeting. Transferees of Common Stock which is transferred on the
books of the Company subsequent to such date shall not be entitled to notice
of or to vote at the Annual Meeting.
As of April 30, 2008, there were outstanding 3,741,721 shares of Common
Stock. A majority of the outstanding shares of Common Stock entitled to vote,
whether present in person or by proxy, constitutes a quorum for the conduct
of business at the Annual Meeting. Abstentions and ''broker non-votes'' on
matters as to which they lack voting authority will be treated as shares
present and entitled to vote for purposes of determining the presence of a
quorum. Unless cumulative voting is requested by a shareholder, each share of
Common Stock is entitled to one vote for the election of each director of the
Company and to one vote on every other matter to be voted upon at the Annual
Meeting. Under the California General Corporation Law, if a shareholder gives
notice prior to the commencement of voting on the election of directors of his
or her intention to cumulate his or her votes, then all shareholders (or their
proxies) may cumulate their votes in connection with the election of
directors. No cumulative voting will occur if no such notice is given.
Cumulative voting permits each shareholder to cast an aggregate number of
votes equal to the number of shares owned multiplied by the number of
directors to be elected; all of such votes may be cast for a single nominee or
may be allocated among any two or more nominees as the shareholder wishes.
If a proxy is marked "FOR" the election of directors, it may, at the
discretion of the persons named in the enclosed form of proxy (the "Proxy
Holders"), be voted cumulatively in the election of directors. Under either
form of voting, the five nominees receiving the highest number of votes cast
will be elected as directors.
If you hold your shares of Common Stock in "street name," please contact
your broker or nominee as to the voting of your stock.
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PROPOSAL 1
ELECTION OF DIRECTORS
Directors are to be elected at the Annual Meeting to serve until the next
annual meeting and until their successors are elected and qualified. Unless
authority to vote for directors is withheld in the proxy card, it is the
intention of the Proxy Holders to vote for the election of the following five
persons as directors: John H. Alexander, Michael D. Herman, Thomas W. Ladd,
Gary L. Ronning and John E. Turco.
The Board has been informed that all nominees are willing to serve as
directors. If any of them should decline or be unable to act as a director,
the Proxy Holders will vote for the election of another person or persons as
they, in their discretion, may choose. The Board has no reason to believe any
nominee will be unable or unwilling to serve.
The nominees for election as directors of the Company are as follows:
Director Officer
Name Age Position(1) Since Since
----- ---- ----------- -------- -------
Michael D. Herman 50 Chairman of the Board 2005 --
and Director
John H. Alexander 60 President, Chief Executive 1984 1986
Officer and Director
Thomas W. Ladd 59 Director 1998 --
Gary L. Ronning 65 Director 1998 --
John E. Turco 77 Director 1996 --
(1) Position listed is that held with the Company.
MICHAEL D. HERMAN
MICHAEL D. HERMAN has been Chairman of the Company since July of 2005 and
the majority shareholder of the Company since June 15, 2005. Mr. Herman is
the Chairman and sole shareholder of Heat Waves Hot Oil Service, LLC and
Dillco. Heat Waves and Dillco provides various energy related services such
as water hauling, acidizing, frac heating and hot oil services to customers in
Kansas, Oklahoma, Colorado and New Mexico. Mr. Herman was the Chairman and
owner of Pasadena, California based Key Food Ingredients, Inc. from January 1,
2005 until October, 2007. Key Food Ingredients supplies dehydrated vegetables
from its factory in Qngdao, China to customers worldwide. Mr. Herman was
Chairman and owner of Telematrix, Inc. from October 1992 until December 1998
when the company was sold to a major hospitality company, and he repurchased a
majority ownership interest in December 2004 and held that majority ownership
interest until April 2006. Telematrix Inc. designs and distributes
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communications products and telephones to hospitality and business customers
globally. From November 2003 until February 2005, Mr. Herman was Chairman and
majority shareholder of Ft. Lauderdale based Sunair Electronics but chose not
to stand for re-election as a director in February 2006. Sunair Electronics
is engaged in the design, manufacture and sale of high frequency
communications equipment for long-range voice and data applications.
JOHN H. ALEXANDER
Mr. Alexander has been an independent oil operator in Orange County,
California, since 1970. Mr. Alexander has been President and Chief Executive
Officer of the Company since June 3, 2004. From 1986 to 2004, Mr. Alexander
was Vice President and a director of the Company.
THOMAS W. LADD
Mr. Ladd has been President and Chairman of the Board of Tetra Oil
Company, which is engaged in petroleum lease acquisition, exploration and
operations, since 1979. Mr. Ladd is also an independent geologist, offering
consulting services in petroleum, government compliance, environmental
assessments and co-generation development.
GARY L. RONNING
Mr. Ronning had been Executive Vice President, Western Region of
Prime Natural Resources, LLC, since 1999. Mr. Ronning has previously been
with Ferguson Energy, an independent oil and gas exploration company, since
1967. Mr. Ronning has had several positions with Ferguson Energy.
JOHN E. TURCO
JOHN E. TURCO has been the President and Chief Financial Officer of
Corotto Company, Inc., an agricultural company growing citrus in Kern County,
California, since March 1991. Mr. Turco has been President of Turco Desert
Company, Inc., an agricultural company growing dates, grapes and citrus in
California's Coachella Valley, since August 1991. Mr. Turco served as a
member and chairman of the finance committee of the California Citrus Research
Board from November 1992 until September 2001. Mr. Turco has served as a
trustee of the United Agricultural Benefit Trust, which provides medical
insurance to agricultural workers, since January 2002. Mr. Turco received his
B.S. in business administration from Menlo College.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
NOMINEES NAMED.
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IDENTIFICATION OF EXECUTIVE OFFICERS
Officer
Name Age Position Since
---- --- -------- -------
John H. Alexander 60 President, Chief 1986
Executive Officer
and Director
The biographical description of Mr. Alexander is included under
"Election of Directors."
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, the Company's directors, executive
officers, and any person holding more than 10% of the Company's Common Stock
are required to report their ownership of the Company's securities and any
changes in that ownership to the Securities and Exchange Commission. Specific
due dates for these reports have been established, and the Company is required
to report any failures to file by these dates. The Company knows of no
instances of persons who have failed to file or have delinquently filed
Section 16(a) reports within the most recently completed fiscal year.
SECURITY OWNERSHIP OF DIRECTORS, OFFICERS AND NOMINEES
The following table sets forth certain information as of April 30, 2008,
with respect to beneficial ownership of the Company's Common Stock by each of
the Company's directors, director nominees and executive officers named below
in the executive compensation table and by all directors and executive
officers as a group. The number of shares owned are those "beneficially
owned," as determined under rules of the Securities and Exchange Commission.
The information disclosed below is not necessarily indicative of beneficial
ownership for any other purpose. Beneficial ownership as described below,
includes any shares of Common Stock as to which the person named below has
sole or shared voting power or investment power pursuant to a discretionary
account or similar arrangement.
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Percentage of
Shares Outstanding
Name and Title (1) Owned (2) Common Stock(3)
----------------- -------- ---------------
Michael D. Herman 2,099,520(4) 56.11%
Director, Chairman of the Board
John H. Alexander, Director 74,298 1.99%
President and Chief Executive
Officer
Thomas W. Ladd, Director 100 --
Gary L. Ronning, Director -- --
John E. Turco, Director 183,267(5) 4.90%
Directors and Executive Officers
as a Group (6 persons) 2,357,185 63.00%
(1) Title listed refers to the Company unless otherwise stated.
(2) Amounts reported by each director do not include shares held in name of
his spouse, children and other relatives because the director does not
have sole or shared voting or investment control over the shares.
(3) As a percentage of the 3,741,721 shares of Common Stock outstanding at
April 30, 2008.
(4) Mr. Michael D. Herman's children own in the aggregate, 39,250 shares of
Common Stock. Mr. Herman disclaims any beneficial interest in such
shares.
(5) Mr. Turco owns 50% of Corotto Co. which in turn owns 21,750 shares of
the Company. Such shares are included in the total shares owned.
BOARD COMMITTEES; DIRECTOR NOMINATING PROCESS;
SHAREHOLDER COMMUNICATIONS WITH THE BOARD
The members of the Audit Committee and Compensation Committee are Thomas
W. Ladd, Gary L. Ronning and John E. Turco. The Company's Board of Directors
has determined that directors Ladd, Ronning and Turco are 'independent' within
the meaning of Rule 10A-3(b)(1) under the Securities Exchange Act of 1934 and
Section 121.A of the American Stock Exchange Company Guide. In addition, the
Board of Directors has determined that director Herman is independent under
Section 121.A of the American Stock Exchange Company Guide, and that director
Alexander is not independent since he is an employee of the Company.
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The Audit Committee reviews the Company's financial and accounting
organization, financial reporting and the reports of the independent auditors
and is responsible for the selection and oversight of the independent
auditors. The Company's Board of Directors has determined that Mr. Turco is
an 'audit committee financial expert' within the meaning of Item 407(d) (5) of
Securities and Exchange Commission Regulation S-B, and that Mr. Turco is
'financially sophisticated' within the meaning of Section 121.B(2)(a)(iii) of
the American Stock Exchange Company Guide. The Board of Directors based its
determination upon Mr. Turco's employment experience since March 1991 as the
Chief Financial Officer of Corotto Company, Inc.
The Audit Committee held four meetings during the last fiscal year. All
of the Company's directors who were members of the Audit Committee attended
all of the Audit Committee meetings. A copy of the Audit Committee's charter
is attached to this proxy statement as Appendix A.
The Compensation Committee recommends and approves the compensation of
the Company's directors and executive officers, including approving individual
executive officer compensation, reviews and recommends to the Board
compensation plans, policies and benefit programs for employees generally.
The Compensation Committee held one meeting during the last fiscal year. All
of the Company's directors who were members of the Compensation Committee
attended all of the Compensation Committee meetings. A copy of the
Compensation Committee's charter is attached to this proxy as Appendix B.
All directors of the Company comprise the Nominating Committee, which
recommends prospective directors to fill vacancies that may arise from time to
time and proposes individuals for election to the Company's Board by the
Company's shareholders. The Nominating Committee held one meeting during the
last fiscal year. All of the Company's directors attended the Nominating
Committee meeting. The Nominating Committee does not have a separate written
charter.
The Board of Directors, in its capacity as the Company's Nominating
Committee, will consider shareholder nominations for candidates for membership
on the Board. In evaluating such nominations, the Board seeks to achieve a
balance of knowledge, experience and capability on the Board. Any shareholder
nominations proposed for consideration by the Board should include the
nominee's name and qualifications for Board membership and should be addressed
to Lee G. Christianson, Secretary, Pyramid Oil Company, P.O. Box 832,
Bakersfield, California 93302. Shareholder nominations should be delivered to
Mr. Christianson at least 120 days before the date of the annual meeting.
The Board believes that directors should have the highest professional
and personal ethics and values, consistent with longstanding Company values
and standards. They should have broad experience at the policy-making level
in business, government, education, technology or public interest. They should
be committed to enhancing shareholder value and should have sufficient time to
carry out their duties and to provide insight and practical wisdom based on
experience. Their service on other boards of public companies should be
limited to a number that permits them, given their individual circumstances,
to perform responsibly all director duties.
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The Board utilizes a variety of methods for identifying and evaluating
nominees for director. The Board periodically assesses the appropriate size
of the Board and whether any vacancies on the Board are expected due to
retirement or otherwise. In the event that vacancies are anticipated, or
otherwise arise, the Board will consider various potential candidates for
director. Candidates may come to the attention of the Board's through current
Board members, professional search firms, shareholders or other persons.
These candidates will be evaluated at regular or special meetings of the
Board, and may be considered at any point during the year. If any materials
are provided by a shareholder in connection with the nomination of a director
candidate, the materials will be forwarded to the Board. The Board will also
review materials provided by professional search firms or other parties in
connection with a nominee who is not proposed by a shareholder.
All five of the director nominees identified in this proxy statement
currently serve as directors of the Company.
Any shareholder can communicate with all directors or with specified
directors by sending a letter to the Company's Corporate Secretary at the
address listed above. All such letters will be forwarded to the entire Board
or to the directors specified by the shareholder.
BOARD MEETINGS AND COMPENSATION
The Board of Directors met twice in 2007. Only non-employee directors
receive payment for service as directors of the Company. Non-employee
directors receive $600 for each Board meeting attended. The non-employee
directors received a total of $1,200 in directors' fees during 2007. Each
Board meeting was attended by all of the directors, except for Mr. Ronning,
who attended one meeting in 2007.
Fees Earned
Or Paid All Other
Name In Cash Compensation Total
------------------ ----------- ------------ --------
Michael D. Herman $ 1,200 $ -0- $ 1,200
Thomas W. Ladd 1,200 -0- 1,200
Gary L. Ronning 600 -0- 600
John E. Turco 1,200 -0- 1,200
Each director is encouraged to attend each annual meeting of
shareholders. All directors attended the 2007 annual meeting of shareholders.
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REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees and monitors the participation of the
Company's management and independent auditors throughout the financial
reporting process. Other than their services as directors of the Company, no
member of the Audit Committee has any other material relationship with the
Company.
In connection with its function to oversee and monitor the financial
reporting process, the Audit Committee has, among other things: reviewed and
discussed with the Company's management the audited financial statements for
the fiscal year ended December 31, 2007, discussed with the Company's
independent auditors those matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standards, AU 380); received the
written disclosures and letter from the Company's independent auditors
required by Independence Standards Board Standard No. 1 (Independence
Standards Board Standard No. 1, Independence Discussions with Audit
Committees); and discussed with the Company's independent auditors their
independence in light of any non-audit services performed by them for the
Company.
Based upon the foregoing, the Audit Committee approved the inclusion of
the audited financial statements in the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 2007.
Thomas W. Ladd Gary L. Ronning John E. Turco
EXECUTIVE COMPENSATION
The following table sets forth the compensation for the Chief Executive
Officer ("CEO") as indicated below. The Company has not granted any stock
options or stock appreciation rights to the CEO. No other officers or
employees had total compensation in excess of $100,000 for the 2007 fiscal
year.
Name and
Principal Position Year Salary (1) Bonus (1) Total
------------------ ---- --------- -------- --------
John H. Alexander 2007 $124,233 $35,000 $159,233
President and Chief
Executive Officer 2006 $107,983 $35,000 $142,983
(1) Perquisites and other personal benefits provided to the CEO were less than
$10,000 in the aggregate and, in accordance with applicable SEC regulations,
they are not listed in this table. Mr. Alexander became the Company's CEO on
June 2, 2004.
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EXECUTIVE EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Mr. John H. Alexander, the
Company's President and Chief Executive Officer.
In February 2002, the Company entered into an employment agreement with
John H. Alexander pursuant to which Mr. Alexander agreed to serve as the
Company's Vice President. On June 3, 2004, Mr. Alexander was appointed as the
Company's President and Chief Executive Officer. The employment agreement is
for an initial term of five years, which term automatically renews annually if
written notice is not tendered, and provides for an annual base salary of
$100,000 and benefits, as defined in the agreement.
Pursuant to the employment agreement, the Company may terminate Mr.
Alexander's employment with or without cause at any time before its term
expires upon providing written notice. In the event the Company terminates
Mr. Alexander's employment without cause, Mr. Alexander would be entitled to
receive a severance amount equal to his annual base salary and benefits for
the balance of the term of his employment agreement. In the event of
termination by reason of Mr. Alexander's death or permanent disability, his
legal representative will be entitled to receive his annual salary and
benefits for the remaining term of his employment agreement. In the event of,
or termination following, a change in control of the Company, as defined in
the agreement, Mr. Alexander would be entitled to receive his annual salary
and benefits for the remainder of the term of his agreement.
On January 9, 2007, the Company and John Alexander entered into a
Severance Award Agreement pursuant to which the Company awarded Mr. Alexander
a supplemental payment in connection with his future severance of employment
with the Company. Mr. Alexander serves as the Company's Chief Executive
Officer. Pursuant to the Severance Award Agreement and following the
termination of Mr. Alexander's employment, he will be entitled to receive (at
the Company's option) 20,000 shares of the Company's common stock or the
then-fair market value of the shares. The closing price of a share of the
Company's common stock on April 28, 2008 was $8.16.
RETIREMENT AND EMPLOYEE BENEFIT PLANS
The Company has a defined contribution plan (Simple IRA) available to all
employees meeting certain service requirements. Employees may contribute up
to a maximum of $6,000 of their annual compensation to the plan. The Company
makes a mandatory contribution to the plan in an amount equal to the employees
contributions of up to 3% of their annual compensation. Contributions of
$13,119, $11,748 and $9,775 were made by the Company during the years ended
December 31, 2007, 2006 and 2005, respectively.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective January 1, 1990, John H. Alexander, an officer and director of
the Company participated with a group of investors that acquired the mineral
and fee interest on one of the Company's oil and gas leases (Santa Fe Energy
lease) in the Carneros Creek field after the Company declined to participate.
The thirty-three percent interest owned by Mr. Alexander represents a minority
interest in the investor group. Royalties on oil and gas production from this
property paid to the investor group approximated $324,700 in 2007, $307,600 in
2006 and $221,400 in 2005.
During August 2005, after approval by the Company's Board of Directors,
the Company leased additional acreage from the investor group. The new lease,
Santa Fe Energy Section 32, is adjacent to the Company's existing Santa Fe
Energy lease. The Company paid the investor group $22,000 for an oil and gas
lease on 440 acres for a term of 3 years. The Company drilled a discovery
well with a joint venture partner on this property in the first quarter of
2006. A decision was made in the fourth quarter of 2006 to abandon this well.
In December of 2007, Mr. Alexander purchased a used pickup truck from the
Company for $21,150. The sale of the vehicle resulted in a gain to the
Company of approximately $1,500.
AS A DIRECTOR, MR. ALEXANDER HAS ABSTAINED FROM VOTING ON ANY OF THE
ABOVE MATTERS THAT HAVE BEEN BROUGHT BEFORE THE BOARD OF DIRECTORS, INVOLVING
THE SANTA FE LEASE.
PRINCIPAL HOLDERS OF SECURITIES
The following table furnishes information as of April 30, 2008, as to
each person known to the Company to be a beneficial owner of more than 5% of
the Company's Common Stock.
Number of Percentage of
Beneficially Outstanding
Name and Address Owned Shares Common Stock
---------------- ------------ --------------
Michael D. Herman 2,099,520 56.11%
P. O. Box 60446
Colorado Springs, Co 80960
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PROPOSAL 2
APPROVAL OF INDEPENDENT AUDITORS
The Audit Committee has appointed Singer Lewak Greenbaum & Goldstein, LLP
as independent public accountants to audit the books, records and accounts of
the Company for the year ending December 31, 2008. The appointment is being
presented to the shareholders for their ratification. Representatives of
Singer Lewak Greenbaum & Goldstein, LLP will be present at the meeting. They
will have an opportunity to make statements if they desire and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF SINGER
LEWAK GREENBAUM & GOLDSTEIN, LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
YEAR ENDING DECEMBER 31, 2008. IN THE EVENT THAT THE SHAREHOLDERS DO NOT
RATIFY THE APPOINTMENT, THE APPOINTMENT WILL BE RECONSIDERED BY THE AUDIT
COMMITTEE.
PRINCIPAL AUDITOR FEES AND SERVICES
The following table shows the fees billed to the Company by Singer Lewak
Greenbaum & Goldstein LLP for the audit and other services rendered by Singer
Lewak Greenbaum & Goldstein LLP during fiscal 2007 and 2006.
2007 2006
-------- --------
Audit Fees (1) $188,100 $122,100
Audit-Related Fees -- --
Tax Fees -- --
All Other Fees -- --
------------
(1) Audit fees represent fees for professional services provided to the
Company in connection with the audit of the Company's financial statements and
review of the Company's quarterly financial statements and audit services
provided in connection with other statutory or regulatory filings.
All audit-related services and other services rendered by Singer Lewak
Greenbaum & Goldstein LLP were pre-approved by the Board of Directors in its
capacity as the Audit Committee. The Board has a pre-approval policy that
requires the pre-approval by the Board of all services performed for the
Company by Singer Lewak Greenbaum & Goldstein LLP.
ANNUAL REPORT TO SHAREHOLDERS
Accompanying this Proxy Statement is a copy of the Company's 2007 Annual
Report to Shareholders.
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SHAREHOLDER PROPOSALS
FOR THE 2008 ANNUAL MEETING OF SHAREHOLDERS
A shareholder wishing to offer a proposal at the next annual meeting for
inclusion in the Company's proxy statement pursuant to SEC Rule 14a-8 must
submit the proposal to the Company's Secretary no later than January 10, 2009.
Proposals should be mailed to Lee G. Christianson, Pyramid Oil Company, P.O.
Box 832, Bakersfield, California 93302.
If notice of a shareholder proposal that the shareholder does not desire
to include in the Company's proxy statement is not received by the Company's
Secretary by March 27, 2009, the persons named in our proxy for the next
annual meeting of shareholders will have discretionary authority to vote on
the proposal at the annual meeting in accordance with their best judgment.
OTHER MATTERS
The Board of Directors is not aware of any other matters to be presented
at the Annual Meeting. If any other matters should properly come before the
Annual Meeting, the Proxy Holders will vote the proxies received according to
their best judgment.
The Company filed an annual report on Form 10-KSB with the Securities and
Exchange Commission. Shareholders may obtain a copy of this report without
charge, by writing to Lee G. Christianson, Secretary, Pyramid Oil Company,
P.O. Box 832, Bakersfield, California 93302.
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APPENDIX A
PYRAMID OIL COMPANY
AUDIT COMMITTEE CHARTER
This Charter shall be reviewed as necessary for adequacy by the Audit
Committee and the Board of Directors but no less frequently than annually.
I. PURPOSE
The principal purpose of the Audit Committee is to oversee the integrity
of the Company's accounting and financial reporting processes and the audits
of the Company's financial statements. In particular, the Audit Committee
shall monitor (a) the integrity of the Company's financial statements, (b) the
Company's compliance with legal and regulatory requirements, (c) the
qualifications, independence and performance of the Company's independent
auditors, and (d) the performance of the Company's internal audit function.
The Audit Committee shall also prepare the report required by the Securities
and Exchange Commission (the 'Commission') to be included in the Company's
annual proxy statement.
The Company's independent auditors are ultimately accountable to the
Audit Committee in its capacity as a committee of the Company's Board of
Directors (the Board), and the independent auditors shall report directly to
the Audit Committee. The Audit Committee shall have sole and direct authority
and responsibility to select, hire, oversee, evaluate, approve the
compensation of, and, where appropriate, replace the Company's independent
auditors (subject, if applicable, to stockholder ratification of the selection
of the independent auditors).
In discharging its oversight role, the Audit Committee is granted the
power to investigate any matter brought to its attention with full access to
all books, records, facilities and personnel of the Company and the power to
retain and determine funding for, at the Company's expense, independent legal
counsel, additional independent auditors or other experts and advisors for
this purpose. The Company shall provide the Audit Committee with appropriate
funding to perform its duties, including payment of the Company's independent
auditors and any experts or advisors retained by the Audit Committee.
II. Meetings
The Audit Committee shall meet as often as it deems necessary or
advisable, but not less frequently than quarterly. The Audit Committee shall
meet periodically with the Company's management and its independent auditors
in separate or joint sessions as deemed appropriate by the Audit Committee.
The Audit Committee may request any officer or employee of the Company or the
Company's outside counsel or independent auditors to attend any meeting of the
Audit Committee or to meet with any members of, or consultants to, the Audit
Committee.
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III. MEMBERSHIP
The Audit Committee shall be appointed by the Board and shall, so long as
the Company is a 'Small Business Filer', be comprised of not fewer than two
members of the Company's Board, each of whom shall meet the independence and
other requirements of the American Stock Exchange, the Securities Exchange Act
of 1934 (the "Exchange Act"), the rules and regulations of the Commission
regarding audit committees, and the rules and regulations of any other
relevant body, including those regarding independence and experience. At such
time as the Company is no longer a 'Small Business Filer', the Audit Committee
shall be comprised of not fewer than three members of the Board. All members
of the Audit Committee shall be able to read and understand fundamental
financial statements. At least one member of the Audit Committee shall be an
audit committee financial expert as defined by the Commission, and, at least
one member of the Audit Committee shall satisfy any applicable financial
sophistication or financial expert requirements of the American Stock
Exchange.
IV. KEY FUNCTIONS AND RESPONSIBILITIES
The following functions shall be the common recurring activities of the
Audit Committee in carrying out its duties. The functions and responsibilities
are set forth as a guide and may be varied from time to time by the Audit
Committee as appropriate under the circumstances.
The Audit Committee, to the extent it deems necessary or appropriate, shall:
FINANCIAL STATEMENT AND DISCLOSURE MATTERS
1. Review and discuss with management and the Company's independent
auditors the Company's annual audited financial statements, including
disclosures made in management's discussion and analysis, and recommend to the
Board whether the audited financial statements should be included in the
Company's Form 10-KSB.
2. Review and discuss with management and the Company's independent
auditors the Company's quarterly financial statements prior to the filing of
its Form10-QSB, including the results of the independent auditors' review of
the quarterly financial statements.
3. Discuss with management and the Company's independent auditors
significant financial reporting issues and judgments made in connection with
the preparation of the Company's financial statements, including any
significant changes in the Company's selection or application of accounting
principles, the quality and adequacy of the Company's internal controls and
any special steps adopted in light of material deficiencies in such controls.
4. Review and discuss quarterly reports from the independent auditors
on: (a) all critical accounting policies and practices to be used; (b) all
alternative treatments of financial information within generally accepted
accounting principles that have been discussed with management, ramifications
of the use of such alternative disclosures and treatments and the
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treatment preferred by the independent auditors; (c) other material written
communications between the independent auditors and management, such as any
management letter or schedule of unadjusted differences; and (d) conformance
with auditing standards.
5. Discuss with management the Company's earnings press releases,
including the use of "pro forma" or "adjusted" non-GAAP information, as well
as financial information and earnings guidance provided to analysts and rating
agencies.
6. Discuss with management the Company's major financial risk
exposures and the steps management has taken to monitor and control such
exposures, including the Company's risk assessment and risk management
policies, and discuss with management any off-balance sheet transactions,
arrangements or obligations in which the Company has an interest.
7. Review disclosures made to the Audit Committee by the Company's
CEO and CFO during their certification and disclosure process for reports on
Form 10-KSB and Form 10-QSB about any significant deficiencies in the design
or operation of internal controls or material weaknesses therein and any fraud
involving management or other employees who have a significant role in the
Company's internal controls.
OVERSIGHT OF THE COMPANY'S RELATIONSHIP WITH THE INDEPENDENT AUDITORS
8. Pre-approve all auditing services, including the annual audit
plan, and permitted non-audit services (including the fees and terms thereof)
to be performed for the Company or for the Audit Committee or Board by the
Company's independent auditors; provided that, to the extent permitted by
Commission regulations, (a) the Audit Committee may delegate such pre-approval
authority to a subcommittee of the Audit Committee that promptly reports all
such approvals to the full Audit Committee, and (b) the Audit Committee may
adopt pre-approval policies and procedures regarding the services to be
rendered by the independent auditors.
9. Meet with the independent auditors prior to the audit to discuss
the planning and staffing of the audit. Discuss with the Company's
independent auditors significant matters relating to the conduct of audits and
attestation reports on management's assessment of internal control over
financial reporting, including any difficulties encountered in the course of
audit work, any restrictions on the scope of activities or access to requested
information, any significant disagreements with management and the adequacy of
the Company's internal control over financial reporting and disclosure
controls and procedures. Discuss with the independent auditors matters
relating to the report of the Audit Committee that is required by Commission
rules to be included in the Company's annual proxy statement. The Audit
Committee shall be responsible for resolving any disagreements between
management and the independent auditors.
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10. Obtain from the Company's independent auditors annually a formal
written statement delineating all relationships between the independent
auditors and the Company; discuss with the independent auditors any such
disclosed relationships and their impact on the independent auditors'
independence; and take or recommend that the Board take appropriate action
regarding the independence of the independent auditors. Ensure the rotation
of the audit partners as required by law, and monitor the Company's hiring of
employees or former employees of the independent auditors to ensure compliance
with applicable law.
11. Obtain and review an annual report by the Company's independent
auditors describing the firm's internal quality-control procedures and any
material issues raised by the most recent internal quality-control review, or
peer review of the firm.
12. Evaluate the qualifications, performance and independence of the
Company's independent auditors, including considering whether the provision of
permitted non-audit services is compatible with maintaining the independent
auditors' independence. The Audit Committee shall present its conclusions with
respect to the independent auditors to the Board at least once each year.
COMPLIANCE OVERSIGHT RESPONSIBILITIES
13. At the conclusion of each audit, obtain from the Company's
independent auditors assurance that the firm is not required to report to the
Company under Section 10A(b) of the Exchange Act any illegal act.
14. Approve or reject proposed related party transactions. Obtain
reports from management that the Company and its employees are in compliance
with applicable legal requirements and the Company's Code of Conduct.
15. Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal accounting
controls or auditing matters, and the confidential, anonymous submission by
employees of concerns regarding questionable accounting or auditing matters.
16. Discuss with management and the Company's independent auditors
any correspondence with regulators or governmental agencies and any published
reports that raise material issues regarding the Company's financial
statements or accounting policies.
17. Discuss with the Company's General Counsel and outside counsel
any legal matters that may have a material impact on the financial statements
or the Company's compliance policies.
18. Meet quarterly.
19. Report regularly to the Board.
20. Perform any other activities consistent with this Charter, the
Company's Bylaws, AMEX rules and governing law and regulations, as the Audit
Committee deems necessary or appropriate.
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21. Maintain minutes of meetings and periodically report to the Board
on significant results of the foregoing activities.
22. Discuss with management and the Board policies with respect to
risk assessment and risk management, and review and discuss with management,
the Board and the Company's independent auditors any annual reports by
management on the Company's internal control over financial reporting that are
required by Commission rules and any related attestation reports that are
required from the independent auditors pursuant to Commission rules.
V. LIMITATION OF AUDIT COMMITTEE'S ROLE
The Audit Committee's role is one of oversight. While the Audit Committee
has the responsibilities and powers set forth in this Charter, it is not the
duty of the Audit Committee to plan or conduct audits or to determine that the
Company's financial statements and disclosures are complete and accurate and
are in accordance with generally accepted accounting principles and applicable
rules and regulations. These are the responsibilities of management and the
Company's independent auditors.
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APPENDIX B
PYRAMID OIL COMPANY
COMPENSATION COMMITTEE CHARTER
PURPOSE
The purposes of the Compensation Committee (the "Committee") of the board of
directors (the "Board") of Pyramid Oil Company (the "Corporation") are:
To discharge the Board's responsibilities relating to compensation of the
Corporation's directors and executive officers, including approving individual
executive officer compensation;
To review and recommend to the Board compensation plans, policies and
benefit programs for employees generally; and
To prepare the report on executive compensation required to be included
in the Corporation's annual proxy statement.
COMPOSITION AND TERM OF OFFICE
The Committee will consist of not fewer than two members each of whom
shall be a director who satisfies the independence requirements of the
Securities and Exchange Commission, as interpreted by the Board in its
business judgment.
One member shall serve as Chairman of the Committee. The members of the
Committee shall serve one-year terms, and shall be appointed by the Board
annually on the day of the Annual Meeting of Stockholders or on such other
date as the Board shall determine. Members of the Committee may be removed or
replaced by the Board.
COMMITTEE MEETINGS - OPERATING PRINCIPLES
The Committee shall meet with such frequency and at such intervals as it
shall determine is necessary to carry out its duties and responsibilities, but
in any case, at least two times each year.
Meetings of the Committee may be called as needed by the Chairman of the
Committee.
The Chairman will preside, when present, at all meetings of the
Committee. The Committee may meet by telephone and may take action by written
consent.
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The Committee shall have the sole right to retain and terminate
compensation consultants to assist in the evaluation of director, CEO or
executive officer compensation, including the sole authority to approve the
consultant's fees and other retention terms.
The Committee shall have the authority to obtain advice and assistance
from any officer or employee of the Corporation or from any outside legal
expert or other advisor.
The Committee may request that members of management or outside
consultants and advisors of the Committee, be present to assist the Committee
in performing its duties.
Minutes of each meeting will be kept and distributed to the entire
Committee.
The Committee may form, and where legally permissible may delegate
authority to, subcommittees when the Committee deems it appropriate or
desirable to facilitate the operation or administration of the plans or
programs. Where legally permissible, the Committee may also delegate
authority to committees consisting of employees when the Committee deems it
appropriate or desirable for the efficient administration of employee
compensation and benefit plans.
COMPENSATION/EMPLOYEE BENEFITS RESPONSIBILITIES
The Committee shall perform the following functions:
Provide oversight and guidance for compensation and benefit philosophy
for all employees of the Corporation.
Review and approve corporate goals and objectives relevant to CEO
compensation, evaluate the CEO's performance in light of those goals and
objectives and have the sole authority to determine the CEO's compensation
level based on this evaluation.
Review and approve other significant terms of employment for the CEO.
Review and make recommendations to the Board with respect to incentive
compensation plans and equity-based plans.
Review and make recommendations to the Board on matters concerning the
directors' annual retainer, as well as any other compensation programs
relating to the Board.
Prepare the report on executive compensation for inclusion in the
Corporation's proxy statement in accordance with applicable rules and
regulations.
Exercise any fiduciary, administrative or other function assigned to the
Committee under any of the Corporation's health, benefit or welfare plans.
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OTHER RESPONSIBILITIES
Following each Committee meeting, report at the next meeting of the full
Board all significant items discussed at the Committee meeting.
Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval.
Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement.
Conduct an annual performance evaluation of the Committee.
Take such further actions or provide such further advice as the full
Board may from time to time delegate to the Committee.
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Proxy Number Number of Shares
PYRAMID OIL COMPANY
P. O. Box 832-2008, 21st Street
Bakersfield, California 93302
Please Sign and Return Promptly
Date: 2008
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(Signature(s) of Shareholders)
Please date and sign exactly as name appears
hereon. When signing as executor, adminis-
trator, trustee, guardian, attorney, etc.
full title as such should be shown. If
shares are registered in more than one name
all registered owners should sign.
THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED AT THE MEETING.
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PROXY
PYRAMID OIL COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Pyramid Oil Company (the "Company") hereby
appoints Michael D. Herman and John H. Alexander, and each of them, the true
and lawful attorneys, agents and proxies of the undersigned, with full power
of substitution and revocation to each of them, for and in the name of the
undersigned to vote all the shares of Common Stock of the Company which the
undersigned may be entitled to vote at the Annual Meeting of Shareholders of
the Company to be held at the Corporate Offices of Pyramid Oil Company, 2008
21st Street, Bakersfield, California 93301, on Thursday, June 5, 2008 at
10:30 A.M. Pacific Daylight Time, and at any postponement or adjournment of
such meeting, as fully as the undersigned could do if present in person. The
undersigned hereby revokes all proxies heretofore given. Without limiting the
generality of the foregoing, said proxies are authorized to vote:
(1) Election of Directors
/ / FOR all nominees listed below (except as marked to the
contrary below.
/ / WITHHOLD AUTHORITY to vote for all nominees below.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Michael D. Herman, John H. Alexander, Thomas W. Ladd
Gary L. Ronning, John E. Turco
(2) Proposal to ratify the selection of Singer Lewak Greenbaum &
Goldstein, LLP as the Company's independent auditors for 2008:
/ /FOR / /AGAINST / /ABSTAIN
IF NO VOTING INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION
OF THE NOMINEES FOR DIRECTORS NAMED ABOVE AND FOR THE SELECTION OF SINGER
LEWAK GREENBAUM & GOLDSTEIN, LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR
2008. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND AT ANY AND ALL
ADJOURNMENTS OF THE MEETING.