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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