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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