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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Mark One)
/ / Filed by the Registrant
/X/ Filed by a Party Other than the Registrant
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
TRI-VALLEY CORPORATION
(Exact Name as Specified in its Charter)
THE TRI-VALLEY COMMITTEE FOR NEW MANAGEMENT
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(l), 14a-6(j)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
Title of each class of securities to which transaction applies:
Aggregate number of securities to which transaction applies:
Per unit price or other 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):
Proposed maximum aggregate value of transaction:
Total fee paid:
/X/ Fee paid previously with 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.
Amount previously paid:
Form, Schedule Or Registration Statement No.:
Filing Party:
Date filed:
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PROXY STATEMENT
OF
THE TRI-VALLEY COMMITTEE FOR NEW MANAGEMENT
2 NORTH CASCADE AVENUE
SUITE 1100
COLORADO SPRINGS, COLORADO 80903
SOLICITATION OF PROXIES FOR
MEETING OF STOCKHOLDERS
OF
TRI-VALLEY CORPORATION
JUNE 7, 1996
To Fellow Stockholders of the Company:
The enclosed proxy material relating to Tri-Valley Corporation ("Tri-
Valley" or the "Company") from the Tri-Valley Committee for New Management (the
"Committee") is sent to you as the direct or beneficial owner of common stock
of the Company. The Committee includes stockholders of the Company who are
dissatisfied with the actions and nonperformance of the Board of Directors
culminating in the recent bankruptcy filing of the Company. The Committee was
formed to replace the incumbent directors of the Company with the Committee's
nominees named in this Proxy Statement (the "Nominees").
As a result of the Committee's efforts, on May 2, 1996, the judge in the
Company's federal bankruptcy case ordered the Company to hold a meeting of
stockholders of the Company no later than July 31, 1996. BECAUSE OF THE
COMMITTEE'S ACTIONS TAKEN ON YOUR BEHALF, THIS WILL BE THE FIRST STOCKHOLDERS
MEETING HELD BY THE COMPANY IN OVER THREE YEARS, AND GIVES STOCKHOLDERS AN
OPPORTUNITY TO EXPRESS THEIR DISSATISFACTION WITH THE CURRENT MANAGEMENT OF THE
COMPANY BY NOT RE-ELECTING THE INCUMBENT BOARD.
To be ensured to vote at the stockholders meeting with the Committee, you
need to execute the enclosed green proxy card and return it to the Committee.
By returning the enclosed proxy, stockholders will be able to vote for the
Committee's nominees and to vote on all matters that may arise at the
stockholders meeting.
The Committee urges you to ignore any requests of the Company's current
Board of Directors to execute proxies on behalf of the current Board or to
revoke or not to sign the Proxy requested by the Committee. Instead, the
Committee urges you to sign and return the enclosed form of Proxy.
This Proxy Statement, together with the enclosed form of Proxy (printed on
green paper), is first being mailed or distributed to stockholders of the
Company on or about June 7, 1996.
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THE STOCKHOLDERS COMMITTEE
The Committee is comprised of eight persons, namely, Alfred Ainsworth III,
Jay T. Dalton, Eugene R. Hering, Marc R. Herman, Bernard L. Larsen, Lorrie T.
Olivier, Todd A. Oseth and James J. Williams, as representative of the Patexco
Employees' Pension Trust. All of the foregoing members are collectively
referred to in this Proxy Statement as the "Committee members." As of May 13,
1996, the Committee members beneficially owned an aggregate of 408,990 shares of
the Company's common stock, representing approximately 5.6% percent of the
Company's shares currently outstanding.
INTEREST OF CERTAIN PERSONS IN
MATTERS TO BE ACTED UPON
Three of the Committee members, Messrs. Ainsworth, Oseth and Olivier, are
Committee Nominees. Additional information about the Committee members, the
Committee Nominees and certain other persons is set forth in Annex A which
accompanies this Proxy Statement. See also further information concerning the
Committee's Nominees set forth in the discussion below under the caption
"Election of the Committee's Nominees."
BACKGROUND PRECEDING PROXY SOLICITATION
Current management took control of the Company over fifteen years ago.
During that time, stockholders of the Company have confronted serious problems,
including a declining stock price, no dividends, unauthorized corporate
transactions, diversion of funds, and self-dealing. SEE "Summary of Management
Problems Prior to Bankruptcy" below. Perhaps the most significant indicator of
poor management, however, was the Company's declaration of bankruptcy. Without
any general communication with its stockholders regarding the deterioration of
the Company or an exploration of the Company's alternatives, the present Board
of Directors and management filed on January 30, 1996 for protection under
Chapter 11 of the United States Bankruptcy Act in the United States Bankruptcy
Court, Fresno, California (Case No. 96-10620B).
Because of current management's poor performance, the Committee was formed
to replace the incumbent directors of the Company. To this end, the Committee
conducted a solicitation of consents from stockholders of the Company in March
and April 1996 to remove the current Board of Directors and replace them with
the Committee's nominees. While sufficient consents were not obtained by the
April 29, 1996 deadline to effect the proposed change in management using the
consent process, the Committee did obtain consents from the holders of
approximately 47% of the outstanding common stock. In addition, the Committee,
through intervention in the Company's bankruptcy proceeding, was able to help
convince the bankruptcy court judge to order the Company to hold a meeting of
stockholders. By a motion submitted by the United States Trustee overseeing the
Company's bankruptcy, the Company was ordered to hold a meeting
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of stockholders no later than July 31, 1996. This meeting will be the first
meeting of stockholders, and the first time stockholders will be given the
chance to vote for the Company's Board of Directors at a regular meeting, in
over three years. THE COMMITTEE URGES YOU TO TAKE ADVANTAGE OF THIS OPPORTUNITY
TO SHOW CURRENT MANAGEMENT WHO THEY ARE WORKING FOR BY GRANTING THE ENCLOSED
PROXY TO THE COMMITTEE FOR THE ELECTION OF ITS NOMINEES TO THE COMPANY'S BOARD
OF DIRECTORS.
SUMMARY OF MANAGEMENT PROBLEMS PRIOR TO BANKRUPTCY
In the opinion of the Committee, the chief reason giving rise to the
Company's bankruptcy is that the Company has been managed poorly. For example,
at the end of 1995, the Company's outstanding debt had ballooned to more than
$900,000. The Committee believes that the incurrence of this debt is a primary
reason the Company had to file for bankruptcy protection.
In addition, despite the expenditure by the Company, according to filings
made with the United States Bankruptcy Court, of over $l,700,000 on mineral
lease acquisitions and gold exploration since 1986, it is the Committee's
understanding, based on conversations between the Comittee and the former
Secretary and Treasurer of the Company, that resulting revenues for the Company
during this time have totaled only approximately one-third of this amount. In
addition, Mr. F. Lynn Blystone, President and Chief Executive Officer of the
Company, admitted at the Company's "section 341" bankruptcy hearing on March 28,
1996, that the Company is in default on claims to more than half of its prospect
acreage simply due to the Company's failure to stay current with its payments on
the claims. The Committee believes that, in its current financial condition,
the Company cannot afford to hold onto its claims, much less mine any gold.
Furthermore, a motion filed May 6, 1996, by Phillips Petroleum, Co. in
bankruptcy court against the Company states that the Company is delinquent in
the payment of real estate property taxes (including applicable state oil and
gas production taxes) of at least $15,000 for certain of the Company's natural
gas producing properties known as the Martins-Severin #2, #3 and #5 wells in
Contra Costa County, California. Natural gas producing properties currently
represent the Company's sole source of operating revenues. These taxes could
become a lien against the properties, reducing their value and posing the
ultimate risk that taxing authorities could foreclose on the properties. It has
become apparent that current management is not capable of exploiting its
valuable properties. The Committee believes that these circumstances must
change, but will not without a new Board of Directors or new management.
The Committee believes current management also has demonstrated a serious
disregard of its duties owed to stockholders as a publicly-held company. The
rules of the Securities and Exchange Commission ("SEC") require that Tri-Valley
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submit annual financial and operating information on a Form 10-K to the SEC and
to the stockholders by way of an annual report. THE COMPANY HAS FAILED TO FILE
ITS FORM 10-K WITH THE SEC AND HAS NOT SENT ANNUAL REPORTS TO STOCKHOLDERS FOR
AT LEAST THE PAST TWO YEARS. The Committee believes that one possibility giving
rise to this failure is that current management was deliberately attempting to
withhold material information to its stockholders regarding the state of the
Company. Moreover, the bylaws require that the Company hold a stockholder's
meeting each year in September for the purpose of electing directors and
conducting other business. CURRENT MANAGEMENT HAS FAILED TO HOLD THESE REQUIRED
MEETINGS FOR MORE THAN THREE YEARS.
In addition to the foregoing, the Committee faults the record of the
present Board of Directors based, in part, on the following issues:
1. Lack of oversight with respect to management that permitted
unauthorized transactions and diversion of funds. For example, according to a
declaration filed with the United States Bankruptcy Court by Ms. Helen O'Brien,
a former Secretary and Treasurer of the Company purportedly terminated by the
Company for cause in December 1995 after six and a half years of service, Mr.
Blystone, President and Chief Executive Officer of the Company, obtained a
secured loan for the Company in early May 1995 for $620,000, even though the
Board of Directors had authorized a loan for only $500,000. Ms. O'Brien's
declaration also discloses that Mr. Blystone directed her to divert $45,000 of
funds from gas well working interest partners to make lease payments in respect
of certain gold claims owned by the Company, then repaid the working interest
partners with a loan from a stockholder of the Company, and then repaid the loan
to the stockholder with other gas well working interest partner funds.
2. Self-dealing on the part of the Company's President and Chief
Executive Officer. According to Mr. Blystone's own testimony at a "section 341"
bankruptcy hearing on March 28, 1996, Mr. Blystone has obtained royalty
interests for himself in gas field development investments made by the Company.
While the Company's Board of Directors may have known about or approved of these
transactions, the transactions have not been publicly disclosed to the Company's
stockholders. In addition, Mr. Blystone testified at the hearing that he had
made at least one personal loan to the Company through his family corporation at
an interest rate higher than that available from other sources at the time the
loan was made. Finally, according to declaration of the former Secretary and
Treasurer of the Company referred to above, Mr. Blystone is accruing interest on
unpaid salary at a rate of 18% per annum.
3. The Committee is informed that, prior to filing for bankruptcy, the
Board of Directors, for no stated reason, refused to negotiate an out-of-court
settlement with the Company's largest creditor, despite the potential benefit to
the stockholders of a negotiated work-out without filing bankruptcy. The
Committee believes that an out-of-court settlement could have significantly
benefited
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stockholders because the Company's largest creditor is secured by the Company's
oil and gas producing properties, will likely be entitled to such properties, or
the proceeds therefrom, as part of plan of reorganization, and offered to
negotiate a settlement with the Company prior to bankruptcy that included an
offer to purchase the Company's gas-producing properties, but provided an option
by the Company to repurchase the properties within twelve months at a pre-set
price based upon commercially reasonable interest rates. Acceptance would have
provided the Company with both liquidity and the ability to recover its
interests in the gas fields upon exercise of the repurchase option.
4. According to testimony by Mr. Blystone at the Company's section 341
bankruptcy hearing on March 28, 1996, and according to statements in letters to
stockholders from Mr. Blystone, current management has been soliciting the sale
of the Company's gas reserves. These reserves comprise the only revenue
generating assets owned by Tri-Valley. We believe that such a sale should be
approved by either a stockholder vote or by the bankruptcy court. Current
management, however, has not informed you of their actions in this regard.
5. Over the combined opposition of the Committee, the Company's Equity
Committee and the United States Trustee overseeing the Company's bankruptcy, the
Company has been authorized by the bankruptcy court to increase the Company's
outstanding indebtedness by more than 15%. The Committee believes that the
terms of the proposed debt are irregular in that the Company is required to pay
to the lender an origination fee equal to 10% of the principal amount of the
loan. In addition, given past instances of diversion of funds reported by the
former Secretary and Treasurer of the Company to the United States Bankruptcy
Court, the Committee questions whether management can be trusted to make prudent
use of the loan proceeds.
6. Finally, members of the Committee have made several attempts to make
direct contact with the Board of Directors to discuss the Committee's concerns.
The members received no response to their inquiries, other than to receive
threats of litigation from the Board. As such, the Committee feels compelled to
make this proxy solicitation and establish a Board of Directors that will be
responsive to stockholder concerns.
REASONS FOR PROXY SOLICITATION
The Committee proposes that the Company's stockholders join it in electing
a new Board of Directors of the Company for the purpose of implementing its plan
for change, the first order of business of which will be the removal of Mr. F.
Lynn Blystone as President and Chief Executive Officer and the review and
evaluation of all other executive officers of the Company. The second order of
business will be to conduct the Company's bankruptcy proceedings, after giving
appropriate consideration to creditors, for the stockholders' benefit, to emerge
from bankruptcy in a manner that will permit the Company to generate an optimal
value for the
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stockholders and to develop the Company's business consistent with the objective
of long-term growth.
COMMITTEE OBJECTIVES
The Committee desires to bring to the Company the experience and leadership
needed to once again become a successful business.
The proposed Nominees have demonstrated business experience. The
Committee's slate include individuals with particular expertise in the oil, gas
and mineral industry and is augmented by individuals with strength in finance
and operations management.
If elected, the Nominees will initiate steps to implement a successful
long-term growth strategy of the Company. The Nominees' emphasis will be
focused, first, on a Plan of Reorganization for the Company's Chapter 11
bankruptcy that will address creditors' claims AND maximize stockholder value,
and, second, on the strategic development of the Company's assets. While the
Committee does not currently have a Reorganization Plan and may not file such a
plan with the United States Bankruptcy Court until after the Company's
exclusivity period for presenting a plan to the court, and while no definitive
plan alternatives have been decided upon, the Committee already has an open
dialogue with the Company's Creditors' Committee, Unsecured Creditors' Committee
and the the Official Equity Committee in the Company's bankruptcy.
The Committee's business strategy also anticipates a thorough analysis of
market trends and opportunities. These actions are designed to restore investor
confidence, improve earnings and increase stockholder value. These steps are
expected to include:
1. Immediately working with the Company's creditors, including Frank
Agar, who the Committee believes is the largest creditor of the Company, to work
out a plan which satisfies the creditors and conserves value for the
stockholders. The Committee understands that the Company owes Mr. Agar in
excess of $660,000, including interest, and that this indebtedness is secured
with a deed of trust on all of the producing gas properties of the Company.
Assuming the Nominees are elected and work out a mutually acceptable plan with
Mr. Agar, Mr. Agar has indicated his willingness to work with the Committee in
developing a plan of reorganization for the Company, to work with the Company in
finalizing a restructuring of the Company, and to join the Company as a member
of the Board of Directors, if nominated and elected, once the Company has
emerged from bankruptcy.
2. The Nominees intend to give serious consideration to certain
strategic changes in the philosophy and operation of Tri-Valley. The Nominees
will review whether the Company would be better served by sharing more
extensively with
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other participants the costs and risks inherent in exploring and developing the
Company's property holdings.
3. Promptly upon taking office, the Nominees will evaluate the
activities and performance of management and will make any changes that it deems
necessary to improve overall management performance.
4. Promptly upon taking office, the Nominees will take actions necessary
to cause the Company to be in compliance with SEC and any other laws and
regulations that have been neglected by present management.
5. The Committee believes that a "termination agreement" has been granted
to F. Lynn Blystone, the current Chairman and CEO. The Committee believes that
this termination agreement is not in the best interest of the Company and should
not have been approved by the incumbent Board of Directors. The Committee
believes that such a contract significantly curtails the Company's freedom of
action in its dealings with top management officers. For example, if the
Committee's nominees were elected to the Board of Directors, this agreement
reportedly requires a cash payment to be made by the Company to Mr. Blystone in
the amount of $100,000. The Committee believes such contract should not have
been implemented without shareholder consent and ratification. Accordingly, if
the Committee's slate of directors is elected, the Committee pledges that it
will study the legality and enforceability of such contract as being wasteful of
the Company's assets and, if it determines that the contract is subject to legal
attack on such grounds, it will challenge such contract in appropriate legal
proceedings.
6. The Nominees intend to retain experts and analysts in the Company's
various fields of operation in order to determine alternative strategies for
utilizing some or all of the Company's assets. Access to the detailed and
comprehensive data contained in the books and records of Tri-Valley, which have
not been available to the Committee and its advisor, will help to define any
plan which may ultimately be decided upon. Until a definitive program is
determined, however, the Nominees will use their best efforts to operate the
Company's businesses in the ordinary course and in a manner which will improve
Tri-Valley's relationships with its employees, customers, suppliers and
creditors.
7. The Nominees will focus on the Company's long-standing history as an
oil and gas company. In doing so, the Board will strive to return Tri-Valley to
its roots as a respected, active participant in oil and gas exploration and
production. In doing so, the Nominees intend to seek to enhance share value,
provide working capital and improve industry and market recognition. The
Nominees may consider moving the principal offices of the Company to an industry
center such as Dallas or Houston if such a move will improve the Company's
earning potential.
8. The Nominees will carefully review all transactions made by the
current management to determine their validity and purpose. Should transactions
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be discovered which were made contrary to the interests of the Company or were a
breach of fiduciary duty, any actions available will be taken to address such
transactions.
9. The Nominees intend to take action to renew all of the gold mining
claims that the Company has let lapse over the past year. Once renewed, the
Nominees intend to retain analysts to determine the profitability of developing
the gold properties.
It is the Committee's opinion that its proposals for change would benefit
the Company and the Company's stockholders.
The Committee believes that its Nominees to the Board of Directors will, if
elected, introduce positive changes to the Company. The Committee urges
stockholders to consider carefully this opportunity to bring much-needed
experience and expertise to the Company.
THE COMMITTEE'S NOMINEES
The following information has been furnished to the Committee by the
respective Nominees. Annex A to this Proxy Statement sets forth additional
information for each Committee Nominee as required by the federal securities
laws governing the use and distribution of this Proxy Statement. The Committee
proposes the following slate of seven candidates for election to the Board of
Directors of the Company:
ALFRED AINSWORTH, III, age 34, has worked in the oil and gas industry for
more than 15 years. Since 1994, he has served as President of Ainsworth
Production Company, Inc., an independent exploration and production company
which he founded. From 1989 to 1994, he served as Vice President of Ainsworth
Operating Company, a family owned and operated exploration and production
company. Mr. Ainsworth has also worked as a staff geologist for Placid Oil
Company, and as a financial consultant for Merrill Lynch Pierce Fenner & Smith.
CHARLES B. BONNER, age 54, has served as President of Pacific Resources
Inc., a merger and acquisition and verture capital firm serving middle market
companies, since 1990. Prior to that, Mr. Bonner served as President of Bonner
Packing Company, a producer and distributor of dried fruits, for 14 years. Mr.
Bonner presently serves on the Board of Directors of a number of organizations,
including the Boy Scouts of America, Fresno, California.
C. DOUGLAS BROWN, age 34, has more than 10 years of experience in the oil
and gas industry. He is currently President of BXP Company, LLC, a privately-
owned, independent oil and gas acquisition and development company. Prior to
founding BXP, Mr. Brown served as Acquisition Coordinator for Petro-Hunt
Corporation.
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From 1986 to 1992, Mr. Brown served as a production and exploration geologist
for Sun Exploration and Production Company and Oryx Energy Company.
J. BRUCE CARRUTHERS II, age 61, has worked in the natural resources
industry throughout his entire career. Since 1989, he has served as President
and Chairman of the Board of Hexagon Resources, Inc., a mining exploration and
development company for which he was the co-founder. Prior to that, Mr.
Carruthers worked for Occidental Petroleum Corporation for 18 years, holding
various positions, including Director of International Trade, Planning Manager
for Worldwide Oil and Gas Exploration and Production, Manager of New Ventures
and Petroleum Supply Manager. Mr. Carruthers was also the founder and President
and Chief Executive Officer of a high-technology energy service corporation.
Mr. Carruthers was a member of the Board of Directors of Tri-Valley until 1996,
when he resigned in a dispute with management over the conduct of Company
affairs.
JOHN E. GRANT, age 48, is presently a self-employed rancher. Mr. Grant
previously worked as a self-employed real estate broker and as an agricultural
and commercial real estate developer. From 1988 to 1989, Mr. Grant was Vice
President of Tri-Valley, during which time he supervised the Company's gold
mining operations. In 1993, Mr. Grant personally filed a petition under the
federal bankruptcy laws. The bankruptcy arose after the Resolution Trust
Company (RTC) sued Mr. Grant for all debt outstanding on two commercial real
projects in which Mr. Grant held a 5% non-management general partner interest.
The bankruptcy was discharged in 1993.
LORRIE T. OLIVIER, age 45, has twenty-two years of management experience in
international and domestic oil and gas operations. Mr. Olivier is presently
Vice President of American International Petroleum Corporation (AIPC). From
1991 to 1994, Mr. Olivier served as Manager of Colombian Operations and Manager
of International Operations for AIPC. Prior to joining AIPC, Mr. Olivier was
Managing Director and founder of Colamer Ltd., a managerial and consulting firm
specializing in small and medium size oil and gas companies. Mr. Olivier has
served as a Director of I.B.C. Limited since 1990. I.B.C. Limited manages
private placements of capital in various natural resource ventures, including
Tri-Valley Corporation.
TODD A. OSETH, age 33, has served as Vice President of Business Development
and Acquisitions for Sony Electronics since 1995. In 1993, he founded Enhanced
Memory Systems, a subsidiary of Ramtron International Corporation, a public
company and leading producer of high speed computer and memory products. Mr.
Oseth served as President of Enhanced Memory Systems until he joined Sony
Electronics in 1995. From 1989 to 1993, Mr. Oseth served as Vice President of
Business Development for Ramtron International Corporation.
Each Nominee has agreed to serve if elected, and the Committee does not
know of any reason why any of the Nominees will not stand for election or serve
if elected.
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There are no arrangements or understandings between any Nominee and any
other person pursuant to which he was selected as a Nominee or is proposed to be
elected, except as disclosed in this Proxy Statement. As to those Nominees who
are also members of the Committee, each has agreed, among other things, to vote
his shares in favor of the Nominees. Other than Mr. Grant, no Committee Nominee
has ever been employed by the Company or any subsidiary or affiliate of the
Company.
The Committee understands that outside directors of the Company are
currently paid an annual retainer and a fee and reimbursement of reasonable
expenses for attending board meetings. The Nominees, if elected, will review
the entire compensation program for service on the Board of Directors of the
Company. The Nominee's current intention is to provide for no compensation for
outside directors except for reimbursement of reasonable expenses.
PLEASE VOTE WITH THE COMMITTEE BY SIGNING, DATING AND MAILING PROMPTLY THE
ENCLOSED PROXY (PRINTED IN GREEN) IN THE POSTAGE-PAID ENVELOPE PROVIDED.
OTHER ACTIONS AT THE STOCKHOLDERS MEETING
At the stockholders meeting, stockholders may be asked to appoint
independent auditors or take other actions incident to the meeting not currently
known by the Committee. The grant of the enclosed proxy to the Committee will
authorize the Committee to vote upon matters not known to the Committee as of
the date of this proxy statement that arise at the stockholders meeting, matters
incident to the conduct of the stockholders meeting, and to vote for any nominee
of the Committee whose nomination results from the inability of the Committee's
nominees to serve on the Company's Board of Directors.
VOTING RIGHTS AND USE OF THE PROXY CARD
You can vote on the election of directors to the Company' Board by using
the enclosed green Proxy Card. The Committee will keep all cards it receives
confidential from the Company until the deadline for their submission, absent a
court order requiring disclosure.
Because the Committee is uncertain whether the Company intends to hold a
true annual meeting of stockholders or merely a special meeting of stockholders
for the election of directors, and because the date of the meeting at this time
is uncertain, the proxy solicited by the Committee grants authority to the
proxies to vote your shares at the next annual meeting of stockholders or at the
next special meeting of stockholders at which an election of directors is held,
together with any adjournments thereof.
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If you sign and return the enclosed green card and do not instruct the
Committee how to vote, the Committee will vote for all of its nominees to the
Company's Board of Directors. If any other business should come before the
meeting other than an election of directors, the proxy holders will vote your
shares in their best judgment.
Only stockholders of record as of the record dated established by the
Company's Board are entitled to vote. As of the date of this proxy statement,
no record date had been established, according to the transfer agent for the
Company's Common Stock. While it is the Company's responsibility to set a
record date within 60 days of the meeting, mail proxy or informational materials
within 20 days of the meeting date, and give notice to stockholders of the
meeting within 10 days of the meeting date, the Committee will endeavor to
inform each stockholder to whom it sends this proxy statement of the record and
meeting dates once it learns of such dates.
A quorum of holders represented in person or by proxy of a majority of the
common stock of the Company will be required for the conduct of the stockholders
meeting. A vote of a majority of the holders of Company common stock
represented at the stockholders meeting will be required to elect the
Committee's nominees to the Company's Board.
SOLICITATION OF PROXIES
The persons designated on the Committee's proxy cards are Alfred Ainsworth,
III, and Lorrie T. Olivier, members of the Committee. The Committee expects to
solicit proxies by mail, telephone, facsimile, telegram or personal solicitation
or other means of communication, for which efforts no compensation will be paid.
Banks, brokerage houses and other custodians, nominees and fiduciaries will be
requested to forward the solicitation material of the Committee to their
customers for whom they hold shares and the Committee will reimburse them for
their reasonable out-of-pocket expenses.
The expense of preparing and mailing this Proxy Statement and any other
soliciting material and the total expenditures relating to this solicitation
campaign (including, without limitation, costs, if any, relating to advertising,
printing, attorneys' fees and the like) will be borne by the Committee members,
jointly and severally, unless otherwise determined by the Committee. The
Nominees (other than those who are also Committee members) will not bear any
portion of such costs of the solicitation. It is estimated that total expenses
relating to this solicitation (excluding the cost of litigation) will be
approximately $5,000. Total expenditures to date have been approximately
$1,000. The Committee intends to seek reimbursement for these expenses from the
Company in the event that its nominees are elected to the Company's Board of
Directors and does not presently expect to seek stockholder approval for such
reimbursement at a subsequent meeting unless such approval is required under
Delaware law.
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ADDITIONAL INFORMATION
Information provided in this Proxy Statement about the Company is based
upon the information contained in the Company's various filings with the
Securities and Exchange Commission. Accordingly, reference is herein made to
such filings for information concerning the incumbent directors of the Company,
the beneficial ownership of the Company's shares of common stock by directors,
management and principal stockholders of the Company, compensation and other
benefits afforded directors and certain members of management of the Company,
and the procedures for submitting stockholder proposals for consideration in the
next annual meeting of the Company's stockholders.
Subject to the foregoing, the following Table sets forth information with
respect to each person known to the Committee to be a beneficial owner of more
than five percent (5%) of the outstanding common stock of the Company, each
known director and all directors and executive officers of the Company, as a
group. Information with respect to the Nominees is set forth elsewhere in this
Consent Statement.
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PRINCIPAL STOCKHOLDERS OF THE COMPANY
Name of Shares Percentage of
BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK(1)
---------------- ------------------ ------------
Edgar Moss(2) 550,857 7.51%
Victor Millar 400,000 5.45
F. Lynn Blystone(3) 370,064 5.04
Earl H. Beistline(3) 5,000 (4)
Milton J. Carlson(3) 49,000 (4)
Dennis P. Lockhart(3) 41,091 (4)
Loren Miller(3) 15,300 (4)
Terrance L. Stringer(3) 52,045 (4)
All officers and directors
as a group (six persons) 532,500 7.26
______________
(1) Based upon the Company's filings with the Securities and Exchange
Commission (SEC), filings made by 5% and greater stockholders of the
Company with the SEC, and the Company's most recently available
stockholders list. The Committee notes that the latest annual or quarterly
report on file with the Commission is the Company's quarterly report on
Form 10-Q for the period ended April 30, 1995. The most recently available
stockholders list, obtained from the Company's filings with the United
States Bankruptcy Court, stated that the Company had 7,337,248 share of
common stock outstanding. Because this public information is dated, the
information in this table may be inaccurate.
(2) Based upon information set forth in the Schedule 13D filed by Mr. Moss with
the SEC.
(3) Mr. Blystone is President and Chief Executive Officer of the Company.
Messrs. Beistline, Carlson, Lockhart, Miller and Stringer are members of
the Board of Directors of the Company.
(4) Less than one percent (1%).
See Annex A for certain additional information regarding the Committee and
its nominees to the Board of Directors of the Company.
______________________________________________________
-13-
<PAGE>
PLEASE SIGN, DATE AND RETURN THE ENCLOSED GREEN PROXY CARD IN THE ENVELOPE
PROVIDED.
IF YOUR SHARES OF THE COMPANY'S COMMON STOCK ARE HELD IN THE NAME OF A
BROKERAGE FIRM, BANK OR NOMINEE, ONLY THEY CAN EXECUTE THE PROXY AND ONLY UPON
RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY, PLEASE CONTACT THE PERSON
RESPONSIBLE FOR YOUR ACCOUNT AND GIVE INSTRUCTIONS FOR SUCH SHARES IMMEDIATELY.
IF YOU HAVE ANY QUESTIONS OR REQUIRE ASSISTANCE, PLEASE CALL ALFRED
AINSWORTH, CHAIRMAN OF THE COMMITTEE, AT (719) 590-6005.
-14-
<PAGE>
ANNEX A
INFORMATION REGARDING COMMITTEE
MEMBERS, COMMITTEE NOMINEES AND OTHERS
Set forth below is certain information about the Committee members,
Committee Nominees, other participants (as that term is defined under applicable
federal securities laws), and their associates, if any. Except as set forth in
the Proxy Statement or this Annex A, no Committee member, Committee Nominee, or
other participant (or for purposes of clauses (ii), (iv), (v), (vi), (viii),
(ix) and (x), no associate of such person) (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) during the
last ten years (ii) owns beneficially, directly or indirectly, any securities of
the Company or any parent or subsidiary of the Company, (iii) owns any
securities of the Company of record, but not beneficially, (iv) within the past
two years has purchased or sold any securities of the Company, (v) has current
indebtedness incurred for the purpose of acquiring or holding the securities of
the Company referred to in (iv) above, (vi) is or has been within the past year
a party to any contract, arrangement or understanding with respect to any
securities of the Company, (vii) has had since the beginning of the Company's
last fiscal year, or is to have, a direct or indirect material interest in any
transaction or any proposed transaction, to which the Company or any of its
affiliates was or is a party (viii) has any substantial interest in any matter
to be acted upon under this Proxy solicitation, (ix) has any arrangement or
understanding with respect to future transactions to which the Company or any of
its affiliates will or may be a party or (x) is involved in any pending legal
proceedings as a party adverse (or has a material interest adverse) to the
Company or any subsidiary of the Company. Except as set forth below, each
holder of the Company's shares listed below has sole voting and investment power
over the Company's shares beneficially owned by such holder.
BACKGROUND INFORMATION
Name and Present Shares
Business Address Occupation Beneficially Owned
---------------- ---------- ------------------
Alfred Ainsworth, III President, oil & gas 10,000
Ainsworth Production Company, Inc. company
2 North Cascade, Suite 1100
Colorado Springs, CO 80903
Charles B. Bonner President, venture 30,000
4884 N. Van Ness Boulevard capital firm
Fresno, CA 93704
Charles D. Brown President, oil & gas 5,000
3625 N. Hall Street, #560 company
Dallas, TX 75219
A-1
<PAGE>
J. Bruce Carruthers, II President, mining company 185,286(1)
Hexagon Resources
1620 West University Heights
Drive North
Flagstaff, AZ 86001
Jay T. Dalton International business attorney 20,000
2431 East 61st Street, Suite 200
Tulsa, OK 74136-1230
John Grant Rancher 29,000(2)
43940 Battle Mountain Drive
Springsville, CA 93265
Eugene R. Hering Executive management, 20,000
Occidental of Albania, Inc. energy company
Durres Compound, Villa 20
Durres, Albania
Marc R. Herman President, international 1,570
M.H. Investments, Inc. clothing manufacturer
13212 Raymer
North Hollywood, CA 91605
Bernard L. Larsen Consulting engineer 40,000
6946 Sunrise Court
Coral Gables, FL 33133
Lorrie T. Olivier Vice President, 253,330(3)
American International oil and gas company
Petroleum Corp.
55 Waugh Drive, Suite 606
Houston, TX 77007
Todd A. Oseth Vice President of Business 10,000
Sony Electronics Development, electronics company
One Sony Place
San Antonio, TX 78245
James J. Williams, Executive management, 19,090(4)
as representative energy company
of Patexco Employees'
Pension Trust
c/o Occidental of Albania, Inc.
Durres Compound, Villa 20
Durres, Albania
______________
(1) Mr. Carruthers disclaims beneficial ownership as to 20,000 such shares, for
which he acts as custodian on behalf of his children.
(2) Mr. Grant disclaims beneficial ownership as to all 29,000 shares, for which
he acts as custodian on behalf of his children.
(3) Mr. Olivier disclaims beneficial ownership as to 248,090 shares, for which
he has sole voting power and sole investment power as director of IBC Ltd.
(4) Mr. Williams disclaims beneficial ownership as to all 19,090 shares, for
which he has voting and investment power as a trustee of the Patexco
Employee's Pension Trust.
A-2
<PAGE>
BENEFICIAL OWNERSHIP OF SHARES
As of May 13, 1996, the Committee's Nominees owned shares of the Company's
common stock of record and beneficially as disclosed in the following Table:
Shares
Name Beneficially Owned Percent Of Class
---- ------------------ ----------------
Alfred Ainsworth, III 10,000 0.14%
Charles B. Bonner 30,000 0.42%
Charles D. Brown 5,000 0.07%
J. Bruce Carruthers, II 165,286 2.34%
John Grant 0 0.00%
Lorrie T. Olivier 5,240 0.07%
Todd A. Oseth 10,000 0.14%
STOCK TRANSACTIONS WITHIN THE PAST TWO YEARS
The following table set forth information with respect to all purchases and
sales of Common Stock of the Company by each Committee Nominee during the past
two years. No part of the purchase price is represented by borrowed funds.
Name Purchase Date
---- -------- ----
Alfred Ainsworth, III 1,000 12/8/95
6,000 2/14/96
3,000 2/20/96
Charles D. Brown 5,000 2/23/96
Todd A. Oseth 10,000 2/13/96
A-3
<PAGE>
PROXY CARD
TRI-VALLEY CORPORATION
THIS PROXY IS SOLICITED BY THE TRI-VALLEY COMMITTEE FOR NEW MANAGEMENT
The undersigned stockholder of Tri-Valley Corporation, a Delaware
corporation (the "Company"), hereby appoint(s) Alfred Ainsworth, III and Lorrie
T. Olivier, and each of them, with full power of substitution, proxies of the
undersigned to vote all shares of the undersigned in the Company at the next
annual meeting of stockholders of the Company, or at the next special meeting of
the stockholders at which an election of directors is held, and any adjournments
thereof (the "Meeting"). This proxy shall be valid, and shall not expire, until
the earlier of the conclusion of the Meeting or December 31, 1996, unless
revoked by the undersigned stockholder.
THE TRI-VALLEY COMMITTEE FOR NEW MANAGEMENT STRONGLY RECOMMENDS
A VOTE FOR THE ELECTION OF EACH NOMINEE LISTED BELOW TO THE BOARD
OF DIRECTORS OF THE COMPANY.
1. ELECTION OF NOMINEES TO THE BOARD OF DIRECTORS OF THE COMPANY.
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY / / ABSTAIN
(except as marked to the to vote for all nominees
contrary in the space below) listed below
Alfred Ainsworth, III, Charles B. Bonner, C. Douglas Brown, J. Bruce
Carruthers, II, John E. Grant, Lorrie T. Olivier, Todd A. Oseth
INSTRUCTIONS: To grant authority, withhold authority or abstain as to the vote
for the election of all candidates, check the appropriate box above. To
withhold authority to vote for any particular nominee(s), write the name(s) of
such director(s) in the following space:
NOTE: If no box is marked in number one above, the undersigned will be deemed
to vote "FOR" all nominees listed.
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON MATTERS NOT
KNOWN TO THE TRI-VALLEY COMMITTEE FOR NEW MANAGEMENT AS OF THE DATE OF THE
ACCOMPANYING PROXY STATEMENT THAT ARISE AT THE MEETING, MATTERS INCIDENT TO
THE CONDUCT OF THE MEETING AND TO VOTE FOR ANY NOMINEE WHOSE NOMINATION
RESULTS FROM THE INABILITY OF ANY OF THE ABOVE NAMED NOMINEES TO SERVE ON
THE COMPANY'S BOARD OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY, USING THE ENCLOSED ENVELOPE.
Please sign exactly as your name appears as a stockholder of the Company. If
shares are registered in more than one name, the signatures of all such persons
are required. A corporation should sign its full corporate name by a duly
authorized officer, stating his/her title. Trustees, guardians, executors and
administrators should sign in their official capacity, giving their full title
as such. If a partnership or limited liability company, please sign in the
partnership or limited liability company name by authorized persons.
Dated: , 1996.
- ------------------------- ---------------------
(Name)
- -------------------------
(Signature)
- ------------------------- -----------------------------
(Joint Signature, if held (Title or authority, if applicable)
jointly)
