PROXY STATEMENT
OF
TRI-VALLEY
CORPORATION
230 South Montclair
Street, Suite 101
Bakersfield,
California 93309
SOLICITATION OF
PROXIES FOR
MEETING OF
STOCKHOLDERS
For the Annual Shareholder Meeting to be Held
in the
Bakersfield,
California 93309
(local time), on
OF
TRI-VALLEY
CORPORATION
To Fellow Stockholders of the Company:
The enclosed proxy material relating to Tri-Valley
Corporation ("Tri-
Valley" or the "Company") from the Board of Directors of the
Company is
sent to you as the direct or beneficial owner of common stock of
the
Company with the Company's sincere request that you give those
materials
your prompt and thorough consideration.
WE NEED YOUR HELP NOW TO STOP EFFORTS TO RAID AND DESTROY YOUR
COMPANY.
Your Board of Directors has, for several years now,
firmly dealt with
the toughest conditions in the industry's history and resisted
numerous
internal and external attempts to take over the Company and its
properties.
The latest such attempt, with many of the same players, is being
conducted
by The Tri-Valley Committee for New Management, chaired by Alfred
Ainsworth, III, Esq. (the "Ainsworth Committee"). It is a small
group of
dissident, extremely minority shareholders. WHO ARE THESE PEOPLE?
WHY DON'T THEY
OFFER SHAREHOLDERS AND THE COMPANY MONEY INSTEAD OF
PAYING LAWYERS TO HELP SMEAR MANAGEMENT?
Members of the Ainsworth Committee and its nominees for
directors
include:
1. A former Tri-Valley employee who was fired for
cause in
1989,
and who took personal bankruptcy in 1993;
2. A former Tri-Valley director who admitted he
colluded with
another former Tri-Valley employee to take
over the Company
so he could take personal control of the
Company's
Richardson
gold property;
3. An attorney who posed as a person helping to
secure funding
for Tri-Valley projects who then used
proprietary
information
provided to him in good faith for that purpose
to
organize a
take over effort;
4. Others who became stockholders after the
Company filed
Chapter 11.
DO NOT BE MISLED
READ ON
The Ainsworth Committee freely uses hearsay, comments out
of
context and false and misleading statements to foment
dissatisfaction and
dissent in their vigorous efforts to deceive you and their similar
vigorous, self-serving attempt to take over the Company.
1. AINSWORTH COMMITTEE'S MISLEADING STATEMENT:
Based on
conversations between the Committee and the
former
Secretary
and Treasurer of the Company, Tri-Valley
revenues from
mining have been about one third of the $1.7
million the
Company has invested to date.
1. THE TRUTH: The former Secretary-Treasurer,
helen
O'Brien, was fired for embezzlement and
fraud as discovered by the Company's
independent auditors.
She, like the former employee and former
director appear
vindictive. Clearly, we believe her
statements cannot be
trusted and the Ainsworth Committee has
carefully chosen
portions of her statements as the support of
their
attack on
present management.
In fact, Company revenues to date from mineral
activities are
about $1 million and an additional $1.6
million has been
invested in the property by third parties -
all while
still in the
exploration stage,, not the production stage,
which is
yet to
come.
2. AINSWORTH COMMITTEE'S MISLEADING STATEMENT:
F. Lynn
Blystone, President and Chief Executive
Officer of the
Company admitted the Company is in default on
more than
half of its prospect acreage due to failure to
stay
current on
payments.
2. THE TRUTH: Mr. Blystone stated over half the
acreage had
been dropped. This was done to concentrate
Company
resources on the most advanced targets after
evaluating some
225 square miles, a good business decision.
The Company
retains over 37 square miles containing the
more
prospective
acreage.
3. AINSWORTH COMMITTEE'S MISLEADING STATEMENT:
A motion filed
by Phillips Petroleum Company states the
Company is
delinquent on property taxes on certain
natural gas wells.
3. THE TRUTH: The Company is NOT DELINQUENT ON
ITS
PROPERTY TAXES FOR ANY OF ITS NATURAL GAS
WELLS. The Company recently disputed property
taxes on
certain wells, won a large adjustment and paid
at
settlement.
The wells were NEVER in jeopardy.
4. AINSWORTH COMMITTEE'S MISLEADING STATEMENT:
Current
Management has demonstrated a serious
disregard of its
duties
owed to stockholders as a publicly held
Company by filing
reports late and not holding shareholder
meetings annually.
4. THE TRUTH: From time to time, during periods
of severe
cash squeeze, the Company has delayed filing
reports and
used
its available cash to protect assets,
corporate
opportunities and
continue in business. The Company has never
had a comment
letter from the SEC. The Company is currently
filed on its
audited fiscal year end, a copy of which
accompanies this
material. Quarterly unaudited reports are
being
prepared to
send to shareholders as soon as possible.
Management is aware that it did not hold
shareholder
meetings
annually and is not absolutely required to
either by
Delaware
law or its charter and by-laws. Like many
small companies
during times when funds were dear, the Company
President
was deferring salary and the Directors were
deferring
fees and
expenses in order to preserve corporate
opportunity, it
seemed
reasonable to defer the priority of such an
expenditure.
The
preparation by the Company for a shareholder
meeting can
cost $20,000 to $25,000. Instead, funds were
used to
maintain
and preserve precious leases, mineral claims
and basic
staff to
perform operational responsibilities.
Given the choices and circumstances of a very
tough
business
environment, management (which has
communicated with
shareholders frequently and in depth
throughout)
believes it
has acted in the best interest of all the
shareholders.
Management believes it thus has exercised the
maximum duty
and care consistent with the conditions and
resources with
which it operated.
5. AINSWORTH COMMITTEE'S MISLEADING STATEMENT:
Lack of
oversight permitted unauthorized transactions
and
diversion of
funds ACCORDING TO A DECLARATION FILED BY
HELEN O'BRIEN, FORMER SECRETARY-TREASURER OF
THE COMPANY PURPORTEDLY FIRED FOR CAUSE IN
DECEMBER, 1995.
5. THE TRUTH: MS. O'BRIEN WAS INDEED FIRED FOR
CAUSE - EMBEZZLEMENT AND FRAUD - IN DECEMBER,
1995. Except for her own diversion of Company
funds to her
personal account, there has been no diversion
of Company
funds and all funds have been used for
corporate purposes.
The President and Chief Executive Officer has
always acted
and transacted within his authority under
Delaware law, the
charter and by-laws of the corporation and the
scope of the
Company's agreements and attendant accounting
policies.
6. AINSWORTH COMMITTEE'S MISLEADING STATEMENT:
Self dealing
on the part of the Company's President and
Chief Executive
Officer.
6. THE TRUTH: THE PRESIDENT HAS NEVER "SELF
DEALT" BUT HAS SELF SACRIFICED MANY TIMES
OVER THE YEARS TO HELP KEEP THE COMPANY
GOING IN VERY HARD TIMES, TO MEET THE PAYROLL
OF OTHER STAFF AND TO ACQUIRE VALUABLE
CORPORATE OPPORTUNITIES AND ASSETS.
Since the 1980's the Company has reported to
the
shareholders
about the employee bonus pool derived from
small overriding
royalties on gas wells. As one of the
eligible
employees, Mr.
Blystone received his appropriate share while
the
program was
in existence.
The President has routinely purchased 1%
working
interest in
the Company's gas plays either directly for
fresh cash
or as an
offset to deferred salary. Because the odds
of success are
negative, most of these investments have been
lost in dryholes.
Beginning in 1991, some of these investments
have been
successful due
to a string of discovery success. The
President has NEVER
taken from the Company's share.
On advice of counsel, the President has been
paid
interest on
deferred salary at normal bank commercial
lending
rates, all
below 10%. The President has NEVER been paid
18% interest
on deferred salary. Further, the President
NEVER demanded
cash payment, rather, on occasion, he
accepted the Company's
restricted common stock above book value and
above market
quote for accrued salary and interest.
During his tenure, the Company President,
F. Lynn Blystone,
has gone without salary (he is paid up through
August 4, 1993).
He has canceled earned bonuses, lent money for
the
payroll of
other staff, bought Company restricted stock
above
book value
and above market quote, gone without vacation
and without
full business expense reimbursement and had no
reimbursement of
very substantial high interest credit card
obligations
made in
pursuit of business. He has found ways to use
his personal
resources and self denial to keep the Company
going through
hard times. The employment contract of the
President and
Chief Executive Officer was negotiated with
the outside
directors and ratified by the shareholders.
It is a
standard
agreement.
7. AINSWORTH COMMITTEE'S MISLEADING STATEMENT:
The Board
refused to negotiate with the Company's
largest creditor.
7. THE TRUTH: In fact, there were many meetings
in person
and via telephone between management, the
Board of
Directors, and individual directors with the
secured lender in
an effort to negotiate an acceptable
settlement. The
Tri-Valley
president and CEO was on the telephone with
the secured
lender right up to closing of the window to
file
Chapter 11.
But, in the end, the secured lender refused to
give
additional
written forbearance to negotiate and the
Company could not
allow itself to be put in the position of
negotiating
while the
properties and revenues would be in
foreclosure.
This would
have been extremely detrimental to
shareholders and their
investment in the Company. Besides, the
offers of the
secured
lender to buy the properties were considerably
below other
offers available to the Company. It is
important to emphasize that the Company's actions succeeded in
protecting the assets and the secured creditor was paid in full.
8. AINSWORTH COMMITTEE'S MISLEADING STATEMENT:
Current
management has not informed Tri-Valley
shareholders of its
efforts to sell the Company's producing gas
reserves.
8. THE TRUTH: In fact, shareholders were
apprised of the
possibility of reserve sale as far back as
June 30, 1995, with
subsequent notices in February and March,
1996. At one
point, Tri-Valley pursued a few companies
known to be
interested in buying reserves and capable of
performing. All
of these companies offered considerably more
than did the
secured lender. Management reasoned that
Tri-Valley was
not
broke, it just lacked the liquid capital to
meet a very
short
term demand. Its reserves are cash in the
ground which the
Company can use only once a month and this
monthly revenue
could not solve the all due and payable
pay-off demand of
the
secured lender. However, a normal and
reasonable sale of
the
reserves could pay off all obligations and
leave
substantial cash
to resume operations -not unlike the proceeds
from a stock
offering or sale of a large prospect. The
President has
the
authority to negotiate and sell, but also got
Director
ratification
of his authority. Happily, other
opportunities have since
emerged that enabled Tri-Valley to keep its
reserves.
However, sale of the reserves is not out of
the question
anymore than it is with any other oil and gas
company as
properties are constantly being bought and
sold by
companies
for any number of reasons. This is simply
another
example of
the Ainsworth Committee trying to foment
dissatisfaction and
dissent through false and misleading
statements.
9. AINSWORTH COMMITTEE'S MISLEADING STATEMENT:
Complaining
about Tri-Valley being permitted to use
$150,000 for
corporate
purposes.
9. THE TRUTH: The U.S. Bankruptcy Court sided
with Tri-
Valley on all points regarding the use of
$150,000.
The claims
of the Ainsworth Committee, the Official
Committee of
Equity
Security Holders and the U.S. Trustee were
spurious and
false,
and realized as such by the Bankruptcy Judge.
Tri-Valley
is
pleased to have found a capital formation
resource which
produces results more favorable than the
Company has been
able to do on its own with only a 10% cost,
which is far
less
than most brokerages - especially for a
company in
Chapter 11.
This is another example of the Ainsworth
Committee
trying to
put a negative "spin" on a matter to in order
to foment
dissatisfaction and dissent with false and
misleading
statements.
The Company has properly used these funds to
preserve and
advance its opportunities. Quite simply - the
U.S.
Bankruptcy
Court carefully and reasonably scrutinizes any
such
transaction
by a debtor. The Ainsworth Committee
obstruction
effort had
its day in court and was rejected.
10. AINSWORTH COMMITTEE'S MISLEADING STATEMENT:
Current
Directors refused to meet with Ainsworth
Committee members.
10. THE TRUTH: As far back as 1989, the Directors
have gone
far out of their way to patiently accommodate
and listen
to the
complaints and demands from a small group of
dissident
shareholders and former fired employees who
are now
members of, or associated with, the Ainsworth
Committee.
These members have ignored factual
explanations and
rebuttals
of their complaints and claims. Hours and
hours and
hours of
Director time, Tri-Valley auditor time,
Tri-Valley counsel
time
and management time have gone into very
detailed reviews
with such members, only to be totally ignored.
The
Ainsworth
Committee made it plain before the proxy
solicitation they
intended to take over the Company. No one
sees any point,
after years of this, to spend any more time
with them on
these
matters, none of which is new or
uninvestigated or
unreviewed.
One compelling fact which you should consider:
the U.S.
Bankruptcy Court has heard and rejected every
claim and
argument asserted by the Committee members and
turned
these matters over to you, the shareholders.
The Ainsworth
Committee is using the proxy rules to rehash
these
previously
rejected complaints.
TAKE A CLOSE LOOK AT THE EXPERIENCE, QUALIFICATIONS AND
DEDICATION OF
THE PRESENT PEOPLE WHO COMPRISE THE TRI-VALLEY BOARD OF DIRECTORS
WHO HAVE
NOT QUIT IN THE FACE OF HARD TIMES OR DISAPPOINTING CIRCUMSTANCES.
THE
PRESENT MANAGEMENT HAS TAKEN THE COMPANY FORWARD DURING THE YEARS
WHEN
THE VAST MAJORITY OF ITS COMPETITORS WENT OUT OF BUSINESS.
THE BOARD OF DIRECTORS ASKS FOR YOUR PROXY AND SUPPORT
IN ORDER TO COMPLETE VERY PROMISING AND EXCEPTIONAL COMPANY
PROJECTS IN A MANNER THAT PRESERVES THE OPPORTUNITY FOR YOU, THE
CURRENT, LOYAL SHAREHOLDERS TO BENEFIT.
This Proxy Statement, together with the enclosed form of
Proxy
(PRINTED ON GOLD PAPER), is first being mailed or distributed to
stockholders of the Company on or about September 10, 1996.
WHAT IS THE OFFICIAL
COMMITTEE OF
EQUITY SECURITY HOLDERS?
(OCESH)
Under the U.S. Bankruptcy Code, the office of the U.S.
Trustee may
form a committee to represent the shareholders, ordinarily the
seven largest
shareholders willing to serve. However, in our case, the U.S.
Trustee formed
a five person committee with the first three coming from the
Ainsworth
Committee. This gave the Ainsworth Committee a quorum, a majority
and
veto power over all activities. They own a combined number of
shares in our Company (175,000) totalling 1.4% (.014) of the
outstanding shares and they purport to represent all of the
shareholders in our Company.
They have so misused and abused this position
that two Tri-Valley shareholders each resigned in disgust and
protest and subsequent shareholders have filed motions in the
Bankruptcy Court noting the
conflicts of interest and breaches of fiduciary duty of the
Ainsworth group.
The U.S. Trustee has allowed the OCESH to continue as a
transparent
cover for the tiny minority dissident Ainsworth group rather than
a fair
representation of Tri-Valley shareholders prescribed by the U.S.
Bankruptcy
Code. This can be very injurious to Company shareholders because
the
OCESH can hire lawyers, accountants and staff, ALL AT TRI-VALLEY
EXPENSE! The OCESH includes:
1. John E. Grant, Chairman, who owns no stock but
votes 29,000
shares as custodian for his children. John
Grant was fired
from the Company for cause in 1989. He filed
Chapter 7 personal
bankruptcy in 1993 listing liabilities of $3.3
million and assets of less than $10,000. He is a nominee for a
board seat by
the
Ainsworth Committee of which he is a former
member.
2. Alfred Ainsworth, III, Esq. owns 10,000 shares
(.008 of Tri-Valley), 9,000 of
which
he acquired after Tri-Valley filed Chapter 11.
Mr.
Ainsworth
was introduced to Tri-Valley management last
November and
posed as a person seeking substantial projects
for
presentation
to his investor groups "on the east coast".
In good
faith, he
was provided proprietary and inside
information for that
purpose. Unknown to us he began communication
with our
secured lender, Frank Agar, and acquired 1,000
shares of
Tri-Valley stock in December. In January he began making
demands on the Company and its Board of
Directors to meet
with him and Frank Agar. Tri-Valley
management already
had dialogue with Mr. Agar and had no reason
to respond to
Mr. Ainsworth's threats and demands. He
acquired another
9,000 shares in February and some associates
bought 16,570
shares
for a total of 25,570 shares after Tri-Valley
filed and
began a
formal raid on the Company. Mr. Ainsworth
represents
himself as founder and president of Ainsworth
Production
Company. He did not disclose that the
corporate status of
Ainsworth Production Company was DELINQUENT!
3. J. Bruce Carruthers is a former dissident
director.
In 1989,
after taking early retirement, Mr. Carruthers
began to
assert
himself as a prospective employee of
Tri-Valley and
increasingly attempted to acquire an interest
in, if not
control
of, the Company's Richardson, Alaska mining
property. To
that end, he admittedly colluded with a former
Tri-Valley
employee to gain control of the Company and
"take the
Richardson property off its hands". An
apology and
pledge by
Mr. Carruthers to let "bygones be bygones",
enabled him to
remain on the Board of Directors. However,
until his
recent
resignation and joining the Ainsworth
Committee, his
presence
was obstructive and jeopardized the
confidentiality of the
Directors' deliberations and sensitive
corporate and
project
information. His actions on the OCESH
continue the same way and members of the OCESH have had to file
motions to force Mr. Carruthers to produce minutes of Committee
meetings for which he is recording secretary so they can properly
document committee actions and attorney costs.
Both Mr. Grant and Mr. Carruthers recently
resigned from
the Ainsworth Committee in an effort to mask
their
conflict of
interest while continuing to serve on the
OCESH and where
they can, in effect, charge Tri-Valley for
expenses of the
Ainsworth Committee agenda. In fact, they
should instead have resigned from the OCESH due to obvious
conflicts and breaches of fiduciary duty.
Another Ainsworth Committee member and nominee for the
Board of
Directors, Lorrie Olivier, joined American International Petroleum
Corporation in 1991. Since then, its stock has plummeted from over
39.00
dollars per share to its present .38 cents per share range.
PLEASE COMPARE THAT WITH THE COMPANY SLATE OF
MEN WHO ARE IN THE TRENCHES BUILDING AND PROTECTING
STOCKHOLDER EQUITY FOR ALL THE SHAREHOLDERS:
The six person Tri-Valley Board of Directors is comprised
of Earl Beistline,
Milton Carlson, Loren Miller, Dennis Lockhart, Terry Stringer and
Lynn
Blystone, who is also president and chief executive officer of the
Company.
All except Blystone are outside directors. All the foregoing
members are
collectively referred to in this Proxy Statement as the
"Directors". As of August
30, 1996, the Directors directly owned 500,500 shares equal to
3.98% of the
12,581,498 shares issued and outstanding. Clearly, the present
Directors have done their
duty in regard to the Company, its future successes and,
especially, this
election. All of the present Directors of the Company have been
nominated for re-election.
TRI-VALLEY
CORPORATION
MANAGEMENT'S SLATE OF
DIRECTORS
Director
Since
F. Lynn Blystone - 60
President and Chief Executive
Officer 1974
383,519 shares (1) 2.66%
Tri-Valley Corporation, and its
wholly
owned
subsidiary, Tri-Valley Oil &
Gas
Co.,
Bakersfield, California
Mr. Blystone became president of Tri-Valley Corporation in October,
1981,
and was nominally vice president from July to October, 1981. His
background includes institution management, venture capital and
various
management functions for a mainline pipeline contractor including
the Trans
Alaska Pipeline Project. He has founded, run and sold companies in
several
fields including Learjet charter, commercial construction,
municipal finance
and land development. He is also president of a family
corporation, Bandera
Land Company, Inc., with real estate interests in Kern, Riverside
and
Orange Counties, California. A graduate of Whittier College,
California,
he did graduate work at George Williams College, Illinois in
organization
management. He gives full time to Tri-Valley.
Terrance L. Stringer - 54
Executive Vice President 1982
52,045 shares .4%
Huntway Refining Company
Wilmington, California
Mr. Stringer is responsible for refinery supply, planning and
intermediate
product marketing of Huntway, a NYSE limited partnership with three
refineries in the United States. Prior to that he was vice
president of supply
and marketing of Golden West Refinery in Santa Fe Springs,
California. He
was formerly president of several subsidiaries of Tosco Corporation
including
TPFC, which purchased gas supplies for the Avon Refinery; Toscogen,
Inc.,
which provided co-generation services; Teorco, a heavy oil producer
and was
also general manager oil, gas and minerals for Tosco Corporation.
Prior to
that he spent 9 years with Standard Oil of California (now Chevron)
in
finance, supply and trading including 3 years in the London crude
oil trading
office. He holds a B.Sc. in chemical engineering from the
University of
Illinois and a M.B.A. from UCLA.
Dennis P. Lockhart - 48
President 1982
41,091 shares .3%
Heller International Group, Inc.
Chicago, Illinois
After service as a corporate banking officer of Citibank since
1971, most
recently as vice president in the Central and South America Group
responsible for debt-to-equity conversions, Mr. Lockhart has become
president of Heller International, an old line firm now owned by
Fuji Bank
Group. Heller provides financing in 20 countries. While with
Citibank, Mr.
Lockhart served the bank's international operations in Jedda and
Riyahd,
Saudi Arabia; Athens, Greece; Beirut, Lebanon; and as executive
vice
president of Iranian's Bank of Tehran, Iran. He then served as
vice
president and regional executive for corporate banking in the seven
southeastern states and Puerto Rico for Citicorp (USA) Inc. A
graduate of
Stanford University, he has an M.A. from John Hopkins University.
Milton J. Carlson - 65
Investor, Kalispell, Montana 1985
49,000 shares .4%
Mr. Carlson is a principal in Earthsong Corporation which, in part,
consults
on environmental matters and performs environmental audits for
government
agencies and public and private concerns. Until its merger with
another
firm, Mr. Carlson formerly was vice president and corporate
secretary of
Union Sugar Company, a $100 million unit of Sara Lee Corporation.
He was
involved in representing industrial end users of energy through the
California
Manufacturers Association as the former chairman of the CMA
steering
committee of the standing energy and environmental committees. Mr.
Carlson was also the energy and environmental representative with
Sara Lee
energy advisory group and monitored related matters before the
California
Public Utilities Commission and Energy Commission as well as
serving as the
legislative representative in Sacramento, California and
Washington, D.C.
Mr. Carlson attended the University of Colorado at Boulder and the
University of Denver.
Loren J. Miller, CPA - 51
CPA, Controller 1992
15,300 shares .1%
Petro America, Inc.
Long Beach, California
Mr. Miller has served in a treasury and chief financial officer
capacity as
vice president successively of Hershey Oil Corporation, Mock
Resources, Inc.
and McMullen Oil Company, Inc. Prior to that he was vice president
and
general manager of Tosco Production Finance Corporation and
formerly a
senior auditor with Touche Ross & Co. He is experienced in
exploration,
production, product trading, refining and distribution as well as
corporate
finance. He holds a B.S. in accounting and an M.B.A. in finance
from the
University of Southern California.
Earl H. Beistline, LLD. - 79
Mining Consultant 1992
8,000 shares .06%
Fairbanks, Alaska
Dr. Beistline is chairman of the Alaska State Minerals Commission
and Dean
Emeritus of the School of Mineral Industry of the University of
Alaska. Born
in Juneau, he has achieved a special position in Alaska during its
transition
from territorial status into statehood. He has numerous honors
from local,
state and federal governments, academia, professional and civic
organizations
and the mineral industry. An active miner in the Central-Circle
Mining
District, Dr. Beistline also serves as a director of one of the
state's primary
companies, Usibelli Coal Mines, Inc. He holds a Bachelor of Mining
Engineering, Engineer of Mines and Honorary Doctor of Law degree
from
the University of Alaska.
(1) Mr. Blystone votes 48,455 shares owned by Bandera Land
Co., Inc.,
in which he owns a minority interest.
Background Preceding Proxy
Solicitation
As a shareholder of this Company, you know that
management
communicates with you frequently through activity update letters
and other
reports, including personal letters and telephone discussions
responding to
individual shareholders. All of you have been advised over the
years of the
extreme conditions in the oil and gas industry which have prevailed
over the
last 15 years. Because of steadfast effort, the Company has been
able to
grow in spite of these conditions. By any measure, Tri-Valley has
out
performed the vast majority of its peers over the last 15 years and
its present
Chapter 11 status is simply a means of reorganizing and
recapitalizing the
Company for greater growth opportunity. The sudden price reversals
in the
business which collapsed many firms did not have that affect on
Tri-Valley,
which has been able to deal with the drastic turn of events and
severe
business reversals. The Company filed for protection under Chapter
11 of
the United States Bankruptcy Act because it had millions of dollars
in
stockholder equity built up in the toughest times of the industry
that were
being threatened. The Company has ample value to more than pay its
obligations, but needed freedom from interference and more time to
satisfy
its obligations while preserving the maximum shareholder equity.
In fact, the Company has been successful in protecting the reserves
and other assets without discounting either the shareholder book
value of our creditors.
Using inside information in a manner adverse to the
Company, the
Ainsworth Committee has tried to foment and attract dissent in an
attempt
to take over the Company and its valuable properties for a
minuscule
investment on their part. The Ainsworth Committee previously
conducted
a solicitation that the Company believes violated federal and state
securities
laws and then, like now, freely used false and misleading
statements in the
effort to garner a majority of shares. That effort failed and,
once the
shareholders understood what was happening, a large number of them
showed their support of present management by revoking the
Ainsworth solicitation.
The Ainsworth Committee and its nominees have not
demonstrated
they have anything to offer except to take over control. Then
what? They
have no answers. They propose to "retain experts and analysts".
In
contrast, Tri-Valley has grown, and yes, prospered through the
dedicated
efforts of the current Directors in the very toughest of times.
The current
Directors, who own more stock than the Ainsworth Committee and
nominees,
have always pursued value for the shareholders.
We respectfully ask for your proxy to enable us to complete
projects of
exceptional potential and reorganize the Company for greater
growth.
Summary of Business Problems
Prior to
Chapter 11
Without access to conventional capital, Tri-Valley has
had to compete
and grow in the toughest times of the industry with the barest of
capital and
personnel resources. As an indicator of its success, Tri-Valley
has been able
to compound its assets and net worth. Its debt has not ballooned,
but its net
worth has. However, the terms of its debt were so tight that a
combination
of declining production and prices plunging briefly to 20-year lows
squeezed
the Company drastically. Still, the Company has managed to not
only hang
on, but advance its projects. It was not the debt so much as it
was
interference in the process of settling it that caused the Company
to file for
Chapter 11 protection. The Chapter 11 has been successful! Tri-
Valley was able to arrange very favorable debt/equity financing
that enabled it to keep its valuable reserves and other assets.
The conversion of debt to equity will create a debt free Company
with an INCREASE in book value per share! Under very tough
circumstances and industry conditions, your management has
continued to build shareholder value.
Reasons For Proxy
Solicitation
It is not
easy to give exceptional service to the vast majority of
shareholders, while
taking time to listen to an extremely small group of disgruntled
former
employees and dissidents malign dedicated efforts of current
management
and seek only to promote their self interests of our truly
exceptional projects.
Ainsworth pressed during our reorganization to hold a short
notice shareholder meeting. This would have the effect of denying
millions of votes who would not be able to receive, review, vote
and return their proxies in time for them to be counted at the
meeting. This, of course, could make it easier for their hostile
takeover to succeed.
We resisted this unfair tactic and have scheduled a full
notice meeting to give ALL shareholders a chance to have their
votes count. Tri-Valley Directors believe they have been
particularly attentive to shareholder interest and have
communicated
frequently and in depth with the shareholders even though
shareholder
meetings were not held.
The Ainsworth Committee and its nominees have no plan and
demonstrate absolutely no understanding of the Company's
circumstances
and opportunities. They only want to take over and then figure out
what to
do.
Please vote with present management by signing, dating
and mailing
promptly the enclosed Proxy (PRINTED ON GOLD PAPER) in the postage
paid envelope provided.
OTHER ACTIONS AT THE
STOCKHOLDER'S MEETING
At the stockholder's meeting, stockholders may be asked
to take other
actions incident to the meeting not yet known. The grant of the
enclosed
Proxy to present management as in previous years will authorize
present
management to vote on such matters as they arise and to vote for
any
nominee of present management whose nomination results from the
inability
of any member of the slate of present management 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's Board by
using the enclosed GOLD PROXY CARD. The Company will keep all
Proxies it receives confidential until the deadline for their
submission absent
a court order requiring disclosure.
The Proxy solicited by present management grants
authority to the
Proxies to vote your shares at the next annual meeting of
stockholders or the
next special meeting of stockholders at which an election of
directors is held,
together with any adjournments thereof.
If you sign and return the enclosed GOLD PROXY CARD and
do not
instruct present management how to vote, present management will
vote for
its slate 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 judgement.
Only the stockholders of record as of the date
established by the
Company's Board are entitled to vote. The Company's Board of
Directors
has established September 11, 1996 as the record date for
shareholders entitled to
vote at this shareholder meeting. A quorum of stockholders
represented in
person or by proxy of a majority of common stock of the Company
will be
required for the conduct of the stockholder's meeting. A vote of
the majority
of holders of the Company common stock represented at the
stockholder's
meeting will be required to re-elect the slate of present
management as the
Company's Board.
SOLICITATION OF
PROXIES
The persons designated on the GOLD PROXY CARDS of present
management are F. Lynn Blystone, President, Chief Executive Officer
and
Loren J. Miller, both Directors of the Company. The Company
expects to
solicit proxies by mail, telephone, facsimile, telegram or personal
solicitation
or other means of communication, for which costs and expenses will
be borne
by the Company. Banks, brokerage houses and other custodians and
nominees and fiduciaries will be requested to forward the
solicitation material
of the Company to their customers for whom they hold shares and the
Company will reimburse them for their reasonable out of pocket
expenses.
ADDITIONAL
INFORMATION
Information in this Proxy Statement about the Company,
the
Ainsworth Committee and group and the Official Committee of Equity
Security Holders is based upon information contained in the various
filings
of the Company and the Ainsworth Committee with the Securities and
Exchange Commission and the U.S. Bankruptcy Court, internal records
and
knowledge of the Company. Accordingly, reference is herein made
to such
filings for information concerning the incumbent Directors of the
Company,
members of the Ainsworth Committee, the OCESH and others and
beneficial
ownership of the Company's shares of common stock, compensation and
other benefits afforded directors and certain members of management
of the
Company.
PLEASE SIGN, DATE AND RETURN THE ENCLOSED GOLD
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 ON RECEIPT OF
YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY, PLEASE
CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND
GIVE INSTRUCTIONS FOR SUCH SHARES IMMEDIATELY.
YOU MAY HOLD YOUR TRI-VALLEY CORPORATION STOCK
IN THE NAME OF A PREDECESSOR COMPANY WITH ONE OF THE
FOLLOWING NAMES:
SALINAS VALLEY
EXPLORATION COMPANY
TRI-VALLEY OIL & GAS
CO.
COMMODITY RESOURCES
INCORPORATED
TRI-VALLEY OIL & GAS
CORPORATION
TRI-VALLEY
CORPORATION
IF YOU HAVE ANY QUESTIONS OR REQUIRE ASSISTANCE
PLEASE CALL TRI-VALLEY CORPORATION PRESIDENT AND CEO,
F. LYNN BLYSTONE AT 805/837-9300.
Principal Stockholders of
the Company
8,027,248 Shares Issued and
Outstanding*
<TABLE>
<C>Name of
Beneficial Owner<PAGE>
<C>Shares
Beneficially
Owned<PAGE>
<C>Percentage
of
Common Stock<PAGE>
Daniel J. Demers, TTEE 2,798,000 22.24% F.
Lynn Blystone (1)<PAGE>
335,064 2.66%<PAGE>
Earl H. Beistline (1)<PAGE>
8,000 .06%<PAGE>
Milton J. Carlson (1)<PAGE>
49,000 .39%<PAGE>
Dennis P. Lockhart (1)<PAGE>
41,091 .33%<PAGE>
Loren Miller (1)<PAGE>
15,300 .12%<PAGE>
Terrance L. Stringer (1)<PAGE>
52,045 .41% All officers and
directors as a group (six
persons)<PAGE>
500,500 3.98%</TABLE>
(1) 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.
* - On June 7, 1996, TsNIGRI converted its 300,000 preferred
shares into
common stock in support of present management.
- On June 19, 1996, SRS BroadWay Associates exercised their
options
on 390,000 shares of common stock in support of present
management.
- On August 14, 1996, the Company sold 798,000 shares of
restricted common stock.
- On August 15, 1996, the Company sold 2,000,000 shares of
restricted common stock.
- On August 28, 1996, the Company sold 200,000 of shares
restricted common stock.<PAGE>
PROXY CARD
TRI-VALLEY CORPORATION
THIS PROXY IS BEING SOLICITED BY
THE PRESENT MANAGEMENT OF TRI-VALLEY CORPORATION
The undersigned stockholder of Tri-Valley Corporation, a
Delaware
Corporation (the "Company"), hereby appoints F. Lynn Blystone and
Loren J.
Miller, 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 our election of directors is held, and
any adjournments
thereof (the "meeting"). This proxy shall be valid until the
earlier of the
Meeting or December 31, 1996, and revokes all previous proxies.
THE PRESENT MANAGEMENT STRONGLY RECOMMENDS A VOTE FOR THE RE-
ELECTION OF EACH OF THE PRESENT DIRECTORS LISTED BELOW TO THE BOARD
OF DIRECTORS OF THE COMPANY.
1. Re-election of the present directors to the Board of Directors
of the
Company.
FOR All directors
listed below (except as
marked to the contrary in
the space below).
<PAGE>
WITHHOLD AUTHORITY to
vote for all
directors listed below.<PAGE>
ABSTAINEARL BEISTLINE, F. LYNN BLYSTONE, MILTON J. CARLSON,
DENNIS P. LOCKHART, LOREN
J. MILLER, TERRANCE STRINGER
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. Appointment of the CPA firm of Brown, Armstrong Randall &
Reyes (BARR) as
independent auditors for the Company.
FOR BARR as independent accountants WITHHOLD
AUTHORITY to vote
for BARR to be ABSTAIN
for the Company. appointed independent
auditors for the Company.
3. In their discretion, the proxies are authorized to vote upon
such matters
as shall come before 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 Directors to serve on the Company's Board of
Directors.
The invalidity, illegality or unenforceability of any particular
provision of this Proxy shall be construed in all respects as if
such invalid, illegal or unenforceable provisions were omitted
without the validity, legality or unenforceability of the remaining
provisions hereof. This card revokes all prior proxies or
revocations of proxy with respect to shares held by the
undersigned.
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 on the label below. 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 jointly) (Title or Authority, if
applicable)
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FRIDAY, NOVEMBER 8, 1996
To the Shareholders of TRI-VALLEY CORPORATION:
The Annual Meeting of Shareholders of Tri-Valley Corporation
(the
"Company") will be held in the Belridge Room of the Four Points
Hotel Sheraton,
5101 California Avenue, Bakersfield, California 93309, at 10:00
A.M. (Pacific
Standard Time), on November 8, 1996 for the following purposes:
(1) To elect six directors to serve for the ensuing year and
until their
successors have been elected and qualified. Management
proposes and
nominates the following slate for re-election: F. Lynn
Blystone,
Earl H. Beistline, Milton J. Carlson, Dennis P. Lockhart,
Loren J.
Miller and Terrance L. Stringer.
(2) To appoint the CPA firm of Brown, Armstrong Randall &
Reyes as
independent auditors for the Company.
(3) To transact such other business as may properly come
before the
Annual Meeting and any adjournments thereof.
The meeting will also provide an opportunity to give a current
report on
the progress of the Company and its plans and prospects for the
future.
Only persons who held Common Stock of record at the close of
business on September 11, 1996, will be entitled to vote at the
Annual Meeting and any adjournments thereof, as fixed by action of
the Board of Directors.
All shareholders are urged to attend the Annual Meeting in
person or by proxy. IT IS IMPORTANT THAT YOUR SHARES BE
REPRESENTED REGARDLESS OF THE NUMBER OF SHARES YOU MAY HOLD.
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING IN PERSON,
PLEASE COMPLETE, SIGN, DATE AND MAIL THE ENCLOSED PROXY. IF YOU
RECEIVE MORE THAN ONE PROXY BECAUSE YOUR SHARES ARE REGISTERED IN
DIFFERENT NAMES OR ADDRESSES, EACH SUCH PROXY SHOULD BE SIGNED AND
RETURNED TO ASSURE THAT ALL OF YOUR SHARES WILL BE VOTED. THE
PROXY SHOULD BE SIGNED BY ALL REGISTERED HOLDERS EXACTLY AS THE
STOCK IS REGISTERED.
A Shareholder giving a proxy has the power to revoke it any
time before it is exercised by attending the Annual Meeting and
voting his shares in person or by filing with the Secretary of the
Company either a written notice of revocation or a duly executed
proxy bearing a later date.
By Order of the Board of Directors
F. Lynn Blystone
President and Chief Executive Officer
Bakersfield, California
