EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT, effective as of the 1 ^st day of January 2008, amended the 8 ^th day of March 2008, is between Tri-Valley Corporation, a Delaware corporation and its wholly owned subsidiary, TRI-VALLEY OIL & GAS COMPANY, a California corporation (“Employer”) and F. LYNN BLYSTONE, (“Employee”).

WITNESSETH

WHEREAS, Employer wishes to employ Employee in the capacity of President and Chief Executive Officer and Employee wishes to serve Employer in such capacity.

NOW THEREFORE, in consideration of the conditions and covenants set forth hereinafter, it is agreed as follows:

1.          Employment . Employer hereby employs Employee, and Employee hereby accepts such employment, upon the terms and conditions hereinafter set forth.

2.          Term of Employment . Subject to the provision of this Agreement, the Term of Employment shall commence on January 1, 2008, and shall continue to and include January 1, 2011. The term of this Agreement and Term of Employment shall automatically be extended three times for a one-year period each time unless the Employer terminates the Agreement giving Employee at least 90 days written notice prior to the expiration of the Term of Employment or the extended Term of Employment.

(a) Employer shall pay Employee two hundred ten thousand ($210,000) per year, payable in installments on the 15 ^th and last business day of each month. Employer shall deduct and withhold from such salary such sums as are required by statute and applicable laws for Social Security, taxes, or otherwise, to be deducted or withheld from such compensation. Employee’s salary shall not be reduced during the term of this Agreement. During the term of this Agreement, Employer shall review the performance by Employee at the regular intervals of not less than twelve months. Upon satisfactory performance, the Board of Directors may increase the salary during this contract period.

(b) Employer shall convey to Employee five thousand (5,000) shares of Employer’s common stock upon execution of this Agreement and five thousand (5,000) additional shares at the end of each year of service hereunder, unless Employee is terminated for cause.

(c) Employee shall receive an annual bonus equal to 10% of the net operating cash flow before tax after interest and before other debt service and borrowing or proceeds of sale of stock of the Employer (to be further defined by formula attached as Exhibit “A” - Method of Calculation). Such bonus will be paid upon the later of 90 days after the end of the fiscal year or ten days after the filing of Form 10-K for the fiscal year with the Securities and Exchange Commission. Amount of this bonus shall not exceed $25,000.00.

(d) Employee shall receive an annual bonus equal to four percent of the annual net after-tax income of Employer provided (e) below. Such bonus shall be paid upon the later of 90 days after the end of the fiscal year or ten days after the filing of Form 10-K for the fiscal with the Securities and Exchange Commission.

(e) The totals of bonuses paid in items (c) and (d) shall not exceed $50,000 in aggregate. However, the Board of Directors may consider an additional bonus based on performance regardless of the amount paid under (c) and (d) of Article 3.

(f) Employer will contribute an amount equal to three percent (3%) of employee’s base salary per installment into the Company’s 401k program.

(g) Employer may, from time to time, assign additional goals and bonuses, fringes and benefits to Employee as it deems fit.

4.          Duties . Employee is employed as President and Chief Executive Officer of Employer in charge of all corporate operations to perform the duties of such office and to perform such other executive duties as may be prescribed from time to time by the Bylaws and the Board of Directors of Employer. Employee may resign or be removed from such office without violating the terms of this Agreement or affecting the obligations of the parties hereunder so long as Employer and Employee fulfill the other terms hereof.

5.          Nature of Service . Employee shall devote substantially all of his business time, attention, and energies to the business of Employer (or such other business as the Board of Directors of Employer may from time to time direct) and shall not, during the term of this Agreement, be engaged in any other business activity, whether or not such other business activity is pursued for gain, profit, or other pecuniary advantage, which would materially impair his freedom to fulfill his duties to Employer under this agreement without consent of the Board of Directors of Employer. Nothing in this paragraph shall be construed as preventing Employee from investing his assets, nor from spending time or service in the operating of the affairs of the companies or other enterprises in which such investments are made. Employee shall well and faithfully perform his duties under this Agreement with fidelity and loyalty, and in a manner consistent with the level of responsibility contemplated and in compliance with Board directions and written company policies.

6.          Termination Due to Disability, etc . This Agreement may be terminated by Employer, prior to the time for termination specified in paragraph 2 hereof, in each of the following circumstances:

(a) If Employee violates the terms of this Agreement or engages in illegal or unethical conduct or activities.

(b) If Employee dies, or in the opinion of a physician of Employer’s choice is unable to perform his duties hereunder owing to illness or incapacity for a continuous period of 180 days.

            Following the happening of any of the foregoing events, termination of this Agreement pursuant to this paragraph 6 shall become effective upon 30 days written notice from Employer to Employee stating Employer’s election to terminate this Agreement pursuant to this paragraph 6. In the event this Agreement shall terminate pursuant to this paragraph 6, Employer shall have no further liability or obligation hereunder, except as to earned or accrued salary and other vested benefits.

(a) Employer shall reimburse Employee for all reasonable, ordinary and necessary bus