SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act
June 30, 2010
Date of Report (Date of Earliest Event Reported)
Earth Energy Reserves, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 000-51489 75-2000774
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(State or other jurisdiction (Commission File Number (I.R.S. Employer
of incorporation or organization Identification Number)
671 Heinz Parkway
Estes Park, CO 80517
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(Address of principal executive offices, Zip Code
(970) 577-8325
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
During the first two quarters of 2010, we sold 1,491,000 Series 1 Units
at $1.00 per unit. Each unit consisted of one common share and one
warrant to purchase one common share at an exercise price of $1.50 per
common share. The warrants were immediately exercisable, and will
remain exercisable for three years. The offering was closed on June
30, 2010.
The units were sold to accredited investors only pursuant to an
exemption from registration under Rule 505 of Regulation D of the
Securities Act of 1933.
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS
OF CERTAIN OFFICERS
Effective July 1, 2010, Steven A. Kranker was appointed to serve as
chief executive officer, president and director of Earth Energy until
the next annual meeting of the shareholders.
Mr. Kranker has over 25 years of broad oil and gas experience with
major and large independent E&P companies in roles of increasing
responsibility. Prior to joining EER, he served as the Corporate
Engineering Manager for Forest Oil Corp., with expertise in acquisition
and divestiture evaluation, petroleum property optimization and
valuation studies, SEC reserve reporting and associated bank credit
facilities. Mr. Kranker was responsible for the oil and gas reserves
and economic evaluations in $4 billion in acquisition transactions and
$3 billion in divestitures during the past five years, with recent
emphasis on the assessment of horizontal drilling in unconventional gas
plays. Previous service includes Senior Reservoir Engineer in numerous
locations with exposure to a variety of petroleum reservoirs with
Brunei Shell Petroleum, Arco Alaska, Maxus Exploration, Conoco and
Shell. He holds a Bachelor of Science degree in Petroleum Engineering
from the Colorado School of Mines.
Effective July 1, 2010, W.A. Sikora was appointed to serve as executive
vice president and chief financial officer of Earth Energy until the
next annual meeting of the shareholders.
Mr. Sikora was recently named Executive Vice President and CFO,
bringing to EER over 40 years experience in corporate finance,
governance, compliance and financial analysis, reporting and accounting
for numerous public and private companies with a primary emphasis in
the energy industry. Prior to joining EER, Mr. Sikora operated for over
22 years a successful individual consulting practice providing
business, financial and governance advisory services to corporate
executive managements, primarily in Denver and Houston. Previously, Mr.
Sikora served as Executive Vice President of TransMontaigne, Inc.; CEO
and President of Lucas Energy, Inc.; a Director and Chairman of the
Audit Committee of Appleton Papers, Inc.; and a Director of and advisor
to several other public companies. He was Founder and Co-Managing
Partner of Hein + Sikora CPA's (now Hein & Associates LLP); Partner
with Touche Ross & Co. (now Deloitte & Touche LLP); Partner with Peat,
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Marwick, Mitchell & Co. (now KPMG LLP); and a Senior Manager with
Arthur Andersen & Co. He also founded and was Managing Partner of Audit
Committee Advisors LP. Mr. Sikora holds a BS degree in Accounting from
the University of Colorado.
Effective July 1, 2010, Doyle Pennington was appointed to serve as vice
president of administration and investor relations of Earth Energy
until the next annual meeting of the shareholders.
Mr. Pennington specializes in strategic planning and management of
domestic and international special projects for non-profit
organizations. He has worked for agencies of the Southern Baptist
Convention and other non-profit organizations including the Religious
Heritage of America Foundation, Mission America Coalition, the
Consortium for Global Education, the International Evangelism
Association, Touch the World Ministries, Global Resources Ministries,
and the National Christian Foundation. Mr. Pennington has established
mission funds to ten state conventions and has managed and coordinated
numerous projects and special events for various agencies of the
Southern Baptist Convention. He has been a hotel owner-operator of
Holiday Inns and apartment complexes, and has developed, owned and
managed commercial real estate properties for many years.
Mr. Pennington holds a BBA from the University of Mississippi.
Compensation Agreement
Effective July 1, 2010, we entered into an Employment Agreement with
Mr. Steven A. Kranker, our President and Chief Executive Officer. Mr.
Kranker's employment agreement is a four year term and provides that he
will receive:
(1) $260,000 per annum base salary (which amount may be increased or
decreased under certain circumstances), plus bonus payments or
incentive compensation as may be determined from time to time by our
board of directors;
(2) a grant of incentive stock options to purchase 1,000,000 shares of
our Common Stock, at an exercise price of $1.00 per share. 100,000 of
the options vested on the date of the agreement, and 100,000 of the
options will vest on January 1, 2011 and each January 1 thereafter
until all such incentive stock options are fully vested. If any
incentive stock options have not vested and Mr. Kranker ceases to be
employed by us, the unvested options will become nonqualified stock
options and will fully vest on the date of such termination;
(3) 4,000,000 shares of our Common Stock, fully paid and nonassessable,
for a purchase price of $400, payable in cash at the time of issue,
which restricted shares shall remain unvested and subject to forfeiture
upon termination of Mr. Kranker's employment unless one of the
following events occurs prior to such termination:
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(a) Mr. Kranker continues to be employed by us on February 1, 2013, in
which event 665,000 shares will vest on that date and become
nonforfeitable, with the remaining shares vesting in equal installments
of 667,000 shares on the first day of every third month thereafter so
long as Mr. Kranker continues to be employed by us; or
(b) Shares of our Common Stock are traded on a national stock exchange
and the average reported closing price of our Common Stock on the
principal stock exchange or other market is $5.00 or more for 20
consecutive trading days, in which event (i) 50% of the shares will
become vested and nonforfeitable on that date, and (ii) the remaining
50% of the shares will become vested and nonforfeitable on the January
1 immediately following the date on which the first 50% of the shares
vested. Upon Mr. Kranker's termination or demotion coincident with a
change of control, all unvested shares shall immediate become vested
and nonforfeitable.
ITEM 5.03 CHANGE IN FISCAL YEAR
On August 1, 2010, the board of directors of Earth Energy approved the
change of its fiscal year to June 30. The report to be filed covering
the transition period will be the Form 10-K for the transition period
ended June 30, 2010.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
Exhibits
No. Description
10 Steven A. Kranker employment agreement dated July 1,
2010
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Current Report on Form 8-K to be
signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 26, 2010
EARTH ENERGY RESERVES, INC.
By: /s/James E. Hogue
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James E. Hogue, Principal Executive Officer
