Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): June 22, 2011
SYNERGY RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
Colorado None 20-2835920
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
20203 Highway 60
Platteville, Colorado 80651
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (970) 737-1073
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N/A
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(Former name or former address if changed since last report)
Check 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 (see General Instruction A.2. below)
[ ] 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-14(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
See Items 3.02 and 5.02 of this report.
Item 3.02. Unregistered Sales of Equity Securities
On June 23, 2011, the Company issued 159,485 shares of its common stock to
11 persons in consideration for the assignment by these persons of oil and gas
leases. The leases cover 18,136.45 gross (15,861.76 net) acres in the
Denver-Julesburg Basin. George Seward, a director of the Company, received 1,471
of these shares for his assignement of leases covering 160 net acres.
The 159,485 shares of common stock were not registered under the Securities
Act of 1933 and are restricted securities. The Company relied upon the exemption
provided by Section 4(2) of the Securities Act of 1933 in connection with the
issuance of the shares.
See also Item 5.02 of this report.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
On June 23, 2011 the Company's directors approved an employment agreement
with Frank L. Jennings, the Company's Principal Financial and Accounting
Officer. The employment agreement provides that the Company will pay Mr.
Jennings a monthly salary of $15,000 and issue to Mr. Jennings:
o 50,000 shares of the Company's restricted common stock; and
o options to purchase 150,000 shares of the Company's common stock. The
options are exercisable at a price of $4.40 per share, vest over
three years in 50,000 share increments beginning March 6, 2012, and
expire on March 7, 2021.
The employment agreement expires on March 7, 2014 and requires Mr. Jennings
to devote all of his time to the Company's business.
The employment agreement will terminate upon Mr. Jennings' death,
disability or for cause. If the employment agreement is terminated for any of
these reasons, Mr. Jennings, or his legal representatives as the case may be,
will be paid the salary provided by the employment agreement through the date of
termination.
For purposes of the employment agreement, "cause" is defined as:
(i) the conviction of Mr. Jennings of any crime or offense involving
fraud or moral turpitude which significantly harms the Company;
(ii) the refusal of Mr. Jennings to follow the lawful directions of
the Company's Board of Directors;
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(iii) Mr. Jennings' gross negligence which shows a reckless or willful
disregard for the reasonable business practices and significantly
harms the Company; or
(iv) a breach of the employment agreement by Mr. Jennings.
If Mr. Jennings resigns within 90 days of a relocation (or demand for
relocation) of his place of employment to a location more than 35 miles from his
then current place of employment, the employment agreement will be terminated
and Mr. Jennings will be paid the salary provided by the employment agreement
through the date of termination and the unvested portion of any stock options
held by Mr. Jennings will vest immediately.
In the event there is a change in the control of the Company, the
employment agreement allows Mr. Jennings to resign from his position and receive
a lump-sum payment equal to 12 months salary. In addition, the unvested portion
of any stock options held by Mr. Jennings will vest immediately. For purposes of
the employment agreement, a change in the control means: (1) the merger of the
Company with another entity if after such merger the shareholders of the Company
do not own at least 50% of voting capital stock of the surviving corporation;
(2) the sale of substantially all of the Company's assets; (3) the acquisition
by any person of more than 50% of the Company's common stock; or (4) a change in
a majority of the Company's directors which has not been approved by the
incumbent directors.
In accordance with the terms of the employment agreement, the Company's
directors, on June 23, 2011, issued 50,000 shares of the Company's restricted
common stock to Mr. Jennings.
On June 22, 2011, Benjamin J. Barton resigned his position as a director of
the Company. Mr. Barton determined that he did not have sufficient time to meet
the responsibilities associated with properly serving on the Board as the
Company continues to grow. Mr. Barton was one of the founders of the Company and
served as a Director for three years. Mr. Barton remains a significant
shareholder and will consult with the Company on strategic matters.
Item 9.01 Financial Statements and Exhibits
Exhibit Number Description
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10.11 Employment Agreement with Frank L. Jennings.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: June 23, 2011
SYNERGY RESOURCES CORPORATION
By: /s/ Ed Holloway
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Ed Holloway, President
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