UNITED STATE
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 6, 2013
SYNERGY RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 001-35245 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)
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 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangement of
Certain Officers.
On June 6, 2013 Synergy entered into a new employment agreement with Ed
Holloway, Synergy's President and Chief Executive Officer. The employment
agreement, which is effective June 1, 2013 and expires on May 31, 2016, provides
that Synergy will pay Mr. Holloway an annual salary of $420,000 and requires Mr.
Holloway to devote approximately 80% of his time to Synergy. In addition, for
every 50 wells that begin producing oil and/or gas after June 1, 2013, whether
as the result of Synergy's successful drilling efforts or acquisitions, Synergy
will pay Mr. Holloway $100,000 up to a maximum $300,000 during any 12 month
period, provided that:
o each horizontal well that meets the criteria above will count toward
seven wells (as adjusted to reflect the Company's net working interest
in each horizontal well), and
o the unpaid balance pertaining to any wells included in the previous
"50 well bonus program" that first began producing commercial
quantities of oil and/or gas as a result of the successful drilling
efforts, or as the result of a completed acquisition by the Company,
during the three year period ended May 31, 2013, will be counted
toward the 50 net well limit applicable for the period beginning June
1, 2013.
The employment agreement will terminate upon Mr. Holloway's death,
disability or for cause. If the employment agreement is terminated for any of
these reasons, Mr. Holloway, 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. Holloway of any crime or offense involving fraud
or moral turpitude which significantly harms Synergy;
(ii) the refusal of Mr. Holloway to follow the lawful directions of
Synergy's Board of Directors;
(iii) Mr. Holloway's negligence which shows a reckless or willful disregard
for the reasonable business practices and significantly harms Synergy;
or
(iv) a breach of the employment agreement by Mr. Holloway.
The employment agreement will constructively terminate if a Change of
Control event has occurred.
For purposes of the employment agreement "Change of Control" is defined
as:
(i) a merger, consolidation or reorganization resulting in Synergy's
shareholders controlling less than 50% of the successor corporation;
(ii) the sale of substantially all of Synergy's assets;
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(iii) the acquisition of more than 50% of Synergy by a tender offer not
approved by the Board of Directors; and
(iv) a substantial change in the Board of Directors over a 36 month period.
In the event of a Change in Control, Mr. Holloway can resign as an employee
of Synergy and the Company will pay Mr. Holloway the greater of twelve months of
salary or the amount due under the employment agreement. Whether or not Mr.
Holloway resigns as a result of a Change in Control event, all options or bonus
shares of Synergy held by Mr. Holloway will become fully vested.
On June 6, 2013 Synergy also entered into a new employment agreement with
William E. Scaff, Jr., Synergy's Vice President and Secretary/Treasurer. The
employment agreement, which is also effective June 1, 2013 and expires on May
31, 2016, provides that Synergy will pay Mr. Scaff an annual salary of $420,000
and requires Mr. Scaff to devote approximately 80% of his time to Synergy. In
addition, for every 50 wells that begin producing oil and/or gas after June 1,
2013, whether as the result of Synergy's successful drilling efforts or
acquisitions, Synergy will pay Mr. Scaff $100,000 up to a maximum of $300,000
during any 12 month period, provided that:
o each horizontal well that meets the criteria above will count
toward seven wells (as adjusted to reflect the Company's net
working interest in each horizontal well), and
o the unpaid balance pertaining to any wells included in the
previous "50 well bonus program" that first began producing
commercial quantities of oil and/or gas as a result of the
successful drilling efforts, or as the result of a completed
acquisition by the Company, during the three year period ended
May 31, 2013, will be counted toward the 50 net well limit
applicable for the period beginning June 1, 2013.
The provisions of Mr. Scaff's employment agreement regarding termination
and change in control are identical to those in Mr. Holloway's employment
agreement.
The employment agreements with Mr. Holloway and Mr. Scaff were approved by
Synergy's Compensation Committee and Board of Directors.
In addition, Synergy's Compensation Committee and Board of Directors
approved extending the expiration dates of 1,000,000 stock options granted to Ed
Holloway and 1,000,000 stock options granted to William. E. Scaff, Jr. from June
1, 2013 to June 1, 2016. The stock options are exercisable at $1.00 per share
and can be exercised on a "cashless" basis.
Item 9.01 Financial Statements and Exhibits
Exhibit Number Description
10.1 Employment Agreement with Ed Holloway
10.2 Employment Agreement with William E. Scaff, Jr.
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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 6, 2013
SYNERGY RESOURCES CORPORATION
By: /s/ Frank L. Jennings
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Frank L. Jennings, Principal Financial
Officer
SYNERGY RESOURCES CORPORATION
FORM 8-K
EXHIBITS