0001004878-13-000221.txt : 20130715
0001004878-13-000221.hdr.sgml : 20130715
20130715160955
ACCESSION NUMBER: 0001004878-13-000221
CONFORMED SUBMISSION TYPE: PRER14A
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20130715
DATE AS OF CHANGE: 20130715
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SYNERGY RESOURCES CORP
CENTRAL INDEX KEY: 0001413507
STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311]
IRS NUMBER: 202835920
STATE OF INCORPORATION: CO
FISCAL YEAR END: 0831
FILING VALUES:
FORM TYPE: PRER14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-35245
FILM NUMBER: 13968409
BUSINESS ADDRESS:
STREET 1: 20203 HIGHWAY 60
CITY: PLATTEVILLE
STATE: CO
ZIP: 80651
BUSINESS PHONE: 303-591-7413
MAIL ADDRESS:
STREET 1: 20203 HIGHWAY 60
CITY: PLATTEVILLE
STATE: CO
ZIP: 80651
FORMER COMPANY:
FORMER CONFORMED NAME: Brishlin Resources, Inc.
DATE OF NAME CHANGE: 20071217
FORMER COMPANY:
FORMER CONFORMED NAME: Blue Star Energy Inc
DATE OF NAME CHANGE: 20070926
PRER14A
1
prelimproxyamd7-13.txt
REVISED PRELIM PROXY 7-13
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[] Definitive Proxy Statement
[] Definitive Additional Materials
[] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
SYNERGY RESOURCES CORPORATION
-------------------------------------------
(Name of Registrant as Specified In Its Charter)
William T. Hart - Attorney for Registrant
-------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6
(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
SYNERGY RESOURCES CORPORATION
20203 Highway 60
Platteville, CO 80651
(970) 737-1073
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD August 20, 2013
To the Shareholders:
Notice is hereby given that Synergy Resources Corporation's (the "Company")
annual meeting of the shareholders will be held at the Embassy Suites, 4705
Clydesdale Parkway, Loveland, Colorado 80538 on August 20, 2013, at 10:00am.
Mountain Daylight Time, for the following purposes:
(1) To elect the directors who shall constitute the Company's Board of
Directors for the ensuing year;
(2) To approve an amendment to the Company's Articles of Incorporation to
provide that the presence of one-third of the votes to be cast on any
matter by a voting group constitutes a quorum of that voting group for
action on the matter;
(3) To approve an amendment to the Company's Non-Qualified Stock Option
Plan such that the shares of common stock that may be issued upon the
exercise of options granted pursuant to the Plan will be increased
from 2,000,000 shares to 5,000,000 shares;
(4) To approve the issuance of shares of the Company's common stock to
George Seward for his assistance in helping the Company acquire oil
and gas leases;
(5) To ratify the appointment of EKS&H LLLP as the Company's independent
registered public accounting firm for the fiscal year ending August
31, 2013;
to transact such other business as may properly come before the meeting.
July 1, 2013 is the record date for the determination of shareholders
entitled to notice of and to vote at such meeting. Shareholders are entitled to
one vote for each share held. As of July 1, 2013 there were 68,925,330 issued
and outstanding shares of the Company's common stock.
The Company's Board of Directors recommends that the Company's shareholders
vote in favor of the nominees to the board of directors and proposals (2)
through (5).
SYNERGY RESOURCES CORPORATION
July 22, 2013 Edward Holloway
Chief Executive Officer
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ATTACHED PROXY CARD,
AND SIGN, DATE AND RETURN THE PROXY CARD.
TO SAVE THE COST OF FURTHER SOLICITATION,
PLEASE VOTE PROMPTLY
2
SYNERGY RESOURCES CORPORATION
20203 Highway 60
Platteville, CO 80651
(970) 737-1073
PROXY STATEMENT
The accompanying proxy is solicited by the Company's directors for voting
at the annual meeting of shareholders to be held on August 20, 2013, and at any
and all adjournments of such meeting. If the proxy is executed and returned, it
will be voted at the meeting in accordance with any instructions, and if no
specification is made, the proxy will be voted for the proposals set forth in
the accompanying notice of the annual meeting of shareholders. Shareholders who
execute proxies may revoke them at any time before they are voted, either by
writing to the Company at the address shown above or in person at the time of
the meeting. Additionally, any later dated proxy will revoke a previous proxy
from the same shareholder. This proxy statement was posted on the Company's
website on or about July 22, 2013.
There is one class of capital stock outstanding. Provided a quorum
consisting of a majority of the shares entitled to vote is present at the
meeting or by proxy, the affirmative vote of a majority of the shares of common
stock voting in person or by proxy is required to elect directors and adopt
other proposals to come before the meeting. Cumulative voting is not permitted.
Shares of the Company's common stock represented by properly executed
proxies that reflect abstentions or "broker non-votes" will be counted as
present for purposes of determining the presence of a quorum at the annual
meeting. "Broker non-votes" represent shares held by brokerage firms in
"street-name" with respect to which the broker has not received instructions
from the customer or otherwise does not have discretionary voting authority.
Abstentions and broker non-votes will not be counted as having voted against the
proposals to be considered at the meeting.
PRINCIPAL SHAREHOLDERS
The following table lists, as of July 1, 2013, the shareholdings of (i)
each person owning beneficially 5% or more of the Company's common stock (ii)
each officer who received compensation in excess of $100,000 during the
Company's most recent fiscal year and (iii) all officers and directors as a
group. Unless otherwise indicated, each owner has sole voting and investment
powers over his shares of common stock.
3
Name Number of Shares (1) Percent of Class (2)
---- ---------------- ----------------
Edward Holloway 3,760,909 (3) 5.4%
William E. Scaff, Jr. 3,760,909 (4) 5.4%
Frank L. Jennings 174,000 0.3%
Rick A. Wilber 536,700 0.8%
Raymond E. McElhaney 245,725 0.4%
Bill M. Conrad 247,225 0.4%
R.W. Noffsinger, III 288,425 0.4%
George Seward 1,573,707 2.3%
All officers and directors 10,587,600 14.8%
as a group (8 persons)
(1) Share ownership includes shares issuable upon the exercise of options or
warrants, all of which are exercisable within 60 days of July 1, 2013, held
by the persons listed below. Share ownership excludes options which expired
prior to the date of this proxy.
Share Issuable Upon
Exercise of Option Expiration
Name Options or Warrants Exercise Price Date
---- ------------------- -------------- -----------
Edward Holloway 1,000,000 $ 1.00 6-1-16
William E. Scaff, Jr. 1,000,000 $ 1.00 6-1-16
Frank L. Jennings 100,000 $ 4.40 3-7-21
George Seward 387,500 $ 6.00 12-31-14
(2) Computed based upon 68,925,330 shares of common stock outstanding as of
July 1, 2013.
(3) Shares are held of record by various trusts and limited liability companies
controlled by Mr. Holloway.
(4) Shares are held of record by various trusts and limited liability companies
controlled by Mr. Scaff.
ELECTION OF DIRECTORS
Unless the proxy contains contrary instructions, it is intended that the
proxies will be voted for the election of the current directors listed below to
serve as members of the Board of Directors until the next annual meeting of
shareholders and until their successors shall be elected and shall qualify.
4
All current directors have consented to stand for re-election. In case any
nominee shall be unable or shall fail to act as a director by virtue of an
unexpected occurrence, the proxies may be voted for such other person or persons
as shall be determined by the persons acting under the proxies in their
discretion.
The Company's officers and directors are listed below. The Company's
directors are generally elected at its annual shareholders' meeting and hold
office until the next annual shareholders' meeting, or until their successors
are elected and qualified. The Company's executive officers are elected by its
directors and serve at their discretion.
Name Age Position
Edward Holloway 61 President, Principal Executive Officer
and Director
William E. Scaff, Jr. 56 Executive Vice President, Secretary,
Treasurer and Director
Frank L. Jennings 62 Principal Financial and Accounting Officer
Rick A. Wilber 66 Director
Raymond E. McElhaney 56 Director
Bill M. Conrad 56 Director
R.W. Noffsinger, III 38 Director
George Seward 63 Director
The principal occupations of the Company's officers and directors during
the past several years are as follows:
Edward Holloway - Mr. Holloway has been an officer and director since September
2008 and was an officer and director of our predecessor between June 2008 and
September 2008. Mr. Holloway co-founded Cache Exploration Inc., an oil and gas
exploration and development company. In 1987, Mr. Holloway sold the assets of
Cache Exploration to LYCO Energy Corporation. He rebuilt Cache Exploration and
sold the entire company to Southwest Production a decade later. In 1997, Mr.
Holloway co-founded, and since that date has co-managed, Petroleum Management,
LLC, a company engaged in the exploration, operations, production and
distribution of oil and natural gas. In 2001, Mr. Holloway co-founded, and since
that date has co-managed, Petroleum Exploration and Management, LLC, a company
engaged in the acquisition of oil and gas leases and the production and sale of
oil and natural gas. Mr. Holloway holds a degree in Business Finance from the
University of Northern Colorado and is a past president of the Colorado Oil and
Gas Association.
William E. Scaff, Jr. - Mr. Scaff has been an officer and director since
September 2008 and was an officer and director of our predecessor between June
2008 and September 2008. Between 1980 and 1990, Mr. Scaff oversaw financial and
credit transactions for Dresser Industries, a Fortune 50 oilfield equipment
company. Immediately after serving as a regional manager with TOTAL Petroleum
between 1990 and 1997, Mr. Scaff co- founded, and since that date co-managed,
Petroleum Management, LLC, a company engaged in the exploration, operations,
production and distribution of oil and natural gas. In 2001, Mr. Scaff
co-founded, and since that date has co-managed, Petroleum Exploration and
5
Management, LLC, a company engaged in the acquisition of oil and gas leases and
the production and sale of oil and natural gas. Mr. Scaff holds a degree in
Finance from the University of Colorado.
Frank L. Jennings - Mr. Jennings began his service as our Chief Financial
Officer on a part-time basis in June 2007. In March 2011, he joined us on a
full-time basis. From 2001 until 2011, Mr. Jennings was an independent
consultant providing financial accounting services, primarily to smaller public
companies. From 2006 until 2011, he also served as the Chief Financial Officer
of Gold Resource Corporation (AMEX:GORO). From 2000 to 2005, he served as the
Chief Financial Officer and a director of Global Casinos, Inc., a publicly
traded corporation, and from 1994 to 2001 he served as Chief Financial Officer
of American Educational Products, Inc. (NASDAQ:AMEP), before it was purchased by
Nasco International. After his graduation from Austin College with a degree in
economics and from Indiana University with an MBA in finance, he joined the
Houston office of Coopers & Lybrand. He also spent four years as the manager of
internal audit for The Walt Disney Company.
Rick A. Wilber - Mr. Wilber has been one of our directors since September 2008.
Since 1984, Mr. Wilber has been a private investor in, and a consultant to,
numerous development stage companies. In 1974, Mr. Wilber was co-founder of
Champs Sporting Goods, a retail sporting goods chain, and served as its
President from 1974-1984. He has been a Director of Ultimate Software Group Inc.
since October 2002 and serves as a member of its audit and compensation
committees. Mr. Wilber was a director of Ultimate Software Group between October
1997 and May 2000. He served as a director of Royce Laboratories, Inc., a
pharmaceutical concern, from 1990 until it was sold to Watson Pharmaceuticals,
Inc. in April 1997 and was a member of its compensation committee.
Raymond E. McElhaney - Mr. McElhaney has been one of our directors since May
2005, and prior to September 2008 was our President and Chief Executive Officer.
Mr. McElhaney began his career in the oil and gas industry in 1983 as founder
and President of Spartan Petroleum and Exploration, Inc. Mr. McElhaney also
served as a chairman and secretary of Wyoming Oil & Minerals, Inc., a publicly
traded corporation, from February 2002 until 2005. From 2000 to 2003, he served
as vice president and secretary of New Frontier Energy, Inc., a publicly traded
corporation. McElhaney is a co-founder of MCM Capital Management Inc., a
privately held financial management and consulting company formed in 1990 and
has served as its president of that company since inception.
Bill M. Conrad - Mr. Conrad has been one of our directors since May 2005 and
prior to September 2008 was our Vice President and Secretary. Mr. Conrad has
been involved in several aspects of the oil and gas industry over the past 20
years. From February 2002 until June 2005, Mr. Conrad served as president and a
director of Wyoming Oil & Minerals, Inc., and from 2000 until April 2003, he
served as vice president and a director of New Frontier Energy, Inc. Since June
2006, Mr. Conrad has served as a director of Gold Resource Corporation, a
publicly traded corporation engaged in the mining industry. In 1990, Mr. Conrad
co-founded MCM Capital Management Inc. and has served as its vice president
since that time.
6
R.W. "Bud" Noffsinger, III - Mr. Noffsinger was appointed as one of our
directors in September 2009. Mr. Noffsinger has been the President/ CEO of RWN3
LLC, a company involved with investment securities, since February 2009.
Previously, Mr. Noffsinger was the President (2005 to 2009) and Chief Credit
Officer (2008 to 2009) of First Western Trust Bank in Fort Collins, Colorado.
Prior to his association with First Western, Mr. Noffsinger was a manager with
Centennial Bank of the West (now Guaranty Bank and Trust). Mr. Noffsinger's
focus at Centennial was client development and lending in the areas of
commercial real estate, agriculture and natural resources. Mr. Noffsinger is a
graduate of the University of Wyoming and holds a Bachelor of Science degree in
Economics with an emphasis on natural resources and environmental economics.
George Seward - Mr. Seward was appointed as one of the Company's directors on
July 8, 2010. Mr. Seward cofounded Prima Energy in 1980 and served as its
Secretary until 2004, when Prima was sold to Petro-Canada for $534,000,000. At
the time of the sale, Prima had 152 billion cubic feet of proved gas reserves
and was producing 55 million cubic foot of gas daily from wells in the D-J Basin
in Colorado and the Powder River Basin of Wyoming and Utah. Since March 2006 Mr.
Seward has been the President of Pocito Oil and Gas, a limited production
company, with operations in northeast Colorado, southwest Nebraska and Barber
County, Kansas. Mr. Seward has also operated a diversified farming operation,
raising wheat, corn, pinto beans, soybeans and alfalfa hay in southwestern
Nebraska and northeast Colorado, since 1982.
The Company believes Messrs. Holloway, Scaff, McElhaney, Conrad and Seward
are qualified to act as directors due to their experience in the oil and gas
industry. The Company believes Messrs. Wilber and Noffsinger are qualified to
act as directors as result of their experience in financial matters.
Rick Wilber, Raymond McElhaney, Bill Conrad and R.W. Noffsinger are
considered independent as that term is defined Section 803.A of the NYSE Amex
Rules.
The members of the Company's compensation committee are Rick Wilber,
Raymond McElhaney, Bill Conrad, and R.W. Noffsinger. The members of the
Company's Audit Committee are Raymond McElhaney, Bill Conrad and R.W.
Noffsinger. Mr. Noffsinger acts as the financial expert for the Audit Committee
of the Company's board of directors.
All of the Company's officers devote at least 80% of their time to the
Company's business.
The Company's Board of Directors does not have a "leadership structure", as
such, since each director is entitled to introduce resolutions to be considered
by the Board and each director is entitled to one vote on any resolution
considered by the Board. The Company's Board of Directors does not have a
chairman.
The Company's Board of Directors has the ultimate responsibility to
evaluate and respond to risks facing the Company. The Company's Board of
Directors fulfills its obligations in this regard by meeting on a regular basis
and communicating, when necessary, with the Company's officers.
7
The Company has adopted a Code of Ethics which is applicable to all of the
Company's officers and employees. The Code of Ethics is available on the
Company's website, located at www.syrginfo.com.
If a violation of this code of ethics act is discovered or suspected, the
officer or employee, as the case may be should (anonymously, if desired) send a
detailed note, with relevant documents to the Company's Audit Committee, c/o
R.W. Noffsinger, at the company's offices, located at 20203 Highway 60,
Platteville, Colorado 80651.
The Company's Board of Directors met four times during the fiscal year
ended August 31, 2012. All of the Directors attended these meetings, either in
person or by telephone conference call. In addition, the Board of Directors had
a number of informal telephonic meetings during the course of the year.
For purposes of electing directors at its annual meeting the Company does
not have a nominating committee or a committee performing similar functions. The
Company's Board of Directors does not believe a nominating committee is
necessary since the nominees to the Board of Directors are selected by a
majority vote of the Company's independent directors.
The Company does not have any policy regarding the consideration of
director candidates recommended by shareholders since a shareholder has never
recommended a nominee to the Board of Directors and under Colorado law, any
shareholder can nominate a person for election of a director at the annual
shareholders' meeting. However, the Company's Board of Directors will consider
candidates recommended by shareholders. To submit a candidate for the Board of
Directors the shareholder should send the name, address and telephone number of
the candidate, together with any relevant background or biographical
information, to the Company's Chief Executive Officer, at the address shown on
the cover page of this proxy statement. The Board has not established any
specific qualifications or skills a nominee must meet to serve as a director.
Although the Board does not have any process for identifying and evaluating
director nominees, the Board does not believe there would be any differences in
the manner in which the Board evaluates nominees submitted by shareholders as
opposed to nominees submitted by any other person.
The meeting scheduled to be held on August 20, 2013 will be the Company's
second annual meeting. The Company does not have a policy with regard to Board
member's attendance at annual meetings.
Holders of the Company's common stock can send written communications to
the Company's entire Board of Directors, or to one or more Board members, by
addressing the communication to "the Board of Directors" or to one or more
directors, specifying the director or directors by name, and sending the
communication to the Company's offices in Platteville, Colorado. Communications
addressed to the Board of Directors as whole will be delivered to each Board
member. Communications addressed to a specific director (or directors) will be
delivered to the director (or directors) specified.
8
Security holder communications not sent to the Board of Directors as a
whole or to specified Board members may not be relayed to Board members.
Executive Compensation
----------------------
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (CD&A) outlines the Company's
compensation philosophy, objectives and process for its executive officers. This
CD&A includes information on how compensation decisions are made, the overall
objectives of the Company's compensation program, a description of the various
components of compensation that are provided, and additional information
pertinent to understanding the Company's executive officer compensation program.
The Compensation Committee determines the compensation of the Company's
officers.
The Company's compensation philosophy extends to all employees, including
executive officers, and is designed to align employee and shareholder interests.
The philosophy's objective is to provide fair compensation based upon the
employee's position, experience and individual performance.
The Company's compensation program is structured to be competitive both in
its design and in the total compensation offered.
The Company does not believe that its compensation program encourages any
of its employees to take risks that would be likely to have a material adverse
effect on the Company. The Company reached this conclusion based on management's
opinion that the salaries paid to employees are consistent with the employees'
duties and responsibilities.
Review of Executive Officer Compensation
The Company's current policy is that the various elements of the
compensation package are not interrelated in that gains or losses from past
equity incentives are not factored into the determination of other compensation.
For instance, if the exercise price on options that are granted in a previous
year is less than the listed stock price the next year, the Company does not
take that into consideration in determining the amount of the options which may
be granted in a subsequent year. Similarly, if the options granted in a previous
year become more valuable, the Company does not take that into consideration in
determining the options which may be awarded for the next year.
Components of Compensation--Executive Officers
The Company's executive officers are compensated through the following four
components:
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o Base salary
o Stock options
o Benefits
o Specially tailored bonus programs
A goal of the compensation program is to provide executive officers with a
reasonable level of security through base salary and benefits. The Company wants
to ensure that the compensation programs are appropriately designed to encourage
executive officer retention and motivation to create shareholder value. The
Compensation Committee believes that the Company's stockholders are best served
when the Company can attract and retain talented executives by providing
compensation packages that are competitive but fair. Base Salaries
Base salaries generally have been targeted to be competitive when compared
to the salary levels of persons holding similar positions in other oil and gas
exploration and development companies and other publicly traded companies of
comparable size.
Long-Term Incentives
Stock option grants help to align the interests of the Company's officers
with those of its shareholders. Options grants are made under the Company's
Stock Option Plan.
The Company believes that grants of stock options:
o Enhance the link between the creation of shareholder value and
long-term executive incentive compensation;
o Provide focus, motivation and retention incentive; and
o Provide competitive levels of total compensation.
Benefits
In addition to cash and equity compensation programs, executive officers
participate in the health insurance programs available to the Company's other
employees.
All executive officers are eligible to participate in the Company's 401(k)
plan on the same basis as all other employees. The Company matches participant's
contribution in cash, not to exceed 4% of the participant's total compensation.
Summary Compensation Table
The following table shows the compensation paid or accrued to the Company's
executive officers during each of the three years ended August 31, 2012.
10
Name and Stock Option All Other
Principal Fiscal Salary Bonus Awards Awards Compensation
Position Year (1) (2) (3) (4) (5) Total
----------------- ------- ---------- ------- --------- -------- ------------ -----
Edward Holloway, 2012 $ 300,000 $ 100,000 - - $ 9,800 $409,800
Principal 2011 $ 300,000 $ 100,000 - - $ 9,800 $409,800
Executive 2010 $ 175,000 - - - - $175,000
Officer
William E.Scaff, Jr. 2012 $ 300,000 $100,000 - - $ 9,800 $409,800
Scaff, Jr., 2011 $ 300,000 $100,000 - - $ 9,800 $409,800
Executive Vice 2010 $ 175,000 - - - - $175,000
President,
Secretary and
Treasurer
Frank L. Jennings, 2012 $ 180,000 - - - $5,400 $185,400
Principal 2011 $ 87,391 - $220,000 $404,352 - $711,743
Financial and 2010 $ 106,225 - - - - $106,225
Accounting
Officer
(1) The dollar value of base salary (cash and non-cash) earned.
(2) The dollar value of bonus (cash and non-cash) earned.
(3) The fair value of stock issued for services computed in accordance
with ASC 718 on the date of grant.
(4) The fair value of options granted computed in accordance with ASC 718
on the date of grant.
(5) All other compensation received that the Company could not properly
report in any other column of the table.
The compensation to be paid to Mr. Holloway, Mr. Scaff and Mr. Jennings is
based upon their employment agreements, which are described below. All material
elements of the compensation paid to these officers is discussed below.
On June 1, 2010, the Company entered into employment agreements with Mr.
Holloway and Mr. Scaff. The employment agreements, which expired on May 31,
2013, provide that the Company will pay Mr. Holloway and Mr. Scaff each a
monthly salary of $25,000 and require both Mr. Holloway and Mr. Scaff to devote
approximately 80% of their time to the Company's business. In addition, for
every 50 net vertical wells that begin producing oil and/or gas after June 1,
2010, whether as the result of the Company's successful drilling efforts or
acquisitions, the Company would issue to each of Mr. Holloway and Mr. Scaff, a
cash payment of $100,000 or shares of common stock in an amount equal to
$100,000 divided by the average closing price of the Company's common stock for
the 20 trading days prior to the date the 50th well began producing.
11
On June 6, 2013 the Company entered into new employment agreements with Ed
Holloway, Synergy's President and Chief Executive Officer, and William E. Scaff,
Jr., Synergy's Executive Vice President and Secretary/Treasurer. The employment
agreements, which are effective June 1, 2013 and expire on May 31, 2016, provide
that the Company will pay Mr. Holloway and Mr. Scaff each an annual salary of
$420,000 and require Mr. Holloway and Mr. Scaff to devote approximately 80% of
their time to the Company. In addition, for every 50 wells that begin producing
oil and/or gas after June 1, 2013, whether as the result of the Company's
successful drilling efforts or acquisitions, the Company will pay each of Mr.
Holloway and Mr. Scaff $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 agreements will terminate upon the death of Mr. Holloway or
Mr. Scaff, their disability or for cause, as the cause may be. If the employment
agreement is terminated for any of these reasons, the employee or his legal
representatives, as the case may be, will be paid the salary provided by the
employment agreement through the date of termination.
The employment agreements with Mr. Holloway and Mr. Scaff will also will
terminate if a Change of Control has occurred. In the event of a Change in
Control, Mr. Holloway and Mr. Scaff can resign as an employee of Synergy and
Synergy will pay Mr. Holloway and Mr. Scaff the greater of twelve months of
salary or the amount due under their employment agreements. Whether or not Mr.
Holloway of Mr. Scaff resigns as a result of a Change in Control event, all
options or bonus shares of Synergy held by Mr. Holloway and Mr. Scaff will
become fully vested.
The new employment agreements with Mr. Holloway and Mr. Scaff were approved
by Synergy's Compensation Committee and Board of Directors.
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 restricted common stock; and
o options to purchase 150,000 shares of 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.
12
The employment agreement expires on March 7, 2014 and requires Mr. Jennings
to devote all of his time to the Company's business.
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, the employment agreement
with Mr. Jennings allows him 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 agreements mentioned above, "cause" is
defined as:
(i) the conviction of the employee of any crime or offense involving fraud
or moral turpitude which significantly harms Synergy;
(ii) the refusal of the employee to follow the lawful directions of
Synergy's Board of Directors;
(iii) the employee'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 the employee.
For purposes of the employment agreements, "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;
(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.
Stock Option and Bonus Plans
The Company has a Non-Qualified Stock Option Plan, a Incentive Stock Option
Plan, and a 2011 Stock Bonus Plan. A summary description of each plan follows.
Non-Qualified Stock Option Plan. The Company's Non-Qualified Stock Option
Plan authorizes the issuance of shares of the Company's common stock to persons
that exercise options granted pursuant to the Plan. The Company's employees,
directors, officers, consultants and advisors are eligible to be granted options
pursuant to the Plan, provided however that bona fide services must be rendered
13
by such consultants or advisors and such services must not be in connection with
promoting the Company's stock or the sale of securities in a capital-raising
transaction. The option exercise price is determined by the Company's directors.
At the Annual Meeting to be held on August 20, 2013, the shareholders of
the Company are being requested to approve an amendment to the Non-Qualified
Plan such that a total of 5,000,000 shares would be available for issuance upon
the exercise of options granted pursuant to the plan.
Incentive Stock Option Plan. The Company's Incentive Stock Option Plan
authorizes the issuance of shares of the Company's common stock to persons that
exercise options granted pursuant to the Plan. The Company's employees,
directors, officers, consultants and advisors are eligible to be granted options
pursuant to the Plan, provided however that bona fide services must be rendered
by such consultants or advisors and such services must not be in connection with
promoting the Company's stock or the sale of securities in a capital-raising
transaction. The option exercise price is determined by the Company's directors.
Stock Bonus Plan. The Company's Stock Bonus Plan allows for the issuance of
shares of common stock to the Company's employees, directors, officers,
consultants and advisors. However, bona fide services must be rendered by the
consultants or advisors and such services must not be in connection with
promoting the Company's stock or the sale of securities in a capital-raising
transaction.
Summary. The following is a summary of options granted or shares issued
pursuant to the Plans as of July 1, 2013. These plans have been approved by the
Company's shareholders. Each option represents the right to purchase one share
of the Company's common stock.
Total
Shares Reserved for Shares Remaining
Reserved Outstanding Issued as Options/Shares
Name of Plan Under Plans Options Stock Bonus Under Plans
------------ ----------- ------------ ----------- -------------
Non-Qualified Stock
Option Plan 2,000,000 1,805,000 -- 195,000
Incentive Stock
Option Plan 2,000,000 -- -- 2,000,000
Stock Bonus Plan 2,000,000 -- 165,500 1,834,500
At the Annual Meeting to be held on August 20, 2013, the shareholders of
the Company are being requested to approve an amendment to the Non-Qualified
Plan such that a total of 5,000,000 shares would be available for issuance upon
the exercise of options granted pursuant to the plan.
Other Options
The Company has issued options to the persons shown below. The options were
not granted pursuant to any of the Company's stock option plans. As of July 1,
2013, none of these options have been exercised.
14
Shares Issuable
Grant Upon Exercise Exercise Expiration
Name Date of Options Price Date
---- ------- --------------- -------- ----------
Edward Holloway (1) 9-10-08 1,000,000 $ 1.00 6-1-16
William E. Scaff, Jr. (2) 9-10-08 1,000,000 $ 1.00 6-1-16
(1) Options are held of record by a limited liability company controlled by Mr.
Holloway.
(2) Options are held of record by a limited liability company controlled by Mr.
Scaff.
The following table shows information concerning the Company's outstanding
options as of July 1, 2013.
Shares underlying unexercised
Option which are: Exercise Expiration
Name Exercisable Unexercisable Price Date
---- ----------- ------------- -------- -----------
Ed Holloway 1,000,000 -- $ 1.00 6-1-16
William E. Scaff, Jr. 1,000,000 -- $ 1.00 6-1-16
Frank L. Jennings 100,000 50,000 $ 4.40 3-7-21
Employees 329,500 (1) 1,325,500 (1) (1) (1)
(1) Options were issued to several employees pursuant to the Company's
Non-Qualified Stock Option Plan. The exercise price of the options varies
between $2.45 and $6.82 per share. The options expire at various dates
between December 2018 and April 2023.
The following table shows the weighted average exercise price of the
outstanding options granted pursuant to the Company's Non-Qualified Stock Option
Plan or otherwise as of August 31, 2012.
1 2 3
Number of Securities
Remaining Available
For Future Issuance
Number Under Equity
of Securities Weighthed-Average Compensation Plans,
Upon Exercise Exercise Price of Excluding Securities
Plan category of Outstanding of Outstanding Options Reflected
Options Options in Column 1
--------------------------------------------------------------------------------
Non-Qualified Stock
Option Plan 915,000 $5.09 3,085,000
Other Options 4,000,000 $5.50 --
15
Compensation of Directors During Year Ended August 31, 2012
Fees Earned or Stock Option
Paid in Cash Awards (1) Awards (2) Total
-------------- ---------- ---------- ------
Rick Wilber $ 22,000 -- -- $ 22,000
Raymond McElhaney 32,000 -- -- 32,000
Bill Conrad 30,500 -- -- 30,500
R.W. Noffsinger 27,500 -- -- 27,500
George Seward 22,500 -- -- 22,500
-------- ------ ------ --------
$134,500 -- -- $134,500
======== ====== ====== ========
(1) The fair value of stock issued for services computed on the date of the
grant in accordance with generally accepted accounting principles.
(2) The fair value of options granted computed in accordance with generally
accepted accounting principles.
Compensation Committee
During the year ending August 31, 2012 the Company had a Compensation
Committee which was comprised of Rick Wilber, Raymond McElhaney, Bill Conrad and
R.W. Noffsinger. During the year ended August 31, 2012 the Compensation
Committee met on two occasions. All members of the Compensation Committee
attended these meetings.
During the year ended August 31, 2012, no director of the Company was also
an executive officer of another entity, which had an executive officer of the
Company serving as a director of such entity or as a member of the compensation
committee of such entity.
The Company's Board of Directors has adopted a written charter for the
compensation committee, a copy of which can be found on the Company's website
at:
www.syrginfo.com
The following is the report of the Compensation Committee:
The key components of the Company's executive compensation program include
annual base salaries and long-term incentive compensation consisting of stock
options. It is the Company's policy to target compensation (i.e., base salary,
stock option grants and other benefits) at approximately the median of
comparable companies in the oil and gas exploration and development industry.
Accordingly, data on compensation practices followed by other companies in the
oil and gas exploration and development industry is considered.
The Company's long-term incentive program consists exclusively of periodic
grants of stock options with an exercise price equal to the fair market value of
the Company's common stock on the date of grant. Decisions made regarding the
timing and size of option grants take into account the performance of both the
Company and the employee, "competitive market" practices, and the size of the
16
option grants made in prior years. The weighting of these factors varies and is
subjective.
During the year ending August 31, 2012, the compensation paid to the
Company's executive officers was based on their employment contracts.
The foregoing report has been approved by the members of the Compensation
Committee:
Rick Wilber
Raymond McElhaney
Bill Conrad
R.W. Noffsinger
Audit Committee
During the year ended August 31, 2012 the Company had an Audit Committee
comprised of Raymond McElhaney, Bill Conrad and R.W. Noffsinger. All members of
the Audit Committee are independent as independence is defined by Section 803 of
the NYSE Amex's Listing Standards. R.W. Noffsinger serves as the audit
committee's financial expert. The purpose of the Audit Committee is to review
and approve the selection of the Company's independent registered public
accounting firm and review the Company's financial statements with the Company's
independent registered public accounting firm.
During the fiscal year ended August 31, 2012, the Audit Committee met on
six occasions. All members of the Audit Committee attended these meetings.
The following is the report of the Audit Committee:
(1) The Audit Committee reviewed and discussed the Company's audited
financial statements for the year ended August 31, 2012 with the
Company's management.
(2) The Audit Committee discussed with the Company's independent
registered public accounting firm the matters required to be discussed
by Statement on Accounting Standards (SAS) No. 114 "The Auditor's
Communication With Those Charged With Governance".
(3) The Audit Committee has received the written disclosures and the
letter from the Company's independent registered public accounting
firm required by PCAOB (Public Company Accounting Oversight Board)
standards, and had discussed with the Company's independent registered
public accounting firm the independent registered public accounting
firm's independence; and
(4) Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited
financial statements be included in the Company's Annual Report on
Form 10-K for the year ended August 31, 2012 for filing with the
Securities and Exchange Commission.
17
(5) During the year ended August 31, 2012 the Company paid EKS&H LLLP
(formerly known as Erhardt, Keefe, Steiner & Hottman P.C.), the
Company's independent registered public accounting firm, fees for
professional services rendered for the audit of the Company's annual
financial statements and the reviews of the financial statements
included in the Company's form 10-Q reports for the fiscal year and
all regulatory filings. The Audit Committee is of the opinion that
these fees are consistent with maintaining its independence from the
Company.
The foregoing report has been approved by the members of the Audit
Committee:
Raymond McElhaney
Bill Conrand
R.W. Noffsinger
The Company's Board of Directors has adopted a written charter for the
Audit Committee, a copy of which can be found on the Company's website at
www.syrginfo.com.
Certain Relationships and Related Transactions
Any transaction between us and related parties must be approved by a
majority of our disinterested directors.
Two of our officers, Ed Holloway and William Scaff, Jr., control three
entities with which we have entered into agreements. These entities are
Petroleum Management, LLC ("PM"), Petroleum Exploration and Management, LLC
("PEM"), and HS Land and Cattle, LLC ("HSLC").
We acquired all of the working oil and gas assets owned by PEM in a
transaction that closed on May 24, 2011. In total, we acquired interests in 88
gross (40 net) oil and gas wells in the Wattenberg Field, and interests in oil
and gas leases covering approximately 6,968 gross acres in the Wattenberg Field
and the Eastern D-J Basin. These oil and gas interests were acquired from
Petroleum Exploration and Management, LLC ("PEM"), a company owned by Ed
Holloway and William E. Scaff, Jr., two of our officers, for approximately $19.0
million. The transaction was approved by the disinterested directors and by a
vote of the shareholders, with Mr. Holloway and Mr. Scaff not voting. The
purchase was funded with a combination of cash, restricted shares and a note
payable. In November 2011, the Company utilized proceeds from the bank credit
facility to repay the entire principal balance on the related party notes of
$5.2 million and accrued interest summing to approximately $142,000.
In October 2010, and following the approval of our directors, we acquired
oil and gas properties from PM and PEM, for approximately $1.0 million. The oil
and gas properties we acquired are located in the Wattenberg Field and consisted
of:
18
o six producing oil and gas wells.
o two shut in oil wells.
o fifteen drill sites, net 6.25 wells, and
o miscellaneous equipment.
We have a 100% working interest (80% net revenue interest) in the six
producing wells and the two shut in wells.
In 2009, PM and PEM acquired the same oil and gas properties sold to us
from an unrelated third party for $920,000. The difference in the price we paid
for the properties and the price PM and PEM paid for the properties represents
interest on the amount paid by PM and PEM for the properties, closing costs and
equipment improvements.
We had a letter agreement with PM and PEM which provided us with the option
to acquire working interests in oil and gas leases owned by these firms and
covering lands on the D-J basin. The oil and gas leases covered 640 acres in
Weld County, Colorado and, subject to certain conditions, would be transferred
to us for payment of $1,000 per net mineral acre. The working interests in the
leases we could acquire varied, but the net revenue interest in the leases,
could not be less than 75%. Under this letter agreement, through February 2010
we acquired leases covering 640 gross (360 net) acres from PM and PEM for
$360,000.
Since closing the transaction with PEM on May 24, 2011, PEM has not engaged
in oil and gas exploration and development activities.
Pursuant to the terms of an Administrative Services Agreement, through June
30, 2010, PM provided us with office space and equipment storage in Platteville,
Colorado, as well as secretarial, word processing, telephone, fax, email and
related services for a fee of $20,000 per month. Following the termination of
the Administrative Services Agreement, and since July 1, 2010, we have leased
the office space and equipment storage yard from HSLC at a rate of $10,000 per
month.
During the year ended August 31, 2011, the Company acquired oil and gas
leases from George Seward, a member of the Company's board of directors. In
total, the Company purchased lease interests covering 22,066 gross (19,717 net)
undeveloped acres, located in eastern Colorado and western Nebraska, in exchange
for 353,817 shares of the Company's common stock. Based on the market price of
the Company's common stock on the transaction dates, these acquisitions were
valued at $788,676.
During the year ended August 31, 2012, the Company purchased oil and gas
leases from Mr. Seward covering 61,397gross (51,127 net) undeveloped acres,
located in eastern Colorado and western Nebraska, in exchange for 188,137 shares
of the Company's common stock. Based on the market price of the Company's common
stock on the transaction dates, these acquisitions were valued at $595,785.
19
QUORUM FOR MEETINGS OF SHAREHOLDERS
The Company is a Colorado corporation. Section 7-107-206 of the Colorado
Business Corporation Act provides that, unless otherwise provided in the
Articles of Incorporation, a quorum at any meeting of a corporation's
shareholders is the presence at the meeting, in person or by proxy, of
shareholders owning a majority of the shares entitled to vote at the meeting.
A corporation's Articles of Incorporation may provide for less than a
majority provided that a quorum cannot consist of less than one-third of the
shares entitled to vote.
At present, the Company's Articles of Incorporation do not have any
provision relating to a quorum at a shareholders' meeting. As a result, a quorum
requires the presence of a majority of the Company's outstanding shares. During
the past five years, the outstanding shares of the Company's common stock have
increased from 9,943,571 shares at August 31, 2008, to 68,925,330 shares at July
1, 2013. In addition, the number of the Company's shareholders, including
shareholders who own shares in "street name" has also increased significantly.
To prevent any difficulty at future shareholders' meetings in obtaining a
quorum, the Company's board of directors recommends that the Company's Articles
of Incorporation be amended to provide for the following:
THE PRESENCE OF ONE-THIRD OF THE VOTES ENTITLED TO BE CAST ON ANY MATTER BY
A VOTING GROUP CONSTITUTES A QUORUM OF THAT VOTING GROUP FOR ACTION ON THE
MATTER.
AMENDMENT TO
NON-QUALIFIED STOCK OPTION PLAN
Shareholders are being requested to vote to approve an amendment to the
Company's Non-Qualified Stock Option Plan. The Company's employees, directors
and officers, and consultants or advisors to the Company are eligible to be
granted options pursuant to the Non-Qualified Plan as may be determined by the
Company's Board of Directors, provided however that bona fide services must be
rendered by such consultants or advisors and such services must not be in
connection with the offer or sale of securities in a capital-raising
transaction.
The Non-Qualified Plan is administered by the Company's Compensation
Committee ("the Committee"), each member of which is a director of the Company.
The members of the Committee were selected by the Company's Board of Directors
and serve for a one-year tenure and until their successors are elected. A member
of the Committee may be removed at any time by action of the Board of Directors.
Any vacancies which may occur on the Committee will be filled by the Board of
Directors. The Committee is vested with the authority to interpret the
provisions of the Plan and supervise the administration of the Plan. In
addition, the Committee is empowered to select those persons to whom shares or
options are to be granted, to determine the number of shares subject to each
grant of a stock bonus or an option and to determine when, and upon what
conditions, shares or options granted under the Plan will vest or otherwise be
subject to forfeiture and cancellation.
20
In the discretion of the Committee, any option granted pursuant to the Plan
may include installment exercise terms such that the option becomes fully
exercisable in a series of cumulating portions. The Committee may also
accelerate the date upon which any option (or any part of any options) is first
exercisable. Any options granted pursuant to the Non-Qualified Stock Option Plan
will be forfeited if any "vesting" schedule established by the Committee
administering the Plan at the time of the grant is not met. For this purpose,
vesting means the period during which the employee must remain an employee of
the Company or the period of time a non-employee must provide services to the
Company. At the discretion of the Committee payment for the shares of common
stock underlying options may be paid through the delivery of shares of the
Company's common stock having an aggregate fair market value equal to the option
price, provided such shares have been owned by the option holder for at least
one year prior to such exercise. A combination of cash and shares of common
stock may also be permitted at the discretion of the Committee.
Options are generally non-transferable except upon death of the option
holder.
The Company's Board of Directors may at any time, and from time to time,
amend, terminate, or suspend the Plan in any manner it deems appropriate,
provided that such amendment, termination or suspension will not adversely
affect rights or obligations with respect to shares or options previously
granted.
The Non-Qualified Plan was adopted by the Company's shareholders on May 23,
2011 and presently authorizes the issuance of up to 2,000,000 shares of the
Company's common stock to persons that exercise options granted pursuant to the
Plan.
As of July 1, 2013, the Company had granted options to purchase 1,805,000
shares of common stock under the Non-Qualified Plan. Shareholders are requested
to approve an amendment which would authorize the issuance of up to 5,000,000
shares of common stock pursuant to the Plan.
ISSUANCE OF COMMON STOCK
TO GEORGE SEWARD
George Seward, one of the Company's directors, has in the past assisted the
Company with the acquisition of oil and gas leases, primarily in eastern
Colorado and western Nebraska. In consideration for his assistance in this
regard, the Company has issued restricted shares of its common stock to Mr.
Seward. The number of shares issued to Mr. Seward was based upon the following
formula:
L x $7.00 = Shares to be issued
----------
ACP
21
Where:
L = Net acres in the lease acquired by the Company. Net acres is
determined by multiplying the gross acres covered by the
lease by the Company's working interest in the lease.
ACP = The average closing price of the Company's common stock for
the twenty trading days prior to the date the lease was signed.
The Company may in the future issue additional shares of its restricted
common stock to Mr. Seward, in accordance with the above formula, for his
assistance in acquiring oil and gas leases. As a result, the Company's
shareholders are requested to approve the issuance of no more than 75,000 shares
of restricted common stock to Mr. Seward during the twelve-month period ending
July 31, 2014.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors has selected EKS&H LLLP (formerly known as Ehrhardt,
Keefe, Steiner & Hottman, P.C.), an independent registered public accounting
firm, to audit the books and records of the Company for the fiscal year ending
August 31, 2013. EKS&H LLLP served as the Company's independent registered
public accounting firm for the fiscal years ended August 31, 2012 and 2011. A
representative of EKS&H LLLP is expected to be present at the shareholders'
meeting.
The following table shows the aggregate fees billed to the Company during
the years ended August 31, 2012 and 2011 by EKS&H LLLP (formerly known as
Ehrhardt, Keefe, Steiner & Hottman, P.C.):
Year Ended August 31,
2012 2011
---- ----
Audit Fees $210,000 $119,514
Audit-Related Fees $ 6,671 $ 35,993
Tax Fees $ 40,670 $ 43,157
All Other Fees - -
Audit fees represent amounts billed for professional services rendered for
the audit of the Company's annual financial statements and the reviews of the
financial statements included in the Company's Form 10-Q reports for the fiscal
year and all regulatory filings. Audit-related fees represent amounts billed for
reviewing amendments to the Company's Form 10-K and 10-Q reports. Before EKS&H
LLLP was engaged by the Company to render audit or non-audit services, the
engagement was approved by the Company's audit committee. The Company's Board of
Directors is of the opinion that the audit fees charged by EKS&H LLLP are
consistent with EKS&H LLLP maintaining its independence from the Company.
22
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the year ending August 31,
2012 will be sent to any shareholder of the Company upon request. Requests for a
copy of this report should be addressed to the Secretary of the Company at the
address provided on the first page of this proxy statement.
SHAREHOLDER PROPOSALS
Any shareholder proposal which may properly be included in the proxy
solicitation material for the annual meeting of shareholders following the
Company's year ending August 31, 2013 must be received by the Secretary of the
Company no later than November 1, 2013.
GENERAL
The cost of preparing, printing and mailing the enclosed proxy,
accompanying notice and proxy statement, and all other costs in connection with
solicitation of proxies will be paid by the Company including any additional
solicitation made by letter, telephone or telegraph. Failure of a quorum to be
present at the meeting will necessitate adjournment and will subject the Company
to additional expense. The Company's annual report, including financial
statements for the 2012 fiscal year, is included in this mailing.
The Company's Board of Directors does not intend to present and does not
have reason to believe that others will present any other items of business at
the annual meeting. However, if other matters are properly presented to the
meeting for a vote, the proxies will be voted upon such matters in accordance
with the judgment of the persons acting under the proxies.
Please complete, sign and return the attached proxy promptly.
23
PROXY
SYNERGY RESOURCES CORPORATION
This Proxy is solicited by the Company's Board of Directors
The undersigned shareholder of Synergy Resources Corporation acknowledges
receipt of the Notice of the Annual Meeting of Shareholders to be held August
20, 2013, at 10:00am. Mountain Daylight Time, at The Embassy Suites, 4705
Clydesdale Parkway, Loveland, Colorado 80538 and hereby appoints Edward Holloway
with the power of substitution, as Attorney and Proxy to vote all the shares of
the undersigned at said annual meeting of shareholders and at all adjournments
thereof, hereby ratifying and confirming all that said Attorney and Proxy may do
or cause to be done by virtue hereof. The above named Attorney and Proxy is
instructed to vote all of the undersigned's shares as follows:
(1) To elect the persons who shall constitute Synergy Resources
Corporation's Board of Directors for the ensuing year;
[ ] FOR all nominees listed below (except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)
Nominees: Edward Holloway William E. Scaff, Jr. Rick A. Wilber
Raymond E. McElhaney Bill M. Conrad George Seward
R.W. Noffsinger III
(2) To approve an amendment to the Company's Articles of Incorporation to
provide that the presence of one-third of the votes to be cast on any
matter by a voting group constitutes a quorum of that voting group for
action on the matter;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) To approve an amendment to the Company's Non-Qualified Stock Option
Plan such that the shares of common stock that may be issued upon the
exercise of options granted pursuant to the Plan will be increased
from 2,000,000 shares to 5,000,000 shares;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) To approve the issuance of shares of the Company's common stock to
George Seward for his assistance in helping the Company acquire oil
and gas leases;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) To ratify the appointment of EKS&H LLLP as the Company's independent
registered public accounting firm for the fiscal year ending August
31, 2013;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
To transact such other business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED
IN FAVOR OF ALL NOMINEES TO THE BOARD OF DIRECTORS AND IN FAVOR OF ITEMS 2
THROUGH 5.
Dated this ____ day of ____, 2013
(Signature)
____________________________________
Print Name
Please sign your name exactly as it appears on your stock certificate. If shares
are held jointly, each holder should sign. Executors, trustees, and other
fiduciaries should so indicate when signing.
Please Sign, Date and Return this Proxy so that your shares may be voted at the
meeting.
Vote your proxy by regular mail, internet, or phone to:
Vote Processing
C/O Broadridge
51 Mercedes Way
Edgewood, NY 11717
Internet: www.proxyvote.com
Phone: 1-800-690-6903
SYNERGY RESOURCES CORPORATION
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS
Important Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting to Be Held on August 20, 2013.
1. This notice is not a form for voting.
2. This communication presents only an overview of the more complete
proxy materials that are available to you on the Internet. We
encourage you to access and review all of the important information
contained in the proxy materials before voting.
3. The Proxy Statement, Notice of Annual Meeting, Annual Report to
Shareholders is available at www.proxyvote.com.
The 2013 annual meeting of the Company's shareholders will be held at the
Embassy Suites, 4705 Clydesdale Parkway, Loveland, CO 80538 on August 20, 2013,
at 10:00 am. Mountain Daylight Time, for the following purposes:
(1) To elect the directors who shall constitute the Company's Board of
Directors for the ensuing year;
(2) To approve an amendment to the Company's Articles of Incorporation to
provide that the presence of one-third of the votes to be cast on any
matter by a voting group constitutes a quorum of that voting group for
action on the matter;
(3) To approve an amendment to the Company's Non-Qualified Stock Option
Plan such that the shares of common stock that may be issued upon the
exercise of options granted pursuant to the Plan will be increased
from 2,000,000 shares to 5,000,000 shares;
(4) To approve the issuance of shares of the Company's common stock to
George Seward for his assistance in helping the Company acquire oil
and gas leases;
(5) to ratify the appointment of EKS&H LLLP (formally Ehrhardt Keefe
Steiner & Hottman) as the Company's independent registered public
accounting firm for the fiscal year ending August 31, 2013;
to transact such other business as may properly come before the meeting.
The Board of Directors recommends that shareholders vote FOR all nominees
to the board of directors and proposals (2) through (5).
July 1, 2013 is the record date for the determination of shareholders
entitled to notice of and to vote at such meeting. Shareholders may cast one
vote for each share held.
Shareholders may access the following documents at www.proxyvote.com:
o Notice of the 2013 Annual Meeting of Shareholders
o Company's 2013 Proxy Statement;
o Company's Annual Report for the year ended August 31, 2012; and
o Proxy Card
Shareholders may request a paper copy of the Proxy Materials and Proxy Card
for all other meetings by calling (970) 737-1073, by emailing the Company at
proxy@syrginfo.com, or by visiting www.proxyvote.com and indicating if you want
a paper copy of the proxy materials and proxy card.
If you have a stock certificate registered in your name, or if you have a
proxy from a shareholder of record on July 1, 2013, you can, if desired, attend
the Annual Meeting and vote in person. Shareholders can obtain directions to the
2013 annual shareholders' meeting by contacting the Company by telephone at
(970) 737-1073 or by email to proxy@syrginfo.com.
Please visit http://materials.proxyvote.com/87164P to print and fill out
the Proxy Card. Complete and sign the proxy card and mail the Proxy Card by
regular mail, email, or fax to:
Vote Processing
c/o Broadridge
51 Mercedes Way
Edgewood, NY 11717
Internet: www.proxyvote.com
Phone: 1-800-690-6903