FORM OF
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is entered into effective
as of [ ], by and between FX ENERGY, Inc., a Nevada corporation
(the"Corporation"), and ("Indemnitee"), based on the following premises.
PREMISES
A. The articles of incorporation of the Corporation (the "Articles") and
the bylaws (the "Bylaws") provide for indemnification of the Corporation's
directors and officers in accordance with the Domestic and Foreign Corporation
laws of Nevada (the "Statute").
B. The Articles, Bylaws, and Statute contemplate that contracts and other
arrangements may be entered into with respect to indemnification of officers and
directors.
C. It is reasonable, prudent, and necessary for the Corporation to
obligate itself contractually to indemnify Indemnitee so that he will to serve
as a director and/or officer of the Corporation and will be able to serve the
Corporation free from undue concern that he will not be adequately protected.
D. Indemnitee is willing to serve the Corporation on condition that he is
indemnified on the terms and conditions of this Agreement.
E. The directors of the Corporation have duly approved this Agreement and
the indemnification provided herein with the express recognition that the
indemnification arrangements provided herein exceed that which the Corporation
would be required to provide pursuant to Section 78.751 of the Statute.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree as
follows:
1. Definitions. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened, pending, or
completed action, suit, or proceeding, whether brought by or in the right
of the Corporation or otherwise and whether of a civil, criminal,
administrative, or investigative nature, in which Indemnitee was, is, or
will be involved as a party, as a witness, or otherwise, by reason of the
fact that Indemnitee is or was a director, officer, agent, or advisor of
the Corporation, by reason of any action taken by him or of any inaction on
his part while acting as a director, officer, agent, or advisor of the
Corporation, or by reason of the fact that he is or was serving at the
request of the Corporation as a director, officer, employee, agent, or
advisor of another corporation, partnership, joint venture, trust, limited
liability company, or other entity or enterprise, in each case whether or
not he is acting or serving in any such capacity at the time any liability
or expense is incurred for which indemnification or reimbursement can be
provided under this Agreement; provided, that any such action which is
brought by Indemnitee to enforce his rights under this Agreement shall not
be a Proceeding without prior approval of a majority of the board of
directors of the Corporation.
(b) The term "Expenses" shall include, without limitation, any
judgments, fines, and penalties against Indemnitee in connection with a
Proceeding; amounts paid by Indemnitee in settlement of a Proceeding; and
all attorneys' fees and disbursements, accountants' fees and disbursements,
private investigation fees and disbursements, retainers, court costs,
transcript costs, fees of experts, fees and expenses of witnesses, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses
reasonably incurred by or for Indemnitee in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or being or
preparing to be a witness in a Proceeding or establishing Indemnitee's
right or entitlement to indemnification for any of the foregoing.
(c) Reference to "other enterprise" shall include employee benefit
plans; references to "fines" shall include any excise tax assessed with
respect to any employee benefit plan; references to "serving at the request
of the Corporation" shall include any service as a director, officer,
employee, agent, or advisor with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in
a manner he reasonably believed to be in the interests of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted
in a manner "not opposed to the best interest of the Corporation" as
referred to in this Agreement.
(d) The term "substantiating documentation" shall mean copies of
bills or invoices for costs incurred by or for Indemnitee, or copies or
court or agency orders or decrees or settlement agreements, as the case may
be, accompanied by a sworn statement from Indemnitee that such bills,
invoices, court or agency orders or decrees or settlement agreements,
represent costs or liabilities meeting the definition of "Expenses" herein.
(e) The term "he" and "his" have been used for convenience and mean
"she" and "her" if Indemnitee is female.
2. Indemnity of Director or Officer. The Corporation hereby agrees to
hold harmless and indemnify Indemnitee against any and all Expenses incurred by
reason of the fact that Indemnitee is or was a director, officer, agent, or
advisor of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee, agent or advisor of another
corporation, partnership, joint venture, trust, limited liability company, or
other entity or enterprise, but only if Indemnitee acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of
the Corporation and, in the case of a criminal proceeding, had no reasonable
cause to believe that his conduct was unlawful. The termination of any
Proceeding by judgment, order of the court, settlement, conviction, or upon a
plea of nolo contendere, or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the
Corporation, and with respect to any criminal proceeding, shall not create a
presumption that such person believed that his conduct was unlawful. The
indemnification provided herein shall be applicable whether or not negligence or
gross negligence of the Indemnitee is alleged or proven. Notwithstanding the
foregoing, in the case of any Proceeding brought by or in the right of the
Corporation, Indemnitee shall not be entitled to indemnification for any claim,
issue, or matter as to which Indemnitee has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be liable
to the Corporation or for amounts paid in settlement to the Corporation, unless
and only to the extent that, the court in which the Proceeding was brought or
another court of competent jurisdiction determines, on application, that in view
of all the circumstances, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
3. Choice of Counsel. Indemnitee shall be entitled to employ, and be
reimbursed for the fees and disbursements of, counsel separate from that chosen
by any other person or persons whom the Corporation is obligated to indemnify
with respect to the same or any related or similar Proceeding.
4. Advances of Expenses. Expenses (other than judgments, penalties,
fines, and settlements) incurred by Indemnitee shall be paid by the Corporation,
in advance of the final disposition of the Proceeding, within 10 days after
receipt of Indemnitee's written request accompanied by substantiating
documentation and Indemnitee's unsecured undertaking to repay such amount to the
extent it is ultimately determined that Indemnitee is not entitled to
indemnification.
5. Right of Indemnitee to Indemnification Upon Application; Procedure
upon Application. Any indemnification under this Agreement, other than pursuant
to Section 4 hereof, shall be made no later than 45 days after receipt by the
Corporation of the written request of Indemnitee, accompanied by substantiating
documentation, unless a determination is made within said 45-day period by (a)
the board of directors by a majority vote of a quorum consisting of directors
who are not or were not parties to such Proceeding, or (b) independent legal
counsel in a written opinion (which counsel shall be appointed if such a quorum
is not obtainable), that Indemnitee has not met the relevant standards for
indemnification set forth in Section 2 hereof.
The right to indemnification or advances as provided by this Agreement
shall be enforceable by Indemnitee in any court of competent jurisdiction. The
burden of proving that indemnification is not appropriate shall be on the
Corporation. Neither the failure of the Corporation (including its board of
directors or independent legal counsel) to have made a determination prior to
the commencement of such action that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor
an actual determination by the Corporation (including its board of directors or
independent legal counsel) that Indemnitee has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
6. Undertaking by Indemnitee. Indemnitee hereby undertakes to repay to
the Corporation any advances of Expenses pursuant to this Agreement to the
extent that it is ultimately determined that Indemnitee is not entitled to
indemnification.
7. Indemnification Hereunder Not Exclusive. The indemnification and
advancement of Expenses provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may be entitled under the Articles or
Bylaws, the Statute, any policy or policies of directors' and officers'
liability insurance, any agreement, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. However, Indemnitee shall reimburse the Corporation for amounts paid to
him under this Agreement in an amount equal to any payments received pursuant to
such other rights to the extent such payments duplicate any payments received
pursuant to this Agreement.
8. Continuation of Indemnity. All agreements and obligations of the
Corporation contained herein shall continue during the period Indemnitee is a
director, officer, agent, or advisor of the Corporation (or is or was serving at
the request of the Corporation as a director, officer, employee, agent, or
advisor of another corporation, partnership, joint venture, trust, limited
liability company, or other enterprise) and shall continue thereafter so long as
Indemnitee shall be subject to any possible Proceeding.
9. Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for some or a
portion of Expenses, but not, however, for the total amount thereof, the
Corporation shall nevertheless indemnify Indemnitee for the portion of such
Expenses to which Indemnitee is entitled.
10. Settlement of Claims. The Corporation shall not be liable to
indemnify Indemnitee under this Agreement for any amounts paid in settlement of
any Proceeding effected without the Corporation's written consent. The
Corporation shall not settle any Proceeding in any manner which would impose any
penalty or limitation on Indemnitee's rights under this Agreement without
Indemnitee's written consent. Neither the Corporation nor Indemnitee will
unreasonably withhold their consent to any proposed settlement. The Corporation
shall not be liable to indemnify Indemnitee under this Agreement with regard go
any judicial award if the Corporation was not given a reasonable and timely
opportunity, at its expense, to participate in the defense of such action.
11. Enforcement.
(a) The Corporation expressly confirms and agreed that it has entered
into this Agreement and assumed the obligations imposed on the Corporation
hereby in order to induce Indemnitee to serve as a director or officer of
the Corporation, and acknowledges that Indemnitee is relying upon this
Agreement in continuing as a director or officer.
(b) In the event Indemnitee is required to bring any action or other
proceeding to enforce rights or to collect monies due under this Agreement
and is successful in such action, the Corporation shall reimburse
Indemnitee for all of the Indemnitee's Expenses in bringing and pursuing
such action.
12. Governing Law; Binding Effect; Amendment and Termination.
(a) This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Nevada.
(b) This Agreement shall be binding upon the Corporation, its
successors and assigns, and shall inure to the benefit of Indemnitee, his
heirs, personal representatives, and assigns, and to the benefit of the
Corporation, its successors and assigns.
(c) No amendment, modification, termination, or cancellation of this
Agreement shall be effective unless in writing signed by the Corporation
and Indemnitee.
13. Severability. If any provision of this Agreement shall be held to be
invalid, illegal, or unenforceable,
(a) the validity, legality, and enforceability of the remaining
provisions of this Agreement shall not be in any way affected or impaired
thereby; and
(b) to the fullest extent possible, the provisions of this Agreement
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal, or unenforceable.
Each section of this Agreement is a separate and independent portion of this
Agreement. If the indemnification to which Indemnitee is entitled as respects
any aspect of any claim varies between two or more sections of this Agreement,
that section providing the most comprehensive indemnification shall apply.
14. Notice. All notices, demands, requests, or other communications
required or authorized hereunder shall be deemed given sufficiently if in
writing and if personally delivered; if sent by facsimile transmission,
confirmed with a written copy thereof sent by overnight express delivery; if
sent by registered mail or certified mail, return receipt requested and postage
prepaid; or if sent by overnight express delivery:
If to the Corporation, to: FX Energy, Inc.
3006 Highland Drive, Suite 206
Salt Lake City, Utah 84106
Telecopy No.: (801) 486-5575
If to the Indemnitee, to:
or such other addresses and facsimile numbers as shall be furnished by any party
in the manner for giving notices hereunder, and any such notice, demand,
request, or other communication shall be deemed to have been given as of the
date so delivered or sent by facsimile transmission, five business days after
the date so mailed, or one day after the date so sent by overnight delivery.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective on and as of the day and year first above written.
Corporation:
FX ENERGY, INC.
By:--------------------------
David N. Pierce, President
Indemnitee:
-----------------------------
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The foregoing Indemnification Agreement is entered by and between FX ENERGY,
Inc. and the following Schedule of Indemnitees:
Dennis Goldstein
Dennis Tatum