Exhibit 10.79
CHANGE IN CONTROL COMPENSATION AGREEMENT
This Agreement, dated as of the 16th day of November, 2004 between FX
Energy, Inc, ("FX"), and _______________________________________ (the
"Executive").
The Compensation Committee of the Board of Directors of FX has
recommended, and the Board of Directors has approved, that FX enter into
agreements, providing for compensation under certain circumstances after a
change in control, with key executives of FX and its subsidiaries who are from
time to time designated by the Compensation Committee;
Executive is a key executive of FX and has been selected by the
Compensation Committee to enter into this Agreement;
Should FX become subject to any proposed or threatened Change in
Control (as defined below), the Board of Directors of FX believes it imperative
that FX and the Board of Directors be able to rely upon Executive to continue in
his position, and that FX be able to receive and rely upon his advice, if
requested, as to the best interests of FX and its stockholders without concern
that he might be distracted by the personal uncertainties and risks created by
such a proposal or threat; and
Should FX receive any such proposal, in addition to Executive's regular
duties, he may be called upon to assist in the assessment of such proposals,
advise management and the Board of Directors as to whether such proposal would
be in the best interests of FX and its stockholders, and to take such other
actions above and beyond his regular duties as the Board might determine to be
appropriate;
NOW, THEREFORE, to assure FX that it will have the continued dedication
of Executive and the availability of his advice and counsel notwithstanding the
possibility, threat or occurrence of an effort to take over control of FX, and
to induce Executive to remain in the employ of FX following a Change in Control
(as defined below) to facilitate an orderly transition, and for other good and
valuable consideration, FX and Executive agree as follows:
1. Termination Following Change in Control. Except as provided in
Section 3 below, FX will provide or cause to be provided to
Executive the rights and benefits described in Section 2 below
in the event that Executive's employment is terminated at any
time within two (2) years following a Change in Control (as
such term is defined in this Section 2) under the
circumstances stated in (a) or (b) below.
(a) for reasons other than for "cause" (as such term is
defined in Section 4 hereof) or other than as a
consequence of Executive's death, permanent
disability or voluntary retirement.
(b) by Executive following the occurrence of any of the
following events:
(i) a substantial reduction in Executive's
duties or responsibilities;
(ii) the reduction of Executive's annual base
salary, including any deferred portions of
it;
(iii) the transfer of Executive to a location
requiring a change in his residence or a
material increase in the amount of travel
normally required of Executive in connection
with his employment; or
If a Change in Control shall occur prior to
or during any renewal term, as set forth in Section 5
below, Executive shall be entitled to the rights and
benefits provided for in Section 2 notwithstanding
any other provisions to the contrary in this
Agreement.
For purposes of this agreement, a "change in
control of the company" means a change in control of
a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of
1934; provided that, without limitation, such a
change in control shall be deemed to have occurred
if:
(A) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of
1934) other than the company or any person who on the
date hereof is a director or officer of the company
is or becomes the beneficial owner (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934)
directly or indirectly, of securities of the company
representing 20 percent of the combined voting power
of the company's then outstanding securities; or (B)
there is a merger or consolidation of the Company in
which the Company does not survive as an independent
public company; or (C) the business or businesses of
the Company for which your services are principally
performed are disposed of by the Company pursuant to
a partial or complete liquidation of the Company, a
sale of assets of the Company, or otherwise.
2. Rights and Benefits Upon Termination. In the event of the termination of
Executive's employment under any of the circumstances set forth in Section 1
hereof ("Termination"), FX agrees to provide or cause to be provided to
Executive the following rights and benefits:
(a) Salary and Other Payments at Termination. Executive shall
be entitled to receive payment in cash within 60 days
following termination in the amount of two (2) times the
greater of (a) Executive's then current annual salary, or (b)
Employee's salary plus bonus compensation for the year most
recently ended as reportable on the applicable W-2.
(b) Plan Benefits under FX's Profit Sharing Plan. Except to
the extent expressly prohibited by any applicable law or
regulation, any and all restrictions, vesting schedules or
Schedule of exercise provided in the FX Profit Sharing
Retirement Plan (or any successor to it) shall immediately
lapse and Executive shall be entitled immediately to receive
all benefits previously granted him under that plan.
(c) Plan Benefits under FX's Stock and/or Incentive Plans.
Except to the extent expressly prohibited by any applicable
law or regulation, the Executive shall fully vest in and have
the right to exercise all outstanding options, stock purchase
awards, and other outstanding awards including shares as to
which he would not otherwise be vested or exercisable.
(d) Insurance and Other Special Benefits. For a period of two
(2) years, Executive shall continue to be covered by the life
insurance, medical insurance, and accident and disability
insurance plans of FX and its subsidiaries or any successor
plan or program in effect at or after Termination for
employees in the same class or category as was Executive prior
to his Termination, subject to the terms of such plans and to
Executive's making any payments therefor required of employees
in the same class or category as was Executive prior to his
Termination. In the event Executive is ineligible to continue
to be so covered under the terms of any such benefit plan or
program, or, in the event Executive is eligible but the
benefits applicable to Executive under any such plan or
program after Termination are not substantially equivalent to
the benefits applicable to Executive immediately prior to
Termination, then, for a period of two (2) years, FX shall
provide such substantially equivalent benefits, or such
additional benefits as may be necessary to make the benefits
applicable to Executive substantially equivalent to those in
effect before Termination, through other sources; provided,
however, that if during such period Executive should enter
into the employ of another company or firm, Executive's
participation in the comparable benefit provided by FX either
directly or through such other sources shall cease. Nothing
contained in this paragraph shall be deemed to require or
permit termination or restriction of any of Executive's
coverage under any plan or program of FX, or any of its
subsidiaries or any successor plan or program thereto to which
Executive is entitled under the terms of such plan.
(e) Other Benefit Plans. The specific arrangements referred to
in this Section 2 are not intended to exclude Executive's
Participation in other benefit plans in which Executive
currently participates or which are or may become available to
executive personnel generally in the class or category of
Executive or to preclude other compensation or benefits as may
be authorized by the Board of Directors from time to time.
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(f) No Duty to Mitigate. Executive's entitlement to benefits
under this plan shall not be governed by any duty to mitigate
his damages by seeking further employment nor offset by any
compensation which he may receive from future employment.
(g) Payment Obligations Absolute. Unless Section 3 is
applicable, FX's obligation to pay or cause to be paid to
Executive the benefits and to make the arrangements provided
in this Section 2 shall be absolute and unconditional and
shall not be affected by any circumstances, including without
limitation, any counterclaim or defense which FX may have
against him or anyone else. All amounts payable by or on
behalf of FX under this agreement shall, unless specifically
stated to the contrary in this agreement, be paid without
notice or demand. Each and every payment made hereunder by or
on behalf of FX shall be final and FX and its subsidiaries
shall not, for any reason whatsoever, seek to recover all or
any part of such payment from Executive or from whomever shall
be entitled thereto.
3. Conditions to the Obligations of FX. FX shall have no obligation to provide
or cause to be provided to Executive the rights and benefits described in
Section 2 hereof if either of the following events shall occur:
(a) Termination for Cause. If Executive engages in serious or
willful misconduct which is detrimental to the Company or its
shareholders or is convicted of a felony.
(b) Resignation as Director or Officer. If executive shall
fail, promptly after Termination and upon receiving a written
request to do so, to resign as a director and/or officer of FX
and each subsidiary and affiliate of FX of which he is then
serving as a director and/or officer.
4. Cooperation. Executive agrees that, at all times following Termination, he
will furnish such information and render such assistance and cooperation as may
reasonably be requested in connection with any litigation or legal proceedings
concerning FX or any of its subsidiaries (other than any legal proceedings
concerning Executive's employment). In connection with such cooperation, FX will
pay or reimburse Executive for all reasonable expenses incurred in cooperating
with such requests.
5. Term of Agreement. Subject to Section 1 hereof, this Agreement shall
terminate on December 31, 2005; provided, however, that this Agreement shall
automatically renew for successive one-year terms unless FX notifies Executive
in writing at least 60 days prior to the expiration date that it does not desire
to renew the Agreement for an additional term; and provided further, however,
that such notice shall not be given and if given shall have no effect (i) within
two (2) years after a Change in Control or (ii) during any period of time when
FX has reason to believe that any third person has begun a tender or exchange
offer, circulated a proxy to stockholders, or taken other steps or formulated
plans to effect a Change in Control, such period of time to end when, in the
opinion of the Compensation Committee, the third person has abandoned or
terminated his efforts or plans to effect a Change in Control.
6. Expenses. FX shall pay or reimburse Executive for all costs and expenses,
including, without limitation, court costs and attorneys' fees, incurred by
Executive as a result of any claim, action or proceeding by Executive against FX
arising out of, or challenging the validity or enforceability of, this Agreement
or any provision of this agreement.
7. Miscellaneous.
(a) Severability. If any one or more of the provisions
contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect
the validity and enforceability of any other provisions
hereof. Further, should any provisions within this Agreement
ever be reformed or rewritten by a judicial body, those
provisions as rewritten shall be binding upon the Employer and
the Employee.
(b) Right of Setoff. The Employer and Employee shall each be
entitled, at its option and not in lieu of any other remedies
to which it may be entitled, to set off any amounts due from
the other or any affiliate of the other against any amount due
and payable by such person or any affiliate of such person
pursuant to this Agreement or otherwise.
(c) Representations and Warranties of the Employee. The
Employee represents and warrants to the Employer that (i) the
Employee understands and voluntarily agrees to the provisions
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of this Agreement; (ii) the Employee is not aware of any
existing medical condition which might cause him to be or
become unable to fulfill his duties under this Agreement; and
(iii) the Employee is free to enter into this Agreement and
has no commitment, arrangement or understanding to or with any
third party that restrains or is in conflict with this
Agreement or that would operate to prevent the Employee from
performing the services to the Employer that the Employee has
agreed to provide hereunder.
(d) Succession. This Agreement and the rights and obligations
hereunder shall be binding upon and inure to the benefit of
the parties hereto and their respective legal representatives,
and shall also bind and inure to the benefit of any successor
of the Employer by merger or consolidation or any assignee of
all or substantially all of its property.
(e) Assignment. Except to any successor or assignee of the
Employer as provided in Section 7(d), neither this Agreement
nor any rights or benefits hereunder may be assigned by either
party hereto without the prior written consent of the other
party. Neither the Employee, the Employee's spouse, the
Employee's designated contingent beneficiary, nor their
estates shall have any right to anticipate, encumber, or
dispose of any payment due under this Agreement. Such payments
and other rights are expressly declared nonassignable and
nontransferable, except as specifically provided herein.
(f) Reimbursement of Expenses. In the event that it shall be
necessary or desirable for the Employee to retain legal
counsel and/or incur other costs and expenses in connection
with the enforcement of any and all of the Employee's rights
under this Agreement, the Employee shall be entitled to
recover from the Employer reasonable attorneys' fees, costs,
and expenses incurred by the Employee in connection with the
enforcement of said rights if the Employee prevails in such
enforcement action. However, in the event that it shall be
necessary or desirable for the Employer to retain legal
counsel and/or incur other costs and expenses in connection
with the enforcement of any and all of the Employer's rights
under this Agreement, the Employer shall be entitled to
recover from the Employee reasonable attorneys' fees, costs,
and expenses incurred by the Employer in connection with the
enforcement of said rights if the Employer prevails in such
enforcement action. Fees payable hereunder shall be in
addition to any other damages, fees, or amounts provided for
herein.
(g) Indemnification. The Employer and Employee have entered
into a separate indemnification agreement dated November 5,
1996.
(h) Notices. Any notices or other communications required or
permitted under this Agreement shall be sufficiently given if
personally delivered, if sent by facsimile or telecopy
transmission or other electronic communication confirmed by
sending a copy thereof by United States mail, if sent by
United States mail, registered or certified, postage prepaid,
or if sent by prepaid overnight courier addressed as set forth
on the signature page hereto or such other addresses as shall
be furnished in writing by any party in the manner for giving
notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered or
sent by facsimile or telecopy transmission or other electronic
communication, one day after the date so sent by overnight
courier, or three days after the date of deposit in the United
States mail.
(i) Entire Agreement. This Agreement contains the entire
Agreement between the parties hereto with respect to the
subject matter contained herein. No change, addition, or
amendment shall be made except by written agreement signed by
the parties hereto.
(j) Waiver of Breach. The failure by any party to insist upon
the strict performance of any covenant, duty, agreement, or
condition of this Agreement or the failure to exercise any
right or remedy consequent upon a breach hereof shall not
constitute a waiver of any such breach or of any covenant,
agreement, term, or condition and the waiver by either party
hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent
breach by any party.
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(k) Multiple Counterparts. This Agreement has been executed in
a number of identical counterparts, each of which for all
purposes is to be deemed an original, and all of which
constitute, collectively, one agreement. In making proof of
this Agreement, it shall not be necessary to produce or
account for more than one such counterpart.
(l) Descriptive Headings. In the event of a conflict between
titles to articles and paragraphs and the text, the text shall
control.
(m) Governing Law. The laws of the state of Utah shall govern
the validity, construction, enforcement, and interpretation of
this Agreement.
IN WITNESS, the parties have executed this Agreement as of the day and
year first above written.
Date: _____________________ __________________________
Executive
FX ENERGY, INC.
Date: _____________________ ________________________________________
Chairman, Compensation Committee of the
Board of Directors of FX Energy, Inc.
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Schedule of Executives
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxx Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
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