Exhibit 10.71
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is entered into
effective as of _______________________, 2003, by and between FX ENERGY, Inc., a
Nevada corporation (the "Corporation"), and _____________________("Indemnitee"),
based on the following premises.
Premises
A. The Restated Articles of Incorporation of the Corporation (the
"Articles") and the Bylaws (the "Bylaws") provide for indemnification of the
Corporation's directors and officers to the fullest extent permitted by the
Nevada Revised Statutes (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. In addition to any insurance purchased by the Corporation on behalf
of Indemnitee, it is reasonable, prudent, and necessary for the Corporation to
obligate itself contractually to indemnify Indemnitee so that he may remain free
from undue concern that he will not be adequately protected both during his
service as an executive officer and a director of the Corporation and following
any termination of such service.
D. 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, 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.
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(b) The term "Expenses" shall include 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,
payments of attachment, appeal or other bonds or security, 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, appealing, 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 interests 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 "Independent Counsel" shall mean an attorney, law
firm, or member of a law firm, who (or which) is licensed to practice
law in the state of Nevada and is experienced in matters of corporation
law and neither presently is, nor in the past five years has been,
retained to represent (i) the Corporation or Indemnitee in any other
matter material to either such party; or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not
include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in
representing either the Corporation or Indemnitee in an action to
determine Indemnitee's rights under this Agreement. From time to time,
the Corporation may select and preapprove the names of persons or law
firms that it deems qualified as Independent Counsel under the
foregoing criteria. Further, at the request of Indemnitee, the
Corporation shall review the qualifications and suitability under the
foregoing criteria of persons or law firms selected by Indemnitee and
preapprove them as Independent Counsel if they meet the foregoing
criteria. An Independent Counsel that has already been preapproved by
the board of directors may be appointed as Independent Counsel without
any further evaluation, so long as such prospective Independent Counsel
continues, as determined by the board of directors, to remain
independent.
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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, to the fullest extent permitted by applicable law.
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 is not entitled to indemnification,
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 the breach of any standard of care or
duty, including a breach of a fiduciary duty, of the Indemnitee is alleged or
proven, except as limited by section 3 herein. 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. Limit on Indemnification. Notwithstanding any breach of any standard
of care or duty, including breach of a fiduciary duty, by the Indemnitee, the
Corporation shall indemnify Indemnitee except when a final adjudication
establishes that Indemnitee's acts or omissions involved intentional misconduct,
fraud, or a knowing violation of law and were material to the cause of action.
4. 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.
5. 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.
6. Officer and Director Liability Insurance. The Corporation shall,
from time to time, make the good faith determination whether or not it is
practicable for the Corporation to obtain and maintain a policy or policies of
insurance with reputable insurance companies providing the officers and
directors of the Corporation with coverage for losses from wrongful acts, or to
ensure the Corporation's performance of its indemnification obligations under
this Agreement. Among other considerations, the Corporation will weigh the costs
of obtaining such insurance coverage against the protection afforded by such
coverage. The Corporation shall consult with and be heard by Indemnitee in
connection with the Corporation's actions hereunder. In all policies of director
and officer liability insurance, (a) Indemnitee shall be named as an insured in
such a manner as to provide Indemnitee the same rights and benefits as are
accorded to the most favorably insured of the Corporation's directors, if
Indemnitee is a director, or of the Corporation's officers, if Indemnitee is not
a director of the Corporation but is an officer; and (b) the policy shall
provide that it shall not be cancelled or materially modified without 30 days'
prior written notice to Indemnitees. Notwithstanding the foregoing, the
Corporation shall have no obligation to obtain or maintain such insurance if the
Corporation determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionate to the
amount of coverage provided, if the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit, or if Indemnitee
is covered by similar insurance maintained by a subsidiary or parent of the
Corporation.
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7. Indemnification Trust Fund or Other Financial Arrangements. Pursuant
to NRS 78.752 or any successor statute, the Corporation shall establish an
indemnification trust fund or make other financial arrangements acceptable to
Indemnitee for Indemnitee's benefit. Such fund or other arrangements shall be
available to Indemnitee for payment of expenses upon the Corporation's failure,
inability, or refusal to pay expenses incurred by the Indemnitee.
8. Right of Indemnitee to Indemnification upon Application; Selection
of Independent Counsel; Procedure upon Application.
(a) Any application for indemnification under this Agreement,
other than when Expenses are paid in advance of any final disposition
pursuant to section 5 hereof, shall be submitted to the board of
directors. If a quorum of the board of directors were not parties to
the action, a majority of such directors may determine whether
indemnification of the applicant is proper in the circumstances or may
have such determination made by Independent Counsel in a written
decision. If a quorum of the board directors who were not parties to
the action cannot be obtained, the board of directors shall have such
determination made by Independent Counsel in a written decision.
Notwithstanding the foregoing, however, the board of directors may
under any circumstances submit the determination of whether
indemnification is proper in the circumstances to the stockholders. The
board of directors shall respond to a request for indemnification or
initiate the process of submitting the determination to the
stockholders within 45 days after receipt by the Corporation of the
written application for indemnification.
(b) If required, Independent Counsel shall be selected by the
board of directors, and the Corporation shall give written notice to
Indemnitee advising him of the identity of Independent Counsel so
selected. Indemnitee may, within seven days after such written notice
of selection shall have been given, deliver to the Corporation a
written objection to such selection. Such objection may be asserted
only on the ground that Independent Counsel so selected does not meet
the requirements of "Independent Counsel," as defined in section 1, and
the objection shall set forth with particularity the factual basis of
such assertion. If such written objection is made, Independent Counsel
so selected may not serve as Independent Counsel unless and until a
court has determined that such objection is without merit. If, within
20 days after submission by Indemnitee of a written objection to the
Independent Counsel selected, the Corporation has failed to identify a
replacement Independent Counsel, the Indemnitee may petition any court
of competent jurisdiction for resolution of any objection that shall
have been made by Indemnitee to the Corporation's selection of
Independent Counsel and for appointment as Independent Counsel of a
person selected by such court or by such other person as such court
shall designate, and the person with respect to whom an objection is so
resolved or the person so appointed shall act as Independent Counsel.
The Corporation shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in connection
with its fees and expenses incident to the procedures of this section 8
regardless of the manner in which such Independent counsel was selected
or appointed.
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(c) 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 Counsel)
to have made a determination prior to the commencement of such action
that indemnification is proper in the circumstances, nor an actual
determination by the Corporation (including its board of directors or
Independent Counsel) that indemnification is not proper in the
circumstances, shall be a defense to the action or create a presumption
that indemnification is not proper in the circumstances.
9. Notice to Insurers. If, at the time of the receipt of an application
for indemnification pursuant to section 2 hereof or a request for advances of
expenses pursuant to section 5 hereof, the Corporation has director and officer
liability insurance in effect, the Corporation shall give prompt notice of the
commencement of such Proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Corporation shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such Proceeding
in accordance with the terms of such policies.
10. 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.
11. 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.
12. 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.
13. 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.
14. 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 that 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 its consent to any proposed settlement. The Corporation
shall not be liable to indemnify Indemnitee under this Agreement with regard to
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.
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15. Enforcement.
(a) The Corporation expressly confirms and agrees 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) Without limitation of any kind on the right of the
Indemnify to indemnity provided herein, n the event that it shall be
necessary or desirable for the Indemnitee to retain legal counsel
and/or incur other costs and expenses in connection with the
interpretation or enforcement of any or all of Indemnitee's rights
under this Agreement, Indemnitee shall be entitled to recover from the
Corporation reasonable attorney's fees, costs, and expenses incurred by
Indemnitee in connection with the interpretation or enforcement of said
rights. The Corporation shall make payment to the Indemnitee at the
time such attorney's fees, costs, and expenses are incurred by
Indemnitee. If, however, the Indemnitee does not prevail in such
actions, Indemnitee shall repay any and all such amounts to the
Corporation.
16. Governing Law; Binding Effect; Amendment and Termination;
Construction.
(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.
(d) This agreement shall be construed liberally in favor of
the Indemnitee to the fullest extent possible under Nevada law. In the
event Nevada law is changed after the date of this Agreement, through
statutory amendment, judicial interpretation, administrative
regulations or otherwise, to allow additional indemnification or to
remove or restrict current limitations on indemnification, this
Agreement shall be deemed to be amended and reformed to provide the
fullest indemnification then possible.
17. Mutual Acknowledgement. Both the Corporation and Indemnitee
acknowledge that in certain instances, federal law or applicable public policy
may prohibit the Corporation from indemnifying its directors and officers under
this Agreement or otherwise. Indemnitee understands and acknowledges that the
Corporation has undertaken, or may be required in the future to undertake with
the Securities and Exchange Commission, to submit the question of
indemnification to a court in certain circumstances for a determination of the
Corporation's right under public policy to indemnify Indemnitee.
18. 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
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(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.
19. Notice. Any notice, demand, request or other communication
permitted or required under this Agreement shall be in writing and shall be
deemed to have been given as of the date so delivered, if personally served; as
of the date so sent, if transmitted by facsimile and receipt is confirmed by the
facsimile operator of the recipient; as of the date so sent, if sent by
electronic mail and receipt is acknowledged by the recipient; one day after the
date so sent, if delivered by overnight courier service; or three days after the
date so mailed, if mailed by certified mail, return receipt requested, addressed
as follows:
If to the Corporation: FX Energy, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx XX 00000
Facsimile: (000) 000-0000
E-mail: ________________________
If to Indemnitee, to: ________________________________
________________________________
________________________________
Facsimile: (801) _______________
E-mail: ________________________
or such other addresses, facsimile numbers, or electronic mail address as shall
be furnished in writing by any party in the manner for giving notices hereunder.
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: __________________________
_______________, President
Indemnitee:
___________________________
[Individual Name]
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SCHEDULE
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Xxxxxx X. Xxxxxxxx, Xx.
Xxxx Xxxxxx
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