SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
FX ENERGY, INC.
-------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filling Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2),
or Item 22(a)(2) of Schedule 14A.
[ ] 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 (Set forth the amount on which the
filing fee is calculated and state how it was determined).
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously by written preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
--------
2) Form, Schedule, or Registration Statement No.:
-----
3) Filing Party:
------------------
4) Date Filed:
--------------------
<PAGE>
FX ENERGY, INC.
April 6, 1998
RESCHEDULING OF ANNUAL MEETING FOR MAY 4, 1998
Dear FX Energy Stockholder:
Enclosed is the Notice respecting the 1998 Annual Stockholders' Meeting of
FX Energy, Inc., (the "Company"), together with our 1997 Annual Report and Proxy
Statement related to the 1998 Annual Meeting. At this meeting, we will seek
your support for the election of directors and for the approval of our 1997
Stock Option Plan.
Due to difficulties encountered in printing and assembling the enclosed
documents, they are being sent to you on or about April 10, 1998, rather than
the March 30, 1998, date set forth in the Proxy Statement. In order to provide
for more time to solicit proxies for the Annual Meeting and to give each of the
Stockholders more time to consider the matters set forth in the Proxy Statement,
the Board of Directors has determined that the Annual Meeting shall be
rescheduled for May 4, 1998, rather than April 27, 1998. All references in the
Proxy Statement to April 27, 1998, should be to the new May 4, 1998, date for
the Annual Meeting. The Annual Meeting will take place at the same location and
hour as set forth in the Proxy Statement.
Sincerely,
FX ENERGY, INC.
/S/ David N. Pierce
President
<PAGE>
FX ENERGY, INC.
March 30, 1998
Dear FX Energy Stockholder:
Our 1997 Annual Report and our Proxy Statement for the 1998 Annual
Stockholders' Meeting of FX Energy, Inc. (the "Company"), are enclosed. At this
meeting, we will seek your support for the election of directors and for the
approval of our 1997 Stock Option Plan.
These are important considerations for all Stockholders. Therefore, the
Board urges you to review each of these proposals carefully. The enclosed Proxy
Statement discusses the intended benefits as well as possible disadvantages of
these proposals.
Your Board of Directors believes that the adoption of all of the proposals
is in the best interests of all Stockholders.
Sincerely,
/S/ FX ENERGY, INC.
David N. Pierce
President
<PAGE>
FX ENERGY, INC.
3006 SOUTH HIGHLAND DRIVE, SUITE 206
SALT LAKE CITY, UTAH 84106
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 27, 1998
TO THE STOCKHOLDERS OF FX ENERGY, INC.:
The 1998 Annual Meeting of the Stockholders (the "Annual Meeting") of FX
Energy, Inc. (the "Company"), will be held in the Casper Room, Little America
Hotel, 500 South Main Street, Salt Lake City, Utah, on April 27, 1998. The
Annual Meeting will convene at 10:00 a.m., local time, to consider and take
action on the following proposals:
(1) To elect two directors to serve until the expiration of their respective
terms and until their respective successors are elected and qualified;
(2) To approve the FX Energy, Inc., 1997 Stock Option and Award Plan; and
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment(s) thereof.
ONLY OWNERS OF RECORD OF THE 12,991,882 SHARES OF THE COMPANY'S COMMON
STOCK ISSUED AND OUTSTANDING AS OF THE CLOSE OF BUSINESS ON MARCH 20, 1998, (THE
"RECORD DATE"), WILL BE ENTITLED TO NOTICE OF AND TO VOTE AT THE ANNUAL MEETING.
EACH SHARE OF COMMON STOCK IS ENTITLED TO ONE VOTE.
HOLDERS OF AT LEAST A MAJORITY OF THE SHARES OF COMMON STOCK OUTSTANDING ON
THE RECORD DATE MUST BE REPRESENTED AT THE MEETING TO CONSTITUTE A QUORUM FOR
CONDUCTING BUSINESS.
THE ATTENDANCE AT AND/OR VOTE OF EACH STOCKHOLDER AT THE ANNUAL MEETING IS
IMPORTANT, AND EACH STOCKHOLDER IS ENCOURAGED TO ATTEND.
FX ENERGY, INC.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Andrew W. Pierce, Secretary
Salt Lake City, Utah
March 30, 1998
IMPORTANT
REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE FILL IN,
SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE SELF-ADDRESSED,
STAMPED ENVELOPE PROVIDED. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
SPECIAL REQUEST
IF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, NOMINEE, OR OTHER
INSTITUTION, ONLY IT CAN VOTE YOUR SHARES. PLEASE CONTACT PROMPTLY THE PERSON
RESPONSIBLE FOR YOUR ACCOUNT AND GIVE INSTRUCTIONS FOR YOUR SHARES TO BE VOTED.
<PAGE>
FX ENERGY, INC.
3006 SOUTH HIGHLAND DRIVE, SUITE 206
SALT LAKE CITY, UTAH 84106
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the management of FX Energy, Inc. (the "Company"), to be
voted at the Annual Meeting of Stockholders to be held in the Casper Room,
Little America Hotel, 500 South Main Street, Salt Lake City, Utah, on April 27,
1998, at 10 a.m., local time, or at any adjournment thereof (the "Annual
Meeting"). The enclosed Proxy, when properly executed and returned in a timely
manner, will be voted at the Annual Meeting in accordance with the directions
set forth thereon. If no instructions are indicated on the enclosed Proxy, the
Proxy will be voted at the Annual Meeting:
(1) FOR the election of two nominees of management set forth herein as
directors of the Company to serve as directors until the expiration of
their respective terms and until their successors are elected and
qualified;
(2) FOR approval of the FX Energy, Inc., 1997 Stock Option and Award Plan (the
"Plan"); and
(3) IN accordance with the best judgment of the persons acting as proxies on
other matters presented for a vote.
The enclosed Proxy, even though executed and returned to the Company, may
be revoked at any time before it is voted, either by giving a written notice,
mailed or delivered to the Secretary of the Company, by submitting a new Proxy
bearing a later date, or by voting in person at the Annual Meeting. If the
Proxy is returned to the Company without specific direction, the Proxy will be
voted in accordance with the Board of Directors' recommendations as set forth
above.
The entire expense of this Proxy solicitation will be borne by the
Company. In addition to this solicitation, officers, directors, and regular
employees of the Company, who will receive no extra compensation for such
services, may solicit proxies by mail, by telephone, or in person. This
statement and form of Proxy were first mailed to Stockholders on or about March
30, 1998.
Only holders of the Company's 12,991,882 shares of Common Stock, par value
$0.001 (the "Common Stock"), issued and outstanding as of the close of business
on March 20, 1998 (the "Record Date"), will be entitled to vote at the Annual
Meeting. Each share of Common Stock is entitled to one vote. Holders of at
least a majority of the 12,991,882 shares of Common Stock outstanding on the
Record Date must be represented at the Annual Meeting to constitute a quorum for
conducting business.
All properly executed and returned proxies as well as shares represented in
person at the meeting will be counted for purposes of determining if a quorum is
present, whether the proxies are instructed to abstain from voting or consist of
broker non-votes. Under Nevada corporate law and the Company's Articles of
Incorporation and Bylaws, the election of directors requires the vote of a
plurality of the shares present at the Annual Meeting. All other matters except
certain specified extraordinary matters are considered approved by the
Stockholders if approved by at least a majority of the shares present at a
meeting of the Stockholders at which a quorum is present. Therefore,
abstentions and broker non-votes will have the same legal effect as a vote
against matters other than the election of directors; abstentions and broker
non-votes will not be counted for the election of directors.
Officers and directors holding an aggregate of 1,201,860 shares of Common
Stock, or approximately 9.3% of the issued and outstanding shares, have
indicated their intent to vote in favor of all proposals.
PROPOSAL 1: ELECTION OF DIRECTORS
GENERAL
The Company's Articles of Incorporation provide that the Board of
Directors shall be divided into three classes, with each class as equal in
number as practicable. One class is to be elected each year for a three-year
term. At the Annual Meeting, two directors will be elected to each serve a
three-year term.
It is intended that votes will be cast, pursuant to authority granted by
the enclosed Proxy when properly executed and returned to the Company, for the
election of the nominees named below as directors of the Company, except as
otherwise specified in the Proxy. In the event a nominee shall be unable to
serve, votes will be cast, pursuant to authority granted by the enclosed Proxy,
for such person as may be designated by the Board of Directors. Biographical
information follows for each person nominated and for each director whose term
of office will continue after the Annual Meeting. The officers of the Company
are elected at the Annual Meeting of the Board of Directors to hold office until
their respective successors are elected and qualified. The information
concerning the nominees and directors and their security holdings has been
furnished by them to the Company. (See "Principal Stockholders" below.)
EXECUTIVE OFFICERS, DIRECTORS, AND NOMINEES
The Board of Directors' nominees for election as directors of the Company
at the Annual Meeting are Scott J. Duncan and Thomas B. Lovejoy. The following
table sets forth the name, age, term of directorship, and principal business
experience of each executive officer and director of the Company who has served
in such position since the Company's last fiscal year:
YEAR
DIRECTOR TERM BUSINESS EXPERIENCE DURING PAST
NAME AGE SINCE EXPIRES FIVE YEARS AND OTHER INFORMATION
- ---------- ----- ------- ------- ---------------------------------------------
David N. 51 1992 1999 President and Director of the Company since
Pierce 1992. For over three years prior to 1992,
Vice-President and Director of the Company's
predecessor, Frontier Exploration Company
("Exploration"), co-founded with his brother,
Andrew W. Pierce, in January 1989 and acquired
by the Company in March 1992. Executive
capacities with privately held oil and gas
companies since 1979. An attorney with over 20
years' experience in natural resources,
securities and international business law.
Graduate of Princeton University and Stanford
Law School.
Andrew W. 50 1992 2000 Vice-President and Director of the Company
Pierce since 1992. For over three years prior to
1992, President and Director of the Company's
predecessor, co-founded with his brother, David
N. Pierce, in January 1989. Over 20 years' oil
and gas exploration, drilling, production and
leasing experience, with primary management and
line responsibility for drilling and completion
operations on more than 75 oil and gas wells in
Montana, Wyoming, Utah, and Nevada. Supervises
all field operations of the Company.
Thomas B. 61 1995 1998 Vice-chairman of the Board of Directors and a
Lovejoy(1) Director of the Company. Engaged in financial
advisory and investment banking activities
since 1961. In November 1992, formed Lovejoy
Associates, Inc., Greenwich, Connecticut, to
provide financial strategic advice respecting
private placements, mergers and acquisitions
and other financial alternatives. For three
years prior to forming Lovejoy Associates,
Inc., managing director and head of natural
resource, utility, and mining groups for
Prudential Securities, Inc., New York City.
From 1980 to 1988, managing director and head
of the energy, and natural resources group of
Paine Webber, Inc. Since 1993, Director of
Scaltech, Inc., Houston, Texas, which processes
petroleum refinery oily waste. Received B.S.
from the Massachusetts Institute of Technology
and M.B.A. from Harvard Business School.
Peter L. 59 1996 1999 Director. For over 25 years, employed by
Raven(1) Ultramar, PLC, London, England, a British
holding company for a world-wide group of
operating companies engaged in exploration for,
and production of, crude oil and natural gas,
and shipping, refining, and marketing of crude
oil and petroleum products. From 1957 through
1985, various positions with Ultramar and its
U.K. and American held subsidiaries, including
chief financial officer of Ultramar PLC. From
1985 through 1988, Executive Vice-President,
and from 1988 through 1992, President of
American Ultramar. Graduate of the Downside
School in England, the Institute of Chartered
Accountants in 1962, and the Harvard Business
School Advanced Management Program in 1987.
Scott J. 49 1993 1998 Vice-President, Treasurer and Director.
Duncan Financial consultant to the Company from its
inception through April 1993, when he became a
full-time employee. From December 1988 through
February 1992, a Director and principal
stockholder of MusicNet Holding Company, Salt
Lake City, Utah, and an executive officer of
MusicNet from March 1989 until February 1992.
Served as President, Director and principal
stockholder of Hastings Corp., Salt Lake City,
Utah, from May 1990 until January 1992, when it
acquired Anodyne Corporation, a Whitmore Lake,
Michigan, manufacturer of a patented lift
device. Graduate of the University of Utah
School of Business.
Jay W. 46 1996 2000 Director. Appointed President of Patina Oil &
Decker(1) Gas Corporation, a New York Stock Exchange
independent oil company, Denver, Colorado, in
March 1998. Director of Patina since May,
1996. From September 1995 through March 1998,
Executive Vice-President and Director of
Hugoton Energy Corporation, a public
independent oil company. From 1989 until its
merger into Hugoton, President and chief
executive officer of Consolidated Oil & Gas,
Inc., a private independent oil company based
in Denver, Colorado. Between 1989 and 1995,
oversaw and directed the growth of Consolidated
and its predecessor company from start-up until
merger with Hugoton, at a net asset value of
more than $100 million. Prior to 1989, served
as Vice-President of Operations for General
Atlantic Energy Company and in various
capacities for Peppermill Oil Company, Wainoco
Oil & Gas, and Shell Oil Company. Received his
B.S. degree from the University of Wyoming.
Jerzy B. 47 1996 2000 Vice-President International Exploration, and
Maciolek Director. Employed by the Company since
September 1995. Instrumental in the Company's
exploration efforts. Serves as a member of the
advisory board of the Polish Oil and Gas
Company. Prior to becoming a Company employee,
a private consultant for over five years,
including consulting on hydrocarbon potential
of Poland and Kazakhstan, translating and
interpreting geological and geophysical
information for several integrated hydrocarbon
potential reports on Poland and Kazakhstan and
developing applied integrated geophysical
interpretations over gold mines in Nevada,
California, and Mexico. Since 1992, has also
provided consulting services to the Company
regarding exploration projects in the western
United States and Poland. Received a M.S. in
exploration geophysics from the Mining and
Metallurgy Academy in Krakow, Poland.
(1) Member of the Compensation and Audit Committees of the Board of Directors
of the Company.
BOARD MEETINGS AND COMMITTEES
The Board of Directors had four formal meetings during 1997 and one meeting
to date in 1998. The directors also discussed the business and affairs of the
Company informally on numerous occasions throughout the year and took several
actions through unanimous written consents in lieu of meetings. Jerzy B.
Maciolek, a Director and Vice President of International Exploration of the
Company who is responsible for the Company's day to day activities in Poland,
consulted with the members of the Board of Directors informally from time to
time during 1997, but attended only one formal meeting.
The Audit Committee met twice during 1997 and has met once to date in 1998
to review the results of the audit of the 1997 financial statements of the
Company by its auditor. The Audit Committee recommends the selection of
independent auditors, approves the scope of audit and related fees, and reviews
financial reports, audit results, internal accounting procedures, related party
transactions, where appropriate, and programs to comply with applicable
requirements relating to financial accountability. The Audit Committee's
responsibilities also include compliance responsibilities to develop policies
and procedures for compliance by the Company and its officers and directors with
applicable laws and regulations.
The Compensation Committee met twice during 1997 to review and approve
stock option grants and bonus payments for the 1997 year. The Compensation
Committee has met once to date in 1998. The Compensation Committee has the
responsibility of reviewing performance of senior management, recommending
compensation, and developing compensation strategies and alternatives throughout
the Company.
In connection with the adoption of a Stockholder Rights Plan, the Board of
Directors also formed a Rights Redemption Committee to perform certain functions
in accordance with such plan and appointed Messrs. David N. and Andrew W.
Pierce, Lovejoy, Raven, and Decker to such committee. The Rights Redemption
Committee has not met.
VOTE REQUIRED
Directors are elected by the affirmative vote of the holders of a plurality
of the shares of Common Stock voted at the Annual Meeting. Abstentions and
broker non-votes will not be counted in the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
NOMINEES OF MANAGEMENT SET FORTH HEREIN AS DIRECTORS OF THE COMPANY, TO SERVE IN
SUCH CAPACITIES UNTIL THE EXPIRATION OF THEIR TERM AND UNTIL THEIR SUCCESSORS
ARE ELECTED AND QUALIFIED.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Unless otherwise indicated, the terms of the following transactions
between related parties were not determined as a result of arm's length
negotiations.
Consulting Agreement
Pursuant to a consulting agreement with the Company, Lovejoy Associates,
Inc., a company owned by Thomas B. Lovejoy, advises the Company respecting
future financing alternatives, identification of possible sources of debt and
equity financing and the Company's relationship with the investment community,
at a fee of $10,000 per month through December 31, 1997. The agreement has been
extended through 1998 at a rate of $15,000 per month. The foregoing was not the
result of arm's length negotiations.
Option Exercises and Loans
During 1997, the Company advanced $150,000 to David N. Pierce, repayable
with interest at 7.7%. on December 31, 1998. Subsequently, the Company
advanced an additional $50,000 to David N. Pierce under the same arrangement.
On February 17, 1998, David N. and Andrew W. Pierce each exercised options
that were to expire in May 1998 to purchase 150,000 shares of Common Stock for
$1.50 per share and paid the exercise price by applying a bonus credit for
$100,000 earned in 1997 and delivering a promissory note for $125,000 due, with
interest at 7.7%, December 31, 1998. The foregoing option exercises, which the
Company's Compensation Committee endorsed consistent with its objective that
management should increase its equity stake in the Company, resulted in taxable
income at ordinary rates to each executive of $881,250, the amount by which the
market price of the stock as of the date of exercise exceeded the exercise price
for the 150,000 shares purchased, notwithstanding the fact that the transaction
generated no cash with which the executives could pay such taxes. In order to
assist such executives in meeting these income tax and other obligations so that
they would not be required to raise funds through the premature sale of Common
Stock in the trading market before the opportunity for the Company to realize
results from currently planned exploration drilling, the disinterested directors
unanimously approved interim loans to such individuals to assist them in meeting
their short-term obligations.
In consideration of the agreement of David N. Pierce and Andrew W. Pierce
not to sell stock in market transactions, the Company agreed to aggregate
advances through April 15, 1999 of $950,954 to David N. Pierce, including
amounts previously advanced, and $769,924 to Andrew W. Pierce. Under the new
arrangement, all amounts advanced are repayable, with interest at 7.7% from the
date of the separate advances, in cash or by the delivery of Common Stock by
December 31, 1999. The loans are collateralized by pledges of shares of Common
Stock with a value at $7.375 per share, the market price of the shares on the
date of exercise, equal to the total amount advanced. Both of the executives
agreed that they will not sell any Common Stock until the later of the
announcement of the results of the first two Apache exploratory wells in Poland
or the first commercially successful well in Poland or December 31, 1998 (the
"Lockup Period"). Following the termination of the Lockup Period, the Company
may demand payment of the obligations on 45 days' written notice, in which case
the executives may elect to repay the obligation by paying cash or tendering the
shares of Common Stock. pledged or other shares with a current market value
equal to the amount due. The loans may be prepaid by the executives at any
time.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the Record Date, the name, address
and shareholdings of each person who owns of record, or was known by the Company
to own beneficially, 5% or more of the Common Stock currently issued and
outstanding; the name and shareholdings of each director; and the shareholdings
of all executive officers and directors as a group. Unless otherwise indicated,
all shares consist of Common Stock, and all such shares are owned beneficially
and of record by the named person or group.
PERCENTAGE
NAME OF BENEFICIAL OWNER NATURE OF AMOUNT(1) OF
OWNERSHIP OWNERSHIP(2)
- -------------------------- ------------ ------------- -------------
DIRECTORS AND PRINCIPAL STOCKHOLDERS
David N. Pierce Common Stock 279,993(3) 2.2%
Options 705,000(6) 5.1
---------
Total 984,993 7.2
Andrew W. Pierce Common Stock 239,000 1.8%
Options 660,000(6) 4.8
---------
Total 899,000 6.6
Thomas B. Lovejoy Common Stock 464,867(4) 3.6%
Options 450,000(6) 3.3
---------
Total 914,867 6.8
Scott J. Duncan Common Stock 178,000(5) 1.4%
Options 150,000(6) 1.1
---------
Total 328,000 2.5
Peter L. Raven Common Stock 40,000 0.3%
Options 12,000(6) 0.1
---------
Total 52,000 0.4
Jay W. Decker Options 12,000(6) --
Jerzy B. Maciolek Options 410,000(6) 3.1%
ALL EXECUTIVE OFFICERS AND Common Stock 1,201,860 9.3%
DIRECTORS AS A GROUP (7 Options 2,399,000 15.6
PERSONS) ---------
Total 3,600,860 23.4
(1) Except as otherwise noted, shares are owned beneficially and of record, and
such record stockholder has sole voting, investment, and dispositive power.
(2) Calculations of total percentages of ownership outstanding for each
individual assumes the exercise of options held by that individual to which
the percentage relates. Percentages calculated for totals of all executive
officers and directors as a group assume the exercise of all options held
by the indicated group.
(3) Includes 39,993 shares held by Mr. Pierce jointly with his wife, Mary
Phillips; 19,000 shares held by Mary Phillips; 40,000 shares held by Mr.
Pierce as custodian for minor children; 21,000 shares held by Alyssa
Thirsk, an adult child living in Mr. Pierce's household; and 23,000 held by
Mary Phillips as custodian for a minor child. Mr. Pierce is deemed to hold
or share voting and dispositive power over all of such shares. Mr.
Pierce's address is in care of the Company.
(4) Includes 51,000 shares held in trust for the benefit of Mr. Lovejoy's
children, 49,500 shares held in Mr. Lovejoy's IRA account, 10,000 shares
held by Mr. Lovejoy's spouse's IRA account, and 210,000 shares held by
Lovejoy Associates, Inc., (of which Mr. Lovejoy is sole owner). Mr.
Lovejoy is deemed to hold dispositive power over all of such shares. Mr.
Lovejoy's address is 48 Burying Hill Road, Greenwich CT 06831.
(5) Includes 123,000 shares held by Mr. Duncan jointly with his wife, Cathy H.
Duncan; 7,000 shares held solely by Cathy H. Duncan; and 48,000 shares held
by Cathy Duncan as custodian for minor children. Mr. Duncan is deemed to
hold or share voting and dispositive power over all of such shares.
(6) These options give the holders the right to acquire shares of Common Stock
at prices ranging from $1.50 to $10.25 per share with various expiration
dates ranging from August 2000 to November 2004. Certain of the options
are subject to vesting requirements but are reflected in the table as being
fully vested and exercisable.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of equity securities of the Company. Officers, directors,
and greater than 10% stockholders are required to furnish the Company with
copies of all section 16(a) forms they file.
Based solely upon a review of Forms 3, 4, and 5, and amendments thereto,
furnished to the Company during or respecting its last fiscal year ended
December 31, 1997, no person who, at any time during the most recent fiscal
year, was a director, officer, beneficial owner of more than 10% of any class of
equity securities of the Company or any other person known to be subject to
Section 16 of the Exchange Act failed to file, on a timely basis, reports
required by Section 16(a) of the Exchange Act, except that timely reports were
not filed for four transactions by Mr. Lovejoy's spouse's IRA account, which
resulted in the acquisition of a net of 9,000 shares of Common Stock, or the
acquisition of 3,000 shares of Common Stock by a trust for the benefit of Mr.
Lovejoy's children.
EXECUTIVE COMPENSATION
Summary Compensation
The following table sets forth, for the last three fiscal years of the
Company, the annual and long term compensation earned by, awarded to, or paid to
the person who was Chief Executive Officer of the Company and each other
Executive Officer of the Company as of the end of the last fiscal year (the
"Named Executive Officers").
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------- ---------------------- ----------
(A) (B) (C) (D) (E) (G) (H) (I)
OTHER
ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND YEAR COMPEN- STOCK UNDERLYING LTIP COMPEN-
PRINCIPAL ENDED SALARY BONUS SATION AWARD(S) OPTIONS/ PAYOUTS SATION
POSITION DEC. 31, ($) ($) ($) ($) SARS ($) ($)
(NO.)
- ------------ -------- -------- --------- -------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David N. Pierce 1997 $153,456 $ 185,760 -- -- 55,000 -- --
President (CEO) 1996 129,000 80,000 -- -- 75,000 -- --
1995 120,000 -- -- -- 100,000 -- --
Andrew W. 1997 $114,267 $ 115,200 -- - 45,000 -- --
Pierce
Vice-President 1996 111,753 80,000 -- -- 65,000 -- --
(COO) 1995 75,000 -- -- -- 50,000 -- --
Scott J. Duncan 1997 $88,750 $ 90,000 -- -- 45,000 -- --
Treasurer 1996 67,500 50,000 -- -- 55,000 -- --
1995 60,000 -- -- -- 50,000 -- --
Jerzy B. 1997 $113,600 $ 115,200 -- -- 45,000 -- --
Maciolek
Vice-President 1996 87,000 80,000 -- -- 65,000 -- --
1995 25,000 -- -- -- 200,000 -- --
</TABLE>
Option/SAR Grants in Last Fiscal Year
The following table sets forth information respecting all individual
grants of options and stock appreciation rights ("SARs") made during the last
completed fiscal year to the Named Executive Officers of the Company.
(A) (B) (C) (D) (E)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS/SARS EMPLOYEES DURING PRICE EXPIRATION
NAME GRANTED (NO.) FISCAL YEAR ($/SHARE) DATE
- ---------------- ------------ ---------------- --------- ----------
David N. Pierce 55,000 7.58% $6.625 11/30/04
Andrew W. Pierce 45,000 6.20% $6.625 11/30/04
Scott J. Duncan 45,000 6.20% $6.625 11/30/04
Jerzy B. Maciolek 45,000 6.20% $6.625 11/30/04
See the following for a discussion of the terms of the options granted to
executive officers.
Aggregate Option/SAR Exercises in Last Fiscal Year and Year End Option/SAR
Values
The following table sets forth information respecting the exercise of
options and SARs during the last completed fiscal year by the Named Executive
Officers and the fiscal year end values of unexercised options and SARs.
(A) (B) (C) (D) (E)
NUMBER OF
SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
SHARES UNEXERCISED OPTIONS/SARS AT FY
ACQUIRED OPTIONS/SARS AT FY END
ON VALUE END (NO.) ($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (NO.) ($) UNEXERCISABLE UNEXERCISABLE(1)
- --------------- -------- -------- ----------------- --------------------
David N. Pierce -- -- 625,000/255,000(2) $2,150,000/$700,000
Andrew W. Pierce -- -- 565,000/245,000(3) $1,450,000/$700,000
Scott J. Duncan -- -- 105,000/45,000(4) $175,000/$ --
Jerzy B. Maciolek 50,000 $550,000 215,000/195,000(5) $750,000/$ --
- ------------
(1) Based on the closing sales price for the Common Stock of $6.50 on December
31, 1997.
(2) Includes options to purchase 150,000 shares of Common Stock at any time
through May 6, 1998, at an exercise price of $1.50 per share; 500,000 shares
of Common Stock becoming exercisable in installments of 100,000 shares per
year commencing June 1, 1995, at an exercise price of $3.00 per share
through June 9, 2004; 100,000 shares of Common Stock at any time through
October 5, 2000, at an exercise price of $3.00 per share; 75,000 shares of
Common Stock at an exercise price of $8.875 per share through November 4,
2001; and 55,000 shares of Common Stock becoming exercisable in 1/3
installments per year commencing on the first anniversary of grant at an
exercise price of $6.625 per share, expiring November 30, 2004. Subsequent
to December 31, 1997, David N. Pierce exercised his options to purchase
150,000 shares of Common Stock at an exercise price of $1.50 per share and
transferred options to purchase 25,000 shares of Common Stock at an exercise
price of $8.875 per share to an unrelated individual.
(3) Includes options to purchase 150,000 shares of Common Stock at any time
through May 6, 1998, at an exercise price of $1.50 per share; 500,000 shares
of Common Stock becoming exercisable in installments of 100,000 shares per
year commencing June 1, 1995, at an exercise price of $3.00 per share
through June 9, 2004; 50,000 shares of Common Stock at any time through
October 5, 2000, at an exercise price of $3.00 per share; 65,000 shares of
Common Stock at an exercise price of $8.875 per share through November 4,
2001; and 45,000 shares of Common Stock becoming exercisable in 1/3
installments per year commencing on the first anniversary of grant at an
exercise price of $6.625 per share, expiring November 30, 2004. Subsequent
to December 31, 1997, Andrew W. Pierce exercised his options to purchase
150,000 shares of Common Stock at an exercise price of $1.50 per share.
(4) Includes options to purchase 50,000 shares of Common Stock at any time
through October 5, 2000, at an exercise price of $3.00; 55,000 shares of
Common Stock at an exercise price of $8.875 per share through November 4,
2001; and 45,000 shares of Common Stock becoming exercisable in 1/3
installments per year commencing on the first anniversary of grant at an
exercise price of $6.625 per share, expiring November 30, 2004.
(5) Includes options to purchase 150,000 shares of Common Stock at any time
through August 30, 2000, at an exercise price of $1.50; 65,000 shares of
Common Stock at an exercise price of $8.875 per share through November 4,
2001; 50,000 shares of Common Stock becoming exercisable in 1/3 installments
per year commencing on the first anniversary of grant at an exercise price
of $8.25 per share, expiring May 11, 2004; 100,000 shares of Common Stock
becoming exercisable in 1/3 installments per year commencing on the first
anniversary of grant at an exercise price of $7.25 per share, expiring July
17, 2004; 45,000 shares of Common Stock becoming exercisable in 1/3
installments per year commencing on the first anniversary of grant at an
exercise price of $6.625 per share, expiring November 30, 2004.
On February 17, 1998, David N. Pierce and Andrew W. Pierce each exercised
options to purchase 150,000 shares at $1.50 per share. Each paid the exercise
price by applying a $100,000 bonus credit each had received in 1997 and
delivering a $125,000 promissory note bearing interest at 7.7% due December 31,
1998.
Directors' Compensation
The Company reimburses its directors for costs incurred by them in
attending meetings of the Board of Directors and its committees. In addition,
the Company paid Thomas B. Lovejoy's company, Lovejoy Associates, Inc., $10,000
per month for certain consulting services, including Mr. Lovejoy's services as a
director through December 31, 1997. The Company has agreed to pay $15,000 per
month through December 31, 1998.
During 1997, Mr. Raven received a cash fee of $26,250 and was granted
seven-year options to purchase 6,000 shares of Common Stock at $10.25 per share
and options to purchase 6,000 shares of Common Stock at $6.625 per share, the
respective market price of the Common Stock as of the date of each grant.
In connection with Jay W. Decker's appointment to the Board of Directors,
the Company agreed to pay annual cash compensation of $18,000. In addition,
during 1997, the Company granted Mr. Decker seven-year options to purchase 6,000
shares of Common Stock at $6.625 per share, the market price of the Common Stock
at the date of grant.
The Company does not pay any separate compensation to employees who serve
on the Board of Directors.
Employment Agreements, Termination of Employment, and Change in Control
David N. Pierce and Andrew W. Pierce, officers and directors, are employed
by the Company under three-year employment agreements effective through December
1, 2000, providing for annual salaries during 1997 of $153,456 and $114,267,
respectively, with annual increases of at least 7.5% and bonus compensation, as
determined by the Company's Board of Directors or the compensation committee.
The term of each employment agreement is automatically extended for an
additional year on the anniversary date of such agreement. In the event of
termination of employment resulting from a change in control of the Company not
approved by the Board of Directors, each of the above employees would be
entitled to a termination payment equal to 150% of his annual salary at the time
of termination and the value of previously granted employee benefits, including
the repurchase of outstanding options.
Effective April 18, 1997, the Company entered into an employment agreement
with Scott J. Duncan, an officer and director, on terms substantially similar to
those agreements with Messrs. Pierce, at an annual salary of $90,000.
On July 1, 1996, the Company entered into an employment agreement with
Jerzy B. Maciolek, who is an officer of the Company. The term of the employment
agreement is automatically extended for an additional year on the anniversary
date of such agreement. The agreement provides for an initial annual salary of
$96,000 with an annual increase to be determined by the Company's Board of
Directors or Compensation Committee. The employment agreement also provides for
annual bonuses of $100,000, payable in cash or stock or options, as may be
determined by the Board of Directors or the Compensation Committee, based on the
progress of projects on which Mr. Maciolek is primarily engaged. In May 1997,
the agreement was amended to provide that on each of May 12, 1998, 1999, and
2000, Mr. Maciolek will receive a bonus in the form of a $100,000 credit that
may be applied against the exercise of his options to purchase Common Stock. In
the event the employment contract is terminated by the Company, other than for
cause, or by Mr. Maciolek for cause or because of a change in control of the
Company, Mr. Maciolek is entitled to a termination payment equal to any accrued
but unpaid salary and unreimbursed expenses and benefits plus his salary for the
remaining term of the employment agreement. Additionally, all options held by
Mr. Maciolek shall immediately vest and not be forfeited.
Options Granted to Officers, Directors, Employees, and Consultants
The Company currently has outstanding options to purchase an aggregate of
3,056,500 shares that has been granted to officers, directors, employees, and
consultants of the Company. Of such options, 815,500 contain vesting
limitations contingent on continuing association with the Company. These
options are exercisable at prices ranging between $1.50 and $10.25 per share.
Options issued to executive officers and directors contain terms providing that
in the event of a change in control of the Company and at the election of the
optionee, the unexercised options will be canceled, and the Company will pay to
the optionee an amount equal to the number of unexercised options multiplied by
the amount by which the fair market value of the Common Stock as of the date
preceding the change of control event exceeds the option exercise price. The
grants of options to officers and directors were not the result of arm's length
negotiations.
PROPOSAL 2: APPROVAL OF 1997 STOCK OPTION AND AWARD PLAN
GENERAL
On December 1, 1997, the Board of Directors of the Company approved the
terms of the 1997 Stock Option and Award Plan (the "1997 Plan"). In order for
certain of the 1997 Plan's provisions to be effective, it must be approved by
the Stockholders of the Company and is being submitted for such approval
pursuant to this Proxy Statement.
In the following paragraphs a summary of the terms of the 1997 Plan is
provided. The following summary is qualified in its entirety by the provisions
of the 1997 Plan, the form of which is attached hereto at Appendix "A".
PLAN SUMMARY
The Board of Directors of the Company believes that it is important that
senior management as well as other employees and individuals who contribute to
the success of the Company have a stake in the enterprise as Stockholders.
Consistent with this belief, the award of stock options has been and will
continue to be an important element of their compensation program. The Board of
Directors and the Stockholders previously approved and adopted the 1995 Stock
Option and Award Plan and the 1996 Stock Option and Award Plan. Through
December 31, 1997, options to purchase an aggregate of 982,000 shares had been
granted under such plans, leaving only 18,000 shares available under such plans.
As the award of stock options is an important element of the Company's
compensation program, the Board of Directors believes that another plan should
be adopted.
The 1997 Plan is intended to (a) attract competent directors, executive
personnel, and other employees, (b) ensure the retention of the services of
existing directors, executive personnel and employees, and (c) provide
incentives to all of such personnel to devote the utmost effort and skill to the
advancement and betterment of the Company by permitting them to participate in
ownership and thereby permitting them to share in increases in the value which
they help produce.
The 1997 Plan is to be administered either by the Board of Directors or by
the appropriate committee (the "Committee") to be appointed from time to time by
such Board of Directors. Currently the Compensation Committee recommends to the
Board of Directors actions respecting the 1997 Plan. Awards granted under the
1997 Plan may be incentive stock options ("ISOs") as defined in the Internal
Revenue Code (the "Code"), appreciation rights, options which do not qualify as
ISOs, or stock bonus awards which are awarded to employees, including officers
and directors, who, in the opinion of the Board or the Committee, have
contributed, or are expected to contribute, materially to the success of the
Company. In addition, at the discretion of the Board of Directors or the
Committee, options or bonus stock may be granted to individuals who are not
employees but contribute to the success of the Company.
The exercise price of options granted under the 1997 Plan is to be based on
the fair market value of the underlying Common Stock at the time of grant and,
in the case of ISOs, may not be less than 100% of the fair market value of such
capital stock on the date the option is granted (110% of the fair market value
in the case of 10% Stockholders). Options granted under the 1997 Plan shall
expire not later than ten years after the date of grant (five years in the case
of ISOs granted to 10% Stockholders). The option price may be paid by cash or,
at the discretion of the Company's Board of Directors or Committee, by delivery
of shares of Common Stock of the Company already owned by the optionee (valued
at their fair market value at the date of exercise), or a combination thereof.
All of the employees, officers, and directors of the Company are eligible
to participate under the 1997 Plan. A maximum of 500,000 shares are available
for grant under the 1997 Plan. The identification of individuals entitled to
receive awards, the terms of the awards, and the number of shares subject to
individual awards are determined by the Board of Directors or the Committee, in
their sole discretion; provided, however, that in no event may the aggregate
fair market value of shares for which an ISO is first exercisable in any
calendar year by any eligible employee exceed $100,000.
The aggregate number of shares with respect to which options or stock
awards may be granted under the 1997 Plan, the number of shares covered by each
outstanding option, and the purchase price per share, shall be adjusted for any
increase or decrease in the number of issued shares resulting from a
recapitalization, reorganization, merger, consolidation, exchange of shares,
stock dividend, stock split, reverse stock split, or other subdivision or
consolidation of shares. In the case of an ISO, the ratio of the option price
immediately after the change to the fair market value of the stock subject to
the option immediately after the corporation transaction must not be more
favorable to the optionee on a share by share basis than the ratio of the old
option price to the fair market value of the stock subject to the option
immediately before such transaction. All such adjustments shall be made by the
Board or the Committee, whose good faith determination shall be binding absent
manifest error.
The Board of Directors or the Committee may from time to time alter, amend,
suspend, or discontinue the 1997 Plan with respect to any shares as to which
options or stock awards have not been granted. However, no such alteration or
amendment (unless approved by the Stockholders) shall (a) increase (except
adjustment for an event of dilution) the maximum number of shares for which
options or stock awards may be granted under the 1997 Plan either in the
aggregate or to any eligible employee; (b) reduce (except adjustment for an
event of dilution) the minimum option prices which may be established under the
1997 Plan; (c) extend the period or periods during which options may be granted
or exercised; (d) materially modify the requirements as to eligibility for
participation in the 1997 Plan; (e) change the provisions relating to events of
dilution; or (f) materially increase the benefits accruing to the eligible
participants under the 1997 Plan.
CERTAIN TAX MATTERS
A participant to whom a nonqualified option is granted will not realize
income at the time of the grant. Upon exercise of the option, the excess of the
fair market value of the stock on the date of exercise over the exercise price
will be taxable to the optionee as ordinary income. The tax basis to the
optionee for the stock acquired is the exercise price plus the amount recognized
as income. The Company will be entitled to a deduction equal to the amount of
the ordinary income realized by the optionee in the taxable year which includes
the end of the optionee's taxable year in which he realizes the ordinary income.
When shares acquired pursuant to the exercise of the option are disposed of, the
holder will realize additional capital gain or loss equal to the difference
between the sales proceeds and his or her tax basis in the stock.
If a participant to whom an option is granted exercises such option by
payment of the exercise price in whole or in part with previously owned shares,
the optionee will not realize income with respect to the number of shares
received on exercise which equals the number of shares delivered by the
optionee. The optionee's basis for the delivered shares will carry over to the
option shares received. With regard to the number of nonqualified option shares
received which exceed the number of shares delivered, the optionee will realize
ordinary income at the time of exercise; the optionee's tax basis in these
additional option shares will equal the amount of ordinary income realized plus
the amount of any cash paid.
Recipients of ISOs will not be required to recognize income at the time of
the grant of the options or at the time of exercise of the options as long as
the stock received on exercise is held for at least two years from the date of
the grant of the ISOs or one year from the date of exercise (although the
difference between the fair market value of the stock and the exercise price
paid at the time of exercise must be taken into account for alternative minimum
tax purposes). If the stock received upon exercise of an ISO is disposed of
prior to the expiration of either of such time periods, the optionee will be
required to recognize as ordinary income the amount by which the fair market
value of the stock received at the time of exercise exceeds the exercise price
of the ISOs.
Under the 1997 Plan, stock appreciation rights ("SARs") can be granted at
the time an option is granted with respect to all or a portion of the shares
subject to the related option. SARs can only be exercised to the extent the
related option is exercisable and cannot be exercised for the six month period
following the date of grant, except in the event of death or disability of the
optionee. The exercise of any portion of either the related option or the
tandem SARs will cause a corresponding reduction in the number of shares
remaining subject to the option or the tandem SARs, thus maintaining a balance
between outstanding options and SARs. SARs permit the holder to receive an
amount (in cash, shares, or a combination of cash and shares, as determined by
the Board of Directors at the time of grant) equal to the number of SARs
exercised multiplied by the excess of the fair market value of the shares on the
exercise date over the exercise price of the related options.
Under the terms of the 1997 Plan, the Board of Directors or the Committee
may also grant stock awards which may, at the discretion of such Board of
Directors or Committee, be subject to forfeiture under certain conditions.
Recipients of stock awards will realize ordinary income at the time of the lapse
of any forfeiture provisions equal to the fair market value of the shares less
any amount paid in connection with the issuance (the Board of Directors or the
Committee can require the payment of par value at the time of the grant). The
Company will realize a corresponding compensation deduction. The holder will
have a basis in the shares acquired equal to any amount paid on exercise plus
the amount of any ordinary income recognized by the holder. On sale of the
shares, the holder will have a capital gain or loss equal to the sale proceeds
minus his or her basis in the shares.
ISSUANCE OF OPTIONS PURSUANT TO THE 1997 PLAN
At the time of adoption of the 1997 Plan, the Board of Directors also
approved the grant of options to purchase an aggregate of 197,500 shares of
Common Stock at an exercise price of $6.625 per share under the 1997 Plan. Each
option annually vests, commencing on the first anniversary of the date of grant,
to become exercisable to purchase 1/3 of the Common Stock covered by such
option. If the 1997 Plan is approved by the Stockholders at the Annual Meeting,
an aggregate of 75,000 of the 197,500 options approved by the Board of Directors
will qualify as ISOs and be subject to the treatment described above.
VOTE REQUIRED
Adoption of the 1997 Plan requires the approval of a majority of the shares
present, in person or represented by Proxy, and entitled to vote at the Annual
Meeting. Abstentions and broker non-votes will have the same legal effect as a
vote against the approval of the 1997 Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE 1997
PLAN. IT IS INTENDED THAT, IN THE ABSENCE OF CONTRARY SPECIFICATIONS, VOTES
WILL BE CAST PURSUANT TO THE ENCLOSED PROXIES FOR THE APPROVAL OF THE 1997 PLAN.
INDEPENDENT PUBLIC ACCOUNTANTS
The selection of the Company's auditors will not be submitted to the
Stockholders for their approval in the absence of a requirement to do so. It is
anticipated that representatives of Coopers & Lybrand LLP will be present at the
Annual Meeting and will be provided the opportunity to make a statement, if they
desire to do so, and be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
No proposals have been submitted by Stockholders of the Company for
consideration at the Annual Meeting. It is anticipated that the next Annual
Meeting of Stockholders will be held during April 1999. Stockholders may
present proposals for inclusion in the Proxy Statement to be mailed in
connection with the 1999 Annual Meeting of Stockholders of the Company, provided
such proposals are received by the Company no later than November 28, 1998, and
are otherwise in compliance with applicable laws and regulations and the
governing provisions of the Articles of Incorporation and Bylaws of the Company.
OTHER MATTERS
Management does not know of any business other than that referred to herein
which may be considered at the Annual Meeting. If any other matters should
properly come before the Annual Meeting, it is the intention of the persons
named in the accompanying form of Proxy to vote the proxies held by them in
accordance with their best judgment.
In order to assure the presence of the necessary quorum and to vote on the
matters to come before the Annual Meeting, please indicate your choices on the
enclosed Proxy and date, sign, and return it promptly in the envelope provided.
The signing of a Proxy by no means prevents your attending the meeting.
By Order of the Board of Directors
FX ENERGY, INC.
/s/ Andrew W. Pierce, Secretary
Salt Lake City, Utah
March 30, 1998
<PAGE>
PROXY
FX ENERGY, INC.
ANNUAL MEETING OF THE SHAREHOLDERS OF FX ENERGY, INC. ON APRIL 27, 1998
(THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
The undersigned hereby appoints David N. Pierce and Scott J. Duncan
proxies, with full power of substitution, to vote the shares of common stock of
FX ENERGY, INC. (the "Company"), which the undersigned is entitled to vote at
the Annual Meeting of Shareholders of the Company ("Annual Meeting") to be held
at Little America Hotel, 500 South Main, Salt Lake City, Utah, on April 27,
1998, at 10:00 a.m., local time, or any adjournment(s) thereof, such proxies
being directed to vote as specified below. IF NO INSTRUCTIONS ARE SPECIFIED,
SUCH PROXY WILL BE VOTED "FOR" EACH PROPOSAL.
To vote in accordance with the Board of Directors' recommendations, sign
below. The "FOR" boxes may, but need not, be checked. To vote against any of
the recommendations, check the appropriate box marked "AGAINST" below. To
withhold authority for the proxies to vote for any of the recommendations, check
the appropriate box(es) marked "WITHHOLD AUTHORITY" below.
The Board of Directors recommends votes "FOR" the following proposals,
each of which has been proposed by the Board of Directors:
1. To elect each of the following nominees to serve as a director for a
term expiring at the 2001 Annual Meeting of the Shareholders of the
Company and until a successor is elected and qualified. To withhold
your vote for any individual nominee, strike a line through such
nominee's name.
Thomas B. Lovejoy Scott J. Duncan
2. To approve the FX Energy, Inc. 1997 Stock Option and Award Plan.
FOR [ ] AGAINST [ ] WITHHOLD AUTHORITY [ ]
3. To transact such other business as may properly come before the
Annual Meeting.
FOR [ ] AGAINST [ ] WITHHOLD AUTHORITY [ ]
PLEASE PRINT YOUR NAME AND SIGN EXACTLY AS YOUR NAME APPEARS IN THE RECORDS OF
THE COMPANY. WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. IF YOUR
SHARES ARE HELD AT A BROKERAGE HOUSE, PLEASE INDICATE IN THE SPACE PROVIDED THE
NAME OF THE BROKERAGE HOUSE AND THE NUMBER OF SHARES HELD.
Dated: Number of Shares Held of Record
------------------------------ -----
- ------------------------------------ ----------------------------------
Number of Shares Held at a Name of Brokerage or Clearing House
Brokerage or Clearing House
- ------------------------------------ ------------------------------------
- ---
Signature Signature (if held jointly)
- ------------------------------------ ------------------------------------
Print Name Print Name
PLEASE MARK, SIGN, DATE, AND
RETURN THIS PROXY TO: FX ENERGY, INC.
3006 SOUTH HIGHLAND DRIVE, SUITE 206
SALT LAKE CITY, UTAH 84106
