FXEN » Topics » Annual Cash Incentives

This excerpt taken from the FXEN DEF 14A filed Apr 23, 2009.

Annual Cash Incentives

 

As part of each Named Executive Officer’s performance-based compensation, the Company maintains the FX Energy Cash Bonus Plan (the “Plan”). The purpose of the Plan is to take a significant portion of the Named Executive Officer’s total compensation and vary the amount actually paid based on the performance of the Company and the individual officer with respect to goals that are set to enhance shareholder value over the long term.

 

The Plan calls for the Compensation Committee to review certain corporate performance criteria as it relates to its peers and leaves the Compensation Committee the discretion to consider the achievement of other specific corporate objectives, individual contributions, general economic conditions, and other factors when making incentive awards for each year. The Compensation Committee uses this information to determine an annual incentive award. The Plan provides for an interim award at year-end, followed by a final payment later in the year, which may be zero, once all peer group prior year performance data becomes available.

 

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            The Compensation Committee sets target awards as a percentage of base salary at about the estimated average of peer group award percentages. The Company’s success in meeting its corporate objectives, reviewed at year-end, and each particular Named Executive Officer’s role in meeting those objectives are used to determine whether the actual award should be above, below, or at the anticipated peer group average.

 

For 2008, the Compensation Committee reviewed corporate performance relative to its peer group in the areas of oil and gas reserve growth per share, revenue growth per share, share price growth, and finding costs. The Compensation Committee believes that success in these four areas enhances shareholder value in both the short and long terms. Success in the areas of reserve additions and revenue growth, in particular, reflect the Company’s positive achievements in implementing its business model of translating early-stage exploration efforts into tangible assets and cash flow. Lower than industry-average finding costs demonstrate the Company’s ability to find and drill exploration targets that contribute meaningfully to increases in reserve volumes and values. Relative changes in share price reflect the market’s recognition of the Company’s progress in implementing its business model.

 

At year-end 2008, the Company made an estimate of its relative success for each of the four measures. For the stock price measure, the Company used actual data. For revenue growth, reserve growth and finding costs, the Company’s interim calculation was made with reference to the peer group’s three-year (2005-2007) trailing averages.

 

This excerpt taken from the FXEN DEF 14A filed Apr 25, 2008.

Annual Cash Incentives

 

As part of each Named Executive Officer’s performance-based compensation, the Company maintains the FX Energy Cash Bonus Plan (the “Plan”). The purpose of the Plan is to take a significant portion of the Named Executive Officer’s total compensation and vary the amount actually paid based on the performance of the Company and the individual officer with respect to goals that are set to enhance shareholder value over the long term.

 

For 2007, the Committee reviewed corporate accomplishments in the areas of oil and gas reserve additions, revenue growth, implementation of the Company’s capital plan, and the acquisition of new land and other opportunities. The Committee believes that success in these four areas enhances shareholder value in both the short and long terms. Success in the areas of reserve additions and revenue growth, in particular, reflect the Company’s positive achievements in implementing its business model of translating early stage exploration efforts into tangible assets and cash flow. Positive results in the areas of implementing the Company’s capital plan and acquiring new land indicate the successful expansion of the ‘exploration-to-production’ business model, by developing new projects and completing the necessary science to convert the projects from ideas to assets.

 

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            Target awards were determined at the beginning of the year for each Named Executive Officer. The Committee set the target awards as a percentage of base salary, at about the estimated average of peer group award percentages. The Company’s success in meeting its corporate objectives, reviewed at year-end, and each particular Named Executive Officer’s role in meeting those objectives were used to determine whether the actual award would be above, below or at the anticipated peer group average.

 

This excerpt taken from the FXEN DEF 14A filed Apr 27, 2007.

Annual Cash Incentives

 

As part of each Executive Officer’s performance-based compensation, we maintain the FX Energy Cash Bonus Plan (the “Plan”). The purpose of the Plan is to reward employees for extraordinary performance in achieving individual and corporate accomplishments that result in increased shareholder value. Each year, specific written individual performance objectives are established annually and approved by the Committee for individual performance. For each such objective, actual performance is reviewed by the Committee (usually at the final Compensation Committee meeting of each year) in order to determine the individual component of each year’s potential bonus payment. The Committee also reviews corporate accomplishments, including success in the areas of reserve additions, revenue growth, implementation of the Company’s annual capital plan, and the acquisition of new land and other opportunities. Target awards are determined at the beginning of the year for each Executive Officer. Awards under the Plan are made as a percentage of salary within a range that corresponds to the level of performance determined to have been achieved. The Committee has the ability to apply discretion to increase or decrease the actual payout resulting from the Plan. The Committee also recognizes that events may arise that preclude the Company from making a bonus award, notwithstanding adequate performance by both the Company and its employees.

 

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