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0000351817-09-000006.txt : 20090401
0000351817-09-000006.hdr.sgml : 20090401
20090401164322
ACCESSION NUMBER: 0000351817-09-000006
CONFORMED SUBMISSION TYPE: DEF 14A
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 20090402
FILED AS OF DATE: 20090401
DATE AS OF CHANGE: 20090401
EFFECTIVENESS DATE: 20090401
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SWIFT ENERGY CO
CENTRAL INDEX KEY: 0000351817
STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311]
IRS NUMBER: 203940661
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: DEF 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-08754
FILM NUMBER: 09723957
BUSINESS ADDRESS:
STREET 1: 16825 NORTHCHASE DR STE 400
CITY: HOUSTON
STATE: TX
ZIP: 77060
BUSINESS PHONE: 2818742700
MAIL ADDRESS:
STREET 1: 16825 NORTHCHASE DRIVE
STREET 2: SUITE 400
CITY: HOUSTON
STATE: TX
ZIP: 77060
DEF 14A
1
sfy_2009proxy.htm
PROXY STATEMENT
sfy_2009proxy.htm
UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. )
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Filed
by the Registrant þ
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Filed
by a Party Other Than the Registrant o
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Check
the Appropriate Box:
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o
Preliminary Proxy Statement
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o Confidential, for Use of the
Commission Only (as Permitted by Rule
14a-6(e)(2))
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þ
Definitive Proxy Statement
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o Definitive
Additional Materials
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o Soliciting
Material Pursuant to §240.14a-12
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Swift
Energy Company
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of filing fee (Check the appropriate box):
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þNo fee
required
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o Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11
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(1)
Title of each class of securities to which transaction
applies:
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(2)
Aggregate number of securities to which transaction
applies:
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(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):
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(4)
Proposed maximum aggregate value of transaction:
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(5)
Total fee paid:
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o
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Fee
paid previously with preliminary materials.
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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 mother,
or the Form or Schedule and the date of its
filing.
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(1)
Amount Previously Paid:
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(2)
Form, Schedule or Registration Statement No.:
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(3)
Filing Party:
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(4)
Date Filed:
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NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
To
be held May 12, 2009
The
annual meeting of shareholders of SWIFT ENERGY COMPANY (the “Company” or “Swift
Energy”) will be held at the Hilton Houston North, 12400 Greenspoint Drive,
Houston, Texas, on Tuesday, May 12, 2009, at 4:00 p.m., Houston time, for the
following purposes:
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1.
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To
elect three Class I directors identified in this proxy statement to serve
until the 2012 annual meeting of shareholders, or until their successors
are duly qualified and elected;
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2.
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To
amend the First Amended and Restated Swift Energy Company 2005 Stock
Compensation Plan (the “2005
Plan”);
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3.
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To
ratify the selection of Ernst & Young LLP as Swift Energy’s
independent auditor for the fiscal year ending December 31, 2009;
and
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4.
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To
conduct such other business as may properly be presented at the annual
meeting, or at any and all adjournments or postponements
thereof.
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A record
of shareholders has been taken as of the close of business on March 20, 2009,
and only shareholders of record on that date will be entitled to vote at the
annual meeting, or any adjournment or postponement thereof. A complete list of
shareholders will be available commencing May 1, 2009, and may be inspected
during normal business hours prior to the annual meeting at the offices of the
Company, 16825 Northchase Drive, Suite 400, Houston, Texas 77060. This list
will also be available at the annual meeting.
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By
Order of the Board of Directors,
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April
2, 2009
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Bruce
H. Vincent
President
and Secretary
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Your Vote Is
Important!
Whether
or not you plan to attend the annual meeting of shareholders, we urge you to
vote and submit your proxy as promptly as possible to ensure the presence of a
quorum for the annual meeting. For additional instructions on voting your
shares, please refer to the proxy materials.
TABLE
OF CONTENTS
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Page
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PROXY
STATEMENT
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1
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Solicitation
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1
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Availability
of Proxy
Materials
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1
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Voting
Information
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1
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PROPOSAL
1 — ELECTION OF
DIRECTORS
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4
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Class
I Director
Nominees
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4
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BOARD
OF
DIRECTORS
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5
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Class
I
Directors
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5
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Class
II
Directors
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5
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Class
III
Directors
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5
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Affirmative
Determinations Regarding Independent Directors and Financial
Experts
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7
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Meetings
of Independent
Directors
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7
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Meetings
and Committees of the
Board
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7
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Compensation
of
Directors
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9
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Payments
to Former
Directors
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10
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Board
Succession
Plan
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10
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Nominations
for
Directors
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10
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Compensation
Committee Interlocks and Insider
Participation
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11
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Corporate
Governance
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11
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Related
Party
Transactions
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12
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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13
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Security
Ownership of Certain Beneficial
Owners
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13
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Security
Ownership of
Management
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14
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EXECUTIVE
OFFICERS
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15
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EXECUTIVE
COMPENSATION
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16
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Compensation
Discussion and
Analysis
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16
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Compensation
Committee
Report
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27
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Summary
Compensation
Table
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28
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Grants
of Plan-Based
Awards
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30
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Outstanding
Equity Awards at Fiscal
Year-End
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32
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Option
Exercises and Stock
Vested
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35
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Potential
Payments Upon Termination or Change in
Control
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36
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Conditions
and
Covenants
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38
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PROPOSAL
2 — TO AMEND THE FIRST AMENDED AND RESTATED SWIFT ENERGY
COMPANY
2005 STOCK COMPENSATION
PLAN
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39
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Summary
of the 2005
Plan
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39
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Federal
Income Tax
Considerations
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43
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Equity
Compensation Plan
Information
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46
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Board
Recommendation
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46
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PROPOSAL
3 — RATIFICATION OF SELECTION OF ERNST & YOUNG LLP AS
SWIFT
ENERGY
COMPANY’S INDEPENDENT AUDITOR FOR THE FISCAL YEAR ENDING
DECEMBER
31,
2009
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47
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AUDIT
COMMITTEE
DISCLOSURE
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48
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Preapproval
Policies and
Procedures
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48
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Services
Fees Paid to Independent Public Accounting
Firm
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48
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Report
of the Audit
Committee
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49
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SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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50
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SHAREHOLDER
PROPOSALS
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50
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COMMUNICATIONS
WITH THE BOARD OF
DIRECTORS
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50
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FORWARD
LOOKING
STATEMENTS
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51
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ANNUAL
REPORT ON FORM
10-K
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51
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GENERAL
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51
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SWIFT
ENERGY COMPANY
16825
Northchase Drive, Suite 400
Houston,
Texas 77060
(281)
874-2700
PROXY
STATEMENT
for
the
2009
ANNUAL MEETING OF SHAREHOLDERS
Solicitation
These
proxy materials are being made available to Swift Energy Company’s (“Swift
Energy” or the “Company”) shareholders beginning on or about April 2,
2009. The Board of
Directors (the “Board”) of Swift Energy is soliciting your proxy to vote your
shares of Swift Energy common stock at the annual meeting of shareholders (the
“Annual Meeting”) to be held at the Hilton Houston North, 12400 Greenspoint
Drive, Houston, Texas, on Tuesday, May 12, 2009, at 4:00 p.m., Houston
time. The Board is soliciting proxies to give all shareholders
the opportunity to vote on the matters that will be presented at the Annual
Meeting. This proxy statement provides you with the information on
these matters to assist you in voting your shares.
Availability
of Proxy Materials
We are
using the e-proxy rules of the U.S. Securities and Exchange Commission
(“SEC”). Accordingly, we are making this proxy statement and related
proxy materials available on the Internet with the SEC’s rules that allow
companies to furnish proxy materials to stockholders through a “notice and
access” model using the Internet. The “Notice and Access Rule”
removes the requirement for public companies to automatically send shareholders
a full hard-copy set of proxy materials and allows them instead to deliver to
their shareholders a Notice of Internet Availability of Proxy Materials
(“Notice”) and to provide online access to the documents. We mailed a
Notice on or about April 2, 2009, to all shareholders of record on March 20,
2009, who are the shareholders entitled to vote at the Annual
Meeting.
Voting
Information
What
is a proxy?
A proxy
is your legal designation of another person or persons (the “proxy” or
“proxies”) to vote on your behalf. By voting your shares as
instructed in the materials you received, you are giving the designated proxies
appointed by the Board the authority to vote your shares in the manner you
indicate on your proxy card.
Who
are the proxies appointed by the Board of Directors for the Annual
Meeting?
The
proxies for the Company appointed by the Board at a meeting held on
February 10, 2009, are the following representatives of Swift
Energy:
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Terry
E. Swift
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Chairman
of the Board and Chief Executive Officer
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Bruce
H. Vincent
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President,
Secretary and Director
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Alton
D. Heckaman, Jr.
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Executive
Vice President and Chief Financial
Officer
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Who
is qualified to vote?
You are
qualified to receive notice of and to vote at the Annual Meeting if you own
shares of Swift Energy common stock at the close of business on our record date
of Friday, March 20, 2009.
How
many shares of Swift Energy common stock are entitled to vote at the Annual
Meeting?
As of
March 20, 2009, there were 31,160,232 shares of Swift Energy common stock
issued, outstanding and entitled to vote at the Annual Meeting. Each
share of Swift Energy common stock is entitled to one vote on each matter
presented.
What
is the difference between a holding shares as a shareholder of record and as a
beneficial owner?
Most of
our shareholders hold their shares through a broker, trustee or other nominee
rather than having the shares registered directly in their own
name. There are some distinctions between shares held of record and
those owned beneficially that are summarized below.
Shareholder of Record – If
your shares are registered directly in your name with our transfer agent, you
are the shareholder of record of the shares. As the shareholder of
record, you have the right to grant a proxy to vote your shares to the Company
or another person, or to vote your shares in person at the Annual
Meeting.
Beneficial Owner – If your
shares are held through a broker, trustee or other nominee, it is likely that
they are registered in the name of the nominee and you are the beneficial owner
of shares held in “street name.” As the beneficial owner of shares
held for your account, you have the right to direct the registered holder to
vote your shares as you instruct, and you also are invited to attend the Annual
Meeting. Your broker, trustee or other nominee has provided a voting
instruction card for you to use in directing how your shares are to be
voted. However, since a beneficial owner is not the shareholder of
record, you may not vote your shares in person at the meeting unless you obtain
a legal proxy from the registered holder of the shares giving you the right to
do so.
If
I am a shareholder of record, how do I vote?
You may
vote using any of the following methods:
Via the Internet – You may
vote by proxy via the Internet by following the instructions provided in either
the Notice or proxy card.
By Telephone – You may vote
by proxy by calling the number found on either the Notice or proxy
card.
By Mail – If you request
printed copies of the proxy materials by mail, you may vote by proxy by
completing the proxy card and returning it in the envelope
provided.
In Person – If you are a
shareholder of record, you may vote in person at the Annual
Meeting. We will give you a ballot during the meeting.
If
I am a beneficial owner of shares held in street name, how do I
vote?
You may
vote using any of the following methods:
Via the Internet – You may
vote by proxy via the Internet by following the instructions provided in either
the Notice or voting instruction form provided by your broker, trustee or other
nominee.
By Telephone – You may vote
by proxy by calling the number found on either the Notice or voting instruction
form provided by your broker, trustee or other nominee.
By Mail – If you request
printed copies of the proxy materials by mail, you may vote by proxy by
completing the voting instruction form provided by your broker, trustee or other
nominee and returning it in the envelope provided.
In Person – If you are a
beneficial owner of shares held in street name and you wish to vote in person at
the Annual Meeting, you must obtain a legal proxy from the organization that
holds your shares.
Can
I receive more than one Notice?
Yes. If
you received multiple Notices, you may hold your shares in different ways (e.g., joint tenancy, trusts
or custodial accounts) or in multiple accounts. You should vote on each
Notice you receive.
What
are the Board’s recommendations on how I should vote my shares?
The Board
recommends that you vote your shares as follows:
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Proposal
1 —
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FOR the election of all
three nominees for Class I directors identified in this proxy statement,
with terms to expire at the 2012 Annual Meeting of
Shareholders;
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Proposal
2 —
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FOR the amendment of the
First Amended and Restated Swift Energy Company 2005 Stock Compensation
Plan; and
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Proposal
3 —
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FOR the ratification of
the selection of Ernst & Young LLP as Swift Energy’s independent
auditor for the fiscal year ending December 31,
2009.
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What
are my choices when voting?
Proposal
1 — You may cast your vote in favor of electing the nominees as directors or
withhold your vote on one or more nominees.
Proposals
2 and 3 — You may cast your vote “for” or “against” or you may abstain with
respect to each proposal.
How
will my shares be voted if I do not specify how they should be
voted?
If you
vote by proxy, the individuals named on the proxy card (your “proxies”) will
vote your shares in the manner you indicate. If you sign and return
the proxy card without indicating your instructions, your shares will be voted
as follows:
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Proposal
1 —
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FOR the election of all
three nominees for Class I directors identified in this proxy statement,
with terms to expire at the 2012 Annual Meeting of
Shareholders;
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Proposal
2 —
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FOR the amendment of the
First Amended and Restated Swift Energy Company 2005 Stock Compensation
Plan; and
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Proposal
3 —
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FOR the ratification of
the selection of Ernst & Young LLP as Swift Energy’s independent
auditor for the fiscal year ending December 31,
2009.
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How
are votes withheld, abstentions and broker non-votes treated?
Votes
withheld and abstentions are deemed as “present” at the Annual Meeting and are
counted for quorum purposes. For Proposal 1, the election of
directors, votes withheld will have the same effect as not voting, and for other
proposals, abstentions will have the same effect as a vote against the
matter. Broker nonvotes, if any, while counted for general quorum
purposes, are not deemed to be “present” with respect to any matter for which a
broker does not have authority to vote and also have the same effect as not
voting.
Can
I change my vote after I have voted?
You may
revoke your proxy and change your vote at any time before the final vote at the
Annual Meeting. You may vote again on a later date via the Internet
or by telephone (only your latest Internet of telephone proxy submitted prior to
the Annual Meeting will be counted), by signing and returning a new proxy card
or voting instruction form with a later date, or by attending the Annual Meeting
and voting by ballot at the Annual Meeting.
What
vote is required to approve each proposal?
For
Proposal 1, the election of directors, a plurality of the votes cast by the
holders of shares entitled to vote in the election of directors is required to
elect each nominee for director. Each other proposal requires the
affirmative vote of the holders of a majority of the shares entitled to vote on,
and that voted for or against or expressly abstained with respect to, each
proposal.
Who
pays the cost of this proxy solicitation?
The cost
of preparing, printing and mailing the proxy materials and soliciting proxies is
paid by Swift Energy. The Company will also request brokerage firms, banks,
nominees, custodians and fiduciaries to forward proxy materials to the
beneficial owners of shares of Swift Energy common stock as of the record date
and will reimburse these entities for the costs of forwarding the proxy
materials in accordance with customary practice. Your cooperation in promptly
voting your shares will help to avoid additional expense.
Is
this proxy statement the only way the proxies are being solicited?
In
addition to this solicitation by the Board, employees of Swift Energy may
solicit proxies in person or by mail, delivery service, telephone or facsimile,
without additional compensation. The Company has also retained
Georgeson Shareholder Communications Inc. to act as a proxy solicitor in
conjunction with the Annual Meeting. The Company has agreed to pay
this firm $9,000, plus reasonable out of pocket expenses, for standard proxy
solicitation services.
PROPOSAL
1 — ELECTION OF DIRECTORS
Swift
Energy has three classes of directors. Every year, each director of one class is
elected to serve a three-year term or until his or her successor has been duly
elected and qualified. Messrs. Clyde W. Smith, Jr., Terry E.
Swift and Charles J. Swindells, incumbent Class I directors, have been nominated
by the Board to stand for reelection as Class I directors. Directors are elected
by the affirmative vote of a plurality of the shares cast by the
holders of shares entitled to vote in the election of directors at a meeting of
the shareholders at which a quorum is present.
The
current composition of the Board is:
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Class
I Directors:
(standing
for reelection at this Annual Meeting
for
term to expire at 2012 annual meeting)
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Clyde
W. Smith, Jr.
Terry
E. Swift
Charles
J. Swindells
|
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Class
II Directors:
(term
to expire at 2010 annual meeting)
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Raymond
E. Galvin
Greg
Matiuk
Henry
C. Montgomery
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Class
III Directors:
(term
to expire at 2011 annual meeting)
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Deanna
L. Cannon
Douglas
J. Lanier
Bruce
H. Vincent
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Class
I Director Nominees
Clyde W. Smith, Jr., 60, has
served as a director of Swift Energy since 1984. Since January 2002,
Mr. Smith has served as President of Ascentron, Inc., an electronics
manufacturing services company. From May 1998 until January 2002,
Mr. Smith served as General Manager of D.W. Manufacturing, Inc. d/b/a
Millennium Technology Services, an electronics manufacturer which was acquired
by Ascentron, Inc. in January 2002. Mr. Smith is a Certified
Public Accountant and holds the degree of Bachelor of Business Administration in
Management.
Terry E. Swift, 53, has
served as the Chief Executive Officer of Swift Energy since May 2001, as
Chairman of the Board since June 1, 2006, and as a director of the Company since
May 2000. He was President of the Company from November 1997 to
November 2004, Chief Operating Officer from 1991 to February 2000, and Executive
Vice President from 1991 to 1997. Mr. Swift served in other
positions of progressive responsibility since joining the Company in
1981. He holds the degrees of Bachelor of Science in Chemical
Engineering and Master of Business Administration. He is the son of
the late A. Earl Swift, founder of Swift Energy, and the nephew of
Virgil N. Swift, Director Emeritus.
Charles J. Swindells, 66, has
served as a director of Swift Energy since February 2006. He is also
a director of The Greenbrier Companies, Inc., an international supplier of
transportation equipment and services to the railroad industry. From
2001 to 2005, he served as United States Ambassador to New Zealand and
Samoa. More recently, he served as Vice Chairman, Western Region of
U.S. Trust, Bank of America Private Wealth Management until his retirement in
January 2009. Prior to becoming Ambassador, he was Vice Chairman of
U.S. Trust Company, N.A. from 1993 until 2001. Ambassador Swindells
also served as Chairman of the Board of a non-profit board of trustees for Lewis
& Clark College in Portland, Oregon from 1998 until 2001. He
holds the degree of Bachelor of Science in Political Science.
The Board
of Directors unanimously recommends that shareholders vote “FOR” all of
the director nominees to serve as directors in the Class for which they
are nominated.
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The
persons named as proxies in these proxy materials, unless authority is withheld
by a shareholder on a proxy card, intend to vote “FOR” the election of all of
the nominees named in this proxy statement standing for reelection as Class I
directors. If any nominee should become unavailable or unable to serve as a
director, the persons named as proxies may vote for a substitute selected by
them, or the size of the Board may be reduced accordingly; however, the Board is
not aware of any circumstances likely to render any nominee
unavailable.
BOARD
OF DIRECTORS
Class
I Directors
The
biographies for the Class I directors are set forth above under “Proposal
1—Election of Directors.”
Class
II Directors
Raymond E. Galvin, 77, has
served as Vice Chairman of the Board since June 1, 2006, and as a director of
Swift Energy since August 2003. From 1992 until he retired in
February 1997, Mr. Galvin was President of Chevron USA Production
Company. He also served as a director of Chevron Corporation from
1995 to 1997 and as a Vice President of Chevron Corporation from 1988 to
1997. Mr. Galvin has also served as chairman of the Natural Gas
Council and the Natural Gas Supply Association. Mr. Galvin holds
the degree of Bachelor of Science in Petroleum Engineering.
Greg Matiuk, 63, has served
as a director of Swift Energy since September of 2003. After 36 years
of service, Mr. Matiuk retired from ChevronTexaco Corporation in May 2003,
having last served as Executive Vice President, Administrative and Corporate
Services, a position he had held since 2001. From 1998 until 2001, he
was Vice President, Human Resources and Quality and, from 1996 to 1998, he
served as Vice President of Strategic Planning and
Quality. Mr. Matiuk began his career at Chevron Corporation in
1967 as a production and reservoir engineer. He holds the degree of
Bachelor of Science in Geological Engineering and an Executive Master of
Business Administration.
Henry C. Montgomery, 73, has
served as a director of Swift Energy since 1987. After 22 years of
service, Mr. Montgomery resigned during October 2008 from the Board of
Directors of Montgomery Professional Services Corporation, a financial
management and accounting outsourcing firm that he founded. Since
2006, he has been Chairman and Chief Executive Officer of Montgomery Pacific
Outsourcing LLC, a financial management and accounting outsourcing firm with
subsidiary operations in the Philippines. Mr. Montgomery served
as Chairman of the Board of Catalyst Semiconductor, Inc., which designed,
developed and marketed programmable integrated circuit products, until his
resignation when Catalyst merged into On Semiconductor on October 9,
2008. Mr. Montgomery currently serves as Chairman of the Board of
ASAT Holdings, Ltd., which packages and tests semiconductor
devices. Mr. Montgomery is a member of the board of directors of
the Honolulu Symphony Orchestra Society and sits on the advisory board for the
Miami University Center for Corporate Governance and Ethics (Oxford,
Ohio). Mr. Montgomery holds the degree of Bachelor of Arts in
Economics.
Class
III Directors
Deanna L. Cannon, 48, has
served as a director of Swift Energy since May 2004. Ms. Cannon
is a shareholder and director of Corporate Finance Associates of Northern
Michigan, an investment banking firm, and a director of Corporate Finance
Associates Worldwide. She holds her securities license under
Corporate Finance Securities. She is also President of Cannon & Company
CPA’s PLC, a privately held consulting firm. She served Miller
Exploration Company as Chief Financial Officer and Secretary from November 2001
to December 2003, as Vice President—Finance and Secretary from June 1999 to
November 2001 and as a director of one of its wholly owned subsidiaries from May
2001 to December 2003. Miller Exploration Company was a publicly held
independent oil and gas exploration and production company that was acquired by
Edge Petroleum Corporation in December 2003. Previously, Ms. Cannon
was employed in public accounting for 16 years. Ms. Cannon holds a
Bachelor of Science degree in Accounting and is a Certified Public
Accountant.
Douglas J. Lanier, 59, has
served as a director of Swift Energy since May 2005. Mr. Lanier
retired in 2004 as Vice President of ChevronTexaco Exploration & Production
Company, Gulf of Mexico Business Unit. He began his career with Gulf
Oil Company in 1972 and served in various positions until 1989, when he was
appointed Assistant General Manager–Production for Chevron USA Central Region in
Houston. He served in subsequent appointments until he joined Chevron
Petroleum Technology Company as President in 1997. In October 2000,
he was appointed Vice President of the Gulf of Mexico Shelf Strategic Business
Unit. Mr. Lanier holds the degree of Bachelor of Science in
Petroleum Engineering. He is a member of the Society of Petroleum
Engineers and is a registered Professional
Engineer
in Texas (inactive). Mr. Lanier was inducted into the University
of Tulsa College of Engineering Hall of Fame in 2003.
Bruce H. Vincent, 61, was
elected as a director of Swift Energy in May 2005 and was appointed President of
the Company in November 2004. He also was appointed Secretary in
February 2008 and previously served as Secretary from August 2000 until May
2005. Mr. Vincent previously served as President of Swift Energy
International, Inc. from February 2004 to May 2005, as Executive Vice
President—Corporate Development from August 2000 to November 2004, and as Senior
Vice President—Funds Management since joining the Company in
1990. Mr. Vincent holds the degrees of Bachelor of Arts and
Master of Business Administration.
Affirmative
Determinations Regarding Independent Directors and Financial
Experts
The Board
has determined that each of the following directors is an “independent director”
as such term is defined in Section 303A of the Listed Company Manual of the
New York Stock Exchange, Inc. (“NYSE”): Deanna L. Cannon,
Raymond E. Galvin, Douglas J. Lanier, Greg Matiuk, Henry C. Montgomery, Clyde W.
Smith, Jr., and Charles J. Swindells. These independent directors represent
a majority of the Company’s Board of Directors. Messrs. Swift and
Vincent are not independent directors because they serve as officers of the
Company. Mr. Swift serves as Chief Executive Officer, and
Mr. Vincent serves as President and Secretary.
The Board
has also determined that each member of the Audit, Compensation and Corporate
Governance Committees of the Board meets the independence requirements
applicable to those committees prescribed by the NYSE and the SEC. Further, the
Board has determined that Henry C. Montgomery, Chairman of the Audit
Committee, and Clyde W. Smith, Jr. and Deanna L. Cannon, members of the Audit
Committee, are each an “audit committee financial expert,” as such term is
defined in Item 407(d) of Regulation S-K promulgated by the
SEC.
The Board
reviewed the applicable standards for Board member and Board committee
independence and the criteria applied to determine “audit committee financial
expert” status, as well as the answers to annual questionnaires completed by
each of the independent directors. On the basis of this review, the Board made
its independence and “audit committee financial expert”
determinations.
Meetings
of Independent Directors
At each
executive session of the independent directors, the Lead Director presides.
Mr. Galvin was elected as Lead Director by the independent directors in May
2006. For purposes of Rule 303A.03 of the NYSE Listed Company Manual,
the term “independent directors” is equivalent to “non-management
directors.”
Meetings
and Committees of the Board
The Board
has established the following standing committees: Audit,
Compensation, Corporate Governance and Executive Committees. Descriptions of the
membership and functions of these committees are set forth below. The
following chart identifies the committees upon which each member of the Board
serves, the chairmen of the committees, and the number of meetings and actions
by consent by the Board and the committees during 2008:
|
|
Board
of Directors
|
|
Audit
|
|
Compensation
|
|
Corporate
Governance
|
|
Executive
|
|
|
|
|
|
|
|
|
|
|
|
Number
of meetings held in 2008
|
|
8
|
|
7
|
|
4
|
|
4
|
|
4
|
Number
of actions by consent in 2008
|
|
2
|
|
0
|
|
0
|
|
0
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
Terry
E. Swift
|
|
C
|
|
|
|
|
|
|
|
C
|
Deanna
L. Cannon
|
|
M
|
|
M
|
|
|
|
M
|
|
|
Raymond
E. Galvin
|
|
VC
|
|
|
|
|
|
M
|
|
M
|
Douglas
J. Lanier
|
|
M
|
|
|
|
M
|
|
|
|
M
|
Greg
Matiuk
|
|
M
|
|
|
|
M
|
|
C
|
|
|
Henry
C. Montgomery
|
|
M
|
|
C
|
|
M
|
|
|
|
|
Clyde
W. Smith, Jr.
|
|
M
|
|
M
|
|
C
|
|
|
|
|
Charles
J. Swindells
|
|
M
|
|
|
|
M
|
|
M
|
|
|
Bruce
H. Vincent
|
|
M
|
|
|
|
|
|
|
|
|
|
|
|
C
|
= Chairman
|
VC
|
= Vice
Chairman
|
M
|
= Member
|
During
2008, each director attended at least 75% of the aggregate of (i) the total
number of meetings of the Board and (ii) the total number of meetings of all
committees of the Board on which he or she served.
Audit Committee.
The Audit Committee assists the Board in fulfilling its responsibilities
with respect to oversight in monitoring (i) the integrity of the financial
statements of the Company; (ii) Swift Energy’s compliance with legal and
regulatory requirements; (iii) the independent auditor’s selection,
qualifications and independence; and (iv) the performance of Swift Energy’s
internal audit function and independent auditor. The committee is required to be
comprised of three or more non-employee directors, each of whom is determined by
the Board to be “independent” under the rules promulgated by the SEC under the
Securities Exchange Act of 1934 (the “Exchange Act”) and meets the financial
literacy and experience requirements under the rules or listing standards
established by the NYSE, all as may be amended from time to time. In addition,
at least one member of the committee must satisfy the definition of “audit
committee financial expert” as such term may be defined from time to time under
the rules promulgated by the SEC. The Board has determined that
Messrs. Montgomery and Smith and Ms. Cannon qualify as audit committee
financial experts and that each member of the Audit Committee is independent as
defined in the NYSE Listed Company Manual and the rules of the SEC. A report of
the Audit Committee appears later in this proxy statement.
Messrs. Montgomery (Chairman) and Smith and Ms. Cannon are members of
the Audit Committee.
Compensation
Committee. The Compensation Committee discharges the responsibilities of
the Board relating to compensation of the Company’s executive officers. This
includes evaluating the compensation of the executive officers of the Company
and its affiliates and their performance relative to their compensation to
assure that such executive officers are compensated effectively in a manner
consistent with the strategy of Swift Energy, competitive practices, and the
requirements of the appropriate regulatory bodies. In addition, this committee
evaluates and makes recommendations to the Board regarding the compensation of
the directors. The Compensation Committee also evaluates and approves any
amendment, subject to shareholder approval, to the Company’s existing
equity-related plans and approves the adoption of any new equity-related plans,
subject to shareholder and Board approval. The Compensation Committee is
required to be comprised of at least three directors who are non-employee
directors and determined by the Board to be independent under SEC rules and
NYSE’s listing standards. The Board has determined that all members are
independent as defined by the NYSE listing standards or rules of the SEC and
NYSE. The report of the Compensation Committee is included below.
Messrs. Smith (Chairman), Lanier, Matiuk, Montgomery and Swindells are
members of the Compensation Committee.
Corporate
Governance Committee. The Corporate Governance Committee identifies
individuals qualified to become directors and nominates candidates for
directorships and also recommends to the Board the membership for each of the
Board’s committees. This committee may consider nominees recommended by
shareholders upon written request by a shareholder in accordance with the
procedures for submitting shareholder proposals. The Corporate Governance
Committee also develops, monitors and recommends to the Board corporate
governance principles and practices applicable to Swift Energy. The committee
also assists management of the Company in identifying, screening and
recommending to the Board individuals qualified to become executive officers of
the Company. In addition, this committee administers the Company’s conflicts of
interest policy. The Corporate Governance Committee is required to be comprised
of at least three directors who are non-employee directors and determined by the
Board to be independent under the NYSE listing standards and the rules of the
SEC. Messrs. Matiuk (Chairman), Galvin and Swindells and Ms. Cannon
are members of the Corporate Governance Committee and, as determined by the
Board, all are independent as defined in the NYSE listing standards and rules of
the SEC.
Executive
Committee. The Executive Committee is authorized to act for the Board at
times when it is not convenient for the full Board to act as an assembled board,
except where full Board action is required by applicable law. Any action taken
by the Executive Committee is required to be reported at the next full Board
meeting. Messrs. Swift (Chairman), Galvin and Lanier are members of the
Executive Committee.
Compensation
of Directors
In
accordance with its charter, the Compensation Committee periodically evaluates
the compensation of non-employee directors, including for service on Board
committees. The Compensation Committee recommends annual retainer and
meeting fees for non-employee directors and for service on Board committees,
sets the terms and awards of any stock-based compensation and submits these
recommendations to the Board of Directors for approval subject to shareholder
approval, if required. Directors who are also employees of the
Company receive no additional compensation for service as
directors. The following table shows compensation for non-employee
directors for 2008:
Annual
Board Retainer
|
|
$
|
35,000
|
|
Meeting
Fee
|
|
$
|
2,500
|
(1)
|
Annual
Committee Retainer
|
|
$
|
5,000
|
(2)
|
Committee
Premiums:
|
|
|
|
|
Audit
Committee Chair
|
|
$
|
15,000
|
(3)
|
Compensation
Committee Chair
|
|
$
|
10,000
|
(4)
|
Corporate
Governance Committee Chair
|
|
$
|
8,000
|
(4)
|
Executive
Committee Member
|
|
$
|
8,000
|
|
Lead
Director Premium
|
|
$
|
8,000
|
|
Annual
Restricted Stock Grant Value
|
|
$
|
120,000
|
(5)
|
|
|
|
(1)
|
Annual
meeting fee paid per meeting for a minimum of five
meetings.
|
(2)
|
Annual
fee for serving on one or more committees.
|
(3)
|
Annual
fee for a minimum of four meetings.
|
(4)
|
Annual
fee for a minimum of two meetings.
|
(5)
|
Number
of restricted shares to be determined, based on the closing stock price on
the day after the annual meeting. Restrictions on restricted
shares lapse as to one-third of such shares each year beginning on the
first anniversary of the grant date, and subject to a one-year service
restriction, restrictions on all shares lapse when a director ceases to be
a member of the Board.
|
The
following table sets forth certain summary information regarding compensation
paid or accrued by the Company to or on behalf of the Company’s non-employee
directors for the fiscal year ended December 31, 2008:
Name
|
|
Fees
Earned or Paid in Cash
($)
|
|
|
Stock
Awards
($)(1)
|
|
Option
Awards
($)(1)
|
|
|
Non-Equity
Incentive Plan Compen-sation
($)
|
|
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
($)
|
|
|
All
Other Compen-sation
($)(2)
|
|
|
Total
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deanna
L. Cannon
|
|
$ |
52,500 |
|
|
$ |
117,833 |
|
|
$ |
19,142 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
189,475 |
|
Raymond
E. Galvin
|
|
$ |
68,500 |
|
|
$ |
117,833 |
|
|
$ |
9,571 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
195,904 |
|
Douglas
J. Lanier
|
|
$ |
60,500 |
|
|
$ |
117,833 |
|
|
$ |
--- |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
178,333 |
|
Greg
Matiuk
|
|
$ |
60,500 |
|
|
$ |
117,833 |
|
|
$ |
8,040 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
186,373 |
|
Henry
C. Montgomery
|
|
$ |
67,500 |
|
|
$ |
117,833 |
|
|
$ |
10,999 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
196,332 |
|
Clyde
W. Smith, Jr.
|
|
$ |
62,500 |
|
|
$ |
117,833 |
|
|
$ |
10,999 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
191,332 |
|
Charles
J. Swindells
|
|
$ |
52,500 |
|
|
$ |
117,833 |
|
|
$ |
--- |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
170,333 |
|
|
|
|
(1)
|
The
amounts in columns (c) and (d) reflect the dollar amount recognized for
financial statement purposes for the fiscal year ended December 31, 2008,
in accordance with Statement of Financial Accounting Standards (SFAS) No.
123(R) of awards pursuant to the Company’s stock compensation plans, and
thus include amounts from awards granted in and prior to
2008. Assumptions used in the calculation of these amounts are
included in footnote 6 to the Company’s audited financial statements for
the fiscal year ended December 31, 2008, included in the Company’s Annual
Report on Form 10-K for the year ended December 31,
2008.
|
(2)
|
No
perquisites are included in this column as to any director, as in the
aggregate perquisites for any director during 2008 did not exceed
$10,000.
|
Payments
to Former Directors
The Board
of Directors maintains a policy that the Board reviews from time to time
relating to post-retirement director compensatory agreements. The policy
provides for agreements or arrangements with former directors, including
consulting services, in instances in which a majority of the independent
directors of the Board agree that an individual former director has specific
expertise that the Board and management agree is of material benefit to the
Company. Any agreements with former directors currently in effect or about to
expire will be reviewed in accordance with this policy.
Mr. Virgil
Swift served as a director from 1981 until the annual meeting of shareholders on
May 10, 2005, at which time he was given the honorary title of Director
Emeritus. As this is an honorary distinction, no compensation is paid
to Mr. V. Swift as Director Emeritus. The full Board concluded that
the service of Mr. V. Swift, due to his extensive experience with
Swift Energy and the oil and gas industry, was an invaluable asset to the
Company, and thus a consulting agreement was entered into with this former
director. As such, Mr. V. Swift regularly attends Board and Committee
meetings. Mr. V. Swift received compensation during 2008 pursuant to a
consulting agreement which has been in effect since July 2000 and was renewed on
similar terms effective July 1, 2006. On February 25, 2009, Mr. V.
Swift’s consulting agreement was further amended to reduce his current monthly
payment to approximately $4,800 per month commencing in May 2009 (a 10%
reduction). Pursuant to such agreement and amendments, Mr. V.
Swift provides advisory services to key employees, officers and directors, and
as otherwise requested by the Chairman of the Board and Chief Executive Officer,
or by the President. The monthly payment will increase by four
percent (4%) per year as a result of an annual inflation
provision. The consulting agreement is terminable by either party
without cause upon two weeks’ written notice. Upon a change of
control during the term of the consulting agreement, all outstanding stock
options held by Mr. V. Swift will become 100% vested.
Board
Succession Plan
In line
with our Principles of Corporate Governance, the Board formally considered,
addressed and approved a Board succession plan during 2004, as recommended to
the Board by the Corporate Governance Committee. In accordance with the Board
succession plan, Mr. Galvin would have been scheduled for such
consideration at the 2006 annual meeting. The Corporate Governance
Committee recommended, and the Board approved, the nomination of Mr. Galvin
to stand for election, and Mr. Galvin was reelected as a Class II director
with a term to expire at the 2007 Annual Meeting. Mr. Galvin was
again scheduled for such consideration at the 2007 Annual Meeting. The Corporate
Governance Committee considered Mr. Galvin’s industry experience and
wide-ranging management background and determined that, especially with the
passing of A. Earl Swift in May 2006, the Board and the Company would benefit
from Mr. Galvin’s depth of experience and his continuing to serve as Lead
Director, Vice Chairman and a member of the Executive Committee. The
Corporate Governance Committee recommended, and the Board approved, with
Mr. Galvin’s abstention, that Mr. Galvin be nominated to stand for
reelection for a full three-year term as a Class II director, and
Mr. Galvin was reelected at the 2007 Annual Meeting as a Class II director,
with a term to expire at the 2010 Annual Meeting.
Nominations
for Directors
Identifying
Candidates
The
Corporate Governance Committee, in consultation with the Chairman of the Board,
is responsible for identifying and screening potential director candidates and
recommending qualified candidates to the Board for nomination. It is
the Committee’s policy to consider recommendations of potential candidates from
current directors and shareholders. Shareholders’ nominations for
directors must be made in writing and include the name, age, business and
residence address of the recommended nominee, the class and number of shares, if
any, of Swift Energy stock which are beneficially owned by the recommended
nominee, and any other information required to be disclosed in the Company’s
proxy statement by rules promulgated by the SEC. Additionally, the
recommendation must include the name and address of the shareholder, the number
of shares of the Company’s stock
that the
shareholder beneficially owns, and the period for which the shareholder has held
such shares. Nominations must be addressed as follows and received no
later than March 15, 2010, and no earlier than February 11, 2010, in order to be
considered for the next annual election of directors:
Chairman
of the Corporate Governance Committee
Swift
Energy Company
c/o
Office of the Corporate Secretary
16825
Northchase Drive, Suite 400
Houston,
Texas 77060
|
Qualifications
The
Corporate Governance Committee has not established a specific minimum or maximum
age, education, years of business experience or specific types of skills for
potential director candidates, but, in general, consideration is given to each
candidate’s reputation, mature judgment, career specialization, relevant
technical skills, diversity and the extent to which the candidate would fill a
present need on the Board.
The
Company’s Principles for Corporate Governance require that each
director:
|
•
|
understand
Swift Energy’s business and the marketplaces in which it
operates;
|
|
•
|
regularly
attend meetings of the Board and of the Board committee(s) on which he or
she serves;
|
|
•
|
review
the materials provided in advance of meetings and any other materials
provided to the Board from time to
time;
|
|
•
|
monitor
and keep abreast of general economic, business and management news and
trends, as well as developments in Swift Energy’s competitive environment
and Swift Energy’s performance with respect to that
environment;
|
|
•
|
actively,
objectively and constructively participate in meetings and the strategic
decision-making processes;
|
|
•
|
share
his or her perspective, background, experience, knowledge and insights as
they relate to the matters before the Board and its
committees;
|
|
•
|
be
reasonably available when requested to advise the CEO and management on
specific issues not requiring the attention of the full Board but where an
individual director’s insights might be helpful to the CEO or management;
and
|
|
•
|
be
familiar and comply in all respects with the Code of Ethics and Business
Conduct of the Company, as adopted and as may be amended from time to
time.
|
Nomination
of Candidates
In
determining whether to nominate a candidate, either from an internally generated
or shareholder recommendation, the Corporate Governance Committee will consider
the current composition and capabilities of serving board members, as well as
additional capabilities considered necessary or desirable in light of existing
and future Company needs. The Corporate Governance Committee also
exercises its independent business judgment and discretion in evaluating the
suitability of any recommended candidate for nomination.
Compensation
Committee Interlocks and Insider Participation
During
2008, the Compensation Committee of the Board consisted of Messrs. Smith,
Lanier, Matiuk, Montgomery and Swindells, all of whom are independent
directors. To the Company’s knowledge, there are no compensation
committee interlocks involving members of the Compensation Committee or other
directors of the Company.
Corporate
Governance
Part of
the Company’s historical and ongoing corporate governance practices is the
Company’s policy that requires officers, directors, employees and certain
consultants of the Company to submit annual disclosure statements regarding
their compliance with the Company’s conflict of interest policy. A management
representation letter is provided to the Corporate Governance Committee of the
Board
regarding
the results of the annual disclosure statements and management’s assessment of
any potential or actual conflicts of interest. Based on this assessment and
further discussion with management, the Corporate Governance Committee then
directs management on what additional action, if any, the Committee determines
is necessary to be undertaken with regard to any potential or actual conflict of
interest or related party transaction.
The
Company also requires that officers, directors, employees and certain
consultants of the Company provide an annual reaffirmation of the Company’s Code
of Ethics and Business Conduct. A copy of the Code of Ethics and Business
Conduct is redistributed in connection with this requirement, and each such
person is asked to reaffirm and reacknowledge that they have reviewed and
refreshed their knowledge of the provisions of the Code of Ethics and Business
Conduct and will comply with such Code. They also reaffirm their understanding
that their continued service to the Company is dependent upon compliance with
the Company’s Code of Ethics and Business Conduct. In addition, all
officers, directors, employees and consultants are required to annually
recertify their understanding of, and adherence to, the Company’s Insider
Trading Policy. A copy of the Insider Trading Policy is also
redistributed in connection with this requirement.
Each of
the Audit, Compensation and Corporate Governance Committees has a
charter. Each such charter is reviewed annually by the applicable
committee, and all of the charters are reviewed by the Corporate Governance
Committee. The committee charters, the Board-adopted Principles of
Corporate Governance for the Company and the Code of Ethics and Business Conduct
are applicable to all employees, directors and consultants and are posted on the
Company’s website at www.swiftenergy.com. The committee charters,
Principles of Corporate Governance and Code of Ethics and Business Conduct are
also available in print, without charge, to any shareholder who requests a
copy. Requests should be directed to the Company’s Investor Relations
Department at 16825 Northchase Drive, Suite 400, Houston, Texas 77060; by
telephone at (281) 874-2700 or (800) 777-2412; or by email to
info@swiftenergy.com.
In
addition, the Code of Ethics for Senior Financial Officers and Principal
Executive Officer, as adopted by the Board, is posted on Swift Energy’s website,
where the Company also intends to post any waivers from or amendments to this
Code of Ethics.
Related
Party Transactions
We
receive research, technical writing, publishing, and website-related services
from Tec-Com Inc., a corporation located in Knoxville, Tennessee, and controlled
and majority owned by the aunt of the Company’s Chairman of the Board and Chief
Executive Officer. We paid approximately $0.7 million to Tec-Com for such
services pursuant to the terms of the contract between the parties in 2008, $0.6
million in 2007 and $0.5 million in 2006. The contract was renewed June 30,
2007, on substantially the same terms as the previous contract and expires June
30, 2010. We believe that the terms of this contract are consistent with
unrelated third party arrangements for similar services.
The
Company has not adopted a formal related party transaction policy. As
a matter of corporate governance policy and practice, related party transactions
are presented and considered by the Corporate Governance Committee of the
Company’s Board of Directors. See discussion set forth above under
“Board of Directors—Corporate Governance.”
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security
Ownership of Certain Beneficial Owners
The
following table sets forth information concerning the shareholdings as of March
2, 2009, (unless otherwise indicated), with respect to each person, to the
Company’s knowledge, who beneficially owned more than five percent of the
Company’s outstanding common stock:
Name
and Address of Beneficial Owner
|
|
Amount
and Nature of Beneficial Ownership
|
|
Percent
of Class
|
|
|
|
|
|
|
FMR
LLC
82
Devonshire Street
Boston,
Massachusetts 02109
|
|
3,304,626
|
(1)
|
10.6%
|
|
EARNEST
Partners, LLC
1180
Peachtree Street NE, Suite 2300
Atlanta,
Georgia 30309
|
|
2,690,075
|
(2)
|
8.6%
|
|
Barclays
Global Investors , NA(3)
400
Howard Street
San
Francisco, California 94105
|
|
2,476,201
|
(3)
|
7.9%
|
|
The
Vanguard Group, Inc.
100
Vanguard Boulevard
Malvern,
Pennsylvania 19355
|
|
2,036,392
|
(4)
|
6.5%
|
|
Dimensional
Fund Advisors LP
Palisades
West, Building One
6300
Bee Cave Road
Austin,
Texas 78746
|
|
1,827,091
|
(5)
|
5.9%
|
|
|
|
|
(1)
|
Based
on a Schedule 13G dated February 16, 2009, FMR LLC is parent holding
company in accordance with SEC Rule 13d-1(b)(1)(ii)(G) holds sole voting
power as to 300 shares and sole dispositive power as to all shares
owned.
|
(2)
|
Based
on a Schedule 13G dated January 16, 2009, filed with the SEC to reflect
shares held at December 31, 2008, EARNEST Partners, LLC, is an investment
advisor in accordance with SEC Rule 13d-1(b)(1)(ii)(E), holds sole voting
power as to 917,057 shares, shared voting power as to 681,718 shares and
sole dispositive power as to all 2,690,075 shares.
|
(3)
|
Based
on a Schedule 13G dated February 6, 2009, filed with the SEC to reflect
shares held at December 31, 2008, by the following
entities:
|
|
•
|
Barclays
Global Investors, NA, a Bank as defined in Section 3(a)(6) of the
Securities Act of 1933, holds sole voting power as to 819,849 shares and
sole dispositive power as to 1,080,730 shares.
|
|
•
|
Barclays
Global Fund Advisors, an investment advisor in accordance with SEC Rule
13d-1(b)(1)(ii)(E), holds sole voting power as to 1,023,908 shares and
sole dispositive power as to 1,375,149 shares.
|
|
•
|
Barclays
Global Investors, Ltd., a non-U.S. institution in accordance with SEC Rule
13d-1(b)(1)(ii)(J), holds sole voting power as to 700 shares and sole
dispositive power as to 20,322 shares.
|
(4)
|
Based
on a Schedule 13G dated February 12, 2009, filed with the SEC to reflect
shares held at December 31, 2008, The Vanguard Group, Inc. is an
investment advisor in accordance with SEC Rule 13d-1(b)(1)(ii)(E) and
holds sole voting power as to 40,733 shares and sole dispositive power as
to 2,036,392 shares.
|
(5)
|
Based
on a Schedule 13G dated February 9, 2009, filed with the SEC to reflect
shares held at December 31, 2008, Dimensional Fund Advisors LP
(“Dimensional”) is an investment advisor in accordance with SEC Rule
13d-1(b)(1)(ii)(E) and holds sole voting power as to 1,760,383 shares and
sole dispositive power as to 1,827,091 shares. Dimensional
disclaims beneficial ownership of all such
securities.
|
Security
Ownership of Management
The
following table sets forth information concerning the shareholdings, as of
March 2, 2009, (unless otherwise indicated), of the members of the Board,
the Chief Executive Officer, the Chief Financial Officer, the three most highly
compensated executive officers other than the CEO and CFO, and all executive
officers and directors as a group:
Name
of Beneficial Owner
|
|
Position
|
|
Amount
and Nature of Beneficial Ownership(1)
|
|
Percent
of Class
|
|
|
|
|
|
|
|
|
Terry
E. Swift
|
|
Chairman
of the Board and
Chief
Executive Officer
|
|
311,469
|
|
|
1.0%
|
|
Deanna
L. Cannon
|
|
Director
|
|
16,570
|
|
|
|
(2)
|
Raymond
E. Galvin
|
|
Director
|
|
39,960
|
|
|
|
(2)
|
Douglas
J. Lanier
|
|
Director
|
|
10,460
|
|
|
|
(2)
|
Greg
Matiuk
|
|
Director
|
|
20,460
|
|
|
|
(2)
|
Henry
C. Montgomery
|
|
Director
|
|
25,334
|
|
|
|
(2)
|
Clyde
W. Smith, Jr.
|
|
Director
|
|
34,781
|
(3)
|
|
|
(2)
|
Charles
J. Swindells
|
|
Director
|
|
7,780
|
|
|
|
(2)
|
Bruce
H. Vincent
|
|
Director,
President, and Secretary
|
|
168,867
|
|
|
|
(2)
|
Alton
D. Heckaman, Jr.
|
|
Executive
Vice President and Chief Financial Officer
|
|
131,279
|
|
|
|
(2)
|
Robert
J. Banks
|
|
Executive
Vice President and Chief Operating Officer
|
|
38,118
|
|
|
|
(2)
|
James
P. Mitchell
|
|
Senior
Vice President—Commercial Transactions and Land
|
|
35,754
|
|
|
|
(2)
|
All
executive officers and directors as a group
(15 persons)
|
|
|
|
1,023,104
|
|
|
3.2%
|
|
|
|
|
(1)
|
Unless
otherwise indicated below, the persons named have sole voting and
investment power, or joint voting and investment power with their
respective spouses, over the number of shares of the common stock of the
Company shown as being beneficially owned by them.
|
(2)
|
Less
than one percent.
|
(3)
|
Mr. Smith
disclaims beneficial ownership as to 1,000 shares held in a Roth IRA for
the benefit of Mr. Smith’s
son.
|
EXECUTIVE
OFFICERS
Robert J. Banks, 54, was
appointed Executive Vice President and Chief Operating Officer in February 2008,
prior to which
appointment he served as Vice President―International Operations & Strategic
Ventures since 2006. Mr. Banks has also served as Vice
President―International Operations of the Company’s subsidiary, Swift Energy
International, since he joined the Company in
2004. Mr. Banks has held senior-level positions and led
international units for Vanco Energy Company, Mosbacher Energy Company, Kuwait
Foreign Petroleum Company and Santa Fe International
Corporation. Mr. Banks holds the degree of Bachelor of Science
from Pennsylvania State University.
Alton D. Heckaman, Jr., 52,
was appointed Executive Vice President of Swift Energy in November 2004 and
Chief Financial Officer in August 2000. He previously served as
Senior Vice President—Finance from August 2000 until November 2004 and served in
other progressive positions of responsibility since joining the Company in
1982. He is a Certified Public Accountant and holds the degrees of
Bachelor of Business Administration in Accounting and Master of Business
Administration.
James M. Kitterman, 64, was
appointed Senior Vice President—Operations of Swift Energy in May
1993. He had previously served as Vice President—Operations since
joining the Company in 1983. Mr. Kitterman holds the degrees of
Bachelor of Science in Petroleum Engineering and Master of Business
Administration.
James
P. Mitchell,
54, was appointed Senior Vice President―Commercial Transactions and Land
in February 2003. He previously served as Vice President―Land and
Property Transactions from December 2001 to February 2003 and Vice
President―Land from 1996 to 2001. He served in other positions of
progressive
responsibility since joining the Company in 1987. Mr. Mitchell
holds the degree of Bachelor of Arts in History and Business
Law.
David W. Wesson, 50, was
appointed Controller of Swift Energy in January 2001. He previously
served as Assistant Controller—Reporting from April 1999 to January 2001 and in
other positions of progressive responsibility since joining the Company in
1988. Mr. Wesson is a Certified Public Accountant and holds the
degree of Bachelor of Business Administration in Accounting.
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Compensation
Philosophy and Objectives
Swift
Energy Company is committed to being a premier oil and gas company and top-tier
performer by creating value through sustainable, efficient growth in reserves
and production and by contributing to the country’s energy security. Our executive
compensation program is based on a pay-for-performance philosophy and is
designed to align the interests of our employees with those of our stockholders
and to support the long-term business objectives and corporate values that steer
success. The oil and gas industry has experienced robust conditions
in recent years. Despite the recent downturn in commodity prices, the
competition for geoscientists, petroleum engineers and other talented employees
has remained strong. We believe that it is imperative that we maintain highly
competitive compensation programs to attract and retain quality
personnel.
During
2008, to assist in accomplishing the objectives of our compensation program, the
Compensation Committee of the Board of Directors (within this section, the
“Compensation Committee” or “Committee”) engaged Towers Perrin, a global
professional services firm, to serve as its independent compensation consultant,
and report directly to the Committee. The independent compensation consultant
provides the Committee with comparative data on executive compensation and
expert advice on the design and implementation of the Company’s annual and
long-term compensation programs.
In the
Company’s annual compensation evaluation in February 2009, our Compensation
Committee, in consultation with its independent compensation consultant,
followed the recommendation of executive management to freeze base salaries for
all eleven officers, provide limited 2008 cash bonuses to seven of the officers
and provide no 2008 cash bonuses to our top four executive officers (our CEO,
President, and CFO and COO). This recommendation by executive
management and action by the Committee was based upon the Company’s 2008
performance, the ongoing global financial crisis and recession, and the limited
“reduction in force” in early 2009. In addition, the Committee
considered the cyclical nature of the oil and gas business and determined that
freezing salaries and providing limited or no cash bonuses to Officers was
warranted based on the recent significant downturn in commodity prices, which
ultimately affects the pool of funds used for these compensation
components. At the same time, the Committee determined to provide
long-term equity incentive awards to all eleven officers that would reward
appreciation in our common stock and shareholder return, and that the equity
awards would become most valuable if our stock price increased, which ultimately
is a result of executing Swift Energy’s long-term objectives and
strategies.
Leadership
Structure
|
·
|
SEC
regulations require disclosure regarding the compensation of Named
Executive Officers. For this proxy statement, the Chief
Executive Officer, President, Executive Vice President and Chief Financial
Officer, Executive Vice President and Chief Operating Officer, and Senior
Vice President—Commercial Transactions and Land comprise the Named
Executive Officers.
|
|
·
|
At
the time of filing this proxy statement, we have eleven officers including
the Named Executive Officers, and these eleven individuals are referred to
as “Officers” herein.
|
|
·
|
Our
compensation program described below is the same for all
Officers.
|
|
·
|
Although
our Officers are responsible for specific business functions, together
they share responsibility for the performance of the
Company.
|
Compensation
for a Career at Swift Energy
|
·
|
It
is our objective to attract and retain for a career the best talent
available.
|
|
·
|
It
takes a long period of time and a significant investment to develop the
experienced executive talent necessary to succeed in the oil and gas
business; senior executives must have experience with all phases of the
business cycle to be effective
leaders.
|
|
·
|
We
have an experienced executive team that has served Swift Energy for many
of the Company’s 29 years.
|
|
§
|
Our
CEO has 28 years of service with the Company, our President, 19 years, and
our CFO has 27 years; the average service for our executive officers
(referenced on page) is 21 years.
|
Overview
of the 2008 Compensation Program
|
·
|
At
the beginning of 2008 and in preparation for the February Compensation
Committee and Board meetings, the executive management team (primarily the
CEO, President, and CFO) prepared a recommended compensation program for
2008 for all Officers based on current and long-term business objectives,
benchmarking and peer data, and internal tally sheets (see “Use of
Analytical Tools and Peer Data”).
|
|
§
|
The
recommendation set out the Company metrics and individual performance
goals for the principal components of compensation that would be used to
gauge 2008 performance.
|
|
·
|
At
the February 2008 Committee meeting, the CEO, with the President and CFO
present, presented the recommendation to the Committee for all Officers in
light of current and long-term business
strategies.
|
|
§
|
The
CEO did not participate in the Committee’s discussion of the compensation
program as it relates to the CEO.
|
|
·
|
The
Committee, having the ultimate responsibility of reviewing and
recommending the compensation program to the Board of Directors,
deliberated amongst themselves to discuss the recommendation in detail as
to all Officers.
|
|
§
|
The
Committee also reviewed all market and internal data used in preparing the
recommendation.
|
|
·
|
After
deliberation and discussion, the Committee made changes it deemed
appropriate and then it recommended the compensation program for 2008 to
the Board of Directors for
approval.
|
|
·
|
During
third quarter 2008, the Committee engaged an independent compensation
consultant to prepare a comprehensive study on officer compensation,
including a comparison with our peers, and to prepare an assessment of the
competitiveness of our Officer compensation
program.
|
|
§
|
The
terms of the relationship with the independent compensation consultant are
set forth in an agreement between the Committee and the
consultant.
|
|
§
|
The
Committee anticipates using the independent compensation consultant on an
on-going basis to assist with executive compensation
matters.
|
|
·
|
In
preparation for the Committee’s evaluation of 2008 compensation, the
Committee Chairman requested the independent compensation consultant to
review the executive management team’s recommendations to the Committee
for Officer salary adjustments, cash bonus amounts, and long-term equity
incentive awards based on the results of the pre-determined Company
metrics and individual performance goals in light of the
independent
|
|
compensation
consultant’s prior review of our Compensation Program and its internal
database of compensation levels, structures and trends, so that the
consultant would be in a position to advise the Committee regarding those
recommendations.
|
|
·
|
At
the February 2009 Committee meeting, the Committee reviewed the
recommendations presented by the executive management team, discussed
those recommendations with the independent compensation consultant,
deliberated amongst themselves and other Board members, and approved the
compensation amounts discussed later in this Compensation Discussion and
Analysis.
|
Principal
Elements of Compensation
The
principal elements of our Officer compensation program include:
|
·
|
Long
Term Equity Incentives;
|
|
·
|
Post-employment
Benefits (including change of control benefits);
and
|
Base
Salary
|
·
|
Base
salary generally rewards individual experience and
performance.
|
|
·
|
At
the beginning of each year, each Officer develops individual performance
goals relative to his or her position and organizational
responsibilities.
|
|
§
|
These
individual goals are required to be directly related to our business
objectives.
|
|
§
|
Officers’
(other than the CEO’s) individual goals are discussed with and approved by
the CEO.
|
|
§
|
The
CEO’s goals are developed by the CEO and are discussed with and approved
by the Committee.
|
|
·
|
The
Committee does not use a formula or ratio when considering periodic base
salary adjustments (generally annually); however they do
consider:
|
|
§
|
Individual
Performance – Base salary adjustments are primarily related to
performance, including the Officer’s achievements of his or her previously
established performance goals, as well as living our vision, mission,
values, and behaviors.
|
|
§
|
External
Competiveness – For the 2008 base salary review, each Officer was targeted
at the median of the third quartile (the 66th percentile) of our
peers.
|
Given
that each of the Named Executive Officers fulfilled various pre-established
individual performance goals, each Named Executive Officer would likely have
been entitled to receive an increase in base salary when the Committee reviewed
compensation metrics at the February 2009 meeting. However,
management recommended to the Committee that it freeze base salaries for all
Officers in light of the Company’s overall performance, the ongoing global
financial crisis and recession, and the limited “reduction in force” in early
2009 as part of an overall reduction of costs. The Board of Directors
and the Committee, in consultation with the independent compensation consultant,
accepted this recommendation.
Annual
Cash Bonuses
|
·
|
Annual
cash bonuses can be highly variable depending on the annual financial and
operating results.
|
|
·
|
To
qualify for participation in the Company’s cash bonus plan each Officer
must:
|
|
§
|
be
a full-time Officer of Swift Energy or one of its subsidiaries on the date
of the award;
|
|
§
|
have
no violations of our Code of Ethics and Business Conduct;
and
|
|
§
|
meet
or exceed 50% of the Officer’s personal goals based on the CEO’s
assessment.
|
|
·
|
Annual
cash bonuses are intended to link primarily to the Company’s performance
for the preceding year, but also to individual Officer’s
performance.
|
|
§
|
The
Company’s performance is weighted as two-thirds (2/3) and the Officer’s
individual performance as one-third
(1/3).
|
|
·
|
The
Committee also considers a number of other factors including external
competitive bonus data and the marketplace for talent (See “Use of
Analytical Tools and Peer Data”).
|
|
·
|
The
Committee reserves the discretionary right to increase or decrease cash
bonus amounts when it believes such adjustments are in the best interest
of Swift Energy.
|
|
·
|
During
February of 2008, the Committee set the 2008 cash bonus targets for
Officers at the following:
|
Position
|
|
2008
Target
as
Percentage
of
Base Salary
|
CEO
|
|
100%
|
President
|
|
80%
|
Executive
Vice President
|
|
60%
|
CFO
|
|
60%
|
Senior
Vice President
|
|
50%
|
Vice
President
|
|
40%
|
Other
Officers
|
|
40%
|
|
·
|
As
a measure of the Company’s performance, each Officer, other than the CEO,
President, and CFO, is assigned by the CEO seven out of nine metrics based
on his position.
|
|
§
|
The
CEO, President, and CFO were assigned all nine
metrics.
|
|
§
|
The
other two Named Executive Officers were both assigned all metrics except
Cash Flow per Share and Corporate Net
Margin.
|
|
·
|
Listed
below are the nine metrics:
|
|
-
|
Reserve
Growth (Proven and Probable)
|
|
§
|
Each
of the seven metrics (nine for the CEO, President, and CFO) selected for
an Officer is assigned a specific weighting from 0% to 25%, with all
metrics totaling 100%.
|
|
§
|
Each
financial and operating metric is set for a qualifying level, an expected
baseline achievement level and a maximum
level:
|
|
-
|
If
the qualifying level is not met, then no bonus is awarded for such metric,
subject to Committee discretion.
|
|
-
|
The
next level up, the baseline level, is expected to be reached and
represents 25% to 75% weighting of that
metric.
|
|
-
|
The
maximum level is that level that represents exceptional performance which,
at the discretion of the Committee, would receive a weighting of 100% or
higher for that metric.
|
|
·
|
For
Company performance in 2008, only one metric, Cash Flow per Share, reached
the qualifying level; this metric also surpassed the maximum
level.
|
|
·
|
The
Company did not reach the qualifying level on any other Company
performance metrics; however, the Committee used its discretion to give
partial credit for the metrics “Safety Record” and “HSE Spills
Reduction.”
|
|
§
|
The
Committee believed that meaningful progress was made in 2008 with regard
to the “Safety Record” and “HSE Spills Reduction” metrics; therefore
despite not achieving the qualifying level for these metrics, the
Company’s significant improvement in the area of safety, together with the
achievements made in these areas even in the face of two devastating
hurricanes during 2008, warranted partial credit for these
metrics.
|
|
·
|
For
individual performance evaluation representing a potential one-third (1/3)
of the target bonus, each officer is assessed using the same process as
described in the “Base Salary” section
above.
|
Given the
achievement on certain Company metrics (Cash Flow per Share, Safety Record, and
HSE Spills Reduction) and each Named Executive Officer’s pre-established
performance goals, the Named Executive Officers’ potential cash bonus levels for
2008 performance ranged from 15.9% to 36.7% of base salary. The
executive team (Messrs. Swift, Vincent, Heckaman, and Banks) recommended at the
February 2009 Committee meeting that, despite otherwise qualifying for a cash
bonus based on the results of the pre-determined metrics and individual
performance goals, they not receive any cash bonus in light of the Company’s
overall performance and the ongoing global financial crisis and recession and
the “reduction in force” in early 2009 as part of an overall reduction of
costs. The executive team also recommended that their entire computed
bonus be placed in the pool of money being distributed as bonuses to non-officer
employees. The Board of Directors and the Committee, in consultation
with the independent compensation consultant, accepted these two
recommendations.
Consequently,
our seven non-executive officers (excluding our CEO, President, CFO and COO)
received cash bonuses based on the same performance evaluation process outlined
above. The aggregate cash bonuses paid to the five Named Executive
Officers have been reduced over the last three years, from $2,312,599 for 2006,
to $1,816,831 for 2007, to $52,957 in 2008. This reduction is
primarily
related
to the Company not achieving certain performance metrics and four of the Named
Executive Officers not receiving a cash bonus for 2008.
Long-Term
Equity Incentives
|
·
|
We
believe our long-term equity incentive awards are a critical element in
the mix of compensation.
|
|
§
|
These
awards tie compensation of Officers to long-term increases in Swift
Energy’s stock price and therefore align the interests of Officers and
stockholders.
|
|
§
|
Stock
options awards align the interests of Officers and stockholders by putting
the value of stock options “at-risk” to stock price appreciation, linking
compensation to appreciation in Swift Energy’s stock
price.
|
|
§
|
Restricted
stock awards serve as an important retention tool that are subject to
vesting and are prevalent among our
peers.
|
|
§
|
During
2008, the Committee decided that the appropriate mix of long-term equity
incentives for Officers, to balance between the dual objectives of tying
compensation to stock appreciation and shareholder return and providing
retention incentive, is 50 percent stock options and 50 percent restricted
stock, which is the same percentage allocation used since 2004 when
restricted stock was added to the long-term equity incentive
program.
|
|
·
|
As
with the other primary components of compensation, the Committee considers
competitive data when granting long-term incentive awards (see “Use of
Analytical Tools and Peer Data”).
|
|
·
|
During
February of 2008, the Committee set the 2008 long-term equity incentive
targets (for awards to be made to Officers in February 2009) at the
following:
|
Position
|
|
2008
Target
as
Percentage
of
Base Salary
|
CEO
|
|
250%
|
President
|
|
200%
|
Executive
Vice President
|
|
150%
|
CFO
|
|
150%
|
Senior
Vice President
|
|
125%
|
Vice
President
|
|
100%
|
Other
Officers
|
|
100%
|
|
·
|
The
annual long-term equity incentives are intended to link primarily to the
Company’s performance for the preceding year, but also to the individual
Officer’s performance.
|
|
§
|
The
Company’s performance is weighted as two-thirds (2/3) and the Officer’s
individual performance as one-third
(1/3).
|
|
·
|
The
Committee also established a premium that increases an Officer’s long-term
incentive award by 5%, 10%, or 20% if the officer holds direct ownership
of Swift Energy stock equal to 100%, 150%, or 200%, respectively, of base
salary at December 31, 2008.
|
|
§
|
For
2008 long-term incentive equity awards granted in February 2009, it was
the judgment of the Committee that this premium rewards and thus
encourages Officers to hold a meaningful amount of equity, which would
further align their interests with the long-term interests of
shareholders.
|
|
·
|
For
the Company’s performance, each Officer, based on his position, is
assigned seven metrics:
|
|
-
|
Annual
Shareholder Return Quartile
|
|
-
|
Annual
Shareholder Return 1-year
|
|
-
|
Reserve
Growth 2-year average
|
|
-
|
Reduction
of 3 year Average Finding Costs
|
|
§
|
Each
of the seven metrics selected for an Officer is assigned a specific
weighting from 0% to 25%, with all metrics totaling
100%.
|
|
§
|
Each
operating and financial metric is set for a qualifying level, an expected
baseline achievement level and a maximum
level:
|
|
-
|
If
the qualifying level is not met, then no bonus is awarded for such metric,
subject to Committee discretion.
|
|
-
|
The
next level up, the baseline level is expected to be reached and represents
25% to 75% weighting of that
metric.
|
|
-
|
The
maximum level is that level that represents exceptional performance which,
at the Committee’s discretion, would receive weighting of 100% or higher
for that metric.
|
|
·
|
For
2008, the Company did not reach the qualifying level for any of the
performance metrics above.
|
|
·
|
For
individual performance evaluation representing a potential one-third (1/3)
of the target award, each officer is assessed using the same process as
described in the “Base Salary” section
above.
|
|
·
|
Based
on the Committee’s review of the Company and individual performance as
described above, our Named Executive Officers’ computed long-term
incentive amounts as a percentage of base salary
were:
|
|
§
|
Chief
Executive Officer – 90.2%
|
|
§
|
EVP
& Chief Financial Officer –
47.3%
|
|
§
|
EVP
& Chief Operating Officer –
45.1%
|
|
§
|
SVP—Commercial
Transactions & Land – 35.5%
|
|
·
|
The
Committee used discretion on the computed long-term equity incentive
amounts, and the actual awards for our Named Executive Officers as a
percentage of base salary were:
|
|
§
|
Chief
Executive Officer – 336.7%
|
|
§
|
EVP
& Chief Financial Officer –
179.5%
|
|
§
|
EVP
& Chief Operating Officer –
170%
|
|
§
|
SVP—Commercial
Transactions & Land – 125%
|
|
·
|
The
Committee sought advice from its independent compensation consultant
regarding current industry trends and practices regarding long-term
incentive compensation and considered this information in light of the
Company’s long-term incentive structures. Based upon market
data provided by the consultant and discussion and consideration, the
Committee decided to award long-term equity incentives in the amounts
stated above for the following
reasons:
|
|
§
|
The
independent compensation consultant advised the Committee that most energy
peer companies make long-term incentive awards annually at market
levels. The performance aspect of these awards is then
reflected in future stock price
changes.
|
|
§
|
The
Committee determined that the external circumstances in the economy, the
global financial crisis along with two devastating hurricanes in 2008 made
it difficult to achieve many of the metrics used in this
calculation.
|
|
§
|
The
Committee believes that the Board should provide sufficient incentive for
the Officers to grow the Company’s assets and add value for all
shareholders, thereby aligning the Officer’s interests with those of our
shareholders.
|
|
§
|
The
Committee believes providing long-term equity incentive awards for the
Officers will reward appreciation in our common stock and shareholder
return, and that the equity awards would become most valuable if our stock
price increased, which ultimately is a result of executing Swift Energy’s
long-term objectives and
strategies.
|
Post-employment
Benefits
|
·
|
During
November 2008, we amended employment agreements with five Officers who had
had existing agreements in place since 1995 (in one instance since 1999)
and executed a new employment agreement with one Officer; thus, each Named
Executive Officer has an employment
agreement.
|
|
·
|
Each
amended or new employment agreement provides for an initial three-year
term which is automatically extended for one year on the anniversary date
of the agreement.
|
|
·
|
These
agreements provide for payment of certain amounts, acceleration of certain
equity awards and continuation of life and health insurance benefits for
various periods of time, based upon different termination scenarios (see
“—Potential Payments Upon Termination or Change in Control—Computation of
Payments” for details of the various scenarios as they apply to each Named
Executive Officer).
|
|
§
|
The
Committee believes that that the terms of the Named Executive Officers’
employment agreements are reasonable and competitive with similar
agreements used by our peers.
|
|
·
|
After
a detailed study of post-employment benefits of our peers, we adopted the
Swift Energy Company Change of Control Severance Plan (the “Change of
Control Severance Plan”) in November 2008, in which all employees
(including Officers) are
participants.
|
|
§
|
The
Change of Control Severance Plan was adopted to minimize, with respect to
the possibility of a change of control of the Company, the loss or
distraction of employees of the Company and its subsidiaries to the
detriment of the Company and its
shareholders.
|
|
§
|
Our
Change of Control Severance Plan is a double-trigger plan and benefits
will only be paid if there is both a Change of Control and a qualified
termination within two years of the Change of
Control.
|
|
§
|
Each
Named Executive Officer’s employment agreement enhances certain payment
amounts and other benefits provided in the Change of Control Severance
Plan, which is more fully explained below (see “—Potential Payments Upon
Termination or Change in Control—Computation of Payments” for details of
the various scenarios as they apply to each Named Executive
Officer).
|
|
-
|
The
Committee based its determination on the amounts paid to Named Executive
Officers in the event of a qualified termination following a change of
control on the referenced peer
study.
|
|
-
|
The
five amended agreements had existing Change of Control terms that were
modified slightly under the amended
agreement.
|
Other
Benefits
|
·
|
We
offer a limited number of perquisites to our
executives.
|
|
§
|
Overall,
the Committee believes that these benefits are significantly more limited
than prevailing market practices in the industry, but are reasonable
supplements to the total compensation
program.
|
|
§
|
During
2008, no Named Executive Officer had perquisites exceeding
$10,000.
|
|
§
|
By
the terms of our Named Executive Officers’ employment agreements, each
officer may be reimbursed up to $7,500 for third-party fees related to
financial planning and tax
preparation.
|
|
§
|
We
also provide certain insurance benefits including term life, supplemental
life, voluntary life, and accidental death and dismemberment coverage that
are available to all full-time
employees.
|
|
-
|
From
time to time, we have provided and paid for universal life insurance for
our Officers. During 2008, the Company did not pay any premiums
for this coverage.
|
|
§
|
The
Named Executive Officers are occasionally provided with tickets to local
sporting or cultural events, which are primarily used for business
entertainment or provided to other Officers or key employees;
occasionally, these tickets are provided to local non-profit organizations
for use.
|
|
§
|
Officers
and employees also have access to Company vehicles on a limited, as-needed
and approved basis.
|
|
§
|
Spousal
travel is generally available in connection with Board meetings and
special oil and gas industry functions which specifically promote or
advance the business purpose of Swift
Energy.
|
|
·
|
Each
Officer is eligible to participate in the Company’s 401(k) plan and
Employee Stock Ownership Plan, both of which are available to all of our
employees.
|
Equity
Award Timing
|
·
|
The
Committee grants equity awards to Officers at the Committee’s regular
February meeting, which is generally held the second week in
February.
|
|
·
|
The
Committee meeting is scheduled over a year in
advance.
|
|
·
|
The
Committee does not grant equity awards by unanimous consent, which further
solidifies the firm timing of equity
awards.
|
|
·
|
The
exercise price of any stock options granted is the closing price reported
on the NYSE on the date of the meeting at which the Committee approves the
grants.
|
Use
of Analytical Tools and Peer Data
As is
common practice in our industry, the Committee used various tools to facilitate
the compensation decisions made in 2008:
|
·
|
The
Committee reviews tally sheets prepared internally for each Officer that
show the individual elements of compensation, including benefits, which
also reflect the full cost of each
Officer.
|
|
§
|
The
tally sheets are used to gauge total compensation for each Officer against
publicly available data for comparable positions at comparator
companies.
|
|
·
|
We
operate in a highly competitive environment for talented executive
leadership; therefore, we believe it is necessary and appropriate to
benchmark our executive compensation against peer group companies to
enhance our ability to attract and retain
executives.
|
|
·
|
Comparison
to peer market data is used solely for background information to make
subjective judgment about how our overall compensation program and its
components compare to those our
peers.
|
|
§
|
The
peer market data is not used in any formulaic or statistical manner to
determine executive management’s compensation program recommendation or
Committee decisions.
|
|
·
|
As
described previously, we engaged an independent compensation consultant to
review our compensation program, and the results of their analysis
presented to the Committee contains peer market data from SEC filings and
other data the consultant collects from various
sources.
|
|
·
|
Peer
market data was collected from the following
companies:
|
|
Berry
Petroleum
Cabot
Oil & Gas
Clayton
Williams Energy
Comstock
Resources
Denbury
Resources
Energy
Partners, Ltd.
Forest
Oil
|
Mariner
Energy, Inc.
McMoRan
Exploration
Pioneer
Natural Resources
Newfield
Exploration
Petrohawk
Energy
Petroquest
Energy
Plains
Exploration & Production
|
Quicksilver
Resources
Range
Resources
Southwestern
Energy
St.
Mary Land & Exploration
Stone
Energy Corporation
Ultra
Petroleum Corp.
|
Code
Section 162(m)
Section
162(m) of the Code generally disallows a tax deduction to publicly held
companies for compensation in excess of $1 million paid to the Company’s chief
executive officer or any of the four other most highly compensated Officers, not
including the chief executive officer. Certain performance-based
compensation is specifically exempt from the deduction limit if it otherwise
meets the requirements of Section 162(m). These requirements include
that the compensation to be paid upon attainment of performance goals that are
determined by a board’s compensation committee comprised solely of two or more
outside directors, shareholder approval of the performance goals, and
compensation committee certification that the goals have been
met. Stock options and SARs generally qualify as “performance-based
compensation.” Other awards, grants, or bonuses will be
“performance-based compensation” if they are so designated and if their grant,
vesting or settlement is subject to the performance criteria described above
meeting specified performance criteria and complying with Section 162(m) of the
Code, including related regulations. Restricted stock awards that
vest solely upon the passage of time do not qualify as “performance-based
compensation.”
Change
in Our 2009 Compensation Program Design
Our
Compensation Committee determined to make significant changes to the design of
our compensation program for 2009 and beyond; below, we are highlighting some of
the conceptual difference. These changes primarily reflect that many
of our peers evaluate compensation based on a more flexible program that allows
the Committee to use its own business judgment to evaluate the Company’s
performance on certain financial and operating measures, especially in light of
the cyclical nature of the oil and gas business and recent unprecedented
volatility in commodity prices.
To
further accomplish the objectives of our compensation program, the Committee
engaged an independent compensation consultant, Towers Perrin, to provide
consulting services on executive compensation matters as described earlier in
this Compensation Discussion and Analysis. The Committee requested the
consultant to provide an assessment of our executive officer compensation
program, and such assessment was one of the primary tools used to evaluate
executive management’s recommendation for the 2009 executive compensation
program to the Committee at the February 2009 Committee meeting and in the
Committee’s determinations regarding that program.
The
Committee also requested that the independent compensation consultant conduct a
review of Board compensation. Based on the review and in light of the current
environment, the Board determined that no changes to Board compensation were
needed at this time.
Based on
the results of this review of our executive compensation program and the
Committee’s desire to enhance its design, the 2008 and 2009 compensation
programs will significantly differ.
|
·
|
The
Committee will de-emphasize use of quantitative targets and formulas in
assessing executive performance in determining
compensation.
|
|
·
|
There
will be fewer “metrics” or measures to evaluate Company performance, and
the Committee will not assign weights to the financial and operational
measures considered.
|
|
§
|
The
Company’s financial performance will be based on the Committee’s judgment
of two primary measures: total shareholder return and implementation of
our financial plans.
|
|
§
|
The
Company’s operational performance will be based on the Committee’s
judgment of two primary measures: implementation of strategic plans and
health, safety and environmental
performance.
|
|
·
|
As
in the past, each Officer will have his or her individual goals as well as
knowledge of the Company’s strategy to enable the Officers to focus their
efforts to achieve the Company’s
objectives.
|
|
·
|
The
Committee has requested executive management to work with the independent
compensation consultant to compile alternatives for Officer stock
ownership guidelines and/or requirements, and then to make a
recommendation to the Committee.
|
Compensation Committee
Report
The
Compensation Committee reviewed and discussed the Compensation Discussion and
Analysis with management. Based upon this review, the related
discussions and other matters deemed relevant and appropriate by the
Compensation Committee, the Compensation Committee has recommended to the Board
of Directors that the Compensation Discussion and Analysis be included in this
proxy statement to be delivered to shareholders of Swift Energy.
|
Clyde
W. Smith, Jr. (Chairman)
Douglas
J. Lanier
Greg
Matiuk
Henry
C. Montgomery
Charles
J. Swindells
|
Summary
Compensation Table
The
following table sets forth certain summary information regarding compensation
paid or accrued by the Company to or on behalf of the Company’s Chief Executive
Officer, Chief Financial Officer, and each of the three most highly compensated
executive Officers of the Company other than the CEO and CFO for the fiscal
years ended December 31, 2006, December 31, 2007, and December 31,
2008:
Name
and
Principal
Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)(1)
|
|
Stock
Awards
($)(2)
|
|
Option
Awards
($)(2)
|
|
Non-Equity
Incentive Plan Compen-sation
($)
|
|
Change
in Pension and Non-qualified Deferred Compen-sation Earnings
($)
|
|
All
Other Compen-sation
($)(3)(4)(5)
|
|
Total
($)
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry
E. Swift
Chairman
of the Board and Chief Executive Officer
|
|
2008
|
|
$
|
609,000
|
|
$
|
0
|
|
$
|
1,102,517
|
|
$
|
666,371
|
|
$
|
—
|
|
$
|
—
|
|
$
|
164,771
|
|
$
|
2,542,659
|
|
2007
|
|
$
|
580,000
|
|
$
|
724,249
|
|
$
|
653,541
|
|
$
|
1,415,873
|
|
$
|
—
|
|
$
|
—
|
|
$
|
37,841
|
|
$
|
3,411,504
|
|
2006
|
|
$
|
550,000
|
|
$
|
947,408
|
|
$
|
322,893
|
|
$
|
967,600
|
|
$
|
—
|
|
$
|
—
|
|
$
|
34,608
|
|
$
|
2,822,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alton
D. Heckaman, Jr.
Executive
Vice President and Chief Financial Officer
|
|
2008
|
|
$
|
406,600
|
|
$
|
0
|
|
$
|
436,646
|
|
$
|
524,429
|
|
$
|
—
|
|
$
|
—
|
|
$
|
136,969
|
|
$
|
1,504,644
|
|
2007
|
|
$
|
380,000
|
|
$
|
287,012
|
|
$
|
270,982
|
|
$
|
407,810
|
|
$
|
—
|
|
$
|
—
|
|
$
|
28,122
|
|
$
|
1,373,926
|
|
2006
|
|
$
|
360,000
|
|
$
|
372,613
|
|
$
|
132,384
|
|
$
|
444,688
|
|
$
|
—
|
|
$
|
—
|
|
$
|
26,314
|
|
$
|
1,335,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce
H. Vincent
President
and Secretary
|
|
2008
|
|
$
|
476,700
|
|
$
|
0
|
|
$
|
868,392
|
|
$
|
770,114
|
|
$
|
—
|
|
$
|
—
|
|
$
|
25,235
|
|
$
|
2,140,441
|
|
2007
|
|
$
|
454,000
|
|
$
|
472,921
|
|
$
|
396,000
|
|
$
|
594,165
|
|
$
|
—
|
|
$
|
—
|
|
$
|
42,322
|
|
$
|
1,959,408
|
|
2006
|
|
$
|
430,000
|
|
$
|
592,561
|
|
$
|
191,426
|
|
$
|
891,522
|
|
$
|
—
|
|
$
|
—
|
|
$
|
37,956
|
|
$
|
2,143,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
J. Banks
Executive
Vice President and Chief Operating Officer
|
|
2008
|
|
$
|
360,000
|
|
$
|
0
|
|
$
|
297,615
|
|
$
|
132,851
|
|
$
|
—
|
|
$
|
—
|
|
$
|
21,247
|
|
$
|
811,713
|
|
2007
|
|
$
|
300,000
|
|
$
|
142,660
|
|
$
|
163,496
|
|
$
|
86,065
|
|
$
|
—
|
|
$
|
—
|
|
$
|
31,699
|
|
$
|
723,920
|
|
2006
|
|
$
|
250,000
|
|
$
|
148,308
|
|
$
|
55,334
|
|
$
|
41,756
|
|
$
|
—
|
|
$
|
—
|
|
$
|
22,085
|
|
$
|
517,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
P. Mitchell
Senior
Vice President—Commercial Transactions and Land
|
|
2008
|
|
$
|
333,900
|
|
$
|
52,957
|
|
$
|
318,688
|
|
$
|
139,352
|
|
$
|
—
|
|
$
|
—
|
|
$
|
23,756
|
|
$
|
868,653
|
|
2007
|
|
$
|
315,000
|
|
$
|
189,989
|
|
$
|
163,396
|
|
$
|
165,451
|
|
$
|
—
|
|
$
|
—
|
|
$
|
36,063
|
|
$
|
869,899
|
|
2006
|
|
$
|
300,000
|
|
$
|
251,709
|
|
$
|
83,024
|
|
$
|
136,262
|
|
$
|
—
|
|
$
|
—
|
|
$
|
26,528
|
|
$
|
797,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Bonus
amounts in column (d) for 2006, 2007 and 2008 include amounts earned
during 2006, 2007 and 2008, but paid in 2007, 2008 and 2009,
respectively.
|
(2)
|
The
amounts in columns (e) and (f) reflect the dollar amount recognized for
financial statement purposes for each of fiscal years ended December 31,
2006, December 31, 2007, and December 31, 2008, in accordance with
Statement of Financial Accounting Standards (SFAS) No. 123(R) of awards
pursuant to the Company’s stock compensation plans and thus include
amounts from awards granted in and prior to the year being
reported. Assumptions used in the calculation of these amounts
are included in footnote 6 to the Company’s audited financial statements
for the fiscal years ended December 31, 2006, December 31, 2007, and
December 31, 2008, included in the Company’s Annual Report on Forms 10-K
for the years ended December 31, 2006, December 31, 2007, and December 31,
2008, respectively.
|
(3)
|
Includes
all other compensation items (column (i)) for each of 2006, 2007, and 2008
not reportable in columns (c) through (h):
|
|
|
|
Swift
|
|
Heckaman
|
|
Vincent
|
|
Banks
|
|
Mitchell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
Plan Contributions*
|
2008
|
|
$
|
11,500
|
|
$
|
11,500
|
|
$
|
11,500
|
|
$
|
11,500
|
|
$
|
11,500
|
|
2007
|
|
$
|
11,250
|
|
$
|
11,250
|
|
$
|
11,250
|
|
$
|
11,250
|
|
$
|
11,250
|
|
2006
|
|
$
|
11,000
|
|
$
|
11,000
|
|
$
|
11,000
|
|
$
|
11,000
|
|
$
|
11,000
|
|
|
Life
Insurance Premiums**
|
2008
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
2007
|
|
$
|
16,324
|
|
$
|
9,828
|
|
$
|
19,471
|
|
$
|
13,196
|
|
$
|
17,144
|
|
2006
|
|
$
|
12,243
|
|
$
|
7,171
|
|
$
|
14,341
|
|
$
|
7,500
|
|
$
|
8,155
|
|
|
Tax
Reimbursement for Life Insurance Premiums***
|
2008
|
|
$
|
10,374
|
|
$
|
6,245
|
|
$
|
12,374
|
|
$
|
8,386
|
|
$
|
10,895
|
|
2007
|
|
$
|
7,780
|
|
$
|
4,557
|
|
$
|
9,114
|
|
$
|
4,766
|
|
$
|
5,183
|
|
2006
|
|
$
|
7,780
|
|
$
|
4,557
|
|
$
|
9,030
|
|
$
|
0
|
|
$
|
3,788
|
|
|
Contributions
to Employee Stock Ownership Plan Account****
|
2008
|
|
$
|
1,361
|
|
$
|
1,361
|
|
$
|
1,361
|
|
$
|
1,361
|
|
$
|
1,361
|
|
2007
|
|
$
|
2,487
|
|
$
|
2,487
|
|
$
|
2,487
|
|
$
|
2,487
|
|
$
|
2,487
|
|
2006
|
|
$
|
3,585
|
|
$
|
3,585
|
|
$
|
3,585
|
|
$
|
3,585
|
|
$
|
3,585
|
|
|
*
|
Company
contributions to the Named Executive Officer’s Swift Energy Company
Employee Savings Plan account (100% in Company common
stock).
|
|
**
|
Insurance
premiums paid by the Company with respect to life insurance for the
benefit of the Named Executive Officer.
|
|
***
|
Amount
paid to the Named Executive Officer as a tax reimbursement with respect to
the life insurance premiums paid in the preceding year for the Named
Executive Officer.
|
|
****
|
Company
contributions (100% in Company common stock) to the Named Executive
Officer’s Swift Energy Company Employee Stock Ownership Plan
account.
|
(4)
|
Includes
a one-time payment to each of Messrs. Swift and Heckaman of $141,536 and
$117,863, respectively, representing amounts of Company contributions to a
401(k) plan for their years of service prior to the Company having a
401(k) plan.
|
(5)
|
No
perquisites are included in this column as to any Named Executive Officer,
as in the aggregate perquisites for any Named Executive Officer during
each of 2006, 2007 and 2008 did not exceed
$10,000.
|
Grants
of Plan-Based Awards
The
following table sets forth certain information with respect to the options
granted during the year ended December 31, 2008, to each Named Executive Officer
listed in the Summary Compensation Table:
Name
|
|
Grant
Date
|
|
Estimated
Future Payouts
Under
Non-Equity Incentive
Plan
Awards
|
|
Estimated
Future Payouts
Under
Equity Incentive Plan
Awards
|
|
All
Other Stock Awards: Number of Shares of Stock or Units
(#)
|
|
All
Other Option Awards: Number of Securities Under-lying
Options
(#)
|
|
Exercise
or Base Price of Option Awards
($/Sh)
|
|
Grant
Date Fair Value of Stock and Option Awards
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
(k)
|
|
(l)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry
E. Swift
|
|
02/11/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
26,300
|
(1)
|
|
—
|
|
|
$
|
—
|
|
$
|
1,136,423
|
|
|
02/11/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
37,800
|
(1)
|
|
$
|
43.21
|
|
$
|
654,696
|
|
|
02/18/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2,008
|
(4)
|
|
$
|
44.33
|
|
$
|
20,762
|
Alton
D. Heckaman, Jr.
|
|
02/11/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,900
|
(1)
|
|
—
|
|
|
$
|
—
|
|
$
|
514,199
|
|
|
02/11/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
17,100
|
(1)
|
|
$
|
43.21
|
|
$
|
296,172
|
|
|
02/18/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
225
|
(4)
|
|
$
|
44.33
|
|
$
|
2,326
|
|
|
02/28/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
628
|
(3)
|
|
$
|
49.98
|
|
$
|
7,297
|
|
|
02/28/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
7,504
|
(4)
|
|
$
|
49.98
|
|
$
|
87,196
|
|
|
05/14/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2,221
|
(3)
|
|
$
|
57.80
|
|
$
|
29,672
|
|
|
05/14/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1,425
|
(2)
|
|
$
|
57.80
|
|
$
|
19,038
|
|
|
05/14/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1,034
|
(4)
|
|
$
|
57.80
|
|
$
|
13,814
|
|
|
05/16/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
7,390
|
(3)
|
|
$
|
60.17
|
|
$
|
104,125
|
|
|
06/09/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1,474
|
(3)
|
|
$
|
62.01
|
|
$
|
21,505
|
Bruce
H. Vincent
|
|
02/11/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
17,800
|
(1)
|
|
—
|
|
|
$
|
—
|
|
$
|
769,138
|
|
|
02/11/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
25,600
|
(1)
|
|
$
|
43.21
|
|
$
|
443,392
|
|
|
02/21/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
8,648
|
(4)
|
|
$
|
47.08
|
|
$
|
95,128
|
|
|
05/14/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
8,675
|
(3)
|
|
$
|
57.80
|
|
$
|
115,898
|
|
|
05/16/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2,790
|
(3)
|
|
$
|
60.17
|
|
$
|
39,032
|
|
|
05/16/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2,986
|
(2)
|
|
$
|
60.17
|
|
$
|
41,774
|
|
|
05/16/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1,025
|
(4)
|
|
$
|
60.17
|
|
$
|
14,339
|
|
|
05/21/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2,547
|
(3)
|
|
$
|
62.09
|
|
$
|
36,422
|
|
|
05/21/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
828
|
(4)
|
|
$
|
62.09
|
|
$
|
11,840
|
|
|
06/06/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
8,518
|
(3)
|
|
$
|
60.80
|
|
$
|
120,444
|
|
|
06/24/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
340
|
(3)
|
|
$
|
64.87
|
|
$
|
5,215
|
|
|
06/24/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
914
|
(2)
|
|
$
|
64.87
|
|
$
|
14,020
|
Robert
J. Banks
|
|
02/11/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,600
|
(1)
|
|
—
|
|
|
$
|
—
|
|
$
|
414,816
|
|
|
02/11/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
13,700
|
(1)
|
|
$
|
43.21
|
|
$
|
237,284
|
James
P. Mitchell
|
|
02/11/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,800
|
(1)
|
|
—
|
|
|
$
|
—
|
|
$
|
250,618
|
|
|
02/11/2008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
8,300
|
(1)
|
|
$
|
43.21
|
|
$
|
138,915
|
|
|
|
(1)
|
Amount
shown reflects number of restricted shares or stock options granted to the
Named Executive Officer during 2008 pursuant to the 2005
Plan. Restrictions on restricted shares lapse as to one-third
of such shares each year beginning on the first anniversary of the grant
date. Stock options become exercisable over a five year period
at 20% on each anniversary of the grant date and expire ten years from the
grant date.
|
(2)
|
Amount
reflects number of reload stock options granted pursuant to the 2005
Plan. Reload stock options vest 100% on the first anniversary
of the grant date and expire on the expiration date of the original
options whose exercise triggers the awarding of the reload options, or two
years, whichever is later. For additional discussion of reload
options, refer to “Proposal 2—To Amend the First Amended and Restated
Swift Energy Company 2005 Stock Compensation Plan—Summary of the 2005
Plan—Reload Options.”
|
(3)
|
Amount
reflects number of reload stock options granted pursuant to the Swift
Energy Company 2001 Omnibus Stock Compensation Plan. Reload
stock options vest 100% on the first anniversary of the grant date and
expire on the expiration date of the original options whose exercise
triggers the awarding of the reload options, or two years, whichever is
later.
|
(4)
|
Amount
reflects number of reload stock options granted pursuant to the Swift
Energy Company 1990 Stock Compensation Plan. Reload stock
options vest 100% on the first anniversary of the grant date and expire on
the expiration date of the original options whose exercise is the basis
for the awarding of the reload options, or two years, whichever is
later.
|
Outstanding
Equity Awards at Fiscal Year-End
The
following table includes certain information about stock options and restricted
stock outstanding at December 31, 2008, for each Named Executive Officer listed
in the Summary Compensation Table:
|
|
Option
Awards
|
|
Stock
Awards
|
Name
|
|
Number
of Securities Underlying Unexercised Options
(#)
Exercisable
|
|
Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
|
|
Equity
Incentive Plan Awards: Number of Securities Underlying
Unexercised Unearned Options
(#)
|
|
Option
Exercise Price
($)
|
|
Option
Expiration Date
|
|
Number
of Shares or Units of Stock That Have Not Vested
(#)
|
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)(1)
|
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
That Have Not Vested
(#)
|
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
Other Rights That Have Not Vested
($)
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry E.
Swift
Stock
Options
|
|
647
|
|
—
|
|
—
|
|
$
|
35.04
|
|
02/20/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1
|
|
—
|
|
—
|
|
$
|
30.47
|
|
05/08/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
4,002
|
|
—
|
|
—
|
|
$
|
16.96
|
|
02/04/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
16,000
|
|
—
|
|
—
|
|
$
|
13.84
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
10,400
|
|
5,200
|
(2)
|
—
|
|
$
|
25.18
|
|
11/08/2014
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
10,160
|
|
15,240
|
(2)
|
—
|
|
$
|
44.24
|
|
02/08/2016
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
6,820
|
|
27,280
|
(2)
|
—
|
|
$
|
43.48
|
|
02/06/2017
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
37,800
|
(2)
|
—
|
|
$
|
43.21
|
|
02/11/2018
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
Reload
Stock Options
|
|
9,869
|
|
—
|
|
—
|
|
$
|
28.97
|
|
02/07/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
2,008
|
(3)
|
—
|
|
$
|
44.33
|
|
02/18/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
8,330
|
|
—
|
|
—
|
|
$
|
43.48
|
|
02/20/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
4,458
|
|
—
|
|
—
|
|
$
|
51.21
|
|
02/20/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
29,749
|
|
—
|
|
—
|
|
$
|
51.21
|
|
05/08/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
5,297
|
|
—
|
|
—
|
|
$
|
51.21
|
|
02/04/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
3,821
|
|
—
|
|
—
|
|
$
|
28.97
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2,546
|
|
—
|
|
—
|
|
$
|
43.48
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2,162
|
|
—
|
|
—
|
|
$
|
51.21
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
3,011
|
|
—
|
|
—
|
|
$
|
43.48
|
|
11/08/2014
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2,556
|
|
—
|
|
—
|
|
$
|
51.21
|
|
11/08/2014
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
Restricted
Stock
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
7,200
|
|
$
|
121,032
|
(4)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
5,834
|
|
$
|
98,070
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
15,800
|
|
$
|
265,598
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
26,300
|
|
$
|
442,103
|
(5)
|
—
|
|
|
—
|
Alton
D. Heckaman, Jr.
Stock
Options
|
|
10,000
|
|
—
|
|
—
|
|
$
|
35.04
|
|
02/20/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
7,000
|
|
—
|
|
—
|
|
$
|
30.47
|
|
05/08/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
5,000
|
|
—
|
|
—
|
|
$
|
13.84
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,700
|
|
1,700
|
(2)
|
—
|
|
$
|
25.18
|
|
11/08/2014
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
4,440
|
|
6,660
|
(2)
|
—
|
|
$
|
44.24
|
|
02/08/2016
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2,860
|
|
11,440
|
(2)
|
—
|
|
$
|
43.48
|
|
02/06/2017
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
17,100
|
(2)
|
—
|
|
$
|
43.21
|
|
02/11/2018
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
Reload
Stock Options
|
|
887
|
|
—
|
|
—
|
|
$
|
45.78
|
|
06/18/2009
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1659
|
|
—
|
|
—
|
|
$
|
41.08
|
|
09/27/2009
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2,489
|
|
—
|
|
—
|
|
$
|
34.41
|
|
02/07/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,210
|
|
—
|
|
—
|
|
$
|
35.05
|
|
02/07/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
238
|
|
—
|
|
—
|
|
$
|
38.41
|
|
02/07/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
225
|
(3)
|
—
|
|
$
|
44.33
|
|
02/18/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
752
|
(3)
|
—
|
|
$
|
49.98
|
|
02/28/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
2,459
|
(3)
|
—
|
|
$
|
57.80
|
|
05/14/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
3,322
|
|
—
|
|
—
|
|
$
|
33.01
|
|
08/01/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
6,752
|
(3)
|
—
|
|
$
|
49.98
|
|
08/01/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
4,218
|
|
—
|
|
—
|
|
$
|
50.01
|
|
08/01/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,772
|
|
—
|
|
—
|
|
$
|
49.41
|
|
02/20/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
250
|
|
—
|
|
—
|
|
$
|
49.41
|
|
05/08/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
7,390
|
(3)
|
—
|
|
$
|
60.17
|
|
05/08/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
1,474
|
(3)
|
—
|
|
$
|
62.01
|
|
05/08/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,925
|
|
—
|
|
—
|
|
$
|
39.64
|
|
02/04/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,796
|
|
—
|
|
—
|
|
$
|
40.57
|
|
02/04/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
827
|
|
—
|
|
—
|
|
$
|
45.15
|
|
02/04/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,321
|
|
—
|
|
—
|
|
$
|
31.40
|
|
11/11/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
216
|
|
—
|
|
—
|
|
$
|
38.41
|
|
11/11/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
571
|
|
—
|
|
—
|
|
$
|
43.58
|
|
11/11/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
562
|
|
—
|
|
—
|
|
$
|
44.24
|
|
11/11/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,545
|
|
—
|
|
—
|
|
$
|
36.22
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
866
|
|
—
|
|
—
|
|
$
|
43.58
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,010
|
|
—
|
|
—
|
|
$
|
47.92
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2,076
|
|
—
|
|
—
|
|
$
|
49.70
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
628
|
(3)
|
—
|
|
$
|
49.98
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
2,221
|
(3)
|
—
|
|
$
|
57.80
|
|
11/08/2014
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
Restricted
Stock
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
2,360
|
|
$
|
39,672
|
(4)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
2,567
|
|
$
|
43,151
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
6,600
|
|
$
|
110,946
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
11,900
|
|
$
|
200,039
|
(5)
|
—
|
|
|
—
|
Bruce
H. Vincent
Stock
Options
|
|
11,577
|
|
—
|
|
—
|
|
$
|
13.84
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
8,640
|
|
2,160
|
(2)
|
—
|
|
$
|
25.18
|
|
11/08/2014
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
6,680
|
|
10,020
|
(2)
|
—
|
|
$
|
44.24
|
|
02/08/2016
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
4,220
|
|
16,880
|
(2)
|
—
|
|
$
|
43.48
|
|
02/06/2017
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
25,600
|
(2)
|
—
|
|
$
|
43.21
|
|
02/11/2018
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
Reload
Stock Options
|
|
1,103
|
|
—
|
|
—
|
|
$
|
46.66
|
|
02/07/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
8,648
|
(3)
|
—
|
|
$
|
47.08
|
|
02/21/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
4,011
|
(3)
|
—
|
|
$
|
60.17
|
|
05/16/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
828
|
(3)
|
—
|
|
$
|
62.09
|
|
05/21/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2,746
|
|
—
|
|
—
|
|
$
|
47.92
|
|
08/01/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2,653
|
|
—
|
|
—
|
|
$
|
49.61
|
|
08/01/2010
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
4,673
|
(3)
|
—
|
|
$
|
57.80
|
|
02/20/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
2,790
|
(3)
|
—
|
|
$
|
60.17
|
|
02/21/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
407
|
|
—
|
(3)
|
—
|
|
$
|
30.47
|
|
05/08/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
4,002
|
(3)
|
—
|
|
$
|
57.80
|
|
05/08/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
8,518
|
(3)
|
—
|
|
$
|
60.80
|
|
05/08/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
2,453
|
(3)
|
—
|
|
$
|
62.09
|
|
05/08/2011
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
583
|
|
—
|
|
—
|
|
$
|
43.58
|
|
02/04/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2,987
|
|
—
|
|
—
|
|
$
|
47.67
|
|
02/04/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
915
|
|
—
|
|
—
|
|
$
|
51.84
|
|
02/04/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
340
|
(3)
|
—
|
|
$
|
64.87
|
|
02/04/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
762
|
|
—
|
|
—
|
|
$
|
43.58
|
|
11/11/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2,134
|
|
—
|
|
—
|
|
$
|
46.66
|
|
11/11/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
640
|
|
—
|
|
—
|
|
$
|
51.84
|
|
11/11/2012
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
3,483
|
|
—
|
|
—
|
|
$
|
47.67
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,673
|
|
—
|
|
—
|
|
$
|
49.61
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
94
|
(3)
|
—
|
|
$
|
62.09
|
|
11/05/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
914
|
(3)
|
—
|
|
$
|
64.87
|
|
06/18/2017
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
Restricted
Stock
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
3,000
|
|
$
|
50,430
|
(4)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
3,834
|
|
$
|
64,450
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
9,734
|
|
$
|
163,629
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
17,800
|
|
$
|
299,218
|
(5)
|
—
|
|
|
—
|
Robert
J. Banks
Stock
Options
|
|
5,000
|
|
2,000
|
(2)
|
—
|
|
$
|
16.16
|
|
02/06/2014
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
3,280
|
|
820
|
(2)
|
—
|
|
$
|
25.18
|
|
11/08/2014
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,800
|
|
2,700
|
(2)
|
—
|
|
$
|
44.24
|
|
02/08/2016
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2,300
|
|
9,200
|
(2)
|
—
|
|
$
|
43.48
|
|
02/06/2017
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
13,700
|
(2)
|
—
|
|
$
|
43.21
|
|
02/11/2018
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
Restricted
Stock
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
1,120
|
|
$
|
18,827
|
(4)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
1,034
|
|
$
|
17,382
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
5,334
|
|
$
|
89,665
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
9,600
|
|
$
|
161,376
|
(5)
|
—
|
|
|
—
|
James
P. Mitchell
Stock
Options
|
|
4,000
|
|
0
|
|
—
|
|
$
|
13.84
|
|
11/04/2013
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,020
|
|
1,020
|
(2)
|
—
|
|
$
|
25.18
|
|
11/08/2014
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
2,840
|
|
4,260
|
(2)
|
—
|
|
$
|
44.24
|
|
02/08/2016
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
1,640
|
|
6,560
|
(2)
|
—
|
|
$
|
43.48
|
|
02/06/2017
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
8,300
|
(2)
|
—
|
|
$
|
43.21
|
|
02/11/2018
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
Restricted
Stock
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
1,400
|
|
$
|
23,534
|
(4)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
1,634
|
|
$
|
27,468
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
3,800
|
|
$
|
63,878
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
5,800
|
|
$
|
97,498
|
(5)
|
—
|
|
|
—
|
|
|
|
(1)
|
Amount
reflects the aggregate market value of unvested restricted shares at
December 31, 2008, which equals the number of unvested restricted shares
in column (g) multiplied by the closing price of the Company’s common
stock at December 31, 2008 ($16.81).
|
(2)
|
Stock
options become exercisable in five equal installments each year beginning
on the first anniversary of the grant date.
|
(3)
|
Reload
stock options vest 100% on the first anniversary of the grant date and
expire on the expiration date of the original options whose exercise is
the basis for the awarding of the reload options, or two years, whichever
is later.
|
(4)
|
Restrictions
on restricted shares lapse as to 20% of such shares each year beginning on
February 8, 2007, and on the anniversary of such date
thereafter.
|
(5)
|
Restrictions
on restricted shares lapse as to one-third of such shares each year
beginning on the first anniversary of the grant
date.
|
Option
Exercises and Stock Vested
The
following table includes information regarding stock options exercised and
restricted stock vested for the Named Executive Officers named in the Summary
Compensation Table during the fiscal year ended December 31, 2008:
|
|
Option
Awards
|
|
Stock
Awards
|
Name
|
|
Number
of Shares Acquired on Exercise
(#)
|
|
Value
Realized on Exercise
($)(1)
|
|
Number
of Shares Acquired on Vesting
(#)
|
|
Value
Realized on Vesting
($)(2)
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
|
|
|
|
|
|
|
|
|
|
Terry
E. Swift
|
|
3,075
|
|
$
|
47,232
|
|
17,333
|
|
$
|
716,106
|
Alton
D. Heckaman, Jr.
|
|
45,816
|
|
$
|
1,294,495
|
|
7,047
|
|
$
|
290,905
|
Bruce
H. Vincent
|
|
57,075
|
|
$
|
1,172,624
|
|
10,199
|
|
$
|
420,813
|
Robert
J. Banks
|
|
0
|
|
$
|
0
|
|
4,259
|
|
$
|
174,892
|
James
P. Mitchell
|
|
8,120
|
|
$
|
325,158
|
|
4,233
|
|
$
|
174,841
|
|
|
|
(1)
|
Amount
reflects value realized by determining the difference between the market
price of the underlying securities at exercise and the exercise price of
the stock options.
|
(2)
|
Amount
reflects value realized by multiplying the number of shares of restricted
stock vesting by the market value on the vesting
date.
|
Potential
Payments Upon Termination or Change in Control
The table
below and the discussion that follows reflect the amount of compensation payable
to each Named Executive Officer upon death, permanent disability, change of
control, or other termination under each Named Executive Officer’s employment
agreements and the Company’s Change of Control Severance Plan and equity
compensation plans. The amounts shown assume that such termination
was effective December 31, 2008. The actual amounts to be paid out
can only be determined at the time of such executive’s separation from the
Company.
|
|
|
|
|
|
Equity
Acceleration(2)
|
|
|
|
|
Cash
Payments
|
|
Benefit
Cost(1)
|
|
Stock
Options
|
|
Restricted
Stock
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry
E. Swift
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
$
|
4,669,224
|
|
$
|
13,620
|
|
$
|
—
|
|
$
|
926,803
|
|
$
|
5,609,647
|
Disability
|
|
$
|
4,669,224
|
|
$
|
50,374
|
|
$
|
—
|
|
$
|
926,803
|
|
$
|
5,646,401
|
Change
of Control
|
|
$
|
4,669,224
|
|
$
|
33,944
|
|
$
|
—
|
|
$
|
926,803
|
|
$
|
5,629,971
|
Senior
Officer Tenure(3)
|
|
$
|
3,112,816
|
|
$
|
36,754
|
|
$
|
—
|
|
$
|
926,803
|
|
$
|
4,076,373
|
Termination
by Employee for Good Reason or by the Company without
Cause
|
|
$
|
4,669,224
|
|
$
|
50,374
|
|
$
|
—
|
|
$
|
926,803
|
|
$
|
5,646,401
|
Termination
by Employee without Good Reason
|
|
$
|
1,556,408
|
|
$
|
23,134
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,579,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alton
D. Heckaman, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
$
|
2,337,639
|
|
$
|
13,620
|
|
$
|
—
|
|
$
|
393,808
|
|
$
|
2,745,067
|
Disability
|
|
$
|
2,337,639
|
|
$
|
43,878
|
|
$
|
—
|
|
$
|
393,808
|
|
$
|
2,775,325
|
Change
of Control
|
|
$
|
2,337,639
|
|
$
|
27,448
|
|
$
|
—
|
|
$
|
393,808
|
|
$
|
2,758,895
|
Senior
Officer Tenure (3)
|
|
$
|
1,558,426
|
|
$
|
30,258
|
|
$
|
—
|
|
$
|
393,808
|
|
$
|
1,982,492
|
Termination
by Employee for Good Reason or by the Company without
Cause
|
|
$
|
2,337,639
|
|
$
|
43,878
|
|
$
|
—
|
|
$
|
393,808
|
|
$
|
2,775,325
|
Termination
by Employee without Good Reason
|
|
$
|
779,213
|
|
$
|
16,638
|
|
$
|
—
|
|
$
|
—
|
|
$
|
795,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce
H. Vincent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
$
|
3,207,783
|
|
$
|
13,620
|
|
$
|
—
|
|
$
|
577,726
|
|
$
|
3,799,129
|
Disability
|
|
$
|
3,207,783
|
|
$
|
53,521
|
|
$
|
—
|
|
$
|
577,726
|
|
$
|
3,839,030
|
Change
of Control
|
|
$
|
3,207,783
|
|
$
|
37,091
|
|
$
|
—
|
|
$
|
577,726
|
|
$
|
3,822,600
|
Senior
Officer Tenure (3)
|
|
$
|
2,138,522
|
|
$
|
39,901
|
|
$
|
—
|
|
$
|
577,726
|
|
$
|
2,756,149
|
Termination
by Employee for Good Reason or by the Company without
Cause
|
|
$
|
3,207,783
|
|
$
|
53,521
|
|
$
|
—
|
|
$
|
577,726
|
|
$
|
3,839,030
|
Termination
by Employee without Good Reason
|
|
$
|
1,069,261
|
|
$
|
26,281
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,095,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
J. Banks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
$
|
1,270,770
|
|
$
|
18,660
|
|
$
|
1,300
|
|
$
|
287,249
|
|
$
|
1,577,979
|
Disability
|
|
$
|
1,270,770
|
|
$
|
50,516
|
|
$
|
1,300
|
|
$
|
287,249
|
|
$
|
1,609,835
|
Change
of Control
|
|
$
|
1,507,119
|
(4)
|
$
|
35,856
|
|
$
|
1,300
|
|
$
|
287,249
|
|
$
|
1,831,524
|
Senior
Officer Tenure (3)
|
|
$
|
762,462
|
|
$
|
31,856
|
|
$
|
1,300
|
|
$
|
287,249
|
|
$
|
1,082,867
|
Termination
by Employee for Good Reason or by the Company without
Cause
|
|
$
|
1,270,770
|
|
$
|
50,516
|
|
$
|
1,300
|
|
$
|
287,249
|
|
$
|
1,609,835
|
Termination
by Employee without Good Reason
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
P. Mitchell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death
|
|
$
|
1,464,023
|
|
$
|
10,080
|
|
$
|
—
|
|
$
|
212,378
|
|
$
|
1,686,481
|
Disability
|
|
$
|
1,464,023
|
|
$
|
37,304
|
|
$
|
—
|
|
$
|
212,378
|
|
$
|
1,713,705
|
Change
of Control
|
|
$
|
1,464,023
|
|
$
|
31,224
|
|
$
|
—
|
|
$
|
212,378
|
|
$
|
1,707,625
|
Senior
Officer Tenure (3)
|
|
$
|
878,414
|
|
$
|
27,224
|
|
$
|
—
|
|
$
|
212,378
|
|
$
|
1,118,016
|
Termination
by Employee for Good Reason or by the Company without
Cause
|
|
$
|
1,464,023
|
|
$
|
37,304
|
|
$
|
—
|
|
$
|
212,378
|
|
$
|
1,713,705
|
Termination
by Employee without Good Reason
|
|
$
|
439,207
|
|
$
|
19,664
|
|
$
|
—
|
|
$
|
—
|
|
$
|
458,871
|
|
|
|
(1)
|
Includes
payment of insurance continuation as provided in employment agreement and
the Change of Control Severance Plan.
|
(2)
|
Includes
value of option spread and full value awards upon accelerated vesting of
equity grants at $16.81 per share (closing price on December 31,
2008).
|
(3)
|
Termination
by employee upon achieving "Senior Officer Tenure," which requires that
the one-year anniversary of the Named Executive Officer's Employment
Agreement has occurred, the Named Executive Officer has reached the age of
55 years or older, and the Named Executive Officer has been employed by
the Company for a minimum of ten years. The Named Executive
Officer must meet the conditions for Senior Officer Tenure and provide at
least six months' written notice to the Company of his intention to
terminate his employment.
|
(4)
|
Amount
includes a $236,350 gross-up reimbursement payment for amounts Mr. Banks
would owe in taxes pursuant to Section 4999 of the Internal Revenue
Code.
|
Computation
of Payments
Under the
employment agreements (amended and/or new) executed November 4, 2008, the
Company’s compensation plans and the Company’s Change of Control Severance Plan,
in the event of termination of employment of a Named Executive Officer, the
Named Executive Officer would receive the payments, accelerations and benefits
described below. If you desire, please refer to each of these
documents for specific provisions, which are exhibits to our Quarterly Report on
Form 10-Q for the quarter ending September 30, 2008, filed November 6,
2008. All of our employment agreements and compensation arrangements
have been drafted to comply with Section 409A of the Internal Revenue Code,
principally by deferring amounts payable upon termination for at least six
months. In each scenario, “Annual Compensation Amount” (referred to
as “ACA” below) is the Named Executive Officer’s annual base salary, plus the
highest of his annual cash bonuses paid in the last 36 months:
|
§
|
Cash
Payment:
|
|
|
|
Named
Executive Officer
|
|
Amount
|
|
|
Messrs.
T. Swift, Vincent and Heckaman
|
|
3 x
ACA
|
|
|
Messrs.
Banks and Mitchell
|
|
2.5
x ACA
|
|
§
|
Acceleration
of vesting and exercisability of all equity awards
|
|
|
§
|
Health
Insurance for dependents for 12 months
|
|
·
|
Disability,
by Employee for Good Reason, or by Company Without
Cause
|
|
§
|
Cash
Payment:
|
|
|
|
Named
Executive Officer
|
|
Amount
|
|
|
Messrs.
T. Swift, Vincent and Heckaman
|
|
3 x
ACA
|
|
|
Messrs.
Banks and Mitchell
|
|
2.5
x ACA
|
|
§
|
Acceleration
of vesting and exercisability of all equity awards
|
|
|
§
|
Health
Insurance:
|
|
|
|
Named
Executive Officer
|
|
Coverage
|
|
|
Messrs.
T. Swift, Vincent and Heckaman
|
|
30
months
|
|
|
Messrs.
Banks and Mitchell
|
|
24
months
|
|
§
|
Life
Insurance for 12 months
|
|
|
§
|
Cash
Payment:
|
|
|
|
Named
Executive Officer
|
|
Amount
|
|
|
Messrs.
T. Swift, Vincent and Heckaman
|
|
3 x
ACA
|
|
|
Messrs.
Banks and Mitchell
|
|
2.5
x ACA
|
|
§
|
Reimbursement
for amounts due pursuant to Section 4999 of the Internal Revenue
Code
|
|
|
§
|
Acceleration
of vesting and exercisability of all equity awards
|
|
|
§
|
Health
Insurance for 12 months
|
|
|
§
|
Life
Insurance for 12 months
|
|
|
§
|
Outplacement
services up to $4,000
|
|
·
|
By
Employee Upon 60 Days’ Notice Without Good
Reason
|
|
§
|
Cash
Payment:
|
|
|
|
Named
Executive Officer
|
|
Amount
|
|
|
Messrs.
T. Swift, Vincent and Heckaman
|
|
1 x
ACA
|
|
|
Mr.
Mitchell
|
|
.75
x ACA
|
|
§
|
Acceleration
of vesting of stock options (exercisability dates remain the
same)
|
|
|
§
|
Health
Insurance:
|
|
|
|
Named
Executive Officer
|
|
Coverage
|
|
|
Messrs.
T. Swift, Vincent and Heckaman
|
|
6
months
|
|
|
Mr.
Mitchell
|
|
3
months
|
|
§
|
Life
Insurance for 12 months
|
|
·
|
By
Employee Upon Achieving Senior Officer Tenure, which requires reaching the
age of 55, being employed by the Company for at least ten years and
providing six months’ advance notice after November 1,
2009
|
|
§
|
Cash
Payment:
|
|
|
|
Named
Executive Officer
|
|
Amount
|
|
|
Messrs.
T. Swift, Vincent and Heckaman
|
|
2 x
ACA
|
|
|
Messrs.
Banks and Mitchell
|
|
1.5
x ACA
|
|
§
|
Acceleration
of vesting of stock options (exercisability dates remain the
same)
|
|
|
§
|
Acceleration
of restricted stock, subject to meeting certain service
requirements
|
|
|
§
|
Health
Insurance:
|
|
|
|
Named
Executive Officer
|
|
Coverage
|
|
|
Messrs.
T. Swift, Vincent and Heckaman
|
|
18
months
|
|
|
Messrs.
Banks and Mitchell
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12
months
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§
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Life
Insurance for 12 months
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Conditions
and Covenants
Each
Named Executive Officer must also observe a noncompete provision in his
employment agreement. Based on the terms of the employment agreement,
the covenant not to compete provision would in no event be effective for longer
than three years following the termination of a Named Executive
Officer.
A Named
Executive Officer will not receive compensation under his employment agreement
if the Company terminates the Named Executive Officer for
Cause. Cause is defined in the employment agreement generally as
commission of fraud against the Company, willful refusal, without proper legal
cause to faithfully and diligently perform the Named Executive Officer’s duties
as directed or breach of the confidentiality provision of the employment
agreement.
PROPOSAL
2 — TO AMEND THE FIRST AMENDED AND RESTATED SWIFT ENERGY COMPANY 2005 STOCK
COMPENSATION PLAN
The
shareholders are being asked to approve an amendment to the First Amended and
Restated Swift Energy Company 2005 Stock Compensation Plan (the “2005 Plan”)
that would increase the number of shares of the Company’s common stock available
for award under the 2005 Plan by 1,250,000 shares. The 2005 Plan is
intended as an incentive to encourage stock ownership by certain officers,
employees and directors of the Company so that they may acquire or increase
their proprietary interest in the success of the Company and Subsidiaries, and
to encourage continued service to the Company. The Plan is designed
to meet this intent by offering performance-based stock and cash incentives and
other equity based incentive awards, thereby providing a proprietary interest in
pursuing the long-term growth, profitability and financial success of the
Company.
The oil
and gas industry has experienced robust conditions in recent
years. Despite the recent downturn in commodity prices, the
competition for geoscientists, petroleum engineers and other talented employees
has remained strong, especially in the regions in which we operate. We believe
that it is imperative that we maintain highly competitive compensation programs
to attract and retain quality personnel. The Company anticipates that it will,
as a general matter, grant restricted stock and/or options on an annual basis,
although future grant awards and grant recipients have not been
determined. Therefore, the number, amount and type of awards to be
received by or allocated to eligible persons in the future under the 2005 Plan
cannot be determined at this time. Because of the intense competition
in the industry for qualified oil and gas personnel, the Company granted shares
of restricted stock across the board to all of the Company’s employees,
including officers, in each of the last three years.
An
aggregate of 900,000 shares of the Swift Energy common stock was reserved for
awards under the 2005 Plan when the plan was approved by shareholders at the
2005 Annual Meeting. At succeeding Annual Meetings, the Company’s
shareholders approved increases in the shares available under the 2005 Plan by
an aggregate of 1,950,000 shares. As of December 31, 2008, 967,906
shares were still available for awards under the 2005 Plan, which represents
approximately 3.1% of the Company’s issued and outstanding shares as of such
date. During February 2009, the Company granted 273,400 stock options
and 190,000 restricted stock awards to all officers and several key employees of
the Company. These grants reduced the available shares by 547,000
shares when taking into account that the pool of shares is reduced by one share
for every stock option that is granted, and is reduced by 1.44 shares for every
restricted stock award that is granted. As of February 28, 2009,
taking the awards granted in 2009 into account, the Company had: (1) 508,681
shares available to cover awards granted under the Plan, (2) 654,547 stock
option awards outstanding with a weighted average exercise price of $31.48 and a
weighted average remaining term of 8.67 years, and (3) 538,253 restricted stock
awards outstanding.
The 2005
Plan was amended and restated in November 2008 to comply with Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”). On
December 31, 2008, 346 individuals were eligible to participate in the 2005
Plan.
Copies of
the 2005 Plan as filed with the SEC may be obtained through the SEC’s website at
www.sec.gov. The 2005 Plan appears as Exhibit 10.24 to the Company’s
Form 10-K for the year ended December 31, 2008. The 2005 Plan may
also be obtained without charge by writing to the Company at 16825 Northchase
Drive, Suite 400, Houston, Texas 77060, Attention: Secretary, or calling (281)
874-2700 or (800) 777-2412.
Summary
of the 2005 Plan
The 2005
Plan authorizes the Company to grant various awards (“Awards”) to directors,
Officers and all employees of the Company or its subsidiaries, including
incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), “reload”
options (“Reload Options”), stock appreciation rights (“SARs”), restricted stock
grants (“Restricted Stock Grants”), restricted unit grants (“Restricted Unit
Grants”) and performance bonus awards (“Performance Bonus
Awards”). Terms used but not defined in this summary have the same
meanings as defined in the 2005 Plan.
Administration. The Compensation
Committee of the Board has sole authority to construe and interpret the 2005
Plan, to select participants (“Participants”), to grant Awards and to establish
the terms and conditions of Awards. The Compensation Committee is
allowed to give the Company’s Chief Executive Officer specifically limited
written authority to grant Awards to new employees.
Eligibility. Any employee of the
Company or its subsidiaries, including any Officer or employee-director, any
consultant, and the non-employee directors of the Company, are eligible to
receive various Awards under the 2005 Plan.
Shares Subject
to
2005 Plan. As of May 13, 2008, the
date the shareholders last approved a share increase to the 2005 Plan, the
maximum number of shares of common stock in respect of which Awards could be
granted under the 2005 Plan (the “Plan Maximum”) was 2,850,000 shares in a
“fungible pool” of shares, plus shares covered by previous Awards granted prior
to May 11, 2005, the effective date of the 2005 Plan, under any prior long-term
incentive plan which Awards are forfeited or cancelled. That pool of
shares is reduced by one share for every stock option that is granted and is
reduced by 1.44 shares for every “full-value” Award that is
granted. “Full-value” Awards consist of Restricted Stock Grants,
Restricted Unit Grants and SARs. Thus, if only stock options are
granted, options covering up to 2,850,000 shares may be granted; if only
“full-value” Awards are granted, Awards covering only 1,979,166 shares may be
granted. If both stock options and “full-value” Awards are granted under the
2005 Plan, the number of shares which can be covered by Awards will fall
somewhere between 1,423,611 shares and 2,020,000 shares, depending upon the
ultimate mix of stock options and “full-value” Awards that are granted under the
2005 Plan. ISOs cannot be granted under the 2005 Plan covering more
than 875,000 shares (“ISO Limit”). The reserved share numbers (and the share
numbers constituting the Plan Maximum, ISO Limit, and Named Executive Officer
limits) are subject to appropriate adjustment in the event of a reorganization,
stock split, stock dividend, merger, consolidation, or other change in
capitalization of the Company affecting its common stock.
As of
February 28, 2009, there remained 508,681 shares of common stock in respect of
which Awards may be granted under the 2005 Plan (508,681 shares available if
only stock options Awards are granted, 353,251 shares available if only
“full-value” Awards are granted). At such date, options to purchase
748,303 shares have been granted, and 1,316,870 shares of restricted stock have
been awarded under the 2005 Plan.
If the
proposal to make 1,250,000 additional shares available under the 2005 Plan is
approved by shareholders, Awards will be accounted for as described
above. Therefore, in addition to those currently available under the
2005 Plan, if only stock options are granted, options covering up to 1,250,000
shares may be granted; if only “full-value” Awards are granted, Awards covering
only 868,055 shares may be
granted. Taking this into consideration, if the proposed additional
shares are made available under the 2005 Plan, the aggregate number of shares
that can be covered by Awards would fall somewhere between 1,758,681 and
1,221,306 shares if a combination of both stock options and “full-value” Awards
are granted.
Term. The 2005 Plan will
terminate on May 10, 2015, unless sooner terminated by the Board, except with
respect to Awards then outstanding.
Amendment.
The Board may amend the 2005 Plan at any time, except that (1) the Board
must obtain shareholder approval to make any amendment that would increase the
total number of shares reserved for issuance (except for adjustments necessary
to reflect changes in capitalization), materially modify eligibility
requirements, materially increase the benefits accruing to Participants
resulting in the repricing of Awards already issued, materially extend the term
of the plan, or increase the maximum number of shares covered by Awards to Named
Executive Officers, and (2) certain amendments are altogether prohibited (e.g.,
any amendment that would impair a Participant’s vested rights).
Incentive Stock
Options. Options designated as ISOs within the meaning of Section 422 of
the Code, together with the regulations promulgated thereunder, may be granted
under the 2005 Plan up to the ISO Limit. To the extent that any
portion of an ISO that first becomes exercisable by any Participant during any
calendar year exceeds the $100,000 aggregate fair market value limitation of
Section 422(d) of the Code, or such other limit as may be imposed by the Code,
such excess portion shall be treated as a validly granted NSO. ISOs shall be
exercisable for such periods as the Compensation Committee shall
determine,
but in no event for a period exceeding ten years or, for Participants who own
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company (“10% Shareholders”), five years.
Non-Qualified
Stock Options. NSOs may be granted for
a stated number of shares of common stock and will be exercisable for such
period or periods as the Compensation Committee shall
determine. Holders of NSOs may elect to have the Company withhold
from shares to be delivered upon exercise of an NSO, shares whose fair market
value satisfy withholding taxes attributable to the exercise of the
NSOs. If shares are delivered for this purpose, the Compensation
Committee, in its sole discretion, may grant replacement NSOs in the form of
Reload Options (see below) in the amount of some or all of the shares delivered
to satisfy the withholding tax obligation.
Exercisability. ISOs and NSOs will
become exercisable in installments as determined in its sole discretion by the
Compensation Committee, although it is generally anticipated in keeping with
past Company practice that such options may be exercised in 20% installments on
each of the first five anniversary dates of the date of grant or such other
period as may be designated by the Compensation Committee. The
exercise price for options may be paid in cash or by delivery of shares of
common stock already owned for more than six months by the Participant and
having a market value equal to the exercise price.
Option Exercise
Prices.
Stock options may only be issued at an exercise price that is at least 100% of
the Fair Market Value of the common stock on the date of grant, and ISOs granted
to 10% Shareholders must have an exercise price of at least 110% of the Fair
Market Value of the common stock on the date of grant. The 2005 Plan
provides that the option exercise price may be paid in cash, by check, by cash
equivalent, by a broker-assisted exercise, with shares of common stock (but only
where acceptable to the Compensation Committee and only with shares owned for
six months), or a combination of the above.
Termination of
Awards.
Unless otherwise provided in an Award or the 2005 Plan, Awards will terminate
(i) three months following the holder’s termination of employment by the Company
except for death, disability, retirement, or upon a Change of Control, (ii) on
the first-year anniversary of a Participant’s death or disability, or (iii) on
the tenth-year anniversary of the date of grant.
Reload
Options.
Under the 2005 Plan, unless otherwise provided in a Participant’s stock option
agreement, whenever a Participant holding an ISO or NSO exercises an option (the
“Original Option”) and pays part or all of the exercise price by tendering
shares of common stock (a “stock-for-stock exercise”), the Participant will
automatically receive a “Reload Option” giving that Participant an option to
purchase the exact number of shares tendered in the stock-for-stock exercise at
an exercise price equal to the Fair Market Value of such shares at the date of
grant of such Reload Options, which date of grant will be the date of the notice
of exercise of the Original Option. Reload Options are not
exercisable after the later of the expiration of the option term of the Original
Option or two years following the date of grant of the Reload
Option. Except as described above, the terms and conditions of Reload
Options will be identical to the terms and conditions of the related Original
Options. Reload Options are designed to encourage stock-for-stock exercises by
Participants, without necessarily diluting a Participant’s percentage ownership
of the Company’s common stock or the Company’s outstanding common
stock.
Limitation on
Options and Awards to Named Executive Officers. Because amounts of
compensation paid to Named Executive Officers are subject to the limitations on
deductibility by the Company under Section 162(m) of the Code, the 2005 Plan
provides that such Named Executive Officers may not receive a grant in any given
calendar year of Awards covering or measured by more than 100,000 shares of the
Company’s common stock.
Transferability.
The Compensation Committee may allow transfer of Awards to family
members, trusts and partnerships for their benefit or owned by them, or to
charitable trusts. Awards held by transferees are subject to the same
restrictions and forfeiture upon termination of employment applicable to the
original holder of the Award. ISOs are not transferable except by
will or the laws of descent and distribution.
Change of
Control. In the event of a change of control of the Company as
described in the 2005 Plan, all stock options and SARs outstanding for more
than a year shall become fully vested and fully exercisable (unless otherwise
excepted), and all restrictions and conditions of Restricted Stock Grants and
Restricted Unit Grants outstanding shall be deemed to be satisfied, unless the
Board expressly provides otherwise. We amended the definition of “change of
control” so as to require that a transaction actually occur, rather than such
transaction merely being approved. A “change of control” occurs
upon:
(i) any
person or group, as defined in Section 13(d)(3) of the Exchange Act, becoming
the beneficial owner of shares of the Company with respect to which 40% or more
of the total number of votes for the election of the Board may be
cast;
(ii) as a
result of, or in connection with, any cash tender offer, exchange offer, merger
or other business combination, sale of assets, or contested election, or
combination of the above, persons who were directors of the Company immediately
prior to such event cease to constitute a majority of the Board; or
(iii) the
Company either ceases to be an independent publicly owned corporation or sells
or otherwise disposes of all or substantially all the assets of the
Company.
In
connection with a change of control, the Compensation Committee may also cash
out Awards at the higher of the highest price for shares of the Company’s common
stock in reported NYSE trading or the highest price paid in any bona fide
transaction related to a change of control. The 2005 Plan also
contains provisions that create a mechanism for a conditional exercise in
certain change of control transactions pending a cancellation of vested
unexercised options.
Stock
Appreciation Rights. Under the 2005 Plan,
the Compensation Committee may grant an Award of SARs that entitle a Participant
to receive the excess (if any) of the Fair Market Value of a share of common
stock on the date of exercise of the SAR, over the Fair Market Value of a share
of common stock on the date of grant of the SAR (“Spread”). The
Spread may only be paid in shares having a Fair Market Value on the date of
payment equal to the Spread. The Compensation Committee may establish
procedures for exercise and restrictions regarding the dates on which SARs may
be exercised, and subject to the other provisions of the 2005 Plan, a SAR shall
not be exercisable before the first anniversary date of the date of
grant.
Stock Grants,
Restricted Stock Grants, and Restricted Unit Grants. The Compensation
Committee may in its discretion grant shares of common stock to a Participant
with or without restrictions, vesting requirements or other
conditions. A Restricted Stock Grant is an Award of shares of the
Company’s common stock that does not vest until certain conditions established
by the Compensation Committee have been satisfied. Restricted Awards must
provide for vesting of such Awards over at least a three-year period, unless
specifically determined otherwise by the Compensation Committee, or a one-year
period if the Restricted Award is performance based (“Restriction
Period”). A Restricted Unit Grant is an Award of “units” subject to
similar vesting conditions, each unit having a value equal either to a share of
common stock or the amount by which a share of common stock appreciates in value
between the date of grant and the date at which any restrictions
lapse. During the Restriction Period, a Participant may vote and
receive dividends on the shares of common stock awarded pursuant to a Restricted
Stock Grant, but may not sell, assign, transfer, pledge or otherwise encumber
such shares. During the restricted period, the certificates
representing Restricted Awards will bear a restrictive legend and will be held
by the Company, or will be recorded on the books of the Company’s stock transfer
agent, but not issued to the Participant until the restrictions on the shares
covered by the Restricted Award lapse. When the Restriction Period
expires or the restriction with respect to installments of shares lapses,
provided that federal income tax withholding is provided for, the Participant is
entitled to receive (i) with respect to a Restricted Stock Grant, shares of
common stock free and clear of restrictions on sale, assignment, transfer,
pledge, or other encumbrances, or (ii) with respect to a Restricted Unit Grant,
payment for the value of the units.
Restricted Awards
for Non-Employee Directors. Under the 2005 Plan,
non-employee directors can only receive Restricted Awards described in this
paragraph. Under the 2005 Plan on the date of each annual meeting of
shareholders, each non-employee director will receive a Restricted
Award
consisting
of that number of shares of Company common stock determined by dividing $120,000
by the closing price of a share of common stock on the date of the Award,
payable only in installments as described below. The service
restrictions on non-employee directors’ Restricted Awards shall lapse on the
date of the next annual meeting of shareholders following the grant date, and
each Restricted Award shall vest ratably in three equal installments, one-third
on the date of each of the three successive annual meetings of shareholders
following the grant date; provided that following the date of such initial lapse
of restrictions, if a non-employee director’s service as a director terminates
and the non-employee director is in good standing as determined in the sole
discretion of the Board of Directors, then the Restricted Award of that
non-employee director shall vest immediately. Prior to the date of
such initial lapse of restrictions, no vesting shall occur upon a non-employee
director’s termination of service (other than by death or disability, in which
cases all Restricted Awards shall vest immediately).
Performance Bonus
Awards. The
Compensation Committee, in its sole discretion, may award Participants a
Performance Bonus Award in the form of cash or shares of common stock, or a
combination thereof, on such terms and conditions as the Compensation Committee
designates. Performance Bonus Awards will be based upon evaluation of a variety
of performance factors. Performance factors are to be determined
prior to the period of performance, which shall be not less than one year, and
may include (i) increases in earnings, earnings per share, EBITDA, revenues,
cash flow, return on equity, or total shareholder return, (ii) year-end volumes
of proved oil and gas reserves and/or year-end probable reserves, (iii) yearly
oil and gas production, (iv) share price performance, (v) relative technical,
commercial and leadership attributes, or (vi) similar performance
factors. If a Performance Bonus Award is paid in whole or in part in
shares of common stock, the number of shares shall be determined based upon the
NYSE closing price-based Fair Market Value of such
shares. Performance Bonus Awards are subject to terms and conditions
set by the Committee in its sole discretion.
Federal
Income Tax Considerations
Under
current U.S. federal tax law, the following are the U.S. federal income tax
consequences generally arising with respect to Awards made under the 2005
Plan.
Exercise
of Incentive Stock Option and Subsequent Sale of Shares
A
Participant who is granted an ISO does not realize taxable income at the time of
the grant or at the time of exercise. If the Participant makes no
disposition of shares acquired pursuant to the exercise of an ISO before the
later of two years from the date of grant or one year from such date of exercise
(“statutory holding period”), any gain (or loss) realized on such disposition
will be recognized as a long-term capital gain (or loss). Under such
circumstances, the Company will not be entitled to any deduction for federal
income tax purposes.
However,
if the Participant disposes of the shares during the statutory holding period,
that will be considered a disqualifying disposition. Provided the amount
realized in the disqualifying disposition exceeds the exercise price, the
ordinary income a Participant shall recognize in the year of a disqualifying
disposition will be the lesser of (i) the excess of the amount realized over the
exercise price, or (ii) the excess of the fair market value of the shares at the
time of the exercise over the exercise price; and the Company generally will be
entitled to a deduction for the amount of ordinary income recognized by such
Participant. The ordinary income recognized by the Participant is not
considered wages and the Company is not required to withhold, or pay employment
taxes, on such ordinary income. Finally, in addition to the ordinary
income described above, the Participant shall recognize capital gain on the
disqualifying disposition in the amount, if any, by which the amount realized in
the disqualifying disposition exceeds the fair market value of the shares at the
time of the exercise, which shall be long-term or short-term capital gain
depending on the Participant’s post-exercise holding period for such
shares.
To the
extent a Participant pays all or part of the exercise price of an ISO by
tendering previously acquired common stock owned by such Participant, the tax
consequences described above generally will apply to such
exchange. However, if a Participant exercises an ISO by tendering
shares previously acquired on the exercise of an ISO, a disqualifying
disposition will occur if the applicable holding period requirements described
above have not been satisfied with respect to the surrendered
stock. The consequence of such a disqualifying disposition is that
the Participant may recognize ordinary income at that time.
Notwithstanding
the favorable tax treatment of ISOs for regular tax purposes, as described
above, for alternative minimum tax purposes, an ISO is generally treated in the
same manner as a NSO. Accordingly, a Participant must generally
include as alternative minimum taxable income for the year in which an ISO is
exercised, the excess of the fair market value of the shares acquired on the
date of exercise over the exercise price of such shares. However, to
the extent a Participant disposes of such shares in the same calendar year as
the exercise, only an amount equal to the Participant’s ordinary income for
regular tax purposes with respect to such disqualifying disposition will be
recognized for the Participant's calculation of alternative minimum taxable
income in such calendar year.
Exercise
of Nonqualified Stock Option and Subsequent Sale of Shares
A
Participant who is granted a NSO does not realize taxable income at the time of
the grant, but does recognize ordinary income at the time of exercise in an
amount equal to the excess of the fair market value of the shares acquired on
the date of exercise over the exercise price of such shares; and the Company
generally will be entitled to a deduction for the amount of ordinary income
recognized by such Participant. The ordinary income recognized by the
Participant is considered supplemental wages and the Company is required to
withhold, and the Company and the Participant are required to pay, applicable
employment taxes on such ordinary income.
Upon the
subsequent disposition of shares acquired through the exercise of a NSO, any
gain (or loss) realized on such disposition will be recognized as a long-term or
short-term capital gain (or loss) depending on the Participant’s post-exercise
holding period for such shares. The tax basis in the shares acquired
at exercise of the NSO used to determine the amount of any capital gain or loss
on a future taxable disposition of such shares is the fair market value of the
shares on the date of exercise.
To the
extent a Participant pays all or part of the exercise price of a NSO by
tendering shares of common stock previously owned by the Participant, the tax
consequences described above generally would apply. However, the
number of shares received upon exercise of such option equal to the number of
shares surrendered in payment of the exercise price will have the same basis and
tax holding period as the shares surrendered. The additional shares
received upon such exercise will have a tax basis equal to the amount of
ordinary income recognized on such exercise and a holding period that commences
on the date of the exercise.
Lapse
of Restrictions on Restricted Stock and Subsequent Sale of Shares
When the
restrictions on a Restricted Award lapse, the Participant will recognize
ordinary income in an amount equal to the excess of the fair market value of the
shares at such time over the amount, if any, paid for such shares; and the
Company generally will be entitled to a deduction for the amount of ordinary
income recognized by such Participant. The ordinary income recognized
by the Participant is considered supplemental wages, and the Company is required
to withhold, and the Company and the Participant are required to pay, applicable
employment taxes on such ordinary income. Upon the subsequent
disposition of the formerly restricted shares, any gain (or loss) realized on
such disposition will be recognized as a long-term or short-term capital gain
(or loss) depending on the Participant’s holding period for such shares after
their restrictions lapse.
Under
Section 83(b) of the Code, a Participant who receives an Award of restricted
stock may elect to recognize ordinary income for the taxable year in which the
restricted stock was received equal to the excess of the fair market value of
the restricted stock on the date of the grant, determined without regard to the
restrictions, over the amount (if any) paid for the restricted stock. Any gain
(or loss) recognized upon a subsequent disposition of the shares will be capital
gain (or loss) and will be long-term or short-term depending on the post-grant
holding period of such shares. The amount recognized as taxable
income is added to any amount paid for the shares to determine their tax
basis. If, after making the election, a Participant forfeits any
shares of restricted stock, such Participant is only entitled to a tax deduction
with respect to the consideration (if any) paid for the restricted stock, not
the amount elected to be included as income at the time of grant.
Stock
Appreciation Rights and Performance Awards
A
Participant who is granted a SAR does not realize taxable income at the time of
the grant, but does recognize ordinary income at the time of exercise of the SAR
in an amount equal to the excess of
the fair
market value of the shares (on the date of exercise) with respect to which the
SAR is exercised, over the grant price of such shares; and the Company generally
will be entitled to a deduction for the amount of ordinary income recognized by
the such Participant.
A Named
Executive Officer who has been awarded a Performance Bonus Award does not
realize taxable income at the time of the grant, but does recognize ordinary
income at the time the Award is paid equal to the amount of cash (if any) paid
and the fair market value of shares (if any) delivered; and the Company
generally will be entitled to a deduction for the amount of ordinary income
recognized by the such Participant.
The
ordinary income recognized by a Participant in connection with a SAR or
Performance Bonus Award is considered supplemental wages and the Company is
required to withhold, and the Company and the Participant are required to pay,
applicable employment taxes on such ordinary income.
To the
extent, if any, that shares are delivered to a Participant in satisfaction of
either the exercise of a SAR, or the payment of a Performance Bonus Award, upon
the subsequent disposition of such shares any gain (or loss) realized will be
recognized as a long-term, or short-term, capital gain (or loss) depending on
the participant’s post-delivery holding period for such shares.
Code
Section 162(m)
Section
162(m) of the Code generally disallows a tax deduction to publicly held
companies for compensation in excess of $1 million paid to the Company’s chief
executive officer or any of the four other most highly compensated Officers, not
including the chief executive officer. Certain performance-based
compensation is specifically exempt from the deduction limit if it otherwise
meets the requirements of Section 162(m). These requirements include
that the compensation to be paid upon attainment of performance goals that are
determined by a board’s compensation committee comprised solely of two or more
outside directors, shareholder approval of the performance goals, and
compensation committee certification that the goals have been
met. Stock options and SARs generally qualify as “performance-based
compensation.” Other awards, grants or bonuses will be
“performance-based compensation” if they are so designated and if their grant,
vesting or settlement is subject to the performance criteria described above
meeting specified performance criteria and complying with Section 162(m) of the
Code, including related regulations. Restricted stock awards that
vest solely upon the passage of time do not qualify as “performance-based
compensation.”
Code
Section 409A
To the
extent that any award under the 2005 Plan is or may be considered to involve a
payment of deferred compensation or a deferral subject to Code Section 409A, the
Company intends that the terms and administration of such Award shall comply
with the provisions of such section, applicable Treasury Regulations, IRS
guidance and good faith reasonable interpretations thereof. As was
required under relevant law and regulations, the 2005 Plan was amended in order
to comply with Section 409A requirements, all as specifically authorized in the
2005 Plan, to and make other technical amendments that did not require
shareholder approval.
The
foregoing is only a summary of the effect of U.S. federal income taxation upon
employees and the Company with respect to the grant and exercise of stock
options, SARs, restricted stock and performance awards under the 2005
Plan. It is not intended as tax advice to employees participating in
the 2005 Plan, who should consult their own tax advisors. It does not
purport to be a complete description of the tax consequences under all
circumstances, nor does it describe the tax laws of any municipality, state or
foreign country in which the employee’s income or gain may be
taxable.
Equity
Compensation Plan Information
The
following table provides information as of December 31, 2008, regarding shares
outstanding and available for issuance under the Company’s existing stock
compensation and employee stock purchase plans:
|
|
(a)
|
|
(b)
|
|
(c)
|
|
Plan
Category
|
|
Number
of Securities
to
be Issued Upon
Exercise
of
Outstanding
Options,
Warrants
and Rights
|
|
Weighted-Average
Exercise
Price of
Outstanding
Options,
Warrants
And
Rights
|
|
Number
of Securities
Remaining
Available for
Future
Issuance Under
Equity
Compensation
Plans
(excluding
securities
reflected in
column (a))
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans approved by security holders
|
|
|
1,119,469
|
|
$
|
33.22
|
|
|
1,175,937
|
|
Equity
compensation plans not approved by security holders
|
|
|
—
|
|
$
|
—
|
|
|
—
|
|
Total
|
|
|
1,119,469
|
|
$
|
33.22
|
|
|
1,175,937
|
(1)
|
|
|
|
(1)
|
Includes
208,031 shares remaining available for issuance under the Swift Energy
Company Employee Stock Purchase Plan and 967,906 under the 2005
Plan.
|
Board
Recommendation
The
affirmative vote of the holders of a majority of the shares entitled to vote on,
and that voted for or against or expressly abstained with respect to, Proposal
2, is required to approve the amendment of the 2005 Plan to make additional
shares available for Awards under the 2005 Plan. Unless otherwise
directed by a proxy marked to the contrary, it is the intention of the persons
designated on the proxy card to vote the proxies “FOR” the proposed amendment of
the 2005 Plan. The Board believes that such approval is essential to
enable the Company to continue to attract and retain qualified employees and
directors. The Board supports management’s belief that the approval
of the proposed amendment to make up to 1,250,000 shares of the Company’s common
stock available for Awards under the 2005 Plan will contribute to the
continuation of the Company’s history of employee and director longevity, as the
Company’s stock compensation plans have done in the past.
The
Board of Directors unanimously recommends that shareholders vote “FOR”
amending the First Amended and Restated Swift Energy Company 2005 Stock
Compensation Plan.
|
PROPOSAL
3 — RATIFICATION OF SELECTION OF ERNST & YOUNG LLP AS SWIFT ENERGY COMPANY’S
INDEPENDENT AUDITOR FOR THE FISCAL YEAR ENDING DECEMBER 31, 2009
The Audit
Committee of the Board of Directors has appointed Ernst & Young LLP as the
independent registered public accounting firm for the Company to audit its
consolidated financial statements and internal control over financial reporting
for 2009. See “Audit Committee Disclosure” above for more information
related to Ernst & Young LLP.
Stockholder
approval or ratification is not required for the selection of Ernst & Young
LLP, since the Audit Committee of the Board of Directors has the responsibility
for selecting the Company’s independent auditor. However, the selection is being
submitted for ratification at the Annual Meeting as a matter of good corporate
practice. No determination has been made as to what action the Board of
Directors would take if shareholders do not approve the appointment, but the
Audit Committee may reconsider whether or not to retain the firm. Even if the
selection is ratified, the Audit Committee, in its discretion, may direct the
selection of a different independent registered public accounting firm at any
time during the year if the Audit Committee determines that such a change would
be in the Company’s and its shareholders’ best interests.
The
Board of Directors unanimously recommends that shareholders vote “FOR” the
ratification of the selection of Ernst & Young LLP as the Company’s
independent auditor.
|
AUDIT
COMMITTEE DISCLOSURE
The Audit
Committee assists the Board in fulfilling its responsibilities with respect to
oversight in monitoring (i) the integrity of the financial statements of the
Company; (ii) Swift Energy’s compliance with legal and regulatory requirements;
(iii) the independent auditor’s selection, qualifications and independence; and
(iv) the performance of Swift Energy’s internal audit function and independent
auditor. The committee is required to be comprised of three or more non-employee
directors, each of whom is determined by the Board to be “independent” under the
rules promulgated by the SEC under the Securities Exchange Act of 1934 (the
“Exchange Act”), and meets the financial literacy and experience requirements
under the rules or listing standards established by the NYSE, all as may be
amended from time to time. In addition, at least one member of the committee
must satisfy the definition of audit committee financial expert as such term may
be defined from time to time under the rules promulgated by the SEC. The Board
has determined that Messrs. Montgomery and Smith and Ms. Cannon
qualify as audit committee financial experts and that each member of the Audit
Committee is independent as defined in the NYSE listing standards and the rules
of the SEC. A report of the Audit Committee appears later in this
proxy statement. The Audit Committee is comprised of
Messrs. Montgomery (Chairman) and Smith and Ms. Cannon.
Preapproval
Policies and Procedures
The
charter of the Audit Committee provides that the Audit Committee shall approve,
in its sole discretion, any professional services to be provided by the
Company’s independent auditor, including audit services and significant
non-audit services (significant being defined for these purposes as non-audit
services for which fees in the aggregate equal 5% or more of the base annual
audit fee paid by the Company to its independent auditor), before such services
are rendered, and consider the possible effect of the performance of such latter
services on the independence of the auditor. The Audit Committee may delegate
preapproval authority to a member of the Audit Committee. The decisions of any
Audit Committee member to whom preapproval authority is delegated must be
presented to the full Audit Committee at its next scheduled meeting. All of the
services described above for 2008 and 2007 were preapproved by the Audit
Committee before Ernst & Young LLP was engaged to render the
services.
Services
Fees Paid to Independent Public Accounting Firm
Ernst
& Young LLP, certified public accountants, began serving as the Company’s
independent auditor in 2002. The Audit Committee, with ratification
of the shareholders, engaged Ernst & Young LLP to perform an annual audit of
the Company’s financial statements for the fiscal year ended December 31,
2008. A representative from Ernst & Young LLP will be present at
this year’s Annual Meeting. Such representative will have the opportunity to
make a statement if he or she desires to do so and is expected to be available
to respond to appropriate questions.
The
following table presents fees and expenses billed by Ernst & Young LLP for
its audit of the Company’s annual consolidated financial statements and for its
review of the financial statements included in the Company’s Quarterly Reports
on Form 10-Q for 2008 and 2007, and for its audit of internal control over
financial reporting for 2008 and 2007, and for other services provided by Ernst
& Young LLP.
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
Audit
Fees
|
|
$
|
1,353,900
|
|
$
|
1,850,600
|
Audit-Related
Fees
|
|
|
0
|
|
|
16,000
|
Tax
Fees
|
|
|
436,769
|
|
|
452,260
|
All
Other Fees
|
|
|
0
|
|
|
0
|
Totals
|
|
$
|
1,790,669
|
|
$
|
2,318,860
|
The tax
services provided in 2007 and 2008 generally consisted of compliance, tax advice
and tax planning services. The tax planning services generally consisted of
U.S., federal, state, local and international tax planning, compliance and
advice, and expatriate tax services.
Report of
the Audit Committee
In
connection with the financial statements for the fiscal year ended December 31,
2008, the Audit Committee has:
|
•
|
reviewed
and discussed the audited financial statements with
management;
|
|
•
|
discussed
with Ernst & Young LLP, the Company’s independent registered public
accounting firm (the “Auditor”), the matters required to be discussed by
the Statement on Auditing Standards No. 61, as amended;
and
|
|
•
|
obtained
the written disclosures and the letter from the Auditor in accordance with
the applicable requirements of the Public Company Accounting Oversight
Board regarding the Auditor’s communications with the Audit Committee
concerning independence, and discussed with the Auditor the Auditor’s
independence.
|
Based on
the reviews and discussion referred to above, we have recommended to the Board
of Directors that the Company’s audited financial statements be included in the
Annual Report on Form 10-K for the year ended December 31, 2008, filed with the
Securities and Exchange Commission.
|
AUDIT
COMMITTEE
Henry
C. Montgomery (Chairman)
Deanna
L. Cannon
Clyde
W. Smith, Jr.
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires the Company’s directors, executive Officers,
and persons who own more than 10% of the Company’s common stock to file reports
with the SEC regarding their ownership of, and transactions in, the Company’s
common stock. SEC regulations require Swift Energy to identify anyone who filed
a required report late during the most recent fiscal year. Based on a review of
the Forms 3 and 4 filed during the 2008 fiscal year and written certifications
provided to the Company, the Company believes that all of these reporting
persons timely complied with their filing requirements during 2008.
SHAREHOLDER
PROPOSALS
Pursuant
to various rules promulgated by the SEC, a shareholder who seeks to include a
proposal in the Company’s proxy materials for the annual meeting of the
shareholders of the Company to be held in 2010 must timely submit such proposal
in accordance with SEC Rule 14a-8 to the Company, addressed to the Secretary,
Swift Energy Company, 16825 Northchase Drive, Suite 400, Houston, Texas 77060,
no later than December 4, 2009. Further, a shareholder may not submit
a matter for consideration at the 2009 Annual Meeting, unless the shareholder
shall have timely complied with the requirements in the Company’s Bylaws. The
Bylaws state that in order for business to be properly brought before an annual
meeting by a shareholder, the shareholder must have given timely notice thereof
in writing to the Secretary of the Company. To be timely, a shareholder’s notice
must be delivered to or mailed and received at the principal executive offices
of the Company not less than 60 days or more than 90 days prior to the date of
the annual meeting. A notice given pursuant to this advance notice Bylaw will
not be timely with respect to the Company’s 2010 annual meeting unless duly
given by no later than March 12, 2010, and no earlier than
February 10, 2010.
The
Corporate Governance Committee will consider shareholder recommendations of
individuals for membership on the Board upon written request by a shareholder in
accordance with the procedures for submitting shareholder proposals. For more
information on shareholders’ nomination of directors refer to “Board of
Directors—Nomination of Directors” in this proxy statement.
With
respect to business to be brought before the 2009 Annual Meeting, the Company
has not received any notices, proposals, or nominees from shareholders that the
Company is required to include in this proxy statement.
COMMUNICATIONS
WITH THE BOARD OF DIRECTORS
Typically
the Lead Director presides at executive sessions of the independent directors of
the Board of Directors. Any communications that shareholders or other
interested parties may wish to send to the Board of Directors may be directly
sent to the Lead Director at the following address:
|
Lead
Director
Swift
Energy Company
c/o
CCI
P.O.
Box 561915
Charlotte,
NC 28256
|
Historically,
the Company’s annual meeting of its Board of Directors was held to coincide with
the annual meeting of its shareholders and a majority of the directors would
attend the annual meeting of shareholders; however, with the increased
responsibilities and time requirements in connection with the Board meeting, the
Board’s annual meeting is now held one week before the shareholders’ annual
meeting. Therefore, the Company does not have a policy with regard to Board
members’ attendance at its annual meetings of shareholders. Although some of the
members of the Board will attend the 2009 Annual Meeting, it is not expected
that a majority will be in attendance. Those in attendance will be available to
address shareholder questions. Two directors attended the 2008 Annual
Meeting.
FORWARD
LOOKING STATEMENTS
The
statements contained in this proxy statement that are not historical are
“forward-looking statements,” as that term is defined in Section 21E of the
Exchange Act, that involve a number of risks and uncertainties. Forward-looking
statements use forward-looking terms such as “believe,” “expect,” “may,”
“intend,” “will,” “project,” “budget,” “should,” or “anticipate” or other
similar words. These statements discuss “forward-looking” information such as
future net revenues from production and estimates of oil and gas reserves. These
forward-looking statements are based on assumptions that the Company believes
are reasonable, but they are open to a wide range of uncertainties and business
risks, including the following:
|
•
|
fluctuations
of the prices received or demand for crude oil and natural gas over
time;
|
|
•
|
interruptions
of operations and damages due to hurricanes and tropical
storms;
|
|
•
|
geopolitical
conditions or hostilities;
|
|
•
|
uncertainty
of reserves estimates;
|
|
•
|
unexpected
substantial variances in capital
requirements;
|
|
•
|
currency
rate fluctuations with regard to the New Zealand
dollar;
|
|
•
|
environmental
matters; and
|
|
•
|
general
economic conditions.
|
Other
factors that could cause actual results to differ materially from those
anticipated are discussed in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2008. The Company will not update these forward-looking
statements unless required to do so by applicable law.
ANNUAL
REPORT ON FORM 10-K
Upon
written request, Swift Energy will provide any shareholder of the Company, at no
charge, a copy of the Company’s Annual Report on Form 10-K for 2008, as filed
with the SEC, including the financial statements and schedules, but without
exhibits. Direct requests should be made by mail to Swift Energy
Company, Investor Relations Department, 16825 Northchase Drive, Suite 400,
Houston, Texas 77060; by telephone at (281) 874-2700 or
(800) 777-2412; or by email to info@swiftenergy.com.
GENERAL
The
information contained in this proxy statement in the sections entitled “Proposal
1—Election of Directors,” “Proposal 2—To Amend the First Amended and Restated
Swift Energy Company 2005 Stock Compensation Plan,” “Proposal 3—To Ratify the
Selection of Ernst & Young LLP as Swift Energy Company’s Independent Auditor
for the Fiscal Year Ending December 31, 2009,” “Compensation Committee Report,”
and “Audit Committee Report” shall not be deemed incorporated by reference by
any general statement incorporating by reference any information contained in
this proxy statement into any filing under the Securities Act or the Exchange
Act, except to the extent that the Company specifically incorporates by
reference the information contained in such sections, and shall not otherwise be
deemed filed under the Securities Act or the Exchange Act.
|
By
Order of the Board of Directors,
Bruce
H. Vincent
President and Secretary
|
Houston,
Texas
April
2, 2009
|
|
SWIFT
ENERGY COMPANY
The
Board of Directors Solicits This Proxy for the
Annual
Meeting of Shareholders to be held on May 12, 2009
The
undersigned hereby constitutes and appoints Terry E. Swift, Bruce H. Vincent and
Alton D. Heckaman, Jr., or any one of them, with full power of substitution and
revocation of each, the true and lawful attorneys and proxies of the undersigned
at the Annual Meeting of Shareholders (the “Meeting”) of SWIFT ENERGY COMPANY
(the “Company”) to be held on Tuesday, May 12, 2009, at 4:00 p.m. Houston time,
at the Hilton Houston North, 12400 Greenspoint Drive, Houston, Texas, or
any adjournments or postponements thereof, and to vote the shares of common
stock of the Company standing in the name of the undersigned on the books of the
Company (or which the undersigned may be entitled to vote) on the record date
for the Meeting with all powers the undersigned would possess if personally
present at the Meeting.
(Continued
and to be SIGNED on REVERSE side)
ANNUAL
MEETING OF SHAREHOLDERS OF
SWIFT
ENERGY COMPANY
MAY
12, 2009
PROXY
VOTING INSTRUCTIONS
|
MAIL –
Date, sign and mail your proxy card in the envelope provided as
soon as possible.
|
|
COMPANY
NUMBER
|
|
- OR
-
|
|
ACCOUNT
NUMBER
|
|
INTERNET –
Access www.voteproxy.com
and follow the on-screen instructions. Have your proxy card
available when you access the web page.
|
|
|
|
|
- OR
-
|
|
|
|
IN
PERSON –
You may vote your shares in person by attending the Annual
Meeting.
|
|
|
|
You may enter
your voting instructions at www.voteproxy.com up until 11:59 Eastern Time
the day before the cut-off or meeting
date.
|
Please detach along perforated line and mail in
the envelope provided.
The
Board of Directors recommends a vote “FOR” Proposals 1, 2 and 3.
PLEASE
SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK
YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
Proposal
1. Election
of Directors:
Class I Nominees (Term to expire
2012)
|
|
FOR
|
AGAINST
|
ABSTAIN
|
|
|
|
|
PROPOSAL 2:
Approval to amend the First Amended and Restated Swift Energy
Company 2005 Stock Compensation Plan.
|
|
|
|
|
|
|
|
|
|
NOMINEES:
|
|
|
|
|
o
|
FOR ALL
NOMINEES
|
O
|
Clyde W.
Smith, Jr.
|
|
|
|
|
O
|
|
PROPOSAL 3:
Ratification of selection of Ernst &
Young LLP as Swift Energy Company’s independent auditor for the fiscal
year ending December 31, 2009.
|
|
|
|
|
|
|
|
|
WITHHOLD
AUTHORITY
FOR ALL
NOMINEES
|
O
|
|
|
|
|
|
|
|
|
|
|
|
o
|
FOR ALL
EXCEPT
(See
instructions below)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
This
proxy will be voted in accordance with the specifications made
hereon. If NO specification is made, the shares will be voted
“FOR” Proposals 1, 2 and 3.
|
|
|
|
|
|
|
|
|
|
|
The
undersigned hereby acknowledges receipt of the Notice of 2009 Annual
Meeting of Shareholders, the Proxy Statement and the 2008 Annual Report to
Shareholders furnished herewith.
|
|
|
|
|
|
|
|
|
|
|
INSTRUCTIONS:To
withhold authority to vote for any individual nominee(s), mark “FOR
ALL EXCEPT” and fill in the circle next to each nominee you with to
withhold, as shown here: ●
|
PLEASE
SIGN, DATE AND RETURN IN THE ENCLOSED POSTATED PAID, PRE-ADDRESSED
ENVELOPE.
|
|
|
|
|
|
|
|
|
|
|
To change the
address on your account, please check the box at right and indicate your
new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature of
Shareholder
|
|
Date:
|
|
Signature of
Shareholder
|
|
Date:
|
|
|
|
|
|
Note:Please
sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder must sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as
such. If signer is a partnership, please sign in partnership
name by authorized person.
|
|
|
|
|
GRAPHIC
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