2012 Proxy Statement

2012 Proxy in PDF   /   2012 Proxy at SEC

 

The information below is an html version of the proxy statement filed with the SEC on March 29, 2012. To see this information on the SEC web site, click on the link above.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held May 8, 2012

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 8, 2012, at 3:00 p.m., Houston time, for the following :

  1. To elect three Class I directors identified in this proxy statement to serve until the 2015 annual meeting of shareholders, or until their successors are duly qualified and elected;
  2. To increase the number of shares of common stock that may be issued under the First Amended and Restated Swift Energy Company 2005 Stock Compensation Plan (the “2005 Plan”);
  3. To amend the Swift Energy Company Employee Stock Purchase Plan (the “ESPP”) to increase the number of shares of the Company’s common stock available for issuance under the plan by up to 500,000 additional shares;
  4. To ratify the selection of Ernst & Young LLP as Swift Energy’s independent auditor for the fiscal year ending December 31, 2012;
  5. To conduct a non-binding advisory vote on the compensation of Swift Energy’s named executive officers as presented in this proxy statement; and
  6. To conduct such other business as may properly be presented at the annual meeting, or at any and all adjournments or postponements thereof.

A record of shareholders has been taken as of the close of business on March 16, 2012, 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 April 27, 2012, 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.

 

 
By Order of the Board of Directors,
 
March 29, 2012
Bruce H. Vincent
President and Secretary

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
     Solicitation
     Class II Directors 

 

SWIFT ENERGY COMPANY

16825 Northchase Drive, Suite 400
Houston, Texas 77060
(281) 874-2700


PROXY STATEMENT
for the

2012 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 March 29, 2012.  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 8, 2012, at 3:00 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 pursuant to 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 have mailed a Notice on or about March 29, 2012, to all shareholders of record on March 16, 2012, 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 are the following representatives of Swift Energy:

     
  Terry E. Swift Chairman of the Board and Chief Executive Officer
  Bruce H. Vincent President, Secretary and Director
  Alton D. Heckaman, Jr. Executive Vice President and Chief Financial Officer
     

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 16, 2012.

How many shares of Swift Energy common stock are entitled to vote at the Annual Meeting?

As of March 16, 2012, there were 42,824,356 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 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 the 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 the
       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 the 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 providedd.

       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 card 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:

Proposal 1 — FOR the election of all nominees for Class I directors identified in this proxy statement, with terms to expire at the 2015 annual meeting of shareholders;
Proposal 2 — FOR the increase in the number of shares of common stock that may be issued under the First Amended and Restated Swift Energy Company 2005 Stock Compensation Plan;
Proposal 3 — FOR the amendment of the Swift Energy Company Employee Stock Purchase Plan to increase the number of shares of Swift Energy common stock available for issuance under the plan by up to 500,000 shares;
Proposal 4 — FOR the ratification of the selection of Ernst & Young LLP as Swift Energy’s independent auditor for the fiscal year ending December 31, 2012; and
Proposal 5 — FOR the approval of the compensation of Swift Energy’s named executive officers as presented in this proxy statement.

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, 3, 4, and 5 — 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:

Proposal 1 — FOR the election of all nominees for Class I directors identified in this proxy statement, with terms to expire at the 2015 annual meeting of shareholders;
Proposal 2 — FOR the increase in the number of shares of common stock that may be issued under the First Amended and Restated Swift Energy Company 2005 Stock Compensation Plan;
Proposal 3 — FOR the amendment of the Swift Energy Company Employee Stock Purchase Plan to increase the number of shares of Swift Energy common stock available for issuance under the plan by up to 500,000 shares;
Proposal 4 — FOR the ratification of the selection of Ernst & Young LLP as Swift Energy’s independent auditor for the fiscal year ending December 31, 2012;
Proposal 5 — FOR the approval of the compensation of Swift Energy’s named executive officers as presented in this proxy statement.

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 non-votes, 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.  If you submit a vote and wish to change it prior to the Annual Meeting, you may vote again via the Internet or by telephone (only your latest Internet or 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 new 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, although our Bylaws provide for directors to be elected by a plurality of the votes cast by the holders of shares entitled to vote at the meeting, in December 2011 we adopted a majority voting policy for directors in uncontested elections which will apply at the 2012 annual meeting of shareholders.

The remaining proposals each require 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 Inc. to act as a proxy solicitor in conjunction with the Annual Meeting.  The Company has agreed to pay this firm $10,500, 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 re-election as Class I directors. 

Although Swift Energy’s Bylaws provide for directors to be elected by a plurality of votes cast by holders of shares entitled to vote in the election of directors at a meeting of the shareholders at which a quorum is present, in 2011 we amended our Principles for Corporate Governance to require that in an uncontested election all nominees of the Board standing for re-election shall tender an irrevocable resignation that will become effective upon both a director’s failure to receive a majority of the votes cast in such election and Board acceptance of such resignation.  Upon the failure of a director to receive a majority of votes cast, the Corporate Governance Committee shall promptly consider, and make a recommendation to the Board regarding, whether to accept or reject the tendered resignation, or whether other action should be taken.  The Board must act on the tendered resignation, and publicly disclose its decision and the rationale behind it, within 90 days from the date of the certification of the election results.  This policy provides for independent directors to make determinations as to director resignation and sets out a range of remedies in the event of a majority withhold vote.  Please refer to our Principles for Corporate Governance, which are available at www.swiftenergy.com, for a full description of this policy.

   

Current Composition
of the Board

     

Class I Directors:
(standing for reelection at this Annual Meeting for term to expire at 2015 annual meeting)

  Clyde W. Smith, Jr.
Terry E. Swift
Charles J. Swindells
     
Class II Directors:
(term to expire at 2013 annual meeting)
  Greg Matiuk
Bruce H. Vincent
     
Class III Directors:
(term to expire at 2014 annual meeting)
  Deanna L. Cannon
Douglas J. Lanier
     

The biographies of each of the nominees and continuing directors below contain information regarding the person's service as a director of Swift Energy, business experience, director positions with other companies held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that were considered by the Corporate Governance Committee and the Board in determining that the person should serve as a director for the Company.

Class I Director Nominees

Clyde  

Clyde W. Smith, Jr., 63, 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 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.  His qualifications to serve on the Board include his extensive business management experience and wealth of accounting knowledge.

Terry  

Terry E. Swift, 56, has served as a director of Swift Energy since May 2001 and as Chairman of the Board since June 1, 2006.  He has been Chief Executive Officer of the Company since May 2001 and was President of the Company from November 1997 to November 2004.  He also served as Chief Operating Officer from 1991 to February 2000 and as Executive Vice President from 1991 to 1997.  Mr. Swift served in other progressive positions of 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.  His qualifications to serve as a Board member include his 31 years of service with the Company, and his decades of technical oil and gas industry experience.

Charles  

Charles J. Swindells, 69, has served as a director of Swift Energy since February 2006.  Ambassador Swindells is currently a Senior Advisor to Bessemer Trust.  Ambassador Swindells served as a Senior Advisor of Evercore Wealth Management, a unit of Evercore Partners, from June 2009 until December 31, 2010.  He served as Vice Chairman, Western Region of U.S. Trust, Bank of America Private Wealth Management from 1993 until 2001, and again from 2005 until his retirement in January 2009, and he also is a director on the Board of The Greenbrier Companies, Inc., an international supplier of transportation equipment and services to the railroad industry.  Ambassador Swindells served as United States Ambassador to New Zealand and Samoa from 2001 to 2005.  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.  Ambassador Swindells is qualified to serve on the Board as his several years of service as an Ambassador of the United States, along with his business experience, have enabled him to bring to the Board a unique mix of political, legislative and international knowledge and experience.

Subject to our new majority voting policy for the election of directors, Swift Energy’s Bylaws provide that a plurality of the votes cast by holders of shares entitled to vote is necessary to elect each nominee.  Brokers do not have discretion to vote on this proposal without your instruction.  If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote. 

The Board of Directors unanimously recommends that shareholders vote “FOR”all director nominees identified in this proxy statement to serve as Class I directors.

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 nominees named in this proxy statement standing for election 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 nominee, 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.

CONTINUING MEMBERS OF THE BOARD OF DIRECTORS

Class I Directors

The biographies for the Class I director nominees are set forth above under “Proposal 1—Election of Directors.”

Class II Directors

 

Greg Matiuk, 66, has served as a director of Swift Energy since September 2003.  After 36 years of service, Mr. Matiuk retired from ChevronTexaco Corporation in May 2003, having served as Executive Vice President, Administrative and Corporate Services 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 degrees of Bachelor of Science in Geological Engineering and Executive Master of Business Administration.  Mr. Matiuk was inducted into the Academy of Geological Engineering and Sciences of Michigan Technological University in 2001 in recognition of his professional excellence and service.  He was chosen as a Board member due to his decades of experience in various facets of the energy industry.

 

Bruce H. Vincent, 64, was elected as a director of Swift Energy in May 2005.  He was appointed President of the Company in November 2004 and Secretary of the Company in February 2008, having previously served as Secretary from August 2000 until May 2005.  Mr. Vincent previously served as Executive Vice President—Corporate Development from August 2000 to November 2004, and as Senior Vice President—Funds Management from 1990 (when he joined the Company) to 2000.  He is currently the Immediate Past Chairman of the Independent Petroleum Association of America.  Mr. Vincent holds the degrees of Bachelor of Arts and Master of Business Administration and brings a wealth of business management and finance experience to the Board.

Class III Directors

Cannon  

Deanna L. Cannon, 51, has served as a director of Swift Energy since May 2004 and as the Chair of the Audit Committee since May 2010.  Ms. Cannon is President of Cannon & Company CPAs PLC, a privately held consulting firm.  She served as a shareholder and director of Corporate Finance Associates of Northern Michigan, an investment banking firm, from February 2005 to June 2010. 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.  We believe Ms. Cannon’s qualifications to serve on the Board include her wealth of accounting and financial knowledge, as well as her public company and industry-specific experience.

Lanier  

Douglas J. Lanier, 62, has served as a director of Swift Energy since May 2005 and currently serves as Lead Director at each executive session of the independent directors.  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 Mr. Lanier 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 and is a member of the Society of Petroleum Engineers.  Mr. Lanier was inducted into the University of Tulsa College of Engineering Hall of Fame in 2003.  We believe Mr. Lanier is qualified to serve on the Board as he is an industry veteran with decades of experience in the energy industry.

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, Douglas J. Lanier, Greg Matiuk, Clyde W. Smith, Jr., and Charles J. Swindells. Five of seven directors will be independent after the 2012 Annual Meeting if the Class I nominees are reelected.  These independent directors represent a majority of the Company’s Board of Directors.  Messrs. T. Swift and Vincent are not independent directors because they also serve as officers of the Company. 

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 Deanna L. Cannon, Audit Committee Chair, and Clyde W. Smith, Jr., also a member 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. Lanier was elected as Lead Director by the independent directors in May 2010.  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 chairs of the committees, and the number of meetings and actions by consent of the Board and the committees during 2011:

           
 

Board of Directors

Audit

Compensation

Corporate Governance

Executive

           
Number of meetings held in 2011

7

5

5

5

1

Number of actions by consent in 2011

3

0

0

0

0

           
Terry E. Swift

C

     

C

Deanna L. Cannon

M

C

 

M

 
Douglas J. Lanier

M

 

M

 

M

Greg Matiuk

M

 

M

C

M
Clyde W. Smith, Jr.

M

M

C

   
Charles J. Swindells

M

M

M

M

 
Bruce H. Vincent

M

     
M
     
C =  Chair
M =  Member
   

During 2011, 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 Ms. Cannon and Mr. Smith 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, and each meets the financial literacy and experience requirements established by the NYSE.  A report of the Audit Committee appears later in this proxy statement.  Ms. Cannon (Committee Chair) and Messrs. Smith and Swindells 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, some which may require 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 the NYSE’s listing standards. The Board has determined that all Compensation Committee 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 (Committee Chair), Lanier, Matiuk and Swindells are members of the Compensation Committee.

Corporate Governance Committee

The Corporate Governance Committee identifies individuals qualified to become directors, nominates candidates for directorships and also recommends to the Board the membership of 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 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 (Committee Chair) 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. T. Swift (Committee Chair), Matiuk, Lanier and Vincent are members of the Executive Committee.

Board Leadership Structure; Role in Risk Oversight

Under Swift Energy’s Bylaws, the Board of Directors may choose the same person to serve as the Chairman of the Board and the Company’s Chief Executive Officer.  The Board believes that the Chief Executive Officer bears the primary responsibility for managing the day-to-day business of Swift Energy and is best informed about the Company’s overall strategic direction, which makes him the best person to lead the Company’s Board of Directors and ensure that key strategic business and governance issues are considered by the Board.  Swift Energy’s Board of Directors has appointed Mr. Terry E. Swift to serve in both of these positions.  Mr. T. Swift 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.  The Board believes that having Mr. T. Swift fill both roles remains the best leadership structure for Swift Energy at this time.  Following most meetings of the Board, the Lead Director presides over an executive session of the independent members of the Board. 

The full Board is responsible for general oversight of enterprise risk concerns inherent in our business.  At each Board meeting the Board receives reports from members of our senior management that help the Board assess the risks we face in the conduct of our business.  Members of our senior technical staff frequently make presentations to the Board about current and planned exploration and development activities that may subject us to operational and financial risks.  In addition, the Audit Committee reviews the effectiveness of our internal controls over financial reporting, which are designed to address risks specific to financial reporting with our internal auditors and independent accountants at least annually.  Through the Company’s independent Audit, Compensation, and Corporate Governance committees, Swift Energy has established processes for the effective oversight of critical issues, such as integrity of our financial statements, corporate governance, executive compensation, and selection of directors and director nominees.

Compensation of Directors

In accordance with its charter, the Compensation Committee periodically evaluates the compensation of non-employee directors for service on the Board and on Board committees.  The Compensation Committee, in consultation with an independent compensation consultant, recommends annual retainer and meeting fees for non-employee directors and fees 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 2011:

 

Annual Board Retainer   $

42,500

 
Annual Meeting Fee Payment   $

12,500

(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   $

130,000

(5)
     
(1) Annual meeting fee paid 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, 2011:
                             

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

$78,015

 

$130,032

 

$—

 

$—

 

$—

 

$—

 

$208,047

 
Douglas J. Lanier

$78,227

 

$130,032

 

 $—

 

$—

 

$—

 

$—

 

$208,259

 
Greg Matiuk

$78,324

 

$130,032

 

 $—

 

$—

 

$—

 

$—

 

$208,356

 
Clyde W. Smith, Jr.

$73,284

 

$130,032

 

 $—

 

$—

 

$—

 

$—

 

$203,316

 
Charles J. Swindells

$63,413

 

$130,032

 

 $—

 

$—

 

$—

 

$—

 

$193,445

 
                                         
(1) The amounts in columns (c) and (d) reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for awards granted during that year.  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, 2011, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

(2) No perquisites are included in this column as to any independent director, as in the aggregate perquisites for any director during 2011 did not exceed $10,000.
   

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 addresses 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 9, 2013, and no earlier than February 7, 2013, in order to be considered for the next annual election of directors:

Corporate Governance Committee Chair
Swift Energy Company
c/o Office of the Corporate Secretary
16825 Northchase Drive, Suite 400
Houston, Texas 77060

     

     Qualifications

The Board codified standards for directors in the Board's Principles for Corporate Governance. These principles provide that the Board should encompass a diverse range of talent and perspectives, skill and expertise sufficient to provide sound and prudent guidance with respect to the Company's operations and interests. The Principles for Corporate Governance also provide that at all times a majority of the Board must be "independent directors" as defined from time to time by the listing requirements of the New York Stock Exchange and any specific requirements established by the Board.  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.

We have not adopted a specific written policy with respect to diversity; however, the Corporate Governance Committee considers principles of diversity as a factor in evaluating nominees to recommend for service on our Board.  As part of the Board’s succession planning and annual self-assessment process, the Board reviews the diversity of specific skills and characteristics necessary for the optimal functioning of the Board in its oversight of the Company over both the short and longer term. The Board’s succession planning requires the Corporate Governance Committee and the Board to assess the skill areas currently represented on the Board and those skill areas represented by directors expected to retire or leave the Board in the near future against the target skill areas established annually by the Board, as well as recommendations of directors regarding skills that could improve the overall quality and ability of the Board to carry out its function. The Board then establishes the specific target skill areas or experiences that are to be the focus of a director search, when necessary. Specific qualities or experiences could include matters such as experience in the Company's industry, financial or technological expertise, experience in situations comparable to the Company's, leadership experience and relevant geographical experience. The effectiveness of the Board's diverse mix of skills and experiences is also considered and reviewed as part of each Board self-assessment.

     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 composition and capabilities of existing 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

During 2011, the Compensation Committee of the Board consisted of Messrs. Smith, Lanier, Matiuk 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 and Insider Participation

Rights Agreement Expiration

Effective March 1, 2012, the Board of Directors approved acceleration of the Company’s Rights Agreement, which had been in place since August 1997. The Company filed a Form 8-K on March 5, 2012 detailing this matter.

Other Governance Procedures

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 Conflicts 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 person is asked to reaffirm and re-acknowledge 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 certain 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 for Corporate Governance 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 for 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, which is controlled by the aunt of the Company’s Chairman of the Board and Chief Executive Officer. This relationship is presented to the Corporate Governance Committee each year in the annual disclosure statement process as described above in “Corporate Governance and Insider Participation—Other Governance Procedures.”  We paid approximately $0.6 million to Tec-Com for such services pursuant to the terms of the contract between the parties in 2011, 2010 and 2009. The contract was renewed July 1, 2010, on substantially the same terms as the previous contract and expires June 30, 2013.  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, all 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 “Corporate Governance and Insider Participation—Other Governance Procedures” regarding the Conflicts of Interest Policy and related annual disclosure process used to identify and evaluate related-party transactions, if any, disclosed by our directors, officers and employees.

Director Emeritus

Mr. Virgil Swift served as a director from 1981 until the 2005 annual meeting of shareholders, 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 him.  As such, Mr. V. Swift regularly attends Board and committee meetings. Mr. V. Swift received compensation during 2011 pursuant to a consulting agreement which has been in effect since July 2000 and was renewed on similar terms effective July 1, 2006 and amended on February 25, 2009.  In 2011, Mr. V. Swift was paid approximately $5,200 per month under the consulting agreement.  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.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

The following table sets forth information concerning the shareholdings of each person who, to the Company’s knowledge, beneficially owned more than five percent of the Company’s outstanding common stock as of March 2, 2012:

Name and Address of Beneficial Owner
Amount and Nature of Beneficial Ownership
(# of shares)
 
Percent of Class
 
         
BlackRock, Inc.
40 East 52nd Street
New York, New York 10022

4,699,159 (1)

 

11.0%

 
         
EARNEST Partners, LLC
1180 Peachtree Street NE, Suite 2300
Atlanta, Georgia 30309

2,304,716 (2)

 

5.4%

 
         
The Vanguard Group, Inc.
100 Vanguard Boulevard
Malvern, Pennsylvania 19355

2,326,363 (3)

 

5.4%

 
     
(1) Based on ay Schedule 13G dated January 6, 2012, BlackRock, Inc. is a parent holding company in accordance with SEC Rule 13d-1(b)(1)(ii)(G) and holds sole voting and dispositive power as to all shares owned.
(2) Based on a Schedule 13G dated February 10, 2012, EARNEST Partners, LLC, is an investment advisor in accordance with SEC Rule 13d-1(b)(1)(ii)(E) and holds sole voting power as to 955,825 shares, shared voting power as to 426,597 shares and sole dispositive power as to all 2,304,716 shares.
(3) Based on a Schedule 13G dated February 6, 2012, 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 65,197 shares, sole dispositive power as to 2,261,166  shares and shared dispositive power as to 65,197 shares.
   

Security Ownership of Management

The following table sets forth information concerning the shareholdings of the members of the Board, the Named Executive Officers as defined on page 31 of this proxy statement, and all executive officers and directors as a group, as of March 2, 2012:

             

Name of Beneficial Owner

 

Position

 

Amount and Nature of Beneficial Ownership(1)(2)
(# of shares)

 

Percent of Class

               
Terry E. Swift   Chairman of the Board and
Chief Executive Officer
 

571,023

   

1.3%

 
Deanna L. Cannon   Director  

27,170

      (3)
Douglas J. Lanier   Director  

30,560

      (3)
Greg Matiuk   Director  

36,060

      (3)
Clyde W. Smith, Jr.   Director  

46,381

(4)     (3)
Charles J. Swindells   Director  

18,670

      (3)
Bruce H. Vincent   Director, President, and Secretary  

421,101

   
1%
 
Alton D. Heckaman, Jr.   Executive Vice President and Chief Financial Officer  

267,608

      (3)
Robert J. Banks   Executive Vice President and Chief Operating Officer  

174,660

      (3)
James P. Mitchell   Senior Vice President—
Commercial Transactions and Land
 

88,573

      (3)
Steven L. Tomberlin   Senior Vice President—
Resource Development and Engineering
 

164,486

      (3)
All executive officers and directors as a group (12 persons)      

1,896,798

   

4.4%

 
     
(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, less the shares set forth in this footnote.  The amounts include unvested restricted stock awards for each individual named in the table.  The table also includes the following shares that were acquirable within 60 days following March 2, 2012, by exercise of options granted under the Company’s stock plans: Mr. Swift—231,092; Ms. Cannon—6,000; Mr. Lanier—0; Mr. Matiuk—10,000; Mr. Smith—10,000; Ambassador Swindells—0; Mr. Heckaman—118,265; Mr. Vincent—185,923; Mr. Banks—91,592; Mr. Mitchell—43,239; Mr. Tomberlin—13,232; and all executive officers and directors as a group—725,325.
(2) None of the persons named have pledged as security any of the amounts reported in this table.
(3) Less than one percent.
(4) 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

The Board appoints the executive officers of the Company annually. Information regarding Terry E. Swift, Chief Executive Officer, and Bruce H. Vincent, President, is set forth previously in this proxy statement under “Board of Directors.”  Set forth below is certain information, as of the date of this proxy statement, concerning the other executive officers of the Company.

Robert J. Banks, 57, 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.

Alton D. Heckaman, Jr., 55, 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 P. Mitchell, 57, 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 progressive positions of responsibility since joining the Company in 1987.  Mr. Mitchell holds the degree of Bachelor of Arts in History and Business Law.

Steven L. Tomberlin, 54, was appointed Senior Vice President―Resource Development and Engineering in February 2012.  Mr. Tomberlin previously served as Vice President—Resource Development and Engineering from December 2009 to February 2012, and as Director of Reservoir Management and Technology from 2008 (when he joined the Company) to 2009.  Prior to joining the Company, Mr. Tomberlin held key positions with BP Production America as Performance Unit Leader—Decommissioning from February 2008 to October 2008 and as Manager—Operations Technical Group from January 2005 to January 2008.  He has over thirty years of experience in the oil and gas industry in the areas of exploration and development of properties in the Mid-Continent, Gulf Coast onshore and Gulf of Mexico areas.  Mr. Tomberlin holds the degree of Bachelor of Science in Chemical Engineering.

Barry S. Turcotte, 41, was appointed Vice President and Controller in December 2009 and serves as the Company’s principal accounting officer under SEC guidelines.  He previously served as Assistant Controller from April 2005 until December 2009 and served in other progressive positions of responsibility after joining the Company in 2001.  He has over nineteen years of experience in the accounting profession, both in public accounting firm practice and in the energy industry.  Mr. Turcotte is a Certified Public Accountant and holds the degrees of Bachelor of Business Administration in Accounting and Master of Business Administration.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

     Executive Summary

Our executive compensation program is designed to reward our officers, including the Named Executive Officers in the Summary Compensation Table (“NEOs”), for doing an effective job of creating long-term value for stockholders.  Adhering to this goal of our compensation program, the “at risk” pay of our CEO, which is the proportion of his compensation determinant on Swift Energy’s performance, comprised 88% of his 2011 total compensation reported in the Summary Compensation Table.

Our executive compensation program has three primary components (base salary, annual cash bonus, and long-term incentive equity awards) and our Compensation Committee considers each an essential element in managing total compensation.  Due to the intense competition for executive talent in the oil and gas industry, especially in Houston, Texas, the Compensation Committee deems it critical to utilize benchmarking and current marketplace data provided by our compensation consultant, Towers Watson, both when setting target levels of compensation and when making pay decisions to ensure we keep our top performing officers.  The target total compensation for our NEOs set at the beginning of 2011 was near the 50th percentile of current marketplace data and the actual total compensation paid to our NEOs in early 2012 for 2011 performance was marginally higher than the 50th percentile level, although our CEO’s total compensation for 2011 was lower than 50th percentile of current marketplace data for other chief executive officers in our industry. These higher levels in actual pay were a result of our Compensation Committee awarding above target annual cash bonus and/or long-term incentive awards primarily due to exceeding several 2011 operational and financial objectives. 

We refer you to our Annual Report on Form 10-K, primarily “Management’s Discussion and Analysis of Financial Conditions and Results of Operations,” where we have detailed our full financial and operating results for 2011, which our Compensation Committee considers strong, especially considering the significant decline in natural gas prices during the latter part of the year.  Further detail of our 2011 performance is included in this Compensation Discussion and Analysis; however, the following 2011 highlights are at the heart of the Company’s efforts to achieve long-term value for our shareholders and were determinative in the Compensation Committee’s pay decisions:

  • Annual Production increased 26% from 2010 levels and exceeded our 2011 objective;
  • Proved reserves surpassed our 2011 objective to record levels and 20% over 2010 levels;
  • In executing part of our strategic plans, we added several key oil and gas prospects and acreage to an already existing diverse portfolio of short- and long-term opportunities;
  • Through prudent spending during 2011, we strengthened our balance sheet and favorably executed strategic financing transactions;
  • Cash Flow from Continuing Operations increased 44% from 2010 levels; and
  • Earnings per Share (Diluted) increased 65% from 2010 levels.

After reviewing 2011 performance and considering the marketplace benchmarking information provided by our Compensation Consultant, the following pay actions were made during February 2012:

  • Five of our six NEOs received a cash bonus above their 2011 targeted amount, with our CEO receiving 155% of his target, which was a 20% decrease from 2010;
  • Our NEOs received long-term incentive equity awards ranging between 80% and 130% of their targeted amount (50th percentile of position specific market data), with our CEO receiving 90% of his target, which was a 9.4% decrease when compared to 2010 levels; and
  • Each NEO received a salary increase of 3%, other than one of our Senior Vice Presidents who received a 10% raise due to his promotion.

To further align our executive officers’ interests with the interests of stockholders, the Board of Directors adopted Board and Executive Stock Ownership Guidelines on March 1, 2012, which apply to each of our NEOs.  The administrator of the guidelines has determined that all covered officers are in compliance with the ownership guidelines, which are more fully described below.

     Swift Energy’s Pay-for-Performance Philosophy

Our executive compensation program is based on a pay-for-performance philosophy intended to align the interests of our officers with those of our stockholders and to support the long-term business objectives and corporate values that steer success.  Our Compensation Committee and, when applicable, our executive officers, use pay-for-performance principles in making executive compensation decisions. In 2008, for example, even though they were eligible for a percentage of their bonus target, the Board did not award cash bonuses to executive officers due to underperformance and the beginning of a worldwide recession.  The Committee usually will exercise discretion as to the compensation of our NEOs, but compensation decisions are always linked to performance of the Company. Likewise, as a result of strong performance in 2010, the Compensation Committee approved correspondingly higher bonuses for our Named Executive Officers than had been awarded in prior years. While the Company surpassed many of its operational and financial objectives during 2011, overall performance was slightly down compared to 2010. As a result, many of our NEO’s cash bonus and/or long-term incentive amounts were lower in 2011 than in 2010.

     Leadership Structure

SEC regulations require disclosure regarding the compensation of our Named Executive Officers.  For this proxy statement, Terry Swift, Chief Executive Officer (CEO); Bruce Vincent, President; Alton Heckaman, Executive Vice President and Chief Financial Officer (EVP & CFO); Robert Banks, Executive Vice President and Chief Operating Officer (EVP & COO); James Mitchell, Senior Vice President—Commercial Transactions and Land (SVP-CTL); and Steven Tomberlin, Senior Vice President—Resource Development and Engineering (SVP-RDE) comprise the Named Executive Officers.

     Independent Compensation Consultant and Use of Benchmarking and Marketplace Data

Towers Watson, a global professional services firm, serves as our independent compensation consultant and reports directly to the Compensation Committee.  Since 2008, Towers Watson has provided the Committee with benchmarking and marketplace data on executive compensation design and position specific data on each element.  All of the data provided by Towers Watson is for companies in the same industry and of similar size to Swift Energy.  The ultimate executive compensation program design and compensation decisions regarding our NEOs lie in the hands of our Compensation Committee; however, the consultation, peer and position-specific current and historic benchmarking data, and the assessment of our annual cash bonus and long-term incentive design provided by Towers Watson are important elements in the Committee’s overall executive compensation decisions.

To be successful recruiting and retaining top talent in the current highly competitive oil and gas industry in Houston, Texas, we believe it is necessary and appropriate to benchmark our executive compensation program against our relevant peers to ensure we properly retain our leaders.  The market data provided by our compensation consultant is not used in any formulaic or statistical manner to determine our NEO’s compensation program or actual Committee pay decisions.  Used as a critical point of reference, this data helps our Compensation Committee identify and evaluate pay trends in our industry and determine whether they are appropriate to implement at Swift Energy. 

In February 2011, Towers Watson provided historic and current benchmarking and marketplace compensation data that assisted the Committee both in making actual pay decisions for 2010 performance and for setting 2011 target levels for annual cash bonus and long-term incentive awards.  Similarly in February 2012, Towers Watson provided current 2012 marketplace data that assisted the Committee in making pay decisions for 2011 performance. 

     Industry Peer Group

The companies chosen by the Committee for the peer group represent companies of similar size and scope in the exploration and production sector of the energy industry and/or are companies that compete in the Company’s core areas of operation for both business opportunities and executive talent. The peer group changes from time to time due to business combinations, asset sales and other types of transactions that cause peer companies to no longer exist or to no longer be comparable. The Committee approves all revisions to the peer group. The Company’s 2011 peer group was as follows:

 

       
 

ATP Oil & Gas Corp.
Berry Petroleum
Cabot Oil & Gas
Clayton Williams Energy
Comstock Resources
Denbury Resources
Forest Oil

McMoRan Exploration
Newfield Exploration
Petrohawk Energy
Petroquest Energy
Pioneer Natural Resources
Plains Exploration & Production

Quicksilver Resources
Range Resources
Southwestern Energy
SM Energy
Stone Energy
Ultra Petroleum
 
       
    

In February 2012, the Committee reviewed the peer group list for application in 2012 and future compensation benchmarking.  Several new peers were added to replace companies that were either no longer relevant or no longer existed due to a business combination.   This new peer group includes:

       
 

ATP Oil & Gas Corp.
Berry Petroleum
Clayton Williams Energy
Comstock Resources
Denbury Resources
Energy XXI (Bermuda)
Forest Oil

McMoRan Exploration
Newfield Exploration
Oasis Petroleum
Penn Virginia
Petroleum Development
Petroquest Energy
Plains Exploration & Production

Quicksilver Resources
Rosetta Resources
SM Energy
Stone Energy
Ultra Petroleum

 
       

     Compensation Committee's Performance Review

Our Compensation Committee evaluates our corporate performance, as well as each officer’s individual performance, in its determination of actual annual incentive cash bonuses and long-term equity incentive awards.

  • Our Committee uses quantitative formulas only as a tool to measure one aspect of performance and does not use specific formulas to determine compensation, nor do they assign exact weights to the factors they consider; rather, our Committee’s decisions reflect their judgment taking all factors into consideration.
  • The Committee’s determinations are based on subjective evaluations of the actual performance against corporate and individual performance criteria, and benchmarking information, with assistance from our independent compensation consultant.

     Corporate Performance

The Committee’s review of corporate performance consists of reviewing financial and operating measures set at the beginning of each year that emphasize long-term operational and financial plans.  Multiple measures are used to ensure that no single aspect of performance is driven in isolation. In order to ensure that our officers advance multiple corporate strategies and objectives in parallel, versus emphasizing or weighting one or two at the expense of others, formula-based performance assessments are not used.  The Committee considers the following measures as part of their review:

  • Relative Total Shareholder Return – represents the percentage change in our stock price from one period to another. 
    • Our Committee focuses both on short-term (1-year) and long-term (3-year) total shareholder return for this measure.
    • We believe comparing shareholder return to that of our peer group (defined above) is a tangible measure of performance; however, it is not a perfect measure because it can be affected by factors beyond management’s control and by extrinsic market conditions unrelated to actual performance.
  • Implementation of Financial Plan – represents our progress in implementing our financial plan over a particular performance period with emphasis on long-term results.
  • Implementation of Strategic Plan – represents our progress in implementing our strategic plan over a particular performance period with emphasis on long-term results.
  • Health, Safety and Environment – represents our progress in being good stewards and protecting the health and safety of our employees and services providers, as well as all affected individuals that live and work in the communities where we operate.  We also seek to preserve the environmental quality of the resources we manage.

Although the Compensation Committee reviews the above performance measures for periods greater than one year, our executive officers, with the concurrence of our Board and Compensation Committee, annually set key performance indicators that correspond to meeting our longer term objectives.  The following presents the objectives set for 2011 and the actual results:


2011 Key Performance Indicators

 

Objective

 

Actual

Annual Production Growth

 

25%

 

26%

Proved Reserves Growth

 

15%

 

20%

Probable Reserves Growth

 

15%

 

30%

Lease Operating Expenditure (per Boe)

 

$9.10

 

$9.00

Corporate Cash Flow per Share

 

$7.40

 

$8.47

Pre Incentive Controllable Gross G&A ($MM)

 

$59.0 MM

 

$58.5 MM

Year-end Bank Line Balance (Measuring Cash Flow v.       Capital Expenditures)

 

$100 MM

 

Undrawn

Annual Shareholder Return vs. Peer Group

 

50th
Percentile

 

25th to 50th
Percentile

Successful Non-Core Asset Disposition ($MM)

 

$15 MM

 

$53.5 MM

Corporate performance, including each Key Performance Indicator, is evaluated continuously by our Board of Directors throughout the year at regular Board meetings to assess current and prospective operational and financial strategies, results, and business controls and other areas of general operation and financial performance and guidance. In addition to the foregoing, the Committee also considered several other short- and long-term operational and financial accomplishments relevant in determining cash bonus awards and long-term incentive awards, which are listed below:

     Other Financial Achievements:

  • Strengthened balance sheet to enhance financial flexibility through prudent spending during 2011 and execution of a $250 million issuance of 7-7/8% Senior Notes in November 2011 with favorable terms, conditions and timing, which allowed us to pre-fund a portion of our 2012 capital budget;
  • Extended our revolving bank line’s maturity on favorable terms to secure available funds through 2016 and strengthened our 10 member bank syndicate;
  • 2011 Earnings per Share (Diluted) of $1.95 were 65% greater than 2010 levels;
  • Revenues from Continuing Operations increased to $599.1 million, a 37% increase from 2010 levels; and
  • Approximately 48% and 50%  increase in return on assets and return on equity, respectively, when compared to 2010 levels.

     Other Operating Achievements:

  • Added several key oil and gas prospects and acreage to an already existing diverse portfolio of short- and long-term opportunities;
  • Decreased drilling and completion costs by approximately $1,000,000 per well on average and we continue to identify efficiencies that will lower the costs during 2012 and beyond;
  • Established favorable contractual arrangements for transportation, processing and a dedicated fracturing crew, all to avoid production curtailments and improve future costs with flexibility to extend or cancel arrangements if necessary;
  • Exited 2011 with a production rate level of 31,500 barrels of oil per day (“BOPD”) – a 17% increase from 2010 exit levels;
  • Increased 2011 reserves to 159.6 MMBoe, a record level for Swift Energy; and
  • 100% drilling success rate for the 44 wells drilled during 2011.

     Individual Performance

  • Individual performance is the primary measure used to evaluate an officer’s personal performance.
    • An officer’s personal performance must be high in all key performance areas for the officer to receive a superior evaluation; outstanding performance in one area will not cancel out poor performance in another.
  • As part of the individual performance review, each officer develops individual performance goals relative to his or her position and organizational responsibilities at the beginning of each year.
    • 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.
  • Individual Performance for each of our officers is generally reviewed by another officer on a “one up” basis (CEO reviews President, CFO reviews Treasurer, etc.), and our CEO’s individual performance is reviewed by the entire Board.

     Executive Compensation Components

Our compensation program uses elements common in our industry and, while our Compensation Committee focuses primarily on a total compensation package that will attract and retain highly qualified executives and reward long-term achievements, each individual element serves an important purpose.  For each component described below, we obtain historical and current marketplace data from our compensation consultant both when setting target compensation levels and when approving actual payment levels.  Where target levels are set, we do not set minimum or maximum targets and, based on previous years’ data.  Actual awards can be below or above target levels due to performance, the Committee’s review of current benchmarking data, or other discretion used by the Committee so that all other relevant factors are considered.

     Base Salary

Base Salary provides our NEOs with a base level of income and is based on individuals’ responsibility, performance assessment, and career experience.  We have historically set base salaries for our officers at the median of the third quartile (for 2011, the 66th percentile) of the competitive market to attract and retain the best talent, and base salary adjustments are made from time to time as a result of our review of market data.

Our most recent salary increases for our Named Executive Officers in February 2012 were:


Named Executive Officer

 

Percentage of Salary Increase

 

2012 Salary

 

 

 

 

 

 

 

Terry E. Swift, CEO

 

3%

 

$665,480

Bruce H. Vincent, President

 

3%

 

$520,930

Alton D. Heckaman, EVP & CFO

 

3%

 

$448,630

Robert J. Banks, EVP & COO

 

3%

 

$448,090

James P. Mitchell, SVP—CTL

 

3%

 

$364,870

Steven L. Tomberlin, SVP—RDE

 

10%

 

$332,030

Each NEO received a modest 3% increase, which primarily resulted from our Compensation Committee’s review of position specific benchmarking data, except Mr. Tomberlin’s 10% increase largely due to his promotion in February 2012. In the aggregate, all of our NEO’s salaries are below the 50th percentile of the position specific data provided by Towers Watson for similarly sized companies in our industry.  Our CEO has received an increase of 3% each of the last three years and he received no base salary increase from January 1, 2008 to December 31, 2009.

     Annual Incentive Cash Bonus

Annual incentive cash bonuses reward achievement of annual operational and financial performance, making it an “at risk” component of compensation. Each officer’s actual annual incentive cash bonus was based on the Committee’s subjective evaluation of corporate and individual performance as well as consideration of industry marketplace data of similar sized companies in our industry provided by our compensation consultant.  Target levels are set as a percentage of base salary. The Committee set the following 2011 annual cash bonus target levels during February 2011 and determined the following actual amounts for 2011 in February 2012, which are reflected in the Summary Compensation Table:


Named Executive Officer

 

2011 Target as Percentage of Base Salary

 

2011 Annual Cash Bonus

 

Bonus Received as a Percentage of Base Salary

 

 

 

 

 

 

 

Terry E. Swift, CEO

 

100%

 

$1,001,440

 

155%

Bruce H. Vincent, President

 

90%

 

$705,521

 

140%

Alton D. Heckaman, EVP & CFO

 

90%

 

$607,606

 

140%

Robert J. Banks, EVP & COO

 

90%

 

$606,867

 

140%

James P. Mitchell, SVP—CTL

 

60%

 

$170,035

 

48%

Steven L. Tomberlin, SVP—RDE

 

50%

 

$256,564

 

85%

These award levels were also based, in part, on discussions with our independent compensation consultants regarding industry trends and competitive compensation data.  In addition to these discussions with Towers Watson, the Compensation Committee determined that the overall corporate performance levels warranted awards above the target levels due to the high level of achievement in 2011.

Our CEO’s 2011 total cash compensation (salary plus 2011 annual cash bonus) was below the 50th percentile of the 2012 market place data provided by our Compensation Consultant. In the aggregate, total cash compensation to our NEOs was slightly higher than the 50th percentile of the market place data due to a higher annual cash bonus for one of our NEOs based on his promotion and/or the position specific data provided to the Committee by our Compensation Consultant.

          Long-Term Equity Incentives

We believe our long-term equity incentive awards are a critical element in the mix of compensation and are prevalent amongst our peers.  Benchmarking data provided by our compensation consultant to our Compensation Committee during February 2012 detailed that 89% of companies in the oil and gas industry are using restricted stock awards and 78% are using stock options.  This data also showed that equity awards are the most prominent component of an executive’s compensation.  Significantly fewer oil and gas companies are using performance equity awards than in other industries; however, the trend towards using performance plans is increasing and, as discussed below under “2011 Say on Pay Vote”, our compensation consultant will be providing program design data to management and the Compensation Committee for consideration and implementation in early 2013.

In determining the level of long-term incentive awards of our Named Executive Officers, the Committee utilized relevant position-specific market data provided by our compensation consultant as well as the independent consultant’s assessment of Swift Energy’s long-term equity incentive program in comparison to industry trends and the practices of our peers.  Based on this consultation, the Committee decided the best approach was to target the 50th percentile level of the benchmark data provided by our compensation consultant, and, if appropriate, adjust downward or upward based on the corporate and/or individual performance that contributes to long-term corporate objectives.  The Committee considered the appropriate mix of long-term equity incentives for officers to be 50 percent stock options and 50 percent restricted stock.  This mix is used to balance the dual objectives of tying the value of these equity awards to stock appreciation and providing a retention incentive for our officers.

The long-term equity incentives valued in the Summary Compensation Table in this proxy statement primarily include restricted stock and stock options that were awarded during February 2011. These awards were based on marketplace data at the time of grant (February 2011) and corporate or individual performance considered by the Committee when determining actual awards was related to 2010 performance.  The February 2011 long-term incentive awards were above target levels for certain NEOs primarily because of an exceptional operational and financial year in 2010 in many respects and because the marketplace position-specific data illustrated that the targeted awards were significantly under market. The higher February 2011 awards are the primary reason for the increase in compensation of our CEO from 2010 to 2011 as reported in the Summary Compensation Table.  The total in the Summary Compensation Table also includes approximately $828,000 for our CEO from stock options granted under our 2005 Stock Compensation Plan’s reload feature.  Please see Proposal 2 for more information on the 2005 Stock Compensation Plan’s reload feature.

During February 2012, the Committee awarded long-term equity incentive to our NEOs using 2012 marketplace data provided by our compensation consultant targeting the 50th percentile.  Based on the current rules and regulations of the Securities Exchange Commission, the amounts of these awards will be accounted for in our Summary Compensation Table filed during 2013. Because these awards increase or decrease based on the Committee’s review of 2011 performance, we are discussing them in this proxy statement.  The information below denotes the long-term equity incentive amount for each Named Executive Officer as a percentage of the 50th percentile of the market data for similar positions:


Named Executive Officer

 

Restricted Shares

 

Stock Options(1)

 

Percentage of Target – 50th Percentile of Position Specific Market Data

 

 

 

 

 

 

 

Terry E. Swift, CEO

 

52,100

 

75,000

 

90%

Bruce H. Vincent, President

 

43,700

 

63,000

 

100%

Alton D. Heckaman, EVP & CFO

 

23,900

 

34,400

 

120%

Robert J. Banks, EVP & COO

 

26,700

 

38,400

 

90%

James P. Mitchell, SVP—CTL

 

5,800

 

8,300

 

80%

Steven L. Tomberlin, SVP—RDE

 

12,000

 

17,300

 

130%

 

 

 

 

(1)The exercise price of any stock options granted is the closing price reported on the NYSE on the date of the meeting (a meeting date set a year in advance) at which the Committee approves the grant.

In setting the actual long-term incentive award, the Committee, with the assistance of our independent compensation consultant, referred to multiple, relevant compensation surveys that included, but were not limited to, the peer group listed above (see “Industry Peer Group”). The Committee determined that considering the external circumstances in the economy and in our industry, the Named Executive Officers, both individually and as a team, executed our financial and operating strategic plans and, in many cases, exceeded the stated objectives for 2011.

     Other Compensation Related Policies

     Stock Ownership Guidelines

  • To further align senior management’s interests with the interests of stockholders with respect to long-term stockholder growth, the Board of Directors adopted Board and Executive Stock Ownership Guidelines on March 1, 2012.  The Board has approved equity ownership guidelines for the Company’s officers and directors as follows:

Position

 

Ownership Guidelines

CEO

 

5x base salary or ownership of 75,000 shares of common stock

President

 

4x base salary or ownership of 35,000 shares of common stock

Executive Vice President & Section 16 Officers

 

3x base salary

Non-employee Board of Director

 

5x annual cash retainer

  • The Corporate Governance Committee reviewed compliance with the Board and Executive Stock Ownership Guidelines and concluded that all covered individuals are in compliance with the above guidelines. 
  • Because we have implemented these ownership guidelines for the Board of Directors and the above-mentioned officers and all are in compliance, they are not subject to additional holding requirements for exercised stock options or for common stock resulting from vested restricted stock awards.

     Perquisites

  • We do not currently have a specific policy on perquisites, although it has always been our philosophy to provide only modest perquisites and to remain well below the perquisite levels provided by our industry peers.
    • 2011 was the first year that any of our NEOs had greater than $10,000 in perquisites and required disclosure.  Among these, our CEO had $10,473 in costs classified as perquisites.  Please refer to the Summary Compensation Table for further information.

     Prohibition on Hedging Swift Energy Securities

  • Our Insider Trading Policy, adopted in November 2006 by the Board of Directors, is applicable to all Board members, officers, and employees and prohibits short sales of Swift Energy securities or any hedging or monetization transaction, such as zero-cost collars or forward sale contracts.
  • In addition, the Insider Trading Policy prohibits transactions in publicly traded options, such as puts, calls and other derivative securities, involving Swift Energy securities.

     Clawback Provision

Other than adhering to the rules set out in the Sarbanes-Oxley Act of 2002 related to clawback of compensation, the Company has not adopted express “clawback” provisions with respect to compensation elements which would allow the Company to recoup paid compensation from designated officers in the event of a financial restatement. Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires the SEC to implement regulations requiring clawbacks and the Committee has deferred taking action on clawbacks in anticipation of these regulations.

     2011 Say on Pay Vote

Holders of 75.43% of our shares who voted at the 2011 Annual Meeting of Shareholders on our executive compensation program approved the compensation paid to our Named Executive Officers for the 2010 fiscal year. While our independent Compensation Committee believes this demonstrates sizeable stockholder support of Swift Energy’s approach to executive compensation, in response to this vote the Committee has recently taken steps to modify a portion of our compensation program, including: (1) adopting stock ownership guidelines for all board members and certain officers of the Company, and (2) engaging an independent compensation consultant to provide benchmarking data and benchmarking of program design for implementing performance equity awards that are based upon specific operational and financial metrics as an additional element of our executive compensation program, which are to be introduced through performance awards in 2013.  Other than these actions, the Committee maintained compensation practices related to 2011 executive compensation similar to those used in 2010 because of the attainment of a high level of corporate performance in 2011, including exceeding most of 2011’s corporate performance targets.  The Committee will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for our Named Executive Officers and the related executive compensation program.

Compensation Policies and Practices as They Relate to Risk management

In accordance with the requirements of Regulation S-K, Item 402(s), to the extent that risks may arise from the Company’s compensation policies and practices that are reasonably likely to have a material adverse effect on the Company, we are required to discuss those policies and practices for compensating the employees of the Company (including employees that are not Named Executive Officers) as they relate to the Company’s risk management practices and the possibility of incentivizing risk-taking.  We have determined that the compensation policies and practices established with respect to the Company’s employees are not reasonably likely to have a material adverse effect on the Company and, therefore, no such disclosure is necessary.

Compensation Committee Report

The Compensation Committee reviewed and discussed the above 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.

 

COMPENSATION COMMITTEE

Clyde W. Smith, Jr. (Chair)
Douglas J. Lanier
Greg Matiuk
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, who were serving as an executive officer at the end of the last fiscal year, for the fiscal years ended December 31, 2009, December 31, 2010, and December 31, 2011.  Information is also included for our Senior Vice President—Resource Development and Engineering who was among the three most highly compensated officers for 2011, other than the CEO and CFO; however, he was not an executive officer at the end of the most recently completed fiscal year.  These six individuals are referred to throughout this proxy statement as “Named Executive Officers” or “NEOs."

Name and
Principal Position

 

Year

 

Salary
($)

 

Bonus
($)

 

Stock Awards
($)(1)

 

Option Awards
($)(1)

 

Non-Equity Incentive Plan Compen-sation
($)(2)

 

Change in Pension and Non-qualified Deferred Compen-sation Earnings
($)

 

All Other Compen-sation
($)(3)

 

 

Total
($)

(a)

 

(b)

 

(c)

 

(d)

 

(e)

 

(f)

 

(g)

 

(h)

 

(i)

 

 

(j)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Terry E. Swift
Chairman of the Board and Chief Executive Officer

 

2011

 

$

646,090

 

$

 

$

1,951,538

 

$

2,218,991

 

$

1,001,440

 

$

 

$

45,700

 

 

$

5,863,759

 

2010

 

$

627,270

 

$

 

$

1,105,852

 

$

828,750

 

$

1,254,540

 

$

 

$

23,690

 

 

$

3,840,102

 

2009

 

$

609,000

 

$

 

$

851,746

 

$

529,821

 

$

822,150

 

$

 

$

15,321

 

 

$

2,828,038

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alton D. Heckaman, Jr.
Executive Vice President and Chief Financial Officer

 

2011

 

$

435,560

 

$

 

$

754,197

 

$

722,453

 

$

607,606

 

$

 

$

42,685

 

 

$

2,562,501

 

2010

 

$

418,800

 

$

 

$

483,044

 

$

457,075

 

$

659,610

 

$

 

$

18,753

 

 

$

2,037,282

 

2009

 

$

406,600

 

$

 

$

303,462

 

$

188,634

 

$

494,019

 

$

 

$

13,660

 

 

$

1,406,375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bruce H. Vincent
President and Secretary

 

2011

 

$

505,750

 

$

 

$

1,406,130

 

$

1,005,338

 

$

705,521

 

$

 

$

84,773

 

 

$

3,707,512

 

2010

 

$

491,010

 

$

 

$

698,820

 

$

522,750

 

$

773,341

 

$

 

$

23,856

 

 

$

2,509,777

 

2009

 

$

476,700

 

$

 

$

533,624

 

$

331,692

 

$

579,191

 

$

 

$

15,924

 

 

$

1,937,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Robert J. Banks
Executive Vice President and Chief Operating Officer

 

2011

 

$

435,030

 

$

 

$

856,461

 

$

611,320

 

$

606,867

 

$

 

$

54,477

 

 

$

2,564,155

 

2010

 

$

381,600

 

$

 

$

483,044

 

$

360,825

 

$

601,020

 

$

 

$

20,727

 

 

$

1,847,216

 

2009

 

$

360,000

 

$

 

$

255,084

 

$

158,250

 

$

437,400

 

$

 

$

13,660

 

 

$

1,224,394

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

James P. Mitchell
Senior Vice President—Commercial Transactions and Land

 

2011

 

$

354,240

 

$

 

$

208,789

 

$

149,668

 

$

170,035

 

$

 

$

31,430

 

 

$

914,162

 

2010

 

$

343,920

 

$

 

$

193,708

 

$

145,400

 

$

181,590

 

$

 

$

22,536

 

 

$

887,154

 

2009

 

$

333,900

 

$

 

$

174,454

 

$

108,243

 

$

180,306

 

$

 

$

13,660

 

 

$

810,563

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steve L. Tomberlin
Senior Vice President— Resource Development and Engineering

 

2011

 

$

301,840

 

$

 

$

336,619

 

$

238,204

 

$

256,564

 

$

 

$

13,610

 

 

$

1,146,837

 

2010

 

$

271,920

 

$

 

$

242,748

 

$

181,050

 

$

237,930

 

$

 

$

13,529

 

 

$

947,177

 

2009

 

$

241,000

 

$

 

$

54,360

 

$

 

$

132,000

 

$

 

$

12,250

 

 

$

439,610

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  

The amounts in columns (e) and (f) reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for awards granted during that year.   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, 2009, December 31, 2010, and December 31, 2011, included in the Company’s Annual Report on Forms 10-K for the years ended December 31, 2009, December 31, 2010, and December 31, 2011, respectively.

(2)  

Amounts in column (g) for 2009, 2010 and 2011 include amounts earned during 2009, 2010 and 2011, but paid in 2010, 2011 and 2012, respectively.

(3)  

Includes all other compensation items (column (i)) for each of 2009, 2010, and 2011 in addition to that reported in columns (c) through (h):

 

 

Swift

 

Heckaman

 

Vincent

 

Banks

 

Mitchell

 

Tomberlin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Vacation Buyback

2011

 

$

 

$

14,248

 

$

10,257

 

$

3,655

 

$

 

$

2010

 

$

 

$

 

$

 

$

 

$

 

$

2009

 

$

 

$

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Savings Plan Contributions*

2011

 

$

12,250

 

$

12,250

 

$

12,250

 

$

12,250

 

$

12,250

 

$

12,250

2010

 

$

12,250

 

$

12,250

 

$

12,250

 

$

12,250

 

$

12,250

 

$

12,250

2009

 

$

12,250

 

$

12,250

 

$

12,250

 

$

12,250

 

$

12,250

 

$

12,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Life Insurance Premiums**

2011

 

$

16,324

 

$

10,093

 

$

19,471

 

$

14,395

 

$

17,562

 

$

2010

 

$

8,162

 

$

5,047

 

$

9,736

 

$

7,198

 

$

8,781

 

$

2009

 

$

 

$

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

         Tax Reimbursements***

2011

 

$

5,293

 

$

4,734

 

$

14,157

 

$

7,915

 

$

258

 

$

2010

 

$

1,999

 

$

177

 

$

591

 

$

 

$

226

 

$

2009

 

$

1,661

 

$

 

$

2,264

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

         Contributions to Employee Stock             Ownership Plan Account****

2011

 

$

1,360

 

$

1,360

 

$

1,360

 

$

1,360

 

$

1,360

 

$

1,360

2010

 

$

1,279

 

$

1,279

 

$

1,279

 

$

1,279

 

$

1,279

 

$

1,279

2009

 

$

1,410

 

$

1,410

 

$

1,410

 

$

1,410

 

$

1,410

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

         Perquisites*****

2011

 

$

10,473

a

$

 

$

27,278

b

$

14,902

c

$

 

$

2010

 

$

 

$

 

$

 

$

 

$

 

$

2009

 

$

 

$

 

$

 

$

 

$

 

$

*

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.

***

Amounts paid by the Company to reimburse the Named Executive Officer for the amount taxed on certain taxable benefits.

****

Company contributions (100% in Company common stock) to the Named Executive Officer’s Swift Energy Company Employee Stock Ownership Plan account.

*****

Perquisites are quantified only where the aggregate perquisites for the Named Executive Officer exceeded $10,000 during 2011.  No NEO had perquisites greater than $10,000 during 2009 or 2010.

 

a

Perquisites for Mr. Swift include the following amounts: reserved parking - $260, sporting event and theater tickets - $983, tax preparation - $1,250, and spousal travel - $7,908.

 

b

Perquisites for Mr. Vincent include the following amounts: reserved parking - $260, sporting event and theater tickets - $2,334, tax preparation - $571, estate planning - $10,000, and spousal travel - $14,113.

 

c

Perquisites for Mr. Banks include the following amounts: reserved parking - $260, sporting event and theater tickets - $843, estate planning - $10,000, and spousal travel - $3,799.

 

Grants of Plan-Based Awards

The following table sets forth certain information with respect to the equity awards granted during the year ended December 31, 2011, 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

 

02/09/2011

 

 

 

 

 

 

 

 

 

 

45,800

(1)

 

 

 

$

 

$

42.61

 

 

02/09/2011

 

 

 

 

 

 

 

 

 

 

 

 

66,000

(1)

 

$

42.61

 

$

21.08

 

 

02/16/2011

 

 

 

 

 

 

 

 

 

 

 

 

8,301

(2)

 

$

46.36

 

$

15.20

 

 

03/21/2011

 

 

 

 

 

 

 

 

 

 

 

 

51,207

(2)

 

$

41.83

 

$

13.70

Alton D. Heckaman, Jr.

 

02/09/2011

 

 

 

 

 

 

 

 

 

 

17,700

(1)

 

 

 

$

 

$

42.61

 

 

02/09/2011

 

 

 

 

 

 

 

 

 

 

 

 

25,500

(1)

 

$

42.61

 

$

21.08

 

 

02/16/2011

 

 

 

 

 

 

 

 

 

 

 

 

7,558

(2)

 

$

46.36

 

$

15.20

 

 

03/29/2011

 

 

 

 

 

 

 

 

 

 

 

 

5,013

(2)

 

$

42.54

 

$

13.97

Bruce H. Vincent

 

02/09/2011

 

 

 

 

 

 

 

 

 

 

33,000

(1)

 

 

 

$

 

$

42.61

 

 

02/09/2011

 

 

 

 

 

 

 

 

 

 

 

 

47,500

(1)

 

$

42.61

 

$

21.08

 

 

05/05/2011

 

 

 

 

 

 

 

 

 

 

 

 

331

(2)

 

$

37.46

 

$

12.20

Robert J. Banks

 

02/09/2011

 

 

 

 

 

 

 

 

 

 

20,100

(1)

 

 

 

$

 

$

42.61

 

 

02/09/2011

 

 

 

 

 

 

 

 

 

 

 

 

29,000

(1)

 

$

42.61

 

$

21.08

James P. Mitchell

 

02/09/2011

 

 

 

 

 

 

 

 

 

 

4,900

(1)

 

 

 

$

 

$

42.61

 

 

02/09/2011

 

 

 

 

 

 

 

 

 

 

 

 

7,100

(1)

 

$

42.61

 

$

21.08

Steven L. Tomberlin

 

02/09/2011

 

 

 

 

 

 

 

 

 

 

7,900

(1)

 

 

 

$

 

$

42.61

 

 

02/09/2011

 

 

 

 

 

 

 

 

 

 

 

 

11,300

(1)

 

$

42.61

 

$

21.08

 

 

 

(1) 

Amount shown reflects number of restricted shares or stock options granted to the Named Executive Officer during 2011 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 three-year period in equal installments on each anniversary of the grant date and expire ten years from the grant date.

(2) 

Reload options granted during 2011.  Reload options become exercisable one year from the date of grant and remain exercisable for one year or the original expiration date of the original option, 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, 2011, for each Named Executive Officer listed in the Summary Compensation Table:

 

 

Option Awards

 

Stock Awards

Name and Grant Date

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    02/07/2006

 

25,400

 

 

 

$

44.24

 

02/08/2016

 

 

 

 

 

 

    02/06/2007

 

27,280

 

6,820

(2)

 

$

43.48

 

02/06/2017

 

 

 

 

 

 

    02/11/2008

 

22,680

 

15,120

(2)

 

$

43.21

 

02/11/2018

 

 

 

 

 

 

    02/10/2009

 

2

 

27,900

(3)

 

$

14.66

 

02/10/2019

 

 

 

 

 

 

    02/08/2010

 

 

43,334

(3)

 

$

24.52

 

02/08/2020

 

 

 

 

 

 

    02/09/2011

 

 

66,000

(3)

 

$

42.61

 

02/09/2021

 

 

 

 

 

 

Reload Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    11/15/2005

 

2,546

 

 

 

$

43.48

 

11/04/2013

 

 

 

 

 

 

    11/15/2005

 

3,011

 

 

 

$

43.48

 

11/08/2014

 

 

 

 

 

 

    11/28/2006

 

5,297

 

 

 

$

51.21

 

02/04/2012

 

 

 

 

 

 

    11/28/2006

 

2,162

 

 

 

$

51.21

 

11/04/2013

 

 

 

 

 

 

    11/28/2006

 

2,556

 

 

 

$

51.21

 

11/08/2014

 

 

 

 

 

 

    02/16/2011

 

 

8,301

(4)

 

$

46.36

 

02/16/2013

 

 

 

 

 

 

    03/21/2011

 

 

1,623

(4)

 

$

41.83

 

03/21/2013

 

 

 

 

 

 

    03/21/2011

 

 

7,939

(4)

 

$

41.83

 

11/04/2013

 

 

 

 

 

 

    03/21/2011

 

 

9,390

(4)

 

$

41.83

 

11/08/2014

 

 

 

 

 

 

    03/21/2011

 

 

19,555

(4)

 

$

41.83

 

02/10/2019

 

 

 

 

 

 

    03/21/2011

 

 

12,700

(4)

 

$

41.83

 

02/08/2020

 

 

 

 

 

 

Restricted Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    02/10/2009

 

 

 

 

 

 

 

19,367

(5)

$

575,587

 

 

 

    02/08/2010

 

 

 

 

 

 

 

30,067

(5)

$

893,591

 

 

 

    02/09/2011

 

 

 

 

 

 

 

45,800

(5)

$

1,361,176

 

 

 

Alton D. Heckaman, Jr.
Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    11/08/2004

 

477

 

 

 

$

25.18

 

11/08/2014

 

 

 

 

 

 

    02/07/2006

 

11,100

 

 

 

$

44.24

 

02/08/2016

 

 

 

 

 

 

    02/06/2007

 

11,440

 

2,860

(2)

 

$

43.48

 

02/06/2017

 

 

 

 

 

 

    02/11/2008

 

10,260

 

6,840

(2)

 

$

43.21

 

02/11/2018

 

 

 

 

 

 

    02/10/2009

 

9,933

 

9,934

(3)

 

$

14.66

 

02/10/2019

 

 

 

 

 

 

    02/08/2010

 

9,433

 

18,867

(3)

 

$

24.52

 

02/08/2020

 

 

 

 

 

 

    02/09/2011

 

 

25,500

(3)

 

$

42.61

 

02/09/2021

 

 

 

 

 

 

Reload Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    05/17/2005

 

1,321

 

 

 

$

31.40

 

11/11/2012

 

 

 

 

 

 

    06/09/2005

 

1,545

 

 

 

$

36.22

 

11/04/2013

 

 

 

 

 

 

    07/05/2005

 

216

 

 

 

$

38.41

 

11/11/2012

 

 

 

 

 

 

    11/23/2005

 

1,010

 

 

 

$

47.92

 

11/04/2013

 

 

 

 

 

 

    06/26/2006

 

1,925

 

 

 

$

39.64

 

02/04/2012

 

 

 

 

 

 

    06/27/2006

 

1,796

 

 

 

$

40.57

 

02/04/2012

 

 

 

 

 

 

    11/09/2006

 

2,076

 

 

 

$

49.70

 

11/04/2013

 

 

 

 

 

 

    06/14/2007

 

562

 

 

 

$

44.24

 

11/11/2012

 

 

 

 

 

 

    06/15/2007

 

827

 

 

 

$

45.15

 

02/04/2012

 

 

 

 

 

 

    12/28/2007

 

866

 

 

 

$

43.58

 

11/04/2013

 

 

 

 

 

 

    12/28/2007

 

571

 

 

 

$

43.58

 

11/11/2012

 

 

 

 

 

 

    02/28/2008

 

628

 

 

 

$

49.98

 

11/04/2013

 

 

 

 

 

 

    05/14/2008

 

2,221

 

 

 

$

57.80

 

11/08/2014

 

 

 

 

 

 

    03/17/2010

 

2,065

 

 

 

$

33.50

 

11/04/2013

 

 

 

 

 

 

    03/17/2010

 

2,197

 

 

 

$

33.50

 

11/08/2014

 

 

 

 

 

 

    12/03/2010

 

3,626

 

 

 

$

40.15

 

02/01/2019

 

 

 

 

 

 

    02/16/2011

 

 

7,558

(4)

 

$

46.36

 

02/16/2013

 

 

 

 

 

 

    03/29/2011

 

 

5,013

(4)

 

$

42.54

 

03/29/2013

 

 

 

 

 

 

Restricted Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    02/10/2009

 

 

 

 

 

 

 

6,900

(5)

$

205,068

 

 

 

    02/08/2010

 

 

 

 

 

 

 

13,134

(5)

$

390,342

 

 

 

    02/09/2011

 

 

 

 

 

 

 

17,700

(5)

$

526,044

 

 

 

Bruce H. Vincent
Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    11/04/2003

 

11,577

 

 

 

$

13.84

 

11/04/2013

 

 

 

 

 

 

    11/08/2004

 

10,800

 

 

 

$

25.18

 

11/08/2014

 

 

 

 

 

 

    02/07/2006

 

16,700

 

 

 

$

44.24

 

02/08/2016

 

 

 

 

 

 

    02/06/2007

 

16,880

 

4,220

(2)

 

$

43.48

 

02/06/2017

 

 

 

 

 

 

    02/11/2008

 

15,360

 

10,240

(2)

 

$

43.21

 

02/11/2018

 

 

 

 

 

 

    02/10/2009

 

34,933

 

17,467

(3)

 

$

14.66

 

02/10/2019

 

 

 

 

 

 

    02/08/2010

 

13,666

 

27,334

(3)

 

$

24.52

 

02/08/2020

 

 

 

 

 

 

    02/09/2011

 

 

47,500

(3)

 

$

42.61

 

02/09/2021

 

 

 

 

 

 

Reload Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    11/21/2005

 

2,134

 

 

 

$

46.66

 

11/11/2012

 

 

 

 

 

 

    12/01/2005

 

2,987

 

 

 

$

47.67

 

02/04/2012

 

 

 

 

 

 

    12/01/2005

 

3,483

 

 

 

$

47.67

 

11/04/2013

 

 

 

 

 

 

    11/08/2006

 

1,673

 

 

 

$

49.61

 

11/04/2013

 

 

 

 

 

 

    12/05/2006

 

915

 

 

 

$

51.84

 

02/04/2012

 

 

 

 

 

 

    12/05/2006

 

640

 

 

 

$

51.84

 

11/11/2012

 

 

 

 

 

 

    12/28/2007

 

583

 

 

 

$

43.58

 

02/04/2012

 

 

 

 

 

 

    12/28/2007

 

762

 

 

 

$

43.58

 

11/11/2012

 

 

 

 

 

 

    05/21/2008

 

94

 

 

 

$

62.09

 

11/05/2013

 

 

 

 

 

 

    06/24/2008

 

340

 

 

 

$

64.87

 

02/04/2012

 

 

 

 

 

 

    06/24/2008

 

914

 

 

 

$

64.87

 

06/18/2017

 

 

 

 

 

 

    05/05/2011

 

 

331

(4)

 

$

37.46

 

05/05/2013

 

 

 

 

 

 

Restricted Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    02/10/2009

 

 

 

 

 

 

 

12,134

(5)

$

360,622

 

 

 

    02/08/2010

 

 

 

 

 

 

 

19,000

(5)

$

564,680

 

 

 

    02/09/2011

 

 

 

 

 

 

 

33,000

(5)

$

980,760

 

 

 

Robert J. Banks
Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    02/06/2004

 

7,000

 

 

 

$

16.16

 

02/06/2014

 

 

 

 

 

 

    11/08/2004

 

4,100

 

 

 

$

25.18

 

11/08/2014

 

 

 

 

 

 

    02/07/2006

 

4,500

 

 

 

$

44.24

 

02/08/2016

 

 

 

 

 

 

    02/06/2007

 

9,200

 

2,300

(2)

 

$

43.48

 

02/06/2017

 

 

 

 

 

 

    02/11/2008

 

8,220

 

5,480

(2)

 

$

43.21

 

02/11/2018

 

 

 

 

 

 

02/10/2009

 

16,666

 

8,334

(3)

 

$

14.66

 

02/10/2019

 

 

 

 

 

 

02/08/2010

 

9,433

 

18,867

(3)

 

$

24.52

 

02/08/2020

 

 

 

 

 

 

    02/09/2011

 

 

29,000

(3)

 

$

42.61

 

02/09/2021

 

 

 

 

 

 

Restricted Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    02/10/2009

 

 

 

 

 

 

 

5,800

(5)

$

172,376

 

 

 

    02/08/2010

 

 

 

 

 

 

 

13,134

(5)

$

390,342

 

 

 

    02/09/2011

 

 

 

 

 

 

 

20,100

(5)

$

597,372

 

 

 

James P. Mitchell
Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    02/07/2006

 

7,100

 

 

 

$

44.24

 

02/08/2016

 

 

 

 

 

 

    02/06/2007

 

6,560

 

1,640

(2)

 

$

43.48

 

02/06/2017

 

 

 

 

 

 

    02/11/2008

 

4,980

 

3,320

(2)

 

$

43.21

 

02/11/2018

 

 

 

 

 

 

    02/10/2009

 

5,700

 

5,700

(3)

 

$

14.66

 

02/10/2019

 

 

 

 

 

 

    02/08/2010

 

3,766

 

7,534

(3)

 

$

24.52

 

02/08/2020

 

 

 

 

 

 

    02/09/2011

 

 

7,100

(3)

 

$

42.61

 

02/09/2021

 

 

 

 

 

 

Restricted Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    02/10/2009

 

 

 

 

 

 

 

3,967

(5)

$

117,899

 

 

 

    02/08/2010

 

 

 

 

 

 

 

5,267

(5)

$

156,535

 

 

 

    02/09/2011

 

 

 

 

 

 

 

4,900

(5)

$

145,628

 

 

 

Steven L. Tomberlin
Stock Options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    02/08/2010

 

4,733

 

9,467

(3)

 

$

24.52

 

02/08/2020

 

 

 

 

 

 

    02/09/2011

 

 

11,300

(3)

 

$

42.61

 

02/09/2021

 

 

 

 

 

 

Restricted Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    02/10/2009

 

 

 

 

 

 

 

2,000

(5)

$

59,440

 

 

 

    02/08/2010

 

 

 

 

 

 

 

6,600

(5)

$

196,152

 

 

 

    02/09/2011

 

 

 

 

 

 

 

7,900

(5)

$

234,788

 

 

 

 

 

 

(1) 

Amount reflects the aggregate market value of unvested restricted shares at December 31, 2011, 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, 2011 ($29.72).

(2)

Stock options become exercisable in five equal installments each year beginning on the first anniversary of the grant date.

(3)

Stock options become exercisable in three equal installments each year beginning on the first anniversary of the grant date. 

(4)

Reload stock options become exercisable on the first anniversary date of the grant date. 

(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 listed in the Summary Compensation Table during the fiscal year ended December 31, 2011:

 

Option Awards

 

Stock Awards

Name

Number of Shares Acquired on Exercise

(#)

 

Value Realized on Exercise

($)

 

Number of Shares Acquired on Vesting

(#)

 

Value Realized on Vesting

($)(1)

(a)

(b)

 

(c)

 

(d)

 

(e)

               
Terry E. Swift

125,865

 

$2,778,643

43,167

$1,861,533

Alton D. Heckaman, Jr.

17,000

 

$197,690

17,433

$752,246

Bruce H. Vincent

407

 

$2,844

27,567

$1,188,764

Robert J. Banks

 

$

15,566

$672,212

James P. Mitchell

 

$

8,534

$367,770

James P. Mitchell

 

$

7,300

$285,399

     
(1) 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 agreement (except for Mr. Tomberlin who does not have an employment agreement) and the Company’s Change of Control Severance Plan and equity compensation plans.  The amounts shown assume that such termination was effective December 31, 2011.  The actual amounts to be paid out can only be determined at the time of such executive’s separation from the Company.

Prior versions of those employment agreements with three of the executive officers below have been in place since 1995, one has been in place since 2003 and one since 2008.  These employment agreements automatically extend for one year on each anniversary of the agreement.  However, each officer with an employment agreement serves at the pleasure of the Board as the agreements allow for termination at any time with sixty days written notice.  We also adopted the Swift Energy Company Change of Control Severance Plan (the “Change of Control Severance Plan”) in November 2008, under which all employees (including officers) are participants.  It is a double-trigger plan and benefits are only payable if there is both a Change of Control and a qualified employment termination.  Each Named Executive Officer’s employment agreement enhances certain payment amounts and other benefits provided in the Change of Control Severance Plan, which amounts were determined based on the Compensation Committee’s study of peer programs of this nature.

 

 

 

 

 

 

Equity Acceleration(2)

 

 

 

 

Cash
Payments

 

Benefit
Cost(1)

 

Stock
Options

 

Restricted
Stock

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Terry E. Swift

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Death

 

$

5,701,890

 

$

19,620

 

$

645,511

 

$

2,830,354

 

$

9,197,375

Disability

 

$

5,701,890

 

$

65,374

 

$

645,511

 

$

2,830,354

 

$

9,243,129

Change of Control

 

$

6,997,130

(4)

$

39,944

 

$

645,511

 

$

2,830,354

 

$

10,512,940

Senior Officer Tenure(3)

 

$

3,801,260

 

$

45,754

 

$

645,511

 

$

2,830,354

 

$

7,322,879

Termination by Employee Without Good Reason

 

$

1,900,630

 

$

26,134

 

$

645,511

 

$

 

$

2,572,275

Termination by Employee for Good Reason or by the Company Without Cause

 

 

$

5,701,890

 

 

$

65,374

 

 

$

645,511

 

 

$

2,830,354

 

 

$

9,243,129

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alton D. Heckaman, Jr.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Death

 

$

3,285,510

 

$

19,620

 

$

247,714

 

$

1,121,454

 

$

4,674,299

Disability

 

$

3,285,510

 

$

59,089

 

$

247,714

 

$

1,121,454

 

$

4,713,768

Change of Control

 

$

3,285,510

 

$

33,659

 

$

247,714

 

$

1,121,454

 

$

4,688,338

Senior Officer Tenure (3)

 

$

2,190,340

 

$

39,469

 

$

247,714

 

$

1,121,454

 

$

3,598,978

Termination by Employee Without Good Reason

 

$

1,095,170

 

$

19,849

 

$

247,714

 

$

 

$

1,362,733

Termination by Employee for Good Reason or by the Company Without Cause

 

$

3,285,510

 

$

59,089

 

$

247,714

 

$

1,121,454

 

$

4,713,768

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bruce H. Vincent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Death

 

$

3,837,273

 

$

19,620

 

$

405,190

 

$

1,906,062

 

$

6,168,145

Disability

 

$

3,837,273

 

$

68,521

 

$

405,190

 

$

1,906,062

 

$

6,217,046

Change of Control

 

$

4,734,479

(4)

$

43,091

 

$

405,190

 

$

1,906,062

 

$

7,088,822

Senior Officer Tenure (3)

 

$

2,558,182

 

$

48,901

 

$

405,190

 

$

1,906,062

 

$

4,918,335

Termination by Employee Without Good Reason

 

$

1,279,091

 

$

29,281

 

$

405,190

 

$

 

$

1,713,562

Termination by Employee for Good Reason or by the Company Without Cause

 

$

3,837,273

 

$

68,521

 

$

405,190

 

$

1,906,062

 

$

6,217,046

   
   
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