SWIFT ENERGY COMPANY
16825 Northchase Drive, Suite 400
Houston, Texas 77060
(281) 874-2700
PROXY STATEMENT
for the
2009 ANNUAL MEETING OF SHAREHOLDERS
Solicitation
These proxy materials are being made available to Swift Energy
Company’s (“Swift Energy” or the “Company”) shareholders beginning
on or about April 2, 2009. The Board of Directors (the “Board”)
of Swift Energy is soliciting your proxy to vote your shares of
Swift Energy common stock at the annual meeting of shareholders (the
“Annual Meeting”) to be held at the Hilton Houston North, 12400
Greenspoint Drive, Houston, Texas, on Tuesday, May 12, 2009, at
4:00 p.m., Houston time. The Board is soliciting proxies to
give all shareholders the opportunity to vote on the matters that
will be presented at the Annual Meeting. This proxy statement
provides you with the information on these matters to assist you in
voting your shares.
Availability of Proxy Materials
We are using the e-proxy rules of the U.S. Securities and
Exchange Commission (“SEC”). Accordingly, we are making this proxy
statement and related proxy materials available on the Internet with
the SEC’s rules that allow companies to furnish proxy materials to
stockholders through a “notice and access” model using the
Internet. The “Notice and Access Rule” removes the requirement for
public companies to automatically send shareholders a full hard-copy
set of proxy materials and allows them instead to deliver to their
shareholders a Notice of Internet Availability of Proxy Materials
(“Notice”) and to provide online access to the documents. We mailed
a Notice on or about April 2, 2009, to all shareholders of record on
March 20, 2009, who are the shareholders entitled to vote at the
Annual Meeting.
Voting Information
What is a proxy?
A proxy is your legal designation of another person or persons
(the “proxy” or “proxies”) to vote on your behalf. By voting your
shares as instructed in the materials you received, you are giving
the designated proxies appointed by the Board the authority to vote
your shares in the manner you indicate on your proxy card.
Who are the proxies appointed by the Board of Directors for the
Annual Meeting?
The proxies for the Company appointed by the Board at a meeting
held on February 10, 2009, are the following representatives of
Swift Energy:
| |
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 20, 2009.
How many shares of Swift Energy common stock are entitled to vote
at the Annual Meeting?
As of March 20, 2009, there were 31,160,232 shares of Swift
Energy common stock issued, outstanding and entitled to vote at the
Annual Meeting. Each share of Swift Energy common stock is entitled
to one vote on each matter presented.
What is the difference between a holding shares as a shareholder of
record and as a beneficial owner?
Most of our shareholders hold their shares through a broker, trustee
or other nominee rather than having the shares registered directly in
their own name. There are some distinctions between shares held of
record and those owned beneficially that are summarized below.
Shareholder of Record – If your shares are registered directly in
your name with our transfer agent, you are the shareholder of record of
the shares. As the shareholder of record, you have the right to grant a
proxy to vote your shares to the Company or another person, or to vote
your shares in person at the Annual Meeting.
Beneficial Owner – If your shares are held through a broker,
trustee or other nominee, it is likely that they are registered in the
name of the nominee and you are the beneficial owner of shares held in
“street name.” As the beneficial owner of shares held for your account,
you have the right to direct the registered holder to vote your shares
as you instruct, and you also are invited to attend the Annual
Meeting. Your broker, trustee or other nominee has provided a voting
instruction card for you to use in directing how your shares are to be
voted. However, since a beneficial owner is not the shareholder of
record, you may not vote your shares in person at the meeting unless you
obtain a legal proxy from the registered holder of the shares giving you
the right to do so.
If I am a shareholder of record, how do I vote?
You may vote using any of the following methods:
Via the Internet – You may vote by proxy via the Internet by
following the instructions provided in either the Notice or proxy card.
By Telephone – You may vote by proxy by calling the number found
on either the Notice or proxy card.
By Mail – If you request printed copies of the proxy materials by
mail, you may vote by proxy by completing the proxy card and returning
it in the envelope provided.
In Person – If you are a shareholder of record, you may vote in
person at the Annual Meeting. We will give you a ballot during the
meeting.
If I am a beneficial owner of shares held in street name, how do I
vote?
You may vote using any of the following methods:
Via the Internet – You may vote by proxy via the Internet by
following the instructions provided in either the Notice or voting
instruction form provided by your broker, trustee or other nominee.
By Telephone – You may vote by proxy by calling the number found
on either the Notice or voting instruction form provided by your broker,
trustee or other nominee.
By Mail – If you request printed copies of the proxy materials by
mail, you may vote by proxy by completing the voting instruction form
provided by your broker, trustee or other nominee and returning it in
the envelope provided.
In Person – If you are a beneficial owner of shares held in
street name and you wish to vote in person at the Annual Meeting, you
must obtain a legal proxy from the organization that holds your shares.
Can I receive more than one Notice?
Yes. If you received multiple Notices, you may hold your shares in
different ways (e.g., joint tenancy, trusts or custodial
accounts) or in multiple accounts. You should vote on each Notice
you receive.
What are the Board’s recommendations on how I should vote my shares?
The Board recommends that you vote your shares as follows:
|
Proposal 1 — |
FOR the election of all
three nominees for Class I directors identified in this proxy
statement, with terms to expire at the 2012 Annual Meeting of
Shareholders; |
|
Proposal 2 — |
FOR the amendment of the
First Amended and Restated Swift Energy Company 2005 Stock
Compensation Plan; and |
|
Proposal 3 — |
FOR the ratification of
the selection of Ernst & Young LLP as Swift Energy’s independent
auditor for the fiscal year ending December 31, 2009. |
What are my choices when voting?
Proposal 1 — You may cast your vote in favor of electing the nominees
as directors or withhold your vote on one or more nominees.
Proposals 2 and 3 — You may cast your vote “for” or “against” or you
may abstain with respect to each proposal.
How will my shares be voted if I do not specify how they should be
voted?
If you vote by proxy, the individuals named on the proxy card (your
“proxies”) will vote your shares in the manner you indicate. If you
sign and return the proxy card without indicating your instructions,
your shares will be voted as follows:
|
Proposal 1 — |
FOR the election of all
three nominees for Class I directors identified in this proxy
statement, with terms to expire at the 2012 Annual Meeting of
Shareholders; |
|
Proposal 2 — |
FOR the amendment of the
First Amended and Restated Swift Energy Company 2005 Stock
Compensation Plan; and |
|
Proposal 3 — |
FOR the ratification of
the selection of Ernst & Young LLP as Swift Energy’s independent
auditor for the fiscal year ending December 31, 2009. |
How are votes withheld, abstentions and broker non-votes treated ?
Votes withheld and abstentions are deemed as “present” at the Annual
Meeting and are counted for quorum purposes. For Proposal 1, the
election of directors, votes withheld will have the same effect as not
voting, and for other proposals, abstentions will have the same effect
as a vote against the matter. Broker nonvotes, if any, while counted
for general quorum purposes, are not deemed to be “present” with respect
to any matter for which a broker does not have authority to vote and
also have the same effect as not voting.
Can I change my vote after I have voted?
You may revoke your proxy and change your vote at any time before the
final vote at the Annual Meeting. You may vote again on a later date
via the Internet or by telephone (only your latest Internet of telephone
proxy submitted prior to the Annual Meeting will be counted), by signing
and returning a new proxy card or voting instruction form with a later
date, or by attending the Annual Meeting and voting by ballot at the
Annual Meeting.
What vote is required to approve each proposal?
For Proposal 1, the election of directors, a plurality of the votes
cast by the holders of shares entitled to vote in the election of
directors is required to elect each nominee for director. Each other
proposal requires the affirmative vote of the holders of a majority of
the shares entitled to vote on, and that voted for or against or
expressly abstained with respect to, each proposal.
Who pays the cost of this proxy solicitation?
The cost of preparing, printing and mailing the proxy materials and
soliciting proxies is paid by Swift Energy. The Company will also
request brokerage firms, banks, nominees, custodians and fiduciaries to
forward proxy materials to the beneficial owners of shares of Swift
Energy common stock as of the record date and will reimburse these
entities for the costs of forwarding the proxy materials in accordance
with customary practice. Your cooperation in promptly voting your shares
will help to avoid additional expense.
Is this proxy statement the only way the proxies are being solicited?
In addition to this solicitation by the Board, employees of Swift
Energy may solicit proxies in person or by mail, delivery service,
telephone or facsimile, without additional compensation. The Company
has also retained Georgeson Shareholder Communications Inc. to act as a
proxy solicitor in conjunction with the Annual Meeting. The Company has
agreed to pay this firm $9,000, plus reasonable out of pocket expenses,
for standard proxy solicitation services.
PROPOSAL 1 — ELECTION OF DIRECTORS
Swift Energy has three classes of directors. Every year, each
director of one class is elected to serve a three-year term or until his
or her successor has been duly elected and qualified. Messrs. Clyde W.
Smith, Jr., Terry E. Swift and Charles J. Swindells, incumbent Class I
directors, have been nominated by the Board to stand for reelection as
Class I directors. Directors are elected by the affirmative vote of
a plurality of the shares cast by the holders of shares entitled to
vote in the election of directors at a meeting of the shareholders at
which a quorum is present.
The current composition of the Board is:
|
Class I Directors:
(standing for reelection at this Annual Meeting
for term to expire at 2012 annual meeting) |
Clyde W. Smith, Jr. Terry E.
Swift
Charles J. Swindells |
Class II Directors:
(term to expire at 2010 annual meeting) |
Raymond E. Galvin
Greg Matiuk
Henry C. Montgomery |
Class III Directors:
(term to expire at 2011 annual meeting) |
Deanna L. Cannon Douglas J.
Lanier
Bruce H. Vincent |
Class I Director Nominees
Clyde W. Smith, Jr., 60, has served as a director of Swift Energy
since 1984. Since January 2002, Mr. Smith has served as President of
Ascentron, Inc., an electronics manufacturing services company. From
May 1998 until January 2002, Mr. Smith served as General Manager of D.W.
Manufacturing, Inc. d/b/a Millennium Technology Services, an electronics
manufacturer which was acquired by Ascentron, Inc. in January
2002. Mr. Smith is a Certified Public Accountant and holds the degree
of Bachelor of Business Administration in Management.
Terry E. Swift, 53, has served as the Chief Executive Officer of
Swift Energy since May 2001, as Chairman of the Board since June 1,
2006, and as a director of the Company since May 2000. He was President
of the Company from November 1997 to November 2004, Chief Operating
Officer from 1991 to February 2000, and Executive Vice President from
1991 to 1997. Mr. Swift served in other positions of progressive
responsibility since joining the Company in 1981. He holds the degrees
of Bachelor of Science in Chemical Engineering and Master of Business
Administration. He is the son of the late A. Earl Swift, founder of
Swift Energy, and the nephew of Virgil N. Swift, Director Emeritus.
Charles J. Swindells, 66, has served as a director of Swift
Energy since February 2006. He is also a director of The Greenbrier
Companies, Inc., an international supplier of transportation equipment
and services to the railroad industry. From 2001 to 2005, he served as
United States Ambassador to New Zealand and Samoa. More recently, he
served as Vice Chairman, Western Region of U.S. Trust, Bank of America
Private Wealth Management until his retirement in January 2009. Prior
to becoming Ambassador, he was Vice Chairman of U.S. Trust Company, N.A.
from 1993 until 2001. Ambassador Swindells also served as Chairman of
the Board of a non-profit board of trustees for Lewis & Clark College in
Portland, Oregon from 1998 until 2001. He holds the degree of Bachelor
of Science in Political Science.
|
The Board of Directors unanimously recommends
that shareholders vote “FOR” all of the director nominees to
serve as directors in the Class for which they are nominated. |
The persons named as proxies in these proxy materials, unless
authority is withheld by a shareholder on a proxy card, intend to vote
“FOR” the election of all of the nominees named in this proxy statement
standing for reelection as Class I directors. If any nominee should
become unavailable or unable to serve as a director, the persons named
as proxies may vote for a substitute selected by them, or the size of
the Board may be reduced accordingly; however, the Board is not aware of
any circumstances likely to render any nominee
unavailable.
BOARD OF DIRECTORS
Class I Directors
The biographies for the Class I directors are set forth above under
“Proposal 1—Election of Directors.”
Class II Directors
Raymond E. Galvin, 77, has served as Vice Chairman of the Board
since June 1, 2006, and as a director of Swift Energy since August
2003. From 1992 until he retired in February 1997, Mr. Galvin was
President of Chevron USA Production Company. He also served as a
director of Chevron Corporation from 1995 to 1997 and as a Vice
President of Chevron Corporation from 1988 to 1997. Mr. Galvin has also
served as chairman of the Natural Gas Council and the Natural Gas Supply
Association. Mr. Galvin holds the degree of Bachelor of Science in
Petroleum Engineering.
Greg Matiuk, 63, has served as a director of Swift Energy since
September of 2003. After 36 years of service, Mr. Matiuk retired from
ChevronTexaco Corporation in May 2003, having last served as Executive
Vice President, Administrative and Corporate Services, a position he had
held since 2001. From 1998 until 2001, he was Vice President, Human
Resources and Quality and, from 1996 to 1998, he served as Vice
President of Strategic Planning and Quality. Mr. Matiuk began his
career at Chevron Corporation in 1967 as a production and reservoir
engineer. He holds the degree of Bachelor of Science in Geological
Engineering and an Executive Master of Business Administration.
Henry C. Montgomery, 73, has served as a director of Swift Energy
since 1987. After 22 years of service, Mr. Montgomery resigned during
October 2008 from the Board of Directors of Montgomery Professional
Services Corporation, a financial management and accounting outsourcing
firm that he founded. Since 2006, he has been Chairman and Chief
Executive Officer of Montgomery Pacific Outsourcing LLC, a financial
management and accounting outsourcing firm with subsidiary operations in
the Philippines. Mr. Montgomery served as Chairman of the Board of
Catalyst Semiconductor, Inc., which designed, developed and marketed
programmable integrated circuit products, until his resignation when
Catalyst merged into On Semiconductor on October 9, 2008. Mr.
Montgomery currently serves as Chairman of the Board of ASAT Holdings,
Ltd., which packages and tests semiconductor devices. Mr. Montgomery is
a member of the board of directors of the Honolulu Symphony Orchestra
Society and sits on the advisory board for the Miami University Center
for Corporate Governance and Ethics (Oxford, Ohio). Mr. Montgomery
holds the degree of Bachelor of Arts in Economics.
Class III Directors
Deanna L. Cannon, 48, has served as a director of Swift Energy
since May 2004. Ms. Cannon is a shareholder and director of Corporate
Finance Associates of Northern Michigan, an investment banking firm, and
a director of Corporate Finance Associates Worldwide. She holds her
securities license under Corporate Finance Securities. She is also
President of Cannon & Company CPA’s PLC, a privately held consulting
firm. She served Miller Exploration Company as Chief Financial Officer
and Secretary from November 2001 to December 2003, as Vice
President—Finance and Secretary from June 1999 to November 2001 and as a
director of one of its wholly owned subsidiaries from May 2001 to
December 2003. Miller Exploration Company was a publicly held
independent oil and gas exploration and production company that was
acquired by Edge Petroleum Corporation in December 2003. Previously,
Ms. Cannon was employed in public accounting for 16 years. Ms. Cannon
holds a Bachelor of Science degree in Accounting and is a Certified
Public Accountant.
Douglas J. Lanier, 59, has served as a director of Swift Energy
since May 2005. Mr. Lanier retired in 2004 as Vice President of
ChevronTexaco Exploration & Production Company, Gulf of Mexico Business
Unit. He began his career with Gulf Oil Company in 1972 and served in
various positions until 1989, when he was appointed Assistant General
Manager–Production for Chevron USA Central Region in Houston. He served
in subsequent appointments until he joined Chevron Petroleum Technology
Company as President in 1997. In October 2000, he was appointed Vice
President of the Gulf of Mexico Shelf Strategic Business
Unit. Mr. Lanier holds the degree of Bachelor of Science in Petroleum
Engineering. He is a member of the Society of Petroleum Engineers and
is a registered Professional Engineer in Texas (inactive). Mr. Lanier
was inducted into the University of Tulsa College of Engineering Hall of
Fame in 2003.
Bruce H. Vincent, 61, was elected as a director of Swift Energy
in May 2005 and was appointed President of the Company in November
2004. He also was appointed Secretary in February 2008 and previously
served as Secretary from August 2000 until May 2005. Mr. Vincent
previously served as President of Swift Energy International, Inc. from
February 2004 to May 2005, as Executive Vice President—Corporate
Development from August 2000 to November 2004, and as Senior Vice
President—Funds Management since joining the Company in
1990. Mr. Vincent holds the degrees of Bachelor of Arts and Master of
Business Administration.
Affirmative Determinations Regarding Independent Directors and
Financial Experts
The Board has determined that each of the following directors is an
“independent director” as such term is defined in Section 303A of the
Listed Company Manual of the New York Stock Exchange, Inc.
(“NYSE”): Deanna L. Cannon, Raymond E. Galvin, Douglas J. Lanier, Greg
Matiuk, Henry C. Montgomery, Clyde W. Smith, Jr., and Charles J.
Swindells. These independent directors represent a majority of the
Company’s Board of Directors. Messrs. Swift and Vincent are not
independent directors because they serve as officers of the
Company. Mr. Swift serves as Chief Executive Officer, and Mr. Vincent
serves as President and Secretary.
The Board has also determined that each member of the Audit,
Compensation and Corporate Governance Committees of the Board meets the
independence requirements applicable to those committees prescribed by
the NYSE and the SEC. Further, the Board has determined that Henry C.
Montgomery, Chairman of the Audit Committee, and Clyde W. Smith, Jr. and
Deanna L. Cannon, members of the Audit Committee, are each an “audit
committee financial expert,” as such term is defined in Item 407(d) of
Regulation S-K promulgated by the SEC.
The Board reviewed the applicable standards for Board member and
Board committee independence and the criteria applied to determine
“audit committee financial expert” status, as well as the answers to
annual questionnaires completed by each of the independent directors. On
the basis of this review, the Board made its independence and “audit
committee financial expert” determinations.
Meetings of Independent Directors
At each executive session of the independent directors, the Lead
Director presides. Mr. Galvin was elected as Lead Director by the
independent directors in May 2006. For purposes of Rule 303A.03 of the
NYSE Listed Company Manual, the term “independent directors” is
equivalent to “non-management directors.”
Meetings and Committees of the Board
The Board has established the following standing committees: Audit,
Compensation, Corporate Governance and Executive Committees.
Descriptions of the membership and functions of these committees are set
forth below. The following chart identifies the committees upon which
each member of the Board serves, the chairmen of the committees, and the
number of meetings and actions by consent by the Board and the
committees during 2008:
| |
|
Board of Directors |
|
Audit |
|
Compensation |
|
Corporate Governance |
|
Executive |
| |
|
|
|
|
|
|
|
|
|
|
| Number of
meetings held in 2008 |
|
8 |
|
7 |
|
4 |
|
4 |
|
4 |
| Number of
actions by consent in 2008 |
|
2 |
|
0 |
|
0 |
|
0 |
|
0 |
| |
|
|
|
|
|
|
|
|
|
|
| Terry E. Swift |
|
C |
|
|
|
|
|
|
|
C |
| Deanna L.
Cannon |
|
M |
|
M |
|
|
|
M |
|
|
| Raymond E.
Galvin |
|
VC |
|
|
|
|
|
M |
|
M |
| Douglas J.
Lanier |
|
M |
|
|
|
M |
|
|
|
M |
| Greg Matiuk |
|
M |
|
|
|
M |
|
C |
|
|
| Henry C.
Montgomery |
|
M |
|
C |
|
M |
|
|
|
|
| Clyde W. Smith,
Jr. |
|
M |
|
M |
|
C |
|
|
|
|
| Charles J.
Swindells |
|
M |
|
|
|
M |
|
M |
|
|
| Bruce H.
Vincent |
|
M |
|
|
|
|
|
|
|
|
| |
|
|
| C |
= Chairman |
| VC |
= Vice Chairman |
| M |
= Member |
During 2008, each director attended at least 75% of the aggregate of
(i) the total number of meetings of the Board and (ii) the total number
of meetings of all committees of the Board on which he or she served.
Audit Committee. The Audit Committee assists the Board
in fulfilling its responsibilities with respect to oversight in
monitoring (i) the integrity of the financial statements of the Company;
(ii) Swift Energy’s compliance with legal and regulatory requirements;
(iii) the independent auditor’s selection, qualifications and
independence; and (iv) the performance of Swift Energy’s internal audit
function and independent auditor. The committee is required to be
comprised of three or more non-employee directors, each of whom is
determined by the Board to be “independent” under the rules promulgated
by the SEC under the Securities Exchange Act of 1934 (the “Exchange
Act”) and meets the financial literacy and experience requirements under
the rules or listing standards established by the NYSE, all as may be
amended from time to time. In addition, at least one member of the
committee must satisfy the definition of “audit committee financial
expert” as such term may be defined from time to time under the rules
promulgated by the SEC. The Board has determined that Messrs. Montgomery
and Smith and Ms. Cannon qualify as audit committee financial experts
and that each member of the Audit Committee is independent as defined in
the NYSE Listed Company Manual and the rules of the SEC. A report of the
Audit Committee appears later in this proxy statement.
Messrs. Montgomery (Chairman) and Smith and Ms. Cannon are members of
the Audit Committee.
Compensation Committee. The Compensation Committee
discharges the responsibilities of the Board relating to compensation of
the Company’s executive officers. This includes evaluating the
compensation of the executive officers of the Company and its affiliates
and their performance relative to their compensation to assure that such
executive officers are compensated effectively in a manner consistent
with the strategy of Swift Energy, competitive practices, and the
requirements of the appropriate regulatory bodies. In addition, this
committee evaluates and makes recommendations to the Board regarding the
compensation of the directors. The Compensation Committee also evaluates
and approves any amendment, subject to shareholder approval, to the
Company’s existing equity-related plans and approves the adoption of any
new equity-related plans, subject to shareholder and Board approval. The
Compensation Committee is required to be comprised of at least three
directors who are non-employee directors and determined by the Board to
be independent under SEC rules and NYSE’s listing standards. The Board
has determined that all members are independent as defined by the NYSE
listing standards or rules of the SEC and NYSE. The report of the
Compensation Committee is included below. Messrs. Smith (Chairman),
Lanier, Matiuk, Montgomery and Swindells are members of the Compensation
Committee.
Corporate Governance Committee. The Corporate
Governance Committee identifies individuals qualified to become
directors and nominates candidates for directorships and also recommends
to the Board the membership for each of the Board’s committees. This
committee may consider nominees recommended by shareholders upon written
request by a shareholder in accordance with the procedures for
submitting shareholder proposals. The Corporate Governance Committee
also develops, monitors and recommends to the Board corporate governance
principles and practices applicable to Swift Energy. The committee also
assists management of the Company in identifying, screening and
recommending to the Board individuals qualified to become executive
officers of the Company. In addition, this committee administers the
Company’s conflicts of interest policy. The Corporate Governance
Committee is required to be comprised of at least three directors who
are non-employee directors and determined by the Board to be independent
under the NYSE listing standards and the rules of the SEC. Messrs. Matiuk
(Chairman), Galvin and Swindells and Ms. Cannon are members of the
Corporate Governance Committee and, as determined by the Board, all are
independent as defined in the NYSE listing standards and rules of the
SEC.
Executive Committee. The Executive Committee is
authorized to act for the Board at times when it is not convenient for
the full Board to act as an assembled board, except where full Board
action is required by applicable law. Any action taken by the Executive
Committee is required to be reported at the next full Board meeting.
Messrs. Swift (Chairman), Galvin and Lanier are members of the Executive
Committee.
Compensation of Directors
In accordance with its charter, the Compensation Committee
periodically evaluates the compensation of non-employee directors,
including for service on Board committees. The Compensation Committee
recommends annual retainer and meeting fees for non-employee directors
and for service on Board committees, sets the terms and awards of any
stock-based compensation and submits these recommendations to the Board
of Directors for approval subject to shareholder approval, if
required. Directors who are also employees of the Company receive no
additional compensation for service as directors. The following table
shows compensation for non-employee directors for 2008:
|
Annual Board Retainer |
|
$ |
35,000 |
|
|
Meeting Fee |
|
$ |
2,500 |
(1) |
|
Annual Committee Retainer |
|
$ |
5,000 |
(2) |
|
Committee Premiums: |
|
|
|
|
|
Audit Committee Chair |
|
$ |
15,000 |
(3) |
|
Compensation Committee Chair |
|
$ |
10,000 |
(4) |
|
Corporate Governance Committee Chair |
|
$ |
8,000 |
(4) |
|
Executive Committee Member |
|
$ |
8,000 |
|
|
Lead Director Premium |
|
$ |
8,000 |
|
|
Annual Restricted Stock Grant Value |
|
$ |
120,000 |
(5) |
| |
|
|
| (1) |
Annual meeting
fee paid per meeting for a minimum of five meetings. |
| (2) |
Annual fee for
serving on one or more committees. |
| (3) |
Annual fee for a
minimum of four meetings. |
| (4) |
Annual fee for a
minimum of two meetings. |
| (5) |
Number of
restricted shares to be determined, based on the closing stock
price on the day after the annual meeting. Restrictions on
restricted shares lapse as to one-third of such shares each year
beginning on the first anniversary of the grant date, and
subject to a one-year service restriction, restrictions on all
shares lapse when a director ceases to be a member of the Board. |
The following table sets forth certain summary information regarding
compensation paid or accrued by the Company to or on behalf of the
Company’s non-employee directors for the fiscal year ended December 31,
2008:
| |
|
Fees Earned or Paid in Cash
($) |
|
|
Stock Awards
($)(1) |
|
Option NameAwards
($)(1) |
|
|
Non-Equity Incentive Plan Compen-sation
($) |
|
|
Change in Pension Value and Nonqualified
Deferred Compensation Earnings
($) |
|
|
All Other Compen-sation
($)(2) |
|
|
Total
($) |
|
|
(a) |
|
(b) |
|
|
(c) |
|
(d) |
|
|
(e) |
|
|
(f) |
|
|
(g) |
|
|
(h) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deanna L. Cannon |
|
$ |
52,500 |
|
|
$ |
117,833 |
|
|
$ |
19,142 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
189,475 |
|
|
Raymond E. Galvin |
|
$ |
68,500 |
|
|
$ |
117,833 |
|
|
$ |
9,571 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
195,904 |
|
|
Douglas J. Lanier |
|
$ |
60,500 |
|
|
$ |
117,833 |
|
|
$ |
--- |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
178,333 |
|
|
Greg Matiuk |
|
$ |
60,500 |
|
|
$ |
117,833 |
|
|
$ |
8,040 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
186,373 |
|
|
Henry C. Montgomery |
|
$ |
67,500 |
|
|
$ |
117,833 |
|
|
$ |
10,999 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
196,332 |
|
|
Clyde W. Smith, Jr. |
|
$ |
62,500 |
|
|
$ |
117,833 |
|
|
$ |
10,999 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
191,332 |
|
|
Charles J. Swindells |
|
$ |
52,500 |
|
|
$ |
117,833 |
|
|
$ |
--- |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
170,333 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
The amounts in
columns (c) and (d) reflect the dollar amount recognized for
financial statement purposes for the fiscal year ended December
31, 2008, in accordance with Statement of Financial Accounting
Standards (SFAS) No. 123(R) of awards pursuant to the Company’s
stock compensation plans, and thus include amounts from awards
granted in and prior to 2008. Assumptions used in the
calculation of these amounts are included in footnote 6 to the
Company’s audited financial statements for the fiscal year ended
December 31, 2008, included in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2008.
|
| (2) |
No perquisites
are included in this column as to any director, as in the
aggregate perquisites for any director during 2008 did not
exceed $10,000. |
Payments to Former Directors
The Board of Directors maintains a policy that the Board reviews from
time to time relating to post-retirement director compensatory
agreements. The policy provides for agreements or arrangements with
former directors, including consulting services, in instances in which a
majority of the independent directors of the Board agree that an
individual former director has specific expertise that the Board and
management agree is of material benefit to the Company. Any agreements
with former directors currently in effect or about to expire will be
reviewed in accordance with this policy.
Mr. Virgil Swift served as a director from 1981 until the annual
meeting of shareholders on May 10, 2005, at which time he was given the
honorary title of Director Emeritus. As this is an honorary
distinction, no compensation is paid to Mr. V. Swift as Director
Emeritus. The full Board concluded that the service of Mr. V. Swift,
due to his extensive experience with Swift Energy and the oil and gas
industry, was an invaluable asset to the Company, and thus a consulting
agreement was entered into with this former director. As such, Mr. V.
Swift regularly attends Board and Committee meetings. Mr. V. Swift
received compensation during 2008 pursuant to a consulting agreement
which has been in effect since July 2000 and was renewed on similar
terms effective July 1, 2006. On February 25, 2009, Mr. V. Swift’s
consulting agreement was further amended to reduce his current monthly
payment to approximately $4,800 per month commencing in May 2009 (a 10%
reduction). Pursuant to such agreement and amendments, Mr. V. Swift
provides advisory services to key employees, officers and directors, and
as otherwise requested by the Chairman of the Board and Chief Executive
Officer, or by the President. The monthly payment will increase by four
percent (4%) per year as a result of an annual inflation provision. The
consulting agreement is terminable by either party without cause upon
two weeks’ written notice. Upon a change of control during the term of
the consulting agreement, all outstanding stock options held by Mr. V.
Swift will become 100% vested.
Board Succession Plan
In line with our Principles of Corporate Governance, the Board
formally considered, addressed and approved a Board succession plan
during 2004, as recommended to the Board by the Corporate Governance
Committee. In accordance with the Board succession plan, Mr. Galvin
would have been scheduled for such consideration at the 2006 annual
meeting. The Corporate Governance Committee recommended, and the Board
approved, the nomination of Mr. Galvin to stand for election, and
Mr. Galvin was reelected as a Class II director with a term to expire at
the 2007 Annual Meeting. Mr. Galvin was again scheduled for such
consideration at the 2007 Annual Meeting. The Corporate Governance
Committee considered Mr. Galvin’s industry experience and wide-ranging
management background and determined that, especially with the passing
of A. Earl Swift in May 2006, the Board and the Company would benefit
from Mr. Galvin’s depth of experience and his continuing to serve as
Lead Director, Vice Chairman and a member of the Executive
Committee. The Corporate Governance Committee recommended, and the
Board approved, with Mr. Galvin’s abstention, that Mr. Galvin be
nominated to stand for reelection for a full three-year term as a Class
II director, and Mr. Galvin was reelected at the 2007 Annual Meeting as
a Class II director, with a term to expire at the 2010 Annual
Meeting.
Nominations for Directors
Identifying Candidates
The Corporate Governance Committee, in consultation with the Chairman
of the Board, is responsible for identifying and screening potential
director candidates and recommending qualified candidates to the Board
for nomination. It is the Committee’s policy to consider
recommendations of potential candidates from current directors and
shareholders. Shareholders’ nominations for directors must be made in
writing and include the name, age, business and residence address of the
recommended nominee, the class and number of shares, if any, of Swift
Energy stock which are beneficially owned by the recommended nominee,
and any other information required to be disclosed in the Company’s
proxy statement by rules promulgated by the SEC. Additionally, the
recommendation must include the name and address of the shareholder, the
number of shares of the Company’s stock that the shareholder
beneficially owns, and the period for which the shareholder has held
such shares. Nominations must be addressed as follows and received no
later than March 15, 2010, and no earlier than February 11, 2010, in
order to be considered for the next annual election of directors:
Chairman of the Corporate Governance Committee
Swift Energy Company
c/o Office of the Corporate Secretary
16825 Northchase Drive, Suite 400
Houston, Texas 77060
Qualifications
The Corporate Governance Committee has not established a specific
minimum or maximum age, education, years of business experience or
specific types of skills for potential director candidates, but, in
general, consideration is given to each candidate’s reputation, mature
judgment, career specialization, relevant technical skills, diversity
and the extent to which the candidate would fill a present need on the
Board.
The Company’s Principles for Corporate Governance require that each
director:
- understand Swift Energy’s
business and the marketplaces in which it operates;
- regularly attend meetings of the
Board and of the Board committee(s) on which he or she serves;
- review the materials provided in
advance of meetings and any other materials provided to the
Board from time to time;
- monitor and keep abreast of
general economic, business and management news and trends, as
well as developments in Swift Energy’s competitive environment
and Swift Energy’s performance with respect to that environment;
- actively, objectively and
constructively participate in meetings and the strategic
decision-making processes;
- share his or her perspective,
background, experience, knowledge and insights as they relate to
the matters before the Board and its committees;
- be reasonably available when
requested to advise the CEO and management on specific issues
not requiring the attention of the full Board but where an
individual director’s insights might be helpful to the CEO or
management; and
- be familiar and comply in all
respects with the Code of Ethics and Business Conduct of the
Company, as adopted and as may be amended from time to time.
Nomination of Candidates
In determining whether to nominate a candidate, either from an
internally generated or shareholder recommendation, the Corporate
Governance Committee will consider the current composition and
capabilities of serving board members, as well as additional
capabilities considered necessary or desirable in light of existing and
future Company needs. The Corporate Governance Committee also exercises
its independent business judgment and discretion in evaluating the
suitability of any recommended candidate for
nomination.
Compensation Committee Interlocks and Insider Participation
During 2008, the Compensation Committee of the Board consisted of
Messrs. Smith, Lanier, Matiuk, Montgomery and Swindells, all of whom are
independent directors. To the Company’s knowledge, there are no
compensation committee interlocks involving members of the Compensation
Committee or other directors of the Company.
Corporate Governance
Part of the Company’s historical and ongoing corporate governance
practices is the Company’s policy that requires officers, directors,
employees and certain consultants of the Company to submit annual
disclosure statements regarding their compliance with the Company’s
conflict of interest policy. A management representation letter is
provided to the Corporate Governance Committee of the Board regarding
the results of the annual disclosure statements and management’s
assessment of any potential or actual conflicts of interest. Based on
this assessment and further discussion with management, the Corporate
Governance Committee then directs management on what additional action,
if any, the Committee determines is necessary to be undertaken with
regard to any potential or actual conflict of interest or related party
transaction.
The Company also requires that officers, directors, employees and
certain consultants of the Company provide an annual reaffirmation of
the Company’s Code of Ethics and Business Conduct. A copy of the Code of
Ethics and Business Conduct is redistributed in connection with this
requirement, and each such person is asked to reaffirm and reacknowledge
that they have reviewed and refreshed their knowledge of the provisions
of the Code of Ethics and Business Conduct and will comply with such
Code. They also reaffirm their understanding that their continued
service to the Company is dependent upon compliance with the Company’s
Code of Ethics and Business Conduct. In addition, all officers,
directors, employees and consultants are required to annually recertify
their understanding of, and adherence to, the Company’s Insider Trading
Policy. A copy of the Insider Trading Policy is also redistributed in
connection with this requirement.
Each of the Audit, Compensation and Corporate Governance Committees
has a charter. Each such charter is reviewed annually by the applicable
committee, and all of the charters are reviewed by the Corporate
Governance Committee. The committee charters, the Board-adopted
Principles of Corporate Governance for the Company and the Code of
Ethics and Business Conduct are applicable to all employees, directors
and consultants and are posted on the Company’s website at
www.swiftenergy.com. The committee charters, Principles of Corporate
Governance and Code of Ethics and Business Conduct are also available in
print, without charge, to any shareholder who requests a copy. Requests
should be directed to the Company’s Investor Relations Department at
16825 Northchase Drive, Suite 400, Houston, Texas 77060; by telephone at
(281) 874-2700 or (800) 777-2412; or by email to
info@swiftenergy.com.
In addition, the Code of Ethics for Senior Financial Officers and
Principal Executive Officer, as adopted by the Board, is posted on Swift
Energy’s website, where the Company also intends to post any waivers
from or amendments to this Code of Ethics.
Related Party Transactions
We receive research, technical writing, publishing, and
website-related services from Tec-Com Inc., a corporation located in
Knoxville, Tennessee, and controlled and majority owned by the aunt of
the Company’s Chairman of the Board and Chief Executive Officer. We paid
approximately $0.7 million to Tec-Com for such services pursuant to the
terms of the contract between the parties in 2008, $0.6 million in 2007
and $0.5 million in 2006. The contract was renewed June 30, 2007, on
substantially the same terms as the previous contract and expires June
30, 2010. We believe that the terms of this contract are consistent with
unrelated third party arrangements for similar services.
The Company has not adopted a formal related party transaction
policy. As a matter of corporate governance policy and practice,
related party transactions are presented and considered by the Corporate
Governance Committee of the Company’s Board of Directors. See
discussion set forth above under “Board of Directors—Corporate
Governance.”
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth information concerning the
shareholdings as of March 2, 2009, (unless otherwise indicated), with
respect to each person, to the Company’s knowledge, who beneficially
owned more than five percent of the Company’s outstanding common stock:
|
Name and Address of Beneficial Owner |
|
Amount and Nature of Beneficial Ownership |
|
Percent of Class |
| |
|
|
|
|
|
FMR LLC
82 Devonshire Street
Boston, Massachusetts 02109 |
|
3,304,626 |
(1) |
10.6% |
|
EARNEST Partners, LLC
1180 Peachtree Street NE, Suite 2300
Atlanta, Georgia 30309 |
|
2,690,075 |
(2) |
8.6% |
|
Barclays Global Investors , NA(3)
400 Howard Street
San Francisco, California 94105 |
|
2,476,201 |
(3) |
7.9% |
|
The Vanguard Group, Inc.
100 Vanguard Boulevard
Malvern, Pennsylvania 19355 |
|
2,036,392 |
(4) |
6.5% |
|
Dimensional Fund Advisors LP
Palisades West, Building One
6300 Bee Cave Road
Austin, Texas 78746 |
|
1,827,091 |
(5) |
5.9% |
|
| |
|
|
| (1) |
Based on
a Schedule 13G dated February 16, 2009, FMR LLC is parent
holding company in accordance with SEC Rule 13d-1(b)(1)(ii)(G)
holds sole voting power as to 300 shares and sole dispositive
power as to all shares owned. |
| (2) |
Based on
a Schedule 13G dated January 16, 2009, filed with the SEC to
reflect shares held at December 31, 2008, EARNEST Partners, LLC,
is an investment advisor in accordance with SEC Rule
13d-1(b)(1)(ii)(E), holds sole voting power as to 917,057
shares, shared voting power as to 681,718 shares and sole
dispositive power as to all 2,690,075 shares. |
| (3) |
Based on
a Schedule 13G dated February 6, 2009, filed with the SEC to
reflect shares held at December 31, 2008, by the following
entities: |
| |
• |
Barclays
Global Investors, NA, a Bank as defined in Section 3(a)(6) of
the Securities Act of 1933, holds sole voting power as to
819,849 shares and sole dispositive power as to 1,080,730
shares. |
| |
• |
Barclays
Global Fund Advisors, an investment advisor in accordance with
SEC Rule 13d-1(b)(1)(ii)(E), holds sole voting power as to
1,023,908 shares and sole dispositive power as to 1,375,149
shares. |
| |
• |
Barclays
Global Investors, Ltd., a non-U.S. institution in accordance
with SEC Rule 13d-1(b)(1)(ii)(J), holds sole voting power as to
700 shares and sole dispositive power as to 20,322 shares. |
| (4) |
Based on
a Schedule 13G dated February 12, 2009, filed with the SEC to
reflect shares held at December 31, 2008, The Vanguard Group,
Inc. is an investment advisor in accordance with SEC Rule
13d-1(b)(1)(ii)(E) and holds sole voting power as to 40,733
shares and sole dispositive power as to 2,036,392 shares. |
| (5) |
Based on
a Schedule 13G dated February 9, 2009, filed with the SEC to
reflect shares held at December 31, 2008, Dimensional Fund
Advisors LP (“Dimensional”) is an investment advisor in
accordance with SEC Rule 13d-1(b)(1)(ii)(E) and holds sole
voting power as to 1,760,383 shares and sole dispositive power
as to 1,827,091 shares. Dimensional disclaims beneficial
ownership of all such securities. |
Security Ownership of Management
The following table sets forth information concerning the
shareholdings, as of March 2, 2009, (unless otherwise indicated), of the
members of the Board, the Chief Executive Officer, the Chief Financial
Officer, the three most highly compensated executive officers other than
the CEO and CFO, and all executive officers and directors as a group:
|
Name of Beneficial Owner |
|
Position |
|
Amount and Nature of Beneficial Ownership(1) |
|
Percent of Class |
|
|
|
|
|
|
|
|
|
|
Terry E. Swift |
|
Chairman of the Board and Chief Executive Officer |
|
311,469 |
|
|
1.0% |
|
|
Deanna L. Cannon |
|
Director |
|
16,570 |
|
|
|
(2) |
|
Raymond E. Galvin |
|
Director |
|
39,960 |
|
|
|
(2) |
|
Douglas J. Lanier |
|
Director |
|
10,460 |
|
|
|
(2) |
|
Greg Matiuk |
|
Director |
|
20,460 |
|
|
|
(2) |
|
Henry C. Montgomery |
|
Director |
|
25,334 |
|
|
|
(2) |
|
Clyde W. Smith, Jr. |
|
Director |
|
34,781 |
(3) |
|
|
(2) |
|
Charles J. Swindells |
|
Director |
|
7,780 |
|
|
|
(2) |
|
Bruce H. Vincent |
|
Director, President, and Secretary |
|
168,867 |
|
|
|
(2) |
|
Alton D. Heckaman, Jr. |
|
Executive Vice President and Chief Financial Officer |
|
131,279 |
|
|
|
(2) |
|
Robert J. Banks |
|
Executive Vice President and Chief Operating Officer |
|
38,118 |
|
|
|
(2) |
|
James P. Mitchell |
|
Senior Vice President—Commercial Transactions and Land |
|
35,754 |
|
|
|
(2) |
|
All executive officers and directors as a group
(15 persons) |
|
|
|
1,023,104 |
|
|
3.2% |
|
|
|
|
|
| (1) |
Unless otherwise indicated below, the persons named have sole
voting and investment power, or joint voting and investment
power with their respective spouses, over the number of shares
of the common stock of the Company shown as being beneficially
owned by them. |
| (2) |
Less than one percent. |
| (3) |
Mr. Smith disclaims beneficial ownership as to 1,000 shares held
in a Roth IRA for the benefit of Mr. Smith’s
son. |
EXECUTIVE OFFICERS
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, 54, was appointed Executive Vice President and
Chief Operating Officer in February 2008, prior
to which appointment he served as Vice
President―International Operations & Strategic Ventures since
2006. Mr. Banks has also served as Vice President―International
Operations of the Company’s subsidiary, Swift Energy International,
since he joined the Company in 2004. Mr. Banks
has held senior-level positions and led international units for Vanco
Energy Company, Mosbacher Energy Company, Kuwait Foreign Petroleum
Company and Santa Fe International Corporation. Mr. Banks holds the
degree of Bachelor of Science from Pennsylvania State University.
Alton D. Heckaman, Jr., 52, was appointed Executive Vice
President of Swift Energy in November 2004 and Chief Financial Officer
in August 2000. He previously served as Senior Vice President—Finance
from August 2000 until November 2004 and served in other progressive
positions of responsibility since joining the Company in 1982. He is a
Certified Public Accountant and holds the degrees of Bachelor of
Business Administration in Accounting and Master of Business
Administration.
James M. Kitterman, 64, was appointed Senior Vice
President—Operations of Swift Energy in May 1993. He had previously
served as Vice President—Operations since joining the Company in
1983. Mr. Kitterman holds the degrees of Bachelor of Science in
Petroleum Engineering and Master of Business Administration.
James P. Mitchell , 54, was
appointed Senior Vice President―Commercial Transactions and Land in
February 2003. He previously served as Vice President―Land and Property
Transactions from December 2001 to February 2003 and Vice President―Land
from 1996 to 2001. He served in other positions of progressive
responsibility since joining the Company in 1987. Mr. Mitchell holds
the degree of Bachelor of Arts in History and Business Law.
David W. Wesson, 50, was appointed Controller of Swift Energy in
January 2001. He previously served as Assistant Controller—Reporting
from April 1999 to January 2001 and in other positions of progressive
responsibility since joining the Company in 1988. Mr. Wesson is a
Certified Public Accountant and holds the degree of Bachelor of Business
Administration in Accounting.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation Philosophy and Objectives
Swift Energy Company is committed to being a premier oil and gas
company and top-tier performer by creating value through sustainable,
efficient growth in reserves and production and by contributing to the
country’s energy security. Our executive compensation program is based
on a pay-for-performance philosophy and is designed to align the
interests of our employees with those of our stockholders and to support
the long-term business objectives and corporate values that steer
success. The oil and gas industry has experienced robust conditions in
recent years. Despite the recent downturn in commodity prices, the
competition for geoscientists, petroleum engineers and other talented
employees has remained strong. We believe that it is imperative that we
maintain highly competitive compensation programs to attract and retain
quality personnel.
During 2008, to assist in accomplishing the objectives of our
compensation program, the Compensation Committee of the Board of
Directors (within this section, the “Compensation Committee” or
“Committee”) engaged Towers Perrin, a global professional services firm,
to serve as its independent compensation consultant, and report directly
to the Committee. The independent compensation consultant provides the
Committee with comparative data on executive compensation and expert
advice on the design and implementation of the Company’s annual and
long-term compensation programs.
In the Company’s annual compensation evaluation in February 2009, our
Compensation Committee, in consultation with its independent
compensation consultant, followed the recommendation of executive
management to freeze base salaries for all eleven officers, provide
limited 2008 cash bonuses to seven of the officers and provide no 2008
cash bonuses to our top four executive officers (our CEO, President, and
CFO and COO). This recommendation by executive management and action by
the Committee was based upon the Company’s 2008 performance, the ongoing
global financial crisis and recession, and the limited “reduction in
force” in early 2009. In addition, the Committee considered the
cyclical nature of the oil and gas business and determined that freezing
salaries and providing limited or no cash bonuses to Officers was
warranted based on the recent significant downturn in commodity prices,
which ultimately affects the pool of funds used for these compensation
components. At the same time, the Committee determined to provide
long-term equity incentive awards to all eleven officers that would
reward appreciation in our common stock and shareholder return, and that
the equity awards would become most valuable if our stock price
increased, which ultimately is a result of executing Swift Energy’s
long-term objectives and strategies.
Leadership Structure
- SEC regulations require disclosure
regarding the compensation of Named Executive Officers. For this
proxy statement, the Chief Executive Officer, President, Executive
Vice President and Chief Financial Officer, Executive Vice President
and Chief Operating Officer, and Senior Vice President—Commercial
Transactions and Land comprise the Named Executive Officers.
At the time of filing this proxy statement, we
have eleven officers including the Named Executive Officers, and
these eleven individuals are referred to as “Officers” herein.
Our compensation program described below
is the same for all Officers.
Although our Officers are responsible
for specific business functions, together they share responsibility for
the performance of the Company.
Compensation for a Career at Swift Energy
- It is our objective to attract and
retain for a career the best talent available.
- It takes a long period of time and a
significant investment to develop the experienced executive talent
necessary to succeed in the oil and gas business; senior executives
must have experience with all phases of the business cycle to be
effective leaders.
- We have an experienced executive
team that has served Swift Energy for many of the Company’s 29
years.
- Our CEO has 28 years of service with
the Company, our President, 19 years, and our CFO has 27 years; the
average service for our executive officers (referenced on page) is
21 years.
Overview of the 2008 Compensation Program
- At the beginning of 2008 and in
preparation for the February Compensation Committee and Board
meetings, the executive management team (primarily the CEO,
President, and CFO) prepared a recommended compensation program
for 2008 for all Officers based on current and long-term
business objectives, benchmarking and peer data, and internal
tally sheets (see “Use of Analytical Tools and Peer Data”).
- The recommendation set out the
Company metrics and individual performance goals for the
principal components of compensation that would be used to gauge
2008 performance.
- At the February 2008 Committee
meeting, the CEO, with the President and CFO present, presented
the recommendation to the Committee for all Officers in light of
current and long-term business strategies.
- The CEO did not participate in
the Committee’s discussion of the compensation program as it
relates to the CEO.
- The Committee, having the
ultimate responsibility of reviewing and recommending the
compensation program to the Board of Directors, deliberated
amongst themselves to discuss the recommendation in detail as to
all Officers.
- The Committee also reviewed all
market and internal data used in preparing the recommendation.
- After deliberation and
discussion, the Committee made changes it deemed appropriate and
then it recommended the compensation program for 2008 to the
Board of Directors for approval.
- During third quarter 2008, the
Committee engaged an independent compensation consultant to
prepare a comprehensive study on officer compensation, including
a comparison with our peers, and to prepare an assessment of the
competitiveness of our Officer compensation program.
- The terms of the relationship
with the independent compensation consultant are set forth in an
agreement between the Committee and the consultant.
- The Committee anticipates using
the independent compensation consultant on an on-going basis to
assist with executive compensation matters.
- In preparation for the
Committee’s evaluation of 2008 compensation, the Committee
Chairman requested the independent compensation consultant to
review the executive management team’s recommendations to the
Committee for Officer salary adjustments, cash bonus amounts,
and long-term equity incentive awards based on the results of
the pre-determined Company metrics and individual performance
goals in light of the independent compensation consultant’s prior
review of our Compensation Program and its internal database of
compensation levels, structures and trends, so that the
consultant would be in a position to advise the Committee
regarding those recommendations.
- At the February 2009 Committee
meeting, the Committee reviewed the recommendations presented by
the executive management team, discussed those recommendations
with the independent compensation consultant, deliberated
amongst themselves and other Board members, and approved the
compensation amounts discussed later in this Compensation
Discussion and Analysis.
Principal Elements of Compensation
The principal elements of our Officer compensation program include:
- Base Salary;
- Annual Cash Bonus;
- Long Term Equity Incentives;
- Post-employment Benefits
(including change of control benefits); and
- Other Benefits.
Base Salary
- Base salary generally rewards
individual experience and performance.
- At the beginning of each year,
each Officer develops individual performance goals relative to
his or her position and organizational responsibilities.
- These individual goals are
required to be directly related to our business objectives.
- Officers’ (other than the CEO’s)
individual goals are discussed with and approved by the CEO.
- The CEO’s goals are developed by
the CEO and are discussed with and approved by the Committee.
- The Committee does not use a
formula or ratio when considering periodic base salary
adjustments (generally annually); however they do consider:
- Individual Performance – Base
salary adjustments are primarily related to performance,
including the Officer’s achievements of his or her previously
established performance goals, as well as living our vision,
mission, values, and behaviors.
- External Competiveness – For the
2008 base salary review, each Officer was targeted at the median
of the third quartile (the 66th percentile) of our peers.
Given that each of the Named Executive Officers fulfilled various
pre-established individual performance goals, each Named Executive
Officer would likely have been entitled to receive an increase in base
salary when the Committee reviewed compensation metrics at the February
2009 meeting. However, management recommended to the Committee that it
freeze base salaries for all Officers in light of the Company’s overall
performance, the ongoing global financial crisis and recession, and the
limited “reduction in force” in early 2009 as part of an overall
reduction of costs. The Board of Directors and the Committee, in
consultation with the independent compensation consultant, accepted this
recommendation.
Annual Cash Bonuses
- Annual cash bonuses can be highly
variable depending on the annual financial and operating
results.
- To qualify for participation in
the Company’s cash bonus plan each Officer must:
- be a full-time Officer of Swift
Energy or one of its subsidiaries on the date of the award;
- have no violations of our Code of
Ethics and Business Conduct; and
- meet or exceed 50% of the
Officer’s personal goals based on the CEO’s assessment.
- Annual cash bonuses are intended
to link primarily to the Company’s performance for the preceding
year, but also to individual Officer’s performance.
- The Company’s performance is
weighted as two-thirds (2/3) and the Officer’s individual
performance as one-third (1/3).
- The Committee also considers a
number of other factors including external competitive bonus
data and the marketplace for talent (See “Use of Analytical
Tools and Peer Data”
- The Committee reserves the
discretionary right to increase or decrease cash bonus amounts
when it believes such adjustments are in the best interest of
Swift Energy.
- During February of 2008, the
Committee set the 2008 cash bonus targets for Officers at the
following:
|
Position |
|
2008 Target
as Percentage
of Base Salary |
| CEO |
|
100% |
| President |
|
80% |
| Executive Vice
President |
|
60% |
| CFO |
|
60% |
| Senior Vice
President |
|
50% |
| Vice President |
|
40% |
| Other Officers |
|
40% |
- As a measure of the Company’s
performance, each Officer, other than the CEO, President, and
CFO, is assigned by the CEO seven out of nine metrics based on
his position
- The CEO, President, and CFO were
assigned all nine metrics.
- The other two Named Executive
Officers were both assigned all metrics except Cash Flow per
Share and Corporate Net Margin.
- Listed below are the nine
metrics:
- Financial Metrics
- Earnings per Share
- Cash Flow per Share
- Corporate Net Margin
- Reserve Growth (Proven and
Probable)
- Operating Metrics
- MMBOE Production
- LOE (Controllable)
- Finding Costs
- Safety Record
- HSE Spill Reductions
- Each of the seven metrics (nine
for the CEO, President, and CFO) selected for an Officer is
assigned a specific weighting from 0% to 25%, with all metrics
totaling 100%.
- Each financial and operating
metric is set for a qualifying level, an expected baseline
achievement level and a maximum level:
- If the qualifying level is not
met, then no bonus is awarded for such metric, subject to
Committee discretion.
- The next level up, the baseline
level, is expected to be reached and represents 25% to 75%
weighting of that metric.
- The maximum level is that level
that represents exceptional performance which, at the discretion
of the Committee, would receive a weighting of 100% or higher
for that metric.
- For Company performance in 2008,
only one metric, Cash Flow per Share, reached the qualifying
level; this metric also surpassed the maximum level.
- The Company did not reach the
qualifying level on any other Company performance metrics;
however, the Committee used its discretion to give partial
credit for the metrics “Safety Record” and “HSE Spills
Reduction.”
- The Committee believed that
meaningful progress was made in 2008 with regard to the “Safety
Record” and “HSE Spills Reduction” metrics; therefore despite
not achieving the qualifying level for these metrics, the
Company’s significant improvement in the area of safety,
together with the achievements made in these areas even in the
face of two devastating hurricanes during 2008, warranted
partial credit for these metrics.
- For individual performance
evaluation representing a potential one-third (1/3) of the
target bonus, each officer is assessed using the same process as
described in the “Base Salary” section above.
Given the achievement on certain Company metrics (Cash Flow per
Share, Safety Record, and HSE Spills Reduction) and each Named Executive
Officer’s pre-established performance goals, the Named Executive
Officers’ potential cash bonus levels for 2008 performance ranged from
15.9% to 36.7% of base salary. The executive team (Messrs. Swift,
Vincent, Heckaman, and Banks) recommended at the February 2009 Committee
meeting that, despite otherwise qualifying for a cash bonus based on the
results of the pre-determined metrics and individual performance goals,
they not receive any cash bonus in light of the Company’s overall
performance and the ongoing global financial crisis and recession and
the “reduction in force” in early 2009 as part of an overall reduction
of costs. The executive team also recommended that their entire
computed bonus be placed in the pool of money being distributed as
bonuses to non-officer employees. The Board of Directors and the
Committee, in consultation with the independent compensation consultant,
accepted these two recommendations.
Consequently, our seven non-executive officers (excluding our CEO,
President, CFO and COO) received cash bonuses based on the same
performance evaluation process outlined above. The aggregate cash
bonuses paid to the five Named Executive Officers have been reduced over
the last three years, from $2,312,599 for 2006, to $1,816,831 for 2007,
to $52,957 in 2008. This reduction is primarily related to the Company
not achieving certain performance metrics and four of the Named
Executive Officers not receiving a cash bonus for 2008.
Long-Term Equity Incentives
- We believe our long-term equity
incentive awards are a critical element in the mix of
compensation.
- These awards tie compensation of
Officers to long-term increases in Swift Energy’s stock price
and therefore align the interests of Officers and stockholders.
- Stock options awards align the
interests of Officers and stockholders by putting the value of
stock options “at-risk” to stock price appreciation, linking
compensation to appreciation in Swift Energy’s stock price.
- Restricted stock awards serve as
an important retention tool that are subject to vesting and are
prevalent among our peers.
- During 2008, the Committee
decided that the appropriate mix of long-term equity incentives
for Officers, to balance between the dual objectives of tying
compensation to stock appreciation and shareholder return and
providing retention incentive, is 50 percent stock options and
50 percent restricted stock, which is the same percentage
allocation used since 2004 when restricted stock was added to
the long-term equity incentive program.
- As with the other primary
components of compensation, the Committee considers competitive
data when granting long-term incentive awards (see “Use of
Analytical Tools and Peer Data”).
- During February of 2008, the
Committee set the 2008 long-term equity incentive targets (for
awards to be made to Officers in February 2009) at the
following:
|
Position |
|
2008 Target
as Percentage
of Base Salary |
| CEO |
|
250% |
| President |
|
200% |
| Executive Vice
President |
|
150% |
| CFO |
|
150% |
| Senior Vice
President |
|
125% |
| Vice President |
|
100% |
| Other Officers |
|
100% |
- The annual long-term equity
incentives are intended to link primarily to the Company’s
performance for the preceding year, but also to the individual
Officer’s performance.
- The Company’s performance is
weighted as two-thirds (2/3) and the Officer’s individual
performance as one-third (1/3).
- The Committee also established a
premium that increases an Officer’s long-term incentive award by
5%, 10%, or 20% if the officer holds direct ownership of Swift
Energy stock equal to 100%, 150%, or 200%, respectively, of base
salary at December 31, 2008.
- For 2008 long-term incentive
equity awards granted in February 2009, it was the judgment of
the Committee that this premium rewards and thus encourages
Officers to hold a meaningful amount of equity, which would
further align their interests with the long-term interests of
shareholders.
- For the Company’s performance,
each Officer, based on his position, is assigned seven metrics:
- Financial Metrics
- Earnings per Share
- Annual Shareholder Return
Quartile
- Annual Shareholder Return 1-year
- Reserve Growth 2-year average
- Operating Metrics
- MMBOE Production
- LOE (Controllable)
- Reduction of 3 year Average
Finding Costs
- Each of the seven metrics
selected for an Officer is assigned a specific weighting from 0%
to 25%, with all metrics totaling 100%.
- Each operating and financial
metric is set for a qualifying level, an expected baseline
achievement level and a maximum level:
- If the qualifying level is not met, then
no bonus is awarded for such metric, subject to Committee discretion.
- The next level up, the baseline
level is expected to be reached and represents 25% to 75%
weighting of that metric.
- The maximum level is that level
that represents exceptional performance which, at the
Committee’s discretion, would receive weighting of 100% or
higher for that metric.
- For 2008, the Company did not
reach the qualifying level for any of the performance metrics
above.
- For individual performance
evaluation representing a potential one-third (1/3) of the
target award, each officer is assessed using the same process as
described in the “Base Salary” section above.
- Based on the Committee’s review
of the Company and individual performance as described above,
our Named Executive Officers’ computed long-term incentive
amounts as a percentage of base salary were:
- Chief Executive Officer – 90.2%
- President – 72.1%
- EVP & Chief Financial Officer –
47.3%
- EVP & Chief Operating Officer –
45.1%
- SVP—Commercial Transactions &
Land – 35.5%
- The Committee used discretion on
the computed long-term equity incentive amounts, and the actual
awards for our Named Executive Officers as a percentage of base
salary were:
- Chief Executive Officer – 336.7%
- President – 269.4%
- EVP & Chief Financial Officer –
179.5%
- EVP & Chief Operating Officer –
170%
- SVP—Commercial Transactions &
Land – 125%
- The Committee sought advice from
its independent compensation consultant regarding current
industry trends and practices regarding long-term incentive
compensation and considered this information in light of the
Company’s long-term incentive structures. Based upon market
data provided by the consultant and discussion and
consideration, the Committee decided to award long-term equity
incentives in the amounts stated above for the following
reasons:
- The independent compensation
consultant advised the Committee that most energy peer companies
make long-term incentive awards annually at market levels. The
performance aspect of these awards is then reflected in future
stock price changes.
- The Committee determined that the
external circumstances in the economy, the global financial
crisis along with two devastating hurricanes in 2008 made it
difficult to achieve many of the metrics used in this
calculation.
- The Committee believes that the
Board should provide sufficient incentive for the Officers to
grow the Company’s assets and add value for all shareholders,
thereby aligning the Officer’s interests with those of our
shareholders.
- The Committee believes providing
long-term equity incentive awards for the Officers will reward
appreciation in our common stock and shareholder return, and
that the equity awards would become most valuable if our stock
price increased, which ultimately is a result of executing Swift
Energy’s long-term objectives and strategies.
Post-employment Benefits
- During November 2008, we amended
employment agreements with five Officers who had had existing
agreements in place since 1995 (in one instance since 1999) and
executed a new employment agreement with one Officer; thus, each
Named Executive Officer has an employment agreement.
- Each amended or new employment
agreement provides for an initial three-year term which is
automatically extended for one year on the anniversary date of
the agreement.
- These agreements provide for
payment of certain amounts, acceleration of certain equity
awards and continuation of life and health insurance benefits
for various periods of time, based upon different termination
scenarios (see “—Potential Payments Upon Termination or Change
in Control—Computation of Payments” for details of the various
scenarios as they apply to each Named Executive Officer).
- The Committee believes that that
the terms of the Named Executive Officers’ employment agreements
are reasonable and competitive with similar agreements used by
our peers.
- After a detailed study of
post-employment benefits of our peers, we adopted the Swift
Energy Company Change of Control Severance Plan (the “Change of
Control Severance Plan”) in November 2008, in which all
employees (including Officers) are participants.
- The Change of Control Severance
Plan was adopted to minimize, with respect to the possibility of
a change of control of the Company, the loss or distraction of
employees of the Company and its subsidiaries to the detriment
of the Company and its shareholders.
- Our Change of Control Severance
Plan is a double-trigger plan and benefits will only be paid if
there is both a Change of Control and a qualified termination
within two years of the Change of Control.
- Each Named Executive Officer’s
employment agreement enhances certain payment amounts and other
benefits provided in the Change of Control Severance Plan, which
is more fully explained below (see “—Potential Payments Upon
Termination or Change in Control—Computation of Payments” for
details of the various scenarios as they apply to each Named
Executive Officer).
- The Committee based its
determination on the amounts paid to Named Executive Officers in
the event of a qualified termination following a change of
control on the referenced peer study.
- The five amended agreements had
existing Change of Control terms that were modified slightly
under the amended agreement.
Other Benefits
- We offer a limited number of
perquisites to our executives.
- Overall, the Committee believes
that these benefits are significantly more limited than
prevailing market practices in the industry, but are reasonable
supplements to the total compensation program.
- During 2008, no Named Executive
Officer had perquisites exceeding $10,000.
- By the terms of our Named
Executive Officers’ employment agreements, each officer may be
reimbursed up to $7,500 for third-party fees related to
financial planning and tax preparation.
- We also provide certain insurance
benefits including term life, supplemental life, voluntary life,
and accidental death and dismemberment coverage that are
available to all full-time employees.
- From time to time, we have
provided and paid for universal life insurance for our
Officers. During 2008, the Company did not pay any premiums for
this coverage.
- The Named Executive Officers are
occasionally provided with tickets to local sporting or cultural
events, which are primarily used for business entertainment or
provided to other Officers or key employees; occasionally, these
tickets are provided to local non-profit organizations for use.
Officers and employees also have
access to Company vehicles on a limited, as-needed and approved
basis.
Spousal travel is generally
available in connection with Board meetings and special oil and
gas industry functions which specifically promote or advance the
business purpose of Swift Energy.
Each Officer is eligible to
participate in the Company’s 401(k) plan and Employee Stock
Ownership Plan, both of which are available to all of our
employees.
Equity Award Timing
- The Committee grants equity
awards to Officers at the Committee’s regular February meeting,
which is generally held the second week in February.
- The Committee meeting is
scheduled over a year in advance.
- The Committee does not grant
equity awards by unanimous consent, which further solidifies the
firm timing of equity awards.
- The exercise price of any stock
options granted is the closing price reported on the NYSE on the
date of the meeting at which the Committee approves the grants.
Use of Analytical Tools and Peer Data
As is common practice in our industry, the Committee used various
tools to facilitate the compensation decisions made in 2008:
- The Committee reviews tally
sheets prepared internally for each Officer that show the
individual elements of compensation, including benefits, which
also reflect the full cost of each Officer.
- The tally sheets are used to
gauge total compensation for each Officer against publicly
available data for comparable positions at comparator companies.
- We operate in a highly
competitive environment for talented executive leadership;
therefore, we believe it is necessary and appropriate to
benchmark our executive compensation against peer group
companies to enhance our ability to attract and retain
executives.
- Comparison to peer market data is
used solely for background information to make subjective
judgment about how our overall compensation program and its
components compare to those our peers.
- The peer market data is not used
in any formulaic or statistical manner to determine executive
management’s compensation program recommendation or Committee
decisions.
- As described previously, we
engaged an independent compensation consultant to review our
compensation program, and the results of their analysis
presented to the Committee contains peer market data from SEC
filings and other data the consultant collects from various
sources.
- Peer market data was collected
from the following companies:
| |
Berry Petroleum
Cabot Oil & Gas
Clayton Williams Energy
Comstock Resources
Denbury Resources
Energy Partners, Ltd.
Forest Oil |
Mariner Energy, Inc.
McMoRan
Exploration
Pioneer Natural Resources
Newfield Exploration
Petrohawk Energy
Petroquest Energy
Plains Exploration & Production |
Quicksilver Resources
Range
Resources
Southwestern Energy
St. Mary Land & Exploration
Stone Energy Corporation
Ultra Petroleum Corp.
|
Code Section 162(m)
Section 162(m) of the Code generally disallows a tax deduction to
publicly held companies for compensation in excess of $1 million paid to
the Company’s chief executive officer or any of the four other most
highly compensated Officers, not including the chief executive
officer. Certain performance-based compensation is specifically exempt
from the deduction limit if it otherwise meets the requirements of
Section 162(m). These requirements include that the compensation to be
paid upon attainment of performance goals that are determined by a
board’s compensation committee comprised solely of two or more outside
directors, shareholder approval of the performance goals, and
compensation committee certification that the goals have been
met. Stock options and SARs generally qualify as “performance-based
compensation.” Other awards, grants, or bonuses will be
“performance-based compensation” if they are so designated and if their
grant, vesting or settlement is subject to the performance criteria
described above meeting specified performance criteria and complying
with Section 162(m) of the Code, including related
regulations. Restricted stock awards that vest solely upon the passage
of time do not qualify as “performance-based compensation.”
Change in Our 2009 Compensation Program Design
Our Compensation Committee determined to make significant changes to
the design of our compensation program for 2009 and beyond; below, we
are highlighting some of the conceptual difference. These changes
primarily reflect that many of our peers evaluate compensation based on
a more flexible program that allows the Committee to use its own
business judgment to evaluate the Company’s performance on certain
financial and operating measures, especially in light of the cyclical
nature of the oil and gas business and recent unprecedented volatility
in commodity prices.
To further accomplish the objectives of our compensation program, the
Committee engaged an independent compensation consultant, Towers Perrin,
to provide consulting services on executive compensation matters as
described earlier in this Compensation Discussion and Analysis. The
Committee requested the consultant to provide an assessment of our
executive officer compensation program, and such assessment was one of
the primary tools used to evaluate executive management’s recommendation
for the 2009 executive compensation program to the Committee at the
February 2009 Committee meeting and in the Committee’s determinations
regarding that program.
The Committee also requested that the independent compensation
consultant conduct a review of Board compensation. Based on the review
and in light of the current environment, the Board determined that no
changes to Board compensation were needed at this time.
Based on the results of this review of our executive compensation
program and the Committee’s desire to enhance its design, the 2008 and
2009 compensation programs will significantly differ.
- The Committee will de-emphasize
use of quantitative targets and formulas in assessing executive
performance in determining compensation.
- There will be fewer “metrics” or
measures to evaluate Company performance, and the Committee will
not assign weights to the financial and operational measures
considered.
- The Company’s financial
performance will be based on the Committee’s judgment of two
primary measures: total shareholder return and implementation of
our financial plans.
- The Company’s operational
performance will be based on the Committee’s judgment of two
primary measures: implementation of strategic plans and health,
safety and environmental performance.
- As in the past, each Officer will
have his or her individual goals as well as knowledge of the
Company’s strategy to enable the Officers to focus their efforts
to achieve the Company’s objectives.
- The Committee has requested
executive management to work with the independent compensation
consultant to compile alternatives for Officer stock ownership
guidelines and/or requirements, and then to make a
recommendation to the Committee.
Compensation Committee Report
The Compensation Committee reviewed and discussed the Compensation
Discussion and Analysis with management. Based upon this review, the
related discussions and other matters deemed relevant and appropriate by
the Compensation Committee, the Compensation Committee has recommended
to the Board of Directors that the Compensation Discussion and Analysis
be included in this proxy statement to be delivered to shareholders of
Swift Energy.
| |
Clyde W. Smith, Jr. (Chairman)
Douglas J. Lanier
Greg Matiuk
Henry C. Montgomery
Charles J. Swindells |
Summary Compensation Table
The following table sets forth certain summary information regarding
compensation paid or accrued by the Company to or on behalf of the
Company’s Chief Executive Officer, Chief Financial Officer, and each of
the three most highly compensated executive Officers of the Company
other than the CEO and CFO for the fiscal years ended December 31, 2006,
December 31, 2007, and December 31, 2008:
|
Name and
Principal Position |
|
Year |
|
Salary
($) |
|
Bonus
($)(1) |
|
Stock Awards
($)(2) |
|
Option Awards
($)(2) |
|
Non-Equity Incentive Plan
Compensation
($) |
|
Change in Pension and
Non-qualified Deferred Compensation Earnings
($) |
|
All Other Compen-sation
($)(3)(4)(5) |
|
Total
($) |
|
(a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f) |
|
(g) |
|
(h) |
|
(i) |
|
(j) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry E.
Swift Chairman of the
Board and Chief Executive Officer |
|
2008 |
|
$ |
609,000 |
|
$ |
0 |
|
$ |
1,102,517 |
|
$ |
666,371 |
|
$ |
— |
|
$ |
— |
|
$ |
164,771 |
|
$ |
2,542,659 |
|
|
2007 |
|
$ |
580,000 |
|
$ |
724,249 |
|
$ |
653,541 |
|
$ |
1,415,873 |
|
$ |
— |
|
$ |
— |
|
$ |
37,841 |
|
$ |
3,411,504 |
|
|
2006 |
|
$ |
550,000 |
|
$ |
947,408 |
|
$ |
322,893 |
|
$ |
967,600 |
|
$ |
— |
|
$ |
— |
|
$ |
34,608 |
|
$ |
2,822,509 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alton D.
Heckaman, Jr. Executive
Vice President and Chief Financial Officer |
|
2008 |
|
$ |
406,600 |
|
$ |
0 |
|
$ |
436,646 |
|
$ |
524,429 |
|
$ |
— |
|
$ |
— |
|
$ |
136,969 |
|
$ |
1,504,644 |
|
|
2007 |
|
$ |
380,000 |
|
$ |
287,012 |
|
$ |
270,982 |
|
$ |
407,810 |
|
$ |
— |
|
$ |
— |
|
$ |
28,122 |
|
$ |
1,373,926 |
|
|
2006 |
|
$ |
360,000 |
|
$ |
372,613 |
|
$ |
132,384 |
|
$ |
444,688 |
|
$ |
— |
|
$ |
— |
|
$ |
26,314 |
|
$ |
1,335,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce H.
Vincent President and
Secretary |
|
2008 |
|
$ |
476,700 |
|
$ |
0 |
|
$ |
868,392 |
|
$ |
770,114 |
|
$ |
— |
|
$ |
— |
|
$ |
25,235 |
|
$ |
2,140,441 |
|
|
2007 |
|
$ |
454,000 |
|
$ |
472,921 |
|
$ |
396,000 |
|
$ |
594,165 |
|
$ |
— |
|
$ |
— |
|
$ |
42,322 |
|
$ |
1,959,408 |
|
|
2006 |
|
$ |
430,000 |
|
$ |
592,561 |
|
$ |
191,426 |
|
$ |
891,522 |
|
$ |
— |
|
$ |
— |
|
$ |
37,956 |
|
$ |
2,143,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert J.
Banks Executive Vice
President and Chief Operating Officer |
|
2008 |
|
$ |
360,000 |
|
$ |
0 |
|
$ |
297,615 |
|
$ |
132,851 |
|
$ |
— |
|
$ |
— |
|
$ |
21,247 |
|
$ |
811,713 |
|
|
2007 |
|
$ |
300,000 |
|
$ |
142,660 |
|
$ |
163,496 |
|
$ |
86,065 |
|
$ |
— |
|
$ |
— |
|
$ |
31,699 |
|
$ |
723,920 |
|
|
2006 |
|
$ |
250,000 |
|
$ |
148,308 |
|
$ |
55,334 |
|
$ |
41,756 |
|
$ |
— |
|
$ |
— |
|
$ |
22,085 |
|
$ |
517,483 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James P.
Mitchell Senior Vice
President—Commercial Transactions and Land |
|
2008 |
|
$ |
333,900 |
|
$ |
52,957 |
|
$ |
318,688 |
|
$ |
139,352 |
|
$ |
— |
|
$ |
— |
|
$ |
23,756 |
|
$ |
868,653 |
|
|
2007 |
|
$ |
315,000 |
|
$ |
189,989 |
|
$ |
163,396 |
|
$ |
165,451 |
|
$ |
— |
|
$ |
— |
|
$ |
36,063 |
|
$ |
869,899 |
|
|
2006 |
|
$ |
300,000 |
|
$ |
251,709 |
|
$ |
83,024 |
|
$ |
136,262 |
|
$ |
— |
|
$ |
— |
|
$ |
26,528 |
|
$ |
797,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| (1) |
Bonus amounts
in column (d) for 2006, 2007 and 2008 include amounts earned
during 2006, 2007 and 2008, but paid in 2007, 2008 and 2009,
respectively. |
| (2) |
The amounts in
columns (e) and (f) reflect the dollar amount recognized for
financial statement purposes for each of fiscal years ended
December 31, 2006, December 31, 2007, and December 31, 2008, in
accordance with Statement of Financial Accounting Standards (SFAS)
No. 123(R) of awards pursuant to the Company’s stock
compensation plans and thus include amounts from awards granted
in and prior to the year being reported. Assumptions used in
the calculation of these amounts are included in footnote 6 to
the Company’s audited financial statements for the fiscal years
ended December 31, 2006, December 31, 2007, and December 31,
2008, included in the Company’s Annual Report on Forms 10-K for
the years ended December 31, 2006, December 31, 2007, and
December 31, 2008, respectively. |
| (3) |
Includes all
other compensation items (column (i)) for each of 2006, 2007,
and 2008 not reportable in columns (c) through (h): |
| |
|
|
Swift |
|
Heckaman |
|
Vincent |
|
Banks |
|
Mitchell |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings Plan Contributions* |
2008 |
|
$ |
11,500 |
|
$ |
11,500 |
|
$ |
11,500 |
|
$ |
11,500 |
|
$ |
11,500 |
|
|
2007 |
|
$ |
11,250 |
|
$ |
11,250 |
|
$ |
11,250 |
|
$ |
11,250 |
|
$ |
11,250 |
|
|
2006 |
|
$ |
11,000 |
|
$ |
11,000 |
|
$ |
11,000 |
|
$ |
11,000 |
|
$ |
11,000 |
|
|
|
Life
Insurance Premiums** |
2008 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
|
2007 |
|
$ |
16,324 |
|
$ |
9,828 |
|
$ |
19,471 |
|
$ |
13,196 |
|
$ |
17,144 |
|
|
2006 |
|
$ |
12,243 |
|
$ |
7,171 |
|
$ |
14,341 |
|
$ |
7,500 |
|
$ |
8,155 |
|
|
|
Tax
Reimbursement for Life Insurance Premiums*** |
2008 |
|
$ |
10,374 |
|
$ |
6,245 |
|
$ |
12,374 |
|
$ |
8,386 |
|
$ |
10,895 |
|
|
2007 |
|
$ |
7,780 |
|
$ |
4,557 |
|
$ |
9,114 |
|
$ |
4,766 |
|
$ |
5,183 |
|
|
2006 |
|
$ |
7,780 |
|
$ |
4,557 |
|
$ |
9,030 |
|
$ |
0 |
|
$ |
3,788 |
|
|
|
Contributions to Employee Stock Ownership Plan Account**** |
2008 |
|
$ |
1,361 |
|
$ |
1,361 |
|
$ |
1,361 |
|
$ |
1,361 |
|
$ |
1,361 |
|
|
2007 |
|
$ |
2,487 |
|
$ |
2,487 |
|
$ |
2,487 |
|
$ |
2,487 |
|
$ |
2,487 |
|
|
2006 |
|
$ |
3,585 |
|
$ |
3,585 |
|
$ |
3,585 |
|
$ |
3,585 |
|
$ |
3,585 |
|
| |
* |
Company
contributions to the Named Executive Officer’s Swift Energy
Company Employee Savings Plan account (100% in Company common
stock). |
| |
** |
Insurance
premiums paid by the Company with respect to life insurance for
the benefit of the Named Executive Officer. |
| |
*** |
Amount paid to
the Named Executive Officer as a tax reimbursement with respect
to the life insurance premiums paid in the preceding year for
the Named Executive Officer. |
| |
**** |
Company
contributions (100% in Company common stock) to the Named
Executive Officer’s Swift Energy Company Employee Stock
Ownership Plan account. |
| (4) |
Includes a
one-time payment to each of Messrs. Swift and Heckaman of
$141,536 and $117,863, respectively, representing amounts of
Company contributions to a 401(k) plan for their years of
service prior to the Company having a 401(k) plan. |
| (5) |
No perquisites
are included in this column as to any Named Executive Officer,
as in the aggregate perquisites for any Named Executive Officer
during each of 2006, 2007 and 2008 did not exceed $10,000. |
Grants of Plan-Based Awards
The following table sets forth certain information with respect to
the options granted during the year ended December 31, 2008, to each
Named Executive Officer listed in the Summary Compensation Table:
|
Name |
|
Grant Date |
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards |
|
Estimated Future Payouts
Under Equity Incentive Plan
Awards |
|
All Other Stock Awards: Number of Shares of
Stock or Units
(#) |
|
All Other Option Awards: Number of Securities
Under-lying Options
(#) |
|
Exercise or Base Price of Option Awards
($/Sh) |
|
Grant Date Fair Value of Stock and Option
Awards |
|
Threshold
($) |
|
Target
($) |
|
Maximum
($) |
Threshold
(#) |
|
Target
(#) |
|
Maximum
(#) |
|
(a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f) |
|
(g) |
|
(h) |
|
(i) |
|
(j) |
|
(k) |
|
(l) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry E. Swift |
|
02/11/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
26,300 |
(1) |
|
— |
|
|
$ |
— |
|
$ |
1,136,423 |
|
|
|
02/11/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
37,800 |
(1) |
|
$ |
43.21 |
|
$ |
654,696 |
|
|
|
02/18/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
2,008 |
(4) |
|
$ |
44.33 |
|
$ |
20,762 |
|
Alton D. Heckaman, Jr. |
|
02/11/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
11,900 |
(1) |
|
— |
|
|
$ |
— |
|
$ |
514,199 |
|
|
|
02/11/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
17,100 |
(1) |
|
$ |
43.21 |
|
$ |
296,172 |
|
|
|
02/18/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
225 |
(4) |
|
$ |
44.33 |
|
$ |
2,326 |
|
|
|
02/28/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
628 |
(3) |
|
$ |
49.98 |
|
$ |
7,297 |
|
|
|
02/28/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
7,504 |
(4) |
|
$ |
49.98 |
|
$ |
87,196 |
|
|
|
05/14/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
2,221 |
(3) |
|
$ |
57.80 |
|
$ |
29,672 |
|
|
|
05/14/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
1,425 |
(2) |
|
$ |
57.80 |
|
$ |
19,038 |
|
|
|
05/14/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
1,034 |
(4) |
|
$ |
57.80 |
|
$ |
13,814 |
|
|
|
05/16/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
7,390 |
(3) |
|
$ |
60.17 |
|
$ |
104,125 |
|
|
|
06/09/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
1,474 |
(3) |
|
$ |
62.01 |
|
$ |
21,505 |
|
Bruce H. Vincent |
|
02/11/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
17,800 |
(1) |
|
— |
|
|
$ |
— |
|
$ |
769,138 |
|
|
|
02/11/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
25,600 |
(1) |
|
$ |
43.21 |
|
$ |
443,392 |
|
|
|
02/21/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
8,648 |
(4) |
|
$ |
47.08 |
|
$ |
95,128 |
|
|
|
05/14/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
8,675 |
(3) |
|
$ |
57.80 |
|
$ |
115,898 |
|
|
|
05/16/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
2,790 |
(3) |
|
$ |
60.17 |
|
$ |
39,032 |
|
|
|
05/16/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
2,986 |
(2) |
|
$ |
60.17 |
|
$ |
41,774 |
|
|
|
05/16/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
1,025 |
(4) |
|
$ |
60.17 |
|
$ |
14,339 |
|
|
|
05/21/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
2,547 |
(3) |
|
$ |
62.09 |
|
$ |
36,422 |
|
|
|
05/21/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
828 |
(4) |
|
$ |
62.09 |
|
$ |
11,840 |
|
|
|
06/06/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
8,518 |
(3) |
|
$ |
60.80 |
|
$ |
120,444 |
|
|
|
06/24/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
340 |
(3) |
|
$ |
64.87 |
|
$ |
5,215 |
|
|
|
06/24/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
914 |
(2) |
|
$ |
64.87 |
|
$ |
14,020 |
|
Robert J. Banks |
|
02/11/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
9,600 |
(1) |
|
— |
|
|
$ |
— |
|
$ |
414,816 |
|
|
|
02/11/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
13,700 |
(1) |
|
$ |
43.21 |
|
$ |
237,284 |
|
James P. Mitchell |
|
02/11/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
5,800 |
(1) |
|
— |
|
|
$ |
— |
|
$ |
250,618 |
|
|
|
02/11/2008 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
8,300 |
(1) |
|
$ |
43.21 |
|
$ |
138,915 |
|
|
|
|
| (1) |
Amount shown reflects number of restricted shares or stock
options granted to the Named Executive Officer during 2008
pursuant to the 2005 Plan. Restrictions on restricted shares
lapse as to one-third of such shares each year beginning on the
first anniversary of the grant date. Stock options become
exercisable over a five year period at 20% on each anniversary
of the grant date and expire ten years from the grant date. |
| (2) |
Amount reflects number of reload stock options granted pursuant
to the 2005 Plan. Reload stock options vest 100% on the first
anniversary of the grant date and expire on the expiration date
of the original options whose exercise triggers the awarding of
the reload options, or two years, whichever is later. For
additional discussion of reload options, refer to “Proposal 2—To
Amend the First Amended and Restated Swift Energy Company 2005
Stock Compensation Plan—Summary of the 2005 Plan—Reload
Options.” |
| (3) |
Amount reflects number of reload stock options granted pursuant
to the Swift Energy Company 2001 Omnibus Stock Compensation
Plan. Reload stock options vest 100% on the first anniversary
of the grant date and expire on the expiration date of the
original options whose exercise triggers the awarding of the
reload options, or two years, whichever is later. |
| (4) |
Amount reflects number of reload stock options granted pursuant
to the Swift Energy Company 1990 Stock Compensation
Plan. Reload stock options vest 100% on the first anniversary
of the grant date and expire on the expiration date of the
original options whose exercise is the basis for the awarding of
the reload options, or two years, whichever is
later. |
Outstanding Equity Awards at Fiscal Year-End
The following table includes certain information about stock options
and restricted stock outstanding at December 31, 2008, for each Named
Executive Officer listed in the Summary Compensation Table:
|
|
|
Option Awards |
|
Stock Awards |
|
Name |
|
Number of Securities Underlying Unexercised
Options
(#)
Exercisable |
|
Number of Securities Underlying Unexercised
Options
(#)
Unexercisable |
|
Equity Incentive Plan Awards: Number of
Securities Underlying Unexercised Unearned Options
(#) |
|
Option Exercise Price
($) |
|
Option Expiration Date |
|
Number of Shares or Units of Stock That Have
Not Vested
(#) |
|
Market Value of Shares or Units of Stock That
Have Not Vested
($)(1) |
|
Equity Incentive Plan Awards: Number of
Unearned Shares, Units or Other Rights That Have Not Vested
(#) |
|
Equity Incentive Plan Awards: Market or Payout
Value of Unearned Shares, Units or Other Rights That Have Not
Vested
($) |
|
(a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f) |
|
(g) |
|
(h) |
|
(i) |
|
(j) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry E. Swift
Stock Options |
|
647 |
|
— |
|
— |
|
$ |
35.04 |
|
02/20/2011 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
1 |
|
— |
|
— |
|
$ |
30.47 |
|
05/08/2011 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
4,002 |
|
— |
|
— |
|
$ |
16.96 |
|
02/04/2012 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
16,000 |
|
— |
|
— |
|
$ |
13.84 |
|
11/04/2013 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
10,400 |
|
5,200 |
(2) |
— |
|
$ |
25.18 |
|
11/08/2014 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
10,160 |
|
15,240 |
(2) |
— |
|
$ |
44.24 |
|
02/08/2016 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
6,820 |
|
27,280 |
(2) |
— |
|
$ |
43.48 |
|
02/06/2017 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
— |
|
37,800 |
(2) |
— |
|
$ |
43.21 |
|
02/11/2018 |
|
— |
|
|
— |
|
— |
|
|
— |
|
Reload Stock Options |
|
9,869 |
|
— |
|
— |
|
$ |
28.97 |
|
02/07/2010 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
— |
|
2,008 |
(3) |
— |
|
$ |
44.33 |
|
02/18/2010 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
8,330 |
|
— |
|
— |
|
$ |
43.48 |
|
02/20/2011 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
4,458 |
|
— |
|
— |
|
$ |
51.21 |
|
02/20/2011 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
29,749 |
|
— |
|
— |
|
$ |
51.21 |
|
05/08/2011 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
5,297 |
|
— |
|
— |
|
$ |
51.21 |
|
02/04/2012 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
3,821 |
|
— |
|
— |
|
$ |
28.97 |
|
11/04/2013 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
2,546 |
|
— |
|
— |
|
$ |
43.48 |
|
11/04/2013 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
2,162 |
|
— |
|
— |
|
$ |
51.21 |
|
11/04/2013 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
3,011 |
|
— |
|
— |
|
$ |
43.48 |
|
11/08/2014 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
2,556 |
|
— |
|
— |
|
$ |
51.21 |
|
11/08/2014 |
|
— |
|
|
— |
|
— |
|
|
— |
|
Restricted Stock |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
7,200 |
|
$ |
121,032 |
(4) |
— |
|
|
— |
|
|
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
5,834 |
|
$ |
98,070 |
(5) |
— |
|
|
— |
|
|
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
15,800 |
|
$ |
265,598 |
(5) |
— |
|
|
— |
|
|
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
26,300 |
|
$ |
442,103 |
(5) |
— |
|
|
— |
|
Alton D. Heckaman, Jr.
Stock Options |
|
10,000 |
|
— |
|
— |
|
$ |
35.04 |
|
02/20/2011 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
7,000 |
|
— |
|
— |
|
$ |
30.47 |
|
05/08/2011 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
5,000 |
|
— |
|
— |
|
$ |
13.84 |
|
11/04/2013 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
1,700 |
|
1,700 |
(2) |
— |
|
$ |
25.18 |
|
11/08/2014 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
4,440 |
|
6,660 |
(2) |
— |
|
$ |
44.24 |
|
02/08/2016 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
2,860 |
|
11,440 |
(2) |
— |
|
$ |
43.48 |
|
02/06/2017 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
— |
|
17,100 |
(2) |
— |
|
$ |
43.21 |
|
02/11/2018 |
|
— |
|
|
— |
|
— |
|
|
— |
|
Reload Stock Options |
|
887 |
|
— |
|
— |
|
$ |
45.78 |
|
06/18/2009 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
1659 |
|
— |
|
— |
|
$ |
41.08 |
|
09/27/2009 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
2,489 |
|
— |
|
— |
|
$ |
34.41 |
|
02/07/2010 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
1,210 |
|
— |
|
— |
|
$ |
35.05 |
|
02/07/2010 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
238 |
|
— |
|
— |
|
$ |
38.41 |
|
02/07/2010 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
— |
|
225 |
(3) |
— |
|
$ |
44.33 |
|
02/18/2010 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
— |
|
752 |
(3) |
— |
|
$ |
49.98 |
|
02/28/2010 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
— |
|
2,459 |
(3) |
— |
|
$ |
57.80 |
|
05/14/2010 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
3,322 |
|
— |
|
— |
|
$ |
33.01 |
|
08/01/2010 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
— |
|
6,752 |
(3) |
— |
|
$ |
49.98 |
|
08/01/2010 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
4,218 |
|
— |
|
— |
|
$ |
50.01 |
|
08/01/2010 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
|
| |
