<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
- --------------------------------------------------------------------------------
SWIFT ENERGY COMPANY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
SWIFT ENERGY COMPANY
16825 NORTHCHASE DRIVE, SUITE 400
HOUSTON, TEXAS 77060
(281) 874-2700
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 9, 2000
Notice is hereby given that the annual meeting of shareholders of SWIFT
ENERGY COMPANY (the "Company") will be held at Hotel Sofitel, 425 North Sam
Houston Parkway East, Houston, Texas, on Tuesday, May 9, 2000 at 4:00 p.m.
Houston time for the following purposes:
1. To elect two members of Class I of the board of directors to
serve for the terms specified in the attached Proxy Statement
or until their successors are elected and qualified; and
2. To consider and act upon such other business as may properly
be presented at the meeting or any adjournment thereof.
A record of shareholders has been taken as of the close of business on
March 20, 2000, and only shareholders of record on that date will be entitled to
notice of and to vote at the meeting, or any adjournment thereof. A complete
list of shareholders will be available commencing April 28, 2000, and may be
inspected during normal business hours prior to the meeting at the offices of
the Company, 16825 Northchase Drive, Suite 400, Houston, Texas, and such list
will be available at the place of the meeting on the day of the meeting.
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD RIGHT AWAY WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. A STAMPED ENVELOPE IS ENCLOSED
FOR THAT PURPOSE. YOUR PROMPT RETURN OF THE PROXY CARD WILL ENSURE A QUORUM AND
SAVE THE COMPANY THE EXPENSE OF FURTHER SOLICITATION.
By Order of the Board of Directors,
JOHN R. ALDEN
Secretary
April 7, 2000
<PAGE> 3
SWIFT ENERGY COMPANY
16825 NORTHCHASE DRIVE, SUITE 400
HOUSTON, TEXAS 77060
(281) 874-2700
PROXY STATEMENT
This proxy statement is mailed to shareholders commencing on or about
April 7, 2000, in connection with the solicitation by the board of directors of
SWIFT ENERGY COMPANY (the "Company") of proxies to be voted at the annual
meeting of shareholders to be held at Hotel Sofitel, 425 North Sam Houston
Parkway East, Houston, Texas, on May 9, 2000 at 4:00 p.m. Houston time, and any
adjournment thereof, for the purposes set forth in the accompanying notice.
Management does not expect that any matters other than those referred to in such
notice will be presented for action at the meeting.
The Annual Report to Shareholders covering the fiscal year ended
December 31, 1999 will be mailed to each shareholder entitled to vote at the
annual meeting on or before the date of mailing this proxy statement.
The cost of soliciting proxies will be borne by the Company. In
addition to solicitations by mail, a number of regular employees of the Company
may, if necessary to ensure the presence of a quorum, solicit proxies in person
or by telephone. The Company does not contemplate retaining a proxy solicitor at
this time.
QUORUM AND VOTING
The record date for the determination of shareholders entitled to
notice of and to vote at the annual meeting was the close of business on March
20, 2000. On the record date, there were 20,859,456 shares of common stock of
the Company, par value $.01 per share, issued and outstanding and entitled to
vote.
Each share of common stock entitles the holder to one vote on each
matter presented at the meeting. Proxies will be voted in accordance with the
directions specified thereon and otherwise in accordance with the judgment of
the persons designated as proxies. Any proxy on which no direction is specified
will be voted for the election of all nominees named therein to the board of
directors for the terms indicated and otherwise at the discretion of the persons
designated as proxies. A shareholder may revoke his proxy at any time prior to
the voting thereof by attending and voting at the meeting or by filing with the
Secretary of the Company a written revocation or a duly executed proxy bearing a
later date.
The presence, in person or by proxy, of the holders of a majority of
the issued and outstanding shares entitled to be voted at the meeting is
necessary to constitute a quorum to transact business. If a quorum is not
present or represented at the annual meeting, a majority of the votes
represented at the meeting may adjourn the annual meeting from time to time
without notice other than an announcement until a quorum is present or
represented.
An automated system administered by the Company's transfer agent
tabulates the votes. Abstentions are included in the determination of the number
of shares present and voting and are counted as abstentions in tabulating the
votes cast on nominations or proposals presented to shareholders. Broker
nonvotes are not included in the determination of the number of shares present
and voting or as a vote with respect to such nominations or proposals.
<PAGE> 4
ELECTION OF DIRECTORS
At the annual meeting, two Class I directors are to be elected for
terms to expire at the 2003 Annual Meeting. There are three classes of directors
and each year the directors in one of such classes are nominated to serve three
year terms, or until their successors have been duly elected and qualified. In
order to be elected, each nominee for director must receive at least the number
of votes equal to a majority of the shares having voting power present in person
or represented by proxy at the meeting.
The persons named in the accompanying proxy have been designated by the
board of directors, and unless authority is withheld by a shareholder on the
accompanying proxy, they intend to vote for the election of all of the nominees
named below to the board of directors. Raymond O. Loen, whose term as a Class I
director of the Company will expire at the 2000 Annual Meeting is not seeking
reelection as he has decided to retire as a director. Clyde W. Smith, Jr., a
current member of the board of directors, and Terry E. Swift, the Company's
President, have each been nominated as Class I members of the board of
directors. If any nominee should become unavailable or unable to serve as a
director, the proxy may be voted for a substitute selected by persons named as
proxies or the board may be reduced accordingly; however, the board of directors
is not aware of any circumstances likely to render any nominee unavailable. Any
director elected by the board of directors to fill a vacancy will be elected for
the unexpired term of such director's predecessor in office.
CLASS I
Clyde W. Smith, Jr.
Terry E. Swift
Set forth below, for information purposes only, are the names and
remaining terms of the other five directors:
CLASS II
A. Earl Swift
Henry C. Montgomery
Harold J. Withrow
(Terms to expire at 2001 Annual Meeting)
CLASS III
Virgil N. Swift
G. Robert Evans
(Terms to expire at 2002 Annual Meeting)
NOMINEES
Set forth below is certain information, as of the date hereof,
concerning the nominees for election to the board of directors of the Company.
2
<PAGE> 5
CLASS I DIRECTORS
Clyde W. Smith, Jr., 51, has served as a director of the Company since
1984. Since August 1997, Mr. Smith has served as President of Millennium
Technology Service, a White City, Oregon based contract electronics
manufacturer. He served as President of Somerset Properties, Inc., a real estate
investment company, from 1985 to 1994 and as President of H&R Precision, Inc., a
general contractor, from 1994 to 1997. Mr. Smith is a certified public
accountant. On May 5, 1997, Mr. Smith filed a petition under Chapter 7 of the
U.S. Bankruptcy Code.
Terry E. Swift, 44, was appointed President of the Company in November
1997. He served as Executive Vice President from 1991 to 1997 and was Chief
Operating Officer from 1991 to January 2000. He served as Senior Vice
President--Exploration and Joint Ventures from 1990 to 1991 and as Vice
President--Exploration and Joint Ventures from 1988 to 1990. Mr. Swift has a
degree in Chemical Engineering and a Master's Degree in Business Administration.
He is the son of A. Earl Swift and the nephew of Virgil N. Swift.
Set forth below, for information purposes only, is information
regarding the Class II and Class III directors whose terms will expire at the
annual meetings in 2001 and 2002, respectively:
CLASS II DIRECTORS
A. Earl Swift, 66, is Chief Executive Officer and Chairman of the Board
of Directors of the Company and has served in such capacity since its founding
in 1979. He previously served as President from 1979 to November 1997, at which
time Terry E. Swift was appointed President. For the 17 years prior to 1979, he
was employed by affiliates of American Natural Resources Company. Mr. Swift is a
registered professional engineer and holds a degree in Petroleum Engineering, a
Juris Doctor degree and a Master's degree in Business Administration. He is the
brother of Virgil N. Swift and the father of Terry E. Swift. The Company has
announced Mr. Swift's intent to retire as its chief executive officer in the
fourth quarter of 2000. Mr. Swift plans, however, to remain as chairman of the
board. The board of directors has commenced its search for Mr. Swift's
replacement as chief executive officer.
Henry C. Montgomery, 64, has served as a director of the Company since
1987. Since 1980, Mr. Montgomery has been and continues to serve as the Chairman
of the Board of Montgomery Financial Services Corporation, a management
consulting and financial services firm. Mr. Montgomery specializes in services
for companies in transition or that are financially troubled. The following
describes some of those engagements. Since January 2000 Mr. Montgomery has
served as Executive Vice President, Finance and Administration, and Chief
Financial Officer of Indus International, Inc., a public company engaged in
enterprise asset management systems. For eight months in 1999 he served as
Executive Vice President of Finance and Administration of Spectrian Corporation,
a public company engaged in making cellular base station power amplifiers and
power transistors. Mr. Montgomery served as Executive Vice President of SyQuest
Technology, Inc., a public company engaged in the development, manufacture and
sale of computer hard drives from November 1996 through July 1997. On November
17, 1998, SyQuest filed a petition under Chapter 11 of the U.S. Bankruptcy Code.
Mr. Montgomery served as President and Chief Executive Officer of New Media
Corporation, a privately held company engaged in developing, manufacturing and
selling PCMCIA cards for the computer industry, from March 1995 until
mid-November 1996. On October 14, 1998, New Media Corporation filed a petition
under Chapter 11 of the U.S. Bankruptcy Code.
Harold J. Withrow, 72, has been a director of the Company since 1988.
Mr. Withrow worked as an independent oil and gas consultant from 1988 until he
retired at the end of 1995. From 1975 until 1988, Mr. Withrow served as Senior
Vice President-Gas Supply for Michigan Wisconsin Pipe Line Company and its
successor, ANR Pipeline Company.
3
<PAGE> 6
CLASS III DIRECTORS
Virgil N. Swift, 71, has been a director of the Company since 1981, and
has acted as Vice Chairman of the Board and Executive Vice President--Business
Development since November 1991. He previously served as Executive Vice
President and Chief Operating Officer from 1982 to late 1991. Mr. Swift joined
the Company in 1981 as Vice President-Drilling and Production. For the preceding
28 years he held various production, drilling and engineering positions with
Gulf Oil Corporation and its subsidiaries, last serving as General
Manager--Drilling for Gulf Canada Resources, Inc. Mr. Swift is a registered
professional engineer and holds a degree in Petroleum Engineering. He is the
brother of A. Earl Swift and the uncle of Terry E. Swift.
G. Robert Evans, 68, has been a director of the Company since 1994.
Effective January 1, 1998, Mr. Evans retired as Chairman of Material Sciences
Corporation, having held that position since 1991. Material Sciences Corporation
develops and commercializes continuously processed, coated materials
technologies. He remains a director of Material Sciences Corporation. He is also
currently serving as a director of Consolidated Freightways Corporation.
COMPENSATION TO DIRECTORS
Board members are reimbursed for travel expenses they incur in
attending board of directors meetings. Employees of the Company are not
compensated for serving as directors. During 1999, nonemployee members of the
board of directors received, and during 2000, they will receive an aggregate
amount of $12,250 for attendance at board meetings, an annual fee of $5,000 for
serving on committees of the board, and an annual fee of $5,000 for services as
a director. Aggregate compensation paid to the five nonemployee directors during
1999 for their services as directors totaled $111,250.
Under the Company's 1990 Nonqualified Stock Option Plan (Amended and
Restated as of May 13, 1997) (the "1990 Nonqualified Plan"), each nonemployee
director is granted options to purchase 10,000 shares of the Company's common
stock on the date he first becomes a nonemployee director. Additionally, on the
day after each annual meeting of the shareholders, each individual who is a
nonemployee director on that date is granted options to purchase 5,000 shares of
the Company's common stock. The 1990 Nonqualified Plan permits each nonemployee
director to hold a maximum of 60,000 options to purchase shares of common stock,
which maximum increased to 66,000 due to a 10% stock dividend declared October
1, 1997. Also as a result of the stock dividend, the number of shares underlying
all options held by each of the nonemployee directors increased by 10% with a
commensurate 10% decrease in the option exercise price.
One nonemployee director exercised options during the year ended
December 31, 1999, acquiring an aggregate of 8,470 shares of the Company's
common stock.
The following table presents information as of December 31, 1999,
regarding the total number of unexercised options held by the nonemployee
directors under the 1990 Nonqualified Plan. Each of the five nonemployee
directors received his annual grant of options for 5,000 shares in May 1999, at
an exercise price of $12.50. Due to the retirement of Mr. Loen, following the
May 2000 annual shareholders meeting, there will be four nonemployee directors.
Each of the four nonemployee directors will receive options to purchase 5,000
additional shares under the 1990 Nonqualified Plan on the day following the 2000
annual shareholders meeting.
4
<PAGE> 7
NONEMPLOYEE DIRECTOR OPTIONS
<TABLE>
<CAPTION>
DECEMBER 31, 1999
-----------------
SHARES OF COMMON STOCK
UNDERLYING UNEXERCISED OPTIONS GRANTED
NAME UNDER 1990 NONQUALIFIED PLAN
---- --------------------------------------
<S> <C>
G. Robert Evans 43,100
Raymond O. Loen 60,700
Henry C. Montgomery 35,752
Clyde W. Smith, Jr. 49,810
Harold J. Withrow 55,860
</TABLE>
For the number of options exercisable within 60 days of March 1, 2000
by each of the nonemployee directors, see footnote (1) to the table set forth
under "Principal Shareholders" below.
MEETINGS OF THE BOARD OF DIRECTORS
During 1999, the board of directors met on eleven occasions. In
addition, management confers frequently with its directors on an informal basis
to discuss Company affairs. During 1999, each director attended at least 75% of
the aggregate of (i) the total number of meetings of the board of directors and
(ii) the total number of meetings of all committees of the board on which he
served.
COMMITTEES OF THE BOARD
The board of directors of the Company has established the following
standing committees: Audit, Nominating and Corporate Governance, Compensation,
Conflicts of Interest, Executive and Special Transactions Committees.
Descriptions of the functions of the Audit, Nominating and Corporate Governance
and Compensation Committees are set forth below.
AUDIT COMMITTEE. The New York Stock Exchange (the "NYSE") has
established standards, which have been accepted by the Securities and Exchange
Commission, with respect to independence and financial experience of the members
of audit committees. The NYSE standards require that all of the members of audit
committees be independent and that they all be able to read and understand
fundamental financial statements, including balance sheets, income statements
and cash flow statements. Additionally, at least one member of the committee
must have past employment experience in finance or accounting or other
comparable experience or background such as being or having been a chief
executive officer, chief financial officer or other senior officer with
financial oversight responsibilities. The members of the Swift Audit Committee
satisfy the NYSE criteria for both independence and experience. The Audit
Committee recommends to the board of directors the engagement of, and reviews
the services performed by, the Company's independent auditors. The Audit
Committee also reviews the annual audited financial statements as well as the
interim quarterly financial statement of the Company. Messrs. Loen, Montgomery
and Smith are members of the Audit Committee, which held four meetings in 1999.
In May 2000, after Mr. Loen's retirement from the board of directors, Mr. Evans
will replace Mr. Loen on the Audit Committee
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE. The Nominating and
Corporate Governance Committee reviews the performance of directors and
recommends persons to be management's nominees for directorships. The Nominating
and Corporate Governance Committee may consider nominees recommended by
shareholders, upon written request by a shareholder addressed to any member of
the committee. See
5
<PAGE> 8
"Shareholder Proposals" herein. This committee also reviews corporate governance
duties and procedures and, where necessary, recommends changes to the board.
Messrs. A. E. Swift, Loen, Evans and Smith are members of the Nominating and
Corporate Governance Committee. The Nominating and Corporate Governance
Committee held one meeting in 1999. In May 2000, Mr. Withrow will replace Mr.
Loen on the Nominating and Corporate Governance Committee.
COMPENSATION COMMITTEE. The Compensation Committee at all times is
comprised of at least three nonemployee directors who are "non-employee
directors" as defined in Rule 16b-3 under the Securities Exchange Act of 1934
(the "Exchange Act"). The Compensation Committee has sole authority to
administer the Company's stock option plans and stock purchase plan, although it
has no discretion as to awards of stock options under the 1990 Nonqualified
Plan. The Compensation Committee also reviews and makes recommendations
regarding the compensation levels of the Company's executive officers. Messrs.
Loen, Montgomery and Withrow are members of the Compensation Committee, which
held six meetings in 1999. In May 2000, Mr. Smith will replace Mr. Loen on the
Compensation Committee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class of
the Company's equity securities, to file with the Securities and Exchange
Commission (the "SEC"), the New York Stock Exchange and the Pacific Stock
Exchange initial reports of ownership and reports of changes in ownership of
common stock of the Company. Officers, directors and greater than 10%
shareholders are required by regulation to furnish the Company with copies of
all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
Forms 3 and 4 furnished to the Company during the fiscal year beginning January
1, 1999, and ending December 31, 1999, and Forms 5 furnished to the Company with
respect to such fiscal year, the Company's officers, directors and greater than
10% beneficial owners complied with all Section 16(a) filing requirements
6
<PAGE> 9
PRINCIPAL SHAREHOLDERS
The following table sets forth information concerning the
shareholdings, as of March 1, 2000 (unless otherwise indicated), of the seven
current members of the board of directors, each of the Company's five most
highly compensated executive officers (which includes one director nominee), all
executive officers and directors as a group, and each person who beneficially
owned more than five percent of the Company's outstanding common stock.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED AT
MARCH 1, 2000(1)
-----------------------------
PERCENT OF
CLASS
NAME OF PERSON OR GROUP POSITION NUMBER OUTSTANDING
- ----------------------- -------- ------ -----------
<S> <C> <C> <C>
A. Earl Swift................. Chairman of the Board, Chief Executive
Officer 363,780(2) 1.7%
Virgil N. Swift............... Vice Chairman of the Board, Executive
Vice President--Business Development 366,732(2)(3) 1.8%
G. Robert Evans............... Director 29,000 (4)
Raymond O. Loen............... Director 159,281(5) (4)
Henry C. Montgomery........... Director 48,866 (4)
Clyde W. Smith, Jr............ Director 26,210 (4)
Harold J. Withrow............. Director 38,606 (4)
Terry E. Swift................ President, Director Nominee 176,137(2) (4)
John R. Alden................. Senior Vice President--Finance, Chief 137,237(2)(6) (4)
Financial Officer, Secretary
James M. Kitterman............ Senior Vice President--Operations 127,692(2) (4)
All executive officers and directors as a group (13 persons).................. 1,703,209 7.9%
FMR Corp ..................................................................... 2,403,997(7) 11.1%
Fidelity Low-Priced Stock Fund
Fidelity Management and Research Company
Edward C. Johnson 3d
Abigail P. Johnson
82 Devonshire Street
Boston, Massachusetts 02109
Franklin Resources, Inc....................................................... 1,994,367(8) 8.4%
Franklin Advisers, Inc.
Charles B. Johnson
Rupert H. Johnson, Jr.
777 Mariners Island Blvd.
San Mateo, California 94404
Neuberger Berman Inc.......................................................... 1,337,964(9) 6.2%
Neuberger Berman, LLC
Neuberger Berman Management Inc.
605 Third Avenue
New York, NY 10158-3698
Boston Partners Asset Management, L.P......................................... 1,329,300(10) 6.1%
Boston Partners, Inc.
Desmond John Heathwood
28 State Street, 20th floor
Boston, MA 02109
</TABLE>
7
<PAGE> 10
- ---------------------------
(1) Unless otherwise indicated in the footnotes below, the number of shares
of common stock held and percent outstanding are as of March 1, 2000.
Unless otherwise indicated below, the persons named have sole voting
and investment power over the number of shares of the Company's common
stock shown as being owned by them. The table includes the following
shares that were acquirable within 60 days following March 1, 2000 by
exercise of options granted under the Company's stock option plans: Mr.
A. E. Swift - 95,748; Mr. V. N. Swift - 71,054; Mr. Evans - 20,600; Mr.
Loen - 37,100; Mr. Montgomery - 15,067; Mr. Smith - 26,210; Mr. Withrow
- 32,260; Mr. T. E. Swift - 139,760; Mr. Alden - 101,210; Mr. Kitterman
- 93,445; and all executive officers and directors as a group -
800,276.
(2) Includes approximately 342 shares held by individual's (each of the
five named executive officers) ESOP account over which individual
possesses voting, but not investment, control.
(3) Includes 121 shares held jointly by Mr. Virgil N. Swift and his wife
and 119,400 shares held of record by a Texas family limited partnership
in which Mr. Virgil Swift and his wife holds a 97% interest. Mr. Swift
and his wife are both general partners of the family limited
partnership and as such they share voting and dispositive power as to
the 119,400 shares held by the partnership. Consequently, Mr. Swift is
deemed to beneficially own the 119,400 shares held by the partnership.
Mr. Swift expressly disclaims beneficial ownership as to 3%, or 3,582,
of the shares held by the partnership.
(4) Less than one percent.
(5) Includes 77,000 shares held by Mr. Loen's wife (who holds sole voting
and investment power as to those shares), 3,847 shares held in her IRA,
and 2,809 shares held in Mr. Loen's IRA.
(6) Includes 220 shares in an IRA held by Mr. Alden's wife (who holds sole
voting and investment power as to those shares).
(7) Based on a Schedule 13G dated February 14, 2000 filed with the SEC to
reflect shares held at December 31, 1999, Fidelity Management &
Research Company ("Fidelity"), a wholly-owned subsidiary of FMR Corp.
and an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940, is the beneficial owner of 2,018,797
shares or 9.31% of the common stock outstanding of the Company as a
result of acting as investment adviser to various investment companies
registered under Section 8 of the Investment Company Act of 1940. The
ownership of one investment company, Fidelity Low-Priced Stock Fund,
amounted to 2,018,100 shares or 9.307% of the common stock outstanding.
Edward C. Johnson 3d, FMR Corp., through its control of Fidelity, and
the investment funds (the "Fidelity Funds") each has sole power to
dispose of the 2,018,797 shares owned by the Fidelity Funds.
Neither FMR Corp. nor Edward C. Johnson 3d,Chairman of FMR Corp., has
the sole power to vote or direct the voting of the shares owned
directly by the Fidelity Funds, which power resides with the Fidelity
Funds' Boards of Trustees. Fidelity carries out the voting of the
shares under written guidelines established by the Fidelity Funds'
Boards of Trustees.
Fidelity Management Trust Company, a wholly-owned subsidiary of FMR
Corp. and a bank as defined in Section 3(a)(6) of the Securities
Exchange Act of 1934, is the beneficial owner of 385,200 shares of
1.776% of the common stock outstanding of the Company as a result of
its serving as investment manager of institutional account(s). Edward
C. Johnson 3d and FMR Corp., through its control of Fidelity Management
Trust Company, each has sole dispositive power over 385,200 shares and
sole power to vote or to direct the voting of 385,200 shares of common
stock owned by institutional account(s) as reported above.
Strategic Advisers, Inc., 82 Devonshire Street, Boston, MA 02109, a
wholly-owned subsidiary of FMR Corp. and an investment adviser
registered under Section 203 of the Investment Advisers Act of 1940,
provides
8
<PAGE> 11
investment advisory services to individuals. It does not have sole
power to vote or direct the voting of shares of certain securities held
for clients and does have sole dispositive power over such securities.
As such, FMR Corp.'s beneficial ownership may include shares
beneficially owned through Strategic Advisers, Inc.
James C. Curvey, President of FMR Corp., has sole voting and
dispositive power over 175 shares or 0.0008% of the Company common
stock.
Members of the Edward C. Johnson 3d family are the predominant owners
of Class B shares of common stock of FMR Corp., representing
approximately 49% of the voting power of FMR Corp. Of these, 12% are
owned by Mr. Johnson 3d and 24.5% are owned by Abigail Johnson. The
Johnson family group and all other Class B shareholders have entered
into a shareholders voting agreement under which all Class B shares
will be voted in accordance with the majority vote of the Class B
shares. Accordingly, through their ownership of voting common stock of
FMR Corp. and the execution of the shareholders voting agreement,
members of the Johnson family may be deemed, under the Investment
Company Act of 1940, to control a controlling group with respect to FMR
Corp.
(8) Based on a Schedule 13G dated January 31, 2000 filed with the SEC to
reflect shares beneficially held at December 31, 1999. The Company's
common stock is beneficially owned by one or more open or closed-end
investment companies or other managed accounts which are advised by
direct and indirect investment advisory subsidiaries (the "Adviser
Subsidiaries") of Franklin Resources, Inc. ("FRI"). Such advisory
contracts grant to such Adviser Subsidiaries all investment and/or
voting power over the securities owned by such advisory clients.
Therefore, such Adviser Subsidiaries may be deemed to be, for such
purposes of Rule 13d-3 under the Securities Exchange Act of 1934, the
beneficial owner of the securities covered by this statement.
Beneficial ownership by investment advisory subsidiaries and other
affiliates of FRI is being reported in conformity with the guidelines
articulated by the SEC staff in Release No. 34-39538 (January 12, 1998)
relating to organizations, such as FRI, where related entities exercise
voting and investment powers over the securities being reported
independently from each other. The voting and investment powers held by
Franklin Mutual Advisers, LLC ("FMA"), formerly Franklin Mutual
Advisers, Inc., an indirect wholly owned investment advisory subsidiary
of FRI, are exercised independently from FRI and from all other
investment advisor subsidiaries of FRI (FRI, its affiliates and
investment advisor subsidiaries other than FMA are collectively
referred to herein as "FRI affiliates"). Furthermore, FMA and FRI
internal policies and procedures establish informational barriers that
prevent the flow between FMA and the FRI affiliates of information that
relates to the voting and investment powers over the securities owned
by their respective advisory clients. Consequently, FMA and the FRI
affiliates are each reporting the securities over which they hold
investment and voting power separately from each other.
Charles B. Johnson and Rupert H. Johnson, Jr. (the "Principal
Shareholders") each own in excess of 10% of the outstanding Common
Stock of FRI and are the principal shareholders of FRI. FRI and the
Principal Shareholders may be deemed to be, for purposes of Rule 13d-3
under the 1934 Act, the beneficial owner of securities held by persons
and entities advised by FRI subsidiaries. FRI, the Principal
Shareholders and each of the Advisers Subsidiaries disclaim any
economic interest or beneficial ownership in any of the securities
covered by this statement.
FRI, the Principal Shareholders, and each of the Adviser Subsidiaries
are of the view that they are not acting as a "group" for purposes of
Section 13(d) under the 1934 Act and that they are not otherwise
required to attribute to each other the "beneficial ownership" of
securities held by any of them or by any persons or entities advised by
FRI subsidiaries.
(9) Based on a Schedule 13G dated January 28, 2000 filed with the SEC to
reflect shares held at December 31, 1999, Neuberger Berman, LLC
("Neuberger") and Neuberger Berman Management Inc. ("Management") serve
as sub-advisers and investment managers of various mutual funds and are
thus deemed beneficial owners of 1,337,964 shares of the Company's
common stock, which shares they hold for their clients. Of the shares
beneficially owned, both Neuberger and Management share dispositive
power as to all 1,337,964 shares and share voting power as to 808,290
shares of the Company's common stock. As the parent holding company of
Neuberger and Management, Neuberger Berman Inc. is also deemed
beneficial owner of these shares.
(10) Based on a Schedule 13G dated February 1, 2000 filed with the SEC to
reflect shares held at December 31, 1999, Boston Partners Asset
Management, L.P. ("BPAM"), an investment adviser registered under
Section 203
9
<PAGE> 12
of the Investment Advisers Act of 1940, owns of record 1,329,300 shares
of the Company's common stock. Boston Partners, Inc., as sole general
partner of BPAM, and Mr. Desmond John Heathwood, as principal
stockholder of Boston Partners, may be deemed to beneficially own all
1,329,300 shares. As to all 1,329,300 shares, BPAM, Boston Partners and
Mr. Heathwood all share power to dispose of or direct the disposition
of and power to vote or direct the voting of the shares. BPAM holds all
of the referenced 1,329,300 shares under management for its clients,
who have the right to direct the receipt of dividends, to receive
dividends from such shares and to receive the proceeds from the sale of
such shares. None of these clients holds more than five percent of the
Company's stock.
EXECUTIVE OFFICERS
The executive officers of the Company are appointed annually by the
board of directors. Information regarding A. Earl Swift, Chief Executive Officer
and Chairman of the Board, Terry E. Swift, President and Virgil N. Swift,
Executive Vice President--Business Development and Vice Chairman of the Board,
is set forth above under "Election of Directors--Nominees." Set forth below is
certain information, as of the date hereof, concerning the other executive
officers of the Company.
John R. Alden, 54, was appointed Senior Vice President--Finance and
Chief Financial Officer in 1990. He is also Secretary of the Company. He joined
the Company in 1981 and prior to 1990 he served the Company as its secretary and
its principal financial officer under a variety of titles. Mr. Alden holds a
degree in Accounting and a Master's degree in Business Administration.
Bruce H. Vincent, 52, joined the Company as Senior Vice
President--Funds Management in 1990. Mr. Vincent holds a degree in Business
Administration and a Master's degree in Finance.
James M. Kitterman, 55, was appointed Senior Vice President--Operations
in May 1993. He had previously served as Vice President--Operations since
joining the Company in 1983. Mr. Kitterman holds a degree in Petroleum
Engineering and a Master's degree in Business Administration.
Joseph A. D'Amico, 51, serves the Company as Senior Vice President and
was appointed Chief Operating Officer of the Company in January 2000. He was
Senior Vice President of Exploration and Development of the Company from
February 1998 to January 2000. He served as the Company's Vice President of
Exploration and Development from 1993 to 1998, Director of Exploration and
Development from 1992 to 1993 and Funds Manager from 1988 to 1992. Mr. D'Amico
holds Bachelor of Science and Master of Science degrees in Petroleum Engineering
and a Master's degree in Business Administration.
Alton D. Heckaman, Jr., 43, was appointed Vice President and Controller
in May 1993. He had previously served as Assistant Vice President--Finance and
Controller since 1986. Mr. Heckaman joined the Company in 1982. He is a
Certified Public Accountant and holds a degree in Accounting.
10
<PAGE> 13
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
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 and each of the other four most highly compensated
executive officers of the Company (determined as of the end of 1999) for the
fiscal years ended December 31, 1997, 1998 and 1999.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION ANNUAL COMPENSATION ($)
--------------------------------- --------------- --------------------------------
BONUS(1)
--------------------
COMMON STOCK
NAME AND UNDERLYING LIFE
PRINCIPAL POSITION YEAR SALARY ($) CASH ($) STOCK ($) OPTIONS/SARs(#) INSURANCE ($)(2) 401(k) ($)(3)
- ----------------------- ---- ---------- -------- --------- --------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
A. EARL SWIFT 1999 $627,278 $250,250 $ 0 0 $ 3,804 $8,000
Chief Executive Officer 1998 447,500 125,981 31,519 96,300 80,073 8,000
1997 410,583 179,961 45,039 25,000 52,093 7,928
TERRY E. SWIFT 1999 $307,500 $ 55,349 $ 13,839 0 $ 5,709 $8,000
President 1998 306,875 43,158 10,763 81,400 12,282 8,000
1997 237,383 56,928 14,214 30,000 13,905 7,928
JOHN R. ALDEN 1999 $216,000 $ 34,262 $ 8,578 0 $ 7,447 $8,000
Chief Financial 1998 214,600 29,723 7,431 59,800 17,635 8,000
Officer, Senior Vice 1997 195,650 56,928 9,419 20,000 15,406 7,928
President--Finance
VIRGIL N. SWIFT 1999 $208,980 $ 34,846 $ 8,693 0 $23,798 $8,000
Executive Vice 1998 207,765 28,772 7,175 51,800 47,798 8,000
President--Business 1997 252,455 36,853 9,248 20,000 49,696 7,928
Development
JAMES M. KITTERMAN 1999 $204,000 $ 34,036 $ 8,464 0 $ 8,011 $8,000
Sr. Vice President 1998 202,625 26,962 6,765 44,900 17,692 8,000
Operations 1997 184,375 33,113 8,220 20,000 15,513 7,928
</TABLE>
- ----------
(1) Bonus amounts reported for 1999, 1998 and 1997 include bonuses earned
during those years, but actually paid in the following year.
(2) Represents insurance premiums paid by the Company during the covered
fiscal year with respect to life insurance for the benefit of the named
executive officer.
(3) Contributions by the Company to the Swift Energy Company Employee
Savings Plan (one-half in cash and one-half in Company common stock for
1997 and 1999 and 100% in Company common stock for 1998) for the
account of the named executive officer.
EMPLOYMENT CONTRACTS
Effective June 1, 1994, Virgil Swift commenced a five year employment
agreement which provided for an immediate 40% reduction in salary, coupled with
an immediate 25% reduction in working hours, decreasing to a 50% work schedule
at the commencement of the third year of the agreement and continuing for the
remaining term thereof. The agreement was amended in December 1995 to reflect
the fact that Mr. Swift has actually worked more hours than originally
contemplated, with a commensurate increase in his salary. The contract also
provides for payments of $55,550 for four years, all of which have been paid, in
consideration of Mr. Swift's agreement not to compete with the Company for a
period of seven years. If Mr. Swift's employment is terminated by the Company
upon a change in control (as defined under "Change of
11
<PAGE> 14
Control Arrangements" below), he is no longer required to comply with the
non-competition provisions and he is entitled to receive his remaining salary in
one lump sum, discounted to present value at 8% per annum. The term of the
agreement was extended in February 1999 to continue through May 31, 2002.
Effective November 1, 1995, the Company entered into employment
agreements with its other five most senior executive officers, A. Earl Swift,
Chief Executive Officer, Terry E. Swift, President (then Executive Vice
President), and three Senior Vice Presidents, John R. Alden, James M. Kitterman
and Bruce H. Vincent. The Company named a fourth Senior Vice President in 1998,
Joseph A. D'Amico, and entered into an employment agreement with him effective
February 1, 1998. All of the agreements (other than that for A. Earl Swift)
provide for an initial three-year term, which is automatically extended for one
year on each anniversary thereof. These agreements provide for payment of six
months' salary (plus, for A. Earl Swift, two weeks' salary for every year of
service to the Company) and six months' continuation of medical benefits upon
termination of employment other than for "cause." The agreements can be
terminated by the Company (other than for "cause") only by a majority of the
directors then in office who have been or will have been directors for the
two-year period ending on the date notice of the meeting or written consent to
take such action is first provided to shareholders, or those directors who have
been nominated for election or elected to succeed such directors by a majority
of such directors. Upon employment termination in connection with or following a
change of control (as defined under "Change of Control Arrangements" below), the
executives are entitled to receive 18 months' salary plus two weeks' salary for
every year of service to the Company, and continuation of certain insurance
coverages for certain periods. Following termination of employment all
outstanding vested and non-vested stock options held by the executives will be
converted into nonqualified five year options for the same number of shares at
the same exercise prices, or the closing price (as of the date of termination of
employment) of the Company's common stock on the New York Stock Exchange if it
is lower.
A. Earl Swift's 1995 employment agreement was amended in February 1999
to reflect Mr. Swift's continuation of a full work schedule beyond late 1998,
and is similar to those for the other executives, with the following exceptions.
As amended, the term is for up to 10 years depending on the length of time Mr.
Swift works on a full-time basis. Under the amended terms of this agreement, Mr.
Swift is to work on a full-time basis until November 2000 under the same
compensation arrangements which were in place under the original contract. From
November 1, 2000 through October 31, 2005, the agreement provides for
compensation for up to 20 hours of work per week, 46 weeks per year on specific
matters designated by the Board of Directors. During this five year period, Mr.
Swift's compensation will be one-half his annual base compensation at October
31, 2000, with a 4% per annum inflation adjustment, plus any bonus provided by
the Board of Directors. In the event of a change of control prior to November 1,
2000, Mr. Swift's compensation for the remaining term of the agreement would be
at least as much as for the last preceding year, or, if a change of control
occurs during the remaining five years of the agreement, at least the average of
his total compensation during the first five years of the agreement. Mr. Swift's
contract provides for a payment during each of the last five years of the
agreement to him (or his estate) of $75,850, plus 17% of his total compensation
during the last 12 months of full time employment under the agreement, in
consideration of Mr. Swift's agreement not to compete with the Company for a
period of up to ten years. In the event of a change of control, these amounts
are payable in the same manner as provided in Virgil Swift's agreement described
above, together with two weeks' salary for every year of service to the Company.
STOCK OPTION GRANTS
During 1999, the Company did not grant any stock options to the named
executive officers under the Company's 1990 Stock Compensation Plan.
OPTION VALUES
The following table contains information concerning the number of
shares acquired and value realized from the exercise of options during 1999 and
the number of unexercised options held by the named executive officers at
December 31, 1999.
12
<PAGE> 15
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND
FY-END OPTION VALUES
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS(1)
OPTIONS AT YEAR END 1999 AT YEAR END 1999
--------------------------- -------------------------
Shares Acquired Value
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
A. Earl Swift 13,310 $31,200 94,088 108,840 $302,474 $171,225
Virgil N. Swift 8,030 $19,325 69,735 42,160 $222,083 $ 89,425
Terry E. Swift 10,527 $24,246 127,253 77,520 $400,182 $150,363
John R. Alden 12,335 $28,410 99,890 53,560 $319,354 $111,338
James M. Kitterman 15,125 $34,836 92,126 38,400 $285,733 $ 78,275
</TABLE>
- ----------
(1) Options are "in-the-money" if the market price of a share of common
stock exceeds the exercise price of the option. The value of
unexercised in-the-money options equals the market price of shares at
December 31, 1999 ($11.50 per share) less the exercise price.
CHANGE OF CONTROL ARRANGEMENTS
Under the 1990 Stock Compensation Plan and the 1990 Nonqualified Plan
(collectively, the "Plans"), the occurrence of a change of control of the
Company will (unless the board of directors provides otherwise prior to the
change of control) cause all outstanding stock options to become fully
exercisable, other than options that have been outstanding less than one year. A
"change of control" is defined in the Plans to mean any of the following events:
(i) any person or group becomes the beneficial owner of shares having 40% or
more of the votes that may be cast for the election of directors; (ii) as a
result of any cash tender offer, exchange offer, merger or other business
combination, sale of assets or contested election, persons who were directors of
the Company immediately prior to such event cease to constitute a majority of
the board of directors; (iii) the shareholders of the Company approve an
agreement providing either for a transaction in which the Company will cease to
be an independent publicly owned corporation or for a sale or other disposition
of all or substantially all the assets of the Company; or (iv) a tender offer or
exchange offer is made for shares of the Company's common stock (other than by
the Company) and shares are acquired thereunder.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the Compensation Committee of the Company consisted of
Messrs. Loen, Montgomery and Withrow, who are all independent directors. To the
Company's knowledge, there are no inter-relationships involving members of the
Compensation Committee or other directors of the Company requiring disclosure in
this section of the Proxy Statement.
13
<PAGE> 16
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY
The board of directors first established its Compensation Committee in
1982. The Compensation Committee has always been composed solely of nonemployee
directors, and has set executive compensation since that time. Since 1987 when
the Compensation Committee undertook an evaluation of the Company's policies,
compensation has been based upon Company performance.
Philosophically, the Compensation Committee and the Company's Chief
Executive Officer believed it to be beneficial to the Company in its early years
to keep executive compensation in the low to middle ranges in comparison to
levels paid by comparable entities, particularly in comparison to many companies
in the oil and gas industry in which compensation levels grew rapidly during the
late 1970s and early 1980s. Since 1987, the bonus compensation of the Company's
Chief Executive Officer has been based almost solely upon the Company's
performance, as described below.
Since late 1989, the bonus formula for the Chief Executive Officer has
been based upon earnings per share and growth in oil and gas reserves, as
described in detail below. In 1995, the Compensation Committee modified its
criteria to reflect the importance of cash flow to an oil and gas company and
the Company's increased emphasis on exploration and drilling activities to
achieve growth in probable reserves, in addition to acquisition of producing
properties, given the Compensation Committee's belief that successful drilling
activities are based upon a high level of drilling prospects. Accordingly, the
bonus formula in the 1990 Stock Compensation Plan (the "1990 Plan") provides for
bonuses based on year-to-year increases in both cash flow per share and probable
reserves.
COMPENSATION CRITERIA AND PERFORMANCE MEASUREMENT
The Company's executive compensation consists of three components: base
salary, annual incentive bonuses, and long term stock-based incentives.
BASE SALARY for a particular year is based upon (i) the executive's
scope of responsibility, (ii) an evaluation of each executive's individual
performance during the year, (iii) an attempt to keep executive salaries within
the range paid by comparably sized oil and gas exploration and production
companies, based in part upon an annual survey provided by an outside consultant
on a group of 37 independent oil and gas companies with market capitalizations
between $20 million and $1.8 billion (the "Compensation Survey Group"), and (iv)
an evaluation of the Company's performance during the preceding year, including
the Company's earnings, reserve growth, cash flow and levels of general and
administrative expenses. Individual performance evaluation is based upon each
executive's review of his own performance throughout the year and upon a
performance review by the Company's Chief Executive Officer, and in the case of
the Chief Executive Officer, a review of his performance by the Compensation
Committee.
The Compensation Survey Group includes only one company in common with
the Dow Jones Oil, Secondary Index (the "Index") used in the "Five Year
Shareholder Return Comparison" set forth herein. The Compensation Survey Group
is used by the Company for purposes of executive compensation comparison because
it constitutes a broader group than the group of 17 companies included in the
Index, and because the Compensation Survey Group is comprised of companies
somewhat closer in size and line of business to the Company than the companies
included in the Index. The Index was selected in accordance with SEC rules
solely for shareholder return comparison purposes because it is a published
industry index.
ANNUAL INCENTIVE BONUSES for a particular year are awarded after the
end of that year, based on both individual and Company performance during that
year. Bonuses are awarded under the 1990 Plan in the form of Performance Bonus
Awards, which may be either in cash or in shares of the Company's common stock
as determined by the Compensation Committee. The amount of an executive
officer's Performance Bonus Award for a particular year is determined under a
formula that utilizes the following factors: (i) the increase in
14
<PAGE> 17
earnings per share during that year (a measure of short-term performance); (ii)
the increase in the cash flow per share during that year (a measure of
short-term performance); (iii) the increase in the volume of the Company's
proved oil and gas reserves during that year (a measure of long-term
performance); (iv) the increase in the probable oil and gas reserves during that
year (a measure of long-term performance); and (v) the overall performance of
that executive officer in contributing to the Company's achievement of its
strategic objectives, as evaluated by the Compensation Committee. The 1990 Plan,
prior to being amended in 1995, did not include the factors of increases in cash
flow per share and increases in probable reserves though it did include earnings
per share and reserve growth. Generally, three broad categories of performance
factors (short-term factors, long-term factors and individual performance
factors) are given equal weight, except that the Committee may make adjustments
in the bonus formula or in the performance factors considered on a uniform basis
among all the executive officers (other than the Chief Executive Officer, as to
whom a different adjustment may be made).
In determining Performance Bonus Awards for 1999 (determined and paid
in 2000), the Committee considered the 4% increase in net proved reserves and
the 25% increase in probable reserves as well as the increase in basic earnings
per share from a loss of $2.93 in 1998 to positive earnings per share of $1.07
in 1999. The Compensation Committee also took into account individual
performance ratings reflecting individual contribution and contribution to group
effectiveness.
Under the 1990 Plan, executive officers may receive Performance Bonus
Awards of up to 35% of their base salaries, and the Chief Executive Officer may
receive an award of up to 70% of his base salary. Awards for 1999 averaged 21%
of executive officers' base salaries and 56% of the Chief Executive Officer's
base salary. Historically, the Compensation Committee has elected to have a
portion of the bonus consist of Company stock.
The Performance Bonus Award to the Chief Executive Officer additionally
differs from those awarded to the other executive officers in that the size of
the Chief Executive Officer's Performance Bonus Award is more closely tied to
Company performance, so that it has varied more widely from year to year than
the awards to other executive officers.
LONG-TERM STOCK-BASED INCENTIVES are provided through annual grants of
incentive stock options to executives and others under the 1990 Plan. This
component is intended to retain and motivate executives to improve long-term
shareholder value. Stock options are granted at or above the prevailing market
price. Grants have always vested in equal amounts over five years.
The Compensation Committee determines a total number of options to be
granted in any year based on the total number of outstanding unexercised
executive options, so as to avoid excessive dilution of the shareholders' value
in the Company through executive option exercises. Out of the number so
determined, options are granted to executive officers in varying amounts,
roughly related to their levels of executive responsibility. Outstanding
historical performance by an executive officer may be recognized through a
larger than normal option grant.
In 1999, no stock options were granted to executives due to the options
repricing that benefitted them at the end of 1998.
The Company believes that its compensation policy described above
provides an excellent link between the value created for shareholders and the
compensation paid to executive officers.
COMPENSATION OF CHIEF EXECUTIVE OFFICER FOR 1999
Base Salary. The Chief Executive Officer's base salary in 1999 was
$627,278, which was $179,778 more than his base salary in 1998. The increase was
due mainly to a one time payment to the Chief Executive Officer of $177,278 in
accordance with company policy, as reimbursement for unused vacation time
15
<PAGE> 18
accumulated. The Compensation Committee's determination was based on the factors
described above under "--Compensation Criteria and Performance Measurement--Base
Salary."
Bonus. As noted in the section on "Annual Incentive Bonuses" above, in
determining the Chief Executive Officer's bonus, the Committee may give a
different weight to the five bonus formula performance factors than the weight
used in determining bonuses for other executive officers. In determining the
Chief Executive Officer's bonus, the Committee has typically given more weight
to factors based upon the Company's performance than to its evaluation of his
general contribution, since the Committee does not observe and supervise such
performance on a day-to-day basis. For 1999, the Committee increased the Chief
Executive Officer's total bonus from $157,500 in 1998 ($125,981 in cash and
$31,519 in stock) to $250,000 all in cash.
Stock Options. In 1999, the Company did not grant the Chief Executive
Officer any options to purchase shares of the Company's common stock. as
explained above under "--Compensation Criteria and Performance Measurement
- --Long-Term Stock-Based Incentives."
Section 162(m) of the Internal Revenue Code. The Compensation Committee
does not propose to adopt any particular policy with respect to Section 162(m)
of the Internal Revenue Code, which was adopted by Congress in 1993 and limits
the deductibility of compensation paid to any individual in excess of $1 million
per year. The Company has not paid and does not anticipate paying compensation
at these levels, and even including the unrealized value of unexercised stock
options granted in any given year, does not believe that these provisions will
be relevant to the Company's executive compensation levels for the foreseeable
future.
COMPENSATION COMMITTEE
Raymond O. Loen, Chairman
Henry C. Montgomery
Harold J. Withrow
FORWARD LOOKING STATEMENTS
The statements contained in this Proxy Statement that are not
historical are "forward-looking statements," as that term is defined in Section
21E of the Securities and Exchange Act of 1934, as amended, that involve a
number of risks and uncertainties.
16
<PAGE> 19
FIVE YEAR SHAREHOLDER RETURN COMPARISON
The graph below compares the cumulative total return on the Company's
common stock to that of (i) the Standard & Poor's 500 Stock Index and (ii) the
Dow Jones Oil, Secondary Index.
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Swift Energy Co $100 $123 $306 $238 $ 83 $130
S & P 500 100 138 169 226 290 351
D J OIL - SECONDARY 100 116 143 152 111 125
</TABLE>
- ----------
*"Cumulative total return" equals (i) the change in share price during
the measurement period plus cumulative dividends (of which, in accordance with
its dividend policy, the Company has paid none) for the measurement period
(assuming dividend reinvestment), divided by (ii) the share price at the
beginning of the measurement period.
17
<PAGE> 20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In the ordinary course of its business, the Company acquires interests
in exploratory and developmental oil and gas prospects and sells interests in
such prospects to unaffiliated third parties. For the past several years, the
Company has made available for sale to its executive officers and certain other
employees a portion of the interests in certain prospects that would otherwise
have been sold to third parties. Interests in a prospect are sold to the
Company's employees on terms identical to those at which interests are sold to
third party investors in that prospect. During 1999, leasehold and drilling
costs associated with such investments in excess of $60,000 were incurred by
Virgil N. Swift in the amount of $105,369.
AUDITORS
Arthur Andersen LLP, certified public accountants, has served as the
independent auditors of the Company since its inception. While management
anticipates that this relationship will continue to be maintained during 2000
and subsequent years, it is not proposed that any formal action be taken at the
meeting with respect to the continued employment of Arthur Andersen LLP,
inasmuch as no such action is legally required. A representative from Arthur
Andersen LLP will be present at this year's meeting of shareholders. Such
representative will have the opportunity to make a statement if he desires to do
so and is expected to be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Pursuant to various rules promulgated by the SEC, a shareholder that
seeks to include a proposal in the Company's proxy statement and form of proxy
card for the annual meeting of the Shareholders of the Company to be held in
2001 must timely submit such proposal in accordance with SEC Rule 14a-8 to the
Company, addressed to John R. Alden, Secretary, 16825 Northchase Drive, Houston,
Texas 77060 no later than December 8, 2000. Further, a shareholder may not
submit a matter for consideration at the 2000 annual meeting, regardless of
whether presented for inclusion in the Company's proxy statement and form of
proxy card, unless the shareholder shall have timely complied with the
requirements in the Company's bylaws which set a notice deadline after which a
shareholder will not be permitted to present a proposal at the Company's
shareholder meetings. The bylaws state that in order for business to be properly
brought before an annual meeting by a shareholder, the shareholder must have
given timely notice thereof in writing to the Secretary of the Company. To be
timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Company not less than 60 days nor more
than 90 days prior to the first anniversary of the preceding year's annual
meeting. A notice given pursuant to this advance notice bylaw will not be timely
with respect to the Company's 2001 meeting unless duly given by no later than
March 10, 2001 and no earlier than February 8, 2001.
With respect to business to be brought before the 2000 annual meeting,
the Company has not received any notices from shareholders that the Company is
required to include in this Proxy Statement.
18
<PAGE> 21
GENERAL
The information contained in this Proxy Statement in the sections
entitled "Election of Directors -- Report From the Compensation Committee
Regarding Executive Compensation" and "Comparative Total Returns" shall not be
deemed incorporated by reference by any general statement incorporating by
reference any information contained in this Proxy Statement into any filing
under the Securities Act of 1933, as amended (the "Securities Act"), or the
Exchange Act, except to the extent that the Company specifically incorporates by
reference the information contained in such sections, and shall not otherwise be
deemed filed under the Securities Act or the Exchange Act.
By Order of the Board of Directors
JOHN R. ALDEN
Secretary
Houston, Texas
April 7, 2000
19
<PAGE> 22
SWIFT ENERGY COMPANY
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 9, 2000
The undersigned hereby constitutes and appoints G. Robert Evans, Harold J.
Withrow or A. Earl Swift, or any of them, with full power of substitution and
revocation to each, the true and lawful attorneys and proxies of the undersigned
at the Annual Meeting of Shareholders (the "Meeting") of SWIFT ENERGY COMPANY
(the "Company") to be held on May 9, 2000 at 4:00 p.m. Houston time, in the
Hotel Sofitel, 425 North Sam Houston Parkway East, Houston, Texas, or any
adjournments thereof, and to vote the shares of common stock of the Company
standing in the name of the undersigned on the books of the Company (or which
the undersigned may be entitled to vote) on the record date for the Meeting with
all powers the undersigned would possess if personally present at the Meeting.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 23
PLEASE DATE, SIGN AND MAIL BACK YOUR
PROXY CARD AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
SWIFT ENERGY COMPANY
MAY 9, 2000
o PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED o
- -------------------------------------------------------------------------------
A [X] Please mark your
votes as in this
example.
<TABLE>
<S> <C> <C> <C> <C> <C>
To withhold authority to vote for any Individual nominee, strike his name from
the listing below.
FOR WITHHELD
PROPOSAL 1: [ ] [ ] Nominees: Clyde W. Smith, Jr. PROPOSAL 2: In their discretion, the Proxies are
FOR the election Terry E. Swift authorized to vote upon such other matters as may
of all nominees properly come before the Meeting, hereby revoking
for directors listed any proxy or proxies heretofore given by the
for the terms specified in the Company's 2000 Annual Proxy undersigned.
Statement (except as marked to the contrary at right); or to
WITHHOLD AUTHORITY to vote for all nominees. The Board of Directors recommends a vote for all
nominees named in Proposal 1. This proxy will be
voted in accordance with the specifications made
hereon. If NO specification is made, the shares
will be voted for all nominees.
The undersigned hereby acknowledges receipt of
the Notice of 2000 Annual Meeting of Shareholders
and Proxy Statement and the 1999 Annual Report to
Shareholders furnished herewith.
PLEASE SIGN AND RETURN IN THE ENCLOSED STAMPED,
PRE-ADDRESSED ENVELOPE.
SIGNATURE _____________________________________ DATE ___________ SIGNATURE _____________________________________ DATE ___________
Note: Signature should agree with name as it appears hereon. If stock is held in the name of more than one person, EACH joint owner
should sign. Executors, administrators, trustees, guardians and attorneys should indicate the capacity in which they sign. Attorneys
should submit powers of attorney.
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