SWIFT ENERGY COMPANY
INDUCEMENT PLAN
1.
Purpose
. The purpose of the Swift Energy Company Inducement Plan (the “
Plan
”) is to provide a means through which Swift Energy Company, a Delaware corporation (the “
Company
”), and its Affiliates may attract and retain able persons as employees, directors and consultants, thereby enhancing the profitable growth of the Company and its Affiliates. Accordingly, the Plan provides for the grant of Incentive Stock Options, Nonstatutory Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Stock Awards, Dividend Equivalents, Other Stock-Based Awards, Cash Awards, Substitute Awards, Performance Awards, or any combination of the foregoing.
2.
Definitions
. For purposes of the Plan, the following terms shall be defined as set forth below:
(a) “
Affiliate
” means any corporation, partnership, limited liability company, limited liability partnership, association, trust or other organization that, directly or indirectly, controls, is controlled by, or is under common control with, the Company. For purposes of the preceding sentence, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any entity or organization, shall mean the possession, directly or indirectly, of the power (i) to vote more than 50% of the securities having ordinary voting power for the election of directors of the controlled entity or organization, or (ii) to direct or cause the direction of the management and policies of the controlled entity or organization, whether through the ownership of voting securities, by contract, or otherwise.
(b) “
Award
” means any Option, SAR, Restricted Stock Award, Restricted Stock Unit, Stock Award, Dividend Equivalent, Other Stock-Based Award, Cash Award, Substitute Award or Performance Award, together with any other right or interest, granted under the Plan.
(c) “
Award Agreement
” means any written instrument (including any employment, severance or change in control agreement) that sets forth the terms, conditions, restrictions and/or limitations applicable to an Award, in addition to those set forth under the Plan.
(d) “
Board
” means the Board of Directors of the Company.
(e) “
Cash Award
” means an Award denominated in cash granted under
Section 6(i)
.
(f) “
Change in Control
” means, except as otherwise provided in an Award Agreement, the occurrence of any of the following events:
(i) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “
Person
”) (other than (A) an Excluded Person, (B) the Company, (C) any trustee or other fiduciary holding securities under any employee benefit plan of the Company, (D) any company or entity owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of Stock or (E) pursuant to an Exempt Transaction), becomes the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors (“
Voting Securities
”);
(ii) the consummation of a merger, reorganization or consolidation of the Company with another Person, other than an Exempt Transaction;
(iii) the consummation of a sale, disposition or other change in ownership of assets of the Company and/or any of its direct and indirect subsidiaries having a value (with “value” of such assets defined, for this purpose, as either (A) the value of the assets of the Company and/or any of its direct and indirect subsidiaries or (B) the value of the assets being disposed of, in each case, as determined without regard to any liabilities associated with such assets) constituting at least 50% of the total gross fair market value of all of the assets of the Company and its direct and indirect subsidiaries (on a consolidated basis), (with “gross fair market value” of such assets determined without regard to any liabilities associated with such assets), immediately prior to such transaction to a Person or Persons (other than an Excluded Person) in one or a series of related transactions; or
(iv) the consummation of a transaction that implements in whole or in part a resolution of the stockholders of the Company authorizing a complete liquidation or dissolution of the Company.
For the sake of clarity, a Change in Control will not be deemed to have occurred if an Excluded Person has the ability to appoint a majority of the Board or similar governing body of any parent entity.
Notwithstanding the foregoing, to the extent necessary to comply with the Nonqualified Deferred Compensation Rules with respect to a particular Award, any of the foregoing events shall constitute a “Change in Control” only if such event is also a “change in control event” within the meaning of the Nonqualified Deferred Compensation Rules.
(g) “
Change in Control Price
” means the amount determined in the following clause (i), (ii), (iii), (iv) or (v), whichever is applicable, as follows: (i) the price per share offered to holders of Stock in any merger or consolidation, (ii) the per share Fair Market Value of the Stock immediately before the Change in Control without regard to assets sold in the Change in Control and assuming the Company has received the consideration paid for the assets in the case of a sale of the assets, (iii) the amount distributed per share of Stock in a dissolution transaction, (iv) the price per share offered to holders of Stock in any tender offer or exchange offer whereby a Change in Control takes place, or (v) if such Change in Control occurs other than pursuant to a transaction described in clauses (i), (ii), (iii), or (iv) of this
Section 2(g)
, the value per share of the Stock that may otherwise be obtained with respect to such Awards or to which such Awards track, as determined by the Committee as of the date determined by the Committee to be the date of cancellation and surrender of such Awards. In the event that the consideration offered to stockholders of the Company in any transaction described in this
Section 2(g)
or in
Section 8(e)
consists of anything other than
cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered which is other than cash and such determination shall be binding on all affected Participants to the extent applicable to Awards held by such Participants.
(h) “
Code
” means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations thereto.
(i) “
Committee
” means a committee of two or more directors designated by the Board to administer the Plan;
provided
,
however
, that, unless otherwise determined by the Board, the Committee shall consist solely of two or more Qualified Members.
(j) “
Dividend Equivalent
” means a right, granted to an Eligible Person under
Section 6(g)
, to receive cash, Stock, other Awards or other property equal in value to dividends paid with respect to a specified number of shares of Stock, or other periodic payments.
(k) “
Effective Date
” means December 15, 2016.
(l) “
Eligible Person
” means any officer or employee of the Company or of any of its Affiliates, and any other person who provides services to the Company or any of its Affiliates, including a director of the Company;
provided
,
however
, that, on and after the Listing Date, only an individual eligible to receive an inducement award or inducement grant under applicable national securities exchange rules shall be an “Eligible Person” for purposes of the Plan, except as otherwise approved by the stockholders of the Company. Notwithstanding the foregoing, any such individual must be an “employee” of the Company or any of its parents or subsidiaries within the meaning of General Instruction A.1(a) to Form S-8 if such individual is granted an Award that may be settled in Stock. An employee on leave of absence may be considered as still in the employ of the Company or one of its Affiliates for purposes of eligibility for participation in the Plan.
(m) “
Exchange Act
” means the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor provisions and rules thereto.
(n) “
Excluded Person
” means any fund or account of any subsidiary thereof controlled or managed (as investment manager, investment adviser or equivalent) directly or indirectly by Strategic Value Partners, LLC or its affiliates, excluding any operating portfolio companies of the foregoing funds or accounts.
(o) “
Exempt Transaction
” means a transaction or series of transactions in which the holders of the Voting Securities of the Company outstanding immediately prior thereto, continue to retain or represent, directly or indirectly, (either by remaining outstanding or by being converted into Voting Securities of the surviving entity), more than 50% of the combined voting power of the Voting Securities of the Company, such surviving entity or any ultimate parent thereof outstanding immediately following such transaction or series of transactions.
(p) “
Fair Market Value
” means, as of any specified date, (i) if the Stock is listed on a national securities exchange, the closing sales price of the Stock, as reported on the stock exchange composite tape on the preceding date (or if no sales occur on such date, on the last preceding
date on which such sales of the Stock are so reported); (ii) if the Stock is not traded on a national securities exchange but is traded over the counter at the time a determination of its fair market value is required to be made under the Plan, the average between the reported high and low bid and asked prices of Stock on the most recent date on which Stock was publicly traded; or (iii) in the event Stock is not publicly traded at the time a determination of its value is required to be made under the Plan, the amount determined by the Committee in its discretion in such manner as it deems appropriate, taking into account all factors the Committee deems appropriate including, without limitation, the Nonqualified Deferred Compensation Rules.
(q) “
Incentive Stock Option
” or “
ISO
” means any Option intended to be and designated as an “incentive stock option” within the meaning of section 422 of the Code.
(r) “
Listing Date
” means the first date, following the Effective Date, on which the Stock is listed (or approved for listing) upon official notice of issuance on any national securities exchange (exclusive of the OTC Markets).
(s) “
Nonqualified Deferred Compensation Rules
” means the limitations or requirements of section 409A of the Code, as amended from time to time, including the guidance and regulations promulgated thereunder and successor provisions, guidance and regulations thereto.
(t) “
Nonstatutory Option
” means any Option that is not intended to be an “incentive stock option” within the meaning of section 422 of the Code.
(u) “
Option
” means a right, granted to an Eligible Person under
Section 6(b)
, to purchase Stock or other Awards at a specified price during specified time periods.
(v) “
Other Stock-Based Award
” means an Award granted to an Eligible Person under
Section 6(h)
.
(w) “
Participant
” means a person who has been granted an Award under the Plan that remains outstanding, including a person who is no longer an Eligible Person.
(x) “
Performance Award
” means an award granted to an Eligible Person under
Section 6(k)
, the grant, vesting, exercisability and/or settlement of which (and/or the timing or amount thereof) is subject to the achievement of one or more performance goals specified by the Committee.
(y) “
Qualified Member
” means a member of the Board who is (i) a “nonemployee director” within the meaning of Rule 16b-3(b)(3) and (ii) “independent” under the listing standards or rules of the national securities exchange upon which the Stock is traded, but only to the extent such independence is required in order to take the action at issue pursuant to such standards or rules.
(z) “
Recapitalization
” means the occurrence of a recapitalization by the Company, reclassification of Stock by the Company or other change in the Company’s capital structure, in each case, without the occurrence of a Change in Control.
(aa) “
Restricted Stock
” means Stock granted to an Eligible Person under
Section 6(d)
that is subject to certain restrictions and to a risk of forfeiture.
(bb) “
Restricted Stock Unit
” means a right, granted to an Eligible Person under
Section 6(e)
, to receive Stock, cash or a combination thereof at the end of a specified period (which may or may not be coterminous with the vesting schedule of the Award).
(cc) “
Rule 16b-3
” means Rule 16b-3, promulgated by the Securities and Exchange Commission under section 16 of the Exchange Act.
(dd) “
Securities Act
” means the Securities Act of 1933, as amended from time to time, including rules thereunder and successor provisions and rules thereto.
(ee) “
Stock
” means the Company’s Common Stock, par value $0.01 per share, and such other securities as may be substituted (or re-substituted) for Stock pursuant to
Section 8
.
(ff) “
Stock Appreciation Right
” or “
SAR
” means a right granted to an Eligible Person under
Section 6(c)
.
(gg) “
Stock Award
” means unrestricted shares of Stock granted to an Eligible Person under
Section 6(f)
.
(hh) “
Substitute Award
” means an Award granted under
Section 6(j)
in substitution for a similar award as a result of certain business transactions.
3.
Administration
.
(a)
Authority of the Committee
. The Plan shall be administered by the Committee except to the extent the Board elects to administer the Plan, in which case references herein to the “Committee” shall be deemed to include references to the “Board.” Subject to the express provisions of the Plan, Rule 16b-3 and other applicable laws, the Committee shall have the authority, in its sole and absolute discretion, to: (i) designate Eligible Persons as Participants; (ii) determine the type or types of Awards to be granted to an Eligible Person; (iii) determine the number of shares of Stock or amount of cash to be covered by Awards; (iv) determine the terms and conditions of any Award, including whether, to what extent and under what circumstances Awards may be vested, settled, exercised, cancelled or forfeited; (v) modify, waive or adjust any term or condition of an Award that has been granted, which may include the acceleration of vesting, waiver of forfeiture restrictions, modification of the form of settlement of the Award (for example, from cash to Stock or vice versa) or modification of any other condition or limitation regarding an Award; (vi) interpret and administer the Plan and any Award Agreement; (vii) establish, amend, suspend, or waive rules and regulations used to administer the Plan; (viii) correct any defect, supply any omission or reconcile any inconsistency in the Plan, in any Award, or in any Award Agreement; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. Any action of the Committee shall be final, conclusive and binding on all persons,
including the Company, its Affiliates, stockholders, Participants, beneficiaries, and permitted transferees under
Section 7(a)
or other persons claiming rights from or through a Participant.
(b)
Exercise of Committee Authority
. At any time that a member of the Committee is not a Qualified Member, any action of the Committee relating to an Award granted or to be granted to an Eligible Person who is then subject to section 16 of the Exchange Act in respect of the Company, where such action is not taken by the full Board, may be taken either (i) by a subcommittee, designated by the Committee, composed solely of two or more Qualified Members, or (ii) by the Committee but with each such member who is not a Qualified Member abstaining or recusing himself or herself from such action;
provided
,
however
, that upon such abstention or recusal, the Committee remains composed solely of two or more Qualified Members. Such action, authorized by such a subcommittee or by the Committee upon the abstention or recusal of such non-Qualified Member(s), shall be the action of the Committee for purposes of the Plan. For the avoidance of doubt, the full Board may take any action relating to an Award granted or to be granted to an Eligible Person who is then subject to section 16 of the Exchange Act in respect of the Company.
(c)
Delegation of Authority
. The Committee may delegate any or all of its powers and duties under the Plan to a subcommittee of directors or to any officer of the Company, including the power to perform administrative functions and grant Awards under the Plan;
provided
,
however
, that such delegation does not (i) violate state or corporate law or (ii) result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to section 16 of the Exchange Act in respect of the Company. Upon any such delegation, all references in the Plan to the “Committee,” other than in
Section 8
, shall be deemed to include any subcommittee or officer of the Company to whom such powers have been delegated by the Committee. Any such delegation shall not limit the right of such subcommittee members or such an officer to receive Awards under the Plan;
provided
,
however
, that such subcommittee members and any such officer may not grant Awards to himself or herself, a member of the Board, or any executive officer of the Company or an Affiliate, or take any action with respect to any Award previously granted to himself or herself, a member of the Board, or any executive officer of the Company or an Affiliate. The Committee may also appoint agents to assist it in administering the Plan that are not executive officers of the Company or members of the Board, provided that such individuals may not be delegated the authority to grant or modify any Awards that will, or may, be settled in Stock.
(d)
Limitation of Liability
. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the Company or any of its Affiliates, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of the Plan. Members of the Committee and any officer or employee of the Company or any of its Affiliates acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or determination.
4.
Stock Subject to Plan
.
(a)
Overall Number of Shares Available for Delivery
. Subject to adjustment in a manner consistent with any adjustment made pursuant to
Section 8
, the total number of shares of Stock reserved and available for delivery with respect to Awards under the Plan is 441,000 shares, and such total number of shares of Stock shall be available for the issuance of ISOs.
(b)
Application of Limitation to Grants of Awards
. Subject to
Section 4(c)
, no Award may be granted if the number of shares of Stock to be delivered in connection with such Award exceeds the number of shares of Stock remaining available under the Plan minus the number of shares of Stock issuable in settlement of or relating to then-outstanding Awards. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or Substitute Awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award.
(c)
Availability of Shares Not Delivered under Awards
. Shares of Stock subject to an Award under the Plan that expires or is cancelled, forfeited, exchanged, settled in cash or otherwise terminated (including (i) shares forfeited with respect to Restricted Stock, and (ii) the number of shares withheld or surrendered to the Company in payment of any exercise or purchase price of an Award or taxes relating to Awards) shall not be considered “delivered shares” under the Plan and shall again be available for delivery with respect to Awards under the Plan, except that if any such shares could not again be available for Awards to a particular Participant under any applicable law or regulation, such shares shall be available exclusively for Awards to Participants who are not subject to such limitation. If an Award may be settled only in cash, such Award need not be counted against any share limit under this
Section 4
.
(d)
Stock Offered
. The shares of Stock to be delivered under the Plan shall be made available from (i) authorized but unissued shares of Stock, (ii) Stock held in the treasury of the Company, or (iii) previously issued shares of Stock reacquired by the Company, including shares purchased on the open market.
5.
Eligibility
.
(a)
Eligibility
. Awards may be granted under the Plan only to persons who are Eligible Persons at the time of grant thereof. For the avoidance of doubt, any Award granted under the Plan on or after the Listing Date shall (i) to the extent the Company is listed on the New York Stock Exchange, comply with all requirements relating to “employment inducement awards” set forth in NYSE Listed Company Manual Rule 303A.08 (or any successor rule) or (ii) to the extent the Company is listed on the NASDAQ Stock Market, comply with all requirements relating to “employment inducement grants” set forth in NASDAQ Listing Rule 5635(c) (or any successor rule), including, without limitation, the requirement that any such grant be approved by either the Company’s independent compensation committee or a majority of the Company’s Qualified Members.
6.
Specific Terms of Awards
.
(a)
General
. Awards may be granted on the terms and conditions set forth in this
Section 6
. Awards granted under the Plan may, in the discretion of the Committee, be granted either alone, in addition to, or in tandem with any other Award. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to
Section 10
), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine.
(b)
Options
. The Committee is authorized to grant Options, which may be designated as either ISOs or Nonstatutory Options, to Eligible Persons on the following terms and conditions:
(i)
Exercise Price
. Each Award Agreement evidencing an Option shall state the exercise price per share of Stock (the “
Exercise Price
”);
provided
,
however
, that except as provided in
Section 6(j)
or in
Section 8
, the Exercise Price of an Option shall not be less than the greater of (A) the par value per share of the Stock or (B) 100% of the Fair Market Value per share of the Stock as of the date of grant of the Option (or in the case of an ISO granted to an individual who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or its parent or any of its subsidiaries, 110% of the Fair Market Value per share of the Stock on the date of grant). Notwithstanding the foregoing, the Exercise Price of a Nonstatutory Option that (1) does not provide for a deferral of compensation by reason of satisfying the short-term deferral exception set forth in the Nonqualified Deferred Compensation Rules or (2) provides for a deferral of compensation and is compliant with the Nonqualified Deferred Compensation Rules, in each case, may be less than 100% of the Fair Market Value per share of Stock as of the date of grant of the Option as determined by the Committee at the time the Option is granted.
(ii)
Time and Method of Exercise; Other Terms
. The Committee shall determine the number of shares of Stock to which the Option relates, the time or times at which, or the circumstances under which, an Option may be vested and/or exercised in whole or in part (including based on achievement of one or more performance goals pursuant to
Section 6(k)
and/or future service requirements), the methods by which such Exercise Price may be paid or deemed to be paid, the form of such payment, including without limitation, cash or cash equivalents, Stock (including previously owned shares or through a cashless or broker-assisted exercise, net settlement or other reduction of the amount of shares otherwise issuable pursuant to the Option), other Awards or awards granted under other plans of the Company or any Affiliate, other property, or any other legal consideration the Committee deems appropriate (including notes or other contractual obligations of Participants to make payment on a deferred basis), the methods by or forms in which Stock will be delivered or deemed to be delivered to Participants, including, but not limited to, the delivery of Restricted Stock subject to
Section 6(d)
, and any other terms and conditions of any Option. In the case of an exercise whereby the Exercise Price is paid with Stock, such Stock shall be valued as of the date of exercise. No Option may be exercisable for a period of more than ten (10) years following the date of grant of the Option (or in the case of an ISO granted to an individual who owns stock possessing more than 10% of the total combined voting power of all classes of
stock of the Company or its parent or any of its subsidiaries, for a period of more than five (5) years following the date of grant of the ISO).
(iii)
ISOs
. The terms of any ISO granted under the Plan shall comply in all respects with the provisions of section 422 of the Code. ISOs may only be granted to Eligible Persons who are employees of the Company or employees of a parent or any subsidiary corporation of the Company. Except as otherwise provided in
Section 8
, no term of the Plan relating to ISOs (including any SAR in tandem therewith) shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any ISO under section 422 of the Code, unless the Participant has first requested the change that will result in such disqualification. ISOs shall not be granted more than ten years after the earlier of the adoption of the Plan or the approval of the Plan by the Company’s stockholders. Notwithstanding the foregoing, the Fair Market Value of shares of Stock subject to an ISO and the aggregate Fair Market Value of shares of stock of any parent or subsidiary corporation (within the meaning of sections 424(e) and (f) of the Code) subject to any other “incentive stock option” (within the meaning of section 422 of the Code) of the Company or a parent or subsidiary corporation (within the meaning of sections 424(e) and (f) of the Code) that first becomes purchasable by a Participant in any calendar year may not (with respect to that Participant) exceed $100,000, or such other amount as may be prescribed under section 422 of the Code. As used in the previous sentence, Fair Market Value shall be determined as of the date the “incentive stock option” is granted. Failure to comply with this provision shall not impair the enforceability or exercisability of any Option, but shall cause the excess amount of shares to be reclassified in accordance with the Code.
(c)
Stock Appreciation Rights
. The Committee is authorized to grant SARs to Eligible Persons on the following terms and conditions:
(i)
Right to Payment
. An SAR is a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of exercise over (B) the grant price of the SAR as determined by the Committee.
(ii)
Grant Price
. Each Award Agreement evidencing an SAR shall state the grant price per share of Stock;
provided
,
however
, that except as provided in
Section 6(j)
or in
Section 8
, the grant price per share of Stock subject to an SAR shall not be less than the greater of (A) the par value per share of the Stock or (B) 100% of the Fair Market Value per share of the Stock as of the date of grant of the SAR. Notwithstanding the foregoing, the grant price of an SAR that (1) does not provide for a deferral of compensation by reason of satisfying the short-term deferral exception set forth in the Nonqualified Deferred Compensation Rules or (2) provides for a deferral of compensation and is compliant with the Nonqualified Deferred Compensation Rules, in each case, may be less than 100% of the Fair Market Value per share of Stock subject to an SAR as of the date of grant of the SAR and shall be determined by the Committee at the time the SAR is granted.
(iii)
Time and Method of Exercise; Other Terms
. The Committee shall determine the number of shares of Stock to which the SAR relates, the time or times at which and the circumstances under which an SAR may be vested and/or exercised in whole or in part (including based on achievement of one or more performance goals pursuant to
Section 6(k)
and/or future
service requirements), the form of consideration payable upon settlement, the method by or forms in which Stock (if any) will be delivered or deemed to be delivered to Participants, and any other terms and conditions of any SAR. SARs may be either free-standing or in tandem with other Awards. No SAR may be exercisable for a period of more than ten (10) years following the date of grant of the SAR.
(iv)
Rights Related to Options
. An SAR granted in connection with an Option shall entitle a Participant, upon exercise, to surrender that Option or any portion thereof, to the extent unexercised, and to receive payment of an amount determined by multiplying (A) the difference obtained by subtracting the Exercise Price with respect to a share of Stock specified in the related Option from the Fair Market Value of a share of Stock on the date of exercise of the SAR, by (B) the number of shares as to which that SAR has been exercised. The Option shall then cease to be exercisable to the extent surrendered. SARs granted in connection with an Option shall be subject to the terms and conditions of the Award Agreement governing the Option, which shall provide that the SAR is exercisable only at such time or times and only to the extent that the related Option is exercisable and shall not be transferable except to the extent that the related Option is transferrable.
(d)
Restricted Stock
. The Committee is authorized to grant Restricted Stock to Eligible Persons on the following terms and conditions:
(i)
Grant and Restrictions
. Restricted Stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of one or more performance goals pursuant to
Section 6(k)
and/or future service requirements), in such installments or otherwise, as the Committee may determine at the date of grant or thereafter. During the restricted period applicable to the Restricted Stock, the Restricted Stock may not be sold, transferred, pledged, hedged, hypothecated, margined or otherwise encumbered by the Participant.
(ii)
Dividends and Splits
. As a condition to the grant of an Award of Restricted Stock, the Committee may allow a Participant to elect, or may require, that any cash dividends paid on a share of Restricted Stock be automatically reinvested in additional shares of Restricted Stock, applied to the purchase of additional Awards under the Plan or deferred without interest to the date of vesting of the associated Award of Restricted Stock. Unless otherwise determined by the Committee and specified in the applicable Award Agreement, Stock distributed in connection with a Stock split or Stock dividend, and other property (other than cash) distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed.
(e)
Restricted Stock Units
. The Committee is authorized to grant Restricted Stock Units to Eligible Persons on the following terms and conditions:
(i)
Award and Restrictions
. Restricted Stock Units shall be subject to such restrictions (which may include a risk of forfeiture) as the Committee may impose, if any, which restrictions may lapse at the expiration of the deferral period or at earlier specified times
(including based on achievement of one or more performance goals pursuant to
Section 6(k)
and/or future service requirements), separately or in combination, in installments or otherwise, as the Committee may determine.
(ii)
Settlement
. Settlement of vested Restricted Stock Units shall occur upon expiration of the deferral period specified for such Restricted Stock Units by the Committee (or, if permitted by the Committee, as elected by the Participant). Settlement of Restricted Stock Units shall be made by delivery of (A) a number of shares of Stock equal to the number of Restricted Stock Units for which settlement is due, or (B) cash in an amount equal to the Fair Market Value of the specified number of shares of Stock covered by such Restricted Stock Units, or a combination thereof, as determined by the Committee at the date of grant or thereafter.
(f)
Stock Awards
. The Committee is authorized to grant Stock Awards under the Plan to Eligible Persons as a bonus, as additional compensation, or in lieu of cash compensation any such Eligible Person is otherwise entitled to receive, in such amounts and subject to such other terms as the Committee in its discretion determines to be appropriate.
(g)
Dividend Equivalents
. The Committee is authorized to grant Dividend Equivalents to Eligible Persons, entitling any such Eligible Person to receive cash, Stock, other Awards, or other property equal in value to dividends or other distributions paid with respect to a specified number of shares of Stock, or other periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award (other than an Award of Restricted Stock or a Stock Award). The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or at a later specified date and, if distributed at a later date, may be deemed to have been reinvested in additional Stock, Awards, or other investment vehicles or accrued in a bookkeeping account without interest, and subject to such restrictions on transferability and risks of forfeiture, as the Committee may specify. With respect to Dividend Equivalents granted in connection with another Award, absent a contrary provision in the Award Agreement, such Dividend Equivalents shall be subject to the same restrictions and risk of forfeiture as the Award with respect to which the dividends accrue and shall not be paid unless and until such Award has vested and been earned.
(h)
Other Stock-Based Awards
. The Committee is authorized, subject to limitations under applicable law, to grant to Eligible Persons such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including without limitation convertible or exchangeable debt securities, other rights convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of the Company or any other factors designated by the Committee, and Awards valued by reference to the book value of Stock or the value of securities of or the performance of specified Affiliates of the Company. The Committee shall determine the terms and conditions of such Other Stock-Based Awards. Stock delivered pursuant to an Other-Stock Based Award in the nature of a purchase right granted under this
Section 6(h)
shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Stock, other Awards, or other property, as the Committee shall determine.
(i)
Cash Awards
. The Committee is authorized to grant Cash Awards, on a free-standing basis or as an element of or supplement to, or in lieu of, any other Award under the Plan to Eligible Persons in such amounts and subject to such other terms (including the achievement of one or more performance goals pursuant to
Section 6(k)
and/or future service requirements) as the Committee in its discretion determines to be appropriate.
(j)
Substitute Awards; No Repricing
. Awards may be granted under the Plan in substitution for similar awards held by individuals who become Eligible Persons as a result of a merger, consolidation or acquisition of another entity or the assets of another entity by or with the Company or an Affiliate of the Company. Such Substitute Awards referred to in the immediately preceding sentence that are Options or Stock Appreciation Rights may have an exercise price that is less than the Fair Market Value of a share of Stock on the date of the substitution if such substitution complies with the Nonqualified Deferred Compensation Rules and other applicable laws and national securities exchange rules. Except as provided in this
Section 6(j)
or in
Section 8
, the terms of outstanding Awards may not be amended, without the approval of the stockholders of the Company, to (i) reduce the Exercise Price or grant price of an outstanding Option or SAR, (ii) grant a new Option, SAR or other Award in substitution for, or upon the cancellation of, any previously granted Option or SAR that has the effect of reducing the Exercise Price or grant price thereof, (iii) exchange any Option or SAR for Stock, cash or other consideration when the Exercise Price or grant price per share of Stock under such Option or SAR exceeds the Fair Market Value of a share of Stock or (iv) take any other action that would be considered a “repricing” of an Option or SAR under the applicable listing standards of the national securities exchange on which the Stock is listed (if any).
(k)
Performance Awards
. The Committee is authorized to designate any of the Awards granted under the foregoing provisions of this
Section 6
as Performance Awards. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance goals applicable to a Performance Award, and may exercise its discretion to reduce or increase the amounts payable under any Performance Award. Performance goals may differ for Performance Awards granted to any one Participant or to different Participants. The performance period applicable to any Performance Award shall be set by the Committee in its discretion but shall not exceed ten (10) years.
7.
Certain Provisions Applicable to Awards
.
(a)
Limit on Transfer of Awards
.
(i) Except as provided in
Sections 7(a)(iii)
and
(iv)
, no Award (other than a Stock Award), and no right under any such Award, may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate.
(ii) Except as provided in
Sections 7(a)(iii)
and
(iv)
, each Option and SAR shall be exercisable only by the Participant during the Participant’s lifetime, or by the person to whom the Participant’s rights shall pass by will or the laws of descent and distribution.
Notwithstanding anything to the contrary in this
Section 7(a)
, an ISO shall not be transferable other than by will or the laws of descent and distribution.
(iii) To the extent specifically provided by the Committee, an Award may be transferred by a Participant without consideration to immediate family members or related family trusts, limited partnerships or similar entities or on such terms and conditions as the Committee may from time to time establish.
(iv) An Award may be transferred pursuant to a domestic relations order entered or approved by a court of competent jurisdiction upon delivery to the Company of a written request for such transfer and a certified copy of such order.
(b)
Form and Timing of Payment under Awards; Deferrals
. Subject to the terms of the Plan and any applicable Award Agreement, payments to be made by the Company or any of its Affiliates upon the exercise or settlement of an Award may be made in such forms as the Committee shall determine in its discretion, including without limitation cash, Stock, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis (which may be required by the Committee or permitted at the election of the Participant on terms and conditions established by the Committee);
provided
,
however
, that any such deferred or installment payments will be set forth in the Award Agreement and/or otherwise made in a manner that will not result in additional taxes under the Nonqualified Deferred Compensation Rules. Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Stock. The Plan shall not constitute an “employee benefit plan” for purposes of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.
(c)
Evidencing Stock
. The Stock or other securities of the Company delivered pursuant to an Award may be evidenced in any manner deemed appropriate by the Committee in its sole discretion, including, but not limited to, in the form of a certificate issued in the name of the Participant or by book entry, electronic or otherwise and shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Stock or other securities are then listed, and any applicable federal, state or other laws, and the Committee may cause a legend or legends to be inscribed on any such certificates to make appropriate reference to such restrictions. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, related to the Restricted Stock.
(d)
Consideration for Grants
. Awards may be granted for such consideration, including services, as the Committee shall determine, but shall not be granted for less than the minimum lawful consideration.
(e)
Additional Agreements
. Each Eligible Person to whom an Award is granted under the Plan may be required to agree in writing, as a condition to the grant of such Award or otherwise, to subject an Award that is exercised or settled following such Eligible Person’s termination of employment or service to a general release of claims and/or a noncompetition or other restricted covenant agreement in favor of the Company and its Affiliates, with the terms and conditions of such agreement(s) to be determined in good faith by the Committee.
(f)
Termination of Service
. Except as provided herein, the treatment of an Award upon a termination of employment or any other service relationship by and between a Participant and the Company or any Affiliate shall be specified in the applicable Award Agreement.
8.
Subdivision or Consolidation; Recapitalization; Change in Control; Reorganization
.
(a)
Existence of Plans and Awards
. The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Company, the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of debt or equity securities ahead of or affecting Stock or the rights thereof, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding.
(b)
Subdivision or Consolidation of Shares
. The terms of an Award and the share limitations under the Plan shall be subject to adjustment by the Committee from time to time, in accordance with the following provisions:
(i) If at any time, or from time to time, the Company shall subdivide as a whole (by reclassification, by a Stock split, by the issuance of a distribution on Stock payable in Stock, or otherwise) the number of shares of Stock then outstanding into a greater number of shares of Stock or in the event the Company distributes an extraordinary cash dividend, then, as appropriate
(A) the maximum number of shares of Stock available for delivery with respect to Awards under the Plan as provided in
Section 4
shall be increased proportionately, and the kind of shares or other securities available for the Plan shall be appropriately adjusted, (B) the number of shares of Stock (or other kind of shares or securities) that may be acquired under any then outstanding Award shall be increased proportionately, and (C) the price (including the Exercise Price or grant price) for each share of Stock (or other kind of shares or securities) subject to then outstanding Awards shall be reduced proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.
(ii) If at any time, or from time to time, the Company shall consolidate as a whole (by reclassification, by reverse Stock split, or otherwise)
the number of shares of Stock then outstanding into a lesser number of shares of Stock, then, as appropriate (A) the maximum number of shares of Stock available for delivery with respect to Awards under the Plan as provided in
Section 4
shall be decreased proportionately, and the kind of shares or other securities available for the Plan shall be appropriately adjusted, (B) the number of shares of Stock (or other kind of shares or securities) that may be acquired under any then outstanding Award shall be decreased
proportionately, and (C) the price (including the Exercise Price or grant price) for each share of Stock (or other kind of shares or securities) subject to then outstanding Awards shall be increased proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.
(iii) Whenever the number of shares of Stock subject to outstanding Awards and the price for each share of Stock subject to outstanding Awards are required to be adjusted as provided in this
Section 8(b)
, the Committee shall promptly prepare a notice setting forth, in reasonable detail, the event requiring adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the change in price and the number of shares of Stock, other securities, cash, or property purchasable subject to each Award after giving effect to the adjustments. The Committee shall promptly provide each affected Participant with such notice.
(c)
Recapitalization
. Notwithstanding anything contained herein to the contrary, upon the occurrence of a Recapitalization or an “equity restructuring” event that could result in an additional compensation expense to the Company pursuant to the provisions of Accounting Standards Codification Topic 718,
Compensation – Stock Compensation
, or any successor accounting standard (“
ASC Topic 718
”), if adjustments to Awards with respect to such Recapitalization or event were discretionary, the Committee shall equitably adjust the number and type of shares of Stock (or other securities or property) covered by each outstanding Award and the terms and conditions, including the Exercise Price and performance goals (if any), of such Award to equitably reflect such Recapitalization or event and shall adjust the number and type of shares of Stock (or other securities or property) with respect to which Awards may be granted under the Plan after such Recapitalization or event. Upon the occurrence of any other Recapitalization or similar event that would not result in an accounting charge under ASC Topic 718 if the adjustment to Awards with respect to such Recapitalization or event were subject to discretionary action, the Committee shall have complete discretion to adjust Awards and the number and type of shares of Stock (or other securities or property) with respect to which Awards may be granted under the Plan in such manner as it deems appropriate with respect to such other event. In the event the Committee makes any adjustment pursuant to the foregoing provisions of this
Section 8(c)
, the Committee shall make a corresponding and proportionate adjustment with respect to the maximum number of shares of Stock available for delivery with respect to Awards under the Plan as provided in
Section 4
and the kind of Stock or other securities available for grant under the Plan.
(d)
Additional Issuances
. Except as expressly provided herein, the issuance by the Company of shares of stock of any class or securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Stock subject to Awards theretofore granted or the purchase price per share of Stock, if applicable.
(e)
Change in Control and Other Events
. Except to the extent otherwise provided in any applicable Award Agreement, vesting of any Award shall not occur solely upon the occurrence of a Change in Control and, in the event of a Change in Control or other changes in the outstanding
Stock by reason of a recapitalization, reorganization, merger, consolidation, combination, exchange or other relevant change in capitalization occurring after the date of the grant of any Award and not otherwise provided for by this
Section 8
, the Committee, acting in its sole discretion without the consent or approval of any holder of an Award, may effect one or more of the following alternatives, which may vary among individual holders of Awards and which may vary among Options, SARs or other Awards held by any individual holder of an Award: (i) remove any applicable forfeiture restrictions on any Award; (ii) accelerate the time of exercisability of an Award so that such Award may be exercised in full or in part for a limited period of time on or before a date specified by the Committee, after which specified date all unexercised Awards and all rights of holders thereunder shall terminate; (iii) provide for a cash payment with respect to outstanding Awards by requiring the mandatory surrender to the Company by selected holders of some or all of the outstanding Awards held by such holders (irrespective of whether such Awards are then vested or exercisable pursuant to the Plan) as of a date, specified by the Committee, in which event the Committee shall thereupon cancel such Awards (with respect to all shares subject to such Awards) and pay to each holder of such an Award an amount of cash (or other consideration including securities or other property) per Award (other than a Dividend Equivalent or Cash Award) equal to the Change in Control Price, less the Exercise Price with respect to an Option and less the grant price with respect to a SAR, as applicable to such Awards;
provided
,
however
, that to the extent the Exercise Price of an Option or the grant price of an SAR exceeds the Change in Control Price, such Award may be canceled for no consideration; (iv) cancel Awards that remain subject to a restricted period as of the date of a Change in Control or other such event without payment of any consideration to the Participant for such Awards; or (v) make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Change in Control or other such event (including, but not limited to, (x) the substitution, assumption, or continuation of Awards by the successor company or a parent or subsidiary thereof for new awards, and (y) the adjustment as to the number and price of shares of Stock or other consideration subject to such Awards);
provided
,
however
, that the Committee may determine in its sole discretion that no adjustment is necessary to Awards then outstanding.
9.
General Provisions
.
(a)
Tax Withholding
. The Company and any of its Affiliates are authorized to withhold from any Award granted, or any payment relating to an Award under the Plan, including from a distribution of Stock, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company, its Affiliates and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. The Committee shall determine, in its sole discretion, the form of payment acceptable for such tax withholding obligations, including, without limitation, the delivery of cash or cash equivalents, Stock (including previously owned shares, net settlement, a broker-assisted sale, or other cashless withholding or reduction of the amount of shares otherwise issuable or delivered pursuant to the Award), other property, or any other legal consideration the Committee deems appropriate. Any determination made by the Committee to allow a Participant who is subject to Rule 16b-3 to pay taxes with shares of Stock through net settlement or previously owned shares shall be approved by either a committee made up of solely two or more Qualified Members or the full Board. If such tax obligations are
satisfied through net settlement or previously owned shares, the maximum number of shares of Stock that may be so withheld (or surrendered) shall be the number of shares of Stock that have an aggregate Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such tax liabilities determined based on the greatest withholding rates for federal, state, foreign and/or local tax purposes, including payroll taxes, that may be utilized without creating adverse accounting treatment with respect to such Award, as determined by the Committee.
(b)
Limitation on Rights Conferred under Plan
. Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or any of its Affiliates, (ii) interfering in any way with the right of the Company or any of its Affiliates to terminate any Eligible Person’s or Participant’s employment or service relationship at any time, (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and/or employees and/or other service providers, or (iv) conferring on a Participant any of the rights of a stockholder of the Company unless and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award.
(c)
Governing Law; Submission to Jurisdiction
. All questions arising with respect to the provisions of the Plan and Awards shall be determined by application of the laws of the State of Delaware, without giving effect to any conflict of law provisions thereof, except to the extent Delaware law is preempted by federal law. The obligation of the Company to sell and deliver Stock hereunder is subject to applicable federal and state laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock.
With respect to any claim or dispute related to or arising under the Plan, the Company and each Participant who accepts an Award hereby consent to the exclusive jurisdiction, forum and venue of the state and federal courts located in the State of Delaware.
(d)
Severability and Reformation
. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable law or, if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. To the fullest extent possible, the grant of any Awards to, or other transaction by, a Participant who is subject to section 16 of the Exchange Act shall be exempt from such section pursuant to an applicable exemption (except for transactions acknowledged in writing to be non-exempt by such Participant). If any of the terms or provisions of the Plan or any Award Agreement conflict with the requirements of Rule 16b-3 (as those terms or provisions are applied to Eligible Persons who are subject to section 16 of the Exchange Act) or section 422 of the Code (with respect to ISOs), then those conflicting terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of Rule 16b-3 (unless the Board or the Committee, as appropriate, has expressly determined that the Plan or such Award should not comply with Rule 16b-3) or section 422 of the Code. With respect to ISOs, if the Plan does not contain any provision required to be
included herein under section 422 of the Code, that provision shall be deemed to be incorporated herein with the same force and effect as if that provision had been set out at length herein;
provided
, further, that, to the extent any Option that is intended to qualify as an ISO cannot so qualify, that Option (to that extent) shall be deemed a Nonstatutory Option for all purposes of the Plan.
(e)
Unfunded Status of Awards; No Trust or Fund Created
. The Plan is intended to constitute an “unfunded” plan for certain incentive awards. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other person. To the extent that any person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Company or such Affiliate.
(f)
Nonexclusivity of the Plan
. The adoption of the Plan by the Board shall not be construed as affecting any other equity incentive or compensation plan adopted by the Company or any of its Affiliates (including the Swift Energy Company 2016 Equity Incentive Plan), nor shall the adoption of the Plan by the Board be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable. Nothing contained in the Plan shall be construed to prevent the Company or any of its Affiliates from taking any corporate action which is deemed by the Company or such Affiliate to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No employee, beneficiary or other person shall have any claim against the Company or any of its Affiliates as a result of any such action.
(g)
Fractional Shares
. No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine in its sole discretion whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares of Stock or whether such fractional shares of Stock or any rights thereto shall be canceled, terminated, or otherwise eliminated with or without consideration.
(h)
Interpretation
. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. Words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural. In the event of any conflict between the terms and conditions of an Award Agreement and the Plan, the provisions of the Plan shall control.
(i)
Facility of Payment
. Any amounts payable hereunder to any individual under legal disability or who, in the judgment of the Committee, is unable to manage properly his financial affairs, may be paid to the legal representative of such individual, or may be applied for the benefit of such individual in any manner that the Committee may select, and the Company shall be relieved of any further liability for payment of such amounts.
(j)
Conditions to Delivery of Stock
. Nothing herein or in any Award Agreement shall require the Company to issue any shares with respect to any Award if that issuance would, in the opinion of counsel for the Company, constitute a violation of the Securities Act or any similar
or superseding statute or statutes, any other applicable statute or regulation, or the rules of any applicable national securities exchange or securities association, as then in effect. In addition, each Participant who receives an Award under the Plan shall not sell or otherwise dispose of Stock that is acquired upon grant or vesting of an Award in any manner that would constitute a violation of any applicable federal or state securities laws, the Plan or the rules, regulations or other requirements of the Securities and Exchange Commission or any stock exchange upon which the Stock is then listed. At the time of any exercise of an Option or Stock Appreciation Right, or at the time of any grant of any other Award the Company may, as a condition precedent to the exercise of such Option or Stock Appreciation Right or settlement of any other Award, require from the Participant (or in the event of his or her death, his or her legal representatives, heirs, legatees, or distributees) such written representations, if any, concerning the Award holder’s intentions with regard to the retention or disposition of the shares of Stock being acquired pursuant to the Award and such written covenants and agreements, if any, as to the manner of disposal of such shares as, in the opinion of counsel to the Company, may be necessary to ensure that any disposition by such Award holder (or in the event of such Award holder’s death, his or her legal representatives, heirs, legatees, or distributees) will not involve a violation of the Securities Act or any similar or superseding statute or statutes, any other applicable state or federal statute or regulation, or any rule of any applicable national securities exchange or securities association, as then in effect. Stock or other securities shall not be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement (including, without limitation, any Exercise Price, grant price, or tax withholding) is received by the Company.
(k)
Section 409A of the Code
. It is the general intention, but not the obligation, of the Committee to design Awards to comply with or to be exempt from the Nonqualified Deferred Compensation Rules, and Awards will be operated and construed accordingly. Neither this
Section 9(k)
nor any other provision of the Plan is or contains a representation to any Participant regarding the tax consequences of the grant, vesting, exercise, settlement, or sale of any Award (or the Stock underlying such Award) granted hereunder, and should not be interpreted as such. In no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with the Nonqualified Deferred Compensation Rules. Notwithstanding any provision in the Plan or an Award Agreement to the contrary, in the event that a “specified employee” (as defined under the Nonqualified Deferred Compensation Rules) becomes entitled to a payment under an Award that would be subject to additional taxes and interest under the Nonqualified Deferred Compensation Rules if the Participant’s receipt of such payment or benefits is not delayed until the earlier of (i) the date of the Participant’s death, or (ii) the date that is six months after the Participant’s “separation from service,” as defined under the Nonqualified Deferred Compensation Rules (such date, the “
Section 409A Payment Date
”), then such payment or benefit shall not be provided to the Participant until the Section 409A Payment Date. Any amounts subject to the preceding sentence that would otherwise be payable prior to the Section 409A Payment Date will be aggregated and paid in a lump sum without interest on the Section 409A Payment Date. The applicable provisions of the Nonqualified Deferred Compensation Rules are hereby incorporated by reference and shall control over any Plan or Award Agreement provision in conflict therewith.
(l)
Clawback
. Any Award Agreement may provide for the cancellation or forfeiture of an Award or the forfeiture and repayment to the Company of any gain related to an Award, or other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Committee from time to time, if a Participant, either (a) during employment or other service with the Company or one of its Affiliates or (b) within a specified period after termination of such employment or service, shall engage in any detrimental activity, including misconduct, malfeasance or gross negligence in the performance of the Participant’s duties that either caused or significantly contributed to the material inaccuracy of financial results or other performance metric. In addition, notwithstanding anything in this Plan to the contrary, any Award Agreement may also provide for the cancellation or forfeiture of an Award or the forfeiture and repayment to the Company of any gain related to an Award, or other provisions intended to have a similar effect, upon such terms and conditions as may be required by the Committee or under Section 10D of the Exchange Act and any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the Stock may be traded.
(m)
Plan Effective Date and Term
. The Plan was adopted by the Board to be effective on the Effective Date. No Awards may be granted under the Plan on and after the tenth anniversary of the Effective Date, which is December 15, 2026. However, any Award granted prior to such termination, and the authority of the Board or Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award in accordance with the terms of the Plan, shall extend beyond such termination date until the final disposition of such Award.
10.
Amendments to the Plan and Awards.
The Committee may amend, alter, suspend, discontinue or terminate the Plan or the Committee’s authority to grant Awards under the Plan without the consent of stockholders or Participants, except that any amendment or alteration to the Plan, including any increase in any share limitation, shall be subject to the approval of the Company’s stockholders not later than the annual meeting next following such Committee action if such stockholder approval is required by any federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Stock may then be listed or quoted, and the Committee may otherwise, in its discretion, determine to submit other such changes to the Plan to stockholders for approval;
provided
, that, without the consent of an affected Participant, no such Committee action may materially and adversely affect the rights of such Participant under any previously granted and outstanding Award. The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue or terminate any Award theretofore granted and any Award Agreement relating thereto, except as otherwise provided in the Plan;
provided
,
however
, that, without the consent of an affected Participant, no such Committee action may materially and adversely affect the rights of such Participant under such Award. For purposes of clarity, any adjustments made to Awards pursuant to
Section 8
will be deemed
not
to materially and adversely affect the rights of any Participant under any previously granted and outstanding Award and therefore may be made without the consent of affected Participants.
SWIFT ENERGY COMPANY
INDUCEMENT PLAN
[FORM OF] RESTRICTED STOCK UNIT AGREEMENT
* * * * *
Participant: [●]
(the “
Participant
”)
Grant Date: [●]
(the “
Grant Date
”)
Number of Restricted Stock Units: [●]
* * * * *
THIS RESTRICTED STOCK UNIT AWARD AGREEMENT
(this “
Agreement
”), dated as of the Grant Date specified above, is entered into by and between Swift Energy Company, a Delaware corporation (the “
Company
”), and the Participant specified above, pursuant to the Swift Energy Company Inducement Plan (the “
Plan
”), which is administered by the Committee; and
WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Restricted Stock Units (“
RSUs
”) provided herein to the Participant.
NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:
I.
Incorporation By Reference; Plan Document Receipt
. This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the grant of the RSUs hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its contents. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.
2.
Grant of Restricted Stock Unit Award
. The Company hereby grants to the Participant, as of the Grant Date specified above, the number of RSUs specified above. Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason. The Participant shall have no rights as a stockholder with respect to any of the shares of Stock underlying this Award unless and until such shares of Stock are delivered to the Participant in accordance with Section 4.
3.
Vesting
.
(a)
General
. Except as otherwise provided in this Section 3, one-hundred percent (100%) of the RSUs subject to this grant shall vest on the first anniversary of the Grant Date;
provided
,
however
, that the Participant has continuously provided services to the Company or an Affiliate of the Company, as applicable, through such vesting date. The continuous provision of services shall not be considered interrupted or terminated in the case of transfers between locations of the Company and its Affiliates.
(b)
Committee Discretion to Accelerate Vesting
. Notwithstanding the foregoing, the Committee may, in its sole discretion, provide for accelerated vesting of the RSUs at any time and for any reason.
(c)
Termination by Reason of Death or Disability
. If the Participant’s service relationship is terminated by reason of death or “Disability” (as defined below), all RSUs that are held by the Participant at the time of the Participant’s termination that have not otherwise vested shall be immediately fully vested as of the date of such termination. For purposes of this Agreement, “Disability” means the Participant’s inability to perform the Participant’s duties due to a mental or physical impairment for (i) 90 consecutive days or (ii) 180 days out of any 365-day period, which in either case, shall only be deemed to occur following the written determination by the Committee of any such occurrence of Disability.
(d)
Termination by the Company other than for Cause
. If the Participant’s service relationship is terminated by the Company for a reason other than Cause (as defined below), all RSUs that are held by the Participant at the time of the Participant’s termination of service relationship that have not otherwise vested shall be immediately fully vested as of the date of such termination. For purposes of this Agreement, “Cause” means (i) the Participant’s commission of fraud or material dishonesty in the performance of the Participant’s duties against the Company or its Affiliates, (ii) the Participant’s conviction of, or plea of guilty or nolo contendere to, a felony, (iii) the Participant’s commission of malfeasance or misconduct in the performance of the Participant’s service or any wrongful act or omission (other than in the good faith performance of duties) that is materially injurious to the financial condition or business reputation of the Company, (iv) the Participant’s material breach of a confidentiality covenant that is not cured within thirty (30) days following the Participant’s receipt of notice from the Company, (v) the Participant’s material breach of a non-disparagement covenant that is not cured within thirty (30) days following a notice from the Company, (vi) the Participant’s breach of a non-compete or non-solicitation covenant to which the Participant is subject or (vii) a material breach or a material violation of the Company’s code of conduct or any other material policy.
(e)
Other Terminations
. Except as set forth above, all unvested RSUs that are held by the Participant shall immediately terminate and be forfeited upon a termination of the Participant’s service relationship.
(f)
Change in Control
. If the Participant’s service relationship with the Company is terminated because the Participant is not nominated for election, or is not elected, as a member of the Board, in either case during the “CIC Severance Protection Period” (as defined below), the
RSUs shall become fully vested upon the later of the occurrence of a Change in Control or such termination. For purposes of this Agreement, “CIC Severance Protection Period” means the time period commencing six (6) months prior to the occurrence of a Change in Control and continuing until the first anniversary of such Change in Control.
4.
Delivery of Shares
.
(a)
The Company shall deliver to the Participant the shares of Stock underlying the outstanding RSUs within thirty (30) days following each date such RSUs vest. In no event shall the Participant be entitled to receive any shares of Stock with respect to any unvested or forfeited portion of the RSUs.
(b)
The Company’s obligations to the Participant with respect to the RSUs will be satisfied in full upon the issuance of Common Shares corresponding to such RSUs.
(c)
In the event an amount becomes payable pursuant to this Section 4 on account of the termination of the Participant’s service relationship due to death, or the Participant becomes entitled to receive an amount pursuant to this Section and the Participant dies prior to receiving any or all of the amounts to which the Participant is due, then the amounts payable pursuant to this Section 4 shall be made to the beneficiary or beneficiaries (which may include individuals, trusts or other legal entities) designated by the Participant on the form attached hereto as
Attachment 1
or as otherwise provided by and filed with the Company prior to the Participant’s death (the “
Beneficiary Designation Form
”). If the Participant fails to designate a beneficiary or fails to file the Beneficiary Designation Form with the Company prior to the Participant’s death, such amounts shall be made to the Participant’s estate. If a named beneficiary entitled to receive payments pursuant to the Beneficiary Designation Form dies at a time when additional payments still remain to be paid, then and in any such event, such remaining payments shall be paid to the other primary beneficiary or beneficiaries named by the Participant who shall then be living or in existence, if any, otherwise to the contingent beneficiary or beneficiaries named by the Participant who shall then be living or in existence, if any; otherwise to the estate of the Participant.
5.
Dividend Equivalents; Voting and Other Rights
.
(a)
The Participant shall have no rights of ownership in the shares of Stock underlying the RSUs and no right to vote the shares of Stock underlying the RSUs until the date on which the shares of Stock underlying the RSUs are issued or transferred to the Participant pursuant to Section 4 above.
(b)
The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver shares of Stock in the future, and the rights of the Participant will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.
6.
Plan Restrictions
. The Participant acknowledges and agrees that the RSUs granted under this Agreement and any shares of Stock received in settlement thereof, shall be subject
to all applicable provisions of the Plan, including but not limited to the restrictions on transferability set forth in Section 7(a) of the Plan.
7.
Securities Representations
. Upon the delivery of the shares of Stock prior to the registration of the shares of Stock to be issued hereunder pursuant to the Securities Act of 1933, as amended, and the rules and regulations thereunder (the “
Securities Act
”), the Participant shall be deemed to acknowledge and make the following representations and warranties and as otherwise may be requested by the Company for compliance with applicable laws, and any issuances of shares of Stock by the Company hereunder shall be made in reliance upon the express representations and warranties of the Participant:
(a)
The Participant is acquiring and will hold the shares of Stock to be issued hereunder for investment for the Participant’s account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or other applicable securities laws.
(b)
The Participant will not transfer the shares of Stock deliverable with respect to the RSUs in violation of the Plan, this Agreement, the Securities Act (or the rules and regulations promulgated thereunder) or under any other applicable securities laws. The Participant agrees that the Participant will not dispose of the shares of Stock to be issued hereunder unless and until the Participant has complied with all requirements of the Plan and this Agreement applicable to the disposition of such shares of Stock.
(c)
The Participant has been furnished with, and has had access to, such information as the Participant considers necessary or appropriate for deciding whether to invest in the shares of Stock to be issued hereunder, and the Participant has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the issuance of such shares of Stock.
(d)
The Participant is aware that an investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss. The Participant is able, without impairing the Participant’s financial condition, to hold the shares of Stock to be issued hereunder for an indefinite period and to suffer a complete loss of the Participant’s investment in such shares of Stock.
8.
Entire Agreement; Amendment
. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Participant. The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.
9.
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to the principles of conflict of laws thereof.
10.
Withholding of Tax
. To the extent the Company is required to withhold any taxes in connection with any payment made or benefit realized under this Agreement, and the amounts available to the Company are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other applicable person shall make arrangements satisfactory to the Company for payment of such taxes required to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment of a portion of such benefit. If such benefit is to be in the form of shares of Stock and the Participant fails to make arrangements for the payment of tax, unless otherwise determined by the Committee, the Company will withhold shares of Stock having a value equal to the amount required to be withheld. Notwithstanding the foregoing, if the Participant is required to pay an amount required to be withheld, the Participant may elect, unless otherwise determined by the Committee, to satisfy the obligation, in whole or in part, by having withheld, from the shares of Stock required to be delivered hereunder, shares of Stock having a value equal to the amount required to be withheld or by delivering to the Company other Shares held by the Participant. Shares of Stock used for withholding will be valued at the market value of such shares of Stock on the date the benefit is to be included in Participant’s income and such market value will in no event exceed the minimum amount of taxes required to be withheld. Further, to the extent that the Company is not required to withhold any taxes in connection with any payment made or benefit realized under this Agreement, the Participant acknowledges and agrees that the Participant is responsible for all tax obligations that arise in connection with the grant, vesting or settlement of the RSUs granted under this Agreement.
11.
No Right to Service
. Nothing in this Agreement shall interfere with or limit in any way the right of the Company to terminate the Participant’s service relationship at any time, for any reason and, to the extent applicable, with or without Cause. Any questions as to whether and when there has been a termination of such service relationship and the cause of such termination shall be determined in the good faith of the Committee.
12.
Notices
. Any notice which may be required or permitted under this Agreement shall be in writing, and shall be delivered in person or via facsimile transmission, overnight courier service or certified mail, return receipt requested, postage prepaid, properly addressed as follows:
(a)
If such notice is to the Company, to the attention of the General Counsel of the Company or at such other address as the Company, by notice to the Participant, shall designate in writing from time to time.
(b)
If such notice is to the Participant, at his/her address as shown on the Company’s records, or at such other address as the Participant, by notice to the Company, shall designate in writing from time to time.
13.
Transfer of Personal Data
.
The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Affiliate) of any personal data
information related to the RSU awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Participant.
14.
Compliance with Laws
. This issuance of RSUs (and the shares of Stock underlying the RSUs) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations and any other law or regulation applicable thereto. The Company shall not be obligated to issue this RSU or any of the shares of Stock pursuant to this Agreement if any such issuance would violate any such requirements. As a condition to the issuance of the RSUs, upon delivery of the shares of Stock underlying the RSUs, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation.
15.
Section 409A
. Notwithstanding anything herein or in the Plan to the contrary, the RSUs are intended to be exempt from the applicable requirements of the Nonqualified Deferred Compensation Rules and shall be limited, construed and interpreted in accordance with such intent.
16.
Binding Agreement; Assignment
. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Participant shall not assign (except in accordance with Section 7(a) of the Plan) any part of this Agreement without the prior express written consent of the Company.
17.
Counterparts
. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.
18.
Headings
. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.
19.
Further Assurances
. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.
20.
Severability
. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF
, the parties hereto have executed this Agreement as of the date first written above.
SWIFT ENERGY COMPANY
By:
Name:
Title:
Restricted Stock Unit Agreement – Signature Page
IN WITNESS WHEREOF
, the parties hereto have executed this Agreement as of the date first written above.
PARTICIPANT
Name:
Restricted Stock Unit Agreement – Signature Page
This form applies to Participants with unvested RSUs and any other unvested equity awards from the Swift Energy Company Inducement Plan (the “Plan”). Please refer to your Award Agreements for more information. Any election made on this form will revoke all prior beneficiary designations made by you. In the absence of any beneficiary designation made by you, your benefits remaining unpaid or rights remaining unexercised at your death will be paid to or exercised by the representative of your estate.
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Complete all requested information. Enter the whole percentage you wish each beneficiary to receive. These whole percentages must total 100% for elected primary beneficiaries and 100% for elected contingent beneficiaries, if any.
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You may designate benefits to a trust. Please include the name, date, and taxpayer ID of your trust below.
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If you are married and name a primary beneficiary other than your spouse, please see the Spousal Consent section.
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Participant Information (Please print clearly in ink)
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________________________________________________
Last Name, First Name M.I
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____________________
Social Security Number
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___________________
Employee ID (if applicable)
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I, the undersigned, hereby elect that upon my death the following person(s) shall be my primary and contingent beneficiary(ies) for any pre-retirement death benefits payable under the Swift Energy Company Inducement Plan.
Primary Beneficiary(ies):
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________________________________________________
Last Name, First Name M.I.
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____________________________________
Social Security Number/Taxpayer ID No.
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_______________________________________________
Street Address
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_________________________
City
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______
State
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__________
ZIP Code
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______________________________________
Relationship
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__________________________
Birth Date/Date of Trust
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___________________
Phone Number
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___________
Percentage
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________________________________________________
Last Name, First Name M.I.
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____________________________________
Social Security Number/Taxpayer ID No.
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_______________________________________________
Street Address
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_________________________
City
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______
State
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__________
ZIP Code
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______________________________________
Relationship
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__________________________
Birth Date/Date of Trust
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___________________
Phone Number
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___________
Percentage
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________________________________________________
Last Name, First Name M.I.
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____________________________________
Social Security Number/Taxpayer ID No.
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_______________________________________________
Street Address
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_________________________
City
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______
State
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__________
ZIP Code
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______________________________________
Relationship
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__________________________
Birth Date/Date of Trust
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___________________
Phone Number
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___________
Percentage
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Contingent Beneficiary(ies):
In the event none of the primary beneficiary(ies) named above is/are living, I designate the following person(s) as my contingent beneficiary(ies).
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________________________________________________
Last Name, First Name M.I.
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____________________________________
Social Security Number/Taxpayer ID No.
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_______________________________________________
Street Address
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_________________________
City
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______
State
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__________
ZIP Code
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______________________________________
Relationship
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__________________________
Birth Date/Date of Trust
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___________________
Phone Number
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___________
Percentage
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________________________________________________
Last Name, First Name M.I.
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____________________________________
Social Security Number/Taxpayer ID No.
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_______________________________________________
Street Address
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_________________________
City
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______
State
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__________
ZIP Code
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______________________________________
Relationship
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__________________________
Birth Date/Date of Trust
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___________________
Phone Number
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___________
Percentage
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________________________________________________
Last Name, First Name M.I.
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____________________________________
Social Security Number/Taxpayer ID No.
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_______________________________________________
Street Address
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_________________________
City
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______
State
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__________
ZIP Code
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______________________________________
Relationship
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__________________________
Birth Date/Date of Trust
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___________________
Phone Number
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___________
Percentage
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Designation of Custodian for Minor Children:
If you designate a child who is under age 18 as your beneficiary, you must also designate a custodian of assets for the child. Please indicate the custodian’s name and address below.
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Child’s Name
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Custodian’s Name
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Custodian’s Address
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1.____________________
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_____________________________
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____________________________
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2.____________________
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_____________________________
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____________________________
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3.____________________
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_____________________________
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____________________________
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Participant Declaration and Signature
I hereby revoke all previous death benefit beneficiary designations, if any, for the Swift Energy Company Inducement Plan. I understand that this beneficiary designation does not take effect unless and until my properly completed and signed form has been received by the Company prior to my death. I further
understand that no benefits will be paid to my designated beneficiary(ies) if I die before I am vested in my Plan benefit. By completing this form, I acknowledge that if no beneficiaries chosen by me are surviving at the time payment is to be made, or if I do not designate any beneficiaries, Plan benefits, if any, will be paid according to Plan provisions.
Current Marital Status: (check one)
¨
Single
¨
Married and have designated my spouse as the sole primary beneficiary.
(No Spousal Consent required)
¨
Married and have not designated my spouse as the sole primary beneficiary.
(Spousal Consent required)
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Your signature______________________________________________
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Date_________________________
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If you are married and have chosen a primary beneficiary other than your spouse, your spouse must complete the section below.
Spousal Consent
I hereby consent to the beneficiary(ies) named by my spouse on this form with respect to the death benefit under the Swift Energy Company Inducement Plan. I understand that by giving my consent, (1) I am waiving all rights to the community property interest I may have in the death benefit which may be payable under the Plan if my spouse dies while actively providing services, (2) I am giving up my legal right to be the sole beneficiary of the death benefit which may be payable under the Plan if my spouse dies while actively providing services; (3) any death benefit payable from the Plan at my spouse’s death will be paid to the beneficiary(ies) designated above; and (4) I cannot revoke this consent unless my spouse changes Plan beneficiary designations.
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_________________________________________________________________________
Spouse’s Name (please type or print)
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____________________________
Spouse’s Social Security Number
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___________________________________________________________
Spouse’s Signature
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________________________________
Date Signed
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Please return your completed form via intercompany mail to:
.
SWIFT ENERGY COMPANY
INDUCEMENT PLAN
[FORM OF] STOCK OPTION AGREEMENT
* * * * *
Participant: [●]
(the “
Participant
”)
Grant Date: [●]
(the “
Grant Date
”)
Per Share Exercise Price: $[●]
(the “
Exercise Price
”)
Number of Shares subject to Option: [●]
(the “
Option Shares
”)
* * * * *
THIS STOCK OPTION AWARD AGREEMENT
(this “
Agreement
”), dated as of the Grant Date specified above, is entered into by and between Swift Energy Company, a Delaware corporation (the “
Company
”), and the Participant specified above, pursuant to the Swift Energy Company Inducement Plan (the “
Plan
”), which is administered by the Committee; and
WHEREAS,
it has been determined under the Plan that it would be in the best interests of the Company to grant the Option provided for herein to the Participant.
NOW, THEREFORE,
in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:
I.
Incorporation By Reference; Plan Document Receipt
. This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its contents. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.
2.
Grant of Option
. The Company hereby grants to the Participant, as of the Grant Date specified above, a Nonstatutory Option (the “
Option
”) to acquire from the Company at the Exercise Price per share of Stock specified above, the aggregate number of Option Shares specified above. Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason. The Participant shall have no rights as a stockholder with respect to any shares of Stock covered by the Option unless and until the Participant has become the holder of record of such
shares of Stock, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such shares of Stock, except as otherwise specifically provided for in the Plan or this Agreement.
3.
Vesting and Exercise
.
(a)
Vesting
. Except as otherwise provided in this Section 3, the Option shall vest and become exercisable as to one-hundred percent (100%) of the Option Shares on the first anniversary of the Grant Date;
provided
,
however
, that the Participant has continuously provided services to the Company or an Affiliate of the Company, as applicable, through such vesting date. Upon expiration of the Option, the Option shall be cancelled and no longer exercisable. The continuous provision of services shall not be considered interrupted or terminated in the case of transfers between locations of the Company and its Affiliates.
(b)
Committee Discretion to Accelerate Vesting
. Notwithstanding the foregoing, the Committee may, in its sole discretion, provide for accelerated vesting of the Option at any time and for any reason.
(c)
Termination by Reason of Death or Disability
. If the Participant’s service relationship is terminated by reason of death or “Disability” (as defined below), all Option Shares that are held by such Participant at the time of the Participant’s termination that have not otherwise vested shall be immediately fully vested and become exercisable as of the date of such termination and may be exercised by the Participant (or, in the case of death, by the legal representative of the Participant’s estate) at any time within a one (1)-year period from the date of such termination, but in no event beyond the expiration of the stated term of the Option. For purposes of this Agreement, “Disability” means the Participant’s inability to perform the Participant’s duties due to a mental or physical impairment for (i) 90 consecutive days or (ii) 180 days out of any 365-day period, which in either case, shall only be deemed to occur following the written determination by the Committee of any such occurrence of Disability.
(d)
Termination by the Company other than for Cause
. If the Participant’s service relationship is terminated by the Company for a reason other than Cause (as defined below), all Option Shares that are held by such Participant at the time of the Participant’s termination that have not otherwise vested shall be immediately fully vested and become exercisable as of the date of such termination and may be exercised by the Participant at any time within a period of ninety (90) days from the date of such termination, but in no event beyond the expiration of the stated term of the Option. For purposes of this Agreement, “Cause” means (i) the Participant’s commission of fraud or material dishonesty in the performance of the Participant’s duties for the Company or its Affiliates, (ii) the Participant’s conviction of, or plea of guilty or nolo contendere to, a felony, (iii) the Participant’s commission of malfeasance or misconduct in the performance of the Participant’s service or any wrongful act or omission (other than in the good faith performance of duties) that is materially injurious to the financial condition or business reputation of the Company, (iv) the Participant’s material breach of a confidentiality covenant that is not cured within thirty (30) days following the Participant’s receipt of notice from the Company, (v) the Participant’s material breach of a non-disparagement covenant that is not cured within thirty (30) days following a notice from the Company, (vi) the Participant’s breach of a non-compete or non-solicitation covenant to which
the Participant is subject or (vii) a material breach or a material violation of the Company’s code of conduct or any other material policy.
(e)
Other Terminations
. Except as set forth above (i) all unvested Option Shares that are held by the Participant shall immediately terminate and be forfeited upon a termination of the Participant’s service relationship and (ii) all Option Shares that are vested and exercisable at the time of the Participant’s termination may be exercised by the Participant at any time within a period of thirty (30) days from the date of such termination, but in no event beyond the expiration of the stated term of the Option.
(f)
Change in Control
. If the Participant’s service relationship with the Company is terminated because the Participant is not nominated for election, or is not elected, as a member of the Board, in either case during the CIC Severance Protection Period (as defined below), the Option shall become fully vested upon the later of the occurrence of a Change in Control or such termination and may be exercised by the Participant at any time within a period of ninety (90) days from the date of such termination, but in no event beyond the expiration of the stated term of the Option. For purposes of this Agreement, “CIC Severance Protection Period” means the time period commencing six (6) months prior to the occurrence of a Change in Control and continuing until the first anniversary of such Change in Control.
(g)
Expiration
. Unless earlier terminated in accordance with the terms and provisions of the Plan and/or this Agreement, all portions of the Option (whether vested or not vested) shall expire and shall no longer be exercisable after the expiration of ten (10) years from the Grant Date.
(h)
Beneficiary Designation
. In the event an amount becomes payable pursuant to this Section 3 on account of the termination of the Participant’s service relationship due to death, or the Participant becomes entitled to receive an amount pursuant to this Section and the Participant dies prior to receiving any or all of the amounts to which the Participant is due, then the amounts payable pursuant to this Section 3 shall be made to the beneficiary or beneficiaries (which may include individuals, trusts or other legal entities) designated by the Participant on the form attached hereto as
Attachment 1
or as otherwise provided by and filed with the Company prior to the Participant’s death (the “
Beneficiary Designation Form
”). If the Participant fails to designate a beneficiary or fails to file the Beneficiary Designation Form with the Company prior to the Participant’s death, such amounts shall be made to the Participant’s estate. If a named beneficiary entitled to receive payments pursuant to the Beneficiary Designation Form dies at a time when additional payments still remain to be paid, then and in any such event, such remaining payments shall be paid to the other primary beneficiary or beneficiaries named by the Participant who shall then be living or in existence, if any, otherwise to the contingent beneficiary or beneficiaries named by the Participant who shall then be living or in existence, if any; otherwise to the estate of the Participant.
4.
Method of Exercise and Payment
.
(a)
Subject to Section 9 hereof (if applicable), to the extent that the Option has become vested and exercisable with respect to a number of Option Shares as provided herein, the
Option may thereafter be exercised by the Participant, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein and in accordance with this Section 4 and with Company trading policies. No shares of Stock resulting from the exercise of the Option shall be issued until full payment therefore has been made as set forth in this Section 4.
(b)
The Option shall be exercised in whole or in part by the Participant’s delivery of a written or electronic notice of exercise (in accordance with procedures established by the Company) to the Chief Financial Officer or General Counsel of the Company (or each of his or her designee), setting forth the number of shares of Stock with respect to which the Option is to be exercised, accompanied by full payment of the Exercise Price with respect to each such share of Stock and, to the extent applicable, an amount sufficient to pay all taxes required to be withheld by any governmental agency. The Exercise Price shall be payable to the Company (i) in full cash or its equivalent, (ii) by the actual or constructive transfer to the Company of shares of Stock owned by the Participant having a value at the time of exercise equal to the total Exercise Price, (iii) subject to any conditions or limitations established by the Committee, the Company’s withholding of Option Shares otherwise issuable upon exercise of an Option pursuant to a “net exercise” arrangement (it being understood that, solely for purposes of determining the number of treasury shares held by the Company, the shares of Stock so withheld will not be treated as issued and will be acquired by the Company upon such exercise), (iv) by a combination of such methods of payment, or (v) by such other methods as may be approved by the Committee and authorized under Section 6(b) of the Plan. No shares of Stock resulting from the exercise of the Option shall be issued until full payment therefore has been made. As soon as reasonably practicable after receipt of a written notification of exercise and full payment of the Exercise Price for the shares of Stock with respect to which the Option is exercised, the Company shall deliver to the Participant share certificates (or the equivalent if such shares of Stock are held in book entry form) for such shares of Stock with respect to which the Option is exercised.
(c)
To the extent applicable, the exercise of the Option is contingent upon payment by the Participant of the amount sufficient to pay all taxes required to be withheld by any governmental agency. Such payment (if any) may be in any form acceptable to the Committee.
5.
Plan Restrictions
. The Participant acknowledges and agrees that the Option granted under this Agreement and any shares of Stock received following exercise thereof, shall be subject to all applicable provisions of the Plan, including but not limited to the restrictions on transferability set forth in Section 7(a) of the Plan.
6.
Securities Representations
. Upon the exercise of the Option prior to the registration of the shares of Stock to be issued hereunder pursuant to the Securities Act of 1933, as amended, and the rules and regulations thereunder (the “
Securities Act
”), the Participant shall be deemed to acknowledge and make the following representations and warranties and as otherwise may be requested by the Company for compliance with applicable laws, and any issuances of shares of Stock by the Company hereunder shall be made in reliance upon the express representations and warranties of the Participant:
(a)
The Participant is acquiring and will hold the shares of Stock to be issued hereunder for investment for the Participant’s account only and not with a view to, or for resale in
connection with, any “distribution” thereof within the meaning of the Securities Act or other applicable securities laws.
(b)
The Participant will not transfer the Option Shares deliverable upon exercise of the Option in violation of the Plan, this Agreement, the Securities Act (or the rules and regulations promulgated thereunder) or under any other applicable securities laws. The Participant agrees that the Participant will not dispose of the shares of Stock to be issued hereunder unless and until the Participant has complied with all requirements of the Plan and this Agreement applicable to the disposition of such shares of Stock.
(c)
The Participant has been furnished with, and has had access to, such information as the Participant considers necessary or appropriate for deciding whether to invest in the shares of Stock to be issued hereunder, and the Participant has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the issuance of such shares of Stock.
(d)
The Participant is aware that an investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss. The Participant is able, without impairing the Participant’s financial condition, to hold the shares of Stock to be issued hereunder for an indefinite period and to suffer a complete loss of the Participant’s investment in such shares of Stock.
7.
Entire Agreement; Amendment
. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Participant. The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.
8.
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to the principles of conflict of laws thereof.
9.
Withholding of Tax
.
To the extent the Company is required to withhold any taxes in connection with any payment made or benefit realized under this Agreement, and the amounts available to the Company are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other applicable person shall make arrangements satisfactory to the Company for payment of such taxes required to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment of a portion of such benefit. If such benefit is to be in the form of shares of Stock and the Participant fails to make arrangements for the payment of tax, unless otherwise determined by the Committee, the Company will withhold shares of Stock having a value equal to the amount required to be withheld. Notwithstanding the foregoing, if the Participant is required to pay an amount required to be withheld, the Participant may elect, unless otherwise determined by the Committee, to satisfy the
obligation, in whole or in part, by having withheld, from the shares of Stock required to be delivered hereunder, shares of Stock having a value equal to the amount required to be withheld or by delivering to the Company other shares of Stock held by the Participant. Shares of Stock used for withholding will be valued at the market value of such shares of Stock on the date the benefit is to be included in Participant’s income and such market value will in no event exceed the minimum amount of taxes required to be withheld. Further, to the extent that the Company is not required to withhold any taxes in connection with any payment made or benefit realized under this Agreement, the Participant acknowledges and agrees that the Participant is responsible for all tax obligations that arise in connection with the grant, vesting or settlement of the Option Shares granted under this Agreement.
10.
No Right to Service
. Nothing in this Agreement shall interfere with or limit in any way the right of the Company to terminate the Participant’s service relationship at any time, for any reason and, to the extent applicable, with or without Cause. Any questions as to whether and when there has been a termination of such service relationship and the cause of such termination shall be determined in the good faith of the Committee.
11.
Notices
. Any notice which may be required or permitted under this Agreement shall be in writing, and shall be delivered in person or via facsimile transmission, overnight courier service or certified mail, return receipt requested, postage prepaid, properly addressed as follows:
(a)
If such notice is to the Company, to the attention of the General Counsel of the Company or at such other address as the Company, by notice to the Participant, shall designate in writing from time to time.
(b)
If such notice is to the Participant, at his/her address as shown on the Company’s records, or at such other address as the Participant, by notice to the Company, shall designate in writing from time to time.
12.
Transfer of Personal Data
.
The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Affiliate) of any personal data information related to the Option awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Participant.
13.
Compliance with Laws
. The issuance of the Option (and the Option Shares upon exercise of the Option) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations and any other law or regulation applicable thereto. The Company shall not be obligated to issue the Option or any of the Option Shares pursuant to this Agreement if any such issuance would violate any such requirements. As a condition to the issuance of the Option Shares upon exercise of the Option, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation.
14.
Section 409A
. Notwithstanding anything herein or in the Plan to the contrary, the Option is intended to be exempt from the applicable requirements of the Nonqualified Deferred Compensation Rules and shall be limited, construed and interpreted in accordance with such intent.
15.
Binding Agreement; Assignment
. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Participant shall not assign (except in accordance with Section 7(a) of the Plan) any part of this Agreement without the prior express written consent of the Company.
16.
Counterparts
.
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.
17.
Headings
. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.
18.
Further Assurances
. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.
19.
Severability
. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF
, the parties hereto have executed this Agreement as of the date first written above.
SWIFT ENERGY COMPANY
By:
Name:
Title:
Nonstatutory Option Award Agreement – Signature Page
IN WITNESS WHEREOF
, the parties hereto have executed this Agreement as of the date first written above.
PARTICIPANT
Name:
Nonstatutory Option Award Agreement – Signature Page
This form applies to Participants with an Option and any other unvested equity awards from the Swift Energy Company Inducement Plan (the “Plan”). Please refer to your Award Agreements for more information. Any election made on this form will revoke all prior beneficiary designations made by you. In the absence of any beneficiary designation made by you, your benefits remaining unpaid or rights remaining unexercised at your death will be paid to or exercised by the representative of your estate.
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Complete all requested information. Enter the whole percentage you wish each beneficiary to receive. These whole percentages must total 100% for elected primary beneficiaries and 100% for elected contingent beneficiaries, if any.
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You may designate benefits to a trust. Please include the name, date, and taxpayer ID of your trust below.
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If you are married and name a primary beneficiary other than your spouse, please see the Spousal Consent section.
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Participant Information (Please print clearly in ink)
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________________________________________________
Last Name, First Name M.I
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____________________
Social Security Number
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___________________
Employee ID (if applicable)
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I, the undersigned, hereby elect that upon my death the following person(s) shall be my primary and contingent beneficiary(ies) for any pre-retirement death benefits payable under the Swift Energy Company Inducement Plan.
Primary Beneficiary(ies):
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Last Name, First Name M.I.
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____________________________________
Social Security Number/Taxpayer ID No.
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_______________________________________________
Street Address
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_________________________
City
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______
State
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__________
ZIP Code
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______________________________________
Relationship
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__________________________
Birth Date/Date of Trust
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___________________
Phone Number
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___________
Percentage
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________________________________________________
Last Name, First Name M.I.
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____________________________________
Social Security Number/Taxpayer ID No.
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_______________________________________________
Street Address
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_________________________
City
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______
State
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__________
ZIP Code
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______________________________________
Relationship
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__________________________
Birth Date/Date of Trust
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___________________
Phone Number
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___________
Percentage
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________________________________________________
Last Name, First Name M.I.
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____________________________________
Social Security Number/Taxpayer ID No.
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_______________________________________________
Street Address
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_________________________
City
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______
State
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__________
ZIP Code
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______________________________________
Relationship
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__________________________
Birth Date/Date of Trust
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___________________
Phone Number
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___________
Percentage
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Contingent Beneficiary(ies):
In the event none of the primary beneficiary(ies) named above is/are living, I designate the following person(s) as my contingent beneficiary(ies).
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________________________________________________
Last Name, First Name M.I.
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____________________________________
Social Security Number/Taxpayer ID No.
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_______________________________________________
Street Address
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_________________________
City
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______
State
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__________
ZIP Code
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______________________________________
Relationship
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__________________________
Birth Date/Date of Trust
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___________________
Phone Number
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___________
Percentage
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________________________________________________
Last Name, First Name M.I.
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____________________________________
Social Security Number/Taxpayer ID No.
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_______________________________________________
Street Address
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_________________________
City
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______
State
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__________
ZIP Code
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______________________________________
Relationship
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__________________________
Birth Date/Date of Trust
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___________________
Phone Number
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___________
Percentage
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________________________________________________
Last Name, First Name M.I.
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____________________________________
Social Security Number/Taxpayer ID No.
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_______________________________________________
Street Address
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_________________________
City
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______
State
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__________
ZIP Code
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______________________________________
Relationship
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__________________________
Birth Date/Date of Trust
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___________________
Phone Number
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___________
Percentage
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Designation of Custodian for Minor Children:
If you designate a child who is under age 18 as your beneficiary, you must also designate a custodian of assets for the child. Please indicate the custodian’s name and address below.
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Child’s Name
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Custodian’s Name
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Custodian’s Address
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1.____________________
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_____________________________
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____________________________
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2.____________________
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_____________________________
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____________________________
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3.____________________
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_____________________________
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____________________________
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Participant Declaration and Signature
I hereby revoke all previous death benefit beneficiary designations, if any, for the Swift Energy Company Inducement Plan. I understand that this beneficiary designation does not take effect unless and until my properly completed and signed form has been received by the Company prior to my death. I further
understand that no benefits will be paid to my designated beneficiary(ies) if I die before I am vested in my Plan benefit. By completing this form, I acknowledge that if no beneficiaries chosen by me are surviving at the time payment is to be made, or if I do not designate any beneficiaries, Plan benefits, if any, will be paid according to Plan provisions.
Current Marital Status: (check one)
¨
Single
¨
Married and have designated my spouse as the sole primary beneficiary.
(No Spousal Consent required)
¨
Married and have not designated my spouse as the sole primary beneficiary.
(Spousal Consent required)
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Your signature______________________________________________
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Date_________________________
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If you are married and have chosen a primary beneficiary other than your spouse, your spouse must complete the section below.
Spousal Consent
I hereby consent to the beneficiary(ies) named by my spouse on this form with respect to the death benefit under the Swift Energy Company Inducement Plan. I understand that by giving my consent, (1) I am waiving all rights to the community property interest I may have in the death benefit which may be payable under the Plan if my spouse dies while actively providing services, (2) I am giving up my legal right to be the sole beneficiary of the death benefit which may be payable under the Plan if my spouse dies while actively providing services; (3) any death benefit payable from the Plan at my spouse’s death will be paid to the beneficiary(ies) designated above; and (4) I cannot revoke this consent unless my spouse changes Plan beneficiary designations.
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_________________________________________________________________________
Spouse’s Name (please type or print)
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____________________________
Spouse’s Social Security Number
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___________________________________________________________
Spouse’s Signature
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________________________________
Date Signed
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Please return your completed form via intercompany mail to:
.