exhibit10-3.htm


    



      Exhibit
10.3

      


      SECOND
AMENDED AND RESTATED

      EXECUTIVE
EMPLOYMENT AGREEMENT

       

      TERRY
E. SWIFT

       

       

                 THIS SECOND AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT (“Agreement”) replaces in its entirety the Amended and
Restated Employment Agreement dated May 9, 2001, which in turn
restated the original Employment Agreement dated as of November 1, 1995, and is
entered into by and between Swift Energy Company, a Texas corporation (the
“Company”), and Terry E. Swift (“Employee”) effective November 4,
2008.

       

      W
I
T
N
E
S
S
E
T
H:

       

      WHEREAS, Employee is employed as Chief Executive
Officer and serves as Chairman of the Board of the Company; and

       

      WHEREAS,
as approved by the Compensation Committee of the Board of Directors of the
Company (the “Board”), the Company and Employee wish to document certain terms
of employment of Employee in such capacity;

       

      NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained, the Company and Employee hereby agree as follows:

       

      1. Employment and
Term of Employment.  Subject to the terms and conditions of
this Agreement, the Company hereby agrees to employ Employee, and Employee
hereby agrees to serve as Chief Executive Officer of the Company, or in such
other or additional position as is mutually acceptable to both Employee and the
Company, for a period of three years commencing on the date hereof, which period
shall automatically be extended for an additional year on each anniversary of
this Agreement thereafter (such period, as so extended from time to time, the
“Term of Employment”) unless notice to the contrary is given by either party to
this Agreement not less than 60 days prior to any anniversary of this
Agreement.

       

      2. Scope of
Employment.  During the Term of Employment, (i) Employee will
serve as Chief Executive Officer with the duties, powers and responsibilities of
such position set forth in the bylaws of the Company as further reasonably
designated by the Board, or in such other or additional position as is mutually
acceptable to both Employee and the Company and approved by the Board, and
Employee will perform diligently to the best of his ability those duties in a
manner that promotes the business, interests and goodwill of the
Company.

       

      3. Compensation.  During
the Term of Employment, the Company shall compensate Employee for his services
hereunder in such amount as shall be determined by the Compensation Committee of
the Board from time to time.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      4. Benefits.  As
additional compensation for Employee’s services under this Agreement, during the
Term of Employment the Company agrees to provide Employee with the following
reimbursements and benefits, which reimbursements and benefits may or may not be
taxable to Employee based on federal income tax laws, rules and regulations in
effect from time to time:

       

      (a) The
Company shall reimburse Employee for reasonable and necessary expenses incurred
by Employee in furtherance of the Company’s business, including a mileage
allowance for all business-related travel on a per-mile basis at a rate
equivalent to that allowed by the Internal Revenue Service, provided that such
expenses are incurred in accordance with the Company’s policies and upon
presentation of documentation in accordance with expense reimbursement policies
of the Company as they may exist from time to time, and submission to the
Company of adequate documentation in accordance with federal income tax
regulations.  Approved expenses will be reimbursed no later than the
end of the calendar year next following the calendar year in which such expenses
were incurred, and the required documentation must be submitted so as to provide
sufficient time for reimbursement within such time
limitation.

       

      (b) Employee
may participate in any non-cash benefits provided by the Company to its
employees as they may exist from time to time.  Such benefits shall
include, but not be limited to, leave or vacation time, medical and dental
insurance, life insurance, accidental death and dismemberment insurance, health
club dues reimbursements, retirement benefits and disability benefits, as such
benefits may hereafter be provided by the Company in accordance with its
policies in force from time to
time.

       

      (c) During
the Term of Employment, the Company will reimburse Employee up to $7,500 per
calendar year for third party fees, legal fees and expenses actually paid by
Employee for tax return preparation, and/or financial planning services,
provided that the Company shall be obligated to pay, and shall pay, such third
party fees legal fees or other expenses no later than the end of the calendar
year next following the calendar year in which such fees and expenses were
incurred.  The amount of such third party fees, legal fees, or other
expenses that the Company is obligated to pay in any given calendar year shall
not affect the third party fees, legal fees or other expenses that the Company
is obligated to pay in any other calendar year.  The Employee’s right
to have the Company pay such third party fees, legal fees or other expenses may
not be liquidated or exchanged for any other
benefit.

       

      5. Confidentiality.

       

      (a) Employee
recognizes that the Company’s business involves the handling of confidential
information of both the Company and the Company’s affiliates, subsidiaries,
joint venture partners and industry partners, and requires a confidential
relationship between them and the Company and Employee, and Employee and the
Company acknowledge the execution of an agreement entitled “Employee
Confidentiality Agreement” and hereby agree that the Employee Confidentiality
Agreement, as the same may be amended from time to time (the “Confidentiality
Agreement”), shall govern the Employee’s obligations with respect to
Confidential Information, as that term is defined in the Confidentiality
Agreement.  A breach of the Confidentiality Agreement shall be deemed
to be a breach of this Section
5(a).

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      (b) Employee
specifically covenants and agrees not to, directly or indirectly, make or cause
to be made to anyone any statement, orally or in writing, criticizing or
disparaging the Company, its directors, officers or employees, or commenting in
a negative fashion on the operations or business reputation of the Company, its
directors, officers or
employees.

       

      (c) Employee
agrees that upon termination of his employment for any reason, he will surrender
to the Company all Confidential Information (as defined in the Confidentiality
Agreement) and, to the extent not included within the definition of
“Confidential Information,” all electronic data, reports, manuals, procedures,
guidelines, documents, writing, illustrations, models and other such materials
produced by him or coming into his possession by virtue of his employment with
the Company during the period of his employment and agrees that all such
materials are at all times the property of the Company.  Employee
shall be entitled to review, inspect and copy any of the Company information or
material necessary for legal or other proceedings to which Employee is a party
defendant by reason of the fact that he is or was an Employee of the
Company.

       

      (d) Employee
and the Company acknowledge their respective execution of an agreement entitled
“Agreement Relating to Inventions, Copyrights, and Confidentiality of Company or
Customer Information” (the “Inventions Agreement”) and hereby agree that should
any provision of this Agreement conflict with any provision of the Inventions
Agreement, the provisions of the Inventions Agreement shall
control.

       

      6. Covenant Not to
Compete.

       

      (a) Subject to the provisions of Section 6(c) below,
without the express prior written consent of the Corporate Governance Committee
of the Board, Employee will not serve as an employee, officer, director or
consultant, or in any other similar capacity or make investments (other than
open market investments in no more than five percent (5%) of the outstanding
stock of any publicly traded company) in or on behalf of any person, firm,
corporation, association or other entity whose activities directly compete with
the activities of the Company then existing (during all periods of Employee’s
employment by the Company), or contemplated (as of the date he last worked on
the Company’s behalf pursuant to this Agreement), as applicable, in those
portions or areas of oil and gas basins in which the Company is active or as to
which it has begun study or analysis, where such employment may involve working
for or with, or assisting, such competitor with activities that are the same as
or similar to activities Employee performed on behalf of the
Company;

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (b) Subject
to the provisions of (c) of this section, without the express prior written
consent of the Company, he will not solicit, recruit or hire, or assist any
person, or entity in the solicitation, recruitment or hiring of any person
engaged by the Company as an employee, officer, director or consultant;
and

       

      (c) Employee’s
obligations under Sections 6(a) and (b) above shall continue in force during all
periods of Employee’s employment by the Company, and after termination of
employment for a period ending with the date of final payment of any cash
severance compensation or other post-employment cash compensation, paid to
Employee after the Term of Employment, provided that if the Company, in
violation of the provisions of this Agreement, refuses or fails, within 60 days
after written demand from Employee (unless an arbitral or court proceeding is
being pursued in good faith), to pay Employee amounts to be paid by the Company
hereunder, or if there has been a “Change of Control,” as defined in the
Company’s Change of Control Severance Plan dated November 4, 2008 (“COC
Severance Plan”), as such definition therein may be modified by duly adopted
amendments thereto from time to time, then the provisions of Sections 6(a) and
(b) above shall have no further force and effect after such failure to pay or
Change of Control.

       

      7. Separation From
Service Under Section 409A.  The Employee’s termination of
employment for all purposes under this agreement will be determined to have
occurred in accordance with the “separation from service” requirements of
Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) and based
on whether the facts and circumstances indicate that the Company and the
Employee reasonably anticipated that no further services would be performed
after a certain date or that the level of bona fide services the Employee would
perform after such date (as an employee or as an independent contractor) would
permanently decrease to no more than 20 percent of the average level of bona
fide services performed over the immediately preceding 36-month
period.  All references hereunder to the Employee’s termination of
employment shall conform to this requirement whenever necessary to comply with
Code Section 409A.

       

      Upon termination of Employee’s employment hereunder
in the circumstances described in Sections 8 through 12 below during the Term of
Employment, Employee’s last day of employment by the Company shall be referred
to herein as the “Termination Date.”  The date which is six months and
15 days following an Employee’s Termination Date shall be referred to herein as
Employee’s “409A Date.”

       

      It is the parties’ intention that the benefits and
rights to which the Employee could become entitled in connection with the
termination of employment covered under this Agreement comply with Section 409A
of the Code.  If the Employee or the Company believes, at any time,
that any of such benefits or rights do not so comply, he or it shall promptly
advise the other party and shall negotiate reasonably and in good faith to amend
the terms of such arrangement such that it complies with Section 409A (with the
most limited possible economic effect on the Employee and on the
Company).

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      8. Termination By
the Company For
Cause.  The Company may terminate Employee’s employment for
“Cause,” which shall require the affirmative vote of a majority of the members
(other than Employee, if applicable) of the Board then in office who have been
or will have been directors for the two-year period ending on the latter of (i)
the date notice of the meeting or written consent to take such action is first
provided to directors, or (ii) the date of such meeting or consent, or those
directors who have been nominated for election or elected to succeed such
directors by a majority of such directors (the “Continuing
Directors”).

       

      "Cause" shall be defined as (i) commission of fraud
against the Company, its subsidiaries, affiliates or customers, (ii) willful
refusal without proper legal cause to faithfully and diligently perform
Employee's duties as directed in the notice specified below, or correct or
terminate those practices as described in such notice, or (iii) breach of
Section 5 of this Agreement; provided that 30 days’ advance written notice from
a majority of the Continuing Directors is provided to Employee in those
instances covered by clauses (ii) and (iii) of this
paragraph.

       

      Upon Employee’s termination of employment hereunder
for Cause, no payments shall be made to Employee hereunder, other than those to
which Employee is entitled immediately prior to such termination for accrued but
unpaid base salary, bonuses (if any), and any applicable benefits, and no
acceleration of vesting or exercisability of any equity awards held by Employee
and previously granted to Employee under the Company’s equity compensation plans
shall take place.

       

      9. Termination By
Employee Upon 60 Days’ Notice Without Good Reason.  Unless
otherwise expressly covered by the provisions of either Section 10 upon
Employee’s termination of employment for Good Reason, or Section 12 upon
Employee achieving Senior Officer Tenure, Employee may terminate his employment
hereunder by providing at least 60 days’ prior written notice to the Chairman of
the Board of the Company (unless the Compensation Committee of the Board has
given its prior written consent to a lesser prior notice period).  If
such prior notice is given as provided
above:

       

      (a) Employee
shall be paid an amount equal to the sum of (x) the annual base salary being
paid to Employee immediately prior to the Termination Date (“Base Salary”) and
(y) the highest of the last three cash bonuses paid to Employee prior to the
Termination Date (such sum being the “Annual Compensation
Amount”).

       

      (b) The
total cash payments to be made by the Company to Employee under the provisions
of this Section 9, shall be paid to Employee as
follows:

       

      (i) One-half
of such total cash payments shall be paid in a lump sum on Employee’s 409A Date,
together with six months of interest calculated thereon at the short-term AFR
rate published by the Internal Revenue Service for the month of the Termination
Date (the “Interest Rate”); and

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      (ii) The
remaining portion of such total cash payments shall be paid over a six-month
period, commencing on the first or fifteenth day of the month immediately
following the 409A Date, and shall be paid on a twice per month basis in equal
installments.

       

      (c) Effective
immediately prior to such termination, but expressly subject to Employee having
provided the 60 days’ prior notice (unless modified by the Compensation
Committee of the Board) called for under the provisions of this Section 9, all
outstanding unexercised options to purchase shares of common stock of the
Company held by Employee immediately prior to the Termination Date (other than
any award of options which has been outstanding less than 6 months prior to the
Termination Date) shall immediately vest or be deemed to have vested, and
otherwise Employee shall retain any such unexercised options with no change in
the number of shares covered by such options, the date such options first become
exercisable, the period over which they are exercisable, or their exercise
price.

       

      10. Termination
Upon Death or Disability, by Employee for Good Reason, or by Company without
Cause.

       

      (a) Employee’s
employment hereunder shall be terminated upon Employee’s death or Employee’s
total and/or permanent disability (as total disability, permanent disability, or
same or similar concepts are defined in the Company’s long-term disability plan
in effect from time to time and under which Employee is covered, or if the
Company has no long-term disability plan in effect and under which Employee is
covered, at the time of Employee’s disability event, total
and/or  permanent disability shall have the meaning provided in
Section 22(e)(3) of the Code, as used herein "Permanent
Disability").

       

      (b) Employee
may terminate Employee’s employment hereunder during the Term of Employment upon
60 days’ prior written notice to the Chairman of the Board of the Company if
Good Reason, as defined, exists or has occurred within the prior 60
days.

       

      “Good Reason” shall exist upon the occurrence of any
one of the following without Employee’s consent:

       

      (i) any
reduction of Employee’s annual base salary by more than 10% per
annum;

       

      (ii) the
Company requires Employee (without the consent of Employee) to be based at any
place outside a 50 mile radius of Employee’s prior place of employment, except
for reasonably required travel on the Company’s business, or, in the event
Employee consents to any relocation beyond such 50-mile radius, the failure of
the Company to pay (or reimburse Employee) for reasonable moving expenses
incurred by Employee relating to a change of Employee’s principal residence in
connection with such relocation;

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      (iii) a
substantial reduction in Employee’s position or
responsibilities;

       

      (iv) any
material breach by the Company of any provision of this
Agreement;

       

      (v) the
Company makes an assignment for the benefit of the creditors of the Company or
one or more of its material Subsidiaries or files a voluntary petition under the
Federal Bankruptcy Code or state solvency law on behalf of the Company;
or

       

      (vi) any
failure of any successor of the Company to assume or agree to perform, this
Agreement, either as contemplated in Section 20 hereof or
otherwise.

       

      (c) The
Company may terminate Employee’s employment hereunder during the Term of
Employment without Cause upon 60 days’ prior written notice to Employee,
provided that such termination by the Company shall require the affirmative vote
of a majority of the Continuing
Directors.

       

      (d) Upon
Employee’s termination of employment hereunder in those circumstances described
above in this Section 10, Employee shall be paid an amount equal to three times
his Annual Compensation Amount.

       

      (e) The
total cash payments to be made by the Company to Employee under the provisions
of this Section 10, shall be paid to Employee as
follows:

       

      (i) Except
in those circumstances covered by subparagraph (iii) below, 16.66% of such total
cash payments shall be paid in a lump sum on Employee’s 409A Date, together with
six months of interest calculated thereon at the Interest
Rate;

       

      (ii) Except
in those circumstances covered by subparagraph (iii) below, the remaining
portion of such total cash payments shall be paid over a thirty-month period,
commencing on the first or fifteenth day of the month immediately following the
409A Date, and shall be paid on a twice per month basis in equal
installments;

       

      (iii) Provided
that in the event of Employee’s death during the Term of Employment, the Company
shall pay the amounts required to be paid under this Agreement in a lump sum to
the estate of Employee as soon as administratively possible after, but in any
event not more than 90 days after, the date of the Employee’s
death;

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      (iv) If
either a Change of Control or Employee’s death occurs after Employee’s
Termination Date but prior to Employee’s or Employee’s estate’s receipt of all
cash payments to be made to Employee or Employee’s estate under Section 10(e)(i)
or (ii) above, then any remaining amounts payable will instead be paid to
Employee or Employee’s estate as soon as administratively possible, but in no
event more than 90 days, following such Change of Control or Employee’s
death.  For the purpose of this Section 10(e)(iv), Change of Control
shall mean a change of control as defined in Treasury Regulations Section
1.409A-3(i)(5).

       

      (f) Effective
immediately prior to the termination of Employee’s employment in those
circumstances described above in this Section 10, all outstanding unexercised
equity awards held by Employee and previously granted to Employee under the
Company’s equity compensation plans shall become 100% vested and 100%
exercisable by Employee or by Employee’s estate, as applicable, and remain
exercisable until expiration of each such award under its original
terms.

       

      11. Termination In
Connection with Change of
Control.

       

      (a) Upon
Employee’s termination of employment hereunder in those circumstances which
entitle Employee to payment under the terms of the Company’s COC Severance Plan,
as it may be duly amended from time to time, Employee shall be entitled to
receive from the Company under the COC Severance Plan those cash amounts to be
paid to Officers of the Company thereunder, plus an additional amount equal to
50% of the cash amounts provided to be paid under the Company’s COC Severance
Plan to Officers of the Company, plus the benefits provided in the COC Severance
Plan, including continuation of medical and dental insurance, matching 401-K
plan contributions by the Company, and reimbursement of out-placement services,
in each case as required to be paid under the terms of the Company’s COC
Severance Plan as duly amended from time to
time;

       

      (b) In
the Event of a Change of Control (as defined, respectively, in the Company’s
2001 Omnibus Stock Compensation Plan or 2005 Stock Compensation Plan, or any
successor or replacement equity compensation plan adopted by the Company after
the date hereof and under which equity awards are made to Employee), Employee
shall be entitled to the acceleration of vesting and exercisability of awards
held by Employee and previously granted under the Company’s equity compensation
plans which is specified in such equity compensation plans, as such plans may be
duly amended from time to time, but without regard to any such plans’ exclusion
from accelerated vesting or exercisability upon a Change of Control of awards
outstanding for less than a specific period of time set out in such
plans.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (c) The
additional cash payment to be made by the Company to Employee under the
provisions of Section 11(a) shall be paid to Employee in a lump sum in cash on
the same date as payments are made to Employee under the COC Severance
Plan.

       

      (d) Notwithstanding
anything to the contrary in this Agreement, in the event that any payment,
distribution, or other benefit provided by the Company to or for the benefit of
Employee, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (a “Payment”), would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, or any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest or penalties, are hereinafter
collectively referred to as the “Excise Tax”), the Company shall pay to Employee
an additional payment (a “Gross-up Payment”) in an amount such that after
payment by Employee of all taxes on a Payment (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax imposed
on any Gross-up Payment, Employee retains an amount of the Gross-up Payment
equal to the Excise Tax imposed upon a Payment.  The Company and
Employee shall make an initial determination as to whether a Gross-up Payment is
required and the amount of any such Gross-up Payment.  Employee shall
notify the Company immediately in writing of any claim by the Internal Revenue
Service which, if successful, would require the Company to make a Gross-up
Payment (or a Gross-up Payment in excess of that, if any, initially determined
by the Company and Employee) within fifteen days of the receipt of such
claim.  The Company shall notify Employee in writing at least ten days
prior to the due date of any response required with respect to such claim if it
plans to contest such claim.  If the Company decides to contest such
claim, Employee shall cooperate fully with the Company in such action; provided,
however, the Company shall bear and pay directly or indirectly all costs and
expenses (including additional interest and penalties) incurred in connection
with such action and shall indemnify and hold Employee harmless, on an after-tax
basis, for any Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of the Company’s action.  Any
Gross-Up Payment pursuant to this provision shall be paid on the first business
day that is at least six months after the Employee’s termination of
employment.  In any event, the Gross-Up Payment shall be made no later
than the end of the Employee’s taxable year next following the taxable year in
which the related Excise Tax is remitted to the Internal Revenue Service or any
other applicable taxing authority.  If, as a result of the Company’s
action with respect to a claim, Employee receives a refund of any amount paid by
the Company with respect to such claim, Employee shall promptly pay such refund
to the Company.  If the Company fails to timely notify Employee
whether it will contest such claim or the Company determines not to contest such
claim, then the Company shall within 10 days of such failure or determination
pay to Employee the portion of such claim, if any, which it has not previously
paid to Employee.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      12. Termination by
Employee Upon Achieving Senior Officer
Tenure.

       

      (a) Employee
may terminate his employment hereunder during the Term of Employment upon
Employee achieving Senior Officer Tenure, as defined below, and having provided,
once Senior Officer Tenure has been achieved, at least six months’ prior written
notice to the Company of Employee’s intention to terminate his employment
hereunder, unless the Compensation Committee of the Company’s Board of Directors
has given its prior consent to a lesser prior notice
period.

       

      (b) “Senior
Officer Tenure” shall only be achieved when all of the following conditions are
met:

       

      (i) The
one-year anniversary of this Agreement has
occurred;

       

      (ii) Employee
has reached 55 years of age or older;
and

       

      (iii) Employee
has been employed by the Company for a minimum of ten
years.

       

      (c) Upon
Employee’s termination of employment after having achieved Senior Officer Tenure
and having provided the required prior notice, Employee shall be paid an amount
equal to two times his Annual Compensation Amount; provided
that:

       

      (i) if
prior to receiving all cash payments to be made to Employee under this Section
12, Employee becomes entitled to an earlier lump sum payment under the Company’s
COC Severance Plan, then in lieu of payment of the remaining amounts to be paid
under this Section 12, Employee shall be paid the difference between the lump
sum Change of Control payment to be paid under the Company’s COC Severance Plan
and the amounts already paid to Employee under this Section 12, with such
difference to be paid on such earlier payment date when payments are made to
Company employees under the COC Severance Plan;
and

       

      (ii) if
Employee has provided the notice under this Section 12 of Employee’s intention
to terminate his employment hereunder, and Employee’s death or Disability occurs
prior to Employee’s estate or Employee receiving all payments otherwise to be
paid under the provisions of this Section 12, then in lieu of payment of the
remaining amounts to be paid under this Section 12, Employee’s estate, or
Employee, as applicable, shall be paid, as soon as administratively possible but
in no event more than 90 days following Employee’s death or Disability, the
difference between the total amount to be paid on death or Disability under
Section 10 and the amounts already paid to Employee under this Section
12.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      (d) Subject
to the provisions of Section 12(c)(i) and (ii) above, the total cash payments to
be made by the Company to Employee under the provisions of this Section 12,
shall be paid to Employee as
follows:

       

      (i) One-quarter
of such total cash payments shall be paid in a lump sum on the Employee’s 409A
Date, together with six months of interest calculated thereon at the short-term
AFR rate published by the Internal Revenue Service for the month of the
Termination Date (the “Interest
Rate”);

       

      (ii) The
remaining portion of such total cash payments shall be paid over an
eighteen-month period, commencing on the first or fifteenth day of the month
immediately following the 409A Date, and shall be paid on a twice per month
basis in equal installments.

       

      (e) Effective
immediately prior to termination of Employee’s employment in those circumstances
described in this Section 12, but expressly subject to Employee having provided
the required prior notice called for above under the provisions of this Section
12, all outstanding unexercised options to purchase shares of common stock of
the Company held by Employee immediately prior to the Termination Date shall
immediately vest or be deemed to have vested, and otherwise Employee shall
retain any such unexercised options with no change in the number of shares
covered by such options, the date such options first become exercisable, the
period over which they are exercisable, or their exercise
price.

       

      (f) Effective
immediately prior to Employee’s Termination Date in those circumstances
described above in this Section 12, unless, following Employee’s giving prior
written notice pursuant to Section 12(a) above of his intention to terminate his
employment thereunder, a majority of those Continuing Directors who are
“independent,” within the meaning prescribed by the rules and policies of the
New York Stock Exchange or other exchange upon which the Company’s common stock
is listed determine that (i) Employee has not adequately provided the services
called for under Section 2 of this Agreement and any additional services
reasonably requested by the Company, including but not limited to any
appropriate action useful to facilitate the transition of his position as an
officer of the Company to his designated successor, or (ii) Employee has
otherwise failed to act in compliance with the Company’s Code of Ethics and
Business Conduct, and if applicable its Code of Ethics for Senior Financial
Officers and Principal Executive Officer, all unvested restricted stock or other
equity awards (other than stock options, which are covered by the provisions of
the immediately preceding paragraph) held by Employee and/or previously granted
to Employee under the Company’s equity compensation plans shall become 100%
vested and exercisable, if Employee has provided to the Company the services
called for under Section 2 of this Agreement on a full-time basis for the full
six-month period (or shorter period, if any, approved by the Compensation
Committee) between the date of providing written notice of his intent to
terminate his employment hereunder and his Termination Date;  provided
that if after giving the required prior notice called for under the provisions
of Section 12(a) above, Employee’s death occurs, or there is a Change of
Control, then any such equity which is subject to the requirements of this
Section 12(f) will instead be delivered as soon as administratively possible,
but in no event more than 90 days, following such death or Change of
Control.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      13. Health and Life
Insurance.  In the event Employee’s employment is terminated
hereunder, the Company shall provide the following health and life insurance
benefits:

       

      (a) Upon
Employee’s termination of employment under this Agreement other than upon
Employee’s termination for Cause or upon Employee’s death, the Company shall be
responsible for a one-year period following Employee’s Termination Date, the
scheduled premium payments (on or before their due dates) on any universal life
insurance policy covering Employee’s life which is in force immediately prior to
the Termination Date; provided, however, that the Company shall be obligated to
pay any such premiums only to the extent that, and on the same basis as,
payments are made by the Company on the universal life insurance policies
covering officers of the Company with same or similar coverage and further
provided that during the period of six months immediately following the
Employee’s Termination Date, the Employee shall be obligated to pay the Company
the full cost for any such premium payments, and the Company shall reimburse the
Employee for any such payments on the first business day that is more than six
months after the Employee’s Termination Date, together with interest on such
amount from the Termination Date through the date of payment at the Interest
Rate.

       

      (b) Upon
Employee’s termination of employment under this Agreement other than upon a
Change of Control (which shall be governed by the COC Severance Plan),
Employee’s termination for Cause, or upon Employee’s death, the Company shall,
at its expense, provide such medical and dental coverage as in effect
immediately prior to the Termination Date for Employee and Employee’s then
covered dependents until the end of the period designated for payments to be
made hereunder.  Thereafter, Employee and his qualified beneficiaries
shall be entitled to continue health insurance benefits, under and through the
terms of the applicable COBRA law and regulations, at Employee’s own expense
until the expiration of COBRA
coverage.

       

      (c) In
the event of Employee’s death during the Term of Employment for a twelve-month
period after his death the Company shall make available at its expense medical
and dental insurance covering Employee’s spouse and his dependents
(collectively, “Employee’s Beneficiaries”) who would have been covered (if the
Term of Employment had continued) by the Company’s medical and dental insurance
policies as then in effect, and (ii) thereafter for an additional six-month
period, such medical and dental insurance in effect from time to time shall be
provided to Employee’s Beneficiaries, with Employee’s Beneficiaries (or estate
if applicable) to reimburse the Company for the cost of comparable coverage
under the provisions of this clause (ii), unless otherwise prohibited by
applicable law Thereafter, Employee and his qualified beneficiaries shall be
entitled to continue health insurance benefits, under and through the terms of
the applicable COBRA law and regulations, at Employee’s own expense until the
expiration of COBRA coverage.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      (d) Any
taxable welfare benefits provided pursuant to this Section 13 that are not
“disability pay” or “death benefits” within the meaning of Treasury Regulation
Section 1.409A-1(a)(5) (collectively, the “Applicable Benefits”) shall be
subject to the following requirements in order to comply with Section 409A of
the Code.  The amount of any Applicable Benefit provided during one
taxable year shall not affect the amount of the Applicable Benefit provided in
any other taxable year, except that with respect to any Applicable Benefit that
consists of the reimbursement of expenses referred to in Section 105(b) of the
Code, a limitation may be imposed on the amount of such reimbursements over some
or all of the applicable severance period, as described in Treasury Regulation
Section 1.409A-3(i)(iv)(B).  To the extent that any Applicable Benefit
consists of the reimbursement of eligible expenses, such reimbursement must be
made on or before the last day of the calendar year following the calendar year
in which the expense was incurred.  No Applicable Benefit may be
liquidated or exchanged for another
benefit.

       

      14. Governing
Law.  This Agreement shall be governed by and construed under
the laws of the State of Texas.

       

      15. Notice.  Any
notice, payment, demand or communication required or permitted to be given by
this Agreement shall be deemed to have been sufficiently given or served for all
purposes if delivered personally to and signed for by the party or to any
officer of the party to whom the same is directed or if sent by registered or
certified mail, return receipt requested, postage and charges prepaid, addressed
to such party at its address set forth below such party's signature to this
Agreement or to such other address as shall have been furnished in writing by
such party for whom the communication is intended.  Any such notice
shall be deemed to be given on the date so
delivered.

       

      16. Severability.  In
the event any provisions hereof shall be modified or held ineffective by any
court, such adjudication shall not invalidate or render ineffective the balance
of the provisions hereof.

       

      17. Entire
Agreement.  This Agreement constitutes the sole agreement
between the parties and supersedes any and all other agreements, oral or
written, relating to the subject matter covered by the
Agreement,  with the exception of (i) certain Indemnity Agreements
which may exist between the Company and Employee, and which remain in force
independent of this Agreement, and (ii) the terms of the Company’s equity
compensation plans which are not otherwise specifically addressed in this
Agreement.

       

      18. Waiver.  Any
waiver or breach of any of the terms of this Agreement shall not operate as a
waiver of any other breach of such terms or conditions, or any other terms or
conditions, nor shall any failure to enforce any provisions hereof operate as a
waiver of such provision or any other provision
hereof.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      19. Assignment.  This
Agreement is a personal employment contract and the rights and interests of
Employee hereunder may not be sold, transferred, assigned or
pledged.

       

      20. Successors.  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, representatives, successors (including specifically
any successor to the Company by merger, reorganization or
otherwise).

       

      21. Disputes.

       

      (a) Subject
to Section 21(b) below, if a dispute arises under this Agreement arising out of,
related to or in connection with, the payment of amounts provided hereunder to
be paid by the Company to Employee, the timing of such payments or their
calculation or, questions regarding the breach of the terms hereof or the issue
of arbitrability (a “Dispute”), and the dispute cannot be settled through direct
discussions by the parties within a reasonable amount of time, the Company and
Employee agree that such disputes shall be referred to and finally resolved by,
binding arbitration in accordance with the provisions of Exhibit A
hereto.  The Company will pay the actual fees and expenses of the
arbitrators, and the parties shall bear equally all other expenses of such
arbitration, unless the arbitrators determine that a different allocation would
be more equitable.  The award of the arbitrators will be the exclusive
remedy of the parties for such
disputes.

       

      (b) Section
21(a) to the contrary notwithstanding, it is expressly agreed that if based upon
events which take place after, by, on account of, or in connection with, a
Change of Control it becomes necessary in Employee’s judgment for him to sue the
Company in order to collect amounts to be paid to him under this Agreement or
otherwise enforce his rights under this Agreement, then the Company will be
obligated to pay both its own and Employee’s legal fees in such litigation,
including the obligation of the Company to pay Employee’s legal fees within
thirty days of receiving invoices therefor from
Employee.

       

      (c) Jurisdiction
and venue of any action relating to this Agreement or Employee’s employment by
the Company (subject to the provisions of Section 21(a) hereof), shall be in the
state courts of Houston, Harris County,
Texas.

       

       

       

      [Signatures
on following page]

       

       

       

       


      
        
          
                                                                          


          

           


        

        
          14

          
            

          

        

        
           


        

      


      


      IN
WITNESS WHEREOF, the parties hereto affixed their signatures hereunder as of the
date first above written.

      
 

      
 

      
        	 
      	 
      	 
      
	 
      	
                SWIFT
      ENERGY COMPANY

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:
      s/b Bruce H. Vincent

              	 
      
	 
      	
                Name:  Bruce
      H. Vincent

              	 
      
	 
      	
                Title:  President
      and Secretary

              	 
      
	 
      	
                 

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                "EMPLOYEE"

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                s/b
      Terry E. Swift

              	 
      
	 
      	
                Terry
      Swift

              


      

      
 

      


      


      



      
        
          
                                                                          


          

           


        

        
          15

          
            

          

        

        
           


        

      


      EXHIBIT
A

      


      DISPUTE
RESOLUTION PROCEDURES

      


      1. Applicable
Law/Arbitration.  Venue for the arbitration provided under Section 18
(a) of the Agreement shall be in Houston, Harris County,
Texas.  Except for the limited rights described in Paragraph 9 below,
the parties waive their right to file a lawsuit in a court of law to prosecute
any Dispute.

      
 

      2. Negotiation.  When a Dispute
has arisen and negotiations have reached an impasse, either party may give the
other party written notice of the Dispute. In the event such notice is given,
the parties shall attempt to resolve the Dispute promptly by
negotiation.  Within ten (10) days after delivery of the notice, the
receiving party shall submit to the other a written response. Thereafter, the
parties shall promptly attempt to resolve the Dispute. All reasonable requests
for information made by one party to the other will be
honored.

      
 

      3. Confidentiality of Settlement
Negotiations.  All
negotiations and proceedings pursuant to Paragraph 2 above are confidential and
shall be treated as compromise and settlement negotiations for purposes of
applicable rules of evidence and any additional confidentiality protections
provided by applicable law.

      
 

      4. Commencement of
Arbitration.  If the Dispute
has not been resolved by negotiation within fifteen (15) days of the disputing
party’s notice, or if the parties have failed to confer within fifteen (15) days
after delivery of the notice, either party may then initiate arbitration by
providing written notice of arbitration to the other party.  In order
to be valid, the notice shall contain a precise and complete statement of the
Dispute. Within fifteen (15) days of receipt of the notice initiating
arbitration, the receiving party shall respond by providing a written response
which shall include its precise and complete response to the Dispute, and which
includes any counter Dispute that the responding party may
have.

      
 

      5. Selection of
Arbitrator(s).  The
arbitration may be conducted and decided by a single person that is mutually
agreeable to the parties and knowledgeable and experienced in the type of matter
that is the subject of the Dispute if a single arbitrator can be agreed upon by
the parties.  If the parties cannot agree on a single arbitrator
within ten (10) days of the date of the response to the notice of arbitration,
then the arbitration shall be determined by a panel of three (3)
arbitrators.  To select the three arbitrators, each party shall,
within ten (10) days of the expiration of the foregoing ten day period, select a
person that it believes has the qualifications set forth above as its designated
arbitrator, and such arbitrators so designated shall mutually agree upon a
similarly qualified third person to complete the arbitration panel and serve as
its chairman.  In the event that the persons selected by the parties
are unable to agree upon a third member of the arbitration panel within ten (10)
days after the selection of the latter of the two arbitrators, then he/she shall
be selected from the CPR (as defined below) panel using the CPR
rules.  Once selected, no arbitrator shall have any ex parte
communications with either party.

       

      6. Arbitration
Process.  The arbitration
hearing shall commence within a reasonable time after the selection of the
arbitrator(s), as set by the arbitrator(s).  The arbitrator(s), shall
allow the parties to engage in pre-hearing discovery, to include exchanging (i)
requests for and production of relevant documents, (ii) up to fifteen (15)
interrogatories, (iii) up to fifteen (15) requests for admissions, and producing
for deposition and at the arbitration hearing, up to four (4) persons within
each parties’ control.  Any additional discovery shall only occur by
agreement of the parties or as ordered by the arbitrator(s) upon a finding of
good cause.  The arbitration shall be conducted under the rules of the
CPR International Institute for Conflict Prevention & Resolution (“CPR”) in
effect on the date of notice of the Dispute for dispute resolution rules for
non-administered arbitration of business disputes.  The parties may
agree on such other rules to govern the arbitration that are not set out in this
provision as they may mutually deem
necessary.

      
              
7. Arbitration
Decision.  The
arbitrator(s) shall have the power to award interim relief, and to grant
specific performance.  The arbitrator(s) may award interest at the
Default Interest Rate.  Except as may be specifically limited
elsewhere in this Financing Lease, the arbitrator’s decision may be based on
such factors and evidence as the arbitrator(s) deems fit.  The
arbitrator(s) shall be required to render a written decision to the parties no
later than fifteen (15) days after the completion of the
hearing.

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      8. Arbitration
Award.  The award of a
majority of the arbitrator(s) shall be final, conclusive and
binding.  The award rendered by the arbitrator(s) may be entered in
any court having jurisdiction in respect thereof, including any court in which
an injunction may have been sought.

      
              
9. Injunctive
Relief.  With respect to the
Dispute, controversy or claim between the parties, nothing in this Exhibit A
shall prevent a party from immediately seeking injunctive relief in a court to
maintain the status quo during the
arbitration.


      
        
          
                                                                             


          

           


        

        
          17