exhibit10-2.htm


    


      Exhibit
10.2

       

      


       

      SWIFT
ENERGY COMPANY

       

      CHANGE
OF CONTROL SEVERANCE PLAN

       

      November
4, 2008

       

      INTRODUCTION

       

      The Board
of Directors of Swift Energy Company (the “Company”) recognizes that, as is the
case with many publicly held corporations, there exists the possibility of a
Change of Control of the Company. This possibility and the uncertainty it
creates may result in the loss or distraction of employees of the Company and
its Subsidiaries to the detriment of the Company and its
shareholders.

       

      The Board
considers the avoidance of such loss and distraction to be essential to
protecting and enhancing the best interests of the Company and its shareholders.
The Board recognizes that the oil and gas industry is currently facing shortages
qualified personnel making it difficult to attract and retain highly qualified
employees unless a certain degree of security can be offered to such individuals
against organizational and personnel changes which could result from a Change of
Control (as defined below) of the Company.

       

      The Board
recognizes that its employees and employees of Subsidiaries that become
Employers (as defined below) will be involved in evaluating or negotiating any
offers, proposals or other transactions which could result in a Change of
Control of the Company and believes that it is in the best interest of the
Company and its shareholders for such employees to be in a position, free from
personal financial and employment considerations, to assess objectively and
pursue aggressively the interests of the Company and its shareholders in making
these evaluations and carrying on such negotiation.

       

      In
addition, the Board believes that it is consistent with the employment practices
and policies of the Company and its Subsidiaries and in the best interests of
the Company and its shareholders to treat fairly its employees whose employment
terminates in connection with or due to a Change of Control.

       

      Accordingly,
the Board has determined that appropriate steps should be taken to assure the
Company and its Subsidiaries that have adopted this Plan of the continued
employment and attention and dedication to duty of their employees and to seek
to ensure the availability of their continued service, notwithstanding the
possibility, threat or occurrence of a Change of Control.

       

      In order
to fulfill the above purposes, the Board hereby adopts the Swift Energy Company
Change of Control Severance Plan (the “Plan”) as of the Effective
Date.

       

      ARTICLE
I

       

      ESTABLISHMENT
OF PLAN

       

      As of the
Effective Date, the Company hereby establishes a separation compensation plan
known as the Swift Energy Company Change of Control Severance Plan, as set forth
in this document.

       

      
        
          
          

        

        
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      ARTICLE
II

       

      DEFINITIONS

       

      As used
herein the following words and phrases shall have the following respective
meanings unless the context clearly indicates otherwise.

       

      2.1 Affiliate. Any entity which
controls, is controlled by, or is under common control with the
Company.

       

      2.2 Base Salary.  The
annual base salary which was paid to each Employee immediately prior to the
announcement of a Change of Control.

       

      2.3 Board. The Board of Directors
of Swift Energy Company.

       

      2.4 Bonus. The highest annual
cash bonus that the Participant was paid in the 36 months immediately preceding
the Change of Control.

       

      2.5 Cause. For purposes of this
Plan only, the Employer shall have “Cause,” to terminate a Participant for the
Participant’s (i) failure to substantially perform his or her duties with the
Employer (other than a failure resulting from the Participant’s incapacity due
to physical or mental illness), (ii) conviction (or plea of nolo contendere) for
any felony or any other crime which involves moral turpitude; (iii) gross
negligence or willful misconduct in the performance of the Participant’s duties,
or (iv) breach or violation of any material policy of the Employer or its
affiliate; provided, however, that determination of whether one or more of the
elements of “Cause” has been met under this Plan shall be in the reasonable
discretion of the Employer, and, provided further, that with respect to
Participants who are parties to employment agreements with an Employer, the
foregoing definition shall not apply and as to such Participants “Cause” shall
have the meaning set forth in any such employment agreement to which they are
parties.

       

      2.6 Change of Control. A Change
of Control shall be deemed to have occurred upon the occurrence of any one (or
more) of the following events, other than a transaction with another person
controlled by the Company or its officers or directors, or a benefit plan or
trust established by the Company for its employees:

       

      (a) Any
person including a group as defined in Rule 13d-5 under the Securities Exchange
Act of 1934, as amended (“Exchange Act”), becomes the beneficial owner or shares
of the Company with respect to which 40% or more of the total number of votes
for the election of the Board may be cast;

       

      (b) As a
result of, or in connection with, any cash tender offer, exchange offer, merger
or other business combination, sale of assets or contested election, or
combination of the above, persons who were directors of the Company immediately
prior to such event shall cease to constitute a majority of the
Board;

       

      (c) The
shareholders of the Company shall approve an agreement providing either for a
transaction in which the Company will cease to be an independent publicly owned
corporation or for a sale or other disposition of all or substantially all the
assets of the Company; or

       

      (d) A tender
offer or exchange offer is made for shares of the Company’s common stock (other
than one made by the Company), and shares of common stock are acquired
thereunder.

       

      
        
          
          

        

        
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      Notwithstanding
the foregoing provisions of this Section 2.6, if a
Participant’s employment with the Employer is terminated by the Employer other
than for “Cause” prior to the date on which a Change of Control occurs but after
such Change of Control is announced, and in any case, within two years of the
occurrence of such Change of Control, then for all purposes hereof, such
termination shall be deemed to have occurred due to a Change of
Control.

       

      Notwithstanding
the foregoing provisions of this Section 2.6, in the
event a benefit provided upon the occurrence of a Change of Control is subject
to Section 409A of the Code, then to the extent necessary to comply with the
requirements of Section 409A of the Code, the definition of “Change of Control”
for purposes of such benefit shall be the definition provided for under Section
409A of the Code and the regulations or other guidance issued
thereunder.

       

      2.7 Code. The Internal Revenue
Code of 1986, as amended from time to time.

       

      2.8 Company. Swift Energy Company
and any successor to Swift Energy Company.

       

      2.9 Confidential Information. The
unique and proprietary business and technical information, including but not
limited to inventions, trade secrets, patents, proprietary and confidential data
(including engineering, geophysical, geological and computer program data) and
Employee’s knowledge of the Company, its Affiliates, Subsidiaries, joint venture
partners, industry partners, customers and contractors, including any
proprietary, confidential or non-public information about the Company, its
business, projections or business plans which is conceived or obtained by
Employee in the course of his or her employment. Notwithstanding anything else
contained in the Plan, the term “Confidential Information” shall not be deemed
to include any general knowledge, skills or experience acquired by Employee or
any knowledge or information known to the public in general.

       

      2.10 Continuing Director. The term
“Continuing Director” means any individual who is a member of the Board on the
date hereof or was nominated for election as a director by, or whose nomination
as a director was approved by, the Board with the affirmative vote of a majority
of the directors described in the first clause of this definition, unless any
such individual’s initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a person or entity other than the Board.

       

      2.11 Date of Termination. The date
on which a Participant ceases to be an Employee of an Employer as a result of a
Separation from Service as determined in accordance with the provisions of
Section 409A of the Code and the Internal Revenue Service and Treasury guidance
thereunder.

       

      2.12 Disability. A Participant
shall be disabled for purposes of this Plan if the Participant meets the
criteria for permanent disability (as total disability, permanent disability, or
the same or similar concepts) under the Company’s long-term disability plan in
effect from time to time, or if the Company has no long-term disability plan in
effect 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.

       

      2.13 Effective Date. November 4,
2008.

       

      2.14 Employee.  Any
employee of an Employer, regardless of position, who is normally scheduled to
work 30 or more hours per week for such Employer and who has been employed by an
Employer for at least six months at the Date of Termination as a result of a
Separation from Service without Cause or for Good Reason; provided, however,
that the term “Employee” will apply to persons who have been employed by an
Employer for less than six months if a majority of the Continuing Directors
determines that such person should be designated as an Employee.

       

      
        
          
          

        

        
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      2.15 Employee Participant. Any
Employee of an Employer, other than a Managerial Participant or Officer, who is
designated as an Employee Participant pursuant to Section 3.1
below.

       

      2.16 Employer. The Company and any
Subsidiary that participates in the Plan pursuant to Article V
hereof.

       

      2.17 ERISA. The Employee
Retirement Income Security Act of 1974, as amended from time to
time.

       

      2.18 Good Reason. Good Reason
means, with respect to any Participant, the occurrence, without such
Participant’s written consent, of any one of the following after the
announcement of a Change of Control but within two years after a Change of
Control transaction, or otherwise in connection with a Change of Control
transaction:

       

      (a) any
reduction in the Participant’s annual Base Salary, as in effect during the
120-day period immediately preceding the Change of Control (or as such amount
may be increased from time to time);

       

      (b) the
Employer requiring the Participant (without the consent of the Participant) to
be based at any place outside a 50 mile radius of his or her prior place of
employment immediately prior to a Change of Control, except for reasonably
required travel on the Employer’s business which is not materially greater than
such travel requirements prior to the Change of Control, or, in the event the
Participant consents to any relocation beyond such 50-mile radius, the failure
of the Employer to pay (or reimburse the Participant) for reasonable moving
expenses incurred by him or her relating to a change of his or her principal
residence in connection with such relocation (other than costs incurred in the
sale of his or her residence);

       

      (c) a
substantial reduction in the Participant’s position or responsibilities as in
effect immediately prior to the Change of Control;

       

      (d) any
material breach by the Employer of any provision of this Plan;

       

      (e) the
Company or its successor makes an assignment for the benefit of the creditors of
the Company or one or more of its Subsidiaries or files a voluntary petition
under the Federal Bankruptcy Code or state solvency law on behalf of the Company
or any successor following a Change of Control; or

       

      (f) any
failure of any successor of the Company to assume, or agree to perform, this
Plan as contemplated in Article VI, or otherwise.

       

      2.19 Managerial
Participant.  Any Employee who has sufficient responsibilities
and/or a sufficiently critical role to be designated as a Managerial
Participant, such determination and designation to be made by executive
management on an annual basis in writing, as supplemented from time to
time.

       

      2.20 Notice of Termination. A
notice which indicates the reasons relied upon as the basis for any termination
of employment and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Participant’s
employment; no purported termination of employment shall be effective without
such Notice of Termination.

       

      
        
          
          

        

        
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      2.21 Officer.  Any
Employee identified as an officer for purposes of this Plan by the Board,
provided the Board is comprised of a majority of Continuing Directors at the
time of such identification of officers.

       

      2.22 Participant. An Employee who
is designated as a participant pursuant to Section
3.1.

       

      2.23 Plan. The Swift Energy
Company Change of Control Severance Plan.

       

      2.24 Separation Benefits. The
benefits described in Article IV that are provided to qualifying Participants
under the Plan.

       

      2.25 Separation from Service. A
Participant separates from service with the Employer if the Participant dies,
retires or otherwise has a termination of employment with the
Employer.  Whether a termination of employment has occurred is
determined based on whether the facts and circumstances indicate that the
Employer and the Participant reasonably anticipated that no further services
would be performed after a certain date or that the level of bona fide services
the Participant would perform after such date (as an employee or 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 (or the full period in which the Participant provided services to the
Employer if the Participant has been providing services for less than 36
months).  A Participant will not be deemed to have experienced a
Separation from Service if such Participant is on military leave, sick leave, or
other bona fide leave of absence, to the extent such leave does not exceed a
period of six months or, if longer, such longer period of time during which a
right to re-employment is protected by either statute or contract.  If
the period of leave exceeds six months and the individual does not retain a
right to re-employment under an applicable statute or by contract, the
employment relationship is deemed to terminate on the first date immediately
following such six-month period.

       

      2.26 Subsidiary. Any entity of
which the Company owns, directly or indirectly, all of such entity’s outstanding
shares of capital stock or other voting securities.

       

      2.27 Year of Service. A Year of
Service shall be credited to a Participant for each full 12 months of employment
with the Company or any Affiliate, Subsidiary or predecessor to the Company. A
month of service shall be credited for each full month of employment with such
entities. Service shall also be credited for purposes of the Plan to the extent
required by any agreement between the Company and an entity acquired by or
merged with or into the Company or any Affiliate or Subsidiary of the
Company.

       

      ARTICLE
III

       

      ELIGIBILITY

       

      3.1 Participants.

       

      (a) This Plan
applies to three classifications of Participants:  Employee
Participants, Officer Participants and Managerial Participants.  Each
Employee shall be a Participant in the Plan if either (x) he or she was an
Employee on the date of a Change of Control, or (y) after the announcement of a
Change of Control, the Employee terminated his or her employment for Good Reason
before the actual Change of Control; provided, however, that no “leased
employee” shall be a Participant For the purpose of determining who is a
Participant, an Employee who is on a leave of absence approved by the Employer
in writing or authorized by applicable state or federal law on the date of a
Change of Control, shall be a Participant in the Plan.

       

      Notwithstanding
any provision of the Plan to the contrary, no individual who is designated,
compensated, or otherwise classified or treated by the Employer as an
independent contractor or other non-common law employee shall be eligible to
receive benefits under the Plan. It is expressly intended that individuals not
treated as common law employees by the Employer are to be excluded from Plan
participation even if a court or administrative agency determines that such
individuals are common law employees.

       

      
        
          
          

        

        
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      (b) If a
Participant’s employment is transferred from an Employer to a Subsidiary or
Affiliate of the Company that is not an Employer under the Plan, the provisions
of the Plan will continue to apply to such Participant while employed by such
Subsidiary or Affiliate.

       

      3.2 Duration of Participation. A
Participant shall only cease to be a Participant in the Plan as a result of an
amendment or termination of the Plan complying with Article VII of the Plan, or
when he or she ceases to be an Employee of any Employer under the Plan, unless,
at the time he or she ceases to be an Employee, such Participant is entitled to
payment of a Separation Benefit as provided in the Plan or there has been an
event or occurrence constituting Good Reason that would enable the Participant
to terminate his or her employment and receive a Separation Benefit. A
Participant entitled to payment of a Separation Benefit or any other amounts
under the Plan shall remain a Participant in the Plan until the full amount of
the Separation Benefit and any other amounts payable under the Plan have been
paid to the Participant.

       

      ARTICLE
IV

       

      SEPARATION
BENEFITS

       

      4.1 Terminations of Employment Which
Give Rise to Separation Benefits Under This Plan.

       

      (a) A
Participant shall be entitled to Separation Benefits as set forth in Sections 4.2, 4.3 or 4.4, as applicable,
if (i) at any time following the announcement of a Change of Control
transaction, or (ii) after the occurrence of a Change of Control transaction, or
(iii) otherwise in connection with a Change of Control transaction, BUT, in all
cases, prior to the second anniversary of the Change of Control, the
Participant’s employment is terminated as a result of a Separation from Service
(as determined in accordance with Section 409A of the Code and the Internal
Revenue Service and Treasury guidance thereunder) (i) by the Participant’s
Employer for any reason other than Cause, death, or Disability or (ii) by the
Participant for Good Reason within 120 days after the Participant has knowledge
of the occurrence of Good Reason; provided, however that any purported
termination of employment, either by the Employer or by the Participant, shall
be communicated by written Notice of Termination to the other.

       

      (b) The
benefits provided in this Article IV shall be no less favorable to the
Participant, in terms of amounts and deductibles and costs to him or her, than
the coverage provided the Participant under the plans providing such benefits at
the time Notice of Termination is given. The Employer’s obligation hereunder to
provide a benefit shall terminate if the Participant obtains comparable coverage
under a subsequent employer’s benefit plan. For purposes of the preceding
sentence, benefits will not be comparable during any waiting period for
eligibility for such benefits or during any period during which there is a
preexisting condition limitation on such benefits. In the event that the
Participant’s participation in any such coverage is barred under the general
terms and provisions of the plans and programs under which such coverage is
provided, or any such coverage is discontinued or the benefits thereunder are
materially reduced, the Employer shall provide benefits to the Participant, or
ensure that such benefits are provided to the Participant, that are
substantially similar to those which the Participant was entitled to receive
under such coverage immediately prior to the Notice of Termination. At the end
of the period of coverage set forth below, the Participant shall have the option
to have assigned to him or her at no cost to the Participant and with no
apportionment of prepaid premiums, any assignable insurance owned by the
Employer and relating specifically to the Participant, and the Participant shall
be entitled to all health and similar benefits that are or would have been made
available to the Participant under law.

       

      
        
          
          

        

        
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      (c) Notwithstanding
any other provision of the Plan, the occurrence with respect to a Subsidiary of
any of the events described in the definition of Change of Control set forth
above or other sale, divestiture or other disposition of a Subsidiary shall not
be deemed to be a termination of employment of Employees employed by such
Subsidiary, and such Employees shall not be entitled to benefits from any
Employer under this Plan as a result of such events, or as a result of any
subsequent termination of employment.

       

      4.2 Separation Benefits – Employee
Participants.

       

      (a) If the
Participant is an Employee Participant whose employment is terminated in
circumstances entitling such Employee Participant to Separation Benefits
pursuant to Section
4.1(a), the Employer shall provide to such Employee Participant cash
payments as set forth in subsection 4.2(b)
below, and shall provide to the Employee Participant continued benefits as set
forth in subsection
4.2(c) below. For purposes of determining the benefits set forth in subsections 4.2 (b)
and 4.2 (c), if
the termination of the Employee Participant’s employment is for Good Reason
based upon a reduction of the Employee Participant’s annual Base Salary, as
described in Section
2.18, a material reduction in the Employee Participant’s annual incentive
compensation plan as provided in Section 2.18, or the
failure to provide comparable employee benefits as provided in Section 2.18, such
reduction shall be ignored.

       

      (b) The cash
payments referred to in Section 4.2(a) shall
be the following amounts:

       

      (i) Six
months of then current Base Salary; plus

       

      (ii) 50% of
the Employee Participant’s Bonus; plus

       

      (iii) A “tenure
payment” equal to two percent of Base Salary for each Year of Service, through
the Date of Termination;

       

      provided
that the sum of the amounts paid to an Employee Participant, as set forth in
subsections 4.2(b)(i),
(ii), and (iii), may not exceed
an amount equal to the total of one year of Base Salary plus Bonus.

       

      (c) Benefits
referred to in Section
4.2(a):

       

      (i) The
Company will provide the same medical and dental insurance coverage in existence
as of the date of the announcement of the Change of Control for a period of six
months following the Termination Date; and

       

      (ii) With
respect to the Employee Participant’s 401(k) plan, the Company will match the
Employee Participant’s contribution for that portion of the Change of Control
year represented by the number of months prior to the Change of
Control.  The percentage of the Participant Employee’s contribution
which is matched by the Company will be equal to the percentage of the Employee
Participant’s contribution matched by the Company in the prior year. Such
matching contribution shall be contributed to the 401(k) plan on behalf of the
Participant unless such contribution would cause the plan to lose its tax
qualification, in which event the matching contribution shall be paid directly
to the Participant.

       

      4.3 Separation Benefits - Managerial
Participant.

       

      (a) If the
Participant is a Managerial Participant whose employment is terminated in
circumstances entitling such Managerial Participant to Separation Benefits
pursuant to Section
4.1(a), the Company shall provide to such Managerial Participant cash
payments as set forth in subsection 4.3(b)
below, and shall provide to the Managerial Participant continued benefits as set
forth in subsection
4.3(c) below. For purposes of determining the benefits set forth in subsections 4.3(b)
and 4.3(c), if
the termination of the Managerial Participant’s employment is for Good Reason
based upon a reduction of the Managerial Participant’s annual Base Salary, as
described in Section
2.18, a material reduction in the Managerial Participant’s annual
incentive compensation plan as provided in Section 2.18, or the
failure to provide comparable employee benefits as provided in Section 2.18, such
reduction shall be ignored.

       

      
        
          
          

        

        
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      (b) The cash
payments referred to in Section 4.3(a) shall
be the following amounts:

       

      (i) One year
of then current Base Salary; plus

       

      (ii) Bonus;
plus

       

      (iii) A “tenure
payment” equal to four percent of Base Salary for each Year of Service, through
the Date of Termination;

       

      provided
that the sum of the amounts paid to a Managerial Participant, as set forth in
subsections
4.3(b)(i), (ii), and (iii), may not exceed
an amount equal to the total of two years of Base Salary plus
Bonus.

       

      (c) Benefits
referred to in Section
4.3(a):

       

      (i) The
Company will provide the same medical and dental insurance coverage in existence
as of the date of the announcement of the Change of Control for a period of six
months following the Termination Date;

       

      (ii) With
respect to the Managerial Participant’s 401(k) plan, the Company will match the
Managerial Participant’s contribution for that portion of the Change of Control
year represented by the number of months prior to the Change of
Control.  The percentage of the Participant Manager’s contribution
which is matched by the Company will be equal to the percentage of the
Managerial Participant’s contribution matched by the Company in the prior
year.  Such matching contribution shall be contributed to the 401(k)
plan on behalf of the Participant unless such contribution would cause the plan
to lose its tax qualification, in which event the matching contribution shall be
paid directly to the Participant; and

       

      (iii) Fees to a
third party for outplacement services in an amount not to exceed
$4,000.

       

      4.4 Separation Benefits - Officer
Participants.

       

      (a) If the
Participant is an Officer Participant whose employment is terminated in
circumstances entitling such Officer Participant to Separation Benefits pursuant
to Section
4.1(a), the Company shall provide to such Officer Participant cash
payments as set forth in subsection 4.4(b)
below, and shall provide to the Officer Participant continued benefits as set
forth in subsection
4.4(c) below. For purposes of determining the benefits set forth in subsections 4.4(b)
and 4.4(c), if
the termination of the Officer Participant’s employment is for Good Reason based
upon a reduction of the Officer Participant’s annual Base Salary, as described
in Section
2.18, a material reduction in the Officer Participant’s annual incentive
compensation plan as provided in Section 2.18, or the
failure to provide comparable employee benefits as provided in Section 2.18, such
reduction shall be ignored.

       

      
        
          
          

        

        
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      (b) The cash
payments referred to in Section 4.4(a) shall
be the following amounts:

       

      (i) Two times
then current Base Salary; plus

       

      (ii) Two times
the Officer Participant’s Bonus.

       

      (c) Benefits
referred to in Section
4.4(a):

       

      (i) The
Company will provide the same medical and dental insurance coverage in existence
as of the date of the announcement of the Change of Control for a period of one
year following the Termination Date;

       

      (ii) With
respect to the Officer Participant’s 401(k) plan, the Company will match the
Officer Participant’s contribution for that portion of the Change of Control
year represented by the number of months prior to the Change of
Control.  The percentage of the Participant Officer’s contribution
which is matched by the Company will be equal to the percentage of the Officer
Participant’s contribution matched by the Company in the prior
year.  Such matching contribution shall be contributed to the 401(k)
plan on behalf of the Participant unless such contribution would cause the plan
to lose its tax qualification, in which event the matching contribution shall be
paid directly to the Participant; and

       

      (iii) Fees to a
third party for outplacement services in an amount not to exceed
$4,000.

       

      4.5 Other Benefits Payable. To
the extent not theretofore paid or provided, the Company or Employer, as
applicable, shall timely pay or provide (or cause to be paid or provided) to a
Participant entitled to the Separation Benefits, any other amounts or benefits
required to be paid or provided to the Participant or which the Participant is
eligible to receive under any plan, program, policy or practice or contract or
agreement of the Employer, provided, however, that if a Participant is entitled
to Separation Benefits under this Plan and is also entitled to separation
benefits under any other severance pay plan or policy of the Employer, or any
other agreement, including an employment agreement, the plan, policy or
agreement that provides the greatest amount of benefits will be applicable to
the Participant.

       

      4.6 Certain Additional Payments by the
Company.

       

      (a) Anything
in this Plan to the contrary notwithstanding and except as set forth below, in
the event it shall be determined that any payment or distribution by the
Employer to or for the benefit of a Participant (whether paid or payable or
distributed or distributable pursuant to the terms of this Plan or otherwise,
but determined without regard to any additional payments required under this
Section 4.6) (a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by the Participant with respect
to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the “Excise Tax”), then
the Participant shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Participant of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Participant retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.

       

      
        
          
          

        

        
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      (b) Subject
to the provisions of Section 4.6(c), all
determinations required to be made under this Section 4.6,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a nationally recognized certified public
accounting firm designated by the Company (the “Accounting Firm”) which shall
provide detailed supporting calculations both to the Company and the Participant
within 15 business days of the receipt of notice from the Participant that there
has been a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Company shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section
4.6, shall be paid by the Company to the Participant within 30
days  of the date the Gross-Up Payment is determined, unless the
Participant is a “specified employee” as defined in Code Section 409A, in which
event the Gross-Up Payment shall be made on the first business day that is at
least six months after the Participant’s Separation from Service, if
later.  In any event, the Gross-Up Payment shall be made no later than
the end of the Participant’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.  Any determination by the
Accounting Firm shall be binding upon the Company and the Participant. As a
result of any uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made (“Underpayment”), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 4.6(c) and
the Participant thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be paid by the Company to or for the benefit of
the Participant within 30 days after the Accounting Firm’s determination of the
amount of the Underpayment or such later time as may be required to comply with
Section 409A of the Code, but in no event no later than the end of the
Participant’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.

       

      (c) The
Participant shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as soon as practicable
but no later than 15 days after the Participant is informed in writing of such
claim and shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Participant shall not pay such
claim prior to the expiration of the 30-day period following the date on which
it gives such notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If the Company
notifies the Participant in writing prior to the expiration of such period that
it desires to contest such claim, the Participant shall:

       

      (i) give the
Company any information reasonably requested by the Company relating to such
claim,

       

      (ii) take such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company,

       

      (iii) cooperate
with the Company in good faith in order effectively to contest such claim,
and

       

      (iv) permit
the Company to participate in any proceedings relating to such
claim;

       

      provided,
however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Participant 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 such representation and payment of costs
and expenses.

       

      
        
          
          

        

        
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      (v) Without
limiting the foregoing provisions of this Section 4.6(c), the
Company shall control all proceedings taken in connection with such contest and,
at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Participant to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner,
and the Participant agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however, that
if the Company directs the Participant to pay such claim and sue for a refund,
the Company shall advance the amount of such payment to the Participant, on an
interest-free basis and shall indemnify and hold the Participant harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Participant with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Participant shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

       

      (d) If, after
the receipt by the Participant of an amount advanced by the Company pursuant to
Section 4.6(c),
the Participant becomes entitled to receive any refund with respect to such
claim, the Participant shall (subject to the Company’s complying with the
requirements of Section 4.6(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Participant of an amount advanced by the Company pursuant to
Section 4.6(c),
a determination is made that the Participant shall not be entitled to any refund
with respect to such claim and the Company does not notify the Participant in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be
paid.

       

      (e) All
payments to Participants in accordance with the provisions of this Plan shall be
subject to applicable withholding of local, state, federal and foreign taxes, as
determined in the sole discretion of the Company.

       

      4.7 Mitigation or Set-off of Amounts
Payable Hereunder. The Participant shall not be required to mitigate the
amount of any payment provided for in this Article IV by seeking other
employment or otherwise, and except as otherwise provided in Section 4.1(b), nor
shall the amount of any payment provided for in this Article IV be reduced by
any compensation earned by the Participant as the result of employment by
another employer after a Change of Control. The Employer’s obligations hereunder
also shall not be affected by any set-off, counterclaim, recoupment, defense or
other claim, right or action which the Employer may have against the
Participant.

       

      4.8 Time and Form of Payment. In
order to comply with Section 409A of the Code, the amounts described in Sections 4.2(b),
4.3(b) and
4.4(b) shall be
paid in a lump sum in cash no later than the 30th day following the Date of
Termination.  If the Participant is a “specified employee” as defined
in Code Section 409A and regulations thereunder, such amounts shall instead be
paid on the first business day that is at least six months after the Date of
Termination.

       

      
        
          
          

        

        
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      Any
taxable welfare benefits provided pursuant to this Article IV 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.  If the Participant is a
“specified employee” as defined in Code Section 409A, then during the period of
six months immediately following the Participant’s Separation from Service, the
Participant shall be obligated to pay the Company the full cost for any
Applicable Benefits that do not constitute health benefits of the type required
to be provided under the health continuation coverage requirements of Section
4980B of the Code, and the Company shall reimburse the Participant for any such
payments on the first business day that is more than six months after the
Participant’s Separation from Service.

       

      ARTICLE
V

       

      EMPLOYERS

       

      Any
Subsidiary of the Company may become an Employer under the Plan if approved by
the Company and such Subsidiary. Pursuant to Section 3.1, the
provisions of the Plan shall be fully applicable to the Employees of any such
Subsidiary that becomes an Employer.

       

      ARTICLE
VI

       

      SUCCESSOR
TO COMPANY

       

      This Plan
shall bind any successor of the Company, its assets or its businesses (whether
direct or indirect, by purchase, merger, consolidation or otherwise), in the
same manner and to the same extent that the Company would be obligated under
this Plan if no succession had taken place.

       

      In the
case of any transaction in which a successor would not by the foregoing
provision or by operation of law be bound by this Plan, the Company shall
require such successor expressly and unconditionally to assume and agree to
perform the Company’s obligations under this Plan, in the same manner and to the
same extent that the Company would be required to perform if no such succession
had taken place. The term “Company,” as used in this Plan, shall mean the
Company as hereinbefore defined and any successor or assignee to the business or
assets which by reason hereof becomes bound by this Plan.

       

      ARTICLE
VII

       

      DURATION,
AMENDMENT AND TERMINATION

       

      7.1 Duration. If a Change of
Control occurs while this Plan is in effect, this Plan shall continue in full
force and effect for two years following such Change of Control, and shall then
automatically terminate, provided, however, that all Participants who become
entitled to any payments or benefits hereunder shall continue to receive such
payments or benefits notwithstanding any termination of the Plan.

       

      
        
          
          

        

        
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      7.2 Amendment or Termination. The
Continuing Directors may amend or terminate this Plan for any reason prior to
the announcement of a Change of Control. In the event of a Change of Control,
this Plan shall automatically terminate on the second anniversary of the date of
the Change of Control, but may not be amended or terminated by either the Board
or the Continuing Directors between the date of the announcement of a Change of
Control and the second anniversary of the Change of Control.

       

      7.3 Procedure for Extension, Amendment
or Termination. Any extension, amendment or termination of this Plan by
the Continuing Directors in accordance with the foregoing shall be made by
action of the Continuing Directors in accordance with the Company’s charter and
by-laws and applicable law.

       

      ARTICLE
VIII

       

      PLAN
ADMINISTRATION

       

      8.1 Named Fiduciary;
Administration. The Company is the named fiduciary of the Plan, and shall
administer the Plan, acting through the Company’s officer with responsibility
over Human Resources, who shall be the Plan Administrator. The Plan
Administrator shall review and determine all claims for benefits under this
Plan.

       

      8.2 Claim Procedure.

       

      (a) If an
Employee or former Employee or his or her authorized representative (referred to
in this Article VIII as a “claimant”) makes a written request alleging a right
to receive benefits under this Plan or alleging a right to receive an adjustment
in benefits being paid under the Plan, the Company shall treat it as a claim for
benefits.

       

      (b) All
claims and inquiries concerning benefits under the Plan must be submitted to the
Plan Administrator in writing and be addressed as follows:

       

      Plan
Administrator

       

      Swift
Energy Company Change of Control Severance Plan

      Swift
Energy Company

      16825
Northchase Dr, Suite 400

      Houston,
Texas 77060

       

      The Plan
Administrator shall have full and complete discretionary authority to
administer, to construe, and to interpret the Plan, to decide all questions of
eligibility, to determine the amount, manner and time of payment, and to make
all other determinations deemed necessary or advisable for the Plan. The Plan
Administrator shall initially deny or approve all claims for benefits under the
Plan. The claimant may submit written comments, documents, records or any other
information relating to the claim. Furthermore, the claimant shall be provided,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant to the claim for
benefits.

       

      (c) Claims Denial. If any claim
for benefits is denied in whole or in part, the Plan Administrator shall notify
the claimant in writing of such denial and shall advise the claimant of his
right to a review thereof.  Such written notice shall set forth, in a
manner calculated to be understood by the claimant, specific reasons for such
denial, specific references to the Plan provisions on which such denial is
based, a description of any information or material necessary for the claimant
to perfect his claim, an explanation of why such material is necessary and an
explanation of the Plan’s review procedure, and the time limits applicable to
such procedures.  Furthermore, the notification shall include a
statement of the claimant’s right to bring a civil action under Section 502(a)
of ERISA following an adverse benefit determination on review. Such written
notice shall be given to the claimant within a reasonable period of time, which
normally shall not exceed 90 days, after the claim is received by the Plan
Administrator.

       

      
        
          
          

        

        
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      (d) Appeals.  From and
after the date of the announcement of a Change of Control, there shall be an
Appeals Committee for the purpose of appealing claims under this
Plan.  Subsequent to the announcement of a Change of Control but
before the actual occurrence of such Change of Control, the Appeals Committee
shall comprise three individuals employed by the Company who serve as officers
or managers and who are designated by the Chairman and Chief Executive Officer
of the Company as members of the Appeals Committee.  After the
occurrence of a Change of Control, the Appeals Committee shall comprise at least
three individuals who (x) served as officers or managers of Swift Energy Company
prior to the Change of Control, (y) remain employed by the Company or its
successor after the Change of Control, and (z) are designated by the Chairman
and Chief Executive Officer of the Company serving as such immediately prior to
the announcement of a Change of Control, regardless of whether he is still
employed by the Company or its successor at the time of appointment of the
members of the Appeals Committee.  After a Change of Control, any
claimant whose claim for benefits is denied in whole or in part may appeal, or
his duly authorized representative may appeal on the claimant’s behalf, such
denial by submitting to the Appeals Committee a request for a review of the
claim within 60 days after receiving written notice of such denial from the Plan
Administrator. The Appeals Committee shall give the claimant upon request, and
free of charge, reasonable access to, and copies of, all documents, records and
other information relevant to the claim of the claimant, in preparing his
request for review. The request for review must be in writing and be addressed
as follows:

       

      Appeals
Committee

       

      Swift
Energy Company Change of Control Severance Plan

      Swift
Energy Company

      16825
Northchase Dr, Suite 400

      Houston,
Texas 77060

       

      The
request for review shall set forth all of the grounds upon which it is based,
all facts in support thereof, and any other matters which the claimant deems
pertinent. The Appeals Committee may require the claimant to submit such
additional facts, documents, or other materials as the Appeals Committee may
deem necessary or appropriate in making its review.

       

      (e) Review of Appeals. The
Appeals Committee shall act upon each request for review within 60 days after
receipt thereof. The review on appeal shall consider all comments, documents,
records and other information submitted by the claimant relating to the claim
without regard to whether this information was submitted or considered in the
initial benefit determination. The Appeals Committee shall have full and
complete discretionary authority, in its review of any claims denied by the Plan
Administrator, to administer, to construe, and to interpret the Plan, to decide
all questions of eligibility, to determine the amount, manner and time of
payment, and to make all other determinations deemed necessary or advisable for
the Plan.

       

      (f) Decision on Appeals. The
Appeals Committee shall give written notice of its decision to the claimant. If
the Appeals Committee confirms the denial of the application for benefits in
whole or in part, such notice shall set forth, in a manner calculated to be
understood by the claimant, the specific reasons for such denial, and specific
references to the Plan provisions on which the decision is based. The notice
shall also contain a statement that the claimant is entitled to receive upon
request, and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant to the claimant’s claim for benefits.
Information is relevant to a claim if it was relied upon in making the benefit
determination or was submitted, considered or generated in the course of making
the benefit determination, whether it was relied upon or not. The notice shall
also contain a statement of the claimant’s right to bring an action under ERISA
Section 502 (a). If the Appeals Committee has not rendered a decision on a
request for review within 60 days after receipt of the request for review, the
claimant’s claim shall be deemed to have been approved. The Appeals Committee’s
decision shall be final and not subject to further review within the Company.
There are no voluntary appeals procedures after review by the Appeals
Committee.

       

      
        
          
          

        

        
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      (g) Time of Approved Payment. In
the event that either the Plan Administrator or the Appeals Committee determines
that the claimant is entitled to the payment of all or any portion of the
benefits claimed, such payment shall be made to the claimant in accordance with
Section 4.8 or
within 30 days of the date of such determination or such later time as may be
required to comply with Section 409A of the Code.

       

      (h) Determination of Time
Periods. If the day on which any of the foregoing time periods is to end
is a Saturday, Sunday or holiday recognized by the Company, the period shall
extend until the next following business day.

       

      8.3 Arbitration. In the event
that a Participant wishes to pursue any further claim for benefits under this
Plan following the completion of the appeal process described in Section 8.2, the
Participant must participate in arbitration in Houston, Texas, before a single
arbitrator in accordance with the arbitration rules and procedures of the Center
for Public Resources Rules for Non-Administered Arbitration of Business Disputes
(the “Arbitration Process”); provided, however, that the arbitration will not be
binding on the claimant and the claimant may seek legal or equitable remedies in
court after the arbitrator has made a determination as to the claimant’s claim,
if the claimant does not accept the arbitrator’s determination. The Arbitration
Process shall be commenced by filing a demand for arbitration in accordance with
the Arbitration Process within 18 months after the final notice of denial of the
Participant’s appeal in accordance with Section 8.2. The
arbitrator shall decide all issues relating to arbitrability and the arbitrator
shall also decide all issues with respect to the payment of the costs of such
arbitration, including attorneys’ fees and the arbitrator’s fees. Completion of
the claims procedures described in this document will be a condition precedent
to the commencement of any arbitration in connection with a claim for benefits
under the Plan by a claimant or by any other person or entity claiming rights
individually or through a claimant; provided, however, that the Committee may,
in its sole discretion, waive compliance with such claims procedures as a
condition precedent to any such action.

       

      8.4 Exhaustion of Administrative
Remedies. Completion of the claims and appeals procedures described in
Sections 8.2
and 8.3 of this
Plan, including arbitration, will be a condition precedent to the commencement
of any legal or equitable action in connection with a claim for benefits under
the Plan by a claimant or by any other person or entity claiming rights
individually or through a claimant; provided, however, that the Appeals
Committee may, in its sole discretion, waive compliance with such claims
procedures as a condition precedent to any such action.

       

      ARTICLE
IX

       

      MISCELLANEOUS

       

      9.1 Employment Status. This Plan
does not constitute a contract of employment or impose on the Participant or the
Participant’s Employer any obligation for the Participant to remain an Employee
or change the status of the Participant’s employment or the policies of such
Employer regarding termination of employment.

       

      9.2 Confidential Information.
During and after termination of employment by the Company, Employee agrees to
maintain in a fiduciary capacity for the benefit of the Company the Confidential
and agrees  (i) to prevent the disclosure to any third party of all
such Confidential Information; (ii) not to use for Employee’s own benefit or for
the benefit of another business any of the Company’s Confidential Information,
and (iii) not to aid others in the use of such Confidential Information in
competition with the Company or its Affiliates or Subsidiaries.  These
obligations shall exist during and after any termination of employment by the
Company; provided, however, that in no event shall an asserted violation of the
provisions of this Section 9.2
constitute a basis for deferring or withholding any amounts otherwise payable
under this Plan.

       

      
        
          
          

        

        
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      9.3 Unfunded Plan Status. All
payments pursuant to the Plan shall be made from the general funds of the
Company and no special or separate fund shall be established or other
segregation of assets made to assure payment. No Participant or other person
shall have under any circumstances any interest in any particular property or
assets of the Company as a result of participating in the Plan. Notwithstanding
the foregoing, the Company may (but shall not be obligated to) create one or
more grantor trusts, the assets of which are subject to the claims of the
Company’s creditors, to assist it in accumulating funds to pay its obligations
under the Plan.

       

      9.4 Validity and Severability.
The invalidity or unenforceability of any provision of the Plan shall not affect
the validity or enforceability of any other provision of the Plan, which shall
remain in full force and effect, and any prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

       

      9.5 Governing Law. The validity,
interpretation, construction and performance of the Plan shall in all respects
be governed by the laws of Texas, without reference to principles of conflict of
law, except to the extent pre-empted by Federal law.

       

      IN
WITNESS WHEREOF, this Swift Energy Company Change of Control Severance Plan has
been adopted Board of Directors of the Company as of the 28th day of
October, 2008, to be effective as of the Effective Date set forth
herein.

       

      
        
 

      

      
        SWIFT
ENERGY COMPANY

         

        


         

        By:___s/b Terry E.
Swift_____________________

        Terry E.
Swift

        Chairman
of the Board of Directors and

         Chief
Executive Officer

         




       

      


       


      
        
          
             

          

           


        

        
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