Document:

SFY_ex101-10312012

THIRD AMENDMENT

This THIRD AMENDMENT (“Amendment”) dated as of October 31, 2012 (the “Effective Date”), is by and among Swift Energy Company, a Texas corporation (“Swift Co”), and Swift Energy Operating, LLC, a Texas limited liability company (“Swift LLC”; and together with Swift Co, individually, a “Borrower” and, collectively, the “Borrowers”), the Lenders party hereto, and JPMorgan Chase Bank, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative Agent”). 
WHEREAS, the Borrowers, the lenders from time to time party thereto (the “Lenders”), and the Administrative Agent are parties to the Second Amended and Restated Credit Agreement dated as of September 21, 2010, as amended by the First Amendment and Consent thereto dated as of May 12, 2011 and the Second Amendment thereto dated as of October 2, 2012 (as so amended, and as further amended, restated or otherwise modified from time to time, the “Credit Agreement”); and
WHEREAS, the parties hereto have agreed to make certain amendments to the Credit Agreement as provided for herein;
NOW THEREFORE, in consideration of the premises and the mutual covenants, representations and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
Section 1.    Defined Terms.  Unless otherwise defined in this Amendment, each capitalized term used in this Amendment has the meaning given such term in the Credit Agreement.
Section 2.    Amendments to the Credit Agreement.  
(a)    The cover page to the Credit Agreement is hereby amended by replacing references to the Co-Syndication Agents and Co-Documentation Agents with the following:
WELLS FARGO BANK, N.A., 
AS SYNDICATION AGENT
COMPASS BANK AND ROYAL BANK OF CANADA, 
AS CO-DOCUMENTATION AGENTS
(b)    The introductory paragraph to the Credit Agreement is hereby amended by replacing “BNP PARIBAS AND WELLS FARGO BANK, N.A., as Co-Syndication Agents, and BANK OF SCOTLAND PLC AND SOCIETE GENERALE, as Co-Documentation Agents” with “WELLS FARGO BANK, N.A., as Syndication Agent, and COMPASS BANK AND ROYAL BANK OF CANADA, as Co-Documentation Agents”.

(c)    The pricing grid in the definition of “Applicable Margin” in Section 1.1 of the Credit Agreement is hereby restated in its entirety as follows:
	
				
	Borrowing Base Usage
	Eurodollar Rate Loans
	Alternate Base Rate Loans
	Commitment Fee

	>90%
	2.50%
	1.50%
	0.500%

	<90% and >75%
	2.25%
	1.25%
	0.500%

	<75% and >50%
	2.00%
	1.00%
	0.500%

	<50% and >25%
	1.75%
	0.75%
	0.375%

	<25%
	1.50%
	0.50%
	0.375%

(d)    The definition of “Final Maturity” in Section 1.1 of the Credit Agreement is hereby restated in its entirety as follows:
“Final Maturity” shall mean November 1, 2017.
(e)    The definition of “Maximum Commitment Amount” in Section 1.1 of the Credit Agreement is hereby restated in its entirety as follows:
“Maximum Commitment Amount” shall mean the lesser of (a) the Maximum Facility Amount and (b) $450,000,000, as it may be increased from time to time pursuant to Section 2.26(g).
(f)    Section 1.1 of the Credit Agreement is hereby amended by adding the following new defined term in its appropriate alphabetical order:
“Release Price” shall mean, with respect to any sale by any Borrower or Guarantor of Oil and Gas Properties which are included in the calculation of the Borrowing Base, the price determined by the Required Lenders in their discretion based upon the loan value of such Oil and Gas Properties that the Required Lenders in their discretion (using such methodology, assumptions and discount rates as such Lenders customarily use in assigning loan value to Oil and Gas Properties) assign to such Oil and Gas Properties as of the time in question; provided that, notwithstanding the foregoing, the Administrative Agent may determine the Release Price (in lieu of a determination by the Required Lenders) in connection with any sale or other transfer of Oil and Gas Properties included in the calculation of the Borrowing Base, the aggregate Release Price of which is less than 5% of the Borrowing Base between each scheduled Borrowing Base determination pursuant to Section 2.11.  In the event the Required Lenders are required to determine a Release Price and cannot agree on such Release Price, the Release Price shall be set on the basis of the weighted (based on the Percentage Share of each Lender) arithmetic average of the Release Price as determined by each individual Lender.  To assist the Administrative Agent or the 

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Required Lenders, as applicable, in making a determination of the Release Price, the applicable Borrower or Guarantor shall furnish to the Administrative Agent a breakout from the most recent Reserve Report provided to the Lenders showing the value given to such Oil and Gas Properties being sold or transferred, together with any and all other information pertaining thereto as the Administrative Agent may request.
(g)    Clause (e) of Section 2.11 of the Credit Agreement (Borrowing Base Determinations) is hereby amended and restated in its entirety as follows:
(e)    In connection with any sale or other transfer by any Borrower or any Guarantor of Oil and Gas Properties which are included in the calculation of the Borrowing Base, the aggregate Release Price of which equals or exceeds 5% of the Borrowing Base between each scheduled Borrowing Base determination pursuant to Section 2.11, the Borrowing Base shall be automatically reduced by an amount equal to 100% of the aggregate Release Price of the sold properties.  
(h)    Clause (e) of Section 6.4 of the Credit Agreement (Sales of Properties; Leasebacks) is hereby amended and restated in its entirety as follows:
(e)    the sale or other disposition of Oil and Gas Properties included in the calculation of the Borrowing Base, the aggregate Release Price of which does not exceed 10% of the Borrowing Base between each scheduled Borrowing Base determination pursuant to Section 2.11; provided that (i) no Default or Event of Default has occurred and is continuing and (ii) the sum of the Loan Balance and the L/C Exposure does not exceed the Borrowing Base before or after giving effect to such disposition, any automatic reduction in the Borrowing Base pursuant to Section 2.11(e) and any mandatory prepayment pursuant to Section 2.12(b); and
(i)    Exhibit V to the Credit Agreement is hereby replaced in its entirety with Exhibit V attached hereto.
Section 3.    Borrowing Base Redetermination.  The Administrative Agent hereby notifies the Borrowers, and the undersigned Lenders hereby agree and acknowledge, that the amount of the Borrowing Base has been redetermined by the Administrative Agent and the Lenders in accordance with Section 2.11(b) and (c) of the Credit Agreement, and has been set by the Administrative Agent and the Lenders at $450,000,000, effective as of the Effective Date.  The Borrowing Base shall remain in effect at such level until the Borrowing Base is redetermined in accordance with the terms of Section 2.11 of the Credit Agreement.
Section 4.    Assignment and Assumption; Exiting Lender.  
(a)    For an agreed consideration, each of JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A., Comerica Bank and Bank of Scotland PLC (each, an “Assignor”) hereby irrevocably sells and assigns to each of Compass Bank, Royal Bank of Canada, Amegy Bank National Association, U.S. Bank National Association, Branch Banking & Trust Company, Canadian Imperial Bank of Commerce, Union Bank, N.A. and Whitney Bank, (each, an “Assignee”), 

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and each Assignee hereby irrevocably purchases and assumes from the respective Assignors, subject to and in accordance with this Section 4 and the Credit Agreement, as of the Effective Date (i) all of the respective Assignors’ rights and obligations in their respective capacities as Lenders under the Credit Agreement and any other documents or instruments delivered pursuant thereto (including without limitation any participations in any Letters of Credit) that would result in the Assignors and the Assignees having the respective Facility Amounts set forth in Exhibit V attached hereto and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the respective Assignors (in their respective capacities as Lenders) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by any Assignor to any Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as an “Assigned Interest”).  Each such sale and assignment is without recourse to any Assignor and, except as expressly provided in this Amendment, without representation or warranty by any Assignor.  It is understood and agreed that the rights and obligations of the Assignors and the Assignees, respectively, under this Section 4 are several and not joint.
(b)     Each Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the relevant Assigned Interest, (ii) such Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Amendment and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of any Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by any Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
(c)     Each Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Amendment and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 9.1(b)(iii), (v) and (vi) of the Credit Agreement (subject to such consents, if any, as may be required under Section 9.1(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the relevant Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.2 and 5.3 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this 

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Amendment and to purchase such Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Amendment and to purchase such Assigned Interest, and (vii) if it is a Foreign Lender, it has delivered to the Administrative Agent any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by such Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, any Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
(d)    From and after the Effective Date, the Administrative Agent shall make all payments in respect of each Assigned Interest (including payments of principal, interest, fees and other amounts) to the relevant Assignor for amounts which have accrued to but excluding the Effective Date and to the relevant Assignee for amounts which have accrued from and after the Effective Date.
(e)    Effective as of the Effective Date after giving effect to the assignment and assumption in this Section 4, Bank of Scotland PLC (the “Exiting Lender”) shall cease to be a Lender under the Credit Agreement, shall have no Facility Amount under the Credit Agreement, and shall relinquish its rights (provided that it shall still be entitled to any rights of indemnification in respect of any circumstance or event or condition arising prior to the Effective Date) and be released from its obligations under the Credit Agreement and the other Loan Documents.
Section 5.    Flood Insurance Regulation. Notwithstanding any provision in any Mortgage to the contrary, in no event is any Building (as defined in the applicable Flood Insurance Regulation) or Manufactured (Mobile) Home (as defined in the applicable Flood Insurance Regulation) included in the definition of “Mortgaged Property” in any Security Instrument and no Building or Manufactured (Mobile) Home shall be encumbered any such Security Instrument.  As used herein, “Flood Insurance Regulations” shall mean (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statue thereto, (iii) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.), as the same may be amended or recodified from time to time, (iv) the Flood Insurance Reform Act of 2004 and (v) any regulations promulgated under any of the foregoing statutes.
Section 6.    Conditions to Effectiveness.  This Amendment shall become effective as of the Effective Date upon the satisfaction of the following conditions precedent:
(a)    the Administrative Agent shall have received counterparts hereof duly executed by each Borrower, the Administrative Agent and each of the Lenders;
(b)    the Administrative Agent shall have received counterparts of the attached Acknowledgment and Reaffirmation duly executed by each Guarantor; 

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(c)    a Note payable to the order of each Lender in the amount of its Facility Amount as set forth Exhibit V, if requested pursuant to Section 2.8(a) of the Credit Agreement; and
(d)    the Borrowers shall have paid all fees and expenses required to be paid on the Effective Date pursuant to the Fee Letter dated as of October 31, 2012 among the Borrowers, the Administrative Agent and the Arranger.
Section 7.    Representations and Warranties.  Each Borrower hereby represents and warrants that after giving effect hereto:
(a)    the representations and warranties of the Borrowers contained in the Loan Documents are true and correct in all material respects on and as of the Effective Date, other than those representations and warranties that expressly relate solely to a specific earlier date, which shall remain correct as of such earlier date; and
(b)    no Default or Event of Default has occurred and is continuing.
Section 8.    Effect of Amendment.
(a)    The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender, the Issuing Bank or the Administrative Agent under any of the Loan Documents, nor, except as expressly provided herein, constitute a waiver or amendment of any provision of any of the Loan Documents.
(b)    Upon and after the execution of this Amendment by each of the parties hereto, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified hereby.
(c)    This Amendment is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions thereof.
(d)    Except as specifically modified above, the Credit Agreement and the other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.
Section 9.    Governing Law.  This Amendment shall be deemed to be made under and shall be construed in accordance with and governed by the laws of the State of Texas without giving effect to principles thereof relating to conflicts of law; provided, however, that Chapter 345 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving triparty accounts) shall not apply.

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Section 10.    Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Transmission by facsimile of an executed counterpart of this Amendment shall be deemed to constitute due and sufficient delivery of such counterpart.
Section 11.    ENTIRE AGREEMENT.  THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective duly authorized officers as of the Effective Date.
	
			
	 
	BORROWERS:

SWIFT ENERGY COMPANY

	 
	By:
	/s/ Alton D. Heckaman, Jr.

	 
	 
	Alton D. Heckaman, Jr.

	 
	 
	Executive Vice President and
Chief Financial Officer

	
			
	 
	SWIFT ENERGY OPERATING, LLC

	 
	By:
	/s/ Alton D. Heckaman, Jr.

	 
	 
	Alton D. Heckaman, Jr.

	 
	 
	Executive Vice President and
Chief Financial Officer

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

	
			
	 
	ADMINISTRATIVE AGENT, ISSUING BANK 
AND LENDER:

JPMORGAN CHASE BANK, N.A.

	 
	By:
	/s/ Jo Linda Papadakis

	 
	Name:
	Jo Linda Papadakis

	 
	Title:
	Authorized Officer

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

	
			
	 
	LENDER:

WELLS FARGO BANK, N.A.

	 
	By:
	/s/ Scott Hodges

	 
	Name:
	Scott Hodges

	 
	Title:
	Managing Director

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

	
			
	 
	LENDER:

COMPASS BANK

	 
	By:
	/s/ Dorothy Marchland

	 
	Name:
	Dorothy Marchland

	 
	Title:
	Executive Vice President

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

	
			
	 
	LENDER:

ROYAL BANK OF CANADA

	 
	By:
	/s/ Kristan Spivey

	 
	Name:
	Kristan Spivey

	 
	Title:
	Authorized Signatory

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

	
			
	 
	LENDER:

AMEGY BANK NATIONAL ASSOCIATION

	 
	By:
	/s/ Kenneth R. Batson, III

	 
	Name:
	Kenneth R. Batson, III

	 
	Title:
	Vice President, Energy Lending

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

	
			
	 
	LENDER:

COMERICA BANK

	 
	By:
	/s/ Brenton Bellamy

	 
	Name:
	Brenton Bellamy

	 
	Title:
	Assistant Vice President

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

	
			
	 
	LENDER:

U.S. BANK NATIONAL ASSOCIATION

	 
	By:
	/s/ John C. Lozano

	 
	Name:
	John C. Lozano

	 
	Title:
	Vice President

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

	
			
	 
	LENDER:

BRANCH BANKING & TRUST COMPANY

	 
	By:
	/s/ Parul June

	 
	Name:
	Parul June

	 
	Title:
	Vice President

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

	
			
	 
	LENDER:

CANADIAN IMPERIAL BANK OF COMMERCE

	 
	By:
	/s/ Trudy Nelson

	 
	Name:
	Trudy Nelson

	 
	Title:
	Executive Director

	
			
	 
	By:
	/s/ Richard Antl

	 
	Name:
	Richard Antl

	 
	Title:
	Director

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

	
			
	 
	LENDER:

UNION BANK, N.A.

	 
	By:
	/s/ Lara Sorokolit

	 
	Name:
	Lara Sorokolit

	 
	Title:
	Vice President

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

	
			
	 
	LENDER:

WHITNEY BANK

	 
	By:
	/s/ Liana Tchernysheva

	 
	Name:
	Liana Tchernysheva

	 
	Title:
	Senior Vice President

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

	
			
	 
	Solely for purposes of Section 4:

EXITING LENDER:

BANK OF SCOTLAND PLC

	 
	By:
	/s/ Julia R. Franklin

	 
	Name:
	Julia R. Franklin

	 
	Title:
	Vice President

Signature Page to Third Amendment to Second Amended and Restated Credit Agreement
Swift Energy Company and Swift Energy Operating, LLC

EXHIBIT V
FACILITY AMOUNTS

	
					
	 
	 
	Percentage
	Percentage
	 

	 
	 
	Share of
	Share of
	 

	Name of Lender
	Facility
	Borrowing
	Commitment
	Percentage

	 
	Amount
	Base
	Amount
	Share

	 
	 
	 
	 
	 

	JPMorgan Chase Bank, N.A.
	$61,111,111.09
	$55,000,000.00
	$55,000,000.00
	12.222222222%

	Wells Fargo Bank, N.A.
	$55,555,555.56
	$50,000,000.00
	$50,000,000.00
	11.111111111%

	Compass Bank
	$55,555,555.56
	$50,000,000.00
	$50,000,000.00
	11.111111111%

	Royal Bank of Canada
	$55,555,555.56
	$50,000,000.00
	$50,000,000.00
	11.111111111%

	Amegy Bank National Association
	$38,888,888.89
	$35,000,000.00
	$35,000,000.00
	7.777777778%

	Comerica Bank
	$38,888,888.89
	$35,000,000.00
	$35,000,000.00
	7.777777778%

	U.S. Bank National Association
	$38,888,888.89
	$35,000,000.00
	$35,000,000.00
	7.777777778%

	Branch Banking & Trust Company
	$38,888,888.89
	$35,000,000.00
	$35,000,000.00
	7.777777778%

	Canadian Imperial Bank of Commerce
	$38,888,888.89
	$35,000,000.00
	$35,000,000.00
	7.777777778%

	Union Bank, N.A.
	$38,888,888.89
	$35,000,000.00
	$35,000,000.00
	7.777777778%

	Whitney Bank
	$38,888,888.89
	$35,000,000.00
	$35,000,000.00
	7.777777778%

	Bank of Scotland PLC
	$0.00
	$0.00
	$0.00
	0.000000000%

	 
	 
	 
	 
	 

	Totals:
	$500,000,000.00
	$450,000,000.00
	$450,000,000.00
	100.000000000%

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

ACKNOWLEDGMENT AND REAFFIRMATION

Each of the undersigned (each a “Guarantor” and collectively the “Guarantors”) hereby (i) acknowledges receipt of a copy of the foregoing Third Amendment dated as of October 31, 2012 among Swift Energy Company, Swift Energy Operating, LLC, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent for such lenders (in such capacity, the “Administrative Agent”) and (ii) reaffirms its obligations under the Guaranty Agreement dated as of September 21, 2010 by the Guarantors in favor of the Administrative Agent for the benefit of the Secured Parties (as defined therein).

	
			
	 
	GASRS LLC

	 
	By:
	/s/ Bruce H. Vincent

	 
	 
	Bruce H. Vincent

	 
	 
	President

	
			
	 
	SWENCO-WESTERN, INC.

	 
	By:
	/s/ Alton D. Heckaman, Jr.

	 
	 
	Alton D. Heckaman, Jr.

	 
	 
	Executive Vice President, Chief 
Financial Officer and SecretaryFLIR-2012.9.30-10QEx-10.1

Exhibit 10.1

        

EXECUTIVE EMPLOYMENT AGREEMENT

PARTIES:    FLIR Systems, Inc.        (“Company”)
27700 SW Parkway Avenue
Wilsonville, OR 97070

Earl R. Lewis            (“Executive”)
87 Pinckney Street
Boston, MA  02114-4303

EFFECTIVE DATE:  January 1, 2013

RECITALS:

The Company wishes to obtain the services of Executive for the duration of this Agreement, and the Executive wishes to provide his services for such period, all upon the terms and conditions set forth in this Agreement.

Therefore, in consideration of the mutual promises contained herein, the parties agree as follows:

ARTICLE I
DEFINITIONS

1.1    “Base Salary” means regular cash compensation paid on a periodic basis exclusive of benefits, bonuses or incentive payments. 

1.2    “Board” means the Board of Directors of the Company.
    
1.3    “Cause” means Executive committed any one or more of the following: (i) willful gross misconduct in the performance of any material duties under this Agreement that results in material damage to the Company, and if such misconduct is susceptible of cure, the failure to effect such cure within thirty (30) days after written notice from the Board of such misconduct is given to Executive; (ii) material use of alcohol or illegal drugs which materially interferes with the performance of Executive's duties hereunder and materially damages the Company; (iii) theft, embezzlement, fraud, misappropriation of funds, other willful acts of dishonesty or the willful and material violation of any material law, ethical rule or fiduciary duty relating to Executive's employment by the Company that materially damages the Company; (iv) a felony or any act involving moral turpitude; (v) the willful and material violation of any confidentiality or proprietary rights agreement between Executive and the Company that materially damages the Company; or (vi) the willful and material violation of Company policy or procedure, or breach of any material provision of this Agreement, that materially damages the Company, and if such violation or breach is susceptible of cure, the failure to effect such cure within thirty (30) days after written notice from the Board of such violation or breach is given to Executive.

1.4     “Disability” means for purposes of Section 4.5, the inability of Executive to perform his duties under this Agreement, with or without reasonable accommodation, because of physical or mental incapacity for a continuous period of five (5) months, as determined by the Board.  For purposes of Section 3.3, Disability means total and permanent disability as defined in Internal Revenue Code section 22(e)(3).

1.5     “FLIR” shall mean FLIR Systems, Inc., and its wholly owned subsidiaries.

ARTICLE II
EMPLOYMENT, DUTIES AND TERM

2.1    Employment.  Upon the terms and conditions set forth in this Agreement, the Company hereby employs Executive as President and Chief Executive Officer, and Executive accepts such employment.  During the term of this Agreement, Executive will continue to work with the Board in its efforts to identify an individual to serve as Executive's successor as President and/or Chief Executive Officer.    

2.2    Duties.  Executive shall devote his full‐time and best efforts to the Company and to fulfilling the duties of Chief Executive Officer, which shall include such duties as may from time to time be assigned him by the Board, provided that such duties are reasonably consistent with Executive's education, experience and background.  Executive shall comply with the Company's policies and procedures to the extent they are not inconsistent with this Agreement in which case the provisions of this Agreement prevail.  Executive shall also be permitted to serve on outside boards, commissions and partnerships to the extent such service does not conflict with the provisions of this Agreement.  

2.3    Term.  The term of this Agreement shall be until January 1, 2014, unless earlier terminated in accordance with Article IV.  This Agreement may be extended by mutual agreement of the parties.

ARTICLE III
COMPENSATION AND EXPENSES

3.1    Base Salary.  For all services rendered under this Agreement during the term of Executive's employment, the Company shall pay Executive a minimum annual Base Salary of $875,000 for 2013.

3.2    Bonus.  Executive shall be eligible for bonuses, incentive payments and other awards as determined by the Compensation Committee of the Board (the “Committee”) in accordance with the FLIR Systems, Inc. 2012 Executive Bonus Plan then in effect, as amended from time to time.

3.3    Equity Grants.  Executive shall annually be eligible for equity grants of FLIR stock, based upon achievement of objectives and for such quantity as determined by the Board.  All such grants, including all past and future grants, shall be subject to the terms and conditions set forth in the grant agreements between Executive and the Company associated with each such grant.  In the event of any inconsistency between this Agreement and the grant agreements, the terms and conditions of the grant agreements shall take precedence.  

3.4    Personal Time Off.  Executive shall earn personal time off during the term of his employment in accordance with the Company's policies regarding paid time off that are applicable to the Company's executive officers.

3.5    Benefits.  Executive shall be eligible to participate in all Company-sponsored health and welfare benefit plans made available to other executives of the Company for so long as he is employed by the Company.    

3.6    Supplemental Employee Retirement Plan.      The Company shall make all contributions to its Supplemental Employee Retirement Plan (“SERP”) on behalf of Executive for each plan year in accordance with the SERP then in effect, as amended from time to time. 

3.7    Business Expenses.  The Company shall, in accordance with, and to the extent of, its policies in effect from time to time, bear all ordinary and necessary business expenses reasonably incurred by Executive in performing his duties as an employee of the Company, provided that Executive accounts promptly for such expenses to the Company in the manner prescribed from time to time by the Company.

3.8    Taxes and Withholding.  All amounts payable to Executive under this Agreement shall be net of amounts required to be withheld by law.  

ARTICLE IV
EARLY TERMINATION

4.1    Early Termination.  This Article sets forth the terms for early termination of Executive's employment with the Company.

4.2    Termination for Cause.  The Company may terminate Executive's employment for Cause immediately upon written notice from the Board to Executive.  In the event of termination for Cause pursuant to this Section 4.2, Executive shall be paid Executive's Base Salary through the date of termination at the rate then in effect, and (without regard to any language that may be inconsistent in any option grant) for any option granted on or after the date of this Agreement Executive shall have the lesser of three (3) months from such termination or the remaining option term in which to exercise his vested stock options.

4.3    Termination Without Cause.  Either Executive or the Company may terminate Executive's employment without Cause on no less than thirty (30) days written notice from or to the Board.  In the event Executive terminates his employment without Cause pursuant to this Section 4.3, Executive shall be paid his Base Salary through the date of termination.  In the event the Company terminates the Executive's employment without Cause pursuant to this Section 4.3, the Company shall pay to Executive: (i) continuation of Executive's Base Salary in effect at the time of termination for a period of eighteen (18) months or for the duration of the remaining term of the Agreement, whichever is greater, in accordance with the Company's regular payroll practices; (ii) all equity awards granted to Executive shall immediately vest; and (iii) Executive shall be entitled to an additional severance payment in an amount equal to one (1) year's Base Salary, which amount shall be paid promptly at termination.  

4.4    Termination in Connection with Transition. In the event Executive's employment terminates at a time when a successor as Chief Executive Officer has been identified by Executive and the Board, the following provisions shall apply:
(a)The Executive shall be paid his Base Salary through the date of termination.
(b)The Executive shall be eligible to receive a prorated Performance Award under the Company's annual incentive plan in effect for the year in which such a termination occurs.  The amount of the Performance Award payable in any such year shall be determined by the Committee.  In the event the Executive does not 

agree with the amount as determined by the Committee, the dispute shall be resolved in accordance with Section 6.5, below.
The prorated Performance Award payable under this Section 4.4(b), if any, shall be paid as soon as is practicable following the Executive's termination and the determination, in the ordinary course, of the Company's performance for the relevant Performance Period; provided, however, that in all events, any such prorated Performance Award will be paid no later than March 15th of the year following the year in which the termination takes place.

Capitalized terms in this Sections 4.4(b) are defined terms in the Company's 2012 Executive Bonus Plan.

Any Performance Award made under this Section 4.4(b) is not considered Compensation as defined in the SERP.

(c)For avoidance of doubt, in the event of a termination that is contemplated by this Section 4.4, the Executive shall not, as is contemplated by Section 8 of the version of the Company Corporate Governance Principles that is in effect as of the date hereof, be required to tender a resignation from the Board.

4.5    Termination in the Event of Death or Disability.  In the event Executive's employment terminates as a result of the death or Disability of Executive, the following provisions shall apply:

		
	(a)
	    In the event of Executive's death, the Company shall pay all accrued wages owing through the date of termination, plus an amount equal to one year's Base Salary.  Such amount shall be paid (1) to the beneficiary or beneficiaries designated in writing to the Company by Executive, (2) in the absence of such designation, to the surviving spouse, or (3) if there is no surviving spouse, or such surviving spouse disclaims all or any part, then the full amount, or such disclaimed portion, shall be paid to the executor, administrator or other personal representative of Executive's estate.  The amount shall be paid as a lump sum as soon as practicable following the Company's receipt of notice of Executive's death, but in no event later than December 31 of the year of death if Executive dies between January 1 and October 31.  If Executive dies in November or December, such payment shall be made in January of the year following the year of death.

		
	(b)
	    In the event of Disability, Base Salary shall be paid through the final day of the fifth (5th) month referenced in the definition of “Disability.”

4.6    Entire Termination Payment.  The compensation provided for in this Article IV shall constitute Executive's sole remedy for early termination of Executive's employment. Executive shall not be entitled to any other termination or severance payment which may be payable to Executive under any other agreement between Executive and the Company or under any policy in effect at, preceding or following the date of termination except that, in the event that Executive's employment terminates for any reason, the vested benefits accrued under tax-qualified retirement plans, if any, and the Supplemental Executive Retirement Plan (SERP) will be paid as such plans are ordinarily payable upon a termination of employment.

ARTICLE V
CONFLICT OF INTEREST

5.1    During the term of employment with the Company, Executive will engage in no activity or employment which may conflict with the interests of the Company, and will comply with the Company's policies and guidelines pertaining to business conduct and ethics.

ARTICLE VI
GENERAL PROVISIONS

6.1    Successors and Assigns.  Except as otherwise provided in Article VI, this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, administrators, executors, legatees, and heirs.  In that this Agreement is a personal services contract, it shall not be assigned by Executive.

6.2    Notices.  All notices, requests and demands given to or made pursuant hereto shall, except as otherwise specified herein, be in writing and be delivered or mailed to any such party at its address as set forth at the beginning of this Agreement (if to Company, to the attention of the General Counsel).  Either party may change its address, by notice to the other party given in the manner set forth in this Section.  Any notice, if mailed properly addressed, postage prepaid, registered or certified mail, shall be deemed dispatched on the registered date or that stamped on the certified mail receipt, and shall be deemed received within the third (3rd) business day thereafter or when it is actually received, whichever is sooner.

6.3    Caption.  The various headings or captions in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement.

6.4    Governing Law and Jurisdiction.  The validity, construction and performance of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts, without regard to its choice of laws provisions.

6.5    Mediation.  In the case of any dispute arising under this Agreement which cannot be settled by reasonable discussion, the parties agree that, prior to commencing any proceeding, they will first engage the services of a professional mediator agreed upon by the parties and attempt in good faith to resolve the dispute through confidential nonbinding mediation.  Each party shall bear one‐half (1⁄2) of the mediator's fees and expenses and shall pay all of its own attorneys' fees and expenses related to the mediation.  This Section 6.5 shall not apply to any action to enforce Executive's obligations under a confidentiality or proprietary rights agreement.

6.6    Indemnification.  If Executive is made a party or identified as a witness to any threatened or pending action, suit, or proceeding (whether civil, criminal, administrative or investigative) in any matter concerning or relating to Executive's service to or actions or omissions on behalf of the Company as an employee or agent thereof, then the Company shall, to the maximum extent permitted by law, and in addition to any such right granted to or available to Executive under the Company's Charter, By-Laws or standing or other resolutions or agreements, defend, indemnify and hold Executive harmless against all expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement.  The Company shall, upon Executive's request, promptly advance or pay any amounts for reasonable costs, charges, or expenses (including any legal fees and expenses incurred by Executive) subject to indemnification hereunder or in furtherance of such right, subject to a later determination as to Executive's ultimate right to receive indemnification.  

Executive's right to indemnification will survive until the expiration of all applicable statutes of limitations, without regard to the earlier cessation of Executive's employment or any termination or expiration of this Agreement.

6.7    Attorney Fees.  In the event of any suit, action or arbitration to interpret or enforce this Agreement, the prevailing party shall be entitled to recover its attorney fees, costs and out-of-pocket expenses at trial and on appeal.

6.8    Construction.  Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement.

6.9    Waivers.  No failure on the part of either party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy granted hereby or by any related document or by law.

6.10    Modification.  This Agreement may not be and shall not be modified or amended except by written instrument signed by the parties hereto.

6.11    Section 409A.  Any reimbursement of expenses under this Agreement (including, for example, under Section 3.7) shall occur not later than March 15 of the year following the year in which the expense was incurred.  Any amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be provided, during any other calendar year.  The right to any reimbursement or in-kind benefit pursuant to this Agreement shall not be subject to liquidation or exchange for any other benefit.  In the event Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code at the time of the termination of Executive's employment, any payments on termination due hereunder (other than accrued salary and vacation pay) which are considered deferred compensation and are payable during the six (6) month period beginning on Executive's termination will be deferred and paid, together with interest at eight percent (8%), in a lump sum six (6) months and one (1) day after the date of termination (or, if earlier, upon Executive's death).

It is the intention of the parties that no payment or entitlement pursuant to this Agreement will give rise to any adverse tax consequences to Executive under Section 409A of the Internal Revenue Code and any guidance issued thereunder.  Notwithstanding any provision of this Agreement to the contrary, this Agreement shall be interpreted, applied and (to the minimum extent necessary) amended so that it does not fail to meet, and is operated in accordance with, the requirements of that Section.  Any reference in this Agreement to Section 409A of the Internal Revenue Code shall also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to that Section by the U.S. Department of the Treasury or the Internal Revenue Service.

6.12    Entire Agreement.  Except as set forth in Section 3.3, this Agreement constitutes the entire agreement between the parties and supersedes all prior or contemporaneous oral or written understandings, statements, representations or promises with respect to its subject matter.  This Agreement was the subject of negotiation between the parties and, therefore, the parties agree that the rule of construction requiring that the agreement be construed against the drafter shall not apply to the interpretation of this Agreement.

6.13    Status of Prior Executive Employment Agreements.  The parties acknowledge that this Agreement constitutes an amendment and restatement of the prior Executive Employment Agreements between the Executive and the Company, with effective dates of November 1, 2000, January 1, 2002, January 1, 2003, January 1, 2004, January 1, 2005, January 1, 2006, January 1, 2007, January 1, 2008. January 1, 2009, January 1, 2010 and January 1, 2011, and does not effect a termination of any such prior Agreement.

6.14    Counterparts.  This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

Signed this 5th day of November, 2012.

EARL R. LEWIS                    FLIR SYSTEMS, INC.

/s/ Earl R. Lewis                    By:    /s/ Angus L. Macdonald    
        
Title:    Chairman of the Compensation Committee

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