As filed with the Securities and Exchange Commission on April 16, 2004
Registration Statement No. 333-112041
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SWIFT ENERGY COMPANY
(Exact name of Registrant)
Texas 1311 74-2073055
(State of incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
Terry E. Swift, Chief Executive Officer
Swift Energy Company
16825 Northchase Dr., Suite 400
Houston, Texas 77060
(281) 874-2700
(Name, address and telephone number of Registrant's
executive offices and agent for service)
Copies to:
Donald W. Brodsky Karen Bryant
Lee Thompson General Counsel-Corporate Governance
Jenkens & Gilchrist, Swift Energy Company
A Professional Corporation 16825 Northchase Dr., Suite 400
1401 McKinney, Suite 2700 Houston, Texas 77060
Houston, Texas 77010 (281) 874-2700
(713) 951-3300
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
|_| If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
|X| If any of the securities being registered on this Form are being
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box.
|_| If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
|_| If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
|_| If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 16, 2004
PROSPECTUS
$350,000,000
Swift Energy Company
Debt Securities
Common Stock
Preferred Stock
Depositary Shares
Warrants
Swift Energy Company may offer and sell from time to time debt securities,
common stock, preferred stock, depositary shares or warrants. You should
carefully read this prospectus and any prospectus supplement before you invest.
Our common stock is traded on the New York Stock Exchange and the Pacific
Stock Exchange under the symbol "SFY."
There are significant risks associated with an investment in our
securities. See "Risk Factors" beginning on page 2.
This prospectus provides you with a general description of the securities
that may be offered. This prospectus may not be used to sell securities unless
accompanied by a prospectus supplement that describes those securities. We will
provide specific terms of the offering and sale of these securities in
supplements to this prospectus. These terms will include the initial offering
price, aggregate amount of the offering, listing on any securities exchange or
quotation system, risk factors and the agents, dealers or underwriters, if any,
to be used in connection with the sale of these securities. The Supplements may
also add, update or change information contained in this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is _______________, 2004
You should rely only on the information contained in or incorporated by
reference in this prospectus and in any prospectus supplement. We have not
authorized anyone to provide you with different information. We are not making
an offer of these securities in any state where the offer is not permitted. You
should not assume that the information contained in or incorporated by reference
in this prospectus is accurate as of any date other than the date on the front
of this prospectus or the applicable prospectus supplement.
TABLE OF CONTENTS
Page
----
ABOUT THIS PROSPECTUS..........................................................1
WHERE YOU CAN FIND MORE INFORMATION............................................1
RISK FACTORS...................................................................2
FORWARD-LOOKING STATEMENTS.....................................................3
THE COMPANY....................................................................4
RATIO OF EARNINGS TO FIXED CHARGES.............................................5
USE OF PROCEEDS................................................................5
DESCRIPTION OF DEBT SECURITIES.................................................5
DESCRIPTION OF CAPITAL STOCK..................................................14
DESCRIPTION OF DEPOSITARY SHARES..............................................17
DESCRIPTION OF WARRANTS.......................................................18
PLAN OF DISTRIBUTION..........................................................19
LEGAL OPINIONS................................................................20
EXPERTS.......................................................................21
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
the shelf process, we may sell any combination of the securities described in
this prospectus in one or more offerings up to a total dollar amount of
$350,000,000. This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should carefully read this
prospectus, any applicable prospectus supplement, together with additional
information described under the heading "WHERE YOU CAN FIND MORE INFORMATION"
before you invest in any of these securities.
As used in this prospectus, "Swift," "we," "us," and "our" refer to Swift
Energy Company and its subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934, which requires us to file annual, quarterly and special reports,
proxy statements and other information with the Securities and Exchange
Commission, or the "SEC." You may read and copy any document that we file at the
Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of its public reference room. In addition, our reports and other
information concerning us can be inspected at the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005, where our common stock is listed. You
may also inspect our filings over the Internet at the SEC's web site at
http://www.sec.gov, or at our own website at http://www.swiftenergy.com.
However, the other information on Swift's website does not constitute a part of
this prospectus.
This prospectus constitutes part of a Registration Statement on Form S-3
filed with the SEC under the Securities Act of 1933. It omits some of the
information contained in the Registration Statement, and reference is made to
the Registration Statement for further information with respect to us and the
securities we are offering. Any statement contained in this prospectus
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the SEC is not necessarily
complete, and in each instance reference is made to the copy of the filed
document.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information and the
information in the prospectus. We incorporate by reference (excluding any
information furnished pursuant to Item 9 or Item 12 of any report on Form 8-K)
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
we sell all the securities covered by this prospectus:
1. Our Annual Report on Form 10-K for the year ended December 31, 2003;
2. The description of our common stock contained in our registration statement
on Form 8-A filed on July 24, 1981, as amended, including any amendment or
report filed before or after the date of this prospectus for the purpose of
updating the description;
3. The description of our preferred share purchase rights contained in our
registration statement on Form 8-A filed on August 11, 1997, as amended on
April 7, 1999, including any amendment or report filed before or after the
date of this prospectus for the purpose of updating the description; and
4. Our Current Report on Form 8-K dated February 11, 2004.
Any statement contained in a document incorporated or considered to be
incorporated by reference in this prospectus shall be considered to be modified
or superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or in any subsequently filed document that is or is
considered to be incorporated by reference modifies or supersedes that
statement. Any statement that is modified or superseded shall not, except as so
modified or superseded, constitute a part of this prospectus.
You may request a copy of these filings at no cost, by writing or
telephoning Bruce H. Vincent, Executive Vice President--Corporate Development,
Swift Energy Company, Suite 400, 16825 Northchase Drive, Houston, Texas 77060,
phone: (281) 874-2700.
RISK FACTORS
There are a number of risks associated with investing in Swift and in our
industry. You should carefully review the more detailed description of risk
factors contained in the supplement to this prospectus.
Steep or prolonged drops in prices can harm us financially and hurt our ability
to grow.
Our revenue, profitability and cash flow depend upon the prices and demand
for oil and gas. The markets for these commodities are very volatile and steep
or prolonged drops in prices can harm us financially and hurt our ability to
grow. The changes in oil and natural gas prices have a significant impact on the
value of our reserves, on our revenues, profitability, and on our cash flow.
Oil and natural gas drilling and producing operations involve various risks.
Our drilling activities are subject to many risks, including the risk that
we will not discover commercially productive reservoirs. Operating and
developing oil and natural gas properties involves a number of inherent risks,
including the risk of personal injury, environmental contamination or loss of
wells. In addition, our drilling operations may be curtailed, delayed or
canceled as a result of other factors, including title problems, adverse weather
conditions, facility or equipment malfunctions and compliance with environmental
and other governmental requirements. We may not be able to insure against all of
these risks.
Estimating our reserves, production and future net cash flow is difficult to do
with any certainty.
Estimates of our proved developed oil and natural gas reserves and the
resulting future net revenues contained in this prospectus and elsewhere are
based on a number of uncertainties. A failure to realize our estimated prices or
estimated production volumes could materially adversely affect our revenues,
profitability, cash flow, and financial health.
Shortages of oil field equipment, services and qualified personnel could reduce
our cash flow and adversely affect results of operations.
Our ability to conduct operations in a timely and cost effective manner
depends on the availability of supplies, equipment and personnel. The oil and
gas industry is cyclical and experiences periodic shortages of drilling rigs and
other equipment, tubular goods, supplies and experienced personnel. Shortages
can delay operations and materially increase operating and capital costs.
Our level of indebtedness may adversely affect operations and limit our growth.
We make, and will continue to make, substantial capital expenditures to
acquire, develop, produce, explore and abandon our oil and natural gas reserves.
Our bank borrowing base is adjusted at the banks' discretion and is based in
part upon external factors over which we have no control. Further, our cash flow
from operations is highly dependent on the prices that we receive for oil and
natural gas. Any decrease in our revenues, as a result of lower oil or gas
prices or otherwise, could limit our ability to replace reserves or maintain
production at current levels. If our cash flow from operations drops
significantly, we may be unable to grow our production and proved reserves which
in turn could materially adversely affect our revenues, profitability, financial
health, and on our ability to service our debt.
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Our future success depends on our ability to find, develop or acquire additional
oil and natural gas reserves that are economically recoverable.
Our future success depends on our ability to find, develop or acquire
additional oil and natural gas reserves that are economically recoverable.
Failure to do so will result in lower production and cash flow.
Investors in our securities may encounter difficulties in obtaining, or may be
unable to obtain, recoveries from Arthur Andersen LLP with respect to its audits
of our financial statements at December 31, 2001 and for the year-ended December
31, 2001.
Because we are unable to obtain the written consent of Arthur Andersen LLP
to our naming it in this prospectus as having certified our financial statements
at December 31, 2001 and for prior periods, the rights of investors in our
securities to assert claims against Arthur Andersen LLP will be limited. For
example, because of this lack of consent, you will not be able to sue Arthur
Andersen LLP under Section 11(a)(4) of the Securities Act for any untrue
statement of a material fact contained in the financial statements audited by
Arthur Andersen LLP or any omissions to state a material fact required to be
stated in those financial statements.
FORWARD-LOOKING STATEMENTS
Some of the information included in this prospectus, any prospectus
supplement and the documents we have incorporated by reference contain
forward-looking statements. Forward-looking statements use forward-looking terms
such as "believe," "expect," "may," "intend," "will," "project," "budget,"
"should" or "anticipate" or other similar words. These statements discuss
"forward-looking" information such as:
o anticipated capital expenditures and budgets;
o future cash flows and borrowings;
o pursuit of potential future acquisition or drilling opportunities; and
o sources of funding for exploration and development.
These forward-looking statements are based on assumptions that we believe
are reasonable, but they are open to a wide range of uncertainties and business
risks, including the following:
o fluctuations of the prices received or demand for oil and natural gas;
o uncertainty of drilling results, reserve estimates and reserve
replacement;
o operating hazards;
o acquisition risks;
o unexpected substantial variances in capital requirements;
o environmental matters; and
o general economic conditions.
Other factors that could cause actual results to differ materially from
those anticipated are discussed in our periodic filings with the SEC, including
our Annual Report on Form 10-K for the year ended December 31, 2003.
3
When considering these forward-looking statements, you should keep in mind
the risk factors and other cautionary statements in this prospectus, any
prospectus supplement and the documents we have incorporated by reference. We
will not update these forward-looking statements unless the securities laws
require us to do so.
THE COMPANY
Swift Energy Company, a Texas corporation, is engaged in developing,
exploring, acquiring, and operating oil and gas properties, with a focus on
onshore and inland waters oil and natural gas reserves in Texas and Louisiana
and onshore oil and gas reserves in New Zealand. As of December 31, 2003, we had
interests in 998 oil and gas wells located domestically in four states, in
federal offshore waters and in New Zealand. We operated 870 of these wells,
representing 95% of our proved reserves. At year-end 2003, our estimated proved
reserves were 820.4 Bcfe, of which approximately 41% was natural gas, 47% crude
oil, and 12% natural gas liquids, and overall 59% of these reserves were proved
developed. Our proved reserves at that date were concentrated 40% in Texas, 37%
in Louisiana and 21% in New Zealand.
Our core domestic areas for development and exploration drilling are the
Lake Washington Area located in South Louisiana, the AWP Olmos Area located in
South Texas, the Brookeland Area located in East Texas and the Masters Creek
Area in Central Louisiana. The Lake Washington Area accounted for approximately
32% of our proved reserves as of December 31, 2003 and approximately 23% of our
production for the year ended December 31, 2003, while the AWP Olmos Field
accounted for approximately 26% of our proved reserves as of December 31, 2003
and approximately 16% of our production for the year ended December 31, 2003.
New Zealand accounted for approximately 21% of our proved reserves as of
December 31, 2003 and 36% of our production for the year ended December 31, 2003
and the Masters Creek Area accounted for approximately 8% of proved reserves as
of December 31, 2003 and 11% of our production for the year ended December 31,
2003. Our net sales volume for the year ended December 31, 2003 was 53.2 Bcfe,
of which 53% was natural gas. Brookeland had 5% of proved reserves and 7% of
production in 2003.
We have increased our proved reserves from 436.1 Bcfe at year-end 1998 to
820.4 Bcfe at year-end 2003, which has resulted in the replacement of 266% of
our production during the same period. Our five-year average reserves
replacement costs were $1.25 per Mcfe. In 2003, we increased our proved reserves
by 9%, which replaced 234% of our 2003 production. We have increased our
production from 39.0 Bcfe at year-end 1998 to 53.2 Bcfe at year-end 2003. Net
cash provided by operating activities has had average annual growth of 15% per
year from year-end 1998 to year-end 2003.
We added 105.6 Bcfe of proved reserves through drilling in 2003 (36.1 Bcfe
from New Zealand), 83.9 Bcfe in 2002 (15.9 Bcfe from New Zealand), and 105.8
Bcfe in 2001 (17.4 Bcfe from New Zealand). The 2003 additions were primarily a
result of our development completion rate, as we successfully completed 53 of 63
domestic development wells and 3 of 3 New Zealand development wells, while five
of eight domestic exploratory wells were successfully completed. Our only New
Zealand exploratory well was not successful.
Swift's philosophy is to pursue a balanced growth strategy that includes an
active drilling program, strategic acquisitions, and the utilization of advanced
technologies. We seek to increase our reserves through both drilling and
acquisitions, shifting the balance between the two activities in response to
market conditions. For example, when oil and gas prices are low, we focus upon
acquiring producing properties. When oil and gas prices are high, we shift our
focus to drilling wells.
Our principal executive offices are located at 16825 Northchase Drive,
Suite 400, Houston, Texas 77060 and our telephone number is (281) 874-2700.
4
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges:
Year Ended December 31,
-------------------------------------------------------
2003 2002 2001(1) 2000 1999
---- ---- ---- ---- ----
Ratio of earnings to fixed charges 2.29x 1.38x -- 5.18x 2.39x
___________________
(1) Due to the $98.9 million non-cash charge incurred in the fourth quarter
of 2001 caused by a write-down in the carrying value of oil and gas properties,
2001 earnings were insufficient by $40.2 million to cover fixed charges in this
period. If the $98.9 million non-cash charge is excluded, the ratio of earnings
to fixed charges would have been 4.09 for 2001.
For purposes of calculating the ratio of earnings to fixed charges, fixed
charges include interest expense net (which includes amortization of debt
issuance costs and discounts), capitalized interest and that portion of
non-capitalized rental expense deemed to be the equivalent of interest. Earnings
represent income before income taxes and cumulative effect of change in
accounting principle and from continuing operations before fixed charges
(excluding capitalized interest, net of depletion).
USE OF PROCEEDS
Unless we specify otherwise in an accompanying prospectus supplement, we
intend to use the net proceeds we receive from the sale of securities offered by
this prospectus and the accompanying prospectus supplement for the repayment of
debt and for general corporate purposes. General corporate purposes may include
additions to working capital, development and exploration expenditures or the
financing of possible acquisitions.
The net proceeds may be invested temporarily until they are used for their
stated purpose.
DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the debt
securities which may be offered by us from time to time. The applicable
prospectus supplement will describe the specific terms of the debt securities
offered by that prospectus supplement.
We may issue debt securities either separately or together with, or upon
the conversion of, or in exchange for, other securities. The debt securities are
to be either senior obligations of ours issued in one or more series and
referred to herein as the "Senior Debt Securities," or subordinated obligations
of ours issued in one or more series and referred to herein as the "Subordinated
Debt Securities." The Senior Debt Securities and the Subordinated Debt
Securities are collectively referred to as the "Debt Securities." The Debt
Securities will be general obligations of the Company. Each series of Debt
Securities will be issued under an agreement, or "Indenture," between Swift and
an independent third party, usually a bank or trust company, known as a
"Trustee," who will be legally obligated to carry out the terms of the
Indenture. The name(s) of the Trustee(s) will be set forth in the applicable
prospectus supplement. We may issue all the Debt Securities under the same
Indenture, as one or as separate series, as specified in the applicable
prospectus supplement(s).
This summary of certain terms and provisions of the Debt Securities and
Indentures is not complete. If we refer to particular provisions of an
Indenture, the provisions, including definitions of certain terms, are
incorporated by reference as a part of this summary. The Indentures are or will
be filed as an exhibit to the registration statement of which this prospectus is
a part, or as exhibits to documents filed under the Securities Exchange Act of
1934, which are incorporated by reference into this prospectus. The Indentures
are subject to and governed by the Trust Indenture Act of 1939, as amended. You
should refer to the applicable Indenture for the provisions that may be
important to you.
5
General
The Indentures will not limit the amount of Debt Securities that we may
issue. We may issue Debt Securities up to an aggregate principal amount as we
may authorize from time to time. The applicable prospectus supplement will
describe the terms of any Debt Securities being offered, including:
o the title and aggregate principal amount;
o the date(s) when principal is payable;
o the interest rate, if any, and the method for calculating the interest
rate;
o the interest payment dates and the record dates for the interest
payments;
o the places where the principal and interest will be payable;
o any mandatory or optional redemption or repurchase terms or
prepayment, conversion, sinking fund or exchangeability or
convertibility provisions;
o whether such Debt Securities will be Senior Debt Securities or
Subordinated Debt Securities and, if Subordinated Debt Securities, the
subordination provisions and the applicable definition of "Senior
Indebtedness";
o additional provisions, if any, relating to the defeasance and covenant
defeasance of the Debt Securities;
o if other than denominations of $1,000 or multiples of $1,000, the
denominations the Debt Securities will be issued in;
o whether the Debt Securities will be issued in the form of Global
Securities, as defined below, or certificates;
o whether the Debt Securities will be issuable in registered form,
referred to as "Registered Securities," or in bearer form, referred to
as "Bearer Securities" or both and, if Bearer Securities are issuable,
any restrictions applicable to the exchange of one form for another
and the offer, sale and delivery of Bearer Securities;
o any applicable material federal tax consequences;
o the dates on which premiums, if any, will be payable;
o our right, if any, to defer payment of interest and the maximum length
of such deferral period;
o any paying agents, transfer agents, registrars or trustees;
o any listing on a securities exchange;
o if convertible into common stock or preferred stock, the terms on
which such Debt Securities are convertible;
o the terms, if any, of the transfer, mortgage, pledge, or assignment as
security for any series of Debt Securities of any properties, assets,
proceeds, securities or other collateral, including whether certain
provisions of the Trust Indenture Act are applicable, and any
corresponding changes to provisions of the Indenture as currently in
effect;
6
o the initial offering price; and
o other specific terms, including covenants and any additions or changes
to the events of default provided for with respect to the Debt
Securities.
The terms of the Debt Securities of any series may differ and, without the
consent of the holders of the Debt Securities of any series, we may reopen a
previous series of Debt Securities and issue additional Debt Securities of such
series or establish additional terms of such series, unless otherwise indicated
in the applicable prospectus supplement.
Non U.S. Currency
If the purchase price of any Debt Securities is payable in a currency other
than U.S. dollars or if principal of, or premium, if any, or interest, if any,
on any of the Debt Securities is payable in any currency other than U.S.
dollars, the specific terms with respect to such Debt Securities and such
foreign currency will be specified in the applicable prospectus supplement.
Original Issue Discount Securities
Debt Securities may be issued as "Original Issue Discount Securities" to be
sold at a substantial discount below their principal amount. Original Issue
Discount Securities may include "zero coupon" securities that do not pay any
cash interest for the entire term of the securities. In the event of an
acceleration of the maturity of any Original Issue Discount Security, the amount
payable to the holder thereof upon such acceleration will be determined in the
manner described in the applicable prospectus supplement. Conditions pursuant to
which payment of the principal of the Subordinated Debt Securities may be
accelerated will be set forth in the applicable prospectus supplement. Material
federal income tax and other considerations applicable to Original Issue
Discount Securities will be described in the applicable prospectus supplement.
Covenants
Under the Indentures, we will be required to:
o pay the principal, interest and any premium on the Debt Securities
when due;
o maintain a place of payment;
o deliver a report to the Trustee at the end of each fiscal year
reviewing our obligations under the Indentures; and
o deposit sufficient funds with any paying agent on or before the due
date for any principal, interest or any premium.
Any additional covenants will be described in the applicable prospectus
supplement.
Registration, Transfer, Payment and Paying Agent
Unless otherwise indicated in a prospectus supplement, each series of Debt
Securities will be issued in registered form only, without coupons. The
Indentures, however, provide that we may also issue Debt Securities in bearer
form only, or in both registered and bearer form. Bearer Securities shall not be
offered, sold, resold or delivered in connection with their original issuance in
the United States or to any United States person other than offices located
outside the United States of certain United States financial institutions.
"United States person" means any citizen or resident of the United States, any
corporation, partnership or other entity created or organized in or under the
laws of the United States, any estate the income of which is subject to United
States federal income taxation regardless of its source, or any trust whose
administration is subject to the primary supervision of a United States court
and which has one or more United States fiduciaries who have the authority to
control all substantial decisions of the trust. "United States" means the United
States of America (including the states thereof and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction.
Purchasers of Bearer Securities will be subject to certification procedures and
may be affected by certain limitations under United States tax laws. Such
procedures and limitations will be described in the prospectus supplement
relating to the offering of the Bearer Securities.
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Unless otherwise indicated in a prospectus supplement, Registered
Securities will be issued in denominations of $1,000 or any integral multiple
thereof, and Bearer Securities will be issued in denominations of $5,000.
Unless otherwise indicated in a prospectus supplement, the principal,
premium, if any, and interest, if any, of or on the Debt Securities will be
payable, and Debt Securities may be surrendered for registration of transfer or
exchange, at an office or agency to be maintained by us in the Borough of
Manhattan, The City of New York, provided that payments of interest with respect
to any Registered Security may be made at our option by check mailed to the
address of the person entitled to payment or by transfer to an account
maintained by the payee with a bank located in the United States. No service
charge shall be made for any registration of transfer or exchange of Debt
Securities, but we may require payment of a sum sufficient to cover any tax or
other governmental charge and any other expenses that may be imposed in
connection with the exchange or transfer.
Unless otherwise indicated in a prospectus supplement, payment of principal
of, premium, if any, and interest, if any, on Bearer Securities will be made,
subject to any applicable laws and regulations, at such office or agency outside
the United States as specified in the prospectus supplement and as we may
designate from time to time. Unless otherwise indicated in a prospectus
supplement, payment of interest due on Bearer Securities on any interest payment
date will be made only against surrender of the coupon relating to such interest
payment date. Unless otherwise indicated in a prospectus supplement, no payment
of principal, premium or interest with respect to any Bearer Security will be
made at any office or agency in the United States or by check mailed to any
address in the United States or by transfer to an account maintained with a bank
located in the United States; except that if amounts owing with respect to any
Bearer Securities shall be payable in U.S. dollars, payment may be made at the
Corporate Trust Office of the applicable Trustee or at any office or agency
designated by us in the Borough of Manhattan, The City of New York, if (but only
if) payment of the full amount of such principal, premium or interest at all
offices outside of the United States maintained for such purpose by us is
illegal or effectively precluded by exchange controls or similar restrictions.
Unless otherwise indicated in the applicable prospectus supplement, we will
not be required to:
o issue, register the transfer of or exchange Debt Securities of any
series during a period beginning at the opening of business 15 days
before any selection of Debt Securities of that series of like tenor
to be redeemed and ending at the close of business on the day of that
selection;
o register the transfer of or exchange any Registered Security, or
portion thereof, called for redemption, except the unredeemed portion
of any Registered Security being redeemed in part;
o exchange any Bearer Security called for redemption, except to exchange
such Bearer Security for a Registered Security of that series and like
tenor that is simultaneously surrendered for redemption; or
o issue, register the transfer of or exchange any Debt Security which
has been surrendered for repayment at the option of the holder, except
the portion, if any, of the Debt Security not to be so repaid.
Ranking of Debt Securities
The Senior Debt Securities will be unsubordinated obligations of ours and
will rank equally in right of payment with all other unsubordinated indebtedness
of ours. The Subordinated Debt Securities will be obligations of ours and will
be subordinated in right of payment to all existing and future Senior
Indebtedness. The prospectus supplement will describe the subordination
provisions and set forth the definition of "Senior Indebtedness" applicable to
the Subordinated Debt Securities, and will set forth the approximate amount of
such Senior Indebtedness outstanding as of a recent date.
8
Global Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities that will be deposited with, or on behalf
of, a "Depository" identified in the prospectus supplement relating to such
series. Global Debt Securities may be issued in either registered or bearer form
and in either temporary or permanent form. Unless and until it is exchanged in
whole or in part for individual certificates evidencing Debt Securities, a
Global Debt Security may not be transferred except as a whole:
o by the Depository to a nominee of such Depository;
o by a nominee of such Depository to such Depository or another nominee
of such Depository; or
o by such Depository or any such nominee to a successor of such
Depository or a nominee of such successor.
The specific terms of the depository arrangement with respect to a series
of Global Debt Securities and certain limitations and restrictions relating to a
series of Global Bearer Securities will be described in the applicable
prospectus supplement.
Outstanding Debt Securities
In determining whether the holders of the requisite principal amount of
outstanding Debt Securities have given any authorization, demand, direction,
notice, consent or waiver under the relevant Indenture, the amount of
outstanding Debt Securities will be calculated based on the following:
o the portion of the principal amount of an Original Issue Discount
Security that shall be deemed to be outstanding for such purposes
shall be that portion of the principal amount thereof that could be
declared to be due and payable upon a declaration of acceleration
pursuant to the terms of such Original Issue Discount Security as of
the date of such determination;
o the principal amount of a Debt Security denominated in a currency
other than U.S. dollars shall be the U.S. dollar equivalent,
determined on the date of original issue of such Debt Security, of the
principal amount of such Debt Security; and
o any Debt Security owned by us or any obligor on such Debt Security or
any affiliate of us or such other obligor shall be deemed not to be
outstanding.
Redemption and Repurchase
The Debt Securities may be redeemable at our option, may be subject to
mandatory redemption pursuant to a sinking fund or otherwise, or may be subject
to repurchase by Swift at the option of the holders, in each case upon the
terms, at the times and at the prices set forth in the applicable prospectus
supplement.
Conversion and Exchange
The terms, if any, on which Debt Securities of any series are convertible
into or exchangeable for common stock, preferred stock, or other Debt Securities
will be set forth in the applicable prospectus supplement. Such terms of
conversion or exchange may be either mandatory, at the option of the holders, or
at our option.
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Consolidation, Merger and Sale of Assets
Each Indenture generally will permit a consolidation or merger between us
and another corporation, if the surviving corporation meets certain limitations
and conditions. Subject to those conditions, each Indenture may also permit the
sale by us of all or substantially all of our property and assets. If this
happens, the remaining or acquiring corporation shall assume all of our
responsibilities and liabilities under the Indentures including the payment of
all amounts due on the Debt Securities and performance of the covenants in the
Indentures.
We are only permitted to consolidate or merge with or into any other
corporation or sell all or substantially all of our assets according to the
terms and conditions of the Indentures, as indicated in the applicable
prospectus supplement. The remaining or acquiring corporation will be
substituted for us in the Indentures with the same effect as if it had been an
original party to the Indenture. Thereafter, the successor corporation may
exercise our rights and powers under any Indenture, in our name or in its own
name. Any act or proceeding required or permitted to be done by our board of
directors or any of our officers may be done by the board or officers of the
successor corporation.
Events of Default
Unless otherwise specified in the applicable prospectus supplement, an
Event of Default, as defined in the Indentures and applicable to Debt Securities
issued under such Indentures, typically will occur with respect to the Debt
Securities of any series under the Indenture upon:
o default for a period to be specified in the applicable prospectus
supplement in payment of any interest with respect to any Debt
Security of such series;
o default in payment of principal or any premium with respect to any
Debt Security of such series when due upon maturity, redemption,
repurchase at the option of the holder or otherwise;
o default in deposit of any sinking fund payment when due with respect
to any Debt Security of such series;
o default by us in the performance, or breach, of any other covenant or
warranty in such Indenture, which shall not have been remedied for a
period to be specified in the applicable prospectus supplement after
notice to us by the applicable Trustee or the holders of not less than
a fixed percentage in aggregate principal amount of the Debt
Securities of all series issued under the applicable Indenture;
o certain events of bankruptcy, insolvency or reorganization of Swift;
or
o any other Event of Default that may be set forth in the applicable
prospectus supplement, including an Event of Default based on other
debt being accelerated, known as a "cross-acceleration."
No Event of Default with respect to any particular series of Debt
Securities necessarily constitutes an Event of Default with respect to any other
series of Debt Securities. If the Trustee considers it in the interest of the
holders to do so, the Trustee under an Indenture may withhold notice of the
occurrence of a default with respect to the Debt Securities to the holders of
any series outstanding, except a default in payment of principal, premium, if
any, interest, if any.
Each Indenture will provide that if an Event of Default with respect to any
series of Debt Securities issued thereunder shall have occurred and be
continuing, either the relevant Trustee or the holders of at least a fixed
percentage in principal amount of the Debt Securities of such series then
outstanding may declare the principal amount of all the Debt Securities of such
series to be due and payable immediately. In the case of Original Issue Discount
Securities, the Trustee may declare as due and payable such lesser amount as may
be specified in the applicable prospectus supplement. However, upon certain
conditions, such declaration and its consequences may be rescinded and annulled
by the holders of at least a fixed percentage in principal amount of the Debt
Securities of all series issued under the applicable Indenture.
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The applicable prospectus supplement will provide the terms pursuant to
which an Event of Default shall result in acceleration of the payment of
principal of Subordinated Debt Securities.
In the case of a default in the payment of principal of, or premium, if
any, or interest, if any, on any Subordinated Debt Securities of any series, the
applicable Trustee, subject to certain limitations and conditions, may institute
a judicial proceeding for the collection thereof.
No holder of any of the Debt Securities of any series will have any right
to institute any proceeding with respect to the Indenture or any remedy
thereunder, unless the holders of at least a fixed percentage in principal
amount of the outstanding Debt Securities of such series:
o have made written request to the Trustee to institute such proceeding
as Trustee, and offered reasonable indemnity to the Trustee,
o the Trustee has failed to institute such proceeding within the time
period specified in the applicable prospectus supplement after receipt
of such notice, and
o the Trustee has not within such period received directions
inconsistent with such written request by holders of a majority in
principal amount of the outstanding Debt Securities of such series.
Such limitations do not apply, however, to a suit instituted by a
holder of a Debt Security for the enforcement of the payment of the
principal of, premium, if any, or any accrued and unpaid interest on,
the Debt Security on or after the respective due dates expressed in
the Debt Security.
During the existence of an Event of Default under an Indenture, the Trustee
is required to exercise such rights and powers vested in it under the Indenture
and use the same degree of care and skill in its exercise thereof as a prudent
person would exercise under the circumstances in the conduct of such person's
own affairs. Subject to the provisions of the Indenture relating to the duties
of the Trustee, if an Event of Default shall occur and be continuing, the
Trustee is under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the holders, unless such holders
shall have offered to the Trustee reasonable security or indemnity. Subject to
certain provisions concerning the rights of the Trustee, the holders of at least
a fixed percentage in principal amount of the outstanding Debt Securities of any
series have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any power
conferred on the Trustee with respect to such series.
The Indentures provide that the Trustee will, within the time period
specified in the applicable prospectus supplement after the occurrence of any
default, give to the holders of the Debt Securities of such series notice of
such default known to it, unless such default shall have been cured or waived;
provided that the Trustee shall be protected in withholding such notice if it
determines in good faith that the withholding of such notice is in the interest
of such holders, except in the case of a default in payment of principal of or
premium, if any, on any Debt Security of such series when due or in the case of
any default in the payment of any interest on the Debt Securities of such
series.
Swift is required to furnish to the Trustee annually a statement as to
compliance with all conditions and covenants under the Indentures.
Modification and Waivers
From time to time, when authorized by resolutions of our board of directors
and by the Trustee, without the consent of the holders of Debt Securities of any
series, we may amend, waive or supplement the Indentures and the Debt Securities
of such series for certain specified purposes, including, among other things:
o to cure ambiguities, defects or inconsistencies;
o to provide for the assumption of our obligations to holders of the
Debt Securities of such series in the case of a merger or
consolidation;
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o to add to our Events of Default or our covenants or to make any change
that would provide any additional rights or benefits to the holders of
the Debt Securities of such series;
o to add or change any provisions of such Indenture to facilitate the
issuance of Bearer Securities;
o to establish the form or terms of Debt Securities of any series and
any related coupons;
o to add guarantors with respect to the Debt Securities of such series;
o to secure the Debt Securities of such series;
o to maintain the qualification of the Indenture under the Trust
Indenture Act; or
o to make any change that does not adversely affect the rights of any
holder.
Other amendments and modifications of the Indentures or the Debt Securities
issued thereunder may be made by Swift and the Trustee with the consent of the
holders of not less than a fixed percentage of the aggregate principal amount of
the outstanding Debt Securities of each series affected, with each series voting
as a separate class; provided that, without the consent of the holder of each
outstanding Debt Security affected, no such modification or amendment may:
o reduce the principal amount of, or extend the fixed maturity of the
Debt Securities, or alter or waive any redemption, repurchase or
sinking fund provisions of the Debt Securities;
o reduce the amount of principal of any Original Issue Discount
Securities that would be due and payable upon an acceleration of the
maturity thereof;
o change the currency in which any Debt Securities or any premium or the
accrued interest thereon is payable;
o reduce the percentage in principal amount outstanding of Debt
Securities of any series which must consent to an amendment,
supplement or waiver or consent to take any action under the Indenture
or the Debt Securities of such series;
o impair the right to institute suit for the enforcement of any payment
on or with respect to the Debt Securities;
o waive a default in payment with respect to the Debt Securities or any
guarantee;
o reduce the rate or extend the time for payment of interest on the Debt
Securities;
o adversely affect the ranking of the Debt Securities of any series;
o release any guarantor from any of its obligations under its guarantee
or the Indenture, except in compliance with the terms of the
Indenture; or
o solely in the case of a series of Subordinated Debt Securities, modify
any of the applicable subordination provisions or the applicable
definition of Senior Indebtedness in a manner adverse to any holders.
The holders of a fixed percentage in aggregate principal amount of the
outstanding Debt Securities of any series may waive compliance by us with
certain restrictive provisions of the relevant Indenture, including any set
forth in the applicable prospectus supplement. The holders of a fixed percentage
in aggregate principal amount of the outstanding Debt Securities of any series
may, on behalf of the holders of that series, waive any past default under the
applicable Indenture with respect to that series and its consequences, except a
default in the payment of the principal of, or premium, if any, or interest, if
any, on any Debt Securities of such series, or in respect of a covenant or
provision which cannot be modified or amended without the consent of a larger
fixed percentage of holders or by the holder of each outstanding Debt Securities
of the series affected.
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Discharge, Termination and Covenant Termination
When we establish a series of Debt Securities, we may provide that such
series is subject to the termination and discharge provisions of the applicable
Indenture. If those provisions are made applicable, we may elect either:
o to terminate and be discharged from all of our obligations with
respect to those Debt Securities subject to some limitations; or
o to be released from our obligations to comply with specified covenants
relating to those Debt Securities, as described in the applicable
prospectus supplement.
To effect that termination or covenant termination, we must irrevocably
deposit in trust with the relevant Trustee an amount which, through the payment
of principal and interest in accordance with their terms, will provide money
sufficient to make payments on those Debt Securities and any mandatory sinking
fund or similar payments on those Debt Securities. This deposit may be made in
any combination of funds or government obligations. On such a termination, we
will not be released from certain of our obligations that will be specified in
the applicable prospectus supplement.
To establish such a trust we must deliver to the relevant Trustee an
opinion of counsel to the
o will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of the termination or covenant termination; and
o will be subject to U.S. federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if the
termination or covenant termination had not occurred.
If we effect covenant termination with respect to any Debt Securities, the
amount of deposit with the relevant Trustee must be sufficient to pay amounts
due on the Debt Securities at the time of their stated maturity. However, those
Debt Securities may become due and payable prior to their stated maturity if
there is an Event of Default with respect to a covenant from which we have not
been released. In that event, the amount on deposit may not be sufficient to pay
all amounts due on the Debt Securities at the time of the acceleration.
The applicable prospectus supplement may further describe the provisions,
if any, permitting termination or covenant termination, including any
modifications to the provisions described above.
Governing Law
The Indentures and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of New York.
Regarding the Trustees
The Trust Indenture Act contains limitations on the rights of a trustee,
should it become a creditor of ours, to obtain payment of claims in certain
cases or to realize on certain property received by it in respect of any such
claims, as security or otherwise. Each Trustee is permitted to engage in other
transactions with us from time to time, provided that if such Trustee acquires
any conflicting interest, it must eliminate such conflict upon the occurrence of
an Event of Default under the relevant Indenture, or else resign.
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DESCRIPTION OF CAPITAL STOCK
General
As of the date of this prospectus, we are authorized to issue up to
90,000,000 shares of stock, including up to 85,000,000 shares of common stock
and up to 5,000,000 shares of preferred stock. As of December 31, 2003, we had
27,484,091 shares of common stock and no shares of preferred stock outstanding.
As of December 31, 2003, we also had approximately 3,238,611 million shares of
common stock reserved for issuance upon exercise of outstanding options or in
connection with other awards outstanding under various employee or director
incentive, compensation and option plans.
The following is a summary of the key terms and provisions of our equity
securities. You should refer to the applicable provisions of our articles of
incorporation, bylaws, the Texas Business Corporation Act and the documents we
have incorporated by reference for a complete statement of the terms and rights
of our capital stock.
Common Stock
Voting Rights. Each holder of common stock is entitled to one vote per
share. Subject to the rights, if any, of the holders of any series of preferred
stock pursuant to applicable law or the provision of the certificate of
designation creating that series, all voting rights are vested in the holders of
shares of common stock. Holders of shares of common stock have noncumulative
voting rights, which means that the holders of more than 50% of the shares
voting for the election of directors can elect 100% of the directors, and the
holders of the remaining shares voting for the election of directors will not be
able to elect any directors.
Dividends. Dividends may be paid to the holders of common stock when, as
and if declared by the board of directors out of funds legally available for
their payment, subject to the rights of holders of any preferred stock. Swift
has never declared a cash dividend and intends to continue its policy of using
retained earnings for expansion of its business.
Rights upon Liquidation. In the event of our voluntary or involuntary
liquidation, dissolution or winding up, the holders of common stock will be
entitled to share equally, in proportion to the number of shares of common stock
held by them, in any of our assets available for distribution after the payment
in full of all debts and distributions and after the holders of all series of
outstanding preferred stock, if any, have received their liquidation preferences
in full.
Non-Assessable. All outstanding shares of common stock are fully paid and
non-assessable. Any additional common stock we offer and issue under this
Prospectus will also be fully paid and non-assessable.
No Preemptive Rights. Holders of common stock are not entitled to
preemptive purchase rights in future offerings of our common stock.
Listing. Our outstanding shares of common stock are listed on the New York
Stock Exchange and the Pacific Stock Exchange under the symbol "SFY." Any
additional common stock we issue will also be listed on the NYSE and the PSE.
Preferred Stock
Our board of directors can, without approval of our shareholders, issue one
or more series of preferred stock and determine the number of shares of each
series and the rights, preferences and limitations of each series. The following
description of the terms of the preferred stock sets forth certain general terms
and provisions of our authorized preferred stock. If we offer preferred stock, a
description will be filed with the SEC and the specific designations and rights
will be described in a prospectus supplement, including the following terms:
o the series, the number of shares offered and the liquidation value of
the preferred stock;
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o the price at which the preferred stock will be issued;
o the dividend rate, the dates on which the dividends will be payable
and other terms relating to the payment of dividends on the preferred
stock;
o the liquidation preference of the preferred stock;
o the voting rights of the preferred stock;
o whether the preferred stock is redeemable or subject to a sinking
fund, and the terms of any such redemption or sinking fund;
o whether the preferred stock is convertible or exchangeable for any
other securities, and the terms of any such conversion; and
o any additional rights, preferences, qualifications, limitations and
restrictions of the preferred stock.
The description of the terms of the preferred stock to be set forth in an
applicable prospectus supplement will not be complete and will be subject to and
qualified in its entirety by reference to the certificate of designation
relating to the applicable series of preferred stock. The registration statement
of which this prospectus forms a part will include the certificate of
designation as an exhibit or incorporate it by reference.
Undesignated preferred stock may enable our board of directors to render
more difficult or to discourage an attempt to obtain control of us by means of a
tender offer, proxy contest, merger or otherwise, and to thereby protect the
continuity of our management. The issuance of shares of preferred stock may
adversely affect the rights of the holders of our common stock. For example, any
preferred stock issued may rank prior to our common stock as to dividend rights,
liquidation preference or both, may have full or limited voting rights and may
be convertible into shares of common stock. As a result, the issuance of shares
of preferred stock may discourage bids for our common stock or may otherwise
adversely affect the market price of our common stock or any existing preferred
stock.
Any preferred stock will, when issued, be fully paid and non-assessable.
Anti-takeover Provisions
Certain provisions in our articles of incorporation, bylaws and our
shareholders' rights plan may encourage persons considering unsolicited tender
offers or other unilateral takeover proposals to negotiate with our board of
directors rather than pursue non-negotiated takeover attempts.
Our Classified Board of Directors. Our bylaws provide that our board of
directors is divided into three classes as nearly equal in number as possible.
The directors of each class are elected for three-year terms, and the terms of
the three classes are staggered so that directors from a single class are
elected at each annual meeting of stockholders. A staggered board makes it more
difficult for shareholders to change the majority of the directors and instead
promotes continuity of existing management.
Our Ability to Issue Preferred Stock. As discussed above, our board of
directors can set the voting rights, redemption rights, conversion rights and
other rights relating to authorized but unissued shares of preferred stock and
could issue that stock in either private or public transactions. Preferred stock
could be issued for the purpose of preventing a merger, tender offer or other
takeover attempt which the board of directors opposes.
Our Rights Plan. Our board of directors has adopted a stockholders' rights
plan. The rights attach to all common stock certificates representing
outstanding shares. One right is issued for each share of common stock
outstanding. Each right entitles the registered holder, under the circumstances
described below, to purchase from us one one-thousandth of a share of our Series
A Junior Participating Preferred Stock, a "Series A" share, at a price of
$150.00 per one one-thousandth of a Series A share, subject to adjustment. The
dividend and liquidation rights and the non-redemption feature of the Series A
shares are designed so that the value of one one-thousandth of a Series A share
purchasable upon exercise of each right will approximate the value of one share
of common stock. The following is a summary of the terms of the rights plan. You
should refer to the applicable provisions of the rights plan which we have
incorporated by reference as an exhibit to the registration statement of which
this prospectus is a part.
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The rights will separate from the common stock and right certificates will
be distributed to the holders of common stock as of the earlier of:
o 10 business days following a public announcement that a person or
group of affiliated persons has acquired beneficial ownership of 15%
or more of our outstanding voting shares, or
o 10 business days following the commencement or announcement of an
intention to commence a tender offer or exchange offer which would
result in a person or group beneficially owning 15% or more of our
outstanding voting shares.
The rights are not exercisable until rights certificates are distributed.
The rights will expire on July 31, 2007 unless that date is extended or the
rights are earlier redeemed or exchanged.
If a person or group (with certain exceptions for investment advisers)
acquires 15% or more of our voting shares, each right then outstanding, other
than rights beneficially owned by such person or group, becomes a right to buy
that number of shares of common stock or other securities or assets having a
market value of two times the exercise price of the right. The rights belonging
to the acquiring person or group become null and void.
If Swift is acquired in a merger or other business combination, or 50% of
its consolidated assets or assets producing more than 50% of its earning power
or cash flow are sold, each holder of a right will have the right to receive
that number of shares of common stock of the acquiring company which at the time
of such transaction has a market value of two times the purchase price of the
right.
At any time after a person or group acquires beneficial ownership of 15% or
more of our outstanding voting shares and before the earlier of the two events
described in the prior paragraph or acquisition by a person or group of
beneficial ownership of 50% or more of our outstanding voting shares, our board
of directors may, at its option, exchange the rights, other than those owned by
such person or group, in whole or in part, at an exchange ratio of one share of
common stock or a fractional share of Series A stock or other preferred stock
equivalent in value thereto, per right.
The Series A shares issuable upon exercise of the rights will be
non-redeemable and rank junior to all other series of our preferred stock. Each
whole Series A share will be entitled to receive a quarterly preferential
dividend in an amount per share equal to the greater of $1.00 in cash, or in the
aggregate, 1,000 times the dividend declared on the common stock, subject to
adjustment. In the event of liquidation, the holders of Series A share may
receive a preferential liquidation payment equal to the greater of $1,000 per
share, or in the aggregate, 1,000 times the payment made on the shares of common
stock. In the event of any merger, consolidation or other transaction in which
the shares of common stock are exchanged for or changed into other stock or
securities, cash or other property, each whole Series A share will be entitled
to receive 1,000 times the amount received per share of common stock. Each whole
Series A share will be entitled to 1,000 votes on all matters submitted to a
vote of our stockholders and Series A shares will generally vote together as one
class with the common stock and any other capital stock on all matters submitted
to a vote of our stockholders.
Prior to the earlier of the date it is determined that right certificates
are to be distributed or the expiration date of the rights, our board of
directors may redeem all, but not less than all, of the then outstanding rights
at a price of $0.01 per right. Our board of directors in its sole discretion may
establish the effective date and other terms and conditions of the redemption.
Upon redemption, the ability to exercise the rights will terminate and the
holders of rights will only be entitled to receive the redemption price.
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As long as the rights are redeemable, we may amend the rights agreement in
any manner except to change the redemption price. After the rights are no longer
redeemable, we may, except with respect to the redemption price, amend the
rights agreement in any manner that does not adversely affect the interests of
holders of the rights.
Business Combinations Under Texas Law. Swift is a Texas corporation subject
to Part Thirteen of the Texas Business Corporation Act known as the "Business
Combination Law." In general, the Business Combination Law prevents an
affiliated shareholder, or its affiliates or associates, from entering into a
business combination with an issuing public corporation during the three-year
period immediately following the date on which the affiliated shareholder became
an affiliated shareholder, unless:
o before the date such person became an affiliated shareholder, the
board of directors of the issuing public corporation approves the
business combination or the acquisition of shares that caused the
affiliated shareholder to become an affiliated shareholder; or
o not less than six months after the date such person became an
affiliated shareholder, the business combination is approved by the
affirmative vote of holders of at least two-thirds of the issuing
public corporation's outstanding voting shares not beneficially owned
by the affiliated shareholder, or its affiliates or associates.
An affiliated shareholder is a person that is or was within the preceding
three-year period the beneficial owner of 20% or more of a corporation's
outstanding voting shares. An issuing public corporation includes most publicly
held Texas corporations, including Swift. The term business combination
includes:
o mergers, share exchanges or conversions involving the affiliated
shareholder;
o dispositions of assets involving the affiliated shareholder having an
aggregate value of 10% or more of the market value of the assets or of
the outstanding common stock or representing 10% or more of the
earning power or net income of the corporation;
o issuances or transfers of securities by the corporation to the
affiliated shareholder other than on a pro rata basis;
o plans or agreements relating to a liquidation or dissolution of the
corporation involving an affiliated shareholder;
o reclassifications, recapitalizations, distributions or other
transactions that would have the effect of increasing the affiliated
shareholder's percentage ownership of the corporation; and
o the receipt of tax, guarantee, loan or other financial benefits by an
affiliated shareholder other than proportionately as a shareholder of
the corporation.
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DESCRIPTION OF DEPOSITARY SHARES
We may offer preferred stock represented by depositary shares and issue
depositary receipts evidencing the depositary shares. Each depositary share will
represent a fraction of a share of preferred stock. Shares of preferred stock of
each class or series represented by depositary shares will be deposited under a
separate deposit agreement among us, a bank or trust company acting as the
"Depository" and the holders of the depositary receipts. Subject to the terms of
the deposit agreement, each owner of a depositary receipt will be entitled, in
proportion to the fraction of a share of preferred stock represented by the
depositary shares evidenced by the depositary receipt, to all the rights and
preferences of the preferred stock represented by such depositary shares. Those
rights include any dividend, voting, conversion, redemption and liquidation
rights. Immediately following the issuance and delivery of the preferred stock
to the Depository, we will cause the Depository to issue the depositary receipts
on our behalf.
If depositary shares are offered, the applicable prospectus supplement will
describe the terms of such depositary shares, the deposit agreement and, if
applicable, the depositary receipts, including the following, where applicable:
o the payment of dividends or other cash distributions to the holders of
depositary receipts when such dividends or other cash distributions
are made with respect to the preferred stock;
o the voting by a holder of depositary shares of the preferred stock
underlying such depositary shares at any meeting called for such
purpose;
o if applicable, the redemption of depositary shares upon a redemption
by us of shares of preferred stock held by the Depository;
o if applicable, the exchange of depositary shares upon an exchange by
us of shares of preferred stock held by the Depository for debt
securities or common stock;
o if applicable, the conversion of the shares of preferred stock
underlying the depositary shares into shares of our common stock,
other shares of our preferred stock or our debt securities;
o the terms upon which the deposit agreement may be amended and
terminated;
o a summary of the fees to be paid by us to the Depository;
o the terms upon which a Depository may resign or be removed by us; and
o any other terms of the depositary shares, the deposit agreement and
the depositary receipts.
If a holder of depositary receipts surrenders the depositary receipts at
the corporate trust office of the Depository, unless the related depositary
shares have previously been called for redemption, converted or exchanged into
other securities of Swift, the holder will be entitled to receive at this office
the number of shares of preferred stock and any money or other property
represented by such depositary shares. Holders of depositary receipts will be
entitled to receive whole and, to the extent provided by the applicable
prospectus supplement, fractional shares of the preferred stock on the basis of
the proportion of preferred stock represented by each depositary share as
specified in the applicable prospectus supplement. Holders of shares of
preferred stock received in exchange for depositary shares will no longer be
entitled to receive depositary shares in exchange for shares of preferred stock.
If the holder delivers depositary receipts evidencing a number of depositary
shares that is more than the number of depositary shares representing the number
of shares of preferred stock to be withdrawn, the Depository will issue the
holder a new depositary receipt evidencing such excess number of depositary
shares at the same time.
Prospective purchasers of depositary shares should be aware that special
tax, accounting and other considerations may be applicable to instruments such
as depositary shares.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of preferred or common stock, either
independently or together with other securities. Each series of warrants will be
issued under a warrant agreement to be entered into between Swift and a bank or
trust company. You should refer to the warrant agreement relating to the
specific warrants being offered for the complete terms of such warrant agreement
and the warrants.
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Each warrant will entitle the holder to purchase the number of shares of
preferred or common stock at the exercise price set forth in, or calculable as
set forth in any applicable prospectus supplement. The exercise price may be
subject to adjustment upon the occurrence of certain events, as set forth in any
applicable prospectus supplement. After the close of business on the expiration
date of the warrant, unexercised warrants will become void. The place or places
where, and the manner in which, warrants may be exercised shall be specified in
any applicable prospectus supplement.
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus and applicable
prospectus supplements:
o through underwriters or dealers;
o through agents;
o directly to purchasers; or
o through a combination of any such methods of sale.
Any such underwriter, dealer or agent may be deemed to be an underwriter within
the meaning of the Securities Act of 1933.
The applicable prospectus supplement relating to the securities will set
forth:
o their offering terms, including the name or names of any underwriters,
dealers or agents;
o the purchase price of the securities and the proceeds to us from such
sale;
o any underwriting discounts, commissions and other items constituting
compensation to underwriters, dealers or agents;
o any initial public offering price;
o any discounts or concessions allowed or reallowed or paid by
underwriters or dealers to other dealers;
o in the case of debt securities, the interest rate, maturity and
redemption provisions; and
o any securities exchanges on which the securities may be listed.
If underwriters or dealers are used in the sale, the securities will be
acquired by the underwriters or dealers for their own account and may be resold
from time to time in one or more transactions in accordance with the rules of
the New York Stock Exchange and the Pacific Stock Exchange:
o at a fixed price or prices which may be changed;
o at market prices prevailing at the time of sale;
o at prices related to such prevailing market prices; or
o at negotiated prices.
The securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more of such firms. Unless otherwise set forth in an applicable prospectus
supplement, the obligations of underwriters or dealers to purchase the
securities will be subject to certain conditions precedent and the underwriters
or dealers will be obligated to purchase all the securities if any are
purchased. Any public offering price and any discounts or concessions allowed or
reallowed or paid by underwriters or dealers to other dealers may be changed
from time to time.
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Securities may be sold directly by us or through agents designated by us
from time to time. Any agent involved in the offer or sale of the securities in
respect of which this prospectus and a prospectus supplement is delivered will
be named, and any commissions payable by us to such agent will be set forth, in
the prospectus supplement. Unless otherwise indicated in the prospectus
supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.
If so indicated in the prospectus supplement, we will authorize
underwriters, dealers or agents to solicit offers from certain specified
institutions to purchase securities from us at the public offering price set
forth in the prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. Such
contracts will be subject to any conditions set forth in the prospectus
supplement and the prospectus supplement will set forth the commission payable
for solicitation of such contracts. The underwriters and other persons
soliciting such contracts will have no responsibility for the validity or
performance of any such contracts.
Underwriters, dealers and agents may be entitled under agreements entered
into with us to be indemnified by us against certain civil liabilities,
including liabilities under the Securities Act of 1933, or to contribution by
Swift to payments which they may be required to make. The terms and conditions
of such indemnification will be described in an applicable prospectus
supplement. Underwriters, dealers and agents may be customers of, engage in
transactions with, or perform services for, us in the ordinary course of
business.
Each class or series of securities will be a new issue of securities with
no established trading market, other than the common stock, which is listed on
the New York Stock Exchange and the Pacific Stock Exchange. We may elect to list
any other class or series of securities on any exchange, other than the common
stock, but we are not obligated to do so. Any underwriters to whom securities
are sold by us for public offering and sale may make a market in such
securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for any securities.
Certain persons participating in any offering of securities may engage in
transactions that stabilize, maintain or otherwise affect the price of the
securities offered. In connection with any such offering, the underwriters or
agents, as the case may be, may purchase and sell securities in the open market.
These transactions may include overallotment and stabilizing transactions and
purchases to cover syndicate short positions created in connection with the
offering. Stabilizing transactions consist of certain bids or purchases for the
purpose of preventing or retarding a decline in the market price of the
securities; and syndicate short positions involve the sale by the underwriters
or agents, as the case may be, of a greater number of securities than they are
required to purchase from us, as the case may be, in the offering. The
underwriters may also impose a penalty bid, whereby selling concessions allowed
to syndicate members or other broker-dealers for the securities sold for their
account may be reclaimed by the syndicate if such securities are repurchased by
the syndicate in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the securities,
which may be higher than the price that might otherwise prevail in the open
market, and if commenced, may be discontinued at any time. These transactions
may be effected on the New York Stock Exchange, the Pacific Stock Exchange, in
the over-the-counter market or otherwise. These activities will be described in
more detail in the sections entitled "Plan of Distribution" or "Underwriting" in
the applicable prospectus supplement.
LEGAL OPINIONS
Jenkens & Gilchrist, A Professional Corporation, Houston, Texas, will issue
an opinion for Swift regarding the legality of the securities offered by this
prospectus and applicable prospectus supplement. If the securities are being
distributed in an underwritten offering, certain legal matters will be passed
upon for the underwriters by counsel identified in the applicable prospectus
supplement.
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EXPERTS
The consolidated financial statements of Swift Energy Company as of
December 31, 2003 and 2002 and for each of the two years in the period ended
December 31, 2003, appearing in Swift Energy Company's Annual Report (Form 10-K)
for the year ended December 31, 2003, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Swift Energy Company at December
31, 2001 and for the year ended December 31, 2001 appearing in Swift Energy
Company's Annual Report on Form 10-K for the year ended December 31, 2003 have
been audited by Arthur Andersen LLP, independent auditors, as set forth in their
report thereon, a copy of which is included therein and incorporated herein by
reference. The report has not been reissued because Arthur Andersen LLP has
ceased operations. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
Because Arthur Andersen is no longer in a position to consent to the
inclusion or incorporation by reference in any prospectus or registration
statement of its report on such financial statements, we are not able to obtain,
and have not filed, Arthur Andersen's consent in reliance on Rule 437(a) under
the Securities Act of 1933. Consequently, your ability to assert claims against
Arthur Andersen LLP will be limited. In particular, because of this lack of
consent, you will not be able to sue Arthur Andersen LLP under Section 11(a)(4)
of the Securities Act for any untrue statement of a material fact contained in
the financial statements audited by Arthur Andersen LLP or any omissions to
state a material fact required to be stated in those financial statements.
Therefore, your right of recovery against Arthur Andersen under that section
will be limited.
On June 18, 2002, we filed a Current Report on Form 8-K announcing that our
board of directors, acting upon the recommendation of our audit committee,
engaged Ernst & Young LLP as our independent public accountants for fiscal 2002,
replacing Arthur Andersen LLP. The decision to change independent public
accountants was not the result of any disagreement with Arthur Andersen LLP on
matters of accounting principles or practices, financial statement disclosure or
auditing scope and procedure.
Information referenced or incorporated by reference in this prospectus
regarding our estimated quantities of oil and gas reserves and the discounted
present value of future net cash flows therefrom is based upon estimates of such
reserves and present values audited by H.J. Gruy and Associates, Inc.,
independent petroleum engineers.
21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses payable by Swift in
connection with the sale of securities being registered hereby. All amounts are
estimates, except the registration fee.
Item Amount
---- ------
SEC registration fee........................................ $ -0-
Printing fees............................................... $ 250,000
Accounting fees and expenses................................ $ 140,000
Legal fees and expenses..................................... $ 190,000
Blue Sky qualification fees and expenses.................... $ 12,000
Trustees' fees and expenses................................. $ 18,000
Rating agency fees.......................................... $ 65,000
Miscellaneous expenses...................................... $ 25,000
------------
Total.............................................. $ 700,000
============
Item 15. Indemnification of Officers and Directors
Swift has the authority under Articles 2.02(A)(16) and 2.02-1 of the Texas
Business Corporation Act to indemnify its directors and officers to the extent
provided for in such statute. Swift's bylaws, as amended, provide for
indemnification of its officers, directors and employees to the fullest extent
permitted by Article 2.02-1 of the Texas Business Corporation Act. With
shareholder approval, Swift amended its articles of incorporation to confirm
that Swift has the power to indemnify certain persons in such circumstances as
are provided in its Bylaws. The amendment allows Swift to enter into additional
insurance and indemnity arrangements at the discretion of Swift's board of
directors. Swift has entered into indemnification agreements with certain of its
officers and directors that indemnify the individual to the fullest extent
permitted by law.
Article 7.06 of the Texas Miscellaneous Corporation Laws Act provides that
a corporation's articles of incorporation may provide for the elimination or
limitation of a director's liability. Swift's Articles of Incorporation
eliminate the liability of directors to Swift or its shareholders for monetary
damages for an act or omission in his capacity as a director, with certain
specified exceptions to the fullest extent permitted by Article 7.06 of the
Texas Miscellaneous Corporation Laws Act.
Swift maintains insurance which will cover amounts that it is required to
pay certain of its officers and directors under the indemnity provisions
described above and coverage for its officers and directors against certain
liabilities, including certain liabilities under the federal securities law.
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Item 16. Exhibits
Exhibit No. Document Description
**1.1 Form of Underwriting Agreement (Debt Securities)
**1.2 Form of Underwriting Agreement (Common Stock)
**1.3 Form of Underwriting Agreement (Preferred Stock)
**1.4 Form of Underwriting Agreement (Depositary Shares)
**1.5 Form of Underwriting Agreement (Warrants)
***4.1 Form(s) of Indentures between Swift Energy Company and Trustee to be designated therein
covering Debt Securities to be offered hereunder, including Form of Note or Debenture
attached thereto
**4.2 Form of Certificate of Designation for Preferred Stock, including Specimen Certificate
**4.3 Form of Depositary Agreement between Swift Energy Company and Depository to be designated
therein covering Depositary Shares to be offered hereunder, including Form of Depositary
Receipt attached hereto
**4.4 Form of Warrant Agreement and Trustee to be designated therein covering Common Stock
Warrants to be offered hereunder, including Form of Common Stock Warrant attached thereto
**4.5 Form of Warrant Agreement and Trustee to be designated therein covering Preferred Stock
Warrants to be offered hereunder, including Form of Preferred Stock Warrant attached thereto
4.6 Rights Agreement, including exhibits, as amended and restated as of March 31, 1999, between
Swift Energy Company and American Stock Transfer & Trust company, as Rights Agent
(incorporated by reference to Exhibit 1 to Swift Energy Company's Registration Statement on
Form 8-A/A filed April 7, 1999)
***5 Form of Opinion of Jenkens & Gilchrist, A Professional Corporation, as to the validity of
the Securities being registered hereunder
**8 Form(s) of Opinion of Jenkens & Gilchrist, A Professional Corporation, as to Tax Matters
*12 Swift Energy Company Ratio of Earnings to Fixed Charges
*23.1 Consent of H.J. Gruy and Associates, Inc.
*23.2 Consent of Ernst & Young LLP
23.3 Consent of Arthur Andersen LLP (omitted pursuant to Rule 437(a) of the Securities Act of
1933)
***23.4 Form of Consent of Jenkens & Gilchrist, A Professional Corporation (included in Exhibit 5)
**23.5 Form of Consent of Jenkens & Gilchrist, A Professional Corporation (included in Exhibit 8)
***24 Power of Attorney (included on signature page)
*25 Statement(s) on Form T-1 of Eligibility of Trustee for the Debt Securities
______________________
* Filed herewith
** To be filed by amendment or Form 8-K
*** Previously filed
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17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of securities registered hereby, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule
424(b) under the Securities Act of 1933 if, in the aggregate, the
changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii)to include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement; provided, however, that the undertakings
set forth in paragraph (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby understands that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
(d) For the purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
24
(e) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(f) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
that Act.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Amendment No. 1 to Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on April 16, 2004.
SWIFT ENERGY COMPANY
By: /s/ Terry E. Swift
----------------------------
Terry E. Swift
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated, in multiple counterparts with the effect
of one original.
Signatures Title Date
---------- ----- ----
* Chairman of the Board April 16, 2004
------------------------------------------------
A. Earl Swift*
President, Chief Executive Officer
/s/ Terry E. Swift (Principal Executive Officer) and Director April 16, 2004
------------------------------------------------
Terry E. Swift
Senior Vice President-Finance,
Chief Financial Officer
/s/ Alton D. Heckaman, Jr. (Principal Financial Officer) April 16, 2004
------------------------------------------------
Alton D. Heckaman, Jr.
Controller
/s/ David W. Wesson (Principal Accounting Officer) April 16, 2004
------------------------------------------------
David W. Wesson
* Director April 16, 2004
------------------------------------------------
Virgil N. Swift*
* Director April 16, 2004
------------------------------------------------
G. Robert Evans*
* Director April 16, 2004
------------------------------------------------
Raymond E. Galvin*
* Director April 16, 2004
------------------------------------------------
Greg Matiuk*
* Director April 16, 2004
------------------------------------------------
Henry C. Montgomery*
* Director April 16, 2004
------------------------------------------------
Clyde W. Smith, Jr.*
* Director April 16, 2004
------------------------------------------------
Harold J. Withrow*
* Attorney-in-fact pursuant to a power of April 16, 2004
attorney contained in the original filing
/s/ Bruce H. Vincent of this Registration Statement
------------------------------------------------
*Bruce H. Vincent
26