Exhibit 10.2

EXECUTIVE CLAIMS SETTLEMENT AGREEMENT

This EXECUTIVE CLAIMS SETTLEMENT AGREEMENT (including all exhibits attached
hereto, and as may be amended, supplemented or modified in accordance with the
terms hereof, this “Agreement”) is entered into as of December 13, 2016 and
effective as of the Effective Date (as defined below), by and among, STONE
ENERGY CORPORATION, a Delaware corporation, with its principal office located at
625 East Kaliste Saloom Road, Lafayette, Louisiana 70508 (the “Company”) and
David Welch, Kenneth Beer, Lisa Jaubert, John Leonard, Eldon J. Louviere, Keith
Seilhan, Richard Toothman, Thomas Messonnier, and Florence Ziegler (each, a
“Senior Executive” and, collectively, the “Senior Executives” and together with
the Company, each a “Party” and, collectively, the “Parties”).

R E C I T A L S

A. The Company intends to file pre-packaged cases (the “Chapter 11 Cases”) under
chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the
“Bankruptcy Code”) with the United States Bankruptcy Court for the Southern
District of Texas (the “Bankruptcy Court”);

B. The pre-packaged plan of reorganization to be filed on the first day (the
Petition Date”) of the Chapter 11 Cases (the “Plan”) provides for payment in
full of all general unsecured claims;

C. Each of the Senior Executives (other than Messr. Welch) is a participant in
either the Stone Energy Corporation Executive Change of Control and Severance
Plan or the Stone Energy Corporation Executive Change in Control Severance
Policy (collectively, the “CIC/Severance Plan”);

D. Each of the Senior Executives is a participant in the Stone Energy
Corporation 2016 Performance Incentive Compensation Plan (the “Performance Bonus
Plan”);

E. Certain of the Senior Executives are participants in the Stone Energy
Corporation Non-Qualified Deferred Compensation Plan (the “Non-Qualified Plan”);

F. The Company is party to the following employment agreements with certain of
the Senior Executives: (a) Letter Agreement dated December 2, 2008 between Stone
Energy Corporation and David H. Welch; and (b) Letter Agreement dated August 10,
2016 by and between Stone Energy Corporation and Richard L. Toothman, Jr.
(collectively, the “Employment Agreements”);

G. The Company is a party to that certain Letter Agreement dated May 19, 2005
between Stone Energy Corporation and Kenneth H. Beer (the “Beer Agreement”);

H. Among other things, the Plan may result in a change of control of the
Company, which, absent entry into this Agreement, could result in enhanced
benefits to the Senior Executives under the CIC/Severance Plan or the Beer
Agreement, as applicable;

I. As part of the negotiations of the Plan, the Company’s major creditor
constituencies required the Company to modify the CIC/Severance Plan, the
Performance Bonus Plan, the Non-Qualified Plan, the Employment Agreements, and
the Beer Agreement to reduce the potential claims of the Senior Executives
thereunder;

J. The Company and the Senior Executives believe that confirmation of the Plan,
which would enable the Company to continue operating as a going concern, is in
the best interests of the Company and the Senior Executives;

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K. Accordingly, after negotiations between the Company and the Senior
Executives, and with the support of holders of approximately 85.4% of the
outstanding principal amount of the Company’s unsecured notes (the “Consenting
Noteholders”), the Company and the Senior Executives have agreed to modify the
CIC/Severance Plan, the Performance Bonus Plan, the Non-Qualified Plan, the
Employment Agreements, and the Beer Agreement on the terms and subject to the
conditions set forth herein;

L. Pursuant to the terms and subject to the conditions set forth herein, the
Company and the Senior Executives desire to terminate the CIC/Severance Plan and
the Beer Agreement and, as a replacement therefor, adopt the Stone Energy
Corporation Executive Severance Plan (the “Executive Severance Plan”), a copy of
which is attached hereto as Exhibit A, in which the Senior Executives will be
allowed to participate, subject to the terms of the Executive Severance Plan;

M. Pursuant to the terms and subject to the conditions set forth herein, the
Company and Messrs. Welch and Toothman desire to amend their Employment
Agreements in the form of the amendments attached hereto as Exhibit B
(collectively, the “Employment Agreement Amendments”), pursuant to which Messrs.
Welch and Toothman will waive any rights to severance under their Employment
Agreements in exchange for participation in the Executive Severance Plan;

N. By terminating the CIC/Severance Plan and the Beer Agreement, entering into
the Employment Agreement Amendments, and adopting the Executive Severance Plan,
the potential aggregate claims the Senior Executives could assert will be
reduced from $21,043,620 to $4,553,000;

O. Pursuant to the terms and subject to the conditions set forth herein, the
Company desires that the Senior Executives waive their claims related to the
Performance Bonus Plan, and in exchange therefor, adopt the Stone Energy
Corporation Key Executive Incentive Plan (the “KEIP”), a copy of which is
attached hereto as Exhibit C, in which the Senior Executives shall be allowed to
participate, subject to the terms of the KEIP;

P. Pursuant to the KEIP, the aggregate incentive bonus claims of the Senior
Executives for the fourth quarter of 2016 would be reduced from a maximum level
of $3,012,638 (the “Fourth Quarter Bonus Opportunity”) to $0 and any future
bonus payments to the Senior Executives under the KEIP would be limited to
$2,008,425, which is equal to the target bonus for the Senior Executives under
the Performance Bonus Plan for the fourth quarter of 2016;

Q. Pursuant to the terms and subject to the conditions set forth herein, the
Company desires to effectuate the assumption of the Non-Qualified Plan (as
amended), a copy of which is attached hereto as Exhibit D, in the Chapter 11
Cases; and

R. Pursuant to the terms and subject to the conditions set forth herein, the
Company desires to effectuate the assumption of the Employment Agreements, as
amended by the Employment Agreement Amendments.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged and agreed, each of the Parties agrees as
follows:

1. Definitions. The following term shall have the following meaning in this
Agreement:

 

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“Claims” shall mean any and all claims, causes of action, liabilities,
obligations, rights, demands, remedies, suits, debts, setoffs, recoupments,
counterclaims, judgments, and damages of any kind whatsoever, whether direct or
derivative, matured or unmatured, disputed or undisputed, known or unknown,
liquidated or unliquidated, foreseen or unforeseen, discoverable or
undiscoverable, fixed or contingent, arising in law, equity, or otherwise.

2. Termination of CIC/Severance Plan and Beer Agreement; Waiver of Claims.

a. Termination of CIC/Severance Plan. The CIC/Severance Plan shall be
irrevocably terminated as of the Effective Date, notwithstanding anything to the
contrary therein, and the Senior Executives’ rights under the CIC/Severance Plan
shall cease as of the Effective Date, including any rights to receive benefits
from the Company in connection with any “change of control,” as defined in, and
pursuant to the terms of, the CIC/Severance Plan.

b. Termination of Beer Agreement. The Beer Agreement shall be irrevocably
terminated as of the Effective Date, notwithstanding anything to the contrary
therein, and Messr. Beer’s rights under the Beer Agreement shall cease as of the
Effective Date.

c. Waiver of Claims Under CIC/Severance Plan. As of the Effective Date, each
Senior Executive (other than Messr. Welch), on behalf of his/herself and his/her
successors, heirs, and assigns, hereby irrevocably, unconditionally and without
reservation of any kind, waives, generally releases and forever discharges, and
covenants not to sue, the Company, and each of its subsidiaries, affiliates,
partners, lenders, predecessors, successors and assigns, together with each of
their respective current and former agents, officers, directors, members,
managers, owners, representatives, partners, employees, attorneys and advisors
(in each case, solely in their capacity as such), from and against any and all
Claims, arising under, out of, related to, or which could have been asserted in
connection with, the CIC/Severance Plan and the performance of obligations
thereunder, including, without limitation, all amounts and benefits that could
be paid under the CIC/Severance Plan and any amounts owed prior to the Effective
Date; provided, however, that nothing in this paragraph shall release any rights
or obligations expressly arising under this Agreement or otherwise limit the
enforcement of this Agreement.

d. Waiver of Claims Under Beer Agreement. As of the Effective Date, Messr. Beer,
on behalf of himself and his successors, heirs, and assigns, hereby irrevocably,
unconditionally and without reservation of any kind, waives, generally releases
and forever discharges, and covenants not to sue, the Company, and each of its
subsidiaries, affiliates, partners, lenders, predecessors, successors and
assigns, together with each of their respective current and former agents,
officers, directors, members, managers, owners, representatives, partners,
employees, attorneys and advisors (in each case, solely in their capacity as
such), from and against any and all Claims, arising under, out of, related to,
or which could have been asserted in connection with, the Beer Agreement and the
performance of obligations thereunder, including, without limitation, all
amounts and benefits that could be paid under the Beer Agreement and any amounts
owed prior to the Effective Date; provided, however, that nothing in this
paragraph shall release any rights or obligations expressly arising under this
Agreement or otherwise limit the enforcement of this Agreement.

3. Entry into Employment Agreement Amendments; Waiver of Severance Under
Employment Agreements.

a. Entry into Employment Agreement Amendments. As of the Effective Date, the
Company and Messrs. Welch and Toothman agree to enter into their respective
Employment Agreement Amendments.

 

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b. Waiver of Severance Under Employment Agreement. As of the Effective Date,
Messr. Welch on behalf of himself and his successors, heirs, and assigns, hereby
irrevocably, unconditionally and without reservation of any kind, waives,
generally releases and forever discharges, and covenants not to sue, the
Company, and each of its subsidiaries, affiliates, partners, lenders,
predecessors, successors and assigns, together with each of their respective
current and former agents, officers, directors, members, managers, owners,
representatives, partners, employees, attorneys and advisors (in each case,
solely in their capacity as such), from and against any and all Claims, arising
under, out of, related to, or which could have been asserted in connection with,
the payment of severance under his Employment Agreement, including, without
limitation, all amounts and benefits that could be paid as severance under such
Employment Agreement and any amounts owed prior to the Effective Date; provided,
however, that nothing in this paragraph shall release any rights or obligations
expressly arising under this Agreement or otherwise limit the enforcement of
this Agreement.

4. Adoption of Executive Severance Plan and New Plan Following Emergence.

a. Contemporaneous with the termination of the CIC/Severance Plan and the Beer
Agreement and entry into the Employment Agreement Amendments, and in lieu of
severance payable thereunder, the Company shall adopt and implement the
Executive Severance Plan, and the Senior Executives shall become participants
under the Executive Severance Plan, with all rights, benefits, and entitlements
provided thereunder, all in accordance with the terms and conditions set forth
in the Executive Severance Plan.

b. Following the effective date of a plan of reorganization in the Chapter 11
Cases (the “Emergence Date”), the board of directors of the reorganized Company
(the “New Board”) shall retain a compensation consultant to advise on a new
change in control severance plan for the Senior Executives (the “New Severance
Plan”), following input from the Senior Executives, to be adopted by the New
Board no later than one hundred and eighty (180) days following the Emergence
Date. Failure to adopt a New Severance Plan shall not be a breach of this
Agreement, but shall constitute “Good Reason” as defined in the Executive
Severance Plan for participants other than Messrs. Welch, Beer, and Toothman.

5. Waiver of Claims Under Performance Bonus Plan; Adoption of KEIP.

a. Waiver of Claims Under Performance Bonus Plan. Except as provided in this
Agreement, as of the Effective Date, each Senior Executive, on behalf of
his/herself and his/her successors, heirs, and assigns, hereby irrevocably,
unconditionally and without reservation of any kind, waives, generally releases
and forever discharges, and covenants not to sue, the Company, and each of its
subsidiaries, affiliates, partners, lenders, predecessors, successors and
assigns, together with each of their respective current and former agents,
officers, directors, members, managers, owners, representatives, partners,
employees, attorneys and advisors (in each case, solely in their capacity as
such), from and against any and all Claims, arising under, out of, related to,
or which could have been asserted in connection with, the Performance Bonus Plan
and the performance of obligations thereunder, including, without limitation,
the Fourth Quarter Bonus Opportunity and any other amounts owed prior to the
Effective Date; provided, however, that nothing in this paragraph shall release
any rights or obligations expressly arising under this Agreement or otherwise
limit the enforcement of this Agreement.

b. Adoption of KEIP. In exchange for the Senior Executives’ waiver of Claims
under the Performance Bonus Plan, the Company shall adopt and implement the
KEIP, and the Senior Executives shall become participants under the KEIP, with
all rights, benefits, and entitlements provided thereunder, including the right
to receive incentives in an aggregate amount that shall not exceed $2,008,425,
all in accordance with the terms and conditions set forth in the KEIP.

 

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c. As soon as commercially practicable after the Emergence Date, the New Board
shall develop and adopt with the assistance of a compensation consultant, and in
consultation with the Senior Executives, a market-based incentive compensation
plan.

6. Acknowledgements. Each of the Parties represents, warrants, acknowledges and
agrees that:

a. this Agreement has been negotiated and effectuated in good faith, for fair,
good and reasonably equivalent valuable consideration and for legitimate
business purposes; and

b. the execution and delivery of this Agreement and performance of obligations
hereunder will not result in a violation or default under any instrument,
contract, agreement or other document to which it is a party.

7. Effectiveness. The Company hereby agrees that it will use its best efforts to
file a motion reasonably satisfactory to the Senior Executives in the Chapter 11
Cases, no later than three (3) days following the Petition Date, seeking:
(i) approval of this Agreement under Rule 9019 of the Federal Rules of
Bankruptcy Procedure and (ii) assumption of the Non-Qualified Plan and the
Employment Agreements (as amended by the Employment Agreement Amendments)
pursuant to Section 365 of the Bankruptcy Code (the “Approval Motion”). This
Agreement shall become enforceable and effective (the “Effective Date”) upon
entry of a final non-appealable order by the Bankruptcy Court approving the
Approval Motion that is reasonably satisfactory to the Senior Executives and
acceptable to the Consenting Noteholders.

8. Representations and Warranties. Each Party represents, warrants, and
covenants to each other Party that:

a. it has the full power and authority to execute and deliver this Agreement,
and this Agreement will constitute a valid and binding obligation of the Party,
enforceable against each other Party in accordance with its terms;

b. the execution and delivery of this Agreement does not require any consent,
waiver, approval or authorization of any third party (other than the Bankruptcy
Court);

c. it has not assigned, sold or conveyed and will not assign, sell or convey,
any Claims released herein;

d. it has conducted its own due diligence as well as undertaken the opportunity
to review information, ask questions and receive satisfactory answers concerning
the terms and conditions of this Agreement;

e. it possesses the knowledge, experience and sophistication to allow it to
fully evaluate and accept the merits and risks of entering into this Agreement;

f. it has read and considered this Agreement carefully; it has discussed this
Agreement with its advisors; its advisors have reviewed this Agreement; it has
been given a reasonable period of time (as long as it deemed necessary) to
consider this Agreement before signing; it fully understands the extent and
impact of the provisions of this Agreement; and it has executed this Agreement
knowingly and voluntarily and without any coercion, undue influence, threat, or
intimidation of any kind whatsoever; and

 

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g. it has not relied upon any representation, either oral or written, made by
any other Party in executing this Agreement, other than those specifically set
forth herein, and further represents that there have been no representations or
inducements of any type or character made by any Party other than those
specifically set forth in writing herein.

9. Headings. The division of this Agreement into articles, sections, paragraphs
and other subdivisions and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation hereof.

10. Incorporation of Recitals. Each of the forgoing recitals is agreed and
incorporated herein by reference.

11. Counterparts; Signatures. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed an original, but
all such counterparts shall constitute one and the same instrument, and all
signatures need not appear on any one counterpart. Any Party hereto may execute
and deliver a counterpart of this Agreement by delivering by facsimile or other
electronic transmission a signature page to this Agreement signed by such Party,
and any such facsimile or other electronic signature shall be treated in all
respects as having the same effect as an original signature.

12. Entire Agreement. This Agreement sets forth the entire agreement between the
Parties as it relates to the subject matter hereof, and replaces and supersedes
any and all prior agreements, promises, proposals, representations,
understandings and negotiations, written or not, relating to the same.

13. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. In the event that any
part of this Agreement is declared by any court or other judicial or
administrative body to be null, void or unenforceable, said provision shall
survive to the extent it is not so declared, and all of the other provisions of
this Agreement shall remain in full force and effect only if, after excluding
the portion deemed to be unenforceable, the remaining terms provide for the
consummation of the transactions contemplated hereby in substantially the same
manner as originally set forth at the later of the date this Agreement was
executed or last amended.

14. Governing Law. This Agreement and all disputes arising hereunder shall be
governed by, and construed in accordance with, the laws of the State of
Louisiana without regard to conflicts of law. All actions or proceedings with
respect to this Agreement or any other instrument or document executed in
connection herewith shall be instituted in the Bankruptcy Court during the
pendency of the Chapter 11 Cases and in the United States District Court for the
Western District of Louisiana after the pendency of the Chapter 11 Cases and by
execution and delivery of this Agreement, each of the Parties hereto, to the
fullest extent permitted by applicable law, unconditionally submits to the
exclusive jurisdiction of such courts and irrevocably waives (i) any objection
such Party may now or hereafter have to the laying of venue in such courts and
(ii) any claim that an action or proceeding brought in any of such courts has
been brought in an inconvenient forum. EACH OF THE PARTIES HEREBY IRREVOCABLY
WAIVES ITS RIGHTS TO A JURY TRIAL FOR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT.

15. Mutual Drafting. This Agreement is the result of the Parties’ joint efforts,
and each of them and their respective counsel have reviewed this Agreement and
each provision hereof

 

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has been subject to the mutual consultation, negotiation, and agreement of the
Parties, and the language used in this Agreement shall be deemed to be the
language chosen by the Parties to express their mutual intent, and therefore
there shall be no construction against either Party based on any presumption of
that Party’s involvement in the drafting thereof.

16. Amendment and Modification. Neither this Agreement nor any terms hereof may
be amended, changed, waived, discharged, or terminated unless such amendment,
change, waiver, discharge or termination is in a writing signed by the Company
and each other Party affected by such amendment, change, waiver, discharge or
termination.

17. Successors and Assigns. The Parties’ respective rights and obligations under
this Agreement shall be binding upon and inure to the benefit and detriment of
their respective successors, assigns, heirs and transferees.

18. Cooperation. The Parties agree to cooperate fully and execute any and all
supplementary documents and to take all additional actions which may be
reasonably necessary or appropriate to give full force and effect to the terms
and intent of this Agreement.

19. Further Assurances. Each of the Parties shall, from time to time at the
request of another Party hereto, without any additional consideration, furnish
such Party with such further information or assurances, execute and deliver such
additional documents, instruments and conveyances, and take such other actions
and do such other things, as may be reasonably necessary to carry out the
provisions of this Agreement, and give effect to the transactions contemplated
hereby and thereby.

[signature page follows]

 

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WHEREFORE, intending to be bound hereby, each Party has executed this Agreement
as of the date indicated below.

 

STONE ENERGY CORPORATION      DAVID WELCH By:  

/s/ Kenneth Beer

    

/s/ David Welch

Its: Executive Vice President and Chief Financial Officer      Date: December
13, 2016      KENNETH BEER      LISA JAUBERT

/s/ Kenneth Beer

    

/s/ Lisa Jaubert

JOHN LEONARD      ELDON J. LOUVIERE

/s/ John Leonard

    

/s/ Eldon J. Louviere

KEITH SEILHAN      RICHARD TOOTHMAN

/s/ Keith Seilhan

    

/s/ Richard Toothman

THOMAS MESSONNIER      FLORENCE ZIEGLER

/s/ Thomas Messonnier

    

/s/ Florence Ziegler

 

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