Exhibit 10.1
STONE ENERGY CORPORATION
EXECUTIVE CHANGE OF CONTROL
AND SEVERANCE PLAN
(As Amended and Restated Effective December 31, 2008)
          The STONE ENERGY CORPORATION EXECUTIVE CHANGE OF CONTROL AND SEVERANCE
PLAN (the “Plan”) is hereby amended and restated, effective as of December 31,
2008 (the “Effective Date”), pursuant to the authorization of the Board of
Directors of STONE ENERGY CORPORATION (the “Company”). The Plan has been
established to provide financial security to the Company’s Executives (as
defined below) in the event of a Change of Control (as defined below) and upon
certain terminations of employment with the Company. This amendment and
restatement of the Plan also replaces in full and supersedes the Company’s
Executive Change in Control Severance Policy that was maintained for certain of
the Company’s executives.
I .
DEFINITIONS AND CONSTRUCTION
     1.1 Definitions. Where the following words and phrases appear in the Plan,
they shall have the respective meanings set forth below, unless their context
clearly indicates to the contrary.
          “Annual Pay” shall mean the annual rate of base compensation of an
Executive in effect immediately prior to the Change of Control or on his
termination of employment, whichever is greater.
          “Board” shall mean the Board of Directors of the Company or its
successor.
          “Cause” shall mean any termination of an Executive’s employment by
reason of the Executive’s: (i) willful and continued failure to perform
substantially the Executive’s duties (other than any such failure resulting from
the Executive’s incapacity due to physical or mental illness) after written
notice of such failure has been given to the Executive specifying in detail such
failure or (ii) the willful engaging by the Executive in conduct that is
demonstrably and materially injurious to the Company and its affiliates taken as
a whole, monetarily or otherwise. For purposes of clauses (i) and (ii) of this
definition, no act or failure to act, on behalf of the Executive’s part shall be
deemed “willful” unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the Executive’s act, or failure to
act, was in the best interests of the Company.
          “Change of Control” shall be deemed to have occurred for purposes of
the Plan if the event set forth in any one of the following paragraphs shall
have occurred:
(A) any person (a “person or entity”) is or becomes the Beneficial Owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such

 

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Person any securities acquired directly from the Company) representing 20% or
more of the combined voting power of the Company’s then outstanding securities,
excluding any person who becomes such a Beneficial Owner in connection with a
transaction described in clause (i) of paragraph (C) below; or
(B) the following individuals cease for any reason to constitute a majority of
the number of directors then serving: individuals, who, on the Effective Date,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of directors of the Company) whose appointment
or election by the Board or nomination for election by the Company’s
stockholders was approved or recommended by a vote of at least two-thirds of the
directors then still in office who either were directors on the date hereof or
whose appointment, election or nomination for election was previously so
approved or recommended; or
(C) there is consummated a scheme of arrangement, merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any other
corporation, other than (i) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior to such scheme of
arrangement, merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof), in combination with the ownership of
any trustee or other fiduciary holding securities under an employee benefit plan
of the Company or any subsidiary of the Company, at least 65% of the combined
voting power of the securities of the Company or such surviving entity or any
parent thereof outstanding immediately after such merger or consolidation, or
(ii) a scheme of arrangement, merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities Beneficially Owned by such person any
securities acquired directly from the Company or its affiliates other than in
connection with the acquisition by the Company of its affiliates of a business)
representing 20% or more of the combined voting power of the Company’s then
outstanding securities; or
(D) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets,
other than a sale or disposition by the Company of all or substantially all of
the Company’s assets to an entity, at least 65% of the combined voting power of
the voting securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the Company immediately
prior to such sale.
Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.

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          “Change of Control Period” shall mean (i) in the case of a Level One
Executive, the 24-month period beginning on the date that a Change of Control
occurs, and (ii) in the case of a Level Two Executive, the 12-month period
beginning on the date that a Change of Control occurs.
          “Code” shall mean the Internal Revenue Code of 1986, as amended.
          “Committee” shall mean the Compensation Committee of the Board, or, if
no Compensation Committee exists, the Board. The Committee may delegate all or
part of its authority as it may choose to the Vice President of Human Resources
of the Company.
          “Employer” shall mean the Company and each eligible entity designated
as an Employer in accordance with the provisions of Section 4.4 of the Plan.
          “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended.
          “Executive” shall mean any individual who, on or immediately prior to
a Change of Control or at the time of his Involuntary Termination, if earlier,
is the chief executive officer, a president, executive vice president, senior
vice president or vice president of an Employer.
          “Good Reason” for termination by the Executive of the Executive’s
employment shall mean the occurrence (without the Executive’s express written
consent) on or within the applicable Change of Control Period of any one of the
following acts by the Company:
(A) a material reduction in the Executive’s annual base salary as in effect on
the date of the Change of Control or as the same may be increased from time to
time thereafter except for across-the-board salary reductions similarly
affecting all senior executives of the Company and all senior executives of any
person in control of the Company;
(B) a material diminution in the authority, duties or responsibilities of the
Executive as in effect immediately prior to the Change of Control; or
(C) a requirement that the Executive transfer to a work location that is more
than fifty (50) miles from such Executive’s principal work location immediately
prior to the Change of Control.
The Executive’s right to terminate the Executive’s employment for Good Reason
shall not be affected by the Executive’s incapacity due to physical or mental
illness. Subject to the provisions of Involuntary Termination below, the
Executive’s continued employment shall not constitute consent to, or a waiver of
rights with respect to, any act or failure to act constituting Good Reason
hereunder.
          “Health Benefit Coverages” shall mean coverage under each group health
plan sponsored or contributed to by the Employer (or following the Change of
Control, by an affiliate of the Employer that employs the Executive) for its
similarly situated active employees.

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          “Involuntary Termination” shall mean (i) any termination of the
Executive’s employment by the Employer other than for Cause and (ii) any
termination of the Executive’s employment by the Executive on or following a
Change of Control, but within the applicable Change of Control Period, for Good
Reason. In order for a termination by the Executive to be for Good Reason, the
Executive must first give written notice to the Company in writing of the Good
Reason event within 30 days of the initial existence of the Good Reason event,
and the Company shall then have 30 days from its receipt of such notice to
remedy the event and if the Company fails to timely remedy the event, the
Executive may terminate his employment for Good Reason in the seven day period
following the Company’s failure to remedy the event. Such Involuntary
Termination by the Executive for Good Reason shall be deemed to be within the
applicable Change of Control Period if the initial existence of the Good Reason
event occurred within the applicable Change of Control Period.
          “Level One Executive” shall mean any Executive designated by the Board
in its sole discretion as a “Level One Executive” for purposes of the Plan.
Notwithstanding the foregoing, as of the Effective Date, the individuals serving
as of such date in the positions of (i) president and chief executive officer of
the Company and (ii) chief financial officer of the Company shall be Level One
Executives.
          “Level Two Executive” shall mean any Executive who is not designated
by the Board as a “Level One Executive” for purposes of the Plan.
Notwithstanding the foregoing, as of the Effective Date, each Executive as of
such date who is not a Level One Executive as of such date shall be a Level Two
Executive.
          “Release” shall mean a general release, substantially in the form
attached hereto, from the Executive that releases the Company and its affiliates
from employment related claims.
     1.2 Number and Gender. Wherever appropriate herein, words used in the
singular shall be considered to include the plural and the plural to include the
singular. The masculine gender, where appearing in the Plan, shall be deemed to
include the feminine gender.
     1.3 Headings. The headings of Articles and Sections herein are included
solely for convenience and if there is any conflict between such headings and
the text of the Plan, the text will control.
II .
CHANGE OF CONTROL AND SEVERANCE BENEFITS
     2.1 Change of Control Benefits. Immediately prior to or upon a Change of
Control, an Executive will receive the following benefits, without regard to
whether the Executive’s employment with an Employer is terminated:
               (a) the Company shall cause each of the unexercised
“in-the-money” stock options granted to an Executive pursuant to any of the
Company’s stock option plans or stock incentive plans to be fully vested and
shall cancel each such stock option immediately prior to the Change of Control
for cash equal to the excess, if any, of the product of the number of the
Company’s shares issuable upon exercise of such stock option times the cash
consideration per

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share to be determined by the Board in connection with the Change of Control,
over the aggregate exercise price of such stock option,
               (b) all then remaining vesting restrictions with respect to any
of the Company’s restricted stock awards issued or issuable to an Executive
pursuant to any of the Company’s stock incentive plans shall expire and the
restricted shares shall be treated as the Company’s common shares,
               (c) the Company will contribute to its 401(k) plan (the “401(k)
Plan”) a matching amount for the participants equal to $1.00 for every $2.00
contributed as a 401(k) contribution (other than a 401(k) catch-up contribution)
by the participants in the 401(k) Plan for the period from January 1 in the
calendar year of the Change of Control through the effective date of the Change
of Control, less any matching amounts previously contributed to the 401(k) Plan
for such period, if any. Such matching contribution shall be credited to the
401(k) Plan participants’ accounts according to the terms of the 401(k) Plan, up
to a total maximum matching contribution for an individual participant’s account
that does not exceed the limit authorized by the Code for such contribution, and
               (d) the Company will pay to the Executive a pro rata share of the
bonus opportunity up to the date of the Change of Control at the then projected
year end rate of payout, in an amount, if any, as determined by the Compensation
Committee in its sole discretion.
If, for purposes of Section 409A of the Code, it is determined that the
Executive has a “vested right” prior to the Change of Control to one or more of
the above benefits, then such benefits shall be paid only if the Change of
Control is also a “change of control event,” within the meaning of Section 409A
of the Code and the Treasury regulations issued thereunder.
     2.2 Severance Payments. Subject to the provisions of Sections 2.3, 2.5,
2.6, and 4.5 hereof, if an Executive incurs an Involuntary Termination, then on
the date upon which his Release becomes irrevocable, the Executive shall receive
the following severance benefits:
               (a) a lump sum cash severance payment equal to: (i) in the case
of a Level One Executive, 2.99 times the sum of (1) the Level One Executive’s
Annual Pay and (2) any target bonus at the 100% level for which the Level One
Executive is eligible with respect to the fiscal year in which termination
occurs; and (ii) in the case of a Level Two Executive, (1) the Level Two
Executive’s Annual Pay if such Involuntary Termination occurs outside of a
Change of Control Period and (2) the product of 2.99 and the Level Two
Executive’s Annual Pay if such Involuntary Termination occurs during a Change of
Control Period;
               (b) a pro rata share of the Executive’s bonus opportunity up to
the date of his Involuntary Termination at the then projected year end rate of
payout, in an amount, if any, as determined by the Compensation Committee in its
sole discretion (but reduced by any amount paid to the Executive for such bonus
year pursuant to Section 2.1(d));
               (c) the continuation of the Health Benefit Coverages for himself
and, where applicable, his eligible dependents for a period of six months
following the date of Involuntary Termination, at a cost to the Executive that
is equal to the cost for an active employee for similar coverage. The Executive
may choose to continue some or all of such Health Benefit Coverages.

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If at any time on or after an Executive’s Involuntary Termination any health
benefit plan in which he has elected to continue his coverage either is
terminated or ceases to provide coverage to him or his covered beneficiaries for
any reason, including, without limitation, by its terms or the terms of an
insurance contract providing the benefits of such plan or, with respect to a
group health plan, such plan no longer being subject to the Consolidated Omnibus
Reconciliation Act of 1985 (“COBRA”), then Health Benefit Coverages shall mean
an economically equivalent cash payment for coverage equivalent to the coverage
that is provided (or if the plan has been terminated, that would have been
provided but for such termination) for similarly situated active employees,
plus, where applicable, a gross-up payment to the Executive to reflect the loss
of tax benefits associated with his “lost” employer-provided health plan
coverage benefit(s). With respect to the obligation of the Company to provide
continued health plan coverage hereunder, the Company shall take all actions
necessary such that the coverage is provided in a manner that satisfies the
requirements of Sections 105 and 106 of the Code such that the health benefits
received are not includible in the individual’s taxable income. The subsidized
COBRA Health Benefit Coverage(s) provided hereunder shall immediately end upon
the Executive’s obtainment of new employment and eligibility for health benefit
plan coverage(s) similar to that being continued (with the Executive being
obligated hereunder to promptly report such eligibility to the Employer);
               (d) the Executive will be eligible to receive outplacement
services, the duration and costs for which shall be determined by the then
prevailing practice of the Company’s Human Resources Department concerning
outplacement services, but such services shall be reasonable and commensurate
with the Executive’s position and in no event shall such benefits exceed a cost
to the Company of five percent of the Annual Pay of the Executive; and
               (e) without regard to the Release requirement, a lump sum amount,
within 30 days of such termination, equal to the earned, but unpaid, portion of
the Executive’s Annual Pay as of the date of his Involuntary Termination.
     2.3 Release and Full Settlement. Notwithstanding anything to the contrary
herein, as a condition to the receipt of any severance payments or benefits
under Section 2.2 (a) through (d) above, an Executive whose employment has been
subject to an Involuntary Termination must, within 45 days of his Involuntary
Termination, execute a Release, in substantially the form attached hereto as
Attachment A, releasing the Committee, the Plan fiduciaries, the Employer, and
the Employer’s parent corporation, subsidiaries, affiliates, shareholders,
partners, officers, directors, employees and agents from any and all claims and
from any and all causes of action of any kind or character including, but not
limited to, all claims or causes of action arising out of such Executive’s
employment with the Employer or the termination of such employment, but
excluding all claims to benefits and payments the Executive may have under any
compensation or benefit plan, program or arrangement, including the Plan. The
performance of the Employer’s obligations hereunder and the receipt of any
benefits provided hereunder by such Executive shall constitute full settlement
of all such claims and causes of action.
     2.4 No Mitigation. An Executive shall not be required to mitigate the
amount of any payment or benefit provided for in this Article II by seeking
other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Article II be reduced by any compensation or benefit earned
by the Executive as the result of employment by another

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employer or by retirement benefits, except as provided in Section 2.2(c) with
respect to Health Benefit Coverage and in Section 2.5 with respect to the
coordination of severance benefits hereunder with other agreements providing
severance benefits. Subject to the foregoing, the benefits under the Plan are in
addition to any other benefits to which an Executive is otherwise entitled.
     2.5 Coordination with Other Arrangements. Any Executive who is a party to
an individual employment or severance agreement or covered by another similar
Change of Control or severance plan (“Other Plan”) of the Employer and who
becomes eligible for severance payments and benefits as provided in Section 2.2
of the Plan, shall receive such severance payments and benefits as provided
under Section 2.2 of the Plan, but such payments and benefits shall be “offset”
or reduced by any severance payments or benefits provided to such Executive
under any such Other Plan.
     2.6 Parachute Taxes. Notwithstanding anything to the contrary herein, in
the event any payment, distribution or provision of a benefit to an Executive
pursuant to the terms of the Plan, when aggregated with any other payment,
distribution or provision of a benefit to or on behalf of such Executive outside
of the Plan, would be subject to the excise tax imposed by Section 4999 of the
Code, or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest or penalties, are hereinafter collectively
referred to as the “Excise Tax”), the Company shall:
               (a) in the case of a Level One Executive, pay to such Executive
an additional amount (a “Gross-Up Payment”) such that the net amount retained by
the Executive, after deduction of any Excise Tax on the total payments and any
federal, state and local income and employment taxes and Excise Tax upon the
Gross-Up Payment, shall be equal to the amount the Executive would have
otherwise received without such Excise Tax; provided, however, that if it shall
be determined that a Level One Executive is entitled to a Gross-Up Payment, but
that the total to be paid to the Executive does not exceed 110% of the greatest
amount (the “Reduced Amount”) that could be paid to the Executive such that the
receipt of the total would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the total payments to the Executive
in the aggregate shall be reduced to the Reduced Amount. The reduction of the
total payments, if applicable, pursuant to the preceding sentence, shall be made
by reducing payments (including reducing a payment to zero) payable in the order
in which such payments would be made (beginning with such payment that would be
made first in time and continuing, to the extent necessary, through to such
payment that would be made last in time). The determination as to whether any
such reduction in the amount of the payments and benefits provided hereunder is
necessary shall be made by the Company in good faith. Payment of the Gross-Up
Payment, if due hereunder, shall be made on or as soon as practicable following
the date the Excise Tax is remitted to the applicable tax authorities (but not
later than the end of the taxable year following the year in which the Excise
Tax is remitted); and
               (b) in the case of a Level Two Executive, reduce the payments
and/or benefits (based on the principles for reductions described in
Section 2.6(a) above) to such Executive in whole or in part so that no part of
the payments or benefits received under the Plan by such Executive will be
subject to the Excise Tax; provided, however, that such reduction(s) shall be
made only if by reason of such reduction(s) the Executive’s net after-tax
benefit (as determined

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in good faith by the Company), after all such reduction(s), will exceed the
Executive’s net after-tax benefit if such reduction(s) were not made.
Nothing in this Section 2.6 shall require the Company to be responsible for, or
have any liability or obligation with respect to, Executive’s excise tax
liabilities under Section 4999 of the Code.
III .
ADMINISTRATION OF PLAN
     3.1 Committee’s Powers and Duties. The Company shall be the named fiduciary
and shall have full power to administer the Plan in all of its details, subject
to applicable requirements of law. The duties of the Company shall be performed
by the Committee. It shall be a principal duty of the Committee to see that the
Plan is carried out, in accordance with its terms, for the exclusive benefit of
persons entitled to participate in the Plan. For this purpose, the Committee’s
powers shall include, but not be limited to, the following authority, in
addition to all other powers provided by the Plan:
               (a) to make and enforce such rules and regulations as it deems
necessary or proper for the efficient administration of the Plan;
               (b) to interpret the Plan and all facts with respect to a claim
for payment or benefits, its interpretation thereof to be final and conclusive
on all persons claiming payment or benefits under the Plan;
               (c) to decide all questions concerning the Plan and the
eligibility of any person to participate in the Plan;
               (d) to make a determination as to the right of any person to a
payment or benefit under the Plan (including, without limitation, to determine
whether and when there has been a termination of an Executive’s employment and
the cause of such termination and the amount of such payment or benefit);
               (e) to appoint such agents, counsel, accountants, consultants,
claims administrator and other persons as may be required to assist in
administering the Plan;
               (f) to allocate and delegate its responsibilities under the Plan
and to designate other persons to carry out any of its responsibilities under
the Plan, any such allocation, delegation or designation to be in writing;
               (g) to sue or cause suit to be brought in the name of the Plan;
and
               (h) to obtain from the Employer and from Executives such
information as is necessary for the proper administration of the Plan.
     3.2 Member’s Own Participation. No member of the Committee may act or vote
in a decision of the Committee specifically relating to himself as a participant
in the Plan.

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     3.3 Indemnification. The Employer shall indemnify and hold harmless each
member of the Committee against any and all expenses and liabilities arising out
of his administrative functions or fiduciary responsibilities, including any
expenses and liabilities that are caused by or result from an act or omission
constituting the negligence of such member in the performance of such functions
or responsibilities, but excluding expenses and liabilities that are caused by
or result from such member’s own gross negligence or willful misconduct.
Expenses against which such member shall be indemnified hereunder shall include,
without limitation, the amounts of any settlement or judgment, costs, counsel
fees, and related charges reasonably incurred in connection with a claim
asserted or a proceeding brought or settlement thereof.
     3.4 Compensation, Bond and Expenses. The members of the Committee shall not
receive compensation with respect to their services for the Committee. To the
extent required by applicable law, but not otherwise, Committee members shall
furnish bond or security for the performance of their duties hereunder. Any
expenses properly incurred by the Committee incident to the administration,
termination or protection of the Plan, including the cost of furnishing bond,
shall be paid by the Company.
     3.5 Claims Procedure. Any Executive that the Committee determines is
entitled to a benefit under the Plan is not required to file a claim for
benefits. Any Executive who is not paid a benefit and who believes that he is
entitled to a benefit or who has been paid a benefit and who believes that he is
entitled to a greater benefit may file a claim for benefits under the Plan in
writing with the Committee. In any case in which a claim for Plan benefits by an
Executive is denied or modified, the Committee shall furnish written notice to
the claimant within 90 days after receipt of such claim for Plan benefits (or
within 180 days if additional information requested by the Committee
necessitates an extension of the 90-day period and the claimant is informed of
such extension in writing within the original 90-day period), which notice
shall:
               (a) state the specific reason or reasons for the denial or
modification;
               (b) provide specific reference to pertinent Plan provisions on
which the denial or modification is based;
               (c) provide a description of any additional material or
information necessary for the Executive or his representative to perfect the
claim, and an explanation of why such material or information is necessary; and
               (d) explain the Plan’s claim review procedure as contained herein
and describe the Executive’s right to bring an action under Section 502(a) of
ERISA following a denial or modification on review.
In the event a claim for Plan benefits is denied or modified, if the Executive
or his representative desires to have such denial or modification reviewed, he
must, within 60 days following receipt of the notice of such denial or
modification, submit a written request for review by the Committee of its
initial decision. In connection with such request, the Executive or his
representative may review any pertinent documents upon which such denial or
modification was based and may submit issues and comments in writing. Within
60 days following such request for review the Committee shall, after providing a
full and fair review, render its final decision in

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writing to the Executive and his representative, if any, stating specific
reasons for such decision and making specific references to pertinent Plan
provisions upon which the decision is based. If special circumstances require an
extension of such 60-day period, the Committee’s decision shall be rendered as
soon as possible, but not later than 120 days after receipt of the request for
review. If an extension of time for review is required, written notice of the
extension shall be furnished to the Executive and his representative, if any,
prior to the commencement of the extension period. The Committee shall given
written notice of its decision on review to the Executive. In the event a claim
for Plan benefits is denied or modified on review, such notice shall set forth
the specific reasons for such denial or modification and provide specific
references to the Plan provisions on which the denial or modification is based.
The notice shall also provide that the Executive is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the Executive’s claim for benefits,
including (i) documents, records or other information relied upon for the
benefit determination, (ii) documents, records or other information submitted,
considered or generated without regard to whether such documents, records or
other information were relied upon in making the benefit determination, and
(iii) documents, records or other information that demonstrates compliance with
the standard claims procedure. The notice shall also contain a statement
describing the Executive’s right to bring an action under Section 502(a) of
ERISA. Any legal action with respect to a claim for Plan benefits must be filed
no later than one year after the later of (1) the date the claim is denied by
the Committee or (2) if a review of such denial is requested pursuant to the
provisions above, the date of the final decision by the Committee with respect
to such request.
IV .
GENERAL PROVISIONS
     4.1 Funding. The benefits provided herein shall be unfunded and shall be
provided from the Employer’s general assets.
     4.2 Cost of Plan. Except as provided in Section 2.2(c), the entire cost of
the Plan shall be borne by the Employer and no contributions shall be required
of the Executives.
     4.3 Plan Year. The Plan shall operate on a calendar year basis.
     4.4 Other Participating Employers. The Committee may designate any entity
eligible by law to participate in the Plan as an Employer by written instrument
delivered to the Secretary of the Company and the designated Employer. Such
written instrument shall specify the effective date of such designated
participation, may incorporate specific provisions relating to the operation of
the Plan which apply to the designated Employer only and shall become, as to
such designated Employer and its employees, a part of the Plan. Each designated
Employer shall be conclusively presumed to have consented to its designation and
to have agreed to be bound by the terms of the Plan and any and all amendments
thereto upon its submission of information to the Committee required by the
terms of or with respect to the Plan; provided, however, that the terms of the
Plan may be modified so as to increase the obligations of an Employer only with
the consent of such Employer, which consent shall be conclusively presumed to
have been given by such Employer upon its submission of any information to the
Committee required by the terms of or with respect to the Plan.

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     4.5 Amendment and Termination.
          (a) The Plan may be terminated or amended from time to time at the
discretion of the Board; provided, however, that, subject to the provisions of
Section 4.5(b), the Plan may not be amended or terminated to adversely affect
the benefits or potential rights to benefits (contingent or otherwise) of any
Executive then covered under the Plan for a period of 12 months following
amendment or termination of the Plan (which period shall be automatically
increased to 24 months with respect to a Level One Executive upon the occurrence
of a Change of Control). For purposes of this Section, a change in the
designation of participating Employers by the Committee pursuant to Section 4.4
shall be deemed to be an amendment to the Plan. Notwithstanding anything to the
contrary herein, the Board, in its sole discretion, may terminate the coverage
of any Executive under the Plan by giving prior written notice to the Executive
at least 12 months in advance of such termination of coverage (which period
shall be automatically increased to 24 months with respect to a Level One
Executive upon the occurrence of a Change of Control). Notwithstanding the
foregoing, in the event of a Change of Control during the existence of the Plan,
the Plan shall remain in full force and effect for 24 months following the date
of such Change of Control. The Employer’s obligation to make all payments and
provide benefits that have become payable as a result of an Involuntary
Termination occurring during the existence of the Plan shall survive any
termination of the Plan.
          (b) The provisions set forth in Section 4.5(a) that otherwise restrict
amendments to the Plan shall not apply to (i) an amendment to the administrative
provisions of the Plan that is required pursuant to applicable law, (ii) an
amendment that increases the benefits payable under the Plan or otherwise
constitutes a bona fide improvement of an Executive’s rights under the Plan or
(iii) an amendment which decreases the benefits of an Executive that is
consented to in writing by such Executive.
     4.6 Not Contract of Employment. The adoption and maintenance of the Plan
shall not be deemed to be a contract of employment between the Employer and any
person or to be consideration for the employment of any person. Nothing herein
contained shall be deemed to give any person the right to be retained in the
employ of the Employer or to restrict the right of the Employer to discharge any
person at any time nor shall the Plan be deemed to give the Employer the right
to require any person to remain in the employ of the Employer or to restrict any
person’s right to terminate his employment at any time.
     4.7 Severability. Any provision in the Plan that is prohibited or
unenforceable in any jurisdiction by reason of applicable law shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating or affecting the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
     4.8 Nonalienation. Executives shall not have any right to pledge,
hypothecate, anticipate or assign benefits or rights under the Plan, except by
will or the laws of descent and distribution.

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     4.9 Effect of Plan. The Plan is intended to supersede all prior oral or
written policies of the Employer and all prior oral or written communications to
Executives with respect to the subject matter hereof, and all such prior
policies or communications (including, without limitation, the Company’s
Executive Change in Control Severance Policy) are hereby null and void and of no
further force and effect. Further, the Plan shall be binding upon the Employer
and any successor of the Employer, by merger or otherwise, and shall inure to
the benefit of and be enforceable by the Employer’s Executives.
     4.10 Taxes. The Employer or its successor may withhold from any amounts
payable to an Executive under the Plan such federal, state or local taxes as
shall be required to be withheld pursuant to any applicable law or regulation.
     4.11 Governing Law. The Plan shall be interpreted and construed in
accordance with the laws of the State of Louisiana without regard to conflict of
laws principles, except to the extent preempted by federal law.
     4.12 Section 409A. Notwithstanding any provision of the Plan to the
contrary, if on the date of the Executive’s separation from service the
Executive is a “specified employee,” as defined in Section 409A of the Code,
then all or such portion of any severance payments, benefits, or reimbursements
under the Plan that would be subject to the additional tax provided by Section
409A(a)(1)(B) of the Code if not delayed as required by Section 409A(a)(2)(B)(i)
of the Code shall be delayed until the date that is six months after the date of
the Executive’s separation from service date (or, if earlier, the Executive’s
date of death) and shall be paid as a lump sum (without interest) on such date.
No payment shall be made under the Plan prior to the date the Executive incurs a
“separation from service,” within the meaning of Section 409A of the Code and
the regulations thereunder.
          EXECUTED this 7th day of April, 2009.

            STONE ENERGY CORPORATION
      By:   /s/ David H. Welch       Name:   David H. Welch      Title:  
President and Chief Executive Officer     

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ATTACHMENT A TO
STONE ENERGY CORPORATION
EXECUTIVE CHANGE OF CONTROL
AND SEVERANCE PLAN
RELEASE AND WAIVER
          This Release and Waiver (“Release and Waiver” or “Agreement”) is made
as of the                      day of                     , 20___(the “Effective
Date”), by and between Stone Energy Corporation (the “Company”), a Delaware
corporation, whose address is 625 E. Kaliste Saloom Road, Lafayette, Louisiana
70508, and                                                              (“You,”
“you,” “your” and/or the “Employee”). This Release and Waiver confirms that your
employment with the Company terminated effective as of                     ,
20___. You have been or will be paid by the Company through your last day of
employment and will have no further duties or responsibilities thereafter. In
exchange for your agreement to the terms of this Agreement, the Company will
provide you with the benefits described in Sections 2.2(a), (b), (c) and (d) of
the Company’s Executive Change of Control and Severance Plan, as amended (the
“Plan”), in accordance with the terms and conditions of the Plan (less
applicable withholding for taxes and other lawful deductions). Such benefits are
referred to in this Agreement as the “Severance Benefits.”
          As used in this Agreement, the “Stone Releasees” means the Company and
its parents, subsidiaries, insurers, related and/or affiliated entities,
predecessors, successors, and assigns of any of these entities, and the past,
present, and future officers, directors, employees, shareholders, trustees,
representatives and agents of any of them, whether in their individual or
official capacities.
          For purposes of paragraphs 1 through 14 below, “You,” “you,” “your”
and/or the “Employee” means you and anyone who has, may have, or will have any
legal rights or claims through you. This includes, but is not limited to, your
spouse, heirs, assigns, agents, executors, administrators, and legal
representatives.
          In entering into this Release and Waiver, you hereby acknowledge and
agree as follows:
          1. In exchange for the Severance Benefits, you agree and hereby waive
and release all rights, claims, and causes of action, if any, you may have
against the Stone Releasees, of whatever nature, at common law, statutory or
otherwise, including but not limited to any and all claims or causes of action
arising under federal or state law that relate to your employment, the
termination of your employment, or any purportedly unlawful employment practice
accruing from any time in the past to the date hereof. This general release
applies to and includes, among other things, (i) any claims for age
discrimination that could be brought under the Age Discrimination in Employment
Act of 1967, as amended; (ii) any claims brought by any other person or class
action under which you may have a right or benefit, and you agree that, in the
event that any such claims are brought, you will not accept any proceeds or
compensation obtained by the parties asserting such claims; (iii) any purported
rights you may have under any policies of, or agreements with, the Stone
Releasees other than this Agreement; (iv) any claims arising under any federal,
state or local statute, ordinance, rule, regulation or common-law

 

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principle, including but not limited to Title VII of the Civil Rights Act of
1964, as amended, the Civil Rights Act of 1866 and 1871 (42 U.S.C. section
1981), as amended, the National Labor Relations Act, as amended, the Family and
Medical Leave Act of 1993, as amended, the Employee Retirement Income Security
Act of 1974, as amended, the Americans with Disabilities Act of 1990, as
amended, the Rehabilitation Act of 1973, as amended, the Occupational Safety and
Health Act, as amended, the Immigration Reform Control Act, as amended, the
Civil Rights Act of 1991, as amended, or the anti-discrimination, employment,
wage and hour, or corporation laws of any state or municipality, and/or any
claims under any express or implied contract or any rights purported to exist
under any common law principle (all claims listed above are collectively
referred to as the “Released Claims”). This general release shall not include
(A) any rights you have under an employee pension plan according to the terms
and conditions of such plan; (B) any rights to continuation coverage under the
Consolidated Omnibus Reconciliation Act; (C) any claims that controlling law
expressly provides may be not be waived or released by settlement; (D) any
claims that may arise after the date this Release and Waiver is signed; (E) any
rights you have under any indemnification agreement with the Company; or (F) any
claim to enforce the terms of this Agreement. Further, nothing in this Agreement
shall prevent you from filing any non-legally waivable claim, including a
challenge to the validity of this Agreement, with the Equal Employment
Opportunity Commission (“EEOC”), National Labor Relations Board (“NLRB”) or
comparable state or local agency, or participating in any investigation or
proceeding conducted by the EEOC, NLRB or comparable state or local agency;
however, you understand and agree that you are waiving any and all rights to
recover any monetary or personal relief or recovery as a result of such EEOC,
NLRB or comparable state or local agency proceeding or subsequent legal actions.
          2. You represent that you have made no assignment, sale, delivery,
transfer or conveyance of any rights you have asserted or may have against the
Stone Releasees with respect to any of the Released Claims.
          3. You acknowledge and agree that the amounts being paid to you and
the benefits being provided to you pursuant to this Agreement are not amounts
and benefits to which you are otherwise entitled and are being paid and provided
to you solely in exchange for your entry into this Agreement.
          4. You agree to refrain from making public or private comments
relating to any of the Stone Releasees that are derogatory or which may tend to
injure any such party in its or their business, public or private affairs.
Nothing herein is intended, or should be construed to (i) inhibit or limit your
ability to cooperate with any investigation conducted by a governmental or
regulatory agency or official, including by providing information, causing
information to be provided, or otherwise assisting in an investigation by such
governmental or regulatory agency or official regarding conduct which you
reasonably believe constitutes a violation of state or federal law; (ii) inhibit
or limit your right to conduct a reasonable and good faith defense of any
litigation or other claims that might be asserted against you; (iii) inhibit or
limit your ability to respond to a subpoena or other lawful order compelling you
to provide testimony or information; or (iv) inhibit or limit your ability to
file, cause to be filed, testify, participate in or otherwise assist in a
proceeding filed or about to be filed relating to an alleged violation of
federal securities laws and/or regulations or any other federal law relating to
fraud against shareholders (excepting any proceeding purporting to assert any
claims on your behalf that have been released by the terms of this Agreement).

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          5. You agree that you will not violate the Confidentiality Agreement
contained in the Company’s Employee Handbook (a copy of which is attached to
this Agreement and the terms of which are incorporated herein by reference),
except as may be provided in the second sentence of paragraph 4 above. By
entering into this Agreement, you again agree and affirm that you will not
disclose any confidential, proprietary, financial, or technical data that you
developed, assisted in developing, accumulated, interpreted, or that in any way
became known to you while working for the Company, except as may be provided in
the second sentence of paragraph 4 above. You also agree that you will not
disclose any trade secrets that you developed, assisted in developing,
accumulated, interpreted, or that in any way became known to you while working
for the Company, except as may be provided in the second sentence of paragraph 4
above. You also agree that you will keep the terms of this Agreement
confidential and that you will not discuss the contents of this Agreement with
anyone but your spouse, your tax preparer, or your lawyer, except as may be
required in responding to a subpoena or other lawful order of compulsion or as
may be requested by a governmental or regulatory agency or official.
          6. You expressly acknowledge and agree that you have been provided:
(i) all wages and compensation to which you were entitled as of the date that
you executed this Agreement; and (ii) all leaves (paid and unpaid) to which you
were entitled during the course of your employment.
          7. This Agreement expresses the entire agreement between the Company
and you relating to your termination of employment and the matters contained in
this Agreement. You agree that no one has made any representations or promises
to induce you to enter into this Agreement, except as set forth herein.
          8. You understand and agree that promises made in this Agreement,
including the general release, are voluntary, and that the Agreement provides
you with consideration in addition to anything to which you are otherwise
entitled. You have [twenty-one (21)] [forty-five (45)] days to review this
Agreement and, if during that time period you sign the Agreement, then you have
seven (7) days following the date that you sign the Agreement to revoke your
acceptance of it. If you decide to revoke the Agreement, notice should be sent
to                     , P.O. Box, 52897, Lafayette, Louisiana 70505;
(telephone: (337) 237-0410). If you do not accept this Agreement or if you
revoke the Agreement, then you will not receive the Severance Benefits. The
Severance Benefits are not due and payable until the expiration of the seven-day
revocation period and are only due if the Agreement is not revoked by you during
that time. If you revoke your acceptance of the Agreement during the revocation
period described above, then this Agreement shall become null and void.
          9. You agree to return immediately all Company property including, for
example but without limitation, building keys, access card, company phone,
company laptop, and any papers, memoranda, reports, or other documents received
or developed by you during your employment. The return of this property is a
condition of your receiving the Severance Benefits.

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          10. If, for any reason whatsoever, any one or more of the provisions
of this Agreement shall be held or deemed to be inoperative, unenforceable, or
invalid by a court of competent jurisdiction, it shall be reformed to reflect
the intent of the parties. If reformation is deemed impossible, the offending
provisions shall be severed and the remaining paragraphs and clauses shall be
enforced with the intent of this Agreement preserved. Furthermore, such
circumstances shall not have the effect of rendering such provision invalid in
any other case.
          11. The law of                      shall govern the validity and
interpretation of this Agreement insofar as federal law does not control.
          12. You are hereby advised in writing to consult with an attorney
prior to executing this Agreement, and you acknowledge that you have adequate
opportunity to do so.
          13. You acknowledge and agree that this Agreement is written in a
manner calculated to be understood by you and that you fully understand the
terms and conditions of this Agreement. You are not obligated to sign this
Release and Waiver, and refusal to do so will not jeopardize your right to any
benefits to which you are already entitled.
          14. You hereby agree and acknowledge that this Release and Waiver is a
knowing and voluntary waiver of any Released Claims you have or may have had
against any of the Stone Releasees for anything that occurred up until the date
that this Agreement is executed.
          IN WITNESS WHEREOF, the parties hereto have executed this Release and
Waiver.

            STONE ENERGY CORPORATION
      By:           Name:           Title:           Date:       

            EMPLOYEE
            Date:            

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