exv10w1



 








Exhibit 10.1




STONE ENERGY CORPORATION




EXECUTIVE SEVERANCE POLICY




1. POLICY




     Stone Energy Corporation (the “Company”) will provide its executives that are terminated for
the convenience of the Company with the severance benefits as defined herein. Whether a
termination is for the convenience of the Company will be determined by the Compensation Committee
of the Board of Directors of the Company (the “Compensation Committee”) in its sole discretion.



2. PURPOSE




     The purpose of this policy is to define the executive severance policy of the Company.



3. SCOPE




     This policy shall apply to all executives as defined hereinafter. An executive for purposes
of this policy is defined as an employee of the Company that holds a job title of vice president or
higher, including without limitation a vice president, senior vice president, executive vice
president, president and/or executive chairman. No benefit shall be payable under this policy to
employees who enter into separate written severance agreements with the Company on or after the
effective date of this policy and who are entitled to receive severance payments thereunder as a
result of their termination of employment. No benefit shall be payable under this policy to an
employee who is entitled to receive severance benefits as a result of their termination of
employment under a change of control policy or plan of the Company. As a condition precedent to
eligibility to receive any benefits under this policy, each employee will be required to execute a
binding release satisfactory to the Company pursuant to which such employee releases the Company
from any liability in connection with employment and termination by the Company.



4. PROCEDURE




     Executives who are terminated for the convenience of the Company as determined under this
policy shall be provided the following payments, benefits and other services as hereinafter
defined.




	 	4.1	 	Base Salary
	 
	 	 	 	The Company will pay base salary up to the date of termination.
	 
	 	4.2	 	Bonus
	 
	 	 	 	The Company will pay the executive a pro rata share of the bonus opportunity up to
the date of 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.




 









 






	 	4.3	 	Severance
	 
	 	 	 	The executive will be eligible to receive a lump sum cash severance payment equal to
one year base salary calculated using the annual salary rate in effect at the time
of termination or, in the case of certain designated executives, a lump sum cash
severance payment equal to 2.99 times the sum of: (a) the executive’s base salary
calculated using the annual salary rate in effect at the time of termination and (b)
any target bonus at the one hundred percent (100%) level for which the executive is
eligible for the fiscal year in which termination occurs, with such lump sum cash
severance payment to be paid to the executive on the first date after the
executive’s termination of employment that the payment is not subject to any
additional taxes and interest under section 409A of the Internal Revenue Code.
	 
	 	4.4	 	Long Term Incentives
	 
	 	 	 	Terminations made under the provisions of this policy shall for purposes of any long
term incentive awards held by the executive be deemed “For Convenience of the
Company,” as defined within the individual LTIP award letters, if any.
	 
	 	4.5	 	Outplacement
	 
	 	 	 	The executive will be eligible to receive outplacement services the duration and
costs for which shall be determined by the then prevailing Human Resources
Department’s practice concerning use of outplacement services, and in no event
should exceed a cost to the Company of 5% of the base annual salary of the
executive.
	 
	 	4.6	 	Other Benefits
	 
	 	 	 	Any other termination benefits will be managed consistent with current severance
practices for non-executive employees.





5. RESPONSIBILITY




     Except as otherwise stated herein, this policy will be administered by the Company’s Vice
President of Human Resources. This policy is subject to review, change or cancellation at any time
at the sole discretion of the Compensation Committee.



6. SECTION 409A




     Notwithstanding anything in this policy to the contrary, if any payment or benefit under this
policy would result in the imposition of an additional tax under Section 409A of the Internal
Revenue Code and related regulations and United States Department of the Treasury



 









 




pronouncements, that provision of this policy will be reformed to avoid imposition of the
applicable tax.




7. EFFECTIVE DATE




     The effective date of this policy is August 18, 2005.