Document:

EX-10.1

Exhibit 10.1

TWENTY-SIXTH AMENDMENT TO CREDIT AGREEMENT

     TWENTY-SIXTH AMENDMENT, dated as of April 7, 2009 (this “Amendment”), to the Credit
and Guaranty Agreement, dated as of July 19, 2007, as amended by the First Amendment and Waiver to
Credit Agreement, dated as of November 9, 2007, the Second Amendment to Credit Agreement, dated as
of March 12, 2008, the Third Amendment to Credit Agreement, dated as of March 26, 2008, the Fourth
Amendment to Credit Agreement, dated as of July 18, 2008, the Fifth Amendment to Credit Agreement,
dated as of July 24, 2008, the Sixth Amendment to Credit Agreement, dated as of August 25, 2008,
the Seventh Amendment to Credit Agreement, dated as of September 30, 2008, the Eighth Amendment to
Credit Agreement, dated as of October 2, 2008, the Ninth Amendment to Credit Agreement, dated as of
October 29, 2008, the Tenth Amendment to Credit Agreement, dated as of November 6, 2008, the
Eleventh Amendment to Credit Agreement, dated as of November 14, 2008, the Twelfth Amendment to
Credit Agreement, dated as of November 21, 2008, the Thirteenth Amendment to Credit Agreement,
dated as of December 4, 2008, the Fourteenth Amendment to Credit Agreement, dated as of December
19, 2008, the Fifteenth Amendment to Credit Agreement, dated as of January 5, 2009, the Sixteenth
Amendment to Credit Agreement, dated as of January 16, 2009, the Seventeenth Amendment to Credit
Agreement, dated as of February 5, 2009, the Eighteenth Amendment to Credit Agreement, dated as of
February 17, 2009, the Nineteenth Amendment to Credit Agreement, dated as of February 23, 2009, the
Twentieth Amendment to Credit Agreement, dated as of March 3, 2009, the Twenty-First Amendment to
Credit Agreement, dated as of March 10, 2009, the Twenty-Second Amendment to Credit Agreement,
dated as of March 17, 2009, the Twenty-Third Amendment to Credit Agreement, dated as of March 24,
2009, the Twenty-Fourth Amendment to Credit Agreement, dated as of March 25, 2009, the Twenty-Fifth
Amendment to Credit Agreement, dated as of March 31, 2009 and that certain letter agreement dated
February 26, 2008 (as further amended, restated or otherwise modified from time to time, the
“Credit Agreement”), by and among Proliance International Inc., a Delaware corporation
(“Holdings” and the “Borrower”), certain domestic subsidiaries of the Borrower
listed as a “Guarantor” on the signature pages thereto (together with each other Person (as defined
in the Credit Agreement) that guarantees all or any portion of the Obligations (as defined in the
Credit Agreement) from time to time, each a “Guarantor” and collectively, the
“Guarantors”), the lenders from time to time party thereto (each a “Lender” and
collectively, the “Lenders”), Silver Point Finance, LLC, a Delaware limited liability
company (“Silver Point”), as collateral agent for the Agents (as hereinafter defined) and
the Lenders (in such capacity, together with its successors and assigns in such capacity, if any,
the “Collateral Agent”), and as administrative agent for the Agents and the Lenders (in
such capacity, together with its successors and assigns in such capacity, if any, the
“Administrative Agent” and together with the Collateral Agent, each an “Agent” and
collectively, the “Agents”) and Silver Point as lead arranger (in such capacity, together
with its successors and assigns in such capacity, if any, the “Lead Arranger”).

     WHEREAS, capitalized terms used in these recitals shall have the respective meanings set forth
in the Credit Agreement unless otherwise defined herein.

 

 

     WHEREAS, the Credit Parties have requested that the Agents and the Lenders amend certain
provisions of the Credit Agreement, subject to the terms and conditions set forth in this
Amendment.

     WHEREAS, the Agent and the Lenders are willing to agree to this requested Amendment, but only
upon the terms and subject to the conditions set forth herein.

     NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained herein,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Credit Parties, the Agents and the Lenders hereby agree as follows:

     1. Definitions. All capitalized terms used herein and not otherwise defined herein
are used herein as defined in the Credit Agreement.

     2. Defined Terms in the Credit Agreement. Section 1.1 of the Credit Agreement is
hereby amended, as follows:

          (a) New Definitions. Section 1.1 of the Credit Agreement is hereby amended by adding
the definitions of the following terms thereto, in alphabetical order, to read in their entirety as
follows:

          “‘Twenty-Sixth Amendment’ means the Twenty-Sixth Amendment to the Credit Agreement, dated as
of April 7, 2009, by and among the Credit Parties, the Requisite Lenders and the Agents.”

          “‘Twenty-Sixth Amendment Effective Date’ has the meaning ascribed to the term “Twenty-Sixth
Amendment Effective Date” in the Twenty-Sixth Amendment.”

     3. Section 2.23 — Waiver Reserve. Section 2.23 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:

          “2.23 Waiver Reserve. The Agents, the Borrowing Base Agent, the Lenders, the Borrower and the
Guarantors hereby agree that (i) as of March 25, 2009 a reserve in the amount of $2,250,000 was
established against the Borrowing Base (the “Waiver Reserve”), (ii) such Waiver Reserve
shall be reduced to $0 on the Twenty-Sixth Amendment Effective Date, and (iii) such Waiver Reserve
shall be increased to $7,250,000 on the earliest of (x) the occurrence of an Event of Default, and
(y) April 21, 2009.”

     4. Section 5.13 — Interest Rate Protection. Section 5.13 of the Credit Agreement is
hereby amended by replacing the reference therein to “March 31, 2009” with “April 30, 2009”

     5. Conditions to Effectiveness. This Amendment shall become effective (the
“Twenty-Sixth Amendment Effective Date”) only upon satisfaction in full of the following
conditions precedent:

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     (a) Collateral Agent shall have received counterparts of this Amendment that bear the
signatures of each Credit Party, each Agent and the Requisite Lenders.

     (b) Except as set forth in the Second Amendment, the Third Amendment, the Fourth Amendment,
the Fifth Amendment, the Sixth Amendment, the Seventh Amendment, the Eighth Amendment, the Ninth
Amendment, the Tenth Amendment, the Eleventh Amendment, the Twelfth Amendment, the Thirteenth
Amendment, the Fourteenth Amendment, the Fifteenth Amendment, the Sixteenth Amendment, the
Seventeenth Amendment, the Eighteenth Amendment, the Nineteenth Amendment, the Twentieth Amendment,
the Twenty-First Amendment, the Twenty-Second Amendment, the Twenty-Third Amendment, the
Twenty-Fourth Amendment, the Twenty-Fifth Amendment and this Amendment, the representations and
warranties contained herein, in Section IV of the Credit Agreement and in each other Credit
Document are true and correct in all material respects on and as of the Twenty-Sixth Amendment
Effective Date as though made on and as of such date, except to the extent that any such
representation or warranty expressly relates solely to an earlier date (in which case such
representation or warranty shall be true and correct in all material respects on and as of such
earlier date).

     (c) Borrower shall have paid to Administrative Agent all amounts due and owing to any Agent or
any Lender in connection with this Amendment and the Credit Documents.

     (d) Except as expressly waived herein, no Default or Event of Default shall have occurred and
be continuing on the Twenty-Sixth Amendment Effective Date or would result from this Amendment
becoming effective in accordance with its terms.

     (e) All legal matters incident to this Amendment shall be reasonably satisfactory to the
Agents and their respective counsel.

     6. Representations and Warranties. Each Credit Party represents and warrants as
follows:

     (a) Organization, Good Standing, Etc. Each Credit Party (i) is a corporation, limited
liability company or limited partnership, duly organized, validly existing and in good standing
under the laws of the state or jurisdiction of its organization, (ii) has all requisite power and
authority to execute and deliver this Amendment, consummate the transactions contemplated hereby
and perform the Credit Agreement, as amended and modified hereby and (iii) is duly qualified to do
business and is in good standing in each jurisdiction in which the character of the properties
owned or leased by it or in which the transaction of its business makes such qualification
necessary other than in such jurisdictions where the failure to be so qualified and in good
standing could not reasonably be expected to have a Material Adverse Effect.

     (b) Authorization, Etc. The execution, delivery and performance by each Credit Party
of this Amendment and the performance by each Credit Party of the Credit Agreement, as amended and
modified hereby (i) have been duly authorized by all necessary action, (ii) do not and will not
contravene its charter or by-laws, its limited liability company or operating agreement or its
certificate of partnership or partnership agreement, as applicable, or

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any applicable law, or any contractual restriction binding on or otherwise affecting it or any
of its properties, (iii) do not and will not result in or require the creation of any Lien (other
than pursuant to any Credit Document) upon or with respect to any of its properties, and (iv) do
not and will not result in any default, noncompliance, suspension, revocation, impairment,
forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to
its operations or any of its properties.

     (c) Governmental Approvals. No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority is required in connection with the due
execution, delivery and performance by any Credit Party of this Amendment or the performance by any
Credit Party of the Credit Agreement, as amended and modified hereby.

     (d) Enforceability of Credit Documents. Each of this Amendment and the Credit
Agreement, as amended and modified hereby, is a legal, valid and binding obligation of the Credit
Parties which are party hereto or thereto, enforceable against such Credit Parties in accordance
with its terms, except as enforceability may be limited by equitable principles and by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’
rights generally.

     (e) Representations and Warranties; No Default. Except as set forth in the Second
Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the
Seventh Amendment, the Eighth Amendment, the Ninth Amendment, the Tenth Amendment, the Eleventh
Amendment, the Twelfth Amendment, the Thirteenth Amendment, the Fourteenth Amendment, the Fifteenth
Amendment, the Sixteenth Amendment, the Seventeenth Amendment, the Eighteenth Amendment, the
Nineteenth Amendment, the Twentieth Amendment, the Twenty-First Amendment, the Twenty-Second
Amendment, the Twenty-Third Amendment, the Twenty-Fourth Amendment, the Twenty-Fifth Amendment and
this Amendment, the representations and warranties contained herein, in Section IV of the Credit
Agreement and in each other Credit Document are true and correct in all material respects on and as
of the Twenty-Sixth Amendment Effective Date as though made on and as of such date, except to the
extent that any such representation or warranty expressly relates solely to an earlier date (in
which case such representation or warranty shall be true and correct in all material respects on
and as of such earlier date); and, except as expressly waived herein, no Default or Event of
Default shall have occurred and be continuing on the Twenty-Sixth Amendment Effective Date or would
result from this Amendment becoming effective in accordance with its terms.

     7. Effect of Amendment; Continued Effectiveness of the Credit Agreement.

     (a) Ratifications. Except as otherwise expressly provided herein, (i) the Credit
Agreement and the other Credit Documents are, and shall continue to be, in full force and effect
and are hereby ratified and confirmed in all respects, except that on and after the Twenty-Sixth
Amendment Effective Date (A) all references in the Credit Agreement to “this Agreement”, “hereto”,
“hereof”, “hereunder” or words of like import referring to the Credit Agreement shall mean the
Credit Agreement as amended and modified by this Amendment, and (B) all references in the other
Credit Documents to the “Credit Agreement”, “thereto”, “thereof”, “thereunder” or words of like
import referring to the Credit Agreement shall mean the Credit

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Agreement as amended and modified by this Amendment, (ii) to the extent that the Credit
Agreement or any other Credit Document purports to pledge to the Collateral Agent, or to grant to
the Collateral Agent a security interest in or lien on, any collateral as security for the
Obligations or the Guaranteed Obligations, such pledge or grant of a security interest or lien is
hereby ratified and confirmed in all respects, and (iii) the execution, delivery and effectiveness
of this Amendment shall not operate as an amendment of any right, power or remedy of the Agents or
the Lenders under the Credit Agreement or any other Credit Document, nor constitute an amendment of
any provision of the Credit Agreement or any other Credit Document. This Amendment shall be
effective only in the specific instances and for the specific purposes set forth herein and does
not allow for any other or further departure from the terms and conditions of the Credit Agreement
or any other Credit Document, which terms and conditions shall remain in full force and effect.

     (b) No Waivers. Except as expressly set forth herein, this Amendment is not a waiver
of, or consent to, any Default or Event of Default now existing or hereafter arising under the
Credit Agreement or any other Credit Document and the Agents and the Lenders expressly reserve all
of their rights and remedies under the Credit Agreement and the other Credit Documents in respect
of all such Defaults or Events of Default not waived or consented to hereby, by the Second
Amendment, by the Third Amendment, by the Fourth Amendment, by the Fifth Amendment, by the Sixth
Amendment, the Seventh Amendment, the Eighth Amendment, the Ninth Amendment, the Tenth Amendment,
the Eleventh Amendment, the Twelfth Amendment, the Thirteenth Amendment, the Fourteenth Amendment,
the Fifteenth Amendment, the Sixteenth Amendment, Seventeenth Amendment, the Eighteenth Amendment,
the Nineteenth Amendment, the Twentieth Amendment, the Twenty-First Amendment, the Twenty-Second
Amendment, the Twenty-Third Amendment, the Twenty-Fourth Amendment or the Twenty-Fifth Amendment,
under applicable law or otherwise.

     (c) Amendment as Credit Document. Each Credit Party confirms and agrees that this
Amendment shall constitute a Credit Document under the Credit Agreement. Accordingly, it shall be
an Event of Default under the Credit Agreement if any representation or warranty made or deemed
made by any Credit Party under or in connection with this Amendment shall have been incorrect in
any material respect when made or deemed made or if any Credit Party fails to perform or comply
with any covenant or agreement contained herein.

     8. Release. Each Credit Party hereby acknowledges and agrees that: (a) neither it
nor any of its Affiliates has any claim or cause of action against any Agent, the Borrowing Base
Agent or any Lender (or any of their respective Affiliates, officers, directors, employees,
attorneys, consultants or agents) and (b) each Agent, the Borrowing Base Agent, and each Lender has
heretofore properly performed and satisfied in a timely manner all of its obligations to the Credit
Parties and their Affiliates under the Credit Agreement and the other Credit Documents.
Notwithstanding the foregoing, the Agents, the Borrowing Base Agent and the Lenders wish (and the
Credit Parties agree) to eliminate any possibility that any past conditions, acts, omissions,
events or circumstances would impair or otherwise adversely affect any of the Agents’, the
Borrowing Base Agent’s and the Lenders’ rights, interests, security and/or remedies under the
Credit Agreement and the other Credit Documents. Accordingly, for and in consideration of the
agreements contained in this Amendment and other good and valuable consideration, each Credit Party
(for itself and its Affiliates and the successors, assigns, heirs and

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representatives of each of the foregoing) (collectively, the “Releasors”) does hereby
fully, finally, unconditionally and irrevocably release and forever discharge each Agent, the
Borrowing Base Agent, each Lender and each of their respective Affiliates, officers, directors,
employees, attorneys, consultants and agents (collectively, the “Released Parties”) from
any and all debts, claims, obligations, damages, costs, attorneys’ fees, suits, demands,
liabilities, actions, proceedings and causes of action, in each case, whether known or unknown,
contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law
or in equity, under contract, tort, statute or otherwise (collectively, “Claims”), which
any Releasor has heretofore had or now or hereafter can, shall or may have against any Released
Party by reason of any act, omission or thing whatsoever done or omitted to be done (collectively,
“Actions”) on or prior to the Twenty-Sixth Amendment Effective Date arising out of,
connected with or related in any way to this Amendment, the Credit Agreement or any other Credit
Document, or any act, event or transaction related or attendant thereto done or omitted to be done
on or prior to the Twenty-Sixth Amendment Effective Date, or the agreements of any Agent, the
Borrowing Base Agent or any Lender contained therein, or the possession, use, operation or control
of any of the assets of any Credit Party, or the making of any Loans or other advances, or the
management of such Loans or advances or the Collateral on or prior to the Twenty-Sixth Amendment
Effective Date. For the avoidance of doubt, nothing contained in this Amendment shall be deemed to
release or discharge any Released Party from any Claims arising out of, in connection with or
related in any way to Actions occurring after the date of this Amendment.

     9. Miscellaneous.

     (a) Counterparts. This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed to be an original,
but all of which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of this Amendment by telefacsimile or electronic mail shall be equally
effective as delivery of an original executed counterpart of this Amendment.

     (b) Headings. Section and paragraph headings herein are included for convenience of
reference only and shall not constitute a part of this Amendment for any other purpose.

     (c) Governing Law. This Amendment shall be governed by, and construed in accordance
with, the laws of the State of New York.

     (d) Expenses. The Borrower will pay on demand all reasonable fees, costs and expenses
of the Agents, the Borrowing Base Agent and the Lenders in connection with the preparation,
execution and delivery of this Amendment and all documents incidental hereto, including, without
limitation, the reasonable fees, disbursements and other charges of Schulte Roth & Zabel LLP,
counsel to Administrative Agent and Collateral Agent, and of McGuireWoods LLP, counsel to Borrowing
Base Agent. In addition, the Borrower will pay all costs and expenses, including attorneys’ fees
(including allocated costs of internal counsel) and costs of settlement, incurred by any Agent,
Borrowing Base Agent and Lenders in enforcing any Obligations of or in collecting any payments due
from any Credit Party hereunder or under the other Credit Documents by reason of any Default or
Event of Default (including in connection

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with the sale of, collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty) or in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a “work out” or pursuant to any insolvency or
bankruptcy cases or proceedings (including, without limitation, the costs and expenses of any
advisers retained by Agents, the Borrowing Base Agent and Lenders; provided, that so long
as no Event of Default has occurred and is continuing the Borrower shall not be responsible for
costs and expenses of CRS in excess of $25,000).

[Remainder of this page intentionally left blank]

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized, as of the date first above written.

	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 
	 	 	PROLIANCE INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Arlen F. Henock
 

Name: Arlen F. Henock
	 	 
	 

	 	 	 	Title: Executive Vice President, Chief	 	 
	 

	 	 	 	Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	GUARANTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	AFTERMARKET LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Arlen F. Henock	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Arlen F. Henock	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	AFTERMARKET DELAWARE	 	 
	 	 	CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Arlen F. Henock	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Arlen F. Henock	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	PROLIANCE INTERNATIONAL	 	 
	 	 	HOLDING CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Arlen F. Henock	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Arlen F. Henock	 	 
	 

	 	 	 	Title: President	 	 

 

 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	AGENTS AND LEAD ARRANGER:	 	 
	 
	 	 	 	 	 	 
	 	 	SILVER POINT FINANCE, LLC, as	 	 
	 	 	Administrative Agent, Lead Arranger and	 	 
	 	 	Collateral Agent	 	 
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ Zachary M. Zeitlin
 

Name: Zachary M. Zeitlin

Title: Authorized Signatory
	 	 
	 
	 	 	 	 	 	 
	 	 	LENDERS:	 	 
	 
	 	 	 	 	 	 
	 	 	SPF CDO I, LTD., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Zachary M. Zeitlin	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Zachary M. Zeitlin	 	 
	 

	 	 	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	FIELD POINT III, LTD. as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Zachary M. Zeitlin	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Zachary M. Zeitlin	 	 
	 

	 	 	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	FIELD POINT IV, LTD. as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Zachary M. Zeitlin	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Zachary M. Zeitlin	 	 
	 

	 	 	 	Title: Authorized Signatory	 	 

 

 

	 	 	 	 	 	 	 
	 	 	BORROWING BASE AGENT AND LENDER:	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS FARGO FOOTHILL, LLC, as	 	 
	 	 	Borrowing Base Agent and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jonathan Boynton
 

Name: Jonathan Boynton
	 	 
	 

	 	 	 	Title: VPexv10w1

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

 

 

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.

-3-

 

          “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.

-11-

 

     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

 

 

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).

-14-

 

          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.

-15-

 

          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:	 	 
	 	 	 
	 

-16-

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