Document:

Exhibit

Exhibit 10.71

FORM OF PERFORMANCE SHARE AWARD AGREEMENT
(Expeditors International of Washington, Inc. 2017 Omnibus Incentive Plan)

THIS AGREEMENT, dated as of ____________, 20__ (“Agreement”), is entered into between Expeditors International of Washington, Inc., a Washington corporation (the “Company”), and _____________, an employee of the Company or an affiliate of the Company (“Participant”). This Agreement sets forth the terms and conditions of a Performance Share Award representing the right to receive shares of Common Stock (“Common Stock”), par value $.01 per share, of the Company granted by the Company pursuant to its 2017 Omnibus Incentive Plan, which was approved by shareholders on May 2, 2017 (the “Plan”).  Capitalized terms that are not defined in this Agreement shall have the meaning ascribed to such terms in the Plan. 
Subject to the terms and conditions of the Plan and the Agreement, the Company grants to Participant a Performance Share Award entitling Participant to the number of Performance Share Units (sometimes referred to herein as “PSUs”) equal to the “Target Award Number” set forth below.  The Target Award Number shall be adjusted upward or downward following the end of the Performance Period based on performance, as provided in the Exhibit A to this Agreement, which Exhibit is made a part of this Agreement.  The number of PSUs that Participant will receive under the Agreement, after giving effect to such adjustment, is referred to herein as the “Final Award Number.”  Each PSU represents the right to receive one share of Common Stock, subject to the vesting requirements and distribution provisions of the Agreement and the terms of the Plan.  The shares of Common Stock distributable to Participant with respect to PSUs granted hereunder are referred to as the “Shares”. The performance periods over which the Final Award Number will be determined (the “Performance Period”) are set forth below.  
The Company and the Participant agree as follows:
		
	1.
	Performance Share Award.  The Company, effective as of the date of this Agreement, hereby grants to Participant Performance Share Units as set forth below and subject to the terms and conditions set forth in this Agreement and the Plan:

(a)Target Award Number; Final Award Number.  The Target Award Number shall consist of two (2) tranches (Tranche A and Tranche B).  Seventy-five percent of the total Target Award Number is allocated to Tranche A; and twenty-five percent of the total Target Award Number is allocated to Tranche B, in each case as set forth in 1(b) below.  The potential Final Award Number for each tranche ranges from a maximum number equal to 200% of the Tranche Target Award Number to zero in the event the threshold level of performance for that tranche is not achieved (see Exhibit A).  
(b)Performance Criteria; Performance Period.  Performance criteria for Tranche A are based on Cumulative EPS and performance criteria for Tranche B are based on Net Revenues, in each case as set forth in Exhibit A.  The Performance Periods for purposes of determining whether, and the extent to which the PSUs within each tranche will vest and become payable hereunder, and the Target Number of Shares for each Tranche subject to this Award are:

Performance Period                             Target Number in Tranche              
Tranche A:  _________, 20__ to __________, 20__    [75% of total Target Award Number]
Tranche B   _________, 20__ to__________, 20__    [25% of total Target Award Number]
(c)    Vesting Date.  Except as otherwise provided herein, the “Vesting Date” for Performance Share Units (to the extent they become vested based on satisfaction of performance goals) shall be the last day of the performance period.  Provided Participant remains continuously employed by the Company or an Affiliate through the Vesting Date, and subject to earlier settlement/payout with respect to Performance 

Share Units that become vested under Section 3(b) below in the event of Disability or death, vested Performance Share Units will be settled and Shares delivered as soon as administratively feasible following the Vesting Date, but in no event later than March 15th of the year following the calendar year in which the Vesting Date occurs.  
		
	2.
	Rights of Participant with Respect to the Performance Share Units.

(a)No Shareholder Rights.  Performance Share Units granted pursuant to this Agreement do not and shall not entitle Participant to any rights of a shareholder of Common Stock.  The rights of Participant with respect to the Performance Share Units shall remain forfeitable at all times prior to the date on which such rights become vested, and the restrictions with respect to Performance Share Units lapse, in accordance with Sections 1 and 3 hereof.
(b)Dividend Equivalents.  As long as Participant holds Performance Share Units granted pursuant to this Agreement, the Company shall credit to Participant, on each date that the Company pays a cash dividend to holders of Common Stock generally, an additional number of Performance Share Units (“Additional Performance Share Units”) equal to the  number of Performance Share Units and Additional Performance Share Units previously credited to Participant under this Agreement multiplied by the dollar amount of the cash dividend paid per share of Common Stock by the Company on such date, divided by the Fair Market Value of a share of Common Stock on such date.  Any fractional Performance Share Unit resulting from such calculation shall be included in the Additional Performance Share Units.  A report showing the number of Additional Performance Share Units so credited shall be sent to Participant periodically, as determined by the Company.  The Additional Performance Share Units so credited shall be subject to the same terms and conditions as the Performance Share Units with respect to which such Additional Performance Share Units were credited, and the Additional Performance Share Units shall be forfeited in the event that the Performance Share Units with respect to which such additional Performance Share Units were credited are forfeited.  Further, for avoidance of doubt, Participant will be eligible to receive Additional Performance Share Units with respect to unvested Performance Share Units only if Participant remains in continuous employment with the Company or an Affiliate through the applicable dividend record date as declared by the Board.  Additional Performance Share Units are subject to income and payroll tax withholding by the Company.  
(c)Issuance of Shares; Conversion of Performance Share Units.  No Shares of Common Stock shall be issued to Participant prior to the date on which the Performance Share Units vest, and the restrictions with respect to the Performance Share Units lapse, in accordance with Section 1 or Section 3 hereof.  Neither this Section 2(c) nor any action taken pursuant to or in accordance with this Section 2(c) or any other provision of the Plan or this Performance Share Award agreement shall be construed to create a trust of any kind.  After any Performance Share Units vest pursuant to Section 1 or Section 3 hereof, the Company shall promptly cause to be issued, in either certificated or uncertificated form, Shares of Common Stock registered in Participant’s name or in the name of Participant’s legal representatives, beneficiaries or heirs, as the case may be, in payment of such vested Performance Share Units and any Additional Performance Share Units and shall cause such certificated or uncertificated shares to be delivered to Participant or Participant’s legal representatives, beneficiaries or heirs, as the case may be (including for this purpose a delivery of Shares to a deceased Participant’s brokerage account maintained in connection with Awards under the Plan).  Any fractional  Performance Share Unit credited to the Participant at the time of final settlement of this Performance Share Unit Award will be rounded up to the next whole unit.  In no event shall issuance of Shares occur later than March 15th of the year following the calendar year in which PSUs vest (and the restrictions with respect to such PSUs lapse).  
3.Vesting; Forfeiture. 
(a)Termination of Employment.  In the event that Participant’s employment with the Company and its Affiliates is terminated prior to a Tranche Vesting Date, the Participant’s right to receive any Shares (including the right to receive any Shares relating to Additional Performance Share Units) corresponding to that Tranche Vesting Date shall be immediately and irrevocably forfeited, unless such termination is by reason of:

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	(1)
	Participant’s permanent disability (within the meaning of Section 409A(a)(2)(C)(i) of the Code (“Disability”);

		
	(2)
	Participant’s death;

		
	(3)
	Participant’s Retirement (as defined in Section 3(c) below).

		
	(4)
	Participant’s Involuntary Termination without Cause (as defined in Section 3(d) below) or

		
	(5)
	Participant’s Voluntary Termination for Good Reason (as defined in Section 3(d) below.

(b)Death and Disability.  In the event of Participant’s death or Disability (as defined in Section 3(a) above) prior to the commencement or completion of a Performance Period, the Participant or Participant’s estate shall be entitled to receive a payment/settlement with respect to a prorated portion of PSUs corresponding to such Performance Period based on, and assuming that, performance would be achieved at the target level, as set forth in Exhibit A to this Agreement.  The prorated number of PSUs for the Performance Period shall be determined by dividing the number of days during the performance period prior to Participant’s death or Disability by the total number of days in the Performance Period.  Such settlement of PSUs will occur as soon as administratively feasible following death or Disability but in no event more than ninety (90) days following Participant’s death or Disability, as applicable.  If a payment/settlement is made pursuant to this Section 3(b), no payment/settlement shall be made pursuant to Section 1 of this Agreement.
(c)Retirement.  In the event Participant terminates employment as a result of Retirement prior to the commencement or completion of a Performance Period, then (i) a prorated portion of PSUs corresponding to such Performance Period shall be eligible to become vested at the end of the Performance Period based on actual achievement of performance goals as specified in Exhibit A; and (ii) all other unvested PSUs will be forfeited.  The prorated number of PSUs (that otherwise would become vested and payable under Section 1 based on actual performance achieved) shall be determined by dividing the number of days in the period commencing on the date of grant and ending on the date of Retirement, by the total number of days in the period commencing on the date of grant and ending on the last day of the Performance Period. “Retirement” shall mean the voluntary or involuntary termination of Participant’s employment for any reason other than for Cause, Disability or death (i) at such time or after Participant has attained age 55 and completed at least ten years of service (measured from his or her most recent hire date) as an employee of the Company and/or an Affiliate of the Company, or (ii) after having completed at least thirty years of continuous service (measured from his or her most recent hire date) as an employee of the Company and/or an Affiliate of the Company, and in either case, so long as Participant has at all times that Performance Share Units are outstanding under this Agreement complied with the terms of any applicable confidentiality, non-disclosure and/or non-competition agreement between the Company and the Participant. Settlement of such PSUs shall occur as soon as administratively feasible following the end of the Performance Period (but in no event later than March 15th of the year following the calendar year in which the last day of the Performance Period occurs).  If a payment/settlement is made pursuant to this Section 3(c), no payment/settlement shall be made pursuant to Section 1 of this Agreement.
(d)Involuntary Termination without Cause or Voluntary Termination for Good Reason (not in connection with a Change in Control).  The following provisions apply if  Participant terminates employment as a result of an Involuntary Termination (as defined below) without Cause (as defined in the Plan) or a Voluntary Termination for Good Reason (as defined below) and such termination is not a Qualifying Termination as defined in the Plan (in connection with a Change in Control). If Participant’s employment is terminated as a result of an Involuntary Termination without Cause or a Voluntary Termination for Good Reason prior to the commencement or completion of a Performance Period, then (i) unvested PSUs granted during the prior six month period will be forfeited; (ii) provided that Participant timely executes a waiver and release of claims against the Company in a form acceptable to the Company, a prorated portion (based on service completed at the time of termination) of unvested PSUs will be eligible to become vested at the end of the applicable Performance Period, based on actual achievement of performance goals as specified in 

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Exhibit A; and (iii) all other unvested PSUs shall be forfeited.  The prorated number of PSUs shall be determined by dividing the number of days in the period commencing on the date of grant and ending on the date of termination, by the total number of days in the period commencing on the date of grant and ending on the last day of the Performance Period.  “Involuntary Termination without Cause” means termination of Participant’s employment by the Company’s exercise of unilateral authority in circumstances where Participant was willing and able to continue employment and such termination was not for Cause (as defined in the Plan).  “Voluntary Termination for Good Reason” means Participant’s voluntary termination of employment as a result of (i) a material diminution of Participant’s annual base compensation, authority, duties or responsibilities; (ii) a material change in Participant’s reporting relationship, including a requirement that Participant report to a corporate officer or employee instead of reporting directly to the Board; (iii) a material change in the geographic location at which Participant must perform the duties of his or her position; or (iv) any other action or inaction that constitutes a material breach by the Company of the agreement under which Participant serves (e.g. an employment agreement), and in each case Participant has advised the Company in writing of the condition set forth above within ninety (90) days of the initial existence of the condition and the Company has not remedied the condition with thirty (30) days of receipt of such notice.  Notwithstanding the foregoing, the provisions in the Section 3(d) will apply only if Participant has at all times that Performance Share Units are outstanding under this Agreement complied with the terms of any applicable confidentiality, non-disclosure and/or non-competition agreement between the Company and the Participant. Settlement of such PSUs shall occur as soon as administratively feasible following the end of the Performance Period (but in no event later than March 15th of the year following the calendar year in which the last day of the Performance Period occurs).  If a payment/settlement is made pursuant to this Section 3(d), no payment/settlement shall be made pursuant to Section 1 of this Agreement.
(e)Change in Control - Qualifying Termination. Notwithstanding the foregoing provisions, in the event that a Change in Control (as defined in the Plan) occurs, the provisions of the Plan will govern the treatment of Performance Share Units, provided that for purposes of determining any prorated portion of the Award pursuant to Section 8 of the Plan, the prorated number of PSUs shall be determined by dividing the number of days in the period commencing on the date of grant and ending on the date of the Change in Control, by the total number of days in the period commencing on the date of grant and ending on the last day of the Performance Period.  
4.Restrictions on Transfer.  Performance Share Units shall not be transferable other than by will or by the laws of descent and distribution.  Notwithstanding the foregoing, Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of Participant and receive any property distributable with respect to Performance Share Units upon the death of Participant.  Each right under this Agreement shall be exercisable during Participant’s lifetime only by Participant or, if permissible under applicable law, by Participant’s legal representative.  Performance Share Units and any rights under this Agreement may not be sold, assigned, transferred, pledged, alienated, attached or otherwise encumbered and any purported sale, assignment, transfer, pledge, alienation, attachment or encumbrance shall be void and unenforceable against the Company or any Affiliate.

5.Income Tax Matters.  In order to comply with all applicable federal, foreign, state or local income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal, foreign, state or local payroll, withholding, income or other taxes, which are the sole and absolute responsibility of Participant, are withheld or collected from Participant.  Upon vesting of the Performance Share Units and the lapse of the restrictions with respect to the Performance Share Units under the terms of this Award Agreement, Participant shall be obligated to pay any applicable withholding taxes arising from such vesting and lapse of restrictions and payment with respect to Performance Share Units. 

6.Securities Matters.  No Shares of Common Stock shall be issued pursuant to this Agreement prior to such time as counsel to the Company shall have determined that the issuance of such shares will not violate any securities or other laws, rules or regulations.  The Company shall not be required to deliver any Shares of Common Stock until the requirements of any applicable securities or other laws, rules or regulations (including the rules of any securities exchange) as may be determined by the Company to be applicable 

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are satisfied.  In addition, the grant of these Performance Share Units and/or the delivery of any Shares of Common Stock under this Agreement are subject to the Company’s executive compensation clawback policies as they may exist at the time of grant of this Award and as the Company may adopt in the future to conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (or any other applicable law) and any applicable rules and regulations of the Securities and Exchange Commission or applicable stock exchange.
7.Tax Consequences.  Participant agrees that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimize the Participant’s tax liabilities.  Participant will not make any claim against the Company, or any of its officers, directors, employees or Affiliates related to tax liabilities arising from Performance Share Units or the Participant’s other compensation.
8.    Adjustments.  In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares or other securities of the Company, issuance of warrants or other rights to purchase shares or other securities of the Company or other similar corporate transaction or event affects the Common Stock such that an adjustment is necessary in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Agreement, then the Committee shall, in such manner as it may deem equitable, in its sole discretion, adjust any or all of the number and type of shares subject to Performance Share Units.  
9.    General Provisions.
(a)Section 409A.  This Performance Share Award is intended to be exempt from Section 409A of the Code (“Section 409A”) under Treas. Reg. Section 1.409A-1(b)(4) and this Agreement and the Plan will be construed and administered accordingly.  Notwithstanding the foregoing, to the extent it is determined that any payment due hereunder is (i) deferred compensation subject to Section 409A, and (ii) is payable to a specified employee (as that term is defined in Section 409A), and (iii) is payable on account of the specified employee’s separation from service (as that term is defined in Section 409A), payment of any part of such amount that would have been made during the six (6) months following the separation from service shall not then be paid but shall rather be paid on the first day of the seventh (7th) month following the separation from service.
		
	(1)
	For this purpose, specified employees shall be identified by the Company on a basis consistent with regulations issued under Section 409A, and consistently applied to all plans, programs, contracts, etc. maintained by the Company that are subject to Section 409A.

		
	(2)
	For this purpose, “termination of employment” shall be defined as “separation from service” as that term is defined under Section 409A.

		
	(3)
	To the extent that Section 409A is applicable to this Agreement, this Agreement shall be construed and administered to comply with the rules of Section 409A.  Neither the Company nor any of its officers, directors, agents or affiliates shall be obligated, directly or indirectly, to any participant or any other person for any taxes, penalties, interest or like amounts that may be imposed on the participant or other person on account of any amounts under this Plan or on account of any failure to comply with any Code section.

(b)Interpretations.  This Agreement is subject in all respects to the terms of the Plan.  Terms used herein which are defined in the Plan shall have the respective meanings ascribed to such terms in the Plan, unless otherwise defined herein.  In the event that any provision of this Agreement is inconsistent with the terms of the Plan, the terms of the Plan shall govern.  Any question of administration or interpretation 

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arising under this Agreement shall be determined by the Committee, and such determination shall be final and conclusive upon all parties in interest.  
(c)No Right to Employment.  The grant of Performance Share Units shall not be construed as giving Participant the right to be retained as an employee of the Company or any Affiliate.  In addition, the Company or an Affiliate may at any time dismiss Participant from employment, free from any liability or any claim under this Agreement, unless otherwise expressly provided in this Agreement or the Plan.
(d)Headings.  Headings are given to the sections and subsections of this Agreement solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Agreement or any provision hereof.
(e)Severability.  If any provision of this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction under any law deemed to be applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable law, or if it cannot be so construed or amended without, in the determination of the Committee, materially altering the purpose or intent of this Agreement, such provision shall be stricken as to such jurisdiction or this Agreement, and the remainder of this Agreement shall remain in full force and effect.
(f)Governing Law.  The internal law, and not the law of conflicts, of the State of Washington will govern all questions concerning the validity, construction and effect of this Agreement.  Any claim or action brought with respect to this Award shall be brought in a federal or state court located in Seattle, Washington.  
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first set forth above.

Expeditors International of Washington, Inc. 

By: _________________________________________

_____________________________________________________
Participant
Date: _______________________________________

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Exhibit A

TO
PERFORMANCE SHARE AWARD AGREEMENT
Expeditors International of Washington, Inc. 2017 Omnibus Incentive Plan)
This Exhibit A to the Performance Share Award Agreement sets forth the manner in which the Committee will determine whether, and the extent to which, Performance Share Units that will become vested, and thus the  number of Shares of Common Stock that will become payable with respect to the Award.  
Definitions
Capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan and the Performance Share Award Agreement. The following terms used in this Exhibit A shall have the meanings set forth below:
“Cumulative EPS” shall equal the [sum of the] Company’s diluted earnings attributable to shareholders per share for the [___] fiscal year[s] of the Company included in the Performance Period.  The Company’s diluted earnings attributable to shareholders per share for any such fiscal year of the Company during the Performance Period shall be as set forth in the audited consolidated financial statements of the Company and its subsidiaries.  
“Net Revenues” means the [sum of the] net revenues for the [___] fiscal year[s] of the Company included in the Performance Period, as reported in the Company’s Annual Report on Form 10-K in the Financial Highlights table under Item 6 - Selected Financial Data.  Net Revenues are a non-GAAP measure calculated as revenues less directly related operations expenses attributable to the Company's principal services. The Company's management believes that net revenues are a better measure than total revenues when evaluating the Company's operating segment performance since total revenues earned as a freight consolidator include the carriers' charges for carrying the shipment, whereas revenues earned in other capacities include primarily the commissions and fees earned by the Company. Net revenue is one of the Company's primary operational and financial measures and demonstrates the Company's ability to concentrate and leverage purchasing power through effective consolidation of shipments from customers utilizing a variety of transportation carriers and optimal routings.       
“Cumulative EPS Threshold Performance” means ___________________________________.
“Cumulative EPS Target Performance” means ______________________________________.
“Cumulative EPS Maximum Performance” means ___________________________________.
 “Determination Date” means the date on which the Final Award Number is determined, which date shall not be later than 60 days after the last day of the Performance Period.
“Final Award Number” means the number of Shares that become payable in settlement of this Performance Share Award determined based on performance in accordance with this Exhibit A, and Final Award Number for an individual Tranche means the number of Shares that become payable in settlement of that Tranche  determined in accordance with this Exhibit A.
“Net Revenues Threshold Performance” means ______________________________________.
“Net Revenues Target Performance” means__________________________________________.
“Net Revenues Maximum Performance” means ______________________________________.

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 “Performance Period” has the meaning set forth in Section 1(b) of this Performance Share Award.  
“Target Award Number” for each Tranche means the target number set forth in Section 1(b) of the Award Agreement.  
“Target Award Number Percentage” means, for each Tranche, the percentage of the Target Award Number for such Tranche that may become vested, determined in accordance with this Exhibit A.  
Determination of Final Award Number
Each Participant has been granted a number of Units equal to the Target Award Number.  Seventy-Five percent (75%) of the Target Award Number is allocated to Tranche A and twenty-five percent (25%) is allocated to Tranche B, as set forth in Section 1(b) of the Performance Share Award Agreement.  
The Target Award Number for each Tranche will be adjusted upward or downward following the end of the Performance Period on the Determination Date, depending on whether, and the extent to which, the Cumulative EPS Target and the Net Revenues Target, as applicable, have been met.  The Final Award Number for each Tranche will be determined by multiplying (i) the Target Award Number Percentage for the Tranche by (ii) the Target Award Number for the Tranche.  The Target Award Number Percentage will be determined in accordance with the following:
		
	•
	If Cumulative EPS Target Performance is achieved, 100% of the Target Number for Tranche A will become vested. If Cumulative EPS Maximum Performance (or greater) is achieved, 200% of the Target Number for Tranche A will become vested.  If Cumulative EPS Threshold Performance is achieved, 50% of the Target Number for Tranche A will become vested. If Cumulative EPS Threshold Performance is not achieved, 0% of the Target Number for Tranche A will become vested.  The Final Award Number for Tranche A will be determined by linear interpolation for performance between Cumulative EPS Threshold Performance and Cumulative EPS Target Performance, or between Cumulative EPS Target Performance and Cumulative EPS Maximum Performance, as applicable.  

		
	•
	If Net Revenues Target Performance is achieved, 100% of the Target Number for Tranche B will become vested. If Net Revenues Maximum Performance (or greater) is achieved, 200% of the Target Number for Tranche B will become vested.  If Net Revenues Threshold Performance is achieved, 50% of the Target Number for Tranche B will become vested. If Net Revenues Threshold Performance is not achieved, 0% of the Target Number for Tranche B will become vested.  The Final Award Number for Tranche B will be determined by linear interpolation for performance between Net Revenues Threshold Performance and Net Revenues Target Performance, or between Net Revenues Target Performance and Net Revenues Maximum Performance, as applicable.  

The Final Award Number for each Participant shall be determined by the Committee on the Determination Date.  The Committee shall have no discretion to increase the amount determined on the basis of the objective performance criteria set forth herein but shall retain discretion to reduce such amount.  
Committee Determinations
The Committee shall make all determinations necessary to arrive at the Final Award Number for each Tranche for each Participant.  Any determination by the Committee pursuant to this Exhibit A will be binding upon each Participant and the Company.
No Fractional Units 
In the event the Final Award Number is a number of Units that is not a whole number, then the Final Award Number shall be rounded up to the nearest whole number.

8Exhibit

Exhibit 10.1
                    

By Hand Delivery
May 11, 2017

Mr. David H. Welch
18 Colony Rd
Gretna, LA  70056

Dear Mr. Welch, 
By signing below, this letter will become an Agreement between you, David H. Welch (“Welch” or “You”), and Stone Energy Corporation (the “Company”) regarding the terms of your separation from employment with the Company.
1.Your separation from employment was effective April 28, 2017.  As of that date, you agree to resign from any and all positions that you hold with the Company and any of its subsidiaries.  In addition, effective as of the date of this Agreement, You hereby irrevocably resign from the board of directors of the Company and from the board of directors of any of the Company’s subsidiaries, which resignation shall remain effective whether or not You revoke your acceptance of this Agreement pursuant to Paragraph 10 below.
2.    You will be paid $100,000 for all outstanding wages earned since your last paycheck and all accrued vacation and sick pay through and including April 28, 2017 (less customary and applicable payroll deductions), $82,500 of which the Company has already paid to you prior to the date of this Agreement, and the remaining payment due of $17,500 will be made within ten (10) days of the date of this Agreement.  You confirm and agree that, other than the payments set forth in this paragraph, you received all wages, reimbursements, commissions, vacation and sick pay, or other payments or benefits to which you are entitled as a result of your employment with the Company.  The payments set forth in this paragraph are not contingent upon your signing this Agreement.
3.    As consideration for this Agreement and as required under the terms of the Stone Energy Corporation Executive Severance Plan, the Company agrees to provide you with the consideration identified in Schedule A (collectively, the “Consideration”).
Payment of the Consideration will be made in one lump sum in accordance with the Company’s regular payroll practices, beginning on the first regular payroll date following the “payment date” as defined in Paragraph 10 below. The Company’s agreement to provide all of the Consideration is specifically contingent upon you executing this Agreement and not revoking the Agreement, as set forth in Paragraph 10 below.  The Company’s obligation to pay the Consideration shall cease upon your breach of any of your continuing contractual obligations to the Company.
4.    You will receive, by separate letter, information regarding your rights for health insurance and COBRA.  To the extent that you have such rights, nothing in this Agreement will change or impair those rights.

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5.    In return for the Consideration in Paragraph 3, you hereby UNCONDITIONALLY RELEASE AND DISCHARGE the Company, its successors, subsidiaries, parent companies, assigns, joint ventures, and affiliated companies and their respective agents, insurers, legal representatives, shareholders, attorneys, employees, members, managers, officers and directors (collectively, the “Releasees”) from ALL CLAIMS, LIABILITIES, DEMANDS AND CAUSES OF ACTION which you may by law release, whether known or unknown, that you may have or claim to have against any Releasee for any reason as of the date you sign this Agreement, including, but not limited to any and all rights under federal, state and local employment laws including without limitation the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 1981, the Americans With Disabilities Act, the Family and Medical Leave Act, the Genetic Information Nondiscrimination Act, the Employee Retirement Income Security Act, the Equal Pay Act, the Occupational Safety and Health Act, the National Labor Relations Act, and any and all other local, state, and federal law claims arising under statute or common law.  You further agree that if anyone (including, but not limited to the Equal Employment Opportunity Commission (the “EEOC”) or any other government agency or similar such body or proposed class) makes a claim, including a class action, or undertakes an investigation involving you in any way, you waive any and all right and claim to financial recovery resulting from such claim or investigation.  Except to the extent that applicable law requires that you be allowed to file a charge of discrimination with the EEOC or other administrative charge or complaint, you further hereby AGREE NOT TO FILE A LAWSUIT or other legal claim or charge to assert against any of the Releasees any claim released by this Agreement.  It is agreed that this is a general release and it is to be broadly construed as a release of all claims, except those that cannot be released by law.  By signing this Agreement, you acknowledge that you are doing so knowingly and voluntarily, that you understand that you may be releasing claims you may not know about, and that you are waiving all rights you may have had under any law that is intended to protect you from waiving unknown claims.  You warrant that you have not filed any notices, claims, complaints, charges, or lawsuits of any kind whatsoever against the Company or any of the Releasees as of the date of execution of this Agreement.
6.    You represent and warrant that you have returned to the Company and the Releasees all of their property (and that you have not and will not retain or provide to anyone else any copies, summaries, excerpts, portions or other representations thereof), including all keys, access cards, phones, computers, printers, and computer-related equipment, and all copies of all files and documents in your possession, custody and control, including without limitation any files or documents (whether in paper or electronic form) you have about the Company’s practices, procedures, trade secrets, customer lists, price lists, product marketing, personnel, staffing, salaries and wages, and other things, files, or documents provided to you by the Company, created during your employment with the Company, or otherwise relating to or belonging to the Company.  The Company acknowledges receipt of all such property and information.
7.    You agree not to disparage the Company and the Releasees.  This includes, but is not limited to, disparaging comments, social media posts, correspondence, or conversation with any and all persons, whether intended to be public or private.  In response to inquiries from third parties, You and the Company shall confirm only that you separated from the Company on mutually acceptable terms.  You agree that the Company also may confirm to third parties your dates of employment, title, and position(s) held.  
8.    Obligations regarding confidential information:
a.    You agree that you will not violate the confidentiality agreement contained in the Company’s employee handbook, except as may be provided below.
b.    You agree that you will not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person any confidential or proprietary information regarding the Company’s and/or the Releasees’ trade secrets (as defined by applicable law); financial plans and data; management planning information; business plans; operational methods; market studies; marketing plans or strategies; pricing information; product development techniques or plans; customer lists; customer files, data and financial information; details of customer contracts; current and anticipated customer requirements; identifying and other information pertaining to business referral sources; past, current and planned research and development; computer aided systems, software, strategies and programs; business acquisition plans; management 

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organization and related information (including, without limitation, data and other information concerning the compensation and benefits paid to officers, directors, employees and management); personnel and compensation policies; new personnel acquisition plans; and other similar information.  This obligation shall remain in effect for as long as the information or materials in question remain confidential or proprietary to the Company and/or the Releasees.  Notwithstanding the foregoing, this Agreement shall not prohibit disclosure of information that (1) was generally known or available to the public prior to its disclosure; or (2) becomes generally known or available to the public subsequent to disclosure through no wrongful act of any person.
c.    You agree that you will not disclose or otherwise communicate to any person the terms and/or circumstances of this Agreement, including but not limited to the benefit being paid under it or the fact of such payment, except that you may disclose this information to your spouse, and to your attorney, accountant or other professional advisor to whom you must make the disclosure in order for them to adequately provide professional services to you.  You will instruct them, however, to maintain the confidentiality of this information just as you must.
d.    Notwithstanding the foregoing obligations and restrictions regarding confidential information, nothing in this Agreement shall prohibit or restrict you from:  (1) making any disclosure of information required by law, court order or subpoena (provided that you first provide the Company with prior notice of the contemplated disclosure and cooperate with the Company in seeking a protective order or other appropriate protection of such information); or (2) providing information to, cooperating or assisting with any investigation or proceeding brought by a federal, state or local law enforcement agency, regulatory or governmental body, or judicial authority (collectively “Governmental Agencies”). Further, this Agreement does not limit your ability to communicate with any Governmental Agencies or otherwise participate in any investigation or preceding that may be conducted by any Governmental Agency, including providing documents or other information, without notice to the Company.  This Agreement does not limit your right to receive an award from a Government Agency for information provided to any Government Agencies.  However, you agree that you have waived any right to recover monetary damages or other personal relief, where such rights can be lawfully waived, from the Releasees in any action filed by you or by anyone else on your behalf.
9.    You acknowledge that the provisions of Paragraphs 6 through 8 are of unique and substantial value to the Company, that damages to the Company and/or the Releasees for breach of Paragraphs 6 through 8 would be difficult to ascertain, and that in the event you breach any of the provisions of Paragraph 6 through 8, the Company shall have the right to immediately obtain an injunction or decree of specific performance from any court of competent jurisdiction to restrain you from violating such provisions or to compel you to perform such undertakings or agreements.  If the Company must institute a proceeding to enforce this Agreement against you, the Company shall be entitled to recover from you its attorneys’ fees and all other associated costs and expenses.  If any violation occurs by you, and regardless of whether the Company obtains legal or equitable relief against you, you agree that you will remain subject to all of the terms of this Agreement.
10.    The offer embodied in this Agreement shall remain open and capable of acceptance by you until June 1, 2017, after which time the offer shall be revoked.  You acknowledge that you have at least 21 calendar days from the date of this letter to accept the terms of this Agreement, although you may accept it at any time within those 21 days.  You are advised to consult an attorney about the Agreement prior to executing it.  By entering into this Agreement you will be releasing the Company from any and all claims you may have against the Company arising prior to your execution of this Agreement, including claims arising under the Age Discrimination in Employment Act. To accept the Agreement, please date and sign this letter and return it to me such that I receive it on or before June 1, 2017.  After you sign this Agreement, you will still have an additional 7 days in which to revoke your acceptance.  To revoke, you must notify me in writing delivered via hand delivery or certified mail, return receipt requested, and I must receive such written notification before the end of the 7-day revocation period.  If you do not revoke, the twelfth business day after the date of your acceptance will be the “payment date” for purposes of Paragraph 3 above.
11.    This Agreement shall not in any way be construed as an admission by the Company and/or the Releasees of wrongdoing or liability or that you have any rights against any of these persons.

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12.    The provisions of this Agreement shall be construed according to the laws of the State of Louisiana without regard to its conflicts of law provisions.
13.    With the exception of the release contained in Paragraph 5, the provisions of this Agreement are severable and if any part of it is found to be unenforceable the other paragraphs shall remain fully and validly enforceable.  If the general release and covenant not to sue set forth in Paragraph 5 of this Agreement is found to be unenforceable, this Agreement shall be null and void and you will be required to return to the Company all Consideration already paid to you.  The language of all valid parts of this Agreement shall in all cases be construed as a whole, according to fair meaning, and not strictly for or against any of the parties.
14.    With the exception of the February 24, 2017 Indemnification Agreement between You and the Company, which remains in full force and effect, this Agreement expresses the entire agreement between the Company and You relating to your termination of employment and the matters contained in this Agreement and supersedes and replaces all prior agreements between You and the Company.  You agree that no one has made any representations or promises to induce you to enter into this Agreement, except as set forth herein.  This Agreement may be amended only by a written document signed by both you and an authorized representative of the Company.
If you have any questions about this Agreement or about your departure from the Company in general, please address them directly to me.  I am pleased that we are able to part ways on these amicable terms.  Thank you for your commitment and years of service.  The Company and I wish you every success in your future endeavors.
Sincerely,

/s/ Lisa S. Jaubert

Lisa S. Jaubert
Senior Vice President, General Counsel & Secretary

PLEASE READ CAREFULLY.  THIS SEPARATION AGREEMENT 
AND GENERAL RELEASE INCLUDES A RELEASE OF ALL KNOWN 
AND UNKNOWN CLAIMS THROUGH THE DATE OF YOUR SIGNATURE. 
YOU ARE ADVISED TO CONSULT AN ATTORNEY BEFORE SIGNING BELOW.
Accepted and agreed this 11      day of     May      2017:
Signature: /s/ David H. Welch     
Print Name: David H. Welch    

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Schedule A
	
			
	Item
	Amount
	Comment

	Annual Base Salary
	$975,000
	Equal to 1.5x Mr. Welch’s annual base salary of $650,000.

	Accrued Bonus
	$260,000
	Equal to the prorated portion of Mr. Welch’s annual bonus opportunity of 120% of his annual base salary through April 28, 2017.

	Health and Welfare Benefits
	N/A
	COBRA continuation, provided COBRA coverage is elected, for a period of six months following April 28, 2017 at a cost to Mr. Welch that is equal to the cost for an active employee for similar coverage; provided, such coverage will immediately end upon Mr. Welch’s obtainment of new employment and eligibility for health benefit plan coverage(s) similar to that being continued.

	Accelerated vesting of the next tranche of unvested restricted stock and warrants as of the “payment date” as defined in Paragraph 10
	5,201 warrants
1,473 restricted stock
	Mr. Welch will inform the Company upon exercise of the warrants and reimburse the Company for applicable withholding taxes arising as a result of such exercise.

	Outplacement services
	Up to $32,500
	Reimbursement for outplacement services up to $32,500, which is five percent of Mr. Welch’s annual base salary.

	Key Executive Incentive Plan
	$365,625
	Equal to the remaining payment owed to Mr. Welch under the Company’s Key Executive Incentive Plan.

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