Document:

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Exhibit 10.1

STONE ENERGY CORPORATION

EXECUTIVE CHANGE OF CONTROL

AND SEVERANCE PLAN

     The STONE ENERGY CORPORATION EXECUTIVE CHANGE OF CONTROL AND SEVERANCE PLAN (the “Plan”) is
hereby adopted effective as of November 16, 2006 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 in the event of a Change of Control (as defined
below) and upon certain terminations of employment of the Company and replaces in full the
Company’s present Executive Severance Policy.

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:
(1) 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
(2) 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 (1) and (2) 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 interest
of the Company.

     “Change of Control” shall be deemed to have occurred for purposes of this policy 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 twenty percent (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 date hereof, 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 (2/3) 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 sixty-five percent (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
twenty percent (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
sixty-five percent (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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     “Good Reason” for termination by the Executive of the Executive’s employment shall mean the
occurrence (without the Executive’s express written consent) within twelve (12) months after any
Change of Control of any one of the following acts by the Company, or failures by the Company to
act:

(A) a 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 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) the failure by the Company to continue in effect any compensation plan in which the
Executive participates immediately prior to the Change of Control which is material to the
Executive’s total compensation, including but not limited to the Company’s Annual Incentive
Compensation Plan and its Amended and Restated Stock Incentive Plan or any substitute plans
adopted prior to the Change of Control, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such plan or unless
the Company eliminates the compensation plan for all participants, or the failure by the
Company to continue the Executive’s participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in terms of the amount or
timing of payment of benefits provided and the level of the Executive’s participation
relative to other participants, as existed immediately prior to the Change of Control;

(C) the failure by the Company to continue to provide the Executive with benefits
substantially similar to those enjoyed by the Executive under any of the Company’s pension,
savings, life insurance, medical, health and accident, or disability plans in which the
Executive was participating immediately prior to the Change of Control (except for
across-the-board changes similarly affecting all senior Executives of the Company and all
senior Executives of any Person in control of the Company), the taking of any other action
by the Company which would directly or indirectly materially reduce any of such benefits or
deprive the Executive of any material fringe benefit or perquisite enjoyed by the Executive
at the time of the Change of Control, or the failure by the Company to provide the Executive
with the number of paid vacation days to which the Executive is entitled on the basis of
years of service with the Company in accordance with the Company’s normal vacation policy in
effect at the time of the Change of Control;

(D) the failure by the Company or, in the event of a merger or acquisition that constitutes
a Change of Control, by the controlling entity following such Change of Control, if not the
Company, to name the Executive an officer of the parent company within ninety (90) days
after the date of the Change of Control and continuing as such thereafter; or

(E) 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.

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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. 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.

     “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 a president, executive vice president,
senior vice president or vice president of an Employer, other than any individual who (i) is
covered under the Company’s Executive Change of Control Severance Policy or (ii) has entered into a
separate written employment, severance or change of control agreement with the Company and has
become entitled to receive severance benefits thereunder as a result of his termination of
employment.

     “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.

     “Involuntary Termination” shall mean any termination of the Executive’s employment with the
Employer that is for the convenience of the Employer, as determined by the Compensation Committee
of the Board, in its sole discretion; however, a termination (other than for Cause) that occurs on
or following a Change of Control, but not later than 12 months after the Change of Control, or that
results from a resignation by an Executive for a Good Reason shall be deemed for purposes hereof a
“termination for the convenience of the Employer.”

     “Release” shall mean a general release, substantially in the form attached hereto, from the
Eligible Employee 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 this 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.

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II.

CHANGE OF CONTROL AND SEVERANCE BENEFITS

     2.1 Change of Control Benefits. Immediately prior to or upon a Change of Control,

          (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 options times the cash consideration to be determined by the Board in
connection with the Change of Control, over the aggregate exercise price of such stock options,

          (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 “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 Internal Revenue Code for
such contribution, and

          (d) the Company will pay 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.

     2.2 Severance Payments. Subject to the provisions of Sections 2.3, 2.5 and 4.14 hereof, if an Executive incurs an
Involuntary Termination, upon his Release becoming irrevocable, the Executive shall be entitled to
the following severance benefits:

          (a) if such Involuntary Termination is prior to a Change of Control, a lump sum cash payment,
within 30 days of such termination, equal to his Annual Pay;

          (b) a pro rata share, within 30 days of such termination, of the Executive’s bonus opportunity
up to the date of his 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 reduce 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 the remainder, if any, of the six-month period following the date of the
Change of Control, at a cost to the Executive that is equal to the cost for an active

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employee for similar coverage. The Executive may choose to continue some or all of such Health Benefit
Coverages. 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). The
subsidized COBRA Health Benefit Coverage(s) provided hereunder shall immediately end upon the
Executive’s obtainment of new employment and eligibility for welfare 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 in no event shall such benefits exceed a cost to
the Company of 5% of the Annual Pay of the Executive;

          (e) if such Involuntary Termination is on or after a Change of Control, a lump sum cash
payment, within 30 days of such termination, equal to the product of 2.99 and the Executive’s
Annual Pay; and

          (f) 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. Anything to the contrary herein notwithstanding, as a condition to the receipt of any
severance payments or benefits under Section 2.2 (a) through (e) above, an Executive whose
employment has been subject to an Involuntary Termination shall first execute a Release, in
substantially the form attached hereto as Attachment 1, 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 this 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 this Plan, shall receive
such severance payments and benefits as provided under Section 2.2 of this Plan, but such payments
and benefits shall be “offset” or reduced by any severance payments or benefits provided to such
Covered Employer under any such Other Plan.

     2.6 Parachute Taxes. Notwithstanding anything in this Plan to the contrary, in the event any payment or benefit to
an Executive pursuant to this Plan, when aggregated with any other payments or benefits to or on
behalf of such Executive outside of this Plan, would constitute an “excess parachute payment”,
within the meaning of Section 280G of the Internal Revenue Code, the payments and/or benefits (as
selected by the Company) to such Executive shall be reduced in whole or in part so that no part of
the payments or benefits received under this Plan by such Executive will constitute “excess
parachute payments”; however, such reduction(s) shall be made only if by reason of such
reduction(s) the Executive’s net after-tax benefit (as determined 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.

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 this 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

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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.

     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 employee that the Committee determines is entitled to a benefit under the Plan is not
required to file a claim for benefits. Any employee 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;

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          (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.

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 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.
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 with a short plan year commencing on the
effective date of the Plan.

     4.4 Other Participating Employers. The Committee may designate any entity eligible by law to participate in this 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

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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.

     4.5 Amendment and Termination. The Plan may be terminated or amended from time to time at the discretion of the Board;
provided, however, that notwithstanding the foregoing, the Plan may not be amended or terminated
during its term to adversely affect the benefits or potential rights to benefits (contingent or
otherwise) of any Executive then covered under the Plan. 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. The initial term of the Plan shall begin on November 16, 2006 and
shall continue through December 31, 2007. The Plan shall automatically terminate on January 1,
2008 unless, on or before November 30, 2007, the Board, in its sole discretion to be evidenced by
resolution in the minutes of the Board, extends the term of the Plan for the calendar year
beginning on January 1, 2008. The Board, in its sole discretion, may continue the Plan in effect
beyond December 31, 2008 by similarly extending the term of the Plan for successive calendar years,
one year at a time, to be evidenced by resolution(s) in the minutes of the Board. Notwithstanding
the foregoing, however, in the event of a Change of Control during the existence of the Plan, the
term of the Plan shall automatically be extended for twelve (12) 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 term shall survive
any termination of the Plan.

     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.

     4.9 Effect of Plan. Except with respect to individuals that are not Executives, this 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
are hereby null and void and of no further force and effect.

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Further, this 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 anything in this Plan to the contrary, if any payment or benefit under this
Plan would result in the imposition of an additional tax under Section 409A of the Internal
Revenue Code and related regulations and United States Department of the Treasury
pronouncements, that provision of this Plan will be reformed to avoid imposition of the applicable
tax. If the Executive is a “specified employee,” as defined in Section 409A of the Internal
Revenue Code (the “Code”) with respect to the Employer or an affiliate, severance payments pursuant
to Section 2.2 of this Plan shall be paid in a lump sum (without interest) on the date which is six
months after the date of the Executive’s “separation from service,” as defined in Section 409A of
the Code and the regulations thereunder, or, if earlier, the date of the Executive’s death in a
lump sum.

     EXECUTED on November 16, 2006.

STONE ENERGY CORPORATION

By: /s/ David H. Welch

Name: David H. Welch

Title: President and Chief Executive Officer

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Exhibit 10.2

STONE ENERGY CORPORATION

EMPLOYEE CHANGE OF CONTROL

SEVERANCE PLAN

     The STONE ENERGY CORPORATION EMPLOYEE CHANGE OF CONTROL SEVERANCE PLAN (the “Plan”) is hereby
adopted effective as of November 16, 2006 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 Covered Employees in the event of a Change of Control of the Company and replaces in
full the Company’s present Employee Change of Control Severance Policy.

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 or annualized rate of base wages
of a Covered Employee in effect immediately prior to the Change of Control.

     “Board” shall mean the Board of Directors of the Company or its successor.

     “Cause” shall mean any termination of a Covered Employee’s employment by reason of the Covered
Employee’s: (1) willful and continued failure to perform substantially the Covered Employee’s
duties (other than any such failure resulting from the Covered Employee’s incapacity due to
physical or mental illness) after written notice of such failure has been given to the Covered
Employee specifying in detail such failure and the Covered Employee has had a reasonable period
(not to exceed 30 days) to correct such failure; (2) conviction (or plea of nolo contendere) for
any felony or any other crime which involves moral turpitude; (3) gross negligence or willful
misconduct in the performance of the Covered Employee’s duties; provided, however, that no act or
failure to act on the part of the Covered Employee shall be considered “gross negligence” or
“willful misconduct” if done or omitted to be done by the Covered Employee in good faith and in the
reasonable belief that such act or failure to act was in the best interest of the Employer or its
affiliate; (4) breach or violation of any material provision of any material policy of the Employer
or its affiliate, which, if capable of being remedied, remains unremedied by the Covered Employee
for more than 10 days after written notice thereof is given to the Covered Employee by the Employer
or its affiliate; or (5) dishonesty, theft, fraud, embezzlement or misappropriation against the
Employer or its affiliate.

     “Change in Duties” shall mean the occurrence, within six months after the date upon which a
Change of Control occurs, of any one or more of the following:

 

 

     (1) a significant reduction in the duties or responsibilities of a Covered Employee from those
applicable to him immediately prior to the date on which the Change of Control occurs;

(2) a reduction in a Covered Employee’s rate of Annual Pay; or

     (3) a change in the location of a Covered Employee’s principal place of employment by more
than 50 miles from the location where he was principally employed immediately prior to the date on
which the Change of Control occurs, unless such relocation is agreed to in writing by the Covered
Employee; provided, however, that a relocation scheduled prior to the date of the Change of Control
shall not constitute a Change in Duties.

     “Change of Control” shall be deemed to have occurred for purposes of this policy 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 twenty percent (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 date hereof, 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 (2/3) 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 sixty-five percent (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

-2-

 

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 twenty percent
(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
sixty-five percent (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 in 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.

     “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.

     “Covered Employee” shall mean any individual who, immediately prior to the Change of Control,
is a regular employee of the Employer who is normally scheduled to work 30 or more hours per week,
other than any individual who (i) is an Officer or (ii) is, or is treated by the Company as being,
a consultant, independent contractor or part-time employee.

     “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.

     “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 Covered Employee) for its similarly situated active employees.

     “Involuntary Termination” shall mean any termination of the Covered Employee’s employment with
the Employer that occurs on or following a Change of Control but not later than six months after
the Change of Control, and which:

     (1) does not result from a voluntary resignation by the Covered Employee (other than a
resignation pursuant to clause (2) of this definition); or

     (2) results from a resignation by a Covered Employee on or before the date which is 60 days
after the date the Covered Employee receives notice of a Change in Duties;

-3-

 

provided, however, that the term ‘Involuntary Termination’ shall not include: (i) a termination
for Cause; (ii) any termination as a result of a Covered Employee’s death or disability under
circumstances entitling him to benefits under the long-term disability plan of the Employer; or
(iii) any termination as a result of a Covered Employee declining to accept an offer of comparable
employment from a successor employer. For purposes of clause (iii), comparable employment shall
mean employment that would not result in a Change in Duties for the Covered Employee.

     “Officer” shall mean an employee of an Employer who holds the title of chief executive
officer, president, chief financial officer, vice president, senior vice president or executive
vice president of an Employer.

     “Release” shall mean a general release, substantially in the form attached hereto, from the
Eligible Employee that releases the Company and its affiliates from employment related claims.

     “Week’s of Pay” shall mean 1/52 of the Covered Employee’s Annual Pay.

     “Year of Service” shall mean the Covered Employee’s period of continuous employment (in days)
with the Employer and its affiliates as of the date of Involuntary Termination, including
predecessors and successors, divided by 365, and disregarding any resulting fractional years.

     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 this 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.
On or immediately prior to a Change of Control,

          (a) each Covered Employee will receive a lump sum cash payment equal to the product of (i) the
number of “restricted shares” of Company stock that the employee would have received under the
Company’s stock plan but did not receive for the time-vested portion of his or her long-term stock
incentive award, if any, for the calendar year in which the Change of Control occurs times (ii) the
price per share of the Company’s common stock utilized in effecting the Change of Control, provided
that such amount shall be prorated by multiplying
such amount by the number of full months that have elapsed from January 1 of that calendar
year to the effective date of the Change of Control and then dividing the result by twelve (12);

          (b) the Company shall cause each unexercised “in-the-money” stock option granted to a Covered
Employee pursuant to any of the Company’s stock option plans or stock

-4-

 

incentive plans to be
cancelled for cash equal to the excess, if any, of the product of (i) the number of shares of
Company stock issuable upon exercise of such stock options and (ii) the cash consideration to be
determined by the Board in connection with the Change of Control over the aggregate exercise price
of such stock options;

          (c) all then remaining vesting restrictions with respect to any of the Company’s restricted
stock awards issued or issuable to a Covered Employee 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; and

          (d) 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 Internal Revenue Code for
such contribution.

     2.2 Severance Payments.
Subject to the provisions of Sections 2.3, 2.5 and 4.12 hereof, if a Covered Employee incurs
an Involuntary Termination, upon his Release becoming irrevocable, such Covered Employee shall be
entitled to the following severance benefits:

          (a) a lump sum cash payment, payable by the later of 30 days following the Involuntary
Termination, equal to the sum of (i) the product of the Covered Employee’s Week’s of Pay and each
full Year of Service as of his termination date, plus (ii) one Week’s of Pay for each full $10,000
of Annual Pay; however, the sum of (i) and (ii) shall not be less than 12 Week’s of Pay nor exceed
52 Week’s of Pay;

          (b) a lump sum cash severance payment equal to 100% of the Eligible Employee’s annual targeted
bonus opportunity for the calendar year in which the Involuntary Termination occurs, provided that
such amount shall be prorated by multiplying such amount by the number of days that have elapsed
from January 1 of that calendar year to the date of the Involuntary Termination and dividing the
result by 365;

          (c) the continuation of the Health Benefit Coverages for himself and, where applicable, his
eligible dependents for the remainder, if any, of the 6-month period following the date of the
Change of Control, at a cost to the Covered Employee that is equal to the cost for an active
employee for similar coverage. The Covered Employee may choose to continue some or all of such
Health Benefit Coverages. If at any time on or after a Covered Employee’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

-5-

 

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 Covered Employee to reflect the loss of tax benefits associated with his “lost”
employer-provided health plan coverage benefit(s). The subsidized COBRA Health Benefit Coverage(s)
provided hereunder shall immediately end upon the Covered Employee’s obtainment of new employment
and eligibility for welfare benefit plan coverage(s) similar to that being continued (with the
Covered Employee being obligated hereunder to promptly report such eligibility to the Employer);
and

          (d) a lump sum equal to his earned, but unpaid Annual Pay up to the date of his Involuntary
Termination.

     2.3 Release and Full Settlement.
Anything to the contrary herein notwithstanding, as a condition to the receipt of any
severance payments or benefits under Section 2.2 (a) through (c) above, a Covered Employee whose
employment has been subject to an Involuntary Termination shall first execute a Release, in
substantially the form attached hereto as Attachment 1, 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 Covered Employee’s employment with the Employer or the
termination of such employment, but excluding all claims to benefits and payments the Covered
Employee may have under any compensation or benefit plan, program or arrangement, including this
Plan. The performance of the Employer’s obligations hereunder and the receipt of any benefits
provided hereunder by such Covered Employee shall constitute full settlement of all such claims and
causes of action.

     2.4 No Mitigation.
A Covered Employee 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 Covered Employee as the result of employment by another employer or by retirement
benefits, except as provided in Section 2.2(c) with respect to Health Benefit Coverage and in
Section 2.6 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 a Covered Employee is otherwise entitled.

     2.5 Severance Pay Plan Limitation.
This Plan is intended to be an employee welfare benefit plan within the meaning of section
3(1) of ERISA and the Labor Department regulations promulgated thereunder. Therefore, anything to
the contrary herein notwithstanding, in no event shall any Covered Employee receive total severance
payments under Section 2.2 of the Plan that exceed the equivalent of twice such Covered Employee’s
“annual compensation” (as such term is defined in 29 CFR § 2510.3-2(b)(2)) during the year
immediately preceding his Involuntary Termination. If total severance payments under Section 2.2
of the Plan to a Covered Employee would otherwise exceed the limitation in the preceding sentence,
the amount payable to such Covered Employee pursuant to Section 2.2 shall be reduced in order to
satisfy such limitation.

-6-

 

     2.6 Coordination with Other Arrangements.
Any Covered Employee 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 this Plan,
shall receive such severance payments and benefits as provided under Section 2.2 of this Plan, but
such payments and benefits shall be “offset” or reduced by any severance payments or benefits
provided to such Covered Employer under any such Other Plan.

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 this 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
a Covered Employee’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 Covered Employees such information as is necessary
for the proper administration of the Plan.

-7-

 

     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.

     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 employee that the Committee determines is entitled to a benefit under the Plan is not
required to file a claim for benefits. Any employee 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 a Covered Employee 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 Covered
Employee 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.

In the event a claim for Plan benefits is denied or modified, if the Covered Employee 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 Covered Employee 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

-8-

 

following such request for
review the Committee shall, after providing a full and fair review, render its final decision in
writing to the Covered Employee 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 Covered Employee and his representative, if any, prior to the
commencement of the extension period. 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 Covered Employees.

     4.3 Plan Year.
The Plan shall operate on a calendar year basis with a short plan year commencing on the
effective date of the Plan.

     4.4 Other Participating Employers.
The Committee may designate any entity eligible by law to participate in this 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.

     4.5 Amendment and Termination.
The Plan may be terminated or amended from time to time at the discretion of the Board;
provided, however, that notwithstanding the foregoing, the Plan may not be amended or terminated
during its term to adversely affect the benefits or potential rights to benefits (contingent or
otherwise) of any Covered Employee then covered under the Plan. 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. The initial term of the Plan shall begin on November 16,
2006 and shall continue through

-9-

 

December 31, 2007. The Plan shall automatically terminate on
January 1, 2008 unless, on or before November 30, 2007, the Board, in its sole discretion to be
evidenced by resolution in the minutes of the Board, extends the term of the Plan for the calendar
year beginning on January 1, 2008. The Board, in its sole discretion, may continue the Plan in
effect beyond December 31, 2008 by similarly extending the term of the Plan for successive calendar
years, one year at a time, to be evidenced by resolution(s) in the minutes of the Board.
Notwithstanding the foregoing, however, in the event of a Change of Control during the existence of
the Plan, the term of the Plan shall automatically be extended for six (6) 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
term shall survive any termination of the Plan.

     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.
Covered Employees 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.

     4.9 Effect of Plan.
Except with respect to individuals that are not Covered Employees, this Plan is intended to
supersede all prior oral or written policies of the Employer and all prior oral or written
communications to Covered Employees with respect to the subject matter hereof, and all such prior
policies or communications are hereby null and void and of no further force and effect. Further,
this 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 Covered
Employees.

     4.10 Taxes.
The Employer or its successor may withhold from any amounts payable to a Covered Employee
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.

-10-

 

     4.12 Section 409A.
Notwithstanding anything in this policy to the contrary, if any payment or benefit under this
Policy would result in the imposition of an additional tax under Section 409A of the Internal
Revenue Code and related regulations and United States Department of the Treasury pronouncements,
that provision of this Policy will be reformed to avoid imposition of the applicable tax.

     EXECUTED on November 16, 2006.

	 	 	 	 	 
	 	 	STONE ENERGY CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/David H. Welch
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	David H. Welch
	 
	 	 	 	 
	 

	 	Title:
	 	President and Chief Executive Officer

-11-

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