Exhibit 10.1
STONE ENERGY CORPORATION
EXECUTIVE CHANGE IN CONTROL SEVERANCE POLICY
(as
amended and restated)
1.
POLICY
Stone Energy Corporation (the
“Company”) will provide the severance benefits as
defined herein to designated executives of the Company who are
terminated by the Company for other than Cause or who leave for
Good Reason on or within twenty-four (24) months after a
Change in Control.
2.
PURPOSE
The purpose of this policy is to
define the severance policy of the Company for designated
executives on or after a Change in Control.
3.
SCOPE
This policy shall only apply to
certain executives designated by the Company’s Board of
Directors (the “Board”) in its sole discretion. No
benefit shall be payable under this policy to employees who enter
into a separate written severance agreement with the Company on or
after the effective date of this policy and who are entitled to
receive severance payments thereunder as a result of a termination
of service on or within twenty-four (24) months after a Change
in Control. As a condition precedent to receipt of any payments,
benefits or other services under this policy, each executive will
be required to execute a binding release satisfactory to the
Company pursuant to which such executive releases the Company from
any liability in connection with employment by the Company.
4.
PROCEDURE
Executives who are terminated by the
Company for other than Cause or who leave for Good Reason as
defined under this policy shall be provided the following payments,
benefits and other services as hereinafter defined, with payments
to be made within eight (8) business days after execution of a
release, in substantially the form attached hereto as Attachment 1,
provided such release is executed within forty-five (45) days
of the Executive’s termination date.
4.1 Base Salary
The Company
will pay the executive’s base salary up to the date of
termination.
4.2 Bonus
The Company
will pay the executive a pro rata share of the bonus opportunity up
to the date of termination at the then projected year end rate of
payout, in an amount, if any, as determined by the Compensation
Committee in its sole discretion.
4.3 Severance
The executive
will be eligible to receive a lump sum cash severance payment equal
to 2.99 times the sum of: (a) the executive’s base
salary calculated using the higher of the annual salary rate in
effect at the time of termination or that in effect on the date of
the Change in Control and (b) any target bonus at the one
hundred percent (100%) level for which the executive is eligible
for the fiscal year in which termination occurs.
4.4 Outplacement
The executive
will be eligible to receive outplacement services the duration and
costs for which shall be determined by the then prevailing Human
Resources Department’s practice concerning use of
outplacement services, which shall be reasonable in amount and
commensurate with the executive’s position and in no event
exceed a cost to the Company of 5% of the base annual salary of the
executive.
4.5 Other Benefits
Any other
termination benefits will be managed consistent with current
severance practices for non-executive employees.
4.6 Excise Tax
If any of the
payments or benefits received by the executive designated to
participate, whether or not pursuant to this policy, will be
subject to the Excise Tax, then the Company shall pay to the
executive an additional amount (“Gross-Up Payment”)
such that the net amount retained by the executive, after deduction
of any Excise Tax on the total payments and any federal, state and
local income and employment taxes and Excise Tax upon the Gross-Up
Payment, shall be equal to the amount the executive would have
otherwise received without such Excise Tax; provided, however, that
if it shall be determined that the executive is entitled to a
Gross-Up Payment, but that the total to be paid to executive does
not exceed one hundred ten percent (110%) of the greatest amount
(the “Reduced Amount”) that could be paid to the
executive such that the
receipt of the
total would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the executive and the total payments to
executive in the aggregate shall be reduced to the Reduced Amount.
Payment of the Gross-Up Payment, if due hereunder, shall be made no
later than the date the Excise Tax is remitted to the applicable
tax authorities.
5.
DEFINITIONS
“Cause” for termination by the Company of the
executive’s employment shall mean (i) the willful and
continued failure by the executive to substantially perform the
executive’s duties with the Company (other than any such
failure resulting from the executive’s incapacity due to
physical or mental illness) after a written demand for substantial
performance is delivered to the executive by the Board which demand
specifically identifies the manner in which the Board believes that
the executive has not substantially performed the executive’s
duties, or (ii) the willful engaging by the executive in
conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise. For purposes of clauses
(i) and (ii) of this definition, no act, or failur
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