8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 25, 2017

STONE ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-12074	72-1235413
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

625 E. Kaliste Saloom Road

Lafayette, Louisiana 70508

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (337) 237-0410

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On April 25, 2017, David H. Welch informed the Board of Directors (the “Board”) of Stone Energy Corporation (“the Company”) of his intention to retire as the Chief Executive Officer and President of the Company and as a member of the Board. The Company expects to enter into a separation agreement with Mr. Welch that will provide for certain compensation, benefits and other terms relating to his retirement.

Effective April 28, 2017, the Board elected James M. Trimble, a member of the Board, to serve as the Company’s interim Chief Executive Officer and President. Mr. Trimble, 68, has served as a director of the Company since February 28, 2017. Mr. Trimble previously served as the Chief Executive Officer and President of PDC Energy, Inc., a publicly traded independent natural gas and oil company, from 2011 until 2015. From 2005 until 2010, Mr. Trimble was the Managing Director of Grand Gulf Energy, Limited, a public company traded on the Australian Securities Exchange, and President and Chief Executive Officer of Grand Gulf’s U.S. subsidiary Grand Gulf Energy Company LLC, an exploration and development company. Mr. Trimble has served on the board of directors of Callon Petroleum Company since 2014.

In connection with his election, the Company entered into a compensation term sheet (the “Term Sheet”) with Mr. Trimble effective April 28, 2017, pursuant to which Mr. Trimble is entitled to (i) an annual base salary equal to $650,000, (ii) an annual target bonus opportunity equal to 120% of his annual base salary, and (iii) the option to participate in the Company’s employee benefit plans available to senior executives of the Company. The Company and Mr. Trimble intend to enter into an employment agreement consistent with the terms in the Term Sheet following Mr. Trimble’s election. The description of the Term Sheet is qualified in its entirety by reference to the full text of the Term Sheet, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K.

Mr. Trimble does not have any family relationships with any director, executive officer or any person nominated to become a director or executive officer of the Company and there are no arrangements or understandings between Mr. Trimble and any other person pursuant to which Mr. Trimble was elected as the interim Chief Executive Officer and President. There are no transactions in which Mr. Trimble had or will have an interest that would be required to be disclosed pursuant to Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended.

Effective April 28, 2017, the Board also appointed Keith A. Seilhan, the Company’s Senior Vice President – Gulf of Mexico, to serve as the Company’s Chief Operating Officer. Mr. Seilhan, 50, has served as the Company’s Senior Vice President – Gulf of Mexico since January 2015 and as Vice President – Deep Water from February 2013 until January 2015. Prior to joining the Company, Mr. Seilhan filled various senior leadership roles for Amoco and BP over his 21 year career with them. In his final year with BP, he filled the role as BP’s Incident Commander on the Deepwater Horizon Incident in 2010, and thereafter worked as an Emergency Response Consultant with The Response Group for one and one half years. While with Amoco and BP, he served, among other roles, as an Asset Manager and an Operations Manager for Deep Water assets, Operations Director for Gulf of Mexico and the Organizational Capability Manager. In connection with his appointment, Mr. Seilhan’s annual base salary was increased from $320,000 to $400,000.

Mr. Seilhan does not have any family relationships with any director, executive officer or any person nominated to become a director or executive officer of the Company and there are no arrangements or understandings between Mr. Seilhan and any other person pursuant to which Mr. Seilhan was appointed as Chief Operating Officer. There are no transactions in which Mr. Seilhan had or will have an interest that would be required to be disclosed pursuant to Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended.

Item 7.01. Regulation FD Disclosure.

On April 28, 2017, the Company issued a press release announcing that Mr. Welch was retiring as Chief Executive Officer and President and as a member of the Board and Mr. Trimble was elected interim Chief Executive

Officer and President of the Company. The press release also announced that Mr. Seilhan was promoted to Chief Operating Officer. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 7.01.

Item 9.01. Financial Statements and Exhibits.

(d)    Exhibits

Exhibit No.	Description
10.1	Chief Executive Officer Term Sheet, dated as of April 27, 2017, by and between James M. Trimble and Stone Energy Corporation
99.1	Press release dated April 28, 2017

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	STONE ENERGY CORPORATION
Date: May 1, 2017	By:	/s/ Lisa S. Jaubert
	Lisa S. Jaubert Senior Vice President, General Counsel and Secretary

EXHIBIT INDEX

Exhibit No.	Description
10.1	Chief Executive Officer Term Sheet, dated as of April 27, 2017, by and between James M. Trimble and Stone Energy Corporation
99.1	Press release dated April 28, 2017

EX-10.1

Exhibit 10.1

EXECUTION COPY

PRIVILEGED AND CONFIDENTIAL

Chief Executive Officer Term Sheet

Set forth below are the key terms of the proposed arrangement concerning the service of Executive (as defined below) with Stone Energy Corporation (the “Company”). Until superseded by an executed definitive agreement, this term sheet constitutes the entire agreement between the parties hereto and is hereafter referred to as the “Agreement.” This Agreement will be effective upon execution.

Name:	James Trimble (“Executive”).
Position/Duties:	Executive will serve as interim Chief Executive Officer and interim President of the Company. Executive will report directly to the board of directors of the Company (the “Board”). Executive will serve as a member of the Board.
Term:	Executive will be an employee-at-will and the term of employment will commence on April 28, 2017 (the “Start Date”) and end when terminated by either party upon 30 days advance written notice or as otherwise provided in definitive agreements between the parties.
Annual Base Salary:	While employed under this Agreement, Executive’s annual base salary will be $650,000 (“Base Salary”) and will be paid in cash in accordance with the customary payroll practices of the Company.
Annual Bonus:	While employed under this Agreement, Executive will be eligible to receive an annual bonus (the “Bonus”) with a target equal to 120% of Base Salary (the “Target Bonus”) contingent upon the achievement of qualitative and quantitative performance goals approved by the Board. Executive’s Bonus for 2017 will be no less than the amount of his Target Bonus prorated from the Start Date. In the event of a Corporate Change of the Company or the termination of Executive’s employment by the Company without Cause or by Executive for Good Reason, Executive will be paid the prorated Target Bonus for the period from the Start Date through December 31, 2017 in a lump sum following termination subject to the execution and irrevocability of a release of claims. Unless otherwise provided in definitive agreements between the parties, the definitions of “Cause” and “Good Reason” and the form of release from the Stone Energy Corporation Executive Severance Plan shall apply for purposes of this Agreement and “Corporate Change” shall have the meaning given such term under the Stone Energy Corporation 2017 Long-Term Incentive Plan.

1

EXECUTION COPY

Benefits:	While employed under this Agreement, Executive will be eligible to participate in the Company’s employee benefit plans generally applicable to senior executives of the Company as in effect from time to time and in accordance with the terms and conditions set forth in such plans. The Company will provide Executive with indemnification and directors and officers insurance coverage to the fullest extent permitted by applicable law.
Restrictive Covenants:	Executive agrees that he is subject to a (i) 12-month post-termination non-competition obligation relating to the business of the Company (ii) 12-month post-termination non-solicitation obligation applying to employees, consultants, customers and similar business relationships of the Company (iii) perpetual confidentiality obligation and (iv) perpetual non-disparagement obligation.
Withholding:	Payments due to Executive hereunder will be subject to withholding in accordance with applicable tax laws or regulations.
Governing Law	This Agreement shall be governed by, and construed in accordance with, the laws of the State of Louisiana, without regard to the rules thereof relating to conflicts of law.
Definitive Agreements:	The parties agree to negotiate in good faith and to enter into definitive agreements on terms consistent with this Agreement and in forms reasonably acceptable to the parties, which will supersede this Agreement and any other agreements between the Company and Executive.

2

The parties have executed this Agreement as of the date set forth below.

STONE ENERGY CORPORATION
By:	/s/ Neal Goldman
Name:	Neal Goldman
Title:	Chairman of the Board of Directors
EXECUTIVE
/s/ James Trimble
Agreed as of April 27, 2017

EX-99.1

Exhibit 99.1

STONE ENERGY CORPORATION

David Welch to Retire, Jim Trimble Elected Interim Chief Executive

Officer and President of Stone Energy Corporation

Keith Seilhan Promoted to Chief Operating Officer

LAFAYETTE, LA. April 28, 2017

Stone Energy Corporation (NYSE: SGY) (“Stone Energy” or the “Company”) today announced that David H. Welch, Chief Executive Officer and President of Stone Energy, informed the Stone Energy Board of Directors of his intention to retire following more than 13 years of service to the Company. Mr. Welch also indicated his intention to step down from his position as a director of the Company.

James M. Trimble, currently an independent director of the Company, has been elected interim Chief Executive Officer and President by the Board of Directors, effective April 28, 2017. The Board also appointed Keith Seilhan, formerly the Company’s Senior Vice President – Gulf of Mexico, to the new post of Chief Operating Officer, effective immediately.

Neal P. Goldman, Chairman of the Board of Directors said, “We thank Dave for his years of dedication to Stone Energy. He led the Company with integrity and prioritized safety and environmental protection in all of Stone’s operations.”

Mr. Goldman continued, “We are thrilled that Jim has agreed to lead our senior management team. The Board is confident that Jim is the right leader to guide the company into a new period of shareholder value creation. He is a proven and highly-respected oil and gas executive with decades of industry experience.”

“I am very excited to join the management team at Stone Energy,” said Mr. Trimble. “I firmly believe that with the Company’s excellent asset base, strong balance sheet, and seasoned executive team, Stone Energy can be a growing player in the offshore sector. I am honored by the confidence placed in me by the Board at this exciting time in the history of Stone Energy.”

Mr. Trimble brings more than 35 years of energy industry experience to this position. Mr. Trimble was President and Chief Executive Officer of PDC Energy from 2011 – 2015, a period of exceptional growth and value creation for PDC shareholders. Earlier, he founded and/or led several private oil and gas companies focused primarily on drilling in Texas, Louisiana and Oklahoma. Mr. Trimble served as the Senior Vice President of Exploration and Production for Cabot Oil and Gas for 17 years. He graduated from Mississippi State University with a degree in petroleum engineering.

Mr. Seilhan was named Senior Vice President-Gulf of Mexico in January 2015 and Vice President-Deep Water in February 2013. He previously served as Deep Water Projects Manager beginning in July 2012. Prior to joining Stone Energy, Mr. Seilhan filled various senior leadership and operations roles for Amoco and BP over his 21-year career with those organizations.

Stone Energy is an independent oil and natural gas exploration and production company headquartered in Lafayette, Louisiana with additional offices in New Orleans and Houston. Stone is engaged in the acquisition, exploration, development and production of properties in the Gulf of Mexico basin. For additional information, contact Kenneth H. Beer, Chief Financial Officer, at 337-521-2210 phone, 337-521-9880 fax or via e-mail at CFO@StoneEnergy.com