EXHIBIT 10.1

 

AMENDED AND RESTATED

 

EXCO RESOURCES, INC.

 

SEVERANCE PLAN

 

(EFFECTIVE AS OF AUGUST 17, 2004)

 

 

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TABLE OF CONTENTS

 

SECTION

 

 

 

 

 

ONE

PURPOSE OF PLAN

 

 

 

 

TWO

PRIOR SEVERANCE ARRANGEMENTS

 

 

 

 

THREE

DEFINITIONS

 

 

 

 

FOUR

ELIGIBILITY AND SEVERANCE PAY BENEFITS

 

4.1

Eligibility

 

4.2

Release Form

 

4.3

Termination of Eligibility for Severance Pay

 

4.4

Severance Pay

 

 

 

 

FIVE

FUNDING

 

 

 

 

SIX

CLAIMS PROCEDURE

 

6.1

Filing and Initial Determination of Claim

 

6.2

Duty of Plan Administrator Upon Denial of Claim

 

6.3

Request for Review of Claim Denial

 

6.4

Decision on Review of Denial

 

 

 

 

SEVEN

ADMINISTRATION OF THE PLAN

 

7.1

Plan Administrator

 

7.2

Responsibilities

 

7.3

Allocation and Delegation of Plan Administrator Responsibilities

 

7.4

Actions of Fiduciaries

 

7.5

General Administrative Powers

 

7.6

Appointment of Professional Assistance

 

7.7

Discretionary Acts

 

7.8

Responsibility of Fiduciaries

 

7.9

Indemnity by Employer

 

 

 

 

EIGHT

ADOPTION OF PLAN BY SUBSIDIARY

 

 

 

 

NINE

AMENDMENT OF THE PLAN

 

 

 

 

TEN

TERMINATION OF THE PLAN

 

 

 

 

ELEVEN

VESTING

 

 

 

 

TWELVE

STATUS OF EMPLOYMENT RELATIONS

 

 

 

 

THIRTEEN

RESTRICTIONS ON ASSIGNMENT

 

 

 

 

FOURTEEN

APPLICABLE LAW

 

 

 

 

FIFTEEN

INTERPRETATION OF THE PLAN

 

 

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AMENDED AND RESTATED

 

EXCO RESOURCES, INC.

 

SEVERANCE PLAN

 

EXCO RESOURCES, INC. (the “Company”) is amending and restating its severance
plan originally adopted on August 15, 2002 as of August 17, 2004 (the “Effective
Date”), in accordance with the terms and conditions contained herein.  The
severance plan originally adopted on August 15, 2002, is replaced in its
entirety with this Amended and Restated EXCO Resources, Inc. Severance Plan (the
“Plan”) and no provision of the August 15, 2002, plan shall survive.

 

SECTION ONE

PURPOSE OF PLAN

 

The purpose of the Plan is to provide financial support to Eligible Employees
who incur a Termination of Employment due to a Change of Control.

 

SECTION TWO

PRIOR SEVERANCE ARRANGEMENTS

 

As of the Effective Date, the Plan replaces any and all severance pay
obligations, plans, policies, practices, arrangements or programs, written or
unwritten, under which the Eligible Employees may otherwise be eligible for
severance benefit payments.  Notwithstanding the foregoing provisions of this
Section Two, nothing in this Plan shall adversely affect the rights an
individual Eligible Employee may have to severance payments under any written
agreement executed by and between the Employer and that Eligible Employee (a
“Severance Agreement”); provided, however, that in the event any Eligible
Employee that is a party to a Severance Agreement suffers a Termination of
Employment and is entitled to and is receiving the severance benefits intended
to be provided under his or her Severance Agreement, such Eligible Employee
shall not be entitled to receive severance benefits pursuant to this Plan.

 

SECTION THREE

DEFINITIONS

 

As used in the Plan:

 

3.1           “Base Pay” shall mean the Eligible Employee’s gross annual salary
or wages before any deductions, exclusions or any deferrals or contributions
under any Company plan or program, but excluding overtime, bonuses, incentive
compensation, shift and lead premium payments, employee benefits or any other
form of compensation, being received by an Eligible Employee immediately prior
to employment termination.  The Base Pay for an Eligible Employee paid on an
hourly basis shall be the individual’s hourly pay rate in effect immediately
prior to the sale multiplied by 40 hours per week and multiplied by 52 weeks.

 

3.2           “Cause” shall mean (i) the willful breach or habitual neglect of
assigned duties related to the Company, including compliance with Company
policies; (ii) conviction (including any plea of nolo contendere) of the
Eligible Employee of any felony or crime involving dishonesty or moral
turpitude; (iii)

 

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any act of personal dishonesty knowingly taken by the Eligible Employee in
connection with his responsibilities as an employee and intended to result in
personal enrichment of the Eligible Employee or any other person; (iv) bad faith
conduct that is materially detrimental to the Company; (v) inability of the
Eligible Employee to perform the Employee’s duties due to alcohol or illegal
drug use; (vi) the Eligible Employee’s failure to comply with any legal written
directive of the Board of Directors of the Company; (vii) any act or omission of
the Eligible Employee which is of substantial detriment to the Company because
of the Eligible Employee’s intentional failure to comply with any statute, rule
or regulation, except any act or omission believed by the Eligible Employee in
good faith to have been in or not opposed to the best interest of the Company
(without intent of the Eligible Employee to gain, directly or indirectly, a
profit to which the Eligible Employee was not legally entitled) and except that
Cause shall not mean bad judgment or negligence other than habitual neglect of
duty; or (viii) any other act or failure to act or other conduct which is
determined by the Plan Administrator, in its sole discretion, to be demonstrably
and materially injurious to the Employer, monetarily or otherwise.

 

3.3           “Change of Control” shall mean

 

(i)            the Company or EXCO Holdings Inc. is merged or consolidated into
or with another entity, and as a result of such merger or consolidation less
than a majority of the combined voting power of the then-outstanding securities
of such entity immediately after such transaction is held by the holders of
Voting Stock of the Company immediately prior to such transaction;

 

(ii)           the Company or EXCO Holdings Inc. sells or otherwise transfers
all or substantially all of its assets to any person or entity, and less than a
majority of the combined voting power of the then-outstanding securities of such
person or entity immediately after such sale or transfer is held by the holders
of Voting Stock of the Company immediately prior to such sale or transfer; or

 

(iii)          the sale or transfer of substantially all of the assets of North
Coast Energy, Inc. to a third party and less than a majority of the combined
voting power of the then outstanding securities of such person or entity
immediately after such sale or transfer is held by the individuals who held the
voting stock of the selling company immediately prior to the transaction; or

 

(iv)          the sale of a controlling interest (fifty-one percent (51%) or
more shall constitute a controlling interest) of the issued and outstanding
stock of either North Coast Energy, Inc. or of any other subsidiary of EXCO
Holdings Inc. or EXCO Resources, Inc. to a third party and less than a majority
of the combined voting power of the then outstanding securities of such
purchasing entity immediately after such sale or transfer is held by the
individuals who held the voting stock of the selling company immediately prior
to the transaction; or

 

(v)           North Coast Energy, Inc. is merged or consolidated into or with
another entity and as a result of the merger or consolidation less than a
majority of the combined voting power of the then outstanding securities of
either entity immediately after such transaction is held by the holders of
voting stock of the selling company immediately prior to the transaction.

 

However, in the event EXCO Holdings is sold to a third party and a group headed
by Douglas H. Miller repurchases or purchases back some or all of the assets of
a subsidiary or the stock of the subsidiary, then all eligible employees, even
those retained by the purchasing group lead by Douglas H. Miller, will receive
severance benefits if they are Eligible Employees under the terms of this Plan.

 

3.4           “Company” shall mean EXCO Resources, Inc.

 

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3.5           “Comparable Offer of Employment” shall mean:

 

(i)            that the proposed compensation and benefits, in the aggregate, to
be paid by the Company, its parent organization or any of its affiliate
organizations, or any successor to the Company by merger or acquisition of all
or substantially all of the Company’s assets, offering employment are
commensurate with the compensation and benefits previously paid by the Company,
in the aggregate, to such Eligible Employee;

 

(ii)           the Eligible Employee incurs no demotion in his or her position
with the Employer from the position the Eligible Employee held immediately prior
to the effective date of the Change of Control;

 

(iii)          the Eligible Employee incurs no significant adverse change in the
nature or scope of the authorities, powers, functions, responsibilities or
duties attached to the position or positions with the Employer which the
Eligible Employee held immediately prior to the effective date of the Change of
Control, without the prior written consent of the Eligible Employee, which is
not remedied within ten (10) calendar days after receipt by the Employer of
written notice from the Eligible Employee of such change; and

 

(iv)          the Eligible Employee’s principal place of work has not changed to
any location that is more than thirty-five (35) miles from his or her principal
place of work immediately prior to the effective date of the Change of Control,
without the prior written consent of the Eligible Employee.

 

3.6           “Eligible Employee” shall mean any employee employed by the
Company as a regular, full-time employee on the effective date of a Change of
Control and who incurs a Termination of Employment due to a Change of Control
either on the date of the Change of Control or within the six-month period
immediately following the effective date of the Change of Control and such
Termination of Employment was not for Cause. Notwithstanding the foregoing, any
employee who owns, either directly or beneficially, Class A or Class B Common
Stock of EXCO (excluding stock options for Class A Common Stock granted under
the EXCO Resources, Inc. 2004 Long Term Incentive Plan) as of the date of a
Change of Control shall not be an Eligible Employee.

 

3.7           “Employer” shall mean the Company and any direct or indirect
United States subsidiary of the Company which adopts the Plan, and any successor
to either the Company or any direct or indirect United States subsidiary of the
Company which adopted this Plan.

 

3.8           “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.  References to any Section of ERISA shall
include any successor provision thereto.

 

3.9           “Good Reason” shall mean any of the following events that occur
either on the effective date of a Change of Control or within the six-month
period immediately following the effective date of a Change of Control:

 

(i)            the Eligible Employee incurs a demotion in his or her position
with the Employer from the position the Eligible Employee held immediately prior
to the effective date of the Change of Control;

 

(ii)           the Eligible Employee incurs a reduction in his or her Base Pay
from his or her Base Pay immediately prior to the effective date of a Change of
Control;

 

(iii)          the Eligible Employee incurs a significant adverse change in the
nature or scope of the authorities, powers, functions, responsibilities or
duties attached to the position or positions with the Employer which the
Eligible Employee held immediately prior to the effective date of

 

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the Change of Control, without the prior written consent of the Eligible
Employee, which is not remedied within ten (10) calendar days after receipt by
the Employer of written notice from the Eligible Employee of such change; or

 

(iv)          the Eligible Employee’s principal place of work changed to any
location that is more than thirty-five (35) miles from his or her principal
place of work immediately prior to the effective date of the Change of Control,
without the prior written consent of the Eligible Employee.

 

3.10         “Internal Revenue Code” shall mean the Internal Revenue Code of
1986, as amended from time to time.  References to any Section of the Internal
Revenue Code shall include any successor provision thereto.

 

3.11         “Net Proceeds” is the amount to which an Eligible Employee is
entitled to receive for the sale of Class A Common Stock of the Company,
including the Class A common Stock the Eligible Employee would hold if at the
time of the Change in Control the Eligible Employee exercised his outstanding
stock options granted under the EXCO Resources 2004 Long Term Incentive Plan and
immediately sold such shares, less the cost of his exercise of such options.

 

3.12         “Plan” shall mean the Amended and Restated EXCO Resources, Inc.
Severance Plan as set forth in this document, and as hereafter amended.

 

3.13         “Plan Administrator” shall mean the person, persons or entity
administering the Plan in accordance with the provisions of Section Seven
hereof.  The Plan Administrator shall be the “named fiduciary,” as referred to
in Section 402(a) of ERISA, with respect to the management, operation and
administration of the Plan.

 

3.14         “Plan Year” shall mean an initial period starting on the Effective
Date and ending on December 31, 2002, and thereafter the twelve (12)-month
period ending on each December 31.

 

3.15         “Release Form” shall mean a release agreement which is to be signed
by the Eligible Employee releasing any and all claims against the Employer and
which is in such form as approved by the Company.

 

3.16         “Severance Pay” shall mean an amount equal to an Eligible
Employee’s Base Pay less such employee’s Net Proceeds. If such amount is equal
to or less than zero, the employee shall receive no Severance Pay.

 

3.17         “Termination of Employment” shall mean a termination of employment
from the Employer which results from an affirmative discharge from employment by
the Employer, other than discharge for Cause.  An Eligible Employee who
voluntarily terminates employment for Good Reason shall be deemed to have
incurred a Termination of Employment.  An Eligible Employee shall not be deemed
to have incurred a Termination of Employment by reason of the transfer of the
Eligible Employee’s employment between the Company and any Subsidiary or among
Subsidiaries (or among any department or business unit of the Company).  The
Plan Administrator shall determine, in its sole discretion, whether an Eligible
Employee’s termination of employment from the Employer constitutes a
“Termination of Employment.”

 

3.18         “Voting Stock” shall mean shares of the Company’s Common Stock, par
value $.02 per share, and any other securities of the Company entitled to vote
for the election of directors.

 

3.19         Wherever appropriate, words used in the Plan in the singular may
mean the plural, the plural may mean the singular, and the masculine may mean
the feminine.

 

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SECTION FOUR

 

ELIGIBILITY AND SEVERANCE PAY BENEFITS

 

4.1           Eligibility.  Subject to Sections 4.3 and 4.4 of this Plan, any
Eligible Employee is eligible for Severance Pay following his or her Termination
of Employment if such Termination of Employment occurs either on the effective
date of a Change of Control or within the six-month period immediately following
the effective date of a Change of Control, provided that such Eligible Employee
executes a Release Form pursuant to Section 4.2 of this Plan.

 

4.2           Release Form.  An Eligible Employee otherwise eligible for
Severance Pay under this Plan shall be paid such Severance Pay only if the
Eligible Employee executes and files the appropriate fully completed and
executed Release Form (substantially in the form of Exhibit A-1 or Exhibit A-2,
as the case may be, attached hereto) with the Plan Administrator, in accordance
with the instructions and on or before the date specified on the Release Form or
any document accompanying the Release Form, and in the case of an Eligible
Employee age 40 or over, does not revoke the Release Form within seven (7) days
of executing the Release Form.

 

4.3           Termination of Eligibility for Severance Pay.  An Eligible
Employee will cease to be eligible to receive Severance Pay, under this Plan
upon the earlier of the following:

 

(a)                                  the Eligible Employee’s death, unless it
occurs after the date the Release Form is executed;

 

(b)                                 the Eligible Employee’s discharge for Cause
or misconduct;

 

(c)                                  the Eligible Employee’s failure to execute
and file the Release Form by the date specified on the Form;

 

(d)                                 the Eligible Employee’s receipt of a
Comparable Offer of Employment from any other United States operation of the
Company or its parent organization or any of its affiliate organizations,
regardless of whether such Eligible Employee accepts such offer;

 

(e)                                  the Eligible Employee’s receipt and
acceptance of a transfer of employment to any other United States or Canadian
operation of the Company or its parent organization or any of its affiliate
organizations; or

 

(f)                                    the Eligible Employee’s Net Proceeds
equals or exceeds the Eligible Employee’s Severance Pay.

 

4.4           Severance Pay. The Severance Pay to which an Eligible Employee is
entitled shall be paid to such Employee after the effective date of a Change in
Control in cash in a lump sum within fourteen (14) days following receipt by the
Company of an executed Release Form or, where applicable, following the
expiration of the revocation period provided for on the Release Form.  Any
Severance Pay shall be offset by any other severance pay or other income
replacement, or any pay or wages in lieu of notice of a plant closing, or any
pay or wages paid following issuance of a notice of a plant closing, including
without limitation any mandated severance pay benefits required under any
applicable law.

 

If an Eligible Employee dies following execution of the Release Form, but before
receiving all or part of the Severance Pay to which he is entitled, the Plan
Administrator shall pay such Eligible Employee’s Severance Pay to the Eligible
Employee’s estate.

 

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SECTION FIVE

 

FUNDING

 

Funding for this Plan shall come solely from the general assets of the
Employer.  All payments of Severance Pay shall be paid from the general assets
of the Employer.  Neither the Employer nor the Plan Administrator shall have any
obligation to establish a trust or fund for the payment of benefits under the
Plan or to insure any of the benefits under the Plan.  None of the officers,
members of the Board of Directors, or agents of the Employer or the Plan
Administrator guarantees in any manner the payment of benefits hereunder.

 

SECTION SIX

 

CLAIMS PROCEDURE

 

6.1           Filing and Initial Determination of Claim.  An Eligible Employee
or his/her duly authorized representative may file a claim for a benefit to
which the claimant believes that he or she is entitled.  Such a claim must be in
writing and delivered to the Plan Administrator by postage prepaid certified
mail.  Within fifteen (15) days after receipt of a claim, the Plan Administrator
shall send to the claimant by certified mail, postage prepaid, notice of the
granting or denying, in whole or in part, of such claim, unless special
circumstances require an extension of time for processing the claim.  In no
event may the extension exceed fifteen (15) days from the end of the initial
period.  If such extension is necessary, the claimant will be given a written
notice to this effect prior to the expiration of the initial 15-day period.  The
extension notice shall indicate the special circumstances requiring an extension
of time and the date by which the Plan expects to render the benefit
determination.  The Plan Administrator shall have full discretion to deny or
grant a claim in whole or in part.  If notice of the denial of a claim is not
furnished in accordance with this Section 6.1, the claim shall be deemed denied
and the claimant shall be permitted to exercise his/or right to review pursuant
to Section 6.3.

 

6.2           Duty of Plan Administrator Upon Denial of Claim.  If a claim for
benefits is denied, the Plan Administrator shall provide to the claimant written
notice setting forth in a manner calculated to be understood by the claimant:
(i) the specific reason or reasons for the denial; (ii) specific reference to
pertinent Plan provisions on which the denial is based; (iii) a description of
any additional material or information necessary for the claimant to perfect the
claim and an explanation of why such material is necessary; and (iv) a
description of the Plan’s claims review procedure and the time limits applicable
to such procedures, including a statement of the claimant’s right to being a
civil action under Section 502(a) of ERISA following a denial of the claim on
review.

 

6.3           Request for Review of Claim Denial.  If an Eligible Employee
receives written notification of the denial in whole or in part of his/her claim
pursuant to Section 6.1, or if an employee is not included in Schedule A and is
therefore not eligible for benefits under this Plan, within sixty (60) days of
the Eligible Employee’s receipt of claim denial or the date the employee becomes
aware that he is not eligible for benefits under this Plan, if the claimant
disagrees with such action, the claimant or his/her authorized representative
shall file a written request with the Plan Administrator that it conduct a full
and fair review of the denial of the claim for benefits.  In connection with any
request for a review of the denial of a claim for benefits, the claimant shall
have the opportunity to submit written comments, documents, records, and other
information relating to the claim for benefits.  The Plan Administrator shall
provide the claimant, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the
claimant’s claim for benefits.  A document, record, or other information shall
be considered “relevant” to a claim for benefits if that document, record or
other information: (i) was relied upon in making the benefit determination; (ii)
was submitted, considered, or generated in the course of making the benefit
determination, without regard to whether such document,

 

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record or other information was relied upon in making the benefit determination;
or (iii) demonstrates compliance with the administrative process and safeguards
required by ERISA in making the benefit determination.  The review of a denial
shall take into account all comments, documents, records, and other information
submitted by the claimant, without regard to whether such information was
submitted or considered in the initial benefit determination.

 

6.4           Decision on Review of Denial.  Upon receipt of the request for
review, the Plan Administrator shall review the claim and shall deliver to the
claimant a written decision on the claim for benefits within sixty (60) days
after the receipt of the aforesaid request for review, except that if there are
special circumstances (such as the need to hold a hearing, if necessary) that
require an extension of time for processing, the aforesaid sixty (60) day period
shall be extended to one hundred twenty (120) days and the claimant will be
given written notice of the extension prior to the expiration of the initial
60-day period.  In no event shall such extension exceed a period of sixty (60)
days from the end of the initial 60-day period.  The extension notice shall
indicate the special circumstances requiring an extension of time and the date
by which the Plan expects to render the determination on review.

 

The Plan Administrator’s decision shall be written in a manner calculated to be
understood by the claimant.  Any notice of a denial on review shall include (i)
the specific reason or reasons for the denial on review; (ii) reference to the
specific plan provisions on which the denial is based; (iii) a statement that
the claimant is entitled to receive, upon request and free of charge, reasonable
access to, and copies of all documents, records, and other information relevant
to the claimant’s claim for benefits; and (iv) a statement of the claimant’s
right to bring an action under Section 502(a) of ERISA.  If notice of the
decision on the review is not furnished in accordance with this Section 6.4, the
claim shall be deemed denied and the Plan Administrator will have no further
duty to review such claim.

 

SECTION SEVEN

 

ADMINISTRATION OF THE PLAN

 

 

7.1           Plan Administrator.  The Plan Administrator hereunder shall be the
Compensation Committee as appointed from time to time by the Board of Directors
of the Company.

 

7.2           Responsibilities.  The Plan Administrator shall be the
“administrator” (as defined in Section 3(16)(A) of ERISA) of the Plan, and shall
be responsible for all obligations under the Internal Revenue Code and ERISA and
all other obligations required or permitted to be performed by the Plan
Administrator and not otherwise delegated pursuant to the Plan.  The Plan
Administrator shall be the designated agent for service of legal process.

 

7.3           Allocation and Delegation of Plan Administrator Responsibilities. 
The Plan Administrator may appoint such assistants or representatives as it
deems necessary for the effective exercise of its duties in administering the
Plan and may delegate to such assistants and representatives any powers and
duties, both ministerial and discretionary, as it deems expedient or
appropriate.  The Plan Administrator also may designate any person, firm or
corporation to carry out any of the other responsibilities of the Plan
Administrator under the Plan.  Any such allocation or designation shall be made
pursuant to a written instrument executed by the Plan Administrator.

 

7.4           Actions of Fiduciaries.  The Plan Administrator may authorize or
approve any action by written instrument signed by a person duly authorized to
act on behalf of the Plan Administrator.  Any written memorandum signed by any
such duly authorized person or by any other person duly authorized by the Plan
Administrator to act in respect of the subject matter of the memorandum, shall
have the same force and effect as a formal resolution adopted by the Plan
Administrator.

 

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All acts and determinations with respect to the administration of the Plan made
by the Plan Administrator and any assistants or representatives appointed by it
shall be duly recorded by the Plan Administrator or by the assistant or
representative appointed by it to keep such records.  All records, together with
such other documents as may be necessary for the administration of the Plan,
shall be preserved in the custody of the Plan Administrator or the assistants or
representatives appointed by it.

 

7.5           General Administrative Powers.  Except as otherwise provided
herein, the Plan Administrator is authorized to take such actions as may be
necessary to carry out the provisions and purposes of the Plan and shall have
the authority to control and manage the operation and administration of the
Plan.  In order to effectuate the purposes of the Plan, the Plan Administrator
shall have the discretionary authority and power to construe and interpret the
Plan, to supply any omissions therein, to reconcile and correct any errors or
inconsistencies, to decide any questions in the administration and application
of the Plan, and to make equitable adjustments for any mistakes or errors made
in the administration of the Plan.  All such actions or determinations made in
good faith by the Plan Administrator, and the application of rules and
regulations to a particular case or issue by the Plan Administrator shall,
subject to the claims procedures set forth in Section Six hereof, not be subject
to review by anyone, but shall be final, binding and conclusive on all persons
ever interested hereunder.  In construing the Plan and in exercising its power
under provisions requiring the Plan Administrator’s approval, the Plan
Administrator shall attempt to ascertain the purpose of the provisions in
question and when such purpose is known or reasonably ascertainable, such
purpose shall be given effect to the extent feasible.  In the discharge of this
discretionary authority the Plan Administrator shall have all necessary powers
and duties, including but not limited to the following:

 

(a)           to require any person to furnish such information as is reasonably
necessary or appropriate for administration of the Plan as a condition to
receiving benefits under the Plan;

 

(b)           to make such rules and regulations and prescribe the use of such
forms as he shall deem necessary for the efficient administration of the Plan;

 

(c)           to establish or cause to be established such procedures, protocols
and guidelines as he shall deem necessary to interpret the terms and conditions
of the Plan;

 

(d)           to decide on questions concerning Plan eligibility, Years of
Employment and employment termination in accordance with the terms of the Plan;

 

(e)           to determine the amount of benefits payable to an Eligible
Employee, in accordance with the Plan, and to provide a full and fair review to
any Eligible Employee whose claim for benefits has been denied in whole or in
part; and

 

(f)            to designate other persons to carry out any duty or power which
would otherwise be a fiduciary responsibility of the Plan Administrator, under
the terms of the Plan.

 

7.6           Appointment of Professional Assistance.  The Plan Administrator
may engage accountants, attorneys and such other personnel as it deems necessary
or advisable.  The functions of any such persons engaged by the Plan
Administrator shall be limited to the specific services and duties for which
they are engaged, and such persons shall have no other duties, obligations or
responsibilities under the Plan.  Unless otherwise specifically so delegated,
such persons shall exercise no discretionary authority or discretionary control
respecting the management of the Plan.

 

7.7           Discretionary Acts.  Any discretionary actions of the Plan
Administrator with respect to the administration of the Plan shall be made in a
manner which does not discriminate in favor of stockholders, officers and highly
compensated employees.

 

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7.8           Responsibility of Fiduciaries.  The Plan Administrator and its
assistants and representatives shall be free from all liability for their acts
and conduct in the administration of the Plan except for acts of gross
negligence, fraud or willful misconduct; provided, however, that the foregoing
shall not relieve any of them from any responsibility or liability for any
responsibility, obligation or duty that they may have pursuant to ERISA.

 

7.9           Indemnity by Employer.  In the event and to the extent not insured
against by any insurance company pursuant to provisions of any applicable
insurance policy, the Employer shall indemnify and hold harmless the Plan
Administrator and its assistants and representatives from any and all claims,
demands, suits or proceedings in connection with the Plan that may be brought by
the Employer’s employees or their legal representatives, or by any other person,
corporation, entity, government or agency thereof, including any amounts paid in
settlement, with the approval of the Plan Administrator, and any and all other
losses, damages, interest, expenses, including counsel fees approved by the Plan
Administrator, and penalties, including any penalties imposed by the Secretary
of Labor pursuant to Section 502(l) of ERISA relating to any breaches of
fiduciary responsibility under Part 4 of Title I of ERISA, arising from any
action or failure to act, except where the same is judicially determined to be
due to gross negligence, fraud, or willful misconduct of such individual in
connection with the Plan.  The indemnification contained in this Section shall
apply regardless of whether the event causing the liability arises in whole or
in part from the negligence (other than judicially determined gross negligence)
or other fault on the part of the individual, specifically including breaches of
fiduciary responsibility under ERISA.

 

SECTION EIGHT

 

ADOPTION OF PLAN BY SUBSIDIARY

 

Any subsidiary of the Company, whether or not presently existing, may, with the
approval of the Plan Administrator, adopt this Plan.  Any such subsidiary that
adopts the Plan is thereafter an Employer with respect to its employees for
purposes of the Plan.

 

SECTION NINE

 

AMENDMENT OF THE PLAN

 

The Plan Administrator may amend the Plan at any time and in any manner with
respect to all of the Employees. Any amendment to this Plan shall be effectuated
by a written instrument signed by the Plan Administrator and shall be
incorporated into the Plan document.  Any amendment or restatement may be made
retroactive if, in the judgment of the Plan Administrator, such retroactivity is
necessary or advisable for any reason.  Notwithstanding the above, this Plan may
not be terminated or amended within six months following a Change in Control.

 

SECTION TEN

 

TERMINATION OF THE PLAN

 

Continuance of the Plan is not assumed as a contractual obligation of the
Employer, and the Plan Administrator reserves the right to terminate the Plan at
any time. Notwithstanding the above, this Plan may not be terminated or amended
within six months following a Change in Control.  Such termination may occur
without consent being obtained from the Plan Administrator, Eligible Employees
or any other interested person.  The Plan shall automatically terminate upon
dissolution of the Company, unless provision is specifically made by its
successors, if any, for the continuation of the Plan.  If not sooner

 

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terminated, this Plan shall terminate when all liabilities provided for
hereunder have been fully discharged.

 

SECTION ELEVEN

 

VESTING

 

No Eligible Employee shall have a vested right to any benefit under this Plan
prior to the time a determination is made by the Plan Administrator that the
particular Eligible Employee is entitled to receive benefits under the Plan.  At
any time prior to such determination the Plan may be amended or terminated with
respect to any benefits to which such Eligible Employee would otherwise have
been entitled.

 

SECTION TWELVE

 

STATUS OF EMPLOYMENT RELATIONS

 

The adoption and maintenance of the Plan shall not be deemed to constitute a
contract between any Employer and its employees or to be consideration for, or
an inducement or condition of, the employment of any person.  Nothing herein
contained shall be deemed (i) to give to any employee the right to be retained
in the employ of the Employer; (ii) to affect the right of the Employer to
discipline or discharge any employee at any time; (iii) to give the Employer the
right to require any employee to remain in its employ; or (iv) to affect any
employee’s right to terminate his employment at any time.

 

SECTION THIRTEEN

 

RESTRICTIONS ON ASSIGNMENT

 

The benefits provided hereunder are not subject in any manner to the debts or
other obligations of the persons to whom they are payable.  The interest of an
Eligible Employee may not be sold, transferred, assigned or encumbered in any
manner, either voluntarily or involuntarily, and any attempt so to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be
null and void.

 

SECTION FOURTEEN

 

APPLICABLE LAW

 

To the extent not preempted by ERISA, the Plan shall be construed, regulated,
interpreted and administered under and in accordance with the laws of the State
of Texas.

 

SECTION FIFTEEN

 

INTERPRETATION OF THE PLAN

 

It is the intention of the Employers that the Plan shall comply with the
Internal Revenue Code, and the regulations thereunder, the requirements of ERISA
and the corresponding provisions of any subsequent laws; the provisions of the
Plan shall be construed to effectuate such intention.

 

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IN WITNESS WHEREOF, EXCO Resources, Inc. has caused the Plan to be signed by its
duly authorized officer on this 18th day of November, 2004.

 

 

 

EXCO RESOURCES, INC.

 

 

 

 

 

 

 

By:

/s/ J. Douglas Ramsey

 

 

 

 

Its: Vice President and Chief Financial Officer

 

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SCHEDULE A

 

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Exhibit A-1

40+

 

RELEASE AGREEMENT

 

IN RETURN FOR THE CONSIDERATION of payment of severance benefits to me from EXCO
Resources, Inc. (“EXCO”) in accordance with EXCO Resources, Inc. Severance Plan,
I am entering into this Release Agreement.  I understand and agree that the
severance payment is in addition to the other (non-severance) benefits to which
I may be entitled under the normal policies and procedures applicable to
employees of EXCO as a result of my termination of employment from EXCO.

 

I,                                                  , on behalf of myself, my
heirs, executors, successors and assigns hereby irrevocably and unconditionally
RELEASE, WAIVE, AND FOREVER DISCHARGE EXCO and all of its parents, divisions,
subsidiaries and affiliates, and their present and former agents, employees,
officers, directors, partners, stockholders, successors and assigns (hereinafter
collectively “Releasees”) from any and all claims, demands, actions and causes
of action, and all liability whatsoever, whether known or unknown, fixed or
contingent, which I have or may have against Releasees as a result of my
employment by or subsequent termination as an employee of EXCO, or failure to be
hired by any Releasee, up to the date of execution of this Release Agreement. 
This Release Agreement includes but is not limited to claims at law or equity or
sounding in contract (express or implied) or tort arising under federal, state
or local laws prohibiting age, sex, race, national origin, disability, religion,
veteran or any other forms of discrimination (including but not limited to
Title VII of the Civil Rights Act of 1964, the Rehabilitation Act of 1973, the
Americans with Disabilities Act, as well as applicable state fair employment
practices laws), claims arising under the Fair Labor Standards Act, the National
Labor Relations Act, the Worker Adjustment and Retraining Notification Act, the
Family and Medical Leave Act, the Employee Retirement Income Security Act, or
any other legal and equitable claims regarding my employment with EXCO, the
continuation of employment or the termination of said employment.

 

I understand and agree that this Release Agreement shall not in any way be
construed as an admission by Releasees of any unlawful or wrongful acts
whatsoever against me or any other person, and Releasees specifically disclaim
any liability to or wrongful acts against me or any other person.

 

I acknowledge that I have been advised in writing by EXCO that I should consult
an attorney prior to executing this Release Agreement, and I further acknowledge
that I have been given a period of forty-five (45) calendars days after my
termination by EXCO within which to review and consider the provisions of this
Release Agreement.

 

I acknowledge that I have been given information regarding the ages and job
titles of persons affected and unaffected by these terminations of employment.

 

I understand and acknowledge that I have seven (7) calendar days following the
execution of this Release Agreement to revoke my acceptance of this Release
Agreement and that this Release Agreement shall not become effective and the
severance shall not become payable until this revocation period has expired.  In
order to revoke this Release Agreement, I acknowledge that I am required to
deliver written notice clearly stating my intent to revoke to [Insert Name and
Address of Contact Person at Company].  I agree that my notice will not be
considered effective unless [Mr./Ms. Insert Name], or a representative
designated by EXCO, receives it within the seven calendar days following my
execution of this Release Agreement.

 

I understand it is my choice whether or not to enter into this Release Agreement
and that my decision to do so is voluntary and made knowingly.

 

Please read carefully as this document includes a release of claims.

 

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As evidenced by my signature below, I hereby certify that I have read the above
Release Agreement and agree to its terms.

 

Dated this                 day of                               , 2004.

 

 

 

 

 

WITNESS

 

EMPLOYEE SIGNATURE

 

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Exhibit A-2

Under 40

 

RELEASE AGREEMENT

 

IN RETURN FOR THE CONSIDERATION of payment of severance benefits to me from EXCO
Resources, Inc. (“EXCO”) in accordance with the EXCO Resources, Inc. Severance
Plan, I am entering into this Release Agreement.  I understand and agree that
the severance payment is in addition to the other (non-severance) benefits to
which I may be entitled under the normal policies and procedures applicable to
employees of EXCO as a result of my termination of employment from EXCO.

 

I,                                              , on behalf of myself, my heirs,
executors, successors and assigns hereby irrevocably and unconditionally
RELEASE, WAIVE, AND FOREVER DISCHARGE EXCO and all of its parents, divisions,
subsidiaries and affiliates, and their present and former agents, employees,
officers, directors, partners, stockholders, successors and assigns (hereinafter
collectively “Releasees”) from any and all claims, demands, actions and causes
of action, and all liability whatsoever, whether known or unknown, fixed or
contingent, which I have or may have against Releasees as a result of my
employment by or subsequent termination as an employee of EXCO, or failure to be
hired by any Releasee, up to the date of execution of this Release Agreement. 
This Release Agreement includes but is not limited to claims at law or equity or
sounding in contract (express or implied) or tort arising under federal, state
or local laws prohibiting age, sex, race, national origin, disability, religion,
veteran or any other forms of discrimination (including but not limited to
Title VII of the Civil Rights Act of 1964, the Rehabilitation Act of 1973, the
Americans with Disabilities Act, as well as applicable state fair employment
practices laws), claims arising under the Fair Labor Standards Act, the National
Labor Relations Act, the Worker Adjustment and Retraining Notification Act, the
Family and Medical Leave Act, the Employee Retirement Income Security Act, or
any other legal and equitable claims regarding my employment with EXCO, the
continuation of employment or the termination of said employment.

 

I understand and agree that this Release Agreement shall not in any way be
construed as an admission by Releasees of any unlawful or wrongful acts
whatsoever against me or any other person, and Releasees specifically disclaim
any liability to or wrongful acts against me or any other person.

 

I acknowledge that I have been advised in writing by EXCO that I should consult
an attorney prior to executing this Release Agreement, and further acknowledge
that I have been given a period of ten (10) calendar days after my termination
by EXCO within which to review and consider the provisions of this Release
Agreement.

 

I understand and acknowledge that once I have executed this Release Agreement,
it is immediately binding and may not be revoked or rescinded by either party.

 

I understand it is my choice whether or not to enter into this Release Agreement
and that my decision to do so is voluntary and is made knowingly.

 

--------------------------------------------------------------------------------

 

Please read carefully as this document includes a release of claims.

 

As evidenced by my signature below, I hereby certify that I have read the above
Release Agreement and agree to its terms.

 

Dated this                 day of                                              ,
2004.

 

 

 

 

 

WITNESS

 

EMPLOYEE SIGNATURE

 

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