EXHIBIT 10.1
TRANSITION CONSULTING AGREEMENT

This Transition Consulting Agreement (“Agreement”) is by and between EXCO
Resources, Inc. (the “Company”), and Stephen F. Smith (“Smith”). This Agreement
is entered into as of February 28, 2013 (the “Effective Date”). The parties
agree to this Agreement as follows:

RECITALS

WHEREAS, the Company currently employs Smith as its President and Chief
Financial Officer and Smith currently serves as a member of the Board of
Directors (the “Board”) and as Vice Chairman of the Board;
WHEREAS, Smith has expressed a desire to retire from the Company and the parties
believe it is appropriate to transition his position as President and Chief
Financial Officer of the Company during the period beginning on the Effective
Date and ending on May 31, 2013 (the “Transition Period”);
WHEREAS, the Company desires to continue to receive the benefit of certain of
Smith’s services on a contract basis after May 31, 2013 for a period of three
years, all as more fully described in this Agreement; and
WHEREAS, in light of the foregoing, Smith has agreed to continue in the employ
of the Company during the Transition Period, as more specifically described
herein, and has agreed to undertake to perform certain consulting services for
the period beginning on June 1, 2013 and ending on June 1, 2016 (the “Consulting
Period”), as more specifically described herein.
In consideration of the promises and mutual covenants in this Agreement, the
Company and Smith agree as follows:
I.
SERVICES TO BE PROVIDED BY SMITH

A.Description of Transition Period Services. During the Transition Period, and
subject to the terms of this Agreement (including the early termination
provisions of Section V below), Smith agrees to serve, and the Company agrees to
continue to employ Smith: (i) as the Company’s Chief Financial Officer until
April 1, 2013; (ii) as the Director and Vice Chairman of the Board until the
Company’s next annual meeting of shareholders scheduled to be held on May 30,
2013 (the “Annual Meeting”). Smith agrees that effective as of the Effective
Date, he shall resign from his position as President of the Company and shall
continue to serve as a full-time employee of the Company until May 31, 2013.
Smith further agrees to resign from his position as Chief Financial Officer of
the Company effective as of April 1, 2013 and shall not stand for re-election as
Director and Vice Chairman of the Board at the Annual Meeting. Smith
acknowledges and understands that the Board will not nominate him for
re-election to the Board at the Annual Meeting. As an employee of the Company
during the Transition Period, Smith agrees to assist with the transition of his
current duties and responsibilities as President and Chief Financial Officer of
the Company to each of his respective successors and to perform such other
duties as the Company’s Management Executive Committee and Smith may reasonably
agree to from time to time (the “Transition Services”).
B.Description of Consulting Services. Subject to the terms of this Agreement,
during the Consulting Period, the Company agrees to retain Smith, and Smith
agrees with the Company to serve, as a consultant to the Company for the purpose
of providing advice and offering other assistance to the Company consistent with
Smith’s position and with the resources of Smith on matters as the Company
reasonably requests, and to perform the following services for the Company
during the Consulting Period: (i) serve as

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a member of the board of directors of EXCO/HGI GP, LLC, the general partner of
EXCO/HGI Production Partners, LP (“MLP”), which shall include access to MLP
senior management and periodic reports and data to stay abreast of MLP
activities; (ii) assist with other partnership entities, including Land Bank and
drilling partnerships, as may be requested by the Company from time to time;
(iii) assist with financial reporting and risk management reviews, as may be
requested from time to time by the Company; (iv) as requested, assist with
operational, financial, human resources, recruiting, vendor relations and other
projects; (v) assist with the identification and review of business development
opportunities for MLP and the Company; and (vi) perform such other duties as the
Company’s Management Executive Committee and Smith may reasonably agree to from
time to time (collectively, the “Consulting Services”). Smith shall report
directly to the Company’s Management Executive Committee. It is agreed that
other consulting services may be undertaken that are outside the foregoing scope
of services by mutual consent. The Company has agreed to retain Smith as a
consultant during the Consulting Period in reliance on the special and unique
abilities of Smith in rendering the Consulting Services and Smith will use
Smith’s reasonable efforts, skills, judgment, and abilities in rendering the
Consulting Services. Smith shall perform the Consulting Services in a diligent,
trustworthy, and businesslike manner, with the purpose of advancing the business
of the Company. While the time commitment of Smith required to perform the
Consulting Services will vary depending upon the projects assigned, the parties
intend that the average level of bona fide services to be provided by Smith
during the Consulting Period shall be equal to or greater than 20% of the
average level of the bona fide services provided by Smith during the 36-month
period immediately preceding the last day of his employment with the Company.
Smith’s time commitment to the Company shall be reviewed and approved by the
Company’s Management Executive Committee on a quarterly basis, and increased or
decreased as the members of the Company’s Management Executive Committee deem
appropriate.
C.Company’s Reliance. The Company is entering into this Agreement with respect
to the Consulting Period in reliance on Smith’s special and unique abilities in
rendering the Consulting Services and Smith will use Smith’s best effort, skill,
judgment, and ability in rendering the Consulting Services.
D.Representations by Smith. Smith represents to the Company that Smith is under
no contractual, legal or fiduciary obligation or burden that reasonably may be
expected to interfere with Smith’s ability to perform the Consulting Services in
accordance with the Agreement’s terms, including without limitation any
agreement or obligation to or with any other company, and that Smith is not
bound by the terms of any agreement with any previous employer or other party to
refrain from using or disclosing any trade secret or confidential or proprietary
information in the course of Smith’s engagement by the Company or to refrain
from competing, directly or indirectly, with the business of any other party.
Smith agrees that Smith will not use, distribute or provide to anyone at the
Company any confidential or proprietary information belonging to any other
company or entity, at any time during Smith’s performance under this Agreement.
Smith further represents that Smith’s performance of the Consulting Services
will not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by Smith in confidence or in trust prior this
Agreement, and Smith will not disclose to the Company or induce the Company to
use any confidential or proprietary information or material belonging to any
other party.
E.Nature of Relationship Between Parties. During the Transition Period, Smith
shall render the Transition Services described in this Agreement as an employee.
During the Consulting Period, Smith will render the Consulting Services in this
Agreement as an independent contractor, while specifically adhering to the terms
of this Agreement. Except as otherwise specifically agreed to by the Company in
writing, during the Consulting Period, Smith shall have no authority or power to
bind the Company with respect to third parties and Smith shall not represent to
third parties that Smith has authority or power to bind the Company (other than
in his capacity as a member of the board of directors of EXCO/HGI GP, LLC). It
is not the intention of the parties to this Agreement to create, by virtue of
any portion of this Agreement relating to the Consulting Services or the
Consulting Period, any employment relationship, trust, partnership, or joint
venture between Smith and the Company or any of its affiliates, except as
specifically provided in this Agreement, to make them legal representatives or
agents of each other or to create any fiduciary relationship

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or additional contractual relationship among them. The parties acknowledge,
agree and understand that during the Consulting Period, Smith shall at all times
be free to engage in all aspects of any other business for his own account and
for the accounts of others, and this Agreement in no way shall prohibit Smith
from providing services to other unrelated third parties during the Consulting
Period; provided, however that Smith shall not perform services for any other
independent oil and natural gas company nor any other entity engaged in a
business that is competitive with the Company or the MLP without obtaining the
prior written consent of the Company. The Company further acknowledges and
agrees that during the Consulting Period, the Company shall have no rights by
virtue of this Agreement, in and to, or to the income or profits derived from,
Smith’s independent business ventures.
II.
COMPENSATION FOR SERVICES

A.    Consideration for Transition Services. During the Transition Period, the
Company will continue to pay Smith his monthly base salary as was in effect
immediately prior to the Effective Date, less applicable withholdings, payable
in accordance with the Company’s normal payroll practices. In addition, Smith
will be entitled to participate in the Company’s benefit plans provided by the
Company for all employees generally, and for the Company’s executive employees,
subject to the terms and conditions of such plans, as such plans may be amended,
modified, terminated or replaced by the Company from time to time.
B.    Consulting Fee. The Company shall pay Smith a rate of $250,000 for each
year during the Consulting Period (pro-rated for any partial years, to the
extent this Agreement is terminated earlier in accordance with Section V below),
payable in equal installments, on the first business day of each month (the
“Consulting Fee”), provided that Smith presents any documentation detailing the
Consulting Services performed as may be requested by the Company. The Consulting
Fee constitutes the sole compensation to which Smith shall be entitled for
performance of the Consulting Services.
C.    Continued Vesting of Outstanding Awards Granted under the EXCO Resources,
Inc. 2005 Long-Term Incentive Plan. With respect to any awards previously
granted to Smith under the EXCO Resources, Inc. 2005 Long-Term Incentive Plan
(the “Plan”) and outstanding as of the Effective Date, as provided by Section
2.40 of the Plan, a “Termination of Service” (as defined in the Plan) shall not
be deemed to have occurred, and such awards shall continue to vest as provided
in the underlying award agreements (the “Award Agreements”) as amended by this
Section II.C., so long as Smith continues to provide services pursuant to this
Agreement. Notwithstanding anything to the contrary contained herein, the
Company agrees to amend the Award Agreements as of the Effective Date to provide
that such awards (i) to the extent such awards are options and such options have
not previously vested pursuant to the terms of such Award Agreements, the
unvested portion of such options shall immediately become fully-vested and
become exercisable on the earlier of June 1, 2016 or the date this Agreement
terminates for any reason other than pursuant to Section V.A.(iii) or Section
V.A.(iv), and the vested portion of such options shall remain exercisable until
the earlier of (A) the last day of the term of the option (which term shall be
extended to the same extent as the term may be extended by the Board of
Directors or other governing body of the Company from time to time for other
options that were granted on the same date to a group of participants) as if
Smith had continued to provide services to the Company during such period, or
(B) the date that is one year after the date this Agreement terminates under
Section V.A.(iii) or Section V.A.(iv); and (ii) to extent such awards are
restricted stock and such restricted stock awards have not previously vested
pursuant to the terms of such Award Agreements, the unvested portion of such
restricted stock awards shall immediately become fully-vested on the earlier of
June 1, 2016 or the date this Agreement terminates for any reason other than
pursuant to Section V.A.(iii) or Section V.A.(iv). For the avoidance of doubt,
if this Agreement is terminated pursuant to Section V.A.(iii) or Section
V.A.(iv), then the unvested portion of any awards outstanding at that time shall
lapse and be forfeited to the Company.

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D.    Expense Reimbursement. No expenses will be reimbursed unless Smith
receives written approval from the Company. Any reimbursement will be made in
accordance with the Company’s policies and procedures regarding reimbursement
following submission of appropriate documentation of such costs by Smith to the
Company.
E.    Benefits. During the Consulting Period, Smith shall at all times be an
independent contractor (and not an employee or agent of the Company); therefore,
Smith shall not be entitled to participate in any benefit plans or programs that
the Company provides or may provide to its employees, including, but not limited
to, pension, profit-sharing, medical, dental, workers’ compensation,
occupational injury, life insurance and vacation or sick benefits.
F.    COBRA. During the Consulting Period, if Smith is eligible for and elects
continuation coverage under the Company’s group health plan in accordance with
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), the Company shall pay 100% of the premiums due with respect to such
COBRA coverage, until the earlier of: (i) the date this Agreement terminates;
(ii) the date that is eighteen (18) months after May 31, 2013; (iii) the date
that Smith obtains coverage under another plan, dies, or breaches this
Agreement; or (iv) the date Smith’s coverage under the Company’s medical plan
terminates for any reason, other than non-payment of premiums. If after the
termination of this Agreement, Smith is eligible for and wishes to continue his
COBRA continuation coverage, and the maximum applicable continuation coverage
period has not expired, Smith may continue such coverage, provided, however,
Smith shall be solely responsible for payment of the entire premium for such
coverage. Notwithstanding anything to the contrary contained herein, the Company
retains the right to amend, modify or terminate any of its employee benefit
plans, policies or programs at any time, provided that any such amendment,
modification or termination is not designed to solely affect Smith. In the event
Smith’s coverage under COBRA ends prior to the end of the Consulting Period, the
Company agrees to use its best commercial efforts to assist Smith with obtaining
health insurance in the individual insurance market, and to the extent Smith is
able to obtain such coverage, Smith shall be solely responsible for payment of
the entire premium for such coverage; provided that the Company’s obligations
under this Section II.F. shall immediately cease upon termination of this
Agreement for any reason. To the extent any benefits provided under this Section
II.F. are otherwise taxable to Smith, such benefits shall, for purposes of
Section 409A of the Code, be provided as separate monthly in-kind payments of
those benefits, and to the extent those benefits are subject to and not
otherwise exempt from Section 409A of the Code, the provision of the in-kind
benefits during one calendar year shall not affect the in-kind benefits to be
provided in any other calendar year.
G.    Use of Infrastructure. During the Consulting Period, the Company shall
provide Smith with the use of his current Company email account consistent with
the Company’s practice for other independent contractors and other Company
infrastructure necessary to perform services pursuant to this Agreement.
H.    Workers’ Compensation. Smith understands and acknowledges that the Company
shall not obtain workers’ compensation insurance covering Smith during the
Consulting Period.

III.
PAYMENT OF TAXES

A.    Federal, State, and Local Taxes. With respect to the Transition Services,
the Company shall be solely responsible for withholding taxes or making any
necessary payments to any taxing authority based on the Company’s payment of the
consideration for the Transition Services under this Agreement. With respect to
the Consulting Services, neither federal, state, or local income tax nor payroll
tax of any kind shall be withheld or paid by the Company on behalf of Smith.
Smith shall not be treated as an employee of

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the Company with respect to the Consulting Services performed under the
Agreement for federal, state, or local tax purposes.
B.    Notices to Contractor About Tax Duties And Liabilities. Smith understands
that during the Consulting Period, Smith is responsible to pay, according to the
applicable law, Smith’s income taxes. The parties agree that any tax
consequences or liability arising from the Company’s payments to Smith during
the Consulting Period shall be the sole responsibility of Smith.
IV.
INDEMNIFICATIONS AND COVENANTS

A.    Liability Insurance. During the Transition Period, Smith shall be covered
by the Company’s directors’ and officers’ liability insurance policy to the same
extent as other similarly-situated executives of the Company.
B.    Smith’s Standard of Care. Subject to the other Agreement provisions, Smith
will provide Smith’s services under this Agreement with the same degree of care,
skill, and prudence that would be customarily exercised in the Company’s best
interest.
C.    Return of Company Property. Upon the termination of this Agreement for any
reason, Smith shall immediately return and deliver to the Company any and all
Confidential Information (as defined below), software, devices, data, reports,
proposals, lists, correspondence, materials, equipment, computers, hard drives,
papers, books, records, documents, memoranda, manuals, e-mail, electronic or
magnetic recordings or data, including all copies thereof, books of account,
drawings, prints, plans, and the like which belong to the Company or relate to
the Company’s business and which are in Smith’s possession, custody or control,
whether prepared by Smith or others. If at any time after termination of this
Agreement, for any reason, Smith determines that Smith has any Confidential
Information in Smith’s possession or control, Smith shall immediately return to
the Company all such Confidential Information in Smith’s possession or control,
including all copies and portions thereof. Further, Smith shall not retain any
Confidential Information, data, information or documents belonging to the
Company or any copies thereof (in electronic or hard copy format). For purposes
of this Agreement, “Confidential Information” includes, but is not limited to,
(i) all confidential or competitively sensitive information relating to the
business of the Company or MLP, or their subsidiaries or affiliates, (ii) all
intellectual property and proprietary rights of the Company or MLP, (iii)
computer codes and instructions, processing systems and techniques, inputs and
outputs (regardless of the media on which stored or located) and hardware and
software configurations, designs, architecture and interfaces, (iv) business
research, studies, procedures, costs, plans and strategies, (v) financial data,
budgets and plans, (vi) distribution methods, plans and strategies, (vii)
marketing data, research, methods, plans, strategies and efforts, (viii)
information regarding actual and prospective suppliers, clients and customers
(including lists, profiles, identities of and customer and client nonpublic
personal information), (ix) the terms of contracts and agreements with, the
needs and requirements of, and the Company’s or MLP’s, as the case may be,
course of dealing with, actual or prospective suppliers, clients and customers,
(x) personnel information (including the names, contact information, skills and
compensation of employees and contractors of the Company or MLP), (xi) client,
customer and vendor credit information, (xii) information received from third
parties subject to obligations of non-disclosure or non-use, (xiii) costs,
pricing and pricing strategies, (xiv) audit processes, management methods and
information, reports, recommendations and conclusions, and (xv) development
tools, techniques and processes and training methods and manuals.

V.     PERIOD OF AGREEMENT; TERMINATION
A.    Period. The term of this Agreement shall commence on the Effective Date
and continue until the first of the following dates:

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(i)    June 1, 2016;
(ii)    the date Smith dies or suffers a “Total and Permanent Disability” (as
such defined in the Plan);
(iii)    on the date that is sixty (60) days following the date Smith has
provided the Company with written notice that he intends to cease providing
services pursuant to this Agreement; or
(iv)    immediately on the date that the Company notifies Smith, in writing,
that it is terminating this Agreement for Cause (as defined below).
This Agreement governs all Transition Services performed by Smith during the
Transition Period and all Consulting Services performed by Smith for the Company
during the Consulting Period. If this Agreement is terminated, either prior to
or on June 1, 2016, and the parties fail to execute a new agreement, all
services will be discontinued as of the date of such termination; provided,
however, Smith shall use Smith’s best efforts to complete all services commenced
prior to such termination at the discretion of the Company and shall bill the
Company for the completion of such services, on a pro rata basis, in accordance
with the fees set forth in this Agreement. For purposes of this Agreement,
“Cause” means (i) any act of fraud, misappropriation or embezzlement by Smith
regarding any aspect of the Company’s business; (ii) the intentional, material
failure of Smith to follow the Company’s Management Executive Committee’s lawful
directives that are not inconsistent with Smith’s duties, as set forth in this
Agreement; or (iii) the conviction of Smith by a court of competent jurisdiction
of a felony or a crime involving moral turpitude.
B.    Survival. The provisions set forth in Section IV. shall survive
termination or expiration of this Agreement.
VI.
OTHER PROVISIONS

A.    Partial Invalidity. In the event any court of competent jurisdiction holds
any provision of this Agreement to be invalid or unenforceable, such invalid or
unenforceable portion(s) shall be limited or excluded from this Agreement to the
minimum extent required, and the remaining provisions shall not be affected or
invalidated and shall remain in full force and effect.
B.    Reformation. Smith agrees that in the event any of the covenants contained
in this Agreement shall be held by any court to be effective in any particular
area or jurisdiction only if said covenant is modified to limit its duration or
scope, then the court shall have such authority to so reform the covenant and
the parties hereto shall consider such covenant(s) and/or other provisions to be
amended and modified with respect to that particular area or jurisdiction so as
to comply with the order of any such court and, as to all other jurisdictions,
the covenants contained herein shall remain in full force and effect as
originally written.
 
C.    Entire Agreement. This Agreement is the entire agreement between the
parties with respect to the subject matter hereof, and fully supersedes any and
all prior agreements, understandings, or representations between the parties,
whether oral or written, pertaining to the subject matter of this Agreement.
Smith represents and acknowledges that in executing this Agreement, Smith does
not rely, and has not relied, upon any representation(s) by the Company or its
agents except as expressly contained in this Agreement. Smith agrees that Smith
has used Smith’s own judgment in executing this Agreement. This Agreement may
not be amended unless it is in writing and signed by Smith and the Chief
Executive Officer of the Company.

D.    Notices. Any notices or other communication required, permitted or desired
to be given hereunder shall be deemed delivered when personally delivered; the
next business day, if delivered by overnight courier; the same day, if
transmitted by facsimile on a business day prior to noon, Dallas time; the

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next business day, if otherwise transmitted by facsimile; and the third business
day after mailing, if mailed by prepaid certified mail, return receipt
requested, as addressed or transmitted as follows:

If to Smith:

Stephen F. Smith
XXXX    XXXXXX XXXX
XXXXXX, XX  XXXXX
Telephone: (XXX) XXX-XXXX

If to the Company:

EXCO Resources, Inc.
12377 Merit Drive
Suite 1700
Dallas, TX 75251
Attn: Vice President and General Counsel
Telephone: (214) 368-2084
    
E.    Controlling Law. Any dispute in the meaning, effect, or validity of this
Agreement and/or any dispute arising out of Smith’s relationship with the
Company shall be resolved in accordance with the laws of the State of Texas
without regard to the conflict of laws provisions thereof. Venue of any
litigation arising from this Agreement or Smith’s relationship with the Company
shall be in a state district court of competent jurisdiction in Dallas County,
Texas, or the United States District Court for the Northern District of Texas,
Dallas Division. Smith consents to personal jurisdiction of the state district
courts of Dallas County, Texas and to the United States District Court for the
Northern District of Texas, Dallas Division, and agrees that Smith shall not
challenge personal jurisdiction in such courts. Smith waives any objection that
Smith may now or hereafter have to the venue or jurisdiction of any proceeding
in such courts or that any such proceeding was brought in an inconvenient forum
(and agrees not to plead or claim the same).

F.    Voluntary Agreement. Smith acknowledges that Smith has had an opportunity
to consult with an attorney or other counselor concerning the meaning, import,
and legal significance of this Agreement, and Smith has read this Agreement, as
signified by Smith’s signature hereto, and Smith is voluntarily executing the
same after, if sought, advice of counsel for the purposes and consideration
herein expressed.

G.    Limitations on Assignment. In entering into this Agreement, the Company is
relying on the unique services of Smith; services from another company or
contractor will not be an acceptable substitute. Except as provided in this
Agreement, Smith may not assign this Agreement or any of the rights or
obligations set forth in this Agreement without the explicit written consent of
the Company. Any attempted assignment by Smith in violation of this paragraph
shall be void.
H.    Headings. The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement.
I.    Counterparts. This Agreement and amendments to it will be in writing and
may be executed in counterparts. Each counterpart will be deemed an original,
but both counterparts together will constitute one and the same instrument.
J.    Ambiguities.    Any rule of construction to the effect that ambiguities
shall be resolved against the drafting party shall not apply to the
interpretation of this Agreement.

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The signatures below indicate that the Parties have read, understand and will
comply with this Agreement.

SMITH:

Signature:/s/ Stephen F. Smith            

Printed Name: Stephen F. Smith        

Date: 2/28/13        

EXCO RESOURCES, INC.

Signature:/s/ Douglas H. Miller                

Name:    Douglas H. Miller                

Title:    Chief Executive Officer                

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