Exhibit 10.4

CHANGE IN CONTROL SEVERANCE PLAN FOR EXECUTIVE OFFICERS

OTHER THAN CEO AND PRESIDENT

Pursuant to a resolution of its Board of Directors, this Change in Control
Severance Plan for Executive Officers Other than CEO and President (the “Plan”)
is adopted by PostRock Energy Corporation (the “Company”) and its subsidiaries
effective as of the 20th day of February, 2012 (the “Effective Date”).

Except as otherwise specifically provided herein, an executive officer of the
Company other than the CEO and President (as defined herein, an “Executive”) as
of the date of the Change in Control (as defined herein) shall be entitled to
the benefits set forth herein (the “Severance Benefits”) upon the occurrence of
(a) a Change in Control and (b) Termination of Employment (as defined herein)
(together, a “Severance Event”).

1. Definitions. For purposes of this Plan, the following terms shall have the
meanings set forth below:

“Acting as a group” shall have the same meaning as defined in Code Section 409A.

“Cash Compensation” means base salary in effect immediately prior to the
effective date of termination (without regard to any reduction in salary that
constitutes a Termination of Employment) plus any cash bonus compensation paid
by the Company in the most recently completed four fiscal quarters of the
Company as of the effective date of termination.

“Cause” for termination means:

 

  (i) Executive’s conviction of, plea of guilty to, or plea of nolo contendere
to a felony or other crime that involves fraud or dishonesty;

 

  (ii) Any willful action or omission by Executive which would constitute
grounds for immediate dismissal under the employment policies of the Company;

 

  (iii) Executive’s habitual neglect of duties, including, but not limited to,
repeated absences from work without reasonable excuse; or

 

  (iv) Executive’s willful and intentional material misconduct in the
performance of his duties that results in financial detriment to the Company or
any subsidiary of the Company;

An Executive who agrees to resign from his affiliation with the Company or a
subsidiary of the Company in lieu of being terminated for Cause may be deemed to
have been terminated for Cause for purposes of this Plan.

 

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“Change in Control” shall be consistent with regulations issued under Code
Section 409A and shall mean the occurrence of a “Change in the Ownership of the
Company” or a “Change in the Ownership of a Substantial Portion of the Company’s
Assets.”

 

  (i) “Change in the Ownership of the Company” means the acquisition by any one
person, or more than one person acting as a group, of the outstanding and issued
shares of common stock (“Shares”) of the Company that, together with Shares held
by such person or group, constitutes more than 50 percent of the total voting
power of the Shares (however, if any one person, or more than one person acting
as a group, is considered to own more than 50 percent of the total voting power
of the Shares, the acquisition of additional Shares by the same person or group
shall not constitute a Change in the Ownership of the Company).

 

  (ii) “Change in the Ownership of a Substantial Portion of the Company’s
Assets” occurs when any one person, or more than one person acting as a group,
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) assets from the Company that
have a total gross fair market value equal to or more than 40 percent of the
total gross fair market value of all of the assets of the Company immediately
prior to such acquisition or acquisitions.

Notwithstanding the foregoing, (a) in no event shall any acquisition of Shares
or other securities of the Company by White Deer Energy L.P. or any of its
affiliates, whether occurring before or after the date of this Plan or (b) the
sale by the Company of all or part of the membership interest in PostRock KPC
Pipeline, LLC (“KPC”) and/or all or part of the assets held by KPC constitute a
Change in Control hereunder.

“Code” means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.

“Code Section 409A” means Section 409A of the Code and the Treasury regulations
and other interpretive rulings and guidance issued thereunder.

“Executive” means: the Chief Financial Officer (currently David Klvac), Chief
Accounting Officer (currently David Klvac), General Counsel (currently Stephen
DeGiusti), Vice President of Operations (currently Clark Edwards) and any
Executive Vice President, Senior Vice President or Vice President of the
Company. Provided, however, that for purposes of this Plan, Executive does not
include the Executive Vice President-Midstream (currently Tom Saunders) or Vice
President-Marketing and Commercial Development (currently Cathy Pocock).

“Gross fair market value” means the value of the assets of the Company, or the
value of the assets being disposed of, determined without regard to any
liabilities associated with such assets).

“Termination of Employment” means:

 

  (i) an involuntary termination of Executive’s employment by the Company, other
than for Cause, within one year after a Change in Control;

 

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  (ii) a material diminution in Executive’s compensation in the aggregate within
one year after a Change in Control;

 

  (iii) a material diminution or other material adverse change in Executive’s
position, authority or duties within one year after a Change in Control; or

 

  (iv) a change in Executive’s assigned office or location of employment by
greater than 50 miles within one year after a Change in Control.

2. Severance. Upon the occurrence of a Severance Event, subject to the execution
of the Waiver and Release, attached hereto as Exhibit A (“Waiver”), without
revocation (as described below), Executive shall be entitled to the following
Severance Benefits:

(a) The Company shall pay Executive in a single lump sum within thirty (30) days
of the effective date of termination the value of any accrued but unused paid
time off (PTO);

(b) All unvested equity awards previously granted to Executive, including, but
not limited to, awards granted under the Company’s 2010 Long-Term Incentive Plan
or its successor, shall immediately vest in full;

(c) The Company shall pay Executive in a single lump sum within thirty (30) days
of the Waiver Effective Date (as defined below) severance pay equal to 100% of
Executive’s Cash Compensation;

(d) Executive and his spouse and/or his dependents, as applicable who are
enrolled in a medical, dental, or vision plan sponsored by the Company
immediately prior to the effective date of termination may be eligible to
continue coverage under such medical, dental, or vision plan, at the time of
Executive’s termination of employment under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”). The Company will notify Executive of any
such right to continue such coverage at the time of termination pursuant to
COBRA. If Executive timely elects COBRA coverage for Executive (and his spouse
and/or his dependents, as applicable), the Company will pay the COBRA premiums
for Executive (and his spouse and/or his dependents, as applicable) that exceed
the cost of the active employee premium cost for a similarly situated active
employee for the period of such COBRA coverage, provided that any such premiums
paid by the Company will be treated as taxable income to Executive. No provision
of this Plan will affect the continuation coverage rules under COBRA, except
that the Company’s payment of applicable insurance premiums will be credited as
payment by Executive for purposes of Executive’s premium payment required under
COBRA. For purposes of this Section 2, any applicable premiums that may be paid
by the Company shall not include any amounts payable by Executive under a Code
Section 125 health care reimbursement plan, which amounts, if any, are the sole
responsibility of Executive.

 

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Executive’s entitlement to the payments and benefits in this Section 2, other
than PTO in clause (a) above, is subject to and contingent upon Executive’s
binding execution of the Waiver within thirty (30) days of the date of
Executive’s Termination of Employment (and not before such date), without
revocation during the seven-day period following execution of the Waiver
(“Waiver Effective Date”). If Executive fails to timely execute and return the
Waiver or revokes the Waiver prior to the Waiver Effective Date, then Executive
shall not be entitled to any payments or benefits under the Plan (other than
PTO).

3. Certain Excise Taxes. Notwithstanding anything to the contrary in this Plan,
if Executive is a “disqualified individual” (as defined in Code
Section 280G(c)), and the payments and benefits provided for in this Plan,
together with any other payments and benefits which Executive has the right to
receive from the Company or any of its affiliates, would constitute a “parachute
payment” (as defined in Code Section 280G(b)(2)), then the payments and benefits
provided for in this Plan shall be either (a) reduced (but not below zero) so
that the present value of such total amounts and benefits received by Executive
from the Company and its affiliates will be one dollar ($1.00) less than three
(3) times Executive’s “base amount”(as defined in Code Section 280G(b)(3)) and
so that no portion of such amounts and benefits received by Executive shall be
subject to the excise tax imposed by Code Section 4999 or (b) paid in full,
whichever produces the better net after tax position to Executive (taking into
account any applicable excise tax under Code Section 4999 and any other
applicable taxes). The reduction of payments and benefits hereunder, if
applicable, shall be made by reducing, first, payments or benefits to be paid in
cash hereunder in the order in which such payment or benefit would be paid or
provided (beginning with such payment or benefit that would be made last in time
and continuing, to the extent necessary, through to such payment or benefit that
would be made first in time) and, then, reducing any benefit to be provided in
kind hereunder in a similar order. The determination as to whether any such
reduction in the amount of the payments and benefits provided hereunder is
necessary shall be made by the Company in good faith. If a reduced payment or
benefit is made or provided and through error or otherwise that payment or
benefit, when aggregated with other payments and benefits from the Company (or
its affiliates) used in determining if a parachute payment exists, exceeds one
dollar ($1.00) less than three (3) times Executive’s base amount, then Executive
shall immediately repay such excess to the Company upon notification that an
overpayment has been made. Nothing in this Section 3 shall require the Company
to be responsible for, or have any liability or obligation with respect to,
Executive’s excise tax liabilities under Code Section 4999.

4. Amendment or Termination. The Board may amend (in whole or in part) or
terminate this Plan at any time; provided, however, that this Plan cannot be
amended or terminated during the one year period following the occurrence of a
Change in Control. Notwithstanding the foregoing, no termination shall reduce or
terminate Executive’s right to receive, or continue to receive, any payments and
benefits that became payable in respect of a termination of employment that
occurred prior to the date of such termination of this Plan.

5. Successors and Assigns. This Plan shall be binding upon and inure to the
benefit of the Company and its successors and assigns. This Plan and all rights
of each Executive shall inure to the benefit of and be enforceable by such
Executive and his personal or legal representatives, executors, administrators,
heirs and permitted assigns. If any Executive should die while any amounts are
due and payable to such Executive hereunder, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Plan to the
legal representative of such Executive’s estate. No payments, benefits or rights
arising under this Plan may be assigned or pledged by any Executive, except
under the laws of descent and distribution.

 

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6. Tax Withholding. The Company shall have the right to deduct from any payment
hereunder all taxes (federal, state or other) which it is required to withhold
therefrom.

7. Section 409A.

(a) It is intended that the payments and benefits provided under this Plan shall
be exempt from or comply with the application of the requirements of Code
Section 409A. This Plan shall be construed, administered and governed in a
manner that affects such intent. Specifically, any taxable benefits or payments
provided under this Plan are intended to be separate payments that qualify for
the “short-term deferral” exception to Code Section 409A to the maximum extent
possible, and to the extent they do not so qualify, are intended to qualify for
the separation pay exceptions to Code Section 409A, to the maximum extent
possible. To the extent that none of these exceptions (or any other available
exception) applies, then notwithstanding anything contained herein to the
contrary, and to the extent required to comply with Code Section 409A, if
Executive is a “specified employee,” as determined by the Company, as of the
date of the Severance Event, then all amounts due under this Plan that
constitute a “deferral of compensation” within the meaning of Code Section 409A,
that are provided as a result of a “separation from service” within the meaning
of Code Section 409A, and that would otherwise be paid or provided during the
first six months following date of the Severance Event, shall be accumulated
through and paid or provided on the first business day that is more than six
months after the date of the Severance Event (or, if Executive dies during such
six-month period, within 90 days after Executive’s death).

(b) All reimbursements or provision of in-kind benefits pursuant to this Plan
shall be made in accordance with Treasury Regulation § 1.409A-3(i)(1)(iv) such
that the reimbursement or provision will be deemed payable at a specified time
or on a fixed schedule relative to a permissible payment event. Specifically,
the amount reimbursed or in-kind benefits provided under this Plan during
Executive’s taxable year may not affect the amounts reimbursed or provided in
any other taxable year (except that total reimbursements may be limited by a
lifetime maximum under a group health plan), the reimbursement of an eligible
expense shall be made on or before the last day of Executive’s taxable year
following the taxable year in which the expense was incurred, and the right to
reimbursement or provision of in-kind benefit is not subject to liquidation or
exchange for another benefit.

(c) No vesting of any equity awards shall trigger an acceleration of payment of
such equity award that results in noncompliance with the requirements of Code
Section 409A, to the extent applicable

8. No Employment Rights Conferred. This Plan shall not be deemed to create a
contract of employment between any Executive and the Company and/or its
affiliates. Nothing contained in this Plan shall (a) confer upon any Executive
any right with respect to continuation of employment with the Company or
(b) subject to the rights and benefits of any Executive hereunder, interfere in
any way with the right of the Company to terminate such Executive’s employment
at any time.

 

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9. Governing Law. This Plan and the Waiver will be construed and enforced in
accordance with the laws of the State of Oklahoma.

 

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Exhibit A

WAIVER AND RELEASE

In exchange for the Severance Benefits under the Change in Control Severance
Plan for Executive Officers Other than CEO and President (the “Plan”), Executive
hereby releases, acquits and forever discharges PostRock Energy Corporation (the
“Company”), its subsidiaries, affiliates, shareholders, directors, officers,
agents, employees, predecessors, successors and assigns (collectively, the
“Released Parties”) of and from any and all claims, demands, actions and causes
of action and liabilities of any kind or nature whatsoever, whether in tort or
equity, known or unknown, accrued or unaccrued (collectively “Claims”) that
Executive has or may have as of the date hereof against the Released Parties, or
any of them, arising out of or related to Executive’s employment by the Company
and/or the termination thereof, including, but not limited to, any Claims
arising under the following statutes and all applicable amendments thereto,
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Civil Rights Acts of 1866 and 1871, the Age Discrimination in Employment Act,
the Family Medical Leave Act, the Fair Labor Standards Act, the Employee
Retirement Income Security Act of 1974, the Americans With Disabilities Act, the
Equal Pay Act, the Older Workers Benefit Protection Act, the Rehabilitation Act,
the Worker Adjustment and Retraining Notification Act, and the Sarbanes-Oxley
Act.

Executive understands that signing this Waiver and Release is an important legal
act and acknowledges that the Company has advised Executive in writing by means
of this Waiver and Release to consult an attorney before signing this Waiver and
Release. Executive understands that Executive (a) may take up to twenty-one
(21) days to consider whether to execute this General Release, and (b) may
revoke his/her execution and acceptance of this General Release by providing
written notice thereof to Company within seven (7) days from the date upon which
he/she executes this General Release. Upon execution of this Waiver and Release,
Executive shall return the same to the Company’s General Counsel by first-class
mail or by hand delivery in order for it to be effective to the following
address: PostRock Energy Corporation, 210 Park Avenue, Suite 2750, Oklahoma
City, OK 73102.

Executive expressly represents that no promise or agreement which is not
expressed in the Plan or this Waiver and Release has been made to Executive in
executing this Waiver and Release, and that Executive is relying on Executive’s
own judgment in executing this Waiver and Release, and that Executive is not
relying on any statement or representation of the Company or its Related Parties
or any of their agents. Executive agrees that this Waiver and Release is valid,
fair, adequate and reasonable, is with Executive’s full knowledge and consent,
was not procured through fraud, duress or mistake and has not had the effect of
misleading, misinforming or failing to inform Executive.

This Waiver and Release includes a release of claims of discrimination or
retaliation on the basis of workers’ compensation status, but does not include
workers’ compensation claims. Excluded from this Waiver and Release are any
claims which by law cannot be waived in a private agreement between an employer
and employee, including, but not limited to, claims under the Fair Labor
Standards Act and the right to file a charge with or participate in an
investigation conducted by the Equal Employment Opportunity Commission (“EEOC”)
or any state or local fair employment practices agency. Executive waives,
however,

 

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the right to any monetary recovery or other relief should the EEOC or any other
agency pursue a claim on Executive’s behalf. Executive does not release and
expressly retains (a) all rights to indemnity, contribution, advancement of
expenses and a defense, and directors and officers and other liability coverage
that Executive may have under any statute, the bylaws of the Company or by other
agreement; and (b) the right to any unpaid reasonable business expenses and any
accrued benefits payable under any Company welfare plan, tax-qualified/401(k)
plan or other benefit plans.

Should any of the provisions set forth in this Waiver and Release be determined
to be invalid by a court, agency or other tribunal of competent jurisdiction, it
is agreed that such determination shall not affect the enforceability of other
provisions of this Waiver and Release.

Executive understands that for a period of seven calendar days following
Executive’s execution of this Waiver and Release (the “Waiver Revocation
Period”), Executive may revoke this Waiver and Release by delivering a written
statement to the Company by hand or by registered mail, addressed to the
Company’s General Counsel, in which case the Waiver and Release will not become
effective and in turn the Company shall have no obligation to provide any
payments or benefits (other than PTO) under the Plan. Executive understands that
failure to revoke acceptance of the Waiver and Release within the Waiver
Revocation Period will result in this Waiver and Release being permanent and
irrevocable.

Executive acknowledges that Executive has read this Waiver and Release, has had
an opportunity to ask questions, have it explained and had the opportunity to
seek independent legal advice with respect to the matters addressed in this
Waiver and Release and that Executive understands that this Waiver and Release
will have the effect of knowingly and voluntarily waiving any action Executive
might pursue, including breach of contract, personal injury, retaliation,
discrimination on the basis of race, age, sex, national origin or disability and
any other claims arising prior to the date of this Waiver and Release, except
for those claims specifically not released by Executive herein.

 

AGREED TO AND ACCEPTED this          day of             , 20    

 

Name:  

 

  (please print)

 

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