Exhibit 10.13

GASTAR EXPLORATION, LTD.

EMPLOYEE CHANGE OF CONTROL

SEVERANCE PLAN

The GASTAR EXPLORATION, LTD. EMPLOYEE CHANGE OF CONTROL SEVERANCE PLAN (the
“Plan”) is hereby adopted effective as of March 23, 2007 pursuant to the
authorization of the Board of Directors of GASTAR EXPLORATION, LTD. (the
“Company”). The Plan has been established to provide financial security to
Covered Employees in the event of a Change of Control.

I.

DEFINITIONS AND CONSTRUCTION

1.1 Definitions. Where the following words and phrases appear in the Plan, they
shall have the respective meanings set forth below, unless their context clearly
indicates to the contrary.

“Affiliate” shall mean with respect to any person or entity, any entity,
directly or indirectly, controlled by, controlling or under common control with
such person or entity.

“Annual Pay” shall mean the amount a Covered Employee is entitled to receive as
wages or salary on an annualized basis (including overtime), calculated
immediately prior to a Change of Control or, if greater, at any time thereafter.

“Annual Target Bonus” shall mean a certain percentage (a “Bonus Target”) of a
Covered Employee’s Annual Pay. The specific percentage applicable to a Covered
Employee or class of Covered Employees is set forth in Schedule A of this Plan.

“Board” shall mean the Board of Directors or Managers, as the case may be, of
the Company or its successor.

“Cause” shall mean a termination of employment of a Covered Employee evidenced
by a resolution adopted in good faith by 2/3 of the Committee that a Covered
Employee: (1) willfully and continually failed to substantially perform his
duties with the Employer (other than a failure resulting from the Covered
Employee’s incapacity due to physical or mental illness), which failure
continued for a period of at least 30 days after a written notice of demand for
substantial performance was delivered to the Covered Employee specifying the
manner in which the Covered Employee has failed to substantially perform, or
(2) willfully engaged in conduct that is demonstrably and materially injurious
to the Employer and its Affiliates collectively, monetarily or otherwise.

“Change of Control” shall mean the occurrence of any of the following events:

(1) the consummation of any transaction (including without limitation, any
merger, consolidation, tender offer, or exchange offer) the result of which is
that any individual, entity, group or “person” (as such term is used in Sections
13(d)(3) and 14(d)(2), of the Securities Exchange Act of 1934 (the “Exchange
Act”)), other than the Company, a subsidiary or an employee benefit plan of
either, becomes the “beneficial owner” (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act), directly or indirectly, of stock and/or
securities of the Company representing 50% or more of the combined voting power
of the Company’s then outstanding voting securities;

(2) a change in the composition of the Board, as a result of which fewer than a
majority of the directors are Incumbent Directors. “Incumbent Directors” shall
mean directors who either (A) are directors as of the effective date of this
Plan, or (B) are elected, appointed or nominated for election, thereafter to the
Board with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election, appointment or nomination, provided that
for purposes of this clause (B), in the absence of evidence of affirmative votes
of at least one-half of such Incumbent Directors opposing the nomination of such
director, the nomination as director shall be

 

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deemed approved by the affirmative vote of a majority of Incumbent Directors at
the time of such nomination, if such director is duly elected by shareholders of
the Company after being included as a nominee for director in a proxy statement
or consent solicitation prepared by Company management and distributed to
shareholders for such purpose, but “Incumbent Director” shall not include an
individual whose election or nomination is in connection with (i) an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Securities Exchange Act of 1934) or an actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board or (ii) a plan or agreement to replace a majority of the then
Incumbent Directors;

(3) the consummation of the sale, lease, transfer, conveyance or other
disposition (including by merger or consolidation) in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
subsidiaries, taken as a whole (other than to an entity wholly owned, directly
or indirectly, by the Company), unless, following such transaction all or
substantially all of the persons who were the beneficial owners of the
outstanding voting stock and securities of the Company immediately prior to such
transaction beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding voting stock and securities of the entity
resulting from such transaction in substantially the same proportions as
immediately prior to such transaction; or

(4) the adoption by the Board of a plan relating to the liquidation or
dissolution of the Company.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Board; however, the Board may delegate all or part of
its authority as it may choose to any committee of the Board or to any officer
of the Company.

“Covered Employee” shall mean any individual who, immediately prior to the
Change of Control, is a regular employee of the Employer who is normally
scheduled to work 30 or more hours per week, other than any individual who is,
or is treated by the Company as, being a consultant, independent contractor or
part-time employee.

“Effective Date” shall mean the date this Plan is approved by the Board.

“Employer” shall mean the Company, Gastar Exploration Texas LP, and each
eligible entity designated as an Employer in accordance with the provisions of
Section 4.4 of the Plan.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

“Good Reason” shall mean the occurrence of any of the following events or
conditions on or following a Change of Control:

(1) the Employer’s requiring the Covered Employee (without the consent of the
Covered Employee) to be based at any place outside a 35-mile radius of his place
of employment immediately prior to the Change of Control, except for reasonably
required travel on the Employer’s business that is not materially greater than
such travel requirements prior to the Change of Control;

(2) a reduction in the Covered Employee’s annual base salary or a material
reduction in the benefits provided to the Covered Employee immediately prior to
the Change of Control;

(3) any material breach by the Company of any provision of this Plan;

(4) any purported termination of the Covered Employee’s employment for Cause by
the Employer that does not otherwise comply with the terms of this Plan; or

(5) a change in the Covered Employee’s position or responsibilities that
represents a substantial reduction of the Covered Employee’s responsibilities
immediately prior thereto, except in connection with the

 

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termination of the Covered Employee’s employment for Cause, Permanent
Disability, as a result of his death, or by the Covered Employee other than for
Good Reason.

Notwithstanding the foregoing or anything to the contrary contained herein, any
event described in the above clauses (1) through (5) that occurs prior to a
Change of Control (“Potential Good Reason Event”) and the Covered Employee
reasonably demonstrates was at the request of a third party who had indicated an
intention or taken steps reasonably calculated to effect a Change of Control and
who effectuates a Change of Control within six months following such event,
shall constitute Good Reason for purposes of this Agreement notwithstanding that
it occurred prior to the Change of Control. Further, any Potential Good Reason
Event that occurs on or subsequent to the execution of an agreement providing
for a transaction or transactions that if consummated would constitute a Change
of Control shall constitute a Good Reason if such Change of Control is
consummated within six months of such event.

“Involuntary Termination” shall mean any termination of the Covered Employee’s
employment with the Employer that occurs on or within two years following a
Change of Control, and which:

(1) does not result from a voluntary resignation by the Covered Employee (other
than a resignation pursuant to clause (2) of this definition); or

(2) results from a resignation by a Covered Employee for Good Reason; but

(3) the term ‘Involuntary Termination’ shall not include: (A) a termination by
the Employer for Cause; (B) any termination as a result of a Covered Employee’s
death or Permanent Disability; or (C) any termination as a result of a Covered
Employee declining to accept an offer of comparable employment from a successor
employer. For purposes of clause (C), “comparable employment” shall mean
employment that would not allow for a termination of employment based on Good
Reason for the Covered Employee.

Notwithstanding the foregoing or anything herein to the contrary, in the event
that the employment of a Covered Employee is terminated for a Potential Good
Reason Event within six months prior to a Change of Control, then for purposes
of this Plan the date of the Change of Control with respect to that Covered
Employee shall be deemed to be the date immediately prior to the Covered
Employee’s Termination Date.

“Permanent Disability” shall mean that a physician selected or approved by the
Chief Executive Officer of the Company finds a Covered Employee, upon the basis
of medical evidence satisfactory to him, to be totally disabled, whether due to
physical or mental condition, so as to be prevented from engaging in further
employment by the Employer and that such disability will be permanent and
continuous during the remainder of his life; provided, that no Covered Employee
shall be deemed to have become permanently disabled unless prior to the
determination by such physician, the Covered Employee has been determined to
qualify for long-term disability benefits under an applicable long-term
disability benefit plan of the Employer.

“Release” shall mean a general release, substantially in the form of Attachment
1, which is attached hereto, from the Eligible Employee that releases the
Company and its Affiliates from employment related claims.

“Severance Period” the period of years set forth in Appendix A of this Plan for
each Covered Employee or class of Covered Employees.

“Termination Date” shall mean the date of the termination of a Covered
Employee’s employment with the Employer as determined in accordance with Article
III.

1.2 Number and Gender. Wherever appropriate herein, words used in the singular
shall be considered to include the plural and the plural to include the
singular. The masculine gender, where appearing in this Plan, shall be deemed to
include the feminine gender.

 

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1.3 Headings. The headings of Articles and Sections herein are included solely
for convenience, and if there is any conflict between such headings and the text
of the Plan, the text will control.

II.

CHANGE OF CONTROL SEVERANCE BENEFITS

2.1 Severance Payments. Subject to the further provisions of this Article II and
Section 4.12 hereof, if a Covered Employee incurs an Involuntary Termination,
upon his Release becoming irrevocable, such Covered Employee shall be entitled
to the following severance benefits:

(a) a lump sum cash payment equal to the Covered Employee’s applicable Severance
Period (as set forth in Schedule A of this Plan) times the sum of the Covered
Employee’s (1) Annual Pay and (2) Annual Target Bonus;

(b) for the Covered Employee’s Severance Period, reimbursement for the cost of
continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985 (“COBRA”) less the amount charged to such Covered Employee before
his Termination Date for health insurance coverage.

Further, if any payment made, or benefit provided, to or on behalf of a Covered
Employee pursuant to the Plan or otherwise (“Payments”) results in a Covered
Employee being subject to the excise tax imposed by section 4999 of the Code (or
any successor or similar provision) (“Excise Tax”), the Company shall, as soon
as administratively practicable, pay such Covered Employee an additional amount
in cash (the “Additional Payment”) such that after payment by the Covered
Employee of all taxes, including, without limitation, any taxes imposed on the
Additional Payment, such Covered Employee retains an amount of the Additional
Payment equal to the Excise Tax imposed on the Payments. Such determinations
shall be made by the Company’s independent certified public accountants.

2.2 Release and Full Settlement. Anything to the contrary herein
notwithstanding, as a condition to the receipt of any severance payments or
benefits under Section 2.1 above, a Covered Employee whose employment has been
subject to an Involuntary Termination shall first execute a Release, in
substantially the form attached hereto as Attachment 1, releasing the Committee,
the Plan fiduciaries, the Employer, and the Employer’s parent corporation,
subsidiaries, Affiliates, shareholders, partners, officers, directors, employees
and agents from any and all claims and from any and all causes of action of any
kind or character including, but not limited to, all claims or causes of action
arising out of such Covered Employee’s employment with the Employer or the
termination of such employment, but excluding all claims to benefits and
payments the Covered Employee may have under any compensation or benefit plan,
program or arrangement, including this Plan. The performance of the Employer’s
obligations hereunder and the receipt of any benefits provided hereunder by such
Covered Employee shall constitute full settlement of all such claims and causes
of action.

2.3 No Mitigation. A Covered Employee shall not be required to mitigate the
amount of any payment or benefit provided for in this Article II by seeking
other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Article II be reduced by any compensation or benefit earned
by the Covered Employee as the result of employment by another employer, except
as provided in Section 2.4 with respect to the coordination of severance
benefits hereunder with other agreements providing severance benefits. Subject
to the foregoing, the benefits under the Plan are in addition to any other
benefits to which a Covered Employee is otherwise entitled.

2.4 Coordination with Other Arrangements. Upon an Involuntary Termination, if a
Covered Employee becomes eligible under another agreement, contract or plan with
an Employer for severance payments and benefits from the Employer similar to
those provided in Section 2.1 of this Plan, to prevent a duplication of
benefits, (a) if such similar severance payments and benefits are equal to or
greater than the Covered Employee’s severance payments and benefits under
Section 2.1 of this Plan, the Covered Employee shall receive such similar
benefits under the other agreement, contract or plan but no benefits under this
Plan; or (b) if such similar severance payments and benefits are less than the
Covered Employee’s severance payments and benefits under Section 2.1 of

 

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this Plan, the Covered Employee shall receive the severance payments and
benefits provided for in Section 2.1 of this Plan reduced by such similar
severance payments and benefits.

2.5 Separate Pay Plans. This Plan document represents two separate plans for
purposes of ERISA: (1) the participation in the Plan by the Chief Executive
Officer, Chief Financial Officer and the Vice Presidents of the Company
constitutes a separate employee pension benefit plan within the meaning of
section 3(2) of ERISA and (2) the participation in the Plan by all other Covered
Employees (the “Welfare Plan Covered Employees”) constitutes a separate employee
welfare benefit plan. Anything to the contrary herein notwithstanding, in no
event shall any Welfare Plan Covered Employee receive total severance payments
under Section 2.1(a) and (b) of the Plan that exceed the equivalent of twice
such Welfare Plan Covered Employee’s “annual compensation” (as such term is
defined in 29 CFR § 2510.3-2(b)(2)) during the year immediately preceding his
Involuntary Termination. If total severance payments under Section 2.1(a) and
(b) of the Plan to a Welfare Plan Covered Employee would otherwise exceed the
limitation in the preceding sentence, the amount payable to such Welfare Plan
Covered Employee pursuant to Section 2.1(a) shall be reduced in order to satisfy
such limitation.

III.

ADMINISTRATION OF PLAN

3.1 Committee’s Powers and Duties. The Company shall be the named fiduciary and
shall have full power to administer the Plan in all of its details, subject to
applicable requirements of law. The duties of the Company shall be performed by
the Committee. It shall be a principal duty of the Committee to see that the
Plan is carried out, in accordance with its terms, for the exclusive benefit of
persons entitled to participate in the Plan. For this purpose, the Committee’s
powers shall include, but not be limited to, the following authority, in
addition to all other powers provided by this Plan:

(a) to make and enforce such rules and regulations as it deems necessary or
proper for the efficient administration of the Plan;

(b) to interpret the Plan and all facts with respect to a claim for payment or
benefits, its interpretation thereof to be final and conclusive on all persons
claiming payment or benefits under the Plan;

(c) to decide all questions concerning the Plan and the eligibility of any
person to participate in the Plan;

(d) to make a determination as to the right of any person to a payment or
benefit under the Plan (including, without limitation, to determine whether and
when there has been a termination of a Covered Employee’s employment and the
cause of such termination and the amount of such payment or benefit);

(e) to appoint such agents, counsel, accountants, consultants, claims
administrator and other persons as may be required to assist in administering
the Plan;

(f) to allocate and delegate its responsibilities under the Plan and to
designate other persons to carry out any of its responsibilities under the Plan,
any such allocation, delegation or designation to be in writing;

(g) to sue or cause suit to be brought in the name of the Plan; and

(h) to obtain from the Employer and from Covered Employees such information as
is necessary for the proper administration of the Plan.

3.2 Member’s Own Participation. No member of the Committee may act or vote in a
decision of the Committee specifically relating to himself as a participant in
the Plan.

3.3 Indemnification. The Employer shall indemnify and hold harmless each member
of the Committee against any and all expenses and liabilities arising out of his
administrative functions or fiduciary

 

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responsibilities, including any expenses and liabilities that are caused by or
result from an act or omission constituting the negligence of such member in the
performance of such functions or responsibilities, but excluding expenses and
liabilities that are caused by or result from such member’s own gross negligence
or willful misconduct. Expenses against which such member shall be indemnified
hereunder shall include, without limitation, the amounts of any settlement or
judgment, costs, counsel fees, and related charges reasonably incurred in
connection with a claim asserted or a proceeding brought or settlement thereof.

3.4 Compensation, Bond and Expenses. The members of the Committee shall not
receive compensation with respect to their services for the Committee. To the
extent required by applicable law, but not otherwise, Committee members shall
furnish bond or security for the performance of their duties hereunder. Any
expenses properly incurred by the Committee incident to the administration,
termination or protection of the Plan, including the cost of furnishing bond,
shall be paid by the Company.

3.5 Claims Procedure. Any employee that the Committee determines is entitled to
a benefit under the Plan is not required to file a claim for benefits. Any
employee who is not paid a benefit and who believes that he is entitled to a
benefit or who has been paid a benefit and who believes that he is entitled to a
greater benefit may file a claim for benefits under the Plan in writing with the
Committee. In any case in which a claim for Plan benefits by a Covered Employee
is denied or modified, the Committee shall furnish written notice to the
claimant within 90 days after receipt of such claim for Plan benefits (or within
180 days if additional information requested by the Committee necessitates an
extension of the 90-day period and the claimant is informed of such extension in
writing within the original 90-day period), which notice shall:

(a) state the specific reason or reasons for the denial or modification;

(b) provide specific reference to pertinent Plan provisions on which the denial
or modification is based;

(c) provide a description of any additional material or information necessary
for the Covered Employee or his representative to perfect the claim, and an
explanation of why such material or information is necessary; and

(d) explain the Plan’s claim review procedure as contained herein.

In the event a claim for Plan benefits is denied or modified, if the Covered
Employee or his representative desires to have such denial or modification
reviewed, he must, within 60 days following receipt of the notice of such denial
or modification, submit a written request for review by the Committee of its
initial decision. In connection with such request, the Covered Employee or his
representative may review any pertinent documents upon which such denial or
modification was based and may submit issues and comments in writing. Within 60
days following such request for review, the Committee shall, after providing a
full and fair review, render its final decision in writing to the Covered
Employee and his representative, if any, stating specific reasons for such
decision and making specific references to pertinent Plan provisions upon which
the decision is based. If special circumstances require an extension of such
60-day period, the Committee’s decision shall be rendered as soon as possible,
but not later than 120 days after receipt of the request for review. If an
extension of time for review is required, written notice of the extension shall
be furnished to the Covered Employee and his representative, if any, prior to
the commencement of the extension period. Any legal action with respect to a
claim for Plan benefits must be filed no later than one year after the later of
(1) the date the claim is denied by the Committee or (2) if a review of such
denial is requested pursuant to the provisions above, the date of the final
decision by the Committee with respect to such request.

IV.

GENERAL PROVISIONS

4.1 Funding. The benefits provided herein shall be unfunded and shall be
provided from the Employer’s general assets.

 

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4.2 Cost of Plan. The entire cost of the Plan shall be borne by the Employer,
and no contributions shall be required of the Covered Employees.

4.3 Plan Year. The Plan shall operate on a calendar year basis.

4.4 Other Participating Employers. The Committee may designate any entity
eligible by law to participate in this Plan as an Employer by written instrument
delivered to the Secretary of the Company and the designated Employer. Such
written instrument shall specify the effective date of such designated
participation, may incorporate specific provisions relating to the operation of
the Plan which apply to the designated Employer only and shall become, as to
such designated Employer and its employees, a part of the Plan. Each designated
Employer shall be conclusively presumed to have consented to its designation and
to have agreed to be bound by the terms of the Plan and any and all amendments
thereto upon its submission of information to the Committee required by the
terms of or with respect to the Plan; provided, however, that the terms of the
Plan may be modified so as to increase the obligations of an Employer only with
the consent of such Employer, which consent shall be conclusively presumed to
have been given by such Employer upon its submission of any information to the
Committee required by the terms of or with respect to the Plan.

4.5 Amendment and Termination. The Plan may be terminated or amended from time
to time at the discretion of the Board; provided, however, that notwithstanding
the foregoing, the Plan may not be amended or terminated on or following a
Change of Control to adversely affect the rights (contingent or otherwise) of
any person who is a Covered Employee under the Plan immediately prior to the
Change of Control, including those persons whose employment is terminated prior
to a Change of Control but who are deemed to have a Change of Control date
before such termination of employment pursuant to clause (B) of the last
paragraph of the “Involuntary Termination” definition. For purposes of this
Section, a change in the designation of participating Employers by the Committee
pursuant to Section 4.4 shall be deemed to be an amendment to the Plan. In the
event of a Change of Control during the existence of the Plan, the term of the
Plan shall automatically be extended for two years following the date of such
Change of Control. The Employer’s obligation to make all payments and provide
benefits that have become payable as a result of an Involuntary Termination
shall survive any termination of the Plan.

4.6 Not Contract of Employment. The adoption and maintenance of the Plan shall
not be deemed to be a contract of employment between the Employer and any person
or to be consideration for the employment of any person. Nothing herein
contained shall be deemed to give any person the right to be retained in the
employ of the Employer or to restrict the right of the Employer to discharge any
person at any time, nor shall the Plan be deemed to give the Employer the right
to require any person to remain in the employ of the Employer or to restrict any
person’s right to terminate his employment at any time.

4.7 Severability. Any provision in the Plan that is prohibited or unenforceable
in any jurisdiction by reason of applicable law shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

4.8 Nonalienation. Covered Employees shall not have any right to pledge,
hypothecate, anticipate or assign benefits or rights under the Plan, except by
will or the laws of descent and distribution.

4.9 Effect of Plan. Except with respect to Covered Employees who have individual
written employment, severance or change of control contracts or agreements with
the Employer on the Effective Date (“Individual Agreements”), this Plan is
intended to supersede provisions of prior oral or written policies of the
Employer to the extent that such provisions address severance payments or
benefits provided upon a Change of Control and all prior oral or written
communications to Covered Employees with respect to the subject matter hereof,
and all such provisions of such prior policies or communications are hereby null
and void and of no further force and effect. The terms of all Individual
Agreements shall continue without change and are not superseded, modified,
voided or terminated by the Plan. This Plan shall be binding upon the Employer
and any successor of the Employer, by merger or otherwise, and shall inure to
the benefit of and be enforceable by the Employer’s Covered Employees.

 

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4.10 Taxes. The Employer or its successor may withhold from any amounts payable
to a Covered Employee under the Plan such federal, state or local taxes as shall
be required to be withheld pursuant to any applicable law or regulation.

4.11 Governing Law. The Plan shall be interpreted and construed in accordance
with the laws of the State of Texas without regard to conflict of laws
principles, except to the extent preempted by federal law.

4.12 Section 409A. Notwithstanding anything in this Plan to the contrary, if any
payment or benefit under this Plan would result in the imposition of an
additional tax under section 409A of the Code and related regulations and United
States Department of the Treasury pronouncements, that provision of this Plan
will be reformed to avoid imposition of the applicable tax.

EXECUTED on                                     , 2007, effective for all
purposes as of the Effective Date.

 

GASTAR EXPLORATION, LTD.

By:        Name:        Title:     

 

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APPENDIX A

 

Position of Covered Employee

 

Severance Period (in years)

 

Bonus Target

CEO

  3.00   50%

CFO

  2.50   35%

VP

  2.00   25%

Manager

  1.25   0%

Supervisor

  1.00   0%

Staff

  0.75   0%

 

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