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                                                                    EXHIBIT 10.1

                           ENCORE ACQUISITION COMPANY

                       EMPLOYEE SEVERANCE PROTECTION PLAN

         As of the Effective Date, Encore Acquisition Company (the "Company")
establishes its Employee Severance Protection Plan (the "Plan"). The purpose of
the Plan is to ensure the continued availability of stable, motivated employee
services during periods of uncertainty due to a fundamental corporate change by
entitling Participants to termination benefits in the event of their termination
in connection with the corporate change. Additionally, the Plan responds to the
increasing trend among the Company's peer companies to provide continuity
protection to employees as an integral element of a competitive, multifaceted
compensation package.

SECTION 1.        Definitions.

         As used in this Plan, the following terms shall have the following
meanings:

         (a)      "Board" shall mean the Board of Directors of the Company, as
constituted from time to time throughout the term of the Plan.

         (b)      "Cause" shall be deemed to exist for a Participant's
termination if the Participant has:

                  (i) committed any fraud, theft or other dishonesty or willful
         misconduct which results in significant loss to the Company;

                  (ii) been convicted of a felony, entered a plea of nolo
         contendere (no contest) to a felony indictment or charge, or obtained a
         deferred adjudication following a felony indictment or charge; or

                  (iii) engaged in competitive behavior which could reasonably
         be expected to adversely affect the Company in any significant respect,
         misappropriated or aided in misappropriating a material opportunity of
         the Company or secured or attempted to secure a significant personal
         benefit not fully disclosed and approved in accordance with the
         Company's policies and procedures, as in effect from time to time, in
         connection with any transaction of, or on behalf of, the Company.

         (c)      "Change in Control" shall mean:

                  (i) the acquisition by any individual, entity or group (within
         the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
         Act of 1934, as amended (the "Exchange Act) (a "Person")) of beneficial
         ownership (within the meaning of Rule 13d-3 promulgated under the
         Exchange Act) of 40% or more of either (A) the then outstanding shares
         of common stock of the Company (the "Outstanding Company Common Stock")
         or (B) the combined voting power of the then outstanding voting
         securities of the Company entitled to vote generally in the election of
         directors (the "Outstanding Company Voting Securities"); provided,
         however, that the following acquisitions shall

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         not constitute a Change in Control: (1) any acquisition directly from
         the Company, (2) any acquisition by the Company, (3) any acquisition by
         any employee benefit plan (or related trust) sponsored or maintained by
         the Company or any corporation controlled by the Company or (4) any
         acquisition by any corporation pursuant to a transaction described in
         clauses (A), (B) and (C) of subparagraph (iii) below or (5) any
         acquisition by a person or entity that owns on the Effective Date more
         than 20% of the outstanding capital stock of the Company at such date;

                  (ii) individuals who, at the Effective Date, constitute the
         Board (the "Incumbent Board") cease for any reason to constitute at
         least a majority of the Board; provided, however, that any individual
         becoming a director subsequent to such date whose election, or
         nomination for election by the stockholders of the Company, was
         approved by a vote of at least a majority of the directors then
         comprising the Incumbent Board shall be considered as though such
         individual were a member of the Incumbent Board, but excluding, for
         this purpose, any such individual whose initial assumption of office
         occurs as a result of an actual or threatened election contest with
         respect to the election or removal of directors or other actual or
         threatened solicitation of proxies or consents by or on behalf of a
         person or entity other than the Board;

                  (iii) Approval by the stockholders of the Company of a
         reorganization, merger, share exchange or consolidation (a "Business
         Combination"), unless, in each case following such Business
         Combination, (A) all or substantially all of the individuals and
         entities who were the beneficial owners, respectively, of the
         Outstanding Company Common Stock and Outstanding Company Voting
         Securities immediately prior to such Business Combination beneficially
         own, directly or indirectly, more than 60% of, respectively, the then
         outstanding shares of common stock and the combined voting power of the
         then outstanding voting securities entitled to vote generally in the
         election of directors, as the case may be, of the corporation resulting
         from such Business Combination (including, without limitation, a
         corporation that as a result of such transaction owns the Company
         through one or more subsidiaries) in substantially the same proportions
         as their ownership, immediately prior to such Business Combination of
         the Outstanding Company Common Stock and Outstanding Company Voting
         Securities, as the case may be, (B) no Person (excluding any employee
         benefit plan (or related trust) of the Company or such corporation
         resulting from such Business Combination) beneficially owns, directly
         or indirectly, 40% or more of, respectively, the then outstanding
         shares of common stock of the corporation resulting from such Business
         Combination or the combined voting power of the then outstanding voting
         securities of such corporation except to the extent that such Person
         owned 40% or more of the Outstanding Company Common Stock or
         Outstanding Company Voting Securities prior to the Business Combination
         and (C) at least a majority of the members of the board of directors of
         the corporation resulting from such Business Combination were members
         of the Incumbent Board at the time of the execution of the initial
         agreement, or of the action of the Board, providing for such Business
         Combination; or

                  (iv) Approval by the stockholders of the Company of (A) a
         complete liquidation or dissolution of the Company or (B) the sale or
         other disposition of all or substantially all of the assets of the
         Company, other than to a corporation with respect to which,

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         following such sale or other disposition, (1) more than 60% of,
         respectively, the then outstanding shares of common stock of such
         corporation and the combined voting power of the then outstanding
         voting securities of such corporation entitled to vote generally in the
         election of directors is then beneficially owned, directly or
         indirectly, by all or substantially all of the individuals and entities
         who were the beneficial owners, respectively, of the Outstanding
         Company Common Stock and Outstanding Company Voting Securities
         immediately prior to such sale or other disposition in substantially
         the same proportion as their ownership, immediately prior to such sale
         or other disposition, of the Outstanding Company Common Stock and
         Outstanding Company Voting Securities, as the case may be, (2) less
         than 40% of, respectively, the then outstanding shares of common stock
         of such corporation and the combined voting power of the then
         outstanding voting securities of such corporation entitled to vote
         generally in the election of directors is then beneficially owned,
         directly or indirectly, by any Person (excluding any employee benefit
         plan (or related trust) of the Company or such corporation), except to
         the extent that such Person owned 40% or more of the Outstanding
         Company Common Stock or Outstanding Company Voting Securities prior to
         the sale or disposition and (3) at least a majority of the members of
         the board of directors of such corporation were members of the
         Incumbent Board at the time of the execution of the initial agreement,
         or of the action of the Board, providing for such sale or other
         disposition of assets of the Company or were elected, appointed or
         nominated by the Board.

         (d)      "Effective Date" shall mean the date the Plan is approved by
the Board or such other date as shall be specified by the Board at the time of
approval of the Plan.

         (e)      "Level 1 Participant" and "Level 2 Participant" shall have the
respective meanings set forth in Section 3(b).

         (f)      "Participant" shall mean a person who meets the eligibility
requirements set forth in Section 3.

         (g)      "Resignation for Good Reason" shall mean a resignation of
employment by the Participant within 30 days following the occurrence, without
the Participant's prior written consent, of one or more of the following events:

                  (i) any change in the Participant's titles, duties or
         responsibilities that results in the Participant's not having titles,
         duties or responsibilities equivalent to or greater than those the
         Participant had immediately prior to the relevant Change in Control;

                  (ii) any reduction in the Participant's compensation level in
         effect immediately prior to the relevant Change in Control with respect
         to base salary, cash and non-cash perquisites, bonus and incentive
         program eligibility and payout potential, including stock option and
         restricted stock awards, and welfare plans, including medical
         insurance, life insurance, and disability insurance;

                  (iii) the relocation of the Participant's place of employment
         to a location more than 50 miles from his office location immediately
         prior to the relevant Change in Control; or

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                  (iv) any failure by the Company to comply with any of the
         provisions of this Agreement, other than a failure not occurring in bad
         faith and which is cured by the Company promptly after receipt of
         notice thereof given by the Participant.

SECTION 2.        Plan Implementation

         The Board and its designees shall be responsible for implementation of
the terms and provisions of the Plan.

SECTION 3.        Eligibility and Participation.

         (a)      Each regular full-time employee of the Company or any of its
direct or indirect wholly-owned subsidiaries, and each part-time employee who
has completed 90 days of employment, shall automatically become a Participant in
the Plan. A Participant ceases to be a Participant upon termination of
employment, provided that any and all rights and obligations accruing to the
Participant under the Plan as a result of such employment termination shall
survive the Participant's termination of participation in the Plan.

         (b)      Participants shall participate at one of two levels. Each
participant who is a member of the Company's Strategic Group, as designated from
time to time by the Board, shall be a Level 1 Participant. Each other
Participant shall be Level 2 Participant. Any Level 2 Participant who becomes a
member of the Strategic Group by designation of the Board shall at such time
automatically cease to be a Level 2 Participant and shall become a Level 1
Participant. In the event that a Participant who was a member of the Strategic
Group shall cease to be a member, such Participant shall remain a Level 1
Participant despite no longer being a member of the Strategic Group.

SECTION 4.        Termination Benefits.

         (a)      Following the termination of a Participant's employment with
the Company during the period commencing 90 days prior to, and ending two years
following, a Change in Control, the Participant shall be entitled to receive the
following benefits without further action by the Board:

                  (I)      In the event of termination by death or disability of
         the Participant, the Participant's involuntary termination by the
         Company for Cause, or the Participant's voluntary termination other
         than a Resignation for Good Reason, the Participant shall be entitled
         to receive within five days following such termination:

                           (i)      any compensation which is accrued and unpaid
                  as of the date of termination;

                           (ii)     all unpaid accumulated and accrued benefits
                  due under any benefit plan or program of the Company in which
                  the Participant was a participant; and

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                           (iii)    all payments with respect to accrued and
                  unpaid reimbursable expenses incurred by the Participant prior
                  to the date of termination.

                  (II)     In the event of either the Participant's involuntary
         termination by the Company other than for Cause or the Participant's
         Resignation for Good Reason, the Participant shall be entitled to
         receive, within five days following such termination:

                           (i)      any compensation which is accrued and unpaid
                  as of the date of termination;

                           (ii)     all unpaid accumulated and accrued benefits
                  due under any benefit plan or program of the Company in which
                  the Participant was a participant;

                           (iii)    all payments with respect to accrued and
                  unpaid reimbursable expenses incurred by the Participant prior
                  to the date of termination;

                           (iv)     benefits equal to:

                                    (A)      if the Participant is a Level 1
                           Participant:

                                             (1)   a lump-sum cash payment equal
                                    to the product of two multiplied by the sum
                                    of the Participant's then annual base salary
                                    plus the amount of any cash bonus under the
                                    Company's annual incentive bonus plan earned
                                    by the Participant with respect to the most
                                    recently completed fiscal year of the
                                    Company; and

                                             (2)   to the extent permitted under
                                    the Company's medical, dental and life
                                    insurance benefit plans and subject to the
                                    Participant's timely payment to the Company
                                    of the Participant's portion of premiums
                                    payable under such plans, continued
                                    insurance coverage, for a period of 36
                                    months following the Participant's
                                    termination of employment, under such plans
                                    providing the same benefits that are
                                    provided to employees of the Company, or, if
                                    participation in such plans is not permitted
                                    following the Participant's termination of
                                    employment, then the Company shall obtain
                                    and maintain equivalent insurance coverage
                                    in effect for such period; provided that if
                                    during such period the Participant obtains
                                    other employment with substantially
                                    comparable medical, dental and life
                                    insurance benefits, then the Participant's
                                    insurance benefit coverage hereunder shall
                                    then cease; or

                                    (B)      if the Participant is a Level 2
                           Participant:

                                             (1)   a lump-sum cash payment equal
                                    to the Participant's then annual base salary
                                    plus the amount of any cash bonus under the
                                    Company's annual incentive bonus plan earned
                                    by the

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                                    Participant with respect to the most
                                    recently completed fiscal year of the
                                    Company; and

                                             (2)   to the extent permitted under
                                    the Company's medical, dental and life
                                    insurance benefit plans and subject to the
                                    Participant's timely payment to the Company
                                    of the Participant's portion of premiums
                                    payable under such plans, continued
                                    insurance coverage, for a period of 24
                                    months following the Participant's
                                    termination of employment, under such plans
                                    providing the same benefits that are
                                    provided to employees of the Company, or, if
                                    participation in such plans is not permitted
                                    following the Participant's termination of
                                    employment, then the Company shall obtain
                                    and maintain equivalent insurance coverage
                                    in effect for such period; provided that if
                                    during such period the Participant obtains
                                    other employment with substantially
                                    comparable medical, dental and life
                                    insurance benefits, then the Participant's
                                    insurance benefit coverage hereunder shall
                                    then cease; and

                                    (C)      to the extent provided for under
                           the Company's 2000 Incentive Stock Plan, or any
                           subsequent or other benefit plan of the Company
                           providing for the grant or award of stock options,
                           restricted stock, performance shares, phantom stock
                           or other equity-based incentive awards, the
                           acceleration of the vesting of the Participant's
                           stock options, restricted stock, performance shares
                           and other awards, subject to and in accordance with
                           the provisions of such plans and the procedures,
                           requirements and conditions relating to or limiting
                           the Participant's receipt of benefits under such
                           plans.

         (b)      In the event that any benefits accruing to a Participant
hereunder, and the acceleration of vesting of stock options, restricted stock or
other equity-based awards, shall result in the Participant's being subject to
the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, or any successor or similar provision thereto, or comparable state or
local tax laws, then the Company shall pay to the Participant such additional
amount as shall be necessary (after taking into account all federal, state and
local income taxes payable by the Participant as a result of the receipt of such
additional payment) to place the Participant in the same after-tax position he
would have been in had no such excise tax (or any interest or penalties thereon)
been paid or incurred. The Company shall make such additional payment upon the
earlier of (i) the time at which the Company withholds such excise tax from any
payments to the Participant or (ii) 30 days after the Participant notifies the
Company that the Participant has filed a tax return which provides that such
excise tax is due and payable in reliance on a written opinion of the
Participant's tax counsel that it is more likely than not that such excise tax
is due and payable. If the Participant pays any such excise tax as a result of
an adjustment to the Participant's tax liability by any federal, state or local
tax authority, the Company will pay to the Participant within 30 days after
notification thereof to the Company the additional payment provided hereunder
resulting from such excise tax liability. In the event the Participant makes a
payment pursuant to the preceding sentence, the Participant will negotiate in
good faith with the

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Company procedures reasonably requested by the Company to afford the Company the
ability to contest the imposition of such excise tax, provided that the
Participant will not be required to afford the Company any right to contest the
applicability of any such excise tax to the extent that the Participant
reasonably determines that such contest is inconsistent with the overall tax
interests of the Participant. The Company will hold in confidence and not
disclose, without the prior written consent of the Participant, any information
with regard to the Participant's tax position which the Company obtains pursuant
to this paragraph.

         (c)      The Company shall continue to maintain, for a period of at
least 36 months following the termination of any Participant entitled to
benefits under Section 4(a)(II) and who was an officer of the Company at any
time after the Change in Control, director and officer liability insurance
covering past officers of the Company. Such director and officer insurance
coverage shall provide to past officers substantially the same benefits afforded
to present officers of the Company.

         (d)      In the event of a termination of employment under this Section
4, the Participant shall be under no obligation to seek other employment or
mitigate the amount of any payment provided for herein, and, subject to Section
4(b) no reduction shall be made to any amount paid or payable to the Participant
hereunder.

         (e)      The Company shall be the primary obligor with respect to the
obligations to Participants hereunder irrespective of whether the Participant is
employed by the Company or any wholly owned subsidiary of the Company. Each
subsidiary of the Company which employs any Participant shall be a secondary
obligor. If for any reason the Company is unable to pay to each Participant the
amounts due hereunder, then any subsidiary with which any Participant is
employed shall be responsible for any deficiency of payments to the relevant
Participant.

SECTION 5.        Interest. In the event that the Company fails to make timely
payment in full of the payments to a Participant under the Plan, then the
Participant shall be entitled to receive interest on any unpaid amount at a rate
equal to the maximum discount rate permitted under Section 280G(d)(4) of the
Internal Revenue Code of 1986, as amended.

SECTION 6.        Expenses. In the event that any Participant incurs any costs
or expenses to enforce or defend his rights under the Plan, then such
Participant shall be entitled to recover from the Company all such costs and
expenses, including attorney's fees, reasonably incurred by or on behalf of such
Participant.

SECTION 7.        Termination, Amendment of the Plan.

         The Plan may be terminated by action of the Board at any time with
respect to the Plan's application to persons commencing employment with the
Company subsequent to the Plan's termination. The Board may terminate the Plan
as to all Participants beginning on the third anniversary of the Plan's adoption
and on each anniversary thereafter. The Plan is not otherwise terminable. The
Board may revise or amend the Plan from time to time, but only to the extent
that any such revision or amendment would not adversely affect any right of a
Participant under the Plan without the consent of such Participant.

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SECTION 8.        No Employment Right.

         Nothing contained in the Plan shall confer upon any Participant any
right to continued employment with the Company or any of its subsidiaries or in
any way limit the right of the Company or any of its subsidiaries to terminate
the Participant's employment at any time.

SECTION 9.        Unfunded Plan.

         The Company's liability to pay benefits under the Plan shall constitute
an unfunded, unsecured liability of the Company. Nothing contained in the Plan
shall create or be construed to create a trust of any kind. No Participant, or
anyone claiming under a Participant, shall acquire any right or security or
other interest in any assets, funds or property of the Company or any subsidiary
by virtue of the Plan.

SECTION 10.       Notices.

         All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given when personally delivered or
five days after deposit with the United States Postal Service to be sent by
registered or certified mail, postage prepaid return receipt requested,
addressed to the Company, attention to the general counsel, at its principal
place of business and to the Participant at his address as shown on the records
of the Company or to such other address as the Company shall have received in
writing from the Participant.

SECTION 11.       Governing Law.

         The Plan shall be governed by and construed in accordance with the laws
of the State of Texas.

SECTION 12.       Severability.

         In the event that any provision of the Plan shall be determined to be
invalid or unenforceable for any reason, in whole or in part, the remaining
provisions of the Plan shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by law.

SECTION 13.       Successors.

         The Plan shall be binding upon and inure to the benefit of any
successor or assign of the Company, whether directly or indirectly and whether
by way of merger, consolidation, operation of law, assignment or other
acquisition of substantially all of the assets or business of the Company, in
the same manner and to the full extent that the Company is obligated hereunder,
and such successor or assign shall be deemed the "Company" for all purposes of
the Plan. In the event that any such successor or assign shall not by operation
of law be bound by all of the Company's obligations hereunder, then the Company
shall require such successor or assign to expressly and unconditionally assume
all of the Company's obligations under the Plan.

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