Exhibit 10.3


 


THIRD AMENDED
AND RESTATED


 


EXCO RESOURCES, INC.


 


SEVERANCE
PLAN


 


(EFFECTIVE
AS OF NOVEMBER 14, 2007)


 

















 


TABLE OF CONTENTS


 


	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ONE PURPOSE OF PLAN

  	
   

  	
  1

  
	
  TWO PRIOR SEVERANCE ARRANGEMENTS

  	
   

  	
  1

  
	
  THREE DEFINITIONS

  	
   

  	
  1

  
	
  FOUR ELIGIBILITY AND SEVERANCE PAY BENEFITS

  	
   

  	
  5

  
	
  4.1

  	
  Eligibility

  	
   

  	
  5

  
	
  4.2

  	
  Release Form

  	
   

  	
  5

  
	
  4.3

  	
  Termination of Eligibility for Severance Pay

  	
   

  	
  5

  
	
  4.4

  	
  Severance Pay

  	
   

  	
  6

  
	
  FIVE FUNDING

  	
   

  	
  6

  
	
  SIX CLAIMS PROCEDURE

  	
   

  	
  6

  
	
  6.1

  	
  Filing and Initial Determination of Claim

  	
   

  	
  6

  
	
  6.2

  	
  Duty of Plan Administrator Upon Denial of Claim

  	
   

  	
  7

  
	
  6.3

  	
  Request for Review of Claim Denial

  	
   

  	
  7

  
	
  6.4

  	
  Decision on Review of Denial

  	
   

  	
  7

  
	
  SEVEN ADMINISTRATION OF THE PLAN  

  	
   

  	
  8

  
	
  7.1

  	
  Plan Administrator

  	
   

  	
  8

  
	
  7.2

  	
  Responsibilities

  	
   

  	
  8

  
	
  7.3

  	
  Allocation and Delegation of Plan Administrator
  Responsibilities

  	
   

  	
  8

  
	
  7.4

  	
  Actions of Fiduciaries

  	
   

  	
  8

  
	
  7.5

  	
  General Administrative Powers

  	
   

  	
  8

  
	
  7.6

  	
  Appointment of Professional Assistance

  	
   

  	
  9

  
	
  7.7

  	
  Discretionary Acts

  	
   

  	
  9

  
	
  7.8

  	
  Responsibility of Fiduciaries

  	
   

  	
  9

  
	
  7.9

  	
  Indemnity by Employer

  	
   

  	
  9

  
	
  EIGHT ADOPTION OF PLAN BY SUBSIDIARY  

  	
   

  	
  10

  
	
  NINE AMENDMENT OF THE PLAN  

  	
   

  	
  10

  
	
  TEN TERMINATION OF THE PLAN  

  	
   

  	
  10

  
	
  ELEVEN VESTING

  	
   

  	
  10

  
	
  TWELVE STATUS OF EMPLOYMENT RELATIONS  

  	
   

  	
  11

  
	
  THIRTEEN RESTRICTIONS ON ASSIGNMENT  

  	
   

  	
  11

  
	
  FOURTEEN APPLICABLE LAW

  	
   

  	
  11

  
	
  FIFTEEN INTERPRETATION OF THE PLAN  

  	
   

  	
  11

  



 


i

















 


THIRD AMENDED
AND RESTATED


 


EXCO
RESOURCES, INC.


 


SEVERANCE
PLAN


 


EXCO RESOURCES, INC.
(the “Company”) is amending and restating its severance plan, originally adopted
on August 15, 2002, amended and restated as of August 17, 2004,
further amended and restated as of November 8, 2006, and further amended
and restated as of November 14, 2007 (the “Effective Date”), in accordance
with the terms and conditions contained herein. The amended and restated severance
plan adopted on November 8, 2006, is replaced in its entirety with this Third
Amended and Restated EXCO Resources, Inc. Severance Plan (the “Plan”) and
no provision of the November 8, 2006, plan shall survive.


 


SECTION ONE


 


PURPOSE OF PLAN


 


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


 


SECTION TWO


 


PRIOR SEVERANCE
ARRANGEMENTS


 


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


 


SECTION THREE


 


DEFINITIONS


 


As used in the Plan:


 


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


 

















 


individual’s hourly pay
rate in effect immediately prior to the sale multiplied by 40 hours per week
and multiplied by 52 weeks.


 


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


 


3.3           “Change of Control”
shall mean


 


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


 


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


 


(iii)          any “person” (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) is or
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that for purposes of this clause (iii) such
person shall be deemed to have “beneficial ownership” of all shares that any
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time, directly or indirectly, of more
than 50% of the total voting power of the Voting Stock of the Company; or


 


(iv)          individuals who on the
Effective Date constituted the Board of Directors of the Company (together with
any new directors whose election by such Board of Directors of the Company or
whose nomination for election by the shareholders of the Company was approved
by a vote of 66-2/3% of the directors of the Company then still in office who
were either directors on the Effective Date or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; or


 


(v)           the adoption of a plan
relating to the liquidation or dissolution of the Company.


 


2

















 


Provided, however, that
in the event any subsidiary of the Company is spun off by means of a rights
offering to the Company’s shareholders or an underwritten public offering, or
any combination thereof, even where less than a majority of the voting equity
ownership is retained by the Company, shall not in any event constitute a
Change of Control.


 


3.4           “Company” shall mean
EXCO Resources, Inc.


 


3.5           “Comparable Offer of
Employment” shall mean:


 


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


 


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


 


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


 


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


 


3.6           “Eligible Employee”
shall mean any employee employed by the Company or any subsidiary of the
Company as a regular, full-time employee on the effective date of a Change of
Control and who incurs a Termination of Employment due to a Change of Control
either on the date of the Change of Control or within the six-month period
immediately following the effective date of the Change of Control and such
Termination of Employment was not for Cause.


 


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


 


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


 


3.9           “Exchange Act” shall
mean the Federal Securities Exchange Act of 1934, as amended from time to time.


 


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


 


3

















 


(i)            the Eligible Employee, without his or her
consent, incurs a demotion in his or her position with the Employer from the
position the Eligible Employee held immediately prior to the effective date of
the Change of Control and such demotion constitutes (x) a material diminution
in the Eligible Employee’s authority, duties, or responsibilities; (y) a
material diminution in the budget over which the Eligible Employee retains
authority; or (z) a material diminution in the authority, duties, or
responsibilities of the supervisor to whom the Eligible Employee is required to
report;


 


(ii)           the Eligible Employee,
without his or her consent, incurs a material reduction in his or her Base Pay
from his or her Base Pay immediately prior to the effective date of a Change of
Control;


 


(iii)          the Eligible Employee
incurs a significant adverse change in the nature or scope of the authorities,
powers, functions, responsibilities or duties attached to the position or
positions with the Employer which the Eligible Employee held immediately prior
to the effective date of the Change of Control, without the prior written
consent of the Eligible Employee,. and such change constitutes (x) a material
diminution in the Eligible Employee’s authority, duties, or responsibilities;
(y)  a material diminution in the budget
over which the Eligible Employee retains authority; or (z) a material diminution in the authority,
duties, or responsibilities of the supervisor to whom the Eligible Employee is
required to report; or


 


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


 


Notwithstanding anything
to the contrary contained herein, a termination of employment for “Good Reason”
shall occur only if the Eligible Employee provides written notice to the
Company of the occurrence of the event described in this Section 3.10 that
constitutes “Good Reason” within 30 days of the event’s initial existence, the
Company fails to remedy the event within 30 days of its receipt of such notice
and the Eligible Employee terminates his or her employment no later than 30
days following the end of such cure period.


 


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


 


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


 


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


 


3.14         “Plan Year” shall mean an
initial period starting on November 8, 2006 and ending on December 31,
2006, and thereafter the twelve (12)-month period ending on each December 31.


 


4

















 


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


 


3.16         “Severance Pay” shall
mean an amount equal to an Eligible Employee’s Base Pay.


 


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


 


3.18         “Voting Stock” shall mean
shares of the Company’s Common Stock, par value $0.001 per share, and any other
securities of the Company entitled to vote for the election of directors.


 


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


 


SECTION FOUR


 


ELIGIBILITY AND SEVERANCE
PAY BENEFITS


 


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


 


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


 


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


 


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


 


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


 


5

















 


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


 


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


 


(e)                                  the
Eligible Employee’s receipt and acceptance of a transfer of employment to any
other operation of the Company or any of its affiliate organizations.


 


4.4           Severance Pay.
The Severance Pay to which an Eligible Employee is entitled shall be paid to
such Employee after the effective date of a Change in Control in cash in a lump
sum within ten (10) days following receipt by the Company of an executed
Release Form or, where applicable, following the expiration of the
revocation period provided for on the Release Form. If an Eligible Employee
fails to return an executed Release Form to the Company within thirty (30)
days following his or her Termination of Employment, such Eligible Employee’s
rights to Severance Pay shall be immediately forfeited and he or she shall not
be entitled to any payments pursuant to this Plan.


 


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


 


SECTION FIVE


 


FUNDING


 


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


 


SECTION SIX


 


CLAIMS PROCEDURE


 


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


 


6

















 


furnished in accordance
with this Section 6.1, the claim shall be deemed denied and the claimant
shall be permitted to exercise his/or right to review pursuant to Section 6.3.


 


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


 


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


 


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


 


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


 


7

















 


SECTION SEVEN


 


ADMINISTRATION OF THE
PLAN


 


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


 


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


 


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


 


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


 


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


 


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


 


8

















 


feasible. In the
discharge of this discretionary authority the Plan Administrator shall have all
necessary powers and duties, including but not limited to the following:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


9

















 


The
indemnification contained in this Section shall apply regardless of
whether the event causing the liability arises in whole or in part from
the negligence (other than judicially determined gross negligence) or other
fault on the part of the individual, specifically including breaches of
fiduciary responsibility under ERISA.


 


SECTION EIGHT


 


ADOPTION OF PLAN BY
SUBSIDIARY


 


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


 


SECTION NINE


 


AMENDMENT OF THE PLAN


 


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


 


SECTION TEN


 


TERMINATION OF THE PLAN


 


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


 


SECTION ELEVEN


 


VESTING


 


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


 


10

















 


SECTION TWELVE


 


STATUS OF
EMPLOYMENT RELATIONS


 


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


 


SECTION THIRTEEN


 


RESTRICTIONS ON
ASSIGNMENT


 


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


 


SECTION FOURTEEN


 


APPLICABLE LAW


 


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


 


SECTION FIFTEEN


 


INTERPRETATION OF
THE PLAN


 


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


 


11

















 


IN
WITNESS WHEREOF, EXCO Resources, Inc. has caused the Plan to be signed by
its duly authorized officer on this 14th day of November, 2007.


 


 


	
  

  	
  EXCO
  RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas H. Miller

  
	
   

  	
   

  
	
   

  	
  Its: Chief Executive
  Officer

  



 


12

















 


Exhibit A-1


40+


 


RELEASE
AGREEMENT


 


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


 


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


 


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


 


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


 


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


 


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


 


13

















 


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


 


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


 


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


 


 


	
  Dated
  this                       
  day of                                                       ,
  2006.

  
	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS

  	
   

  	
  EMPLOYEE SIGNATURE

  



 


14

















 


Exhibit A-2


Under
40


 


RELEASE AGREEMENT


 


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


 


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


 


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


 


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


 


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


 


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


 


15

















 


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


 


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


 


 


	
  Dated
  this                       
  day of                                                       ,
  2006.

  
	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS

  	
   

  	
  EMPLOYEE SIGNATURE

  



 


16