ex10_1.htm


    Exhibit
      10.1

    Quicksilver
      Gas Services LP

    Annual
      Bonus Plan

     

    Section
      1.  Eligibility:  This Annual Bonus Plan (the
“Plan”) provides for awards of annual cash bonuses to officers and employees
      of
      Quicksilver Resources Inc. (“Quicksilver”) who provide services to Quicksilver
      Gas Services GP LLC, a Delaware limited liability company (the “General
      Partner”), the general partner of Quicksilver Gas Services LP, a Delaware
      limited partnership (the “Partnership”), for the benefit of the
      Partnership.  The Chief Executive Officer (as defined below) is
      authorized to establish the aggregate bonus pool available for awards under
      the
      Plan pursuant to the criteria set forth below.

     

    Except
      as
      provided below for death and disability, (i) only Eligible Employees (as
      defined below) employed by Quicksilver as of November 1 of a Plan Year and
      meeting the criteria set forth below are eligible to participate in the Plan
      for
      such Plan Year and (ii) in order to receive a bonus under the Plan, an
      Eligible Employee must be an active, full-time employee in good standing on
      the
      date bonuses are paid hereunder.  The bonus of an Eligible Employee
      who is hired after the beginning of a Plan Year (but on or before November
      1 of
      the Plan Year) will be pro-rated based on the number of calendar days in the
      Plan Year that he or she is an employee.

     

    If
      an
      Eligible Employee dies or becomes disabled and unable to work during the Plan
      Year, a pro-rated award based on the number of calendar days in the Plan Year
      that he or she participated in the Plan before his or her death or disability
      will be paid to the employee or his or her beneficiary at the same time and
      in
      the same manner as awards for the Plan Year are paid to other
      employees.  An Eligible Employee’s beneficiary under the Plan will be
      the beneficiary designated under Quicksilver’s group life insurance
      plan.  If no such beneficiary has been designated, the award will be
      paid to the employee’s estate.

     

    Section
      2.  Definitions:

     

    Board
      of Directors:  The Board of Directors of the General
      Partner.

     

    Bonus
      Pool:  The maximum aggregate dollar amount that will be
      available to be allocated as cash bonuses to Eligible Employees under the Plan
      for a Plan Year.  The Bonus Pool will be the sum of each Eligible
      Employee’s Target Incentive multiplied by the “Percent Target Awarded” value
      corresponding to the estimated performance result as set forth in Table 1 for
      that Quantitative Performance Measure for the Plan Year and further multiplied
      by the Weighting Factor applicable to that Quantitative Performance
      Measure.

     

    Chief
      Executive Officer:  The Chief Executive Officer of the
      General Partner.

     

    Earnings
      per Unit:  The Partnership’s earnings per unit for the
      current Plan Year estimated as of October 31 of the Plan Year.

     

    Eligible
      Employee:  An officer or employee of Quicksilver, including
      an employee of Quicksilver who is seconded to the General Partner, who provides
      services to the General Partner for the benefit of the Partnership and who
      is
      selected to participate in the Plan for a Plan Year by the Chief Executive
      Officer.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Performance
      Rating:  The performance rating assigned to each Eligible
      Employee by the Chief Executive Officer or his designees (or, with respect
      to an
      executive officer of the General Partner, the Board of Directors), based upon
      an
      assessment of the employee’s job performance during the Plan
      Year.  Each Eligible Employee will receive a percentage performance
      rating ranging from 0% to 200%, with a rating of 200% representing the highest
      level of performance.

     

    Plan
      Year:  The calendar year.  The first Plan Year will
      begin January 1, 2008, and end December 31, 2008.

     

    Quantitative
      Performance Goals:  Performance goals for each of the
      Quantitative Performance Measures as established by the Board of
      Directors.

     

    Quantitative
      Performance Measures:  Earnings per Unit and Return on
      Average Capital Employed.

     

    Return
      on Average Capital Employed:  The Partnership’s Return on
      Average Capital Employed for the current Plan Year estimated as of
      October 31 of the Plan Year.  Return on Average Capital Employed
      is determined by dividing (i) earnings before interest, taxes, depreciation
      and
      amortization (“EBITDA”) for the period by (ii) the average Property, Plant and
      Equipment balance for the period.

     

    Target
      Incentive:  The Chief Executive Officer will assign to each
      Eligible Employee a Target Incentive that is a function of his or her position
      and base salary, and which represents the unadjusted bonus that the employee
      would receive if he or she receives a Performance Rating of 100% for the Plan
      Year and the Bonus Pool is an amount sufficient to pay bonuses of 100% of Target
      Incentive for all Eligible Employees; provided, however, that with respect
      to an
      Eligible Employee who is an executive officer of the General Partner, the Target
      Incentive will be established by the Board of Directors.

     

    Weighting
      Factor:  The weighting percentage assigned to each
      Quantitative Performance Measure, as set forth in Table 1 attached
      hereto.

     

    Section
      3.  Calculation of Awards: With respect
      to each Quantitative Performance Measure, an Eligible Employee’s Target
      Incentive is multiplied by the “Percent Target Awarded” value corresponding to
      the estimated performance result as set forth in Table 1 for that Quantitative
      Performance Measure and further multiplied by the Weighting Factor applicable
      to
      that Quantitative Performance Measure.  The resulting products for
      each Quantitative Performance Measure are then summed, and that sum is
      multiplied by the Eligible Employee’s Performance Rating, as assigned to each
      Eligible Employee based on an assessment of the employee’s job performance, to
      obtain the Eligible Employee’s award; provided, however, that the aggregate of
      the awards paid to Eligible Employees shall not exceed the Bonus
      Pool.

     

    If
      an
      Eligible Employee terminates employment with Quicksilver before he or she has
      been paid an actual bonus under the Plan, the Chief Executive Officer may,
      but
      is not required to, adjust the Bonus Pool or award amounts in any manner that
      he
      deems necessary or appropriate to reflect the reduced participation in the
      Plan.

     

    Section
      4.  Payment of Awards:  Payment of an award will be
      made by the General Partner or Quicksilver in a lump sum payment in cash, and
      will be made no later than March 15 following

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        
the
        end
        of the Plan Year.  Awards under the Plan are intended to be “Seconded
        Employee Expenses” within the meaning of that certain Services and Secondment
        Agreement dated as of August 10, 2007, between Quicksilver and the General
        Partner and are subject to the terms of such agreement, including without
        limitation Sections 3.2 and 4.2 thereof.  Quicksilver and the General
        Partner may deduct from any award such amounts as may be required to be withheld
        under any federal, state or local tax laws.  It is intended that any
        bonus awarded under the Plan will not constitute a deferral of compensation
        within the meaning of Section 409A of the Internal Revenue Code of 1986,
        as
        amended.

    

     

    Section
      5.  No Contract:  The Plan is not and will not be
      construed as an employment contract or as a promise or contract to pay awards
      to
      participants or their beneficiaries.  No person will accrue any right
      to a bonus under the Plan unless and until such award has been paid to such
      person.  The Plan has been approved by the Board of Directors and may
      be amended from time to time by the Board of Directors without notice; provided
      that the Chief Executive Officer may modify the Weighting Factors, Quantitative
      Performance Measures, Quantitative Performance Goals and Percent Target Awarded
      criteria set forth in Table 1 at the beginning of the Plan Year.  No
      participant or beneficiary may sell, assign, transfer, discount or pledge as
      collateral for a loan, or otherwise anticipate any right to payment of an award
      under the Plan.

     

    Section
      6.  Administration of the Plan:  The Chief
      Executive Officer (or, with respect to an award to an executive officer of
      the
      General Partner, the Board of Directors) has the full authority and discretion
      to administer the Plan and to take any action that is necessary or advisable
      in
      connection with the administration of the Plan, including without limitation
      the
      authority and discretion to interpret and construe any provision of the Plan
      or
      of any agreement, notification or document evidencing an award of an incentive
      bonus.  The interpretation and construction by the Chief Executive
      Officer or the Board of Directors of any such provision and any determination
      by
      the Chief Executive Officer or the Board of Directors pursuant to any provision
      of the Plan or of any such agreement, notification or document will be final
      and
      conclusive.  Neither the Chief Executive Officer nor any member of the
      Board of Directors will be liable for any such action or determination made
      in
      good faith.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      TABLE
        1

       

      ATTACHED
        TO QUICKSILVER GAS SERVICES LP

      ANNUAL
        BONUS PLAN

       

      I.  Quantitative
        Performance Measures and Weighting Factors

       

      
        	
                Quantitative

                Performance

                Measure

              	
                Weighting
                  Factor

              
	 	 
	
                Earnings
                  per Unit

              	
                50%

              
	
                Return
                  on Average Capital Employed

              	
                50%

              


      

       

      II.  Determination
        of Performance and Preliminary Awards

       

      
        
          	
                  Performance1

                	
                  Percent
                    Target Awarded

                
	
                  120%
                    of Budget

                	
                  200.00%

                
	
                  119%
                    of Budget

                	
                  195.00%

                
	
                  118%
                    of Budget

                	
                  190.00%

                
	
                  117%
                    of Budget

                	
                  185.00%

                
	
                  116%
                    of Budget

                	
                  180.00%

                
	
                  115%
                    of Budget

                	
                  175.00%

                
	
                  114%
                    of Budget

                	
                  170.00%

                
	
                  113%
                    of Budget

                	
                  165.00%

                
	
                  112%
                    of Budget

                	
                  160.00%

                
	
                  111%
                    of Budget

                	
                  155.00%

                
	
                  110%
                    of Budget

                	
                  150.00%

                
	
                  109%
                    of Budget

                	
                  145.00%

                
	
                  108%
                    of Budget

                	
                  140.00%

                
	
                  107%
                    of Budget

                	
                  135.00%

                
	
                  106%
                    of Budget

                	
                  130.00%

                
	
                  105%
                    of Budget

                	
                  125.00%

                
	
                  104%
                    of Budget

                	
                  120.00%

                
	
                  103%
                    of Budget

                	
                  115.00%

                
	
                  102%
                    of Budget

                	
                  110.00%

                
	
                  101%
                    of Budget

                	
                  105.00%

                
	
                  100%
                    of Budget

                	
                  100.00%

                
	
                  99%
                    of Budget

                	
                  98.00%

                
	
                  98%
                    of Budget

                	
                  96.00%

                
	
                  97%
                    of Budget

                	
                  94.00%

                
	
                  96%
                    of Budget

                	
                  92.00%

                
	
                  95%
                    of Budget

                	
                  90.00%

                
	
                  94%
                    of Budget

                	
                  88.00%

                
	
                  93%
                    of Budget

                	
                  86.00%

                
	
                  92%
                    of Budget

                	
                  84.00%

                
	
                  91%
                    of Budget

                	
                  82.00%

                
	
                  90%
                    of Budget

                	
                  80.00%

                
	
                  89%
                    of Budget

                	
                  78.00%

                
	
                  88%
                    of Budget

                	
                  76.00%

                
	
                  87%
                    of Budget

                	
                  74.00%

                
	
                  86%
                    of Budget

                	
                  72.00%

                
	
                  85%
                    of Budget

                	
                  70.00%

                
	
                  84%
                    of Budget

                	
                  68.00%

                
	
                  83%
                    of Budget

                	
                  66.00%

                
	
                  82%
                    of Budget

                	
                  64.00%

                
	
                  81%
                    of Budget

                	
                  62.00%

                
	
                  80%
                    of Budget

                	
                  60.00%

                
	
                  Less
                    than 80% of Budget but more than 50% of Budget

                	
                  50%

                
	
                  
                    50%
                      of Budget or below

                  

                	
                   25.00%2

                


        

      

    

     

     
      “Budget”
        represents (i) with respect to Earnings per Unit, the applicable performance
        measure budgeted for the Plan Year in the Partnership’s 2008 Budget approved by
        the Board on December 10, 2007, and (ii) with respect to Return on
        Average Capital Employed, the applicable performance goal established by
        the
        Board of Directors for purposes of the Plan on December 10,
        2007.

       

      The
        Quantitative Performance Goals will be calculated so as to exclude the effects
        of any extraordinary or nonrecurring events (including any material
        restructuring charges, financial or otherwise), or any changes in accounting
        principles, acquisitions or divestitures.

       

      
        

      

    

     

    
      1
        Performance results will be rounded to the
        closest whole percentage of Budget to determine the performance level
        attained.

      
        2
          The Percent Target Awarded for performance of
          less than 50% of Budget may be any percent from 0-25% at the discretion
          of the
          Chief Executive Officer.