ex10_8.htm


    Exhibit
10.8

     

    
      QUICKSILVER
RESOURCES INC.

      SECOND
AMENDED AND RESTATED

      KEY
EMPLOYEE

      CHANGE
IN CONTROL RETENTION INCENTIVE PLAN

       

      
        WHEREAS,
Quicksilver Resources Inc., a Delaware corporation (the “Company”), considers it
to be in the best interests of its stockholders to encourage the continued
employment of certain Key Employees (as defined herein) notwithstanding the
possibility, threat or occurrence of a Change in Control (as defined
herein);

         

        WHEREAS, the
Company believes that the possibility of the occurrence of a Change in Control
may result in the termination by the Key Employee of the Key Employee’s
employment by the Company or in the distraction of the Key Employee from the
performance of his or her duties to the Company, in either case to the detriment
of the Company and its stockholders;

         

        WHEREAS, the
Company recognizes that the Key Employee could suffer adverse financial and
professional consequences if a Change in Control were to occur;
and

         

        WHEREAS, the
Company has determined that it is advisable to establish a severance benefit
program to protect the Key Employee if a Change in Control occurs, thereby
encouraging the Key Employee to remain in the employ of the Company and not to
be distracted from the performance of his or her duties to the Company by the
possibility of a Change in Control.

         

        NOW,
THEREFORE, the Company adopts the Quicksilver Resources Inc. Second
Amended and Restated Key Employee Change in Control Retention Incentive Plan,
the terms of which are as follows:

         

        ARTICLE
1

        DEFINITIONS

         

        1.1           “Base Salary”
means the Participant’s annual gross salary before any deductions, exclusions or
any deferrals or contributions under any Company plan or program, but excluding
bonuses, incentive compensation, deferred compensation, employee benefits,
expense reimbursements or any other non-salary form of compensation being
received by a Participant (determined without regard to any reduction in such
Base Salary that occurs after a Change in Control).

         

        1.2           “Benchmark
Bonus” means the greater of (a) the average of the three annual
bonuses earned by the Participant during the three fiscal years of the Company
immediately preceding the Change in Control event (or, if the Participant has
been employed for fewer than three fiscal years of the Company, the average of
all annual bonuses earned by the Participant for the fiscal years immediately
preceding the Change in Control event) or (b) the annual bonus that would be
payable to the Participant if the target level of performance was achieved for
the fiscal year of the Company in which the Change in Control event occurs under
the terms of the Company’s annual incentive plan applicable to such Participant.
In the event that a Participant received a bonus in a year in which he was not
employed for the entire 12 months of that year, such bonus will be annualized
for purposes of determining the average as set forth in
Article 1.2(a).

         

        1.3           “Benefits”
means the severance benefits a Participant is entitled to receive pursuant to
Article 3 hereof, and any retention bonus a Participant is entitled to receive
pursuant to Article 5 hereof.

         

        1.4           “Board” means
the Board of Directors of the Company or its direct or indirect
parent.

         

        1.5           “Cause” means
(a) the conviction of the Participant for any felony involving dishonesty,
fraud or breach of trust or (b) the willful engagement by the Participant
in gross misconduct in the performance of his or her duties that materially
injures the Company.

         

        1.6           “Change in
Control” means the
occurrence of any of the following after the Effective Date:

         

        (a)           any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934 (“Exchange Act”)) is or becomes the
beneficial owner (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of the combined voting power of the
then-outstanding Voting Stock of the Company; provided, however, that the
following acquisitions shall not constitute a Change in Control:  (i)
any acquisition of Voting Stock of the Company directly from the Company that is
approved by a majority of the Incumbent Directors; (ii) any acquisition of
Voting Stock of the Company by the Company or any Subsidiary of the Company;
(iii) any acquisition of Voting Stock of the Company by the trustee or other
fiduciary holding securities under any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary of the Company; and
(iv) any acquisition of Voting Stock of the Company by Mercury Exploration
Company, Quicksilver Energy, L.P., The Discovery Fund, Pennsylvania Avenue
Limited Partnership, Pennsylvania Management Company, the estate of Frank
Darden, Lucy Darden, Anne Darden Self, Glenn Darden or Thomas Darden, or their
respective successors, assigns, designees, heirs, beneficiaries, trusts, estates
or controlled affiliates;

         

        (b)           a
majority of the Board ceases to be comprised of Incumbent Directors;
or

         

        (c)           the
consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the consolidated assets of the
Company (each, a “Business Combination Transaction”) immediately after which the
Voting Stock of the Company outstanding immediately prior to such Business
Combination Transaction does not continue to represent (either by remaining
outstanding or by being converted into Voting Stock of the entity surviving,
resulting from, or succeeding to all or substantially all of the Company’s
consolidated assets as a result of, such Business Combination Transaction or any
parent of such entity), at least 50% of the combined voting power of the then
outstanding shares of Voting Stock of (i) the entity surviving, resulting
from, or succeeding to all or substantially all of the Company’s consolidated
assets as a result of, such Business Combination Transaction or (ii) any
parent of any such entity (including, without limitation, an entity which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more
subsidiaries).

         

        For
purposes of this Plan, (i) “Incumbent Directors” means the individuals who, as
of the date hereof, are Directors of the Company and any individual becoming a
Director subsequent to the date hereof whose election, nomination for election
by the Company’s shareholders, or appointment, was approved by a vote of a
majority of the then Incumbent Directors (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for director, without objection to such nomination) and (ii) “Voting
Stock” means securities entitled to vote generally in the election of
Directors.

         

        1.7           “Code” means
the Internal Revenue Code of 1986, as amended.

         

        1.8           “Company”
means Quicksilver Resources Inc., a Delaware corporation.  The term
“Company” shall also include any Successor, whether the liability of such
Successor under the Plan is established by contract or occurs by operation of
law.

         

        1.9           “Effective
Date” means the date on which the Plan is adopted.

         

        1.10           “Employment
Termination Date” means the date on which the employment relationship
between the Participant and the Company is terminated due to an Involuntary
Termination.

         

        1.11           “ERISA” means
the Employee Retirement Income Security Act of 1974, as amended.

         

        1.12           “Good Reason
Event” means the occurrence of one or more of the following events or
conditions after the occurrence of a Change in Control:

         

        (a)           the
Company removes the Participant from, or fails to re-elect or appoint the
Participant to, any duties or position with the Company that were assigned or
held by the Participant immediately before the occurrence of the Change in
Control, except that a nominal change in the Participant’s title that is merely
descriptive and does not affect rank or status shall not constitute such an
event;

         

        (b)           the
Company or a Subsidiary assigns to the Participant any duties inconsistent with
the Participant’s position (including offices, titles and reporting
requirements), authority, duties or responsibilities with the Company or a
Subsidiary in effect immediately before the occurrence of the Change in
Control;

         

        (c)           the
Company takes any action that results in a material diminution of the
Participant’s position, authority, duties or responsibilities with the Company
or a Subsidiary in effect immediately before the occurrence of the Change in
Control, or otherwise takes any action that materially interferes
therewith;

         

        (d)           the
Company reduces the Participant’s Base Salary or the Participant’s incentive
bonus opportunity as in effect immediately prior to such reduction (including a
reduction in the Participant’s incentive bonus target or any other action that
would adversely affect the Participant’s participation in or benefits under the
Company’s incentive bonus plan(s));

         

        (e)           the
Company or a Subsidiary relocates the Participant’s principal workplace to an
area that is located outside of a radius of 50 miles from the location of the
Participant’s principal workplace immediately prior to the Change in Control,
or  requires the Participant to perform a majority of his or her
duties more than 50 miles from the Participant’s principal work location
(determined as of the date of the Change in Control) for a period of more than
21 consecutive days or for more than 90 days in any calendar year;

         

        (f)           the
Company or a Subsidiary fails to (i) continue in effect any bonus, incentive,
profit sharing, performance, savings, retirement or pension policy, plan,
program or arrangement (such policies, plans, programs and arrangements
collectively being referred to herein as “Basic Benefit Plans”), including, but not limited
to, any deferred compensation, supplemental executive retirement or other
retirement income, stock option, stock purchase, stock appreciation, or similar
policy, plan, program or arrangement of the Company or a Subsidiary, in which
the Participant was a participant immediately before the occurrence of the
Change in Control, unless an equitable and reasonably comparable arrangement
(embodied in a substitute or alternative benefit or plan) shall have been made
with respect to such Basic Benefit Plan promptly following the occurrence of the
Change in Control, or (ii) continue the Participant’s participation in any Basic
Benefit Plan (or any substitute or alternative plan) on substantially the same
basis, both in terms of the amount of benefits provided to the Participant
(which are in any event always subject to the terms of any applicable Basic
Benefit Plan) and the level of the Participant’s participation relative to
other participants, as existed immediately before the occurrence of the Change
in Control;

         

        (g)           the
Company or a Subsidiary fails to continue to provide the Participant with
benefits substantially similar to those enjoyed by the Participant under any of
the Company’s or a
Subsidiary’s other benefit plans, policies, programs and arrangements,
including, but not limited to, life insurance, medical, dental, health,
hospital, accident or disability plans, in which the Participant was a
participant immediately before the occurrence of the Change in
Control;

         

        (h)           the
Company takes any action that would directly or indirectly materially reduce any
other non-contractual benefits that were provided to the Participant by the
Company immediately before the occurrence of the Change in Control or deprive
the Participant of any material fringe benefit enjoyed by him or her immediately
before the occurrence of the Change in Control;

         

        (i)           the
Company fails to provide the Participant with the number of paid vacation days
to which he or she was entitled in accordance with the Company’s vacation policy
in effect immediately before the occurrence of the Change in
Control;

         

        (j)           the
Company fails to continue to provide the Participant with office space, related
facilities and support personnel (including, but not limited to, administrative
and secretarial assistance) (i) that are both commensurate with
Participant’s responsibilities to and position with the Company immediately
before the occurrence of the Change in Control and not materially dissimilar to
the office space, related facilities and support personnel provided to employees
of the Company having comparable responsibility to the Participant, or
(ii) that are physically located at the Company’s principal executive
offices;

         

        (k)           the
Company fails to honor any provision of this Plan; or

         

        (l)           the
Company gives effective notice of an election to terminate at the end of the
term (or to not extend the term) of any employment agreement that the
Participant has or may in the future have with the Company or the Successor in
accordance with the terms of any such agreement.

         

        1.13           “Involuntary
Termination” means the termination of a Participant’s employment
relationship with the Company and each Subsidiary (a) by the Company or a
Subsidiary after the occurrence of a Change in Control for any reason other than
Cause, or (b) by the Participant on account of a Good Reason
Event.  For purposes of the Plan, a Participant’s termination will not
be considered to be on account of a Good Reason Event unless the Participant
terminates employment no more than 60 days following such Good Reason
Event.  A Participant shall not be deemed to have incurred an
Involuntary Termination by reason of the transfer of the Participant’s
employment between the Company and any of its Subsidiaries, or among
Subsidiaries.  The Plan Administrator shall determine, in its sole
discretion, whether a Participant’s termination of employment from the Company
or any Subsidiary constitutes an Involuntary Termination.  For
purposes of the Plan, a Participant will not be considered to have terminated
his or her employment relationship unless the termination of employment
qualifies as a Separation from Service.

         

        1.14           “Key Employee”
means an employee of the Company or any Subsidiary whose name appears on Exhibit
B which is attached hereto and made a part hereof for all purposes, as the same
may be amended from time to time by the Board or the Chief Executive Officer of
the Company.

         

        1.15           “Participant”
means an individual who (a) is a Key Employee on the date a Change in
Control occurs and (b) is not eligible to participate in the Quicksilver
Resources Inc. Amended and Restated Executive Change in Control Retention
Incentive Plan.  An individual who is classified by the Company as a
temporary employee or an independent contractor on the date a Change in Control
occurs is not eligible to participate in the Plan (even if he or she is
subsequently reclassified by the Internal Revenue Service or a court as a common
law employee of the Company and the Company acquiesces to such
reclassification).  Notwithstanding the foregoing, in the event that a
Key Employee has entered into an employment agreement with the Company or a
Subsidiary, such Key Employee will not be deemed a Participant under this Plan
unless such employment agreement specifically adopts and incorporates this Plan
by reference.

         

        1.16           “Person” means
any individual, entity or group that is a “person” within the meaning of Section
3(a)(9), 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended.

         

        1.17           “Plan” means
the Quicksilver Resources Inc. Second Amended and Restated Key Employee Change
in Control Retention Incentive Plan, as set forth herein and as amended from
time to time.

         

        1.18           “Plan
Administrator” means the Company; however, the Company may designate any
Person or a committee to administer the Plan in accordance with the provisions
of Article 8.

         

        1.19           “Release”
means the Release Agreement in substantially the form attached hereto as Exhibit
A and made a part hereof for all purposes.

         

        1.20           “Separation from
Service” means a Participant’s separation from service within the meaning
of Section 409A of the Code; provided, however, that to the extent permitted by
Section 409A of the Code, a Participant will be treated as incurring a
Separation from Service if the reasonably anticipated level of bona fide
services the Participant will perform is permanently decreased to less than 50%
of the average level of bona fide services performed by the Participant over the
immediately preceding 12 months.

         

        1.21           “Specified
Employee” means a specified employee within the meaning of Section 409A
of the Code.  A Participant who is identified by the Company as a
Specified Employee at any time during a calendar year will be considered a
Specified Employee for purposes of Article 4 during the 12-month period
that begins on April 1 of the immediately following calendar year, and no
other Participant will be considered a Specified Employee during such 12-month
period.

         

        1.22           “Subsidiary”
means  a corporation, partnership, limited liability company or other
entity in which the Company owns directly or indirectly more than 50% of the
outstanding shares of voting stock or other voting interest.

         

        1.23           “Successor”
means a person with or into which the Company shall have been merged or
consolidated or to which the Company shall have transferred all or substantially
all of its assets.

         

        ARTICLE
2

        ELIGIBILITY

         

        (a)           Except
as specified herein, a Participant who incurs an Involuntary Termination within
two years after the occurrence of a Change in Control (including such a
termination on the date of the Change in Control) shall be entitled to the
severance benefits described in Article 3 hereof.

         

        (b)           The
Plan does not provide benefits with respect to any termination of employment
prior to the occurrence of a Change in Control, whether such termination is for
Cause or otherwise.  A Participant will forfeit all Benefits under the
Plan if he or she is discharged by the Company for Cause.

         

        ARTICLE
3

        CHANGE
IN CONTROL BENEFITS

         

        Subject
to Article 4 hereof, the Company shall pay or provide a Participant who has
satisfied the requirements of Article 2 hereof the following
Benefits:

         

        (a)           A
single sum cash payment equal to two times the sum of (i) the Participant’s
Base Salary, plus (ii) the Participant’s Benchmark Bonus.

         

        (b)           To
the extent permitted by law, the Company shall take all actions necessary to
cause the Participant’s account balances under the Company’s 401(k) Plan to
become fully vested and nonforfeitable; provided that such action would not
require the accelerated vesting of any other participant’s account balance in
the Company’s 401(k) Plan.

         

        (c)           To
the extent permitted by Section 409A of the Code, all outstanding stock options
and restricted share and restricted share unit awards held by the Participant
shall immediately become fully vested.

         

        (d)           The
Company shall take the following actions:

         

        (i)           Throughout
the two years following the Employment Termination Date, the Company shall
maintain in effect and not materially reduce the benefits provided by the
Company’s group medical, dental and vision insurance and group basic life
insurance plans in which the Participant participated immediately prior to the
Employment Termination Date; and

         

        (ii)           the
Company shall arrange for the Participant’s uninterrupted participation
throughout the two-year period commencing on the Participant’s Employment
Termination Date in such group medical, dental and vision insurance and group
basic life insurance plans, provided that if the Participant’s participation
after his or her Employment Termination Date in any such plan is not permitted
by the terms of that plan, then throughout such two-year period, the Company
shall provide the Participant with substantially the same benefits that were
provided to the Participant under such plan immediately before the Employment
Termination Date.  All reimbursements of expenses under the Company’s
medical, dental and vision programs or other reimbursements of expenses shall be
made no later than December 31 of the year following the year in which the
Participant incurs the related expense.  In no event will the amount
of expenses eligible for reimbursement, or in-kind benefits provided, by the
Company in one taxable year affect the amount of expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other taxable
year.  The Participant’s right to reimbursement or in-kind benefits
shall not be subject to liquidation or exchange for another
benefit.

         

        (e)           Benefits
under the Plan shall not be taken into account as compensation for purposes of
determining contributions or benefits under any other employee benefit plan of
the Company or a Subsidiary.  In addition, Benefits under the Plan
shall be reduced by any severance, termination or similar payments payable to a
Participant pursuant to any employment, change in control, severance or similar
agreement with the Company or a Subsidiary, unless such agreement expressly
provides that a cash severance or retention payment is in addition to the
Benefits under the Plan.

         

        ARTICLE
4

        TIME
OF SEVERANCE PAYMENT

         

        Provided
that the Participant has executed and delivered to the Company the Release and
such Release has become effective and irrevocable in accordance with its terms
prior to the date of payment, the Company shall pay the Participant the cash
severance benefits described in paragraph (a) of Article 3 on the 60th day
after the date of the Participant’s Separation from Service and shall provide
the benefits described in paragraph (d) of Article 3; provided, however, that if
the Company determines in good faith that (a) any payment to the Participant or
his estate or beneficiaries under Article 3 hereof does not qualify for the
“short-term deferral exception” or otherwise would constitute a “deferral of
compensation” under Section 409A of the Code, (b) the Participant is a Specified
Employee, and (c) delay of such payment is required by Section 409A of the Code
and is not already provided for, the payment date shall instead be the earlier
of (x) the first day of the seventh month following the date of the
Participant’s Separation from Service, or (y) the date of the Participant’s
death.  If payment is required to be delayed pursuant to the foregoing
provision, the cash severance payment described in paragraph (a) of
Article 3 shall be increased to include interest payable on such cash
severance payment at the interest rate described below from the date of the
Participant’s Separation from Service to the date of payment.  The
interest rate shall be determined as of the date of the Participant’s Separation
from Service and shall be the rate of interest then most recently published in
The
Wall Street Journal as the “prime rate” at large U.S. money center
banks.

         

        If the
Participant fails to furnish the executed Release, or if the Release furnished
by the Participant has not become effective and irrevocable by the date of
payment, the Participant will not be entitled to the severance benefits
described in paragraphs (a) and (d) of Article 3.

         

        ARTICLE
5

        RETENTION
BONUS

         

        If a
Participant remains employed by the Company or a Subsidiary throughout the
six-month period following a Change in Control, then six months after the date
of the Change in Control the Company shall pay to the Participant, in a single
cash payment, a retention bonus equal to one-half (1/2) of the Participant’s
Base Salary (without regard to whether the Participant is or ever will become
entitled to severance benefits under Article 3 hereof).

         

        ARTICLE
6

        LIMITATION
ON PAYMENT OF BENEFITS

         

        Notwithstanding
any provision of this Plan to the contrary, if any amount or benefit to be paid
or provided under this Plan would be an “Excess Parachute Payment,” within the
meaning of Section 280G of the Code but for the application of this sentence,
then the payments and benefits to be paid or provided under this Plan will be
reduced to the minimum extent necessary (but in no event to less than zero) so
that no portion of any such payment or benefit, as so reduced, constitutes an
Excess Parachute Payment; provided, however, that the foregoing reduction will
be made only if and to the extent that such reduction would result in an
increase in the aggregate payment and benefits to be provided, determined on an
after-tax basis (taking into account the excise tax imposed pursuant to Section
4999 of the Code, any tax imposed by any comparable provision of state law, and
any applicable federal, state and local income and employment
taxes).  Whether requested by the Participant or the Company, the
determination of whether any reduction in such payments or benefits to be
provided under this Plan or otherwise is required pursuant to the preceding
sentence will be made at the expense of the Company by the Company’s independent
accountants in effect prior to the Change in Control.  The fact that
the Participant’s right to payments or benefits may be reduced by reason of the
limitations contained in this Article will not of itself limit or otherwise
affect any other rights of the Participant other than pursuant to this
Plan.  In the event that any payment or benefit intended to be
provided under this Plan or otherwise is required to be reduced pursuant to this
Article, the Company will effect such reduction by first reducing the Benefits
described in paragraph (a) of Article 3 and then, to the extent necessary,
by reducing the Benefits described in paragraph (d) of
Article 3.

         

        ARTICLE
7

        UNFUNDED
ARRANGEMENT

         

        The plan
is unfunded, and all cash Benefits will be paid, as needed, from the general
assets of the Company.  The Plan is only a general corporate
commitment and each Participant must rely upon the general credit of the Company
for the fulfillment of its obligations hereunder.  Under all
circumstances the rights of Participants to any asset held by the Company will
be no greater than the rights expressed in this Plan.  Nothing
contained in this Plan shall constitute a guarantee by the Company that the
assets of the Company will be sufficient to pay any Benefits under this Plan or
would place the Participant in a secured position ahead of general creditors of
the Company; the Participants are only unsecured creditors of the Company with
respect to their Plan benefits, and the Plan constitutes a mere promise by the
Company to make Benefit payments in the future.  No specific assets of
the Company have been or shall be set aside, or shall in any way be transferred
to a trust or shall be pledged in any way for the performance of the Company’s
obligations under the Plan which would remove such assets from being subject to
the general creditors of the Company.

         

        ARTICLE
8

        ADMINISTRATION
OF THE PLAN

         

        The Plan
Administrator shall have the full power and authority to administer the Plan,
carry out its terms and conditions and effectuate its purposes.  The
Plan Administrator shall be the “named fiduciary,” as such term is defined in
ERISA, of the Plan, with responsibility for administration of the
Plan.

         

        The Plan
Administrator shall serve without compensation for its services as
such.  However, all reasonable expenses of the Plan Administrator
shall be paid or reimbursed by the Company upon proper
documentation.  The Plan Administrator shall be indemnified by the
Company against personal liability for actions taken in good faith in the
discharge of duties as the Plan Administrator.

         

        The Plan
Administrator shall keep all individual and group records relating to
participants and former participants and all other records necessary for the
proper operation of the Plan.  Such records shall be made available to
the Company and to each Participant for examination during business hours except
that a Participant shall examine only such records as pertain exclusively to the
examining Participant and to the Plan.  The Plan Administrator shall
prepare and shall file as required by law or regulation all reports, forms,
documents and other items required by ERISA, and every other relevant statute,
each as amended, and all regulations thereunder (except that the Company, as
payor of the Benefits, shall prepare and distribute to the proper recipients all
forms relating to withholding of income or wage taxes, Social Security taxes,
and other amounts which may be similarly reportable).

         

        ARTICLE
9

        AMENDMENT
OR TERMINATION

         

        The Board
reserves the right to amend or terminate the Plan at any time and in any manner
without the consent of any affected individual, which right includes, without
limitation, the right to change the individuals who are eligible to participate
in the Plan from time to time.  In addition, without the consent of
any affected individual, the Chief Executive Officer may amend Exhibit B hereto
from time to time in order to add individuals to the list of Key Employees or to
remove individuals from the list of Key Employees.  Notwithstanding
the foregoing, (i) for a period of two years following a Change in Control, the
Plan may not be terminated or amended in any manner adverse to any eligible
Participant without the written consent of each affected Participant and (ii)
any amendment to or termination of the Plan will not adversely affect the
Benefits payable to a Participant whose Employment Termination Date occurred
prior to the date of such amendment or termination.

         

        ARTICLE
10

        CLAIMS
PROCEDURES

         

        10.1           Claim for
Benefits.  When a Benefit is due, a Claimant may submit a claim
for Benefits to the office designated by the Plan Administrator to receive
claims.  For purposes of this Article, “Claimant” means a Participant
or an authorized representative of a Participant who makes a claim for Benefits
under the Plan.

         

        10.2           Deadline for
Notifications of Claim Determinations.  If a Claimant’s claim
for Benefits under the Plan is denied in whole or in part, the Plan
Administrator will provide to the Claimant a written notice of the claim
decision within 90 days of receipt of the claim.  This 90-day period
may be extended one time by the Plan Administrator for up to 90 days, provided
that the Plan Administrator notifies the Claimant, prior to the expiration of
such 90-day period, of the circumstances requiring the extension of time and the
date by which the Plan Administrator expects to render a
decision.  Claims not acted upon within the time prescribed herein
shall be deemed denied for purposes of proceeding to the review
stage.

         

        10.3           Contents of Notices
of Claims Denials.  When a claim is denied (an adverse
determination) in full or in part, the Plan Administrator will provide the
Claimant a written or electronic notification of the denial within the time
frame specified in Section 9.1.  This notice will:

         

        (a)           explain
the specific reasons for the adverse determination;

         

        (b)           reference
the specific Plan provisions on which the adverse determination is
based;

         

        (c)           provide
a description of any additional material or information necessary for the
Claimant to complete the claim and an explanation of why such material or
information is necessary; and

         

        (d)           
provide a description of the Plan’s review procedures 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 an adverse claims
determination on review.

         

        10.4           Appeals of Denied
Claims.  The Claimant will have 60 days after receiving the
notice that the Claimant’s claim is denied to appeal the adverse determination
in writing to the Plan Administrator. The Claimant may submit written comments,
documents, records, and other information relevant to the claim, and such
information will be taken into account during the review, without regard to
whether it was submitted or considered in the initial claim
determination.  In addition, the Claimant will be provided, upon
request and free of charge, reasonable access to and copies of all documents,
records, and other information relevant to the claim.

         

        If no
appeal of the adverse determination is made in writing to the Plan Administrator
within 60 days after the Claimant’s receipt of the notice of denial, the denial
of the claim is final.

         

        10.5           Deadlines for
Notifications of Appeals Determinations.  The Administrator
will notify the Claimant of its determination on review of an adverse claim
determination within a reasonable period of time, but not later than 60 days
from receipt of a request for review of the adverse
determination.  This 60-day period may be extended one time by the
Plan Administrator for up to 60 days, provided that the Plan Administrator
notifies the Claimant, prior to the expiration of such 60-day period, of the
circumstances requiring the extension of time and the date by which the Plan
Administrator expects to render a decision.

         

        10.6           Contents of Notices
of Final Claims Determinations.  Notice of the Plan’s claims
decision will be given in writing or electronically.  If the
Claimant’s claim is denied in whole or in part the notification will
include:

         

        (a)           the
specific reasons for the denial;

         

        (b)           reference
to the specific Plan provisions on which the decision was based;

         

        (c)           a
statement of the Claimant’s right to receive, upon request and free of charge,
reasonable access to and copies of all documents, records, and other information
relevant to the claim; and

         

        (d)           a
statement of the Claimant’s right to bring a civil action in court under section
502(a) of ERISA.

         

        ARTICLE
11

        MISCELLANEOUS

         

        11.1           Tax
Withholding.  The Company will calculate the deductions from
the amount of the benefit paid under the Plan for any taxes required to be
withheld by federal, state or local government and shall cause them to be
withheld.

         

        11.2           Plan Not an
Employment Contract.  The adoption and maintenance of the Plan
is not a contract between the Company and its employees, which gives any
employee the right to be retained in its employment.  Likewise, it is
not intended to interfere with the rights of the Company to discharge any
employee at any time or to interfere with the employee’s right to terminate his
or her employment at any time.

         

        11.3           Alienation
Prohibited.  No benefits hereunder shall be subject to
anticipation or assignment by a Participant, to attachment by, interference
with, or control of any creditor of a Participant, or to being taken or reached
by any legal or equitable process in satisfaction of any debt or liability of a
Participant prior to its actual receipt by the Participant.  Any
attempted conveyance, transfer, assignment, mortgage, pledge, or encumbrance of
the benefits hereunder prior to payment thereof shall be void.

         

        11.4           Gender and
Number.   If the context requires it, words of one gender
when used in the Plan shall include the other genders, and words used in the
singular or plural shall include the other.

         

        11.5           Severability. If any
provision of the Plan is determined to be invalid or unenforceable, that
determination shall not affect the validity or enforceability of any other
provision.

         

        11.6           Successors.  The
Company shall not, directly or indirectly, consolidate with, merge into or sell
or otherwise transfer all or substantially all of its assets to, any person, or
permit any person to consolidate with or merge into the Company, unless
immediately after such consolidation, merger, sale or transfer, the Successor
shall have assumed in writing the Company’s obligations under the
Plan.

         

        11.7           Assignment; Binding
Effect.  This Plan shall be binding upon any
Successor.  The Company shall not assign any of its obligations under
the Plan unless (a) such assignment is to a Successor, and (b) the requirements
of Section 11.6 are fulfilled.

         

        11.8           Compliance with
Section 409A of the Code.  To the extent applicable, it is
intended that the Plan and any Benefits payable hereunder are exempt from
Section 409A of the Code or are structured in a manner that would not cause a
Participant to be subject to taxes and interest pursuant to Section 409A of the
Code.  The Plan shall be construed and interpreted in a manner
consistent with such intent.

         

        11.9           Governing
Law.  The provisions of the Plan shall be construed,
administered, and governed under the laws of the State of Texas and, to the
extent applicable, by the laws of the United States.

      

       

      
        
          	 	QUICKSILVER
      RESOURCES INC.	 
	 	 	 	 
	 	By:	/s/
      Thomas F. Darden	 
	 	Title:	Chairman
      of the Board	 


        

      

       

      
        
           

        

        
           

          
            
 

        

        
           

        

      

      Exhibit A

      
         

        
          QUICKSILVER
RESOURCES INC.

          SECOND
AMENDED AND RESTATED

          KEY
EMPLOYEE

          CHANGE
IN CONTROL RETENTION INCENTIVE PLAN

           

        

      

      RELEASE
AGREEMENT

       

      
        This
RELEASE
is executed by _____ (the “Employee”) in consideration of the severance benefits
provided under the Quicksilver Resources Inc. Second Amended and Restated Key
Employee Change in Control Retention Incentive Plan (the “Plan”), and as a
condition to the receipt of such benefits.  For purposes of this
Release, the term “Company” means Quicksilver Resources Inc. and any Successor
(as defined in the Plan).

         

        NOW
THEREFORE, the Employee provides the following
release:

         

        1.           Release by
Employee. I,
____ ,
on behalf of myself and my heirs and assigns, in consideration of the Company’s
payment of the severance benefits in the amount of $_____________ (less any
amounts that the Company is required to withhold under applicable laws) and the
welfare benefits described in Section 3(d) of the Plan to be furnished to me
pursuant to the Plan, the sufficiency of which is hereby acknowledged, and as a
material inducement to the Company to enter into this Release hereby release and
forever discharge the Company, and its directors, officers, shareholders,
partners, representatives, agents, employees, predecessors, successors,
affiliates, divisions, subsidiaries and related entities and their respective
directors, officers, shareholders, agents, representatives and employees, from
all claims of any nature whatsoever waivable by applicable law, from the
beginning of time to the date of the execution of this Release, known or
unknown, suspected or unsuspected, including but not limited to all claims
arising out of, based upon, or relating to my employment with the Company, or
compensation for that employment.  I understand that the consideration
provided for in the Plan exceeds anything of value to which I am already
entitled without the Plan.

         

        Without
limiting the generality of the foregoing, I understand and agree that this
Release includes, but is not limited to, claims based on or relating
to:  (a) any express or implied employment contract; (b) wrongful
discharge; (c) termination in breach of public policy; (d) age discrimination
under the Age Discrimination in Employment Act of 1967, as amended;
(e) claims of discrimination, harassment or retaliation under Title VII of
the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act,
or any other law which prohibits discrimination based on race, color, age,
ancestry, national origin, sex, sexual orientation, religion, mental or physical
disabilities, or marital status; (f) any other federal, state or local laws or
regulations prohibiting employment discrimination; (g) personal injury,
defamation, assault, battery, invasion of privacy, fraud, intentional or
negligent misrepresentation of fact, intentional or negligent infliction of
emotional distress, or false imprisonment; (h) claims for additional wages,
compensation, severance pay or bonuses; and (i) claims for attorneys’ fees or
costs.

         

        I
UNDERSTAND THAT THIS RELEASE COVERS BOTH CLAIMS THAT I KNOW ABOUT AND THOSE THAT
I MAY NOT KNOW ABOUT.

         

        2.           Additional Issues
Associated with Scope of Release.  I understand that I am only
waiving those claims that I have as of the date I sign this Release, and not any
claims that might arise in the future.  I also understand that this
Release does not release or discharge claims that are not waivable by applicable
law.  Also excluded from the scope of this Release are any rights I
have to any vested benefits under the Company’s benefit plans, including but not
limited to the Quicksilver Resources Inc. 401(k) Plan.  Further,
nothing in this Release prohibits me from filing a charge with the EEOC or
participating in an investigation or proceeding of the EEOC.  However,
I am waiving the right to any personal monetary recovery or other personal
relief should the EEOC or any other agency pursue alleged charges in part or
entirely on my behalf.

         

        3.           No Knowledge of
Legal Violations. I
further assert that during my employment with the Company and activities
regarding any company or organization affiliated with the Company, that I have
no information or knowledge of any legal irregularity, violation, or alleged
violation of any law, regulation, statute, or ordinance of any kind resulting
from the operations of the Company, or any other company or organization
affiliated with the Company.  I have never reported any such
irregularity or violation to any superior with respect to the Company or any
company or organization affiliated with the Company.

         

        4.           Advisement to
Consult with an Attorney and Forty-five (45) Day Review
Period.  I acknowledge that I am hereby advised in writing to
consult with an attorney prior to executing this Release to discuss the contents
of this document and its meaning.  I understand that I have forty-five
(45) days after receiving this Release to consider this waiver and release of my
rights.  I understand the terms and conditions of this Release in
full, agree to abide by this, and knowingly and voluntarily execute it without
hidden reservations.

         

        5.           Seven (7) Day
Revocation Period. I
understand that I will have seven (7) days after I sign this Release during
which I can revoke my signature and cancel my acceptance of the benefits under
the Plan for any reason, and that this Release shall not become effective or
enforceable until after this revocation period has expired.  I
understand that I may revoke or rescind this Release by providing written notice
of revocation to the Company’s General Counsel,  [name, address, fax
number], within the 7-day revocation period.  I understand that I will
not be entitled to any severance benefits under the Plan until the end of the
7-day revocation period.

         

        6.           Receipt of
Disclosures.  I acknowledge that I have received the
Disclosures that are attached to this Release as Exhibit 1.

         

        7.           Governing
Law.  The provisions of the Plan and this Release shall be
construed, administered and governed under the laws of the State of Texas and,
to the extent applicable, the laws of the United States.

         

        [8.           Continuing
Obligations After Separation from Employment.  I agree that before
and after my separation from employment, I will continue to abide by any Company
policies and procedures relating to confidentiality, inventions, non-disclosure
and/or other employment obligations that survive the termination of my
employment.  I agree that I will continue to be bound by all
post-employment obligations as required by the Company’s policies and procedures
or as required in any other written agreement between myself and the
Company.  I agree that the Plan and this Release do not affect or
diminish in any manner any of my post-employment obligations to the Company,
including, but not limited to, those specifically described within this
Release.]1

         

        [9.           Entire
Agreement. I understand that
the Plan and this Release contain the entire agreement and understanding between
me and the Company regarding my employment and separation from that employment
and that no other covenants or promises have been made except those contained in
the Plan and this Release.  The Plan and this document supersede all
other agreements and arrangements between the Company and me, whether written or
oral.]2

         

        10.           Attorneys’
Fees.  I
further agree I am fully responsible for any attorneys’ fees incurred by me in
consulting with an attorney of my choice in connection with my review or
execution of this document.

         

        11.           Severability.  I
agree that should any court or arbitrator determine that any clause, sentence,
provision, paragraph, or part of this Release is illegal, invalid, or
unenforceable, that court’s or arbitrator’s determination shall not affect,
impair, or invalidate the remainder of the Release, and the remainder of the
Release will remain in full force and effect.

         

        12.           Headings.  I
understand that all headings used in this Release are intended for convenience
and reference only and do not in any manner amplify, limit, modify or amend the
Release.  A court or arbitrator shall not use any headings in the
construction or interpretation of any section of the
Release.

         

        
          EXECUTED
in multiple originals this ____ day of ___________,
________.

           

          
            
              	 	Signature of
      Employee	 
	 	 	 
	 	 	 
	 	 	 
	 	WITNESS 	 


            

          

           

          NON-REVOCATION
STATEMENT

           

          I, _______________, acknowledge that at least seven (7)
days have expired since the execution of the Release Agreement by me on the ____
day of ___________, ________, and I knowingly and voluntarily elect not to
revoke this waiver and release of my rights under the Age Discrimination in
Employment Act, as amended, 29 U.S.C. § 621 et
seq.

           

          EXECUTED
in multiple originals this ____ day of ___________, ________.

           

          
            
              
                	 	 	 
	 	
                        Signature of
      Employee

                      	 
	 	 	 


              

            

            

              
 

          

        

        
          1
Note:  This provision should refer to any post-employment obligations
by specific policy name or agreement name, where applicable.  Seek
guidance from legal department.

           

        

        
          2
Note:  Before using this form, managers must first consider whether
any of the individuals who are asked to sign this agreement have any other
contracts or written agreements with the Company.  In such a case, it
is imperative that you seek guidance from the legal
department.

           

        

      

       

       

       

       

      
        
           

        

        
           

          
            
 

        

        
           

        

      

      Exhibit 1

       

      45-DAY
WAIVER

       

      DISCLOSURES

       

      Covered
Class of Employees, Eligibility and Time
Limits.

       

      The
individuals selected to participate in the Plan are those employees of
___________ (Company) who incur Involuntary Terminations as defined in the
Quicksilver Resources Inc. Second Amended and Restated Key Employee Change in
Control Retention Incentive Plan (the “Plan”).  This program will end
on the date of _________.

       

      Eligible
Employees.

       

      The
following is a list of the job titles and ages of all employees who are
eligible to
participate in the Plan:

       


       

      
        	 	
                Job
      Title

              	 	
                Age

              	 
	 	
                 

              	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


      

       

      Employees
Not Eligible.

       

      The
following is a list of the ages of employees who are not eligible to participate
in the Plan:

       

      
         

        
          	 	
                  Job
      Title

                	 	
                  Age

                	 
	 	
                   

                	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


        

         

      

      
        
           

        

        
           

          
            
 

        

        
           

        

      

      Exhibit B

       

      
        
          QUICKSILVER
RESOURCES INC.

          SECOND
AMENDED AND RESTATED

          KEY
EMPLOYEE

          CHANGE
IN CONTROL RETENTION INCENTIVE PLAN

        

      

       

      List
of Key Employees of Quicksilver Resources Inc.