Document:

EXHIBIT 10.1

 

AMENDED AND RESTATED

 

EXCO RESOURCES, INC.

 

SEVERANCE PLAN

 

(EFFECTIVE AS OF AUGUST 17, 2004)

 

 

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ONE

  	
  PURPOSE OF PLAN

  	
   

  
	
   

  	
   

  	
   

  
	
  TWO

  	
  PRIOR
  SEVERANCE ARRANGEMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  THREE

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  FOUR

  	
  ELIGIBILITY AND SEVERANCE PAY BENEFITS

  	
   

  
	
  4.1

  	
  Eligibility

  	
   

  
	
  4.2

  	
  Release Form

  	
   

  
	
  4.3

  	
  Termination of Eligibility
  for Severance Pay

  	
   

  
	
  4.4

  	
  Severance Pay

  	
   

  
	
   

  	
   

  	
   

  
	
  FIVE

  	
  FUNDING

  	
   

  
	
   

  	
   

  	
   

  
	
  SIX

  	
  CLAIMS PROCEDURE

  	
   

  
	
  6.1

  	
  Filing and
  Initial Determination of Claim

  	
   

  
	
  6.2

  	
  Duty of Plan
  Administrator Upon Denial of Claim

  	
   

  
	
  6.3

  	
  Request for Review of Claim
  Denial

  	
   

  
	
  6.4

  	
  Decision on Review of Denial

  	
   

  
	
   

  	
   

  	
   

  
	
  SEVEN

  	
  ADMINISTRATION OF THE PLAN

  	
   

  
	
  7.1

  	
  Plan Administrator

  	
   

  
	
  7.2

  	
  Responsibilities

  	
   

  
	
  7.3

  	
  Allocation and
  Delegation of Plan Administrator Responsibilities

  	
   

  
	
  7.4

  	
  Actions of Fiduciaries

  	
   

  
	
  7.5

  	
  General Administrative Powers

  	
   

  
	
  7.6

  	
  Appointment of
  Professional Assistance

  	
   

  
	
  7.7

  	
  Discretionary Acts

  	
   

  
	
  7.8

  	
  Responsibility of Fiduciaries

  	
   

  
	
  7.9

  	
  Indemnity by Employer

  	
   

  
	
   

  	
   

  	
   

  
	
  EIGHT

  	
  ADOPTION OF PLAN BY SUBSIDIARY

  	
   

  
	
   

  	
   

  	
   

  
	
  NINE

  	
  AMENDMENT
  OF THE PLAN

  	
   

  
	
   

  	
   

  	
   

  
	
  TEN

  	
  TERMINATION
  OF THE PLAN

  	
   

  
	
   

  	
   

  	
   

  
	
  ELEVEN

  	
  VESTING

  	
   

  
	
   

  	
   

  	
   

  
	
  TWELVE

  	
  STATUS OF EMPLOYMENT RELATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  THIRTEEN

  	
  RESTRICTIONS ON ASSIGNMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  FOURTEEN

  	
  APPLICABLE LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  FIFTEEN

  	
  INTERPRETATION OF THE PLAN

  	
   

  
					

 

i

 

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 as of August 17, 2004 (the
“Effective Date”), in accordance with the terms and conditions contained herein.  The severance plan originally adopted on
August 15, 2002, is replaced in its entirety with this Amended and
Restated EXCO Resources, Inc. Severance Plan (the “Plan”) and no provision of
the August 15, 2002, 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 or EXCO Holdings Inc. 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 or EXCO Holdings Inc. 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)          the
sale or transfer of substantially all of the assets of North Coast Energy, Inc.
to a third party 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 individuals who held the voting stock of the
selling company immediately prior to the transaction; or

 

(iv)          the
sale of a controlling interest (fifty-one percent (51%) or more shall
constitute a controlling interest) of the issued and outstanding stock of
either North Coast Energy, Inc. or of any other subsidiary of EXCO Holdings
Inc. or EXCO Resources, Inc. to a third party and less than a majority of the
combined voting power of the then outstanding securities of such purchasing
entity immediately after such sale or transfer is held by the individuals who
held the voting stock of the selling company immediately prior to the
transaction; or

 

(v)           North
Coast Energy, Inc. is merged or consolidated into or with another entity and as
a result of the merger or consolidation less than a majority of the combined
voting power of the then outstanding securities of either entity immediately
after such transaction is held by the holders of voting stock of the selling
company immediately prior to the transaction.

 

However, in the event EXCO Holdings is sold to a third party and a
group headed by Douglas H. Miller repurchases or purchases back some or all of
the assets of a subsidiary or the stock of the subsidiary, then all eligible
employees, even those retained by the purchasing group lead by Douglas H.
Miller, will receive severance benefits if they are Eligible Employees under
the terms of this Plan.

 

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, its parent organization or any of its affiliate organizations, 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 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. Notwithstanding the foregoing, any employee who owns, either
directly or beneficially, Class A or Class B Common Stock of EXCO (excluding
stock options for Class A Common Stock granted under the EXCO Resources, Inc.
2004 Long Term Incentive Plan) as of the date of a Change of Control shall not
be an Eligible Employee.

 

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           “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:

 

(i)            the
Eligible Employee 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;

 

(ii)           the
Eligible Employee incurs a 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, which is not remedied within ten (10) calendar days after
receipt by the Employer of written notice from the Eligible Employee of such
change; 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.

 

3.10         “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.

 

3.11         “Net Proceeds” is the
amount to which an Eligible Employee is entitled to receive for the sale of
Class A Common Stock of the Company, including the Class A common Stock the
Eligible Employee would hold if at the time of the Change in Control the
Eligible Employee exercised his outstanding stock options granted under the
EXCO Resources 2004 Long Term Incentive Plan and immediately sold such shares,
less the cost of his exercise of such options.

 

3.12         “Plan” shall mean the
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 the Effective Date and ending on December
31, 2002, and thereafter the twelve (12)-month period ending on each
December 31.

 

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 less such employee’s
Net Proceeds. If such amount is equal to or less than zero, the employee shall
receive no Severance 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 $.02 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;

 

(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 United States
operation of the Company or its parent organization or any of its affiliate
organizations, regardless of whether such Eligible Employee accepts such offer;

 

(e)                                  the Eligible Employee’s
receipt and acceptance of a transfer of employment to any other United States
or Canadian operation of the Company or its parent organization or any of its
affiliate organizations; or

 

(f)                                    the Eligible
Employee’s Net Proceeds equals or exceeds the Eligible Employee’s Severance
Pay.

 

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 fourteen
(14) 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.  Any Severance Pay
shall be offset by any other severance pay or other income replacement, or any
pay or wages in lieu of notice of a plant closing, or any pay or wages paid
following issuance of a notice of a plant closing, including without limitation
any mandated severance pay benefits required under any applicable law.

 

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
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 being 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.

 

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 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.  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.

 

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.

 

 

IN WITNESS WHEREOF, EXCO
Resources, Inc. has caused the Plan to be signed by its duly authorized officer
on this 18th day of November, 2004.

 

 

	
   

  	
  EXCO RESOURCES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Douglas Ramsey

  
	
   

  	
   

  	
   

  
	
   

  	
  Its: Vice President and Chief Financial Officer

  

 

 

SCHEDULE A

 

 

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.

 

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                               ,
2004.

 

 

	
   

  	
   

  	
   

  
	
  WITNESS

  	
   

  	
  EMPLOYEE SIGNATURE

  

 

 

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.

 

 

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                                              ,
2004.

 

 

	
   

  	
   

  	
   

  
	
  WITNESS

  	
   

  	
  EMPLOYEE SIGNATUREEXHIBIT 10.2

 

FIRST AMENDMENT TO

 

The EXCO Holdings Inc.

 

2004 LONG-TERM INCENTIVE PLAN

 

The EXCO Holdings Inc. 2004
Long-term Incentive Plan (the “Plan”) is hereby amended as of November 18, 2004
as follows:

 

1.                                       All
capitalized terms used herein but not defined herein shall have the meaning set
forth in the Plan.

 

2.                                       Section
15.7 is hereby amended by deleting the text in its entirety and substituting in
lieu thereof the following:

 

“15.7      Assignability.  Incentive Stock Options may not be
transferred, assigned, pledged, hypothecated or otherwise conveyed or
encumbered other than by will or the laws of descent and distribution and may
be exercised during the lifetime of the Participant only by the Participant or
the Participant’s legally authorized representative, and each Award Agreement
in respect of an Incentive Stock Option shall so provide. The designation by a
Participant of a beneficiary will not constitute a transfer of the Stock
Option.  The Committee may waive or
modify any limitation contained in the preceding sentences of this
Section 15.7 that is not required for compliance with Section 422 of the
Code.

 

Except as
otherwise provided herein, Nonqualified Stock Options  and SARs may not be transferred, assigned,
pledged, hypothecated or otherwise conveyed or encumbered other than by will or
the laws of descent and distribution. 
The Committee may, in its discretion, authorize all or a portion of a
Nonqualified Stock Option or SAR to be 
granted to a Participant on terms which permit transfer by such Participant
to (i) the spouse (or former spouse), children or grandchildren of the
Participant (“Immediate Family Members”), (ii) a trust or trusts for the
exclusive benefit of such Immediate Family Members, (iii) a partnership in
which a majority of the partnership interests are owned by (1) the Participant
or such Immediate Family Members and/or (2) entities which are substantially
controlled by the Participant or Immediate Family Members, (iv) an entity
exempt from federal income tax pursuant to Section 501(c)(3) of the Code or any
successor provision, or (v) a split interest trust or pooled income fund
described in Section 2522(c)(2) of the Code or any successor provision, provided
that (x) there shall be no consideration for any such transfer,
(y) the Award Agreement pursuant to which such Nonqualified Stock Option
or SAR is granted must be approved by the Committee and must expressly provide
for transferability in a manner consistent with this Section, and
(z) subsequent transfers of transferred Nonqualified Stock Options or SARs
shall be prohibited except those by will or the laws of descent and
distribution.

 

Following any
transfer, any such Nonqualified Stock Option and SAR shall continue to be
subject to the same terms and conditions as were applicable immediately prior
to transfer, provided that for purposes of Articles 8, 9, 11, 13 and 15
hereof the term “Participant” shall be deemed to include the transferee.  The events of Termination of Service shall
continue to be applied with respect to the original Participant, following
which the Nonqualified Stock Options and SARs shall be exercisable by the
transferee only to the extent and for the periods specified in the Award
Agreement.  The Committee and the Company
shall have no obligation to inform any transferee of a Nonqualified Stock
Option or SAR of any expiration, termination, lapse or acceleration of such
Stock Option or SAR.  The Company shall
have no obligation to register with any federal or state securities commission
or agency any Common Stock issuable or issued under a Nonqualified Stock Option
or SAR that has been transferred by a Participant under this Section 15.7.”

 

 

3.                                       Except
as expressly amended hereby, the Plan continues to remain in full force and
effect in accordance with its terms.

 

IN WITNESS
WHEREOF, the Company has caused this instrument to be executed as of November
18, 2004, by its Chief Executive Officer and Secretary pursuant to prior action
taken by the Board.

 

	
   

  	
   

  	
  EXCO
  HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ T.W.
  EUBANK

  	
   

  
	
   

  	
   

  	
  Name: T.W.
  Eubank

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ J. DOUGLAS RAMSEY

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