Document:

Executive Variable Compensation Plan

 Exhibit 10.5 
  
 

 
  
 Executive Variable Compensation
Plan 
  
 The following summary highlights key features of Red
Hat’s Executive Variable Compensation Plan (the “Plan”). 
  

	I.	PURPOSE 

  
 The Plan has been designed to motivate and reward key management employees whose efforts impact the performance of Red Hat Incorporated (the
“Company”) and its subsidiaries through the achievement of pre-established financial and individual objectives. 
  
 Performance under the Plan is measured on the fiscal year and payments under the Plan are made annually. 
  

	II.	ELIGIBILITY 

  
 Officers and key management employees may be eligible to participate in the plan, upon the recommendation by the Chief Executive Officer of the Company
and approval by the Board of Directors. An employee who is eligible to participate in any other cash incentive plan of the company is not eligible to participate in this Plan. 
  

	III.	AWARD CRITERIA 

  
 The Board of Directors, upon the recommendation by the Compensation Committee, must approve the Company performance objectives that are used to determine
awards paid under this plan. Performance metrics may include one or more of (but not limited to) the following: net revenues, gross margins, operating income, pre-tax income, net income, EPS (basic and diluted) EBITDA, return on invested capital,
return on equity, cash flow from operations, or changes in deferred revenues. 
  
 In general, 100% of performance under this Plan will be based on financial objectives. At the discretion of the Compensation Committee, up to 25% of the individual award may be based on subjective factors such
as individual performance or achievement of other goals not stated in the Plan. In other words, each Participant is eligible to receive no less than 75% of the award earned on the basis of financial performance, and is eligible for up to 125%.
 
  

	IV.	TARGET AWARDS 

  
 A Target Award percentage is established for each position eligible to participate in the Plan. Target Awards (TA’s) may range from 10% to 100%,
depending on position, of each participant’s base pay in effect at the conclusion of the performance period (or pro rata at the time of becoming a participant). 
  
 Generally, the participants receive the TA when performance under the Plan meets, but does not exceed, the pre-established
performance objectives. 
  

	V.	PERFORMANCE MEASUREMENT 

  

			
	 Minimum
	  	This is the lowest level of performance at which an award will be generated for this particular objective of the plan. The award paid for performance at the minimum level is 5% of Target
Award. There will be no payment for performance below the minimum level.
		
	 Target
	  	This is the expected level of performance based on the current year’s financial plan, and will generally result in a payment equal to 100% of Target Award.
		
	 Maximum
	  	This is the performance level for which the maximum award under the plan will be paid. The maximum award under the plan is limited to 225% of the Target Award.

  

	VI.	AWARD CALCULATION 

  
 Attainment of the financial objectives of the Plan is measured based on actual results versus Plan targets. Payouts are expressed as percentage of target
bonus for each participant versus actual levels of financial performance versus Plan targets. If actual results are between stated percentages, interpolations of payout percentages are to be applied. 
  

	VII.	INDIVIDUAL OBJECTIVES 

  
 The Compensation Committee may approve the use of individual objectives as part of the participant’s performance criteria under the Plan. The use of
individual objectives is subject to the following requirements: 
  

	 	•	Not to exceed 25% of the total award 

  

	 	•	Individual objectives must be specifically identified at the beginning of the plan year and must be quantifiable in terms of both the targeted achievement and the time frame in
which the objective is to be completed. 

  

	 	•	Each objective must specify minimum, target and maximum performance levels. 

  

	VIII. 	ALTERNATIVE CALCULATIONS 

  
 There may be circumstances under which the financial performance of the Company does not generate an award under this program. The nature and scope of the
Company’s operations are such that at times unanticipated economic and market conditions may render pre-established financial objectives unattainable in any given plan year. If, in the opinion of the Committee, such circumstances should arise,
then bonus payments not to exceed 50% of Target Award may be paid. 
  

	IX.	MODIFICATIONS 

  
 If, during a Plan Year, there has occurred or should occur, in the opinion of the Company, a significant beneficial or adverse change in economic
conditions, the indicators of growth or recession in the Company’s business segments, the nature of the operations of the Company, or applicable laws, regulations or accounting practices, or other matters which were not anticipated by the
Company when it approved objectives for the Plan Year and which, in the Company’s judgment, had, have, or are expected to have a substantial positive or negative effect on the performance of the Company as a whole, the Compensation Committee,
subject to ratification by the Board, may modify or revise the Performance Objectives for the Plan Year in such manner as it may deem appropriate in its sole judgment. By way of illustration, and not limitation, such significant changes might result
from sales of assets, or mergers, acquisitions, divestitures, or spin-offs.  
  

	X.	PAYMENT 

  
 Any awards generated under the Plan must be approved by the Compensation Committee and ratified by the Board of Directors. It is anticipated that any
awards generated in during the fiscal year (performance period) will be paid during the first quarter of the subsequent fiscal year. 
  
 EVC-eligible employees hired during the calendar year will receive a prorated bonus based upon the actual date of hire. Employees terminating prior to the
payout date are not eligible for payment of any award under this plan unless termination is due to retirement or economic reduction in force. In such cases, any bonus payments will be prorated to the date of termination and determined on the basis
of bonuses actually paid to similarly situated employees.Incentive Arrangements Agreement

 Exhibit 10.1 
  
 INCENTIVE ARRANGEMENTS AGREEMENT 
  
 THIS AGREEMENT made as of September 24, 2004 
  
 AMONG: 
  
 QUICKSILVER RESOURCES INC., a corporation incorporated under the laws of Delaware (hereinafter called “QRI”) 
  
 - and - 
  
 MGV ENERGY INC., a corporation incorporated under the laws of the Province of Alberta (hereinafter called
“MGV”) 
  
 - and - 
  
 J. MICHAEL GATENS, an individual resident in the City of Calgary, in
the Province of Alberta (hereinafter called “Gatens”) 
  
 - and - 
  
 GEORGE W. VONEIFF, an individual
resident in the City of Calgary, in the Province of Alberta (hereinafter called “Voneiff”) 
  
 - and - 
  
 BROWN HOWARD, an individual resident in the City of Calgary, in the Province of Alberta (hereinafter called “Howard”) 
  
 - and - 
  
 PETER A. BASTIAN, an individual resident in the City of Keller, in the State of Texas (hereinafter called “Bastian”) 
  
 WHEREAS: 
  

	1.	 	The Gatens Agreement and the Voneiff Agreement prior to their amendment and restatement, and the Howard Agreement and the Bastian Agreement, refer to the MGV Incentive, which the
Executives agreed to share among them on the basis set forth in the Executive Letter; and 

  

	2.	 	 The Executive Agreements have been or will be amended, restated or terminated, and the Parties have agreed to replace the MGV Incentive with the Reserve 

	 	 
Incentive, Stock Options and Non-Compete Payment, all on the basis set forth herein, 

  
 NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of these premises and the
mutual covenants and agreements set forth herein, the Parties hereby covenant and agree as follows: 
  
 ARTICLE 1 
 DEFINITIONS AND INTERPRETATION 
  

	1.1	 	Definitions Generally 

  
 In this Agreement, including the recitals hereto and this section 1.1: 
  
 “Affiliate” means any Person that directly, or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, a Party, and control in this context means control in fact whether through the ownership of shares, participation rights or representation on the board of directors or other governing body or
agency; 
  
 “Agreement” means this Incentive
Arrangements Agreement including the Schedules, as amended from time to time; 
  
 “BCFE” means a billion standard cubic feet of gas equivalent, with crude oil and natural gas liquids converted to gas equivalent at a ratio of one Barrel equal to six thousand standard cubic feet of
gas; 
  
 “Barrel” means a standard barrel of
crude oil (or natural gas liquids) having a volume of approximately 42 United States gallons or 34.9722 Imperial (Canadian) gallons; 
  
 “Bastian Agreement” means the Incentive Agreement made September 24, 2002 among MGV, Bastian and QRI; 
  
 “Bastian Employment Agreement” means the letter agreement
made between QRI and Bastian dated February 1, 2001 and accepted by Bastian on February 15, 2001; 
  
 “Bastian Stock Option Agreement” means the agreement granting to Bastian the Stock Options he is entitled to provided for in section 3.2,
such agreement to be in the form set forth in Schedule ”A”; 
  
 “Business Combination Transaction” has the meaning ascribed thereto in the Stock Option Agreements; 
  
 “Business Day” means a day other than a Saturday, Sunday or Statutory holiday in Alberta or Texas; 
  

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 “Cause” means fraud, embezzlement, theft, disclosure of information in respect of the
affairs and business of the Executive’s employer (MGV, QRI or their respective Affiliates, as the case may be), having a material adverse effect on the Corporation, material dishonesty during the course of employment, a material breach of this
Agreement, acting in a manner contrary to the interests of the Corporation with knowledge that such actions will cause material harm to or could cause material harm to the Corporation, gross incompetence, willful disobedience of a lawful and
reasonable order of the Board, and conduct proven to have constituted sexual harassment, provided that the occurrence of a Disability shall in no event constitute “Cause”; 
  
 “Competing Entity” means an individual, proprietorship, firm, partnership, corporation or other legal
entity engaged in whole or in part in the Oil & Gas Business; 
  
 “Consulting Arrangement” has the meaning ascribed thereto in section 4.5; 
  
 “Disability” shall be deemed to have occurred: 
  

	 	(a)	 	upon the death of the Executive; or 

  

	 	(b)	 	upon the delivery by two medical doctors who are independent of the Executive and MGV, or QRI, as the case may be, of written statements certifying that the Executive is physically
or mentally disabled and by reason of such disability can not reasonably be expected to fulfill his employment duties for a period of at least twelve (12) consecutive months; 

  
 “Effective Date” means September 24, 2004; 
  
 “Execution Date” means the date upon which this Agreement
has been executed and delivered by all of the Parties; 
  
 “Executive Agreements” means, collectively, the Gatens Agreement, the Voneiff Agreement, the Howard Agreement and the Bastian Agreement and “Executive Agreement” means any one of them, as the particular
context requires; 
  
 “Executive Letter” means
the letter agreement made among the Executives dated September 24, 2002 setting out the sharing of the MGV Incentive amongst them; 
  
 “Executives” means Gatens, Voneiff, Howard and Bastian and “Executive” means any one of them, as the particular context
requires; 
  
 “Gatens Agreement” means the
Executive Employment Agreement made December 22, 2000 among MGV, Gatens and QRI, as amended and restated effective September 27, 2004; 
  

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 “Gatens Stock Option Agreement” means the agreement granting to Gatens the Stock Options
he is entitled to pursuant to section 3.2, such agreement to be in the form set forth in Schedule ”A”; 
  
 “Howard Agreement” means the Incentive Agreement made December 22, 2000 among MGV, Howard and QRI; 
  
 “Howard Stock Option Agreement” means the agreement
granting to Howard the Stock Options he is entitled to pursuant to section 3.2, such agreement to be in the form set forth in Schedule ”A”; 
  
 “MCFE” means one thousand standard cubic feet of gas equivalent, with crude oil and natural gas liquids converted to gas equivalent at a
ratio of one Barrel being equal to six thousand standard cubic feet of gas; 
  
 “MGV Board” means the board of directors of MGV; 
  
 “MGV Incentive” has the meaning ascribed thereto in the Gatens Agreement and the Voneiff Agreement as at December 22, 2000; 

 
 “Non-Compete Payment” has the meaning ascribed thereto
in section 4.1(b); 
  
 “Non-Compete Period” has
the meaning ascribed thereto in section 4.1(a); 
  
 “Notice” has the meaning ascribed thereto in section 6.1; 
  
 “Oil & Gas Business” means the business of exploration for oil and gas (including coalbed methane) and the subsequent development, production, processing, transportation and marketing thereof, and
all other matters incidental thereto; 
  
 “Opportunity” has the meaning ascribed thereto in section 4.2; 
  
 “Participating Interest Share” has the meaning ascribed thereto in section 5.1; 
  
 “Parties” means the parties to and bound by this Agreement, and “Party” means any one of them, as the particular context
requires; 
  
 “Proved Reserves” means the
quantity of crude oil, natural gas and natural gas liquids allocable to MGV’s net interest estimated in accordance with the applicable rules of the SEC from time to time, which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions; i.e. prices and costs as of the date the estimate is made, provided that for purposes of this Agreement crude oil reserves shall be
converted to the equivalent natural gas reserves at a ratio of six thousand standard cubic feet of natural gas for each barrel of oil; 
  

 - 4 - 

 “QRI Annual Reserve Report” means the annual reserves report prepared on behalf of QRI
for each year that is filed with the SEC; 
  
 “QRI
Designate” has the meaning ascribed thereto in section 4.2; 
  
 “Reserve Incentive” has the meaning ascribed thereto in section 3.3; 
  
 “Restricted Area” means those lands within the areas outlined and described in Schedule ”B”; 
  
 “SEC” means the Securities and Exchange Commission of the
United States of America; 
  
 “Stock Options”
means the options to acquire common shares of QRI to be granted to the Executives by the Stock Option Agreement pursuant to section 3.2; 
  
 “Stock Option Agreements” means, collectively, the Gatens Stock Option Agreement, the Voneiff Stock Option Agreement, the Howard Stock
Option Agreement and the Bastian Stock Option Agreement, and Stock Option Agreement or means any one of them, as the particular content requires; 
  
 “Voluntary Resignation” for the purposes of the Agreement means: 
  

	 	(a)	 	in respect of either of Howard or Bastian, a voluntary resignation by such Executive from his employment with MGV or QRI, as the case may be, provided however, that any termination
of employment by operation of law or otherwise due to Disability shall not constitute a voluntary resignation for purposes hereof; and 

  

	 	(b)	 	in respect of either of Gatens or Voneiff, has the meaning ascribed thereto in the Gatens Agreement or the Voneiff Agreement, respectively. 

  
 “Voneiff Agreement” means the Executive Employment
Agreement made December 22, 2000 among MGV, Voneiff and QRI, as amended and restated effective September 27, 2004 ; and 
  
 “Voneiff Stock Option Agreement” means the agreement granting to Voneiff the Stock Options he is entitled to pursuant to section 3.2,
such agreement to be in the form set forth in Schedule ”A”. 
  

	1.2	 	Interpretation 

  
 Unless a contrary intention appears in context, or express provisions of this Agreement provide otherwise: 
  

	 	(a)	 	the inclusion of headings and an index herein are for convenience of reference only and shall not be considered in the construction or interpretation of the provisions hereof;

  

 - 5 - 

	 	(b)	 	unless otherwise stated, references to an Article, section or Schedule are references to those set forth in this Agreement; 

  

	 	(c)	 	references herein to an enactment, statute or other legislative instrument include all regulations or subordinate legislation issued, promulgated or otherwise in effect pursuant
thereto from time to time, whether or not so stated herein; 

  

	 	(d)	 	words importing a particular gender shall include all genders; 

  

	 	(e)	 	unless otherwise expressly stated, all monetary amounts referenced herein shall be in the lawful currency of the United States of America; 

  

	 	(f)	 	capitalized words and phrases used herein which are derivatives of words or phrases, or vice versa, which are otherwise defined herein, shall have a corresponding
meaning; 

  

	 	(g)	 	where a period of time is defined, referenced or calculated from a certain date or event, such period of time shall be calculated excluding that date but including the end or last
date; and 

  

	 	(h)	 	time shall in all respects be of the essence hereof. 

  

	1.3	 	Governing Law and Attornment 

  
 Except as may otherwise be provided in the Stock Option Agreement relative thereto, this Agreement shall be subject to and interpreted, construed and
enforced in accordance with the laws applicable in the Province of Alberta, except that any conflicts of laws principles or rules embodied therein shall not apply to preclude the Province of Alberta as the choice of law for purposes hereof. Each of
the Parties hereby attorn to the exclusive jurisdiction of the Courts of the Province of Alberta, and all courts of appeal therefrom, for the resolution of any disputes arising under this Agreement. The Parties shall, in the satisfaction of any of
their respective obligations hereunder, be entitled to comply with any law applicable hereto, which, in the case of QRI shall include satisfaction of any withholding or similar obligations to any taxation or other government authorities or agencies
with respect to any payments to be made hereunder. 
  

	1.4	 	Conflicts 

  
 Any conflict or inconsistency between: 
  

	 	(a)	 	any provision of the main body of this Agreement and any Schedule shall be resolved in favour of the main body of this Agreement to the extent of such conflict or inconsistency; and

  

	 	(b)	 	this Agreement and any of the Executive Agreements shall be resolved in favour of this Agreement to the extent of such conflict or inconsistency. 

  

 - 6 - 

	1.5	 	Severability 

  
 If any provision of this Agreement is determined by a court of competent jurisdiction to be unenforceable, such provision shall be deemed to be severed
from this Agreement and of no force or effect whatsoever. Subject thereto, and provided such severance would not materially and adversely compromise the substance of the bargain of the Parties set forth herein, this Agreement as so amended shall
remain in full force and effect between the Parties, enforceable against each of them in accordance with its respective terms. 
  
 ARTICLE 2 
 SCHEDULES

  

	2.1	 	Schedules 

  
 The following Schedules are attached to and form part of this Agreement: 
  

	 	(a)	 	Schedule ”A” – Form of Stock Option Agreement; and 

  

	 	(b)	 	Schedule “B” – Maps of the Restricted Area. 

  
 ARTICLE 3 
 INCENTIVE
ARRANGEMENTS 
  

	3.1	 	Executive Agreements 

  
 On the Execution Date: 
  

	 	(a)	 	MGV, Gatens and QRI agree that the condition precedent set forth in Section 16.9 of the Gatens Agreement has been satisfied such that the Gatens Agreement comes into full force and
effect in accordance with its terms; 

  

	 	(b)	 	MGV, Voneiff and QRI agree that the condition precedent set forth in Section 16.9 of the Voneiff Agreement has been satisfied such that the Voneiff Agreement comes into full force
and effect in accordance with its terms; 

  

	 	(c)	 	MGV, Howard and QRI agree the Howard Agreement is terminated in its entirety; and 

  

	 	(d)	 	MGV, Bastian and QRI agree that the Bastian Agreement is terminated in its entirety, 

  
 the foregoing all effective as of the Effective Date. 
  

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	3.2	 	Stock Options 

  

	 	(a)	 	QRI hereby covenants and agrees with the Executives to grant Stock Options to each of them by Stock Option Agreement, to be entered into concurrently with the execution of this
Agreement, in a number equal to their respective Participating Interest Share of 1,183,422 Stock Options, which number of Stock Options for each Executive are, unless otherwise provided herein or pursuant hereto, as follows:

  

			
	 Gatens
	  	497,037
	 Voneiff
	  	497,037
	 Howard
	  	165,680
	 Bastian
	  	23,668
	 	  	

	 TOTAL
	  	1,183,422
	 	  	

  

	 	(b)	 	The Stock Options granted pursuant to section 3.2(a) shall have a strike price of $31.27 per share, be fully vested on the December 31, 2005 and have an expiry date of December 31,
2008. 

  

	 	(c)	 	If all or any portion of the Stock Options are purchased or settled for cash prior to December 31, 2005 in connection with a Business Combination Transaction, and the per share
amount (determined without reduction for any tax withholding or setoff) payable to the Executives on account of shares that were subject to the Stock Options immediately prior to such purchase or settlement (the “Per Share Proceeds”) is
less than $6.76, then QRI shall promptly pay to each Executive an amount equal to the product of: 

  

	 	(i)	 	the aggregate number of shares subject to the Stock Options held by the Executive that were so purchased and settled; and 

  

	 	(ii)	 	the difference that results from subtracting: 

  

	 	A.	the Per Share Proceeds from 

  

	 	B.	$6.76. 

  

	 	(d)	 	The obligations under this section 3.2 shall apply to each Executive on a several basis. 

  

	3.3	 	Reserve Incentive 

  

	 	(a)	 	If the Proved Reserves reported in the QRI Annual Reserve Report applicable for the year ending on December 31, 2005 are equal to or greater than 400 BCFE, each Executive shall,
subject to any applicable terms and conditions of his Executive Agreement, be entitled to his 

  

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 Participating Interest Share of a reserve incentive bonus (the “Reserve Incentive”) determined
as a base amount of $5,000,000 plus $0.05 for each MCFE of Proved Reserves above 400 BCFE up to but not exceeding 1,000 BCFE. If the Proved Reserves as so calculated are below 400 BCFE as at December 31, 2005, no Reserve Incentive shall apply or be
payable to the Executives. 
  

	 	(b)	 	If a Business Combination Transaction, or other transaction, is proposed to occur prior to December 31, 2005 which would or could result in no QRI Annual Reserve Report being
prepared and filed with the SEC for that year, or no Proved Reserves being reported therein for that year, QRI shall obtain the agreement of the successor entity to QRI, or MGV, as applicable, whereby it covenants and agrees to cause the Proved
Reserves as at December 31, 2005 to be determined on the same basis and within the same time frame as would have been required in respect of a QRI Annual Reserve Report had it been required for filing with the SEC for the period ending on December
31, 2005. The calculation of Proved Reserves so made shall be provided by QRI, or any applicable successor, before March 15, 2006 in a written report to the Executives, and shall be utilized in lieu of the QRI Annual Reserves Report for the purposes
of calculating the Reserve Incentive provided for hereunder. 

  

	 	(c)	 	Each of Howard and Bastian shall be entitled to his Participating Interest Share of the Reserve Incentive, determined in accordance with this Agreement, provided that
notwithstanding anything to the contrary provided in this Agreement, if, prior to December 31, 2005, the employment of such Executive with MGV or QRI, as the case may be, has been terminated for Cause, or he has otherwise terminated his employment
with MGV or QRI, as the case may be, pursuant to a Voluntary Resignation, that Executive shall not be entitled to any portion of the Reserve Incentive. 

  

	3.4	 	Payment Terms 

  
 If a Reserve Incentive is payable pursuant to section 3.3, QRI shall, on or before March 15, 2006, pay, or cause to be paid, to each Executive, his
Participating Interest Share of the Reserve Incentive in cash, common shares of QRI, or any combination thereof, such payment method to be determined in QRI’s sole discretion. If QRI common shares are issued to the Executive in whole or in part
satisfaction of this obligation, their equivalent cash value shall be determined based on the trading value of QRI common shares on the latest trading date prior to the date upon which payment or distribution of QRI common shares is made pursuant
hereto. 
  

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 ARTICLE 4 
 NON-COMPETITION 
  

	4.1	 	Non-Competition 

  

	 	(a)	 	Non-compete period (the “Non-Compete Period”) means in respect of each Executive the two (2) year period commencing on the earlier of: 

  

	 	(i)	 	the date prior to December 31, 2005 that the Executive’s employment with MGV or QRI is terminated for Cause or as a result of a Voluntary Resignation; and

  

	 	(ii)	 	January 1, 2006. 

  
 Notwithstanding the foregoing, if the Executive is on January 1, 2006 engaged by MGV or QRI, or an affiliate of either, through either an employment or
consulting agreement, or is a member of the MGV Board, the Non-Compete Period for the Executive means the two (2) year period commencing on the later of the date the Executive’s employment or consulting agreement is terminated, for any reason,
and the date the Executive ceases to be a member of MGV’s Board. 
  

	 	(b)	 	In consideration of the Executives agreeing to the provisions in this Article 4, QRI agrees to pay to each Executive, within seven (7) days of the earlier of the commencement of
that Executive’s Non-Compete Period and January 1, 2006, his Participating Interest Share of the total amount of Four Million ($4,000,000) Dollars (the “Non-Compete Payment”). 

  

	 	(c)	 	The Executives severally agree with QRI and MGV that, provided the Non-Compete Payment has been made to the Executive, the Executive, will not, during his respective Non-Compete
Period, compete, either directly or indirectly, with either of QRI or MGV within the Restricted Area, except on the basis permitted by section 4.2. If the provisions of this section 4.1(b) are breached by an Executive, that Executive agrees that,
without limiting any other rights or remedies either or both of QRI and MGV may have against him, QRI or MGV shall be entitled to seek an injunction or other similar remedy prohibiting the Executive from continuing the breach without posting a bond
or undertaking as to damages, to which he will not object. 

  

	 	(d)	 	The Parties agree that the provisions of this section 4.1 are mandatory, and the benefits and obligations provided for hereunder cannot be waived by any Party without the prior
express agreement of the other Parties. 

  

	4.2	 	Exception to Non-Compete 

  
 If, during the Non-Compete Period, an Executive is retained under a Consulting Arrangement and, either directly or indirectly, is provided with, creates,
develops or 
  

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 arranges an opportunity to participate in an Oil & Gas Business opportunity (the “Opportunity”) within the
Restricted Area, such Opportunity shall be first offered by the Executive to MGV, or such other entity as QRI may direct (in either case the “QRI Designate”) for participation with such Executive, or any Competing Entity, as applicable, on
an equal basis, or such other basis as may be agreed upon between the QRI Designate and the Executive. If the QRI Designate declines to participate in the Opportunity, the Executive, or any Competing Entity, as applicable, shall, notwithstanding
section 4.1, have the right to pursue the Opportunity independently of the QRI Designate, provided the terms of his or its participation are not varied in a material respect from those offered to the QRI Designate. If material changes are made to
such terms, the obligation to offer to the QRI Designate the right to participate in the Opportunity shall again apply. If participation in the Opportunity by its terms cannot be offered to the QRI Designate, the Executive shall not be entitled to
pursue the Opportunity, either directly or through the Competing Entity, without the prior written consent of the QRI Designate. The Executive may, at any time, offer participation to a QRI Designate in a potential project in an area outside the
Restricted Area on such terms as he deems appropriate. 
  

	4.3	 	Employees 

  
 The Executives shall not, during their respective Non-Compete Periods, solicit or induce any employees of MGV, other than the Executives themselves, to
join any Competing Entity. 
  

	4.4	 	Board Positions 

  
 Gatens and Voneiff may at any time, in the discretion of QRI, be offered the positions of non-executive chairman of the MGV Board and MGV Board member,
respectively, with the terms thereof to commence on January 1, 2006 or as otherwise agreed. 
  

	4.5	 	Consulting Arrangement 

  
 QRI may, in its sole discretion, offer either or both of Gatens and Voneiff a consulting contract with MGV, Quicksilver or any Affiliate of either for up
to two (2) years, or such other term as may be mutually agreed upon (the “Consulting Arrangement”). If QRI intends to offer, or cause to be offered, a Consulting Arrangement to Gatens or Voneiff, it will, not less than ninety (90) days
prior to December 31, 2005, so notify Gatens, Voneiff, or either, as applicable, setting out the proposed terms of the arrangement which, if offered, shall provide for compensation to the Executive so offered of $500,000 per annum, pro-rated for
part years. 
  

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 ARTICLE 5 
 BENEFITS OF THE AGREEMENT 
  

	5.1	 	Participation 

  

	 	(a)	 	The participating interest shares (collectively “Participating Interest Shares” and individually a “Participating Interest Share”) of the
Executives for purposes of this Agreement are as follows: 

  

	 	(i)	 	J. Michael Gatens - 42%; 

  

	 	(ii)	 	George W. Voneiff - 42%; 

  

	 	(iii)	 	Brown Howard - 14%; and 

  

	 	(iv)	 	Peter A. Bastian - 2%. 

  

	 	(b)	 	If the employment of an Executive is terminated for any reason, his Participating Interest Share shall not be assigned in whole or in part to any of the Executives who remain
employed by QRI or MGV, or to any other party whomsoever. In such circumstances the total Participating Interest Shares for purposes hereof shall be the sum of the Participating Interest Share of the Executives who remain employed by QRI or MGV at
the particular time. 

  

	5.2	 	Assignment 

  

	 	(a)	 	The rights and obligations of the Parties shall not be assigned by a Party to any third party without the prior consent of the other Parties except as otherwise expressly provided
in this section 5.2. 

  

	 	(b)	 	The Executives may, by unanimous agreement among them, to be evidenced in writing and provided to QRI by Notice, amend their respective Participating Interest Shares provided that
the total Participating Interest Shares shall not exceed 100% or the relevant limitation if the provisions of section 5.1(b) apply. 

  

	 	(c)	 	The Stock Options shall not be transferable from any Executive to any other Executive except in accordance with the terms and conditions of the applicable Stock Option Agreement.

  

	 	(d)	 	In the case of QRI or MGV, their respective rights and obligations hereunder may be transferred when and to the extent resulting from a Business Combination Transaction involving
any of Quicksilver, MGV or their respective Affiliates. In that circumstance the obligations provided for hereunder shall survive the implementation of the Business Combination Transaction and shall be binding in all respects upon the successors to
QRI, MGV or their respective affiliates as applicable. 

  

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 ARTICLE 6 
 MISCELLANEOUS PROVISIONS 
  

	6.1	 	Notices 

  

	 	(a)	 	All notices, communications and statements (“Notices”) required, permitted or contemplated hereunder shall be in writing and shall be sufficiently given and received if:

  

	 	(i)	 	personally delivered to the addressee at the address set forth below (Notices so delivered shall be deemed received by the addressee when actually delivered); or

  

	 	(ii)	 	sent by facsimile transmission or other electronic communication confirmed as delivered by the sender’s facsimile equipment (Notices so delivered shall be deemed received by
the Addressee on the day of dispatch if a Business Day, or if not a Business Day then the next ensuing Business Day, provided that if the transmission is not dispatched and confirmed prior to 4:00 p.m. local time on a Business Day, such Notice shall
be deemed to have been received on the next ensuing Business Day). 

  

	 	(b)	 	The addresses of the Parties for receipt of Notices are as set forth below: 

  

Quicksilver Resources Inc. 
 777 West Rosedale Street, Suite 300 
 Fort Worth, TX 76104 
  

			
	 Attention:
	  	Glenn Darden
	 Facsimile:
	  	(817) 665-5004
	 Telephone:
	  	(817) 665-4828

  
 MGV
Energy Inc. 
 Suite 2000, 125 - 9th Avenue SE 
 Calgary, Alberta T2G 0P8 
  

			
	 Attention:
	  	President
	 Facsimile:
	  	(403) 262-6115
	 Telephone:
	  	(403) 537-2455

  

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 J. Michael Gatens 
 4-712 Memorial Drive NW 
 Calgary, Alberta T2N 3C7 
  

			
	 Facsimile:
	  	 c/o Gowling Lafleur Henderson LLP
 Attention:    K. J. Warren
 (403) 263-9193

	 Telephone:
	  	(403) 670-9975

  
 George W. Voneiff 
 110 Springbank Crescent SW 
 Calgary, Alberta T3H 3S6 
  

			
	 Facsimile:
	 	(403) 202-1269
	 Telephone:
	 	(403) 202-2756

  
 Brown Howard 
 19 Edgeridge Green N.W. 
 Calgary, Alberta T3A 6A9 
  

			
	 Facsimile:
	  	 c/o Gowling Lafleur Henderson LLP
 Attention:    K. J. Warren
 (403) 263-9193

	 Telephone:
	  	(403) 208-3209

  
 Peter A. Bastian 
 1615 Pleasant Run 
 Keller, Texas 76248 
  

			
	 Facsimile:
	  	 c/o Gowling Lafleur Henderson LLP
 Attention:    K. J. Warren
 (403) 263-9193

	 Telephone:
	  	(817) 431-1706

  
 The foregoing
addresses may be changed by a Party by Notice served in accordance of this section 6.1. 
  

	6.2	 	Prior Agreements 

  
 This Agreement supersedes and replaces any and all prior agreements, discussions, negotiations, documents, understandings or other verbal or written
communications among the Parties or any of them made or communicated prior to the Effective Date and relating to the subject matter hereof. 
  

 - 14 - 

	6.3	 	Entire Agreement 

  
 This Agreement and the Executive Agreements as applicable set forth the entire agreement amongst the Parties pertaining to the subject matter hereof.

  

	6.4	 	Enurement 

  
 Subject to any other applicable provisions hereof, this Agreement shall enure to the benefit of and be binding upon the Parties and their respective
heirs, successors, receivers, receiver-managers, trustees, representatives and permitted assigns. 
  

	6.5	 	Amendments 

  
 Amendments to this Agreement shall not be effective unless made by written instrument duly executed by all of the Parties. 
  

	6.6	 	Waiver in Writing 

  
 No waiver of, or waiver of any breach of, any provision of this Agreement shall be effective unless set forth in a written instrument duly executed by the
Party granting the waiver. Such waiver shall affect only the matter specifically identified in the instrument granting the waiver and shall not extend to any other matter, provision or breach. 
  

	6.7	 	Delay Not Waiver 

  
 Failure of a Party to give Notice to any other Party, or to take any other step in exercising any right in respect of a breach by that other Party, shall
not operate as a waiver of that right or breach, nor shall any single or partial exercise of any such right preclude any other or future exercises of the right or exercise of any other right, whether in law, equity or otherwise. 
  

	6.8	 	Acceptance of Payment Not Waiver 

  
 Acceptance of a partial payment by a Party after the breach or non-fulfillment of any provision of this Agreement by another Party shall not constitute a
waiver of the provisions of this Agreement in respect of any amount remaining due and owing. 
  

	6.9	 	Further Assurances 

  
 The Parties shall do all such acts and execute and deliver all such further instruments as may reasonably be required to give effect to and implement this
Agreement. 
  

	6.10	 	Counterpart Execution and Delivery 

  

	 	(a)	 	This Agreement may be executed in separate counterparts, each of which, when so executed, shall be deemed to be an original and together shall 

  

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 constitute one Agreement. A facsimile copy of an executed counterpart hereof shall be acceptable evidence
of the execution hereof by a Party and shall be binding on that Party for all purposes. 
  

	 	(b)	 	Delivery of this Agreement may effected by facsimile transmission. A Party so executing this Agreement shall forthwith after execution caused to be provided to the other Parties
original execution copies hereof, provided however, that any failure by a Party to do so shall not affect the enforceability of this Agreement against that Party. 

  

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 IN WITNESS WHEREOF this Agreement has been duly signed by the authorized representatives of the
Parties, or in the case of individuals by such individuals, as of the day and year first above written. 
  

			
	QUICKSILVER RESOURCES INC.
		
	 Per:
	 	 /s/ Glenn Darden

	 Per:
	 	  

	
	MGV ENERGY INC.
		
	 Per:
	 	 /s/ Bill Lamkin

	 Per:
	 	 /s/ George W. Voneiff

  

					
		
	 /s/ Aileen Sinclair

	 	 /s/ J. Michael Gatens

	 Witness
	 	J. MICHAEL GATENS
		
	 /s/ Aileen Sinclair

	 	 /s/ George W. Voneiff

	 Witness
	 	GEORGE W. VONEIFF
		
	 /s/ Aileen Sinclair

	 	 /s/ Brown Howard

	 Witness
	 	BROWN HOWARD
		
	 /s/ John C. Cirone

	 	 /s/ Peter A. Bastian

	 Witness
	 	PETER A. BASTIAN

  

 - 17 - 

 AFFIDAVIT OF EXECUTION 
  
 I, Aileen Sinclair, of the City of Calgary, in the Province of Alberta, MAKE OATH AND SAY THAT: 
  
 1. I was personally present and did see J. MICHAEL GATENS, named in the within
instrument who is personally known to me to be the person named therein, duly sign and execute the same for the purpose named therein. 
  
 2. The same was executed at the City of Calgary, in the Province of Alberta, and that I am the subscribing witness thereto. 
  
 3. I know the said J. MICHAEL GATENS and he is, in my belief, of the full age of
eighteen years. 
  

					
	 SWORN BEFORE ME at the City of
	 	)	 	 
	 Calgary, in the Province of Alberta, this
	 	)	 	 
	 6th day of October, 2004.
	 	)	 	 
	 /s/ Roxanne Turcotte

	 	)	 	 /s/ Aileen Sinclair

	 A Commissioner for Oaths in and for the
	 	)	 	 
	 Province of Alberta
	 	)	 	 

 AFFIDAVIT OF EXECUTION 
  
 I, Aileen Sinclair, of the City of Calgary, in the Province of Alberta, MAKE OATH AND SAY THAT: 
  
 1. I was personally present and did see GEORGE W. VONEIFF, named in the within
instrument who is personally known to me to be the person named therein, duly sign and execute the same for the purpose named therein. 
  
 2. The same was executed at the City of Calgary, in the Province of Alberta, and that I am the subscribing witness thereto. 
  
 3. I know the said GEORGE W. VONEIFF and he is, in my belief, of the full age of
eighteen years. 
  

					
	 SWORN BEFORE ME at the City of
	 	)	 	 
	 Calgary, in the Province of Alberta, this
	 	)	 	 
	 6th day of October, 2004.
	 	)	 	 
	 /s/ Roxanne Turcotte

	 	)	 	 /s/ Aileen Sinclair

	 A Commissioner for Oaths in and for the
	 	)	 	 
	 Province of Alberta
	 	)	 	 

 AFFIDAVIT OF EXECUTION 
  
 I, Aileen Sinclair, of the City of Calgary, in the Province of Alberta, MAKE OATH AND SAY THAT: 
  
 1. I was personally present and did see BROWN HOWARD, named in the within instrument
who is personally known to me to be the person named therein, duly sign and execute the same for the purpose named therein. 
  
 2. The same was executed at the City of Calgary, in the Province of Alberta, and that I am the subscribing witness thereto. 
  
 3. I know the said BROWN HOWARD and he is, in my belief, of the full age of eighteen
years. 
  

					
	 SWORN BEFORE ME at the City of
	 	)	 	 
	 Calgary, in the Province of Alberta, this
	 	)	 	 
	 6th day of October, 2004.
	 	)	 	 
	 /s/ Roxanne Turcotte

	 	)	 	 /s/ Aileen Sinclair

	 A Commissioner for Oaths in and for the
	 	)	 	 
	 Province of Alberta
	 	)	 	 

 AFFIDAVIT OF EXECUTION 
  
 I, JOHN C. CIRONE of the City of Fort Worth, in the State of Texas, MAKE OATH AND SAY THAT: 
  
 1. I was personally present and did see PETER A. BASTIAN, named in the within
instrument who is personally known to me to be the person named therein, duly sign and execute the same for the purpose named therein. 
  
 2. The same was executed in the City of Fort Worth, in the State of Texas, and that I am the subscribing witness thereto. 
  
 3. I know the said PETER A. BASTIAN and he is, in my belief, of the full age of
eighteen years. 
  

					
	 SWORN BEFORE ME at the City of Fort
	 	)	 	 
	 Worth, in the State of Texas, this 7th day of
	 	)	 	 
	 October, 2004.
	 	)	 	 
	 	 	)	 	 
	 /s/ Deborah K. Shores

	 	 	 	 /s/ John C. Cirone

	 A Notary Public in and for the State of
	 	)	 	 
	 Texas
	 	)

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