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Exhibit
10.3
QUICKSILVER RESOURCES
INC.
Retention Share
Agreement
This AGREEMENT (this
“Agreement”) is made and entered into as of
(“Grant Date”) by and between Quicksilver Resources
Inc., a Delaware corporation (the “Company”), and
(the “Employee”).
1. Grant of Retention
Shares . Subject to and upon the terms, conditions, and
restrictions set forth in this Agreement and in the Company’s
Amended and Restated 1999 Stock Option and Retention Stock Plan
(the “Plan”), the Company hereby grants to the Employee
as of the Grant Date [
] Retention Shares. The Retention Shares shall be fully paid and
nonassessable and shall be evidenced by book-entry registration or
by a stock certificate registered in the name of the Employee.
Unless the context otherwise requires, terms used herein shall have
the same meaning as in the Plan.
2. Restrictions on
Transfer of Retention Shares . The Retention Shares may not be
transferred, sold, pledged, exchanged, assigned or otherwise
encumbered or disposed of by the Employee, except to the Company,
until they have become nonforfeitable in accordance with Section 3
of this Agreement; provided , however , that the
Employee’s interest in the Retention Shares may be
transferred at any time by will or the laws of descent and
distribution. Any purported transfer, encumbrance or other
disposition of the Retention Shares that is in violation of this
Section 2 of this Agreement shall be null and void, and the other
party to any such purported transaction shall not obtain any rights
to or interest in the Retention Shares.
3. Vesting of Retention
Shares .
(a) Vesting Schedule .
Except as otherwise provided in this Agreement, on each anniversary
of the Grant Date, the number of Retention Shares equal to [33
1 /
3 %] multiplied by the initial number of Retention
Shares specified in this Agreement shall become nonforfeitable on a
cumulative basis until all of the Retention Shares have become
nonforfeitable, subject to the Employee’s remaining in the
continuous employ of the Company. For purposes of this Agreement
the continuous employment of the Employee with the Company shall
not be deemed to have been interrupted, and the Employee shall not
be deemed to have ceased to be an employee of the Company, by
reason of the transfer of the Employee’s employment among the
Company and its Subsidiaries.
(b) Accelerated
Vesting . Notwithstanding the foregoing, all of the Retention
Shares shall immediately become nonforfeitable in the event of (i)
a Change in Control, (ii) the Employee’s death or becoming
disabled (within the meaning of Section 22(e)(3) of the Code) while
the Employee is employed by the Company, or (iii) the
Employee’s retirement from the Company at or after age 55
with at least five years of credited Company service. For purposes
of this Agreement, “Change in Control” means the
occurrence of any of the following events:
(i) any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (“Exchange Act”)) is or
becomes the beneficial owner (within the meaning of Rule
13d-3
Page 1
promulgated under the
Exchange Act) of 50% or more of the combined voting power of the
then-outstanding Voting Stock of the Company; provided ,
however , that the following acquisitions shall not
constitute a Change in Control: (A) any acquisition of Voting Stock
of the Company directly from the Company that is approved by a
majority of the Incumbent Directors; (B) any acquisition of Voting
Stock of the Company by the Company or any subsidiary of the
Company; (C) any acquisition of Voting Stock of the Company by the
trustee or other fiduciary holding securities under any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any subsidiary of the Company; and (D) any acquisition
of Voting Stock of the Company by Mercury Exploration Company,
Quicksilver Energy, L.P., The Discovery Fund, Pennsylvania Avenue
Limited Partnership, Pennsylvania Management Company, the estate of
Frank Darden, Lucy Darden, Anne Darden Self, Glenn Darden or Thomas
Darden, or their respective successors, assigns, designees, heirs,
beneficiaries, trusts, estates or controlled affiliates;
(ii) a majority of the Board
of Directors of the Company ceases to be comprised of Incumbent
Directors; or
(iii) the consummation of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the consolidated assets
of the Company (each, a “Business Combination
Transaction”) immediately after which (A) the Voting Stock of
the Company outstanding immediately prior to such Business
Combination Transaction does not continue to represent (either by
remaining outstanding or by being converted into Voting Stock of
the entity surviving, resulting from, or succeeding to all or
substantially all of the Company’s consolidated assets as a
result of, such Business Combination Transaction or any parent of
such entity), at least 50% of the combined voting power of the then
outstanding shares of Voting Stock of the entity surviving,
resulting from, or succeeding to all or substantially all of the
Company’s consolidated assets as a result of, such Business
Combination Transaction (including, without limitation, an entity
which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries).
For purposes of this Agreement, (i)
”Incumbent Directors” means the individuals who, as of
the date hereof, are Directors of the Company and any individual
becoming a Director subsequent to the date hereof whose election,
nomination for election by the Company’s shareholders, or
appointment, was approved by a vote of a majority of the then
Incumbent Directors (either by a specific vote or by approval of
the proxy statement of the Company in which such person is named as
a nominee for director, without objection to such nomination) and
(ii) ”Voting Stock” means securities entitled to vote
generally in the election of Directors.
4. Payment of Retention
Shares . At the end of the Restriction Period and after all
Vesting Conditions have been satisfied, or at such earlier time as
provided for in Section 9(c) of t
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