Exhibit 10.3
 
Crosstex Energy GP, LLC
Amended and Restated Long-Term Incentive Plan
 
CROSSTEX ENERGY GP, LLC
LONG-TERM INCENTIVE PLAN
(As Amended and Restated on March 17, 2009)
 
Section 1. Purpose of the Plan.
 
The Crosstex Energy GP, LLC Long-Term Incentive Plan (the “Plan”) is intended to
promote the interests of Crosstex Energy, L.P., a Delaware limited partnership
(the “Partnership”), by providing to employees and directors of Crosstex Energy
GP, LLC (the “Company”) and its Affiliates who perform services for the
Partnership incentive compensation awards for superior performance that are
based on Units. The Plan is also contemplated to enhance the ability of the
Company and its Affiliates to attract and retain the services of individuals who
are essential for the growth and profitability of the Partnership and to
encourage them to devote their best efforts to the business of the Partnership,
thereby advancing the interests of the Partnership and its partners.
 
Section 2. Definitions.
 
As used in the Plan, the following terms shall have the meanings set forth
below:
 
“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control with, the Person in question. As used herein, the term
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.
 
“Award” means an Option or Restricted Unit granted under the Plan, and shall
include any tandem DERs granted with respect to such Award.
 
“Board” means the Board of Directors of the Company.
 
“Cause” means (i) Participant has failed to perform the duties assigned to him
and such failure has continued for thirty (30) days following delivery by the
Company of written notice to Participant of such failure, (ii) Participant has
been convicted of a felony or misdemeanor involving moral turpitude,
(iii) Participant has engaged in acts or omissions against the Company
constituting dishonesty, breach of fiduciary obligation, or intentional
wrongdoing or misfeasance, (iv) Participant has acted intentionally or in bad
faith in a manner that results in a material detriment to the assets, business
or prospects of the Company, or (v) Participant has breached any obligation
under this Agreement.
 
“Change in Control” means: (a) the consummation of a merger or consolidation of
the Company with or into another entity or any other transaction (other than a
merger, consolidation or other transaction with or into the Partnership,
Crosstex Energy GP, L.P. or Crosstex Energy Inc.), if Persons who were not
holders of equity interests of the Company immediately prior to such merger,
consolidation or other transaction beneficially own, immediately after such
merger, consolidation or other transaction, 50% or more of the voting power of
the outstanding equity interests of the continuing or surviving entity; (b) the
sale, transfer or other disposition of all or substantially all of the Company’s
or the Partnership’s assets; (c) a change in the composition of the Board as a
result of which fewer than 50% of the incumbent directors are directors who
either (i) had been directors of the Company on the date 12 months prior to the
date of the event that may constitute a Change in Control (the “original
directors”) or (ii) were elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the aggregate of the original
directors who were still in office at the time of the election or nomination and
the directors whose election or nomination was previously so approved; or (d)
the consummation of any transaction as a result of which any Person (other than
Yorktown Partners LLC, a Delaware limited liability company, or its Affiliates
including any funds under its management) becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of at
least 50% of the total voting power represented by the outstanding voting
securities of

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Crosstex Energy, Inc. (“CEI”) at a time when CEI still beneficially owns 50% or
more of the voting power of the outstanding equity interests of the Company.
 
“Committee” means the Compensation Committee of the Board or such other
committee of the Board appointed to administer the Plan.
 
“DER” means a contingent right, granted in tandem with a specific Restricted
Unit, to receive an amount in cash equal to the cash distributions made by the
Partnership with respect to a Unit during the period such Restricted Unit is
outstanding.
 
“Director” means a “non-employee director” of the Company, as defined in
Rule 16b-3.
 
“Employee” means any employee of the Company or an Affiliate, as well as any
individual providing direct consulting services to the Company or any Affiliate,
in each case as determined by the Committee. Any reference to employment or
termination of employment shall include engagement as a consultant or
independent contractor or termination of such engagement, as applicable.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Fair Market Value” means the closing sales price of a Unit on the applicable
date (or if there is no trading in the Units on such date, on the next preceding
date on which there was trading) as reported in The Wall Street Journal (or
other reporting service approved by the Committee). In the event Units are not
publicly traded at the time a determination of fair market value is required to
be made hereunder, the determination of fair market value shall be made in good
faith by the Committee.
 
“Option” means an option to purchase Units granted under the Plan.
 
“Participant” means any Employee or Director granted an Award under the Plan.
 
“Partnership Agreement” means the Amended and Restated Agreement of Limited
Partnership of Crosstex Energy, L.P.
 
“Person” means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.
 
“Qualifying Termination” means Participant’s employment or service with the
Company or its Affiliates is terminated as a result of Participant’s (i) death,
(ii) becoming disabled and qualified to receive benefits under the Company’s
long-term disability plan or (iii) retirement with the approval of the Committee
on or after reaching age 60.
 
“Restricted Period” means the period established by the Committee with respect
to an Award during which the Award either remains subject to forfeiture or is
not exercisable by or payable to the Participant.
 
“Restricted Unit” means a phantom unit granted under the Plan which upon or
following vesting entitles the Participant to receive a Unit.
 
“Rule 16b-3” means Rule 16b-3 promulgated by the SEC under the Exchange Act, or
any successor rule or regulation thereto as in effect from time to time.
 
“SEC” means the Securities and Exchange Commission, or any successor thereto.
 
“Unit” means a Common Unit of the Partnership or any other securities or other
consideration into which a Common Unit of the Partnership is converted pursuant
to any capital reorganization, recapitalization, merger or other similar
transaction.
 
Section 3. Administration.
 
The Plan shall be administered by the Committee. A majority of the Committee
shall constitute a quorum, and the acts of the members of the Committee who are
present at any meeting thereof at which a quorum is present, or acts unanimously
approved by the members of the Committee in writing, shall be the acts of the
Committee. Subject to the following, and any applicable law, the Committee, in
its sole discretion, may delegate any or all of its powers

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and duties under the Plan, including the power to grant Awards under the Plan,
to the Chief Executive Officer of the Company (provided the Chief Executive
Officer is a member of the Board), subject to such limitations on such delegated
powers and duties as the Committee may impose, if any. Upon any such delegation
all references in the Plan to the “Committee,” other than in Section 7, shall be
deemed to include the Chief Executive Officer; provided, however, that such
delegation shall not limit the Chief Executive Officer’s right to receive Awards
under the Plan. Notwithstanding the foregoing, the Chief Executive Officer may
not grant Awards to, or take any action with respect to any Award previously
granted to himself, a person who is an officer subject to Rule 16b-3 or a member
of the Board. Subject to the terms of the Plan and applicable law, and in
addition to other express powers and authorizations conferred on the Committee
by the Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a
Participant; (iii) determine the number of Units to be covered by Awards;
(iv) determine the terms and conditions of any Award; (v) determine whether, to
what extent, and under what circumstances Awards may be settled, exercised,
canceled, or forfeited; (vi) interpret and administer the Plan and any
instrument or agreement relating to an Award made under the Plan;
(vii) establish, amend, suspend, or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper administration of the
Plan; and (viii) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, the Partnership, any Affiliate, any Participant,
and any beneficiary of any Award.
 
Section 4. Units
 
(a) Units Available.  Subject to adjustment as provided in Section 4(c), the
number of Units with respect to which Restricted Units and Options may be
granted under the Plan is 5,600,000. If any Option or Restricted Unit is
forfeited or otherwise terminates or is canceled without the delivery of Units,
then the Units covered by such Award, to the extent of such forfeiture,
termination or cancellation, shall again be Units with respect to which Options
or Restricted Units may be granted, as the case may be.
 
(b) Sources of Units Deliverable Under Awards.  Any Units delivered pursuant to
an Award shall consist, in whole or in part, of Units acquired in the open
market, from any Affiliate, the Partnership or any other Person, or any
combination of the foregoing, as determined by the Committee in its discretion.
 
(c) Adjustments.  In the event that the Committee determines that any
distribution (whether in the form of cash, Units, other securities, or other
property), recapitalization, split, reverse split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of Units
or other securities of the Partnership, issuance of warrants or other rights to
purchase Units or other securities of the Partnership, or other similar
transaction or event affects the Units such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any or
all of (i) the number and type of Units (or other securities or property) with
respect to which Awards may be granted under the Plan, (ii) the number and type
of Units (or other securities or property) subject to outstanding Awards, and
(iii) the grant or exercise price with respect to any outstanding Award or, if
deemed appropriate, make provision for a cash payment to the holder of an
outstanding Award; provided, that the number of Units subject to any Award shall
always be a whole number.
 
Section 5. Eligibility.
 
Any Employee who performs services for the benefit of the Partnership or
Director shall be eligible to be designated a Participant and receive an Award
under the Plan.
 
Section 6. Awards.
 
(a) Options.  The Committee shall have the authority to determine the Employees
and Directors to whom Options shall be granted, the number of Units to be
covered by each Option, the purchase price therefor and the

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conditions and limitations applicable to the exercise of the Option, including
the following terms and conditions and such additional terms and conditions, as
the Committee shall determine, that are not inconsistent with the provisions of
the Plan.
 
(i) Exercise Price.  The purchase price per Unit purchasable under an Option
shall be determined by the Committee at the time the Option is granted and shall
be no less than its Fair Market Value as of the date of grant.
 
(ii) Time and Method of Exercise.  The Committee shall determine the Restricted
Period, i.e., the time or times at which an Option may be exercised in whole or
in part, which may include, without limitation, accelerated vesting upon the
achievement of specified performance goals, and the method or methods by which
payment of the exercise price with respect thereto may be made or deemed to have
been made, which unless otherwise prohibited by applicable law, may include,
without limitation, cash, check acceptable to the Company, a “cashless-broker”
exercise through procedures approved by the Company, by withholding from the
issuance under the Option Units otherwise deliverable thereunder, other
securities or other property, or any combination thereof, having a Fair Market
Value on the exercise date equal to the relevant exercise price. The Committee
may adopt additional rules and procedures regarding the exercise of options from
time to time, provided that such rules and procedures are not inconsistent with
the Plan or applicable law.
 
(iii) Term.  Subject to earlier termination as provided in the grant agreement
or the Plan, each Option shall expire on the tenth anniversary of its date of
grant.
 
(iv) Forfeiture.  Except as otherwise provided in the terms of the Option grant,
upon termination of a Participant’s employment with the Company and its
Affiliates or membership on the Board, whichever is applicable, for any reason
other than a Qualifying Termination during the applicable Restricted Period, all
Options shall be forfeited by the Participant: (i) if such termination is for
Cause, on the date of such termination, and (ii) in all other cases, thirty
(30) days after the date of such termination. The Committee may, in its
discretion, waive in whole or in part such forfeiture with respect to a
Participant’s Options.
 
(v) Exercise Upon Qualifying Termination.  In the event of a Qualifying
Termination, an Option may be exercised at any time before the expiration date
by: (i) Participant; (ii) the personal representative of Participant’s estate or
the person who acquires the Option by will or the laws of descent and
distribution in the event of Participant’s death; or (iii) Participant’s legal
guardian in the event one is appointed as a result of Participant’s disability.
 
(vi) Option Exchanges.   The Committee shall have the authority to implement a
program under which (i) outstanding Awards are surrendered or cancelled in
exchange for Awards of the same type (which may have lower exercise prices and
different terms), Awards of a different type and/or cash, and/or (ii) the
exercise price of an outstanding Award is reduced. The terms and conditions of
any exchange program will be determined by the Committee in its sole discretion.
 
(b) Restricted Units.  The Committee shall have the authority to determine the
Employees and Directors to whom Restricted Units shall be granted, the number of
Restricted Units to be granted to each such Participant, the Restricted Period,
the conditions under which the Restricted Units may become vested or forfeited,
which may include, without limitation, the accelerated vesting upon the
achievement of specified performance goals, and such other terms and conditions
as the Committee may establish with respect to such Awards, including whether
DERs are granted with respect to such Restricted Units.
 
(i) DERs.  To the extent provided by the Committee, in its discretion, a grant
of Restricted Units may include a tandem DER grant, which may provide that such
DERs shall be paid directly to the Participant, be credited to a bookkeeping
account (with or without interest in the discretion of the Committee) subject to
the same vesting restrictions as the tandem Award, or be subject to such other
provisions or restrictions as determined by the Committee in its discretion.
 
(ii) Forfeiture.  Except as otherwise provided in the terms of the Restricted
Units grant, upon termination of a Participant’s employment with the Company and
its Affiliates or membership on the Board, whichever is applicable, for any
reason other than a Qualifying Termination during the applicable Restricted

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Period, all Restricted Units shall be forfeited by the Participant. In the event
of a Qualifying Termination occurring during the Restricted Period, the
Restricted Units shall become fully vested and the Restricted Period shall
terminate. The Committee may, in its discretion, waive in whole or in part such
forfeiture with respect to a Participant’s Restricted Units.
 
(iii) Lapse of Restrictions.  Upon or following the vesting of each Restricted
Unit, the Participant shall be entitled to receive from the Company one Unit,
subject to the provisions of Section 8(b).
 
(c) General.
 
(i) Awards May Be Granted Separately or Together.  Awards may, in the discretion
of the Committee, be granted either alone or in addition to, in tandem with, or
in substitution for any other Award granted under the Plan or any award granted
under any other plan of the Company or any Affiliate. Awards granted in addition
to or in tandem with other Awards or awards granted under any other plan of the
Company or any Affiliate may be granted either at the same time as or at a
different time from the grant of such other Awards or awards.
 
(ii) Limits on Transfer of Awards.
 
(A) Except as provided in (C) below, each Option shall be exercisable only by
the Participant during the Participant’s lifetime, or by the person to whom the
Participant’s rights shall pass by will or the laws of descent and distribution.
 
(B) Except as provided in (C) below, no Award and no right under any such Award
may be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate.
 
(C) To the extent specifically provided by the Committee with respect to an
Option grant, an Option may be transferred by a Participant without
consideration to immediate family members or related family trusts, limited
partnerships or similar entities or on such terms and conditions as the
Committee may from time to time establish. In addition, Awards may be
transferred by will and the laws of descent and distribution.
 
(iii) Term of Awards.  The term of each Award shall be for such period as may be
determined by the Committee.
 
(iv) Unit Certificates.  All certificates for Units or other securities of the
Partnership delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the Plan or the rules, regulations, and
other requirements of the SEC, any stock exchange upon which such Units or other
securities are then listed, and any applicable federal or state laws, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
 
(v) Consideration for Grants.  Awards may be granted for no cash consideration
or for such consideration as the Committee determines.
 
(vi) Delivery of Units or other Securities and Payment by Participant of
Consideration.  Notwithstanding anything in the Plan or any grant agreement to
the contrary, delivery of Units pursuant to the exercise or vesting of an Award
may be deferred for any period during which, in the good faith determination of
the Committee, the Company is not reasonably able to obtain Units to deliver
pursuant to such Award without violating the rules or regulations of any
applicable law or securities exchange. No Units or other securities shall be
delivered pursuant to any Award until payment in full of any amount required to
be paid pursuant to the Plan or the applicable Award grant agreement (including,
without limitation, any exercise price or tax withholding) is received by the
Company. Unless otherwise prohibited by applicable law, such payment may be made
by such method or methods and in such form or forms as the Committee shall
determine, including, without limitation, cash, other Awards, withholding of
Units, cashless- broker exercises with simultaneous sale, or any combination
thereof; provided that the combined value, as determined by the Committee, of
all cash and cash equivalents and the Fair Market Value of any such Units or
other property so tendered to the Company, as of the

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date of such tender, is at least equal to the full amount required to be paid to
the Company pursuant to the Plan or the applicable Award agreement.
 
(vii) Change in Control.  Upon a Change in Control, or such period prior thereto
as may be established by the Committee, all Awards shall automatically vest and
become payable or exercisable, as the case may be, in full. In this regard, all
Restricted Periods shall terminate and all performance criteria, if any, shall
be deemed to have been achieved at the maximum level. Notwithstanding the
foregoing, payment of any Award subject to Section 409A shall not be accelerated
upon a Change of Control unless such Change of Control qualifies as a “change in
control event” within the meaning of Treas. Reg. Section 1.409A-3(i)(5). To the
extent that an Option is not exercised upon a Change in Control, the Committee
may, in its discretion, cancel such Award without payment or provide for a
replacement grant with respect to such property and on such terms as it deems
appropriate.
 
Section 7. Amendment and Termination.
 
Except to the extent prohibited by applicable law and unless otherwise expressly
provided in an Award agreement or in the Plan:
 
(a) Amendments to the Plan.  Except as required the rules of the principal
securities exchange on which the Units are traded and subject to Section 7(b)
below, the Board or the Committee may amend, alter, suspend, discontinue, or
terminate the Plan in any manner, including increasing the number of Units
available for Awards under the Plan, without the consent of any partner,
Participant, other holder or beneficiary of an Award, or other Person.
 
(b) Amendments to Awards.  Subject to Section 7(a), the Committee may waive any
conditions or rights under, amend any terms of, or alter any Award theretofore
granted, provided no change, other than pursuant to Section 7(c), in any Award
shall materially reduce the benefit to a Participant without the consent of such
Participant.
 
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events.  The Committee is hereby authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4(c) of the Plan) affecting the Partnership or the financial statements
of the Partnership, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
 
Section 8.  General Provisions.
 
(a) No Rights to Award.  No Person shall have any claim to be granted any Award
under the Plan, and there is no obligation for uniformity of treatment of
Participants. The terms and conditions of Awards need not be the same with
respect to each recipient.
 
(b) Withholding.  The Company or any Affiliate is authorized to withhold from
any Award, from any payment due or transfer made under any Award or from any
compensation or other amount owing to a Participant the amount (in cash, Units,
other securities, Units that would otherwise be issued pursuant to such Award or
other property) of any applicable taxes payable in respect of the grant of an
Award, its exercise, the lapse of restrictions thereon, or any payment or
transfer under an Award or under the Plan and to take such other action as may
be necessary in the opinion of the Company or Affiliate to satisfy its
withholding obligations for the payment of such taxes.
 
(c) No Right to Employment.  The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate or to remain on the Board, as applicable. Further, the Company or
an Affiliate may at any time dismiss a Participant from employment, free from
any liability or any claim under the Plan, unless otherwise expressly provided
in the Plan or in any Award agreement.

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(d) Governing Law.  The validity, construction, and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware without regard to its conflict of laws
principles.
 
(e) Severability.  If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any
Person or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to the applicable laws, or if it cannot be construed or deemed
amended without, in the determination of the Committee, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, person or award and the remainder of the Plan and any such Award
shall remain in full force and effect.
 
(f) Other Laws.  The Committee may refuse to issue or transfer any Units or
other consideration under an Award if, in its sole discretion, it determines
that the issuance or transfer or such Units or such other consideration might
violate any applicable law or regulation, the rules of the principal securities
exchange on which the Units are then traded, or entitle the Partnership or an
Affiliate to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.
 
(g) No Trust or Fund Created.  Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any participating Affiliate and a
Participant or any other Person. To the extent that any Person acquires a right
to receive payments from the Company or any participating Affiliate pursuant to
an Award, such right shall be no greater than the right of any general unsecured
creditor of the Company or any participating Affiliate.
 
(h) No Fractional Units.  No fractional Units shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Units or whether such fractional Units or any rights thereto
shall be canceled, terminated, or otherwise eliminated.
 
(i) Headings.  Headings are given to the Sections and subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
 
(j) Facility Payment.  Any amounts payable hereunder to any person under legal
disability or who, in the judgment of the Committee, is unable to properly
manage his financial affairs, may be paid to the legal representative of such
person, or may be applied for the benefit of such person in any manner which the
Committee may select, and the Company shall be relieved of any further liability
for payment of such amounts.
 
(k) Gender and Number.  Words in the masculine gender shall include the feminine
gender, the plural shall include the singular and the singular shall include the
plural.
 
(l) Section 409A.  All Awards under this Plan are intended either to be exempt
from, or to comply with the requirements of Section 409A, and this Plan and all
Awards shall be interpreted and operated in a manner consistent with that
intention. Notwithstanding anything in this Plan to the contrary, if any Plan
provision or Award under this Plan would result in the imposition of an
applicable tax under Section 409A, that Plan provision or Award shall be
reformed to avoid imposition of the applicable tax and no such action shall be
deemed to adversely affect the Participant’s rights to an Award.
 
Section 9. Term of the Plan.
 
This amendment and restatement of the Plan shall be effective on the date of its
approval by the unitholders of the Partnership and shall continue until the date
10 years following such approval, the date terminated by the Board or the date
Units are no longer available for grants of Awards under the Plan, whichever
occurs first. However, unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award granted prior to such termination, and the
authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under such Award, shall extend beyond such termination date.

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