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Exhibit 10.5

CROSSTEX ENERGY, INC.
LONG-TERM INCENTIVE PLAN
(Amended and Restated Effective as of December 31, 2003)

ARTICLE I. ESTABLISHMENT AND PURPOSE

        1.1   Establishment. The Crosstex Energy Holdings, Inc. 2000 Stock
Option Plan was originally approved by the Board of Directors of Crosstex
Energy, Inc., a Delaware corporation, on May 5, 2000. In furtherance of the
purposes of said plan and in order to amend said plan in certain respects, the
plan is hereby amended and restated in its entirety and renamed the Crosstex
Energy, Inc. Long-Term Incentive Plan (the "Plan"), as set forth in this
document.

        1.2   Purpose. The purposes of the Plan are to attract able persons to
enter the employ of the Company, to encourage Employees to remain in the employ
of the Company and to provide motivation to Employees to put forth maximum
efforts toward the continued growth, profitability and success of the Company,
by providing incentives to such persons through the ownership and/or performance
of the Common Stock of Crosstex. A further purpose of the Plan is to provide a
means through which the Company may attract able persons to become directors of
the Company and to provide such individuals with incentive and reward
opportunities. Toward these objectives, Awards may be granted under the Plan to
Employees and Outside Directors on the terms and subject to the conditions set
forth in the Plan.

        1.3   Effectiveness. This amended and restated Plan shall become
effective as of December 31, 2003, the date of its adoption by the Board,
provided it is duly approved by the holders of at least a majority of the shares
of Common Stock present or represented and entitled to vote at a meeting of the
stockholders of Crosstex duly held in accordance with applicable law within
twelve months after the date of adoption of the Plan by the Board. If the
amended and restated Plan is not so approved, the amended and restated Plan
shall not be effective, any Award granted under the amended and restated Plan
shall be null and void, and the Superseded Plan (and option grants made under
said plan) shall remain in full force and effect.

ARTICLE II. DEFINITIONS

        2.1   Affiliate. "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. With respect to an Incentive Stock Option, "Affiliate"
means a "parent corporation" or a "subsidiary corporation" of Crosstex, as those
terms are defined in Section 424(e) and (f) of the Code.

        2.2   Award. "Award" means an award granted to a Participant in the form
of an Option, Phantom Option, Restricted Stock, SAR, or Other Incentive Award,
whether granted singly, in combination or in tandem. All Awards shall be granted
by, confirmed by, and subject to the terms of, an Award Agreement.

        2.3   Award Agreement. "Award Agreement" means a written agreement
between Crosstex and a Participant that sets forth the terms, conditions,
restrictions and/or limitations applicable to an Award.

        2.4   Board. "Board" means the Board of Directors of Crosstex.

        2.5   Cause. "Cause" means the termination of a Participant's employment
or service by reason of fraud, dishonesty, any unauthorized use or disclosure by
the Participant of any confidential information or trade secrets of Crosstex, or
the performance of other acts detrimental to Crosstex or an Affiliate, as
determined by the Committee in its absolute discretion.

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        2.6   Change of Control. "Change of Control" shall have the meaning set
forth in Section 12.1.

        2.7   Code. "Code" means the Internal Revenue Code of 1986, as amended
from time to time, including regulations thereunder and successor provisions and
regulations thereto.

        2.8   Committee. "Committee" means (i) with respect to the application
of this Plan to Employees, the Compensation Committee of the Board or such other
committee of the Board as may be designated by the Board to administer the Plan,
which committee shall consist of two or more non-employee directors, each of
whom is both a "non-employee director" under Rule 16b-3 of the Exchange Act and
an "outside director" under Section 162(m) of the Code, and (ii) with respect to
the application of this Plan to an Outside Director, the Board. To the extent
that no Committee exists that has the authority to administer the Plan, the
functions of the Committee shall be exercised by the Board. If for any reason
the appointed Committee does not meet the requirements of Rule 16b-3 or
Section 162(m) of the Code, such noncompliance with such requirements shall not
affect the validity of Awards, grants, interpretations or other actions of the
Committee.

        2.9   Common Stock. "Common Stock" means the common stock, $.01 par
value per share, of Crosstex, or any stock or other securities of Crosstex
hereafter issued or issuable in substitution or exchange for the Common Stock.

        2.10 Company. "Company" means Crosstex and its Affiliates.

        2.11 Crosstex. "Crosstex" means Crosstex Energy, Inc., a Delaware
corporation, or any successor thereto.

        2.12 Effective Date. "Effective Date" means the date this Plan becomes
effective as provided in Section 1.3.

        2.13 Employee. "Employee" means an employee of Crosstex or an Affiliate
of Crosstex; provided, however, that the term "Employee" does not include an
Outside Director or an individual performing services for Crosstex or an
Affiliate who is treated for tax purposes as an independent contractor at the
time of performance of the services.

        2.14 Exchange Act. "Exchange Act" means the Securities Exchange Act of
1934, as amended.

        2.15 Fair Market Value. "Fair Market Value" means the closing sales
price of a share of Common Stock on the applicable date (or if there is no
trading in the Common Stock 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 the Common Stock is 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.

        2.16 Grant Date. "Grant Date" means the date an Award is granted by the
Committee.

        2.17 Incentive Stock Option. "Incentive Stock Option" means an Option
that is intended to meet the requirements of Section 422(b) of the Code.

        2.18 Nonqualified Stock Option. "Nonqualified Stock Option" means an
Option that is not an Incentive Stock Option.

        2.19 Option. "Option" means an option to purchase shares of Common Stock
granted to a Participant pursuant to Article VII. An Option may be either an
Incentive Stock Option or a Nonqualified Stock Option, as determined by the
Committee.

        2.20 Other Incentive Award. "Other Incentive Award" means an incentive
award granted to a Participant pursuant to Article XI.

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        2.21 Outside Director. "Outside Director" means a "non-employee
director" of the Company, as defined in Rule 16b-3.

        2.22 Participant. "Participant" means an Employee or Outside Director to
whom an Award has been granted under the Plan.

        2.23 Person. "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.

        2.24 Phantom Option. "Phantom Option" means a fictional option granted
to a Participant pursuant to Article VIII.

        2.25 Plan. "Plan" means this Crosstex Energy, Inc. Long-Term Incentive
Plan, as amended from time to time.

        2.26 Restricted Stock. "Restricted Stock" means shares of Common Stock
granted to a Participant pursuant to Article IX, which are subject to such
restrictions as may be determined by the Committee. Restricted Stock shall
constitute issued and outstanding shares of Common Stock for all corporate
purposes.

        2.27 Rule 16b-3. "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.

        2.28 SAR. "SAR" means a stock appreciation right granted to a
Participant pursuant to Article X.

        2.29 Superseded Plan. "Superseded Plan" means the Crosstex Energy
Holdings, Inc. 2000 Stock Option Plan, as in effect prior to the Effective Date.

ARTICLE III. PLAN ADMINISTRATION

        3.1   Plan Administrator. The Plan shall be administered by the
Committee. The Committee may delegate some or all of its power to the Chief
Executive Officer or other executive officer of the Company as the Committee
deems appropriate; provided, that (i) the Committee may not delegate its power
with regard to the grant of an Award to any person who is a "covered employee"
within the meaning of Section 162(m) of the Code or who, in the Committee's
judgment, is likely to be a covered employee at any time during the period an
Award to such employee would be outstanding, and (ii) the Committee may not
delegate its power with regard to the selection for participation in the Plan of
an officer or other person subject to Section 16 of the Exchange Act or
decisions concerning the timing, pricing or amount of an Award to such an
officer or other person.

        3.2   Authority of Administrator. The Committee shall have total and
exclusive responsibility to control, operate, manage and administer the Plan in
accordance with its terms. The Committee shall have all the authority that may
be necessary or helpful to enable it to discharge its responsibilities with
respect to the Plan. Without limiting the generality of the preceding sentence,
the Committee shall have the exclusive right to: (i) interpret the Plan and the
Award Agreements executed hereunder; (ii) determine eligibility for
participation in the Plan; (iii) decide all questions concerning eligibility
for, and the amount of, Awards granted under the Plan; (iv) construe any
ambiguous provision of the Plan or any Award Agreement; (v) prescribe the form
of the Award Agreements embodying Awards granted under the Plan; (vi) correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
any Award Agreement; (vii) issue administrative guidelines as an aid to
administering the Plan and make changes in such guidelines as the Committee from
time to time deems proper; (viii) make regulations for carrying out the Plan and
make changes in such regulations as the Committee from time to time deems
proper; (ix) determine whether Awards should be granted singly, in combination
or in tandem; (x) to the extent permitted under the Plan, grant waivers of Plan
terms, conditions, restrictions and limitations; (xi) accelerate the exercise,
vesting or payment of an Award when such

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action or actions would be in the best interests of the Company; (xii) grant
Awards in replacement of Awards previously granted under the Plan or any other
employee benefit plan of the Company; and (xiii) take any and all other actions
the Committee deems necessary or advisable for the proper operation or
administration of the Plan.

        3.3   Discretionary Authority. The Committee shall have full
discretionary authority in all matters related to the discharge of its
responsibilities and the exercise of its authority under the Plan, including,
without limitation, its construction of the terms of the Plan and its
determination of eligibility for participation and Awards under the Plan. The
decisions of the Committee and its actions with respect to the Plan shall be
final, conclusive and binding on all persons having or claiming to have any
right or interest in or under the Plan, including Participants and their
respective estates, beneficiaries and legal representatives.

        3.4   Liability; Indemnification. No member of the Committee nor any
person to whom authority has been delegated, shall be personally liable for any
action, interpretation or determination made in good faith with respect to the
Plan or Awards granted hereunder, and each member of the Committee (or delegatee
of the Committee) shall be fully indemnified and protected by Crosstex with
respect to any liability he or she may incur with respect to any such action,
interpretation or determination, to the extent permitted by applicable law.

ARTICLE IV. SHARES SUBJECT TO THE PLAN

        4.1   Available Shares. The maximum number of shares of Common Stock
that shall be available for grant of Awards under the Plan shall not exceed a
total of 1,200,000, subject to adjustment as provided in Sections 4.2 and 4.3;
provided, however, that from and after such time as Crosstex registers a class
of equity securities under Section 12 of the Exchange Act, the maximum number of
shares of Common Stock for which Options and SARs may be granted under the Plan
to any one Participant during a calendar year is 100,000. Shares of Common Stock
issued pursuant to the Plan may be shares of original issuance or treasury
shares or a combination of the foregoing, as the Committee, in its absolute
discretion, shall from time to time determine.

        4.2   Adjustments for Recapitalizations and Reorganizations.

        (a)   The shares with respect to which Awards may be granted under the
Plan are shares of Common Stock as presently constituted, but if, and whenever,
prior to the expiration or satisfaction of an Award theretofore granted,
Crosstex shall effect a subdivision or consolidation of shares of Common Stock
or the payment of a stock dividend on Common Stock in the form of Crosstex
Common Stock without receipt of consideration by Crosstex, the number of shares
of Common Stock with respect to which such Award may thereafter be exercised or
satisfied, as applicable, (i) in the event of an increase in the number of
outstanding shares, shall be proportionately increased, and the exercise price
per share shall be proportionately reduced, and (ii) in the event of a reduction
in the number of outstanding shares, shall be proportionately reduced, and the
exercise price per share shall be proportionately increased.

        (b)   If Crosstex recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise or satisfaction, as applicable, of an
Award theretofore granted the Participant shall be entitled to (or entitled to
purchase, if applicable) under such Award, in lieu of the number of shares of
Common Stock then covered by such Award, the number and class of shares of stock
or other securities to which the Participant would have been entitled pursuant
to the terms of the recapitalization if, immediately prior to such
recapitalization, the Participant had been the holder of record of the number of
shares of Common Stock then covered by such Award.

        (c)   In the event of changes in the outstanding Common Stock by reason
of a reorganization, merger, consolidation, combination, separation (including a
spin-off or other distribution of stock

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or property), exchange, or other relevant change in capitalization occurring
after the date of grant of any Award and not otherwise provided for by this
Section 4.2, any outstanding Awards and any Award Agreements evidencing such
Awards shall be subject to adjustment by the Committee in its absolute
discretion as to the number, price and kind of shares or other consideration
subject to, and other terms of, such Awards to reflect such changes in the
outstanding Common Stock.

        (d)   In the event of any changes in the outstanding Common Stock
provided for in this Section 4.2, the aggregate number of shares available for
grant of Awards under the Plan may be equitably adjusted by the Committee, whose
determination shall be conclusive. Any adjustment provided for in this
Section 4.2 shall be subject to any required stockholder action.

        4.3   Adjustments for Awards. The Committee shall have full discretion
to determine the manner in which shares of Common Stock available for grant of
Awards under the Plan are counted. Without limiting the discretion of the
Committee under this Section 4.3, unless otherwise determined by the Committee,
the following rules shall apply for the purpose of determining the number of
shares of Common Stock available for grant of Awards under the Plan:

        (a)   Options and Restricted Stock. The grant of Options and Restricted
Stock shall reduce the number of shares available for grant of Awards under the
Plan by the number of shares subject to such Award.

        (b)   SARs and Phantom Options. The grant of SARs and Phantom Options
shall not affect the number of shares available for grant of Awards under the
Plan.

        (c)   Other Incentive Awards. The grant of an Other Incentive Award in
the form of Common Stock or that may be paid or settled only in Common Stock
shall reduce the number of shares available for grant of Awards under the Plan
by the number of shares subject to such Award. The grant of an Other Incentive
Award that may be paid or settled only for cash shall not affect the number of
shares available for grant of Awards under the Plan. The grant of an Other
Incentive Award that may be paid or settled in either Common Stock or cash shall
reduce the number of shares available for grant of Awards under the Plan by the
number of shares subject to such Award.

        (d)   Termination. If any Award referred to in paragraphs (a) and
(c) above (other than an Other Incentive Award that may be paid or settled only
for cash) is canceled or forfeited, or terminates, expires or lapses, for any
reason (other than the termination of a Related Option (as defined in
Section 10.1) upon exercise of its corresponding SARs), the shares then subject
to such Award shall again be available for grant of Awards under the Plan.

        (e)   Payment of Exercise Price and Withholding Taxes. If previously
acquired shares of Common Stock are used to pay the exercise price of an Award,
the number of shares available for grant of Awards under the Plan shall not be
increased by the number of shares delivered as payment of such exercise price.
If previously acquired shares of Common Stock are used to pay withholding taxes
payable upon exercise, vesting or payment of an Award, or shares of Common Stock
that would be acquired upon exercise, vesting or payment of an Award are
withheld to pay withholding taxes payable upon exercise, vesting or payment of
such Award, the number of shares available for grant of Awards under the Plan
shall not be increased by the number of shares delivered or withheld as payment
of such withholding taxes.

        (f)    Fractional Shares. If any such adjustment would result in a
fractional security being (i) available under the Plan, such fractional security
shall be disregarded or (ii) subject to an Award, Crosstex shall pay the holder
of such Award, in connection with the first vesting, exercise or settlement of
such Award in whole or in part occurring after such adjustment, an amount in
cash determined by multiplying (x) the fraction of such security (rounded to the
nearest

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hundredth) by (y) the excess, if any, of the Fair Market Value on the vesting,
exercise or settlement date over the exercise price, if any, of such Award.

ARTICLE V. ELIGIBILITY

        All Employees and Outside Directors are eligible to participate in the
Plan. The Committee shall recommend, from time to time, Participants from those
Employees and Outside Directors who, in the opinion of the Committee, can
further the Plan purposes. Once a Participant is recommended for an Award by the
Committee, the Committee shall determine the type and size of Award to be
granted to the Participant and shall establish in the related Award Agreement
the terms, conditions, restrictions and/or limitations applicable to the Award,
in addition to those set forth in the Plan and the administrative rules and
regulations, if any, established by the Committee. Outside Directors shall be
eligible to participate in the Plan and receive Awards in the discretion of the
Committee.

ARTICLE VI. FORM OF AWARDS

        Awards may, at the Committee's sole discretion, be granted under the
Plan in the form of Options pursuant to Article VII, Phantom Options pursuant to
Article VIII, Restricted Stock pursuant to Article IX, SARs pursuant to
Article X, and Other Incentive Awards pursuant to Article XI, or a combination
thereof. All Awards shall be subject to the terms, conditions, restrictions and
limitations of the Plan. The Committee may, in its absolute discretion, subject
any Award to such other terms, conditions, restrictions and/or limitations
(including, but not limited to, the time and conditions of exercise, vesting or
payment of an Award and restrictions on transferability of any shares of Common
Stock issued or delivered pursuant to an Award), provided they are not
inconsistent with the terms of the Plan. Awards under a particular Article of
the Plan need not be uniform, and Awards under more than one Article of the Plan
may be combined into a single Award Agreement. Any combination of Awards may be
granted at one time and on more than one occasion to the same Participant.

ARTICLE VII. OPTIONS

        7.1   General. Awards may be granted to Employees and Outside Directors
in the form of Options. Options granted under the Plan may be Incentive Stock
Options or Nonqualified Stock Options, or a combination of both; provided,
however, that Incentive Stock Options may be granted only to Employees.

        7.2   Terms and Conditions of Options. An Option shall be exercisable in
whole or in such installments and at such times as may be determined by the
Committee. The price at which a share of Common Stock may be purchased upon
exercise of a Nonqualified Stock Option shall be determined by the Committee,
but such exercise price shall not be less than 50% of the Fair Market Value per
share of Common Stock on the Grant Date. Except as otherwise provided in
Section 7.3, the term of each Option shall be as specified by the Committee;
provided, however, that, no Options shall be exercisable later than ten years
from the Grant Date. Options may be granted with respect to Restricted Stock or
shares of Common Stock that are not Restricted Stock, as determined by the
Committee in its absolute discretion.

        7.3   Restrictions Relating to Incentive Stock Options. Options granted
in the form of Incentive Stock Options shall, in addition to being subject to
the terms and conditions of Section 7.2, comply with Section 422(b) of the Code.
Accordingly, no Incentive Stock Options shall be granted later than ten years
from the date of adoption of the Plan by the Board. In addition, no Incentive
Stock Option shall be exercisable after the expiration of ten years from the
Grant Date. To the extent that the aggregate Fair Market Value (determined at
the time the respective Incentive Stock Option is granted) of Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
an individual during any calendar year under all incentive stock option plans of
Crosstex and its Affiliates

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exceeds $100,000, such excess Incentive Stock Options shall be treated as
options which do not constitute Incentive Stock Options. The Committee shall
determine, in accordance with the applicable provisions of the Code, which of a
Participant's Incentive Stock Options will not constitute Incentive Stock
Options because of such limitation and shall notify the Participant of such
determination as soon as practicable after such determination. The price at
which a share of Common Stock may be purchased upon exercise of an Incentive
Stock Option shall be determined by the Committee, but such exercise price shall
not be less than 100% of the Fair Market Value of a share of Common Stock on the
Grant Date. No Incentive Stock Option shall be granted to an Employee under the
Plan if, at the time such Option is granted, such Employee owns stock possessing
more than 10% of the total combined voting power of all classes of stock of
Crosstex or an Affiliate, within the meaning of Section 422(b)(6) of the Code,
unless (i) on the Grant Date of such Option, the exercise price of such Option
is at least 110% of the Fair Market Value of the Common Stock subject to the
Option and (ii) such Option by its terms is not exercisable after the expiration
of five years from the Grant Date of the Option.

        7.4   Additional Terms and Conditions. The Committee may subject any
Award of an Option to such other terms, conditions, restrictions and/or
limitations as it determines are necessary or appropriate, provided they are not
inconsistent with the Plan.

        7.5   Exercise of Options. Subject to the terms and conditions of the
Plan, Options shall be exercised by the delivery of a written notice of exercise
to Crosstex, setting forth the number of shares of Common Stock with respect to
which the Option is to be exercised, accompanied by full payment for such
shares.

        Upon exercise of an Option, the exercise price of the Option shall be
payable to Crosstex in full either: (i) in cash or an equivalent acceptable to
the Committee, or (ii) in the absolute discretion of the Committee and in
accordance with any applicable administrative guidelines established by the
Committee, by tendering one or more previously acquired nonforfeitable,
unrestricted shares of Common Stock that have been held by the Participant for
at least six months having an aggregate Fair Market Value at the time of
exercise equal to the total exercise price (including an actual or deemed
multiple series of exchanges of such shares), or (iii) in a combination of the
forms of payment specified in clauses (i) and (ii) above.

        From and after such time as Crosstex registers the Common Stock under
Section 12 of the Exchange Act, payment of the exercise price of an Option may
also be made, in the absolute discretion of the Committee, by delivery to
Crosstex or its designated agent of an executed irrevocable option exercise form
together with irrevocable instructions to a broker-dealer to sell or margin a
sufficient portion of the shares with respect to which the Option is exercised
and deliver the sale or margin loan proceeds directly to Crosstex to pay the
exercise price and any required withholding taxes.

        As soon as reasonably practicable after receipt of written notification
of exercise of an Option and full payment of the exercise price and any required
withholding taxes, Crosstex shall deliver to the Participant, in the
Participant's name, a stock certificate or certificates in an appropriate amount
based upon the number of shares of Common Stock purchased under the Option.

        7.6   Termination of Employment or Service. Each Award Agreement
embodying the Award of an Option shall set forth the extent to which the
Participant shall have the right to exercise the Option following termination of
the Participant's employment or service with the Company. Such provisions shall
be determined by the Committee in its absolute discretion, need not be uniform
among all Options granted under the Plan and may reflect distinctions based on
the reasons for termination of employment or service. In the event a
Participant's Award Agreement embodying the award of an

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Option does not set forth such termination provisions, the following termination
provisions shall apply with respect to such Award:

        (a)   Death or Disability. If the employment or service of a Participant
shall terminate by reason of death or permanent and total disability (within the
meaning of Section 22(e)(3) of the Code), each outstanding Option held by the
Participant may be exercised, to the extent then vested, until the earlier of
(i) the expiration of one year from the date of such termination of employment
or service, or (ii) the expiration of the term of such Option.

        (b)   Other Termination. If the employment or service of a Participant
shall terminate for any reason other than a reason set forth in paragraph (a)
above or paragraph (c) below, whether on a voluntary or involuntary basis, each
outstanding Option held by the Participant may be exercised, to the extent then
vested, until the earlier of (i) the expiration of three months from the date of
such termination of employment or service, or (ii) the expiration of the term of
such Option.

        (c)   Termination for Cause. Notwithstanding paragraphs (a) and
(b) above, if the employment or service of a Participant is terminated for
Cause, all outstanding Options held by the Participant shall immediately be
forfeited to the Company and no additional exercise period shall be allowed,
regardless of the vested status of the Option.

ARTICLE VIII. PHANTOM OPTIONS

        8.1   General. Awards may be granted to Employees and Outside Directors
in the form of Phantom Options. Phantom Options shall be awarded in such numbers
and at such times as the Committee shall determine. All Phantom Options shall be
evidenced by an Award Agreement as described in Section 8.2 below and any
payment or settlement made upon exercise of a Phantom Option shall be made to
the Participant in accordance with the terms and conditions set forth in the
Award Agreement.

        8.2   Award of Phantom Options. Each Award Agreement embodying a Phantom
Option granted pursuant to the Plan shall specify the strike price for each
fictional share of Common Stock subject to the Phantom Option, the number of
fictional shares subject to the Phantom Option being awarded, the manner and
timing of the vesting of the Phantom Option and of payments or transfer of
shares to the Participant under such Award and such other terms and conditions
not inconsistent with the provisions of the Plan as may be approved by the
Committee in its absolute discretion. The strike price of a Phantom Option shall
be determined by the Committee, but such strike price shall not be less than
100% of the Fair Market Value per share of Common Stock on the Grant Date of the
Phantom Option. The term of each Phantom Option shall be as specified by the
Committee; provided, however, that unless otherwise designated by the Committee,
no Phantom Option shall be exercisable later than ten years after the Grant Date
of the Phantom Option. Except as otherwise provided in an applicable Award
Agreement, Participants holding Phantom Options shall not be entitled to any
dividends, rights upon liquidation or other rights of a holder of shares of
Common Stock.

        8.3   Exercise. Subject to the terms and conditions of the Plan, Phantom
Options shall be exercised by the delivery of a written notice of exercise to
Crosstex, setting forth the number of fictional shares with respect to which the
Phantom Option is to be exercised. Subject to the terms and conditions of this
Plan and the applicable Award Agreement, upon exercise each fictional share
subject to a Phantom Option entitles the Participant holding such Phantom Option
to receive the amount, if any, by which the Fair Market Value as of the date of
exercise exceeds the strike price, payable in one or a combination of the
following forms, as determined by the Committee in its absolute discretion:
(i) a cash payment or (ii) a whole number of shares of Common Stock (with cash
payable in lieu of fractional shares).

        8.4   Termination of Employment or Service. Upon a Participant's
termination of employment or service with the Company for any reason other than
for Cause, the vested portion of such Participant's

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Phantom Option shall be deemed to be exercised pursuant to Section 8.3 above and
the unvested portion of such Phantom Option shall immediately be forfeited to
Crosstex. If the employment or service of a Participant shall be terminated for
Cause, all outstanding Phantom Options held by the Participant shall immediately
be forfeited to Crosstex, regardless of the vested status of such Phantom
Options.

ARTICLE IX. RESTRICTED STOCK

        9.1   General. Awards may be granted to Employees and Outside Directors
in the form of Restricted Stock. Restricted Stock shall be awarded in such
numbers and at such times as the Committee shall determine.

        9.2   Restriction Period. At the time an Award of Restricted Stock is
granted, the Committee shall establish a period of time (the "Restriction
Period") applicable to such Restricted Stock. Each Award of Restricted Stock may
have a different Restriction Period, in the discretion of the Committee. The
Restriction Period applicable to a particular Award of Restricted Stock shall
not be changed except as permitted by Article IV or Section 9.3 of this Article.

        9.3   Other Terms and Conditions. Restricted Stock awarded to a
Participant under the Plan shall be represented by a stock certificate
registered in the name of the Participant or, at the option of Crosstex, in the
name of a nominee of Crosstex. Subject to the terms and conditions of the Award
Agreement, a Participant to whom Restricted Stock has been awarded shall have
the right to receive dividends thereon during the Restriction Period, to vote
the Restricted Stock and to enjoy all other stockholder rights with respect
thereto, except that (i) the Participant shall not be entitled to possession of
the stock certificate representing the Restricted Stock until the Restriction
Period shall have expired, (ii) Crosstex shall retain custody of the Restricted
Stock during the Restriction Period, (iii) the Participant may not sell,
transfer, pledge, exchange, hypothecate or otherwise dispose of the Restricted
Stock during the Restriction Period, and (iv) a breach of the terms and
conditions established by the Committee pursuant to the Award of the Restricted
Stock shall cause a forfeiture of the Restricted Stock. At the time of an Award
of Restricted Stock, the Committee may, in its absolute discretion, prescribe
additional terms, conditions, restrictions and/or limitations applicable to the
Restricted Stock, including, but not limited to, rules pertaining to the
termination of employment or service (by reason of death, permanent and total
disability, or otherwise) of a Participant prior to expiration of the
Restriction Period.

        9.4   Payment for Restricted Stock. A Participant shall not be required
to make any payment for Restricted Stock awarded to the Participant, except to
the extent otherwise required by the Committee or by applicable law.

        9.5   Miscellaneous. Nothing in this Article shall prohibit the exchange
of shares of Restricted Stock issued under the Plan pursuant to a plan of
reorganization for stock or securities of Crosstex or another corporation that
is a party to the reorganization, but the stock or securities so received for
shares of Restricted Stock shall, except as provided in Article IV or XII,
become subject to the restrictions applicable to the Award of such Restricted
Stock. Any shares of stock received as a result of a stock split or stock
dividend with respect to shares of Restricted Stock shall also become subject to
the restrictions applicable to the Award of such Restricted Stock.

ARTICLE X. SARs

        10.1 General. The Committee may from time to time grant SARs in
conjunction with all or any portion of any Option (the "Related Option") either
(i) at the time of the initial Option grant (not including any subsequent
modification that may be treated as a new grant of an Incentive Stock Option for
purposes of Section 424(h) of the Code) or (ii) with respect to Nonqualified
Stock Options, at any

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time after the initial Option grant while the Nonqualified Stock Option is still
outstanding. SARs shall not be granted other than in conjunction with an Option
granted hereunder.

        10.2 Terms and Conditions. SARs granted hereunder shall comply with the
following conditions and also with the terms of the Award Agreement governing
the Related Option:

        (a)   The SAR shall expire no later than the expiration of the Related
Option.

        (b)   Upon the exercise of an SAR, the Participant shall be entitled to
receive from Crosstex or the appropriate Affiliate an amount in cash equal to
the excess of the aggregate Fair Market Value of the shares of Common Stock with
respect to which the SAR is then being exercised (determined as of the date of
such exercise) over the aggregate purchase price of such shares as provided in
the Related Option.

        (c)   SARs shall be exercisable (i) only at such time or times and only
to the extent that the Related Option shall be exercisable, (ii) only when the
Fair Market Value of the shares subject to the Related Option exceeds the
purchase price of the shares as provided in the Related Option, and (iii) only
upon surrender of the Related Option or any portion thereof with respect to the
shares for which the SARs are then being exercised.

        (d)   Upon the exercise of an SAR, the Related Option shall be deemed to
have been terminated to the extent of the number of shares of Common Stock with
respect to which such SARs are exercised. Upon the exercise or termination of
the Related Option, the SARs with respect to such Related Option shall be deemed
to have been terminated to the extent of the number of shares of Common Stock
with respect to which the Related Option was so exercised or terminated.

        10.3 Exercise of SARs. Each exercise of SARs, or a portion thereof,
shall be evidenced by a notice in writing to Crosstex.

ARTICLE XI. OTHER INCENTIVE AWARDS

        Subject to the terms and provisions of the Plan, Other Incentive Awards
may be granted to Employees and Outside Directors in such amounts, upon such
terms and at any time and from time to time as shall be determined by the
Committee in its absolute discretion. Other Incentive Awards may be granted
based upon, payable in or otherwise related to, in whole or in part, shares of
Common Stock if the Committee, in its absolute discretion, determines that such
Other Incentive Awards are consistent with the purposes of the Plan. Each grant
of an Other Incentive Award shall be evidenced by an Award Agreement that shall
specify the amount of the Other Incentive Award and the terms, conditions,
restrictions and/or limitations applicable to such Award. Payment of Other
Incentive Awards shall be made at such times and in such form, which may be
cash, shares of Common Stock or other property (or a combination thereof), as
established by the Committee, subject to the terms of the Plan.

ARTICLE XII. CHANGE OF CONTROL

        12.1 Definition of Change of Control. A "Change of Control" shall be
deemed to have occurred if (i) Yorktown Partners LLC, a Delaware limited
liability company, or its Affiliates including any funds under its management
("Yorktown") no longer directly or indirectly owns a controlling interest in
Crosstex, other than as a result of a firm commitment underwritten public
offering, (ii) any sale, lease, exchange or other transfer (in one or a series
of related transactions) of all or substantially all of the assets of Crosstex
to any Person or its Affiliates, other than an Affiliates, or (iii) any merger,
reorganization, consolidation or other transaction pursuant to which more than
50% of the combined voting power of the equity interests in Crosstex ceases to
be owned by Persons who own such interests as of the initial public offering
date of the Common Stock. The phrase "Immediately prior to a Change of Control"
shall be understood to mean sufficiently in advance of a Change of Control to
permit

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Participants to take all steps reasonably necessary to exercise an Award, if
applicable, and to deal with the Common Stock underlying all Awards so that all
Awards and Common Stock issuable with respect thereto may be treated in the same
manner as the shares of stock of other stockholders in connection with the
Change of Control.

        12.2 Effect on Outstanding Awards. Immediately prior to a Change or
Control, all Awards (other than Options granted under the Superseded Plan) shall
automatically vest and become payable or exercisable, as the case may be, in
full. In this regard, all restriction periods shall terminate and all
performance criteria, if any, shall be deemed to have been achieved at the
maximum level. To the extent that an Option or SAR is not exercised upon a
Change of Control, the Committee may, in its discretion, cancel such Award
without payment or provide for a replacement Award with respect to such property
and on such terms as it deems appropriate.

ARTICLE XIII. AMENDMENT AND TERMINATION

        13.1 Plan Amendment and Termination. The Board may at any time suspend,
terminate, amend or modify the Plan, in whole or in part; provided, however,
that no amendment or modification of the Plan shall become effective without the
approval of such amendment or modification by the stockholders of Crosstex
(i) if such amendment or modification increases the maximum number of shares
subject to the Plan (except as provided in Article IV) or changes the
designation or class of persons eligible to receive Awards under the Plan, or
(ii) if counsel for Crosstex determines that such approval is otherwise required
by or necessary to comply with applicable law. The Plan shall terminate upon the
earlier of (i) the termination of the Plan by the Board, or (ii) the expiration
of ten years from the Effective Date. Upon termination of the Plan, the terms
and provisions of the Plan shall, notwithstanding such termination, continue to
apply to Awards granted prior to such termination. No suspension, termination,
amendment or modification of the Plan shall adversely affect in any material way
any Award previously granted under the Plan, without the consent of the
Participant (or the permitted transferee) holding such Award.

        13.2 Award Amendment and Cancellation. The Board may amend the terms of
any outstanding Award granted pursuant to this Plan, but no such amendment shall
adversely affect in any material way the Participant's (or a permitted
transferee's) rights under an outstanding Award without the consent of the
Participant (or the permitted transferee) holding such Award. The Board may,
with a Participant's (or a permitted transferee's) written consent, cancel any
outstanding Award held by such Participant (or permitted transferee) in exchange
for a new Award.

ARTICLE XIV. MISCELLANEOUS

        14.1 Award Agreements. After the Committee grants an Award under the
Plan to a Participant, Crosstex and the Participant shall enter into an Award
Agreement setting forth the terms, conditions, restrictions and/or limitations
applicable to the Award and such other matters as the Committee may determine to
be appropriate. The terms and provisions of the respective Award Agreements need
not be identical. All Award Agreements shall be subject to the provisions of the
Plan, and in the event of any conflict between an Award Agreement and the Plan,
the terms of the Plan shall govern. Any provision of this Plan to the contrary
notwithstanding, all Options granted under the Superseded Plan shall be subject
to the provisions of the Superseded Plan, and in the event of any conflict
between the terms of an Award Agreement granted under the Superseded Plan and
the Superseded Plan, the terms of the Superseded Plan shall govern.

        14.2 Listing Conditions.

        (a)   As long as the Common Stock is listed on a national securities
exchange or system sponsored by a national securities association, the issuance
of any shares of Common Stock pursuant to an Award shall be conditioned upon
such shares being listed on such exchange or

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system. Crosstex shall have no obligation to issue such shares unless and until
such shares are so listed, and the right to exercise any Option or other Award
with respect to such shares shall be suspended until such listing has been
effected.

        (b)   If at any time counsel to Crosstex or its Affiliates shall be of
the opinion that any sale or delivery of shares of Common Stock pursuant to an
Award is or may in the circumstances be unlawful or result in the imposition of
excise taxes on Crosstex or its Affiliates under the statutes, rules or
regulations of any applicable jurisdiction, Crosstex or its Affiliates shall
have no obligation to make such sale or delivery, or to make any application or
to effect or to maintain any qualification or registration under the Securities
Act of 1933, as amended, or otherwise, with respect to shares of Common Stock or
Awards, and the right to exercise any Option or other Award shall be suspended
until, in the opinion of said counsel, such sale or delivery shall be lawful or
will not result in the imposition of excise taxes on Crosstex or its Affiliates.

        (c)   Upon termination of any period of suspension under this
Section 14.2, any Award affected by such suspension which shall not then have
expired or terminated shall be reinstated as to all shares available before such
suspension and as to shares which would otherwise have become available during
the period of such suspension, but no such suspension shall extend the term of
any Award.

        14.3 Additional Conditions. Notwithstanding anything in the Plan to the
contrary: (i) Crosstex may, if it shall determine it necessary or desirable for
any reason, at the time of grant of any Award or the issuance of any shares of
Common Stock pursuant to any Award, require the recipient of the Award or such
shares of Common Stock, as a condition to the receipt thereof, to deliver to
Crosstex a written representation of present intention to acquire the Award or
such shares of Common Stock for his or her own account for investment and not
for distribution; (ii) the certificate for shares of Common Stock issued to a
Participant may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer, and (iii) all certificates for shares of
Common Stock delivered under the Plan shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the SEC, any stock exchange upon
which the Common Stock is then quoted, any applicable federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

        14.4 Nonassignability. No Award granted under the Plan may be sold,
transferred, pledged, exchanged, hypothecated or otherwise disposed of, other
than by will or pursuant to the applicable laws of descent and distribution.
Further, no such Award shall be subject to execution, attachment or similar
process. Any attempted sale, transfer, pledge, exchange, hypothecation or other
disposition of an Award not specifically permitted by the Plan or the Award
Agreement shall be null and void and without effect. All Awards granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant or, in the event of the Participant's legal incapacity, by
his or her guardian or legal representative.

        14.5 Withholding Taxes. The Company shall be entitled to deduct from any
payment made under the Plan, regardless of the form of such payment, the amount
of all applicable income and employment taxes required by law to be withheld
with respect to such payment, may require the Participant to pay to the Company
such withholding taxes prior to and as a condition of the making of any payment
or the issuance or delivery of any shares of Common Stock under the Plan, and
shall be entitled to deduct from any other compensation payable to the
Participant any withholding obligations with respect to Awards under the Plan.
In accordance with any applicable administrative guidelines it establishes, the
Committee may allow a Participant to pay the amount of taxes required by law to
be withheld from or with respect to an Award by (i) withholding shares of Common
Stock from any payment of Common Stock due as a result of such Award, or
(ii) permitting the Participant to deliver to the Company

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previously acquired shares of Common Stock, in each case having a Fair Market
Value equal to the amount of such required withholding taxes. No payment shall
be made and no shares of Common Stock shall be issued pursuant to any Award
unless and until the applicable tax withholding obligations have been satisfied.

        14.6 No Fractional Shares. No fractional shares of Common Stock shall be
issued or delivered pursuant to the Plan or any Award granted hereunder, and
except as otherwise provided herein, no payment or other adjustment shall be
made in respect of any such fractional share.

        14.7 Notices. All notices required or permitted to be given or made
under the Plan or any Award Agreement shall be in writing and shall be deemed to
have been duly given or made if (i) delivered personally, (ii) transmitted by
first class registered or certified United States mail, postage prepaid, return
receipt requested, (iii) sent by prepaid overnight courier service, or (iv) sent
by telecopy or facsimile transmission, answer back requested, to the person who
is to receive it at the address that such person has theretofore specified by
written notice delivered in accordance herewith. Such notices shall be effective
(i) if delivered personally or sent by courier service, upon actual receipt by
the intended recipient, (ii) if mailed, upon the earlier of five days after
deposit in the mail or the date of delivery as shown by the return receipt
therefor, or (iii) if sent by telecopy or facsimile transmission, when the
answer back is received. Crosstex or a Participant may change, at any time and
from time to time, by written notice to the other, the address that it or such
Participant had theretofore specified for receiving notices. Until such address
is changed in accordance herewith, notices hereunder or under an Award Agreement
shall be delivered or sent (i) to a Participant at his or her address as set
forth in the records of the Company or (ii) to Crosstex at the principal
executive offices of Crosstex clearly marked "Attention: LTIP Administrator."

        14.8 Binding Effect. The obligations of Crosstex under the Plan shall be
binding upon any successor corporation or organization resulting from the
merger, consolidation or other reorganization of Crosstex, or upon any successor
corporation or organization succeeding to all or substantially all of the assets
and business of Crosstex. The terms and conditions of the Plan shall be binding
upon each Participant and his or her heirs, legatees, distributees and legal
representatives.

        14.9 Severability. If any provision of the Plan or any Award Agreement
is held to be illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining provisions of the Plan or such agreement, as the
case may be, but such provision shall be fully severable and the Plan or such
agreement, as the case may be, shall be construed and enforced as if the illegal
or invalid provision had never been included herein or therein.

        14.10 No Restriction of Corporate Action. Nothing contained in the Plan
shall be construed to prevent Crosstex or any Affiliate from taking any
corporate action (including any corporate action to suspend, terminate, amend or
modify the Plan) that is deemed by Crosstex or such Affiliate to be appropriate
or in its best interest, whether or not such action would have an adverse effect
on the Plan or any Awards made or to be made under the Plan. No Participant or
other person shall have any claim against Crosstex or any Affiliate as a result
of such action.

        14.11 Governing Law. The Plan shall be governed by and construed in
accordance with the internal laws (and not the principles relating to conflicts
of laws) of the State of Delaware except as superseded by applicable federal
law.

        14.12 No Right, Title or Interest in Company Assets. No Participant
shall have any rights as a stockholder of Crosstex as a result of participation
in the Plan until the date of issuance of a stock certificate in his or her name
and, in the case of Restricted Stock, unless and until such rights are granted
to the Participant pursuant to the Plan. To the extent any person acquires a
right to receive payments from the Company under the Plan, such rights shall be
no greater than the rights of an

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unsecured general creditor of the Company, and such person shall not have any
rights in or against any specific assets of the Company. All of the Awards
granted under the Plan shall be unfunded.

        14.13 Risk of Participation. Nothing contained in the Plan shall be
construed either as a guarantee by Crosstex or its Affiliates, or their
respective stockholders, directors, officers or employees, of the value of any
assets of the Plan or as an agreement by Crosstex or its Affiliates, or their
respective stockholders, directors, officers or employees, to indemnify anyone
for any losses, damages, costs or expenses resulting from participation in the
Plan.

        14.14 No Guarantee of Tax Consequences. No person connected with the
Plan in any capacity, including, but not limited to, Crosstex and the Affiliates
and their respective directors, officers, agents and employees, makes any
representation, commitment or guarantee that any tax treatment, including, but
not limited to, federal, state and local income, estate and gift tax treatment,
will be applicable with respect to any Awards or payments thereunder made to or
for the benefit of a Participant under the Plan or that such tax treatment will
apply to or be available to a Participant on account of participation in the
Plan.

        14.15 Continued Employment or Service. Nothing contained in the Plan or
in any Award Agreement shall confer upon any Participant the right to continue
in the employ or service of the Company, or interfere in any way with the rights
of the Company to terminate a Participant's employment or service at any time,
with or without cause.

        14.16 Miscellaneous. Headings are given to the articles and sections 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 of the Plan or
any provisions hereof. The use of the masculine gender shall also include within
its meaning the feminine. Wherever the context of the Plan dictates, the use of
the singular shall also include within its meaning the plural, and vice versa.

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        IN WITNESS WHEREOF, this Plan has been executed as of this 31st day of
December 2003.

    CROSSTEX ENERGY, INC.
 
 
By:
       

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William W. Davis
Senior Vice President and Chief Financial Officer

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QuickLinks

Exhibit 10.5

CROSSTEX ENERGY, INC. LONG-TERM INCENTIVE PLAN (Amended and Restated Effective
as of December 31, 2003)