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EXHIBIT
10.5


Regency GP LLC

Long-Term Incentive Plan




Grant of Options




Grantee:                                                             




Grant Date:                                                             , 200___





	1.	 	Grant of Options. Regency GP LLC (the “Company”) hereby grants to you the right
and option (“Options”) to purchase all or any part of an aggregate of [___] Common Units
(“Units”) of Regency Energy Partners LP on the terms and conditions set forth herein and in
the Regency GP LLC Long-Term Incentive Plan (the “Plan”), which is incorporated herein by
reference as a part of this Agreement. This grant of Options does not include a tandem grant
of DERs. In the event of any conflict between the terms of this Agreement and the Plan, the
Plan shall control. Capitalized terms used but not defined in this Agreement shall have the
meaning attributed to such terms under the Plan, unless the context requires otherwise.
	 
	2.	 	Purchase Price. The purchase price per Unit purchased pursuant to the exercise of
the Options shall be $                    , subject to adjustment as provided in the Plan.
	 
	3.	 	Vesting and Exercise of Option. Subject to the further provisions of this Agreement,
the Options shall become vested and may be exercised in accordance with the following
schedule, by written notice to the Company at its principal executive office addressed to the
attention of its Secretary (or such other officer or employee of the Company as the Company
may designate from time to time):





	 	 	 
	Anniversary of
	 	Cumulative
	Grant Date
	 	Vested Percentage






[Vesting Schedule]





Notwithstanding the above schedule, but subject to the further provisions hereof, upon the
occurrence of the following events the Options shall vest and become exercisable as provided
below:




	 	(a)	 	Disability. If your employment with the Company and its Affiliates
terminates by reason of a disability that entitles you to benefits under the Company’s
or an Affiliate’s long-term disability plan, the Options shall become fully vested and,
subject to the further provisions of this Agreement, may be exercised at any time
during the one-year period following such termination by you or by your guardian





 









 






or legal representative (or, if you die during such one-year period, by your estate
or the person who acquires the Options by will or the laws of descent and
distribution).




	 	(b)	 	Death. If you die while in the employ of the Company or an Affiliate,
the Options shall become fully vested and, subject to the further provisions of this
Agreement, your estate (or the person who acquires the Options by will or the laws of
descent and distribution) may exercise the Options at any time during the one-year
period following the date of your death.
	 
	 	(c)	 	Other Terminations. If your employment with the Company and its
Affiliates is terminated for any reason other than as provided in paragraphs 3(a) and
(b) above, the Options, to the extent vested on the date of your termination, may be
exercised, subject to the further provisions of this Agreement, at any time during the
three month period following such termination by you or by your guardian or legal
representative (or by your estate or the person who acquires the Options by will or the
laws of descent and distribution or otherwise by reason of your death if you die during
such period), but only as to the vested number of Units, if any, that you were entitled
to purchase hereunder as of the date your employment so terminates.
	 
	 	(d)	 	Change of Control. The Options shall become fully vested upon a Change
of Control.






For purposes of this Agreement, “employment with the Company” shall include being a Director
or an employee of, or a Consultant to, the Company or an Affiliate.




There is no minimum or maximum number of Units that must be purchased upon exercise of the
Options. Instead, the Option may be exercised, at any time and from time to time, to
purchase any number of Units that are then vested and exercisable according to the
provisions of this Agreement.




Notwithstanding any of the foregoing, the Options shall not be exercisable in any event
after the expiration of 10 years from the Grant Date.




All Options that are not vested on your termination of employment with the Company as
provided above shall be automatically cancelled without payment upon such termination.




	4.	 	Payment of Exercise Price. The purchase price of the Units as to which the Options
are exercised shall be paid in full at the time of exercise (a) in cash (including by check
acceptable to the Company), (b) if the Units are readily tradable on a national securities
market or exchange, through a “cashless broker exercise” procedure (a “cashless broker
exercise” is not available for executive officers of the Company except to the extent the
exercise in such manner is approved in advance by the Company) in accordance with a program
established by the Company, (c) any other method approved by the Company, or (d) any
combination of the foregoing. No fraction of a Unit shall be transferred upon exercise of the
Options. Unless and until a certificate or certificates representing such Units shall have
been transferred by the Company to you, you (or the person permitted to





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exercise the Options in the event of your death) shall not be or have any of the rights or
privileges of a unitholder of the Company with respect to Units acquirable upon an exercise
of the Options.




	5.	 	Withholding of Taxes. To the extent that the exercise of an Option results in the
receipt of compensation by you with respect to which the Company or an Affiliate has a tax
withholding obligation pursuant to applicable law, unless other arrangements have been made by
you that are acceptable to the Company or such Affiliate, which, with the consent of the
Committee, may include withholding a number of Units that would otherwise be delivered on
exercise or vesting that have an aggregate Fair Market Value that does not exceed the amount
of taxes to be withheld, you shall deliver to the Company or the Affiliate such amount of
money as the Company or the Affiliate may require to meet its withholding obligations under
such applicable law. No delivery of Units shall be made pursuant to the exercise of an Option
under this Agreement until you have paid or made arrangements approved by the Company or the
Affiliate to satisfy in full the applicable tax withholding requirements of the Company or
Affiliate.
	 
	6.	 	Restrictions. By accepting this grant, you agree that the Units that you may acquire
by exercising the Options will not be sold or otherwise disposed of in any manner that would
constitute a violation of any applicable federal or state securities laws. You also agree
that (i) the certificates representing the Units purchased under the Options may bear such
legend or legends as the Committee deems appropriate in order to assure compliance with
applicable securities laws, (ii) the Company may refuse to register the transfer of the Units
purchased under the Options on the transfer records of the Company if such proposed transfer
would in the opinion of counsel satisfactory to the Company constitute a violation of any
applicable securities law, and (iii) the Company may give related instructions to its transfer
agent, if any, to stop registration of the transfer of the Units purchased under the Options.
	 
	7.	 	Limitations Upon Transfer. All rights under this Agreement shall belong to you alone
and may not be transferred, assigned, pledged, or hypothecated by you in any way (whether by
operation of law or otherwise), other than by will or the laws of descent and distribution and
shall not be subject to execution, attachment, or similar process. Upon any attempt by you to
transfer, assign, pledge, hypothecate, or otherwise dispose of such rights contrary to the
provisions in this Agreement or the Plan, or upon the levy of any attachment or similar
process upon such rights, such rights shall immediately become null and void.
	 
	8.	 	Insider Trading. The terms of the Company’s Insider Trading Policy with respect to
Units are incorporated herein by reference. The timing of the delivery of any Units pursuant
to an Option exercise shall be subject to and comply with such policy.
	 
	9.	 	Binding Effect. This Agreement shall be binding upon and inure to the benefit of any
successors to the Company and all persons lawfully claiming under you.
	 
	10.	 	Entire Agreement. This Agreement constitutes the entire agreement of the parties
with regard to the subject matter hereof, and contains all the covenants, promises,




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	 	 	representations, warranties and agreements between the parties with respect to the Option
granted hereby. Without limiting the scope of the preceding sentence, all prior
understandings and agreements, if any, among the parties hereto relating to the subject
matter hereof are hereby null and void and of no further force and effect.
	 
	11.	 	Modifications. Except as provided below, any modification of this Agreement shall be
effective only if it is in writing and signed by both you and an authorized officer of the
Company.
	 
	12.	 	Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Texas, without regard to conflicts of laws principles thereof.





          IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer all effective as of the day and year first above written.




	 	 	 	 	 
	 	 	REGENCY GP LLC
	 

	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 







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