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Exhibit 10.5    
    

CROSSTEX ENERGY, INC.

LONG-TERM INCENTIVE PLAN

(Amended and Restated Effective as of                        , 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                        , 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void, and the Superseded Plan (and option grants made under said plan) shall remain in full force and effect.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. 

        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. 

        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 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 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 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 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 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 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 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 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 of 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 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 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 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. 

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

	 	 	CROSSTEX ENERGY, INC.
	

 	
 	

 	

 	

 
	 	 	By:	 	 
	 	 	 	

	 	 	 	Name:	 
	 	 	 	 	

	 	 	 	Title:	 
	 	 	 	 	

	 	 	 	 	 

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Exhibit 10.14  

 
 

CROSSTEX ENERGY HOLDINGS INC.    
    
    2000 STOCK OPTION PLAN    
    

RECITALS:  

        A.    Effective as of May 5, 2000 (the "Effective Date"), the Board of Directors of Crosstex Energy Holdings Inc., a Delaware corporation
(the "Company"), hereby adopts this 2000 Stock Option Plan (the "Plan") for certain officers and employees of the Company. 

        B.    It
is the purpose of this Plan to promote the interests of the Company and its stockholders by attracting, retaining and stimulating the performance of selected Employees
(as defined below) and giving such Employees the opportunity to acquire a proprietary interest in the Company and an increased personal interest in its continued success and progress, by granting to
such persons options to acquire additional shares of common stock of the Company, subject to the terms and conditions described below. 

ARTICLE I
  GENERAL  

        1.1    Definitions.    Terms used in this Plan and not otherwise defined shall have the respective meanings assigned
to such terms in the Bylaws of the Company (the "Bylaws"), and the following terms shall have the following meanings: 

        "Board" means the Board of Directors of the Company. 

        "Code" means the Internal Revenue Code of 1986, as amended. 

        "Common Stock" means the common stock, $.01 par value per share, of the Company. 

        "Employee" shall mean any individual treated as an employee by the Company. 

        "Expiration Date" means 5:00 p.m. Dallas, Texas time, on the earlier to occur of the fifth anniversary of the Effective Date or the
Sale of the Company. 

        "Option" means any option granted to an Employee hereunder. 

        "Optionee" means any Employee to whom an Option has been granted under this Plan. 

        "Options" means collectively all Options granted to Employees hereunder. 

        "Sale of the Company" means the sale of all shares of the Common Stock or all or substantially all of the assets of the Company. 

ARTICLE II
  ADMINISTRATION  

        The Plan shall be administered by the Board. The Board may delegate responsibility for administration of the Plan to a committee appointed by and serving under
the pleasure of the Board. The Board shall have full authority, discretion or power to select the Employees who will receive Options and, subject to the aggregate limitations set forth herein, to set
the number of shares of Common Stock to be covered by each Option granted to an Employee and the decisions of the Board relating to such matters shall be final and binding upon the Company and the
Employees. Neither the Board nor any committee of the Board shall have the authority, discretion or power (absent express approval by the stockholders of the Company) to alter any of the terms or
conditions specified herein. 

 

        Subject
to the foregoing limitations, the Board shall have authority and power to adopt such rules and regulations and to take such action as it shall consider necessary or advisable for
the administration of the Plan, and to construe, interpret and administer the Plan. The Board shall incur no liability by reason of any action or determination made in good faith with respect to the
Plan or any option agreement entered into pursuant to the Plan. 

ARTICLE III
  GRANT OF OPTIONS  

        3.1    Option Agreement.    Each Option granted under the Plan to an Employee shall be evidenced by a written option
agreement, which agreement shall be entered into by the Company and the Employee to whom the Option is granted. The agreement for each Option shall be in substantially the form set forth in  Exhibit A hereto, with appropriate insertions of the name of the optionee, the number of shares for which such option may be exercised and the
exercise price. 

        3.2    Maximum Number of Shares Subject to Options.    The total number of shares which may be acquired upon exercise
of all Options granted pursuant to the Plan shall not exceed 180,000 shares of Common Stock, subject to adjustment upon changes in capital structure and certain other corporate transactions
as determined by the Board and as set forth in the Option Agreement. If and to the extent that Options granted under the Plan terminate, are reduced in number, expire or are canceled without having
been fully exercised, new Options may be granted under the Plan with respect to the shares covered by the unexercised portion of such terminated, expired or canceled Options. 

        3.3    Grant of Options.    The Board may at any time grant any of the remaining Options authorized under this Plan to
any person then serving as a Employee of the Company on the date of such grant, subject to the limitations described herein. Subject to Section 3.2, the Board shall have the authority, in its
sole discretion, to determine: 

        (a)    the
persons (from among the class of persons eligible to receive Options under the Plan) to whom Options shall be granted; 

        (b)    the
time or times at which Options shall be granted; 

        (c)    the
number of shares for which an Option may be exercisable; 

        (d)    the
price at which each share may be purchased, which shall equal the "Fair Market Value" (as defined in Section 3.4) of a share on the date of grant; provided,
however, that subsequent to the grant of any Option, the Board may, at its discretion and with the written consent of the Optionee, establish a new price at which each share may be purchased; and 

        (e)    whether
and to what extent any Options that are exercisable for shares are also subject to vesting based upon the Optionee's continued service to, or the performance of,
the Company. 

        3.4    Determination of Fair Market Value.    For purposes of the Plan, the "Fair Market Value" of a share of Common
Stock shall be determined as follows: 

        (a)    if
the shares are publicly traded, (x) the closing price on the business day immediately preceding the date of grant if any trades were made on such business day
and such information is available, otherwise the average of the last bid and asked prices on the business day immediately preceding the date of grant, in the over-the-counter
market as reported by the National Association of Securities Dealers Automated Quotations System ("NASDAQ") or (y) if such shares are then traded on a national securities exchange, the closing
price on the business day immediately preceding the date of grant, if any trades were made on such business day and such information is available, otherwise the average of the high and low prices on
the business day immediately preceding the date of grant, on the principal national securities exchange on which it is so traded; or 

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        (b)    if
there is no public trading market for such shares, the fair value of such shares on the date of grant as reasonably determined in good faith by the Board after taking
into consideration all factors which it deems appropriate, including, without limitation, recent sale and offer prices of such shares in private transactions negotiated at arms length. All
determinations pursuant to this Section 3.4(b) shall be made without regard to any restriction other than a restriction which, by its terms, will never lapse. 

        3.5    Other Provisions.    Each Option granted under the Plan may contain such other terms and conditions not
inconsistent with the Plan as may be determined by the Board, in its sole discretion. 

ARTICLE IV
  GENERAL PROVISIONS  

        4.1    Termination of Plan.    The Plan shall terminate whenever the Board adopts a resolution to that effect. If not
sooner terminated under the preceding sentence, the Plan shall wholly cease and expire at the close of business on the Expiration Date. After termination of the Plan, no Option shall be granted under
this Plan. 

        4.2    Amendment of Plan.    The Board may from time to time amend, modify, suspend or terminate the Plan.
Nevertheless, no such amendment, modification, suspension or termination shall impair any Options theretofore granted under the Plan or deprive any Optionee of any shares of Common Stock which he
might have acquired through or as a result of the Plan. 

        4.3    No Evidence of Employment or Service.    Nothing contained in the Plan or in any Option Agreement shall confer
upon any Optionee any right with respect to the continuation of his or her employment by or service with the Company or interfere in any way with the right of the Company (subject to the terms of any
separate agreement to the contrary) at any time to terminate such employment or service or to increase or decrease the compensation of the Optionee from the rate in existence at the time of the grant
of an Option. 

        4.4    Treatment of Proceeds.    Proceeds from the sale of Common Stock pursuant to Options granted under the Plan
shall constitute general funds of the Company. 

        4.5    Effectiveness.    This Plan shall become effective as of the Effective Date. 

        4.6    Choice of Law.    All questions concerning the construction, interpretation and validity of this Plan and the
instruments evidencing the Options granted hereunder shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without giving effect to any choice or
conflict of law provision or rule (whether in the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. In
furtherance of the foregoing, the internal law of the State of Delaware will control the interpretation and construction of this Plan, even if under such jurisdiction's choice of law or conflict of
law analysis, the substantive law of some other jurisdiction would otherwise apply. 

        4.7    Paragraph Headings.    The paragraph headings included herein are only for convenience, and they shall have no
effect on the interpretation of the Plan. 

        As
adopted by the Board of Directors of Crosstex Energy Holdings Inc. on May     , 2000. 

*
* * * * * * * * * * * 

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   EXHIBIT A  

 OPTION AGREEMENT  

        This Option Agreement ("Agreement"), made and entered into as
of                        , 2000, is by and between Crosstex Energy Holdings Inc., a Delaware
corporation (the "Company"), and                        (the "Optionee"). 

WITNESSETH: 

        WHEREAS,
the Company has adopted that certain 2000 Stock Option Plan (the "Plan") effective as of May    , 2000 (the "Plan Date") for certain employees of the Company; and 

        WHEREAS,
the Optionee is an employee of the Company eligible to participate in the Plan and the Board of Directors of the Company, as administrator of the Plan, has determined that the
Company should recognize the potential contributions that the Optionee may make to the success of the Company by granting him an option to purchase shares of Common Stock in the Company pursuant to
the Plan and upon the terms set forth herein; 

        NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the Company and Optionee hereby agree as follows: 

        1.    Certain Definitions.    Terms used in this Agreement and not otherwise defined shall have the respective
meanings assigned to such terms in the Plan; and the following terms shall have the following meanings: 

        "Expiration Date" means 5:00 p.m., Dallas, Texas time, on the earlier to occur of the fifth anniversary of the Plan Date or the
Sale of the Company. 

        "Market Price" means with respect to any share of Common Stock on any date: 

        (a)    If
the Common Stock is listed or admitted for trading on any national securities exchange or that such shares are quoted on the National Association of Securities
Dealers Automated Quotations System ("NASDAQ"), or any similar system of automated dissemination of quotations of securities prices, the average of the last reported sale prices for such shares for
the 20 consecutive Trading Days (as defined below) beginning 30 Trading Days before the day in question. The last reported sale price for each day shall be (i) if the shares are listed or
admitted for trading on any national securities exchange, the last sale price, or the closing bid price if no sale occurred, of the shares on the principal securities exchange on which the shares are
listed or admitted to trading, (ii) the last reported sale price of the shares on the NASDAQ or any similar system of automated dissemination of quotations of securities prices then in common
use, if so quoted, or (iii) if not quoted as described in clause (ii) above, the mean between the high bid and low asked quotations for the shares as reported by the National Quotation
Bureau, Inc. if at least two securities dealers have inserted both bid and asked quotations for the shares on at least 10 of such 20 consecutive Trading Days. If the shares are quoted on a
national securities or central market system, in lieu of a market or quotation system described above, the last reported sale price shall be determined in the manner set forth in clause (iii)
of the preceding sentence if bid and asked quotations are reported but actual transactions are not, and in the manner set forth in clause (ii) of the preceding sentence if actual transactions
are reported. If none of the conditions set forth above is met, the last reported sale price of the shares on any day or the average of such last reported sale prices for any period shall be the fair
market value of the shares as determined by a member firm of the New York Stock Exchange, Inc. selected by the Company. The term "Trading Days", as used herein, means (i) if the shares
are listed or admitted for trading on any national securities exchange, days on which such national securities exchange is open for business, or (ii) if the shares are quoted on NASDAQ, or any
similar system of automated dissemination of quotations of securities prices, days on which trades may be made on such system. 

1

 

        (b)    If
the Common Stock is not listed or admitted for trading on any national securities exchange or if the conditions set forth in subsection (a) above are not
otherwise applicable, the fair value of such shares on the date of determination as reasonably determined in good faith by the Board after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and offer prices of such shares in private transactions negotiated at arms length. All determinations pursuant to this subsection
(b) shall be made without regard to any restriction other than a restriction which, by its terms, will never lapse. 

        "1933 Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 

        "Original Stockholders" means those persons that acquired shares of the capital stock of the Company on the Plan Date. 

        "State Law" means applicable state securities laws and the rules and regulations promulgated thereunder. 

        2.    The Plan.    The terms and provisions of the Plan are hereby incorporated into this Agreement as if set forth
herein in their entirety. In the event of a conflict between any provision of this Agreement and the Plan, the provisions of the Plan shall control. A copy of the Plan may be obtained from the Company
by the Optionee upon request. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Plan. 

        3.    Grant of Option.    Subject to the terms and conditions hereinafter set forth, the Company hereby irrevocably
grants to the Optionee the right and option (the "Option") to purchase            shares ("Option Shares") of Common Stock, subject to adjustment in accordance with the provisions of
Section 8 of this Agreement. 

        4.    Option Price.    The price to be paid by Optionee to the Company for each Option Share purchased pursuant to the
exercise of this Option ("Option Price") shall be $            ; provided, however, that the Option Price shall be subject to adjustment in accordance with the provisions of Section 8
of
this Agreement. 

        5.    Vesting of Right to Exercise Option.    

        (a)    Except
as otherwise provided in this Agreement, the right to exercise this Option shall vest as determined by the Board. From and after each date of vesting, Optionee
may exercise this Option, subject to the terms and conditions set forth herein, to purchase all or any portion of the Option Shares for which Optionee's rights have vested. 

        (b)    To
the extent Optionee does not purchase all or any part of the Option Shares at the times this Option becomes exercisable, the Optionee has the right cumulatively
thereafter to purchase any Option Shares not so purchased and such right shall continue until this Option terminates or expires. 

        (c)    If
Optionee's employment by the Company is terminated for "cause" or Optionee voluntarily terminates his or her employment other than for "good reason" (as defined
below), the Option shall automatically terminate as of the date of such termination, and the right to exercise this Option shall immediately be forfeited. For purposes of this Agreement, a
"termination for cause" shall mean (i) if Optionee is subject to a written employment agreement with the Company or if the employment agreement does not include a definition of "cause" for the
purposes of termination, any termination for cause as set forth in such employment agreement, and (ii) if Optionee is not subject to a written employment agreement with the Company, any of the
following: (A) Optionee's conviction of, or plea of nolo contendere to, any felony or to any crime or offense causing substantial harm to the Company or its affiliates or involving acts of
theft, fraud, embezzlement, moral turpitude or similar conduct; (B) Optionee's repeated intoxication by alcohol or drugs during the performance of his duties in a 

2

 

manner
that materially and adversely affects Optionee's performance of such duties; (C) malfeasance in the conduct of Optionee's duties, including, but not limited to, (1) willful and
intentional misuse or diversion of funds of the Company, or its affiliates, (2) embezzlement, or (3) fraudulent or willful and material misrepresentations or concealments on any written
reports submitted to the Company or its affiliates; or (D) Optionee's material failure to perform the duties of Optionee's employment or material failure to follow or comply with the reasonable
and lawful written directives of the Board of Directors or senior officers of the Company, in any case under this clause (D) only after Optionee shall have been informed in writing of such
material failure and given a period of not more than 30 days to remedy same. 

        (d)    If
Optionee's employment by the Company is terminated voluntarily by Optionee for "good reason" or by action of the Company for reasons other than for cause, this Option
may be exercised, but only (i) within three months after such termination (if otherwise prior to the date of expiration of this Option), and not thereafter unless otherwise determined by the
Board, and (ii) to purchase the number of Option Shares, if any, that could be purchased upon exercise of this Option at the date of termination of Optionee's employment. For purposes of this
Agreement, a termination by Optionee for good reason shall mean (i) if Optionee is subject to a written employment agreement with the Company, any termination for "good reason" as set forth in
such employment agreement and (ii) if Optionee is not subject to a written employment agreement with the Company or if the employment agreement does not include a definition of "good reason"
for the purposes of termination, any of the following: (A) if without Optionee's consent, Optionee is required to be based at any location that is more than 50 miles from the current executive
offices of the Company, (B) there is a Change of Control of the Company (as defined below); or (C) the Company reduces or proposes to reduce the base salary of the Employee other than a
proportionate reduction in connection with a like reduction in the salaries of all officers. For purposes hereof, "Change of Control" shall mean (1) a sale of all or substantially all of the
assets of the Company, (2) a sale of all or more than 50% of the outstanding equity interests of the Company, or (3) any merger, consolidation, or reorganization to which the Company,
except for a merger, consolidation, or reorganization in which the Company is the surviving corporation and, after giving effect to such merger, consolidation, or reorganization, the holders of the
outstanding equity interests (on a fully diluted basis) of the Company immediately prior to the merger, consolidation, or reorganization will own immediately following the merger, consolidation, or
reorganization, equity interests holding a majority of the voting power of the Company. For purposes of this subsection (d), if this Option shall not have fully vested as of the date of termination of
Optionee's employment, then a ratable portion of the number of Option Shares which would have become purchasable upon the next vesting date shall be deemed to have vested as of the date of such
termination (determined by multiplying the number of Option Shares that vest on the next vesting date
by a fraction with a numerator equal to the number of full months which have then elapsed since the last vesting date and a denominator of 12, and rounding to the closest whole number). 

        (e)    In
the event of Optionee's death or disability, this Option shall remain outstanding and may be exercised by the person who acquires this Option by will or the laws of
descent and distribution, or by Optionee, as the case may be, but only (i) within the one year period following the date of death or disability (if otherwise prior to the date of expiration of
this Option), and not thereafter, and (ii) to purchase the number of Option Shares that were subject to purchase upon exercise of this Option at the time of such death or disability, plus the
number of Option Shares that would have become purchasable upon the next vesting date. 

        (f)    The
terms regarding the vesting or termination of the Option contained in any written employment agreement between Optionee and the Company shall amend and supplement
this Section 5. 

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        6.    Restrictions on Exercise.    The right to exercise the Option shall be subject to the following restrictions: 

        (a)    Vesting.    Optionee shall have no right to exercise this Option to purchase any Option Shares for which
Optionee's rights have not yet vested in accordance with Section 5. 

        (b)    No Fractional Option Shares.    The Option may be exercised only with respect to full Option Shares. 

        (c)    Compliance with Law.    The Option may not be exercised in whole or in part, and no Option Shares shall be
issued nor certificates representing such Option Shares delivered pursuant to any exercise of the Option, if any requisite approval or consent of any governmental authority of any kind having
jurisdiction over the exercise of options or the issuance and sale of Option Shares shall not have been obtained or if such exercise or issuance would violate any applicable law. 

        (d)    Exercise by Optionee.    The Option shall be exercisable only by the Optionee, any representative of the
Optionee, and by any transferee who has received such Option pursuant to Section 5(e). 

        7.    Exercise of Option.    

        (a)    Subject
to the other terms and provisions of this Agreement, the Option shall be exercisable by written notice timely given to the Company by the Optionee, which notice
(i) shall state the number of Option Shares that the Optionee then desires to purchase, and (ii) shall be accompanied by payment in full of the Option Price for each of such Option
Shares, which such payment shall be made in cash or certified check; provided, however, that Optionee may make payment by surrender of shares of Common Stock owned by Optionee (the "Payment Shares"),
the aggregate Market Price of which shall be credited against the Option Price; provided, however, that in lieu of actually tendering the Payment Shares, the Optionee may make a constructive exchange
by relinquishing shares of Common Stock ("Constructive Exchange") represented by the then exercisable portion of the Option hereby granted. Optionee shall notify the Company in writing of any election
to pay all or a portion of the Option Price using a Constructive Exchange. Such notice shall specify the number of Payment Shares to be used in the Constructive Exchange. Upon receipt of such notice
and the required information referred to in the immediately preceding sentence, the Company shall confirm ownership of the Payment Shares by reference to Company records. Upon such confirmation, the
Company shall treat the Payment Shares as being constructively exchanged, and accordingly, the Company shall issue to the Optionee a net number of shares of Common Stock equal to (i) the number
of shares subject to the option exercise for which the Constructive Exchange is being exercised, less (ii) the number of Payment Shares. The Optionee may elect to exercise using a Constructive
Exchange any number of times in succession, subject to compliance with the procedures set forth herein. 

        (b)    The
Company shall be entitled to require the Optionee to deliver to the Company such documents as the Company in its discretion shall deem necessary to confirm that
(i) such exercise and the Company's issuance and sale of such Option Shares are in compliance with the requirements of any applicable laws (including, but not limited to, the 1933 Act and State
Law) and (ii) the Optionee shall be bound by and comply with all of the terms and provisions of the Stockholders Agreement. 

        (c)    Unless
the Company and Optionee shall make mutually acceptable alternative arrangements, at the time of exercise of the Option, Optionee shall pay to the Company, in
cash, any federal, state and local taxes required by law to be paid or withheld in connection with such exercise. 

        8.    Recapitalization or Reorganization; Adjustments.    

        (a)    The
existence of this Option shall not affect in any way the right or power of the Company to make or authorize any adjustment, recapitalization, reorganization or other
change in the Company's capital structure or its business, any merger or consolidation of, or share exchange involving, the 

4

 

Company,
any issuance of additional Company securities with priority over the Common Stock or otherwise affecting the Common Stock or the rights thereof, the dissolution or liquidation of the
Company's Common Stock or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding. 

        (b)    If:    (i) the
Company merges, consolidates or reconstitutes or exchanges shares with or into any other entity either in a situation in which
(X) the Company is not the surviving entity, or (Y) the Company's Original Stockholders shall collectively no longer own at least 50% of the outstanding equity securities of the Company,
(ii) the Company sells, leases or exchanges or agrees to sell, lease or exchange all or substantially all of its assets to any other person or entity, or (iii) the Company is to be
dissolved and liquidated (each such event is referred to herein as a "Fundamental Change"), the Company shall declare any portion of the Option which has not then vested to be vested, so that the
Optionee shall have an opportunity to exercise the Option prior to the consummation of the Fundamental Change. 

        (c)    If
the Company subdivides the Common Stock into a greater number of shares of Common Stock, the Option Price in effect immediately prior to such subdivision shall be
proportionately reduced, and the number of Option Shares then subject to the Option shall be proportionately increased. Conversely, if the Common Stock of the Company is combined into a smaller number
of shares, the Option Price in effect immediately prior to such combination shall be proportionately increased, and the number of Option Shares then subject to the Option shall be proportionately
reduced. 

        9.    Termination of Option.    The Option shall terminate upon the first to occur of: (i) the Expiration Date,
(ii) the date on which Optionee purchases, or in writing surrenders his right to purchase, all Option Shares or other securities then subject to the Option, or (iii) termination pursuant
to Section 5 hereof. 

        10.    Restriction on Transfer of Option.    The Option may not be sold, assigned, hypothecated or transferred, except
by will or by the laws of descent and distribution or to a trust of which the Optionee is the sole trustee who retains all rights regarding the exercise and disposition of the Option. Any attempted
transfer of the Option in violation of this provision shall be void and of no effect whatsoever. 

        11.    Certain Rights Incident to Divorce.    If an interest in the Option is required by law to be transferred to a
spouse of Optionee pursuant to an order of a court in a divorce proceeding (notwithstanding the provisions of Section 10 hereof), Optionee shall nevertheless retain all rights with respect to
the exercise of the Option and any interest of such spouse shall be subject to such rights of Optionee. In addition, if it is determined that Optionee will be required to pay any taxes attributable to
the interest of the spouse in the Option, any tax liability of Optionee which is attributable to such spouse's interest shall be taken into account, and shall reduce such spouse's interest in this
Option. 

        12.    Rights as a Stockholder.    Optionee shall have no rights as a stockholder of the Company with respect to any
Option Shares covered by the Option until the exercise of the Option. 

        13.    Additional Documents.    The Company and the Optionee will, upon request of the other party, promptly execute
and deliver all additional documents, and take all such further action, reasonably deemed by such party to be necessary, appropriate or desirable to complete and evidence the sale, assignment and
transfer of the Option Shares pursuant to this Agreement, including without limitation and if required by the Board of Directors, a counterpart signature page to the Voting and Stockholders'
Agreement. 

5

 

        14.    Representations, Warranties and Covenants of Optionee.    

        (a)    The
Optionee acknowledges that neither the Option nor the Option Shares covered thereby have been registered under the 1933 Act or State Law on the grounds that the
issuance of the Option is, and the sale of any Option Shares pursuant to the exercise of the Option will be, exempt from registration under one or more provisions of each of such acts. The Optionee
further understands that in determining the availability and applicability of such exemptions and in executing and delivering this Agreement and issuing and delivering any Option Shares upon exercise
of the Option, the Company has relied and will rely upon the representations, warranties and covenants made by the Optionee herein and in any other documents which he may hereafter deliver to the
Company. Accordingly, the Optionee represents and warrants to and covenants and agrees with the Company as follows: 

	(i)
	the
Optionee is acquiring and will hold the Option, and will acquire and hold all securities which he acquires upon exercise of the Option, for his own account for
investment and not with a view to or in connection with any sale or distribution of all or any part thereof; and

	(ii)
	the
Optionee will hold all securities acquired by him upon exercise of the Option, as well as any and all other securities issued in respect thereof, subject to all
applicable provisions of the Voting and Stockholders' Agreement, the 1933 Act and State Law, and will not at any time make any sale, transfer, pledge or other disposition or encumbrance of any of such
securities in violation of the Voting and Stockholders' Agreement or in the absence of an effective registration statement for such securities under the 1933 Act and State Law or an applicable
exemption from the registration requirements therefrom. 

        (b)    The
Optionee agrees (i) that the certificates representing the Option Shares or other securities purchased under this Option may bear such legend or legends as
the Company deems appropriate in order to assure compliance with applicable securities laws, (ii) that the Company may refuse to register the transfer of the Option Shares or other securities
purchased under this Option 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 laws, (iii) that the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of the
Option Shares or other securities purchased under this Option, (iv) that the Option Shares or other securities acquired upon exercise of this Option shall be subject, in all respects, to the
Stockholders' Agreement between the Company and its stockholders and (v) Optionee shall become party to the Stockholders' Agreement prior to issuance of any certificate representing the Option
Shares. 

        (c)    Optionee
acknowledges that the value of the Option over its life will be speculative and uncertain, that there is no market for the Option or the Option Shares or other
securities that may be acquired upon exercise of the Option and it is unlikely that any market will develop, and consequently, the Optionee may ultimately realize no value from the Option. 

        15.    Tax Withholding.    Whenever under the Plan securities are to be delivered by an Optionee upon exercise of an
Option, the Company shall be entitled to require as a condition of delivery that the Optionee remit or, in appropriate cases, agree to remit when due, an amount sufficient to satisfy all current or
estimated future federal, state and local withholding tax and employment tax requirements relating thereto. 

        16.    Optionee's Employment.    Nothing contained in the Plan or in this Agreement shall confer upon the Optionee any
right with respect to the continuation of his employment by or service with the Company or interfere in any way with the right of the Company (subject to the terms of any separate agreement to the
contrary) at any time to terminate such employment or service or to increase or decrease the compensation of the Optionee from the rate in existence at the date of this Agreement. 

6

 

        17.    Notices.    All notices required or permitted to be given hereunder shall be in writing and shall be deemed to
have been given on the earlier of the date of receipt by the party to whom the notice is given or five days after being mailed by certified or registered United States mail, postage prepaid, addressed
to the appropriate party at the address shown beside such party's signature below or at such other address as such party shall have theretofore designated by written notice given to the other party. 

        18.    Entirety and Modification.    This Agreement contains the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes any and all prior agreements, whether written or oral, between such parties relating to such subject matter. No modification, alteration, amendment
or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by the party against whom it is sought to be enforced. 

        19.    Severability.    If any provision of this Agreement is held to be unenforceable, this Agreement shall be
considered divisible, and such provision shall be deemed inoperative to the extent it is unenforceable, and in all other respects this Agreement shall remain in full force and effect; provided,
however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by
applicable law. 

        20.    Gender.    Words used in this Agreement which refer to Optionee and denote the male gender shall also be deemed
to include the female gender or the neuter gender when appropriate. 

        21.    Headings.    The headings of the various sections and subsections of this Agreement have been inserted for
convenient reference only and shall not be construed to enlarge, diminish or otherwise change the express provisions hereof. 

        22.    GOVERNING LAW.    THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE DELAWARE PRINCIPLES OF CONFLICTS OF LAW).

        23.    Counterparts.    This Agreement may be signed in counterparts, each of which shall be deemed an original and
all of which shall constitute one and the same agreement. 

*
* * * * * * * * * * * 

[Remainder
of page intentionally left blank] 

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        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above. 

Addresses:  

	 	THE COMPANY:

  
 CROSSTEX ENERGY HOLDINGS INC.
	

2501 Cedar Springs Road

Suite 600

Dallas, Texas 75201	

 	
 	

 	
 	

 
	

 	

By:	
 	

 	
 	

 
	 	 	 	

	 	 	 	Name:	 	 
	 	 	 	 	 	

	 	 	 	Title:	 	 
	 	 	 	 	 	

	

 	
OPTIONEE:
	

 	

	

 	

Name:	
 	

8

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CROSSTEX ENERGY HOLDINGS INC. 2000 STOCK OPTION PLAN

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