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Exhibit 10.7  

 
 

FORM OF
  EXCO PARTNERS, LP
  2008 Long-Term Incentive Plan    
    
    Grant of Options for Director    
    

	Grantee:	                                        
                  
	
Grant Date:	

                                         
       , 200     

	1.
	Grant of Options. EXCO Partners GP, LLC (the "Company") hereby grants to you the right and option ("Options") to purchase all or any
part of an aggregate of [            ] Common Units ("Units") of EXCO Partners, LP on the terms and conditions set forth
herein and in the EXCO Partners, LP 2008 Long-Term Incentive Plan (the "Plan"), which is incorporated herein by reference as a part of this Agreement. This grant of Options includes a
tandem grant of Distribution Equivalent Rights ("DERs") with respect to each Option. The Company shall establish a DER bookkeeping account for you with respect to each Option granted that shall be
credited with an amount equal to any cash distributions made by the Partnership on a Unit during the period such Options are outstanding and unexercised. In the event of any conflict between the terms
of this Agreement and the Plan, the Plan shall control. Capitalized terms used but not defined in this Agreement shall have the meaning attributed to such terms under the Plan, unless the context
requires otherwise. 

The
Options are granted to you in your capacity as a Director of the Company which, through EXCO GP Partners, LP (as the general partner of the Partnership), is responsible for the conduct, direction
and management of all activities of the Partnership. In your role as a Director, you are furnishing your services directly to the Partnership for the management, oversight and administration of the
Partnership's business and affairs and it is in respect of such direct services that the Company has made this grant of the Options to you. 

	2.
	Purchase Price. The purchase price per Unit purchased pursuant to the exercise of the Options shall be
$                        , subject to
adjustment as provided in the Plan.

	3.
	Vesting and Exercise of Option. Subject to the further provisions of this Agreement, the Options (and the tandem DERs) shall become
vested and the Options may be exercised in accordance with the following schedule, by written notice to the Company at its principal executive office addressed to the attention of its Secretary (or
such other officer or employee of the Company as the Company may designate from time to time): 

	Date
 
	 	Cumulative

Vested Percentage
	 
	Grant Date	 	25	%
	First Anniversary of Grant Date	 	50	%
	Second Anniversary of Grant Date	 	75	%
	Third Anniversary of Grant Date	 	100	%

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

	(a)
	Retirement. If your membership on the Board terminates as a result of your Retirement, the Options shall remain exercisable, for a
period of 90 days following such date, but only as to the vested number of Units, if any, that you were entitled to purchase hereunder as of the date your Board membership terminates. For
purposes of this Agreement, "Retirement" shall mean any termination of your membership on the Board solely due to retirement upon or after attainment of age sixty-five (65), or permitted
early retirement as determined by the Committee. 

 

	(b)
	Disability. If your membership on the Board terminates as a result of your Total and Permanent Disability, the Options and the tandem
DERs shall become fully vested and, subject to the further provisions of this Agreement, the Options may be exercised at any time during the 180-day period following such termination by
you or by your guardian or legal representative (or, if you die during such 180-day period, by your estate or the person who acquires the Options by will or the laws of descent and
distribution).

	(c)
	Death. If you die while a member of the Board, the Options and the tandem DERs shall become fully vested and, subject to the further
provisions of this Agreement, your estate (or the person who acquires the Options by will or the laws of descent and distribution) may exercise the Options at any time during the 180-day
period following the date of your death.

	(d)
	Other Terminations. If your membership on the Board terminates for any reason other than as provided in paragraphs 3(a), (b), and
(c) above, the Options, to the extent vested on the date of your termination, may be exercised, subject to the further provisions of this Agreement, at any time during the 30 day period
following such termination by you or by your guardian or legal representative (or by your estate or the person who acquires the Options by will or the laws of descent and distribution or otherwise by
reason of your death if you die during such period), but only as to the vested number of Units, if any, that you were entitled to purchase hereunder as of the date your Board membership so terminates.
Notwithstanding anything to the contrary herein, in the event your membership on the Board is terminated for Cause, any Options that remain unexercised on your termination date and all tandem DERs
will be forfeited on such date.

	(e)
	Change of Control. The Options and the tandem DERs shall become fully vested upon a Change of Control. 

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

Notwithstanding
any of the foregoing, the Options shall not be exercisable in any event after the expiration of 10 years from the Grant Date and no amounts will be payable under tandem DERs
with respect to Partnership distributions made on or after such expiration date. 

All
Options and tandem DERs that are not vested on your termination of Board membership as provided above shall be automatically cancelled without payment upon your termination. Any Options that
remain unexercised at the expiration of the applicable exercise period following your termination (if any) and all tandem DERs will be forfeited on such expiration date (except as to any vested
amounts credited to your DER bookkeeping account with respect to distribution made by the Partnership prior to such date). 

Notwithstanding
the foregoing, if your Award is subject to Section 409A of the Code, vesting acceleration will occur only upon a permissible payment event, as determined in accordance with
Treasury Regulation § 1.409A-3. 

	4.
	Payment of DERs. As soon as administratively practicable after the vesting of a DER, but not later than seven days thereafter, you shall
be paid in cash all amounts credited to your DER account with respect to such tandem DER to the extent then vested. If an Option is forfeited, the amount credited to your DER account with respect to
such Option shall be similarly forfeited. Notwithstanding the foregoing, payment of DERs shall not be contingent upon your exercise of any of the Options. 

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	5.
	Payment of Exercise Price. The purchase price of the Units as to which the Options are exercised shall be paid in full at the time of
exercise (a) in cash (including by check acceptable to the Company), (b) if the Units are readily tradable on a national securities market or exchange, through a "cashless broker
exercise" procedure (a "cashless broker exercise" is not available for executive officers of the Company except to the extent the exercise in such manner is approved in advance by the Company) in
accordance with a program established by the Company, (c) any other method approved by the Company, including, with the consent of the Committee, by withholding a number of Units that would
otherwise be delivered on exercise of the Option that have an aggregate Fair Market Value that does not exceed the aggregate exercise price for the Options being then exercised, or (d) any
combination of the foregoing. No fraction of a Unit shall be transferred upon exercise of the Options. Unless and until a certificate or certificates representing such Units shall have been
transferred by the Company to you, you (or the person permitted to exercise the Options in the event of your death) shall not be or have any of the rights or privileges of a unitholder of the Company
with respect to Units acquirable upon an exercise of the Options.

	6.
	Withholding of Tax. To the extent that the exercise of an Option or payment of DERs results in the receipt of compensation by you with
respect to which the Company or an Affiliate has a tax withholding obligation pursuant to applicable law, unless other arrangements have been made by you that are acceptable to the Company or such
Affiliate, which, with the consent of the Committee, may include withholding a number of Units that would otherwise be delivered on exercise or vesting that have an aggregate Fair Market Value that
does not exceed the amount of taxes to be withheld, you shall deliver to the Company or the Affiliate such amount of money as the Company or the Affiliate may require to meet its withholding
obligations under such applicable law. No delivery of Units shall be made pursuant to the exercise of an Option or payment of a vested tandem DER under this Agreement until you have paid or made
arrangements approved by the Company or the Affiliate to satisfy in full the applicable tax withholding requirements of the Company or Affiliate.

	7.
	Restrictions. By accepting this grant, you agree that the Units which you may acquire by exercising the Options will not be sold or
otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws. You also agree that (i) the certificates representing the Units
purchased under the Options may bear such legend or legends as the Committee deems appropriate in order to assure compliance with applicable securities laws, (ii) the Company may refuse to
register the transfer of the Units purchased under the Options on the transfer records of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a
violation of any applicable securities law, and (iii) the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of the Units purchased under
the Options.

	8.
	Limitations Upon Transfer. All rights under this Agreement shall belong to you alone and may not be transferred, assigned, pledged, or
hypothecated by you in any way (whether by operation of law or otherwise), other than by will or the laws of descent and distribution and shall not be subject to execution, attachment, or similar
process. Upon any attempt by you to transfer, assign, pledge, hypothecate, or otherwise dispose of such rights contrary to the provisions in this Agreement or the Plan, or upon the levy of any
attachment or similar process upon such rights, such rights shall immediately become null and void.

	9.
	Insider Trading. The terms of the Company's Insider Trading Policy are incorporated herein by reference. The timing of the delivery of
any Units pursuant to an Option exercise shall be subject to and comply with such policy. 

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	10.
	Binding Effect. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully
claiming under you.

	11.
	Entire Agreement. Except as explicitly provided in a written agreement between you and the Company, this
Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the
parties with respect to the Option granted hereby. Without limiting the scope of the preceding sentence, all prior understandings and agreements, if any, among the parties hereto relating to the
subject matter hereof are hereby null and void and of no further force and effect. Except as otherwise provided in the Plan, any modification of this Agreement shall be effective only if it is in
writing and signed by both you and an authorized officer of the Company.

	12.
	Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, without regard to
conflicts of laws principles thereof. 

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

	 	EXCO PARTNERS GP, LLC
	

 	
By:	

  

	 	 	Name:	  

	 	 	Title:	  

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FORM OF EXCO PARTNERS, LP 2008 Long-Term Incentive Plan Grant of Options for DirectorExhibit 10.8  

FORM OF

2008 DIRECTOR PLAN OF

EXCO PARTNERS GP LP, LLC

(Adopted                        , 2007)  

1.    Purpose. The purpose of this 2008 Director Plan of EXCO Partners GP LP, LLC (the "Director Plan") is (i) to attract to and retain
at EXCO Partners GP LP, LLC, a Delaware limited liability company (the "Company"), the managing general partner of EXCO Partners, LP, a Delaware limited partnership (the "Partnership"), qualified and
competent directors, upon whose efforts and judgment the success of the Company and the Partnership are largely dependent, and (ii) to stimulate the active interest of these persons in the
development and financial success of the Company and the Partnership by providing for ownership of common units in the Partnership by such persons. 

2.    Definitions. Except as otherwise stated, all capitalized terms herein shall have the meanings assigned to such terms in the EXCO
Partners, LP 2008 Long-Term Incentive Plan (the "Incentive Plan"), as amended from time to time. In addition, the following terms shall have the meanings indicated: 

	(a)
	"Change
in Control" shall mean:

	(A)
	Any
"Person" (as defined in paragraph (E) below), other than (1) the Company or any of its Affiliates, (2) a trustee or other fiduciary holding stock under an
employee benefit plan of the Company or any of its Affiliates, (3) an underwriter temporarily holding stock pursuant to an offering of such stock, or (4) a corporation owned, directly or
indirectly, by the unitholders of the Partnership, holders of the membership interests of the Company or shareholders of EXCO Resources, Inc. ("EXCO") in substantially the same proportions as
their ownership of Units of the Partnership, membership interests of the Company or shareholders of EXCO, as applicable, acquires ownership of Units of the Partnership, membership interests of the
Company or stock of EXCO, as applicable, that, together with the Units, membership interests or stock, as applicable, held by such Person, constitutes more than 50% of the total fair market value or
total voting power of the Units of the Partnership, membership interests of the Company or stock of EXCO, as applicable. However, if any Person is considered to own more than 50% of the total fair
market value or total voting power of the Units of the Partnership, membership interests of the Company or stock of EXCO, as applicable, the acquisition of additional Units, membership interests or
stock by the same Person is not considered to be a Change of Control;

	(B)
	If
EXCO is the majority shareholder, directly or indirectly, of the Company (within the meaning of Treas. Reg. § 1.409A-3(h)(vi)(A)(2)), a majority of members
of the board of directors of EXCO (the "EXCO Board") is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the EXCO Board
before the date of the appointment or election; provided, however, that any such director shall not be considered to be endorsed by the EXCO Board if his or her initial assumption of office occurs as
a result of an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the EXCO Board; or

	(C)
	If
no shareholder is the majority shareholder of the Company (within the meaning of Treas. Reg. § 1.409A-3(h)(vi)(A)(2)), a majority of members of the Board is
replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of the appointment or election; provided, however,
that any such director shall not be considered to be endorsed by the Board if his or her initial assumption of office occurs as a result of an actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board; or 

 

	(D)
	There
is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, except if:

	(1)
	the
merger or consolidation would result in the voting equity interests of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting equity interests of the surviving entity or any parent thereof) more than 70% of the total voting power of the equity interests of the Company or such surviving
entity or any parent thereof outstanding immediately after such merger or consolidation; or

	(2)
	the
merger or consolidation is effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquires ownership during the 12-month
period ending on the date of the most recent acquisition by such Person, of equity interests of the Company (not including in the equity interests beneficially owned by such Person any equity
interests acquired directly from the Company or its Affiliates other than in connection with the acquisition by the Company or its Affiliates of a business) representing 30% or more of the total
voting power of the Company's then outstanding equity interests; or

	(E)
	If
no shareholder is the majority shareholder of the Company (within the meaning of Treas. Reg. § 1.409A-3(h)(vi)(A)(2)), there is consummated a merger or
consolidation of EXCO or any direct or indirect subsidiary of EXCO under the circumstances described in paragraph (C) above, substituting "EXCO" for the "Company," as applicable.

	(F)
	For
purposes of this Section 2(a):

	(1)
	"Person"
shall have the meaning given in Section 7701(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code"). Person shall include more than one Person acting as a
group as defined by the Final Treasury Regulations issued under Section 409A of the Code.

	(2)
	"Affiliate"
shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended.

	(3)
	Reference
to a "Change in Control" event involving EXCO shall apply only if EXCO remains the majority shareholder of the Company or any corporation in a chain of corporations in which
each corporation is a majority shareholder of another corporation ending in the Company.

	(4)
	The
occurrence of an event described in this Section 2(a) shall only constitute a Change of Control hereinafter if it also constitutes a "change in ownership or effective
control" with respect to a "relevant corporation" within the meaning of Treas. Reg. § 1.409A-3(i)(5).

	(b)
	"Committee"
shall have the meaning set forth in Section 8(a).

	(c)
	"Director"
shall mean a member of the Company's Board of Directors.

	(d)
	"Director
Fees" shall mean all fees payable to Directors (including their annual retainer for Board services and all fees paid for service on Board committees), as set from time to
time by the Board, payable in four (4) equal quarterly amounts (each of such four (4) amounts being the "Quarterly Director Fees") to each Director on the first business day following
the end of each fiscal quarter beginning with the fiscal quarter ended                        , 2008 (collectively, such payment
dates being the "Quarterly Payment Dates"), which may be paid in cash or in
Units. For clarification purposes, "Director Fees" shall relate solely to the fees or other compensation that are paid to a Director for his or her services as a Director. 

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	(e)
	"Effective
Date" shall have the meaning set forth in Section 4(b).

	(f)
	"Employee
Director" shall mean a Director who is an employee of the Company or any of its subsidiaries or affiliates.

	(g)
	"Nonemployee
Director" shall mean a Director who is not an employee of the Company or any of its subsidiaries or affiliates.

	(h)
	"Option"
(when capitalized) shall mean any stock option described in Section 5 of this Director Plan.

	(i)
	"Payment
Election" shall have the meaning set forth in Section 4(a).

	(j)
	"Quarterly
Payment Dates" shall have the meaning set forth in Section 2(d).

	(k)
	"Separation
from Service" shall mean a termination of services provided by a Director as a director of the Board or of the board of directors of any other member of the controlled
group of corporations (as defined in Section 414(b) of the Code) which includes the Company (hereinafter for purposes of this Section 2(k) the Company and such other controlled group
members being referred to as "ERISA Affiliates") whether voluntarily or involuntarily, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(h). In
determining whether a Director has experienced a Separation from Service as a director of the Board or of a board of directors of an ERISA Affiliate, the following provisions shall apply:

	(A)
	If
a Director is an Employee Director at the time of his Separation from Service as a Director, the services such Director provides as an employee shall not be taken into account in
determining whether the Director has a Separation from Service as a Director for purposes of this Plan (provided that this Plan is not, at the time of such determination, aggregated under Treas. Reg.
§ 1.409A-1(c)(2)(ii) with any plan in which the Director participates in as an employee, in which case he or she shall not be treated as incurring a Separation from
Service for purposes of this Plan until he or she has separated from service both as a Director and as an employee).

	(B)
	If
a Nonemployee Director is also providing additional services to the Company as an independent contractor, he or she shall not be treated as incurring a Separation from Service for
purposes of this Plan until he or she has separated from service both as a Director and as an independent contractor.

	(C)
	A
Director shall be considered to have experienced a Separation from Service when the facts and circumstances indicate that the Director and the Company and each ERISA Affiliate
reasonably anticipate that the Director will perform no further services for the Company or any ERISA Affiliate as a director of the Board (or the board of directors of any ERISA Affiliate), and the
Director's term as a member of the Board has expired.

	(l)
	"Unit(s)"
shall mean a common unit or common units of the Partnership. 

3.    Incentive Plan. 

        (a)   Units. To the extent a Director elects that his or her Director Fees be paid as Units in accordance with  Section 4, (i) such Units shall be issued as Other
Unit-Based Awards pursuant to the Incentive Plan and shall be subject to
all of the terms and provisions thereof, and (ii) the number of Units that shall be granted as Other Unit-Based Awards shall be based on fair market value of the Units determined on
the applicable Quarterly Payment Date on which such Director Fees would normally be paid to the Director. With respect to this Units component of the Director Fees, if there is a conflict between the
terms of this Director Plan and the Incentive Plan, the terms of the Incentive Plan shall be given effect and the conflicting provisions hereof shall be disregarded. 

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        (b)   Options. Options described in Section 5 of this Director Plan
shall be issued pursuant to the Incentive Plan and shall be subject to all of the terms and provisions thereof. With respect to such Options, if there is a conflict between the terms of this Director
Plan and the Incentive Plan, the terms of the Incentive Plan shall be given effect and the conflicting provisions hereof shall be disregarded. If any Option granted hereunder shall terminate, expire,
or be canceled or surrendered as to any Units, such Units shall thereafter be available for Awards under Section 4 of the Incentive Plan. 

4.    Director Fees. Each Director may make an election (a "Payment Election") in accordance with this  Section 4 to receive all or a specified portion his or her
Director Fees in Units, and/or to defer his or her receipt of such Director Fees. A
Payment Election shall be made in a manner satisfactory to the Committee. Generally, a Payment Election shall be made by completing and filing the specified election form with the Secretary or his or
her designee within the period described in Section 4(a). All elections made in an election form are irrevocable,  provided that any such election made
for any calendar year may be revoked by a Director with respect to such year by providing written notice of such
revocation to the Company prior to the start of such year. If a Director makes no Payment Election or his Payment Election is untimely, he shall be paid his Director Fees in cash on the Quarterly
Payment Date on which such Director Fees would normally be paid to the Director. 

        (a)   Timing of Election. Each Director who is serving on the Board as of                        2007
(the "Effective Date") may make
a Payment Election at any time on or prior to the Effective Date or within 15 days after the Effective Date, unless an election made during such period would result in the current taxation of
such person pursuant to Section 409A of the Code or any guidance issued thereunder. If a person becomes a Director after the Effective Date, such Director may make a Payment Election
(i) no earlier than the
date that is 15 days prior to the date on which such person first becomes a Director, and (ii) no later than the close of the day on which such person first becomes a Director, unless an
election made during such period would result in the current taxation of such person pursuant to Section 409A of the Code or any guidance issued thereunder. A Director who does not make a
Payment Election when first eligible may make a Payment Election with respect to Director Fees to be earned in any subsequent calendar year before the start of such calendar year, in accordance with
administrative procedures established with respect to the Director Plan. 

        (b)   Effect and Duration of Election. A Payment Election shall apply to Director Fees earned during any calendar year after
the date such election is made and shall be deemed to be continuing and applicable to all Director Fees earned in subsequent calendar years, unless the Director revokes or modifies such election by
filing a new election form before the first day of any subsequent calendar year in accordance with administrative procedures established with respect to the Director Plan, effective for all Director
Fees earned on and after the first day of such calendar year. 

        (c)   Timing of Payment. Each Payment Election filed under this  Section 4 shall specify the time(s) when a Director shall receive his or her Directors Fees. Pursuant to
such Payment Election, the Director may
elect to receive his or her Director Fees: (i) on the Quarterly Payment Dates on which such Director Fees are normally paid to a Director; (ii) on or as soon as administratively feasible
after the date on which the Director incurs a Separation from Service; (iii) on or as soon as administratively feasible after the date specified by the Director; (iv) upon a Change in
Control; or (v) upon the earliest to occur of two or more of the events described in "(ii)," "(iii)," and/or "(iv)" above. With respect to receiving, or beginning to receive, a distribution in
accordance with "(ii)," "(iii)," "(iv)," or "(v)" above, a Director must elect to receive such distribution in the applicable election form and in accordance with  Section 4. If a Director dies
before his or her Director Fees have been distributed pursuant to this Director Plan, such Director Fees shall be
paid as soon as administratively feasible after the Director's death, to the Director's 

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beneficiary
in accordance with Section 7. Notwithstanding the foregoing, if a Director has elected to defer payment or the commencement of
payment of his or her Director Fees, as applicable, to a specified date in accordance with clause (iii) or clause (v) above, and the Director wishes to change such date to a later date,
the Director may elect to change such date by delivering an additional election form to the Secretary or his or her designee ("Second Timing Election").
Such a Second Timing Election must be made at least twelve (12) months prior to the original payment date or payment commencement date, as applicable, and must defer payment or the commencement
of payments of Director Fees, as applicable, for an additional period of not less than five (5) years after the applicable original payment date or payment commencement date. In connection with
any Second Timing Election and the Second Option Election (as defined in Section 4(d) below), the entitlement to installment payments under this
Director Plan shall be treated as a single payment for purposes of Section 409A of the Code and any guidance issued thereunder. 

        (d)   Form of Payment. Each Payment Election filed under this Section 4
shall specify the form(s) in which a Director shall receive his or her Directors Fees. Pursuant to such Payment Election, the Director may elect to receive his or her Director Fees on the applicable
Quarterly Payment: (i) in cash; (ii) Units with
a fair market value equal to his or her Director Fees; or (iii) fifty percent (50%) of his or her Director Fees in cash, and Units with a fair market value equal to fifty percent (50%) of his
or her Director Fees. Notwithstanding anything to the contrary herein, a Director who has elected to defer payment of his Director Fees may only receive such payment in cash. The determination of the
fair market value of any Units to be paid to a Director in respect of his Director Fees shall be made as of the Quarterly Payment Date on which such Director Fees would normally be paid to the
Director. If a Director has elected to defer the payment of his or her Director Fees, a Payment Election filed under this Section 4 shall specify
whether the payment of his or her Director Fees is to be settled by delivering cash and/or Units to the Director in either (i) a lump sum, or (ii) substantially equal annual installments
over a period not to exceed five (5) years. Notwithstanding the foregoing, if a Director has elected to defer the payment of his or her Director Fees and he or she wishes to change the manner
in which such Director Fees are distributed, the Director may elect to change such manner of distribution by delivering an additional election form to the Secretary or his or her designee
("Second Option Election"). Such a Second Option Election must be made at least 12 months prior to the original payment date or payment
commencement date, as applicable, and must defer payment or the commencement of payments, as applicable, for an additional period of not less than five (5) years after the applicable original
payment date or payment commencement date. 

5.    Automatic Grant of Options. 

        (a)   An
Option to purchase 25,000 Units shall automatically be granted to each Director on the date the Partnership makes its first public offering of Units pursuant to a
registration statement filed with and declared effective by the Securities and Exchange Commission. 

        (b)   Options
automatically granted to Directors pursuant to this Section 5 shall be in addition to the Director Fees or
any other benefits with respect to the Director's position with the Company or its Affiliates. 

        (c)   The
Option to be granted pursuant to subparagraph (a) of this Section 5 (a "Director's Option") shall vest
in four (4) equal annual amounts of 6,250 Units with the first 6,250 shares vesting upon grant and each successive increment vesting on the applicable anniversary of the date of grant, provided
that the Director continues to serve as a Director on such anniversary date. The foregoing notwithstanding, no Units subject to a Director's Option shall vest in any fiscal year in which the Director
attends less than seventy-five percent (75%) of the Board meetings held for that fiscal year; failure to attend the requisite number of meetings during a given fiscal year shall 

5

 

result
in a forfeiture of the 6,250 Units subject to the Option that were eligible to vest in that year. In the event a Director ceases to serve as such for any reason, the unvested Units subject to
the Option shall be forfeited, and the Option shall only be exercisable for the number of Units that vested prior to the Director ceasing to serve as a Director. [Notwithstanding the
foregoing, if a Director dies or becomes Totally and Permanently Disabled while serving as a Director, any unvested Director Options will immediately vest.]  [Note: This provision is consistent with the current draft of the
XP LTIP award form but this is not specified in the EXCO Director Plan. Is this still
desired?] If a Director dies before exercising his or her Option pursuant to this Director Plan, such Option shall be transferred as administratively feasible after
the Director's death, to the Director's beneficiary in accordance with Section 7. 

        (d)   Except
for the automatic grants of Options under subparagraph (a) of this Section 5 and the issuance of
Units to Directors under Section 4 above, no Options or Units shall otherwise be granted hereunder, and the Board shall not have any discretion
with respect to the grant of Options or issuance of Units within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the "1934 Act"), or any
successor rule. 

6.    Unfunded Status. 

        (a)   General. The interest of each Director in any Director Fees deferred under the Plan shall be that of a general creditor
of the Company. Deferred Director Fees shall at all times be maintained by the Company as bookkeeping entries evidencing unfunded and unsecured general obligations of the Company. Except as provided
in Section 6(b), no money or other assets shall be set aside for any Director. 

        (b)   Trust. To the extent determined by the Company's Board of Directors, the Company may transfer funds necessary to fund all
or part of the payments under the Director Plan to a domestic trust; however, the assets held in any such trust shall remain at all times subject to the claims of the general creditors of the Company.
No Director or beneficiary shall have any interest in the assets held in any such trust or in the general assets of the Company other than as a general, unsecured creditor. Accordingly, the Company
shall not grant a security interest in the assets held by any such trust in favor of any Director, beneficiary or creditor. 

7.    Designation of Beneficiary. Each Director may designate, on a form provided by the Committee, one or more beneficiaries to receive
payment of the Director's deferred Director Fees and exercise the Director's Options, if applicable, in the event of such Director's death and in accordance with the terms of his Option Agreement. The
Company may rely upon the beneficiary designation list filed with the Committee, provided that such form was executed by the Director or his or her legal representative and filed with the Committee
prior to the Director's death. If a Director has not designated a beneficiary, or if the designated beneficiary is not surviving when a payment is to be made to such person under the Plan or when an
Option is to be exercised, the beneficiary with respect to such payment or Option exercise, as applicable, shall be the Director's estate. 

8.    Administration. 

        (a)   General Administration; Establishment of Committee. Subject to the terms of this  Section 8, the Director Plan shall be administered by the Board or such committee
of the Board as is designated by the Board to administer this
Director Plan (the "Committee"). The Committee shall consist of not fewer than two persons. Any member of the Committee may be removed at any time, with or without cause, by resolution of the Board.
Any vacancy occurring in the membership of the Committee may be filled by appointment by the Board. At any time there is no Committee to administer this Director Plan, any references in this Director
Plan to the Committee shall be deemed to refer to the Board. 

6

 

        Membership
on the Committee shall be limited to those members of the Board who are "outside directors" under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code") and "non-employee directors" as defined in Rule 16b-3 promulgated under the 1934 Act only in the event the Common Stock should ever be registered under the 1934
Act. The Committee shall select one of its members to act as its Chairman. A majority of the Committee shall constitute a quorum, and the act of a majority of the members of the Committee present at a
meeting at which a quorum is present shall be the act of the Committee. 

        (b)   Authority of the Committee. The Committee, in its discretion, shall (i) interpret this Director Plan,
(ii) prescribe, amend, and rescind any rules and regulations necessary or appropriate for the administration of this Director Plan, and (iii) make such other determinations or
certifications and take such other action as it deems necessary or advisable in the administration of this Director Plan. Any interpretation, determination, or other action made or taken by the
Committee shall be final, binding, and conclusive on all interested parties. The Committee's discretion set forth herein shall not be limited by any provision of this Director Plan, including any
provision which by its terms is applicable notwithstanding any other provision of this Director Plan to the contrary. 

        The
Committee may delegate to officers of the Company, pursuant to a written delegation, the authority to perform specified functions under this Director Plan. Any actions taken by any
officers of the Company pursuant to such written delegation of authority shall be deemed to have been taken by the Committee. 

9.    Duration, Amendment and Termination. 

        (a)   Duration. This Director Plan shall continue in effect until terminated in accordance with  Section 9(b) or until such time as the Incentive Plan is terminated.

        (b)   Amendment and Termination. The Director Plan may be terminated or amended in any respect by resolution adopted by
two-thirds of the Board. Notwithstanding anything contained in this Director Plan to the contrary, unless required by law, no action contemplated or permitted by this  Section 9(b) shall adversely
affect any rights of Directors or obligations of the Company to Directors with respect to any Options, Units or
other compensation theretofore granted under this Director Plan without the consent of the affected Director. 

        (c)   Form of Amendment. The form of any amendment or termination of the Director Plan shall be a written instrument signed by
a duly authorized officer or officers of the Company, certifying that the amendment or termination has been approved by at least two-thirds of the Board. 

10.    Successors. Except as otherwise provided in the Incentive Plan with respect to Options and Units, the terms and provisions of this
Director Plan shall [not] be binding on any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Company. [CONFIRM INTENT] 

11.    Adjustment Provisions. In the event of a reorganization, recapitalization, stock split, stock dividend, spin-off,
combination, corporate exchange, merger, consolidation or other change in the Common Stock or any distribution to holders of Units other than cash distributions or any similar transaction that affects
the fair value of an award of Options or Units, then the Committee shall adjust the type and number of Units awarded to a Director (either as part of an Option or in lieu of cash Director Fees) so
that the fair value of such award immediately after the transaction or event is equal to the fair value of the award immediately prior to the transaction or event. Such adjustment shall be made in
accordance with the rules of any securities exchange, stock market, or stock quotation system to which the Partnership is subject. Notwithstanding the foregoing, no such adjustment shall be made or 

7

 

authorized
to the extent that such adjustment would cause the Director Plan or any deferred Director Fees thereunder to violate Section 409A of the Code. 

12.    Miscellaneous Provisions. 

        (a)   No Right to Continued Employment or Board Membership. Neither this Director Plan, the Incentive Plan, nor any Options,
Units or other compensation granted thereunder shall confer upon any Director the right to remain in the employment of the Company or any other entity or to continue to serve as a Director. 

        (b)   Indemnification of Board and Committee. No member of the Board or the Committee, nor any officer or employee of the
Company acting on behalf of the Board or the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to this Director Plan, and
all members of the Board and the Committee, each officer of the Company, and each employee of the Company acting on behalf of the Board or the Committee shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such action, determination, or interpretation. 

        (c)   Effect of the Plan. Neither the adoption of this Director Plan nor any action of the Board or the Committee shall be
deemed to give any person any right to be granted Options, Units or other compensation or any other rights except as may be evidenced by this Director Plan, or any amendment thereto, duly authorized
by the Committee and executed on behalf of the Company, and then only to the extent and upon the terms and conditions expressly set forth therein. 

        (d)   Compliance With Other Laws and Regulations. Notwithstanding anything contained herein to the contrary, the Company shall
not be required to sell or issue Units under any Options, Units or other compensation if the issuance thereof would constitute a violation by the Director or the Company of any provisions of any law
or regulation of any governmental authority or any national securities exchange or inter-dealer quotation system or other forum in which Units are quoted or traded
(including without limitation Section 16 of the 1934 Act in the event the Units should ever be registered under the 1934 Act and Section 162(m) of the Code); and, as a condition of any
sale or issuance of Units hereunder, the Committee may require such agreements or undertakings, if any, as the Committee may deem necessary or advisable to assure compliance with any such law or
regulation. The Director Plan, the Options, Units or other compensation provided hereunder, and the obligation of the Company to sell and deliver Units, shall be subject to all applicable federal and
state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required. 

        (e)   Governing Law. The validity, interpretation, construction and performance of this Director Plan shall in all respects be
governed by the laws of the State of Texas. 

        (f)    Tax Requirements; Employee Directors. The Company shall have the right to deduct from all amounts paid in cash or other
form in connection with this Director Plan, any Federal, state, local, or other taxes required by law to be withheld in connection with the Options, Units or other compensation provided hereunder. The
Company shall comply with all applicable reporting and withholding requirements with regard to the Options, Units or other compensation paid pursuant to this Plan. If it is determined that for any
reason that compensation with regard to the Options, Units or other compensation paid pursuant to this Plan should have been reported by the Partnership and the Partnership should have made any
applicable withholdings with regard to such compensation, the Company shall be deemed to have acted as agent for the Partnership with regard to such reporting and withholding requirements. The Company
may, in its sole discretion, also require an Employee Director receiving Units issued hereunder to pay the Company the amount of any taxes that the Company is required to withhold in connection with
the Employee Director's income arising with respect to such Units. Such payments shall be required to be made 

8

 

when
requested by Company and may be required to be made prior to the delivery of any certificate representing Units. Such payment may be made (i) by the delivery of cash to the Company in an
amount that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole
discretion, so consents in writing, the actual delivery by the exercising Employee Director to the Company of Units that the Employee Director has not acquired from the Company within six
(6) months prior to the date of payment, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under
(iii) below) the required tax withholding payment; (iii) if the Company, in its sole discretion, so consents in writing, the Company's withholding of a number of Units to be delivered
upon the exercise of an Option, which shares so withheld have an aggregate fair market value that equals (but does not exceed) the required tax withholding payment; or (iv) any combination of
(i), (ii), or (iii). The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Employee Director. 

        (g)   Compensation for Direct Services. [All Director Fees, Options, Units or other compensation to be paid or
provided to the Directors hereunder and under the Incentive Plan are being paid or provided as compensation for the Directors' direct services to the Partnership. As Directors of the Company, which
serves as the managing general partner of the Partnership, the Directors provide their services directly to the Partnership for the management, administration and
oversight of the Partnership's business and affairs. While the Company shall be obligated to pay the Director Fees or provide the Units or other compensation to be provided hereunder and under the
Incentive Plan, pursuant to the Administrative Services Agreement in place from time to time between the Partnership and the Company, the Company will be reimbursed by the Partnership for the full
cost of all such compensation.] [CONFIRM] 

        (h)   Section 409A of the Code; Delay of Payments. The terms of this Director Plan have been designed to comply with the
requirements of Section 409A of the Code, where applicable, and shall be interpreted and administered in a manner consistent with such intent. Any Options, Units or other compensation which
constitutes deferred compensation under Section 409A of the Code shall not have the time or schedule of any payment thereunder accelerated, except as permitted under the guidance issued under
Section 409A of the Code. Notwithstanding anything to the contrary in this Plan, (i) if upon a Director's Separation from Service, the Director is a "specified employee" within the
meaning of Section 409A of the Code, and the deferral of any amounts otherwise payable under this Director Plan as a result of the Director's Separation from Service is necessary in order to
prevent any accelerated or additional tax to the Director under Section 409A of the Code, then the Company will delay the payment of any such amounts hereunder until the earliest of
(x) the date that is six (6) months following the date of the Director's Separation from Service; and (y) the date of the Director's death following such Separation from Service;
and (ii) if any other payments of money or other benefits due to the Director hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code,
such payments or other benefits shall be delayed if such delay will make such payment or other benefits compliant under Section 409A of the Code. Upon the expiration of the applicable deferral
period, any delayed amounts will be paid to the Director in a single lump sum, with interest from the date otherwise payable, at the prime rate as published in The Wall Street Journal on the
Director's Separation from Service. 

        (i)    Assignability. Except as otherwise provided herein and in the Incentive Plan, no Options or rights to receive Units or
other compensation provided hereunder may be transferred, assigned, pledged, hypothecated or otherwise conveyed or encumbered other than by will or the laws of descent and distribution. 

9

 

        A
copy of this Plan shall be kept on file in the office of the Company at 12377 Merit Drive, Suite 1700, Dallas, Texas, United States, or any successor location of the Company's
principal executive offices. 

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

        IN
WITNESS WHEREOF, the Company has caused this instrument to be executed as of                        , 2008, by its Chairman and
Chief Executive Officer and Secretary pursuant to prior action
taken by the Board. 

	

 	

 	
 	
EXCO PARTNERS GP, LLC
	

 	

 	
 	

By:	

	 	 	 	Name:	Douglas H. Miller
	 	 	 	Title:	Chairman and Chief Executive Officer
	

Attest:	
 	

 	

 
	

By:	

 William L. Boeing

Vice President and Secretary	
 	

 	

 

10

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