Exhibit 10.6


 


U.S. SHIPPING PARTNERS L.P.


EMPLOYEE UNIT PURCHASE PLAN


 


1.          Purpose of the Plan.


 


The
U.S. Shipping Partners L.P. Employee Unit Purchase Plan (the “Plan”) is
intended to (i) promote the interests of U.S. Shipping Partners L.P., a
Delaware limited partnership (the “Partnership”), by providing to
Employees of the Partnership and its Affiliates the opportunity to acquire or
increase their ownership of Units, (ii) provide a means whereby such
individuals may develop a sense of proprietorship and personal involvement in
the development and financial success of the Partnership and (iii) encourage
such individuals to devote their best efforts to the business of the
Partnership, thereby advancing the interests of the Partnership.


 


2.          Definitions.


 


(a)        As used in the Plan, the following terms
shall have the meanings set forth below:


 


“Affiliate” means with respect to any Person, any other
Person that directly or indirectly through one or more intermediaries controls,
is controlled by or is under common control with, the Person in question.  As used herein, the term “control” means the
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.


 


“Board” means the Board of Directors of US Shipping
General Partner LLC, a Delaware limited liability company.


 


“Committee” means the Compensation Committee of the
Board.


 


“Employee” means any individual who is a United States
citizen for maritime law purposes and a full-time employee of the Partnership
or one of its Affiliates, but, until the Committee decides
otherwise, excluding any employee covered by a collective bargaining agreement
unless such bargaining agreement provides for his participation in the Plan.


 


“Employer” means the Partnership and/or one of its
Affiliates, as the case may be.


 


“Fair Market Value” means, unless otherwise determined by the
Committee or required by applicable law, the closing sales price of a Unit on
the applicable date (or if there is no trading in the Units on such date, on
the next preceding date on which there was trading) as reported in The Wall Street Journal (or other reporting service approved
by the Committee).  In the event Units
are not publicly-traded at the time a determination of Fair Market Value is
required to be made hereunder, the determination of Fair Market Value shall be
made in good faith by the Committee.


 


“Offering Period” means each calendar quarter or other period
as designated by the Committee from time to time.


 





















 


“Person” means an individual or a corporation,
limited liability company, partnership, joint venture, trust, unincorporated
organization, association, governmental agency or political subdivision thereof
or other entity.


 


“Purchase Period” means the 10-day period following the end of
each Offering Period; provided, however, the Purchase Period shall include such
other periods, if any, as may be designated by the Committee from time to time.


 


“Unit” means a Common Unit of the Partnership.


 


(b)       Gender and Number.  Except when otherwise indicated by the
context, the masculine gender shall also include the feminine gender, and the
definition of any term herein in the singular shall also include the plural.


 


3.          Eligibility.


 


(a)        Eligibility and Plan Entry Date.  All Employees shall be eligible to
participate in the Plan.  An Employee is
eligible to enter the Plan beginning on the first day of the month following
180 days after such individual’s employment commencement date.


 


(b)       Prior Service Credit.  The Committee, in it is discretion, may grant
prior service credit to individuals that become Employees pursuant to a
corporate merger or acquisition.


 


4.          Units Available Under the Plan.


 


(a)        Limits on Units Deliverable.  Subject to adjustment as provided in Section
4(c) below, the maximum number of Units that may be purchased under the Plan is
250,000.


 


(b)       Sources of Units Deliverable.  Units to be delivered under the Plan may be
Units acquired by the Partnership in the open market, Units already owned by
the Partnership, authorized but unissued Units, Units acquired directly from
any Person or any combination of the foregoing.


 


(c)        Adjustments.  In the event that the Committee determines
that any distribution (whether in the form of cash, Units, other securities, or
other property), recapitalization, split, reverse split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase or exchange
of Units or other securities of the Partnership, issuance of warrants or other
rights to purchase Units or other securities of the Partnership, or other
similar transaction or event affects the Units such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of the maximum number and type of Units (or other
securities or property) deliverable under the Plan, the maximum number and type
of Units (or other securities or property) acquired during a Purchase Period
and the applicable Unit price paid therefor. 
The adjustments determined by the Committee shall be final, binding and
conclusive.


 


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5.          Purchase of Units.


 


(a)        Employee Withholding Elections.  The Committee shall provide an Employee with
the ability to purchase Units under the Plan upon the following terms and
conditions:


 


(i)        Effective as of the beginning of any
month or, if administratively feasible, the beginning of the next payroll
period, an Employee may elect to have his Employer withhold from the Employee’s
cash base salary or cash base wages for each future pay period, for the purchase
of Units hereunder, a designated whole percentage of the Employee’s cash base
pay or wages (in whole percentages only, not to exceed 10%).  An Employee may change (within the above
limitations) or, subject to Section 5(a)(vi), stop his withholding election at
any time; however, only two such changes may be made during any calendar
year.  All Employee elections and any
changes to an election shall be in such written form as the Committee or its
delegate may establish from time to time.


 


(ii)       Each withholding election made by an
Employee hereunder shall be an ongoing election until the earlier of the date
changed by the Employee or the date the Employee ceases to be eligible to
participate in the Plan.


 


(iii)      The Employer shall maintain for each
electing Employee a separate notional or ledger account reflecting the
aggregate amount of his cash base pay or wages that has been withheld and not
yet applied to the purchase of Units for such Employee.  An Employer, other than the Partnership,
shall remit to the Partnership all amounts of base pay or wages withheld by the
Employer promptly upon request by the Partnership in order to permit the
Partnership to fulfill its obligations under the Plan with respect to the
purchase of Units for Employees.  Amounts
of base pay or wages withheld by the Employer and remitted to the Partnership
shall not be segregated from the general assets of the Partnership and shall
not bear interest.


 


(iv)      During each Purchase Period, the
Partnership shall use, to the fullest extent practicable, all amounts then
credited to the notional accounts of the electing Employees to purchase Units
for such Employees.  Purchases of Units
may be made at any time or times during the Purchase Period on any securities
exchange on which the Units are traded, in the over-the-counter market and/or
in negotiated transactions as the Committee shall determine.


 


(v)       Upon an Employee’s termination of employment
with his Employer, all amounts then credited to his notional account under the
Plan, if any, shall be paid to the terminated Employee as soon as reasonably
practicable.


 


(vi)      Provided an Employee submits his election
to stop withholding prior to the fourteen business day period before the
beginning of an immediately upcoming Purchase Period, all amounts then credited
to such Employee’s notional account shall be returned to the Employee as soon
as administratively practicable.  Unless
otherwise administratively feasible, to the extent an Employee submits his
election to stop withholding within the fourteen business day period before the
beginning of the immediately upcoming Purchase Period, all amounts credited to
such Employee’s notional account will be applied toward the purchase of


 


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Units in the immediately upcoming Purchase Period and
the Employee’s election to stop withholding shall become effective as of the
commencement of the next following Offering Period.  All requests to withdraw from the Plan
submitted during a Purchase Period will become effective as of the commencement
of the next following Offering Period.


 


(b)       Purchase of Units and Plan Expenses.
During each Purchase Period, the Partnership, using funds withheld from
Employees’ wages pursuant to this Section 5, shall purchase for the electing Employees
the maximum number of Units (including fractional Units) that can be acquired
(using the Unit’s Fair Market Value on the date of purchase) based on amounts
then credited to the electing Employees’ notional accounts.  The Partnership shall pay, other than from
the notional accounts, all brokerage fees and other costs and expenses of the
Plan.  To the extent that Units are
purchased on multiple days or at multiple times during a single Purchase
Period, the Partnership shall use the average of the Units’ Fair Market Value
at the times of purchase as the applicable Unit price upon which Units are
allocated to the participating Employees.


 


(c)        Withholding of Taxes.  To the extent that the Employer is required
to withhold any taxes in connection with the purchase of Units, it will be a
condition to the ownership of such Units that the Employee make arrangements
satisfactory to the Employer for the payment of such taxes, which may include,
but not be limited to, a reduction in the Employee’s notional account.


 


6.          Restrictions on Units.


 


(a)        Holding Period.  Subject to the exception provided below under
Section 6(b), all Units purchased under the Plan shall be subject to a “Holding
Period” which shall expire on the first anniversary of the date the Units were
purchased under the Plan.  During such
Holding Period, each Employee shall be prohibited from pledging, transferring,
selling or otherwise disposing of the restricted Units.  Upon the expiration of such Holding Period,
the Employee may, if he desires, make a request to the Partnership (or its
designated third party plan administrator, if any) to receive certificates for
all of such unrestricted whole Units. 
Otherwise, such Units shall be held without restriction (1) by the
Partnership or (2) in the name of the third party administrator (or its
designee), if any, for the benefit of the Employee. Upon payment during the
Holding Period of any distribution with respect to Units, each Employee shall
receive an amount in cash equal to, and at the same time as, the amount of such
distribution multiplied by the number of Units allocated to such Employee.


 


(b)       Holding Period Exception.  Notwithstanding the Holding Period imposed
above under Section 6(a) and subject to the conditions imposed pursuant to this
Section 6(b), an Employee will be permitted to pledge, transfer, sell or
otherwise dispose of his restricted whole Units during the one-year Holding
Period (a “Restricted Transfer”) by notifying the Employer (or its
designated third party plan administrator) of his intention to engage in a
Restricted Transfer.  If a Restricted
Transfer occurs, the Employee shall be prohibited from participating in the
Plan again until the first Purchase Period following the first anniversary of
the date of the Restricted Transfer.  During this period of prohibition, no amounts
shall be withheld from the Employee’s cash base salary or cash base wages.  Such withholding shall not be allowed to
resume, at the earliest, until the first pay period following the first
anniversary of the date of the


 


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Restricted Transfer. 
To the extent an Employee has amounts credited to his notional account
under the Plan on the date of a Restricted Transfer, all such amounts will be
returned to the Participant.  To the
extent a Participant has a fractional Unit credited to his notional account
under the Plan on the date of a Restricted Transfer, such fractional Unit will
be liquidated and the Participant will receive his pro rata portion of the
proceeds from such liquidation.


 


(c)        Investment Representation.  Unless the Units subject to purchase under
the Plan have been registered under the Securities Act of 1933, as amended (the
“1933 Act”), and, in the case of any Employee who may be deemed an
affiliate (for securities law purposes) of the Partnership, such Units have
been registered under the 1933 Act for resale by such Participant, or the
Partnership has determined that an exemption from registration is available,
the Partnership may require prior to and as a condition of the delivery of any
Units that the person purchasing such Units hereunder furnish the Partnership
with a written representation in a form prescribed by the Committee to the
effect that such person is acquiring such Units solely with a view to
investment for his own account and not with a view to the resale or
distribution of all or any part thereof, and that such person will not dispose
of any of such Units otherwise than in accordance with the provisions of Rule
144 under the 1933 Act unless and until either the Units are registered under
the 1933 Act or the Partnership is satisfied that an exemption from such
registration is available.


 


(d)       Compliance with Securities Laws.  Notwithstanding anything herein or in any
other agreement to the contrary, the Partnership shall not be obligated to sell
or issue any Units to an Employee under the Plan unless and until the
Partnership is satisfied that such sale or issuance complies with (i) all
applicable requirements of the securities exchange on which the Units are
traded (or the governing body of the principal market in which such Units are
traded, if such Units are not then listed on an exchange), (ii) all applicable
provisions of the 1933 Act, and (iii) all other laws or regulations by which the
Partnership is bound or to which the Partnership is subject.


 


7.          Rights of Employees; Participants.


 


(a)        Employment.  The Plan will not confer upon any Employee
any right with respect to continuance of employment or other service with the
Employer, nor will it interfere in any way with any right the Employer would
otherwise have to terminate such Employee’s employment or other service at any
time.


 


(b)       Nontransferability.  No right to purchase Units granted under the
Plan shall be assignable or transferable during the lifetime of any Employee
either voluntarily or involuntarily, or be subjected to any lien, directly or
indirectly, by operation of law, or otherwise, including execution, levy,
garnishment, attachment, pledge or bankruptcy.


 


8.          Plan Administration.


 


(a)        Authority of Committee.  The Plan shall be administered by the
Committee.  Subject to the terms of the
Plan and applicable law, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) determine which persons are Employees who may
participate; (ii)


 


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determine the number of Units to be purchased by an
Employee; (iii) determine the time and manner for purchasing Units; (iv)
interpret, construe and administer the Plan; (v) establish, amend, suspend, or
waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; (vi) make a determination
as to the right of any person to receive Units under the Plan; (vii) correct
any defect, supply any omission, or reconcile an inconsistency in the Plan; and
(viii) make any other determinations and take any other actions that the
Committee deems necessary or desirable for the administration of the Plan.


 


(b)       Determination under the Plan.  Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations, and other decisions
under or with respect to the Plan shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive, and binding
upon all persons, including the Partnership, the Employer or any Employee.  No member of the Committee shall be liable
for any action, determination or interpretation made in good faith, and all
members of the Committee shall, in addition to their rights as directors, be
fully protected by the Partnership with respect to any such action,
determination or interpretation.


 


9.          Plan Amendment, Modification and Termination.


 


Except as otherwise required
by applicable law or exchange requirements, the Board may amend the Plan in any
manner, including increasing the maximum number of Units that may be purchased
under the Plan, without the consent of any Person.  The Plan may be terminated at any time by the
Board at any time and shall automatically terminate when all Units authorized
for purchase pursuant to the Plan have been purchased.  On termination of the Plan, all amounts then
remaining credited to the notional accounts for Employees shall be returned to
the affected Employees.


 


10.        Nonexclusivity of the Plan.


 


The adoption of the Plan by
the Partnership shall not be construed as creating any limitations on the power
or authority of the Partnership or any of its Affiliates to adopt such other or
additional incentive or other compensation arrangements of whatever nature as
the Partnership or any of its Affiliates may deem necessary or desirable or to
preclude or limit the continuation of any other plan, practice or arrangement
for the payment of compensation or fringe benefits to employees, non-employee
directors, or consultants generally, or to any class or group of employees,
directors, or consultants, which the Partnership or any of its Affiliates now has
lawfully put into effect, including, without limitation, any long-term incentive plan.


 


11.        Requirements of Law.


 


(a)        Requirements of Law.  The issuance of Units pursuant to the Plan
shall be subject to all applicable laws, rules and regulations.


 


(b)       Governing Law.  The validity, construction and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware, without regard to conflicts
of laws principles.


 


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