Exhibit 10.7


 


OSG
AMERICA L.P.

2007 OMNIBUS INCENTIVE COMPENSATION PLAN


 


SECTION 1.  Purpose.  The purpose of this OSG America L.P. 2007 Omnibus
Incentive Compensation Plan is to promote the interests of OSG America L.P., a
Delaware limited partnership (the “Partnership”), and its unitholders by (a) attracting
and retaining exceptional directors, officers, employees and consultants (including
prospective directors, officers, employees and consultants) of the Partnership
and its Affiliates (as defined below), including Overseas Shipholding Group, Inc.,
and the Partnership’s general partner, OSG America LLC (the “General Partner”) and
(b) enabling such individuals to participate in the long-term growth and
financial success of the Partnership.


 


SECTION 2.  Definitions.  As used herein, the following terms shall
have the meanings set forth below:


 


“Affiliate” means
(a) any entity that, directly or indirectly, is controlled by, controls or
is under common control with, the Partnership and (b) any entity in which the
Partnership has a significant equity interest, in either case as determined by
the Board.


 


“Award” means
any award that is permitted under Section 6 and granted under the Plan.


 


“Award
Agreement” means any written agreement, contract or other instrument or
document evidencing any Award, which may, but need not, require execution or
acknowledgment by a Participant.


 


“Board” means
the Board of Directors of the General Partner.


 


“Cash
Incentive Award” shall have the meaning specified in Section 6(f).


 


“Change of
Control” shall (a) have the meaning set forth in an Award Agreement or (b) if
there is no definition set forth in an Award Agreement, mean, with respect to
the Partnership or the General Partner (the “Applicable Person”), any of the
following events:  (a) any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the Applicable Person’s assets to
any other Person, unless immediately following such sale, lease, exchange or
other transfer such assets are owned, directly or indirectly, by the Applicable
Person; (b) the consolidation or merger of the Applicable Person or any
Subsidiary thereof with or into another Person pursuant to a transaction in
which the outstanding Voting Securities of the Applicable Person are changed
into or exchanged for cash, securities or other property, other than any such
transaction where (i) the outstanding Voting Securities of the Applicable
Person are changed into or exchanged for Voting Securities of the surviving
Person or its parent and (ii) the holders of the Voting Securities of the
Applicable Person immediately prior to such transaction own, directly or
indirectly, not less than a majority of the outstanding Voting Securities of
the surviving Person or its parent immediately after such transaction; and (c) a
“person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of
the Exchange Act) (other than Overseas Shipholding Group,


 

















 


Inc., or its Affiliates, with respect to the General Partner), being or
becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act) of more than 50% of all of the then outstanding Voting
Securities of the Applicable Person, except in a merger or consolidation which
would not constitute a Change of Control under clause (b) above.


 


“Code” means
the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto, and the regulations promulgated thereunder.


 


“Common Units”
means “Common Units”, as defined in the Partnership Agreement.


 


“Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time, or any
successor statute thereto, and the regulations promulgated thereunder.


 


“Exercise
Price” means (a) in the case of Options, the price specified in the
applicable Award Agreement as the price-per-Unit at which Units may be
purchased pursuant to such Option or (b) in the case of UARs, the price
specified in the applicable Award Agreement as the reference price-per-Unit
used to calculate the amount payable to the Participant.


 


“Fair Market
Value” means (a) with respect to any property other than Units, the fair
market value of such property determined by such methods or procedures as shall
be established from time to time by the Board and (b) with respect to the Units,
as of any date, (i) the closing price of Units (A) as reported by the
NYSE for such date or (B) if the Units are listed on any other national
stock exchange, as reported on the stock exchange composite tape for securities
traded on such stock exchange for such date or, with respect to each of clauses (A) and
(B), if there were no sales on such date, on the closest preceding date on
which there were sales of Units or (ii) in the event there shall be no
public market for the Units on such date, the fair market value of the Units as
determined in good faith by the Board.


 


“IRS” means
the Internal Revenue Service or any successor thereto and includes the staff
thereof.


 


“NYSE” means
the New York Stock Exchange or any successor thereto.


 


“Option” means
an option to purchase Units from the Partnership that is granted under Section 6.


 


“Participant” means
any director, officer, employee or consultant (including any prospective director,
officer, employee or consultant) of the Partnership or its Affiliates who is eligible
for an Award under Section 5 and who is selected by the Board to receive
an Award under the Plan or who receives a Substitute Award pursuant to Section 4(c).


 


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“Partnership
Agreement” means the Amended and Restated Agreement of Limited Partnership of
OSG America L.P., as amended from time to time.


 


“Performance Criteria” means the criterion or criteria that the Board
shall select for purposes of establishing a Performance Goal for a Performance
Period with respect to any Performance Unit or Cash Incentive Award under the
Plan.


 


“Performance Formula” means, for a Performance Period, the one or more
objective formulas applied against the relevant Performance Goal to determine,
with regard to the Performance Unit or Cash Incentive Award of a particular
Participant, whether all, a portion or none of the Award has been earned for
the Performance Period.


 


“Performance
Goal” means, for a Performance Period, the one or more goals established by the
Board for the Performance Period based upon the Performance Criteria.


 


“Performance
Period” means the one or more periods of time as the Board may select over
which the attainment of one or more Performance Goals will be measured for the
purpose of determining a Participant’s right to and the payment of a Performance
Unit or Cash Incentive Award.


 


“Performance
Unit” means an Award under Section 6(e) that has a value set by the Board
(or that is determined by reference to a valuation formula specified by the Board
or to the Fair Market Value of Units), which value may be paid to the
Participant by delivery of such property as the Board shall determine,
including without limitation, Units, cash, other securities, other Awards or
other property, or any combination thereof, upon achievement of such Performance
Goals during the relevant Performance Period as the Board shall establish at
the time of such Award or thereafter.


 


“Person” means
any natural person, corporation, limited partnership, limited liability
company, unlimited liability company, partnership, joint venture, trust,
business association, governmental entity or other entity.


 


“Plan” means
this OSG America L.P. 2007 Omnibus Incentive Compensation Plan, as in effect
from time to time.


 


“Restricted Unit”
means a Unit delivered under the Plan that is subject to certain transfer
restrictions, forfeiture provisions and/or other terms and conditions specified
herein and in the applicable Award Agreement.


 


“RUA” means a restricted
unit Award that is designated as such in the applicable Award Agreement and
that represents an unfunded and unsecured promise to deliver Units, cash, other
securities, other Awards or other property in accordance with the terms of the
applicable Award Agreement.


 


“SEC” means
the Securities and Exchange Commission or any successor thereto and shall
include the staff thereof.


 


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“Subsidiary”
means any entity in which the Partnership, directly or indirectly, possesses
50% or more of the total combined voting power of all classes of its stock.


 


“Substitute Awards”
shall have the meaning specified in Section 4(c).


 


“UAR” means a
unit appreciation right Award that represents an unfunded and unsecured promise
to deliver Units, cash, other securities, other Awards or other property equal
in value to the excess, if any, of the Fair Market Value per Unit over the
Exercise Price per Unit of the UAR, subject to the terms of the applicable
Award Agreement.


 


“Units” means
the Common Units of the Partnership or such other securities of the Partnership
(a) into which such units shall be changed by reason of a
recapitalization, merger, consolidation, split-up, combination, exchange of units
or other similar transaction or (b) as may be determined by the Board
pursuant to Section 4(b).


 


“Voting
Securities” means securities of any class of any Person entitling the holders
thereof to vote in the election of members of the board of directors or other
similar governing body of the Person.


 


SECTION 3.  Administration.  (a)  Authority of Board.  The Plan shall be administered by the Board
or such committee of the Board as may be designated by the Board from time to
time.  Subject to the terms of the Plan
and applicable law, and in addition to other express powers and authorizations
conferred on the Board by the Plan, the Board shall have sole and plenary authority
to administer the Plan, including the authority to (i) designate
Participants, (ii) determine the type or types of Awards to be granted to
a Participant, (iii) determine the number of Units to be covered by, or
with respect to which payments, rights or other matters are to be calculated in
connection with, Awards, (iv) determine the terms and conditions of any Awards,
(v) determine the vesting schedules of Awards and, if certain performance
conditions must be attained in order for an Award to vest or be settled or paid,
establish such performance conditions and certify whether, and to what extent, such
performance conditions have been attained, (vi) determine whether, to what
extent and under what circumstances Awards may be settled or exercised in cash,
Units, other securities, other Awards or other property, or canceled, forfeited
or suspended and the method or methods by which Awards may be settled,
exercised, canceled, forfeited or suspended, (vii) determine whether, to
what extent and under what circumstances cash, Units, other securities, other Awards,
other property and other amounts payable with respect to an Award shall be
deferred either automatically or at the election of the holder thereof or of
the Board, (viii) interpret, administer, reconcile any inconsistency in,
correct any default in and supply any omission in, the Plan and any instrument
or agreement relating to, or Award made under, the Plan, (ix) 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, (x) accelerate
the vesting or exercisability of, payment for or lapse of restrictions on,
Awards, (xi) amend an outstanding Award or grant a replacement Award for an
Award previously granted under the Plan if, in its sole discretion, the Board
determines that (A)


 


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the tax consequences of such
Award to the Partnership or the Participant differ from those consequences that
were expected to occur on the date the Award was granted or (B) clarifications
or interpretations of, or changes to, tax law or regulations permit Awards to
be granted that have more favorable tax consequences than initially anticipated
and (xii) make any other determination and take any other action that the Board
deems necessary or desirable for the administration of the Plan.


 


(b)  Board
Decisions.  Unless otherwise
expressly provided in the Plan, and not withstanding any delegation of its
powers, authority or function under the Plan to a duly designated committee of
the Board, all designations, determinations, interpretations and other
decisions under or with respect to the Plan or any Award shall be within the sole
and plenary discretion of the Board, may be made at any time and shall be
final, conclusive and binding upon all Persons, including the Partnership, any
Affiliate, any Participant, any holder or beneficiary of any Award and any unitholder.


 


(c)  Indemnification.  No member of the Board or any employee of the
Partnership or any of its Affiliates (each such Person, a “Covered Person”) shall
be liable for any action taken or omitted to be taken or any determination made
in good faith with respect to the Plan or any Award hereunder.  Each Covered Person shall be indemnified and
held harmless by the Partnership against and from (i) any loss, cost,
liability or expense (including attorneys’ fees) that may be imposed upon or
incurred by such Covered Person in connection with or resulting from any
action, suit or proceeding to which such Covered Person may be a party or in
which such Covered Person may be involved by reason of any action taken or
omitted to be taken under the Plan or any Award Agreement and (ii) any and
all amounts paid by such Covered Person, with the Partnership’s approval, in
settlement thereof, or paid by such Covered Person in satisfaction of any
judgment in any such action, suit or proceeding against such Covered Person; provided
that the Partnership shall have the right, at its own expense, to assume and
defend any such action, suit or proceeding, and, once the Partnership gives
notice of its intent to assume the defense, the Partnership shall have sole
control over such defense with counsel of the Partnership’s choice.  The foregoing right of indemnification shall
not be available to a Covered Person to the extent that a court of competent
jurisdiction in a final judgment or other final adjudication, in either case
not subject to further appeal, determines that the acts or omissions of such
Covered Person giving rise to the indemnification claim resulted from such
Covered Person’s bad faith, fraud or wilful criminal act or omission or that
such right of indemnification is otherwise prohibited by law or by the Partnership
Agreement.  The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification
to which Covered Persons may be entitled under the Partnership Agreement, as a
matter of law, or otherwise, or any other power that the Partnership may have
to indemnify such Persons or hold them harmless.


 


SECTION 4.  Units Available for Awards; Other Limits.  (a)  Units Available.  Subject to adjustment as provided in Section 4(b),
the aggregate number of Units that may be delivered pursuant to Awards granted
under the Plan shall be 250,000.  If,
after the effective date of the Plan, any Award granted under the Plan is
forfeited, or otherwise expires, terminates or is canceled without the delivery
of Units, then the Units covered by such forfeited, expired, terminated or
canceled Award shall again become


 


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available to be delivered
pursuant to Awards under the Plan.  If Units
issued upon exercise, vesting or settlement of an Award, or Units owned by a
Participant (which are not subject to any pledge or other security interest),
are surrendered or tendered to the Partnership in payment of the Exercise Price
of an Award or any taxes required to be withheld in respect of an Award, in
each case, in accordance with the terms and conditions of the Plan and any
applicable Award Agreement, such surrendered or tendered Units shall again
become available to be delivered pursuant to Awards under the Plan.


 


(b)  Adjustments
for Changes in Capitalization and Similar Events.  In the event that the Board determines that
any dividend or other distribution (whether in the form of cash, Units, other
securities or other property), recapitalization, unit split, reverse unit
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 corporate transaction or event that affects
the value of the Units, then the Board shall (i) in such manner as it may
determine equitable or desirable, adjust (A) the number of Units or other
securities of the Partnership (or number and kind of other securities or
property) with respect to which Awards may be granted, including (1) the
aggregate number of Units that may be delivered pursuant to Awards granted
under the Plan and (2) the maximum number of Units or other securities of
the Partnership (or number and kind of other securities or property) with
respect to which Awards may be granted to any Participant in any fiscal year of
the Partnership, and (B) the terms of any outstanding Award, including (1) the
number of Units or other securities of the Partnership (or number and kind of
other securities or property) subject to outstanding Awards or to which
outstanding Awards relate and (2) the Exercise Price with respect to any
Award, (ii) if deemed appropriate or desirable by the Board, make
provision for a cash payment to the holder of an outstanding Award in
consideration for the cancelation of such Award, including, in the case of an
outstanding Option or UAR, a cash payment to the holder of such Option or UAR
in consideration for the cancelation of such Option or UAR in an amount equal
to the excess, if any, of the Fair Market Value (as of a date specified by the
Board) of the Units subject to such Option or UAR over the aggregate Exercise
Price of such Option or UAR and (iii) if deemed appropriate or desirable
by the Board, cancel and terminate any Option or UAR having a per Unit Exercise
Price equal to, or in excess of, the Fair Market Value of a Unit subject to
such Option or UAR without any payment or consideration therefor.


 


(c)  Substitute
Awards.  Awards may, in the
discretion of the Board, be granted under the Plan in assumption of, or in
substitution for, outstanding awards previously granted by the Partnership or any
of its Affiliates or a company acquired by the Partnership or any of its
Affiliates or with which the Partnership or any of its Affiliates combines (“Substitute
Awards”).  The number of Units underlying
any Substitute Awards shall be counted against the aggregate number of Units
available for Awards under the Plan; provided, however, that
Substitute Awards issued in connection with the assumption of, or in
substitution for, outstanding awards previously granted by an entity that is
acquired by the Partnership or any of its Affiliates or with which the


 


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Partnership or any of its
Affiliates combines shall not be counted against the aggregate number of Units
available for Awards under the Plan.


 


(d)  Sources
of Units Deliverable Under Awards. 
Any Units delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued Units or of treasury Units.


 


SECTION 5.  Eligibility.  Any director, officer, employee or consultant
(including any prospective director, officer, employee or consultant) of the Partnership
or any of its Affiliates shall be eligible to be designated a Participant.


 


SECTION 6.  Awards.  (a)  Types of Awards.  Awards may be made under the Plan in the form
of (i) Options, (ii) UARs, (iii) Restricted Units, (iv) RUAs,
(v) Performance Units, (vi) Cash Incentive Awards and (vii) other
equity-based or equity-related Awards that the Board determines are consistent
with the purpose of the Plan and the interests of the Partnership.  Awards may be granted in tandem with other
Awards.


 


(b)  Options.  (i)  Grant.  Subject to the provisions of the Plan, the Board
shall have sole and plenary authority to determine the Participants to whom
Options shall be granted, the number of Units to be covered by each Option and
the conditions and limitations applicable to the vesting and exercise of the
Option.


 


(ii)  Exercise
Price.  Except as otherwise
established by the Board at the time an Option is granted and set forth in the
applicable Award Agreement, the Exercise Price of each Unit covered by an
Option shall be not less than 100% of the Fair Market Value of such Unit
(determined as of the date the Option is granted).


 


(iii)  Vesting
and Exercise.  Each Option shall be
vested and exercisable at such times, in such manner and subject to such terms
and conditions as the Board may, in its sole and plenary discretion, specify in
the applicable Award Agreement or thereafter. 
Except as otherwise specified by the Board in the applicable Award
Agreement, an Option may only be exercised to the extent that it has already vested
at the time of exercise.  Except as
otherwise specified by the Board in the Award Agreement, Options shall become
vested and exercisable with respect to one-third of the Units subject to such
Options on each of the first three anniversaries of the date of grant.  An Option shall be deemed to be exercised
when written or electronic notice of such exercise has been given to the Partnership
in accordance with the terms of the Award by the Person entitled to exercise the
Award and full payment pursuant to Section 6(b)(iv) for the Units
with respect to which the Award is exercised has been received by the Partnership.  Exercise of a vested Option may be for some
or all of the portion of the Option that is then exercisable and any such
partial exercise shall decrease the number of Units that thereafter may be
available for sale under the Option.  The
Board may impose such conditions with respect to the exercise of Options,
including, without limitation, any relating to the application of Federal or
state securities laws, as it may deem necessary or advisable.


 


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(iv)  Payment.  (A)  No Units shall be delivered
pursuant to any exercise of an Option until payment in full of the aggregate Exercise
Price therefor is received by the Partnership, and the Participant has paid to
the Partnership an amount equal to any Federal, state, local and foreign income
and employment taxes required to be withheld. 
Such payments may be made in cash (or its equivalent) or, in the Board’s
sole and plenary discretion, (1) by exchanging Units owned by the Participant
(which are not the subject of any pledge or other security interest) or (2) if
there shall be a public market for the Units at such time, subject to such rules as
may be established by the Board, through delivery of irrevocable instructions
to a broker to sell the Units otherwise deliverable upon the exercise of the
Option and to deliver promptly to the Partnership an amount equal to the aggregate
Exercise Price, or by a combination of the foregoing; provided that the
combined value of all cash and cash equivalents and the Fair Market Value of
any such Units so tendered to the Partnership as of the date of such tender is
at least equal to such aggregate Exercise Price and the amount of any Federal,
state, local or foreign income or employment taxes required to be withheld.


 


(B)  Wherever
in the Plan or any Award Agreement a Participant is permitted to pay the
Exercise Price of an Option or taxes relating to the exercise of an Option by
delivering Units, the Participant may, if permitted by the Board, and subject
to procedures satisfactory to it, in its discretion, satisfy such delivery
requirement by presenting proof of beneficial ownership of such Units, in which
case the Partnership shall treat the Option as exercised without further
payment and shall withhold such number of Units from the Units acquired by the
exercise of the Option.


 


(v)  Expiration.  Except as otherwise set forth in the applicable
Award Agreement, each Option shall expire immediately, without any payment,
upon the earlier of (A) the tenth anniversary of the date the Option is
granted and (B) either (x) 90 days after the date the Participant who
is holding the Option ceases to be a director, officer, employee or consultant
of the Partnership or one of its Affiliates for any reason other than the
Participant’s death or (y) six months after the date the Participant who
is holding the Option ceases to be a director, officer, employee or consultant
of the Partnership or one of its Affiliates by reason of the Participant’s
death.  In no event may an Option be
exercisable after the tenth anniversary of the date the Option is granted.


 


(c)  UARs.  (i)  Grant.  Subject to the provisions of the Plan, the Board
shall have sole and plenary authority to determine the Participants to whom UARs
shall be granted, the number of Units to be covered by each UAR, the Exercise
Price thereof and the conditions and limitations applicable to the exercise
thereof.  UARs may be granted in tandem
with another Award, in addition to another Award or freestanding and unrelated
to another Award.  UARs granted in tandem
with, or in addition to, an Award may be granted either at the same time as the
Award or at a later time.


 


(ii)  Exercise
Price.  Except as otherwise
established by the Board at the time a UAR is granted and set forth in the
applicable Award Agreement, the Exercise Price of each Unit covered by a UAR
shall be not less than 100% of the Fair Market Value of such Unit (determined
as of the date the UAR is granted).


 


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(iii)  Exercise.  A UAR shall entitle the Participant to
receive an amount equal to the excess, if any, of the Fair Market Value of a Unit
on the date of exercise of the UAR over the Exercise Price thereof.  The Board shall determine, in its sole and
plenary discretion, whether a UAR shall be settled in cash, Units, other
securities, other Awards, other property or a combination of any of the
foregoing.


 


(iv)  Other
Terms and Conditions.  Subject to the
terms of the Plan and any applicable Award Agreement, the Board shall
determine, at or after the grant of a UAR, the vesting criteria, term, methods
of exercise, methods and form of settlement and any other terms and conditions
of any UAR.  Any such determination by
the Board may be changed by the Board from time to time and may govern the
exercise of UARs granted or exercised thereafter.  The Board may impose such conditions or
restrictions on the exercise of any UAR as it shall deem appropriate or
desirable.


 


(d)  Restricted
Units and RUAs.  (i)  Grant.  Subject to the provisions of the Plan, the Board
shall have sole and plenary authority to determine the Participants to whom Restricted
Units and RUAs shall be granted, the number of Restricted Units and RUAs to be
granted to each Participant, the duration of the period during which, and the
conditions, if any, under which, the Restricted Units and RUAs may vest or may be
forfeited to the Partnership and the other terms and conditions of such Awards.


 


(ii)  Transfer
Restrictions.  Restricted Units and RUAs
may not be sold, assigned, transferred, pledged or otherwise encumbered except as
provided in the Plan or as may be provided in the applicable Award Agreement; provided,
however, that the Board may in its discretion determine that Restricted Units
and RUAs may be transferred by the Participant. 
Certificates issued in respect of Restricted Units shall be registered
in the name of the Participant and deposited by such Participant, together with
a unit power endorsed in blank, with the Partnership or such other custodian as
may be designated by the Board or the Partnership, and shall be held by the Partnership
or other custodian, as applicable, until such time as the restrictions
applicable to such Restricted Units lapse. 
Upon the lapse of the restrictions applicable to such Restricted Units,
the Partnership or other custodian, as applicable, shall deliver such
certificates to the Participant or the Participant’s legal representative.


 


(iii)  Payment/Lapse
of Restrictions.  Each RUA shall be
granted with respect to one Unit or shall have a value equal to the Fair Market
Value of one Unit.  RUAs shall be paid in
cash, Units, other securities, other Awards or other property, as determined in
the sole and plenary discretion of the Board, upon the lapse of restrictions
applicable thereto, or otherwise in accordance with the applicable Award
Agreement.


 


(e)  Performance
Units.  (i)  Grant.  Subject to the provisions of the Plan, the Board
shall have sole and plenary authority to determine the Participants to whom
Performance Units shall be granted and the terms and conditions thereof.


 


(ii)  Value of Performance Units.  Each Performance Unit shall have an initial
value that is established by the Board at the time of grant.  The Board shall set Performance Goals in its
discretion which, depending on the extent to which they are met


 


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during a Performance Period, will
determine the number and value of Performance Units that will be paid out to
the Participant.


 


(iii)  Earning
of Performance Units.  Subject to the
provisions of the Plan, after the applicable Performance Period has ended, the
holder of Performance Units shall be entitled to receive a payout of the number
and value of Performance Units earned by the Participant over the Performance
Period, to be determined by the Board, in its sole and plenary discretion, as a
function of the extent to which the corresponding Performance Goals have been
achieved.


 


(iv)  Form and Timing of Payment of
Performance Units.  Subject to
the provisions of the Plan, the Board, in its sole and plenary discretion, may
pay earned Performance Units in the form of cash, Units, other securities,
other Awards or other property (or in any combination thereof) that has an
aggregate Fair Market Value equal to the value of the earned Performance Units
at the close of the applicable Performance Period.  Such Units may be granted subject to any
restrictions in the applicable Award Agreement deemed appropriate by the Board.  The determination of the Board with respect
to the form and timing of payout of such Awards shall be set forth in the
applicable Award Agreement.


 


(f)  Cash
Incentive Awards.  Subject to the
provisions of the Plan, the Board, in its sole and plenary discretion, shall
have the authority to grant Cash Incentive Awards.  The Board shall establish Cash Incentive
Award levels to determine the amount of a Cash Incentive Award payable upon the
attainment of Performance Goals.


 


(g)  Other
Unit-Based Awards.  Subject to the
provisions of the Plan, the Board shall have the sole and plenary authority to
grant to Participants other equity-based or equity-related Awards (including,
but not limited to, fully-vested Units) in such amounts and subject to such
terms and conditions as the Board shall determine.


 


(h)  Distribution
Equivalents.  In the sole and plenary
discretion of the Board, an Award, other than an Option, UAR or Cash Incentive
Award, may provide the Participant with distributions or distribution equivalents,
payable in cash, Units, other securities, other Awards or other property, on a
current or deferred basis, on such terms and conditions as may be determined by
the Board in its sole and plenary discretion, including, without limitation,
payment directly to the Participant, withholding of such amounts by the Partnership
subject to vesting of the Award or reinvestment in additional Units, Restricted
Units or other Awards.


 


SECTION 7.  Amendment and Termination.  (a)  Amendments to the Plan.  Subject to any applicable law or government regulation
and to the rules of the NYSE or any successor exchange or quotation system
on which the Units may be listed or quoted, the Plan may be amended, modified
or terminated by the Board at any time and in any manner without the approval
of the unitholders of the Partnership except that unitholder approval shall be
required for any amendment that would (i) increase the maximum number of
Units for which Awards may be granted under the Plan; provided, however,
that any adjustment under Section 4(b) shall not constitute an
increase for


 


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purposes of this Section 7(a)(i);  (ii) decrease the Exercise Price of any
Option or UAR that, at the time of such decrease, has an Exercise Price that is
greater than the then current Fair Market Value of a Unit or cancel, in
exchange for cash or any other Award, any Such Award; provided, however,
that any amendment, modification or termination or other action taken pursuant
to Section 3(a)(xi), Section 4(b), Section 7(c) or Section 8
shall not constitute a decrease or cancelation for purposes of this Section 7(a)(ii);
or (iii) change the class of employees or other individuals eligible to
participate in the Plan.  No
modification, amendment or termination of the Plan may, without the consent of any
Participant to whom any Award shall previously have been granted, materially
and adversely affect the rights of such Participant (or his or her transferee)
under such Award, unless otherwise provided by the Board in the applicable Award
Agreement.


 


(b)  Amendments
to Awards.  The Board may waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate any Award theretofor granted, prospectively or
retroactively; provided, however, that, except as set forth in the
Plan, unless otherwise provided by the Board in the applicable Award Agreement,
any such waiver, amendment, alteration, suspension, discontinuance, cancelation
or termination that would materially and adversely impair the rights of any
Participant or any holder or beneficiary of any Award theretofor granted shall
not to that extent be effective without the consent of the impaired
Participant, holder or beneficiary.


 


(c)  Adjustment
of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.  The Board is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events (including, without
limitation, the events described in Section 4(b) or the occurrence of
a Change of Control) affecting the Partnership, any Affiliate, or the financial
statements of the Partnership or any Affiliate, or of changes in applicable rules,
rulings, regulations or other requirements of any governmental body or
securities exchange, accounting principles or law (i) whenever the Board,
in its sole and plenary discretion, determines that such adjustments are appropriate
or desirable, including, without limitation, providing for a substitution or
assumption of Awards, accelerating the exercisability of, lapse of restrictions
on, or termination of, Awards or providing for a period of time for exercise
prior to the occurrence of such event, (ii) if deemed appropriate or
desirable by the Board, in its sole and plenary discretion, by providing for a
cash payment to the holder of an Award in consideration for the cancelation of
such Award, including, in the case of an outstanding Option or UAR, a cash
payment to the holder of such Option or UAR in consideration for the
cancelation of such Option or UAR in an amount equal to the excess, if any, of
the Fair Market Value (as of a date specified by the Board) of the Units
subject to such Option or UAR over the aggregate Exercise Price of such Option
or UAR and (iii) if deemed appropriate or desirable by the Board, in its
sole and plenary discretion, by canceling and terminating any Option or UAR
having a per Unit Exercise Price equal to, or in excess of, the Fair Market
Value of a Unit subject to such Option or UAR without any payment or
consideration therefor.


 


SECTION 8.  Change of Control.  Unless otherwise provided in the applicable
Award Agreement, in the event of a Change of Control after the date of the
adoption of the Plan, unless provision is made in connection with the Change of
Control


 


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for (a) assumption of
Awards previously granted or (b) substitution for such Awards of new
awards or similar entitlements covering equity interests in the successor
corporation or other entity in the Change of Control with appropriate
adjustments as to the number and kinds of equity interests, Performance Goals and
the Exercise Prices, if applicable, (i) any outstanding Options or UARs then
held by Participants that are unexercisable or otherwise unvested shall
automatically be deemed exercisable or otherwise vested, as the case may be, as
of immediately prior to such Change of Control, (ii) all Performance Units
and Cash Incentive Awards shall be paid out as if the date of the Change of
Control were the last day of the applicable Performance Period and “target”
performance levels had been attained and (iii) all other outstanding
Awards (i.e., other than Options, UARs, Performance Units and Cash Incentive
Awards) then held by Participants that are unexercisable, unvested or still
subject to restrictions or forfeiture, shall automatically be deemed
exercisable and vested and all restrictions and forfeiture provisions related
thereto shall lapse as of immediately prior to such Change of Control.


 


SECTION 9.  General Provisions.  (a)  Nontransferability.  Except as otherwise specified in the
applicable Award Agreement, during the Participant’s lifetime each Award (and
any rights and obligations thereunder) shall be exercisable only by the
Participant, or, if permissible under applicable law, by the Participant’s
legal guardian or representative, and no Award (or any rights and obligations
thereunder) may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a Participant otherwise than by will or by the
laws of descent and distribution, and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Partnership or any Affiliate; provided that (i) the
designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance and (ii) the Board may
permit further transferability, on a general or specific basis, and may impose
conditions and limitations on any permitted transferability.  All terms and conditions of the Plan and all
Award Agreements shall be binding upon any permitted successors and assigns.


 


(b)  No
Rights to Awards.  No Participant or
other Person shall have any claim to be granted any Award, and there is no
obligation for uniformity of treatment of Participants or holders or
beneficiaries of Awards.  The terms and
conditions of Awards and the Board’s determinations and interpretations with
respect thereto need not be the same with respect to each Participant and may
be made selectively among Participants, whether or not such Participants are
similarly situated.


 


(c)  Unit
Certificates.  All certificates for Units
or other securities of the Partnership or any Affiliate delivered under the
Plan pursuant to any Award or the exercise thereof shall be subject to such
stop transfer orders and other restrictions as the Board may deem advisable
under the Plan, the applicable Award Agreement or the rules, regulations and
other requirements of the SEC, the NYSE or any other stock exchange or
quotation system upon which such Units or other securities are then listed or reported
and any applicable Federal or state laws, and the Board may cause a legend or
legends to be put on any such certificates to make appropriate reference to
such restrictions.


 


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(d)  Withholding.  A Participant may be required to pay to the Partnership
or any Affiliate, and the Partnership or any Affiliate shall have the right and
is hereby authorized to withhold from any Award, from any payment due or
transfer made under any Award or under the Plan or from any compensation or
other amount owing to a Participant, the amount (in cash, Units, other
securities, other Awards or other property) of any applicable withholding taxes
in respect of an Award, its exercise or any payment or transfer under an Award
or under the Plan and to take such other action as may be necessary in the
opinion of the Board or the Partnership to satisfy all obligations for the
payment of such taxes.


 


(e)  Section 409A
of the Code.  Participants are solely
responsible and liable for the satisfaction of all taxes and penalties that may
arise in connection with Awards (including any taxes arising under Section 409A
of the Code), and the Partnership shall not have any obligation to indemnify or
otherwise hold any Participant harmless from any or all of such taxes.  The Board shall have the discretion to
organize any deferral program, to require deferral election forms, and to grant
or to unilaterally modify any Award in a manner that (i) conforms with the
requirements of Section 409A of the Code, (ii) voids any Participant
election to the extent it would violate Section 409A of the Code and (iii) for
any distribution event or election that could be expected to violate Section 409A
of the Code, make the distribution only upon the earliest of the first to occur
of a “permissible distribution event” within the meaning of Section 409A
of the Code, or a distribution event that the participant elects in accordance
with Section 409A of the Code.  The Board
shall have the sole discretion to interpret the requirements of the Code,
including Section 409A, for purposes of the Plan and all Awards.


 


(f)  Award
Agreements.  Each Award hereunder
shall be evidenced by an Award Agreement, which shall be delivered to the
Participant and shall specify the terms and conditions of the Award and any rules applicable
thereto, including, but not limited to, the effect on such Award of the death,
disability or termination of employment or service of a Participant and the
effect, if any, of such other events as may be determined by the Board.


 


(g)  No
Limit on Other Compensation Arrangements. 
Nothing contained in the Plan shall prevent the Partnership or any
Affiliate from adopting or continuing in effect other compensation
arrangements, which may, but need not, provide for the grant of options,
restricted units, units and other types of equity-based awards, and such
arrangements may be either generally applicable or applicable only in specific
cases.


 


(h)  No
Right to Employment.  The grant of an
Award shall not be construed as giving a Participant the right to be retained as
a director, officer, employee or consultant of or to the Partnership or any
Affiliate, nor shall it be construed as giving a Participant any rights to
continued service on the Board.  Further,
the Partnership or an Affiliate may at any time dismiss a Participant from
employment or discontinue any consulting relationship, free from any liability
or any claim under the Plan, unless otherwise expressly provided in the Plan or
in any Award Agreement.


 


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(i)  No
Rights as Unitholder.  No Participant
or holder or beneficiary of any Award shall have any rights as a unitholder
with respect to any Units to be distributed under the Plan until he or she has
become the holder of such Units.  In
connection with each grant of Restricted Units, except as provided in the
applicable Award Agreement, the Participant shall not be entitled to the rights
of a unitholder in respect of such Restricted Units.  Except as otherwise provided in Section 4(b),
Section 7(c) or the applicable Award Agreement, no adjustments shall
be made for dividends or distributions on (whether ordinary or extraordinary,
and whether in cash, Units, other securities or other property), or other
events relating to, Units subject to an Award for which the record date is
prior to the date such Units are delivered.


 


(j)  Governing
Law.  The validity, construction and
effect of the Plan and any rules and regulations relating to the Plan and
any Award Agreement shall be determined in accordance with the laws of the
State of Delaware, without giving effect to the conflict of laws provisions
thereof.


 


(k)  Severability.  If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award
under any law deemed applicable by the Board, such provision shall be construed
or deemed amended to conform to the applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Board,
materially altering the intent of the Plan or the Award, such provision shall
be construed or deemed stricken as to such jurisdiction, Person or Award and
the remainder of the Plan and any such Award shall remain in full force and
effect.


 


(l)  Other
Laws.  The Board may refuse to issue
or transfer any Units or other consideration under an Award if, acting in its
sole and plenary discretion, it determines that the issuance or transfer of
such Units or such other consideration might violate any applicable law or
regulation or entitle the Partnership to recover the same under Section 16(b) of
the Exchange Act, and any payment tendered to the Partnership by a Participant,
other holder or beneficiary in connection with the exercise of such Award shall
be promptly refunded to the relevant Participant, holder or beneficiary.  Without limiting the generality of the
foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Partnership, and no such offer shall be outstanding, unless
and until the Board in its sole and plenary discretion has determined that any
such offer, if made, would be in compliance with all applicable requirements of
the U.S. Federal and any other applicable securities laws.


 


(m)  No
Trust or Fund Created.  Neither the
Plan nor any Award shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Partnership or any Affiliate,
on one hand, and a Participant or any other Person, on the other hand.  To the extent that any Person acquires a
right to receive payments from the Partnership or any Affiliate pursuant to an Award,
such right shall be no greater than the right of any unsecured general creditor
of the Partnership or such Affiliate.


 


14

















 


(n)  No
Fractional Units.  No fractional Units
shall be issued or delivered pursuant to the Plan or any Award, and the Board
shall determine whether cash, other securities or other property shall be paid
or transferred in lieu of any fractional Units or whether such fractional Units
or any rights thereto shall be canceled, terminated or otherwise eliminated.


 


(o)  Requirement
of Consent and Notification of Election Under Section 83(b) of the
Code or Similar Provision.  No
election under Section 83(b) of the Code (to include in gross income
in the year of transfer the amounts specified in Section 83(b) of the
Code) or under a similar provision of law may be made unless expressly
permitted by the terms of the applicable Award Agreement or by action of the Board
in writing prior to the making of such election.  If an Award recipient, in connection with the
acquisition of Units under the Plan or otherwise, is expressly permitted under
the terms of the applicable Award Agreement or by such Board action to make
such an election and the Participant makes the election, the Participant shall
notify the Board of such election within ten days of filing notice of the
election with the IRS or other governmental authority, in addition to any
filing and notification required pursuant to regulations issued under Section 83(b) of
the Code or other applicable provision.


 


(p)  Interpretation.  (i) Headings are given to the Sections
and subsections 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 or interpretation of the Plan or any provision thereof.


 


(ii) The
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”.


 


SECTION 10.  Term of the Plan.  (a)  Effective Date.  The Plan shall be effective as of the date of
its adoption by the Board.


 


(b)  Expiration
Date.  No Award shall be granted
under the Plan after the tenth anniversary of the date the Plan is approved
under Section 10(a).  Unless
otherwise expressly provided in the Plan or in an applicable Award Agreement,
any Award granted hereunder may, and the authority of the Board to amend, alter,
adjust, suspend, discontinue or terminate any such Award or to waive any
conditions or rights under any such Award shall, nevertheless continue
thereafter.


 


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