Exhibit 10.1


 


K-SEA TRANSPORTATION PARTNERS L.P.
LONG-TERM INCENTIVE PLAN


 


DIRECTOR PHANTOM UNIT AWARD AGREEMENT


 


THIS AGREEMENT (“Agreement”), made as of the     
day of          ,
2004 (the “Grant Date”), evidences an award by K-Sea General Partner GP LLC, a
Delaware limited liability company (the “Company”) and general partner of the
general partner of K-Sea Transportation Partners L.P., a Delaware limited
partnership (the “Partnership”), to         
          (the
“Grantee”) pursuant to the K-Sea Transportation Partners L.P. Long-Term
Incentive Plan (the “Plan”).  Capitalized
terms used and not otherwise defined herein shall have the meaning ascribed to
them in the Plan.


 


1.             Grant of Phantom Units.  Effective as
of the Grant Date, pursuant to Section 6(b) of the Plan, the Company has
awarded to the Grantee                                   
Phantom Units, subject to the conditions and restrictions set forth below and
in the Plan (the “Phantom Units”).


 


2.             Restrictions; Vesting Schedule.  The Phantom Units granted hereunder to
the Grantee may not be sold, assigned, transferred, pledged or otherwise
encumbered and are subject to forfeiture as described in Section 3.  The Grantee shall have a vested right with
respect to one-fourth (1/4) of the Phantom Units on the first anniversary of
the Grant Date, with respect to an additional one-fourth (1/4) of the Phantom
Units on the second anniversary of the Grant Date, with respect to an
additional one-fourth (1/4) of the Phantom Units on the third anniversary of the
Grant Date and with respect to the remaining one-fourth (1/4) of the Phantom
Units on the fourth anniversary of the Grant Date, provided that as of each
such date the Grantee has been in continuous service as a Director since the
Grant Date.  The number of Phantom Units
that vest as of each date described above will be rounded down to the nearest
whole Phantom Unit, with any remaining Phantom Units to vest with the final
one-fourth (1/4) installment. 
Notwithstanding the foregoing:


 


(a)                                  Grantee shall have a vested right to all
of the Phantom Units upon a termination of Grantee’s service as a
Director due to death, Disability or Retirement; and


 


(b)                                 Grantee shall have a vested right to all
of the Phantom Units upon a Change in Control.


 


The period of time
between the Grant Date and the date that the Grantee obtains a vested right to
a Phantom Unit shall be referred to herein as the “Restricted Period” as to
that Phantom Unit.  In the event that any
day on which the Grantee would otherwise obtain a vested right to a Phantom
Unit is a Saturday, Sunday or holiday, the Grantee shall instead obtain that
vested right on the first business day immediately following such date.  As soon as reasonably practicable following
vesting with respect to a Phantom Unit, the Grantee shall be entitled to
receive a Unit, and the Company shall deliver to the Grantee a certificate
evidencing the Unit.  Upon delivery of a
Unit


 


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in respect of a Phantom Unit, such Phantom Unit shall cease to be
outstanding in the Grantee’s notional account described in Section 4.  For purposes of this Agreement:


 


“Retirement” shall mean Grantee’s termination of
services as a Director on or after age 70.


 


“Disability” shall mean total and permanent disability
of the Grantee as determined by the Committee in its discretion.


 


“Change in Control” shall mean the occurrence of one
or more of the following events: (i) any sale, lease, exchange or other
transfer (in one or a series of related transactions) of all or substantially
all of the assets of the Company or the Partnership to any Person and/or its
Affiliates, other than to the Company, the Partnership or any of their
Affiliates or (ii) any merger, reorganization, consolidation or other
transaction pursuant to which more than 50% of the combined voting power of the
equity interests in the Company cease to be owned by Persons who own such
interests as of the date of the initial public offering of Units. Phantom Units
awarded hereunder shall not vest as provided in Section 6(c)(vii) of the
Plan, but only upon the occurrence of events which meet the definition of
Change in Control as provided in this Agreement.


 


3.             Forfeiture.  If Grantee’s service as a Director
terminates under circumstances other than those provided in Section 2
prior to all or a portion of the Phantom Units having become vested pursuant to
the provisions of Section 2, the Grantee shall forfeit all right to any
Phantom Units not yet vested as of the date of termination of service.  Such forfeiture shall apply to Beneficiaries
(as defined below) as well as the Grantee.


 


4.             DER.  During the Restricted Period, the Award
of Phantom Units hereunder shall be evidenced by entry in a bookkeeping account
and shall include a tandem DER.  Pursuant
to the DER, as of each date that a cash distribution is made with respect to
Units, the Grantee shall be entitled to receive a cash payment with respect to
each Phantom Unit then outstanding equal to the cash distribution made by the
Partnership with respect to each Unit.


 


5.             Beneficiary Designations.  The Grantee shall file with the Company
on such form as may be prescribed by the Company, a designation of one or more
beneficiaries and, if desired, one or more contingent beneficiaries (each
referred to herein as a “Beneficiary”) to whom Units or cash otherwise due the
Grantee under the terms of this Agreement shall be distributed in the event of
the death of the Grantee.  The Grantee
shall have the right to change the Beneficiary or Beneficiaries from time to time;
provided, however, that any change shall not become effective
until received in the Grantee’s handwriting by the Vice President of
Administration.  If any designated
Beneficiary survives the Grantee but dies after the Grantee’s death, any
remaining benefits due such deceased Beneficiary under this Agreement shall be
distributed to the personal representative or executor of the deceased
Beneficiary’s estate.  If there is no
effective Beneficiary designation on file at the time of the Grantee’s death,
or if the designated Beneficiary or Beneficiaries have all predeceased such
Grantee, the payment of any remaining benefits under this Agreement shall be
made to the personal representative or executor of the Grantee’s estate.  If one or more but not all the Beneficiaries
have predeceased such Grantee, the benefits under this Agreement shall be paid
according to the Grantee’s instructions


 


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in his designation of
Beneficiaries.  If the Grantee has not
given instructions, or if the instructions are not clear, the benefits under
this Agreement which would have been paid to the deceased Beneficiary or
Beneficiaries will be paid to the personal representative or executor of
Grantee’s estate.


 


6.             Nonalienation of Benefits.  Except as
contemplated by Section 5 above, no right or benefit under this Agreement
shall be subject to transfer, anticipation, alienation, sale, assignment,
pledge, encumbrance or charge, whether voluntary, involuntary or by operation
of law, and any attempt to transfer, anticipate, alienate, sell, assign,
pledge, encumber or charge the same shall be void.  No right or benefit hereunder shall in any
manner be liable for or subject to any debts, contracts, liabilities or torts
of the person entitled to such benefits. 
If the Grantee or the Grantee’s Beneficiary hereunder shall become
bankrupt or attempt to transfer, anticipate, alienate, assign, sell, pledge,
encumber or charge any right or benefit hereunder, other than as contemplated
by Section 5 above, or if any creditor shall attempt to subject the same
to a writ of garnishment, attachment, execution, sequestration or any other
form of process or involuntary lien or seizure, then such right or benefit
shall cease and terminate.


 


7.             Prerequisites to Benefits.  Neither the Grantee, nor any person
claiming through the Grantee, shall have any right or interest in Phantom Units
or the associated rights to delivery of Units or cash awarded hereunder, unless
and until all the terms, conditions and provisions of this Agreement and the
Plan which affect the Grantee or such other person shall have been complied
with as specified herein.


 


8.             Delivery of Units.  The Company
shall not be obligated to deliver any Units if counsel to the Company
determines that such delivery would violate any applicable law or any rule or
regulation of any governmental authority or any rule or regulation of, or
agreement of the Partnership or the Company with, any securities exchange or
association upon which the Units are listed or quoted. If necessary to comply
with any such law, rule, regulation or agreement, neither the Company nor the
Partnership shall be obligated to take any affirmative action in order to cause
the delivery of Units.


 


9.             Rights as a Unitholder.  Except for the DER described in
Section 4 above, the Grantee (or Beneficiary) shall have no rights as a
unitholder with respect to the Units potentially deliverable pursuant to the
Phantom Units unless and until such Units have been issued and registered in
the Grantee’s name or issued for the benefit of the Grantee hereunder.


 


10.           Taxes.
The Company shall have the right to withhold an appropriate amount of cash or
number of Units, or combination thereof, for payment of taxes or other amounts
required by law or to take such action as may be necessary in the opinion of
the Company to satisfy all obligations for withholding of taxes.  Withholding may be satisfied by the transfer
to the Company of Units theretofore owned by the Grantee, subject to such terms
and conditions as the Committee shall prescribe.


 


11.           Adjustments.  Certain adjustments may be made to the
Phantom Units upon the occurrence of certain corporate transactions or other
events as described in Section 7 of the Plan.  In addition, Phantom Units may be settled in
cash as described in Section 4 of the Plan.


 


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12.           Notice.  Unless the Company notifies the Grantee in
writing of a different procedure, any notice or other communication to the
Company with respect to this Agreement shall be in writing and shall be
delivered personally or sent by first class mail, postage prepaid to the
following address:


 


K-Sea General Partner GP LLC


c/o Vice President of Administration


3245 Richmond Terrace


Staten Island, New York 10303


 


Any notice or other communication to the Grantee with respect to this
Agreement shall be in writing and shall be delivered personally, or shall be
sent by first class mail, postage prepaid, to Grantee’s address as listed in
the records of the Partnership on the Grant Date, unless the Company has
received written notification from the Grantee of a change of address.


 


13.           Amendment.  Without the consent of the Grantee, this
Agreement may be amended or supplemented (i) to cure any ambiguity or to
correct or supplement any provision herein which may be defective or
inconsistent with any other provision herein, or (ii) to add to the covenants
and agreements of the Company or the Partnership for the benefit of Grantee or
to add to the rights of the Grantee or to surrender any right or power reserved
to or conferred upon the Company or the Partnership in this Agreement, subject,
however, to any required approval of the partners of the Partnership
and, provided, in each case, that such changes or corrections shall not
adversely affect the rights of Grantee with respect to the Award evidenced
hereby without the Grantee’s consent, or (iii) to make such other changes as
the Company, upon advice of counsel, determines are necessary or advisable
because of the adoption or promulgation of, or change in or of the
interpretation of, any law or governmental rule or regulation, including any
applicable federal or state securities laws.


 


14.           Grantee Service.  Nothing contained in this
Agreement, and no action of the Company, the Partnership or the Committee with
respect hereto, shall confer or be construed to confer on the Grantee any right
to continue as a Director.


 


15.           Governing Law.  This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State
of Delaware.


 


16.           Construction.  References in this Agreement to “this
Agreement” and the words “herein,” “hereof,” “hereunder” and similar terms
include the Plan.  The headings of the
Sections of this Agreement have been included for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.


 


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17.           Relationship to the Plan.  In addition
to the terms and conditions described in this Agreement, grants of Phantom
Units are subject to all other applicable provisions of the Plan.  The decisions of the Committee with respect
to questions arising as to the interpretation of the Plan, or this Agreement
and as to findings of fact, shall be final, conclusive and binding.


 


 


	
   

  	
  K-SEA GENERAL PARTNER GP LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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  GRANTEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name]

  
	
   

  	
   

  
	
   

  	
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