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Exhibit 10.7  

 
 

BREITBURN ENERGY COMPANY L.P.    
    
    UNIT APPRECIATION PLAN
  FOR EMPLOYEES AND CONSULTANTS    
    

 
  ARTICLE ONE    
    
    GENERAL PROVISIONS    
    

I.     PURPOSE OF THE PLAN  

        This Unit Appreciation Plan for Employees and Consultants is intended to (i) promote the interests of the Company by providing eligible persons in the
employ or service of the Company (or any Subsidiary) with the opportunity to receive compensation based on the growth, development and financial success of Provident, and (ii) attract and
retain individuals whose abilities, experience and judgment may reasonably be expected to contribute to the growth, development and financial success of the Company, and as a result contribute to the
growth, development and financial success of Provident. 

        Capitalized
terms herein shall have the meanings assigned to such terms in the attached Appendix. 

II.    ADMINISTRATION OF THE PLAN  

        A.    Plan Administrator.    The Plan shall be administered by the Board. However, any or all administrative functions
otherwise exercisable by the Board may be delegated to the Committee. Members of the Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the
Board at any time. The Board may also at any time terminate the functions of the Committee and assume any or all powers and authority previously delegated to the Committee. 

        B.    Authority of the Plan Administrator.    The Plan Administrator shall have full authority to determine
(i) which eligible persons are to receive Awards granted under the Plan, (ii) the time or times when those Awards are to be made, (iii) the number of Phantom Units to be covered
by each such Award, (iv) the schedule (if any) setting forth the time or times when, or event or events upon the occurrence of which, each Award under the Plan, or portion thereof, will vest
and become exercisable, and (v) all other terms and conditions which are to apply to one or more Awards under the Plan, provided that such terms
and conditions are not inconsistent with the Plan. 

        C.    Interpretation of the Plan; Decisions of the Plan Administrator.    The Plan Administrator shall have full
discretionary power and authority (subject to the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Plan and to make such
determinations under, and issue such interpretations of, the Plan and any Awards thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator shall be final and binding on all
parties who have an interest in the Plan or any Award thereunder. 

III.  ELIGIBILITY  

        Present and future Employees, consultants and independent advisors providing services to the Company and its Subsidiaries (whether now existing or subsequently
established) shall be eligible to participate in the Plan. 

IV.    PHANTOM UNITS SUBJECT TO THE PLAN  

        A.    Units Reserved.    The maximum aggregate number of Phantom Units upon which Awards may be granted over the term
of the Plan shall not exceed One Million Five Hundred Thousand (1,500,000), subject to adjustment under Section IV.B of this Article One. Notwithstanding the foregoing, to the extent one or
more Awards under the Plan terminates or expires unexercised, the 

 

Phantom
Units subject to such Awards shall return to the Plan and be available for subsequent grants under the Plan. 

        B.    Adjustments.    Should any change be made to the Trust Units by reason of any subdivision, consolidation,
reclassification, reorganization or other similar change affecting the outstanding Trust Units as a class without Provident's receipt of consideration, the Plan Administrator shall make appropriate
and equitable adjustments to: (i) the maximum number of Phantom Units upon which Awards may be granted under the Plan (ii) the type and/or class of securities underlying the Phantom
Units upon which Awards may be granted under the Plan, (iii) the number of Phantom Units, the type and/or class of securities underlying the Phantom Units and the Base Price per Phantom Unit in
effect under the Unit Appreciation Rights of each outstanding Award under the Plan, and (iv) the aggregate amount of Excess Distributions per Phantom Unit to be paid upon exercise of the Unit
Appreciation Rights of each outstanding Award under the Plan. Such adjustments to the outstanding Awards are to be effected in a manner which shall preclude the enlargement or dilution of rights and
benefits under those Awards, as determined by the Plan Administrator. The adjustments determined by the Plan Administrator shall be final, binding and conclusive. 

 
 

ARTICLE TWO    
    
    UNIT APPRECIATION RIGHTS    
    

I.     TERMS AND CONDITION  

        The Plan Administrator shall have full discretionary power and authority, exercisable in its sole discretion, to grant Unit Appreciation Rights in accordance with
this Article Two to Employees, consultants and independent advisors providing services to the Company and its Subsidiaries (whether now existing or subsequently established), subject to the terms and
conditions of the Plan and such other terms and conditions as the Plan Administrator may determine to be appropriate, provided that such other terms and
conditions are not inconsistent with the terms of the Plan: 

        A.    Number of Unit Appreciation Rights.    The number of Unit Appreciation Rights subject to each Award shall be
determined by the Plan Administrator at the time of grant. 

        B.    Base Price.    The Base Price in effect for each Unit Appreciation Right shall be determined by the Plan
Administrator in its sole discretion at the time of grant. The Base Price may be less than, equal to or greater than the Value per Phantom Unit on the grant date; provided,
however, that in no event shall the Base Price be less than the Value per Phantom Unit on the grant date to such an extent that the Participant will be deemed to be in
constructive receipt of income as a result of the grant (or vesting) of such Unit Appreciation Right. 

        C.    Vesting.    The terms and conditions upon which a Participant will vest in the Unit Appreciation Rights subject
to an Award granted under the Plan shall be determined by the Plan Administrator at the time of grant and may be based on the attainment of designated performance goals or the satisfaction of
specified Service requirements. The Plan Administrator shall have the discretionary authority to vest a Participant in any or all Unit Appreciation Rights subject his or her outstanding Awards as to
which the designated performance goals or Service requirements have not been attained or satisfied. 

        D.    Exercise.    

        1.     The
Unit Appreciation Rights of an Award granted under the Plan shall become exercisable in accordance with the vesting schedule established by the Plan Administrator for
the Award. Upon exercise of a Unit Appreciation Right, the Participant (or other holder) shall be 

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entitled
to receive a cash distribution in respect of such Unit Appreciation Right from the Company in an amount equal to: 

        (i)    the
Value of a Phantom Unit (determined as of the Exercise Date), less

        (ii)   the
Base Price in effect for such Unit Appreciation Right. 

        2.     The
Plan Administrator shall have complete discretion, exercisable either at the time an Award is granted or at any time while the Award remains outstanding, to provide
that the amount to be paid upon exercise of one or more Unit Appreciation Rights subject to such Award will include an additional amount equal to any Excess Distributions. 

        3.     The
aggregate exercise proceeds with respect to the exercise of Unit Appreciation Rights, less such amount as may be necessary to satisfy all applicable income and
employment tax withholding requirements, shall be paid to the Participant (or other holder) within the ten (10)-day period following the Exercise Date. 

        4.     The
exercise of any Award under the Plan shall be subject to compliance by the Participant with all requirements of the insider trading policies of Provident (as such
policies may be amended from time to time) and may only be exercised during one or more quarterly "window periods" established by Provident during which Provident employees may exercise unit
appreciation rights granted to them by Provident. 

        E.    Effect of Termination of Service.    

        1.     The
following provisions shall govern the exercise of any Unit Appreciation Rights that are subject to an outstanding Award at the time of the Participant's cessation of
Service: 

        (i)    Any
Unit Appreciation Rights that are subject to an Award outstanding at the time of the Participant's cessation of Service, to the extent then vested and exercisable,
shall remain exercisable for such period of time thereafter as shall be determined by the Plan Administrator and set forth in the documents evidencing the Award, but no such Award shall be exercisable
after the expiration of the Award's maximum term. 

        (ii)   Any
Unit Appreciation Rights that are subject to an Award outstanding at the time of the Participant's death may, to the extent vested and exercisable at that time, be
subsequently exercised by the personal representative of the Participant's estate or by the person or persons to whom the Award is transferred pursuant to the Participant's will or the laws of
inheritance. 

        (iii)  Should
the Participant's Service be terminated for Misconduct or should the Participant otherwise engage in Misconduct while holding one or more outstanding Awards
granted under the Plan, then all of those Awards (including without limitation any vested and exercisable Unit Appreciation Rights thereunder) shall immediately terminate unexercised and cease to be
outstanding. 

        (iv)  Upon
the expiration of the applicable post-Service exercise period or (if earlier) upon the expiration of the maximum Award term, the Award shall terminate
and cease to be outstanding for the vested Unit Appreciation Rights which have not been exercised. The Award shall, immediately upon the Participant's cessation of Service, terminate and cease to be
outstanding with respect to any and all Unit Appreciation Rights which are not vested and exercisable at that time. 

        2.     The
Plan Administrator shall have complete discretion, exercisable either at the time an Award is granted or at any time while the Award remains outstanding, to: 

        (i)    extend
the period of time for which the Award is to remain exercisable following the Participant's cessation of Service from the limited exercise period otherwise in
effect for that 

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Award
to such greater period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration of the Award's maximum term, and/or 

        (ii)   permit
the Award to be exercised, during the applicable post-Service exercise period, not only with respect to the number of Unit Appreciation Rights vested
and exercisable at the time of the Participant's cessation of Service, but also with respect to one or more additional Unit Appreciation Rights in which the Participant would have vested and become
exercisable had the Participant continued in Service. 

        F.    Rights of Ownership.    At no time shall the Participant have any rights of ownership with respect to any Trust
Units by reason of the grant or settlement of an Award, including, without limitation, any rights to receive distributions or to vote such Trust Units. 

        G.    Limited Transferability.    Awards granted under the Plan shall not be assignable or transferable other than by
will or by the laws of inheritance following the Participant's death and may be exercised, during the life of the Participant, only by the Participant or his or her guardian or legal representative.
The terms applicable to any portion of an Award transferred in accordance with the Participant's will or by the laws of inheritance following the Participant's death shall be the same as those in
effect for the Award immediately prior to such transfer and shall be set forth in such documents issued to the transferee as the Plan Administrator may deem appropriate. 

        H.    Maximum Term.    In no event may any Award granted under the Plan have a maximum term in excess of ten
(10) years measured from the grant date. 

II.    CHANGE IN CONTROL  

        In the event the outstanding Awards are to be assumed in connection with a Provident Change in Control or otherwise continued in effect, the Phantom Units
underlying each such Unit Appreciation Right shall be appropriately and equitably adjusted (if necessary) immediately after such Provident Change in Control so as to be based on the number and class
of securities into which each outstanding Trust Unit is converted in connection with such Change in Control. In addition, appropriate and equitable adjustments to reflect a Provident Change in Control
shall also be made to the Base Price and aggregate Excess Distributions payable per Phantom Unit in effect under each outstanding Unit Appreciation Right;  provided the aggregate Base Price and the
aggregate amount of Excess Distributions payable for each Award shall remain the same. 

        In
the event the outstanding Awards are not to be assumed in connection with a Change in Control or otherwise continued in effect, the vested Unit Appreciation Rights subject to each
outstanding Award shall automatically become vested and exercised in full immediately prior to the consummation of such Change in Control. Immediately following the Change in Control, all remaining
Awards under the Plan shall terminate and cease to be outstanding. 

        The
Plan Administrator shall have the discretionary authority, exercisable either at the time an Award is granted or at any time while the Award remains outstanding, to structure such
Award so that any or all of the Unit Appreciation Rights subject thereto shall vest and become exercisable immediately prior to the effective date of a Change in Control or upon the Participant's
subsequent termination by reason of an Involuntary Termination within a designated period following the effective date of any Change in Control. 

III.  INITIAL PUBLIC OFFERING  

        During the 30-day period commencing with the date on which an Initial Public Offering is consummated, the Plan Administrator shall have the
discretionary authority, exercisable with or without the consent of the affected Participants, to cancel one or more outstanding Awards under the Plan in 

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exchange
for one or more options to acquire publicly traded securities of the Company; provided, that such option satisfies the following conditions at
the time such option is granted: 

        (i)    the
excess (if any) of (A) the fair market value of the securities subject to the option over (B) the aggregate exercise price payable with respect to such
securities equals or exceeds the excess (if any) of (X) the sum of (1) the value of the Phantom Units underlying the cancelled portion of the Award, plus (2) the aggregate Excess
Distributions (if any), with respect to the portion of the Determination Period ending on the grant date of the options, with respect to the Unit Appreciation Rights underlying the cancelled portion
of the Award, over (Y) the aggregate Base Price with respect to such Unit Appreciation Rights; 

        (ii)   the
ratio of the per share exercise price to the fair market value of the security subject to the option is not less than the ratio of the Base Price of the cancelled
Award to the sum of (A) the Value of a Phantom Unit plus (B) the aggregate Excess Distributions (if any), with respect to the portion of the Determination Period ending on the grant date
of the options, with respect to a Unit Appreciation Right underlying the cancelled portion of the Award; 

        (iii)  the
option vests and becomes exercisable not later than in accordance with the vesting schedule applicable to the cancelled Award; and 

        (iv)  the
maximum term of the option is not less than the maximum remaining term of the Award at the time of cancellation. 

        The
Plan Administrator shall have the sole responsibility for determining whether an option satisfies the conditions under this Section III of Article Two and any determination
made by the Plan Administrator shall be final, binding and conclusive. In considering whether an option satisfies the conditions under this Section III, the Plan Administrator may, but need
not, consider whether dividend equivalent rights (or other similar rights) will be granted in connection with the replacement options. 

 
 

ARTICLE THREE    
    
    MISCELLANEOUS    
    

I.     EFFECTIVE DATE AND TERM OF PLAN  

        The Plan shall become effective November 3, 2004. The Plan Administrator may grant Awards under the Plan at any time after the effective date of the Plan
and before the date fixed herein for termination of the Plan. 

II.    AMENDMENT, MODIFICATION OR TERMINATION OF THE PLAN  

        A.    Amendment/Modification.    The Board shall have complete and exclusive discretionary power and authority to
amend or modify the Plan in any and all respects and from time to time. Except as otherwise provided in Section II.B of this Article Three, no such amendment or modification shall adversely
affect the rights of a Participant with respect to the vested portion of any Award at the time outstanding under the Plan, unless the Participant consents to such amendment or modification in writing. 

        B.    Savings Clause.    Notwithstanding anything to the contrary in the Plan or any Award Agreement relating to an
outstanding Award, if and to the extent the Board shall determine that the terms of any Award may result in the failure of the such Award to comply with the requirements of Section 409A of the
Code, or any applicable regulations or guidance promulgated by the Secretary of the Treasury in connection therewith, the Board shall have authority to take such action to amend, 

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modify,
cancel or terminate the Plan or any Award as it deems necessary or advisable, including without limitation: 

        1.     Any
amendment or modification of the Plan or any Award to conform the Plan or such Award to the requirements of Section 409A of the Code or any regulations or
other guidance thereunder (including, without limitation, any amendment or modification of the terms of any Award regarding vesting, exercise, or the timing or form of payment). 

        2.     Any
cancellation or termination of any unvested Award, or portion thereof, without any payment to the Participant holding such Award. 

        3.     Any
cancellation or termination of any vested Award, or portion thereof, with immediate payment to the Participant holding such Award of the amount otherwise payable upon
the immediate exercise of any such Award, or vested portion thereof, by such Participant. 

        Any
such amendment, modification, cancellation, or termination of the Plan or any Award may adversely affect the rights of a Participant with respect to such Award without the
Participant's consent. 

        C.    Termination.    The Plan shall terminate on November 2, 2014. Notwithstanding the foregoing, the Board
may terminate the Plan at any time prior to November 2, 2014 upon such terms and conditions as the Board deems appropriate or advisable. Except as otherwise provided in Section II.B of
this Article Three, in no event shall any termination of the Plan adversely affect the rights of a Participant with respect to the vested portion of any Award at the time outstanding under the Plan
without the Participant's express written consent. Accordingly, except as otherwise provided in Section II.B of this Article Three, the vested portion of all Awards outstanding upon the
termination of the Plan shall continue in force and effect in accordance with the provisions of the Plan and the Award Agreements. 

III.  WITHHOLDING  

        The Company's obligations arising from the exercise of any Award granted under the Plan shall be subject to the satisfaction of all applicable income and
employment tax withholding requirements. 

IV.    NATURE OF RIGHTS  

        The obligations of the Company under the Plan shall be unsecured and unfunded obligations, and any rights of a Participant under the Plan shall be no greater than
that of an unsecured general creditor of the Company and no Participant shall have any right, title or interest in the assets of the Company, the General Partner or Provident. 

V.     COMPLIANCE WITH LAWS  

        The Plan, the granting and vesting of Awards under the Plan and the issuance and the payment of money under the Plan or under Awards granted hereunder are subject
to compliance with all applicable federal and state laws, rules and regulations (including but not limited to state and federal securities law) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any Awards granted under the Plan shall be subject to such restrictions,
and the person or persons acquiring such Awards shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure
compliance with all applicable legal requirements. To the extent permitted by applicable law, the Plan and Awards granted hereunder shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations. 

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VI.   NO EMPLOYMENT OR SERVICE RIGHTS  

        Nothing in the Plan shall confer upon the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict
in any way the rights of the Company (or any Parent or Subsidiary employing or retaining such person) or of the Participant, which rights are hereby expressly reserved by each, to terminate such
person's Service at any time for any reason, with or without cause. 

VII. EFFECT OF PLAN UPON COMPENSATION PLANS  

        The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any Parent or Subsidiary. Nothing in the Plan
shall be construed to limit the right of the Company (i) to establish any other forms of incentives or compensation for Employees, consultants or independent advisors of the Company or any
Parent or Subsidiary, or (ii) to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper business purpose including but not by way of
limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association. 

VIII. TITLES  

        Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Plan. 

IX.   SEVERABILITY  

        Whenever possible, each provision in the Plan and in every Award Agreement will be interpreted in such manner as to be effective and valid under applicable law
but if any provision of this Plan or any Award Agreement made thereunder will be held to be prohibited by or invalid under applicable law, then (i) such provision will be deemed amended to, and
to have contained from the outset such language will be necessary to, accomplish the objectives of the provision as originally written to the fullest extent permitted by law and (ii) all other
provisions of the Plan and every Award Agreement will remain in full force and effect. 

X.    GOVERNING LAW  

        The Plan and any agreements pertaining to awards granted hereunder shall be governed by and construed in accordance with the laws of the State of California,
without regard to that State's conflict-of-laws rules. 

[Remainder
of page intentionally left blank.] 

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XI.   ADOPTION  

        IN WITNESS WHEREOF, the Pro GP Corp., acting in its capacity as General Partner, has caused the Company to adopt this Plan effective immediately, as indicated by
the signature of its duly authorized officer this            day of November, 2004. 

	 	 	BREITBURN ENERGY COMPANY L.P.
	

 	
 	

By:	
PRO GP CORP.
	 	 	Its:	General Partner
	

 	
 	

 	

By:	

 
	 	 	 	 	

	 	 	 	Name:	Randall J. Findlay
	 	 	 	Title:	President

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APPENDIX TO THE
  BREITBURN ENERGY COMPANY L.P.
  UNIT APPRECIATION PLAN
  FOR EMPLOYEES AND CONSULTANTS    
    

        The following definitions shall be in effect under the Plan: 

        A.    Award shall mean a grant of Unit Appreciation Rights under the Plan. 

        B.    Award Agreement shall mean an agreement entered into between the Company and the Participant evidencing the terms of an
Award, as the same may be amended from time to time. 

        C.    Base Price shall mean the amount (in U.S. dollars) per Phantom Unit determined by the Plan Administrator at the time of
grant of the Award in accordance with the terms and conditions of Section I.B of Article Two. 

        D.    Board shall mean the Board of Directors of the General Partner. 

        E.    BreitBurn Change in Control shall mean a change in ownership or control of the Company effected through any of the
following transactions: 

        (i)    the
sale, transfer or other disposition of all or substantially all of the assets of the Company; or 

        (ii)   the
acquisition, directly or indirectly by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of more than fifty percent (50%) of the
Company's securities outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction
involves a direct issuance from the Company or the acquisition of outstanding securities held by one or more of the Company's existing partners. 

        In
no event, however, will a BreitBurn Change in Control be deemed to occur upon (1) a reorganization or conversion of the Company as or to a corporation, limited liability
company or other form of entity if the holders of the Company's securities or interests remain substantially the same following such reorganization or conversion or (2) an Initial Public
Offering. 

        F.     Change in Control shall mean the occurrence of one or more of the following: 

        (i)    a
BreitBurn Change in Control; 

        (ii)   a
Provident Change in Control; or 

        (iii)  a
General Partner Change in Control. 

        G.    Code shall mean the Internal Revenue Code of 1986, as amended from time to time. 

        H.    Committee shall mean a committee of one (1) or more members of the Board appointed by the Board to exercise one or
more administrative functions under the Plan. 

        I.     Company shall mean BreitBurn Energy Company L.P., a Delaware limited partnership, and any successor entity to all or
substantially all of the assets or voting capital of BreitBurn Energy Company L.P. which shall by appropriate action adopt the Plan. 

        J.     Determination Period with respect to any Unit Appreciation Right exercised shall mean the period commencing on
(i) the date specified by the Plan Administrator with respect to such Unit Appreciation Right and set forth in the documents evidencing the Award (the "Determination Period Commencement Date")
to (ii) either (a) the last business day preceding the Exercise Date of such Unit Appreciation Right for which a closing selling price of the Trust Units is quoted, if the Trust Units
are 

A-1

 

listed
on an Exchange, (b) the last business day preceding the Exercise Date of such Unit Appreciation Right for which the closing representative bid and asked prices for the Trust Units are
quoted, if the Trust Units are traded on the Nasdaq National Market, or (c) the date of the consummation of a Change in Control, if the Unit Appreciation Right is being exercised immediately
prior to and contingent upon the consummation of such Change in Control. 

        K.    Distributions shall mean the aggregate amount of distributions (as converted, if necessary, into U.S. Dollars on the basis
of the Exchange Rate) of profits and capital made by Provident in respect of a Trust Unit during the Determination Period with respect to a Unit Appreciation Right of an Award. In the event any such
distribution is made in property, the value of such property shall be determined by the Board in good faith. 

        L.    Employee shall mean any officer or other employee (as defined in accordance with Section 3401(c) of the Code) of
the Company, or of any Parent or Subsidiary (whether now existing or subsequently established). 

        M.   Excess Distributions shall mean an amount equal to the portion of the Distributions (if any) which exceeds the Rate of
Return (calculated on a pro rata basis) during the Determination Period with respect to a Unit Appreciation Right of an Award. 

        N.    Exchange shall mean either the American Stock Exchange, the New York Stock Exchange or the Toronto Stock Exchange. 

        O.    Exchange Rate shall mean the rate at which any relevant currency is converted into U.S. Dollars, as reported on the
relevant date in The Wall Street Journal.

        P.     Exercise Date means the date on which the Participant elects to surrender one or more Unit Appreciation Rights. 

        Q.    General Partner shall mean the general partner of the Company, Pro GP Corp., a Delaware corporation. 

        R.    General Partner Change in Control shall mean a change in ownership or control of the General Partner effected through any
of the following transactions: 

        (i)    the
sale, transfer or other disposition of all or substantially all of the assets of the General Partner; or 

        (ii)   the
acquisition, directly or indirectly by any person or related group of persons (other than the General Partner or a person that directly or indirectly controls, is
controlled by, or is under common control with, the General Partner), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of more than fifty percent (50%) of
the total combined voting power of the General Partner's securities outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction
involves a direct issuance from the General Partner or the acquisition of outstanding securities held by one or more of the General Partner's existing stockholders. 

        In
no event, however, will a General Partner Change in Control be deemed to occur upon (1) an incorporation of the General Partner (or other change in the corporate form of the
General Partner) or (2) the occurrence of any reorganization or combination involving the General Partner following which Provident retains one hundred percent (100%) director or indirect
beneficial ownership of the General Partner. 

        S.     Initial Public Offering shall mean the initial sale of the Company's capital securities pursuant to an effective
registration statement filed by the Company pursuant to the 1933 Act. 

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        T.     Involuntary Termination shall mean the termination of the Service of any individual which occurs by reason of: 

        (i)    such
individual's involuntary dismissal or discharge by the Company for reasons other than Misconduct, or 

        (ii)   such
individual's voluntary resignation following (A) a change in his or her position with the Company which materially reduces his or her duties and
responsibilities or the level of management to which he or she primarily reports, (B) a reduction in his or her level of compensation (including base salary, fringe benefits and target bonus
under any performance based bonus or incentive program, without respect to Awards under the Plan) by more than fifteen percent (15%) or (C) a relocation of such individual's principal place of
employment by more than fifty (50) miles, provided and only if such change, reduction or relocation is effected by the Company without the
individual's consent. 

        U.    Misconduct of a Participant shall mean (i) the commission of any act of fraud, embezzlement or dishonesty by the
Participant that has a material adverse impact on the Company (or any Parent or Subsidiary), (ii) any unauthorized use or disclosure by such Participant of confidential information or trade
secrets of the Company (or any Parent or Subsidiary), (iii) any willful and continued failure by the Participant to substantially perform his or her duties with the Company or any Parent or
Subsidiary (other than any such failure resulting from the Participant's incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the
Participant by the Board, which demand specifically identifies the manner in which the Board believes that the Participant has not substantially performed such duties, or (iv) any willful and
continued failure by the Participant to substantially follow and comply with the specific and lawful directives of the Board, as reasonably determined by the Board (other than any such failure
resulting from the Participant's incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Participant by the Board, which demand
specifically identifies the manner in which the Board believes that the Participant has not substantially performed such directives. The foregoing definition shall not in any way preclude or restrict
the right of the Company (or any Parent or Subsidiary) to discharge or dismiss any Participant or other person in the service of the Company (or any Parent or Subsidiary) for any or no reason. 

        V.     1934 Act shall mean the Securities Exchange Act of 1934, as amended from time to time. 

        W.    1933 Act shall mean the Securities Act of 1933, as amended from time to time. 

        X.    Parent shall mean any entity (other than the Company) in an unbroken chain of entities ending with the Company;  provided each entity in the unbroken chain (other
than the Company) owns, at the time of the determination, securities possessing fifty percent (50%) or
more of the total combined voting power of all classes of securities in one of the other entities in such chain. 

        Y.    Participant shall mean any person who receives an Award under the Plan. 

        Z.    Phantom Unit shall mean one hypothetical Trust Unit, used solely for record keeping purposes to determine the right of a
Participant to receive a distribution pursuant to an Award. A Phantom Unit shall not be a Trust Unit or any right, title or interest in a Trust Unit. 

        AA.   Plan shall mean the Company's Unit Appreciation Plan for Employees and Consultants, as set forth in this
document. 

        BB.    Plan Administrator shall mean either the Board or the Committee acting in its capacity as administrator of
the Plan. 

        CC.   Provident shall mean Provident Energy Trust, a trust organized under the laws of Alberta, Canada. 

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        DD.   Provident Change in Control shall mean the occurrence of any of the following: 

        (i)    the
consummation of any transaction in which Provident is merged into or amalgamated with any other entity; 

        (ii)   the
sale, transfer or other disposition of all or substantially all of the assets of Provident, or 

        (iii)  the
commencement of a take-over bid (as defined in the Securities Act (Alberta)) which is not exempt from the take-over bid requirements of the
Securities Act (Alberta) for the Trust Units. 

        EE.   Rate of Return shall mean 8% per annum of the Base Price, unless otherwise provided by the Plan
Administrator at the time of grant. 

        FF.     Service shall mean the performance of services for the Company (or any Parent or Subsidiary, whether now
existing or subsequently established) by a person in the capacity of an Employee, consultant or independent advisor, except to the extent otherwise specifically provided in the documents evidencing
the Award. No Service credit shall be given for vesting purposes for any period a Participant is on a leave of absence, unless otherwise required by law or expressly authorized by the Plan
Administrator. 

        GG.   Subsidiary shall mean any entity (other than the Company) in an unbroken chain of entities beginning with
the Company; provided each entity (other than the last entity) in the unbroken chain beneficially holds, at the time of the determination, securities or
interests representing a controlling interest of the total combined voting power of all classes of securities or interests in one of the other entities in such chain. 

        HH.   Trust Units shall mean the publicly traded units of Provident or such other securities to which a holder of
Trust Units may become entitled by reason of any subdivisions, consolidations or reclassifications of the Trust Units. 

        II.      Unit Appreciation Right shall mean a right entitling the Participant, upon exercise of such right on or
following vesting, to the excess, if any, of the Value of a Phantom Unit on the Exercise Date, over the Base Price. 

        JJ.     Value per Phantom Unit on any relevant date shall be determined in accordance with the following
provisions: 

        (i)    If
the Trust Units are at the time listed on any Exchange, then the Value shall be the closing selling price per Trust Unit on the last preceding date for which such
quotation exists, as such price is reported by the Exchange determined by the Plan Administrator to be the primary market for the Trust Units and officially quoted in the composite tape of
transactions on such exchange. If the closing selling price is reported in a currency other than U.S. Dollars, the Value shall be equal to such closing selling price as converted into U.S. Dollars on
the basis of the Exchange Rate. 

        (ii)   If
the Trust Units are at the time traded on the Nasdaq National Market, then the Value shall be the mean between the closing representative bid and asked prices for
the Trust Units on the last preceding date for which such quotations exists, as reported by the National Association of Securities Dealers on the Nasdaq National Market. 

        (iii)  If
an Award is exercised immediately prior to and contingent upon the consummation of a Provident Change in Control, then the Value of a Phantom Unit shall be equal to
the aggregate amount of cash (as converted, if necessary, into U.S. Dollars on the basis of the Exchange Rate) and property (valued by the Board in good faith) received in exchange for a Trust Unit in
connection with the Provident Change in Control. 

A-4

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BREITBURN ENERGY COMPANY L.P. UNIT APPRECIATION PLAN FOR EMPLOYEES AND CONSULTANTS

ARTICLE ONE GENERAL PROVISIONS

ARTICLE TWO UNIT APPRECIATION RIGHTS

ARTICLE THREE MISCELLANEOUS

APPENDIX TO THE BREITBURN ENERGY COMPANY L.P. UNIT APPRECIATION PLAN FOR EMPLOYEES AND CONSULTANTSQuickLinks
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Exhibit 10.8  

 
 

BREITBURN ENERGY COMPANY L.P.    
    
    LONG TERM INCENTIVE PLAN    
    

        Pro GP Corp., acting in its capacity as the general partner of BreitBurn Energy Company L.P. (the "Company"), has
caused the Company to adopt this BreitBurn Energy Company L.P. Long Term Incentive Plan ("LTIP" or the
"Plan") for the purpose of providing financial incentives to employees, directors, officers, and certain consultants of the Company and its Subsidiaries
(as defined herein). 

        The
Plan is intended to comply with an exception from coverage under Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code"), and, therefore, is not intended to be subject to the requirements of Code Section 409A. 

        The
Plan is intended to constitute a "bonus program" (within the meaning of U.S. Department of Labor Regulation Section 2510.3-2(c)), and, therefore, is not intended
to be subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). 

        This
Plan document is also the summary plan description of the Plan. References in the Plan to "You" or "Your" are references to an employee of the Company. 

1.     Purposes  

        The principal purposes of the Plan are as follows: 

	(a)
	to
attract qualified employees, directors, officers, and consultants which the Company and its Subsidiaries require;

	(b)
	to
encourage such individuals to remain in the employ of the Company and its Subsidiaries and put forth maximum efforts for the success of the business of the Company; and

	(c)
	to
focus management of the Company and its Subsidiaries on operating and financial performance of the Company. 

2.     Definitions  

        As used in this Plan, the following words and phrases shall have the meanings indicated: 

	(a)
	"Adjustment Ratio" means, with respect to any Award, the ratio used to adjust the Incentive Units upon which the amount to be paid on
the applicable Payment Date(s) pertaining to such Award is determined in accordance with the terms of the Plan; and, in respect of each Award, the Adjustment Ratio shall initially be equal to one, and
shall be cumulatively adjusted thereafter by increasing the Adjustment Ratio on each Distribution Payment Date by an amount, rounded to the nearest five decimal places, equal to a fraction having as
its numerator the Distribution, expressed as an amount per Unit, paid on that Distribution Payment Date, and having as its denominator the weighted average price of the Units on the Exchange for the
three consecutive trading days ending on the trading day preceding that Distribution Payment Date;

	(b)
	"Administrator" means either the Board or the Committee acting in its capacity as administrator of the Plan;

	(c)
	"Affiliate" means any Parent or Subsidiary;

	(d)
	"Award" means a Restricted Award or Performance Award made pursuant to the Plan; 

1

 

	(e)
	"Board" means the board of directors of the General Partner, as it may be constituted from time to time;

	(f)
	"Committee" has the meaning set forth in Section 3 hereof;

	(g)
	"Corporate Performance Measures" for any fiscal year means the performance measures to be taken into consideration in making Awards
under the Plan, which may include, without limitation, the following:

	(i)
	Total
Unitholder Return over such fiscal year or years; and

	(ii)
	such
additional measures as the Committee or the Board, in its sole discretion, shall consider appropriate in the circumstances;

	(h)
	"Current Market Price" means the closing price of the Trust Units on the Exchange for the 20 consecutive trading days ending on the
tenth trading day preceding the Payment Date; or the award date 

"Disability" in respect of a Grantee means that such Grantee is receiving benefits under any long term disability plan of the Company or any Affiliate; 

	(i)
	"Distribution" means a distribution paid by the Trust in respect of the Units, expressed as an amount per Unit;

	(j)
	"Distribution Payment Date" means any date that a Distribution is distributed to Unitholders;

	(k)
	"Exchange" means the New York Stock Exchange or such other stock exchange on which the Units are then listed and posted for trading
from time to time;

	(l)
	"Exchange Rate" means the rate at which any relevant currency is converted into U.S. Dollars, as reported on the relevant date in  The Wall Street Journal (or such other
reliable source as may be selected from time to time by the Administrator in its discretion);

	(m)
	"General Partner" means Pro GP Corp., a Delaware corporation;

	(n)
	"Grantee" has the meaning set forth in Section 4 hereof;

	(o)
	"Incentive Units" means the number of Units to be used in calculating the amount of any Award, but for greater certainty shall not mean
actual units or any other securities of the Trust;

	(p)
	"Long Term Incentive Plan Agreement" has the meaning set forth in Section 5 hereof;

	(q)
	"LTIP" means this BreitBurn Energy Company L.P. Long Term Incentive Plan;

	(r)
	"Parent" means any entity (other than the Company) in an unbroken chain of entities ending with the Company; provided each entity in
the unbroken chain (other than the Company) owns, at the time of the determination, securities possessing fifty percent (50%) or more of the total combined voting power of all classes of securities in
one of the other entities in such chain;

	(s)
	"Payment Date" means, with respect to any Award, the date upon which amounts payable thereunder shall be paid to the Grantee of such
Award in accordance with Section 5;

	(t)
	"Payout Multiplier" means, at any time, the number obtained by subtracting one from the product of (i) 0.04 and (ii) the
Percentile Rank in effect at such time; provided, however, that:

	(i)
	in
the event that such Percentile Rank is less than the 35, the Payout Multiplier shall be zero; and 

2

 

	(ii)
	in
the event that such Percentile Rank is greater than 75, the Payout Multiplier shall be two.

	(u)
	"Peer Comparison Group" means, generally, organizations with which the Trust competes for employees in the Canadian Petroleum Industry,
including upstream and midstream companies and trusts whose attributes can be considered comparable to the Trust and which shall be determined from time to time by the Committee or the Board;

	(v)
	"Percentile Rank" means, at any time when used to determine the Payout Multiplier applicable in adjusting the amount payable pursuant
to any Performance Award, the percentile rank, expressed as a whole number, of Total Unitholder Return relative to returns calculated on a similar basis on trust units of the oil and gas midstream
trusts included in the Peer Comparison Group, over the period commencing on the date such Performance Award was made under the terms of the Long Term
Incentive Plan Agreement and ending on the tenth business day preceding the Payment Date;

	(w)
	"Performance Award" means an amount payable under the Plan designated as a "Performance Award" in the Long Term Incentive Plan
Agreement pertaining thereto, which amount shall be paid on the Payment Date determined in accordance with Section 5(c)(ii) hereof;

	(x)
	"Performance Trust Units" ("PTU's") means a Performance Award but for greater certainty
shall not mean actual units or any other securities of the Trust;

	(y)
	"Plan" means this BreitBurn Energy Company L.P. Long Term Incentive Plan;

	(z)
	"Restricted Award" means an amount payable under the Plan designated as a "Restricted Award" in the Long Term Incentive Plan Agreement
pertaining thereto, which amount shall be paid on the Payment Date(s) determined in accordance with Section 5(c)(i) hereof;

	(aa)
	"Restricted Trust Units" ("RTU's") means a Restricted Award but for greater certainty
shall not mean actual units or any other securities of the Trust;

	(bb)
	"Service Provider" has the meaning set forth in Section 4 hereof;

	(cc)
	"Settlement Amount" has the meaning set forth in Section 6(c) hereof;

	(dd)
	"Subsidiary" means any entity (other than the Company) in an unbroken chain of entities beginning with the Company; provided each
entity (other than the last entity) in the unbroken chain beneficially holds, at the time of the determination, securities possessing fifty percent (50%) or more of the total combined voting power of
all classes of securities in one of the other entities in such chain;

	(ee)
	"Takeover Bid Transaction" means a takeover bid transaction or other transaction which results in the Units of the Trust ceasing to be
listed and posted for trading on the Exchange, that is completed pursuant to an offer made generally to the holders of Units in one or more jurisdictions to acquire, directly or indirectly, the
outstanding Units and which is in the nature of a "takeover bid" as defined in the Securities Act (Alberta) and, where the Units are listed and posted
for trading on a stock exchange, is not exempt from the formal bid requirements of the Securities Act (Alberta), and includes a statutory plan of
arrangement which results in the Units of the Trust ceasing to be listed and posted for trading on the Exchange, that is completed pursuant to applicable corporate law;

	(ff)
	"Total Unitholder Return" means, with respect to any period, the total return to Unitholders on the Units calculated using cumulative
distributions on a reinvested basis and the change in the trading price of the Units on the Exchange over such period;

	(gg)
	"Trust" means Provident Energy Trust, a trust organized under the laws of Alberta, Canada; 

3

 

	(hh)
	"Trust Unit" means units of the Trust;

	(ii)
	"Unit" means units of the Trust; and

	(jj)
	"Unitholder" means a holder of Units. 

3.     Administration  

        The Plan shall be administered by the Board. However, any or all administrative functions otherwise exercisable by the Board may be delegated to a committee of
one (1) or more members of the Board appointed by the Board to exercise one or more administrative functions under the Plan. Members of the Committee shall serve for such period of time as the
Board may determine and shall be subject to
removal by the Board at any time. The Board may also at any time terminate the functions of the Committee and assume any or all powers and authority previously delegated to the Committee. 

        The
Administrator shall have the authority in its discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation: 

	(a)
	the
authority to make Awards;

	(b)
	to
determine the Current Market Price of the Units on any date;

	(c)
	to
determine the Service Providers to whom, and the time or times at which Awards shall be granted;

	(d)
	to
determine the number of Incentive Units to be applicable in respect of each Award;

	(e)
	to
determine the Exchange Rate;

	(f)
	to
determine members of the Peer Comparison Group;

	(g)
	to
prescribe, amend and rescind rules and regulations relating to the Plan;

	(h)
	to
interpret the Plan;

	(i)
	to
determine the terms and provisions of Long Term Incentive Plan Agreements (which need not be identical) entered into in connection with Awards; and

	(j)
	to
make all other determinations deemed necessary or advisable for the administration of the Plan. 

        The
determinations of the Committee shall be subject to review and approval by the Board. The Administrator may delegate to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, and the Administrator or any person to whom it has delegated duties as aforesaid may employ one or more persons to render advice with respect to any
responsibility the Administrator or such person may have under the Plan. 

        For
greater certainty and without limiting the discretion conferred on the Administrator pursuant to this Section, the Administrator's decision to approve the grant of an Award in any
year shall not require the Administrator to approve the grant of an Award to any Service Provider in any other year; nor shall the Administrator's decision with respect to the size or terms and
conditions of an Award in any year require it to approve the grant of an Award of the same size or with the same terms and conditions to any Service Provider in any other year. The Administrator shall
not be precluded from approving the grant of an Award to any Service Provider solely because such Service Provider may previously have been granted an Award under this Plan or any other similar
compensation arrangement of the Company or any Affiliate. No Service Provider has any claim or right to be granted an Award. 

4

 

4.     Eligibility and Award Determination  

        Awards may be granted only to persons who are full-time employees, officers, directors or certain consultants of the Company or any Subsidiary,
(collectively, "Service Providers"); provided, however, that the participation of a Service Provider in the Plan is voluntary. In determining the
Service Providers to whom Awards may be granted ("Grantees") and the number of Incentive Units to be applicable in respect of each Award, the
Administrator shall take into account the following factors: 

	(a)
	compensation
data for comparable benchmark positions among the Peer Comparison Group;

	(b)
	the
duties and seniority of the Grantee;

	(c)
	Corporate
Performance Measures of the Trust compared with similar performance measures of members of the Peer Comparison Group for the most recently completed fiscal year;

	(d)
	the
individual contributions and potential contributions of the Grantee to the success of the Company;

	(e)
	the
trading price of the Units at the time of such Award; and

	(f)
	such
other factors as the Administrator may deem relevant in connection with accomplishing the purposes of the Plan. 

5.     Terms and Conditions of Awards  

        Each Award granted under the Plan shall be subject to the terms and conditions of the Plan and be evidenced by a written agreement between the Company and the
Grantee (a "Long Term Incentive Plan Agreement"), which agreement shall be subject to the following terms and conditions (and with such other terms and
conditions not inconsistent with the terms of this Plan as the Committee or the Board, in its discretion, shall establish): 

	(a)
	Amount and Type of Awards

The
Administrator shall determine the number of Incentive Units to be awarded in respect of Restricted Awards or Performance Awards, as applicable. Awards granted to Service Providers who commence
employment with the Company or any Subsidiary will be eligible to receive Awards for the year which such Service Provider commenced employment pro rated on the basis of the length of employment during
such year. 

	(b)
	No Rights to Units

Nothing
under this Plan or any Long Term Incentive Plan Agreement shall be construed as a right to receive any Units or other securities of the Trust and the Grantee shall not under this Plan or under
any Long Term Incentive Plan Award Agreement possess any incidents of ownership of Units or other securities of the Trust. 

	(c)
	Payment Dates and Adjustment of Awards

	(i)
	Restricted Awards ("RTU's")—Subject to the provisions of this Section 5, with respect to any Restricted Award
granted to a Grantee, the amounts payable and the Payment Dates shall be determined as follows:

	(1)
	a
cash amount equal to the Current Market Price multiplied by 1/3 of the number of the Incentive Units awarded pursuant to such Restricted Award shall be paid to the
Grantee on the first anniversary of the date upon which such Restricted Award is granted to the Grantee; and

	(2)
	a
cash amount equal to the Current Market Price multiplied by 1/2 of the remaining Incentive Units awarded pursuant to such Restricted Award, shall be paid to the 

5

 

Grantee
on the second anniversary of the date upon which such Restricted Award is granted to the Grantee; and 

	(3)
	a
cash amount equal to the Current Market Price multiplied by the remaining Incentive Units awarded pursuant to such Restricted Award, shall be paid to the Grantee on the third
anniversary of the date upon which such Restricted Award is granted to the Grantee provided, however, that;

	a.
	in
the event of any Takeover Bid Transaction prior to the Payment Date determined in accordance with the above provisions of this Section 5(c)(i), the Payment Date in respect of
such Restricted Awards that have not yet been paid as of such time shall be the earlier of (i) the Payment Date determined in accordance with the above provisions, and (ii) the date
which is immediately prior to the date upon which a Take-Over Bid Transaction is completed; and

	b.
	immediately
prior to each Payment Date, the number of Incentive Units upon which the amount of the Restricted Award is based shall be adjusted by multiplying such number by the
Adjustment Ratio in effect as of the tenth trading day preceding each such Payment Date.

	(ii)
	Performance Awards ("PTU's")—Subject to the provisions of this Section 5, with respect to any Performance Award,
the cash amount payable shall be the Current Market Price multiplied by the number of Incentive Units awarded pursuant to the Performance Award, and the Payment Date shall be the third anniversary of
the date upon which such Performance Award is granted to the Grantee provided, however, that:

	a.
	in
the event of any Takeover Bid Transaction prior to the Payment Date determined in accordance with the above provisions of this Section 5(c)(ii), the Payment Date in respect
of such Performance Awards that have not yet been paid as of such time shall be the earlier of (i) the Payment Date determined in accordance with the above provisions, and (ii) the date
which is immediately prior to the date upon which a Take-Over Bid Transaction is completed; and

	b.
	immediately
prior to the Payment Date, the number of Incentive Units upon which the amount of the Performance Award is based shall be adjusted by multiplying such number by
(1) the Adjustment Ratio in effect as of the tenth trading day preceding such Payment Date and (2) the Payout Multiplier applicable to such Performance Award. 

Notwithstanding
any other provision of this Plan, but subject to the limits described in Sections 4 and 5(a) hereof and any other applicable requirements of any regulatory authority, the Board hereby
reserves the right to make any additional adjustments to the amounts payable pursuant to any Performance Award if, in the sole discretion of the Board, such adjustments are appropriate in the
circumstances having regard to the principal purposes of the Plan. 

	(d)
	Termination of Relationship as Service Provider  

The
following provisions shall apply in the event that a Grantee ceases to be a Service Provider: 

	(i)
	Termination for cause—If a Grantee ceases to be a Service Provider as a result of termination for cause, effective as of
the date notice is given to the Grantee of such termination, all outstanding Long Term Incentive Plan Agreements under which Awards have been made to such Grantee shall be terminated and all rights to
receive amounts thereunder shall be forfeited by the Grantee. 

6

 

	(ii)
	Termination not for cause—If a Grantee ceases to be a Service Provider as a result of being terminated other than a
termination for cause,

	(1)
	effective
as of the date notice is given in respect of such termination (the "Notice Date") and notwithstanding any other severance
entitlements or entitlement to notice or compensation in lieu thereof, any amounts which would otherwise have become payable the Grantee under Performance Awards had the Grantee remained employed as a
Service Provider on the Payment Date as determined in Section 5(c)(ii) shall be adjusted downward and pro-rated based on the length of time the Grantee was employed as a
Service Provider during the three year vesting period commencing on the date of the grant of the Performance Award and ending on the third Payment Date subsequent to awarding the grant; and the
Payment Date in respect of such pro-rated amount shall be the termination date. Subject to the foregoing, all rights to receive any amounts under Performance Awards shall be forfeited by
the Grantee, and the Grantee shall not be entitled to receive any Performance Awards or compensation in lieu thereof after the Notice Date; and

	(2)
	effective
as of the termination date, the Grantee shall be entitled to receive the pro-rated amount of any Restricted Award previously granted to the Grantee which would
otherwise have become payable to the Grantee during the year in which the Grantee ceased to be a Service Provider, pro-rated based on the length of time the Grantee was employed as a
Service Provider during the year in which that portion of the Restricted Award would otherwise have been payable to the Grantee, and the Payment Date in respect of such pro-rated amount
shall be the termination date. Subject to the foregoing, all rights to receive amounts under Restricted Awards shall be forfeited by the Grantee.

	(iii)
	Voluntary Resignation—If a Grantee voluntarily ceases to be a Service Provider for any reason other than such Grantee's
Disability or death, effective as of the last day of any notice period applicable in respect of such voluntary resignation, all outstanding Long Term Incentive Plan Agreements under which Awards have
been made to such Grantee shall be terminated, and all rights to receive amounts thereunder shall be forfeited by the Grantee; provided, however, that notwithstanding the foregoing, the right to
receive amounts under an Award shall not be affected by a change of employment or term of office or appointment within or among the Company or a Subsidiary so long as the Grantee continues to be a
Service Provider.

	(iv)
	Disability—If a Grantee ceases to be a Service Provider as a result of such Grantee's Disability, all amounts which would
otherwise have become payable under Awards previously granted to the Grantee had the Grantee remained employed as a Service Provider shall become payable and the Payment Date shall be ten days from
the date of such Grantee's termination date.

	(v)
	Death—If a Grantee ceases to be a Service Provider as a result of such Grantee's death, all amounts which would otherwise
have become payable under Awards previously granted to the Grantee had the Grantee remained employed as a Service Provider shall become payable and the Payment Date shall be ten days from the date of
such Grantee's death.

	(e)
	Effects of Certain Changes

In
the event: 

	(i)
	that
any changes occur in the Units through subdivision, consolidation, reclassification, amalgamation, merger or otherwise; 

7

 

	(ii)
	that
any rights are granted to Unitholders to purchase Units at prices substantially below current market price; or

	(iii)
	that,
as a result of an recapitalization, merger, consolidation or other transaction, the Units are converted into or exchangeable for any other securities; 

then,
in any such case, the Board may make such adjustments to the number of Incentive Units applicable in respect of Awards previously granted and outstanding under the Plan as the Board may, in its
sole discretion, consider appropriate in the circumstances to prevent substantial dilution or enlargement of the rights granted to Grantees hereunder. 

6.     Withholding Taxes  

        When a Grantee or other person becomes entitled to receive payment under any Long Term Incentive Plan Agreement, the Company shall have the right to withhold an
amount sufficient to satisfy any withholding tax requirements relating thereto. 

7.     Non-Transferability  

        Except as otherwise set forth in this Plan, the right to receive amounts pursuant to an Award granted to a Service Provider may only be exercised by such Service
Provider personally. Except as otherwise provided in this Plan, no assignment, sale, transfer, pledge or charge of an Award, whether voluntary, involuntary, by operation of law or otherwise, vests any
interest or right in such Award whatsoever in any assignee or transferee and, immediately upon any assignment, sale, transfer, pledge or charge or attempt to assign, sell, transfer, pledge or charge,
such Award shall terminate and be of no further force and effect. 

8.     Nature of Rights  

        The obligations of the Company under the Plan shall be unsecured and unfunded obligations, and any rights of a Grantee under the Plan shall be no greater than
that of an unsecured general creditor of the Company and no Grantee shall have any right, title or interest in the assets of the Company, the General Partner, the Trust or any Affiliate. 

9.     Conversion to U.S. Dollars  

        Except as described in this Section 9, all calculations under the Plan shall be prepared based on Canadian dollars. Amounts denominated in any currency
other than Canadian dollars shall be converted into Canadian dollars on the basis of the Exchange Rate in effect on the relevant date. Notwithstanding the foregoing, the amount payable to a
participant shall be converted into U.S. dollars on the basis of the Exchange Rate in effect on the relevant payment date and all amounts payable under this Plan shall be payable in U.S. dollars. 

10.   Internal Revenue Code Section 409A  

        Awards granted under the Plan are intended to satisfy the short-term deferral exception to the requirements of Section 409A of the Code, as set
forth in the proposed Treasury Regulations thereunder, and shall be interpreted, construed and administered in accordance with such exception. In the event that, following the effective date of the
Plan, the Board determines that any Grantee's Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may
be issued after the effective date of the Plan), the Board may adopt such amendments to the Plan or the Grantee's Award or adopt such other policies and procedures (including amendments, policies and
procedures with retroactive effect), or take any other actions that the Board reasonably determines are necessary to (a) exempt the Severance from 

8

 

Section 409A
of the Code and/or preserve the intended tax treatment of the Awards, or (b) comply with the requirements of Section 409A of the Code and related Department of
Treasury guidance. 

11.   Amendment and Termination of Plan  

        The Company retains the right to amend from time to time or to terminate the terms and conditions of the Plan by resolution of the Board. Any amendments shall be
subject to the prior consent of any applicable regulatory bodies. Except as otherwise provided in Section 10, any amendment to the Plan shall take effect only with respect to Awards granted
after the effective date of such amendment, provided that it may apply to any outstanding Awards with the mutual consent of the Company and the Service Providers to whom such Awards have been made. 

12.   Effective Date  

        The Plan shall take effect as of                        ,
200    . 

13.   Miscellaneous  

	(a)
	Effect of Headings—The section and subsection heading contained herein are for convenience only and shall not affect the
construction hereof.

	(b)
	No Right to Continued Employment—Nothing in the Plan or in any Long Term Incentive Plan Agreement entered into pursuant
hereto shall confer upon any Grantee the right to continue in the employ or service of the Company or any Affiliate, to be entitled to any remuneration or benefits not set forth in the Plan or a Long
Term Incentive Plan Agreement or to interfere with or limit in any way the right of the Company or any Affiliate to terminate Grantee's employment.

	(c)
	Ceasing to be an Affiliate—Except as otherwise provided in this Plan, Awards granted under this Plan shall not be affected
by any change in the relationship between or ownership of the Company or a Subsidiary and the Trust. For greater certainty, all Awards remain valid and exercisable in accordance with the terms and
conditions of this Plan and are not affected by reason only that, at any time, any corporation, partnership or Trust ceases to be a Subsidiary.

	(d)
	Expenses—All expenses in connection with the Plan shall be borne by the Company. 

14.   Governing Law  

        The Plan shall be governed by and construed in accordance with the laws in force in the state of California, without regard to that state's
conflict-of-laws rules. 

15.   Adoption  

        IN WITNESS WHEREOF, Pro GP Corp., acting in its capacity as General Partner, has caused the Company to adopt this Plan effective immediately, as indicated by the
signature of its duly authorized officer this            day
of                        , 200    . 

	 	 	BREITBURN ENERGY COMPANY L.P.
	

 	
 	

By:	
PRO GP CORP.
	 	 	Its:	General Partner
	

 	
 	

 	

By:	

 
	 	 	 	 	

	 	 	 	Name:	Randall J. Findlay
	 	 	 	Title:	President

9

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