Document:

Exhibit

Exhibit 10.7

FIRST AMENDMENT TO THE
BLUEKNIGHT ENERGY PARTNERS, G.P, L.L.C.
LONG-TERM INCENTIVE PLAN
WHEREAS, Blueknight Energy Partners G.P., L.L.C., a Delaware limited liability company (the “Company”) and the general partner of Blueknight Energy Partners, L.P., a Delaware limited partnership, maintains the Blueknight Energy Partners, G.P., L.L.C. Long-Term Incentive Plan, as amended from time to time (the “Plan”); and
WHEREAS, the Company has determined that amendments should be made to the Plan to revise the definition of “Change of Control” contained therein.   
NOW, THEREFORE, the Plan is hereby amended as follows:
1.    The defined term “Change of Control” contained in Section 2 of the Plan is deleted in its entirety and replaced with the following:
“Change of Control” means, and shall be deemed to have occurred upon the occurrence of one or more of the following events: (i) any “person” or “group” within the meaning of those terms as used in Sections 13(d) and 14(d)(2) of the Exchange Act, other than Ergon, Inc. or its Affiliates, shall become the beneficial owner, by way of merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the combined voting power of the equity interests in the Company or the Partnership; (ii) the limited partners of the Partnership approve, in one or a series of transactions, a plan of complete liquidation of the Partnership; (iii) the sale or other disposition by either the Company or the Partnership of all or substantially all of its assets in one or more transactions to any Person other than the Company or an Affiliate of the Company; or (iv) a transaction resulting in a Person other than the Company or an Affiliate of the Company being the general partner of the Partnership. Anything in this definition to the contrary notwithstanding, with respect to any Award which constitutes deferred compensation subject to, and not exempt from, Code Section 409A, no Change of Control shall be deemed to have occurred unless such event constitutes an event specified in Code Section 409A(a)(2)(A)(v) and the Treasury Regulations promulgated thereunder. 
2.    Except as expressly provided herein, all other provisions of the Plan shall remain in full force and effect and are hereby ratified and confirmed.
[Signature Page Follows.]

IN WITNESS WHEREOF, this First Amendment to the Plan is executed and effective this 17 day of January, 2018.
	
					
	 
	 
	 
	Blueknight Energy Partners G.P., L.L.C.,

	 
	 
	a Delaware limited liability company

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	By: 
	/s/ Alex. G. Stallings

	 
	 
	 
	Name:
	Alex G. Stallings

	 
	 
	 
	Title:
	Chief Financial Officer and SecretaryExhibit

                                                

Exhibit 10.9

BLUEKNIGHT ENERGY PARTNERS G.P., L.L.C.
LONG-TERM INCENTIVE PLAN

EMPLOYEE PHANTOM UNIT AGREEMENT
This Phantom Unit Agreement (“Agreement”) between Blueknight Energy Partners G.P., L.L.C. (the “Company”) and [[First Last]] (the “Participant”), regarding an award (“Award”) of [[# of units]] Phantom Units (as defined in the Blueknight Energy Partners G.P., L.L.C. Long-Term Incentive Plan (the “Plan”)) granted to the Participant on [[Grant Date]] (the “Grant Date”), such number of Phantom Units subject to adjustment as provided in the Plan, and further subject to the following terms and conditions:
1.    Relationship to Plan.  This Award is subject to all of the terms, conditions and provisions of the Plan and administrative interpretations thereunder, if any, which have been adopted by the Committee thereunder and are in effect on the date hereof.  Except as otherwise provided herein, capitalized terms shall have the same meanings ascribed to them under the Plan.  
2.    Definitions.
“Cause” means (i) conviction of the Participant by a court of competent jurisdiction of any felony or a crime involving moral turpitude; (ii) the Participant’s willful and intentional failure or willful and intentional refusal to follow reasonable and lawful instructions of the Board; (iii) the Participant’s material breach or default in the performance of his obligations under this Agreement; or (iv) the Participant’s act of misappropriation, embezzlement, intentional fraud or similar conduct involving the Company or any of its Affiliates.

“Disability” means the Participant either (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (ii) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company or any entity that would be considered a single “service recipient” with the Company pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
“Retirement” means the Participant’s employment with the Company and all its Affiliates terminates (other than due to death, Disability or Cause) on or after he attains age 57 with at least five years of service with the Company or its Affiliates.
3.    Vesting Schedule; Settlement.
(a)    The Phantom Units subject to this Award shall vest as follows:

1

                                                

[each] such vesting date, ([a/the] “Vesting Date”).  The Participant must be continuously employed with the Company or any of its Affiliates from the Grant Date through the [applicable] Vesting Date in order for the Award to become vested with respect to the Phantom Units on such date.  
(b)    Notwithstanding any provision in the Plan to the contrary, (i) the occurrence of a Change of Control shall have no effect on the vesting of the Phantom Units and (ii) following the occurrence of a Change of Control, the Phantom Units shall continue to vest in accordance with this Agreement.
(c)    Within 60 days following vesting with respect to a Phantom Unit, the Participant shall be entitled to receive a Common Unit.  Common Units will be evidenced, at the sole option and in the sole discretion of the Committee, either (i) in book-entry form in the Participant’s name in the Common Unit register of the Partnership maintained by the Partnership’s transfer agent or (ii) a unit certificate issued in the Participant’s name.  Upon delivery of a Common Unit in respect of a Phantom Unit, such Phantom Unit shall cease to be outstanding in the Participant’s notional account described below in Section 5.
4.    Forfeiture of Award.  
(a)    If the Participant’s employment with the Company and all Affiliates is terminated by Participant’s employer without Cause (and, for the avoidance of doubt, not due to Retirement), or by reason of death or Disability, all unvested Phantom Units shall immediately vest and the Restricted Period shall terminate as of the date of the Participant’s termination.
(b)    If the Participant’s employment with the Company and all Affiliates is terminated due to Retirement, the unvested Phantom Units shall not be forfeited and shall instead continue to vest and be payable in accordance with this Agreement as if the Participant had remained continuously employed by the Company or an Affiliate.
(c)    If the Participant’s employment with the Company and all Affiliates terminates for any reason not described in Section 4(a) or 4(b), all unvested Phantom Units shall be immediately forfeited as of the date of the Participant’s termination.  
Immediate vesting of units under Section 4.(a), other than by reason of death, are conditioned on the execution by the Participant of a release of all employment-related claims within the applicable period following the Participant’s date of termination provided in such release that is not revoked by the Participant during any applicable revocation period provided in such release; provided, however, that such release shall be contingent upon the Company’s satisfaction of all terms and conditions of this Section.  
5.    Distribution Equivalent Rights.  During the Restricted Period, the Award of Phantom Units hereunder shall be evidenced by entry in a bookkeeping account and shall include a tandem Distribution Equivalent Right with respect to the Phantom Units.  Distribution Equivalent Rights shall only be paid with respect to ordinary quarterly cash distributions and shall not be paid with respect to any special, make-up or extraordinary distributions, in each case as determined by the Committee in its sole discretion.  

2

                                                

Notwithstanding the foregoing, no Distribution Equivalent Rights shall be paid in excess of the Minimum Quarterly Distributions (as defined in the Partnership Agreement) during the one year period following the Grant Date.  Pursuant to the Distribution Equivalent Right, within 45 days following the end of each fiscal quarter for which a cash distribution is made with respect to Common Units, the Participant 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 Common Unit.  
6.    Rights as Unitholder; Delivery of Common Units.  Until delivery of Common Units as described in Section 3(c), the Participant shall have no rights as a unitholder as a result of the grant of Phantom Units hereunder.  The Company shall not be obligated to deliver any Common Units if counsel to the Company determines that such sale or delivery would violate any applicable law or any rule or regulations of any governmental authority or any rule or regulation of, or agreement of the Company with, any securities exchange or association upon which the Common Units are listed or quoted.  The Company shall in no event be obligated to take any affirmative action in order to cause the delivery of Common Units to comply with any such law, rule, regulations or agreement.
7.    Assignment of Award.  The Participant’s rights under this Agreement and the Plan are personal; no assignment or transfer of the Participant’s rights under and interest in this Award may be made by the Participant other than by will, by beneficiary designation, by the laws of descent and distribution or by a qualified domestic relations order.
8.    Withholding.  No certificates representing Common Units hereunder shall be delivered to or in respect of a Participant unless the amount of all federal, state and other governmental withholding tax requirements imposed upon the Company with respect to the issuance of such Common Units has been remitted to the Company or unless provisions to pay such withholding requirements have been made to the satisfaction of the Committee.  The Committee may make such provisions as it may deem appropriate for the withholding of any taxes which it determines is required in connection with this Award.  The Participant may pay all or any portion of the taxes required to be withheld by the Company or paid by the Participant in connection with the vesting of all or any portion of this Award by delivering cash, or, with the Committee’s approval, by electing to have the Company withhold Common Units, or by delivering previously owned Common Units, having a Fair Market Value equal to the amount required to be withheld or paid.  The Participant may only request the withholding of Common Units having a Fair Market Value equal to the statutory minimum withholding amount.  The Participant must make the foregoing election on or before the date that the amount of tax to be withheld is determined.  
9.    No Employment Guaranteed.  No provision of this Agreement shall confer any right upon the Participant to continued employment with the Company or any Affiliate.
10.    Governing Law.  This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware.

3

                                                

11.    Amendment.  This Agreement cannot be modified, altered or amended, except by an agreement, in writing, signed by both the Company and the Participant.
12.    Section 409A.
(a)    The Phantom Units granted pursuant to this Agreement are intended to comply with or be exempt from Code Section 409A, and ambiguous provisions hereof, if any, shall be construed and interpreted in a manner consistent with such intent.  No payment, benefit or consideration shall be substituted for the Phantom Units if such action would result in the imposition of taxes under Code Section 409A.  Notwithstanding anything in this Agreement to the contrary, if any Plan provision or this Agreement results in the imposition of an additional tax under Code Section 409A, that Plan provision or provision of this Agreement shall be reformed, to the extent permissible under Code Section 409A, to avoid imposition of the additional tax, and no such action shall be deemed to adversely affect the Participant’s rights to the Phantom Units.
(b)    Notwithstanding any provision of the Agreement to the contrary, if the Participant is identified by the Company as a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i) on the date on which the Participant has a “separation from service” (other than due to death) within the meaning of Treasury Regulation § 1.409A-1(h), the Phantom Units payable or settled on account of a separation from service that are deferred compensation subject to Code Section 409A shall be paid or settled on the earliest of (i) the first business day following the expiration of six months from the Participant’s separation from service, (ii) the date of the Participant’s death, or (iii) such earlier date as complies with the requirements of Code Section 409A.
(c)    For all purposes of this Agreement, the Participant shall be considered to have terminated employment with the Company and its Affiliates when the Participant incurs a “separation from service” with the Company within the meaning of Treasury Regulation § 1.409A-1(h).

4

                                                

IN WITNESS WHEREOF, the Company and the Participant have executed this Phantom Unit Agreement as of the dates set forth below.
	
		
	BLUEKNIGHT ENERGY PARTNERS G.P., L.L.C.

	 

	 
	 

	By: 
	 

	Name:
	 

	Title:
	 

	Date:
	 

	 
	 

	
		
	PARTICIPANT:

	 
	 

	 
	 

	Name:
	 

	Date:
	 

	 
	 

Signature Page to Phantom Unit Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00280-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00280-of-00352.parquet"}]]