Exhibit 10.1

 

FIFTH AMENDED AND RESTATED EXCHANGE AGREEMENT

 

THIS FIFTH AMENDED AND RESTATED EXCHANGE AGREEMENT (this “Agreement”), dated as
of October 15, 2008, is entered into among BUCKEYE GP HOLDINGS L.P., a Delaware
limited partnership (“Holdco”), BUCKEYE GP LLC, a Delaware limited liability
company (the “General Partner”), BUCKEYE PARTNERS, L.P., a Delaware limited
partnership (the “Partnership”), MAINLINE L.P., a Delaware limited partnership
(the “OLP GP”), BUCKEYE PIPE LINE COMPANY, L.P., a Delaware limited partnership
(“BPLCLP”), LAUREL PIPE LINE COMPANY, L.P., a Delaware limited partnership
(“Laurel”), EVERGLADES PIPE LINE COMPANY, L.P., a Delaware limited partnership
(“Everglades”), and BUCKEYE PIPE LINE HOLDINGS, L.P., a Delaware limited
partnership (collectively with BPLCLP, Laurel, and Everglades, the “Operating
Partnerships”).

 

WITNESSETH:

 

WHEREAS, Buckeye Pipe Line Company LLC, a Delaware limited liability company
(the “Former GP”), Buckeye Management Company LLC, a Delaware limited liability
company (“BMC”), Glenmoor LLC, a Delaware limited liability company
(“Glenmoor”), the Partnership and the Operating Partnerships entered into the
Exchange Agreement, dated as of August 12, 1997 (the “Original Agreement”), the
transactions contemplated by which were consummated on such date effective as of
11:59 P.M.;

 

WHEREAS, the Original Agreement was amended and restated in its entirety on
May 2, 2002, as of May 4, 2004, as of December 15, 2004 and as of August 9, 2006
(as so amended and restated, the “Prior Agreement”);

 

WHEREAS, the Partnership is governed pursuant to an Amended and Restated
Agreement of Limited Partnership (the “Master Partnership Agreement”), dated as
of April 14, 2008, between the General Partner and the limited partners of the
Partnership (the “Limited Partners”), as amended; the Operating Partnerships,
are governed pursuant to similar Amended and Restated Agreements of Limited
Partnership, each dated as of August 9, 2006, as amended, between the OLP GP and
the Partnership (collectively, the “Operating Partnership Agreements”);

 

WHEREAS, in connection with the Original Agreement, the Partnership (i) issued
limited partnership units of the Partnership (“LP Units”) to Buckeye Pipe Line
Services Company, a Pennsylvania corporation (the “Company”), whose shares of
capital stock are owned by the Buckeye Pipe Line Services Company Employee Stock
Ownership Plan Trust (referred to herein as the “ESOP”) in exchange for shares
of Glenmoor stock (the “Exchange Shares”), and (ii) contributed an undivided
interest in the Exchange Shares to the Operating Partnerships as of the date of
the Original Agreement;

 

WHEREAS, the Operating Partnerships transferred and assigned the Exchange Shares
to the Former GP as of the date of the Original Agreement in exchange for the
release of certain obligations that the Partnership had to BMC (as the former
general partner of the Partnership) and the Former GP, and the Operating
Partnerships had to the Former GP; Glenmoor and BMC caused the Former GP to
receive the Exchange Shares and to release such obligations of the

 

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Partnership and the Operating Partnerships; and the Exchange Shares were further
transferred by the Former GP to BMC and by BMC to Glenmoor;

 

WHEREAS, the General Partner was the general partner of the Operating
Partnerships, and pursuant to an Amended & Restated Contribution, Conveyance and
Assumption Agreement dated August 9, 2006, assigned its general partner
interests in the Operating Partnerships and all its right, title and interest in
the Prior Agreement, to the extent relating to the role of general partner of
the Operating Partnerships, to the OLP GP (the “Assignment Agreement”);

 

WHEREAS, Holdco became a party to this Agreement on August 18, 2006, when
MainLine Sub LLC, the former party to this Agreement and a wholly owned
subsidiary of Holdco, was merged with and into Holdco; and

 

WHEREAS, the parties to the Prior Agreement desire to amend and restate the
Prior Agreement in its entirety to amend the provisions of this Agreement
allocating responsibility for the compensation of certain executives.

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:

 

ARTICLE I
THE EXCHANGE

 

Upon the terms and subject to the conditions of this Agreement, the Operating
Partnerships have transferred and assigned the Exchange Shares to the Former GP
in exchange for the release of certain obligations of the Partnership to BMC (as
the former general partner of the Partnership) and the Former GP, and of the
Operating Partnerships to the Former GP, as set forth in Article II below.

 

ARTICLE II
RELEASE OF OBLIGATIONS

 

2.01         Obligations to Reimburse for Executive Compensation.  (a) Upon the
terms and subject to the conditions of this Agreement, the General Partner and
the OLP GP, for themselves and their affiliates, successors and assigns, hereby
confirm that they have irrevocably released, relinquished and discharged the
Partnership and the Operating Partnerships from any and all liability,
obligation, claim, demand, action or suit of any kind or nature, in law or in
equity, whatsoever, known or unknown, which may be asserted for or on account of
or arising out of or in any manner relating to the Partnership’s and/or the
Operating Partnerships’ obligations pursuant to Section 7.4(b) of the Master
Partnership Agreement and the Operating Partnership Agreements or otherwise to
reimburse the General Partner, the OLP GP or their affiliates for total
compensation, including all benefits, paid for the four highest salaried
officers performing duties for the General Partner with respect to the functions
of operations, finance, legal, marketing and business development, treasury, or
performing the function of President of the General Partner (“Executive
Compensation Liabilities”) for the period beginning on the date of the Original
Agreement and continuing through December 31, 2008.  Nothing in this
Section 2.01(a) shall be deemed to have waived the obligations of the
Partnership and the Operating Partnerships to reimburse the General Partner and
the OLP GP for (i) employee fringe benefits and retirement benefits for their
executives relating to services performed prior to the date of the

 

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Original Agreement, (ii) obligations under severance agreements with their
executives to the extent currently reimbursable under the Master Partnership
Agreement or (iii) any obligations in respect of their executives which are not
related to compensation, including, without limitation, indemnification
obligations (collectively, the “Excluded Obligations”).

 

(b)           The Partnership and the Operating Partnerships hereby reassume all
Executive Compensation Liabilities arising on and after January 1, 2009;
provided, however, that for the avoidance of doubt, such reassumption shall not
include (i) any obligations of Holdco, MainLine Management LLC or the General
Partner to any of the Executives pursuant to employment or severance agreements
or arrangements (other than the Excluded Obligations) entered into between
Holdco, MainLine Management LLC or the General Partner and such Executive prior
to January 1, 2009, or (ii) any bonus payments to the Executives for 2008, in
each case regardless of when such obligations become payable. In consideration
of such reassumption, beginning with the calendar year starting January 1, 2009,
Holdco shall make an annual payment calculated in accordance with Schedule A
hereto, which amount may be paid on such terms and in such installments during
or after any calendar year as may be mutually agreed by Holdco and the
Partnership (the “Annual Fixed Payment”).  The Partnership and the Operating
Partnerships acknowledge that so long as Holdco has no operations separate from
its ownership of the General Partner, the Executive Compensation Liabilities
assumed by the Partnership and the Operating Partnerships shall include all
compensation and benefits payable to such officers, and the Annual Fixed Payment
shall be deemed to include reimbursement by Holdco to the Partnership and the
Operating Partnerships in respect of total compensation payable to the same
persons for any services performed by such persons as officers of Holdco.

 

(c)           Holdco, the General Partner and the OLP GP agree, unless the
General Partner is removed as general partner of the Partnership, to perform the
executive level functions referred to in Section 2.01(a) for the benefit of the
Partnership and the Operating Partnerships in a manner satisfactory to the board
of directors of the General Partner.

 

2.02         ESOP Obligations Generally.  As of December 15, 2004, Holdco
acknowledges that it has received all reimbursements due to it from the
Partnership and the Operating Partnerships pursuant to the terms of the Prior
Agreement in respect of (i) cash contributions made or to be made by the Company
to the ESOP pursuant to the terms of the ESOP trust agreement, as necessary for
the ESOP to make all payments of principal, interest and premium due under the
Note Agreement, dated as of May 4, 2004, among the ESOP, The Prudential
Insurance Company of America, Pruco Life Insurance Company and Pruco Life
Insurance Company of New Jersey (the “Note Agreement”), (ii) cash deposits made
or to be made by the Company pursuant to an obligation to maintain a minimum
value of collateral pledged to secure the obligations of the ESOP or the Company
in respect of the Note Agreement, (iii) income taxes incurred by the Company on
the sale of LP Units made to satisfy the redemption obligations described in
Section 2.03 below, and (iv) routine administrative charges and expenses common
to employee stock ownership plans incurred in connection with the operation of
the ESOP.  Each of Holdco, the General Partner and the OLP GP hereby release,
relinquish and discharge the Partnership and the Operating Partnerships from any
and all further liability, obligation, claim, demand, action or suit of any kind
or nature, in law or in equity, whatsoever, known or unknown, which may be
asserted for or on account of or arising out of or in any manner relating to the
foregoing obligations under the Prior Agreement.

 

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2.03         No ESOP Contributions for Departing Employees.  Holdco, the General
Partner and the OLP GP acknowledge that neither the Partnership nor the
Operating Partnerships shall be obligated to reimburse Holdco, the General
Partner or the OLP GP for obligations to redeem the ESOP accounts of departing
employees upon the termination of their employment with the Company, or for any
other costs or expenses of or relating to the operation of the ESOP other than
those specified in Section 2.02 above.

 

2.04         Representations and Warranties.  Holdco, the General Partner and
the OLP GP hereby represent and warrant to the Partnership and the Operating
Partnerships, as of the date of the Original Agreement, that (a) neither the
Company nor any entity treated as a single employer with the Company under
Sections 414(b), 414(c), 414(m), or 414(o) of the Internal Revenue Code of 1986,
as amended (the “Code”), or Section 4001(b) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), has incurred any liability under any
provision of ERISA or other applicable law relating to the ESOP; (b) the ESOP
has been administered, in all material respects, in compliance with its terms
and complies, both in form and operation, with the applicable provisions of
ERISA (including, without limitation, the funding and prohibited transactions
provisions thereof), the Code and other applicable laws; and (c) the ESOP has
been determined by the Internal Revenue Service to be qualified within the
meaning of Section 401 of the Code, and none of Holdco, the General Partner or
the OLP GP is aware of any fact or circumstances which would adversely affect
the qualified status of the ESOP.

 

ARTICLE III
AGREEMENT TO ACT AS GENERAL PARTNER

 

3.01         Failure to Act as General Partner Over the ESOP Period.  Except to
the extent this obligation is assumed by a successor general partner(s) pursuant
to Section 3.02, the General Partner and the OLP GP shall continue to serve as
the general partner of the Partnership and the Operating Partnerships,
respectively, until all principal, interest and premium is paid in full under
the Note Agreement and under any agreements or instruments replacing the Note
Agreements have been repaid, unless the Partnership shall be sooner dissolved
under Section 14.1(d) of the Master Partnership Agreement.  Each Party hereto
hereby (i) consents to the transactions set forth in the Assignment Agreement,
including the assignment of all general partner interests in the Operating
Partnerships by the General Partner to the OLP GP, and (ii) agrees that the
consummation of such transactions did not violate any provision of the Prior
Agreement.

 

3.02         Assumption of Obligations by a Successor General Partner.  If the
General Partner or the OLP GP is removed as general partner of the Partnership
or one or more of the Operating Partnerships, respectively, during the ESOP
Period (but not if the General Partner or the OLP GP voluntarily withdraws as
general partner) pursuant to Section 13.1(b) of the Master Partnership
Agreement, or if the General Partner or the OLP GP transfers its general partner
interests in the Partnership or the Operating Partnerships pursuant to
Section 11.1 of the Master Partnership Agreement, the General Partner or the OLP
GP may cause the successor general partner of the Partnership and the Operating
Partnerships, respectively, to assume its respective obligations, liabilities
and duties under this Agreement.

 

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ARTICLE IV
GENERAL PROVISIONS

 

4.01         Entire Agreement.  This Agreement supersedes all prior discussions
and agreements among the parties hereto with respect to the subject matter
hereof and contains the sole and entire agreement among the parties hereto with
respect to the subject matter hereof.

 

4.02         Headings.  The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.

 

4.03         Waiver and Amendment.  No failure by any party to insist upon the
strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute a waiver of any such breach or of any other covenant, duty,
agreement or condition. Any amendment to this Agreement shall be effective only
if in writing signed by each of the parties hereto.

 

4.04         Severability.  If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions hereof, or of such provision in other
respects, shall not be affected thereby.

 

4.05         Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to a contract
executed and performed in such State, without giving effect to the conflicts of
laws principles thereof.

 

4.06         Counterparts.  This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

 

[signatures follow on next page]

 

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IN WITNESS WHEREOF, each party hereto has caused this Agreement amending and
restating the Prior Agreement to be signed by its officer duly authorized as of
the date first above written.

 

 

BUCKEYE GP HOLDINGS L.P.

 

 

 

By: MAINLINE MANAGEMENT LLC,

 

as General Partner

 

 

 

 

 

By:

/s/ Forrest E. Wylie

 

Name: Forrest E. Wylie

 

Title: Chief Executive Officer

 

 

 

 

 

BUCKEYE GP LLC

 

 

 

 

 

By:

/s/ Forrest E. Wylie

 

Name: Forrest E. Wylie

 

Title: Chief Executive Officer

 

 

 

 

 

MAINLINE L.P.

 

 

 

By: MAINLINE GP, INC.,

 

as General Partner

 

 

 

 

 

By:

/s/ Forrest E. Wylie

 

Name: Forrest E. Wylie

 

Title: Chief Executive Officer

 

 

 

BUCKEYE PARTNERS, L.P.

 

 

 

By: BUCKEYE GP LLC,

 

as General Partner

 

 

 

 

 

By:

/s/ Stephen C. Muther

 

Name: Stephen C. Muther

 

Title: President

 

[SIGNATURES CONTINUE ONTO NEXT PAGE]

 

[Fifth Amended and Restated Exchange Agreement]

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

 

BUCKEYE PIPE LINE COMPANY, L.P.

 

 

 

By: MAINLINE L.P.,

 

as General Partner

 

 

 

By: MAINLINE GP, INC.,

 

as General Partner

 

 

 

By:

/s/ Stephen C. Muther

 

Name: Stephen C. Muther

 

Title: President

 

 

 

 

 

LAUREL PIPE LINE COMPANY, L.P.

 

 

 

By: MAINLINE L.P.,

 

as General Partner

 

 

 

By: MAINLINE GP, INC.,

 

as General Partner

 

 

 

 

 

By:

/s/ Stephen C. Muther

 

Name: Stephen C. Muther

 

Title: President

 

 

 

 

 

EVERGLADES PIPE LINE COMPANY, L.P.

 

 

 

By: MAINLINE L.P.,

 

as General Partner

 

 

 

By: MAINLINE GP, INC.,

 

as General Partner

 

 

 

 

 

By:

/s/ Stephen C. Muther

 

Name: Stephen C. Muther

 

Title: President

 

[SIGNATURES CONTINUE ONTO NEXT PAGE]

 

[Fifth Amended and Restated Exchange Agreement]

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

BUCKEYE PIPE LINE HOLDINGS, L.P.

 

 

 

By: MAINLINE L.P.,

 

as General Partner

 

 

 

By: MAINLINE GP, INC.,

 

as General Partner

 

 

 

 

 

By:

/s/ Stephen C. Muther

 

Name: Stephen C. Muther

 

Title: President

 

[Fifth Amended and Restated Exchange Agreement]

 

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Schedule A

 

Calculation of Annual Fixed Payment

 

 

 

Assumed

 

 

 

 

 

Salaries

 

Actual 2009

 

 

 

Sample

 

Salaries

 

 

 

Calculation*

 

Calculation**

 

Aggregate Annual Base Salaries for four highest paid executives

 

$

1,350,000

 

$

—

 

 

 

 

 

 

 

Benefits

 

30

%

30

%

Plus: Benefits

 

405,000

 

—

 

Total Base and Benefits

 

$

1,755,000

 

$

—

 

Cushion

 

15.0

%

15.0

%

Base + Benefits + Cushion

 

$

2,018,250

 

$

—

 

 

 

 

 

 

 

Annual Incentive Compensation Opportunity (1)

 

$

1,350,000

 

$

—

 

Cushion

 

15.0

%

15.0

%

Annual Incentive Compensation + Cushion

 

$

1,552,500

 

$

—

 

 

 

 

 

 

 

Fixed Annual Payment

 

$

3,570,750

 

$

—

 

 

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(1) 100 percent of Aggregate Annual Base Salaries

 

* The total salary amount in this column is only for the purpose of showing a
sample calculation. The actual 2009 aggregate annualized Base Salaries for the
four highest paid executives will be set by the Compensation Committee of
Buckeye GP LLC and will differ from the sample amount above. The included
salaries are for the Chief Executive Officer, President, Chief Financial Officer
and Chief Operating Officer.

 

** Upon determination of the actual 2009 aggregate annualized Base Salaries for
the four highest paid executives, this Schedule shall be revised by the
Partnership and the Provider with the sum of those amounts and will become the
Final Schedule A to this Agreement. Such update will not be deemed an amendment
of this Agreement.

 

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