Exhibit 10.32
 
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
 
This SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of December 31,
2007 (together with any Exhibits hereto, the “Agreement”), is entered into by
and between BreitBurn Management Company, LLC (“BMC”), Pro GP Corp. (“PROGP”),
BreitBurn GP, LLC ( “BBGP”), and Halbert Washburn (the “Executive”). As used
herein, the term “Employer” shall be deemed to refer to BMC, PROGP, and/or BBGP,
as the context requires.
 
WHEREAS, the Executive and the Employer are currently parties to that certain
Amended and Restated Employment Agreement, dated October 10, 2006 (the “Prior
Agreement”);
 
WHEREAS, the Executive and the Employer wish to amend and restate the terms of
their employment relationship; and
 
WHEREAS, the Employer and the Executive wish to enter into this Second Amended
and Restated Employment Agreement, in the capacities and on the terms set forth
in this Agreement, and to supersede and replace in its entirety the Prior
Agreement.
 
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
 
1. Definitions. All capitalized terms not defined herein shall have the meanings
set forth in Exhibit A hereto.
 
2. Employment Period. The Employer hereby agrees to continue to employ the
Executive, and the Executive hereby agrees to continue such employment, subject
to the terms and conditions of this Agreement, during the period (the
“Employment Period”) beginning on December 31, 2007 (the “Commencement Date”)
and ending on January 1, 2011 or such earlier date upon which Executive’s
employment is terminated as provided herein. Provided that the Employment Period
has not already terminated, commencing on January 1, 2011 (and each January 1
thereafter), the term of this Agreement shall automatically be extended for one
additional year, unless at least ninety days prior to any such January 1, the
Employer or the Executive gives written notice to the other party that it or he,
as the case may be, does not wish to so extend the term of this Agreement.
Notwithstanding the foregoing, the Employment Period shall end on the Date of
Termination.
 
3. Terms of Employment.
 
(a)  Position and Duties.
 
(i)  Position. During the Employment Period, (i) the Executive shall be employed
as the Co-Chief Executive Officer of the Employer, and (ii) the Employer shall
use commercially reasonable efforts to cause the Executive to be elected to
serve as a member of each of the Boards, with the usual and customary duties of
such offices in entities of a similar nature and size. The Executive shall also
serve subsidiaries and affiliates of the Employer in such other capacities, in
roles consistent with his position as Co-Chief Executive Officer, in addition to
the foregoing as the Employer shall designate, and the Executive shall have such
other duties, responsibilities and authority as the Boards of Directors of BMC,
BBGP or PROGP, as applicable, (the “Board” or “Boards” as the context requires)
may specify from time to time, in each case, in roles consistent with his
position as Co-Chief Executive Officer. In no event shall the Executive be
entitled to any additional compensation (from the Employer or otherwise) for
services rendered to any other affiliate of the Employer (the Employer and any
other affiliated entities for which the Executive provides such services, the
“BreitBurn Entities”). The Executive shall report directly to the Board.

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(ii) Exclusivity. During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled under this Agreement,
the Executive shall devote substantially full-time attention and time during
normal business hours to the business and affairs of the BreitBurn Entities
consistent with Section 3 hereof. During the Employment Period it shall not be a
violation of this Agreement for the Executive to (A) carry on other
non-competitive business ventures with the consent of the Employer or its
nominee (not to be unreasonably withheld), (B) serve on the boards or committees
of such ventures or trade associations or civic or charitable organizations or
to engage in activities with such entities, (C) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (D) manage
personal investments, so long as such activities do not significantly interfere
with the performance of the Executive’s responsibilities as an employee of the
Employer in accordance with this Agreement. The Executive shall be entitled to
retain all compensation attributable to activities permitted under this Section
3(a)(ii).
 
(iii) Allocation of Costs. The respective Boards shall use their best efforts to
resolve any ambiguities or conflicts as to their respective obligations to the
Executive under this Agreement. The cost of the Executive’s compensation and
benefits shall be paid by BMC with the other Employer entities reimbursing BMC
for their portion of such costs that are allocable to them on the basis of the
Executive’s estimated time devoted to their respective businesses or on such
other basis as the Employer entities may mutually agree, provided, that (A)
costs associated with the RPUs and CPUs shall be borne by BBGP, and (B) costs
associated with the BECLP Phantom Units shall be borne by PROGP. Notwithstanding
the foregoing, each of BMC, PROGP, and/or BBGP shall be jointly and severally
liable for the performance of the obligations of the Employer hereunder.
 
(iv) Location. The Executive’s services shall be performed at the headquarters
of the Employer, and such location shall be in the Greater Los Angeles
metropolitan area. Notwithstanding the foregoing, the Employer may from time to
time require the Executive to travel temporarily to other locations on the
business of the Employer (and/or other BreitBurn Entities).
 
(v) Operation of the Business. It is the Employer’s current intent to continue
conducting its business in a manner that would not impede the attainment of the
Performance Objectives applicable to the CPUs, provided that the parties
acknowledge that any action or inaction by the Board (or any other person owing
a fiduciary duty to the Employer) with respect to the conduct of the Employer’s
business must be consistent with the Board’s or such person’s view of applicable
fiduciary duties and law. Accordingly, the Employer agrees that, provided that
its actions and inactions are consistent with applicable fiduciary duties and
law, the Employer shall not take any action (or permit any inaction) that
materially impedes the attainment of the Performance Objectives applicable to
the CPUs. Notwithstanding the foregoing, nothing contained in this Section
3(a)(v) nor any breach thereof shall create any right in the Executive (or any
successor in interest to the Executive) to enjoin, preclude, constrain or
otherwise interfere with any lawful action taken by or on behalf of the
Employer, whether by injunction, restraining order, other equitable relief or
otherwise or shall serve as the basis for any claim by the Executive for any
punitive, consequential or incidental damages, and the Executive hereby agrees
that his sole remedy for a breach of this Section 3(a)(v) shall be limited to
the payments and benefits to which he may be entitled under the terms of this
Agreement in the event that he terminates his employment for Good Reason.

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(b) Compensation.
 
(i)  Base Salary. During the Employment Period, the Executive shall receive a
base salary (the “Base Salary”) at an annual rate of $425,000, as the same may
be increased (but not decreased) thereafter in the discretion of the Employer.
The Base Salary shall be paid at such regular intervals as the Employer pays
executive salaries generally, but in no event less frequently than monthly.
During the Employment Period, the Base Salary shall be reviewed at least
annually by the Employer for possible increase in the discretion of the
Employer. Any increase in the Base Salary shall not serve to limit or reduce any
other obligation to the Executive under this Agreement. The Base Salary shall
not be reduced after any such increase, and the term Base Salary as utilized in
this Agreement shall refer to the Base Salary as so increased.
 
(ii) Short-Term Incentives. For each calendar year ending during the Employment
Period, the Executive shall be eligible to participate in the Employer’s
short-term incentive plan at the Chief Executive Officer level and to earn an
annual cash bonus based on the achievement of performance criteria established
by the Board as soon as administratively practicable following the beginning of
each such year (the “Annual Bonus”). For each calendar year during the
Employment Period, (A) the target Annual Bonus shall be an amount equal to 100%
of the Executive’s Base Salary, and (B) the maximum Annual Bonus shall be an
amount equal to 200% of the Executive’s Base Salary. The Employer shall pay the
Annual Bonus (if any) for each such calendar year in a single, cash, lump sum
after the end of the applicable calendar year in accordance with procedures
established by the Board, but in no event later than the fifteenth day of the
third month following the end of such calendar year, subject to and conditioned
upon the Executive’s continued employment with the Employer through the date of
payment of such Annual Bonus.
 
(iii) Long Term Incentives.
 
(A) Grant of RPUs and CPUs. As soon as practicable following the Commencement
Date, BBGP shall grant to the Executive, under the BreitBurn Energy Partners
L.P. 2006 Long-Term Incentive Plan (the “Plan”), (i) 18,700 Restricted Phantom
Units (together with the Restricted Phantom Units described in paragraph (B)
below, the “RPUs”) which shall vest and convert into Units, subject to Section 5
below, as to one-third of such RPUs on each of January 1, 2009, January 1, 2010
and January 1, 2011, subject in each case to the Executive’s continued
employment with the Employer through each such date; and (ii) 187,000
Convertible Performance Units (the “CPUs”) which shall convert into Units,
subject to the attainment of applicable performance objectives and Section 5
below, on the earlier to occur of (A) the attainment of the specified
performance metrics adopted by the Board in resolutions dated December 26, 2007
(the “Performance Objectives”), or (B) January 1, 2013, subject to the
Executive’s continued employment with the Employer through any such date (except
as provided in Section 5 below). Outstanding RPUs and CPUs shall generally
entitle the Executive to receive payments in an amount equal to distributions
made in respect of the Units underlying such awards at such time and in such
amounts as distributions are received by the holders of Units generally (and, in
the case of the CPUs, such payments shall be subject to recoupment by BBGP in
the event that such payments exceed the level of distribution equivalent
payments to which the Executive is ultimately entitled in respect of the CPUs,
based on the level at which the Performance Objectives are attained). Except as
expressly provided in Section 5(d)(ii) below, conversion to, and payment to the
Executive of, the Units underlying CPUs shall occur upon or as soon as
practicable following the vesting of any such CPUs (whether pursuant to this
Section 3(b)(iii) or Section 5 below), but in no event later than the applicable
“short-term deferral period” (within the meaning of Code Section 409A). The
terms and conditions of the RPUs and the CPUs, including without limitation, any
provisions relating to cash distributions, performance or other vesting
conditions and restrictions thereon, shall, consistent with the terms provided
in this Agreement, be set forth in RPU and CPU award agreements, as applicable,
in forms prescribed by the Employer or BBGP (together, the “LTIP Award
Agreements”). The RPUs and the CPUs shall be governed by the terms of the Plan
and the applicable LTIP Award Agreements. The Executive shall be eligible to
receive additional awards under the Plan and to participate in any future
long-term incentive programs available generally to the Employer’s senior
executive officers in the future, both as determined in the sole discretion of
the Board of Directors of BBGP.
 
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(B) MLP Phantom Units.

(i) 2007 MLP Phantom Units. As of the Commencement Date, all MLP Phantom Units
(as defined in the Prior Agreement) granted to the Executive as of January 1,
2007 (the “2007 MLP Phantom Units”) shall be cancelled, terminated and
extinguished in exchange for the right to receive the following payments (the
“MLP Phantom Units Consideration”):

(1) A lump-sum cash payment in an amount equal to $1,200,000 (subject to any
applicable withholding or other taxes), payable as soon as practicable after
January 1, 2008, but in no event more than 30 days thereafter; and

(2) As soon as practicable following the Commencement Date, BBGP shall grant to
the Executive, under the Plan, 92,200 RPUs, which shall vest and convert into
Units, subject to Section 5 below, as to one-third of such RPUs on each of
January 1, 2009, January 1, 2010 and January 1, 2011, subject in each case to
the Executive’s continued employment with the Employer through each such date.
Such RPUs shall be granted on the terms and conditions described in paragraph
(A) above and as otherwise set forth in this Agreement (including, without
limitation, Section 5 hereof).

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(ii) The payment of the MLP Phantom Units Consideration shall be in full and
final satisfaction and settlement of all obligations of the Employer entities
and their affiliates (including without limitation, all BreitBurn Entities) with
respect to the 2007 MLP Phantom Units, and the Executive hereby acknowledges and
agrees that upon the cancellation of the 2007 MLP Phantom Units, he shall cease
to have any rights or interest with respect thereto, except the right to receive
the MLP Phantom Units Consideration. Executive hereby acknowledges and
represents that he has no outstanding MLP Phantom Units other than the 2007 MLP
Phantom Units.

(C) BECLP Phantom Units. Effective as of the first day of each fiscal year of
the Employer during the Employment Period, the Executive shall be granted a
BECLP Phantom Unit on the terms and conditions set forth in Exhibit C hereto.
Any Partnership Phantom Unit (as defined in Appendix B to the Prior Agreement)
granted under the Prior Agreement that remains outstanding after the
Commencement Date shall be governed in accordance with the terms of Exhibit C
hereto.

(D) No Right to Additional Phantom Options or MLP Phantom Units. In
consideration of the payments and benefits described in this Agreement and for
other good and valuable consideration, without limiting the generality of any
other provision of this Agreement, the Executive hereby acknowledges and agrees
that, notwithstanding anything contained in the Prior Agreement (including
Appendix B thereto), and except as expressly provided in Section 3(b)(iii)(C)
above with respect to BECLP Phantom Units, as of the Commencement Date, the
Executive shall have no right to receive any grant of Phantom Options (as
defined in Appendix B to the Prior Agreement) or of MLP Phantom Units in the
future.

(E) Section 409A Transition Relief. The parties intend that the cancellation of
the 2007 MLP Phantom Units in exchange for the MLP Phantom Unit Consideration
comply with the transition relief provided under Treasury Regulations
promulgated under Code Section 409A, Internal Revenue Service Notice 2005-1, Q/A
19(c) and Internal Revenue Service Notice 2006-79, and that such cancellation
and exchange not be treated as a change in the time or form of payment under
Code Section 409A(a)(4) or an acceleration of a payment under Code Section
409A(a)(3). Accordingly, the parties hereby acknowledge and agree that payment
of the MLP Phantom Unit Consideration in lieu of the 2007 MLP Phantom Units (i)
will apply only to amounts that would not otherwise be payable in 2007, (ii)
will not cause any amounts to be paid in 2007 that would not otherwise be
payable in 2007, and (iii) will, to the extent applicable, constitute a deferral
election that is made before January 1, 2008 with respect to an amount that is a
short-term deferral (within the meaning of Treas. Reg. § 1.409A-1(b)(4)), before
the year in which such amount would otherwise have been paid. To the greatest
extent possible, payment of the 2007 MLP Phantom Unit Consideration in lieu of
the 2007 MLP Phantom Units shall be interpreted and construed in accordance with
the aforementioned transition relief.

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(iv) Benefit Plans and Policies. During the Employment Period, the Executive and
the Executive’s eligible dependents shall be eligible to participate in the
savings and retirement plans and policies, welfare plans and policies
(including, without limitation, medical and dental) and fringe benefit plans and
policies of the Employer, in each case, that are made generally available to the
Employer’s senior executive officers on a basis no less favorable than that
provided generally to the Employer’s senior executive officers. Notwithstanding
the foregoing, nothing herein shall, or shall be construed so as to, require the
Employer to adopt or continue any plan or policy or to limit the Employer’s
right to amend or terminate any such plan or policy at any time.
 
(v) Automobile. During the Employment Period, the Employer shall pay directly,
or the Executive shall be entitled to receive prompt reimbursement of, actual
expenses of up to $1,000 per month associated with the lease or purchase of an
automobile, in addition to which the Employer shall pay or reimburse expenses
related to the maintenance and operation of such automobile in accordance with
the Employer’s automobile reimbursement policy applicable to the Employer’s
senior executive officers, as in effect from time to time.
 
(vi) Expenses. During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for reasonable expenses incurred by the Executive
on behalf of or in furtherance of the business of any BreitBurn Entity pursuant
to the terms and conditions of the Employer’s applicable expense reimbursement
policies. To the extent that any such expenses or any other reimbursements or
fringe benefits provided to the Executive during the Employment Period are
deemed to constitute compensation to the Executive, including without limitation
any automobile expenses and/or club memberships reimbursed in accordance with
Section 3(b)(v) above and 3(b)(viii) below, respectively, such expenses shall be
reimbursed no later than December 31 of the year following the year in which the
expense was incurred. The amount of any such compensatory expenses so reimbursed
in one year shall not affect the amount eligible for reimbursement in any
subsequent year and the Executive’s right to reimbursement of any such expenses
shall not be subject to liquidation or exchange for any other benefit.
 
(vii) Vacation. During the Employment Period, the Executive shall be entitled to
paid vacation in accordance with the Employer’s applicable vacation policy, but
in no event less than five (5) weeks per year.
 
(viii) City Club Membership. During the Employment Period, the Employer shall
pay all initiation fees, monthly dues, and reasonable expenses incurred for
business-related use of one city, athletic or dining club. The Executive’s
membership shall be the property of the Executive.
 
4. Termination of Employment.
 
(a)  Death or Disability. The Executive’s employment with the Employer shall
terminate automatically upon the Executive’s death. In addition, if the Board
determines in good faith that the Executive has incurred a Disability, it may
terminate the Executive’s employment upon thirty days’ written notice provided
in accordance with Section 13(b) hereof if the Executive shall not have returned
to full-time performance of the Executive’s duties hereunder prior to the
expiration of such thirty-day notice period.
 
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(b) Cause. The Employer may terminate the Executive’s employment for Cause or
without Cause at any time, provided, that the Employer may not terminate the
Executive’s employment for Cause prior to obtaining the requisite approval of
the Board as required by the definition of “Cause.”
 
(c) Good Reason. The Executive may terminate his employment for Good Reason or
without Good Reason.
 
(d) Notice of Termination. Any termination by the Employer or the Executive
shall be communicated by a Notice of Termination to the other parties hereto
given in accordance with Section 13(b) hereof. The failure by the Executive or
the Employer to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any right
of the Executive or the Employer, respectively, hereunder or preclude the
Executive or the Employer, respectively, from asserting such fact or
circumstance in enforcing the Executive’s or the Employer’s rights hereunder.
 
5. Obligations of the Employer upon Termination; Change of Control. For the
avoidance of doubt, for purposes of this Section 5, a termination of the
Executive’s employment with the Employer shall only occur if the Executive’s
employment is terminated with all Employer entities (and any other BreitBurn
Entities with whom the Executive may be or become employed). Notwithstanding the
foregoing, the parties hereby acknowledge that changes in the Executive’s status
as an employee of the various Employer entities and BreitBurn Entities
(including any transfer of the Executive’s employment between such entities and
any termination of the Executive’s employment relationship with one or more, but
fewer than all, such entities) may, but shall not necessarily, constitute Good
Reason hereunder, and that the effect of such changes on the Executive’s
employment relationship shall be considered in determining whether Good Reason
exists hereunder.
 
(a)  Good Reason; Other Than for Cause, Death or Disability. If, during the
Employment Period, the Employer terminates the Executive’s employment without
Cause (other than as a consequence of the Executive’s death or Disability, which
terminations shall be governed by Section 5(c) below), or the Executive
terminates his employment with the Employer for Good Reason, in either case, in
a manner that constitutes a Separation from Service, then the Executive shall be
entitled to receive the payments and benefits described below in this Section
5(a).
 
(i) (A) The Executive shall be paid, in a single lump-sum payment within thirty
(30) days after the Executive’s Separation from Service (or any shorter period
prescribed by law), the aggregate amount of (1) the Executive’s earned but
unpaid Base Salary and accrued but unpaid vacation pay, if any, through the Date
of Termination, and (2) any unreimbursed business expenses incurred by the
Executive through the Date of Termination that are reimbursable under Section
3(b)(vi) above; and (B) to the extent not theretofore paid or provided, the
Employer shall timely pay or provide to the Executive any accrued benefits and
other amounts or benefits required to be paid or provided prior to the Date of
Termination under any other plan, program, policy, practice, contract or
agreement of the Employer and its affiliates according to their terms (the
payments and benefits described in this Section 5(a)(i), the “Accrued
Obligations”).
 
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(ii) In addition to the Accrued Obligations, provided that the Executive
executes a general release and waiver of claims substantially in the form
attached hereto as Exhibit B (as such form may be updated to reflect changes in
law, the “Release”) within forty-five (45) days after the Executive’s Separation
from Service and does not revoke such Release, and further subject to Section 12
below, the Executive shall be entitled to receive the following payments and
benefits (the “Severance”):
 
(A)  A payment equal to two times the sum of (1) the Executive’s Base Salary as
in effect immediately prior to the Date of Termination, plus (2) the average of
the Executive’s Annual Bonuses earned (including any amounts deferred) during
the two years immediately preceding the Date of Termination (the “Bonus
Amount”), payable no later than sixty days after the date on which the Executive
incurs a Separation from Service;
 
(B)  For a period of twenty-four months following the date on which the
Executive incurs a Separation from Service, but in no event longer than the
period of time during which the Executive would be entitled to continuation
coverage under Code Section 4980B absent this provision (the “COBRA Period”),
the Executive and the Executive’s eligible dependents shall continue to be
provided with medical, prescription and dental benefits at the levels in effect
immediately prior to the Date of Termination at the same cost to the Executive
as immediately prior to the Date of Termination, provided that the Executive
properly elects continuation healthcare coverage under Code Section 4980B;
following such continuation period, any further continuation of such coverage
under applicable law shall be at the Executive’s sole expense. Notwithstanding
the foregoing, the Executive and his dependents shall cease to receive such
medical, prescription and dental benefits on the date that the Executive becomes
eligible to receive benefits under another employer-provided group health plan;
 
(C) Any unpaid Annual Bonus that would have become payable to the Executive
pursuant to Section 3(b)(ii) hereof in respect of any calendar year that ends on
or before the Date of Termination, had the Executive remained employed through
the payment date of such Annual Bonus, payable in the calendar year in which the
Separation from Service occurs, but in no event later than the date in such
calendar year on which annual bonuses are paid to the Employer’s senior
executive officers generally; and

(D) To the extent not previously vested and converted into Units or forfeited,
(1) the RPUs shall vest and convert into Units in full upon the Executive’s
Separation from Service; and (2) the CPUs shall vest and convert into Units on a
pro rata basis as follows: the number of CPUs that vest and convert into Units
shall be equal to the total number of CPUs that would otherwise vest and convert
into units based on the extent to which the applicable Performance Objectives
have been satisfied as of the Date of Termination multiplied by the applicable
percentage set forth in the following schedule (the “CPU Acceleration
Percentage”) (and any CPUs that do not vest and convert into Units in accordance
with this Section 5(a)(ii)(D) (and which have not otherwise vested and converted
into Units prior to the Date of Termination) shall be forfeited as of the Date
of Termination):
 
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(a) if such termination occurs on or before December 31, 2008, such percentage
shall be equal to 40%;
 
(b) if such termination occurs on or before December 31, 2009, such percentage
shall be equal to 60%;

(c) if such termination occurs on or before December 31, 2010, such percentage
shall be equal to 80%; and

(d) if such termination occurs on or after January 1, 2011, such percentage
shall be equal to 100%.

(b) Cause; Resignation Other than for Good Reason. If the Executive incurs a
Separation from Service because the Employer terminates the Executive’s
employment for Cause or the Executive terminates his employment other than for
Good Reason, the Employer shall pay to the Executive the Accrued Obligations
within thirty days after the Executive’s Separation from Service (or any shorter
period prescribed by law) or, in the case of payments or benefits described in
Section 5(a)(i)(B) above, as such payments or benefits become due. Any
outstanding equity awards, including, without limitation, the RPUs and CPUs
granted in accordance with Section 3(b)(iii) above, shall be treated in
accordance with the terms of the governing plan and award agreement.
 
(c) Death or Disability. If the Executive incurs a Separation from Service by
reason of the Executive’s death or Disability during the Employment Period:
 
(i) The Accrued Obligations shall be paid to the Executive’s estate or
beneficiaries or to the Executive, as applicable, within thirty days after the
Executive’s Separation from Service (or any shorter period prescribed by law)
or, in the case of payments or benefits described in Section 5(a)(i)(B) above,
as such payments or benefits become due;
 
(ii) In addition to the Accrued Obligations, subject to the Executive’s (or his
estate’s) execution and non-revocation of a Release, the Executive shall be
entitled to receive the following payments and benefits (the “Death/Disability
Payments”):
 
(A) (1) the RPUs shall vest and convert into Units in full upon the Executive’s
Separation from Service; and (2) the CPUs shall vest and convert into Units on a
pro rata basis as follows: the number of CPUs that vest and convert into Units
shall be equal to the total number of CPUs that would otherwise vest and convert
into Units based on the extent to which the applicable Performance Objectives
have been satisfied as of the Date of Termination multiplied by the applicable
CPU Acceleration Percentage (and any CPUs that do not vest and convert into
Units in accordance with this Section 5(c)(ii)(A) (and which have not otherwise
vested and converted into Units prior to the Date of Termination) shall be
forfeited as of the Date of Termination);
 
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(B) For the period commencing on the Executive’s Separation from Service and
ending on the earlier to occur of (1) the date on which the Employment Period
would have otherwise expired had the Executive not incurred a Separation from
Service (disregarding any renewals thereof that would occur subsequent to the
Date of Termination), and (2) the date of the expiration of the COBRA Period,
the Executive and the Executive’s eligible dependents shall continue to be
provided with medical, prescription and dental benefits as if the Executive’s
employment had not been terminated at the same cost to the Executive (or the
Executive’s estate or dependents) as immediately prior to the Date of
Termination provided that the Executive or his dependents, if applicable,
properly elect continuation healthcare coverage under Code Section 4980B;
following such continuation period, any further continuation of such coverage
under applicable law shall be at the Executive’s (or his estate’s or
dependents’) sole expense; and
 
(C) Any unpaid Annual Bonus that would have become payable to the Executive
pursuant to Section 3(b)(ii) hereof in respect of any calendar year that ends on
or before the Date of Termination, had the Executive remained employed through
the payment date of such Annual Bonus, payable in the calendar year in which the
Separation from Service occurs, but in no event later than the date in such
calendar year on which annual bonuses are paid to the Employer’s senior
executive officers generally.

(d) Non-renewal.
 
(i) Employer Non-Renewal.
 
(A) If the Employer provides a notice of non-renewal of the Employment Period as
set forth in Section 2 hereof and the Executive incurs a Separation from Service
as a result, the CPUs shall vest and convert into Units upon such separation (to
the extent not previously vested and converted into Units or canceled) on a pro
rata basis as follows: the number of CPUs that vests and converts into Units
shall be equal to the total number of CPUs that would otherwise vest and convert
into Units based on the extent to which the applicable Performance Objectives
have been satisfied as of the Date of Termination multiplied by the applicable
CPU Acceleration Percentage, provided, that the vesting and conversion described
in this Section 5(d)(i)(A) shall only occur if, following such notice of
non-renewal by the Employer, the Executive does not voluntarily terminate his
employment (other than upon death or Disability) before the end of the
Employment Period, as determined without regard to any extension of the
Employment Period that might otherwise occur following the Date of Termination
in accordance with the second sentence of Section 2 hereof (a “Post-Termination
Extension”). For purposes of clarification, subject to the Executive’s continued
employment through the end of the Employment Period, as determined without
regard to any Post-Termination Extension, in the event that the Employment
Period terminates on January 1, 2011 as a result of non-renewal by the Employer
in accordance with Section 2 hereof, the final one-third of the RPUs shall vest
and convert into Units as scheduled in accordance with Section 3(b)(iii) on
January 1, 2011. Any RPUs or CPUs that do not vest and convert into Units on or
prior to the Date of Termination) shall be forfeited as of the Date of
Termination.
 
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(B) Neither the Employer’s election not to renew the Employment Period nor a
termination of the Executive’s employment resulting therefrom shall constitute a
termination of the Executive’s employment hereunder without Cause for purposes
of this Agreement. Notwithstanding the foregoing, subject to the Executive’s
execution and non-revocation of a Release, the Employer shall pay to the
Executive, at the time when annual bonuses are paid to the Employer’s senior
executive officers in respect of the year in which the Separation from Service
occurs (but in no event later than the fifteenth day of the third month
following the end of such year), to the extent not previously paid, an Annual
Bonus in respect of the year in which the Separation from Service occurs.
 
(ii) Executive Non-Renewal. If the Executive provides a notice of non-renewal of
the Employment Period in accordance with Section 2 hereof and the Executive
experiences a Separation from Service as a result, then, following such a
termination, a pro rata portion of the CPUs shall remain outstanding and
eligible to vest and convert into Units in accordance with the terms of the
applicable LTIP Award Agreement (if not previously vested and converted into
Units or canceled) as follows: the number of CPUs that remains outstanding and
eligible to vest and convert into Units in accordance with the terms of the
applicable LTIP Award Agreement following the Date of Termination shall be equal
to the total number of CPUs multiplied by a fraction, (A) the numerator of which
is an integer equal to the number of whole years elapsed from the Commencement
Date through and including the Date of Termination, and (B) the denominator of
which equals five, provided, that the eligibility for post-termination vesting
and conversion into Units of the CPUs described in this Section 5(d)(ii) shall
only occur if, following such notice of non-renewal by the Executive, the
Executive does not voluntarily terminate his employment (other than upon death
or Disability) before the end of the Employment Period, as determined without
regard to any Post-Termination Extension. Any CPUs that do not remain eligible
to vest and convert into Units in accordance with this Section 5(d)(ii) (and
which have not otherwise vested and converted into Units or terminated prior to
the Date of Termination) shall be forfeited as of the Date of Termination. The
Executive’s election not to renew the Employment Period and a termination of his
employment resulting therefrom shall be deemed to constitute a termination by
the Executive without Good Reason for purposes of this Agreement. For purposes
of clarification, subject to the Executive’s continued employment through the
end of the Employment Period, as determined without regard to any
Post-Termination Extension, in the event that the Employment Period terminates
on January 1, 2011 as a result of non-renewal by the Executive in accordance
with Section 2 hereof, the final one-third of the RPUs shall vest and convert
into Units as scheduled in accordance with Section 3(b)(iii) on January 1, 2011.
 
(iii) Accrued Obligations. In the case of any termination in accordance with
this Section 5(d), the Accrued Obligations shall be paid to the Executive within
thirty days after the Executive’s Separation from Service (or any shorter period
prescribed by law) or, in the case of payments or benefits described in Section
5(a)(i)(B) above, as such payments or benefits become due.
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(e) Change of Control. Notwithstanding anything herein to the contrary, if a
Change in Control (as defined in the Plan) occurs during the Employment Period,
then, to the extent not previously vested and converted into Units, the RPUs
shall vest in full upon such Change in Control, provided, that notwithstanding
the foregoing, such RPUs shall not convert into Units and shall not convert into
Units and be paid to the Executive until the earlier to occur of (1) the
originally applicable vesting date described in Section 3(b)(iii) above, or (2)
the Executive’s Separation from Service.
 

(f) Termination of Offices and Directorships. Upon termination of the
Executive’s employment for any reason, the Executive shall be deemed to have
resigned from all offices and directorships, if any, then held with the Employer
or any BreitBurn Entity, and shall take all actions reasonably requested by the
Employer to effectuate the foregoing.

6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
the Executive’s participation in any other plan, program, policy or practice
provided by any BreitBurn Entity (other than policies relating to severance
payments or obligations on termination of employment for any reason ) and for
which the Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement
with any BreitBurn Entity. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with any BreitBurn Entity or any of its
affiliates at or subsequent to the Date of Termination shall be payable, if at
all, in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
 
7. No Mitigation. The Employer’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Employer or any of their affiliates may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive as Severance or Death/Disability Payments, and, except as
provided in Section 5(a)(ii)(B) hereof, such amounts shall not be reduced
whether or not the Executive obtains other employment.
 
8. Executive’s Covenants.
 
(a)  Confidential Information. The Executive shall hold in a fiduciary capacity
for the benefit of the Employer and each BreitBurn Entity all secret or
confidential information, knowledge and data relating to the Employer and each
BreitBurn Entity, and their respective businesses, including without limitation
any trade secrets, which shall have been obtained by the Executive during the
Executive’s employment with the Employer and which shall not be or have become
public knowledge or known within the relevant trade or industry (other than by
acts by the Executive or representatives of the Executive in violation of this
Agreement) (together, “Proprietary Information”). The Executive shall not, at
any time during or after his employment, directly or indirectly, without the
prior written consent of the Board or as may otherwise be required by law or
legal process, use for his own benefit such Proprietary Information or
communicate or divulge any such Proprietary Information to anyone (other than an
authorized BreitBurn Entity or any such entity’s designee); provided, that if
the Executive receives actual notice that the Executive is or may be required by
law or legal process to communicate or divulge any such Proprietary Information,
unless otherwise prohibited by law or regulation, the Executive shall promptly
so notify the Board. Anything herein to the contrary notwithstanding, the
provisions of this Section 8 shall not apply with respect to any litigation,
arbitration or mediation involving this Agreement or any other agreement between
the Executive and the Employer or any BreitBurn Entity; provided, that the
Executive shall take all reasonable steps to maintain such Proprietary
Information as confidential, including, without limitation, seeking protective
orders and filing documents containing such information under seal. Nothing
herein shall be construed as prohibiting the Executive from using or disclosing
such Proprietary Information as may be reasonably necessary in his proper
performance of services hereunder.
 
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(b) Non-Solicitation.

(i) While employed by the Employer and for a period of two years following the
Date of Termination, regardless of the reason for the termination, other than in
the ordinary course of the Executive’s duties for the Employer or any BreitBurn
Entity, the Executive shall not, without the prior consent of the Board,
directly or indirectly solicit, induce, or encourage any employee of any
BreitBurn Entity or any of their respective affiliates who is employed on the
Date of Termination (or at any time within six months of such date) to terminate
his or her employment with such entity; and

(ii) While employed by the Employer and thereafter, regardless of the reason for
the termination, the Executive shall not, without the prior consent of the
Board, use any Proprietary Information to hire any employee of the Employer or
any BreitBurn Entity or any of their respective affiliates within six months
after that employee’s termination of employment with any BreitBurn Entity or any
of their respective affiliates.

The Employer acknowledges that its employees may join entities with which the
Executive is affiliated and that such event shall not constitute a violation of
this Agreement if the Executive was not involved in the solicitation, hiring or
identification of such employee as a potential recruit.

(c) Irreparable Harm. In recognition of the facts that irreparable injury will
result to the Employer in the event of a breach by the Executive of his
obligations under Sections 8(a) or 8(b) above, that monetary damages for such
breach would not be readily calculable, and that the Employer would not have an
adequate remedy at law therefor, the Executive acknowledges, consents and agrees
that, in the event of any such breach, or the threat thereof, the Employer shall
be entitled, in addition to any other legal remedies and damages available, to
specific performance thereof and to temporary and permanent injunctive relief
(without the necessity of posting a bond) to restrain the violation or
threatened violation of such obligations by the Executive.
 
(d) Return of Property. Upon the termination of the Executive’s employment with
the Employer for any reason, the Executive shall immediately return and deliver
to the Employer any and all Proprietary Information, and any and all other
papers, books, records, documents, memoranda and manuals, e-mail, electronic or
magnetic recordings or data, including all copies thereof, belonging to the
Employer or any other BreitBurn Entity or relating to their business, in the
Executive’s possession, whether prepared by the Executive or others. If at any
time after the Employment Period, the Executive determines that he has any
Proprietary Information or other such materials in his possession or control, or
any copy thereof, the Executive shall immediately return to the Employer all
such information and materials, including all copies and portions thereof.
Nothing herein shall prevent the Executive from retaining a copy of his personal
papers, information or documentation relating to his compensation.

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9. Successors.
 
(a)  Assignment by the Executive. This Agreement is personal to the Executive
and without the prior written consent of the Board shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement, including any benefits or compensation payable hereunder, shall
inure to the benefit of and be enforceable by the Executive’s legal
representatives, including, without limitation, his heirs and/or beneficiaries.
For the avoidance of doubt, if the Executive dies prior to the payment of
amounts that are owed to him under this Agreement, such amounts shall be paid,
in accordance with the terms of this Agreement, to the Executive’s estate.
 
(b)  Assignment by the Employer. This Agreement shall inure to the benefit of
and be binding upon the Employer and its successors and assigns; provided, that
such assignment shall not relieve any Employer of its obligations under Section
10 of this Agreement. Except as specified in the preceding sentence, no rights
or obligations of the Employer under this Agreement may be assigned or
transferred by the Employer without the Executive’s prior written consent,
except that such rights or obligations may be assigned or transferred in
connection with a merger, consolidation, reorganization or other similar
corporate transaction following which Provident Energy Trust, a trust organized
under the laws of Alberta, Canada (together with its successors and assigns,
“Provident”) will no longer own, directly or indirectly, at least 50% of the
equity securities of BMC or BBGP (determined on a fully diluted basis), or a
sale of all or substantially all of BreitBurn Partners’ assets provided that the
assignee or transferee is the successor to all or substantially all of BreitBurn
Partners’ assets and assumes the liabilities, obligations and duties of the
Employer under this Agreement.
 
(c) Express Assumption of Agreement. The Employer shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Employer or any
assign permitted under Section 9(b) above to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Employer would be required to perform it if no such succession had taken place.
As used in this Section 9(c), “Employer” shall mean the Employer as hereinbefore
defined and any successor to its business and/or assets or assigns as aforesaid
which assumes and agrees to perform this Agreement by operation of law or
otherwise.
 
10. Indemnification and Directors’ and Officers’ Insurance.
 
(a)  General. During the Employment Period and thereafter, the Employer shall
indemnify the Executive to the fullest extent permitted under law from and
against any expenses (including but not limited to attorneys’ fees, expenses of
investigation and preparation and fees and disbursements of the Executive’s
accountants or other experts), judgments, fines, penalties and amounts paid in
settlement actually and reasonably incurred by the Executive in connection with
any proceeding in which the Executive was or is made party, was or is involved
(for example, as a witness) or is threatened to be made a party to, in any case,
by reason of the fact the Executive was or is employed by the Employer or was
performing services for any BreitBurn Entity. Such indemnification shall
continue as to the Executive during the Employment Period and for at least six
years from the Date of Termination with respect to acts or omissions which
occurred prior to his cessation of employment with the Employer and shall inure
to the benefit of the Executive’s heirs, executors and administrators. The
Employer shall advance to the Executive all costs and expenses incurred by him
in connection with any proceeding covered by this provision within twenty
calendar days after receipt by the Employer of a written request for such
advance. Such request shall include an undertaking by the Executive to repay the
amount of such advance if it shall ultimately be determined that he is not
entitled to be indemnified against any such costs and/or expenses.
 
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(b) Insurance. The Employer agrees to maintain directors’ and officers’
liability insurance policies covering the Executive on a basis no less favorable
than provided to the Employer’s senior executive officers, which coverage shall
continue as to the Executive even if he has ceased to be a director, member,
employee or agent of the BreitBurn Entities with respect to acts or omissions
which occurred prior to such cessation. The insurance contemplated under this
Section 10(b) shall inure to the benefit of the Executive’s heirs, executors and
administrators.
 
11. Arbitration Agreement.
 
(a)  General. Any controversy, dispute or claim between the Executive and any
BreitBurn Entity, or any of their respective parents, subsidiaries, affiliates
or any of their officers, directors, agents or other employees, relating to the
Executive’s employment or the termination thereof, shall be resolved by final
and binding arbitration, at the request of any party hereto. The arbitrability
of any controversy, dispute or claim under this Agreement or any other agreement
between the parties hereto shall be determined by application of the substantive
provisions of the Federal Arbitration Act (9 U.S.C. sections 1 and 2) and by
application of the procedural provisions of California law, except as provided
herein. Arbitration shall be the exclusive method for resolving any dispute and
all remedies available from a court of competent jurisdiction shall be
available; provided, that either party may request provisional relief from a
court of competent jurisdiction if such relief is not available in a timely
fashion through arbitration. The claims which are to be arbitrated include, but
are not limited to, any claim arising out of or relating to this Agreement, the
LTIP Award Agreements or the employment relationship between the Executive and
the Employer, claims for wages and other compensation, claims for breach of
contract (express or implied), claims for violation of public policy, wrongful
termination, tort claims, claims for unlawful discrimination and/or harassment
(including, but not limited to, race, religious creed, color, national origin,
ancestry, physical disability, mental disability, gender identity or expression,
medical condition, marital status, age, pregnancy, sex or sexual orientation) to
the extent allowed by law, and claims for violation of any federal, state, or
other government law, statute, regulation, or ordinance, except for claims for
workers’ compensation and unemployment insurance benefits. This Agreement shall
not be interpreted to provide for arbitration of any dispute that does not
constitute a claim recognized under applicable law.
 
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(b) Selection of Arbitrator. The Executive and the Employer shall select a
single neutral arbitrator by mutual agreement. If the Executive and the Employer
are unable to agree on a neutral arbitrator within thirty days of a demand for
arbitration, either party may elect to obtain a list of arbitrators from the
Judicial Arbitration and Mediation Service (“JAMS”) or the American Arbitration
Association (“AAA”), and the arbitrator shall be selected by alternate striking
of names from the list until a single arbitrator remains. The party initiating
the arbitration shall be the first to strike a name. Any demand for arbitration
must be in writing and must be made by the aggrieved party within the statute of
limitations period provided under applicable state and/or federal law for the
particular claim(s). Failure to make a written demand within the applicable
statutory period constitutes a waiver of the right to assert that claim in any
forum.
 
(c) Venue; Process. Arbitration proceedings shall be held in Los Angeles,
California. The arbitrator shall apply applicable state and/or federal
substantive law to determine issues of liability and damages regarding all
claims to be arbitrated, and shall apply the Federal Rules of Evidence to the
proceeding. The parties shall be entitled to conduct reasonable discovery and
the arbitrator shall have the authority to determine what constitutes reasonable
discovery. The arbitrator shall hear motions for summary judgment/adjudication
as provided in the Federal Rules of Civil Procedure. Within thirty days
following the hearing and the submission of the matter to the arbitrator, the
arbitrator shall issue a written opinion and award which shall be signed and
dated. The arbitrator’s award shall decide all issues submitted by the parties,
but the arbitrator may not decide any issue not submitted. The opinion and award
shall include factual findings and the reasons upon which the decision is based.
The arbitrator shall be permitted to award only those remedies in law or equity
which are requested by the parties and allowed by law.
 
(d) Costs. The cost of the arbitrator and other incidental costs of arbitration
that would not be incurred in a court proceeding shall be borne by the Employer.
The parties shall each bear their own costs and attorneys’ fees in any
arbitration proceeding, provided, that the arbitrator shall have the authority
to require either party to pay the costs and attorneys’ fees of the other party
to the extent permitted under applicable federal or state law, as a part of any
remedy that may be ordered.
 
(e) Waiver of Rights. Both the Employer and the Executive understand that, by
agreeing to use arbitration to resolve disputes, they are giving up any right
that they may have to a judge or jury trial with regard to all issues concerning
employment or otherwise covered by this Section 11.
 
12. Internal Revenue Code Section 409A.
 
(a) Certain compensation and benefits payable under this Agreement are not
intended to constitute “nonqualified deferred compensation” within the meaning
of Code Section 409A, while other compensation and benefits payable under this
Agreement may constitute “nonqualified deferred compensation” which is intended
to comply with the requirements of Code Section 409A. To the extent that the
Board determines that any compensation or benefits payable under this Agreement
may not be compliant with or exempt from Code Section 409A, the Board and the
Executive shall cooperate and work together in good faith to timely amend this
Agreement in a manner intended to comply with the requirements of Code Section
409A or an exemption therefrom (including amendments with retroactive effect),
or take any other actions as they deem necessary or appropriate to (a) exempt
such compensation and benefits from Code Section 409A and/or preserve the
intended tax treatment with respect to such compensation and benefits, or (b)
comply with the requirements of Code Section 409A. To the extent applicable,
this Agreement shall be interpreted in accordance with the provisions of Code
Section 409A. If the Executive, nonetheless, becomes subject to the additional
tax under Section 409A with respect to any payment hereunder, the Employer shall
pay the Executive an additional lump-sum cash amount such that after such
additional lump sum the Executive is in the same net after-tax position he would
have been in had no payments under this Agreement subjected him to the
additional tax under Section 409A.
 
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(b)  Potential Six-Month Delay. Notwithstanding anything to the contrary in this
Agreement, no compensation and benefits, including without limitation any
Severance payments or Death/Disability Payments, shall be paid to the Executive
during the 6-month period following his Separation from Service to the extent
that the Employer reasonably determines that paying such amounts at the time or
times indicated in this Agreement would result in a prohibited distribution
under Section 409A(a)(2)(b)(i) of the Code. If the payment of any such amounts
is delayed as a result of the previous sentence, then on the first business day
following the end of such 6-month period (or such earlier date upon which such
amount can be paid under Code Section 409A without resulting in a prohibited
distribution, including as a result of the Executive’s death), the Company shall
pay to Executive a lump-sum amount equal to the cumulative amount that would
have otherwise been payable to the Executive during such 6-month period, plus
interest thereon from the date of the Executive’s Separation from Service
through the payment date at a rate equal to the then-current “applicable Federal
rate” determined under Section 7872(f)(2)(A) of the Code.

13. Miscellaneous.
 
(a)  Governing Law; Captions; Amendment. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
 
(b) Notice. All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party, by registered or
certified mail, return receipt requested, postage prepaid, or by any other means
agreed to by the parties, addressed as follows:
 
If to the Executive: at the Executive’s most recent address on the records of
the Employer;

If to the Employer:
 
BreitBurn Management Company LLC
Attn.: Chairman of the Board of Directors
515 South Flower Street, Suite 4800
Los Angeles, CA 90071
 
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or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
 
(c) Code of Conduct. The Executive hereby agrees to execute, concurrently
herewith, the Employer’s Code of Conduct Policy, receipt of which the Executive
hereby acknowledges.
 
(d) Severability; Provisions Survive. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement. The respective rights and obligations of
the parties hereunder shall survive any expiration or termination of the
Employment Period to the extent necessary to carry out the intentions of the
parties as embodied in this Agreement.
 
(e) Withholding. The Employer may withhold from any amounts payable under this
Agreement such federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
 
(f) Employer Representations. The Employer represents and warrants that (i) the
execution, delivery and performance of this Agreement by it has been fully and
validly authorized, (ii) the entities signing this Agreement are duly authorized
to do so, (iii) the execution and delivery of this Agreement does not violate
any order, judgment or decree or any agreement, plan or corporate governance
document to which it is a party or by which it is bound and (iv) upon execution
and delivery of this Agreement by the parties, it shall be a valid and binding
obligation of the Employer, enforceable against it in accordance with its terms,
except to the extent that enforceability may be limited by applicable laws,
including, without limitation, bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally.
 
(g) Executive Representations and Acknowledgements. The Executive hereby
represents and warrants to the Employer that (i) the Executive is entering into
this Agreement voluntarily and that the performance of his obligations hereunder
will not violate any agreement between the Executive and any other person, firm,
organization or other entity, and (ii) the Executive is not bound by the terms
of any agreement with any previous employer or other party to refrain from
competing, directly or indirectly, with the business of such previous employer
or other party that would be violated by his entering into this Agreement and/or
providing services to the Employer or its affiliates pursuant to the terms of
this Agreement. The Executive hereby acknowledges (A) that the Executive has
consulted with or has had the opportunity to consult with independent counsel of
his own choice concerning this Agreement, and has been advised to do so by the
Employer, and (B) that the Executive has read and understands this Agreement, is
fully aware of its legal effect, and has entered into it freely based on his own
judgment.
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(h) No Waiver. No party’s failure to insist upon strict compliance with any
provision of this Agreement or to assert any right hereunder shall be deemed to
be a waiver of such provision or right or any other provision or right arising
under this Agreement. Any waiver of any provision or right under this Agreement
shall be effective only if in a writing, specifically referencing the provision
being waived and signed by the party against whom the enforcement of the waiver
is being sought.
 
(i) Entire Agreement; Construction. This Agreement, together with the LTIP Award
Agreements and the Employer’s Code of Conduct Policy, constitutes the entire
agreement of the parties with respect to the subject matter hereof and shall
supersede and replace all prior representations, warranties, agreements and
understandings, both written and oral, made by the Employer, any other BreitBurn
Entity or the Executive with respect to the subject matter covered hereby,
including without limitation, the Prior Agreement (including Exhibit B thereto),
provided, that to the extent there is any inconsistency between this Agreement
and the Employer’s Code of Conduct Policy, the terms of this Agreement shall
control. The parties to this Agreement have participated jointly in the
negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises with respect to any term or provision of this
Agreement, this Agreement shall be construed as if drafted jointly by the
parties hereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party hereto by virtue of the authorship of any of the terms or
provisions hereof.
 
(j) Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which taken together shall
constitute one and the same instrument.
 
 

 
[Signature page follows]
 
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and the
Employer has caused these presents to be executed in its name on its behalf, all
as of the day and year first above written.
 

EXECUTIVE                  /s/Halbert Washburn      

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Halbert Washburn                     PRO GP CORP.  
   
   
  By:   /s/ Randall H. Breitenbach  

--------------------------------------------------------------------------------

Name: Randall H. Breitenbach   Title:   Co-Chief Executive Officer

 

        BREITBURN MANAGEMENT COMPANY, LLC  
   
   
  By:   /s/ Randall H. Breitenbach  

--------------------------------------------------------------------------------

Name: Randall H. Breitenbach   Title:   Co-Chief Executive Officer

 

        BREITBURN GP, LLC  
   
   
  By:   /s/ Randall H. Breitenbach  

--------------------------------------------------------------------------------

Name: Randall H. Breitenbach   Title:   Co-Chief Executive Officer

 
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EXHIBIT A

DEFINITIONS
 
“2007 MLP Phantom Units” has the meaning assigned thereto in Section
3(b)(iii)(B) hereof.
 
“AAA” has the meaning assigned thereto in Section 11(b) hereof.
 
“Accrued Obligations” has the meaning assigned thereto in Section 5(a)(i)
hereof.
 
“Agreement” has the meaning assigned thereto in the Recitals hereof.
 
“Annual Bonus” has the meaning assigned thereto in Section 3(b)(ii) hereof.
 
“Base Salary” has the meaning assigned thereto in Section 3(b)(i) hereof.
 
“BBGP” has the meaning assigned thereto in the Recitals hereof.
 
“BECLP” has the meaning assigned thereto in Exhibit C hereto.
 
“BECLP Phantom Unit” has the meaning assigned thereto in Exhibit C hereto.
 
“BMC” has the meaning assigned thereto in the Recitals hereof.
 
“Board” or “Boards” has the meaning assigned thereto in Section 3(a)(i) hereof.
 
“Bonus Amount” has the meaning assigned thereto in Section 5(a)(ii)(A) hereof.
 
“BreitBurn Entity” has the meaning assigned thereto in Section 3(a)(i) hereof.
 
“BreitBurn Partners” means BreitBurn Energy Partners, L.P., a Delaware limited
partnership.
 
“Cause” means the following:
 
(i) the willful and continued failure of the Executive to perform substantially
the Executive’s duties for the Employer or any BreitBurn Entity (as described in
Section 3(a) hereof) (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Employer (after a vote to this
effect by a majority of the Board) which specifically identifies the manner in
which the Board believes that the Executive has not substantially performed the
Executive’s duties and the Executive is given a reasonable opportunity of not
more than twenty (20) business days to cure any such failure to substantially
perform;
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(ii) the willful engaging by the Executive in illegal conduct or gross
misconduct, in each case which is materially and demonstrably injurious to the
Employer or any BreitBurn Entity; or
 
(iii) (A) any act of fraud, or material embezzlement or material theft by the
Executive, in each case, in connection with the Executive’s duties hereunder or
in the course of the Executive’s employment hereunder or (B) the Executive’s
admission in any court, or conviction, or plea of nolo contendere, of a felony
involving moral turpitude, fraud, or material embezzlement, material theft or
material misrepresentation, in each case, against or affecting the Employer or
any BreitBurn Entity.
 
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Employer or any
BreitBurn Entity. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Employer, including, without
limitation, the Board, or based upon the advice of counsel for the Employer
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Employer and the
BreitBurn Entities. Notwithstanding the foregoing, termination of the
Executive’s employment shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a resolution of the
Board duly adopted by an affirmative vote of the Board at a meeting of the Board
held for such purpose (after reasonable notice is provided to the Executive and
the Executive is given an opportunity, together with counsel for the Executive,
to be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in clauses (i), (ii) or
(iii) above, and specifying the particulars thereof in detail; provided, that if
the Executive is a member of the Board, the Executive shall not vote on such
resolution nor shall the Executive be counted.
 
“COBRA Period” has the meaning assigned thereto in Section 5(a)(ii)(B) hereof.
 
“Code” means the Internal Revenue Code of 1986, as amended and any regulations
or other official guidance promulgated thereunder.
 
“Commencement Date” has the meaning assigned thereto in Section 2 hereof.
 
“CPU Acceleration Percentage” has the meaning assigned thereto in Section
5(a)(ii)(D) hereof.
 
“CPUs” has the meaning assigned thereto in Section 3(b)(iii) hereof.
 
“Date of Termination” means (i) if the Executive’s employment is terminated by
the Employer without Cause, or by the Executive with or without Good Reason,
other than due to death or Disability, the date specified in accordance with
applicable provisions of this Agreement in the Notice of Termination (which date
shall not be more than thirty days after the giving of such notice), provided,
that any notice period may be waived by the Employer without compensation in
lieu thereof upon the Executive’s election to terminate employment with or
without Good Reason; (ii) if the Executive’s employment is terminated by reason
of the Executive’s death or Disability, the date of the Executive’s death or the
thirtieth day following notification by the Employer of termination due to
Disability in accordance with Section 4(a) hereof, as the case may be; (iii) if
a notice of non-renewal of the Employment Period is provided by any party in
accordance with Section 2 of this Agreement (and the Executive elects to
terminate his employment immediately following the expiration of the Employment
Period), the last day of the Employment Period; or (iv) any other date mutually
agreed to by the parties hereto.
 
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“Death/Disability Payments” has the meaning assigned thereto in Section 5(c)(ii)
hereof.
 
“Disability” shall mean a “disability” within the meaning of Code Section 409A.
 
“Employer” has the meaning assigned thereto in the Recitals hereof.
 
“Employment Period” has the meaning assigned thereto in Section 2 hereof.
 
“Executive” has the meaning assigned thereto in the Recitals hereof.
 
“Good Reason” means the occurrence of any of the following without the
Executive’s written consent:
 

 
(i)
a material diminution in the Executive’s Base Salary;

 
(ii)
a material diminution in the Executive’s authority, duties, or responsibilities;

 
(iii)
a material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to report;

 
(iv)
a material diminution in the budget over which the Executive retains authority;

 
(v)
a material change in the geographic location at which the Executive must perform
services under this Agreement; or

 
(vi)
any other action or inaction that constitutes a material breach by the Employer
of this Agreement, including without limitation, a material breach of Section
3(a)(v) hereof;

provided, that the Executive’s resignation shall only constitute a resignation
for “Good Reason” hereunder if (a) the Executive provides the Employer with
written notice setting forth the specific facts or circumstances constituting
Good Reason within thirty days after the initial existence of such facts or
circumstances, (b) the Employer has failed to cure such facts or circumstances
within thirty days after receipt of such written notice, and (c) the date of the
Executive’s Separation from Service occurs no later than seventy-five days after
the initial occurrence of the event constituting Good Reason. 

“JAMS” has the meaning assigned thereto in Section 11(b) hereof.
 
“LTIP Award Agreements” has the meaning assigned thereto in Section 3(b)(iii)(A)
hereof.
 
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“MLP Phantom Units Consideration” has the meaning assigned thereto in Section
3(b)(iii)(B) hereof.
 
“Notice of Termination” means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon; (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive’s employment under the
provision so indicated; and (iii) if the Date of Termination is other than the
date of receipt of such notice, specifies the termination date (which date shall
be not more than thirty (30) days after the giving of such notice).
 
“Performance Objectives” has the meaning assigned thereto in Section
3(b)(iii)(A) hereof.
 
“Plan” has the meaning assigned thereto in Section 3(b)(iii)(A) hereof
 
“Post-Termination Extension” has the meaning assigned thereto in Section
5(d)(i)(A) hereof.
 
“Prior Agreement” has the meaning assigned thereto in the Recitals hereof.
 
“Provident” has the meaning assigned thereto in Section 9(b) hereof.
 
“PROGP” has the meaning assigned thereto in the Recitals hereof.
 
“Release” has the meaning assigned thereto in Section 5(a)(ii) hereof.
 
“RPUs” has the meaning assigned thereto in Section 3(b)(iii)(A) hereof.
 
“Separation from Service” means the Executive’s “separation from service” from
the Employer within the meaning of Code Section 409A(a)(2)(A)(i).
 
“Severance” has the meaning assigned thereto in Section 5(a)(ii) hereof.
 
“Unit” shall have the meaning assigned thereto in the Plan.
 
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EXHIBIT B
 
FORM OF RELEASE
 
For valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the undersigned does hereby release and forever discharge the
“Releasees” hereunder, consisting of BreitBurn Management Company, LLC, Pro GP
Corp., BreitBurn GP, LLC (the “Company”), and each of the Company’s partners,
associates, affiliates, subsidiaries, successors, heirs, assigns, agents,
directors, officers, employees, representatives, and all persons acting by,
through, or under them, or any of them, of and from any and all manner of action
or actions, cause or causes of action, in law or in equity, suits, debts, liens,
contracts, agreements, promises, liability, claims, demands, damages, losses,
costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown,
fixed or contingent (“Actions”), which the undersigned now has or may hereafter
have against the Releasees, or any of them, by reason of any matter, cause, or
thing whatsoever arising from the beginning of time to the date hereof
(hereinafter called “Claims”), provided, however, that Claims shall not include
any such Actions against any person or entity other than the Company, its
subsidiaries, affiliates, successors or assigns, in any case, that is not
properly the subject of defense and/or indemnity by the Company (determined
without regard to whether the Company actually defends or indemnifies such
action or cause of action) (the “Excluded Claims”).
 
The Claims released herein include, without limiting the generality of the
foregoing, any Claims in any way arising out of, based upon, or related to the
undersigned’s employment by the Releasees, or any of them, or the termination
thereof; any claim for wages, salary, commissions, bonuses, incentive payments,
profit-sharing payments, expense reimbursements, leave, vacation, severance pay
or other benefits; any claim for benefits under any stock option, restricted
stock or other equity-based incentive plan of the Releasees, or any of them (or
any related agreement to which any Releasee is a party); any alleged breach of
any express or implied contract of employment; any alleged torts or other
alleged legal restrictions on Releasee’s right to terminate the employment of
the undersigned; and any alleged violation of any federal, state or local
statute or ordinance including, without limitation, Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, the Equal Pay Act,
the Family Medical Leave Act, the Americans With Disabilities Act, the Employee
Retirement Income Security Act, the National Labor Relations Act, the California
Labor Code, the California Family Rights Act and the California Fair Employment
and Housing Act, each as amended. Notwithstanding the foregoing, this Release
shall not operate to release any rights or claims (and such rights or claims
shall not be included in the definition of “Claims”) of the undersigned (i) with
respect to payments or benefits under Section 5 of that certain Employment
Agreement, dated as of December 31, 2007, between BreitBurn Management Company,
LLC, Pro GP Corp., BreitBurn GP, LLC and the undersigned (the “Employment
Agreement”), (ii) with respect to Sections 7, 10 and 11 of the Employment
Agreement, (iii) to accrued or vested benefits he may have, if any, under any
applicable plan, policy, program, arrangement or agreement of any BreitBurn
Entity (as defined in the Employment Agreement), including, without limitation,
pursuant to any equity or long-term incentive plans, programs or agreements,
(iv) to indemnification and/or advancement of expenses pursuant to the corporate
governance documents of any BreitBurn Entity or applicable law, or the
protections of any director’ and officers’ liability policies of any BreitBurn
Entity, (v) with respect to claims which arise after the date the undersigned
executes this Release, or (vi) with respect to any Excluded Claims.
 
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THE UNDERSIGNED ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS:
 
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”
 
THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY
RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW
PRINCIPLES OF SIMILAR EFFECT.
 
IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE
UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:
 
(1)  HE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;
 
(2)  HE HAS FORTY-FIVE (45) DAYS FROM HIS SEPARATION FROM SERVICE (AS DEFINED IN
THE EMPLOYMENT AGREEMENT) TO CONSIDER THIS RELEASE BEFORE SIGNING IT; AND
 
(3)  HE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE IT, AND THIS
RELEASE WILL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION PERIOD.
 
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The undersigned represents and warrants that there has been no assignment or
other transfer of any interest in any Claim which he may have against Releasees,
or any of them, and the undersigned agrees to indemnify and hold Releasees, and
each of them, harmless from any liability, Claims, demands, damages, costs,
expenses and attorneys’ fees incurred by Releasees, or any of them, as the
result of any such assignment or transfer or any rights or Claims under any such
assignment or transfer.  It is the intention of the parties that this indemnity
does not require payment as a condition precedent to recovery by the Releasees
against the undersigned under this indemnity.
 
The undersigned agrees that if he hereafter commences any suit arising out of,
based upon, or relating to any of the Claims released hereunder or in any manner
asserts against Releasees, or any of them, any of the Claims released hereunder,
then the undersigned shall pay to Releasees, and each of them, in addition to
any other damages caused to Releasees thereby, all attorneys’ fees incurred by
Releasees in defending or otherwise responding to said suit or Claim. Nothing
herein shall prevent the undersigned from raising or asserting any defense in
any suit, claim, proceeding or investigation brought by any of the Releasees,
and by raising or asserting any such defense, the undersigned shall not become
obligated to pay attorneys’ fees under this paragraph.
 
The undersigned further understands and agrees that neither the payment of any
sum of money nor the execution of this Release shall constitute or be construed
as an admission of any liability whatsoever by the Releasees, or any of them,
who have consistently taken the position that they have no liability whatsoever
to the undersigned.
 
The undersigned acknowledges that different or additional facts may be
discovered in addition to what is now known or believed to be true by him with
respect to the matters released in this Agreement, and the undersigned agrees
that this Agreement shall be and remain in effect in all respects as a complete
and final release of the matters released, notwithstanding any different or
additional facts.
 
IN WITNESS WHEREOF, the undersigned has executed this Release this ____ day of
___________________, 20__.
 

               

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[NAME]        

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EXHIBIT C
 
BECLP PHANTOM UNITS
 
Capitalized terms used but not otherwise defined in this Exhibit C shall have
the meanings assigned thereto in that certain Second Amended and Restated
Employment Agreement by and between BreitBurn Management Company, LLC, Pro GP
Corp. (“PROGP”), BreitBurn GP, LLC and Halbert Washburn, to which this Exhibit C
is annexed (the “Agreement”).
 
1. Pursuant to Section 3(b)(iii)(C) of the Agreement, the Employer shall grant
or cause the grant of BECLP Phantom Units (as defined below) to the Executive on
the following terms and conditions.
 
2. Effective as of the first (1st) day of each fiscal year of the Employer
(currently the calendar year) during the Employment Period (each such date, a
“Grant Date”), PROGP shall grant or cause the grant to the Executive one BECLP
Phantom Unit.
 
3. (i) A “BECLP Phantom Unit” shall mean a hypothetical, nonexistent unit of
Partnership Interests (as defined in the BECLP Partnership Agreement) equal to
the lesser of (a) a Percentage Interest (as defined in the BECLP Partnership
Agreement) equal to one and one-half percent (1.5%) of the total outstanding
Partnership Interests as of the applicable Grant Date or (b) a Percentage
Interest that has a value equal to the Applicable Dollar Amount (as defined
below) as of the applicable Grant Date, determined on the basis of the BECLP
Valuation (defined in Section 6.6.1 of the BECLP Partnership Agreement) for the
Grant Date for each grant;
 
(ii) If the BECLP Valuation on the applicable Grant Date exceeds $500,000,000,
then the Applicable Dollar Amount with respect to a BECLP Phantom Unit shall
equal $7,500,000. If the BECLP Valuation on the applicable Grant Date does not
exceed $500,000,000, then the Applicable Dollar Amount for BECLP shall be equal
to the value of the one and one-half percent (1.5%) Percentage Interest
applicable for BECLP on such Grant Date.
 
As used herein, the BECLP Partnership Agreement shall mean the partnership
agreement, as amended, for BreitBurn Energy Company L.P. (“BECLP”).
 
4. Each BECLP Phantom Unit shall represent the right to receive a payment (the
“BECLP Phantom Unit Payment”) equal to the difference between (a) the sum of (i)
the Value of the BECLP Phantom Unit (as defined below) as of the Determination
Date (as defined below) and (ii) the amount of distributions of cash or property
(with respect to a property distribution, valued by the Board of Directors of
the general partner of BECLP at fair market value and in good faith) made by
BECLP to its partners during the period (the “Option Period”) beginning on the
applicable Grant Date and ending on the applicable Determination Date that the
Executive would have been entitled to receive during the Option Period if he had
actually owned the Partnership Interests represented by the BECLP Phantom Unit
during the entire Option Period, and (b) one hundred and eight percent (108%) of
the Value of the BECLP Phantom Unit as of the applicable Grant Date. In no event
shall the amount of a BECLP Phantom Unit Payment be a negative number or in any
way affect the amount of the Executive’s compensation under the Agreement or any
subsequent BECLP Phantom Unit granted hereunder.
 
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5. The “Value of the BECLP Phantom Unit” as of any date, with respect to a BECLP
Phantom Unit, shall be equal to the value, determined on the basis of the BECLP
Valuation as of that date of the Partnership Interests underlying the BECLP
Phantom Unit as set forth in paragraph 3 above.
 
6. The “Determination Date” with respect to a BECLP Phantom Unit shall be the
last day of BECLP’s fiscal year (currently, December 31), except in the event of
the termination of the Executive’s employment with the Employer prior to the end
of BECLP’s fiscal year, in which case the Determination Date shall be the Date
of Termination.
 
7. The BECLP Phantom Unit Payment shall be made in cash; however, the Executive
may elect to receive such BECLP Phantom Unit Payment all in “restricted” phantom
BECLP Partnership Units (notional units representing a corresponding partnership
interest in BECLP) with such restrictions concerning payments and transfers as
may be applicable to similar phantom awards under other long-term incentive
plans of the Employer, in cash or in any combination thereof. The BECLP Phantom
Unit Payment shall be made to the Executive, or to his beneficiaries, heirs or
estate in the event of his death, as soon as practicable, but in no event more
than sixty (60) days after the Determination Date.
 
8. Subject to Section 9 below, the Executive shall acquire a vested and
non-forfeitable interest in the BECLP Phantom Unit as of the last day of BECLP’s
fiscal year if the Executive is employed by the Employer on such day.
 
9. In the event of the termination of the Executive’s employment by the Employer
without Cause, by the Executive for Good Reason, or by reason of the Executive’s
death or Disability, (a) the Executive shall acquire a vested and
non-forfeitable interest in the BECLP Phantom Unit as of the Date of
Termination, (b) the Option Period shall end on the Date of Termination and (c)
the BECLP Phantom Unit Payment shall be made as soon as practicable, but in no
event more than sixty (60) days after the Date of Termination. In the event of
the termination of the Executive’s employment with the Employer by the Employer
for Cause or by the Executive without Good Reason, the Executive shall forfeit
the BECLP Phantom Unit as of the Date of Termination and the Employer and BECLP
shall have no further obligations to the Executive with respect to such BECLP
Phantom Unit.
 
10. Upon payment of the BECLP Phantom Unit Payment with respect to a BECLP
Phantom Unit, such BECLP Phantom Unit shall automatically terminate and be of no
further force or effect.
 
11. The Employer shall withhold or shall cause to be withheld all applicable
income taxes and employment taxes from the BECLP Phantom Unit Payment as may be
required by law.
 
12. The BECLP Phantom Unit, or any interest in it, shall not be assignable by
the Executive and shall not be subject to attachment, lien, levy or other
creditors’ rights under state or Federal law. The BECLP Phantom Unit Payments
shall be payable from the general assets of the Employer or BECLP, as the case
may be, or pursuant to such other means as they deem appropriate, and the
Executive shall not be entitled to look to any source for payment of such
benefits other than the general assets of the Employer or BECLP, as the case may
be.
 
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