Exhibit 10.1


 


SEVERANCE AGREEMENT


 


This Severance Agreement is made as of the 10th day of November, 2008,
by and between Buckeye Partners, L.P., a Delaware limited partnership (“BPL”),
Buckeye GP Holdings L.P., a Delaware limited partnership (“BGH”), Buckeye Pipe
Line Services Company, a Pennsylvania corporation (“BPLSC”), and Keith E. St.
Clair, residing at 1600 South Wendover Road, Charlotte, NC 28211 (“Employee”).


 


WHEREAS, Employee has been appointed the Senior Vice President and
Chief Financial Officer of Buckeye GP LLC (“Buckeye GP”), the general partner
of BPL, and the Senior Vice President and Chief Financial Officer of MainLine
Management LLC (“MainLine Management”), the general partner of BGH;


 


WHEREAS, pursuant to the terms of a Services Agreement and an Executive
Employment Agreement, BPLSC has agreed to employ and compensate certain
employees on behalf of BPL and BGH, and BPL and BGH have agreed to reimburse
BPLSC for the costs and expenses incurred by BPLSC in connection therewith;


 


WHEREAS, BPLSC, on behalf of BPL and BGH, is commencing employment of
Employee as its Senior Vice President and Chief Financial Officer; and


 


WHEREAS, in consideration of Employee’s commencement of employment with
BPLSC and his agreement to keep information of the Partnerships (defined below)
confidential and not to compete with the Partnerships in the event Employee’s
employment is terminated, BPLSC agrees that Employee shall receive the
compensation set forth in this Agreement as a cushion against the financial and
career impact on Employee in the event Employee’s employment with BPLSC is
terminated under the circumstances described herein;


 


NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally
bound hereby, the parties hereto agree as follows:


 


1.             Definitions.


 


“Affiliate” shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act.


 


 “Annual Base Compensation” shall
mean $325,000 or such other amount as may be determined from time to time to be
the Annual Base Compensation by the Compensation Committee of the Board.


 


“Annual Target Bonus Opportunity” means the annual target cash bonus
opportunity (initially established as 100% of Annual Base Compensation) for
which Employee is eligible for any relevant year pursuant to any BPL annual
incentive compensation plan or program, as determined by the Compensation
Committee of the Board.


 


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“BGH Entities” means BGH, MainLine Management, Buckeye GP, MainLine GP, Inc.,
and MainLine L.P., collectively.


 


“BPL Entities” means BPL, its operating partnerships and other
subsidiaries, and BPLSC, collectively.


 


“Board” means the board of directors or similar governing body of
Buckeye GP.


 


“Cause” means (i) habitual insobriety or substance abuse, (ii) engaging
in acts of disloyalty to BPL or BGH including fraud, embezzlement, theft,
commission of a felony, or proven dishonesty, or (iii) willful misconduct
by Employee in the performance of his duties, or the willful failure of
Employee to perform a material function of Employee’s duties hereunder.


 


“Exchange Act” means the Securities Exchange Act of 1934, as amended.


 


“Internal Revenue Code” means the Internal Revenue Code of 1986, as
amended.


 


“Partnerships” means the BGH Entities and the BPL Entities,
collectively.


 


“Person” shall have the same meaning as in Section 13(d) and
14(d) of the Exchange Act.


 


“Subsidiary” means any entity in which the BGH Entities or the BPL
Entities, directly or indirectly, own at least a 50% interest or an
unincorporated entity of which the BGH Entities or the BPL Entities, directly
or indirectly, owns at least 50% of the profits or capital interests.


 


“Termination Date” means the date of receipt of the Notice of
Termination described in Section 2 hereof or any later date specified
therein, as the case may be.


 


“Termination of Employment” means the termination of Employee’s
employment relationship with the Partnerships, which event shall constitute a “separation
from service” under section 409A of the Internal Revenue Code.


 


2.             Notice of Termination. 
Any Termination of Employment shall be communicated by a Notice of
Termination in accordance with Section 15 hereof.  For purposes of this Agreement, a “Notice of
Termination” means a written notice which (i) indicates the specific
reasons for the termination, (ii) briefly summarizes the facts and
circumstances deemed to provide a basis for termination of Employee’s
employment, and (iii) if the Termination Date is other than the date of
receipt of such notice, specifies the Termination Date (which date shall not be
more than 15 days after the giving of such notice).


 


3.             Severance Compensation upon Termination.


 


(a)           Subject to the last sentence of this
paragraph, Employee shall receive severance compensation as described below
upon a Termination of Employment that is either:


 


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(i)            initiated by BPLSC for any reason other
than (x) Employee’s continuous illness, injury or incapacity for a period
of six consecutive months or (y) for “Cause;” or


 


(ii)           initiated by Employee for “Good Reason”
upon one or more of the following occurrences, subject to subsection (c) below:


 


(A)          any material failure of BPLSC to comply
with and satisfy any of the terms of this Agreement;


 


(B)           any significant reduction by BPLSC of the
authority, duties, or responsibilities of Employee;


 


(C)           any elimination of Employee from
eligibility to participate in, or any exclusion of Employee from participation
in, employee benefit plans or policies, except to the extent such elimination
or exclusion is applicable to Buckeye GP’s named executive officers as a group;


 


(D)          any reduction in Employee’s Annual Base
Compensation or any reduction in Employee’s Annual Target Bonus Opportunity
(unless such reduction in Annual Target Bonus Opportunity is made in connection
with similar reductions in the bonus opportunities of Buckeye GP’s named
executive officers as a group); or


 


(E)           a transfer of Employee, without his
express written consent, to a location that is more than 100 miles from
Houston, Texas.


 


In the
event of a Termination of Employment described above, and subject to the last
sentence of this paragraph, BPLSC shall pay to Employee, within fifteen days
after the Termination Date, an amount in cash, payable in a lump sum, equal to
Employee’s Annual Base Compensation plus Employee’s Annual Target Bonus
Opportunity for such year.  Notwithstanding the foregoing, no
such payment shall be made unless Employee executes, and does not revoke, a
written release, substantially in the form attached hereto as Annex 1 (the “Release”),
of any and all claims against the Partnerships, BPLSC and all related parties
with respect to all matters arising out of Employee’s employment by BPLSC
(other than any entitlements under the terms of this Agreement or under any
other plans or programs of BPLSC in which Employee participated and under which
Employee has accrued or become entitled to a benefit) or the termination
thereof.


 


(b)           In the event a severance payment is made
under paragraph (a) above, BPLSC will provide Employee with the following
payments for a period of 12 months from the Termination Date; provided,
however, that this obligation shall cease upon Employee’s obtaining new
employment that provides Employee with eligibility for medical benefits without
a pre-existing condition limitation (such period is referred to as the “Benefit
Period”):


 


(i)            During the Benefit Period, BPLSC will pay
Employee a monthly payment on the first payroll date of each month equal to the
COBRA cost of continued health and dental coverage under health and dental
plans of BPLSC pursuant to section 4980B of the Internal Revenue Code, less the
amount that 


 


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Employee would be
required to contribute for health and dental coverage if Employee were an
active employee.  These payments will
commence on BPLSC’s first payroll date after the Termination Date and will
continue until the end of the Benefit Period.


 


(ii)           On each date on which a payment is made
under subsection (i) above, BPLSC will pay Employee an additional tax
gross-up amount equal to the federal, state and local income and payroll taxes,
if any, that Employee incurs on the amount paid under subsection (i), and on
the amount paid under this subsection (ii), on that date; provided,
however, that for purposes of this subsection (ii), the aggregate tax rate for
the federal, state and local income and payroll taxes above shall be assumed to
be 25%.  This gross up payment will be made with
respect to each payment under subsection (i) and will cease when payments
under subsection (i) cease.


 


(c)           If Employee incurs a Termination of
Employment other than as described in Section 3(a), Employee shall receive
no severance compensation under this Agreement, and this Agreement shall
terminate; provided that the obligations of Employee under Sections 10, 11, 12,
22 and 23 shall continue in effect according to their terms.


 


(d)           In order for the Employee to resign for
Good Reason as described in Section 3(a)(ii) above, the Employee must
provide written notice of termination for Good Reason to BPLSC within 30 days
after the event constituting Good Reason. 
BPLSC shall have a period of 30 days in which it may correct the act or
failure to act that constitutes the grounds for Good Reason as set forth in the Employee’s
notice of termination.  If BPLSC does not
correct the act or failure to act, the Employee must terminate his or her employment
for Good Reason within 30 days after the end of the cure period, in order for
the termination to be considered a Good Reason termination.


 


4.             Other Payments. 
The payment due under Section 3 hereof shall be in addition to and
not in lieu of accrued but not yet paid compensation and payments or benefits
due to Employee under any other plan, policy or program of BPLSC, except for
severance compensation as described in Section 7 below.


 


5.             Enforcement.


 


(a)           In the event that BPLSC shall fail or
refuse to make payment of any amounts due Employee under this Agreement prior
to January 1, 2009, BGH agrees, and on or after January 1, 2009, BPL
agrees, to make such payment on behalf of BPLSC.


 


(b)           In the event that BPLSC shall fail or
refuse to make payment of any amounts due Employee under Sections 3 and 4
hereof within the respective time periods provided therein, BPL or BGH shall
pay to an escrow agent, who shall invest such sum with interest to be paid to
the prevailing party, any amount remaining unpaid under Sections 3 or 4. In
such event, the parties shall engage in arbitration in the City of
Philadelphia, Pennsylvania, in accordance with the National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association, before a panel of three arbitrators, one of whom shall be 


 


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selected by BPLSC and one by Employee, and the third
of whom shall be selected by the other two arbitrators.  Any award entered by the arbitrators shall be
final, binding and nonappealable and judgment may be entered thereon by either
party in accordance with applicable law in any court of competent
jurisdiction.  This arbitration provision
shall be specifically enforceable.  The
arbitrators shall have no authority to modify any provision of this Agreement
or to award a remedy for a dispute involving this Agreement other than a
benefit specifically provided under or by virtue of the Agreement.


 


(c)           BPLSC shall pay Employee on demand the
amount necessary to reimburse Employee in full for all reasonable expenses
(including reasonable attorneys’ fees and expenses) incurred by Employee in
enforcing any of the obligations of BPLSC, BPL and BGH under this Agreement
subject to Employee’s duty to repay such sums to BPLSC, BPL  and BGH 
in the event that the Employee does not prevail on any material issue
which is the subject of such arbitration. 
If Employee prevails on at least one material issue which is the subject
of such arbitration, BPL or BGH shall be responsible for all of the fees of the
American Arbitration Association and the arbitrators and any expenses relating
to the conduct of the arbitration (including Employee’s reasonable attorneys’
fees and expenses).  Otherwise, each
party shall be responsible for his or its own expenses relating to the conduct
of the arbitration (including reasonable attorneys’ fees and expenses) and
shall equally share the fees of the American Arbitration Association.  All reimbursements shall be made in
accordance with section 409A of the Internal Revenue Code.


 


6.             No Mitigation. 
Employee shall not be required to mitigate the amount of any payment or
benefit provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for herein
be reduced by any compensation earned by other employment or otherwise.


 


7.             Non-exclusivity of Rights. 
Nothing in this Agreement shall prevent or limit Employee’s continuing
or future participation in or rights under any benefit, bonus, incentive or
other plan or program provided by the BGH Entities or the BPL Entities, and for
which Employee may qualify, from the date hereof through the Termination Date;
provided, however, that Employee hereby waives Employee’s right to receive any
payments under any severance pay plan or similar program applicable to other
employees of BPLSC, the BPL Entities or the BGH Entities.


 


8.             No Set-Off.  Except as
specifically provided for herein, the obligation of BPL, BGH and BPLSC to make
the payments provided for in this Agreement and otherwise to perform their
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the BGH Entities or the BPL Entities may have against Employee or
others.


 


9.             Taxes.  Any payment
required under this Agreement shall be subject to all requirements of law with
regard to the withholding of taxes, filing, making of reports and the like, and
BPL, BGH and BPLSC shall use their best efforts to satisfy promptly all such
requirements.


 


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10.           Confidential Information. 
Employee recognizes and acknowledges that, by reason of his relationship
to the Partnerships, he has had and will continue to have access to
confidential information of the Partnerships, including, without limitation,
information and knowledge pertaining to products and services offered,
innovations, designs, ideas, plans, trade secrets, proprietary information, distribution
and sales methods and systems, sales and profit figures, customer and client
lists, and relationships between the entities (“Confidential Information”).  Employee acknowledges that such Confidential
Information is a valuable and unique asset and covenants that he will not,
either during or after his employment by BPLSC, disclose or use any such
Confidential Information to any person for any reason whatsoever without the
prior written authorization of the Board; unless such information is in the public
domain through no fault of Employee or except as may be required by law.


 


11.           Non-Competition.


 


(a)           During his employment by BPLSC and for a
period of one year  thereafter,
Employee will not, unless acting with the prior written consent of the Board,
directly or indirectly, own, manage, operate, join, control or participate in
the ownership, management, operation or control, or be connected as an officer,
director, manager, member, employee, partner, principal, agent, representative,
consultant or otherwise with or use or permit his name to be used in connection
with, (i) any business or enterprise that competes with the Partnerships
in any business or enterprise that contributes more than ten percent (10%) of
BGH’s consolidated gross revenues, either during his employment by BPLSC or on
the Termination Date, as applicable, in any state in which such business or
enterprise is so operated (whether or not such business is physically located
within those areas) (the “Geographic Area”), or (ii) in any business or
enterprise that is a customer of the Partnerships if BGH derives at least five
percent (5%) of its consolidated gross revenues either during his employment by
BPLSC or on the Termination Date, as applicable, from such customer.  It is recognized by Employee that the
Partnerships’ business and Employee’s connection therewith is or will be
involved in activity throughout the Geographic Area, and that more limited
geographical limitations on this non-competition covenant are therefore not
appropriate.  Employee also shall not,
directly or indirectly, during such one-year period (i) solicit or divert
business from, or attempt to convert any client, account or customer of the
Partnerships, whether existing at the date hereof or acquired during Employee’s
employment nor (ii) following Employee’s Termination of Employment,
solicit or attempt to hire any employee of the Partnerships or any person who
has been an employee of the Partnerships at any time during the year prior to
such Termination of Employment.


 


(b)           The foregoing restriction shall not be
construed to prohibit the ownership by Employee of less than five percent (5%)
of any class of securities of any corporation which is engaged in any of the
foregoing businesses having a class of securities registered pursuant to the
Exchange Act, provided that such ownership represents a passive investment and
that neither Employee nor any group of persons including Employee in any way,
either directly or indirectly, manages or exercises control of any such corporation,
guarantees any of its financial obligations, otherwise takes any part in its
business, other than exercising his rights as a shareholder, or seeks to do any
of the foregoing.


 


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12.           Equitable Relief.


 


(a)           Employee acknowledges that the
restrictions contained in Sections 10 and 11 hereof are reasonable and
necessary to protect the legitimate interests of the Partnerships, that BPL,
BGH and BPLSC would not have entered into this Agreement in the absence of such
restrictions, and that any violation of any provision of those Sections will
result in irreparable injury to BPL, BGH and BPLSC.  Employee represents that his experience and
capabilities are such that the restrictions contained in Section 11 hereof
will not prevent Employee from obtaining employment or otherwise earning a
living at the same general level of economic benefit as is currently the
case.  Employee further represents and
acknowledges that (i) he has been advised by BPL, BGH and BPLSC to consult
his own legal counsel in respect of this Agreement, and (ii) he has had
full opportunity, prior to execution of this Agreement, to review thoroughly
this Agreement with his counsel.


 


(b)           Employee agrees that BPL, BGH and BPLSC
shall be entitled to preliminary and permanent injunctive relief, without the
necessity of proving actual damages, as well as an equitable accounting of all
earnings, profits and other benefits arising from any violation of Sections 10
or 11 hereof, which rights shall be cumulative and in addition to any other
rights or remedies to which BGH or BPLSC may be entitled.  In the event that any of the provisions of
Sections 10 or 11 hereof should ever be adjudicated to exceed the time,
geographic, service, or other limitations permitted by applicable law in any
jurisdiction, then such provisions shall be deemed reformed in such
jurisdiction to the maximum time, geographic, service, or other limitations
permitted by applicable law.


 


(c)           Employee irrevocably and unconditionally (i) agrees
that any suit, action or other legal proceeding arising out of Section 10
or 11 hereof, including without limitation, any action commenced by BGH or
BPLSC for preliminary and permanent injunctive relief or other equitable
relief, may be brought in the United States District Court for the Eastern
District of Pennsylvania, or if such court does not have jurisdiction or will
not accept jurisdiction, in any court of general jurisdiction in Lehigh County,
Pennsylvania, (ii) consents to the non-exclusive jurisdiction of any such
court in any such suit, action or proceeding, and (iii) waives any
objection which Employee may have to the laying of venue of any such suit,
action or proceeding in any such court. 
Employee also irrevocably and unconditionally consents to the service of
any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 15 hereof.


 


13.           Term of Agreement. 
The term of this Agreement shall continue until the effectiveness of
Employee’s Termination of Employment; provided, however, that each provision of
this Agreement shall remain effective until all of the obligations of each
party under such provision are satisfied.


 


14.           Successor Company. 
BPL, BGH and BPLSC shall require any successor or successors (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of BPL, BGH or BPLSC, by
agreement in form and substance satisfactory to Employee, to acknowledge
expressly that this Agreement is binding upon and enforceable against BPL, BGH
and BPLSC, as applicable, in accordance with the terms hereof, and to become
jointly and severally obligated with BPL, BGH and BPLSC, as 


 


7

















 


applicable, to perform this Agreement in the same
manner and to the same extent that BPL, BGH or BPLSC would be required to
perform if no such succession or successions had taken place.  Failure of BPL, BGH and BPLSC to obtain such
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement.  As used in this
Agreement, BPL, BGH and BPLSC shall mean BPL, BGH and BPLSC as hereinbefore
defined and any such successor or successors to their business and/or assets,
jointly and severally.


 


15.           Notice.  All notices
and other communications required or permitted hereunder or necessary or
convenient in connection herewith shall be in writing and shall be delivered
personally or mailed by registered or certified mail, return receipt requested,
or by overnight express courier service, as follows:


 


If to
BPL, BGH or BPLSC, to:


 


Buckeye
Partners, L.P.


Buckeye
GP Holdings L.P.


Buckeye
Pipe Line Services Company


Five
TEK Park


9999
Hamilton Boulevard


Breinigsville,
PA 18031


Attention: Chairman


 


With a
copy to:


 


Morgan, Lewis &
Bockius LLP


1701 Market Street


Philadelphia, PA
19103-2921


Attention: Howard L.
Meyers


 


If to
Employee, to:


 


Keith E. St. Clair


1600 South Wendover Road


Charlotte, NC 28211


 


or to
such other names or addresses as BPL, BGH, BPLSC or Employee, as the case may
be, shall designate by notice to the other party hereto in the manner specified
in this Section; provided, however, that if no such notice is given by BPLSC,
notice at the last address of BPLSC or to any successor pursuant to Section 14
hereof shall be deemed sufficient for the purposes hereof.  Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, five days after
deposit, postage prepaid, with the U.S. Postal Service in the case of
registered or certified mail, or on the next business day in the case of
overnight express courier service.


 


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16.           Section 409A.


 


(a)           This Agreement shall be interpreted to
avoid any penalty sanctions under Internal Revenue Code section 409A.  If any payment or benefit cannot be provided
or made at the time specified herein without incurring sanctions under section
409A, then such benefit or payment shall be provided in full at the earliest
time thereafter when such sanctions will not be imposed.


 


(b)           Notwithstanding
anything in this Agreement to the contrary, if Employee is a “specified employee” of a publicly
traded corporation under section 409A at the time of his separation from
service and if payment of any amount under this Agreement is required to be
delayed for a period of six months after separation from service pursuant to
section 409A, payment of such amount shall be delayed as required by section
409A, and the accumulated postponed amount shall be paid in a lump sum payment
within 10 days after the end of the six-month period.  If Employee dies during the
postponement period prior to the payment of postponed amount, the amounts
withheld on account of section 409A shall be paid to the personal representative
of Employee’s
estate within 60 days after the date of Employee’s death.  The determination of specified employees,
including the number and identity of persons considered specified employees and
the identification date, shall be made by the Board in accordance with the
provisions of Section 409A and the regulations issued thereunder.


 


(c)           This Agreement is intended to comply with
section 409A of the Code and its corresponding regulations, or an exemption,
and payments may only be made under this Agreement upon an event and in a
manner permitted by section 409A, to the extent applicable.  For purposes of section 409A, the right to a
series of  payments under this Agreement
shall be treated as a right to a series of separate payments.  All reimbursements and in kind benefits
provided under this Agreement shall be made or provided in accordance with the
requirements of section 409A, including, where applicable, the requirement that
(i) any reimbursement shall be for expenses incurred during Employee’s
lifetime (or during a shorter period of time specified in this Agreement), (ii) the
amount of expenses eligible for reimbursement, or in kind benefits provided,
during a calendar year may not affect the expenses eligible for reimbursement,
or in kind benefits to be provided, in any other calendar year, (iii) the
reimbursement of an eligible expense will be made on or before the last day of
the calendar year following the year in which the expense is incurred, and (iv) the
right to reimbursement or in kind benefits is not subject to liquidation or
exchange for another benefit.


 


17.           Governing Law. 
This Agreement shall be governed by and interpreted under the laws of
the Commonwealth of Pennsylvania without giving effect to any conflict of laws
provisions.


 


18.           Contents of Agreement, Amendment and Assignment.


 


(a)           This Agreement supersedes all prior
agreements, sets forth the entire understanding between the parties hereto with
respect to the subject matter hereof and cannot be changed, modified, extended or
terminated except upon written amendment executed by Employee, BPL, BGH and
BPLSC.  The provisions of this Agreement
may provide for payments to Employee under certain compensation or bonus plans
under circumstances where such plans 


 


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would not provide for payment thereof.  It is the specific intention of the parties
that the provisions of this Agreement shall supersede any provisions to the
contrary in such plans, and such plans shall be deemed to have been amended to
correspond with this Agreement without further action by BPL, BGH or BPLSC or
the Board.


 


(b)           Nothing in this Agreement shall be
construed as giving Employee any right to be retained in the employ of BPLSC or
any of the BGH Entities or the BPL Entities.


 


(c)           All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective heirs, representatives, successors and assigns of the parties
hereto, except that the duties and responsibilities of Employee hereunder shall
not be assignable in whole or in part by the Employee.


 


19.           Severability. 
If any provision of this Agreement or application thereof to anyone or
under any circumstances shall be determined to be invalid or unenforceable,
such invalidity or unenforceability shall not affect any other provisions or
applications of this Agreement which can be given effect without the invalid or
unenforceable provision or application.


 


20.           Remedies Cumulative; No Waiver. 
No right conferred upon Employee by this Agreement is intended to be
exclusive of any other right or remedy, and each and every such right or remedy
shall be cumulative and shall be in addition to any other right or remedy given
hereunder or now or hereafter existing at law or in equity.  Except as provided by Section 2, no
delay or omission by Employee in exercising any right, remedy or power
hereunder or existing at law or in equity shall be construed as a waiver
thereof.


 


21.           Miscellaneous. 
All section headings are for convenience only.  This Agreement may be executed in several
counterparts, each of which is an original. 
It shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.


 


22.           Defense of Claims. 
Employee agrees that, during a period of 36 months after the Termination
Date, upon request from BPL, BGH or BPLSC, Employee will cooperate with the BPL
Entities and the BGH Entities in the defense of any claims or actions that may
be made by or against the BPL Entities and the BGH Entities that relate to
Employee’s prior areas of responsibility, except if Employee’s reasonable
interests are adverse to such entities in such claim or action. BPL, BGH and
BPLSC agree to pay or reimburse Employee for all of his reasonable travel and
other direct expenses incurred, or to be reasonably incurred, to comply with
Employee’s obligations under this Section 22.  If the requirements of Employee under this Section 22
exceed ten business days, BPL, BGH or BPLSC shall compensate Employee
thereafter in an amount equal to $1,000 per day.


 


23.           Non-Disparagement. 
Employee agrees that, in communications with Persons other than the
Partnerships, he shall not disparage in any way, and shall always speak well of
the Partnerships, their Affiliates or respective employees, and under no
circumstances shall Employee, in communications with Persons other than the
Partnerships and their Affiliates criticize or disparage any business practice,
policy, statement, valuation or report that is made, 


 


10

















 


conducted
or published by such entities or individuals. 
Similarly, BPLSC, on behalf of the Partnerships and their Affiliates,
agrees not to disparage Employee. 
Notwithstanding the foregoing, this Section 23 shall not be
construed to prohibit or restrain any criticism or other statements made in
communications exclusively between or among the Partnerships and their
Affiliates or their respective employees, agents or representatives to the
extent such communications or statements are made in the ordinary course of
business or in the discharge by Employee of his duties and responsibilities on
behalf of the Partnerships.  The
obligations of Employee and BPLSC under this Section 23 shall continue
after the termination of the employment period. 
Employee and BPLSC acknowledge that any violation of this Section 23
may cause irreparable injury to the other parties for which monetary damages
are inadequate and difficult to compute. 
Accordingly, this Section 23 may be enforced by specific
performance, and prospective breaches of this Section 23 may be enjoined.


 


[Signature Page Follows]


 


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IN WITNESS WHEREOF, the undersigned, intending to be
legally bound, have executed this Agreement as of the date first above written.


 


	
   

  	
  BUCKEYE
  PARTNERS, L.P.

  
	
   

  	
  By:
  Buckeye GP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Forrest E. Wylie

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BUCKEYE
  GP HOLDINGS L.P.

  
	
   

  	
  By:
  MainLine Management LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Stephen C. Muther

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BUCKEYE
  PIPE LINE SERVICES COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Stephen C. Muther

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KEITH
  E. ST. CLAIR

  
	
   

  	
  Keith
  E. St. Clair

  



 


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Annex 1


 


TERMINATION OF SEVERANCE
AGREEMENT AND RELEASE


 


This
Termination of Severance Agreement and Release (the “Agreement”)
is between Buckeye Partners, L.P., a Delaware limited partnership (“BPL”), Buckeye GP Holdings L.P., a Delaware limited
partnership (“BGH”), Buckeye Pipe Line
Services Company, a Pennsylvania corporation (“BPLSC”),
and Keith E. St. Clair (“Employee”),
pursuant to the Severance Agreement between Employee, BPL, BGH and BPLSC, dated
                          ,
2008 (the “Severance Agreement”).  Capitalized terms used but not defined herein
shall have the meanings given them in the Severance Agreement.


 


WHEREAS, Employee is employed by BPLSC, and Employee,
BPLSC, BPL and BGH are parties to the Severance Agreement;


 


WHEREAS,
Employee’s employment with BPLSC is being terminated in exchange for certain
severance benefits and other valuable consideration provided herein;


 


NOW,
THEREFORE, the parties agree to terminate their employment relationship on the
following terms and conditions.


 


1.     Termination
of Employment.  BPL, BGH,
BPLSC and Employee agree that Employee’s employment with BPLSC is terminated as
of
                            
(the “Termination Date”), pursuant to Section 3
of the Severance Agreement.


 


2.     Complete
Release and Other Consideration from Employee.  In exchange for the obligations of BPL, BGH
and BPLSC under this Agreement, Employee agrees as follows:


 


a.                                       Complete Release. 
On behalf of Employee and Employee’s heirs and assigns, Employee fully
releases BPL, BGH, BPLSC and each of their parents, subsidiaries, affiliates,
divisions, predecessors, successors, and assigns, and, with respect to all such
entities, their partners, members, managers, officers, directors, attorneys,
agents, and employees (collectively, the “Releasees”),
from any and all claims, demands, or causes of action (including claims for
attorneys’ fees) (collectively, “Claims”), known
or unknown, that Employee may have or may claim to have against any of the
Releasees, including but not limited to any claims arising out of Employee’s
employment relationship with and service as an employee, officer or director of
BPLSC or any Releasee, and the termination of such relationship or service (the
“Employee Release”); provided, however, that this Employee Release shall not
apply to the obligations of BPLSC, BPL or BGH under this Agreement.  This Employee Release includes, without
limitation, any claims arising out of any contract (express or implied); any
tort (whether based on negligent, grossly negligent, or intentional conduct);
or any federal, state, or local law, including, without limitation, the Age
Discrimination in Employment 


 


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Act and the Employee Retirement Income Security
Act.  This Employee Release does not
include any claims under the Age Discrimination in Employment Act that may
arise after this Agreement is executed. 
Nothing in this Agreement shall constitute a waiver or release by
Employee of any vested benefits under any pension, retirement savings, deferred
compensation, vacation, health care or other benefit plan of BPL, BGH or BPLSC
in which he was a participant.


 


b.                                      Confidentiality. 
Except as may be required by law or court order or as may be necessary
in an action arising out of this Agreement, Employee agrees not to disclose the
existence or terms of this Agreement to anyone other than Employee’s immediate
family, attorneys, tax advisors, and financial counselors, provided that
Employee first informs them of this confidentiality clause and secures their
agreement to be bound by it.  Employee
understands and agrees that a breach of this confidentiality provision by any
of these authorized persons will be deemed a material breach of this Agreement
by Employee.


 


3.     Release and Other Consideration from
BPLSC, BPL and BGH.  In exchange for
Employee’s obligations under this Agreement, BPLSC, BPL or BGH shall pay
Employee those severance payments and benefits, on the terms provided in the
Severance Agreement.  Employee
acknowledges that these severance payments are subject to Employee’s compliance
with the Severance Agreement.


 


4.     Right to Consult an Attorney; Period of
Review. Employee hereby certifies that:


 


a.                                       he has read the terms of this Termination
of Severance Agreement and Release;


 


b.                                      he has been informed by BPL, BGH and
BPLSC, through this document, that he should discuss this Agreement with an
attorney of his own choice;


 


c.                                       he understands the terms and effects of
this Agreement;


 


d.                                      he has the intention of releasing all
claims recited herein in exchange for the consideration described herein, which
he acknowledges as adequate and satisfactory to him; and


 


e.                                       none of BPL, BGH or BPLSC, and none of
their agents, representatives or attorneys has made any representations to
Employee concerning the terms or effects of this Termination of Employment
Agreement and Release other than those contained herein.


 


5.     Entire Agreement; Amendment; Continuing
Obligations.  This Agreement and the
Severance Agreement contain the entire agreements of the parties with respect
to Employee’s employment and the other matters covered herein and therein;
moreover, this Agreement supersedes all prior and contemporaneous agreements
and understandings, oral or written, between the parties hereto concerning the
subject matter hereof and thereof.  This
Agreement 


 


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may be amended, waived or
terminated only by a written instrument executed by all parties hereto.  Employee hereby reaffirms and agrees to
continue to abide by all of Employee’s obligations under the Severance
Agreement (including, without limitation, Sections 10, 11, 12, 22 and 23
thereof).


 


6.     Revocation/Effectiveness.  Employee acknowledges that he has been
informed that he has the right to consider this Agreement for a period of at
least twenty one (21) days prior to entering into this Agreement and that if he
decides to execute this Agreement before the twenty-one (21) day period has
expired, he does so voluntarily and waives the opportunity to use the full
review period.  He further acknowledges
that he has the right to revoke this Agreement within seven (7) days of
its execution by giving written notice of such revocation pursuant to the
notice provisions of the Severance Agreement within said seven (7) day
period to BGH and BPLSC, and that if he does exercise this right, this
Agreement shall be null and void.


 


7.     Indemnification Rights.  The execution and delivery of this Agreement
shall have no effect on the rights or entitlement of Employee to
indemnification under (a) any agreement between Employee and BPL, BGH or
BPLSC or any of their affiliates or (b) any of the organizational
documents of BPL, BGH, BPLSC and their affiliates, including, without
limitation, MainLine Management LLC and Buckeye GP LLC.


 


8.     Choice of Law.  This Agreement will be governed in all
respects by the laws of the Commonwealth of Pennsylvania, without regard to its
choice of law principles.  This Agreement
is subject to the arbitration provisions in the Severance Agreement.


 


9.     Effectiveness of Agreement.  This Agreement will be effective, and the
payments described above will be made, only if Employee does not revoke the
Agreement under Section 6 above.


 


	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  	
  Name: Keith E. St. Clair

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BUCKEYE
  PARTNERS, L.P.

  
	
   

  	
  By:
  Buckeye GP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  
						



 


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  BUCKEYE GP HOLDINGS L.P.

  
	
   

  	
  By:
  MainLine Management LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BUCKEYE
  PIPE LINE SERVICES COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  



 


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