Exhibit 10.21


FORM OF


FIFTH AMENDED AND RESTATED INCENTIVE
COMPENSATION AGREEMENT


 


This Fifth Amended and
Restated Incentive Compensation Agreement, dated as of
                           ,
2006 (this “Agreement”), is entered into between BUCKEYE GP LLC, a Delaware
limited liability company (“General Partner”), and BUCKEYE PARTNERS, L.P., a
Delaware limited partnership (the “Partnership”).


WHEREAS, the Partnership
and MainLine Sub LLC (“Holdco”) entered into a Fourth Amended and Restated
Incentive Compensation Agreement dated December 15, 2004 (the “Prior
Agreement”);


WHEREAS, pursuant to an
agreement between Holdco and the General Partner, dated the date hereof, Holdco
assigned the Prior Agreement to the General Partner;


WHEREAS, the parties
hereto desire to amend and restate the Prior Agreement in its entirety to
supplement the Partnership Agreement (defined below) as the context requires
and recharacterize payments pursuant to this Agreement as distributions
pursuant to Section 5.2(c) of the Partnership Agreement and to adopt the law of
the State of Delaware as the governing law of this Agreement;


WHEREAS, Section 3.6 of
the Prior Agreement provides that the Prior Agreement may be amended only after
complying with Section 17.2(a) of the Amended and Restated Agreement of Limited
Partnership dated as of December 15, 1986, as amended as of the date hereof
(the “Partnership Agreement”), which provides that, without the prior approval
of a two-thirds interest of the limited partners of the Partnership, the General
Partner shall not amend the Prior Agreement unless such amendment does not, in
the good faith opinion of the General Partner, adversely affect the limited
partners of the Partnership (the “Limited Partners”) in any material respect;
and


WHEREAS, the Board of
Directors of the General Partner has approved the amendment and restatement of
the Prior Agreement in the form set out in this Agreement and has further
determined that, in its good faith opinion, this amendment and restatement of
the Prior Agreement does not adversely affect the Limited Partners in any
material respect.


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


ARTICLE I

DEFINITIONS


Set forth below are
definitions of certain capitalized terms used in this Agreement.  All capitalized terms used herein and not
otherwise defined herein shall have the meanings provided therefor in the
Partnership Agreement.


Section 1.1             “Aggregate Target Quarterly
Amount” means the Target Quarterly Amount per LP Unit times the number of
Units, other than ESOP LP Units, outstanding.

















 


Section 1.2             “Aggregate Target Special
Distribution Amount” means the Target Special Distribution Amount times the
number of Units outstanding.


Section 1.3             “Available Cash” for any
quarter means the Partnership’s consolidated cash receipts during such quarter
(including, for this purpose, amounts retained as described in clause (b) below
during prior quarters and determined by the General Partner, in its sole
discretion, to no longer be required to be so retained) less (a) its
consolidated cash expenditures during such quarter (other than distributions of
Available Cash for the prior quarter and expenditures of amounts received in
prior quarters) and (b) such retentions for working capital, anticipated cash
expenditures (including capital expenditures and debt service) and
contingencies as the General Partner, in its sole discretion, deems
appropriate.


Section 1.4             “ESOP LP Units” means the
2,573,146 LP Units issued to Buckeye Pipe Line Services Company in connection
with the transactions contemplated by the Exchange Agreement, regardless of
whether such LP Units continue to be held by Buckeye Pipe Line Services
Company.


Section 1.5             “IPO Price” is $10.00 per LP
Unit.


Section 1.6             “Pipeline Partnership” means
the limited partnership subsidiaries and the other subsidiaries of the
Partnership, collectively.


Section 1.7             “Quarterly Cash To Be
Distributed” for any quarter means the Available Cash for such quarter
(excluding cash to be distributed in a Special Distribution) less retentions of
Available Cash necessary to make distributions pursuant to this Agreement and
less cash distributed by the Partnership to the holders of the ESOP LP Units or
the GP Units with respect to their ESOP LP Units and GP Units.


Section 1.8             “Special Cash To Be Distributed”
means the cash or fair market value of securities to be distributed in a
Special Distribution, less the cash or fair market value of securities
distributed by the Partnership to the holders of ESOP LP Units or the GP Units
with respect to their ESOP LP Units and GP Units.


Section 1.9             “Special Distribution” means
any special cash distribution to Unitholders in excess of $10 million from the
proceeds of a financing, sale of assets or disposition (or a series of related
financings, sales of assets or dispositions) or a special distribution of
marketable securities with a fair market value in excess of $10 million;
provided, however, that no special distribution from the proceeds of a
financing shall be made without the approval of the disinterested directors of
the Board of Directors of the General Partner or a committee thereof.


Section 1.10           “Target Quarterly Amount” is
$.325 per quarter.


Section 1.11           “Target Special Distribution
Amount” means the amount which, together with all amounts distributed per
LP Unit prior to the Special Distribution compounded quarterly from the
respective dates of distribution to the date of such Special Distribution at
the Target Rate, would equal the IPO Price compounded quarterly at the Target
Rate from December 23, 1986 to the date of such Special Distribution.


 


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Section 1.12           “Target Rate” is 13% per
annum.


Section 1.13           “Unitholders” means the
holders of record collectively of the LP Units and the GP Units.


ARTICLE II

INCENTIVE COMPENSATION AGREEMENT


Section 2.1             Quarterly Incentive Distribution.  If Quarterly Cash To Be Distributed for any
calendar quarter exceeds the Aggregate Target Quarterly Amount and such
Quarterly Cash To Be Distributed is distributed to the Limited Partners as
provided in the Partnership Agreement, the Partnership shall, subject to
Section 2.3 and Section 2.5, distribute to the General Partner an amount equal
to the sum of (a) 15% of the portion of the Quarterly Cash To Be Distributed
which (i) exceeds $.325 per LP Unit and (ii) does not exceed $.35 per LP Unit;
(b) 25% of the portion of the Quarterly Cash To Be Distributed which (i)
exceeds $.35 per LP Unit and (ii) does not exceed $.375 per LP Unit; (c) 30% of
the portion of the Quarterly Cash To Be Distributed which (i) exceeds $.375 per
LP Unit and (ii) does not exceed $.40 per LP Unit; (d) 35% of the portion of
the Quarterly Cash To Be Distributed which (i) exceeds $.40 per LP Unit and
(ii) does not exceed $.425 per LP Unit; (e) 40% of the portion of the Quarterly
Cash To Be Distributed which (i) exceeds $.425 per LP Unit and (ii) does not
exceed $.525 per LP Unit; and (f) 45% of the portion of the Quarterly Cash To
Be Distributed which exceeds $.525 per LP Unit. For purposes of this Section
2.1, “LP Units” shall not include ESOP LP Units.


Section 2.2             Special Incentive Distribution.  If the Special Cash To Be Distributed in a
Special Distribution exceeds the Aggregate Target Special Distribution Amount
for such Special Distribution and such Special Cash To Be Distributed is
distributed to the Limited Partners as provided in the Partnership Agreement,
the Partnership shall, subject to Section 2.3 and Section 2.5, distribute to
the General Partner, out of Special Cash To Be Distributed, an amount equal to
(a) 15% of the portion of the Special Cash To Be Distributed which (i) exceeds
100% of the Aggregate Target Special Distribution Amount and (ii) is not more
than 115% of the Aggregate Target Special Distribution Amount, plus (b) 25% of
the amount (if any) by which the Special Cash To Be Distributed exceeds 115% of
the Aggregate Target Special Distribution Amount.


Section 2.3             Termination Upon Removal of
General Partner.  The agreement
contained in this Article II shall terminate if the General Partner is removed
as general partner of the Partnership pursuant to the Partnership Agreement,
effective upon the date of such removal. 
However, the value of the right to receive distributions as provided in
this Article II shall be included in determining the fair market value of the
GP Units and other Partnership Interests pursuant to Section 13.2 of the
Partnership Agreement.


Section 2.4             Certain Events.  If there is a change in the LP Units to
divide the outstanding LP Units into a greater number of LP Units or to combine
outstanding LP Units into a smaller number of LP Units, in each case in
accordance with the terms and conditions of the Partnership Agreement, the
amounts reflected in Sections 1.5, 1.10 and 2.1 hereof shall be adjusted
automatically to reflect such division or combination and shall apply to all
subsequent calculations of distributions to the General Partner hereunder.


 


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Section 2.5             Distribution Upon Liquidation.  Any distribution to the General Partner
pursuant to Sections 2.1 and 2.2 during the period in which a liquidation of
the Partnership occurs pursuant to Section 14.3 of the Partnership Agreement
shall equal the amounts allocated pursuant to Section 5.1(c)(vi) of the
Partnership Agreement.


ARTICLE III

MISCELLANEOUS


Section 3.1             Headings.  All article or section headings in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any of the provisions hereof.


Section 3.2             Binding Effect; Benefit of
Agreement; Assignment.  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. 
Absent the written consent of each party hereto and, this Agreement may
not be assigned by either party. 
Notwithstanding the foregoing, the General Partner may assign this
Agreement, and the Partnership Interests represented hereby, to (i) an entity
which, directly or indirectly, wholly owns or is wholly owned by the General
Partner, (ii) any entity wholly owned by any entity which wholly owns the
General Partner or (iii) a transferee of the GP Units under Section 11.1 of the
Partnership Agreement; provided that, any such transferee must be admitted to
the Partnership as an additional or successor general partner of the
Partnership.  For so long as the
Executive Employment Agreement, dated as of December 15, 2004, between the
General Partner, Holdco and Buckeye Pipe Line Services Company is in effect,
the General Partner may not assign this Agreement without the prior written
consent of the Trustee of the ESOP, which consent will not be unreasonably
withheld.


Section 3.3             Integration.  This Agreement, together with the Partnership
Agreement, constitutes the entire agreement among the parties pertaining to the
subject matter hereof and supersedes all prior agreements and understandings
pertaining thereto.  This Agreement shall
constitute a supplement to the Partnership Agreement.


Section 3.4             Counterparts.  This Agreement may be executed in any number
of counterparts, all of which together shall constitute one agreement binding
on the parties hereto.


Section 3.5             Applicable Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware.


Section 3.6             Amendment.  This Agreement may be amended only after
complying with Section 17.2(a) of the Partnership Agreement.


 


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IN WITNESS WHEREOF, this
Fifth Amended and Restated Incentive Compensation Agreement has been duly
executed by the parties hereto as of the date first above written.


 


	
   

  	
  BUCKEYE GP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  BUCKEYE
  PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  BUCKEYE GP LLC,

  
	
   

  	
   

  	
  as General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 


 


 


 


 


 


 


 


[Fifth Amended and Restated Incentive Compensation Agreement]


 


 


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