EXHIBIT 10.1


 


EMPLOYMENT AGREEMENT


 


AGREEMENT, dated as of December 26, 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
Mark Pease (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 wish to
enter into an employment relationship; and


 


WHEREAS, the Employer and the Executive wish to
enter into an Employment Agreement, in the capacities and on the terms set
forth in this 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 employ the Executive, and the Executive hereby agrees to accept such
employment, subject to the terms and conditions of this Agreement, during the
period (the “Employment Period”) beginning on December 17,
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, the Executive shall be employed as the Chief Operating
Officer of the Employer, with the usual and customary duties of such office 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
Chief Operating 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 Chief Operating 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 


 


1

















(any other affiliated entity
for which the Executive provides such services, the “BreitBurn
Entities”).  The Executive
shall report directly to the Co-Chief Executive Officers of the Employer.


 


(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 costs associated
with the RPUs and CPUs shall be borne by BBGP. 
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
primarily at the greater Houston metropolitan area office of the Employer.  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),
including without limitation, to the Employer’s Los Angeles headquarters.


 


(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 


 


2

















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.


 


(b)           Compensation.


 


(i)            Base Salary.  During
the Employment Period, the Executive shall receive a base salary (the “Base Salary”) at an annual rate of $350,000, 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 (after December 31,
2007), the Executive shall be eligible to participate in the Employer’s short-term incentive plan at the Executive Vice President 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 75% of the
Executive’s Base Salary, and (B) the maximum Annual Bonus shall be an
amount equal to 150% 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.  For the calendar
year ending December 31, 2008, the Executive shall be guaranteed an Annual
Bonus in an amount equal to no less than 75% of the Executive’s Base Salary;
subject to and conditioned upon the Executive’s continued employment with the
Employer through the date of payment of such Annual Bonus, except as otherwise
provided in Section 5 below.  No
Annual Bonus shall be payable in respect of the year ending December 31,
2007.


 


(iii)          Long Term Incentives. 
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) an
aggregate of 54,320 Restricted Partnership Units (consisting of an initial
grant of 45,370 Restricted Partnership Units and a grant with respect to
calendar year 2008 of 8,950 Restricted Partnership Units) (together, the “RPUs”) which shall vest and convert into Units, subject to Section 5
below, as to one-third of the 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) 89,500
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 


3

















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 distributions made in respect of the Units underlying such awards at
such time and in such amounts as are received by the holders of Units generally
(and, in the case of the CPUs, such distributions shall be subject to
recoupment by BBGP in the event that such distributions exceed the level of distributions
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 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 Peer Executives in the future, both as determined in the sole discretion of
the Board of Directors of BBGP.


 


(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 Peer Executives on a basis
no less favorable than that provided generally to the Peer Executives.  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 Peer Executives, 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 


 


4

















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 four (4) weeks per year.  Executive shall immediately vest in two (2) weeks
of vacation upon the Commencement Date.


 


(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.


 


(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 


 


5

















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”).


 


(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 1.5 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 (or in the event that the
Executive has not been employed for two years, then the average of the Annual
Bonus earned for the first year (if completed) and the forecasted bonus for the
current year based on performance parameters as described in Section 3(b)(ii) hereof
through the Date of Termination, extrapolated through the end of such year) (in
either case, 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 eighteen 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,



 


6

















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 Peer Executives 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):


 


(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 


 


7

















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);


 


(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 Peer Executives generally.


 


8






 












(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 (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.


 


                                                                                            (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 Peer
Executives 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 


 


9

















 


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.


 


(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.


 


10

















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.


 


(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 


 


11

















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.


 


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 


 


12

















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.


 


(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 Peer Executives, 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 


 


13

















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.


 


(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.


 


14

















(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.


 


(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 


 


15

















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.:  Halbert Washburn


515 South Flower Street, Suite 4800


Los Angeles, CA  90071


 


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 on its behalf is 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.


 


16

















(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.


 


(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, 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]


 


17

















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/ Mark Pease

  
	
  Mark Pease

  



 


	
  PRO GP CORP.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Halbert S.
  Washburn

  	
   

  	
   

  
	
  Name: 

  	
  Halbert S.
  Washburn

  	
   

  	
   

  
	
  Title: 

  	
  Co-Chief
  Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BREITBURN MANAGEMENT COMPANY,
  LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Halbert S.
  Washburn

  	
   

  	
   

  
	
  Name: 

  	
  Halbert S.
  Washburn

  	
   

  	
   

  
	
  Title: 

  	
  Co-Chief
  Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BREITBURN GP, LLC

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Halbert S.
  Washburn

  	
   

  	
   

  
	
  Name: 

  	
  Halbert S.
  Washburn

  	
   

  	
   

  
	
  Title: 

  	
  Co-Chief
  Executive Officer

  	
   

  	
   

  
								



 


18






 


 












EXHIBIT A


 


DEFINITIONS


 


“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 the Recitals hereof.


 


“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;


 


(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 or the General Partner, including, without limitation, the Board, or
based upon the advice of counsel for the Employer or the General Partner 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.


 

















“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.


 


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


 


“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 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) 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) hereof.


 


“Plan”
has the meaning assigned thereto in Section 3(b)(iii) hereof


 


“Post-Termination
Extension” has the meaning
assigned thereto in Section 5(d)(i)(A) hereof.


 


“Provident” has the
meaning assigned thereto in Section 9(b) hereof.


 


“Peer Executives” means the Executive Vice
Presidents of the Employer other than the Executive.


 


“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) 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.