Exhibit 10.1


SEVERANCE AGREEMENT


 


This Severance Agreement is made as of the 17th day of February, 2009,
by and between Buckeye Partners, L.P., a Delaware limited partnership (“BPL”),
Buckeye Pipe Line Services Company, a Pennsylvania corporation (“BPLSC”), and
Clark C. Smith, residing at 366 Tynebridge Lane, Houston, Texas 77024 (“Employee”).


 


WHEREAS, Employee has been elected the President and Chief Operating
Officer of Buckeye GP LLC (“Buckeye GP”), the general partner of BPL, and the
President and Chief Operating Officer of MainLine Management LLC (“MainLine
Management”), the general partner of Buckeye GP Holdings L.P., a Delaware
limited partnership (“BGH”);


 


WHEREAS, pursuant to the terms of Services Agreements, BPLSC has agreed
to employ and compensate certain employees on behalf of BPL, and BPL has agreed
to reimburse BPLSC for the costs and expenses incurred by BPLSC in connection
with the provision of employment and other services to BPL;


 


WHEREAS, BPLSC, on behalf of BPL, is commencing employment of Employee
as its President and Chief Operating 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.


 


“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:


 


(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


 


 


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(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 Breinigsville,
Pennsylvania.


 


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
two hundred percent (200%) of Employee’s Annual Base Compensation plus two
hundred percent (200%) of 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 24 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 Employee would be required to contribute for health
and dental coverage if Employee were an active employee.  These payments will commence on BPLSC’s 


 


 


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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, 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 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 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 


 


 


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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 and BPL under
this Agreement subject to Employee’s duty to repay such sums to BPLSC and
BPL  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 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 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 and BPLSC shall use
their best efforts to satisfy promptly all such requirements.


 


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 


 


 


5

















 


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.


 


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 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 and BPLSC.  Employee represents that his experience and
capabilities are such that the restrictions 


 


 


6

















 


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 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 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 BPL 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 BPL 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 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 or BPLSC, by agreement in form and substance satisfactory to
Employee, to acknowledge expressly that this Agreement is binding upon and
enforceable against BPL and BPLSC, as applicable, in accordance with the terms
hereof, and to become jointly and severally obligated with BPL and BPLSC, as
applicable, to perform this Agreement in the same manner and to the same extent
that BPL or BPLSC would be required to perform if no such succession or
successions had taken place.  Failure of
BPL 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 and BPLSC shall mean BPL and BPLSC as
hereinbefore defined and any such successor or successors to their business
and/or assets, jointly and severally.


 


 


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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 or BPLSC, to:


 


Buckeye
Partners, 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:


 


Clark C. Smith


366 Tynebridge Lane


Houston, TX 77024


 


or to
such other names or addresses as BPL, 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.


 


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 


 


 


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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 and BPLSC.  The
provisions of this Agreement may provide for payments to Employee under certain
compensation or bonus plans under circumstances where such plans 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 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 


 


 


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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,
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 


 


 


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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:
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BUCKEYE
  PIPE LINE SERVICES COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  FORREST
  E. WYLIE

  
	
   

  	
   

  	
  Title:
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CLARK
  C. SMITH

  
	
   

  	
  Clark
  C. Smith

  






 


 


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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 Pipe Line Services Company, a Pennsylvania
corporation (“BPLSC”), and Clark C. Smith (“Employee”), pursuant to the Severance Agreement between
Employee, BPL and BPLSC, dated
                          ,
2009 (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 and BPL 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, 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 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 or BPL 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 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 


 


 


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by Employee of any vested benefits under any pension, retirement
savings, deferred compensation, vacation, health care or other benefit plan of
BPL, 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 and BPL.  In exchange for Employee’s obligations under
this Agreement, BPLSC or BPL 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 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.                                       neither BPL nor 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 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).


 


 


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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 BPL 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: Clark C. Smith

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BUCKEYE
  PARTNERS, L.P.

  
	
   

  	
   

  	
  By:
  Buckeye GP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BUCKEYE
  PIPE LINE SERVICES COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  
						






 


 


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