Exhibit 10.2


Summary of Amendment to Annual
Incentive Compensation Plan and Severance Plan


Annual Incentive
Compensation Plan


On June 11, 2006, the Board of Directors (the “Board”)
of Pacific Energy Management LLC, a Delaware limited liability company (“PPX
General Partner Holdco”), which manages Pacific Energy Partners, L.P., a
Delaware limited liability partnership (the “Partnership”), in its capacity as
the general partner of the Partnership’s general partner, modified (subject to
the condition described below) the Partnership’s Annual Incentive Compensation
Plan (the “Incentive Plan”) for 2006 and (if applicable) 2007. Previously, the
Board had approved 2006 performance standards and criteria under the Incentive
Plan that followed the same general structure as the 2005 Annual Incentive Plan
Summary, originally filed with the Securities and Exchange Commission as Exhibit 10.1
to the Partnership’s Form 8-K filed June 24, 2005.


The modifications for 2006 and (if applicable) 2007
were made in connection with the Partnership entering into an Agreement and
Plan of Merger (“Merger Agreement”) dated as of June 12, 2006 with Plains
All American Pipeline, L.P. (“PAA”), Plains AAP, L.P., a Delaware limited
partnership (“PAA General Partner”), Plains All American GP, LLC (“PAA GP LLC”),
PPX General Partner Holdco, and Pacific Energy GP, LP, which material
definitive agreement has been previously announced by the Partnership. The
modifications are conditional upon the closing of the merger.


Under the modifications,
all employees of the Partnership, PPX General Partner Holdco, and their
subsidiaries, will receive one of the following prior to the merger becoming
effective: (i) if the merger becomes effective in 2006, a cash bonus equal
to the target amount the employee would have received under the Incentive Plan
for 2006 prorated for the number of days elapsed in 2006 as of the payment
date, or (ii) if the merger becomes effective in 2007, a cash bonus equal
to the target amount the employee would have received under the Incentive Plan
for 2006 plus an amount equal to the target amount the employee would have
received under the Incentive Plan for 2007 prorated for the number of days
elapsed in 2007 as of the payment date. In addition, the Board clarified that
if the merger is effective in 2007, then bonuses will be payable with respect
to the 2006 calendar year to any employee participating in the Incentive Plan
as of December 31, 2006, whether or not such employee remains employed on
the date of payment.


Severance Plan


In May 2006, the Board of PPX General Partner
Holdco authorized management to implement the Pacific Energy Management LLC
Severance Plan (“Severance Plan”) in connection with the Partnership entering
into the Merger Agreement. In addition, PAA agreed in the Merger Agreement to
assume the plan upon closing of the merger. The Severance Plan is conditional
upon and will not become effective until the closing of the merger.


The Severance Plan sets forth the severance benefits
to be paid to eligible officers of PPX General Partner Holdco or other PPX
entities whose employment is terminated other than for cause (as defined in the
plan) by PAA within the 12-month period immediately following the closing of
the merger. To be eligible, officers must be full-time employees with at
least 90 days of continuous service who do not have an individual employment
agreement that includes severance benefits. Severance benefits for officers are
paid as a multiple of 6 months of base salary and target incentive compensation
for under 1 year (but over 90 days) of service, and 12 months of base salary
and target incentive compensation for 1 year or more of service. The Vice
Chairman is to receive a multiple of 24 months of salary and target incentive
compensation. Officers also receive a continuation of health benefits for 6,
12, or 24 months. The Severance Plan also sets forth the severance benefits to
be paid to non-officer employees of PPX General Partner Holdco and other PPX
entities whose employment is terminated other than for cause (as defined in the
plan) who have at least 90 days of continuous service, who are not subject to a
collective bargaining agreement and who are not covered by another severance
agreement of a PPX entity.