Document:

exv10w4

Exhibit 10.4

2011 AMENDMENT

TO THE

BUCKEYE PARTNERS, L.P. UNIT OPTION AND DISTRIBUTION

EQUIVALENT PLAN

     This 2011 Amendment to the Buckeye Partners, L.P. Unit Option and Distribution Equivalent
Plan, Amended and Restated as of April 1, 2005 (the “Plan”), is made as of March 25, 2011.
Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in
the Plan.

     WHEREAS, the Compensation Committee of the Board of Directors of the General Partner (the
“Committee”) desires to amend the Plan to add a “net exercise” feature to the Plan which will
permit the issuance of a net number of units upon the exercise of an option under the Plan without
actual payment of the option exercise price;

     WHEREAS, the Committee desires to amend the Plan so that the “net exercise” feature will
automatically apply to the vested portion of certain unexpired options as of the expiration date of
such options; and

     WHEREAS, Section 11 of the Plan provides that the Committee has the complete and exclusive
power to amend the Plan and outstanding options issued under the Plan in any or all aspects
whatsoever not inconsistent with the terms of the Plan.

     NOW, THEREFORE, the Plan is amended in the following respects.

	 	1.	 	Section 6(c)(ii) shall be amended in its entirety to read as follows:
	 
	 		 	(ii) Duration of Options. An Option (or portion thereof) granted under the Plan
shall expire and all rights to purchase Units pursuant to the Option (or portion
thereof) shall cease at the end of the day which is seven years following the date
such Option (or portion thereof) became exercisable for the first time, or such
lesser period as may be prescribed by the Committee and specified in the Option
Agreement (the “Expiration Date”). Notwithstanding the foregoing, to the extent
that an Option remains outstanding and unexercised as of the Expiration Date, the
vested portion of such unexercised Option as of the Expiration Date shall
automatically be settled on the Expiration Date through a Net Exercise as defined in
Section 6(d), except that such automatic settlement through Net Exercise shall not
apply in the event an Optionee’s employment with the Partnership, the General
Partner or any Affiliate is terminated for cause, in which case Options held by such
Optionee shall terminate pursuant to Section 12(a).
	 
	 	2.	 	Section 6(d) shall be amended in its entirety to read as follows:
	 
	 		 	(d) Purchase of Units Pursuant to Options. An Optionee may purchase Units subject
to the vested portion of an Option in whole at any time, or in part from

 

 

	 	 	 	time to time, by delivering to the Secretary of the General Partner, or his
designee, written notice specifying the number of Units with respect to which the
Option is being exercised. The Optionee shall pay the purchase price of such Units
in full, plus any applicable federal, state or local taxes for which the
Partnership, the General Partner or any Affiliate has a withholding obligation in
connection with such purchase. Such payment shall be payable to the Partnership in
full in cash or by payment through a broker in accordance with procedures permitted
by Regulation T of the Federal Reserve Board. In addition, to the extent an Option
is vested and exercisable to purchase Units, all or any part of the vested portion
of the Option may be surrendered to the Partnership for a distribution payable in
Units, where the number of Units payable shall equal the number of Units with a fair
market value equal to: (i) the dollar amount by which the then fair market value of
the Units subject to the surrendered portion of the Option exceeds the aggregate
Option purchase price payable for those Units, less (ii) applicable tax withholding
amounts calculated at the statutory minimum (“Net Exercise”). During the lifetime
of the Optionee, the Option shall be exercised only by the Optionee and shall not be
assignable or transferable by the Optionee other than (1) by will, (2) by the laws
of descent and distribution, (3) pursuant to the terms of the Plan, or (4) pursuant
to the terms of a qualified domestic relations order.

     3. Except to the extent expressly amended hereby, the Plan shall remain in full force and
effect in all respects.

     IN WITNESS WHEREOF, Buckeye Partners, L.P. has caused the execution of this Amendment on this
25th day of March, 2011.

	 	 	 	 	 
	 	

BUCKEYE PARTNERS, L.P.
 	 
	 	By  	
Buckeye GP LLC, its sole general partner
 	 
	 
	 	 	 
	 	By:  	                                           /s/ Todd J. Russo
 	 
	 	 	Name:  	Todd J. Russo 	 
	 	 	Title:  	Deputy General Counsel & SecretaryExhibit 10.52

Exhibit 10.52

AQUA AMERICA, INC.

and SUBSIDIARIES

2011 ANNUAL CASH INCENTIVE COMPENSATION PLAN

BACKGROUND

	•	 	In 1989, the Company and its compensation consultant conducted a
feasibility study to determine whether the Company should implement an
incentive compensation plan. The study was prompted by the positive
experience of other investor-owned water companies with incentive
compensation.
	 
	•	 	The study included interviews with executives and an analysis of
competitive compensation levels. Based on the results, the
compensation consultant recommended that the Company’s objectives and
competitive practice supported the adoption of an annual incentive
plan (the “Plan”). The Company has had a cash incentive compensation
plan in place since 1990 and management and the Board of Directors
believe it has had a positive effect on the Company’s operations,
aiding employees, shareholders (higher earnings) and customers (better
service and controlling expenses).
	 
	•	 	The Plan has two components — a Management Incentive Program and an
Employee Recognition (“Chairman’s Award”) Program.
	 
	•	 	The Plan is designed to provide an appropriate incentive to the
officers, managers and certain other key employees of the Company.
The Management Incentive Program covers officers, managers and certain
key employees of Aqua America, Inc., and its subsidiaries.
	 
	•	 	Individual subsidiaries of the Company may adopt separate annual cash
incentive plans with the approval of the subsidiary’s Board of
Directors.
	 
	•	 	All incentive awards under the Plan shall be paid by March 15 of the
calendar year following the calendar year in which such awards are
earned.

MANAGEMENT INCENTIVE PROGRAM

	•	 	Performance Measures

	 	•	 	Annual incentive bonus awards are calculated by multiplying an individual’s
Target Bonus by a Company Factor based on the applicable company’s performance and an
Individual Factor based on the individual employee’s performance.

 

 

 

The approach of having a portion of the calculation of the annual incentive bonus
tied to the applicable company’s financial performance is appropriate as the
participants’ assume some of the same risks and rewards as the shareholders who are
investing in the company and making its capital construction and acquisition
programs possible. Customers also benefit from the participants’. individual
objectives being met, as improvements in performance are accomplished by controlling
costs, improving efficiencies and enhancing customer service. For these reasons,
future rate relief should be lessened and less frequent, which directly benefits all
customers.

	 	•	 	The after-tax net income from continuing operations or earnings before
interest, taxes and depreciation (“EBITD”) for the applicable company or business unit
relative to its annual budget will be the primary measure for the company’s
performance. The measurement to be used as the Company Factor (financial factor,
thresholds and weighting by applicable business unit) for each participant will be
established by the Executive Compensation Committee for those participants whose annual
incentive compensation is determined by the Committee and by the Chairman of the
Company for all other participants. Each year a “Target Net Income” or “Target EBITD”
level will be established for the applicable company or business unit. Portions of the
Company Factor may be tied to the financial targets of more than one company or
business unit for some participants whose responsibilities involve more than one
company or business unit. For purposes of the Plan, the Target Net Income or EBITD may
differ from the budgeted net income or EBITD level. The applicable company’s or
business unit’s final net income or EBITD may exclude the impact of any unbudgeted
extraordinary gains or losses as a result of changes in accounting principles and the
financial results may be adjusted for other factors as deemed appropriate by the
Executive Compensation Committee for those participants whose annual incentive
compensation is determined by the Committee, and by the Chairman of the Company for the
other participants.

	 	•	 	The threshold level of performance is set at 75 percent of the Target Net
Income or Target EBITD. If the final net income or EBITD for the applicable company or
business unit for the year is less than 75 percent of the Target Net Income or Target
EBITD, the Company Factor for that company or business unit will be set at 0%. No
additional bonus will be earned for results exceeding 110 percent of the Target Net
Income or EBITD.

	 	•	 	Each individual’s performance and achievement of his or her objectives will
also be evaluated and factored into the bonus calculation (the “Individual Factor”).
Performance objectives for each participant are established each year and are primarily
directed toward customer growth, improving customer service, controlling costs and
improving efficiencies and productivity. Each objective has specific performance
measures that are used to determine the level of
achievement for each objective. A participant’s target Individual Factor should be
no more than 90 points, with the possibility of additional points up to 110 points
being awarded for measurable performance above the participant’s targeted
performance level. Participants must achieve at least 70 points for their
Individual Factor to be eligible for a bonus award under the Plan.

 

 

 

Participation

	 	•	 	Eligible participants consist of officers, managers and certain key employees.

	 	•	 	Participation in the Management Incentive Program will be determined each year.
Each participant will be assigned a “Target Bonus Percentage” ranging from 5 to 70
percent depending on duties and responsibilities. The Executive Compensation Committee
will approve the Target Bonus Percentage for the CEO and the senior officers designated
by the Committee each year.

	 	•	 	The Target Bonus Percentage for each participant will be applied to their base
salary.

	 	•	 	Actual bonuses may range from 0, if the company’s financial results fall below
the minimum threshold or the participant does not make sufficient progress toward
achieving his or her objectives (i.e. performance measure points totaling less than 70
points), to 187.5 percent if performance — both Company and individual — is rated at
the maximum.

	 	•	 	New employees who are hired into a position that is eligible to participate in
the Management Incentive Plan, will normally be eligible to receive a portion of the
bonus calculated in accordance with this Plan that is pro-rated based on the number of
full calendar months between the new employee’s hire date and the end of the calendar
year.

	 	•	 	Employees who would otherwise be eligible to participate in this Management
Incentive Plan, but who leave employment with the company, either voluntarily (other
than for retirement), or involuntarily, prior to the end of the Company’s fiscal year
will not receive a bonus for the year in which their employment terminates.

	 	•	 	If an employee who would otherwise be eligible to participate in this
Management Incentive Plan dies, the company will pay the deceased employee’s estate a
portion of the bonus the deceased employee would otherwise have been entitled to
assuming a 100% Company Factor and 100% Individual Factor, but pro-rated for the number
of full calendar months the employee completed before his or her death.

 

 

 

	 	•	 	If an employee who would otherwise be eligible to participate in this
Management Incentive Plan retires from the Company within the first ten (10) months of
the Company’s fiscal year, the employee will receive payment of the bonus calculated
under the terms of this Plan that the employee would otherwise have been entitled to
assuming a 100% Company Factor and 100% Individual Factor, but pro-rated for the number
of full calendar months the employee completed before his or her retirement. If an
employee who would otherwise be eligible to participate in this Management Incentive
Plan retires from the Company after completion of the first ten (10) months of the
Company’s fiscal year, the employee will receive payment of the bonus calculated under
the terms of this Plan, but pro-rated for the number of full calendar months the
employee completed before his or her retirement.

Compliance

	 	•	 	The Management Incentive Program is intended to comply with the short-term
deferral rule set forth in the regulations under section 409A of the Code, in order to
avoid application of section 409A to the Management Incentive Program. If and to the
extent that any payment under this Management Incentive Program is deemed to be
deferred compensation subject to the requirements of section 409A, this Management
Incentive Program shall be administered so that such payments are made in accordance
with the requirements of section 409A.

	•	 	Recovery of Incentive Compensation

	 	•	 	In the event of a significant restatement of our financial results caused by
fraud or willful misconduct, the Company reserves the right to review the incentive
compensation received by the participant with respect to the period to which the
restatement relates, recalculate the Company’s results for the period to which the
restatement relates and seek reimbursement of that portion of the incentive
compensation that was based on the misstated financial results from the participant
whose fraud or willful misconduct was the cause of the restatement.

 

 

 

Company Factor

	 	•	 	Company performance will be measured on the following schedule:

	 	 	 	 	 	 	 	 	 
	 	 	Percent of	 	 	Company	 
	 	 	Target	 	 	Factor	 
	 
	 	 	 	 	 	 	 	 
	Threshold
	 	 	<75	%	 	 	0	%
	 
	 	 	75	 	 	 	35	 
	 
	 	 	80	 	 	 	40	 
	 
	 	 	85	 	 	 	45	 
	 
	 	 	90	 	 	 	60	 
	 
	 	 	95	 	 	 	80	 
	Plan
	 	 	100	 	 	 	100	 
	 
	 	 	105	 	 	 	110	 
	 
	 	 	>110	 	 	 	125	 

	 	•	 	The actual Company Factor should be calculated by interpolation between the
points shown in the table above.

	 	•	 	Regardless of the Company rating resulting from this Schedule, the Executive
Compensation Committee retains the authority to determine the final Company Factor for
participants whose annual incentive compensation is determined by the Committee and by
the Chairman of the Company for the other participants under the Plan.

	•	 	Individual Factor

	 	•	 	Individual performance will be measured on the following scale:

	 	 	 	 	 
	Performance Measure	 	Individual	 
	Points	 	Factor	 
	 
	 
	0 – 69
	 	 	0	%
	70
	 	 	70	%
	80
	 	 	80	%
	90
	 	 	90	%
	100
	 	 	100	%
	110
	 	 	110	%

	 	•	 	In addition, up to 40 additional points and additional percentage points may be
awarded to a participant at the discretion of the Chairman for exemplary performance,
subject to approval by the Executive Compensation Committee for those participants
whose annual incentive compensation is determined by the
Committee. Individual performance points for the Chief Executive Officer are
determined by the Executive Compensation Committee.

 

 

 

Sample Calculations

	•	 	Example 1

	 	 	 
	Salary or

	 	$70,000 
	Target Bonus

	 	10 percent ($7,000)
	Company Factor

	 	100 percent
	Individual Factor

	 	90 percent

Calculation:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	Individual
	 	 	 	Company
	 	 	 	Individual
	Target Bonus
	 	x
	 	Factor
	 	x
	 	Factor
	 	=
	 	Bonus Earned
	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	$7,000
	 	x
	 	100%
	 	x
	 	90%
	 	=
	 	$6,300
	 
	 	 	 	 	 	 	 	 	 	 	 	 

	•	 	Example 2

	 	 	 
	Salary or

	 	$70,000 
	Target Bonus

	 	10 percent ($7,000)
	Company Factor

	 	70 percent
	Individual Factor

	 	90 percent

Calculation:

	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	Individual
	 	Company
	 	 	 	Individual
	Target Bonus
	 	x
	 	Factor
	x	 Factor
	 	=
	 	Bonus Earned
	 
	 	 	 	 
	 	 
	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	$7,000
	 	x
	 	90%
	x	 70%
	 	=
	 	$4,410
	 
	 	 	 	 	 	 	 	 	 	 

	•	 	Example 3

	 	•	 	If the Individual Factor is rated below 70 points, no bonus would be earned
regardless of the Company Factor.

Calculation:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Individual
	 	 	 	Company
	 	 	 	Individual	 	 	 	 
	Target Bonus
	 	x
	 	Factor
	 	x
	 	Factor
	 	=
	 	Bonus Earned
	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	$7,000
	 	x
	 	100%
	 	x
	 	0
	 	=
	 	$0

 

 

 

	•	 	Example 4

	 	•	 	If the Company Factor is allocated between two companies, the bonus will be
calculated separately based on the allocation.

Calculation:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	Company
	 	 	 	Company
	 	 	 	Individual	 	 	 	 
	Target Bonus
	 	x
	 	Factor
	 	x
	 	Allocation
	 	x
	 	Factor
	 	=
	 	Bonus Earned
	 
	 	 	 	 
	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 
	$7,000
	 	x
	 	100%
	 	x
	 	20%
	 	x
	 	90%
	 	=
	 	$1,260
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$7,000
	 	x
	 	110%
	 	x
	 	80%
	 	x
	 	90%
	 	=
	 	$5,544
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Bonus
	 	 	 	 	 	 	 	 	 	 	 	 	 	=
	 	$6,804

 

 

 

EMPLOYEE RECOGNITION (“CHAIRMAN’S AWARD”) PROGRAM

	1.	 	In addition to the Management Incentive Program, the Company maintains an Employee
Recognition Program known as the Chairman’s Award program to reward non-union employees who
are not eligible for the management bonus plan for superior performance that contains costs,
improves efficiency and productivity of the workforce and better serves our customers. Awards
may also be made for a special action or heroic deed, or for a project that positively impacts
the performance or image of the Company. Awards are entirely discretionary and may or may not
be awarded to any individual employee. The availability of Awards is also contingent upon the
Company’s meeting certain metrics of successful performance.

	2.	 	Awards may be made from an annual pool designated by the Chairman of Aqua America with the
approval of the Executive Compensation Committee. Unused funds will not be carried over to
the next year. If financial performance warrants, management may request special Awards under
the program. The individual Award calculation and the distribution of Chairman’s Awards to
non-management employees are solely at the discretion of the officer to whom the employee
reports and the Chairman of Aqua America. No Chairman’s Award(s) granted to non-management
employees in prior years should be construed as a guaranty of future awards.

	3.	 	In general, the company or business unit must achieve at least 90% of its EBITD objective for
the year to be eligible for the full amount of the pool created for Chairman’s Awards for that
company or business unit for the year. Chairman’s Awards will not be made to employees of a
company or business unit that does not achieve at least 75% of its EBITD objective for the
year, however, the Chairman may approve a pool of up to one-third of the annual pool that
would otherwise be available for that company or business unit for awards to the eligible
employees of that company or business unit if the company or business unit achieves between
75% and 89.9% of its EBITD target.

	4.	 	Awards may be made throughout the year, however, no more than one-third of a company’s
Chairman’s Award pool may be awarded until the company’s final EBITD for the year is
determined.

	5.	 	Nominations for employees to receive Chairman’s Awards will be made to the applicable officer
and should include documentation on the reasons for the recommendations. The applicable
officer will review the nominations and forward their recommendations to the Chairman of Aqua
America. The applicable officer has complete discretion to choose to recommend an Award or
not, depending on factors and considerations deemed by the officer as relevant. Moreover, the
Chairman may exercise his own discretion to determine if any individual employee will receive
an Award.

	6.	 	The Chairman will determine the individuals to actually receive a bonus and the amount. The
maximum award to any one employee is $5,000.

	7.	 	An employee must be actively employed by the Company at the end of the fiscal year in order
to be eligible to be considered to receive a Chairman’s Award, unless the award is made to the
eligible employee during the year.

 

 

 

	8.	 	All Chairman’s Awards under the Employee Recognition Program shall be paid by March 15 of the
calendar year following the calendar year in which such awards are earned.

	9.	 	The Employee Recognition Program is intended to comply with the short-term deferral rule set
forth in the regulations under section 409A of the Code, in order to avoid application of
section 409A to the Plan. If and to the extent that any payment under this Employee
Recognition Program is deemed to be deferred compensation subject to the requirements of
section 409A, this Employee Recognition Program shall be administered so that such payments
are made in accordance with the requirements of section 409A.

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