Document:

Exhibit 10.1

Attachment C

Amendments to TEPPCO Employee Benefit Plans

1.                                       Texas Eastern Products Pipeline Company, LLC Management
Incentive Compensation Plan

(a)                                  Article III E. — “Committee” shall mean the Board.

(b)                                 A Participant’s employment with EPCO, Inc. or an
affiliate of EPCO, Inc. shall be deemed to be employment with TEPPCO.

2.

3.                                       Texas Eastern Products Pipeline Company, LLC 2000 Long Term
Incentive Plan

(a)                                  A Participant’s employment with EPCO, Inc. or an
affiliate of EPCO, Inc. shall be deemed to be employment with TEPPCO.

4.                                       TEPPCO Retirement Cash Balance Plan

(a)                                  Effective May 31, 2005 participation is “frozen,” i.e.,
no employee who is not a participant on May 31, 2005 shall be eligible to
become covered by (become a participant in) the plan after that date.

(b)                                 Effective December 31, 2005 (i) all benefits
accrued as of that date shall be “frozen,” i.e., no employer contribution
credits shall be credited for any period after that date, and (ii) all
participants shall be 100% vested regardless of their years of service.

(c)                                  The Plan is terminated effective as of January 1, 2006.

5.                                       TEPPCO Supplemental Benefit Plan

(a)                                  A Participant’s employment with EPCO, Inc. or an
affiliate of EPCO, Inc. shall be deemed to be employment with TEPPCO.

(b)                                 The Plan shall be terminated on or before December 31,
2005.

(c)                                  Upon termination of the Plan, all benefits shall be paid in
a lump sum in 2005.

6.

7.

8.                                       TEPPCO 1994 Long Term Incentive Plan

(a)                                  A Participant’s employment with EPCO, Inc. or an
affiliate of EPCO, Inc. shall be deemed to be employment with TEPPCO.

9.

 

 2Exhibit 10.3

SUPPLEMENTAL AGREEMENT No. 2

to

EMPLOYMENT AGREEMENT

This Supplemental Agreement No. 2 supplements and
amends that certain Employment Agreement, entered into the      th
day of                ,
       by and between Texas Eastern Products Pipeline
Company, LLC (“TEPPCO”) and          (“Executive”)
and amended February 23, 2005 (the “Agreement”).

WHEREAS,
TEPPCO has become an affiliate of EPCO, Inc. (“EPCO”) and Executive is
being transferred to EPCO on June 1, 2005; and

WHEREAS,
TEPPCO, EPCO and Executive desire to acknowledge the transfer of Executive’s
employment to EPCO and EPCO’s assumption of TEPPCO’s obligations under the
Agreement;

NOW, THEREFORE,
the Agreement is amended as follows, effective as of June 1,  2005:

1.                                       All
references in the Agreement to TEPPCO shall be changed to EPCO, Inc.,
unless the context clearly requires otherwise.

2.                                       Notwithstanding
anything in the Agreement to the contrary, employment with an affiliate of EPCO
shall be deemed to be employment with EPCO for purposes of this Agreement and
any transfer of Executive’s employment to or from EPCO or an affiliate of EPCO
or between affiliates of EPCO shall not constitute a termination of Executive’s
employment for purposes of this Agreement.

3.                                       Executive
agrees and acknowledges that the transfer of his employment from TEPPCO to EPCO
on June 1, 2005 will not constitute a termination of his employment by
TEPPCO for purposes of the Agreement.

4.                                       Except
as amended by this Supplemental Agreement No. 2, the Agreement is hereby
ratified, affirmed and assumed by EPCO and continued in all respects.

IN WITHESS WHEREOF,
the parties hereto have executed this Supplemental Agreement No. 2 this May      ,
2005.

	
  

  	
   

  	
  EPCO,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:Exhibit 10.4

 

 

 

 

TEXAS
EASTERN PRODUCTS PIPELINE COMPANY, LLC

2005 PHANTOM UNIT PLAN

 

Effective
January 1, 2005

 

 

TEXAS EASTERN PRODUCTS PIPELINE
COMPANY, LLC

2005 PHANTOM UNIT PLAN

WHEREAS, Texas
Eastern Products Pipeline Company, LLC, a Delaware limited liability company (“TEPPCO”), desires to establish the Texas
Eastern Products Pipeline Company, LLC 2005 Phantom Unit Plan (the “Plan”) for
certain key employees so as to offer them a further incentive to increase the
earnings of TEPPCO Partners, L.P.;

WHEREAS, it is
intended that the Plan shall constitute a bonus program within the meaning of
Department of Labor Regulation section 2510.3-2(c) that is exempt
from coverage under the Employee Retirement Income Security Act of 1974, as
amended;

NOW, THEREFORE,
TEPPCO adopts the Plan as follows:

 

 

TEXAS EASTERN PRODUCTS PIPELINE
COMPANY, LLC

2005 PHANTOM UNIT PLAN

TABLE
OF CONTENTS

	
  

  	
   

  	
  Section

  	
   

  
	
  ARTICLE I - PLAN PURPOSE AND
  TERM

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Purpose

  	
   

  	
  1.1

  	
   

  
	
  Effective Date
  of Plan

  	
   

  	
  1.2

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II — DEFINITIONS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Account

  	
   

  	
  2.1

  	
   

  
	
  Affiliate

  	
   

  	
  2.2

  	
   

  
	
  Award

  	
   

  	
  2.3

  	
   

  
	
  Award Agreement

  	
   

  	
  2.4

  	
   

  
	
  Board

  	
   

  	
  2.5

  	
   

  
	
  Cause

  	
   

  	
  2.6

  	
   

  
	
  Change in
  Control

  	
   

  	
  2.7

  	
   

  
	
  Code

  	
   

  	
  2.8

  	
   

  
	
  Committee

  	
   

  	
  2.9

  	
   

  
	
  EBITDA

  	
   

  	
  2.10

  	
   

  
	
  Disability

  	
   

  	
  2.11

  	
   

  
	
  Employee

  	
   

  	
  2.12

  	
   

  
	
  Fair Market
  Value

  	
   

  	
  2.13

  	
   

  
	
  GAAP

  	
   

  	
  2.14

  	
   

  
	
  Grantee

  	
   

  	
  2.15

  	
   

  
	
  Partnership

  	
   

  	
  2.16

  	
   

  
	
  Performance
  Period

  	
   

  	
  2.17

  	
   

  
	
  Phantom Units

  	
   

  	
  2.18

  	
   

  
	
  Plan

  	
   

  	
  2.19

  	
   

  
	
  Separation From
  Service

  	
   

  	
  2.20

  	
   

  
	
  TEPPCO

  	
   

  	
  2.21

  	
   

  
	
  Unit

  	
   

  	
  2.22

  	
   

  
	
  Vested
  Percentage

  	
   

  	
  2.23

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III — AWARDS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Granting of
  Awards

  	
   

  	
  3.1

  	
   

  
	
  Terms of Awards

  	
   

  	
  3.2

  	
   

  
	
  Special Ledger

  	
   

  	
  3.3

  	
   

  
	
  Adjustments Due
  to Changes in the Partnership’s Capital Structure

  	
   

  	
  3.4

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV — PHANTOM UNIT
  REDEMPTION PAYMENTS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Determination of
  Whether Performance Goals Achieved

  	
   

  	
  4.1

  	
   

  
	
  Redemption Payments

  	
   

  	
  4.2

  	
   

  
	
  No Interest on
  Award

  	
   

  	
  4.3

  	
   

  
	
  Redemption
  Payment on Death of Grantee

  	
   

  	
  4.4

  	
   

  

 

 i
 

 

 

	
  Redemption Payment on
  Disability of Grantee

  	
   

  	
  4.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V — UNIT DISTRIBUTION
  EQUIVALENT PAYMENTS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Quarterly Unit
  Distribution Equivalent Payments

  	
   

  	
  5.1

  	
   

  
	
  Quarterly Unit
  Distribution Equivalent Payments on Death of Grantee

  	
   

  	
  5.2

  	
   

  
	
  Quarterly Unit
  Distribution Equivalent Payments on Disability of Grantee

  	
   

  	
  5.3

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI — VESTING OF AWARDS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Determination of
  Vested Percentage

  	
   

  	
  6.1

  	
   

  
	
  Forfeiture Upon
  Separation From Service

  	
   

  	
  6.2

  	
   

  
	
  Complete
  Forfeiture for Cause

  	
   

  	
  6.3

  	
   

  
	
  Treatment of
  Forfeited Interest in Awards

  	
   

  	
  6.4

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII — ADMINISTRATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  General

  	
   

  	
  7.1

  	
   

  
	
  Powers of
  Committee

  	
   

  	
  7.2

  	
   

  
	
  Committee
  Discretion

  	
   

  	
  7.3

  	
   

  
	
  Disqualification
  of Committee Member

  	
   

  	
  7.4

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII — AMENDMENT OR
  TERMINATION OF PLAN

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX - FUNDING

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Payments Under
  the Plan Are the Obligation of TEPPCO

  	
   

  	
  9.1

  	
   

  
	
  Grantees Must
  Rely Solely on the General Credit of TEPPCO

  	
   

  	
  9.2

  	
   

  
	
  Unfunded
  Arrangement

  	
   

  	
  9.3

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X — MISCELLANEOUS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  No Employment
  Obligation

  	
   

  	
  10.1

  	
   

  
	
  Tax Withholding

  	
   

  	
  10.2

  	
   

  
	
  Indemnification
  of the Committee

  	
   

  	
  10.3

  	
   

  
	
  Gender and
  Number

  	
   

  	
  10.4

  	
   

  
	
  Headings

  	
   

  	
  10.5

  	
   

  
	
  Other
  Compensation Plans

  	
   

  	
  10.6

  	
   

  
	
  Rights of
  Company and Affiliates

  	
   

  	
  10.7

  	
   

  
	
  Nonalienation of
  Benefits

  	
   

  	
  10.8

  	
   

  
	
  No Rights as an
  Owner

  	
   

  	
  10.9

  	
   

  
	
  Governing Law

  	
   

  	
  10.10

  	
   

  

 

 ii

 

 

ARTICLE I

PLAN
PURPOSE AND TERM

1.1           Purpose. The Plan is intended to
provide those persons who have substantial responsibility for the growth of
TEPPCO with additional incentives to increase the earnings of TEPPCO Partners,
L.P.

2.0           Effective Date of Plan. The Plan is
effective January 1, 2005.

 

 I-1

 

 

ARTICLE
II

DEFINITIONS

The words and phrases defined in this Article shall
have the meaning set out in these definitions throughout the Plan, unless the
context in which any such word or phrase appears reasonably requires a broader,
narrower, or different meaning.

2.1           “Account” means a bookkeeping ledger
maintained by the Committee that reflects the number of Phantom Units awarded
to the Grantee which have not been redeemed or forfeited.

2.2           “Affiliate” means an entity that is
treated as a single employer together with TEPPCO for certain employee benefit
purposes under section 414 of the Code.

2.3           “Award” means a bonus opportunity
granted under the Plan.

2.4           “Award Agreement” means the written
agreement between TEPPCO and a Grantee that sets forth the terms of an Award.

2.5           “Board”  means the Board of Directors of TEPPCO.

2.6           “Cause” means (a) the willful
and continued failure by the Grantee to substantially perform his duties for
TEPPCO or its Affiliate(s) (other than such failure resulting from his
incapacity due to physical or mental illness) after demand for substantial
performance has been delivered to him by TEPPCO that specifically identifies
the manner in which TEPPCO believes the Grantee has not substantially performed
his duties; (b) the willful engaging by the Grantee in gross misconduct
materially and demonstrably injurious to the property or business of TEPPCO or
any of its Affiliates; or (c) the willful material violation of any TEPPCO
or Partnership policies regarding the protection of confidential information
and/or proprietary information or the material violation of any non-compete
agreement between the Grantee TEPPCO. For purposes of this definition, no act
or failure to act on the Grantee’s part will be considered willful unless done,
or omitted to be done, by him not in good faith and without reasonable belief
that his act or omission was in the best interests of TEPPCO or its Affiliates
or not opposed to the interests or TEPPCO or its Affiliates.

2.7           “Change in Control” means

(i)                                     any
person becomes the beneficial owner, directly or in- directly, of  securities of 
the Partnership representing 66  percent or more of the
Partnership’s then outstanding Units; or

(ii)                                  any
person becomes the beneficial owner, directly or indirectly, of 50 percent or
more of the Units and TEPPCO delivers notice of withdrawal or is otherwise
removed as the general partner of the Partnership; or

 II-1
 

 

(iii)                               the
merger or consolidation of the Partnership with one or more corporations,
business trusts, common law trusts or unincorporated businesses, including,
without limitation, a general partnership, a limited partnership or a limited
liability company, pursuant to a written agreement of merger or consolidation
in accordance with Article 16 of the Second Amended and Restated Agreement
of Limited Partnership of TEPPCO Partners, L.P., dated November 30, 1998,
as it may be amended from time to time, and TEPPCO delivers notice of
withdrawal or is otherwise removed as the general partner of the Partnership;
or

(iv)                              any
person is or becomes the beneficial owner, directly or indirectly, of
securities of TEPPCO representing more than 50 percent of the combined voting
power of TEPPCO’s then outstanding voting securities; or

(v)                                 all
or substantially all of the assets and business of TEPPCO, the Partnership, TE
Products Pipeline Company, Limited Partnership or  TCTM, L.P. are sold, transferred or assigned
to, or otherwise acquired by, any person or persons; or

(vi)                              the
dissolution or liquidation of the Partnership, TCTM, L.P. or TEPPCO; or

(vii)                           the
adoption by the Board of a resolution to the effect that any person has
acquired effective control of the business and affairs of TEPPCO, the
Partnership or TE Products Pipeline Company, Limited Partnership or TCTM, L.P

For purposes of this definition, the term “beneficial
owner” shall have the meaning set forth in Section 13(d) of the
Securities Exchange Act of 1934, as amended, and in the regulations promulgated
thereunder. The term “person” shall mean an individual, corporation,
partnership, trust, unincorporated organization, association or other entity
provided that the term “person” shall not include (a) Duke Energy
Corporation (“Duke”), (b) any
affiliate of Duke, or (c) any employee benefit plan maintained by Duke or
any affiliate of Duke. For purposes of this definition, the term “affiliate” or
“affiliates” shall mean when used with respect to a specified person or entity,
any other person or entity directly or indirectly controlled by, controlling,
or under direct or indirect common control with the specified person or entity.
For the purpose of this definition, “control” or “controlled” when used with
respect to any specified person or entity means the power to direct the
management and policies of that person or entity whether through the ownership
of voting securities, membership interest or by contract.

2.8            “Code” means the Internal Revenue
Code of 1986, as amended.

2.9           “Committee” means members of the
Compensation Committee of the Board.

 II-2
 

 

2.10          “EBITDA” means the the Partnership’s
earnings before minority interest, interest expense-net, other income-net,
income taxes, depreciation and amortization as presented in the Partnership’s
financial statements prepared in accordance with GAAP plus TEPPCO’s
proportional share of the EBITDA of its equity investments, except that for
purposes of the Plan, in its discretion the Committee may exclude gains or
losses from extraordinary, unusual or non-recurring items.

2.11         “Disability”  means the Separation From Service of the
Grantee due to a medically determinable mental or physical impairment which
shall prevent the Grantee from engaging in any substantial gainful activity and
which can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months and which (a) was not contracted,
suffered or incurred while the Grantee was engaged in, and did not result from
the Grantee having engaged in, a felonious criminal enterprise; (b) did
not result from addiction to narcotics; (c) did not result from an injury
incurred while a member of the Armed Forces of the United States for which the
Grantee receives a military pension; and (d) did not result from an
intentionally self-inflicted injury.

2.12         “Employee” means a person who is
employed by TEPPCO as a common law employee.

2.13         “Fair Market Value”   means the closing price of a Unit as reported
on the New York Stock Exchange, Inc. Composite Transactions Reporting
System on the applicable date, or if there have been no reported sales on such
date, on the last preceding date on which reported sales were effected.

2.14         “GAAP” means United States of
America generally accepted accounting principles, consistently applied, or,
when none apply, other sound accounting methodology as determined by the
Committee.

2.15         “Grantee” means an Employee who has
been granted an Award under the Plan.

2.16          “Partnership” means TEPPCO
Partners, L.P., a Delaware limited partnership.

2.17         “Performance Period” means the
period of time specified by the Committee in a Grantee’s Award Agreement.

2.18         “Phantom Units” means a conditional
promise by TEPPCO to make payment to a Grantee in cash, determined by reference
to Units and in accordance with the terms of the Plan and the applicable Award
Agreement.

2.19         “Plan” means the Texas Eastern
Products Pipeline Company, LLC 2005 Phantom Unit Plan, as set forth in this
document and as it may be amended from time to time.

2.20         “Separation From Service” means the
termination of the employment relationship between the Grantee and TEPPCO and
all Affiliates.

 II-3
 

 

2.21         “TEPPCO” means Texas Eastern
Products Pipeline Company, LLC, a Delaware limited liability company.

2.22         “Unit” means a limited partnership
unit in the Partnership.

2.23         “Vested Percentage” means a Grantee’s
nonforfeitable interest in his Award determined in accordance with Article VI.

 

 II-4

 

 

ARTICLE III

AWARDS

3.1           Granting of Awards. The Committee
may grant to those high performing middle management employees of TEPPCO as it
shall determine Awards under the terms and conditions of the Plan.

3.2           Terms of Awards. The terms of each
Award shall be specified in an Award Agreement. An Award Agreement shall
specify (a) the number of Phantom Units subject to the Award, (b) the
date on which the Award is granted, (c) the Performance Goals applicable
to the Award, (d) the manner in which the Grantee’s Vested Percentage is
to be determined, and (e) any other provisions that the Committee deems
appropriate that are not inconsistent with the terms of the Plan; provided, however, that
the Committee may include in a Grantee’s Award Agreement provisions relating to
the effect of a Change in Control on the Grantee’s Award that override
specified provisions of the Plan.

3.3           Special Ledger. The Committee shall
establish or cause to be established an appropriate record that will reflect
the name of each Grantee and all other information necessary to properly
reflect each Grantee’s Awards made by the Committee.

3.4           Adjustments Due to Changes in the Partnership’s
Capital Structure. If the Partnership shall effect a subdivision
or consolidation of Units or other capital readjustment, or other increase or
reduction of the number of Units outstanding, without receiving compensation
for it in money, services or property, then the number of Phantom Units subject
to outstanding Awards under the Plan shall be appropriately adjusted by the
Committee in such a manner as to entitle a Grantee to receive the equivalent
compensation he would have received under the Award had there been no event
requiring the adjustment.

 

 III-1

 

 

ARTICLE IV

PHANTOM UNIT
REDEMPTION PAYMENTS

4.1           Determination of Whether Performance Goals Achieved.
As soon as administratively practicable after the end of the
Performance Period, the Committee shall determine the extent to which the
Performance Goals specified in a Grantee’s Award Agreement have been satisfied.
A Grantee shall have no legally binding right to receive a redemption payment
under his Award pursuant to Section 4.2 until the date on which the
Committee officially determines the extent to which the Performance Goals
specified in his Award Agreement have been achieved (the “Determination
Date”).

4.2           Redemption Payments. As soon as
administratively practicable after the Determination Date (and in no event
later than March 15 following the calendar year in which such
determination has been made), TEPPCO shall pay the Grantee in a single sum in
cash an amount equal to the product of (A), (B) and (C) where (A) is
the average of the Fair Market Values of a Unit over the ten consecutive
trading days immediately preceding the Determination Date, (B) is the
number of Phantom Units granted under the Grantee’s Award Agreement, and (C) is
the Grantee’s Vested Percentage. Upon such redemption of the Phantom Unit the
Phantom Unit shall no longer be credited to the Grantee’s Account.

4.3           No Interest on Award. No interest
shall be credited with respect to any Award or any payment under an Award.

4.4           Redemption Payment on Death of Grantee. In
the event of the death of a Grantee before the Grantee has received a
redemption payment under his Award pursuant to Section 4.2, TEPPCO shall
pay the Grantee’s Spouse if the Spouse survives the Grantee, or  the Grantee’s estate if the Grantee’s Spouse
does not survive the Grantee, in a single sum in cash an amount equal to the
amount of redemption payment the Grantee would have received under Section 5.1
had he not died multiplied by a fraction, the numerator of which is the number
of days the Grantee was employed by TEPPCO or any of its Affiliates during the
applicable Performance Period and the denominator of which is the number of days
during the Performance Period.  Any
payment under this Section 4.5 shall be made at the same time the payment
would have been made to the Grantee pursuant to Section 4.2 had he not
died.

4.5           Redemption Payment on Disability of Grantee.
In the event of the Disability of a Grantee before the Grantee has received a
redemption payment under his Award pursuant to Section 4.2, TEPPCO shall
pay the Grantee (or  his legal guardian
on his behalf in the event he has been judicially determined to be
incapacitated) an amount equal to the amount of redemption payment the Grantee
would have received under Section 4.2 had he not incurred a Disability
multiplied by a fraction, the numerator of which is the number of days the
Grantee was employed by TEPPCO or any of its Affiliates during the applicable
Performance Period and the denominator of which is the number of days during
the Performance Period. Any payment under this Section 4.5 shall be made
at the same time the payment would have been made to the Grantee pursuant to Section 4.2
had he not incurred a Disability.

 

 IV-1

 

 

ARTICLE V

UNIT DISTRIBUTION
EQUIVALENT PAYMENTS

5.1           Quarterly Unit Distribution Equivalent Payments. Each
time quarterly cash distributions are paid to Unit owners, as soon as
administratively practicable thereafter TEPPCO shall pay to each Grantee in
cash an amount equal to the product of the number of Phantom Units then
credited to the Grantee’s Account and the amount of the cash distribution paid
per Unit by the Partnership. A Grantee shall have no legally binding right to
receive any payment pursuant to this Section 5.1 until the date on which
the applicable quarterly cash distributions to Unit holders are paid to Unit
holders.

5.2           Quarterly Unit Distribution Equivalent Payments on
Death of Grantee. In the event of the death of a Grantee before
the Grantee has received a redemption payment under his Award pursuant to Section 4.2,
TEPPCO shall pay the Grantee’s Spouse if the Spouse survives the Grantee,
or  the Grantee’s estate if the Grantee’s
Spouse does not survive the Grantee, the quarterly Unit distribution equivalent
payments the Grantee would have received under Section 5.1 had he not died.
 Any payment under this Section 5.2
shall be made at the same time the payment would have been made to the Grantee
pursuant to Section 5.1 had he not died.

5.3           Quarterly Unit Distribution Equivalent Payments on
Disability of Grantee. In the event of the Disability of a
Grantee before the Grantee has received a redemption payment under his Award
pursuant to Section 4.2, TEPPCO shall pay the Grantee (or  his legal guardian on his behalf in the event
he has been judicially determined to be incapacitated) any quarterly Unit
distribution equivalent payments the Grantee would have received under Section 5.1
had he not incurred a Disability. Any payment under this Section 5.3 shall
be made at the same time the payment would have been made to the Grantee
pursuant to Section 5.1 had he not incurred a Disability.

 

 V-1

 

 

ARTICLE VI

VESTING OF AWARDS

6.1           Determination of Vested Percentage. On
the Determination Date the Committee shall determine the Grantee’s Vested
Percentage, which shall be based upon the achievement of Performance Goals
specified in the Grantee’s Award Agreement.

6.2           Forfeiture Upon Separation From Service. If
a Grantee incurs a Separation From Service during the Performance Period other
than as a result of death or Disability, his Award shall be immediately
forfeited.

6.3           Complete Forfeiture for Cause. Notwithstanding
Section 5.1 of the Plan, if prior to the date that is 120 days prior to
the occurrence of a Change of Control the Committee finds by a majority vote
after full consideration of the facts that a Grantee was discharged from the
employ of TEPPCO or an Affiliate for Cause, the Grantee shall immediately forfeit
his Award to the extent he has not yet been paid benefits pursuant to the Award.
The decision of the Committee as to the cause of the Grantee’s discharge shall
be final. No decision of the Committee shall affect the finality of the
discharge of the Grantee.  No Plan
benefits shall be forfeited pursuant to this Section 6.3 after the date
that is 120 days prior to the occurrence of a Change of Control.

6.4           Treatment of Forfeited Interests in Awards. If
a Grantee’s interest in an Award is fully or partially forfeited for any
reason, his forfeited interest in the Award shall not be applied to increase
the amounts payable under the Plan for any other Grantee.

 

 VI-1

 

 

ARTICLE VII

ADMINISTRATION

7.1           General. The Plan shall be
administered by the Committee. All questions of interpretation and application
of the Plan and Awards shall be subject to the determination of the Committee. A
majority of the members of the Committee shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its members. Any
decision or determination reduced to writing and signed by a majority of the
members shall be as effective as if it had been made by a majority vote at a
meeting properly called and held.

7.2           Powers of Committee. The Committee
shall have the exclusive responsibility for the general administration of the
Plan according to the terms and provisions of the Plan and will have all the
powers necessary to accomplish those purposes, including but not by way of
limitation the right, power and authority:

(a)                                  to
make rules, regulations and administrative guidelines for the administration of
the Plan;

(b)                                 to
construe all terms, provisions, conditions and limitations of the Plan;

(c)                                  to
correct any defect, supply any omission or reconcile any inconsistency that may
appear in the Plan in the manner and to the extent it deems expedient to carry
the Plan into effect for the greatest benefit of all parties at interest;

(d)                                 to
determine all controversies relating to the administration of the Plan,
including but not limited to:

(1)                                  differences
of opinion arising between TEPPCO and a Grantee; and

(2)                                  any
question it deems advisable to determine in order to promote the uniform
administration of the Plan for the benefit of all parties at interest;

(e)                                  to
determine the Employees who shall participate in the Plan from time to time;

(f)                                    to
determine the number of Phantom Units to be awarded to each Grantee; and

(g)                                 to
determine the terms and conditions, if any, not inconsistent with the terms of
the Plan that are to be placed upon the Award or Awards given to a particular
Grantee.

7.3           Committee Discretion. The Committee
in exercising any power or authority granted under the Plan or in making any
determination under the Plan shall perform or refrain 

 VII-1
 

 

 

from performing those acts in its sole discretion and judgment. Any
decision made by the Committee or any refraining to act or any act taken by the
Committee in good faith shall be final and binding on all parties. The
Committee’s decisions shall never be subject to de novo review, but instead
shall only be overturned if found to be arbitrary or capricious by an
arbitrator or a court of law.

7.4           Disqualification of Committee Member. A
member of the Committee shall not vote or act on any Plan matter relating
solely to himself.

 

 VII-2

 

 

ARTICLE VIII

AMENDMENT OR
TERMINATION OF PLAN

The Board may amend, terminate or suspend the Plan at
any time, in its sole and absolute discretion. However, no amendment or
termination of the Plan may, without the consent of a Grantee, reduce the Grantee’s
right to a payment under the Plan that he is entitled to receive under the
terms of the Plan in effect prior to the amendment or termination.

 

 VIII-1

 

 

ARTICLE IX

FUNDING

9.1           Payments Under the Plan Are the Obligation of
TEPPCO. Benefits due under the Plan will be paid by TEPPCO.

9.2           Grantees Must Rely Solely on the General Credit of
TEPPCO. The Plan is only a general corporate commitment of
TEPPCO and each Grantee must rely solely upon the general credit of TEPPCO for
the fulfillment of its obligations hereunder. Under all circumstances the
rights of the Grantee to any asset held by TEPPCO will be no greater than the
rights expressed in the Plan. Nothing contained in the Plan or an Award  will constitute a guarantee by TEPPCO that
the assets of TEPPCO will be sufficient to pay any benefits under the Plan or
would place the Grantee in a secured position ahead of general creditors of
TEPPCO; the Grantees are only unsecured creditors of TEPPCO with respect to
their Plan benefits and the Plan constitutes a mere promise by TEPPCO to make
benefit payments in the future. No specific assets of TEPPCO have been or will
be set aside, or will be pledged in any way for the performance of TEPPCO’s
obligations under the Plan which would remove such assets from being subject to
the general creditors of TEPPCO.

9.3           Unfunded Arrangement. It is intended
that the Plan shall be unfunded for tax purposes and for purposes of Title of
the Employee Retirement Income Security Act of 1974, as amended.

 IX-1

 

 

ARTICLE X

MISCELLANEOUS

10.1         No Employment Obligation. The
granting of any Award shall not constitute an employment contract, express or
implied, nor impose upon TEPPCO or any Affiliate any obligation to employ or
continue to employ the Grantee. The right of TEPPCO or any Affiliate to
terminate the employment of any person shall not be diminished or affected by
reason of the fact that an Award has been granted to him.

10.2         Tax Withholding. TEPPCO shall be
entitled to deduct from payments made under an Award or other compensation
payable to each Grantee any sums required by federal, state, or local tax law
to be withheld with respect to payments under the Award.

10.3         Indemnification of the Committee. TEPPCO
shall indemnify each present and future member of the Committee against, and
each member of the Committee shall be entitled without further act on his part
to indemnity from TEPPCO for, all expenses (including attorney’s fees, the amount
of judgments and the amount of approved settlements made with a view to the
curtailment of costs of litigation, other than amounts paid to TEPPCO itself)
reasonably incurred by him in connection with or arising out of any action,
suit, or proceeding in which he may be involved by reason of his being or
having been a member of the Committee, whether or not he continues to be a
member of the Committee at the time of incurring the expenses — including,
without limitation, matters as to which he shall be finally adjudged in any
action, suit or proceeding to have been found to have been negligent in the
performance of his or her duty as a member of the Committee. However, this
indemnity shall not include any expenses incurred by any member of the
Committee in respect of matters as to which he 
shall be finally adjudged in any action, suit or proceeding to have been
guilty of gross negligence or willful misconduct in the performance of his duty
as a member of the Committee. In addition, no right of indemnification under
the Plan shall be available to or enforceable by any member of the Committee
unless, within 60 days after institution of any action, suit or proceeding, he
shall have offered TEPPCO, in writing, the opportunity to handle and defend
same at its own expense. This right of indemnification shall inure to the
benefit of the heirs, executors or administrators of each member of the
Committee and shall be in addition to all other rights to which a member of the
Committee may be entitled as a matter of law, contract, or otherwise.

10.4         Gender and Number. If the context
requires, words of one gender when used in the Plan shall include the other and
words used in the singular or plural shall include the other.

10.5         Headings. Headings of Articles and
Sections are included for convenience of reference only and do not constitute
part of the Plan and shall not be used in construing the terms of the Plan.

10.6         Other Compensation Plans. The
adoption and maintenance of the Plan shall not affect any other stock option,
incentive or other compensation or benefit plans in effect for 

 X-1
 

 

TEPPCO or any Affiliate or preclude TEPPCO from establishing any other
forms of incentive or other compensation for employees of TEPPCO or any
Affiliate.

10.7         Rights of Company and Affiliates. The
existence of Phantom Units shall not affect in any way the right or power of
TEPPCO or an Affiliate to (a) make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in TEPPCO’s or an Affiliate’s  structure or business, (b) approve and
consummate any merger or consolidation of TEPPCO or an Affiliate  with or into any entity, (c) issue any
bonds, debentures or Company or Affiliate interests of any nature whatsoever to
any person, (d) approve and consummate the dissolution or liquidation of
TEPPCO or an Affiliate or any sale or transfer of all or any part of TEPPCO’s
or an Affiliate’s assets or business or (e) approve and consummate any
other act or proceeding whether of a similar character or otherwise.

10.8         Nonalienation of Benefits. No
benefit provided under the Plan shall be transferable by the Grantee except
pursuant to a state domestic relations order. No right or benefit under the
Plan shall be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance or charge. Any attempt to anticipate, alienate, sell, assign,
pledge, encumber or charge any right or benefit under the Plan shall be void. No
right or benefit under the Plan shall, in any manner, be liable for or subject
to any debts, contracts, liabilities or torts of the person entitled to the
right or benefit. If any Grantee becomes bankrupt or attempts to anticipate,
alienate, assign, pledge, sell, encumber or charge any right or benefit under
the Plan then the right or benefit shall, in the discretion of the Committee,
cease. In that event, TEPPCO and/or one or more Affiliates may hold or apply
the right or benefit or any part of the right or benefit for the benefit of the
Grantee, his  spouse, children or other
dependents or any of them in the manner and in the proportion that the
Committee shall deem proper, in its sole discretion, but is not required to do
so. The restrictions in this Section 9.8 shall not apply to state domestic
relations orders.

10.9         No Rights as an Owner. No Grantee
shall have any rights as a Unit owner as a result of his Award. No Award will
permit any Grantee to exercise any managerial rights or powers with respect to
TEPPCO, the Partnership or any Affiliate.

10.10       Governing Law. The validity,
interpretation, construction and enforceability of the Plan shall be governed
by the laws of the State of Texas.

 X-2

 

 

IN WITNESS WHEREOF,
TEPPCO has caused this Agreement to be executed by its authorized officer on
this 23rd day of February, 2005, effective as of January 1, 2005.

 

	
  

  	
  TEXAS EASTERN PRODUCTS PIPELINE 

  COMPANY, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ BARRY R. PEARL

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

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