Document:

Exhibit 10.16

 

SEVERANCE AGREEMENT

 

This Agreement made as of the 1st day of September,
2004, by and between Glenmoor LLC, a Delaware limited liability company (the “Company”),
and Robert B. Wallace, residing at                                             
(“Employee”).

 

WHEREAS, Employee is an executive of the Company,
currently serving as its Senior Vice President – Finance and Chief Financial
Officer, and Employee holds similar positions in several BPL Entities;

 

WHEREAS, Employee is an employee of, and receives
benefits through, Buckeye Pipe Line Services Company (“BPLSC”), an Affiliate of
the Company. For purposes of this Agreement, Employee’s employment and
provisions of services to BPLSC shall be deemed as the employment by, and
provision of services to, the Company;

 

WHEREAS, the Managers of the Company (the “Managers”)
believe that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of Employee to the Company without
distraction notwithstanding the fact that the Company, or its parent
corporation, could be subject to a change of control, although no such
transaction is currently being discussed, and that such possibility, and the
uncertainty and questions which it may raise among management, may result
in the departure or distraction of key management personnel to the detriment of
the Company; and

 

WHEREAS, in consideration for Employee agreeing to
continue in employment with the Company and agreeing to keep Company
information confidential and not to compete with the Company in the event
Employee’s employment is terminated, the Company 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
the Company is terminated without cause or in the event of a change of control;

 

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” and “Associate” shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.

 

“Base Compensation” shall mean $300,000.

 

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“Beneficial Owner” of any securities shall have the
meaning ascribed to such term in Rule 13d-2 of the General Rules and
Regulations under the Exchange Act.

 

“BPL Entities” shall mean BPL Management LLC, BPL Acquisition
L.P. (“BPL Acquisition”), Glenmoor LLC, Buckeye Management Company LLC, Buckeye
Pipe Line Company LLC, and BPLSC.

 

“Cause” shall mean (i) misappropriation of funds
or any act of common law fraud, theft, or embezzlement, (ii) habitual
insobriety or substance abuse, (iii) conviction of or plea of nolo
contendere to a felony or any crime involving moral turpitude, (iv) willful
misconduct or gross negligence by Employee in the performance of his duties,
the willful failure of Employee to perform a material function of Employee’s
duties hereunder or material failure to comply with any lawful directive of the
Board, or Employee’s engaging in a conflict of interest or other breach of
fiduciary duty, (v) material violation of the code of conduct of the BPL
Entities and policy on workplace harassment, and (vi) subject of a
judicial or administrative order obtained or issued by the Securities and
Exchange Commission for any securities violation involving fraud.

 

“Change of Control” shall be deemed to have taken
place upon the occurrence of any of the following events:

 

(a)                                 any Person, except the BPL Entities or
any employee benefit plan of the BPL Entities (or of any Affiliate of
Associate, or any Person or entity organized, appointed or established by the
BPL Entities for or pursuant to the terms of any such employee benefit plan),
together with all Affiliates and Associates of such Person, shall become the
beneficial owner, or the holder of proxies, in the aggregate of 80% or more of
the limited partnership units (the “Units”) of BPLP then outstanding; provided, however, that no “Change of Control” shall be
deemed to occur for purposes of clause (i) hereof during any period in
which any such Person, and its Affiliates and Associates, are bound by the
terms of a standstill agreement under which such parties have agreed not to
acquire more than 79% of the Units then outstanding or to solicit proxies; or

 

(b)                                 any Person, except one or more of the
equity owners of BPL Acquisition as of the date hereof or any employee benefit
plan of the BPL Entities (or of any Affiliate or Associate or any Person or
entity organized, appointed or established by the BPL Entities for or pursuant
to the terms of any such employee benefit plan), together with all Affiliates
and Associates of such Person, shall become the Beneficial Owner, or the holder
of proxies, in the aggregate of 51% or more of the general partner interests of
BPLP; or

 

(c)                                  if BPLP and the General Partner are
combined into a single entity (the “Successor”), any Person, except one or more
of the equity owners of BPL Acquisition as of the date hereof or any employee
benefit plan of the BPL Entities (or of any Affiliate or Associate or any
Person or entity organized, appointed or established by the BPL Entities for or
pursuant to the thereof any such employee benefit plan), together with all
Affiliates and Associates of such Person, shall become the Beneficial Owner, or
the holder of proxies, in the aggregate of 50% or more of the voting equity
interests of the

 

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Successor then outstanding; provided,
however, that no “Change of Control” shall be deemed to occur for
purposes of clause (c) hereof during any period in which any such Person,
and its Affiliates and Associates, are bound by the terms of a standstill
agreement under which such parties have agreed not to acquire more than 49% of
the voting equity interests of the Successor then outstanding or to solicit
proxies.

 

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

 

“Partnerships” means Buckeye Partners, L.P. and its
operating subsidiaries.

 

“Person” shall have the same meaning as in Section 13(d) and
14(d) of the Exchange Act.

 

“Subsidiary” shall have the meaning ascribed to such
term in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act.

 

“Termination Date” shall mean 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” shall mean the termination
of Employee’s active employment relationship with the Company.

 

2.                                      Notice of Termination. Any Termination of Employment shall be
communicated by a Notice of Termination to the other party hereto given in
accordance with Section 16 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, upon the Termination of Employee that is either:

 

(i)                                     initiated by the Company within one year
of the date hereof 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

 

(ii)                                  initiated by Employee after a Change of
Control has occurred upon one or more of the following occurrences:

 

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(A)                               any failure of the Company to comply with
and satisfy any of the terms of this Agreement;

 

(B)                               any significant reduction by the Company
of the authority, duties, reporting responsibilities or job responsibilities of
Employee;

 

(C)                               any removal by the Company of Employee
from the employment grade or officer positions which Employee holds as of the
date hereof except in connection with promotions to higher office, or any
elimination of Employee from eligibility to participate in employee benefit
plans or policies except changes applicable to all executive level employees as
a group;

 

(D)                               any reduction or diminution in Employee’s
base compensation amount or annual bonus opportunity; or

 

(E)                                a transfer of Employee, without his
express written consent, to a location that is more than 100 miles from his
principal place of business immediately preceding the Change of Control

 

the Company shall pay to
Employee, within fifteen days after the Termination Date, an amount in cash,
payable in a lump sum, equal to (x) Employee’s Base Compensation in the case of
a Termination under Section 3(a)(i), and (y) twice Employee’s Base
Compensation in the case of a Termination under Section 3(a)(2). 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 Company and all
related parties with respect to all matters arising out of Employee’s
employment by the Company (other than any entitlements under the terms of this
Agreement or under any other plans or programs of the Company 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, Employee for a period of twelve (12) months
shall be entitled to continued coverage under the medical and dental benefits
plans and policies of the BPL Entities at the same level of coverage (and
required employee contributions, if any) as Employee was receiving at the time
of his Termination Date, subject to the BPL Entities’ rights to make changes to
such plan and employee contributions for all of its executive level employees
generally and further subject to the BPL Entities’ rights to provide Employee
with cash, on a tax equivalent basis, such that Employee is able to purchase
comparable coverage on his own; 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;
and, provided, further, that such extended coverage shall be in addition to,
and not as a substitute for, Employee’s COBRA rights which shall apply at the
end of such extended coverage.

 

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4.                                      Other Payments. The payment due under Section 3
hereof shall be in addition to and not in lieu of any payments or benefits due
to Employee under any other plan, policy or program of the Company.

 

5.                                      Establishment of Trust. The Company may establish an
irrevocable trust fund pursuant to a trust agreement to hold assets to satisfy
its obligations hereunder. Funding of such trust fund shall be subject to the
Company’s discretion, as set forth in the agreement pursuant to which the fund
will be established.

 

6.                                      Enforcement.

 

(a)                                 In the event that the Company 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, the Company 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 the
Company 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 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.

 

(b)                                 The Company 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 the Company under this Agreement subject to Employee’s
duty to repay such sums to the Company 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, the Company 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.

 

7.                                      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.

 

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8.                                      Non-exclusivity of Rights. Except as provided in Section 4,
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 Company or any of its Subsidiaries or
Affiliates, 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 the Company or the BPL
Entities.

 

9.                                      No Set-Off. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against Employee or others.

 

10.                               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 the Company shall use its best
efforts to satisfy promptly all such requirements.

 

11.                               Confidential Information. Employee recognizes and acknowledges
that, by reason of his relationship to the BPL Entities, he has had and will
continue to have access to confidential information of the BPL Entities and
their Subsidiaries and Affiliates including 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 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 the Company, disclose or use
any such Confidential Information to any person for any reason whatsoever
without the prior written authorization of the Managers; unless such information
is in the public domain through no fault of Employee or except as may be
required by law.

 

12.                               Non-Competition.

 

(a)                                 During his employment by the Company and
for a period of six (6) months thereafter, Employee will not, unless
acting with the prior written consent of the Managers, 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 BPL Entities
or any of their Subsidiaries or Affiliates or the Partnerships in any business
or enterprise that contributes more than ten percent (10%) of the BPL Entities’
or any of their Subsidiaries’ or Affiliates’ or the Partnerships’ revenue,
either during his employment by the Company or on the Termination Date, as
applicable, in any state in which such business or enterprise is so operated
(whether or

 

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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 BPL Entities or any of
their Subsidiaries or Affiliates or the Partnerships if the BPL Entities or any
of their Subsidiaries or Affiliates or the Partnerships derive at least five
percent of its respective gross revenues either during his employment by the Company
or on the Termination Date, as applicable, from such customer. It is recognized
by Employee that the business of the BPL Entities or any of their Subsidiaries
and Affiliates and the Partnerships 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
six (6) month period (i) solicit or divert business from, or attempt
to convert any client, account or customer of the BPL Entities or any of their
Subsidiaries or Affiliates or the Partnerships, whether existing at the date
hereof or acquired during Employee’s employment nor (ii) following
Employee’s employment, solicit or attempt to hire any then employee of the BPL
Entities or any of their Subsidiaries or Affiliates or the Partnerships. This
non-competition provision will not apply, and will have no force or effect, in
the event Employee’s employment is terminated by the Company within one (1) year
of the date hereof for any reason other than Cause.

 

(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.

 

13.                               Equitable Relief.

 

(a)                                 Employee acknowledges that the
restrictions contained in Sections 11 and 12 hereof are reasonable and
necessary to protect the legitimate interests of the Company and its
Subsidiaries and Affiliates, that the Company 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 the Company. Employee
represents that his experience and capabilities are such that the restrictions
contained in Section 12 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 the Company to consult his own legal
counsel in respect of this Agreement, and (ii) that he has had full
opportunity, prior to execution of this Agreement, to review thoroughly this
Agreement with his counsel.

 

(b)                                 Employee agrees that the Company 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

 

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violation of Sections 11
or 12 hereof, which rights shall be cumulative and in addition to any other
rights or remedies to which the Company may be entitled. In the event that
any of the provisions of Sections 11 or 12 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 11
or 12 hereof, including without limitation, any action commenced by the Company
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 Montgomery 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 16
hereof.

 

14.                               Term of Agreement. The term of this Agreement shall be for
five years from the date hereof and shall be automatically renewed for
successive one-year periods unless the Company notifies Employee in writing
that this Agreement will not be renewed at least sixty days prior to the end of
the current term; provided, however, that (i) after a Change of Control
during the term of this Agreement, this Agreement shall remain in effect until
all of the obligations of the parties hereunder are satisfied, and (ii) this
Agreement shall terminate if, prior to a Change of Control, the employment of
Employee with the Company or any of its Subsidiaries or Affiliates, as the case
may be, shall terminate for any reason; provided, however, that in the
event of an involuntary Termination of Employment not for Cause within six
months prior to a Change of Control, Employee shall be entitled to the benefits
of this Agreement notwithstanding such Termination of Employment.

 

15.                               Successor Company. The Company 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 the
Company, by agreement in form and substance satisfactory to Employee, to
acknowledge expressly that this Agreement is binding upon and enforceable
against the Company in accordance with the terms hereof, and to become jointly
and severally obligated with the Company to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform if
no such succession or successions had taken place. Failure of the Company to
obtain such agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement. As used in this Agreement, the Company shall
mean the Company as herein defined and any such successor or successors to its
business and/or assets, jointly and severally.

 

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16.                               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 the Company, to:

 

Glenmoor LLC.

5 Radnor Corporate
Center, Suite 500

100 Matsonford Road

Radnor, PA 19087

Attention: President

 

With a copy to:

 

Morgan, Lewis &
Bockius LLP

1701 Market Street

Philadelphia, PA 19103

Attention: Howard L.
Meyers

 

If to Employee, to:

 

or to such other names or addresses as the Company 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 the Company following a Change of Control, notice at
the last address of the Company or to any successor pursuant to Section 15
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.

 

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 and approved
by the Managers and executed on the Company’s behalf by a duly authorized
officer. 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

 

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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 the Company or the
Managers.

 

(b)                                 Nothing in this Agreement shall be
construed as giving Employee any right to be retained in the employ of the
Company.

 

(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 assigns of the parties
hereto, except that the duties and responsibilities of Employee and the Company
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. 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, including, without limitation, any delay by
Employee in delivering a Notice of Termination pursuant to Section 2
hereof after an event has occurred which would, if Employee had resigned, have
constituted a Termination following a Change of Control pursuant to Section 1
of this Agreement.

 

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.                               Non-Disparagement. Employee agrees that, in communications
with Persons other than the BPL Entities, he shall not disparage in any way,
and shall always speak well of the BPL Entities, the Partnerships their
Affiliates or respective employees and under no circumstances shall Employee,
in communications with Persons other than the BPL Entities, 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. Notwithstanding the foregoing, this Section 22
shall not be construed to prohibit or restrain any criticism or other
statements made in communications exclusively between or among any of the BPL
Entities, the Partnerships and their Affiliates or their respective employees,
to the extent such communications or statements are made in the ordinary course
of  business. The obligations of Employee

 

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under this Section 22
shall continue after the date of employment by any of the BPL Entities, the
Partnerships or their Affiliates. Employee acknowledges that any violation of
this Section 22 may cause irreparable injury to the BPL Entities, the
Partnerships and their Affiliates or their respective employees for which
monetary damages are inadequate and difficult to compute. Accordingly, this Section 22
may be enforced by specific performance, and prospective breaches of this Section 22
may be enjoined.

 

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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.

 

	
  Attest:

  	
  Glenmoor LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
  Employee

  
					

 

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Annex 1

 

TERMINATION OF EMPLOYMENT
AGREEMENT AND RELEASE

 

This termination of employment agreement and release
(the “Agreement”) is between GLENMOOR LLC, a Delaware limited liability company (“Glenmoor”), and Robert B. Wallace (“Employee”),
pursuant to the Severance Agreement between Employee and Glenmoor dated September 1,
2004 (the “Severance Agreement”). Capitalized
terms used but not defined herein shall have the meanings given them in the
Severance Agreement.

 

WHEREAS, Employee is an executive of Glenmoor,
currently serving as its Senior Vice president and Chief Financial Officer, and
Employee holds similar positions in several BPL Entities;

 

WHEREAS, Employee is an employee of, and receives
benefits through, Buckeye Pipe Line Services Company (“BPLSC”), an Affiliate of
Glenmoor. For purposes of this Agreement, Employee’s employment and provisions
of services to BPLSC shall be deemed as the employment by, and provision of
services to, Glenmoor;

 

WHEREAS, Employee’s employment with Glenmoor 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.
Glenmoor and Employee agree that Employee’s employment with Glenmoor 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 Glenmoor’s obligations
under this Agreement, Employee agrees as follows:

 

a.                                      Complete Release. On behalf of Employee and Employee’s
heirs and assigns, Employee fully releases Glenmoor and its 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 “Glenmoor 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 Glenmoor 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 Glenmoor, and the termination of such
relationship or service (the “Employee

 

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Release”); provided, however,
that this Employee Release shall not apply to Glenmoor’s obligations 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 by Employee of any vested
benefits under any retirement plan or policy of Glenmoor or its affiliates to
which he is entitled.

 

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
Glenmoor. In
exchange for Employee’s obligations under this Agreement, Glenmoor 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 Employment Agreement and  Release;

 

b.                                      he has been informed by Glenmoor, 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 Glenmoor nor any of its agents,
representatives or attorneys has made any representations to Employee
concerning the terms or

 

2

 

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 both 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 11, 12 and 13
thereof).

 

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 Glenmoor, 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 Glenmoor or
any of its affiliates or (b) any of the organizational agreements of
Glenmoor and its affiliates, including, without limitation, Buckeye Pipe Line
Company LLC and Buckeye Partners, L.P.

 

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.

 

3

 

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: Robert B. Wallace

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GLENMOOR LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
						

 

4Exhibit 10.21

FORM OF

FIFTH AMENDED AND RESTATED INCENTIVE
COMPENSATION AGREEMENT

 

This Fifth Amended and
Restated Incentive Compensation Agreement, dated as of
                           ,
2006 (this “Agreement”), is entered into between BUCKEYE GP LLC, a Delaware
limited liability company (“General Partner”), and BUCKEYE PARTNERS, L.P., a
Delaware limited partnership (the “Partnership”).

WHEREAS, the Partnership
and MainLine Sub LLC (“Holdco”) entered into a Fourth Amended and Restated
Incentive Compensation Agreement dated December 15, 2004 (the “Prior
Agreement”);

WHEREAS, pursuant to an
agreement between Holdco and the General Partner, dated the date hereof, Holdco
assigned the Prior Agreement to the General Partner;

WHEREAS, the parties
hereto desire to amend and restate the Prior Agreement in its entirety to
supplement the Partnership Agreement (defined below) as the context requires
and recharacterize payments pursuant to this Agreement as distributions
pursuant to Section 5.2(c) of the Partnership Agreement and to adopt the law of
the State of Delaware as the governing law of this Agreement;

WHEREAS, Section 3.6 of
the Prior Agreement provides that the Prior Agreement may be amended only after
complying with Section 17.2(a) of the Amended and Restated Agreement of Limited
Partnership dated as of December 15, 1986, as amended as of the date hereof
(the “Partnership Agreement”), which provides that, without the prior approval
of a two-thirds interest of the limited partners of the Partnership, the General
Partner shall not amend the Prior Agreement unless such amendment does not, in
the good faith opinion of the General Partner, adversely affect the limited
partners of the Partnership (the “Limited Partners”) in any material respect;
and

WHEREAS, the Board of
Directors of the General Partner has approved the amendment and restatement of
the Prior Agreement in the form set out in this Agreement and has further
determined that, in its good faith opinion, this amendment and restatement of
the Prior Agreement does not adversely affect the Limited Partners in any
material respect.

NOW THEREFORE, the
parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

Set forth below are
definitions of certain capitalized terms used in this Agreement.  All capitalized terms used herein and not
otherwise defined herein shall have the meanings provided therefor in the
Partnership Agreement.

Section 1.1             “Aggregate Target Quarterly
Amount” means the Target Quarterly Amount per LP Unit times the number of
Units, other than ESOP LP Units, outstanding.

 

Section 1.2             “Aggregate Target Special
Distribution Amount” means the Target Special Distribution Amount times the
number of Units outstanding.

Section 1.3             “Available Cash” for any
quarter means the Partnership’s consolidated cash receipts during such quarter
(including, for this purpose, amounts retained as described in clause (b) below
during prior quarters and determined by the General Partner, in its sole
discretion, to no longer be required to be so retained) less (a) its
consolidated cash expenditures during such quarter (other than distributions of
Available Cash for the prior quarter and expenditures of amounts received in
prior quarters) and (b) such retentions for working capital, anticipated cash
expenditures (including capital expenditures and debt service) and
contingencies as the General Partner, in its sole discretion, deems
appropriate.

Section 1.4             “ESOP LP Units” means the
2,573,146 LP Units issued to Buckeye Pipe Line Services Company in connection
with the transactions contemplated by the Exchange Agreement, regardless of
whether such LP Units continue to be held by Buckeye Pipe Line Services
Company.

Section 1.5             “IPO Price” is $10.00 per LP
Unit.

Section 1.6             “Pipeline Partnership” means
the limited partnership subsidiaries and the other subsidiaries of the
Partnership, collectively.

Section 1.7             “Quarterly Cash To Be
Distributed” for any quarter means the Available Cash for such quarter
(excluding cash to be distributed in a Special Distribution) less retentions of
Available Cash necessary to make distributions pursuant to this Agreement and
less cash distributed by the Partnership to the holders of the ESOP LP Units or
the GP Units with respect to their ESOP LP Units and GP Units.

Section 1.8             “Special Cash To Be Distributed”
means the cash or fair market value of securities to be distributed in a
Special Distribution, less the cash or fair market value of securities
distributed by the Partnership to the holders of ESOP LP Units or the GP Units
with respect to their ESOP LP Units and GP Units.

Section 1.9             “Special Distribution” means
any special cash distribution to Unitholders in excess of $10 million from the
proceeds of a financing, sale of assets or disposition (or a series of related
financings, sales of assets or dispositions) or a special distribution of
marketable securities with a fair market value in excess of $10 million;
provided, however, that no special distribution from the proceeds of a
financing shall be made without the approval of the disinterested directors of
the Board of Directors of the General Partner or a committee thereof.

Section 1.10           “Target Quarterly Amount” is
$.325 per quarter.

Section 1.11           “Target Special Distribution
Amount” means the amount which, together with all amounts distributed per
LP Unit prior to the Special Distribution compounded quarterly from the
respective dates of distribution to the date of such Special Distribution at
the Target Rate, would equal the IPO Price compounded quarterly at the Target
Rate from December 23, 1986 to the date of such Special Distribution.

 

2

 

Section 1.12           “Target Rate” is 13% per
annum.

Section 1.13           “Unitholders” means the
holders of record collectively of the LP Units and the GP Units.

ARTICLE II

INCENTIVE COMPENSATION AGREEMENT

Section 2.1             Quarterly Incentive Distribution.  If Quarterly Cash To Be Distributed for any
calendar quarter exceeds the Aggregate Target Quarterly Amount and such
Quarterly Cash To Be Distributed is distributed to the Limited Partners as
provided in the Partnership Agreement, the Partnership shall, subject to
Section 2.3 and Section 2.5, distribute to the General Partner an amount equal
to the sum of (a) 15% of the portion of the Quarterly Cash To Be Distributed
which (i) exceeds $.325 per LP Unit and (ii) does not exceed $.35 per LP Unit;
(b) 25% of the portion of the Quarterly Cash To Be Distributed which (i)
exceeds $.35 per LP Unit and (ii) does not exceed $.375 per LP Unit; (c) 30% of
the portion of the Quarterly Cash To Be Distributed which (i) exceeds $.375 per
LP Unit and (ii) does not exceed $.40 per LP Unit; (d) 35% of the portion of
the Quarterly Cash To Be Distributed which (i) exceeds $.40 per LP Unit and
(ii) does not exceed $.425 per LP Unit; (e) 40% of the portion of the Quarterly
Cash To Be Distributed which (i) exceeds $.425 per LP Unit and (ii) does not
exceed $.525 per LP Unit; and (f) 45% of the portion of the Quarterly Cash To
Be Distributed which exceeds $.525 per LP Unit. For purposes of this Section
2.1, “LP Units” shall not include ESOP LP Units.

Section 2.2             Special Incentive Distribution.  If the Special Cash To Be Distributed in a
Special Distribution exceeds the Aggregate Target Special Distribution Amount
for such Special Distribution and such Special Cash To Be Distributed is
distributed to the Limited Partners as provided in the Partnership Agreement,
the Partnership shall, subject to Section 2.3 and Section 2.5, distribute to
the General Partner, out of Special Cash To Be Distributed, an amount equal to
(a) 15% of the portion of the Special Cash To Be Distributed which (i) exceeds
100% of the Aggregate Target Special Distribution Amount and (ii) is not more
than 115% of the Aggregate Target Special Distribution Amount, plus (b) 25% of
the amount (if any) by which the Special Cash To Be Distributed exceeds 115% of
the Aggregate Target Special Distribution Amount.

Section 2.3             Termination Upon Removal of
General Partner.  The agreement
contained in this Article II shall terminate if the General Partner is removed
as general partner of the Partnership pursuant to the Partnership Agreement,
effective upon the date of such removal. 
However, the value of the right to receive distributions as provided in
this Article II shall be included in determining the fair market value of the
GP Units and other Partnership Interests pursuant to Section 13.2 of the
Partnership Agreement.

Section 2.4             Certain Events.  If there is a change in the LP Units to
divide the outstanding LP Units into a greater number of LP Units or to combine
outstanding LP Units into a smaller number of LP Units, in each case in
accordance with the terms and conditions of the Partnership Agreement, the
amounts reflected in Sections 1.5, 1.10 and 2.1 hereof shall be adjusted
automatically to reflect such division or combination and shall apply to all
subsequent calculations of distributions to the General Partner hereunder.

 

3

 

Section 2.5             Distribution Upon Liquidation.  Any distribution to the General Partner
pursuant to Sections 2.1 and 2.2 during the period in which a liquidation of
the Partnership occurs pursuant to Section 14.3 of the Partnership Agreement
shall equal the amounts allocated pursuant to Section 5.1(c)(vi) of the
Partnership Agreement.

ARTICLE III

MISCELLANEOUS

Section 3.1             Headings.  All article or section headings in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any of the provisions hereof.

Section 3.2             Binding Effect; Benefit of
Agreement; Assignment.  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. 
Absent the written consent of each party hereto and, this Agreement may
not be assigned by either party. 
Notwithstanding the foregoing, the General Partner may assign this
Agreement, and the Partnership Interests represented hereby, to (i) an entity
which, directly or indirectly, wholly owns or is wholly owned by the General
Partner, (ii) any entity wholly owned by any entity which wholly owns the
General Partner or (iii) a transferee of the GP Units under Section 11.1 of the
Partnership Agreement; provided that, any such transferee must be admitted to
the Partnership as an additional or successor general partner of the
Partnership.  For so long as the
Executive Employment Agreement, dated as of December 15, 2004, between the
General Partner, Holdco and Buckeye Pipe Line Services Company is in effect,
the General Partner may not assign this Agreement without the prior written
consent of the Trustee of the ESOP, which consent will not be unreasonably
withheld.

Section 3.3             Integration.  This Agreement, together with the Partnership
Agreement, constitutes the entire agreement among the parties pertaining to the
subject matter hereof and supersedes all prior agreements and understandings
pertaining thereto.  This Agreement shall
constitute a supplement to the Partnership Agreement.

Section 3.4             Counterparts.  This Agreement may be executed in any number
of counterparts, all of which together shall constitute one agreement binding
on the parties hereto.

Section 3.5             Applicable Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware.

Section 3.6             Amendment.  This Agreement may be amended only after
complying with Section 17.2(a) of the Partnership Agreement.

 

4

IN WITNESS WHEREOF, this
Fifth Amended and Restated Incentive Compensation Agreement has been duly
executed by the parties hereto as of the date first above written.

 

	
   

  	
  BUCKEYE GP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  BUCKEYE
  PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  BUCKEYE GP LLC,

  
	
   

  	
   

  	
  as General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

 

 

 

 

 

 

[Fifth Amended and Restated Incentive Compensation Agreement]

 

 

5

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