EXHIBIT 10.11
CONFORMED COPY
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MANAGEMENT AGREEMENT
Dated as of January 1, 1998
among
BUCKEYE MANAGEMENT COMPANY,
BUCKEYE PIPE LINE COMPANY
and
GLENMOOR, LTD.
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MANAGEMENT AGREEMENT
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THIS MANAGEMENT AGREEMENT (the "Agreement"), dated as of
January 1, 1998, is entered into among BUCKEYE MANAGEMENT COMPANY, a Delaware
corporation (the "General Partner"), BUCKEYE PIPE LINE COMPANY, a Delaware
corporation ("BPLC"), and GLENMOOR, LTD., a Delaware corporation ("Glenmoor")
formerly known as "BMC Acquisition Company".
WITNESSETH:
WHEREAS, the General Partner owns a 1% general partnership
interest in, and serves as sole general partner of, Buckeye Partners, L.P., a
publicly traded Delaware limited partnership (the `Partnership"); and
WHEREAS, BPLC owns a 1% general partnership interest in, and
serves as sole general partner of, Buckeye Pipe Line Company, L.P., Buckeye Tank
Terminals Company, L.P., Everglades Pipe Line Company, L.P. and Laurel Pipe Line
Company, L.P., each a Delaware limited partnership (together, the "Operating
Partnerships"), and the Partnership owns a 99% limited partnership interest in
each such entity; and
WHEREAS, Glenmoor acquired all of the issued and outstanding
capital stock of the General Partner from Pennsylvania Company, a wholly owned
subsidiary of American Financial Group, Inc. ("AFG"), on March 22, 1996; and
WHEREAS, pursuant to a Management Agreement, dated as of March
22, 1996 (the "1996 Agreement"), the General Partner and BPLC engaged Glenmoor
Partners LLP, a Pennsylvania limited liability partnership ("Glenmoor Partners")
and the owner of all of the issued and outstanding capital stock of Glenmoor, to
provide senior management services to the General Partner and BPLC; and
WHEREAS, Glenmoor Partners dissolved effective December 31,
1997, and Glenmoor wishes to assume, and the General Partner and BPLC wish to
engage Glenmoor to provide, the senior management services previously provided
by Glenmoor Partners under the 1996 Agreement, in accordance with the terms set
forth below.
NOW, THEREFORE, in consideration of the mutual promises
hereinafter set forth and intending to be legally bound, the General Partner,
BPLC and Glenmoor hereby agree as follows:
ARTICLE I
Appointment of Glenmoor
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The General Partner and BPLC hereby appoint Glenmoor as
managing agent, and Glenmoor accepts its appointment by the General Partner and
BPLC, to manage the business and affairs of the General Partner and BPLC in the
manner which Glenmoor deems appropriate and to perform all management functions
previously performed by Glenmoor Partners. Management functions to be performed
by Glenmoor shall include, among other things, supervision of day-to-day
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activities, ESOP plan administration, insurance management, risk management,
strategic planning and advice regarding corporate and partnership governance
issues. Glenmoor agrees to perform such services under the supervision and
control of the boards of directors of the General Partner and BPLC. Employees of
Glenmoor may also serve as officers of the General Partner and BPLC, as they may
be duly elected from time to time by the boards of directors of the General
Partner and BPLC, respectively.
ARTICLE II
Compensation
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In consideration for the services to be performed hereunder,
the General Partner shall pay Glenmoor an annual management fee, the amount of
which shall be approved each year by the disinterested directors of the General
Partner. In connection with such annual approval, Glenmoor shall submit to the
board of directors of the General Partner an itemized report on the components
of the management fee in reasonable detail, consistent with past practice.
Except to the extent such reimbursement obligations have been released pursuant
to the terms and conditions of the Exchange Agreement, dated as of August 12,
1997, among the General Partner, the Partnership, BPLC, the Operating
Partnerships (as therein defined), and Glenmoor, the management fee shall be
based on the reimbursement of all costs and expenses (direct or indirect)
incurred by Glenmoor which are directly or indirectly related to the
capitalization, business or activities of the Partnership and the Operating
Partnerships, including the salaries, bonuses and benefits (including without
limitation participation in all retirement, savings, welfare, workers'
compensation and other benefit plans maintained by the General Partner and BPLC
for its employees) of employees of Glenmoor reasonably allocated to the General
Partner and BPLC based upon time spent on behalf of the Partnership and the
Operating Partnerships. The management fee shall include a "Senior
Administrative Charge" of not less than $975,000 to compensate Glenmoor for
certain senior management functions (including the services of ▇.▇. ▇▇▇▇▇▇▇▇▇▇
and ▇. ▇▇▇▇▇▇▇) set forth in Article I hereof which were previously provided to
the General Partner by AFG and its affiliates. This Senior Administrative Charge
component of the management fee shall be specifically approved by the
disinterested directors of the General Partner in connection with its annual
approval of the management fee.
ARTICLE III
Outside Activities
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Glenmoor shall be entitled to and may have business interests
and engage in business activities in addition to those relating to the business
of the General Partner, BPLC, the Partnership or any Operating Partnership for
its own account and for the account of others, without having or incurring any
obligation to offer any interest in such businesses or activities to the General
Partner, BPLC, the Partnership or any Operating Partnership; provided, however,
that Glenmoor shall not engage in any businesses or activities that are in
direct competition with the General Partner, BPLC, the Partnership or any
Operating Partnership unless Glenmoor has received prior written consent of the
disinterested directors of the General Partner to engage in such competitive
activities. Neither the General Partner, BPLC, the Partnership, any Operating
Partnership, nor any limited partner of the Partnership, shall have any rights
by virtue of this Agreement, or the relationship created hereby, in any such
business interests of Glenmoor.
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ARTICLE IV
Liability of Glenmoor; Indemnification
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4.01 Liability of Glenmoor. Notwithstanding anything to the contrary in
this Agreement, and except to the extent required by applicable law, neither
Glenmoor, any person who is or was a director, officer, employee or agent of
Glenmoor, or any person who is or was serving at the request of Glenmoor as a
director, officer, partner, trustee, employee or agent of another person
(collectively, the "Indemnitees") shall be liable to the General Partner or BPLC
for any action taken or omitted to be taken by such Indemnitee, provided that
such action was taken in good faith and such action or omission does not involve
the gross negligence or willful misconduct of such Indemnitee. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction or
upon a plea of nolo contendere, or its equivalent, shall not, of itself, create
a presumption that an Indemnitee did not act in good faith or that an action or
omission involves gross negligence or willful misconduct.
4.02 Indemnification. (a) The General Partner and BPLC shall, to the
fullest extent permitted by applicable law, jointly and severally indemnify each
Indemnitee against expenses (including legal fees and expenses), judgments,
fines and amounts paid in settlement, actually and reasonably incurred by such
Indemnitee, in connection with any threatened, pending or completed action, suit
or proceeding to which such Indemnitee was or is a party or is threatened to be
made a party by reason of the Indemnittee's status as (i) as managing agent
under this Agreement; (ii) a director, officer, employee or agent of Glenmoor;
or (iii) a person serving at the request of Glenmoor in another entity in
similar capacity, and which relates to this Agreement or the property, business,
affairs or management of the General Partner or BPLC, provided that the
Indemnitee acted in good faith, and the act or omission which is the basis of
such demand, claim, action, suit or proceeding does not involve the gross
negligence or willful misconduct of such Indemnitee.
(b) Expenses (including legal fees and expenses) incurred in
defending any proceeding subject to Section 4.02(a) hereof shall be paid by the
General Partner or BPLC in advance of the final disposition of such proceeding
upon receipt of an undertaking (which need not be secured) by or on behalf of
the Indemnitee to repay such amount if it shall ultimately be determined, by a
court of competent jurisdiction, that the Indemnitee is not entitled to be
indemnified by the General Partner or BPLC as authorized hereunder.
(c) The indemnification provided by Section 4.02(a) hereof
shall be in addition to any other rights to which the Indemnitees may be
entitled and shall continue as to an Indemnitee who has ceased to serve in a
capacity for which the Indemnitee is entitled to indemnification, and shall
inure to the benefit of the heirs, successors, assigns, administrators and
personal representatives of the Indemnitee.
(d) To the extent commercially reasonable, the General Partner
shall purchase and maintain insurance on behalf of the Indemnitees against any
liability which may be asserted against, or expense which may be incurred by,
such Indemnitees in connection with the General Partner's and BPLC's activities,
whether or not the General Partner or BPLC would have the power to indemnify
such Indemnitees against such liability under the provisions of this Agreement.
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(e) An Indemnitee shall not be denied indemnification in whole
or in part under Section 4.02(a) hereof because the Indemnitee had an interest
in the transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement and the
Partnership's Amended and Restated Agreement of Limited Partnership (the
"Partnership Agreement").
(f) The provisions of this Article IV are for the benefit of
the Indemnitees and their heirs, successors, assigns, administrators and
personal representatives, and shall not be deemed to create any rights for the
benefit of any other persons.
ARTICLE V
No Interest Conveyed to Glenmoor
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This Agreement is a management agreement only and does not
convey to Glenmoor any right, title or interest in or to any assets of the
General Partner or BPLC, except that Glenmoor shall have and is hereby granted a
license to enter upon and use such assets for the purpose of performing its
duties and obligations hereunder.
ARTICLE VI
Term
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The term of this Agreement shall commence as of the date
hereof and shall continue until the earlier of (i) the dissolution and
liquidation of the Partnership, (ii) the dissolution and liquidation of Glenmoor
or (iii) the removal of the General Partner as general partner of the
Partnership. Notwithstanding the foregoing, the General Partner may terminate
this Agreement on not less than 180 days' prior written notice upon a
determination by the disinterested directors of the General Partner that
continuation of this Agreement is not in the best interests of the Partnership;
provided, however, that if the General Partner terminates this Agreement
pursuant to the foregoing clause for reasons other than the bad faith, gross
negligence or willful misconduct of Glenmoor or its directors, officers or
employees in connection with a matter material to the Partnership, the General
Partner shall pay Glenmoor promptly following the effective date of Glenmoor's
termination a termination fee equal to (i) the previous year's Senior
Administrative Charge multiplied by three, plus (ii) any amount outstanding
pursuant to Article II hereof, including reimbursement of severance obligations
arising out of the termination of this Agreement by the General Partner which
have been approved by the appropriate committee of the board of directors of the
General Partner.
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ARTICLE VII
General Provisions
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7.01 Address and Notices. Any notice under this Agreement shall be
deemed given if received in writing by the General Partner and BPLC at BPLC's
principal offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
or by Glenmoor at its principal offices located at 5 Radnor Corporate Center,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
7.02 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.
7.03 Assignment; Binding Effect. This Agreement may not be assigned by
Glenmoor without the prior written consent of the disinterested directors of the
General Partner. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their permitted successors and assigns.
7.04 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with regard to management services to be provided by
Glenmoor to the General Partner and BPLC and supersedes all prior agreements or
understandings between the General Partner, BPLC and Glenmoor or their agents
with regard to such services.
7.05 Modification; Waiver. No modification or waiver of any provision
of this Agreement shall be valid unless it is in writing and signed by the party
against whom it is sought to be enforced. No failure by any party to insist upon
the strict performance of any covenant, duty, agreement or condition of this
Agreement, or to exercise any right or remedy consequent upon a breach thereof,
shall constitute a waiver of any such breach or of any other covenant, duty,
agreement or condition. No waiver at any time of any provision of this Agreement
shall be deemed a waiver of any other provision of this Agreement at that time
or a waiver of that or any other provision at any other time.
7.06 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
7.07 Accounting Principles. All financial reports requested to be
rendered under this Agreement shall be prepared in accordance with generally
accepted accounting principles.
7.08 Severability. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions hereof, or of such provision in other
respects, shall not be affected thereby.
7.09 Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania without giving
effect to any conflict of laws provisions.
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IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the date first above written.
BUCKEYE MANAGEMENT COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
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Title: President
BUCKEYE PIPE LINE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
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Title: President
GLENMOOR, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
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Title: President