EXHIBIT 10.2
MANAGEMENT AGREEMENT
DATED AS OF MARCH 22, 1996
AMONG
BUCKEYE MANAGEMENT COMPANY,
BUCKEYE PIPE LINE COMPANY
AND
GLENMOOR PARTNERS LLP
A PENNSYLVANIA LIMITED LIABILITY PARTNERSHIP
MANAGEMENT AGREEMENT
This Management Agreement (the "Agreement"), dated as of March 22, 1996, is
entered into among Buckeye Management Company, a Delaware corporation (the
"General Partner"), Buckeye Pipe Line Company, a Delaware corporation ("BPLC")
and Glenmoor Partners LLP ("Glenmoor"), a Pennsylvania limited liability
partnership.
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, the officers of the General Partner and BPLC, under the supervision
of the board of directors of the General Partner and BPLC, respectively,
currently manage the Partnership and its Operating Partnerships; and
Whereas, on the date hereof, Pennsylvania Company ("Pennco"), a wholly owned
subsidiary of American Financial Group, Inc. ("AFG"), has sold all of the
issued and outstanding capital stock of the General Partner to BMC Acquisition
Company, a newly formed Delaware corporation ("BAC"); and
Whereas, the preferred stock of BAC is held by an employee stock ownership
plan, whose participants consist of the employees of Glenmoor, the General
Partner and BPLC, and the common stock of BAC is held by Glenmoor and certain
managers of BPLC; and
Whereas, Glenmoor intends to employ all of the executive officers and
director-level managers of the General Partner and BPLC; and
Whereas, the General Partner and BPLC desire to engage and appoint Glenmoor
to provide senior management services to the General Partner and BPLC 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
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 currently
performed by the officers of the General Partner and BPLC. Management
functions to be performed by Glenmoor shall include, among other things,
supervision of day-to-day 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
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Partner and BPLC. Employees of Glenmoor shall 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
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 the past practice of AFG.
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
(whether or not such individuals are also partners 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 X.X. Xxxxxxxxxx and X. Xxxxxxx) 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. The
General Partner and BPLC shall also make contributions to the BMC Acquisition
Company Employee Stock Ownership Plan ("ESOP") on behalf of Glenmoor employees
who are also officers of the General Partner or BPLC in a manner consistent
with contributions to the ESOP on behalf of BPLC employees. The executive
officers of BPLC and the General Partner who are employed by Glenmoor will be
directly compensated by Glenmoor and, except for the ESOP contributions noted
above, will not be separately compensated by the General Partner or BPLC for
serving in their officer capacity. In addition to the management fee, the
General Partner shall reimburse Glenmoor for any costs arising out of any
common and competitive severance agreements between Glenmoor and its employees
which have been approved by the appropriate committee of the board of
directors of the General Partner and which are triggered by the termination of
a Glenmoor employee as an officer of the General Partner or BPLC or the
termination of this Agreement by the General Partner.
ARTICLE III
Outside Activities
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
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 partner, 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 Indemnitee's status as (i) a general
partner of Glenmoor; (ii) an 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.
(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.
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ARTICLE V
No Interest Conveyed to Glenmoor
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
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 partners 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.
ARTICLE VII
Reports, Records and Access
Glenmoor shall prepare, maintain and furnish all reports, records and
information required by the Partnership Agreement.
ARTICLE VIII
General Provisions
8.01 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 0000 Xxxxxxxx Xxxx., Xxxxxxxxx, Xxxxxxxxxxxx
00000, or by Glenmoor at its principal offices located at 5 Radnor Corporate
Center, 000 Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxx 00000.
8.02 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.
8.03 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.
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8.04 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.
8.05 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.
8.06 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
8.07 Accounting Principles. All financial reports requested to be rendered
under this Agreement shall be prepared in accordance with generally accepted
accounting principles.
8.08 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.
8.09 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.
In Witness Whereof, this Agreement has been duly executed by the parties
hereto as of the date first above written.
Buckeye Management Company
/s/ Xxxxxx X. Xxxxxxx
By: _________________________________
Buckeye Pipe Line Company
/s/ Xxxxxxx X. Xxxxxx
By: _________________________________
Glenmoor Partners LLP, a
Pennsylvania Limited Liability
Partnership
/s/ C. Xxxxxxx Xxxxxx
By: _________________________________
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