PACIFIC ENERGY PARTNERS LP
EXHIBIT 10.12
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<TYPE>EX-10.12
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<FILENAME>a2106299zex-10_12.htm
<DESCRIPTION>EXHIBIT 10.12
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<BR></FONT><FONT SIZE=2><B>Exhibit 10.12    <BR>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>EMPLOYMENT AGREEMENT  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>THIS EMPLOYMENT AGREEMENT</B></FONT><FONT SIZE=2> (the "</FONT><FONT SIZE=2><B>Agreement</B></FONT><FONT SIZE=2>") is made and entered
into as of the 1st day of October, 2002 by and between Pacific Energy GP,&nbsp;Inc., a Delaware corporation, having its principal executive offices in Long Beach, California (the
"</FONT><FONT SIZE=2><B>Company</B></FONT><FONT SIZE=2>") and Douglas L. Polson, residing in Douglas County, Colorado (the "</FONT><FONT SIZE=2><B>Executive</B></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>WHEREAS,</B></FONT><FONT SIZE=2> the Executive is currently serving as Executive Chairman of the Company; and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>WHEREAS,</B></FONT><FONT SIZE=2> the Company and the Executive mutually desire to formalize the employment arrangement of the Executive and to agree upon the
terms of the Executive's employment as the Executive Chairman of the Company and, in addition, to agree as to certain benefits of said employment. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>NOW, THEREFORE,</B></FONT><FONT SIZE=2> in consideration of the mutual promises and agreements set forth below, the Company and the Executive hereby agree as
follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>TERM OF EMPLOYMENT</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> Subject to the terms of this Agreement, the Company hereby continues the
employment of the Executive, and the Executive hereby accepts such continuing employment, for the period beginning on October&nbsp;1, 2002 and ending September&nbsp;30, 2004, except as provided
herein in Paragraph&nbsp;4 (the "</FONT><FONT SIZE=2><B>Term</B></FONT><FONT SIZE=2>"). This Agreement shall be extended for a period of one year on each September&nbsp;30, beginning in 2004,
unless either party gives notice of termination by the immediately preceding May&nbsp;31. The Executive and the Company acknowledge that, except as may otherwise be provided under this Agreement,
the employment of the Executive by the Company is "at will", and the Executive's employment and/or this Agreement may be terminated by either the Executive or the Company at any time. The consequences
of termination of employment are as set forth in this
Agreement. Portions of this Agreement that by their terms provide or imply that they survive the end of the Term shall survive the end of the Term. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>POSITION AND DUTIES</I></B></FONT><FONT SIZE=2><B>:</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Position</I></B></FONT><FONT SIZE=2>: During the Term, the Executive shall serve as Executive Chairman of the Company and shall have such duties,
responsibilities, and authority as are customarily required of and given to an Executive Chairman and such other duties and responsibilities commensurate with such position as the Board of Directors
of the Company (the "</FONT><FONT SIZE=2><B>Board</B></FONT><FONT SIZE=2>") shall determine from time to time. Such duties, responsibilities, and authority shall include, without limitation,
responsibility for the management, operation, strategic direction, and overall conduct of the business of the Company. The Executive shall perform his duties and responsibilities at the Company's
offices in Denver, Colorado or Long Beach, California, as he deems appropriate. For purposes of this Agreement, the term "</FONT><FONT SIZE=2><B>employment</B></FONT><FONT SIZE=2>" shall include the
Executive's service to the Company or its affiliates (as defined below) in any capacity during the Term; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> the foregoing shall not change the
positions to be held by the Executive. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Commitment of the Executive</I></B></FONT><FONT SIZE=2>: During the Term, the Executive shall devote substantially his full business time, energy, and
ability to the business of the Company. The Executive shall report directly to the Board and shall perform his duties subject to the overall policies and directions of the Board. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Other Positions and Services</I></B></FONT><FONT SIZE=2>: The Executive may (i)&nbsp;with express authorization of the Board, serve as a director or
trustee of other for profit corporations or businesses which are not in competition with the business of the Company or the business of any of its subsidiaries, or, to his knowledge, any other
affiliate of the Company, present or future, </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that, if a directorship is approved and the Board later determines that the directorship would be
with a competitive entity,
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it shall notify the Executive in writing and the Executive shall have a reasonable period of time to resign such directorship, (ii)&nbsp;serve on civic or charitable boards or committees,
(iii)&nbsp;deliver lectures, fulfill speaking engagements, or teach at educational institutions (and retain any fees therefrom), and (iv)&nbsp;manage personal investments; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the Executive may not engage in any of the activities described in this
Paragraph&nbsp;2 (c)&nbsp;to the extent such activities materially interfere with the performance of the Executive's duties and responsibilities to the Company. As used in this Agreement, the term
"</FONT><FONT SIZE=2><B>affiliate</B></FONT><FONT SIZE=2>" of the Company means any company controlled by, controlling, or under common control with the Company, whether through stock ownership or
otherwise. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Investments</I></B></FONT><FONT SIZE=2>: Without the prior express authorization of the Board, the Executive shall not, directly or indirectly, during
the Term (i)&nbsp;render services of a business, professional, or commercial nature to any other person or firm, whether for compensation or otherwise, or (ii)&nbsp;engage in any activity
competitive with the business of the Company or the business of any of its subsidiaries, present or future, or, to his knowledge, of any other affiliate of the Company, present or future, whether
alone, as a partner, or as an officer, director, employee, member or holder (directly or indirectly, such as by means of a trust or option arrangement). The Executive may be an investor, shareholder,
joint venturer, or partner
(hereinafter referred to as "</FONT><FONT SIZE=2><B>Investor</B></FONT><FONT SIZE=2>"); </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that his status as an Investor shall not
(i)&nbsp;pose a conflict of interest, (ii)&nbsp;require the Executive's active involvement in the management or operation of such Investment (recognizing that the Executive shall be permitted to
monitor and oversee the Investment), or (iii)&nbsp;materially interfere with the performance of the Executive's duties and obligations hereunder. For the purposes of clause&nbsp;(i)&nbsp;of the
proviso to the preceding sentence, the Executive shall not be deemed to be subject to a conflict of interest merely by reason of the ownership of less than three percent (3%) of (i)&nbsp;the
outstanding stock of any entity whose stock is traded on an established stock exchange or on the National Association of Securities Dealers Automated Quotation System or (ii)&nbsp;the outstanding
stock, partnership interests or other form of equity interest of any venture fund, investment pool or similar investment vehicle that shall solicit investments on a "blind pool" basis. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>No Conflict</I></B></FONT><FONT SIZE=2>: The Executive represents and warrants that, to the best of his knowledge after the review of his personal
files, he has the full right and authority to enter into this Agreement and to render the services as required under this Agreement, and that by signing this Agreement and rendering such services he
is not breaching any contract or legal obligation he owes to any third party. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>COMPENSATION AND BENEFITS</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> During the Term, while the Executive is employed by the Company, the
Company shall compensate the Executive for his services as set forth in this Paragraph&nbsp;3. The Executive recognizes that during the Term of the Agreement, the Company reserves the right to
change from time to time the terms and benefits of any welfare or fringe benefit plan of the Company, including the right to change any service provider, so long as such changes are also generally
applicable to all executives of the Company. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Salary</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> During the Term, the Company shall pay the Executive a base salary at an annual rate of
Two Hundred and Eighty Thousand Dollars ($280,000). Such salary shall be earned and shall be payable in periodic installments in accordance with the Company's payroll practices. Amounts payable shall
be reduced by standard withholding and other authorized deductions. The Board will review the Executive's salary at least annually and may increase (but not reduce) the Executive's annual base salary
in its sole discretion. Once increased such base salary shall not be reduced. His base salary as so increased shall thereafter be treated as his base salary hereunder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Annual Bonus</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Executive shall be eligible to receive an annual bonus in accordance with the
Company's annual incentive compensation program, as it may be modified from time to time by the Board. Any bonus awarded to the Executive shall be paid in the same form and
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manner and at or around the same time as such bonus payments are made to other senior executives of the Company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Long-Term Incentive Compensation Program</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Executive shall be eligible to
participate in a long-term incentive compensation program if, and to the extent, that the Company establishes such a program. If the Company does establish such a long-term
incentive compensation program, the Executive shall be eligible to participate in the same manner as other senior executives of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Savings and Investment Plans</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Executive shall be entitled to participate in all savings and
investment plans applicable generally to other senior executives of the Company, in accordance with the terms of such plans, as may be amended from time to time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Welfare Benefit Plans</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Executive and his dependants are presently participating in certain
welfare benefits plans and programs provided by The Anschutz Corporation (collectively, as amended from time to time, the "</FONT><FONT SIZE=2><B>Anschutz Plans</B></FONT><FONT SIZE=2>"). The
Executive and his dependants, as the case may be, shall also be eligible to participate, immediately upon the request of the Executive, in and shall receive all benefits under all Company welfare
benefit plans and programs, to the extent such Company plans are applicable generally to other senior executives of the Company and their dependants, provided, however, that the Executive and his
dependants may not participate in any given Company welfare benefits plan or program at any time that the Executive is participating in an Anschutz Plan that provides benefits of a similar type. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Vacation</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> Beginning with the 2002 calendar year, the Executive shall be entitled to paid vacation
at a rate of twenty-five (25)&nbsp;days per calendar year during the Term in accordance with the plans, policies, and programs as in effect generally with respect to other senior
executives of the Company, including the limitations, if any, on the carry-over of accrued but unused vacation time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Expenses</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Company shall reimburse the Executive for reasonable expenses for cellular telephone
usage, entertainment, travel, meals, lodging, and similar items incurred in the conduct of the Company's business. Such expenses shall be reimbursed in accordance with the Company's expense
reimbursement policies and guidelines. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Officers and Directors Liability Insurance; Indemnification</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2>The Company shall obtain and continue
in full force and effect appropriate director and officer liability insurance in such amounts and with such terms and provisions as the Board shall determine in its sole discretion
("</FONT><FONT SIZE=2><B>D&amp;O Insurance</B></FONT><FONT SIZE=2>"). To the fullest extent permitted by the indemnification provisions of the Company's governing instruments in effect as of the date of
this Agreement and the indemnification provisions of the governing laws of the jurisdiction of the Company's formation in effect from time to time (collectively, the
"</FONT><FONT SIZE=2><B>Indemnification Provisions</B></FONT><FONT SIZE=2>"), and in each case subject to the conditions thereof, the Company shall (i)&nbsp;indemnify the Executive, as a director
and officer of the Company or a subsidiary of the Company or a trustee or fiduciary of an employee benefit plan of the Company or a subsidiary of the Company, or, if the Executive shall be serving in
such capacity at the Company's written request, as a director or officer of any other corporation (other than a subsidiary of the Company) or as a trustee or fiduciary of an employee benefit plan not
sponsored by the Company or a subsidiary of the Company, against all liabilities and reasonable expenses that may be incurred by the Executive in any threatened, pending, or completed action, suit or
proceeding, whether civil, criminal or administrative, or investigative and whether formal or informal, because the Executive is or was a director or officer of the Company, a director or officer of
such other corporation or a trustee or fiduciary of such employee benefit plan, and against which the Executive may be indemnified by the Company, and (ii)&nbsp;pay for or reimburse the reasonable
expenses incurred by the Executive in the defense of any proceeding to which the Executive is a party because the Executive is or was a director or officer of the Company, a
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director or officer of such other corporation or a trustee or fiduciary of such employee benefit plan. The rights of the Executive under the Indemnification Provisions shall survive the termination
of the employment of the Executive by the Company. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>TERMINATION</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Executive's employment with the Company during the Term may be terminated by the
Company or the Executive only under the circumstances described in this Paragraph&nbsp;4, and subject to the provisions of Paragraph&nbsp;5: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Death or Disability</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Executive's employment hereunder shall terminate automatically upon the
Executive's death. If the Disability of the Executive has occurred (pursuant to the definition of Disability set forth below), it may give to the Executive written notice of its intention to terminate
the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 10th day after receipt of such notice by the Executive (the
"</FONT><FONT SIZE=2><B>Disability Effective Date</B></FONT><FONT SIZE=2>"), provided that, within the 10-day period after such receipt, the Executive shall not have returned to
full-time performance of the Executive's material duties. For purposes of this Agreement, "</FONT><FONT SIZE=2><B>Disability</B></FONT><FONT SIZE=2>" shall mean any physical or mental
condition which prevents the Executive, for a period of 180 consecutive&nbsp;days, from performing and carrying out his material duties and responsibilities with the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Cause</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Company may immediately terminate this Agreement for "Cause" by giving written notice
to the Executive. Any one or more of the following events shall constitute "</FONT><FONT SIZE=2><B>Cause</B></FONT><FONT SIZE=2>": </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;any
material breach of the representations of the Executive set forth in Paragraph&nbsp;2(e); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;any
willful misconduct with respect to the Company which is materially detrimental to the Company and its subsidiaries in the aggregate, including but not limited to
theft or dishonesty (other than good faith expense account disputes); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;conviction
of (or pleading </FONT><FONT SIZE=2><I>nolo contendere</I></FONT><FONT SIZE=2> to) a felony (other than (A)&nbsp;a traffic violation that is in most
jurisdictions not classified as a felony and (B)&nbsp;a felony resulting from vicarious (rather than direct) liability arising out of his position as an officer or director of the company); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;failure
or refusal to attempt to follow the written directions of the Board within a reasonable period after receiving written notice; or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;gross
continuous nonfeasance with regard to the Executive's duties, taken as a whole, which materially continue after a written notice thereof is given to the Executive. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Other than Death or Disability or Cause</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Company may terminate the Executive's employment upon
written notice to the Executive at any time and for any reason other than Death, Disability, or Cause, subject to the provisions of Paragraph&nbsp;5(c). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Termination by Executive</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Executive may terminate his employment upon written notice to the
Company at any time and for any reason. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Resignations</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> On and as of the date that the employment of the Executive by the Company shall
terminate for any reason, the Executive shall resign from his position as a director and employee of the Company and from all other positions he holds as a director or employee of any subsidiary or
affiliate of the Company. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>OBLIGATIONS OF THE COMPANY AND THE EXECUTIVE UPON TERMINATION</I></B></FONT><FONT SIZE=2><B>:</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Death or Disability</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> If the Executive's employment is terminated by reason of the Executive's
death or Disability during the Term, the Term shall terminate without further obligations to the Executive or his legal representatives under this Agreement, other than for
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(A)&nbsp;payment of the sum of (i)&nbsp;any base salary and bonus owed to the Executive through the date of termination (</FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that for this
purpose the amount of such bonus shall be calculated based on the number of&nbsp;days in the year through the date of termination, as well as any earned bonus for any complete year that theretofore
had not been paid) and (ii)&nbsp;any other compensation earned through the date of termination but not yet paid or delivered to the Executive ("</FONT><FONT SIZE=2><B>Accrued
Obligations</B></FONT><FONT SIZE=2>"), and (B)&nbsp;payment of any amounts due pursuant to the terms of any applicable equity-based plan of the Company or any welfare or pension benefit plan of the
Company as of the date of termination or which by their specific terms extend beyond such date of termination, and (C)&nbsp;payments due, if any, and continuation of coverage (collectively,
"</FONT><FONT SIZE=2><B>Indemnification/Insurance Payments</B></FONT><FONT SIZE=2>"), pursuant to the Indemnification Provisions and D&amp;O Insurance. All such payments shall be paid to the Executive or
his estate or beneficiary, as applicable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Termination for Cause</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> If the Executive's employment is terminated by the Company for Cause, the
Term shall terminate without further obligations to the Executive or his legal representatives under this Agreement on the date of such termination and no further payments or benefits of any kind,
including salary, bonuses and any unpaid amount of the Equalization Payment, shall be payable to the Executive, other than for (i)&nbsp;Accrued Obligations and (ii)&nbsp;the payments and benefits
provided in Paragraph&nbsp;5(f). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Other than Death or Disability or Cause</I></B></FONT><FONT SIZE=2><B>:</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>In General</I></FONT><FONT SIZE=2>: Except as provided in Paragraph&nbsp;5(c)(ii)&nbsp;below, if the Company terminates the Executive's
employment during the Term for any reason other than Death or Disability, or Cause, the Term shall terminate on the date of such termination without further obligation to the Executive other than
(A)&nbsp;Accrued Obligations, (B)&nbsp;payment of any amounts due pursuant to the terms of any applicable equity-based plan of the Company or any welfare or pension benefit plan of the Company as
of the date of termination or which by their specific terms extend beyond such date of termination, (C)&nbsp;payment to the Executive, within thirty (30)&nbsp;days of the date of termination, of a
lump sum equal to the sum of (1)&nbsp;the Executive's then current annual base salary, and (2)&nbsp;an amount equal to 50% of the maximum bonus opportunity under the Company's annual bonus
incentive compensation plan for the year in which the termination occurs, (D)&nbsp;subject to the terms of the applicable plans (or equivalent substitute(s) if the plan(s) prohibit participation by
ex-employees), continuation of the benefits provided in Paragraph&nbsp;3(e) of this Agreement for two (2)&nbsp;years following the date of termination (or such shorter period as shall
terminate on the date that the Executive shall commence his next employment), and (E)&nbsp;payment of Indemnification/Insurance Payments. The Company shall be obligated to make the foregoing
payments and to provide the foregoing benefits upon the Executive and the Company signing a mutual release of all claims against the other in the form provided by the Company; such release shall not
affect the Executive's rights (x)&nbsp;under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("</FONT><FONT SIZE=2><B>COBRA</B></FONT><FONT SIZE=2>") and (y)&nbsp;any conversion rights
under any applicable life insurance policies. The Release to be provided by the Company shall, if applicable, give the Executive appropriate notifications under the Age Discrimination in Employment
Act, as amended by the Older Workers Benefit Protection Act. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Following a "change of control" or corporate downsizing</I></FONT><FONT SIZE=2>: If the Company terminates the Executive's employment during the
Term following a "Change of Control" of the Company, as defined herein, or because of the elimination of the Executive's position or reassignment of the Executive to a lesser position because of a
decision to reduce the Company's operations and the number of employees, the Term shall terminate on the date of such termination without further obligation to the Executive other than
(A)&nbsp;Accrued Obligations, (B)&nbsp;payment of any amounts due pursuant to the terms of any applicable equity-based plan of the Company or any welfare or pension benefit plan of the Company as
of the
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date of termination or which by their specific terms extend beyond such date of termination, (C)&nbsp;payment to the Executive, within thirty (30)&nbsp;days of the date of termination, of a lump
sum equal to the sum of (1)&nbsp;two times the Executive's then current annual base salary and (2)&nbsp;two times the Executive's target bonus (50% of maximum bonus opportunity) for the year of
termination under the Company's annual bonus incentive compensation plan, (D)&nbsp;subject to the terms of the applicable plans (or equivalent substitute(s) if the plan(s) prohibit participation by
ex-employees), continuation of the benefits provided by Paragraph&nbsp;3(e)&nbsp;of this Agreement for two (2)&nbsp;years following the date of termination (or such short period as
shall terminate on the date that the Executive shall commence his next employment), and (E)&nbsp;payment of Indemnification/Insurance Payments. The Company shall be obligated to make the foregoing
payments and to provide the foregoing benefits upon the Executive and the Company signing a mutual release of all claims against the other in a form to be provided by the Company; such release shall
not effect the Executive's rights (x)&nbsp;under COBRA and (y)&nbsp;any conversion rights under any applicable life insurance policies. For purposes of this Agreement, a
"</FONT><FONT SIZE=2><B>Change of Control</B></FONT><FONT SIZE=2>" of the Company shall be deemed to have occurred if either (a)&nbsp;any individual, entity, or group (within the meaning of
Section&nbsp;13(d)(3)&nbsp;or 14(d)(2)&nbsp;of the Securities Exchange Act of 1934 (the "</FONT><FONT SIZE=2><B>1934 Act</B></FONT><FONT SIZE=2>"), other than Anschutz Company, The Anschutz
Corporation, or any entity or organization
controlled by Philip F. Anschutz (collectively, the "</FONT><FONT SIZE=2><B>Anschutz Entities</B></FONT><FONT SIZE=2>"), acquires beneficial ownership (within the meaning of
Rule&nbsp;13d-3 promulgated under the 1934 Act) of twenty percent (20%) or more of either (1)&nbsp;the then-outstanding equity securities of the Company
("</FONT><FONT SIZE=2><B>Outstanding Securities</B></FONT><FONT SIZE=2>") or (2)&nbsp;the combined voting power of the then-outstanding voting securities of the Company entitled to vote
generally in the election of directors or their equivalent ("</FONT><FONT SIZE=2><B>Voting Power</B></FONT><FONT SIZE=2>") and such beneficial ownership (as so defined) by such individual, entity or
group of twenty percent (20%) or more of the Outstanding Securities or the Voting Power, as the case may be, shall then exceed the beneficial ownership (as so defined) by the Anschutz Entities of the
Outstanding Securities or the Voting Power, respectively, or (b)&nbsp;the Anschutz Entities no longer have beneficial ownership (as so defined) of twenty percent (20%) or more of either the
Outstanding Securities or the Voting Power. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Termination by Executive</I></B></FONT><FONT SIZE=2><B>:</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>In General</I></FONT><FONT SIZE=2>: Except as provided below in Paragraph&nbsp;5(d)(ii)&nbsp;if the Executive terminates his employment for
any reason, the Term shall terminate without further obligation to the Executive on the date of such termination and no further payments or benefits of any kind, including salary or bonuses shall be
payable to the Executive, other than for (A)&nbsp;Accrued Obligations and (B)&nbsp;the payments and benefits provided in Paragraph&nbsp;5(f). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Following a Change of Control</I></FONT><FONT SIZE=2>: If the Executive terminates his employment, following a change of control (as defined in
Paragraph&nbsp;5(c)(ii)&nbsp;above) for "Good Reason", the Executive shall be entitled to the payments, benefits and other compensation provided above in Paragraph&nbsp;5(c)(ii)&nbsp;in the
case of termination by the Company following a change of control. For purposes of this Agreement, the Executive's termination of employment with the Company shall be on account of
"</FONT><FONT SIZE=2><B>Good Reason</B></FONT><FONT SIZE=2>" if it occurs for any of the following reasons: (A)&nbsp;a demotion in rank, title, responsibility or authority; (B)&nbsp;the
assignment to the Executive, following a change of control, of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Paragraph&nbsp;2 of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of such notice thereof
given by the Executive; (C)&nbsp;any failure by the Company to comply with any of the provisions
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of Paragraph&nbsp;3 of this Agreement, including but not limited to the failure by the Company to pay the Executive any portion of his compensation or to provide an annual bonus under terms
(including but not limited to measures, targets and payout potential) at least as favorable as the terms for such bonus as in effect during the Company's fiscal year immediately prior to the date of
the Change of Control, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by
the Executive; (D)&nbsp;the Company's requiring the Executive to be based at any office or location other than as provided in Paragraph&nbsp;2(a)&nbsp;hereof for more than 60&nbsp;days, or
(E)&nbsp;any failure by the Company to comply with and satisfy Paragraph&nbsp;8 of this Agreement. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provided,
however, that Executive may not terminate his employment for "Good Reason" as defined herein, unless and until he has given the Company written notice of the reason or reasons
why he believes there is "Good Reason" to terminate his employment, and thereafter gives the Company a minimum of forty-five (45)&nbsp;days to cure the alleged act or failure which the
Executive believes constitutes "Good Reason" for termination. In the absence of such written notice and opportunity by the Company to cure, there can be no termination by Executive for "Good Reason"
as defined herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
an event constituting Good Reason occurs prior to a Change of Control but after there is knowledge of a potential Change of Control, it shall be deemed to constitute Good Reason for
purposes of this Agreement, provided notice is given and the Company is given an opportunity to cure. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Health and Dental</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> Notwithstanding any other provision of this Agreement to the contrary, upon the
termination of the Term for any reason (including, without limitation, death), except a termination by the Company for Cause, Executive and/or his dependants shall be entitled to receive benefits
under the Company's group health and dental plans for two (2)&nbsp;years following the date of termination (or such shorter period as shall terminate on the date that the Executive shall become
covered under other group health and dental plans). Such continuation of coverage shall be on the same general terms and conditions that are applicable to such benefits being provided to senior
executives of the Company from time to time after the Executive's termination. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Exclusive Remedy</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> Except for the payments and benefits provided in this Paragraph&nbsp;5, the
Executive acknowledges and agrees that upon termination of the Term, he shall have no other claims against, and be entitled to no other payments or benefits from, the Company under this Agreement or
pursuant to the Company's policies and plans, other than (A)&nbsp;the Executive's rights under COBRA, (B)&nbsp;any conversion rights under any applicable life insurance policies,
(C)&nbsp;payment of any amounts due pursuant to the terms of any equity-based plan of the Company or any welfare or pension benefit plan of the Company as of the date of termination or which by
their specific terms extend such date of termination and (D)&nbsp;rights with respect to Indemnification/Insurance Payments. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive
obtains other employment. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>CONFIDENTIAL INFORMATION</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> During and after the Term, the Executive shall not use or disclose any
secret, confidential, and/or proprietary information, knowledge, or data relating to the Company, any of its subsidiaries or any of the other affiliates of the Company, present and future, and their
respective businesses, which shall have been obtained by the Executive during his employment by the Company, any of its subsidiaries or any of the other affiliates of the Company and which shall not
be or become public knowledge (other than by acts by the Executive or his representatives in violation of this Agreement) provided that the Executive may, (a)&nbsp;while employed by the Company,
disclose such information, knowledge, or data as he in good faith deems appropriate and (b)&nbsp;otherwise comply with legal process, so long as Executive gives prompt notice to the Company of any
required disclosure and
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reasonably cooperates (without being required to incur any expense or subject himself to sanction or penalty) with the Company if the Company determines to oppose, challenge, or quash the legal
process. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>NONSOLICITATION</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Executive agrees that during the Term of this Agreement and for a period of
one (1)&nbsp;year following the termination of the Term, he will not, directly or indirectly, knowingly solicit on behalf of any such entity any employee of the Company, any of its subsidiaries or
any of its other affiliates, present or future (while an affiliate), who is being compensated at a rate of Fifty Thousand Dollars ($50,000.00) or more per year as an employee of the Company, any of
its subsidiaries, or any of its other affiliates, present or future, to work for any individual or firm then in competition with the business of the Company, any of its subsidiaries or any other
affiliate of the Company, present or future. The Executive may give references with respect to such employees. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>SUCCESSORSHIP</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> This Agreement shall inure to the benefit of and be binding upon the Company and
its successors and permitted assigns and any such successor or permitted assignee shall be deemed substituted for the Company under the terms of this Agreement for all purposes. As used herein,
"successor" and "assignee" shall be limited to any person, firm, corporation, or other business entity which at any time, whether by purchase, merger, or otherwise, directly or indirectly acquires the
stock of the Company or to which the Company assigns this Agreement by operation of law or otherwise in connection with any sale of all or substantially all of the assets of the Company, </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that
any successor or permitted assignee promptly assumes in a writing delivered to the Executive this Agreement and, in no event, shall any
such succession or assignment release the Company from its obligations thereunder. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as herein before defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>ARBITRATION</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> Any and all controversies, claims, or disputes arising out of or in any way relating
to this Agreement or the termination thereof shall be resolved by final and binding arbitration in Denver, Colorado before a single arbitrator in accordance with the Commercial Arbitration
Rules&nbsp;of the American Arbitration Association (the "</FONT><FONT SIZE=2><B>AAA</B></FONT><FONT SIZE=2>"). The arbitration shall be commenced by filing a demand for arbitration with the AAA
within eighteen (18)&nbsp;months after the occurrence of the facts giving rise to any such controversy, claim, or dispute. The arbitrator shall decide all issues relating to arbitrability. The costs
of such arbitration, including the arbitrator's fees, shall be paid by the Company, except for a filing fee to be paid by Executive not to exceed $150.00. Each party to the arbitration shall be
responsible for the payment of its own attorneys' fees, </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that, if the Executive prevails as to any matter in any such arbitration, the Company
shall pay the reasonable attorneys' fees incurred by the Executive in connection with those matters on which he prevails, in an amount to be determined by the arbitrator. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>GOVERNING LAW</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The provisions of this Agreement shall be construed in accordance with, and
governed by, the laws of the State of Colorado without regard to principles of conflict of laws. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>SAVINGS CLAUSE</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> If any provision of this Agreement or the application thereof is held invalid,
the invalidity shall not affect other provisions or applications of the Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this
Agreement are declared to be severable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>WAIVER OF BREACH</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> No waiver of any breach of any term or provision of this Agreement shall be
construed to be, nor shall be, a waiver of any other breach of this Agreement. No waiver shall be binding unless in writing and signed by the party waiving the breach.
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<A NAME="page_bu1411_1_9"> </A></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>MODIFICATION</I></B></FONT><FONT SIZE=2>: No provision of this Agreement may be amended, modified, or waived except by written agreement signed by
the parties hereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>ASSIGNMENT OF AGREEMENT</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Executive acknowledges that his services are unique and personal.
Accordingly, the Executive may not assign his rights or delegate his duties or obligations under this Agreement to any person or entity; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>,
that payments may be made to the Executive's estate or beneficiaries as expressly set forth herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>ENTIRE AGREEMENT</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> This Agreement is an integrated document and constitutes and contains the
complete understanding and agreement of the parties with respect to the subject matter addressed herein, and supersedes and replaces all prior negotiations and agreements, whether written or oral,
concerning the subject matter hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>CONSTRUCTION</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> Each party has cooperated in the drafting and preparation of this Agreement. Hence,
in any construction to be made of this Agreement, the same shall not be construed against any party on the basis that the party was the drafter. The captions of this Agreement are not part of the
provisions and shall have no force or effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>NOTICES</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> Notices and all other communications provided for in this Agreement shall be in writing
and shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or sent by facsimile or prepaid overnight courier to the parties at the addresses
set forth below (or at such other addresses as shall be specified by the parties by like notice). Such notices, demands, claims, and other communications shall be deemed given: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;in
the case of delivery by overnight service with guaranteed next day delivery, such next day or the day designated for delivery; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;in
the case of certified or registered United States mail, five&nbsp;days after deposit in the United States mail; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;&nbsp;&nbsp;&nbsp;in
the case of facsimile, the date upon which the transmitting party received confirmation of receipt by facsimile, telephone, or otherwise; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.&nbsp;&nbsp;&nbsp;&nbsp;in
the case of personal delivery, when received. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Communications
that are to be delivered by the United States mail or by overnight service are to be delivered to the addresses set forth below: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>To the Company</I></FONT><FONT SIZE=2>: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>Pacific
Energy GP,&nbsp;Inc.<BR>
Attn: Irvin Toole, Jr.<BR>
5900 Cherry Avenue<BR>
Long Beach, CA 90805 </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>To the Executive</I></FONT><FONT SIZE=2>: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>Douglas
Polson<BR>
5273 Horseshoe Trail<BR>
PO Box 349<BR>
Sedalia, Colorado 80135 </FONT></P>

</UL>
</UL>
</UL>
</UL>

<P><FONT SIZE=2>Each
party, by written notice furnished to the other party, may modify the acceptable delivery address, except that notice of change of address shall be effective only upon receipt. In the event that
the Company is aware that the Executive is not at the location when notice is being given, notice shall be deemed given when received by the Executive, whether at the aforementioned location or at
another location.
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>TAX WITHHOLDING</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Company may withhold from any amounts payable under this Agreement such
federal, state, or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>REPRESENTATION</I></B></FONT><FONT SIZE=2><B>:</B></FONT><FONT SIZE=2> The Executive represents that he is knowledgeable and sophisticated as to
business matters, including the subject matter of this Agreement, that he has read this Agreement and that he understands its terms. The Executive acknowledges that, prior to assenting to the terms of
this Agreement, he has been given a reasonable time to review it, to consult with counsel of his choice, and to negotiate at arm's-length with the Company as to its contents. The Executive and the
Company agree that the language used in this Agreement is the language chosen by the parties to express their mutual intent, and that they have entered into this Agreement freely and voluntarily and
without pressure or coercion from anyone. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the Company and the Executive, intending to be legally bound, have executed this Agreement on the day and year first above written. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
PACIFIC ENERGY GP,&nbsp;INC.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>IRVIN TOOLE, JR.</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Name: Irvin Toole, Jr. Title: President and Chief Executive Officer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
EXECUTIVE</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>DOUGLAS L. POLSON</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Douglas L. Polson</FONT></TD>
</TR>
</TABLE>
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