EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of the 16th day of September, 2002 by and between Pacific Energy GP, Inc., a Delaware corporation, having its principal executive offices in Long Beach, California (the "Company") and Lynn T. Wood, residing in Denver, Colorado (the "Executive").

        WHEREAS, the Executive has been employed by the Company to serve as its Vice President, Secretary and General Counsel; and

        WHEREAS, 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 by the Company and, in addition, to agree as to certain benefits of said employment.

        NOW, THEREFORE, in consideration of the mutual promises and agreements set forth below, the Company and the Executive hereby agree as follows:

        1.    TERM OF EMPLOYMENT: Subject to the terms of this Agreement, the Company hereby employs the Executive, and the Executive hereby accepts such continuing employment, for the period beginning on September 16, 2002 and ending as provided herein in Paragraph 4 (the "Term"). 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.

        2.    POSITION AND DUTIES:

        a.    Position: During the Term, the Executive shall serve as Vice President, Secretary and General Counsel of the Company. The Executive shall report directly to the President and CEO of the Company and shall have such duties and responsibilities as are normally associated with the chief legal officer of a company and as shall be assigned from time to time by the President, including, without limitation, general oversight of the Company's legal affairs, supervision of outside legal counsel, and providing the Company and Pacific Energy Partners, L.P., a publicly traded limited partnership for which the Company is the general partner (the "Partnership"), advice and counsel on corporate policies, tariff and regulatory issues, and general legal, tax, securities, insurance, audit and contract matters. The Executive will also perform such other duties and responsibilities as may be assigned from time to time, including, without limitation, acting as an officer of one or more affiliates of the Company. The Executive shall perform his duties and responsibilities at the Company's offices in Long Beach, California. For purposes of this Agreement, the term "employment" shall include the Executive's service to the Company in any capacity during the Term, provided the foregoing shall not change the positions to be held by the Executive; and the term "affiliate" of the Company means any company controlled by, controlling, or under common control with the Company or the Partnership, whether through stock or other ownership or otherwise, and without limiting the foregoing, it is agreed that the Partnership and its subsidiaries are affiliates of the Company.

        b.    Commitment of the Executive: During the Term, the Executive shall devote substantially his full business time, energy, and ability to the business of the Company.

        c.    Other Positions and Services: The Executive may (i) serve on civic or charitable boards or committees, (ii) deliver lectures, fulfill speaking engagements, or teach at educational institutions (and retain any fees therefrom), and (iii) manage personal investments; provided, however, that the Executive may not engage in any of the activities described in this Paragraph 2 (c) to the extent such activities materially interfere with the performance of the Executive's duties and responsibilities to the Company.

        d.    Investments: Without the prior express authorization of the Board, the Executive shall not, directly or indirectly, during the Term (i) render services of a business, professional, or commercial nature to any other person or firm, whether for compensation or otherwise, or (ii) 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 "Investor"); provided, however, that his status as an Investor shall not (i) pose a conflict of interest, (ii) 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) materially interfere with the performance of the Executive's duties and obligations hereunder. For the purposes of clause (i) 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) 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) 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.


 

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