UNIT-BASED COMPENSATION PLANS

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

UNIT-BASED COMPENSATION PLANS

11. UNIT-BASED COMPENSATION PLANS

We award unit-based compensation to employees and directors primarily under the Buckeye Partners, L.P. 2013 Long-Term Incentive Plan (the “LTIP”).  We formerly awarded options to acquire LP Units to employees pursuant to the Buckeye Partners, L.P. Unit Option and Distribution Equivalent Plan (the “Option Plan”).  These compensation plans are further discussed below.

We recognized compensation expense from continuing operations related to the LTIP and the Option Plan, of $8.9 million and $6.6 million for the three months ended September 30, 2016 and 2015, respectively. For the nine months ended September 30, 2016 and 2015, we recognized compensation expense of $23.0 million and $17.6 million, respectively.

LTIP

As of September 30, 2016, there were 2,036,228 LP Units available for issuance under the LTIP.

Deferral Plan under the LTIP

We also maintain the Buckeye Partners, L.P. Unit Deferral and Incentive Plan, as amended and restated effective February 4, 2015 (the “Deferral Plan”), pursuant to which we issue phantom and matching units under the LTIP to certain employees in lieu of a portion of the cash payments such employees would be entitled to receive under the Buckeye Partners, L.P. Annual Incentive Compensation Plan, as amended and restated, effective January 1, 2012.  At December 31, 2015 and 2014, actual compensation awards deferred under the Deferral Plan were $3.1 million and $1.7 million, for which 139,526 and 54,592 phantom units (including matching units) were granted during the nine months ended September 30, 2016 and the year ended 2015, respectively.  These grants are included as granted in the LTIP activity table below.

Awards under theLTIP

During the nine months ended September 30, 2016, the Compensation Committee of the Board granted 342,572 phantom units to employees (including the 139,526 phantom units granted pursuant to the Deferral Plan, as discussed above), 20,000 phantom units to independent directors of Buckeye GP and 274,896 performance units to employees.

The following table sets forth the LTIP activity for the periods indicated (in thousands, except per unit amounts):

	Number of LP Units		Weighted Average Grant Date Fair Value per LP Unit
Unvested at January 1, 2016	1,011		$	68.20
Granted	637		53.48
Vested	(267	)	55.28
Forfeited	(8	)	64.53
Unvested at September 30, 2016	1,373		$	64.00

At September 30, 2016, $39.1 million of compensation expense related to the LTIP is expected to be recognized over a weighted average period of 1.8 years.

Unit Option Plan

The following is a summary of the changes in the options outstanding (all of which are vested) under the Option Plan for the periods indicated (in thousands, except per unit amounts): 

	Number of LP Units		Weighted Average Strike Price per LP Unit		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (1)
Outstanding at January 1, 2016	17		$	48.71	0.9	$	300
Exercised	(6	)	47.17
Forfeited, cancelled or expired	(1	)	44.73
Outstanding at September 30, 2016	10		50.36		0.4	$	203
Exercisable at September 30, 2016	10		$	50.36	0.4	$	203

(1) Aggregate intrinsic value reflects fully vested LP Unit options at the date indicated. Intrinsic value is determined by calculating the difference between our closing LP Unit price on the last trading day in September 2016 and the exercise price, multiplied by the number of exercisable, in-the-money options.

The total intrinsic value of options exercised during each of the nine months ended September 30, 2016 and 2015 was $0.1 million.