10. 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 (as amended and restated effective June 6, 2017, 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 related to the LTIP and the Option Plan, of $8.2 million and $8.9 million for the three months ended September 30, 2017 and 2016, respectively. For the nine months ended September 30, 2017 and 2016, we recognized compensation expense of $25.9 million and $23.0 million, respectively.

LTIP

As of September 30, 2017, there were 2,646,326 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, 2016 and 2015, actual compensation awards deferred under the Deferral Plan were $4.4 million and $3.1 million, for which 145,138 and 139,526 phantom units (including matching units) were granted during the nine months ended September 30, 2017 and the year ended December 31, 2016, respectively. These grants are included as granted in the LTIP activity table below.

Awards under the LTIP

During the nine months ended September 30, 2017, the Compensation Committee of the board of directors of Buckeye GP granted 316,490 phantom units to employees (including the 145,138 phantom units granted pursuant to the Deferral Plan, as discussed above), 18,000 phantom units to independent directors of Buckeye GP and 212,062 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 ⁽¹⁾
Unvested at January 1, 2017	1,296		$	63.54
Granted ⁽²⁾	547		69.93
Performance adjustment ⁽³⁾	32		71.50
Vested	(333	)	70.30
Forfeited	(32	)	64.48
Unvested at September 30, 2017	1,510		$	64.47


(1)	Determined by dividing the aggregate grant date fair value of awards by the number of awards issued. The weighted-average grant date fair value per LP Unit for forfeited and vested awards is determined before an allowance for forfeitures.


(2)	Includes both phantom and performance awards. Performance awards are granted at a target amount but, depending on our performance during the vesting period with respect to certain pre-established goals, the number of LP Units issued upon vesting of such performance awards can be greater or less than the target amount.


(3)	Represents the LP Units issued in excess of target amounts for performance awards that vested during the nine months ended September 30, 2017 as a result of our above target performance with respect to applicable performance goals.

At September 30, 2017, $40.5 million of compensation expense related to the LTIP is expected to be recognized over a weighted average period of 1.8 years for the above awards.

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, 2017	10		$	50.36	0.1	$	151
Exercised	(10	)	—
Outstanding at September 30, 2017	—		—		—	$	—

Exercisable at September 30, 2017	—		$	—	—	$	—


(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 2017 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, 2017 and 2016 was $0.2 million and $0.1 million, respectively.