Exhibit 10.16

TESORO LOGISTICS LP
NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM

In January 2015, the Board of Directors of our general partner adopted changes
to the director compensation program under which our general partner's
non-employee directors are compensated for their service as directors. The
changes to the compensation program became effective January 1, 2015. Each
non-employee director receives a compensation package consisting of an annual
retainer, an additional retainer for service as the chair of a standing
committee and meeting attendance fees and may also receive grants of
equity-based awards upon appointment to the Board of Directors. The annual
retainer was increased by $15,000, with the new amounts shown below.
 
Non-Employee Director Annual Retainers and Fees (a)
 
 
 
 
Board of Directors Annual Retainer (b)
$
136,000
 
Annual Retainer for Audit and Conflicts Committee Chairs
15,000
 
Board and Committee Meeting Fees (c)
1,500 per meeting
 

 
 
(a)
In addition to the retainers set forth above, we reimburse our non-employee
directors for travel and lodging expenses that they incur in connection with
attending meetings of the board of directors or its committees.

 
 
(b)
The annual retainer is payable $58,000 in cash and $78,000 in an award of
service phantom units. Unit-based awards granted to non-employee directors under
the annual compensation package or upon first election to the board of directors
under our long-term incentive plan, generally vest one year from the date of
grant. If the non-employee director termination from the board is due to death
or disability, director’s service phantom units will automatically vest along
with any accrued cash distribution equivalent rights. If termination is due to
any other reason, the non-employee director will receive a pro-rated award for
the number of full months served as a non-employee director during the vesting
period along with any accrued cash distribution equivalent rights. The pro-rated
award will vest one year from the date of grant. Cash distribution equivalent
rights accrue with respect to equity-based awards and are distributed at the
time such awards vest. The number of units granted will be determined by
dividing $78,000 by the average closing price of our common units on the NYSE
over a ten business-day period ending on the third business day prior to the
grant date and rounding any resulting fractional units to the nearest whole
unit. The plan provides that unit-based awards to directors will be granted
annually in conjunction with the Board's approval of our Annual Report on Form
10-K, and that any new non-employee director will receive a pro-rata award of
service phantom units when commencing his or her services as a board member.

 
 
(c)
A meeting fee is paid to a non-employee director for attendance in person or by
telephone.