exh10-16.htm


    Exhibit 10.16


     

    August
19, 2008

     

    Mr. James
Griffin

     

    Via Hand
Delivery

     

    
      	
               
      

            	
              Re:

            	
              Retention
      Agreement

            


    

     

    Dear
James:

     

        As SemGroup
Energy Partners Management, Inc. (the “Company”) and
SemGroup Energy Partners G.P., L.L.C. (“SGGP”) believe it is
in the best interests of the Company, SGGP and SemGroup Energy Partners, L.P.
(“SGLP”) to
encourage you to remain in the employ of the Company, the Company hereby agrees,
and SGGP and SGLP guarantee, as of the date set forth above (the “Effective Date”), to
provide you retention payments totaling up to $180,000, which is equivalent to
1.2 times your current annual base salary, (your “Retention
Opportunity”), subject to the terms and conditions more fully set forth
below in this letter agreement (this “Agreement”).

     

    1. Retention
Payments.

     

                    (a) If you remain employed until October
30, 2008 (the “First
Retention Date”), you will be paid a lump sum retention payment equal to
$45,000, which is 25% of your Retention Opportunity, within 30 days
following the First Retention Date.

     

                    (b) If you remain employed until July 31,
2009 (the “Final
Retention Date”), you will be paid an additional lump sum retention
payment equal to $135,000, which is 75% of your Retention Opportunity, within 30
days following the Final Retention Date.

     

                    (c) If your employment is (1) terminated by
the Company other than for Cause prior to the Final Retention Date or (2)
voluntarily terminated by you for Good Reason, then you will be paid a lump sum
retention payment equal to your Retention Opportunity, reduced by the amount of
any payment you may have already received under Section 1(a) above, within 30
days following the date of your termination.   For purposes of
this Agreement, “Cause” means
termination of employment by the Company due to failure to perform your duties
in good faith, misconduct which violates a written company policy, breach of
this Agreement, gross negligence, dishonesty, or intentional acts detrimental or
destructive to the Company or its affiliates, employees or
property.  For purposes of this Agreement, “Good Reason” means
(i) a material reduction in the your base salary, (ii) a material diminution of
your duties, authority or responsibilities as in effect immediately prior to
such diminution or (iii) the relocation of the your principal work location to a
location more than 50 miles from its current location.  In order to be
eligible for payment on account of a Good Reason termination, you must: (i)
provide written notice to the Company within 90 days following the first event
or condition which gives rise to your claim of Good Reason under this section;
(ii) provide the Company 30 days from the date of such notice in which to “cure”
such event or condition and (iii) actually terminate employment within 30 days
following the expiration of the cure period described above.

     

                    (d) For the avoidance of doubt, if you
voluntarily terminate your employment other than for Good Reason or are fired
for Cause prior to the First Retention Date or the Final Retention Date, the
payments otherwise payable on any date following the date of your termination
will be forfeited.  For purposes of this Agreement, employment with
the Company or any affiliate shall be considered employment with the
Company.

     

    2. Confidentiality.  The
Company has provided and will continue to provide you with Confidential
Information regarding the Company and the Company’s business and has agreed to
make certain payments pursuant to Section 1 hereof.  In return for
this and the other consideration provided under this Agreement, you agree that
you will not disclose or make available to any other person or entity, or use
for your own personal gain, any Confidential Information, except for such
disclosures as required (i) by law or legal process, (ii) in the performance of
your obligations hereunder, (iii) in connection with the enforcement of your
rights under this Agreement, or (iv) in connection with the defense or
settlement of any claim, suit or action brought against you by the Company or
any other party; provided, however, that if disclosure of Confidential
Information is required pursuant to (i) or (iv) above, you shall give prompt
written notice to the Company of such requirement, disclose no more information
than is so required, and cooperate with any attempts by the Company to obtain a
protective order or similar treatment.  For purposes of this
Agreement, “Confidential
Information” shall mean any and all information, data and knowledge that
has been created, discovered, developed or otherwise become known to the Company
or in which property rights have been assigned or otherwise conveyed to the
Company, which information, data or knowledge has commercial value in the
business in which the Company is engaged, except such information, data or
knowledge as is or becomes known to the public without violation of the terms of
this Agreement.  By way of illustration, but not limitation,
Confidential Information includes business trade secrets, secrets concerning the
Company’s plans and strategies, nonpublic information concerning pending
investigations, disputes or litigation involving the Company, market information
pertaining to the Company or its operations, material market opportunities,
technical trade secrets, processes, formulas, know-how, improvements,
discoveries, developments, designs, inventions, techniques, marketing plans,
manuals, records of research, reports, memoranda, computer software, strategies,
forecasts, new products, unpublished financial statements or parts thereof,
budgets or other financial information, projections, licenses, prices, costs,
and employee, customer information, customer lists and supplier lists or parts
thereof.  The Company and you agree to use all reasonable means to
insure that this Agreement is kept confidential, except for disclosures required
by law.

     

    3. Withholding of
Taxes.  The Company may withhold from any benefits payable
under this agreement all federal, state, city or other taxes as may be required
pursuant to any law or governmental regulation or ruling.

     

    4. No Right to Continued
Employment.  Nothing in this agreement shall give you any
rights to (or impose any obligations for) continued employment by the Company or
any affiliate or subsidiary thereof or successor thereto, nor shall it give such
entities any rights (or impose any obligations) with respect to continued
performance of duties by you.

     

    5. Duty of
Loyalty.  You represent, warrant, confirm and agree that, so
long as you are employed by the Company and in the scope of your employment,
notwithstanding any agreement or understanding with any person or entity, you
shall at all times act, in your good faith judgment, solely in interest of the
Company, SGGP and SGLP (collectively with the Company and SGGP, the “SGLP Group”), and
that you have no duties to SemGroup L.P. or to any entity other than the SGLP
Group, notwithstanding that any such other person or entity may make payment to
you (including for services rendered to the SGLP Group).  The
foregoing notwithstanding, the mere fact that you voluntarily terminate your
employment with the Company and accept employment elsewhere shall not be deemed
a violation of this duty of loyalty so long as you do not breach the
confidentiality provisions of this Agreement.

     

    6. Offset of Retention
Payments.  If, after the First Retention Date or the Final
Retention Date, the Company determines in good faith that (i) you owe any
undisputed amounts to the Company or any affiliate, (ii) the Company or any
affiliate has a colorable legal claim or cause of action against you or (iii) a
third party has a colorable legal claim or cause of action against the Company
or any affiliate relating to actions you have taken, the Company, in its sole
discretion, may offset any retention payments due to you under Section 1 against
the amount of any obligation or liability (i) you may have to the Company or any
affiliate or (ii) that your actions may have caused the Company or any affiliate
to incur.

     

    7. No Assignment;
Successors.  Your right to receive payments or benefits
hereunder shall not be assignable or transferable, whether by pledge, creation
of a security interest or otherwise, whether voluntary, involuntary, by
operation of law or otherwise, other than a transfer by will or by the laws of
descent or distribution, and in the event of any attempted assignment or
transfer contrary to this Section 7 the Company shall have no liability to
pay any amount so attempted to be assigned or transferred.  This
agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

     

    This
agreement shall be binding upon and inure to the benefit of the Company and SGGP
and their respective successors and assigns, including, without limitation, any
company into or with which the Company or SGGP may merge or consolidate by
operation of law or otherwise.

     

    8. Entire
Agreement.  This agreement represents the entire agreement
between you and the Company with respect to the subject matter hereof, and
supersedes and is in full substitution for any and all prior agreements or
understandings, whether oral or written, relating to the subject matter
hereof.

     

    9. Modification of
Agreement.  Any modification of this agreement shall be binding
only if evidenced in writing and signed by you and an authorized representative
of the Company.

     

    10. Applicable
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma, (except that no effect shall
be given to any conflicts of law principles thereof that would require the
application of the laws of another jurisdiction).  The captions of
this Agreement are not part of the provisions hereof and shall have no force or
effect.

     

    11. Severability.  If a
court of competent jurisdiction determines that any provision of this agreement
is invalid or unenforceable, then the invalidity or unenforceability of that
provision shall not affect the validity or enforceability of any other provision
of this agreement and all other provisions shall remain in full force and
effect.

     

    
      	
               
      

            	
              If
      you agree to the terms of this letter agreement, please sign and date
      below.

            


    

     

    
      	
               
      

            	
              Yours
      very truly,

            


    

     

    


     

    SEMGROUP
ENERGY PARTNERS MANAGEMENT, INC.

     

    


    


    By: /s/ Kevin L.
Foxx_____________________

    President

    


     

    SEMGROUP
ENERGY PARTNERS G.P., L.L.C.

    


    


    


    By: /s/ Alex G.
Stallings____________, Manager

     

    


     

    SEMGROUP
ENERGY PARTNERS, L.P.

     

    By
SEMGROUP ENERGY PARTNERS G.P., L.L.C., its General Partner

     

    By: /s/ Alex G.
Stallings____________, Manager

     

    


     

    


     

    


    


     

    Accepted
and Agreed to By:

     

    /s/ James R. Griffin
________________

    James R.
Griffin

     

    8/20/08_________________________

    Execution
Date