Form of SemGroup Energy Partners G.P., L.L.C. Long-Term Incentive Plan




 Exhibit 10.5 
 SEMGROUP ENERGY PARTNERS G.P., L.L.C. 
 LONG-TERM INCENTIVE PLAN 
  

	1.	Purpose of the Plan. 

 The SemGroup Energy Partners,
G.P., L.L.C. Long-Term Incentive Plan (the “Plan”) has been adopted by SemGroup Energy Partners G.P., L.L.C., a Delaware limited liability company (the “Company”), the general partner of SemGroup Energy Partners,
L.P., a Delaware limited partnership (the “Partnership”), and is intended to promote the interests of the Partnership and the Company and their Affiliates (as defined below) by providing to employees, consultants, and directors of
the Company and its Affiliates who perform services for or on behalf of the Partnership and its subsidiaries incentive compensation awards for superior performance that are based on Units (as defined below). The Plan is also contemplated to enhance
the ability of the Company and its Affiliates to attract and retain the services of individuals who are essential for the growth and profitability of the Partnership and its subsidiaries and to encourage them to devote their best efforts to
advancing the business of the Partnership and its subsidiaries. 
  

	2.	Definitions. 

 As used in the Plan, the following
terms shall have the meanings set forth below: 
 “Affiliate” means, with respect to any Person, any other
Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. 
 “Award” means Unit, Restricted Unit, Phantom Unit, Option, Unit Appreciation Right or DER granted under the Plan.

 “Award Agreement” means the written agreement or other instrument by which an Award shall be evidenced.

 “Board” means the Board of Directors of the Company. 
 “Change of Control” means, and shall be deemed to have occurred upon the occurrence of one or more of the following
events: (i) any “person” or “group” within the meaning of those terms as used in Sections 13(d) and 14(d)(2) of the Exchange Act, other than SemGroup, L.P., an Oklahoma limited partnership, and its Affiliates, shall become
the beneficial owner, by way of merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the combined voting power of the equity interests in the Company or the Partnership; (ii) the limited partners of the
Partnership approve, in one or a series of transactions, a plan of complete liquidation of the 









 
Partnership; (iii) the sale or other disposition by either the Company or the Partnership of all or substantially all of its assets in one or more
transactions to any Person other than the Company or an Affiliate of the Company; or (iv) a transaction resulting in a Person other than the Company or an Affiliate of the Company being the general partner of the Partnership. 
 “Code” means the Internal Revenue Code of 1986, as amended. 
 “Committee” means the Compensation Committee of the Board or, if none, the Board or such committee of the Board, if any,
as may be appointed by the Board to administer the Plan. 
 “Consultant” means an individual, other than an
Employee or a Director, providing bona fide services to the Partnership or any of its subsidiaries as a consultant or advisor, as applicable, provided that such individual is a natural person. 
 “DER” or “Distribution Equivalent Right” means a right to receive an amount in cash equal to the cash
distributions made by the Partnership with respect to a Unit during a specified period. 
 “Director” means a
member of the Board who is not an Employee. 
 “Employee” means any employee of the Company or an Affiliate
who performs services for the Partnership or its Affiliates. 
 “Exchange Act” means the Securities Exchange
Act of 1934, as amended. 
 “Fair Market Value” of a Unit means the closing sales price of a Unit on the
principal national securities exchange or other market in which trading in Units occurs on the applicable date (or if there is no trading in the Units on such date, on the next preceding date on which there was trading) as reported in The Wall
Street Journal (or other reporting service approved by the Committee). In the event Units are not traded on a national securities exchange or other market at the time a determination of fair market value is required to be made hereunder, the
determination of fair market value shall be made in good faith by the Committee. Notwithstanding the foregoing, with respect to an Award granted on the effective date of the initial public offering of Units, Fair Market Value on such date shall mean
the initial offering price per Unit as stated on the cover page of the S-1 for such offering. 
 “Option”
means an option to purchase Units granted under the Plan. 
 “Participant” means any Employee, Consultant or
Director granted an Award under the Plan. 
 “Person” means an individual or a corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity. 
  

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 “Phantom Unit” means a phantom (notional) Unit granted under the Plan
which entitles the Participant to receive, in the discretion of the Committee, a Unit or an amount of cash equal to the Fair Market Value of a Unit. 
 “Restricted Period” means the period established by the Committee with respect to an Award during which the Award remains nontransferable and subject to forfeiture or is either not exercisable by or
payable to the Participant, as the case may be. 
 “Restricted Unit” means a Unit granted under the Plan that
is subject to a Restricted Period. 
 “SEC” means the Securities and Exchange Commission, or any successor
thereto. 
 “UAR” of “Unit Appreciation Right” means an Award that, upon exercise, entitles
the holder to receive, in cash or common stock in the discretion of the Committee, the excess of the Fair Market Value of a Unit on the exercise date over the exercise price established for such Unit Appreciation Right. 
 “Unit” means a common unit of the Partnership. 
  

	3.	Administration. 

 (a) General. The Plan shall
be administered by the Committee. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to:
(i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Units to be covered by Awards; (iv) determine the terms and conditions of any Award (including
but not limited to performance requirements for such Award); (v) determine whether, to what extent, and under what circumstances Awards may be settled, exercised, canceled, or forfeited; (vi) interpret and administer the Plan and any
instrument or agreement relating to an Award made under the Plan; (vii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and
(viii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. The Committee may, in its discretion, provide for the extension of the exercisability of an Award,
accelerate the vesting or exercisability of an Award, eliminate or make less restrictive any restrictions applicable to an Award, waive any restriction or other provision of this Plan or an Award or otherwise amend or modify an Award in any manner
that is either (i) not adverse to the Participant to whom such Award was granted or (ii) consented to by such Participant. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other
decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company, the Partnership, any
Affiliate, any Participant, and any beneficiary of any Award. No member of the Committee or officer of the Company to whom the Committee has delegated authority in accordance with the provisions of Section 3(b) of this Plan shall be liable for
anything done or omitted to be done by him or her, by any member of the 

  

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Committee or by any officer of the Company in connection with the performance of any duties under this Plan, except for his or her own willful misconduct or
as expressly provided by statute. 
 (b) Delegation. Following the authorization of a pool of Units to be available for Awards, the
Board or the Committee may authorize a committee of one or more members of the Board to grant individual Awards from such pool pursuant to such conditions or limitations as the Board or the Committee may establish. The Committee may delegate to the
Chief Executive Officer and to other employees of the Company its administrative duties under this Plan (excluding its granting authority) pursuant to such conditions or limitations as the Committee may establish. The Committee may engage or
authorize the engagement of a third party administrator to carry out administrative functions under the Plan. 
  

	4.	Units. 

 (a) Limits on Units Deliverable.
Subject to adjustment as provided in Section 4(c), the maximum number of Units that may be delivered or reserved for delivery or underlying Awards in the aggregate issued under the Plan is 1,250,000. If any Award expires, is canceled,
exercised, paid or otherwise terminates without the delivery of Units, then the Units covered by such Award, to the extent of such expiration, cancellation, exercise, payment or termination, shall again be Units with respect to which Awards may be
granted. Units that are delivered by a Participant in satisfaction of the exercise or other purchase price of an Award or the tax withholding obligations associated with an Award or are withheld to satisfy the Company’s tax withholding
obligations are available for delivery pursuant to other Awards. The Committee may from time to time adopt and observe such rules and procedures concerning the counting of Units against the Plan maximum or any sublimit as it may deem appropriate,
including rules more restrictive than those set forth above to the extent necessary to satisfy the requirements of any national stock exchange on which the Units are listed or any applicable regulatory requirement. The Board and the appropriate
officers of the Company are authorized to take from time to time whatever actions are necessary, and to file any required documents with governmental authorities, stock exchanges and transaction reporting systems to ensure that Units are available
for issuance pursuant to Awards. 
 (b) Sources of Units Deliverable Under Awards. Any Units delivered pursuant to an Award shall
consist, in whole or in part, of Units acquired in the open market, common units already owned by the Company, common units acquired by the Company directly from the Partnership or any other person or any combination of the foregoing. 
 (c) Adjustments. In the event that any distribution (whether in the form of cash, Units, other securities, or other property), recapitalization,
split, reverse split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Units or other securities of the Partnership, issuance of warrants or other rights to purchase Units or other securities of the
Partnership, or other similar transaction or event affects the Units, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Units (or other securities or property) with respect to
which Awards may be granted, (ii) the number and type of Units (or other securities or property) subject to outstanding Awards, and (iii) the grant or exercise price with respect to any Award or, make provision for a cash 

  

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payment to the holder of an outstanding Award; provided, that the number of Units subject to any Award shall always be a whole number. 
  

	5.	Eligibility. 

 Any Employee, Consultant or Director
shall be eligible to be designated a Participant and receive an Award under the Plan. 
  

	6.	Awards. 

 Awards may, in the discretion of the
Committee, be granted either alone or in addition to, in tandem with or in substitution for any other Award granted under the Plan or any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem
with other Awards or awards granted under any other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards. 
 (a) Units. The Committee shall have the discretion to determine the Employees, Consultants and Directors to whom Units shall be granted and the
number of Units to be granted. All Units granted shall be fully vested upon grant and shall not be subject to forfeiture. 
 (b)
Restricted Units. The Committee shall have the authority to determine the Employees, Consultants and Directors to whom Restricted Units shall be granted, the number of Restricted Units to be granted to each such Participant, the Restricted
Period, the conditions under which the Restricted Units may become vested or forfeited, and such other terms and conditions as the Committee may establish with respect to such Awards. To the extent provided by the Committee, in its discretion, a
grant of Restricted Units may provide that distributions made by the Partnership with respect to the Restricted Units shall be subject to the same forfeiture and other restrictions as the Restricted Unit and, if restricted, such distributions shall
be held, without interest, until the Restricted Unit vests or is forfeited with the accumulated distributions being paid or forfeited at the same time, as the case may be. Absent such a restriction on the distributions in the Award Agreement,
distributions during the Restricted Period shall be paid to the holder of the Restricted Unit without restriction. 
 (c) Phantom
Units. The Committee shall have the authority to determine the Employees, Consultants and Directors to whom Phantom Units shall be granted, the number of Phantom Units to be granted to each such Participant, the Restricted Period, the time or
conditions under which the Phantom Units may become vested or forfeited, which may include, without limitation, the accelerated vesting upon the achievement of specified performance goals, and such other terms and conditions as the Committee may
establish with respect to such Awards, including whether DERs are granted with respect to such Phantom Units. 
 (d) Options. The
Committee shall have the authority to determine the Employees, Consultants and Directors to whom Options shall be granted, the number of Units to be covered by each Option, whether DERs are granted with respect to such Option, the purchase price
therefor and the conditions and limitations applicable to the exercise of the Option as the Committee shall determine, that are not inconsistent with the provisions of the Plan. The term of an Option may not exceed 10 years. The purchase price per
Unit purchasable under an Option 

  

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shall be determined by the Committee at the time the Option is granted, provided such purchase price may not be less than 100% of its Fair Market Value as of
the date of grant. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, which may include, without limitation, accelerated vesting upon the achievement of specified performance goals, and the
method or methods by which payment of the exercise price with respect thereto may be made or deemed to have been made, which may include, without limitation, cash, check acceptable to the Company, a broker-assisted cashless exercise through
procedures approved by the Committee, delivery of previously owned Units having a Fair Market Value on the exercise date equal to the relevant exercise, or any combination thereof. 
 (e) Unit Appreciation Rights. The Committee shall have the authority to determine the Employees, Consultants and Directors to whom Unit
Appreciation Rights shall be granted, the number of Units to be covered by each grant and the conditions and limitations applicable to the exercise of the Unit Appreciation Right as the Committee shall determine, that are not inconsistent with the
provisions of the Plan. The exercise price per Unit Appreciation Right shall be not less than 100% of its Fair Market Value as of the date of grant. The term of a Unit Appreciation Right may not exceed 10 years. 
 (f) Distribution Equivalent Rights. The Committee shall have the authority to determine the Employees, Consultants and Directors to whom DERs are
granted, whether such DERs are tandem or separate Awards, whether the DERs shall be paid directly to the Participant, be credited to a bookkeeping account (with or without interest in the discretion of the Committee) the vesting restrictions and
payment provisions applicable to the Award, and such other provisions or restrictions as determined by the Committee in its discretion all of which shall be specified in the Award Agreements. 
  

	7.	Limits on Transfer of Awards. 

 Each Award shall be
exercisable or payable only to the Participant during the Participant’s lifetime, or to the person to whom the Participant’s rights shall pass by will or the laws of descent and distribution. No Award and no right under any such Award may
be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the
Company or any Affiliate. Notwithstanding the foregoing, to the extent specifically provided by the Committee with respect to an Award, an Award may be transferred by a Participant without consideration to immediate family members or related family
trusts, limited partnerships or similar entities or on such terms and conditions as the Committee may from time to time establish. 
  

	8.	Securities Restrictions. 

 (a) All certificates for
Units or other securities of the Partnership delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the SEC, any stock exchange upon which such Units or other securities are then listed, and any applicable federal or state laws, and the Committee may 

  

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cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. 
 (b) Notwithstanding anything in the Plan or any Award Agreement to the contrary, delivery of Units pursuant to the exercise or vesting of an Award may be
deferred for any period during which, in the good faith determination of the Committee, the Company is not reasonably able to obtain Units to deliver pursuant to such Award without violating the rules or regulations of any applicable law or
securities exchange. No Units or other securities shall be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement (including, without limitation, any exercise
price or tax withholding) is received by the Company. 
  

	9.	Change of Control. 

 Unless specifically provided
otherwise in the Award Agreement, upon a Change of Control or such time prior thereto as established by the Committee, all outstanding Awards shall automatically vest or become exercisable in full, as the case may be. In this regard, all Restricted
Periods shall terminate. 
 Except as otherwise provided in the Award Agreement, the difference between the Fair Market Value of Units on the
payment date and the exercise price of an Option or UAR that is or becomes fully vested and exercisable as of the date of a Change of Control (or any earlier date related to the Change of Control and established by the Committee) shall be paid in a
single payment in Units, or cash and/or other property, or any combination of Units and cash and/or other property, as determined by the Committee. Except as otherwise provided in the Award Agreement, any Award of Phantom Units or Restricted Units
that pursuant to this Section 9 are deemed to have the applicable Restriction Period lapse (and to have all applicable performance criteria achieved at the maximum level, if any) as of the date of a Change of Control (or any earlier date
related to the Change of Control and established by the Committee), shall be settled by (i) issuance of unrestricted Units based on the number of Units that were subject to the Award on the date of grant of the Award or (ii) payment of
cash and/or other property equal to the Fair Market Value of a Unit on the payout date for each Phantom Unit or Restricted Unit or (iii) any combination of payouts under clauses (i) and (ii) of this sentence, as determined by the
Committee. Any accelerated payout pursuant to this Section 9 shall be made in a single payment within 30 days after the date of the Change of Control. 
 To the extent an Option or UAR is not vested or exercisable, or a Phantom Unit or Restricted Unit does not vest, pursuant to the preceding provisions of this Section 9 or the Award Agreement upon the Change of
Control, the Committee may, in its discretion, cancel such Award or provide for an assumption of such Award or a replacement grant on substantially the same terms; provided, however, upon any cancellation of an Option or UAR that has an exercise
price less than the Fair Market Value of a Unit as of the date of cancellation or a Phantom Unit or Restricted Unit, the holder shall be paid an amount in Units or cash and/or other property or any combination of cash and/or other property, as
determined by the Committee, equal to the difference between the Fair Market Value of a Unit and the exercise price if an Option or UAR or equal to the Fair Market Value of a Unit, if a Phantom Unit or Restricted Unit. 
  

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	10.	Amendment and Termination. 

 Except as required by
applicable law or the rules of the principal securities exchange on which the Units are traded, the Board may amend, alter, suspend, discontinue, or terminate the Plan in any manner, including increasing the number of Units available for Awards
under the Plan, without the consent of any Participant, any other holder or beneficiary of an Award or any other Person. 
  

	11.	General Provisions. 

 (a) No Rights to Award.
No Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants. The terms and conditions of Awards need not be the same with respect to each recipient. 
 (b) Tax Withholding. The Company or any Affiliate is authorized to withhold from any Award, from any payment due or transfer made under any Award
or from any compensation or other amount owing to a Participant the amount (in cash, Units, other securities, or other property) of any applicable taxes payable at the minimum statutory rate in respect of the grant of an Award, its exercise, the
lapse of restrictions thereon, or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy its withholding obligations for the payment of such taxes.

 (c) No Right to Employment or Services. The grant of an Award shall not be construed as giving a Participant the right to be
retained as an Employee, Consultant or Director, as applicable. Further, the Company or an Affiliate may at any time dismiss a Participant from employment or service at any time. 
 (d) Governing Law. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware without regard to its conflict of laws principles. 
 (e) Severability. If any
provision of the Plan or any award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision
shall be stricken as to such jurisdiction, person or award and the remainder of the Plan and any such Award shall remain in full force and effect. 
 (f) Other Laws. The Committee may refuse to issue or transfer any Units or other consideration under an Award if, in its sole discretion, it determines that the issuance or transfer of such Units or such other consideration might
violate any applicable law or regulation, the rules of the principal securities exchange on which the Units are then traded, or entitle the Partnership or an Affiliate to recover the same under Section 16(b) of the Exchange Act, and any payment
tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary. 
  

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 (g) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to
create a trust or separate fund of any kind or a fiduciary relationship between the Partnership, Company or any participating Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from
the Partnership, Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Partnership, Company or any participating Affiliate. 
 (h) No Fractional Units. No fractional Units shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Units or whether such fractional Units or any rights thereto shall be canceled, terminated, or otherwise eliminated. 
 (i) Facility of Payment. Any amounts payable hereunder to any person under legal disability or who, in the judgment of the Committee, is unable to
properly manage his financial affairs, may be paid to the legal representative of such person, or may be applied for the benefit of such person in any manner which the Committee may select, and the Partnership, Company and its Affiliates shall be
relieved of any further liability for payment of such amounts. 
 (k) Participation by Affiliates. In making Awards to Employees
employed by an Affiliate of the Company, the Committee shall be acting on behalf of the Affiliate, and to the extent the Partnership has an obligation to reimburse the Affiliate for compensation paid to Employees for services rendered for the
benefit of the Partnership, such payments or reimbursement payments may be made by the Partnership directly to the Affiliate, and, if made to the Company, shall be received by the Company as agent for the Affiliate. 
 (l) Gender and Number. Words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular
shall include the plural. 
 (m) No Guarantee of Tax Consequences. None of the Board, the Partnership, the Company, any Affiliate nor
the Committee makes any commitment or guarantee that any federal, state or local tax treatment will apply or be available to any person participating or eligible to participate hereunder. 
  

	12.	Term of the Plan. 

 The Plan shall become effective
on the later of the date of its approval by the Board or the initial public offering of Units and shall terminate on, and no Awards may be granted after, the earliest of the date established by the Board or the Committee, the 10th anniversary of the
date the Plan was adopted by the Company (or such earlier anniversary, if any, required by the rules of the exchange on which Units are traded) or the date Units are no longer available for delivery pursuant to Awards under the Plan. However, unless
otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted prior to such termination, and the authority of the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any
conditions or rights under such Award, shall extend beyond such termination date. 
  

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