Document:

Susquehanna Bancshares, Inc. - Short-Term Incentive Plan

 Exhibit 10.4 

 

 

 Susquehanna Bancshares, Inc. 
 Short-Term Incentive Plan 
 January 2011 

OUR VISION 
 -
People are our most valuable asset 
 - Customers are our highest priority 

- Information is our competitive edge 
 - Performance is our key to winning 

 Susquehanna Bancshares, Inc. Short-Term Incentive Plan 

 
 Introduction 

Susquehanna Bancshares, Inc. (the “Company”) has adopted this Short-Term Incentive Plan (the “Plan”) to provide a vehicle to reward
eligible employee’s for their contributions to the Company’s financial success. 
 Effective Date 

The Plan is effective January 1, 2011. Each January 1 to December 31 period will be the “Plan Year.” The Plan will be
reviewed annually by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) to ensure proper alignment with the Company’s business objectives. The Compensation Committee retains the
rights, as described below, to amend or modify the Plan at any time.
 Purpose 
 The Plan’s objectives are to: 
  

	 	•	 	 Align executives, management and employees with the Company’s strategic plan and critical performance goals. 

 

	 	•	 	 Encourage teamwork and collaboration across all areas of the Company - the collective contributions from all our contributions will drive improved
business results. 

  

	 	•	 	 Motivate and reward the achievement of core performance objectives. 

 

	 	•	 	 Provide payouts commensurate with Company, affiliate, region, function, unit and/or employee performance – as defined by each participating role.

  

	 	•	 	 Provide competitive total compensation opportunities 

  

	 	•	 	 Enable the Company to attract, motivate and retain talented employees. 

 

	 	•	 	 Ensure our incentives are appropriately risk-balanced (i.e. do not unintentionally motivate inappropriate risk taking). 

 

	 	•	 	 Create a program that is simple and easy to understand and administer. 

 The Plan is intended to meet the requirements for “qualified performance-based compensation” under section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) with
respect to the named executive officers of the Company. 
 Plan Administration 
 The Plan has been approved by the Compensation Committee and the Compensation 

 
Committee will administer the Plan. The Compensation Committee has the sole authority to interpret the Plan and to make or nullify any rules and procedures, as necessary, for proper
administration of the Plan. The Compensation Committee will make all final determinations regarding cash compensation paid to named executive officers under the Plan. Except as required by applicable law, final determinations for other employees
will be made by senior management. Any determination by the Compensation Committee with respect to the named executive officers and/or senior management with respect to all other employees will be final and binding. 

Participation and Eligibility 
 Selected
employees are eligible to participate in the Plan. Employees will be nominated by senior management to be eligible to participate and will be approved by the Compensation Committee. 
 Other criteria for participation include: 
  

	 	•	 	 An employee must be employed by October 31 of the Plan Year to be eligible to participate in the Plan for the Plan Year. An employee hired after
October 31 of the Plan Year must wait until the next applicable Plan Year to be eligible to participate in the Plan.

  

	 	•	 	 An employee must receive a minimum performance rating of “satisfactory” (or such equivalent) or better for the year and remain in good
standing throughout the Plan Year. If an employee is placed on probation during the Plan Year, any Award earned will be prorated to reflect the time on probation.

 

	 	•	 	 An employee must be an active employee as of the Award payout date to receive an Award.

For purposes of the Plan “employee” shall mean an employee of the Company (including an officer or director who is also an employee), but
excluding any individual (a) employed in a casual or temporary capacity (i.e., those hired for a specific job of limited duration), (b) whose terms of employment are governed by a collective bargaining agreement that does not provide for
participation in the Plan, (c) any individual characterized as a “leased employee” within the meaning of section 414(n) of the Code, or (d) classified by the Company as a “contractor” or “consultant,” no
matter how characterized by the Internal Revenue Service, other governmental agency or a court. Any change of characterization of an individual by any court or government agency shall have no effect upon the classification of an individual as an
employee for purposes of the Plan, unless the Compensation Committee determines otherwise. Whether an employee is exempt or non-exempt shall be determined by the Company’s Human Resource Department based on the employee’s status as of the
end of the Plan Year for which an Award is earned. Unless otherwise specified herein, all references to employee in the Plan shall include both exempt and non-exempt employees. 
 Performance Period 
 The performance period for the Plan is the Plan Year. 

  
 3 

 Incentive Targets 
 Each eligible employee will have a specified target annual cash incentive award (the “Target Award”), based on his or her role at the Company. Except as required by applicable law, the Target
Award is determined by the Compensation Committee for named executive officers and by senior management for all other eligible employees in their sole discretion. Target Awards are based on competitive practices and reflect the amount of the Award
to be paid for meeting predefined performance goals at the 100% level. Target Awards will be defined as a percentage of base earnings. Base earnings mean the amount of base salary actually earned by an eligible employee for a Plan Year, determined
as of the last day of the Plan Year. This allows for an automatic conversion for part-time employees, employees who receive salary increases during the year, and employees who are employed after the start of the year. 

Actual awards (“Awards”) can range from 0% to 200% of target depending on performance and may be based on achievement of threshold (i.e.
baseline), target and stretch (i.e. superior) performance which will be determined by the Compensation Committee or such other cap or limitation as the Compensation Committee may set for a Plan Year; provided that for Awards intended to qualify as
“qualified performance-based compensation” for purposes of section 162(m) of the Code the maximum amount payable to any employee under the Plan is 200% of base earnings. Performance below threshold will result in no payout. 

If an employee changes his/her role or is promoted during the Plan Year, and that promotion results in a higher Target Award opportunity, he/she will be
eligible for the new role’s Target Award opportunity on a pro rata basis. 
 In the event of an approved leave of absence, the Target Award
opportunity level for the year will be adjusted to reflect the time in active status.
 Performance Goals 

For each Plan Year, each eligible employee will have predefined performance goals and weights that will determine his or her Award. 

There will be two categories of performance goals for each eligible employee: 

 

	 	•	 	 Corporate/Company Goals; and 

  

	 	•	 	 Unit /Individual (defined for each role). 

 To the extent Awards are intended to qualify as “qualified performance based compensation” for purposes of section 162(m) of the Code, performance goals will be set by the Compensation Committee
no later than the earlier of (i) 90 days after the beginning of the Plan Year or (ii) the date on which 25% of the Plan Year has been completed, or such other date as may be required or permitted under applicable regulations under section
162(m) of the Code and may be based on earnings or earnings growth (including but not limited to earnings per share or net income); economic profit, stockholder value added or economic value added; return on equity, assets or investment; revenues;
expenses; stock price or total stockholder return; regulatory compliance; satisfactory internal or external audits; improvement of financial or credit ratings; achievement of asset quality objectives;

  
 4 

 
achievement of balance sheet or income statement objectives, including, without limitation, capital and expense management; efficiency ratio; non-interest income to total revenue ratio; net
interest margin; credit quality measures (including non-performing asset ratio, net charge-off ratio, and reserve coverage of non-performing loans); net operating profit; loan growth; deposit growth; non-interest income growth; market share;
productivity ratios; achievement of risk management objectives; or any other objective goals established by the Compensation Committee. Such performance goals may also be particular to an eligible employee or the division, department, branch, line
of business, subsidiary or other unit in which the employee works, or may be based on attaining a specified absolute level of the performance goal, or a percentage increase or decrease in the performance goal compared to a pre-established target,
previous years’ results, or a designated market index or comparison group, all as determined by the Compensation Committee. 
 Performance
targets and ranges for each performance goal will be set by management and approved by the Compensation Committee. Target Awards may provide for differing amounts to be paid based on differing thresholds of performance. The Company will notify each
eligible employee of the employee’s Target Award and the applicable performance goals for the Plan Year. The specific allocation of goals, including how the performance goals are weighted, will be determined at the discretion of the
Compensation Committee and may be based on the eligible employee’s role, key area of contribution or such other factor as determined by the Compensation Committee. 
 For Awards intended to meet the requirements for “qualified performance-based compensation” under section 162(m) of Code, the Compensation Committee will specify in the minutes (i) each
employee’s Target Award, (ii) the performance goals for each eligible employee, and (iii) how the financial calculations for the performance goals will be made, including what, if any, adjustments will be made in accordance with the
Plan. The maximum dollar amount that may be paid to an eligible employee for a Plan Year is 200% of base earnings. For decisions with respect to Awards not intended to be “qualified performance-based compensation” the Compensation
Committee will have flexibility in establishing the Target Award opportunity, performance goals and Award level for each eligible employee under the Plan. 
 Award Levels 
 At the end of the Plan Year (December 31st), or as soon as practical
thereafter, performance is assessed against the specific goals established at the start of the Plan Year. An eligible employee will earn an Award for the Plan Year based on the level of achievement of the performance goals established by the
Compensation Committee for the Plan Year; provided that the Compensation Committee may reduce (but not increase) an Award below the level determined based on the Performance Goals. Unless the Compensation Committee determines otherwise, Awards will
be interpolated based on performance between the applicable performance levels. 
 Payout for each goal is determined independently in arriving
at the overall incentive payout. As a result, an eligible employee may not achieve baseline (threshold) performance on one goal but may still receive an Award based upon the level of attainment of other performance goals (assuming the eligible
employee maintains a minimum performance 

  
 5 

 
rating of “satisfactory” (or such equivalent) or better). 
 Awards under the
Plan are based on the performance results for the Plan Year. Achieving higher levels of performance above target up to stretch will increase the Plan payouts to the eligible employee. Similarly, achieving less than target performance will
reduce the Plan payouts.
 Adjustment to Target Awards and Performance goals 
 Except with respect to Awards to named executive officers that are structured to satisfy the requirements for “qualified performance based compensation” under section 162(m) of the Code, the
Compensation Committee may at any time prior to the final determination of Awards change the Target Award opportunity of any eligible employee or assign a different Target Award opportunity to an eligible employee to reflect any change in the
employee’s responsibility level or position during the course of the performance period. 
 In addition, the Compensation Committee may,
but only to the extent consistent with the requirements of section 162(m) of the Code for Awards intended to meet the requirements for “qualified performance-based compensation,” at any time prior to the financial determination of
Awards, change the performance goals to reflect a change in corporate capitalization, such as a stock split or stock dividend, or a corporate transaction, such as a merger, consolidation, separation, reorganization or partial or complete
liquidation, or to equitably reflect the occurrence of any extraordinary event, any change in applicable accounting rules or principles, any change in the Company’s method of accounting, any change in applicable law, any change due to any
merger, consolidation, acquisition, reorganization, stock split, stock dividend, combination of shares or other changes in the Company’s corporate structure or shares, or any other change of a similar nature. 

Application of Section 162(m) of the Internal Revenue Code 
 Awards structured to satisfy the requirements for “qualified performance based compensation” under section 162(m) of the Code will be based on performance goals, including the requirement that
the achievement of the performance goals be substantially uncertain at the time they are established and that the performance goals be established in such a way that a third party with knowledge of the relevant facts could determine whether and to
what extent the performance goals have been met. An Award that is designated as “qualified performance based compensation” under section 162(m) of the Code may not be awarded as an alternative to any other award that is not designated as
“qualified performance based compensation,” but instead must be separate and apart from all other awards made. The Compensation Committee is authorized to reduce an Award for the Plan Year based upon its assessment of personal performance
or other factors, but not to increase the Award beyond the amount determined based on achievement of the performance goals for that employee. Any reduction of an eligible employee’s Award will not result in an increase in any other eligible
employee’s Award. 

  
 6 

 Incentive Award Payments 
 For Awards structured to satisfy the requirements for “qualified performance based compensation” under section 162(m) of the Code and for Awards to named executive officers, the Compensation
Committee will certify the performance goals for the Plan Year and the Awards that will be paid by the Company to each employee following the final determination of the Company’s financial results for the Plan Year. Except as required by
applicable law, all other Awards will be approved by senior management based on the achievement of the performance goals by the employee. 

Except as provided below, employees who terminate during the Plan Year will not be eligible to receive an Award for that Plan Year. Further, to
encourage employees to remain in the employment of the Company, except as set forth herein, an employee must be an active employee of the Company on the date the applicable portion of the Award is paid in accordance with the payment schedule set
forth below. 
 Unless the Compensation Committee determines otherwise, Awards will be paid out to exempt employees out in three installments
following the end of the Plan Year; provided that the employee remains employed through the applicable payment date as follows: 50% of the Award will be paid out within two and one half months following the end of the Plan Year (i.e. no later than
March 15) (such actual date the “Payment Date”), 25% of the Award will be paid out on the first anniversary of the Payment Date and the remaining 25% of the Award will be paid out on the second anniversary of the Payment Date. All
Awards to non-exempt employees will be paid as a single lump sum cash payment on the Payment Date. 
 If an employee ceases to be employed by
the Company prior to the Plan Year for which an Award may be earned due to death, disability (within the meaning of section 22(e)(3) of the Code) or on account of an early or normal retirement (as defined by Susquehanna Bancshares, Inc. Cash Balance
Pension Plan), his/her Award under the Plan will be pro-rated based on actual performance for the applicable Plan Year. Such pro-rated amount will be calculated by multiplying the amount of the Award that the employee would have received had he
remained employed through the end of the Plan Year by a fraction, the numerator of which is the number of completed calendar months during which the employee was employed by the Company during the Plan Year and the denominator of which is 12. Any
Award owed to the employee will be paid to the employee, or the employee’s estate, as applicable, in a lump sum on the Payment Date at the time Awards earned for the applicable Plan Year are paid under the Plan to other employees, but in any
event not later than March 15 of the Plan Year following the Plan Year for which the Award was earned. 
 If an exempt employee ceases to
be employed by the Company due to death, disability or on account of an early or normal retirement, at any time following the Payment Date but prior to one or both of the subsequent payment dates on the first or second anniversary of the Payment
Date, the remaining amount of the Award not yet paid will be paid in full within 30 days following the date of the exempt employee’s death, termination due to disability or early or normal retirement, as applicable. 

Awards will be considered taxable income to employees in the year paid and will be subject to withholding for required income and other applicable taxes.

 Discretionary Awards 
 In
addition to Awards that are designated “qualified performance-based compensation” under section 162(m) of the Code, as described above, the Compensation Committee may grant to employees such other incentive awards as the Compensation
Committee deems appropriate, which may be based on Unit/Individual goals, Corporate/Company goals or such other criteria as the Compensation Committee determines. Decisions with respect to such incentive awards will be made separate and apart from
the Awards intended to be “qualified performance-based compensation.” 
 Taxes 

  
 7 

 The Company is authorized to withhold from any payment under the Plan, amounts of withholding and other
taxes due in connection with a payment made under the Plan, and to take such other action as the Compensation Committee may deem advisable to enable the Company and employees to satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any payment 
 Application of Section 409A of the Internal Revenue Code 

The Plan is intended to comply with the requirements of section 409A of the Code, and shall in all respects be administered in accordance with section
409A of the Code or an exception thereto. Notwithstanding anything in the Plan to the contrary, payments may only be made upon an event and in a manner permitted by section 409A of the Code or an exception thereto. If a payment is not made by the
designated payment date under the Plan, the payment shall be made by December 31 of the calendar year in which the designated date occurs. For purposes of section 409A of the Code, all payments to be made upon an employee ceasing to be employed
by, or providing service to, the Company may only be made upon the employee’s “separation from service” (within the meaning of such term under section 409A of the Code). 
 Notwithstanding anything in the Plan to the contrary, if an employee is a “key employee” under section 409A of the Code and payment of any amount under the Plan is required to be delayed for a
period of six months after separation from service pursuant to section 409A of the Code, payment of such amount will be delayed as required by section 409A of the Code and will be paid within 10 days after the end of the six-month period. If the
employee dies during such six-month period, the amounts withheld on account of section 409A of the Code will be paid to the personal representative of the employee’s estate within 60 days after the date of the employee’s death. 

Limitations on Rights Conferred under Plan 
 Nothing contained in the Plan or in any documents related to the Plan will confer upon any employee any right to continue as an employee or in the employ of the Company or constitute any contract or
agreement of employment, or interfere in any way with the right of the Company to reduce such person’s compensation, to change the position held by such person or to terminate the employment of such employee, with or without cause, but nothing
contained in this Plan or any document related thereto will affect any other contractual right of any employee. No benefit payable under, or interest in, this Plan will be transferable by an employee except by will or the laws of descent and
distribution or otherwise be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge. 

Program Changes or Discontinuance 
 The
Compensation Committee may add to, amend, modify or discontinue any of the terms or conditions of the Plan at any time; provided, however, that the Compensation Committee will not amend the Plan without shareholder approval if such approval is
required by section 162(m) of the Code. The Plan must be re-approved by the Company’s shareholders no later than the first shareholders’ meeting that occurs in the fifth year following the year in

  
 8 

 
which the shareholders previously approved the Plan, if additional Awards are to be paid under the Plan and if required by section 162(m) of the Code or the regulations thereunder. 

Ethics, Interpretation and Clawback 
 If
there is any ambiguity as to the meaning of any terms or provisions of this Plan or any questions as to the correct interpretation of any information contained therein, the Company’s interpretation expressed by the Compensation Committee will
be final and binding. 
 The altering, inflating, and/or inappropriate manipulation of performance/financial results or any other infraction of
recognized ethical business standards, will subject the employee to disciplinary action up to and including termination of employment. In addition, any incentive compensation as provided by this Plan to which the employee would otherwise be
entitled will be revoked. 
 All Awards under the Plan will be subject to any compensation, clawback and recoupment policies that may be
applicable to the employees of the Company, as in effect from time to time and as approved by the Board of Directors or a duly authorized committee thereof, whether or not approved before or after the effective date of the Plan. 

Severability 
 Each provision in this
Plan is severable, and if any provision is held to be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions will not, in any way, be affected or impaired thereby. 

Successors and Assigns 
 The provisions
of the Plan will be binding upon the Company and its successors and upon the employees and their legal representatives. 
 Governing Law

 The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan, and any payment made under the Plan
will be determined in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflicts of laws, and applicable Federal law. 

  
 9SemGroup Corporation Short-Term Incentive Program

 Exhibit 10.1 
 SEMMANAGEMENT L.L.C. 
 Guidelines for Short-Term Incentive Program

 for Eligible Employees 
 ARTICLE I. 
 INTRODUCTION 

1.1 Purpose; STI. 
 (a) The purpose of the Short-Term Incentive Program for Eligible Employees is to provide for annual cash incentives for Eligible Employees (as defined herein) of SemManagement L.L.C. (the
“Company”) or its Affiliates to apply their knowledge, skills and abilities to enable the Company to create value for shareholders of SemGroup Corporation (referred to herein collectively with its Affiliates as “SemGroup”) by,
among other things, rewarding business unit and SemGroup organizational achievements as well as, where applicable, individual effort. Notwithstanding the adoption and publication of the STI and the Guidelines described herein (“these
Guidelines”), the Compensation Official (as defined below) retains full and complete discretion with respect to the making as well as the amount of any Award hereunder. 
 (b) As used herein, the term “STI” refers to these Guidelines together with the metrics, financial goals and any other terms and conditions established by the Committee (as defined below) for
each Performance Year (as defined below). 
 1.2 Effective Date. The STI is effective as of January 1, 2011.

 1.3 Definitions. Capitalized terms used herein have the meanings set forth in Article VI hereof unless otherwise
defined herein. 
 1.4 Effect of Guidelines; Discretion. 

(a) Notwithstanding any public or private communication by the Company or any Affiliate regarding financial performance for a Performance
Year and its potential effect on the payment of Awards under the STI, the Committee and the Compensation Official retain the full authority and discretion regarding the calculation and payment of Awards under the STI otherwise accorded them under
the STI. 
 (b) Except with respect to Section 4.1 below, notwithstanding any use of terms such as “are,”
“will be,” “would” or any similarly declarative word or phrase in this document or any description or summary of the STI, the STI imposes no duty or obligation upon SemGroup, the Company or any Affiliate, the Committee, a
Compensation Official (as defined below) or any delegate of any of the foregoing with regard to the payment of any Award under the STI or the amount thereof. Compliance with the Guidelines, except for Section 4.1 below, is within the complete
discretion of the Compensation Official. 

 1.5 No Legally Binding Right or Entitlement to Award. Neither eligibility nor
participation in the STI shall create any legally binding right nor otherwise entitle any person to receive any Award hereunder for any Performance Year prior to payment of such Award. In addition, there is no obligation for uniformity of treatment
of Eligible Employees or other employees, except as may be provided in any other compensation arrangement to which the Company or, as applicable, an Affiliate, is a party. 
 ARTICLE II. 
 ELIGIBILITY; PARTICIPATION 

2.1 Eligibility. Eligible Employees are common law employees of the Company or one or more of its Affiliates, but not including
anyone who is: 
 (a) A leased employee; 
 (b) an employee who is a member of a group of employees covered by a collective bargaining agreement, unless such agreement expressly provides for coverage under the STI; 

(c) a seasonal employee, a temporary employee, a term employee or an employee not employed on a regularly scheduled basis; 

(d) a person who has a written employment contract or other contract for services, unless such contract provides that such person is
entitled to participate in the STI; 
 (e) a person who is paid through the payroll of a temporary agency or similar
organization regardless of any subsequent reclassification as a common law employee; 
 (f) a person who is designated,
compensated or otherwise treated as an independent contractor by an the Company or applicable Affiliate regardless of any subsequent reclassification as a common law employee; 
 (g) a person who is designated, compensated or otherwise treated as a cooperative education employee; 
 (h) a person who has a written contract with the Company or an Affiliate which states either that such person is not an employee or that such person is not entitled to receive compensation from the
Company or such Affiliate for services under such contract; 
 (i) a person who is not classified as a common law employee for
purposes of the Company’s or an Affiliate’s payroll system. In the event any such person is reclassified as a common law employee for any purpose, including, without limitation, as a common law or

  
 -2-

 
statutory employee, by any action of any third party, including, without limitation, any government agency, or as a result of any private lawsuit, action or administrative proceeding, such person
will, notwithstanding such reclassification, remain ineligible for participation hereunder and will not be considered an Eligible Employee. In addition to and not in derogation of the foregoing, the exclusive means for an individual who is not
classified as a common law employee of the Company or an Affiliate on the Company’s or such Affiliate’s payroll system to become an Eligible Employee under the STI is through an amendment to the STI which specifically renders such person
an Eligible Employee; 
 (j) a person retained by the Company or an Affiliate directly or through an agency or other party to
perform services for the Company or such Affiliate (for either a definite or indefinite duration) in the capacity of a fee-for-service worker or independent contractor or any similar capacity including, without limitation, any such person employed
by temporary employment firms, technical help firms, staffing firms, employee leasing firms, professional employer organizations or other staffing firms, whether or not deemed to be a common law employee; and 

(k) an employee who is on an unpaid leave of absence, unpaid administrative leave or, except as provided in Section 4.3 below,
Disability leave, whether or not the individual is otherwise treated as an employee for other purposes. 
 2.2 Participation;
Eligibility to Receive Award. An Eligible Employee begins to participate in the STI on such person’s first day of active employment as an Eligible Employee for the Company or an Affiliate. Such participation ceases at the time such active
employment as an Eligible Employee ceases, including on commencement of any unpaid leave of absence, administrative leave or Disability leave whether or not the individual is compensated or otherwise treated as an employee for other purposes.
Further, except as set forth in Article IV below, no Eligible Employee may receive an Award under the STI unless he or she is an Eligible Employee participating in the STI on the payment date for such Award. An Eligible Employee will continue to
participate in the STI through the last day of the final month of the period of any paid administrative leave commenced while such Eligible Employee was participating in the STI. 

  
 -3-

 ARTICLE III. 
 GUIDELINES FOR CALCULATING AWARD AMOUNTS 
 3.1 Factors Relevant to
Calculation of Awards. Awards, if any, for Eligible Employees for a Performance Year are calculated based on such factors as the Compensation Official determines in its sole discretion, including without limitation (a) available funding,
(b) the financial performance of SemGroup and its business units in accordance with the Performance Measures (as defined below) and (c) the Eligible Employee’s Target Percentage and Eligible Earnings for such Performance Year.

 3.2 Target Percentage. Within the first quarter of each Performance Year, the Compensation Official will establish a
Target Percentage for each Eligible Employee. The Target Percentage is expressed as a percentage of an Eligible Employee’s Eligible Earnings. An Eligible Employee’s Target Percentage may change during a Performance Year based on a change
in such Eligible Employee’s job title, or upon the recommendation of the Compensation Official. 
 3.3 Eligible
Earnings. For purposes of the STI, an Eligible Employee’s Eligible Earnings means the amount of his or her base salary for a Performance Year. “Base salary” includes, but is not limited to, pay for hours worked during a normal
workday, PTO, short-term disability pay, holiday pay, jury duty pay, bereavement pay and shift differentials. “Base salary” under the STI does not include, by way of example and not limitation, bonuses, overtime, long-term Disability
benefits, commissions, cost of living pay, housing pay, relocation pay, other taxable fringe benefits and extraordinary compensation. 
 3.4 Target Awards; Changes in Target Awards during a Performance Year. 

(a) The amount of an Eligible Employee’s Target Award for a Performance Year is equal to the product of (i) the Eligible
Employee’s Target Percentage multiplied by (ii) his or her estimated Eligible Earnings for such Performance Year. An Eligible Employee’s Target Award represents a payment target for the Award, if any, payable to such Eligible Employee
upon the achievement of the Performance Measures at the target level established for the Performance Year for SemGroup and the business units, and, where applicable, the Eligible Employee’s personal performance goals. The amount of the Award
may vary based upon the level of achievement of the Performance Measures. 
 (b) If during the course of a Performance Year, an
Eligible Employee’s business unit (as defined in Section 3.3 above) changes so that his or her Target Percentage and/or business unit is different for different parts of such Performance Year, and/or the amount of an Eligible
Employee’s Eligible Earnings on an annual basis is increased or decreased, such Eligible Employee’s Target Percentage for that Performance Year, and, therefore, his or her Target Award, are pro rated as appropriate to reflect his or her
Target Percentage and Eligible Earnings under the STI for each portion of such Performance Year. 

  
 -4-

 3.5 Amount of Award; Adjustments and Limits. 

(a) The amount of an Award, if any, for an Eligible Employee for a Performance Year calculated under the STI is initially calculated
based on the Eligible Employee’s Target Award and Eligible Earnings for the Performance year computed under Section 3.4 above, subject to the adjustments and limits described below. 

(b) The Award of an Eligible Employee, if any, initially calculated as for a Performance Year in accordance with Section 3.4 above
is subject to adjustment upward or downward (but not below zero) based on such other factors as the Compensation Official determines appropriate, including without limitation (i) available funding, (ii) the performance of SemGroup and its
business units in accordance with the Performance Measures and (iii) the Eligible Employee’s Target Percentage and Eligible Earnings for such Performance Year. Such adjustment shall be determined based upon percentage achievement of the
Performance Measures and their corresponding relative weight. 
 (c) The amount of each Eligible Employee’s Award, if any,
for a Performance Year under the STI shall not exceed 200% of his or her Target Award, or be less than zero (0). In addition, in no event shall the aggregate amount of all Awards calculated under the STI or a Performance Year exceed the Incentive
Pool (as defined below) for such Performance Year. 
 (d) No Award or any portion thereof shall be payable to any Eligible
Employee with respect to any Performance Year unless SemGroup is profitable for such Performance Year as defined and determined in the sole discretion of the Committee and, notwithstanding such profitability, no Award shall be payable under the STI
except in the discretion of the Compensation Official. 
 3.6 Incentive Pool. The Incentive Pool for a Performance Year
is the total amount of funds, if any, allocated by the Committee for the payment of Awards under the STI for such Performance Year. The Incentive Pool applicable for a Performance Year shall be determined by the Committee following the end of such
Performance Year. 
 ARTICLE IV. 
 PAYMENT 
 4.1 Timing of Payment of Awards. Except as otherwise
provided in Section 5.7 below, any Award or portion thereof under the STI with respect to a Performance Year that is payable under the STI if and as approved for payment by the Compensation Official will be paid in cash on March 14 of the
year following such Performance Year. 
 4.2 No Payment of Award on Termination of Employment except due to Retirement,
Disability or Death. An Eligible Employee whose employment by the Company or 

  
 -5-

 
applicable Affiliate ends, voluntarily or involuntarily, prior to the payment date of an Award or portion thereof otherwise payable to such Eligible Employee for a Performance Year under the STI,
is not eligible to receive any Award under the STI for such Performance Year except, in accordance with Section 4.3 below, if such employment termination is due to Retirement, Disability or death. 

4.3 Discretion to Pay Award on Termination of Employment as a Result of Death, Disability or Retirement. If an Eligible
Employee’s employment by the Company or applicable Affiliate terminates prior to payment of an Award otherwise payable under the STI with respect to a Performance Year due to such Eligible Employee’s Retirement, Disability or death, such
Eligible Employee (or his or her beneficiary, as the case may be) may, in the discretion of the Compensation Official, receive an Award under the STI for such Performance Year. The amount of any Award payable to such Eligible Employee, or
beneficiary, as the case may be), in such case shall be calculated in the same manner and paid at the same time that Awards, if any, are paid to other Eligible Employees. 
 ARTICLE V. 
 GENERAL PROVISIONS 

5.1 Administration. The STI will be administered by the Committee which serves as the Compensation Official with respect to
(a) establishment of the financial performance metrics and goals for each Performance Year, (b) certification of the achievement of established goals for a Performance Year, (c) determination of Target Percentages and Awards, if any,
payable to any Eligible Employee or group of Eligible Employees as to which the Committee directly sets compensation, and (d) such other matters with respect to the STI as the Committee determines in its sole determination. Otherwise, the STI
shall be administered by the applicable Compensation Official with respect to each Eligible Employee or group of Eligible Employees. Notwithstanding anything to the contrary in the STI, the Compensation Official, retains at all times full discretion
and authority over every aspect of the STI as to which such Compensation Official is accorded discretion under the STI or otherwise under the Company’s or applicable Affiliate’s compensation policies and procedures, including without
limitation whether and to what extent any Award will be paid under the STI for any Performance Year and to whom such Award(s) may be paid or not paid. The Compensation Official may further delegate its administrative duties and responsibilities
under the STI to such committees, other groups and individuals as it deems appropriate; provided that no delegation shall be made that would violate applicable law. 
 5.2 No Limit on Other Compensatory Arrangements. Nothing contained herein shall prevent the Company or any Affiliate from adopting other or additional compensation arrangements (which may include,
without limitation, employment agreements with Eligible Employees and arrangements which relate to Awards under the STI), and such arrangements may be either generally applicable or applicable only in specific cases. Notwithstanding anything in this
document to the contrary, the terms of each Award shall be construed so as to be consistent with such other arrangements in effect at the time of the Award. 

  
 -6-

 5.3 Severability. If any provision of the STI is, becomes or is deemed invalid,
illegal or unenforceable in any jurisdiction, or would disqualify the STI or any Award under any law deemed applicable by the Company or employing Affiliate, such provision shall be construed or deemed amended to conform to applicable laws or, if it
cannot be construed or deemed amended without, in the determination of the Company or such Affiliate, materially altering the intent of the STI, such provision shall be deleted and the remainder of the STI shall remain in full force and effect;
provided, however, that unless otherwise determined by the Company, such provision shall not be construed or deemed amended or deleted with respect to any Eligible Employee whose rights and obligations under the STI are not subject to the law of
such jurisdiction or the law deemed applicable by the Company or applicable Affiliate. 
 5.4 Unfunded Status. The STI is
intended to constitute an unfunded plan for incentive compensation. With respect to any payments not yet made to an Eligible Employee pursuant to the STI nothing herein shall give any such Eligible Employee any rights that are greater than those of
a general creditor of the Company or applicable Affiliate; provided, however, that the Company or applicable Affiliate may authorize the creation of trusts or make other arrangements to meet the Company’s or Affiliate’s respective
obligations under the STI to deliver cash or other property pursuant hereto which trusts or other arrangements shall be consistent with the “unfunded” status of the STI. 

5.5 Amendment; Termination. The Committee shall have discretionary authority to amend the STI, except for Section 4.1 hereof,
from time to time without notice to any employee or other person. The STI may be terminated by the Committee in its sole discretion at any time without notice to any person and without any obligation to pay any Award hereunder. 

5.6 Section 409A. The Company intends that the STI and any payment made under the STI be excepted from Section 409A or,
if not excepted, compliant with 409A. Accordingly, to the fullest extent possible, the Plan shall be construed and administered so that each Award paid under the STI shall be paid in a time, form and manner that results in the payment being excepted
from 409A or, if not excepted, compliant with 409A. 
 5.7 Forfeiture and Clawback. Notwithstanding any other provision
of the STI to the contrary, any incentive-based compensation paid to an Eligible Employee under the STI may be subject to recovery by the Company or SemGroup under any clawback policy that SemGroup may adopt from time to time, including without
limitation any policy that SemGroup may be required to adopt under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations of the U.S. Securities and Exchange Commission thereunder or the
requirements of any national securities exchange on which SemGroup’s stock may be listed. In accordance with any such policy, an Eligible Employee may be required to promptly return any such incentive-based compensation which SemGroup
determines it is required to recover from the Eligible Employee under any such clawback policy. 

  
 -7-

 ARTICLE VI. 
 DEFINITIONS 
 Unless otherwise defined in the STI, the following
capitalized terms used in this document shall have the meanings set forth below: 
 (a) “Affiliate” means all persons
with whom the Company would be considered a single employer under Section 414(b) of the Code, and all persons with whom such person would be considered a single employer under Section 414(c) of the Code. 

(b) “Award” has the meaning set forth in Section 3.1 hereof. 

(c) “Committee” means the Compensation Committee of the Board of Directors of SemGroup Corporation. 

(d) “Company” means SemManagement L.L.C. 
 (e) “Compensation Official” means, with respect to an Eligible Employee or group of Eligible Employees, the Committee, an individual or any other committee or group that, under the policies and
practices of the Company or applicable Affiliate in effect at the relevant time, has the authority and discretion to establish the Target Percentage for an Eligible Employee and to determine the final amount of an Award, if any, payable to such
Eligible Employee or group of employees of the Company or applicable Affiliate under the STI. 
 (f) “Disability” or
“Disabled” means a person’s total and permanent disability as defined under any long-term disability plan sponsored by the Company or applicable Affiliate. 
 (g) “Eligible Earnings” has the meaning set forth in Section 3.3 above. 
 (h) “Eligible Employee” means a person eligible to participate in the STI as described in Section 2.1 above. 
 (i) “Guidelines” has the meaning set forth in Section 1.1 above. 

(j) “Incentive Pool” has the meaning set forth in Section 3.6 above. 

(k) “Performance Measures” means the goals established for a Performance Year and approved by the Committee. 

(l) “Performance Year” means a fiscal year of the Company with respect to which an Award is made under the STI. 

  
 -8-

 (m) “Retirement” means an Eligible Employee’s termination of employment due
to his or her retirement as defined under the Company’s tax-qualified retirement plan applicable to such Eligible Employee, or, if no such plan is applicable to such Eligible Employee, (i) after attaining age 65 or (ii) after
attaining age 59 and completing at least five (5) years of service with SemGroup. 
 (n) “Section 409A” means
Section 409A of the Internal Revenue Code of 1986, as amended, and guidance issued thereunder. 
 (o) “SemGroup”
means SemGroup Corporation and all of its Affiliates. 
 (p) “STI” has the meaning given in Section 1.1 above.

 (q) “Target Award” has the meaning set forth in Section 3.4(a) above. 

(r) “Target Percentage” has the meaning set forth in Section 3.2(a) above. 

  
 -9-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00185-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00185-of-00352.parquet"}]]