TESORO LOGISTICS LP (NYSE:TLLP) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
2017 Base Salaries
On February 16, 2017, the Chairman of the Board and independent
directors (the Committee), acting to authority delegated by the
Board of Directors (the Board) of Tesoro Logistics GP, LLC (the
Company), the general partner of Tesoro Logistics LP (the
Partnership), approved an increase in the base salaries of
Phillip M. Anderson, President of the Company, to $395,200, and
Don J. Sorensen, Senior Vice President, Operations of the
Company, to $424,400, each effective February 19, 2017.
directors (the Committee), acting to authority delegated by the
Board of Directors (the Board) of Tesoro Logistics GP, LLC (the
Company), the general partner of Tesoro Logistics LP (the
Partnership), approved an increase in the base salaries of
Phillip M. Anderson, President of the Company, to $395,200, and
Don J. Sorensen, Senior Vice President, Operations of the
Company, to $424,400, each effective February 19, 2017.
2016 Incentive Compensation Payouts
On February 16, 2017, the Committee, acting to authority
delegated by the Board, approved payouts under the Tesoro
Corporation 2016 Incentive Compensation Program of $340,235 for
Mr. Anderson and $330,312 for Mr. Sorensen.
delegated by the Board, approved payouts under the Tesoro
Corporation 2016 Incentive Compensation Program of $340,235 for
Mr. Anderson and $330,312 for Mr. Sorensen.
2017 Incentive Compensation Program
On February 16, 2017, the Committee, acting to authority
delegated by the Board, approved the participation of Messrs.
Anderson and Sorensen in the Tesoro Corporation 2017 Incentive
Compensation Program (the 2017 Program). The 2017 Program, as
applied to Mr. Anderson and Mr. Sorensen, consists of two equally
weighted components: Tesoro Corporations overall performance and
Business Unit performance.
delegated by the Board, approved the participation of Messrs.
Anderson and Sorensen in the Tesoro Corporation 2017 Incentive
Compensation Program (the 2017 Program). The 2017 Program, as
applied to Mr. Anderson and Mr. Sorensen, consists of two equally
weighted components: Tesoro Corporations overall performance and
Business Unit performance.
>The performance results of Tesoro Corporation and the
individual business units may be adjusted to take into account
unbudgeted business decisions, unusual or non-recurring items and
other factors, as approved by Tesoro Corporations Compensation
Committee, to determine the total amount, if any, available under
the 2017 Program, and can range from 0% to 200%. The Committee
has discretion to adjust individual awards based on an assessment
of each executive officers overall performance.
individual business units may be adjusted to take into account
unbudgeted business decisions, unusual or non-recurring items and
other factors, as approved by Tesoro Corporations Compensation
Committee, to determine the total amount, if any, available under
the 2017 Program, and can range from 0% to 200%. The Committee
has discretion to adjust individual awards based on an assessment
of each executive officers overall performance.
Component 1. Corporate Performance – Corporate performance
metrics include the following:
metrics include the following:
|
Achievement of earnings before interest, taxes,
depreciation and amortization measured on a margin neutral basis (this is the most heavily weighted metric, constituting 50% of the bonus opportunity for the corporate performance component) |
|
Growth Productivity Improvements – Targeted improvements in
growth and productivity to create value (this metric constitutes 20% of the bonus opportunity for the corporate performance component) |
|
Cost Management – Measurement of operating expenditures
versus budget (this metric constitutes 15% of the bonus opportunity for the corporate performance component) |
|
Process Safety Management – Targeted improvement in the
number of process safety incidents (this metric constitutes 7.5% of the bonus opportunity for the corporate performance component) |
|
Environmental – Targeted improvement in the number of
environmental incidents (this metric constitutes 7.5% of the bonus opportunity for the corporate performance component) |
An assessment of each executive officers overall performance,
taking into account the performance of their respective business
units, successful achievement of goals, business plan execution,
and other leadership attributes, will be used as the basis for
adjusting an executive officers payout above or below the amount
determined by the overall Corporate Performance.
taking into account the performance of their respective business
units, successful achievement of goals, business plan execution,
and other leadership attributes, will be used as the basis for
adjusting an executive officers payout above or below the amount
determined by the overall Corporate Performance.
Component 2. Business Unit Performance – measured against target
with the range of outcomes between 0% to 200%. Business Unit
performance is measured through balanced scorecards with
performance metrics including, but not limited to:
with the range of outcomes between 0% to 200%. Business Unit
performance is measured through balanced scorecards with
performance metrics including, but not limited to:
|
Safety and Environmental;
|
|
Cost Management;
|
|
Improvements in EBITDA; and
|
|
Business improvement and value creation initiatives.
|
The business units and target payout amounts for Messrs.
Anderson and Sorensen are:
Anderson and Sorensen are:
|
Executive Officers
|
Business Unit
|
Total Target Payout Amount*
|
|
Phillip M. Anderson
|
The Partnership
|
80%
|
|
Don J. Sorensen
|
Business unit results are tied to the Partnerships
performance as well as the performance of all of Tesoros logistical assets (other than the Partnership and including logistics assets for which the Partnership may have the right of first refusal) |
75%
|
_________
* As a percentage of base salary earnings during 2017.
Grant of Awards to Named Executive Officers>
On February 16, 2017, the Committee, acting to authority
delegated by the Board, approved the following grants of awards
to the Chief Executive Officer and other named executive
officers (with Mr. Goff abstaining from voting on his award):
delegated by the Board, approved the following grants of awards
to the Chief Executive Officer and other named executive
officers (with Mr. Goff abstaining from voting on his award):
|
Named Executive Officers Title
|
Target Number of Performance-Based Phantom Units
|
|
Gregory J. Goff,
CEO and Chairman of the Board
|
38,054
|
|
Phillip M. Anderson
President
|
3,721
|
|
Don J. Sorensen
Senior Vice President, Operations
|
4,398
|
|
Steven M. Sterin
Executive Vice President and Chief Financial Officer
|
7,780
|
|
Kim K.W. Rucker
Executive Vice President and General Counsel
|
5,920
|
The awards were made according to the terms of the form of
performance phantom unit agreement (the Award Agreement) to
which performance phantom units may be issued under the Tesoro
Logistics LP 2011 Long-Term Incentive Plan (as amended and
restated, the Plan), as well as the related 2017 Grant
Performance Vesting Phantom Units Summary (the Phantom Units
Summary). The Award Agreement sets forth the terms of grants
for performance phantom units to certain participants under the
Plan, including the Partnerships executive officers. The awards
will vest at the end of a performance period ending on February
16, 2020, will be adjusted based on the achievement of relative
total unitholder return compared to a peer group of companies,
and may range from 0% to 200% of the target number of
performance phantom units granted. The Partnerships peer group
may be determined from time to time by the Board or any
committee designated by the Board to administer the Plan. Any
unvested performance phantom units will be forfeited under
certain circumstances regarding termination.
performance phantom unit agreement (the Award Agreement) to
which performance phantom units may be issued under the Tesoro
Logistics LP 2011 Long-Term Incentive Plan (as amended and
restated, the Plan), as well as the related 2017 Grant
Performance Vesting Phantom Units Summary (the Phantom Units
Summary). The Award Agreement sets forth the terms of grants
for performance phantom units to certain participants under the
Plan, including the Partnerships executive officers. The awards
will vest at the end of a performance period ending on February
16, 2020, will be adjusted based on the achievement of relative
total unitholder return compared to a peer group of companies,
and may range from 0% to 200% of the target number of
performance phantom units granted. The Partnerships peer group
may be determined from time to time by the Board or any
committee designated by the Board to administer the Plan. Any
unvested performance phantom units will be forfeited under
certain circumstances regarding termination.
Each performance phantom unit granted under the Award Agreement
is granted in tandem with an accompanying distribution
equivalent right, which entitles the grantee to receive
payments in an amount equal to any distributions made by the
Partnership with respect to the common units underlying the
performance phantom units.
is granted in tandem with an accompanying distribution
equivalent right, which entitles the grantee to receive
payments in an amount equal to any distributions made by the
Partnership with respect to the common units underlying the
performance phantom units.
The foregoing description is qualified in its entirety by
reference to the actual terms of the Award Agreement and
Phantom Units Summary which are filed as Exhibits 10.1 and
10.2, respectively, to this Current Report on Form 8-K.
reference to the actual terms of the Award Agreement and
Phantom Units Summary which are filed as Exhibits 10.1 and
10.2, respectively, to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
|
*10.1
|
Form of Tesoro Logistics LP 2011 Long-Term
Incentive Plan Performance Phantom Unit Agreement |
|
|
*10.2
|
Tesoro Logistics LP 2017 Grant of
Performance-Vesting Phantom Units and Tandem DERs Term Sheet |
______________
* Filed herewith.
About TESORO LOGISTICS LP (NYSE:TLLP)
Tesoro Logistics LP (TLLP) owns, operates, develops and acquires logistics assets. TLLP is a logistics company operating primarily in the western and mid-continent regions of the United States. The Company operates through three segments: Gathering, Processing, and Terminalling and Transportation. Its gathering systems include crude oil and natural gas pipeline gathering systems in the Bakken Shale/Williston Basin area of North Dakota and Montana and the Green River Basin, Uinta Basin and Vermillion Basin in the states of Utah, Colorado and Wyoming. Its Processing segment consists of Vermillion processing complex, the Uinta Basin processing complex (Uinta Basin Complex), the Blacks Fork processing complex and the Emigrant Trail processing complex (Emigrant Trail Complex). Its Terminalling includes California Terminals and Storage Facilities, Washington Terminals and Storage Facilities, Alaska Terminals and Carson California Petroleum Coke Handling and Storage Facility. TESORO LOGISTICS LP (NYSE:TLLP) Recent Trading Information
TESORO LOGISTICS LP (NYSE:TLLP) closed its last trading session down -3.14 at 56.16 with 336,788 shares trading hands.
