form8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
Date of
report (date of earliest event reported): July 18, 2008
SEMGROUP
ENERGY PARTNERS, L.P.
(Exact
name of Registrant as specified in its charter)
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DELAWARE
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001-33503
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20-8536826
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(State
of incorporation
or
organization)
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(Commission
file number)
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(I.R.S.
employer identification number)
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Two
Warren Place
6120
South Yale Avenue, Suite 500
Tulsa,
Oklahoma
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74136
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(Address
of principal executive offices)
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(Zip
code)
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Registrant’s
telephone number, including area code: (918) 524-5500
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
[
] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[
] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[
] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act(17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act(17 CFR 240.13e-4(c))
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Item
2.04.
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Triggering
Events That Accelerate or Increase a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet
Arrangement.
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The information contained in
Item 5.01 is incorporated in this Item 2.04 by reference.
Item
5.01. Changes
in Control of Registrant.
On the evening of July 18, 2008,
Manchester Securities Corp. and Alerian Finance Partners, LP (the “New
Controlling Owners”), exercised certain rights under a Loan Agreement, dated
June 25, 2008 (the “Holdings Credit Agreement”), with SemGroup Holdings, L.P.
(“Holdings”), the sole member of SemGroup Energy Partners G.P., L.L.C. (the
“General Partner”), which is the general partner of SemGroup Energy Partners,
L.P. (the “Partnership”). Under the Holdings Credit Agreement, the
New Controlling Owners have the right to direct the vote of all of the
membership interests of the General Partner upon an event of default under the
Holdings Credit Agreement. The New Controlling Owners exercised these
voting rights on July 18, 2008 and effectively took control of the General
Partner (the “Change of Control”).
The Change of Control resulted in an
event of default under the Partnership’s Amended and Restated Credit Agreement,
dated February 20, 2008 (the “Credit Agreement”), among the Partnership,
Wachovia Bank, National Association, as Administrative Agent, L/C Issuer and
Swing Line Lender, Bank of America, N.A., as Syndication Agent and the other
lenders from time to time party thereto. Under the terms of the
Credit Agreement, the lenders may, among other remedies, declare all outstanding
amounts under the Credit Agreement immediately due and payable. The
Partnership is in productive dialogue with the agent for the lenders regarding
this matter.
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Item
5.02.
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
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In connection with the Change of
Control, on July 18, 2008, the New Controlling Owners reconstituted the Board of
Directors of the General Partner (the “Board”). Messrs. Thomas L.
Kivisto, Gregory C. Wallace, Kevin L. Foxx, Michael J. Brochetti and Andy Bishop
were removed from the Board. Mr. Bishop had also served as a member
of the conflicts committee, audit committee and compensation committee of the
Board. Messrs. Sundar S. Srinivasan, David N. Bernfeld and Gabriel
Hammond were appointed as directors on the Board. Mr. Srinivasan has
been elected as Chairman of the Board. Messrs. Brian J. Billings and
Edward F. Kosnik remained as directors of the Board and will continue to serve
as members of the conflicts committee, audit committee and compensation
committee of the Board.
Mr. Srinivasan joined Elliott
Associates, L.P. in 2003 where he is a Portfolio Manager and a Managing Director
of its Private Equity affiliate. He previously served as Chairman of
Dice, Inc. and Answer Financial and is currently a director of Franklin Holdings
(Bermuda) Ltd.
Mr. Bernfeld has served as an Analyst
at Elliott Associates, L.P. since May 2008. Prior to joining Elliott, Mr.
Bernfeld was an analyst with DKR Capital, Inc. since 2007, a Private Equity
Associate at Ardshiel, Inc. from 2003 until 2005, and an Analyst in the Mergers
and Acquisition Group of Bear, Stearns & Co. Inc. from 2001 through
2003. Mr. Bernfeld received an M.B.A. from Columbia Business School
in 2007, and a B.A. in Economics and Mathematics from Haverford College in
2001.
Mr. Hammond is the Managing Partner of
Alerian Capital Management. Prior to founding the company in 2004, Mr. Hammond
covered the broader Energy and Power sector at Goldman, Sachs & Co., in the
firm's Equity Research Division. Specializing in the Master Limited Partnership
midstream energy space, Mr. Hammond advised Goldman Sachs Asset Management,
which holds an estimated $2 billion of MLP securities (both as principal and on
behalf of its clients), with portfolio allocation, short-term trading, and
tax-advantaged specialty applications. Mr. Hammond sits on the Board of
Directors of the National Association of Publicly Traded Partnerships. He is
also a member of the Board of Directors of Quest Midstream Partners,
L.P.
The Change of Control constituted a
change of control under the General Partner’s long term incentive plan (the
“LTIP”), which resulted in the vesting of all awards under the
LTIP. As such, the phantom units awarded to Messrs. Foxx,
Brochetti, Alex G. Stallings, Peter L. Schwiering and Jerry A. Parsons in the
amounts of 150,000 units, 90,000 units, 75,000 units, 45,000 units and 20,000
units, respectively, are fully vested. In addition, the restricted
units awarded to Messrs. Billings, Kosnik and Bishop are fully
vested.
The Change of Control also resulted in
a change of control under the employment agreements of Messrs. Foxx, Brochetti,
Stallings, Schwiering and Parsons. If within one year after the
Change of Control any such officer is terminated by the General Partner without
Cause or such officer terminates the agreement for Good Reason, he will be
entitled to payment of any unpaid base salary and vested benefits under any
incentive plans, a lump sum payment equal to 24 months of base salary and
continued participation in the General Partner’s welfare benefit programs for
the longer of the remainder of the term of the employment agreement or one year
after termination. Upon such an event, Messrs Foxx, Brochetti, Stallings,
Schwiering and Parsons would be entitled to lump sum payments of $900,000,
$600,000, $550,000, $500,000 and $500,000, respectively, in addition to
continued participation in the general partner’s welfare benefit programs and
the amounts of unpaid base salary and benefits under any incentive
plans.
For
purposes of the employment agreements:
“Cause”
means (i) conviction of the executive officer by a court of competent
jurisdiction of any felony or a crime involving moral turpitude; (ii) the
executive officer’s willful and intentional failure or willful intentional
refusal to follow reasonable and lawful instructions of the Board;
(iii) the executive officer’s material breach or default in the performance
of his obligations under the employment agreement; or (iv) the executive
officer’s act of misappropriation, embezzlement, intentional fraud or similar
conduct involving the General Partner.
“Good
Reason” means (i) a material reduction in the executive officer’s base
salary; (ii) a material diminution of the executive officer’s duties,
authority or responsibilities as in effect immediately prior to such diminution;
or (iii) the relocation of the named executive officer’s principal work
location to a location more than 50 miles from its current
location.
Item
7.01. Regulation
FD Disclosure.
On July 21, 2008, the Partnership
announced the Change of Control. A copy of the press release is
furnished as an exhibit to this Current Report.
In accordance with General Instruction
B.2 of Form 8-K, the information set forth in this Item 7.01 and in the attached
exhibit shall be deemed to be “furnished” and not be deemed to be “filed” for
purposes of the Securities and Exchange Act of 1934, as amended (the “Exchange
Act”).
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Item
9.01.
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Financial
Statements and Exhibits.
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(d) Exhibits
In accordance with General Instruction
B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 is
deemed to be “furnished” and shall not be deemed to be “filed” for purposes of
the Exchange Act.
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EXHIBIT
NUMBER
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DESCRIPTION
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99.1
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—
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Press
release dated July 21, 2008.
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SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
SEMGROUP ENERGY PARTNERS,
L.P.
By: SemGroup Energy
Partners G.P., L.L.C.
its
General Partner
Date: July
21,
2008 By: /s/ Alex G.
Stallings
Alex G. Stallings
Chief Accounting Officer
INDEX
TO EXHIBITS
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EXHIBIT
NUMBER
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DESCRIPTION
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99.1
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—
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Press
release dated July 21, 2008.
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