Summary of 2006 Long Term Incentive Plan for MarkWest Executives and Key Employees
This document outlines the 2006 Long Term Incentive Plan for executives, officers, managers, and key employees of MarkWest Hydrocarbon Inc. and MarkWest Energy Partners, L.P. The plan aims to align employee interests with company success by awarding restricted or phantom shares based on financial and performance goals. Awards range from 30% to 80% of base salary, contingent on meeting at least 75% of financial targets, with higher awards possible for exceeding goals. Shares vest over three years, encouraging long-term retention and performance.
Exhibit 10.1
SUMMARY OF
2006 LONG TERM INCENTIVE PLAN AND TARGET PERCENTAGES
Executives, Officers, Managers, and Key Employees:
Intent: To align long-term interests and to enable executives to develop and maintain a significant long-term ownership position in the business, as well as to attract, retain and reward executive officers whose contributions are critical to long-term success.
Measurement Criteria: Awards are based on achieving financial goals of MarkWest Hydrocarbon Inc. (“MarkWest Hydrocarbon”) and MarkWest Energy Partners, L.P. (“MarkWest Energy”), on achieving other performance goals, and on department/individual goals and performance, with each criterion weighted based on individual and department responsibilities to align performance and goals.
Threshold: The payout of incentive awards is contingent upon financial performance (income, cash flow and EBITDA (earnings before interest, taxes, depreciation, depletion and amortization)) being a minimum of 75% of financial plan for each of MarkWest Energy and MarkWest Hydrocarbon.
Incentive Award Range: The incentive award target percentage ranges are set from 30% to 80% of base salary depending on level and performance achievement, with opportunity for stretch incentive awards in the ranges of 30% to 80% of base salary if stretch performance (up to 125% of financial plan) is achieved.
Payout: MarkWest Hydrocarbon restricted shares or MarkWest Energy phantom shares, valued at time of grant. Share/Units will vest in thirds annually over a three year period.
