2005 Incentive Compensation Plan Performance Targets for MarkWest Officers and Executives
This agreement outlines the 2005 incentive compensation plan for officers and executives of MarkWest Hydrocarbon Inc. and MarkWest Energy Partners, L.P. It sets short-term and long-term incentive awards based on achieving specific financial and performance goals. Short-term awards are paid in cash and depend on meeting EBITDA and other targets, while long-term awards involve restricted or phantom shares that vest over three years. The plan aims to retain key personnel and align their interests with company performance.
Exhibit 10.2
2005 INCENTIVE COMPENSATION PLAN
PERFORMANCE TARGETS
Officers and Executives:
Intent: To provide a long term and a short-term incentive for retention and to align goals.
Short-term Incentive Component
Measurement Criteria: Award based on achieving operating income budgeted plans of MarkWest Hydrocarbon Inc. (“MarkWest Hydrocarbon”) and MarkWest Energy Partners, L.P. (“MarkWest Energy”), 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 EBITDA (earnings before interest, taxes, depreciation, depletion and amortization) being a minimum of 90% of target for both MarkWest Energy and MarkWest Hydrocarbon.
Incentive Award Range: The incentive award range is set from 30% to 50% of base salary depending on level and performance achievement, with opportunity for stretch incentive awards in the range of 20% to 50% if stretch performance is achieved.
Payout: Cash.
Long-term Incentive Component
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: Award based on achieving operating income budgeted plans of MarkWest Hydrocarbon and MarkWest Energy and department/individual goals and performance, with each criteria weighted based on individual and department responsibilities to align performance and goals.
Incentive Award Range: The incentive award range is set from 30% to 50% of base salary depending on level and performance achievement, with opportunity for stretch incentive.
Payout: MarkWest Hydrocarbon restricted shares or MarkWest Energy phantom shares. Share/Units will vest over a three year period.
