2006 Incentive Compensation Plan Performance Targets for Officers and Executives of MarkWest Hydrocarbon Inc. and MarkWest Energy Partners, L.P.
This agreement outlines the 2006 incentive compensation plan for officers and executives of MarkWest Hydrocarbon Inc. and MarkWest Energy Partners, L.P. The plan aims to align executive pay with company performance and business goals. Incentive awards are based on achieving specific operating income targets and individual or departmental goals, with payouts contingent on meeting at least 85% of EBITDA targets. Awards range from 30% to 50% of base salary, paid in cash, with potential for higher payouts if stretch goals are met.
Exhibit 10.3
2006 INCENTIVE COMPENSATION PLAN
PERFORMANCE TARGETS
Officers and Executives:
Intent: To align compensation with business objectives and performance and enable the company to attract, retain and reward executive officers whose contributions are critical to long-term success.
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 85% 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 30% to 50% if stretch performance is achieved.
Payout: Cash.
