MarkWest 2004 Executive Incentive Compensation Plan Performance Targets
This agreement outlines the 2004 incentive compensation plan for executives of MarkWest Hydrocarbon, Inc. and MarkWest Energy Partners, L.P. Incentive awards are based on achieving specific financial and individual performance targets, with payouts contingent on meeting EBITDA thresholds. Awards range from 20% to 65% of base salary, depending on performance, and are paid half in cash and half in equity. The plan aims to reward executives for meeting or exceeding budgeted goals.
Exhibit 10.2
2004 INCENTIVE COMPENSATION PLAN
PERFORMANCE TARGETS
Intent: To provide a reward for achieving budget targets.
Measurement Criteria: The incentive award for each executive under the 2004 incentive compensation plan was derived from three measurement criteria: 1) MarkWest Hydrocarbon, Inc. (“MarkWest Hydrocarbon”) operating cash flow (weighted 40% of the total incentive award); 2) MarkWest Energy Partner’s, L.P. (“MarkWest Energy”) distributable cash flow (weighted 40% of the total incentive award); and 3) department/individual goals (weighted 20% of the total incentive award).
Threshold: The payout of incentive awards was contingent upon EBITDA (earnings before interest, taxes, depreciation, depletion and amortization) being 90% to 100% of target for both MarkWest Energy and MarkWest Hydrocarbon.
Incentive Award Range: The incentive award range was set from 20% to 35% of base salary for officers and executives if budget targets are achieved, with opportunity of percentages to be increased to up to 35% to 65% of base salary for achieving stretch performance.
Payout: Base incentive award 50% cash and 50% equity (restricted stock or phantom units).
