2005 Incentive Compensation Plan Performance Targets for Officers and Executives of MarkWest Hydrocarbon Inc. and MarkWest Energy Partners, L.P.
This agreement outlines the 2005 incentive compensation plan for officers and executives of MarkWest Hydrocarbon Inc. and MarkWest Energy Partners, L.P. It provides both short-term and long-term incentives based on achieving specific financial and performance goals. Short-term awards are paid in cash and depend on meeting operating income and EBITDA targets, while long-term awards are paid in restricted or phantom shares that vest over three years. Incentive amounts range from 30% to 50% of base salary, with additional awards possible for exceptional performance.
Exhibit 10.3
2005 INCENTIVE COMPENSATION PLAN
PERFORMANCE TARGETS
Officers and Executives:
Intent: To provide a long term and a short term incentive for retention and 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 30% to 50% if stretch performance is achieved.
Payout: cash.
Long-term Incentive Component
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.
Payout: MarkWest Hydrocarbon restricted shares or MarkWest Energy phantom shares. Share/Units will vest over a three year period.
