And Its General Partner,

Transcription

1 CORPORATE GOVERNANCE GUIDELINES OF MARKWEST ENERGY PARTNERS, L.P. And Its General Partner, MARKWEST ENERGY GP, L.L.C. The Board of Directors (the "Board") of MarkWest Energy GP, L.L.C. (the General Partner ), general partner of MarkWest Energy Partners, L.P. (the Partnership ), has adopted the following corporate governance guidelines applicable to MarkWest Energy GP, L.L.C., MarkWest Energy Partners, L.P. and their subsidiaries (collectively, MarkWest ) to reflect the principles by which MarkWest operates. 1. Director Standards Director Selection and Election. Pursuant to the Third Amended and Restated Agreement of Limited Partnership of MarkWest Energy Partners, L.P. (the Partnership Agreement ) and the Amended and Restated Limited Liability Company Agreement of MarkWest Energy GP, L.L.C., as amended (the GP LLC Agreement ), the Board of Directors of the General Partner shall be elected annually by the limited partners of the Partnership holding Voting Units (as defined in the Partnership Agreement). The Nominating and Corporate Governance Committee shall be responsible for assessing the ongoing qualifications for a director s continuing service and for identifying and recommending to the Board qualified new candidates for Board membership, based on the criteria set forth in Section 1.2 below and other background material and information deemed appropriate by the Nominating & Corporate Governance Committee and taking into account the specific needs of the Board and the Partnership at that time. The Nominating and Corporate Governance Committee may engage consultants or third-party search firms to assist in identifying and evaluating potential Board nominees. 1.2 Commitment and Experience. MarkWest believes that the Board should be comprised of individuals who meet the highest possible personal, ethical and professional standards. The directors should collectively have broad experience and skills in management, policy-making and/or finance, relevant industry knowledge, business creativity and vision, and the make-up of the Board should seek to encompass the attributes of compatibility, collegiality and diversity, useful to the effective oversight of the Partnership. Directors should be committed to enhancing unitholder value and should be able to dedicate sufficient time to effectively carry out their duties. 1.3 Independence of Directors. At least a majority of the Board shall consist of independent directors, as defined by the New York Stock Exchange (NYSE). The Nominating & Corporate Governance Committee shall review the independence and other qualifications of directors. To be considered "independent," a director must be affirmatively determined by the Board, after recommendation by the Nominating & Corporate Governance Committee and after due deliberation, to have no material

2 relationship with MarkWest other than as a director. In making such determination, the Board shall adhere to all of the specific tests for independence included in the New York Stock Exchange listing standards and shall consider all other facts and circumstances it deems necessary or advisable and the standards of director independence established by MarkWest. In determining director independence for members of the Audit Committee, the Board will follow the additional independence requirements, imposed by the Securities and Exchange Commission. During the course of a year, directors are expected to inform the Board of any material changes in their circumstances or relationships that may impact their designation by the Board as independent. 1.4 Size and Composition. The Nominating and Corporate Governance Committee will conduct an annual evaluation as to the appropriate number of directors to be seated on the Board and the appropriate composition of the Board as between management, nonmanagement, and independent directors, and the Nominating and Corporate Governance Committee shall report its recommendations to the Board Service on Other Boards. Directors are expected to devote sufficient time to fulfill their responsibilities to the Partnership. Directors may serve on the boards of directors of other companies, but they shall limit such service to that reasonable number of companies which would not conflict with their responsibilities as a director serving on the Board Mandatory Retirement. No director shall stand for reelection at an annual meeting if the director will be have attained the age of 74 years or greater as of the date of such annual meeting. 2. Director Responsibilities Director s Role Direction. The business and affairs of the Partnership are managed by the General Partner under the direction of the Board, which is accountable to the unitholders of the Partnership to the extent set forth in the Partnership Agreement Basic Responsibility. The basic responsibility of directors is to exercise their business judgment to act in what they reasonably believe to be the best interest of the Partnership and its unitholders. In discharging that obligation, directors are entitled to rely on the Partnership s management and outside advisors and auditors Directors and Officers Insurance. The Partnership has purchased and seeks to maintain reasonable directors and officers liability insurance on the directors behalf Indemnification. In addition, the directors receive the benefits of indemnification to the fullest extent permitted by Delaware law Board Meetings Regular and Special Meetings. The Board currently holds regularly scheduled meetings and calls for special meetings as necessary. 2

3 Attendance. Directors are expected to attend all meetings of the Board and committees of the Board on which they serve and, in discharging their duties properly, to spend the time needed and to meet as frequently as necessary. It is understood that, on occasion, circumstances may arise that prevent a director from attending a Board or Board Committee meeting. Attendance by telephone or video conference may be used to facilitate a director s attendance Preparation of Agenda. The Chief Executive Officer and Chairman, in consultation with the Lead Director, will coordinate the development and preparation of the agenda for each Board meeting and the schedule for Board and committee meetings Director Requests. Any director may request that an item be included on an agenda New Agenda Items. While each agenda is to be carefully planned, it shall be flexible so that unexpected developments can be discussed at Board meetings Advance Materials Distribution. Information and data that are important to the Board s understanding of the business to be conducted at a Board or committee meeting are, to the extent practicable, distributed to the directors in advance of the meeting and directors should review these materials prior to the meeting Sensitive Materials. The Board acknowledges that certain materials are of an extremely sensitive nature and that distribution of materials on these matters prior to Board meetings may not be appropriate Non-Management Directors Executive Sessions Schedule. The non-management directors will meet without management directors at regularly scheduled executive sessions, at least once per year, and at such other times as the directors deem appropriate Attendees; Leadership of Sessions. The Lead Director shall act as chair or preside over non-management director executive sessions. The Partnership s finance staff and other employees, and the Partnership s independent auditors, and Board advisors or consultants may be invited to attend non-management director executive sessions Confidentiality Board and Committee Meetings. The proceedings and deliberations of the Board and its committees are confidential, and each director shall maintain the confidentiality of information received in his or her service as a director Intentional Disclosure Prohibited. Except as required by law, no director shall disclose any material non-public information about the Partnership. 3

4 Inadvertent Disclosure. If a director inadvertently discloses information that may be material and non-public, the director should immediately advise the Partnership s General Counsel Board Committees Current Committees. Currently the Board has an Audit Committee, a Compensation Committee, a Finance Committee, and a Nominating and Corporate Governance Committee, as standing committees. The Board may, from time to time, eliminate committees, or establish additional committees, as it deems necessary or appropriate. The charters for the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee shall be posted on the Partnership s website. Except as required by law, no director shall disclose any material non-public information about the Partnership Committee Membership. The membership of each Board committee shall satisfy any membership requirements set forth in the relevant committee charter and as otherwise required by the NYSE or Securities and Exchange Commission. Unless otherwise provided in a Board committee charter, the GP LLC Agreement, the Partnership Agreement or applicable law, a director may serve on more than one Board committee Committee Reports to Board. The Board expects to accomplish a substantial amount of work through its committees, and each Board committee shall regularly report to the Board summarizing such committee s actions and any significant issues considered by such committee. 3. Director access to management and, as necessary and appropriate, independent advisors Access to Management. Each director shall have full access to the Partnership s management. The Partnership s management will make itself available to answer the directors questions about the Partnership at and between meetings Access to Independent Advisors. The Board and Board committees may engage and consult with financial, legal or other independent advisers as the Board or a Board committee deems necessary or appropriate, at the Partnership s expense. 4. Director Compensation Reasonable Compensation. Non-management directors shall receive reasonable compensation for their services, as may be determined from time to time by the Board upon recommendation of the Compensation Committee. The Partnership shall reimburse all directors for reasonable out-of-pocket expenses related to attendance at Board or committee meetings Objectivity. Compensation for non-management directors and committee chairs shall be consistent with the market practices of other similarly situated companies but shall not be at a level or in a form that would call into question the Board s objectivity. The Board believes that compensation for non-management directors should fairly reflect the unique qualifications and skills of the directors. 4

5 4.3. Annual Review. The Compensation Committee shall annually review and report to the Board with respect to director compensation and benefits Management Directors. Directors who are employees of MarkWest shall receive no additional pay for serving as directors Audit Committee Members. In accordance with Securities and Exchange Commission regulations, Directors who are members of the Audit Committee should receive no compensation from the Partnership other than the fees they receive for serving on the Board and as members of committees of the Board, and for reimbursement of reasonable out-of-pocket expenses related to attendance at Board or committee meetings and continuing education programs. 5. Director Orientation and Continuing Education New Directors. Following their election, every newly elected member of the Board will be provided with appropriate orientation on the Partnership Program Content. Directors will receive appropriate information designed to familiarize directors with the Partnership's business and strategic plans, its significant financial, accounting and risk management issues, its Code of Business Conduct and Ethics, compliance programs and other controls, its senior management and its internal and independent auditors. In addition, Directors shall receive information regarding Board procedures, director s responsibilities, these Corporate Governance Guidelines and Board committee charters Continuing Education. Each calendar year, outside Directors will be required to complete or attend two continuing educational events or undertake activities that can be demonstrated to maintain or advance professional knowledge, skills, competency and expertise relevant to the Partnership s business and operations. The Nominating and Governance Committee shall assist in identification of continuing education programs sponsored internally or by universities, stock exchanges or other organizations or consultants specializing in director education, and make quarterly reports to the Board regarding opportunities and director feedback and participation. The Partnership will reimburse directors for reasonable out-of-pocket expenses related to attendance or involvement in such activities or programs. 6. Chief Executive Officer Performance Review Performance Review. The Compensation Committee shall annually review (i) the Chief Executive Officer s performance and (ii) review the Chief Executive Officer s performance evaluations of each of the other senior executive officers, and shall report the results of this review to the Board in executive session Criteria. The review described in Section 6.1 will be based on objective criteria, such as performance of the business and accomplishment of long-term strategic objectives, and subjective criteria as may be determined by the Compensation Committee. 5

6 7. Management Succession Management Succession Plan. The Chief Executive Officer, in collaboration with the Nominating and Corporate Governance Committee, shall develop a succession plan for senior management, including succession in the event of an emergency or the retirement of the Chief Executive Officer Annual Report to Board. The Nominating and Corporate Governance Committee shall review the Partnership s succession plans and report annually to the Board. The Board shall discuss Chief Executive Officer succession in executive session at least annually Board Succession Plan. The Nominating and Corporate Governance Committee shall prepare and discuss at least annually a succession plan in preparation for future director retirements, Board committee assignments, and overall implementation of the Partnership s long-term business plan. 8. Annual Performance Evaluation of the Board Purpose. With the assistance of the Nominating and Corporate Governance Committee, the Board will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively Process. The Nominating and Corporate Governance Committee will ask each director to assess the performance of the Board and its committees. Evaluation criteria will be established by the Nominating and Corporate Governance Committee, which will oversee the process, assess the results and make recommendations, as needed, to the Board Focus. The assessment will focus on the contribution to the Partnership by the Board and its committees and specifically focus on areas in which the directors believe that the Board or its committees could improve. 9. Other Provisions Revisions to the Guidelines. The Nominating and Corporate Governance Committee will review these Corporate Governance Guidelines periodically and will recommend to the Board such revisions as it deems necessary or appropriate for the Board to discharge its responsibilities more effectively. 9.2 Board s Interaction with Third Parties. The Board believes that management speaks for the Partnership. At the request of and in consultation with management, individual directors may, from time to time, meet or otherwise communicate with various constituencies that are involved with the Partnership. If comments are appropriate, they should in most circumstances come from the Partnership s Chief Executive Officer or other Board appointed company official. 6