<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
MARKWEST HYDROCARBON, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[MARKWEST LOGO]
April 19, 2000
Dear Fellow Stockholder:
This year's Annual Meeting of Stockholders will be held at the Company's
headquarters, 155 Inverness Drive West, Suite 200, Englewood, Colorado
80112-5000, on May 18, 2000, at 10:00 a.m., MDT. You are cordially invited to
attend. The matters to be considered at the meeting are described in the
attached Proxy Statement and Notice of Annual Meeting of Stockholders. The
Company's Board of Directors recommends the following actions: (a) the election
of management's two nominees to serve as class I directors and (b) the
ratification of the selection of PricewaterhouseCoopers LLP as the Company's
independent accountants for the fiscal year ending December 31, 2000.
To be certain that your shares are voted at the Annual Meeting, whether or
not you plan to attend in person, you should sign, date and return the enclosed
proxy as soon as possible. Your vote is important.
At the Annual Meeting, our management team will review the Company's
activities during the past year and its plans for the future. An opportunity
will be provided for questions by the stockholders. We will be serving light
refreshments where you will have an additional opportunity to meet with
management. I hope you will be able to join us.
Sincerely,
/s/ John M. Fox
John M. Fox
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
<PAGE>
MARKWEST HYDROCARBON, INC.
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD ON MAY 18, 2000
TO THE STOCKHOLDERS OF MARKWEST HYDROCARBON, INC.:
Notice is hereby given that the Annual Meeting of Stockholders of MarkWest
Hydrocarbon, Inc. (the "Company"), will be held at 10:00 a.m., MDT, on May 18,
2000, at the Company's headquarters, 155 Inverness Drive West, Suite 200,
Englewood, Colorado 80112-5000, for the following purposes:
1. To elect two class I directors to hold office for a three-year term
expiring at the Annual Meeting of Stockholders occurring in 2003 or
until the election and qualification of their respective successors.
2. To ratify the selection of PricewaterhouseCoopers LLP as the Company's
independent accountants for the fiscal year ending December 31, 2000.
3. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on April 7, 2000, as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting. Only stockholders of record as of the close of business
on such date are entitled to notice of and to vote at the meeting.
We encourage you to take part in the affairs of your Company either in
person or by executing and returning the enclosed proxy.
By Order of the Board of Directors,
/s/ Gerald A. Tywoniuk
Gerald A. Tywoniuk
Secretary
Dated: April 19, 2000
STOCKHOLDERS UNABLE TO ATTEND THIS MEETING ARE URGED TO DATE AND SIGN THE
ENCLOSED PROXY AND TO RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>
MARKWEST HYDROCARBON, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 18, 2000
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of MarkWest Hydrocarbon, Inc. (the "Company"),
for use at the Annual Meeting of Stockholders of the Company to be held on May
18, 2000, at 10:00 a.m. at the Company's headquarters, 155 Inverness Drive West,
Suite 200, Englewood, Colorado 80112-5000, and at any adjournment thereof. A
stockholder giving the enclosed proxy may revoke it at any time before the vote
is cast at the Annual Meeting by delivery to the Secretary of the Company of a
written notice of termination of the proxy's authority or a duly executed proxy
or ballot bearing a later date. Shares represented by a proxy will be voted in
the manner directed by a stockholder. If no direction is made, the proxy will be
voted for the election of the nominees for class I directors named in this Proxy
Statement and for the other proposal set forth in this Proxy Statement. This
Proxy Statement and the accompanying form of proxy are being sent or given to
stockholders beginning on or before April 19, 2000, together with the Company's
1999 Annual Report to Stockholders.
Only stockholders of record at the close of business on April 7, 2000 are
entitled to notice of and to vote at the meeting or at any adjournment thereof.
As of such date, there were 8,531,206 shares of Common Stock of the Company
issued and 8,450,386 shares outstanding. Each share is entitled to one vote.
Cumulative voting is not permitted. Shares voted as abstentions on any matter
(or a "withhold vote for" as to a director) will be counted as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum at the meeting and as unvoted, although present and entitled to vote, for
purposes of determining the approval of each matter as to which the stockholder
has abstained. If a broker submits a proxy that indicates the broker does not
have discretionary authority as to certain shares to vote on one or more
matters, those shares will be counted as shares that are present and entitled to
vote for purposes of determining the presence of a quorum at the meeting, but
will not be considered as entitled to vote with respect to such matters. The
Company's by-laws provide that the holders of not less than a majority of the
shares entitled to vote at any meeting of stockholders, present in person or
represented by proxy, shall constitute a quorum.
The Board of Directors knows of no matters other than those that are
described in this Proxy Statement that may be brought before the meeting.
However, if any other matters are properly brought before the meeting, persons
named in the enclosed proxy or their substitutes will vote in accordance with
their best judgment on such matters.
The Company will pay all expenses in connection with the solicitation of
proxies. In addition to solicitation by mail, officers, directors and regular
employees of the Company who will receive no extra compensation for their
services, may solicit proxies by telephone, facsimile or personal calls.
The Company's principal executive offices are located at 155 Inverness
Drive West, Suite 200, Englewood, Colorado 80112-5000, telephone (303) 290-8700.
1
<PAGE>
ELECTION OF DIRECTORS
The business and affairs of the Company are managed under the direction of
its Board of Directors, which is currently comprised of five members. The Board
of Directors is divided into three classes and the members of each class are
elected to serve a three-year term, with the terms of office of each class
ending in successive years.
The term of the existing class I director expires at the Annual Meeting to
be held May 18, 2000, and two class I directors will be elected at the Annual
Meeting to hold office until the Annual Meeting to be held in the year 2003 or
until their respective successors are elected and qualified. Arthur J. Denney is
the incumbent class I director. Mr. Denney is being nominated for election at
the Annual Meeting. Ms. Karen L. Rogers is also being nominated for election at
the Annual Meeting. The persons named as proxies in the enclosed form of proxy
will vote the proxies received by them for the election of Mr. Denney and Ms.
Rogers unless otherwise directed. Mr. Denney and Ms. Rogers have indicated a
willingness to serve, but in case either is not a candidate at the Annual
Meeting, which is not presently anticipated, the persons named as proxies in the
enclosed form of proxy may vote for a substitute nominee at their discretion.
The terms of the incumbent class II and class III directors expire at the 2001
and 2002 Annual Meetings, respectively.
Information regarding the directors and a nominee for director of the
Company is set forth below:
<TABLE>
<CAPTION>
EXPIRATION
NAME AGE OF TERM
---- --- -------
<S> <C> <C>
Arthur J. Denney 51 2000
Karen L. Rogers 44 Nominee for director
Brian T. O'Neill 52 2001
Barry W. Spector (1) 48 2001
John M. Fox 60 2002
Donald D. Wolf (1) 56 2002
</TABLE>
- ----------------
(1) Member of the Compensation Committee and Audit Committee of the Board of
Directors.
ARTHUR J. DENNEY has been the Company's Senior Vice President of
Engineering and Project Development since January 1997 and a member of the Board
of Directors since June 1996. Prior to that, Mr. Denney served as the Company's
Vice President of Engineering and Business Development since January 1990. Mr.
Denney has more than 25 years of experience in gas gathering, gas processing and
natural gas liquids (NGL) businesses. From 1987 to 1990, Mr. Denney served as
Manager of Business Development for Lair Petroleum, Inc. From 1974 to 1987, Mr.
Denney was employed by Enron Gas Processing Co. in a variety of positions,
including seven years as its Rocky Mountain Regional Manager for Business
Development. Mr. Denney holds a bachelor's degree in mechanical engineering and
a master of business administration degree from the University of Nebraska.
KAREN L. ROGERS is a nominee for a class I director. She has over 20 years
of experience in energy finance and corporate banking. From 1978 to 1983, Ms.
Rogers held positions with First Bank Minneapolis, including opening and
managing the company's first loan production office specializing in energy
lending. In 1983, Ms. Rogers joined the Denver office of RepublicBank Dallas.
RepublicBank subsequently became known as NationsBank, which is now Bank of
America. When Ms. Rogers resigned in 1997 to spend more time with her family,
she was Senior Vice President and Manager of NationsBank Energy Group Denver,
Inc. Currently, Ms. Rogers is working in an advisory capacity for Norwest Bank
Colorado, N.A. in its Energy and Minerals Group. Ms. Rogers holds a bachelor's
degree in economics from Ripon College.
BRIAN T. O'NEILL has been MarkWest's Senior Vice President and Chief
Operating Officer and a member of the Board of Directors since its inception in
April 1988. Mr. O'Neill has 24 years of experience in NGLs and natural gas
marketing and served as a Marketing Manager for Western Gas Resources, Inc.,
specializing in gas acquisition and sales, new business development and NGL
marketing from 1982 to 1987. Mr. O'Neill holds a bachelor's degree in
advertising and psychology from the University of Florida and a master's degree
in international marketing and finance from the American Graduate School of
International Management.
2
<PAGE>
BARRY W. SPECTOR has been a member of the Board of Directors of the Company
since September 1995. Mr. Spector has practiced law as a sole practitioner since
1979. Mr. Spector's practice emphasizes oil and gas law, with a particular
emphasis in natural gas contracts, marketing and property acquisitions, and
divestitures. Mr. Spector holds a bachelor's degree in biology and a juris
doctorate from the University of Denver.
JOHN M. FOX has been MarkWest's President and Chief Executive Officer and a
member of the Board of Directors since its inception in April 1988. Mr. Fox was
a founder of Western Gas Resources, Inc., a company listed on the New York Stock
Exchange, and was its Executive Vice President and Chief Operating Officer from
1972 to 1986. Mr. Fox holds a bachelor's degree in engineering from the United
States Air Force Academy and a master of business administration degree from the
University of Denver. Mr. Fox is also a director of Maverick Tube Company, a
publicly held company.
DONALD D. WOLF has been a member of the Board Directors since May 1999. Mr.
Wolf has a diversified 34-year career in the oil and gas industry. He held
positions with Sun Oil Co. and Bow Valley Exploration in Canada before moving to
Denver in 1974, where he was employed by Tesoro Petroleum and Southland Royalty
Co. In 1977 he co-founded Terra Marine Energy Co., which was sold in 1980 to
Southport Exploration. In 1981 Mr. Wolf founded General Atlantic Energy Co.,
where he was Chairman and Chief Executive Officer when it merged with UMC
Petroleum in 1994. Mr. Wolf resigned from UMC in May 1996 as President and Chief
Operating Officer and joined Westport Oil and Gas Company, Inc., as Chairman and
Chief Executive Officer. Mr. Wolf holds a bachelor's degree in business
administration from Greenville College.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK
REPRESENTED AT THE MEETING IS REQUIRED FOR THE ELECTION OF MR. DENNEY AND MS.
ROGERS. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MR. DENNEY
AND MS. ROGERS.
MEETINGS OF THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES
During the fiscal year ended December 31, 1999, the Board of Directors met
four times. All of the directors attended all meetings of the Board of Directors
and meetings of the committees on which they served. The Board of Directors and
its committees also act from time to time by written consent in lieu of
meetings.
The Board of Directors of the Company has standing Audit and Compensation
Committees, which have a current membership as indicated earlier. The Board of
Directors has no standing Nominating Committee.
The Compensation Committee makes recommendations to the Board concerning
salaries and incentive compensation for the Company's officers and employees and
administers the Company's 1996 Stock Incentive Plan (the "Stock Incentive Plan")
and the Company's 1996 Incentive Compensation Plan (the "Incentive Compensation
Plan"). During fiscal 1999, the Compensation Committee held two meetings.
The Audit Committee aids management in the establishment and supervision of
the Company's financial controls, evaluates the scope of the annual audit,
reviews audit results, consults with management and the Company's independent
accountants prior to the presentation of financial statements to stockholders,
and as appropriate, initiates inquiries into aspects of the Company's financial
affairs. During fiscal 1999, the Audit Committee held two meetings.
3
<PAGE>
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
John M. Fox 60 President, Chief Executive Officer
Brian T. O'Neill 52 Senior Vice President, Chief Operating Officer
Arthur J. Denney 51 Senior Vice President of Engineering and Project Development
Gerald A. Tywoniuk 38 Vice President of Finance, Chief Financial Officer, Secretary
Robert F. Garvin 60 Vice President of Exploration
Randy S. Nickerson 38 Vice President and General Manager, Appalachia Business Unit
</TABLE>
See the biographical information on Messrs. Fox, O'Neill and Denney under
"Election of Directors."
GERALD A. TYWONIUK WAS appointed Vice President of Finance and Chief
Financial Officer in April 1997. Mr. Tywoniuk is a Canadian Chartered Accountant
with 18 years of experience in accounting, planning, information systems,
finance and management. From August 1993 to March 1997, Mr. Tywoniuk was
Controller and Vice President--Controller of Echo Bay Mines Ltd. ("Echo Bay"), a
gold mining, exploration and development company. From September 1985 to July
1993, he held a variety of corporate and mine site roles with Echo Bay. Prior to
September 1985, Mr. Tywoniuk was employed with two public accounting firms,
including KPMG Peat Marwick. Mr. Tywoniuk holds a bachelor of commerce degree
from the University of Alberta.
ROBERT F. GARVIN joined MarkWest in 1995 as Manager, Exploration. Mr.
Garvin has been the Company's Vice President of Exploration since April 1996.
From 1988 to 1995, Mr. Garvin was Manager, Exploration, for an affiliate of the
Company. Mr. Garvin has more than 32 years of oil and gas industry experience.
During his career, Mr. Garvin has been employed as a geologist by Phillips
Petroleum Company, Duncan Oil Properties, Excel Energy Corporation, Ecological
Engineering Systems and has been a self-employed geologist. Mr. Garvin holds a
bachelor's degree in geology from Westminster College and a master's degree in
geology from the University of Utah.
RANDY S. NICKERSON joined MarkWest in 1995 as Manager, New Projects. He
served as General Manager of the Michigan Business Unit until 1997 and now
serves as a Vice President and the General Manager of the Appalachia Business
Unit. From 1984 to 1990, Mr. Nickerson worked for Chevron USA and Meridian Oil
Inc. in various process and project engineering positions. From 1990 to 1995,
Mr. Nickerson was a Senior Project Manager and Regional Engineering Manager for
Western Gas Resources, Inc. Mr. Nickerson holds a bachelor's degree in chemical
engineering from Colorado State University.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended ("Section
16(a)"), requires executive officers and directors and persons who beneficially
own more than ten percent (10%) of the Company's Common Stock to file initial
reports of ownership on Form 3 and reports of changes in ownership on Forms 4
and 5 with the Securities and Exchange Commission ("SEC"). Executive officers,
directors, and greater than ten percent (10%) beneficial owners are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
that they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the executive officers, directors and
holders of 10% or more of the Company's Common Stock, Messrs. John M. Fox,
President, Chief Executive Officer and a director of the Company, and Brian T.
O'Neill, Senior Vice President, Chief Operating Officer and a director of the
Company, filed a late Form 4 recording the acquisition of stock. Also, Messrs.
Barry W. Spector, a director of the Company, and David R. Whitney, a former
director of the Company, filed a late Form 5 recording the granting of stock
options.
The Company is not aware of any other failure to file a Section 16(a) form
with the SEC or any transaction that was not reported on a timely basis which
was required to be so reported. The Company believes that its
4
<PAGE>
executive officers, directors and 10% beneficial owners complied with all
other applicable Section 16(a) filing requirements.
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash compensation earned for
fiscal years 1999, 1998 and 1997 by the Company's Chief Executive Officer and
the four other highest paid officers ("Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------- --------------------------------
SECURITIES
UNDERLYING ALL OTHER
FISCAL SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITIONS YEAR ($) (1) ($) (2) (#) (3) ($) (4)
- ---------------------------------------------------- ------------------------------------- --------------------------------
<S> <C> <C> <C> <C> <C>
John M. Fox........................................ 1999 $155,552 $ 83,536 6,818 $14,054
President and Chief Executive Officer 1998 160,408 -- 5,029 10,427
1997 152,371 27,965 -- 12,936
Brian T. O'Neill................................... 1999 167,064 83,536 11,068 14,984
Senior Vice President and Chief Operating 1998 160,408 -- 24,056 10,427
Officer 1997 155,359 27,965 9,643 13,683
Arthur J. Denney................................... 1999 154,538 77,064 11,544 14,669
Senior Vice President of Engineering and 1998 147,902 -- 31,716 9,614
Project Management 1997 143,247 25,784 15,601 12,534
Gerald A. Tywoniuk................................. 1999 139,090 71,384 7,812 13,214
Vice President of Finance, Chief Financial 1998 133,633 -- 44,571 8,816
Officer and Secretary 1997(5) 98,643 17,777 26,611 9,976
Randy S. Nickerson ................................ 1999 125,444 62,515 13,854 11,905
Vice President and General Manager, Appalachia 1998 113,575 -- 35,304 7,382
Business Unit 1997 103,650 12,869 19,183 9,710
</TABLE>
- ------------------------------
(1) Represents actual salary earned in each respective fiscal year.
(2) Represents actual bonus earned in each respective fiscal year.
(3) 1998 options include options repriced on October 1, 1998. Net new options
granted in 1998 were as follows: Mr. Fox--5,029; Mr. O'Neill--10,721; Mr.
Denney--11,376; Mr. Tywoniuk--12,133; and Mr. Nickerson--10,841.
(4) Represents actual Company contributions under the Company's 401(k) Savings
and Profit Sharing Plan.
(5) Mr. Tywoniuk joined MarkWest in April 1997.
5
<PAGE>
OPTION GRANTS. The following table summarizes options granted during fiscal
year 1999 to the Named Executive Officers.
OPTION GRANTS IN FISCAL 1999
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK PRICE APPRECIATION
SECURITIES TOTAL OPTIONS FOR OPTION TERM
UNDERLYING GRANTED TO -----------------------------
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION
NAME GRANTED FISCAL 1999 ($/SHARE) DATE 5% 10%
- ------------------------ ----------------- ---------------- ------------------ ----------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
John M. Fox 3,532 2.5 $ 8.63 06/18/09 $ 19,169 $ 48,579
And...................... 3,286 2.3 5.38 11/30/09 11,118 28,175
Brian T. O'Neill 6,532 4.6 8.63 06/18/09 35,452 89,481
And...................... 4,536 3.2 5.38 11/30/09 15,347 38,893
Arthur J. Denney 4,757 3.4 8.63 06/18/09 25,818 65,428
And...................... 6,787 4.8 5.38 11/30/09 22,963 58,194
Gerald A. Tywoniuk 3,774 2.7 8.63 06/18/09 20,483 51,908
And...................... 4,038 2.8 5.38 11/30/09 13,662 34,623
Randy S. Nickerson 10,001 7.1 8.63 06/18/09 54,279 137,554
And...................... 3,853 2.7 5.38 11/30/09 13,036 33,037
</TABLE>
OPTION VALUES. The following table summarizes the value of the options held
at the end of fiscal year 1999 by the Named Executive Officers. None of the
Named Executive Officers exercised any options during fiscal year 1999.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT END
OPTIONS AT END OF FISCAL 1999 (#) OF FISCAL 1999 ($) (1)
------------------------------------- ------------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ----------------- -------------- ------------------ ------------------ ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
John M. Fox 0 $ -- 15,961 16,041 $ -- $ 3,680
Brian T. O'Neill 0 -- 24,622 31,545 -- 5,080
Arthur J. Denney 0 -- 26,536 36,470 -- 7,601
Gerald A. Tywoniuk 0 -- 13,073 33,483 -- 4,523
Randy S. Nickerson 0 -- 17,166 38,297 -- 4,315
</TABLE>
- -------------------------
(1) Value based on the difference between the closing price of the Company's
Common Stock as reported by the American Stock Exchange on December 31,
1999, and the option exercise price per share multiplied by the number of
shares subject to the option.
In addition to annual salary, executive officers of the Company also
receive compensation pursuant to the Stock Incentive Plan, the Incentive
Compensation Plan and the 401(k) Savings and Profit Sharing Plan. See discussion
of the Stock Incentive Plan under "Compensation Vehicles--Stock Option Program."
See discussion of the 401(k) Savings and Profit Sharing Plan under "Compensation
Vehicles--Savings Plan; Benefits."
The Incentive Compensation Plan provides for cash incentive awards to
executives and employees of the Company in varying amounts and is administered
by the Compensation Committee of the Company's Board of Directors. The Incentive
Compensation Plan was effective as of January 1, 1996. The Incentive
Compensation Plan lists five tiers for determining eligibility: Tier One
includes all executive level employees; Tier Two includes all management level
employees; Tier Three includes all mid-level exempt employees; Tier Four
includes all lower-level exempt employees; and Tier Five includes certain
nonexempt employees. An incentive award is based upon the financial performance
of the Company compared to corporate goals for the year in question. Incentive
payments under the Incentive Compensation Plan are paid periodically throughout
the year. The purpose of the Incentive Compensation Plan is to reward and
provide incentives for executives and employees of the Company by
6
<PAGE>
providing them with an opportunity to acquire cash rewards, thereby increasing
their personal interest in the Company's continued success and progress.
For fiscal year 1999, the Company made profit sharing payments under the
401(k) Savings and Profit Sharing Plan of approximately $0.3 million, and
incentive compensation payments under the Incentive Compensation Plan of
approximately $1.2 million.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company receive no compensation, as
such, for services as members of the Board. All directors who are not employees
of the Company receive an attendance fee of $1,500 ($2,000 beginning December
1999) for each board meeting or committee meeting attended in person by that
director and $500 ($700 beginning December 1999) for each board meeting or
committee meeting in which such director participates by telephone. All
directors are reimbursed for out-of-pocket expenses incurred while attending
board and committee meetings. In addition, pursuant to the Company's 1996
Non-Employee Director Stock Option Plan (the "Non-Employee Director Plan"), as
amended in June 1997 and December 1999, each non-employee director (a) received
options to purchase 1,000 shares of Common Stock at the time of approval of the
Non-Employee Director Plan by the Board of Directors in July 1996 and (b)
beginning December 1999, receives options to purchase an additional 1,000 shares
of Common Stock bi-annually thereafter (previously 500 options on the day after
each annual meeting of the Company's stockholders). The Non-Employee Director
Plan currently provides for the initial grant of options to purchase 1,000
shares of Common Stock to each newly appointed non-employee director upon the
date on which such person becomes a director of the Company. Directors who are
also employees of the Company do not receive any additional stock incentive
compensation for serving on the Board of Directors.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is composed of two
non-employee directors. The Committee is responsible for developing and
approving the Company's executive compensation policies. In addition, the
Compensation Committee determines on an annual basis the compensation to be paid
to the Chief Executive Officer and to each of the other executive officers of
the Company. The Compensation Committee has access to independent compensation
data for other companies. The overall objectives of the Company's executive
compensation program are to provide compensation that will attract and retain
superior talent and reward performance.
COMPENSATION PHILOSOPHY
The goals of the compensation program are to align compensation with
business objectives and performance and to enable the Company to attract, retain
and reward executive officers whose contributions are critical to the long-term
success of the Company. The Company's executive compensation program provides an
overall level of compensation opportunity that is competitive with a broad group
of natural resources companies and a smaller group of energy-related service
companies comparable in size to the Company. Actual compensation levels may be
greater than competitive levels in surveyed companies based upon annual and
long-term Company performance, as well as individual performance. The
Compensation Committee uses its discretion to set executive compensation at
levels warranted in its judgment by the Company's or an individual executive
officer's circumstances. The Company applies a consistent philosophy to
compensation for all employees, including senior management. This philosophy is
based on the premise that the achievements of the Company result from the
coordinated efforts of all individuals working toward common objectives. The
Company strives to achieve those objectives through teamwork that is focused on
meeting the expectations of customers and stockholders. Executive officers are
rewarded based upon corporate performance and individual performance. Corporate
performance is evaluated by reviewing the extent to which strategic and business
plan goals are met, including such factors as profitability, performance
relative to competitors and consummation of strategic acquisitions. Individual
performance is evaluated by reviewing organizational and management development
progress against set objectives and the degree to which teamwork and Company
values are fostered.
7
<PAGE>
COMPENSATION VEHICLES
The Company has had a successful history of using a simple total
compensation program that consists of cash-and equity-based compensation. The
components of the Company's compensation program for its executive officers
include base salary, performance-based cash bonuses, and long-term incentive
compensation in the form of stock options and restricted stock awards.
BASE SALARY
The Chief Executive Officer makes annual recommendations regarding the base
salaries of the executive officers (other than the Chief Executive Officer) to
the Compensation Committee. Base salaries for the executive officers are
intended to be based on the average of fixed compensation levels for comparable
management personnel employed by peer companies of a similar size to the
Company. In general, 1999 base salaries reflected a 3.5% increase over salary
levels from the prior year. In making base salary recommendations, the Chief
Executive Officer also takes into account individual experience and performance
and specific issues particular to the Company. The Compensation Committee
generally approves the Chief Executive Officer's recommendations with respect to
base salaries for other executive officers.
PERFORMANCE-BASED CASH BONUSES
Under the Incentive Compensation Plan, bonuses are awarded only if the
Company achieves or exceeds certain corporate performance objectives relating to
net income as determined by the Board of Directors during the last quarter of
the prior year or early in fiscal year. The size of the fund available for such
bonuses increases in relation to the extent to which such objectives are
exceeded. The Committee allocates the fund among the executive officers based on
a percentage of the executive's salary ranging from approximately 0% to 64% and
all other non-union employees depending on the net income goals as established
at the beginning of the year. If the base performance criteria are met, each
executive officer is entitled to a base bonus amount equal to that percentage of
the executive officer's base salary. A similar approach is used for all other
non-union personnel at differing percentage levels.
For fiscal 1999, the Company exceeded its net income goals set forth in the
Incentive Compensation Plan. As a result, executive officers received bonuses
under the plan at a 50% level.
STOCK OPTION PROGRAM
Stock options and restricted stock awards are granted to executive officers
under the Stock Incentive Plan. The objectives of the Stock Incentive Plan are
to align executive and stockholder long-term interests by creating a strong and
direct link between executive pay and stockholder return, and to enable
executives to develop and maintain a significant long-term ownership position in
the Company's Common Stock.
The Stock Incentive Plan authorizes the Board of Directors or a committee
of non-employee directors to grant stock options, restricted stock and other
types of awards to executive officers. To date, the only type of awards granted
to executive officers under the Stock Incentive Plan have been stock options.
All stock options currently outstanding were granted at an option price at least
equal to the fair market value of the Company's Common Stock on the date of
grant, generally have ten-year terms and generally become exercisable in
installments over either a four- or a five-year period.
Stock options may be granted upon commencement of employment based on the
recommendation of the Chief Executive Officer. In determining whether to
recommend additional option grants to an executive officer, the Chief Executive
Officer typically considers the individual's performance and any planned change
in functional responsibility. Neither the profitability of the Company nor the
market value of its stock are considered in setting the amount of executive
officer stock option grants. The stock option position of executive officers is
reviewed on an annual basis. The Company's policy is generally to grant stock
options biannually. The determination of whether or not additional options will
be granted is based on a number of factors, including Company performance,
individual performance and levels of options granted at the competitive median
for the Company's peer group.
8
<PAGE>
SAVINGS PLAN; BENEFITS
The Company makes a matching contribution under the Company's 401(k)
Savings and Profit Sharing Plan. The Company may also make a discretionary
profit sharing payment annually to executives and other employees under this
plan based upon the financial performance of the Company compared to corporate
goals for the year in question. In addition, the Company provides medical and
other miscellaneous benefits to executive officers that are generally available
to Company employees. The amount of perquisites did not exceed 10% of total
annual salary and bonus for any executive officer during the fiscal year 1999.
NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIALITY AGREEMENT AND SEVERANCE
PLAN
The Company has entered into Non-Competition, Non-Solicitation and
Confidentiality Agreements (the "Non-Competition Agreements") with certain key
employees, including the Named Executive Officers. As a result of signing the
Non-Competition Agreements, key employees are eligible for the 1997 Severance
Plan (the "Severance Plan"). The Severance Plan provides for payment of benefits
in the event that (i) the employee terminates his or her employment for "good
reason" (as defined), (ii) the employee's employment is terminated "without
cause" (as defined), (iii) the employee's employment is terminated by reason of
death or disability or (iv) the employee voluntarily resigns. In the case of
(i), (ii) and (iii) above, the employee shall be entitled to receive base salary
and continued medical benefits for a period ranging from six months to
twenty-four months, depending upon the employee's status at the time of the
termination. In the case of (iv) above, the employee shall be entitled to
receive base salary for a period ranging from one month to six months and
continued medical benefits for a period ranging from one month to six months. In
either case, the aggregate amount of benefits paid to an employee shall in no
event exceed twice the employee's annual compensation during the year
immediately preceding the termination.
CHIEF EXECUTIVE OFFICER COMPENSATION
BASE SALARY
The base salary of the Chief Executive Officer is established by and is
subject to adjustment by the Compensation Committee. Factors taken into
consideration in the determination of the Chief Executive Officer's base salary
include the base salaries for chief executive officers of the Company's peer
group, historical compensation practices at the Company and the general
experience of the Compensation Committee members in dealing with compensation
matters at other service-related energy companies.
BONUSES AND STOCK OPTION AWARDS
As a result of the Company exceeding its net income goals set forth in the
Incentive Compensation Plan, Mr. Fox received a bonus of $83,536 for fiscal year
1999 under the Incentive Compensation Plan. During fiscal year 1999, Mr. Fox
received 6,818 options. Mr. Fox has not been granted any restricted stock under
the Stock Incentive Plan to date.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction for compensation in excess of $1 million paid to the Company's Chief
Executive Officer and certain other highly compensated executive officers.
Qualifying "performance-based" compensation will not be subject to the deduction
limit if certain requirements are met. The Company anticipates that
incentive-based compensation paid in excess of $1 million will be deductible
under Section 162(m). The Compensation Committee believes, however, that there
may be circumstances in which the Company's interests are best served by
providing compensation that is not fully deductible under Section 162(m) and
reserves the ability to exercise discretion to authorize such compensation.
COMPENSATION COMMITTEE
Barry W. Spector
Donald D. Wolf
9
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Company's Common Stock for the period from October 9, 1996 (the date the
Company's Common Stock became publicly traded), through December 31, 1999, with
the cumulative total return on the Amex Composite Index, S&P 500 Index, and an
index of peer companies constructed by the Company. Each company in the peer
group is publicly traded and generates a significant portion of its total
revenue from the gathering, processing and marketing of NGLs.
[GRAPH]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
TOTAL RETURN ANALYSIS 10/9/1996 12/31/1996 12/31/1997 12/31/1998 12/31/1999
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MARKWEST HYDROCARBON $ 100.00 $ 147.62 $ 209.53 $ 85.72 $ 61.91
- -----------------------------------------------------------------------------------------------
NEW PEER GROUP (1) $ 100.00 $ 118.65 $ 154.74 $ 98.76 $ 172.58
- -----------------------------------------------------------------------------------------------
OLD PEER GROUP (2) $ 100.00 $ 134.28 $ 139.89 $ 92.63 $ 168.72
- -----------------------------------------------------------------------------------------------
S&P 500 $ 100.00 $ 106.80 $ 142.42 $ 183.12 $ 221.65
- -----------------------------------------------------------------------------------------------
AMEX COMPOSITE $ 100.00 $ 99.41 $ 120.36 $ 122.45 $ 158.18
- -----------------------------------------------------------------------------------------------
</TABLE>
Source: Carl Thompson Associates www.ctaonline.com (800) 959-9677. Data from
Bloomberg Financial Markets.
(1) Consists of Midcoast Energy Resources, Inc., Mitchell Energy and
Development, Transmontaigne, Inc. and Western Gas Resources, Inc.
Previously, the Company measured its performance against the Old Peer
Group; however, due to industry consolidation within the Old Peer
Group, the data is no longer comparable. The New Peer Group companies
are more comparable in terms of market capitalization and the nature
of their core businesses.
(2) Consists of, Dynegy, Inc., Kinder Morgan, Inc., Midcoast Energy
Resources, Inc. and Western Gas Resources, Inc. Aquila Gas Pipeline
Corporation was omitted from the peer group in 1999 because it was
sold in 1999.
10
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of March 31, 2000, (i) by each person
(or group of affiliated persons) who is known by the Company to own beneficially
more than five percent (5%) of the Company's Common Stock, (ii) by each of the
Named Executive Officers, (iii) by each of the Company's directors and nominees
for directors, and (iv) by all directors and executive officers as a group. The
Company believes that the persons and entities named in the table have sole
voting and investing power with respect to all shares of Common Stock shown as
beneficially owned by them, subject to community property laws, where
applicable.
BENEFICIAL OWNERSHIP AS OF MARCH 31, 2000
<TABLE>
<CAPTION>
OPTIONS TOTAL SHARES PERCENT OF
NUMBER OF EXERCISABLE BENEFICIALLY TOTAL
SHAREHOLDER SHARES WITHIN 60 DAYS OWNED SHARES (1)
- ------------------------------------------------- --------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
MWHC Holding, Inc. (2)......................... 3,691,086 -- 3,691,086 42.5%
155 Inverness Drive West, Suite 200
Englewood, Colorado 80112
FMR Corporation (3)............................ 715,600 -- 715,600 8.2%
82 Devonshire Street
Boston, Massachusetts 021091
Wellington Management Company, LLP (4)......... 716,200 -- 716,200 8.3%
75 State Street
Boston, Massachusetts 02109
Dimensional Fund Advisors (5).................. 563,000 -- 563,000 6.5%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
John M. Fox (6)................................ 4,138,596 8,806 4,147,402 47.8%
155 Inverness Drive West, Suite 200
Englewood, Colorado 80112
Brian T. O'Neill (7)........................... 449,540 24,622 474,162 5.5%
155 Inverness Drive West, Suite 200
Englewood, Colorado 80112
Arthur J. Denney (8)........................... 57,525 26,536 84,061 1.0%
Gerald A. Tywoniuk............................. 14,196 16,073 30,269 *
Robert F. Garvin............................... 10,181 10,356 20,537 *
Randy S. Nickerson............................. 10,597 17,166 27,763 *
Donald D. Wolf................................. 3,000 1,000 4,000 *
Barry W. Spector............................... 6,699 1,500 8,199 *
Karen L. Rogers................................ -- -- -- --
All directors and executive
officers as a group........................ 4,690,334 106,059 4,796,393 55.3%
</TABLE>
* Less than 1.0%
(1) All percentages have been determined at March 31, 2000, in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). For purposes of this table, a person or group of persons
is deemed to have "beneficial ownership" of any shares of Common Stock that
such person or group has the right to acquire within sixty days after March
31, 2000. For purposes of computing the percentage of outstanding shares of
Common Stock held by each person or group of persons named above, any
security which such person or group has the right to acquire within sixty
days after March 31, 2000, is deemed to be outstanding for the purpose of
computing the percentage ownership of such person or group. At March 31,
2000, a total of 8,531,206 shares of Common Stock were issued and 8,449,816
shares were outstanding. Options to acquire a total of 228,060 shares of
Common Stock were exercisable within sixty days.
(2) MWHC Holding, Inc., is an entity controlled by John M. Fox.
(3) Information is based solely on a Schedule 13G filed with the Securities and
Exchange Commission by FMR Corp. ("FMR") with respect to shares held as of
December 31, 1999. The Schedule 13G indicates that Fidelity Management &
Research Company, a registered investment adviser and a wholly owned
subsidiary of FMR, beneficially owns 529,200 shares; and
11
<PAGE>
Fidelity Management Trust Company, a bank and a wholly owned subsidiary of
FMR, owns 186,400 shares. According to the Schedule 13G, FMR has sole
voting power with respect to 186,400 shares and sole dispositive power with
respect to 715,600 shares.
(4) Information is based solely on a Schedule 13G filed with the Securities and
Exchange Commission by Wellington Management Company, LLP ("Wellington"),
with respect to shares held as of December 31, 1999. The Schedule 13G
indicates that Wellington has shared voting power with respect to 626,200
shares and shared dispositive power with respect to 716,200 shares.
(5) Information is based solely on a Schedule 13G filed with the Securities and
Exchange Commission by Dimensional Fund Advisors, Inc. ("Dimensional"),
with respect to shares held as of December 31, 1999. The Schedule 13G
indicates that Dimensional has sole voting and dispositive power with
respect to 563,000 shares.
(6) Includes an aggregate of 214,877 shares held in the Brent A. Crabtree
Trust, the Brian T. Crabtree Trust and the Carrie L. Crabtree Trust (the
"Crabtree Trusts"), for which Mr. Fox is the Trustee. Also includes 112,000
shares held by The MaggieGeorge Foundation, for which certain family
members of Mr. Fox are directors. Also includes all shares owned directly
by MWHC Holding, Inc., an entity controlled by Mr. Fox. As a result of Mr.
Fox's control of MWHC Holding, Inc., Mr. Fox may be deemed to have an
indirect pecuniary interest (within the meaning of Rule 16a-1 under the
Exchange Act) in an indeterminate portion of the shares beneficially owned
by MWHC Holding, Inc. Mr. Fox disclaims beneficial ownership of these
shares within the meaning of Rule 13d-3 under the Exchange Act and also
disclaims beneficial ownership of the shares held in the Crabtree Trusts
and by the MaggieGeorge Foundation.
(7) Includes all shares owned directly by Erin Investments, Inc., an entity
controlled by Mr. O'Neill. As a result of Mr. O'Neill's control of Erin
Investments, Inc., Mr. O'Neill may be deemed to have an indirect pecuniary
interest (within the meaning of Rule 16a-1 under the Exchange Act) in an
indeterminate portion of the shares beneficially owned by Erin Investments,
Inc. Mr. O'Neill disclaims "beneficial ownership" of these shares within
the meaning of Rule 13d-3 under the Exchange Act.
(8) Includes 400 shares held by Mr. Denney as custodian for his two minor
children.
CERTAIN TRANSACTIONS
INVESTMENTS WITH AFFILIATE
The Company, through its wholly owned subsidiary, MarkWest Resources, Inc.
("MarkWest Resources"), holds varied undivided interests in several exploration
and production assets ("E&P assets") owned jointly with MAK-J Energy Partners
Ltd. ("MAK-J"), which owns a 51% undivided interest in such properties. The
general partner of MAK-J is a corporation owned and controlled by John M. Fox,
President and Chief Executive Officer of the Company. The properties are held
pursuant to joint venture agreements entered into between MarkWest Resources and
MAK-J. MarkWest Resources is the operator under such agreements. As the
operator, MarkWest Resources is obligated to provide certain engineering,
administrative and accounting services to the joint ventures. The joint venture
agreements provide for a monthly fee payable to MarkWest Resources for all such
expenses. Conflicts of interest may arise regarding these oil and gas
activities, including decisions regarding expenses and capital expenditures and
the timing of the development and exploitation of the properties. Management
nevertheless believes that the terms of the Company's co-investments with MAK-J
are as favorable to the Company as could have been obtained from unaffiliated
third parties. As of December 31, 1999, MarkWest had invested $11.0 million in
E&P assets owned jointly with MAK-J. At December 31, 1999, MarkWest had
receivables due from MAK-J for approximately $426,000 and payables due to MAK-J
for approximately $400,000.
Mr. Fox has agreed that as long as he is an officer or director of the
Company and for two years thereafter, he will not, directly or indirectly,
participate in any future oil and gas exploration or production activities with
the Company except and to the extent that the Company's independent and
disinterested directors deem it advisable and in the best interests of the
Company to include one or more additional participants, which participants may
include entities controlled by Mr. Fox. Additionally, Mr. Fox has agreed that as
long as he is an officer or director of the Company and for two years
thereafter, he will not, directly or indirectly, participate in any future oil
and gas exploration or production activity that may be in competition with
exploration or production activities of the Company except and to the extent
that Mr. Fox has first offered the Company the opportunity to participate in
that activity and the Company's independent and disinterested directors deem it
advisable and in the best interests of the Company not to participate in that
activity.
12
<PAGE>
OTHER RELATIONSHIPS
Donald D. Wolf, a member of the Board of Directors, is Chairman and Chief
Executive Officer of Westport Oil and Gas Company Inc., which is a party to
certain 1997 contracts with indirect subsidiaries of MarkWest for
transportation, treating and processing services in western Michigan. No
services were performed in the last fiscal year pursuant to these contracts. The
terms of these contracts were negotiated on an arm's length basis prior to Mr.
Wolf's 1999 election to the Board of Directors.
LEGAL FEES PAID TO DIRECTOR
Barry W. Spector, a director of the Company, periodically provides legal
services to the Company. During 1999, the Company paid Mr. Spector legal fees of
approximately $63,000 in return for such services. Fees incurred during 1999
exceeded five percent of Mr. Spector's gross revenues during fiscal year 1999.
RELATED PARTY INDEBTEDNESS
MarkWest Hydrocarbon Partners, Ltd. ("MarkWest Partnership"), predecessor
to MarkWest Hydrocarbon, Inc., periodically extended offers to partners and
employees to purchase initial or additional interests in MarkWest Partnership.
Such partners and/or employees provided MarkWest Partnership with promissory
notes as part of the purchase price for such interests. According to the terms
of such promissory notes, interest accrued at 7% and payments were required for
the greater of accrued interest or distributions made by MarkWest Partnership to
partners in excess of the partner's income tax liability. As part of MarkWest
Partnership's reorganization (the "Reorganization") immediately prior to the
Company's initial public offering in October 1996, the remaining indebtedness
under such promissory notes was replaced by promissory notes owed to the
Company. Effective July 1, 1999, the interest rate on the notes was reduced from
7% to 5.25%. Interest is payable annually, and full payment of principal is due
on October 8, 2001. An aggregate of $163,000 principal amount of such notes was
outstanding as of December 31, 1999.
FUTURE TRANSACTIONS
The terms of any future transactions between the Company and its directors,
officers, principal stockholders or other affiliates, or the decision to
participate or not participate in transactions offered by the Company's
directors, officers, principal stockholders or other affiliates will be approved
by a majority of the Company's independent and disinterested directors. The
Company's Board of Directors will use such procedures in evaluating their terms
as are appropriate considering the fiduciary duties of the Board of Directors
under Delaware law. In any such review the Board may use outside experts or
consultants including independent legal counsel, secure appraisals or other
market comparisons, refer to generally available statistics or prices or take
such other actions as are appropriate under the circumstances. Although such
procedures are intended to ensure that transactions with affiliates will be on
an arm's length basis, no assurance can be given that such procedures will
produce such result.
1999 ANNUAL REPORT TO SHAREHOLDERS
Included with this Proxy Statement is the Company's 1999 Annual Report on
Form 10-K for the fiscal year ended December 31, 1999. The Company will provide,
without charge, an additional copy of the Company's Annual Report on Form 10-K
for the year ended December 31, 1999, as required to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, upon written request to Gerald A. Tywoniuk, Secretary, at the
Company's principal offices, 155 Inverness Drive West, Suite 200, Englewood,
Colorado 80112-5000. Each request must set forth a good faith representation
that, as of April 7, 2000, the person making the request was a beneficial owner
of the Common Stock. The exhibits to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 may be obtained by any stockholder upon
written request to Gerald A. Tywoniuk. Each person making any such request will
be required to pay a fee of $0.25 per page to cover the Company's expenses in
furnishing such exhibits.
13
<PAGE>
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed PricewaterhouseCoopers LLP as the
Company's independent accountants for the year ending December 31, 2000, and
recommends that the stockholders ratify that appointment. PricewaterhouseCoopers
LLP has no relationship with the Company other than that arising from its
engagement as independent accountants. Representatives of PricewaterhouseCoopers
LLP will be present at the 2000 Annual Meeting. They will have an opportunity to
make a statement if they desire to do so and will be available to respond to
appropriate questions from stockholders. The affirmative vote of a majority of
the outstanding shares of the Company's Common Stock represented at the 2000
Annual Meeting is required to ratify this appointment.
OTHER MATTERS
The Board of Directors knows of no other matters other than those that are
described in this Proxy Statement that may be brought before the meeting.
However, if any other matters are properly brought before the Annual Meeting,
persons named in the enclosed proxy or their substitutes will vote in accordance
with their best judgment on such matters.
Whether or not you plan to attend the Annual Meeting, please mark, sign,
date and promptly return the enclosed proxy in the enclosed return envelope.
PROPOSALS FOR THE NEXT ANNUAL MEETING
Any proposal by a stockholder to be presented at the year 2001 annual
meeting must be received at the Company's principal executive offices at 155
Inverness Drive West, Suite 200, Englewood, Colorado 80112-5000, no later than
December 29, 2000.
By Order of the Board of Directors,
/s/ Gerald A. Tywoniuk
Gerald A. Tywoniuk
Secretary
Dated: April 19, 2000
14
<PAGE>
PROXY THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
MARKWEST HYDROCARBON, INC.
155 Inverness Drive West, Suite 200
Englewood, Colorado 80112-5000
The undersigned, having duly received the Notice of Annual Meeting and
Proxy Statement dated April 19, 2000, appoints Gerald A. Tywoniuk and Brian
T. O'Neill proxies (each with the power to act alone and with the power of
substitution and revocation) to represent the undersigned and to vote, as
designated below, all shares of Common Stock of MarkWest Hydrocarbon, Inc.
which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of MarkWest Hydrocarbon, Inc. (the "Company") to be held on May
18, 2000 at the Company's headquarters, 155 Inverness Drive West, Suite 200,
Englewood, CO 80112-5000 at 10:00 a.m., MDT., and any adjournment thereof.
<TABLE>
<S> <C> <C>
1. ELECTION OF CLASS I DIRECTORS / / FOR Arthur J. Denney / / WITHHOLD AUTHORITY to vote for Arthur J. Denney
/ / FOR Karen L. Rogers / / WITHHOLD AUTHORITY to vote for Karen L. Rogers
2. RATIFICATION OF INDEPENDENT / / FOR the ratification of / / AGAINST the ratification / / ABSTAIN from voting on
ACCOUNTANTS PricewaterhouseCoopers of PricewaterhouseCoopers the ratification of
LLP as the Company's LLP as the Company's PricewaterhouseCoopers
independent accountants independent accountants for LLP
for the fiscal year ending the fiscal year ending as the Company's
December 31, 2000 December 31, 2000 independent
accountants for the
fiscal year ending
December 31, 2000
</TABLE>
<PAGE>
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this Proxy
will be voted FOR all of the above items.
Please sign exactly as your name appears hereon. Jointly owned shares
will be voted as directed if one owner signs unless another owner instructs
to the contrary, in which case the shares will not be voted. If signing in a
representative capacity, please indicate title and authority.
----------------------------------------
Signature
, 2000
----------------------------------
Date
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE ENCLOSED ADDRESSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE U.S.
