provide total cash compensation at the market median for executive officers in comparable positions when
target performance is achieved, below the market median when performance is less than target and above the
market median when performance exceeds target. The BDO study was used to determine the competitiveness of
the incentive opportunity for comparable positions. STI payments are generally paid in cash in March of each
year for the prior fiscal year’s performance.
In 2011, the STI objectives were initially designed and proposed by the executive officers, working with
the Chairman of the General Partner’s board of directors, with objectives that are both Partnership-oriented and
individually-oriented. These objectives are intended to promote the achievement of performance objectives of
the Partnership. Historically, the Partnership objectives account for 75% of the award and the personal
objectives account for 25% of the award. Personal objectives focus on specific objectives to be targeted by each
NEO for that particular calendar year. The NEOs are involved in developing these objectives because they best
understand the immediate objectives required for the Partnership’s success. Nevertheless, all proposed
objectives are first reviewed and revised by the Chairman of the Board for the CEO and by the CEO for the
other NEOs. The CEO’s objectives are subsequently reviewed and approved by the compensation committee
and ultimately by the General Partner’s board of directors. In 2011, the STI objectives approved by the
compensation committee and the General Partner’s board of directors were divided as follows: (1) Partnership
objectives accounted for 75% of the STI and (2) personal objectives accounted for 25% of the STI. All STI
objectives are subject to change each year. The target incentive opportunities for 2011 as a percentage of base
salary were as follows:
2011 Targeted
STI
Opportunity
CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60%
CFO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45%
Vice President, General Counsel & Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45%
For 2011, there were five stated Partnership objectives under the STI which accounted for 75% of the total
STI. The stated Partnership objectives for each NEO are described below and were weighted as indicated for
each NEOs:
2011 Target STI Payment Opportunity for Partnership Objectives
STI Partnership Objectives
Mr. Borer Ms. Minas Mr. Richards
1) Distributable Cash Flow Per Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30%
30%
30%
2) Distribution Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20%
20%
20%
3) Total Shareholder Return vs. Peers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20%
20%
20%
4) Recordable Injury Rate (RIR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3%
3%
3%
5) Title V Environmental Deviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2%
2%
2%
Percentage of Total STI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75%
75%
75%
1.
Distributable Cash Flow per Unit.
The achievement of our budget for distributable cash flow per unit
excluding non-cash mark-to-market impacts and any one-time transactions costs. We define distributable
cash flow as net cash provided by or used in operating activities, less maintenance capital expenditures, net
of reimbursable projects, plus or minus adjustments for non-cash mark-to-market of derivative
instruments, proceeds from divestiture of assets, net income attributable to noncontrolling interest net of
depreciation and income tax. As a publicly traded limited partnership, our performance is generally judged
on our ability to pay cash distributions to our unitholders. We use distributable cash flow per unit because
we believe it permits management to focus on the long term sustainability and development of our assets.
For this Partnership objective, the target level of performance will be distributable cash flow per unit of
$3.34 per unit; the maximum level of performance will be distributable cash flow per unit of $3.78 per
unit; and the minimum level of performance will be distributable cash flow per unit of $2.92 per unit.
2.
Distribution Growth.
Complete transactions, projects, acquisitions and other initiatives which result in 4%
or more year-over-year distribution growth comparing distributions paid in November 2011 versus
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