Merger	9 Months Ended
Sep. 30, 2015
Merger
Merger	3. Merger Merger Agreement On July 11, 2015, the Partnership entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MPLX LP (“MPLX”), MPLX GP LLC, the general partner of MPLX (“MPLX GP”), Sapphire Holdco LLC, a wholly owned subsidiary of MPLX (“Merger Sub” and, together with MPLX and MPLX GP, the “MPLX Entities”), and, for certain limited purposes set forth in the Merger Agreement, Marathon Petroleum Corporation, the parent of MPLX GP (“MPC”). Pursuant to the Merger Agreement, Merger Sub will be merged with and into the Partnership (the “Merger”), with the Partnership surviving the Merger as a wholly owned subsidiary of MPLX. After the Merger, the Partnership’s common units will cease to be publicly traded. Under the Merger Agreement, MPC will contribute $675 million to MPLX, without receiving any new equity in exchange, and, at the effective time of the Merger (the “Effective Time”), (a) each outstanding Partnership common unit (the “Common Units”) will be converted into the right to receive 1.09 MPLX common units (the “MPLX Common Units” and, such consideration, the “Common Equity Consideration”) and an amount in cash obtained by dividing $675 million by the number of Common Units plus the number of Canceled Awards (as defined below) plus the number of Partnership Class B units (the “Class B Units”), in each case outstanding as of immediately prior to the Effective Time (together with the Common Equity Consideration, the “Common Merger Consideration”) and (b) each outstanding Class B Unit will be converted into the right to receive one MPLX Class B unit (the “MPLX Class B Units”). Under the Merger Agreement, at the Effective Time, the Partnership Class A units, all of which are owned by wholly owned subsidiaries of the Partnership, will be converted into a specified number of MPLX Class A units, as more fully described in the Merger Agreement. As a result of the Merger, each phantom unit under the Partnership’s equity plans outstanding immediately prior to the Effective Time will become fully vested and converted into an equivalent number of Common Units, which will be canceled and converted into the right to receive the Common Merger Consideration (the “Canceled Awards”). As of the Effective Time, each DER award will be canceled and the holder thereof will cease to have any rights with respect thereto, other than the right to receive distributions declared or made (but not yet paid) by the Partnership prior to the Effective Time. The payments pursuant to this paragraph are subject to any applicable withholding taxes. The completion of the Merger is subject to certain customary conditions, including (a) the approval of the Merger Agreement by the Partnership’s unitholders entitled to vote thereon and (b) the approval of the MPLX Common Units comprising the Common Equity Consideration for listing on the New York Stock Exchange. Each of the Partnership’s and MPLX’s obligation to complete the Merger is also subject to certain additional customary conditions, including (i) subject to specified standards, the accuracy of the representations and warranties of the other party and (ii) performance in all material respects by the other party of its obligations under the Merger Agreement. The registration statement filed by MPLX with respect to the Merger and Common Equity Consideration was declared effective on October 29, 2015. The Partnership’s special unitholders meeting to consider and vote on a proposal to approve the Merger Agreement and the transactions contemplated thereby, has been scheduled to be held on December 1, 2015 at the Partnership’s offices located in Denver, Colorado. The Merger Agreement contains customary representations and warranties from both the Partnership and MPLX, and also contains customary pre-closing covenants, including covenants requiring each of them to use their respective reasonable best efforts to cause the Merger to be consummated, and covenants requiring the Partnership and MPLX, subject to certain exceptions, to carry on their respective businesses in the ordinary course of business consistent with past practice during the period between the execution of the Merger Agreement and the closing of the Merger. The Merger Agreement also contains a “no shop” provision that, in general, restricts the Partnership’s ability to solicit third-party acquisition proposals or provide information to or engage in discussions or negotiations with third parties that have made or that might make an acquisition proposal. The no shop provision is subject to certain limited exceptions that allow the Partnership, under certain circumstances and in compliance with certain obligations, to provide information and participate in discussions and negotiations with respect to unsolicited third-party acquisition proposals that would reasonably be expected to lead to a Superior Proposal (as defined in the Merger Agreement). The Merger Agreement contains certain termination rights and provides that, upon termination of the Merger Agreement under specified circumstances, including, but not limited to, a change in the recommendation of the General Partner of the Partnership, the Partnership will pay MPLX a cash termination fee of $625 million. Under the Merger Agreement, the Partnership, MPC and the MPLX Entities have agreed that, prior to the closing of the Merger, MPLX GP will increase the size of its board of directors by two directors and will appoint two directors identified by the Partnership to such board of directors, one of which shall be independent under the NYSE rules. MPC has also agreed to appoint one director identified by the Partnership to the board of directors of MPC. Both such appointments shall be effective immediately following the closing of the Merger. The partnership has identified Mr. Frank M. Semple as one of the two directors to be appointed to the MPLX GP board, and Mr. Semple has also been identified by the Partnership to be appointed to the MPC board. The Merger Agreement also provides that MPC has agreed to fill the next vacancy on the Board of Directors of MPLX GP that arises following date of the closing of the merger, by first considering the nomination of an individual who was an independent director of the Partnership’s general partner as of the date of the Merger Agreement. In addition, pursuant to the Merger Agreement, certain of the Partnership’s executive officers will retain their titles and become executive officers of MPLX GP and MPC, as the case may be. Voting Agreement On July 11, 2015, and in connection with the execution of the Merger Agreement, M&R MWE Liberty, LLC, which holds 7,352,691 Common Units (representing approximately 3.7% of the outstanding Common Units as of October 28, 2015), entered into a Voting Agreement with the MPLX Entities (the “Voting Agreement”), pursuant to which such holder has agreed, among other things, to vote (or cause to be voted) all Common Units owned by such holder in favor of approving the Merger Agreement. The Voting Agreement shall terminate upon termination of the Merger Agreement, and certain other specified events. Lock-Up Agreement On July 11, 2015, and in connection with the execution of the Merger Agreement, EMG Utica, LLC (“EMG Utica”), EMG Utica Condensate, LLC, the MPLX Entities, the Partnership and M&R MWE Liberty, L.L.C. entered into a Lock-Up Agreement (the “Lock-Up Agreement”), pursuant to which the parties thereto have agreed, among other things, not to convert any Class B Units into Common Units in connection with the Merger and that certain transfer restrictions will apply, during the six-month period following consummation of the Merger, to the MPLX Common Units that the holders of Class B Units will receive as Common Merger Consideration for its Common Units. The MPLX Class B Units will have substantially similar rights and obligations, including registration rights, as those applicable to the Class B Units, other than there will be no transfer restrictions on the MPLX Common Units into which such MPLX Class B Units are convertible. The MPLX Class B Units will be convertible into the Common Merger Consideration on July 1, 2016 and July 1, 2017. As of September 30, 2015, MWE owned a 55% ownership interest in MarkWest Utica EMG Condensate, L.L.C. (“Utica Condensate”). Under the terms of the Lock-Up Agreement, MWE will purchase the remaining 45% interest in Utica Condensate for $83 million in connection with, and conditioned upon, the consummation of the Merger. Utica Condensate’s business is conducted solely through its 60% ownership interest in Ohio Condensate Company, L.L.C. (“Ohio Condensate”). The owner of the remaining 40% interest in Ohio Condensate has certain participatory rights and as a result Ohio Condensate has been and will continue to be accounted for as an equity method investment.

3. Merger

Merger Agreement

On July 11, 2015, the Partnership entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MPLX LP (“MPLX”), MPLX GP LLC, the general partner of MPLX (“MPLX GP”), Sapphire Holdco LLC, a wholly owned subsidiary of MPLX (“Merger Sub” and, together with MPLX and MPLX GP, the “MPLX Entities”), and, for certain limited purposes set forth in the Merger Agreement, Marathon Petroleum Corporation, the parent of MPLX GP (“MPC”).

Pursuant to the Merger Agreement, Merger Sub will be merged with and into the Partnership (the “Merger”), with the Partnership surviving the Merger as a wholly owned subsidiary of MPLX. After the Merger, the Partnership’s common units will cease to be publicly traded.

Under the Merger Agreement, MPC will contribute $675 million to MPLX, without receiving any new equity in exchange, and, at the effective time of the Merger (the “Effective Time”), (a) each outstanding Partnership common unit (the “Common Units”) will be converted into the right to receive 1.09 MPLX common units (the “MPLX Common Units” and, such consideration, the “Common Equity Consideration”) and an amount in cash obtained by dividing $675 million by the number of Common Units plus the number of Canceled Awards (as defined below) plus the number of Partnership Class B units (the “Class B Units”), in each case outstanding as of immediately prior to the Effective Time (together with the Common Equity Consideration, the “Common Merger Consideration”) and (b) each outstanding Class B Unit will be converted into the right to receive one MPLX Class B unit (the “MPLX Class B Units”). Under the Merger Agreement, at the Effective Time, the Partnership Class A units, all of which are owned by wholly owned subsidiaries of the Partnership, will be converted into a specified number of MPLX Class A units, as more fully described in the Merger Agreement.

As a result of the Merger, each phantom unit under the Partnership’s equity plans outstanding immediately prior to the Effective Time will become fully vested and converted into an equivalent number of Common Units, which will be canceled and converted into the right to receive the Common Merger Consideration (the “Canceled Awards”). As of the Effective Time, each DER award will be canceled and the holder thereof will cease to have any rights with respect thereto, other than the right to receive distributions declared or made (but not yet paid) by the Partnership prior to the Effective Time. The payments pursuant to this paragraph are subject to any applicable withholding taxes.

The completion of the Merger is subject to certain customary conditions, including (a) the approval of the Merger Agreement by the Partnership’s unitholders entitled to vote thereon and (b) the approval of the MPLX Common Units comprising the Common Equity Consideration for listing on the New York Stock Exchange. Each of the Partnership’s and MPLX’s obligation to complete the Merger is also subject to certain additional customary conditions, including (i) subject to specified standards, the accuracy of the representations and warranties of the other party and (ii) performance in all material respects by the other party of its obligations under the Merger Agreement. The registration statement filed by MPLX with respect to the Merger and Common Equity Consideration was declared effective on October 29, 2015. The Partnership’s special unitholders meeting to consider and vote on a proposal to approve the Merger Agreement and the transactions contemplated thereby, has been scheduled to be held on December 1, 2015 at the Partnership’s offices located in Denver, Colorado.

The Merger Agreement contains customary representations and warranties from both the Partnership and MPLX, and also contains customary pre-closing covenants, including covenants requiring each of them to use their respective reasonable best efforts to cause the Merger to be consummated, and covenants requiring the Partnership and MPLX, subject to certain exceptions, to carry on their respective businesses in the ordinary course of business consistent with past practice during the period between the execution of the Merger Agreement and the closing of the Merger.

The Merger Agreement also contains a “no shop” provision that, in general, restricts the Partnership’s ability to solicit third-party acquisition proposals or provide information to or engage in discussions or negotiations with third parties that have made or that might make an acquisition proposal. The no shop provision is subject to certain limited exceptions that allow the Partnership, under certain circumstances and in compliance with certain obligations, to provide information and participate in discussions and negotiations with respect to unsolicited third-party acquisition proposals that would reasonably be expected to lead to a Superior Proposal (as defined in the Merger Agreement).

The Merger Agreement contains certain termination rights and provides that, upon termination of the Merger Agreement under specified circumstances, including, but not limited to, a change in the recommendation of the General Partner of the Partnership, the Partnership will pay MPLX a cash termination fee of $625 million.

Under the Merger Agreement, the Partnership, MPC and the MPLX Entities have agreed that, prior to the closing of the Merger, MPLX GP will increase the size of its board of directors by two directors and will appoint two directors identified by the Partnership to such board of directors, one of which shall be independent under the NYSE rules. MPC has also agreed to appoint one director identified by the Partnership to the board of directors of MPC. Both such appointments shall be effective immediately following the closing of the Merger. The partnership has identified Mr. Frank M. Semple as one of the two directors to be appointed to the MPLX GP board, and Mr. Semple has also been identified by the Partnership to be appointed to the MPC board. The Merger Agreement also provides that MPC has agreed to fill the next vacancy on the Board of Directors of MPLX GP that arises following date of the closing of the merger, by first considering the nomination of an individual who was an independent director of the Partnership’s general partner as of the date of the Merger Agreement. In addition, pursuant to the Merger Agreement, certain of the Partnership’s executive officers will retain their titles and become executive officers of MPLX GP and MPC, as the case may be.

Voting Agreement

On July 11, 2015, and in connection with the execution of the Merger Agreement, M&R MWE Liberty, LLC, which holds 7,352,691 Common Units (representing approximately 3.7% of the outstanding Common Units as of October 28, 2015), entered into a Voting Agreement with the MPLX Entities (the “Voting Agreement”), pursuant to which such holder has agreed, among other things, to vote (or cause to be voted) all Common Units owned by such holder in favor of approving the Merger Agreement. The Voting Agreement shall terminate upon termination of the Merger Agreement, and certain other specified events.

Lock-Up Agreement

On July 11, 2015, and in connection with the execution of the Merger Agreement, EMG Utica, LLC (“EMG Utica”), EMG Utica Condensate, LLC, the MPLX Entities, the Partnership and M&R MWE Liberty, L.L.C. entered into a Lock-Up Agreement (the “Lock-Up Agreement”), pursuant to which the parties thereto have agreed, among other things, not to convert any Class B Units into Common Units in connection with the Merger and that certain transfer restrictions will apply, during the six-month period following consummation of the Merger, to the MPLX Common Units that the holders of Class B Units will receive as Common Merger Consideration for its Common Units. The MPLX Class B Units will have substantially similar rights and obligations, including registration rights, as those applicable to the Class B Units, other than there will be no transfer restrictions on the MPLX Common Units into which such MPLX Class B Units are convertible. The MPLX Class B Units will be convertible into the Common Merger Consideration on July 1, 2016 and July 1, 2017.

As of September 30, 2015, MWE owned a 55% ownership interest in MarkWest Utica EMG Condensate, L.L.C. (“Utica Condensate”). Under the terms of the Lock-Up Agreement, MWE will purchase the remaining 45% interest in Utica Condensate for $83 million in connection with, and conditioned upon, the consummation of the Merger. Utica Condensate’s business is conducted solely through its 60% ownership interest in Ohio Condensate Company, L.L.C. (“Ohio Condensate”). The owner of the remaining 40% interest in Ohio Condensate has certain participatory rights and as a result Ohio Condensate has been and will continue to be accounted for as an equity method investment.