Document:

Description of Magellan 2006 Annual Incentive Program

 Exhibit 10(f) 
 2007 Annual Incentive Program Summary 
 Magellan’s 2007 annual incentive program is a
discretionary bonus program established by the Compensation Committee of the Board of Directors to encourage individual activities that will improve the overall financial and operational performance of Magellan Midstream Partners, L.P. The 2007
program payout will be based on a combination of partnership performance and individual performance. 
 A “Funding Metric” has been
established that sets a floor of performance for the partnership below which no payout for any metric will be made. This mechanism reflects the view of management and the Compensation Committee that it is inappropriate to pay bonuses if the overall
cash generation of Magellan drops significantly. The program also has other performance metrics that are used to measure profitability, safety and environmental stewardship. 
 Specific goals for levels of achievement have been set for each metric. Payouts under the plan begin after the threshold level of performance is achieved
and the maximum payout occurs if results reach the stretch targets. 
 Payouts at the target performance level are based on a percentage of
employee eligible earnings. Eligible earnings include regular base pay and eligible overtime pay for the period in which an employee is a participant in the plan, including, but not limited to, hours worked during a normal workday, PTO, short term
disability, holiday pay, jury duty pay, bereavement pay, and shift differentials. An employee hired during the calendar year that receives a paycheck on the final pay period of that year will receive a prorated bonus. Employees on military leave are
also eligible for an award. 
 If target performance is achieved, 100% of the calculated payout based on the percentages shown above is
eligible to be paid under the program. If stretch performance is achieved, 200% of the calculated payout is eligible to be paid. If threshold or lower is achieved, 0% of the calculated payout is eligible to be paid. The calculated payout percentage
for performance between threshold and target, or between target and stretch, will be interpolated. Fifty percent (50%) of the eligible payout is subject to a personal performance adjustment. 
 Eligible employees begin participating in the program on the first day of employment. To be eligible to receive an award, an employee must be employed
during the calendar year including the last day of the calendar year and through the time the award is actually paid. Exceptions to this requirement will be made where a participant’s employment is terminated as a result of retirement, death or
the participant becomes eligible for long-term disability. Such employees will be eligible for a prorated award based on the portion of the year worked prior to the employment termination or disability event. A participant whose employment is
terminated anytime prior to the distribution of the award under any other circumstances is not eligible for an award. 
 After the eligible
payout is determined based on company metrics results, an adjustment may be made based on the employee’s individual performance. This adjustment, if applied, would adjust 50% of an employee’s eligible incentive payout based on
management’s assessment of the employee’s performance on individual goals and the employee’s performance of job responsibilities. This adjustment can range from 0% to 200% of the 50% amount that is subject to the personal performance
adjustment. 

 2007 Annual Incentive Program Metrics 
 Funding Metric 
 ($ in Millions) 
  

			
	 Metric
	 	Threshold
	 EBITDA less Maintenance Capital
	 	Funding occurs at greater than or equal to $285(1)

 Performance Metrics 
 ($ in Millions) 
  

													
	 Metric
	 	Weight	 	 	Threshold	 	Target	 	Stretch
	 Financial –
	 			 			 			 		
	 EBITDA less Maintenance Capital
	 	75	%	 	$	285	 	$	324	 	$	355
					
	 Environmental(2) –
	 			 			 			 		
	 High Consequence Releases
	 	15	%	 	 	5	 	 	3	 	 	1
					
	 Safety(3) –
	 			 			 			 		
	 OSHA Recordable Incident Rate (IR)
	 	10	%	 	 	1.30	 	 	1.17	 	 	1.04

	 (1)
	 Management believes that if overall company performance drops below this level that a payout would not be appropriate
for any metric. Actual 2006 EBITDA less Maintenance Capital was $316 million. 

  

	 (2)
	 If a fatality occurs as a result of a release or any one high consequence release exceeds or is estimated
to exceed $2.5 million in cleanup and third party damage expenses, the environmental metric will automatically be zero percent and therefore receive no payout. 

  

	 (3)
	 If a fatality occurs related to Magellan’s operations, the Safety metric will automatically be zero percent and
therefore receive no payout. 

 Metric Adjustments 
 If an acquisition occurs during the year, the financial metric will be adjusted to reflect the economics used to obtain approval of the acquisition. The Environmental and Safety metrics will not be adjusted until the
new locations have a full year to become compliant with Magellan’s SIP policies and procedures. New internal growth projects approved within a plan year will not change the metric targets for the plan year since these projects generally require
several months to complete.Form of 2006 Phantom Unit Award Agreement

 Exhibit 10(g) 
 PHANTOM UNIT AGREEMENT 
 THIS PHANTOM UNIT AGREEMENT (this “Agreement”) is by
and between Magellan GP, LLC (the “Company”) and Employee Name (the “Participant”). 
  

	1.	Grant of Phantom Units. The Company hereby grants to the Participant effective January 29, 2007 (the “Effective Date”), subject to the terms and conditions of
the Magellan Midstream Partners Long-Term Incentive Plan, as amended and restated (the “Plan”) and this Agreement, the right to be eligible to receive a target grant of # of Units Phantom Units of Magellan Midstream Partners, L.P.
(the “Partnership”). The number of Units received at the end of the Restricted Period will be determined based on the performance criteria set forth in Section 7 herein, employment status at that time and any other relevant provisions
of the Plan. These Units are referred to in this Agreement as “Phantom Units” during the Restricted Period. Until the Phantom Units vest and are paid, the Participant shall have no rights as a unitholder of the Partnership with respect to
the Phantom Units. 

  

	2.	Incorporation of Plan. The Plan is hereby incorporated herein by reference and all capitalized terms used herein but not defined herein shall have the meaning set forth in
the Plan. The Participant acknowledges receipt of a copy of the Plan and hereby accepts the Phantom Units subject to all the terms and provisions of the Plan. 

  

	3.	Compensation Committee of the Board Decisions and Interpretations. The Participant hereby agrees to accept as binding, conclusive and final all decisions and interpretations
of the Compensation Committee of the Board (the “Committee”) of the Company upon any questions arising under the Plan and this Agreement. 

  

	4.	Restricted Period of Phantom Units. The Restricted Period begins with the Effective Date and ends with the first of the following events: 

  

	 	a.	December 31, 2009, provided the Participant is employed by the Company or its Affiliates at such time, and performance relative to the metrics described below meets the
requirements for a payout; or 

  

	 	b.	Your termination of Affiliation (excluding any transfer to an Affiliate of the Company) with the Company, voluntarily for Good Reason or involuntarily (other than due to Cause)
within two years following a Change of Control, as set forth in the Plan. 

  

	5.	 Payment of Phantom Units. To be eligible to receive payment of the Phantom Units at the end of the Restricted Period, the Participant must be employed by the
Company or its Affiliates at the end of the Restricted Period, or must have terminated employment during the Restricted Period due to Retirement, death, or Disability. Subject to legal or contractual obligations, the Company will deliver to the
Participant, or the Participant’s legal representative, as soon as practicable after the final Determination of Payout Levels by the Committee, the value of the Phantom Units equal in value to the number of Phantom Units 

	 	 
less the number of Phantom Units required to cover minimum tax withholding requirements. The number of Phantom Units required to cover minimum tax
withholding will be based on the closing price of the Units at the end of the Restricted Period. 

  

	6.	Termination of Employment Due to Retirement, Death or Disability. In the event a Participant’s employment with the Company and its Affiliates terminates prior to the end
of the Restricted Period due to Retirement, death or Disability, the initial Target Grant will be prorated based upon the Participant’s months of employment between January 1, 2007 and December 31, 2009. Such prorated amount will
continue to be restricted and subject to the terms of this Agreement until the end of the Restricted Period. All Phantom Units in excess of the prorated amount shall be forfeited. 

  

	7.	Performance Criteria. 

 Three-Year Performance
Metrics. The performance criteria will be based upon three annual measures each applied to one-third of the target grant as follows: 
  

									
	 Metric
	  	Weight	 	Threshold	  	Target	  	Stretch
	 First-Year Performance Metric
	  		 		  		  	
	 2007 Distributable Cash Flow per Unit 
	  	33%	 	$2.47	  	$2.76	  	$3.00
	 Second-Year Performance Metric
	  		 		  		  	
	 2008 Distributable Cash Flow per Unit
	  	33%	 	(1)	  	(1)	  	(1)
	 Third-Year Performance Metric
	  		 		  		  	
	 2009 Distributable Cash Flow per Unit 
	  	34%	 	(2)	  	(2)	  	(2)

	 	(1)	To be determined in the first quarter of 2008 and communicated to the Participant by e-mail within 10 days of the determination. 

  

	 	(2)	To be determined in the first quarter of 2009 and communicated to the Participant by e-mail within 10 days of the determination. 

  

	8.	Determination of Payout Level. 

  

	 	(i)	The number of Units awarded will be determined based on performance relative to the performance criteria as follows: 

  

			
	 Below Threshold
	 	No payout
	 Target Achieved
	 	100% of Phantom Units are paid out
	 Stretch Achieved
	 	200% of Phantom Units are paid out

 The payout for results between threshold, target and stretch will be interpolated.

  

	 	(ii)	The number of Units awarded will be subject to an increase or reduction of up to 20% based upon personal performance. 

  

	9.	Other Provisions. 

  

	 	a.	 The Participant understands and agrees that payments under this Agreement shall not be used for, or in the determination of, any other payment or benefit under any
continuing agreement, plan, policy, practice or arrangement providing for the making of any payment or the provision of any benefits to or for the Participant or the Participant’s beneficiaries or representatives, including, without limitation,
any employment agreement, any change of control severance protection plan or any employee benefit plan 

	 	 
as defined in Section 3(3) of ERISA, including, but not limited to qualified and non-qualified retirement plans. 

  

	 	b.	Except as otherwise provided herein, and in the Plan documents, in the event that the Participant’s employment with the Company and its Affiliates terminates prior to the
vesting of the Phantom Units granted under this Agreement, such Phantom Units shall be forfeited. 

  

	 	c.	The Participant acknowledges that this award and similar awards are made on a selective basis and are, therefore, to be kept confidential. 

  

	 	d.	Neither the Phantom Units, nor the Participant’s interest in the Phantom Units, may be sold, assigned, transferred, pledged or otherwise disposed of or encumbered at any time
prior to the vesting and payment of such Phantom Units under this Agreement. 

  

	 	e.	If the Participant at any time forfeits any or all of the Phantom Units pursuant to this Agreement, the Participant agrees that all of the Participant’s rights to and interest
in the Phantom Units shall terminate upon forfeiture without payment of consideration. 

  

	 	f.	The Committee shall make determination as to whether an event has occurred resulting in the forfeiture of the Phantom Units, in accordance with this Agreement, and all
determinations of the Committee shall be final and conclusive. 

  

	 	g.	With respect to the right to receive payment of the Phantom Units under this Agreement, nothing contained herein shall give the Participant any rights that are greater than those of
a general creditor of the Company. 

  

	10.	Notices. All notices to the Company required hereunder shall be in writing and delivered by hand or by mail, addressed to Magellan Midstream Partners, L.P., One Williams
Center, Mail Drop 28-4, Tulsa, Oklahoma 74172, Attention: Compensation Department. Notices shall become effective upon their receipt by the Company if delivered in the forgoing manner. 

  

			
	 Magellan GP, LLC

		
	 By:
	 	 /s/ Don R. Wellendorf

	 Don R. Wellendorf

	 President and Chief Executive Officer

	 Magellan GP, LLC

 Participant: 
 I acknowledge receipt of a copy of the Plan and hereby accept the terms and conditions of this Phantom Unit Agreement: 
                                       
                                        
      Dated this              day of
                                    , 2007. 
 Employee Name

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