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EXHIBIT 10.2
EXECUTIVE INCENTIVE COMPENSATION PLAN
PLAN DOCUMENT
PURPOSE
This Plan is designed to provide selected employees with annual cash incentive
opportunities. Awards are based on the achievement of specific objectives that
reflect business success and generate stockholder value. The Plan directly links
Participants' incentive compensation with the performance of the Subsidiary
where they have personal accountability and also promotes the Company's
results-oriented management style.
ELIGIBILITY/PARTICIPATION
All Senior Management employees are eligible for participation in the Plan.
Participants are selected by management.
PERFORMANCE MEASURES/OBJECTIVES
During the first quarter of each year, Financial Objectives and Personal
Objectives for the year shall be established. The Financial Objectives and
Personal Objectives shall be weighted to reflect the significance of business
and individual performance (e.g. Financial Objectives weighted 60% and Personal
Objectives weighted 40%).
Subsidiary heads shall recommend, and the CEO shall approve, the specific
Financial Objectives to be used by each respective Subsidiary for the year, as
well as the specific weighting of each Financial Objective (e.g. 50% Segment
Earnings and 50% Cash Flow). The specific objectives selected, and their
weightings, may vary by Subsidiary and may be changed from year to year in
response to changes in business priorities.
A Participant's manager shall recommend the Participant's Personal Objectives
for the Plan year. Subsidiary heads shall approve the Personal Objectives for
each eligible Participant in their Subsidiary. The CEO shall approve the
Personal Objectives of all corporate officers and the Compensation Committee
shall approve the Personal Objectives of the CEO. A targeted performance level
shall be established which represents
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the desired performance for the year. A minimum and maximum level of performance
shall also be established.
Early in each Plan year, Participants shall be advised by their management of
the Financial Objectives that will be used to determine their Awards for the
Plan year, the weighting allocation of the various Financial Objectives, as well
as the weighting allocation between Financial Objectives and Personal
Objectives.
AWARD LEVELS
A Target Award shall be established at the beginning of every Plan year for each
executive grade level. Individual Target Award levels shall reflect variations
in job function and scope and the potential impact the Participant has on
company business objectives. The more senior the position, the greater the
portion of total compensation that shall be placed "at risk". Award minimums and
maximums shall also be established for performance levels below and above target
performance. Award opportunity levels corresponding to the minimum, target and
maximum levels of performance may vary by Subsidiary according to business
priorities.
AWARDS
Awards under the Plan shall be determined by evaluating performance against
Financial Objectives and Personal Objectives. Actual Awards may be higher or
lower than the Target Award. Subsidiary heads shall determine Award
recommendations with final approval made by the Compensation Committee.
Awards shall generally be paid in a single cash payment during the first quarter
following the end of the Plan year. Awards shall be based on the Participant's
December 31st base salary of the Plan year. All applicable taxes and
withholdings shall be deducted from Award payments in accordance with federal,
state and local regulations. Awards may be deferred under the Company's Deferred
Compensation Plan ("DCP") in accordance with the provisions of the DCP.
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PLAN CHANGES DUE TO COMPANY ACTIVITY
Acquisitions, divestitures and/or mergers by the Company with outside companies
may require changes/amendments to the current year's Plan targets, measures
and/or Award opportunities of a specific Subsidiary. In such cases, Plan changes
shall be presented for CEO approval.
AWARD PAYMENT UNDER VARIOUS EMPLOYMENT CONDITIONS
The CEO or President may determine, or may delegate the determination of, the
eligibility for Target Awards and any payment of Awards to Participants who
enter or exit employment, transfer between Subsidiaries, or who are promoted
during the Plan year.
PLAN ADMINISTRATION
The Plan shall be administered by the Compensation Committee. The decisions of
the Compensation Committee shall be final and binding.
PLAN CONTINUATION
The Company expects and intends to continue this Plan but does not guarantee any
specific levels of Award payments or the continuation of any Award payments.
Award payments made under this Plan do not create a contract of employment. The
Company reserves the right to modify, suspend, change or terminate this Plan at
any time by the action of the Compensation Committee in its sole discretion.
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DEFINITION OF TERMS
AWARD - A cash incentive based on the achievement of specific financial and
individual objectives expressed as a percentage of year-end base salary.
COMPANY -- Occidental Petroleum Corporation, including its Subsidiaries.
COMPENSATION COMMITTEE -- Members of the Company's Board of Directors who are
appointed by the Board of Directors to monitor and approve the compensation
programs of the Company in order to ensure alignment with company objectives and
shareholder interest.
SUBSIDIARY -- Any entity controlled by Occidental Petroleum Corporation that the
Compensation Committee determines has employees eligible to participate in the
Plan.
FINANCIAL OBJECTIVES -- One or more financial goals established each year which
reflect current business priorities and against which Company performance will
be measured.
PERSONAL OBJECTIVES -- Predetermined, documented personal goals directly related
to an individual's job, including where applicable, management of unanticipated,
unpredictable or uncontrollable events, used to assess individual performance.
PARTICIPANT -- A member of Senior Management who is selected to participate in
the Plan.
"PLAN" - The Executive Incentive Compensation Plan.
SENIOR MANAGEMENT -- Employees of the Company in executive grade levels EX91 and
above.
TARGET AWARD -- An Award that reflects or is contingent upon a specified level
of performance.
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