The Lubrizol Corporation 2006 Annual Incentive Pay Award Letter for Corporate Officers and Business Segment Leaders
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Summary
This letter from The Lubrizol Corporation outlines the 2006 annual incentive pay plan for corporate officers and business segment leaders. Incentive pay is based on achieving specific company and segment performance targets, such as earnings per share (EPS), growth, divestitures, capital management, and structure and culture. The payout amount depends on both company and individual performance, with no guaranteed payments. If minimum performance thresholds are not met, no incentive pay is awarded. The Board's Compensation Committee may adjust the plan or payouts at its discretion.
EX-10.2 3 l17409aexv10w2.txt EXHIBIT 10.2 ANNUAL INCENTIVE PAY AWARD LETTER Exhibit 10.2 The Lubrizol Corporation Annual Incentive Pay Grant Letter (for Corporate Officers) Dear _______________, For our 2006 plan we have set the following targets: - - The size of the pool used to fund performance pay will be tied to the attainment of our 2006 plan and can vary significantly based on overall performance. - - To reach a "targeted pay-out" we must meet the plan for the following metrics with the following weighting factors:
- - Meeting all plan objectives will result in the "targeted pay-out". - - Exceeding objectives can increase the "targeted pay-out". Missing those objectives can also significantly decrease it. - - Your individual "targeted pay-out" is a function of your level of responsibility within the corporation and your individual performance. - - The plan has a "circuit breaker" provision. If the company is below its EPS target but at or above _____________ in 2006, there will be a reduced pay out. Below _____________, there will be no annual incentive pay awards for anyone regardless of plan performance in other areas. - - The Organization & Compensation Committee of the Board of Directors reserves the right during the year, and when determining pay-out, to alter any of the provisions up or down. Our plan does not provide for guaranteed payments. What does this mean to you for 2006? Depending on the degree to which targeted performance is achieved, and provided your personal performance remains at a high level, your annual incentive pay would be in the range shown below:
If we do not achieve ____________, your performance pay will be ZERO. As a leader, we trust that you'll treat the above information as EXTREMELY CONFIDENTIAL. Regards, James L. Hambrick President and CEO The Lubrizol Corporation Annual Incentive Pay Grant Letter (for Business Segment Leaders) Dear _______________, For our 2006 plan we have set the following targets: - - The size of the pool used to fund performance pay will be tied to the attainment of our 2006 plan and can vary significantly based on overall performance. - - To reach a "targeted pay-out" we must meet the plan for the following metrics with the following weighting factors:
- - Meeting all plan objectives will result in the "targeted pay-out". Your target is based 25% on the Corporate Measures and 75% of the Business Segment Measures. - - Exceeding objectives can increase the "targeted pay-out". Missing those objectives can also significantly decrease it. - - Your individual "targeted pay-out" is a function of your level of responsibility within the corporation and your individual performance. - - The plan has a "circuit breaker" provision. If the company is below its EPS target but at or above _____________ in 2006, there will be a reduced pay out. Below _____________, there will be no annual incentive pay awards for anyone regardless of plan performance in other areas. - - The Organization & Compensation Committee of the Board of Directors reserves the right during the year, and when determining pay-out, to alter any of the provisions up or down. Our plan does not provide for guaranteed payments. What does this mean to you for 2006? Depending on the degree to which targeted performance is achieved, and provided your personal performance remains at a high level, your annual incentive pay would be in the range shown below:
If we do not achieve ____________, your performance pay will be ZERO. As a leader, we trust that you'll treat the above information as EXTREMELY CONFIDENTIAL. Regards, James L. Hambrick President and CEO