EOG RESOURCES, INC.
EXECUTIVE OFFICER ANNUAL BONUS PLAN
I. Purpose of the Plan. The Executive Officer Annual Bonus Plan (the "Plan)
of EOG Resources, Inc. (the "Company") is designed to enhance the
Company's ability to attract and retain highly qualified executives and
provide additional financial incentives to such executives to promote the
success of the Company.
II. Eligibility. Eligibility under this Plan is limited to Executive Officers
of the Company, as defined in Section 16 of the Securities Exchange Act of
1934, as amended, who shall hereinafter be referred to as Participants.
III. Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors comprised solely of two or more
outside directors (the "Committee") and shall operate on the basis of the
calendar year. The Committee is authorized to interpret the Plan and from
time to time may adopt such rules, regulations, definitions and forms
consistent with the provisions of the Plan as it may deem advisable to
carry out the Plan.
IV. Performance Goal. Bonuses paid under the Plan are intended to constitute
qualified performance-based compensation for purposes of Section 162(m) of
the Internal Revenue Code of 1986, as amended. The performance goal
necessary for the payment of bonuses under the Plan will be the
achievement of positive Net Income Available to Common, excluding
nonrecurring or extraordinary items, as reported in the Company's year-end
earnings release. The Committee will certify in writing prior to payment
of any bonuses under the Plan that the performance goal was met.
V. Maximum Individual Bonus. In no event shall a bonus paid pursuant to the
Plan to any Participant for any calendar year be in excess of $2.0
million. The Committee may reduce the bonus payable to any Participant
below the maximum amount based on such objective or subjective criteria as
the Committee deems appropriate in its sole and absolute discretion.
VI. Unfunded Nature of Plan. The Plan shall constitute an unfunded, unsecured
obligation of the Company to make bonus payments from its general assets
in accordance with the provisions of the Plan. The establishment of the
Plan shall not be deemed to create a trust. No participant shall have any
security or other interest in any assets of the Company.
VII. Prohibition Against Assignment or Encumbrance. No right, title, interest
or benefit hereunder shall ever be liable for or charged with any of the
torts or obligations of a Participant, or be subject to seizure by any
creditor of a Participant or any person claiming under a Participant. No
Participant nor any person claiming under a Participant shall have the
power to sell, transfer, pledge, anticipate or dispose of any right,
title, interest or benefit hereunder in any manner until the same shall
have been actually distributed free and clear of the terms of the Plan.
VIII. Plan Not an Employment Contract. Nothing in the adoption or
implementation of the Plan shall confer on any Participant any right to
continued employment by the Company or affect in any way the right of the
Company to terminate a Participant's employment.
IX. Severability. In the event any provision of the Plan shall be held
invalid or illegal for any reason, any illegality or invalidity shall not
affect the remaining parts of the Plan, but the Plan shall be construed
and enforced as if the illegal or invalid provision had never been
inserted, and the Company shall have the privilege and opportunity to
correct and remedy such questions of illegality or invalidity by amendment
as provided in the Plan.
X. Withholding of Taxes. The Company shall have the right to deduct from any
payment made under the Plan any federal, state or local taxes required by
law to be withheld with respect to such payments.
XI. Applicable Law. The Plan shall be governed and construed in accordance
with the laws of the State of Texas, except to the extent such laws are
preempted by an applicable federal law.
XII. Rights of Company. Nothing contained in the Plan shall prevent the
Company from adopting or continuing in effect other compensation
arrangements, which arrangements may be either generally applicable or
applicable only in specific cases.
XIII. Effective Date and Term of Plan. Upon approval by the shareholders of the
Company at the 2001 Annual Meeting of Shareholders, the Plan shall be
considered effective as of January 1, 2001. The term of the Plan shall be
XIV. Amendment and Termination of the Plan. The Committee may modify or
terminate the Plan at any time without prior notice to or consent of
Participants; provided that, without the approval of the shareholders of
the Company, no such amendment shall be made that would change the class
of Employees eligible to receive awards under the Plan, increase the
maximum individual bonus allowed under the Plan, change the stated
performance goal, or modify any other material terms of the Plan.