<PAGE>
                                                                   EXHIBIT 10.12


CHEVRONTEXACO


1998 STOCK OPTION PROGRAM
Plan Summary
ChevronTexaco

Effective March 28, 2002
<PAGE>
INTRODUCTION


The information in this summary applies only to employees of the former Chevron
Corporation with outstanding stock options under the 1998 Stock Option Program
(1998 SOP). Effective March 28, 2002, this summary replaces the 1998 Stock
Option Program For U.S. Dollar Employees Brochure.


WHAT'S CHANGING?

Beginning March 28, 2002, Salomon Smith Barney will provide full-service
brokerage and administrative services for the 1998 SOP. Through Salomon Smith
Barney, participants will be able to exercise stock options over the telephone
as well as have access to new features such as real-time processing and placing
limit orders. Review this summary for more details.


CONTENTS

EXERCISING YOUR OPTIONS

   What is the 1998 Stock Option Program?..................................    3
   Am I eligible to exercise my options?...................................    3
   When can I exercise my options?.........................................    3
   What are my choices for exercising?.....................................    4
   How do I exercise my options?...........................................    6
   What are the tax consequences?..........................................    6
   What is required when I file my taxes?..................................    6
   What happens to my options if my employment ends?.......................    7


YOUR STOCK OPTION ACCOUNT AT SALOMON SMITH BARNEY

   What if I do not receive a welcome package?..............................   8
   Do I need to open an account at Salomon Smith Barney? ...................   8
   Is there anything I must do before I exercise my options? ...............   8
   What do I do if I forget or lose my Trading PIN? ........................   8
   What is a market sell order? ............................................   8
   Can I put in an order for my option to be exercised when the stock reaches
   a certain price? ........................................................   8
   When can I expect to receive my proceeds after exercising my options? ...   8
   Will I receive statements of my stock option transactions? ..............   9
   How do I temporarily change my address to receive my exercise proceeds? .   9

GRANT SUMMARY ..............................................................  10





The information in this summary describes the highlights of the 1998 Stock
Option Program. Full details are provided in the official documents that govern
the program. In case of any disagreement between this summary and the documents,
the documents will govern. Participation in the program does not imply a right
to employment with ChevronTexaco or any of its subsidiaries. Your receipt of
this summary does not necessarily mean that you have been granted an option
under the program. Only those individuals who satisfied the program eligibility
requirements on Feb. 11, 1998 were granted a stock option.


1998 Stock Option Program Plan Summary, March, 28, 2002                        2
<PAGE>
EXERCISING YOUR OPTIONS


WHAT IS THE 1998 STOCK OPTION PROGRAM?

On Feb. 11, 1998, the Chevron Board of Directors established the 1998 SOP and
made a one-time grant to employees who were in eligible categories at that time.
The purposes of this grant were to focus employees on creating value for
stockholders over the long term, and to provide employees an opportunity to more
directly participate in the performance of company stock. For a summary of this
grant, see page 10.

AM I ELIGIBLE TO EXERCISE MY OPTIONS?

You are eligible to exercise your vested 1998 SOP options if you are a U.S.
payroll employee in one of the following categories:

-     full-time active, part-time active and seasonal employees;

-     employees on family leave; military leave, personal leave with pay or
      short-term union leave; employees on personal leave without pay,
      disability leave, college leave, political or public office leave,
      long-term union leave or service protection only leave (effective April 1,
      2002);

-     employees receiving Short-Term Disability (or STD memo account) or on
      protected status under the federal FMLA;

-     union-represented employees if participation in the program was agreed to
      by their collective bargaining representative.

You will not be eligible to exercise your vested option under the 1998 SOP if
you are not on the U.S. payroll.

If your employment with ChevronTexaco ends for any reason, you have up to 180
days after the date your employment ends to exercise your vested option. If you
do not exercise your vested option within 180 days, the option is forfeited and
canceled at 1 p.m., Pacific time on the 180th day. See page 7 for an example.

WHEN CAN I EXERCISE MY OPTIONS?

Your vested stock options give you the right to purchase shares of ChevronTexaco
stock at some time in the future at the grant price ($76.3125 per share). The
decision to exercise your vested options is completely up to you. You may
exercise your vested option at any time until the earlier of the following
dates: the date the option expires (Feb. 11, 2008), or 180 days after the date
your employment ends. Remember that the future value of the option will be tied
directly to the performance of ChevronTexaco stock.

Considerations that might influence your exercise decision include:

-     current market price of ChevronTexaco stock compared to the option grant
      price;

-     your personal financial situation;

-     timing of receiving additional taxable income;

-     your employment status.

Remember, any time you exercise your option, you will be required to pay
exercise fees and applicable taxes.

You are responsible for deciding when to exercise your option and for taking all
relevant factors into consideration when making your decision. The value of your
option will depend on when you exercise your option. Neither ChevronTexaco nor
anyone else acting on ChevronTexaco's behalf is authorized to recommend how or
when you should exercise your option. Many factors outside of the company's
control


1998 Stock Option Program Plan Summary, March, 28, 2002                        3
<PAGE>
EXERCISING YOUR OPTIONS


influence the market price of ChevronTexaco shares. There is no assurance that
you will receive any specified value when you exercise your option.

WHAT ARE MY CHOICES FOR EXERCISING?

There are three different exercise methods available:

-     same-day sale (a cashless exercise also known as a cash-out);

-     sell to cover (a cashless exercise also known as a stock-out);

-     cash exercise (also known as a cash purchase, or exercise and hold).

Keep in mind you may cancel any open order to exercise. However, once a trade
has been executed, you cannot cancel the transaction. You are strongly
encouraged to consult with a personal financial planner or tax adviser before
you exercise to determine which method is right for you.


SAME-DAY SALE (A CASHLESS EXERCISE ALSO KNOWN AS A CASH-OUT)

The same-day sale is a transaction in which stock option shares are
simultaneously exercised and sold. The sale proceeds are used to pay the option
cost, plus exercise fees and applicable taxes. The net profit (after fees and
taxes) is sent to you.

Example: Let's assume that you were granted 100 shares at a grant price of
$76.3125 a share. The stock is currently trading at $100.00 a share. You do not
want to hold onto the stock, but you would like to receive cash.

<TABLE>
<S>                                                           <C>
 a) Current market price ($100.00 x 100 shares)               $10,000.00
 b) Less grant price ($76.3125 x 100 shares)                  ($7,631.25)
                                                              ----------
 c) Total taxable gain (included in W-2)                       $2,368.75
 d) Withholding taxes on gain(1)
   (assumed withholding rate: 40.65%)                           ($962.90)
 e) Estimated exercise fees(2)                                   ($30.00)
                                                              ----------
 f) NET PROCEEDS PAID TO YOU                                   $1,375.85
</TABLE>

The example shown here assumes for convenience that exercise occurs when the
fair market value of a share of ChevronTexaco stock is $100. However, the
current market price may be more or less than $100.

(1)   Withholding taxes assume 27 percent federal withholding, 6 percent state
      withholding, Social Security tax of 6.20 percent, Medicare tax of 1.45
      percent. Actual taxes due may be more or less than those assumed in this
      example.

(2)   Estimated exercise fees include a $25 minimum ticket charge, plus a SSB
      standard service fee of $5.00. Standard SEC fees are not included in the
      estimate.


1998 Stock Option Program Plan Summary, March, 28, 2002                        4
<PAGE>
EXERCISING YOUR OPTIONS


SELL-TO-COVER (A CASHLESS EXERCISE ALSO KNOWN AS A STOCK-OUT)

The sell-to-cover is a transaction in which you sell just enough shares to cover
the option cost, exercise fees and applicable taxes. If this transaction results
in fractional shares, you will receive a check for the cash value of the
fractional shares.
The remaining stock is held in your Salomon Smith Barney brokerage account until
you wish to sell it. Stock certificates will only be issued upon request for an
additional charge.

EXAMPLE: Let's assume that you were granted 100 shares at a grant price of
$76.3125 a share. The stock is currently trading at $100.00 a share.

<TABLE>
<S>                                                                          <C>
a) Current market price ($100.00 x 100 shares)                               $10,000.00
b) Less grant price ($76.3125 x 100 shares)                                  ($7,631.25)
                                                                             ----------
c) Total taxable gain (included in W-2)                                       $2,368.75
d) Withholding taxes on gain(1)
   (assumed withholding rate: 40.65%)                                         ($962.90)
e) Estimated exercise fees (2)                                                 ($30.00)
f) Proceeds required to pay grant price,                                      $8,624.15
   exercise fee and withholding taxes (b+d+e)
g) Share sale needed to cover proceed requirements (f divided by $100)(3)     87 shares
h) NET SHARE GAIN (100 - 87 shares)                                           13 SHARES
i) REMAINING CASH OR AMOUNT OWED TO YOU
   as a result of fractional shares (0.7585 x $100)                              $75.85
</TABLE>

The example shown here assumes for convenience that exercise occurs when the
fair market value of a share of ChevronTexaco stock is $100. However, the
current market price may be more or less than $100.

(1)   Withholding taxes assume 27 percent federal withholding, 6 percent state
      withholding, Social Security tax of 6.20 percent, Medicare tax of 1.45
      percent. Actual taxes due may be more or less than those assumed in this
      example.

(2)   Estimated exercise fees include a $25 minimum ticket charge, plus a SSB
      standard service fee of $5.00. Standard SEC fees are not included in the
      estimate.

(3)   Always rounded up to whole share.



CASH EXERCISE (ALSO KNOWN AS A CASH PURCHASE OR EXERCISE AND HOLD)

A cash exercise is a transaction in which you provide your own funds to retain
all of your 1998 SOP shares. No shares are sold to cover the cost of the option,
exercise fees and applicable taxes. Upon completion of the exercise, you hold
the shares in your Salomon Smith Barney brokerage account until you wish to sell
them. Stock certificates will only be issued upon request for an additional
charge.

EXAMPLE: Let's assume that you were granted 100 shares at a grant price of
$76.3125 a share. The stock is currently trading at $100 a share.

<TABLE>
<S>                                                           <C>
a) Current market price ($100.00 x 100 shares)                $10,000.00
b) Less grant price ($76.3125 x 100 shares)                   ($7,631.25)
                                                              ----------
c) Total taxable gain (included in W-2)                        $2,368.75
d) Withholding taxes on gain(1)
   (assumed withholding rate: 40.65%)                           ($962.90)
e) Estimated exercise fees(2)                                      $0.00
f) Cash due for this exercise election (b+d+e)                 $8,594.15
g) SHARES ISSUED TO YOU                                              100
</TABLE>

The example shown here assumes for convenience that exercise occurs when the
fair market value of a share of ChevronTexaco stock is $100. However, the
current market price may be more or less than $100.

(1)   Withholding taxes assume 27 percent federal withholding, 6 percent state
      withholding, Social Security tax of 6.20 percent, Medicare tax of 1.45
      percent. Actual taxes due may be more or less than those assumed in this
      example.

(2)   ChevronTexaco pays the cost of this transaction at no charge to you.


1998 Stock Option Program Plan Summary, March, 28, 2002                        5
<PAGE>
EXERCISING YOUR OPTIONS


HOW DO I EXERCISE MY OPTIONS?

You should continue to call the HR Service Center at 1-888-TALK2HR
(1-888-825-5247) to exercise your options. Starting March 28, 2002, you will be
able to access Salomon Smith Barney's interactive telephone system, which is
available 22 hours a day, seven days a week (the system is down from 7 p.m. to 9
p.m., Pacific time each night). You must have your Social Security number with
your Trading PIN to use the telephone system. If you do not have your Trading
PIN, you may speak with a client service specialist between 6 a.m. and 4 p.m.,
Pacific time on days the New York Stock Exchange is open.

Through the interactive telephone system, you can:

-     receive a current stock quote for ChevronTexaco;

-     certify your W-9 status;

-     obtain information about what is currently available to exercise;

-     analyze potential gains from your exercise decisions;

-     perform real-time sale transactions and establish limit orders;

-     confirm your most recent exercise transaction;

-     speak to a client service specialist.

Keep in mind you may cancel any open order to exercise. However, once a trade
has been executed, you cannot cancel the transaction.

WHAT ARE THE TAX CONSEQUENCES?

You will normally owe taxes on your gain when you exercise your option - no
matter which of the three exercise methods you use. Your gain - the difference
between the exercise price and the grant price - is taxable as ordinary income
in the year that payment is made to you. If you receive ChevronTexaco shares as
a result of your exercise and later sell any of those shares, any gain as a
result of the sale will be treated as a capital gain or loss for tax purposes.

WHAT IS REQUIRED WHEN I FILE MY TAXES?

The gain and withholding information will be included in the W-2 statement you
receive from ChevronTexaco for the year in which the exercise was executed. If
your exercise includes the sale of shares, you will also receive a Form 1099B
and confirmation statement from CitiStreet or Salomon Smith Barney as follows:

-     If you exercise your option before March 28, 2002, you will receive a Form
      1099B from CitiStreet in January of the year following the year that
      shares are sold.

-     If you exercise your option on or after March 28, 2002, you will receive a
      Form 1099B from Salomon Smith Barney in January of the year following the
      year that shares are sold.

The IRS requires that you report the entire amount of the transaction, but you
pay taxes only on the gain. Use the Form 1099B and the confirmation statement
you receive from CitiStreet or Salomon Smith Barney to complete form Schedule D,
Capital Gains and Losses, which must be filed with your Federal Form 1040 Tax
Return.

Please note that neither ChevronTexaco nor the 1998 SOP brokers or service
providers are qualified to give you tax advice. In addition, because tax laws
are subject to change at any time, you are strongly urged to seek advice from a
professional tax adviser before you initiate any exercise transactions or sales.


1998 Stock Option Program Plan Summary, March, 28, 2002                        6
<PAGE>
EXERCISING YOUR OPTIONS


WHAT HAPPENS TO MY OPTIONS IF MY EMPLOYMENT ENDS?

If your employment ends for any reason, including retirement and total
disability, you have up to 180 days after the date your employment ends to
exercise your vested option. If you do not exercise your vested option within
the 180 days, the option is forfeited and canceled at 1 p.m., Pacific time on
the 180th day. The example below illustrates the 180-day period that begins
after the date your employment ends.

Last day worked: Monday, April 1, 2002
Start of 180-day period: Tuesday, April 2, 2002
End of 180-day period: Saturday, Sept. 28, 2002
Last day to exercise: Friday, Sept. 27, 2002, 1 p.m., Pacific time

Because the 180th day is Saturday, Sept. 28, 2002 (which is not a trading
day), your last day to exercise would be Friday, Sept. 27, 2002.

If you die, your designated beneficiary under the Basic Life Insurance Plan
(BLIP), or similar plan if you are not covered by BLIP, will retain a vested
option for 180 days after the date your employment ends, at which time it will
be forfeited.


1998 Stock Option Program Plan Summary, March, 28, 2002                        7
<PAGE>
YOUR STOCK OPTION ACCOUNT AT SALOMON SMITH BARNEY


WHAT IF I DO NOT RECEIVE A WELCOME PACKAGE?

If you do not receive a welcome package by March 28, 2002, please call the HR
Service Center at 1-888-TALK2HR (1-888-825-5247) and speak with a Salomon Smith
Barney client service specialist.

DO I NEED TO OPEN AN ACCOUNT AT SALOMON SMITH BARNEY?

No. ChevronTexaco automatically opens a stock option account on your behalf at
Salomon Smith Barney. This account can only be used to execute stock option
exercises or to review your stock option account information.

IS THERE ANYTHING I MUST DO BEFORE I EXERCISE MY OPTIONS?

Yes. U.S. regulations require that Salomon Smith Barney obtain a Form W-9 from
you. This means you must certify that your Social Security number is correct and
that you are not subject to 30 percent federal tax backup withholding. You may
do this by accessing Salomon Smith Barney's interactive telephone system through
1-888-TALK2HR or by completing and faxing or mailing back a Substitute Form W-9,
which is included in your welcome package. If you do not provide a completed W-9
before you exercise and sell your stock options, an additional 30 percent
federal tax will be withheld from your sale proceeds.

WHAT DO I DO IF I FORGET OR LOSE MY TRADING PIN?

If you forget or lose your Trading PIN, please contact the HR Service Center at
1-888-TALK2HR (1-888-825-5247) and speak with a Salomon Smith Barney client
service specialist between 6 a.m. and 4 p.m., Pacific time on days the New York
Stock Exchange is open.

WHAT IS A MARKET SELL ORDER?

A market sell order is an order that does not specify a price. The order is
executed at whatever price is available when your order reaches the trading
floor. The market sell order will be executed, but a specific execution price
cannot be guaranteed. Keep in mind you may cancel any open order to exercise.
However, once a trade has been executed, you cannot cancel the transaction.


CAN I PUT IN AN ORDER FOR MY OPTION TO BE EXERCISED WHEN THE STOCK REACHES A
CERTAIN PRICE?

Yes. This type of order is called a limit sell order. It remains in effect until
it is either executed or canceled. If the stock price never reaches the
requested limit price, the option will not be exercised and will expire on the
expiration date (unless you change your exercise election). For this reason, it
is not a good idea to place a limit order if your option is close to expiring.

WHEN CAN I EXPECT TO RECEIVE MY PROCEEDS AFTER EXERCISING MY OPTIONS?

If you have executed a cashless exercise, the net proceeds from your sale will
be available as soon as your trade settles. Trade settlement is three business
days after you have executed your transaction (this is known as T+3). If you
choose to receive a check by regular mail, you should receive your proceeds
within seven to ten business days from the date your trade has settled.

Your payment will be sent to you from Salomon Smith Barney. You also have the
option to receive your proceeds via overnight delivery (FedEx), as a wire to
your individual bank account or as a deposit into a Salomon Smith Barney
account. Keep in mind there will be an extra charge for overnight delivery and a
wire to your individual bank account.


1998 Stock Option Program Plan Summary, March, 28, 2002                        8
<PAGE>
YOUR STOCK OPTION ACCOUNT AT SALOMON SMITH BARNEY


WILL I RECEIVE STATEMENTS OF MY STOCK OPTION TRANSACTIONS?

Yes. After you exercise an option or cancel a transaction, you will receive a
confirmation statement from Salomon Smith Barney summarizing the transaction. If
you executed a cashless exercise (same-day sale or sell-to-cover), the
confirmation will include the sale price of your shares. The confirmation will
be mailed to you on the next business day following the date of the exercise.
You should keep these documents for the preparation of your tax return.

HOW DO I TEMPORARILY CHANGE MY ADDRESS TO RECEIVE MY EXERCISE PROCEEDS?

For permanent address changes, you should continue to make your requests through
Benefits Connection or 1-888-TALK2HR. However, if you want to receive your
exercise proceeds at an address that is different from your permanent mailing
address, you may submit a temporary address change in writing to Salomon Smith
Barney. The temporary address change will only remain in effect for 30 business
days. You may fax or mail your temporary change of address to:

Salomon Smith Barney
Attention: 1998 ChevronTexaco Stock Option Program (Plan #16C)
2121 E. El Camino Real
San Mateo, CA 94403

Fax:  (650) 357-5048


1998 Stock Option Program Plan Summary, March, 28, 2002                        9
<PAGE>
GRANT SUMMARY


GRANT PRICE (OPTION PRICE PER SHARE)

-     $76.3125, Chevron's closing stock price on Feb. 11, 1998

GRANT TERM

-     Feb. 11, 1998 to Feb. 11, 2008 (10-year term)

EXERCISE TERM

-     Vesting - Feb. 11, 2000

-     First Exercise Day - Feb. 14, 2000

SIZE OF OPTION GRANT


<TABLE>
<CAPTION>
{PRIVATE}OPTION   EMPLOYEES IN         EMPLOYEES ON GUIDE    EMPLOYEES IN PLEXCO
     SHARES       PLACED JOBS                CURVES (1)            GRADES              EMPLOYEES IN MARINE JOBS
<S>               <C>                  <C>                   <C>                  <C>
      300                1A/1B           $100,000 & Above           16/17           Master, Marine Superintendent,
                                                                                     Marine Representative, Chief
                                                                                        Engineer, Port Captin,
                                                                                           Lightering Master

      250                1C/2            $75,000-$99,999           13/14/15             1st Mate, 1st Assistant
                                                                                       Engineer, Docking/Mooring
                                                                                    Master, Terminal Representative

      200                3A/3B           $60,000-$74,999            11/12               2nd Mate, 2nd Assistant
                                                                                     Engineer, Environmental Cargo
                                                                                        Officer, Radio Officer

      150                4A/4B           $45,000-$59,999            8/9/10              3rd Mate, 3rd Assistant
                                                                                   Engineer, Machinist, Electrician

      100          5A/5B/O&T/O&M (2)     $44,999 & Below             3-7              Marine Ratings, Dock Bosun,
                                                                  O&T/O&M(2)       Maintenance Foreman, Ship's Clerk
</TABLE>


(1)   Base salary on Feb. 11, 1998 for Guide Curve Employees

(2)   O&T - Office & Technician; O&M - Operating & Mechanical


1998 Stock Option Program Plan Summary, March, 28, 2002                       10
<PAGE>
GRANT SUMMARY


GRANT ELIGIBILITY

To have been eligible for a grant under the 1998 SOP, you must have been a
Chevron Corporation U.S. payroll employee in one of the following eligible
categories on Feb. 11, 1998:

-     full-time active, part-time active and seasonal employees;

-     employees on the following leaves: family leave; military leave, personal
      leave with pay; short-term union leave; Plexco temporary layoff;

-     employees receiving Short-Term Disability (or STD memo account) or on
      protected status under the federal FMLA;

-     employees working for Amoseas and Caltex Pacific Indonesia (CPI), having
      been previously transferred from Chevron with repatriation letters or
      having been specifically designated for a grant;

-     union-represented employees if participation in the program was agreed to
      by their collective bargaining representative.

You would not have been eligible for a grant under the 1998 SOP if you were
in any of the following categories on Feb. 11, 1998:

-     employees not on the U.S. payroll;

-     terminated, retired or other former U.S. payroll employees;

-     casual, summer hire and co-op employees;

-     employees of affiliate companies (excluding Amoseas and CPI employees with
      repatriation letters or otherwise designated for a grant);

-     employees of Chevron Stations Inc.;

-     any disabled employee (other than one on FMLA-protected status) who has
      exhausted Short-Term Disability benefits (including any STD memo account),
      except that any such employee will be permitted to exercise a vested
      option during the first 180 days of this disability status;

-     contractors (including workers Chevron considered contractors even if they
      should qualify as common law employees);

-     employees on the following leaves: personal leave without pay, college
      leave, political/public office leave, long-term union leave or service
      protection only leave;

-     employees eligible to participate in Chevron's Long-Term Incentive Plan
      (LTIP); however, employees who became eligible for LTIP after receiving a
      1998 SOP grant would be eligible to exercise the option.


1998 Stock Option Program Plan Summary, March, 28, 2002                       11