exv10w2



 






Exhibit 10.2




CHEVRON CORPORATION

BENEFIT PROTECTION PROGRAM




(Amended and Restated Effective December 7, 2005)




Section 1.     Establishment and Purpose.




     This Chevron Corporation Benefit Protection Program was established effective March 29, 2000
by action of the Board of Chevron Corporation and amended and restated effective December 7, 2005.
The purpose of the Program is to protect certain benefits provided to employees of the Corporation
and its Subsidiaries against elimination or reduction in the event of a Change in Control. In
addition, the Program is designed to provide individuals who are eligible to receive awards under
the Chevron Corporation Long-Term Incentive Plan compensation to offset any excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended.



Section 2.     Definitions.




     (a)     “Accountants” means the independent accountants retained by the Company most
recently prior to the Change in Control.



     (b)     “Benefit Protection Period” means the period commencing six months prior to the
public announcement of a proposed transaction which, when effected, is a Change in Control and
ending on the date which is two years after the date of a Change in Control.



     (c)     “Board” means the board of directors of the Corporation.



     (d)     “Change in Control” shall have the meaning assigned to it in Article VI of the
bylaws of the Corporation, as such bylaws may be amended from time to time.



     (e)     “Code” means the Internal Revenue Code of 1986, as amended.



     (f)     “Corporation” means Chevron Corporation, a Delaware corporation, or any successor
corporation.



     (g)     “Equalization Amount” shall have the meaning set forth in Section 4 of the
Program.



     (h)     “Excise Tax” shall have the meaning set forth in Section 4 of the Program.



     (i)     “Payment” shall have the meaning set forth in Section 4 of the Program.



     (j)     “Program” means this Chevron Corporation Benefit Protection Program.



     (k)     “Subsidiary” means any corporation or entity in which the Corporation directly or
indirectly controls more than 50% of the total voting power of all classes of its stock having
voting powers and which the Board has designated as a Subsidiary for purposes of the Program.



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Section 3.     Benefit Protection.




     (a)     Severance Programs. Concurrent with the adoption of the Program, the Board has
adopted the Chevron Corporation Change in Control Surplus Employee Severance Program for Salary
Grades Below 27, the Chevron Corporation Change in Control Surplus Employee Severance Program for
Salary Grades 27 to 30 and the Chevron Corporation Change in Control Surplus Employee Severance
Program for Salary Grades 40 and Above in order to provide protection to eligible employees of the
Corporation or its Subsidiaries in the event of a Change in Control.



     (b)     Other Chevron Plans.




     (i)     Retiree Health Care and Life Insurance Coverage. During the Benefit
Protection Period, neither the Corporation nor a Subsidiary may take any action which would
render ineligible for post-retirement health care or life insurance coverage an individual
who as of the date of a Change in Control had satisfied the eligibility requirements for
such coverage (as determined under the terms of the applicable plan). This provision shall
be applicable to any such individual, whether or not he or she was employed by the
Corporation or a Subsidiary on the date of the Change in Control.




     (ii)     Employer Health Care and Life Insurance Coverage Contribution. During the
Benefit Protection Period, neither the Corporation nor a Subsidiary may take any action
which would reduce the amount or duration of employer contributions toward the cost of
health care coverage or the proportion which employer contributions bears to the total cost
of life insurance coverage for any individual who as of the date of a Change in Control was
entitled to have the Corporation or a Subsidiary pay for all or a portion of the cost of
such coverage (or who becomes so entitled during the Benefit Protection Period). This
provision shall be applicable to any such individual, whether or not he or she was employed
by the Corporation or a Subsidiary on the date of the Change in Control.




     (iii)     Retirement Plan Vesting. Upon a Change in Control, all Members in the
Chevron Corporation Retirement Plan who were on the active payroll of the Corporation or a
Subsidiary on the date of a Change in Control shall become filly vested in their benefits
accrued under the Retirement Plan.



     (c)     Change in Control Effected Pursuant to Agreement. The Board shall take such
action, if a Change in Control is effected pursuant to an agreement between the Corporation and
another party or parties, as is necessary to require that such agreement contain provisions
reasonably effective to ensure that (i) the benefits intended to be provided under the foregoing
plans to eligible persons as of the date of the Change in Control will be effectively provided
following the Change in Control and for at least two years thereafter; and (ii) following a Change
in Control if any benefit plan or program previously maintained by the Corporation or any
Subsidiary is eliminated or amended to reduce the benefits provided thereunder, the benefits
thereafter provided under any comparable plan maintained by the Corporation or any Subsidiary or by
the party or parties to the Change in Control shall be no less favorable to the individuals
previously eligible to participate in the amended or eliminated plan or program than the benefits



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provided under comparable plans or programs to similarly situated employees or retirees, as
applicable, of the party or parties to the Change in Control.



     (d)     General Provisions.





     (i)     No Mitigation of Damages. No employee shall be required to mitigate the
amount of any payment or benefit provided for in any plan or program of the corporation or a
Subsidiary by seeking other employment or otherwise and, except as otherwise provided in the
Chevron Corporation Change in Control Surplus Employee Severance Program for Salary Grades
27 to 30 or the Chevron Corporation Change in Control Surplus Employee Severance Program for
Salary Grades 40 and Above, as applicable, no such payment shall be offset or reduced by the
amount of any compensation or benefits provided to any employee in any subsequent
employment.




     (ii)     Severability. The provisions of this Program shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof




     (iii)     Successors and Assigns. The Program shall be binding upon and shall
inure to the benefit of the Corporation, its successors and assigns and the Corporation
shall require any successor or assign to expressly assume and agree to perform the Program
in the same manner and to the same extent that the Corporation would be required to perform
them if no such succession or assignment had taken place. The term “the Corporation” as
used herein shall include such successors and assigns. The term “successors and assigns” as
used herein shall mean a corporation or other entity acquiring all or substantially all the
assets and business of the corporation (including the Program) whether by operation of law
or otherwise.




     (iv)     No Right of Setoff. The Corporation’s obligation to make the payments and
provide the benefits included in the Program and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without limitation, any
setoff, counterclaim, recoupment, defense or other rights which the Corporation may have
against the affected employee or others.




     (v)     Waiver. No provision of the Program may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed by the
affected employee and the Corporation. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or provision of the
Program to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the time or at any prior or subsequent time.



Section 4.     Payment of Tax Equalization Benefits.




     (a)     Eligibility. This Section 4 shall be applicable to any individual who is eligible
to receive an award under the Chevron Corporation Long-Term Incentive Plan, as amended from time to
time. Such individuals shall be referred to in this Section 4 as “Eligible Employees.”



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     (b)     Tax Equalization Benefits. If any payments, distributions or other benefits
payable by or from the Corporation to or for the benefit of an Eligible Employee in connection with
or in any way related (or deemed related) to a Change in Control from any source whatsoever
(collectively the “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code
or any interest or penalties are incurred by the Eligible Employee with respect to such excise tax
(such excise tax, together with any such interest and penalties, are collectively referred to as
the “Excise Tax”), then the Payment shall be limited to the largest amount which would not cause
the Eligible Employee to be subject to the Excise Tax (the “Limited Payment”). The preceding
sentence shall not apply, however, if the Payment (prior to such limitation) exceeds the Limited
Payment by more than the lesser of ten percent of the Payment or $50,000. Where the Payment is not
limited to the Limited Payment, the Eligible Employee shall be entitled to receive from the
Corporation or the Subsidiary which employs the Eligible Employee an additional payment (the
“Equalization Amount”) in an amount such that after payment by the Eligible Employee of all taxes
(including, without limitation, any income and employment taxes and any interest and penalties
imposed thereto) and the Excise Tax imposed on the Equalization Amount, the Eligible Employee
retains an amount of the Equalization Payment equal to the Excise Tax imposed upon the Payment;
provided, however, that the maximum Equalization Amount payable to an Eligible Employee shall not
exceed 2.99 times the Eligible Employee’s “base amount” as defined in Section 280G of the Code.
All calculations required pursuant to the Program shall be performed by the Accountants based on
information supplied by the Corporation and the Eligible Employee. All fees and expenses of the
Accountants shall be paid by the Corporation. In the event that an Eligible Employee’s Payment is
limited to a Limited Payment, the components of the Payment shall be reduced in the following
order, solely to the extent necessary to reduce the Payment to the Limited Payment:




     (i)     Payments pursuant to a severance program described in Section 3(a);




     (ii)     Payments pursuant to a performance unit granted under the Chevron Corporation
Long-Term Incentive Plan which was accelerated by reason of the Change in Control;




     (iii)     The right to exercise a stock option granted under the Chevron Corporation
Long-Term Incentive Plan the vesting of which was accelerated by reason of the Change in
Control; and




     (iv)     Any other component of the Payment



Section 5.     Administration.




     (a)     The Committee. The Program shall be administered by the Management Compensation
Committee of the Board, or any successor thereto. The Board may at any time replace the Management
Compensation Committee with another Committee.



     (b)     Actions by the Committee. The Committee shall hold meetings at such times and
places as it may determine. Acts approved by a majority of the members of the Committee present at
a meeting at which a quorum is present, or acts reduced to or approved in writing by a majority of
the members of the Committee, shall be the valid acts of the Committee.



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     (c)     Powers of the Committee. The Committee shall have the authority to administer the
Program in its sole discretion. To this end, the Committee is authorized to construe and interpret
the Program, to promulgate, amend and rescind Rules relating to the implementation of the Program
and to make all other determinations necessary or advisable for the administration of the Program.
Subject to the requirements of applicable law, the Committee may designate persons other than
members of the Committee to carry out its responsibilities and may prescribe such conditions and
limitations as it may deem appropriate. Any determination, decision or action of the Committee in
connection with the construction, interpretation, administration, or application of the Program
shall be final, conclusive and binding upon all persons participating in the Program and any person
validly claiming under or through persons participating in the Program.



     (d)     Liability of Committee Members. No member of the Board or the Committee will be
liable for any action or determination made in good faith by the Board or the Committee with
respect to the Program.



Section 6.     Amendment or Termination of the Program.




     The Board may amend, suspend or terminate the Program at any time; provided, however, that no
amendment, suspension or termination which was approved by the Board during the Benefit Protection
Period shall be valid or effective if such amendment, suspension or termination would alter the
provisions of this Section 6, adversely affect an Eligible Employee’s right to or amount of an
Equalization Amount under the Program, whether or not the Eligible Employee’s employment had
terminated at the time the amendment, suspension or termination was so approved, or otherwise
eliminate or reduce any protection provided by the Program; provided, however, that any such
amendment, suspension or termination may be effected, even if so approved after such a public
announcement, if (a) the amendment, suspension or revision is approved after any plans have been
abandoned to effect the transaction which, if effected, would have constituted a Change in Control
and the event which would have constituted the Change in Control has not occurred, and (b) within a
period of six months after such approval, no other event constituting a Change in Control shall
have occurred, and no public announcement of a proposed event which would constitute a Change in
Control shall have been made, unless thereafter any plans to effect the Change in Control have been
abandoned and the event which would have constituted the Change in Control has not occurred. Any
amendment, suspension or termination of the Program which is approved by the Board prior to a
Change in Control at the request of a third party who effectuates a Change in Control shall be
deemed to be an amendment, suspension or termination which is approved during the Benefit
Protection Period.



Section 7.     General.




     (a)     No Right of Employment. Nothing contained in the Program nor any action of the
Committee pursuant to the Program shall give any individual any right to remain in the employ of
the Corporation or to impair the Corporation’s right to terminate the employment of any individual
at any time, with or without cause, which right is hereby reserved.



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     (b)     Costs of the Program. The costs and expenses of administering the Program shall
be borne by the Corporation.



     (c)     No Assignment. The interest and property rights of any individual under the
Program shall not be subject to option or be assignable either by voluntary or involuntary
assignment or by operation of law, including (without limitation) bankruptcy, garnishment,
attachment or other creditor’s process, and any act in violation of this Section 7(c) shall be
void.



     (d)     Applicable Law. The Program shall be administered, enforced, construed and
governed in accordance with the laws of the State of California, without regard to the conflicts of
laws principles thereof



     (e)     Participant’s Rights Unsecured. The Program is not intended and shall not be
construed to require the Corporation to find any of the benefits provided hereunder or to establish
a trust for such purpose. The interest under the Program of any individual shall be an unsecured
claim against the general assets of the Corporation.



Section 8.     Execution.




     To record the adoption of the amended and restated Chevron Corporation Benefit Protection
Program to read as set forth herein effective December 7, 2005, Chevron Corporation has caused its
authorized officer to affix the corporate name hereto
this 12th day of December , 2005.



	 	 	 
	 

	 	CHEVRON CORPORATION

	 
	 	 
	 

	 	By: /s/ Lydia I. Beebe                                                  
	 

	 	       Lydia I. Beebe
       Corporate Secretary
    
	 
	 	 
	Attest: /s/ Patricia L. Tai                                               
	 	 
	            Patricia
L. Tai
            Assistant Secretary
	 	 







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