Document:

exv10w2

Exhibit 10.2

CHEVRON INCENTIVE PLAN

(Amended and Restated Effective January 1, 2008)

E-17

 

TABLE OF CONTENTS 

	 	 	 	 	 	 	 	 	 
	SECTION I. PURPOSE	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	SECTION II. EFFECTIVE DATE	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	SECTION III. DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	 
	 	(a)	 	“Annual Income”	 	 	E-20	 
	 
	 	(b)	 	“Award”	 	 	E-20	 
	 
	 	(c)	 	“Benefit Protection Period”	 	 	E-20	 
	 
	 	(d)	 	“Board”	 	 	E-20	 
	 
	 	(e)	 	“Business in Competition”	 	 	E-20	 
	 
	 	(f)	 	“Change in Control”	 	 	E-20	 
	 
	 	(g)	 	“Code”	 	 	E-20	 
	 
	 	(h)	 	“Committee”	 	 	E-21	 
	 
	 	(i)	 	“Corporation”	 	 	E-21	 
	 
	 	(j)	 	“Corporation Confidential Information”	 	 	E-21	 
	 
	 	(k)	 	“Covered Employee”	 	 	E-21	 
	 
	 	(l)	 	“Director”	 	 	E-21	 
	 
	 	(m)	 	“Document”	 	 	E-21	 
	 
	 	(n)	 	“Eligible Employee”	 	 	E-22	 
	 
	 	(o)	 	“Executive Committee”	 	 	E-22	 
	 
	 	(p)	 	“Independent Director”	 	 	E-22	 
	 
	 	(q)	 	“Misconduct”	 	 	E-22	 
	 
	 	(r)	 	“Outside Director”	 	 	E-23	 
	 
	 	(s)	 	“Participant”	 	 	E-23	 
	 
	 	(t)	 	“Payroll”	 	 	E-23	 
	 
	 	(u)	 	“Performance Year”	 	 	E-23	 
	 
	 	(v)	 	“Plan”	 	 	E-23	 
	 
	 	(w)	 	“Rules”	 	 	E-24	 
	 
	 	(x)	 	“Subsidiary”	 	 	E-24	 
	 
	 	(y)	 	“Successors or Assigns”	 	 	E-24	 
	 
	 	(z)	 	“Termination”, “Terminated”, or “Terminates”	 	 	E-24	 
	 
	 	 	 	 	 	 	 	 
	SECTION IV. ADMINISTRATION	 	 	E-24	 
	 
	 	 	 	 	 	 	 	 
	 
	 	(a)	 	Composition of the Committee	 	 	E-24	 
	 
	 	(b)	 	Actions by the Committee	 	 	E-24	 
	 
	 	(c)	 	Powers of the Committee	 	 	E-25	 
	 
	 	(d)	 	Liability of Committee Members	 	 	E-26	 
	 
	 	(e)	 	Administration of the Plan Following a Change in Control	 	 	E-26	 
	 
	 	 	 	 	 	 	 	 
	SECTION V. AWARDS UNDER THE PLAN	 	 	E-26	 
	 
	 	 	 	 	 	 	 	 
	 
	 	(a)	 	Discretion to Grant Awards	 	 	E-26	 
	 
	 	(b)	 	Limitation for Covered Employees	 	 	E-26	 
	 
	 	(c)	 	Awards Payable After Change in Control	 	 	E-26	 
	 
	 	(d)	 	Effect of Mandatory Wage Controls	 	 	E-27	 

E-18

 

	 	 	 	 	 	 	 	 	 
	SECTION VI. PAYMENT OF AWARDS	 	 	E-27	 
	 
	 	 	 	 	 	 	 	 
	 
	 	(a)	 	Non-Deferred Awards	 	 	E-27	 
	 
	 	(b)	 	Deferral of Awards	 	 	E-27	 
	 
	 	 	 	 	 	 	 	 
	SECTION VII. ASSIGNABILITY	 	 	E-27	 
	 
	 	 	 	 	 	 	 	 
	SECTION VIII. FORFEITURE FOR MISCONDUCT	 	 	E-28	 
	 
	 	 	 	 	 	 	 	 
	SECTION IX. AMENDMENT OF THE PLAN OR AWARDS	 	 	E-28	 
	 
	 	 	 	 	 	 	 	 
	SECTION X. GENERAL PROVISIONS	 	 	E-29	 
	 
	 	 	 	 	 	 	 	 
	 
	 	(a)	 	Participant’s Rights Unsecured	 	 	E-29	 
	 
	 	(b)	 	Authority to Establish a Grantor Trust	 	 	E-29	 
	 
	 	(c)	 	Awards in Foreign Countries	 	 	E-29	 
	 
	 	(d)	 	Costs of the Plan	 	 	E-29	 
	 
	 	(e)	 	Binding Effect of Plan	 	 	E-29	 
	 
	 	(f)	 	No Waiver of Breach	 	 	E-29	 
	 
	 	(g)	 	No Right to Employment	 	 	E-29	 
	 
	 	(h)	 	Choice of Law	 	 	E-29	 
	 
	 	(i)	 	Severability	 	 	E-30	 
	 
	 	 	 	 	 	 	 	 
	SECTION XI. EXECUTION	 	 	E-30	 

E-19

 

CHEVRON INCENTIVE PLAN

(Amended and Restated Effective January 1, 2008)

SECTION I. PURPOSE.

     The purpose of the Chevron Incentive Plan is to obtain, develop, retain and reward high
caliber employees, stimulate constructive and imaginative thinking, and contribute to the growth
and profits of the Corporation.

SECTION II. EFFECTIVE DATE.

     The Plan, formerly known as the Management Incentive Plan of Chevron Corporation, was adopted
effective January 1, 1966 and approved by the Corporation’s stockholders at the Annual Meeting on
May 5, 1966. Prior to this amendment and restatement, the Plan was last amended and restated
effective January 1, 2005; further amended December 7, 2005 and December 6, 2006; and last approved
by the Corporation’s stockholders at the Annual Meeting on May 15, 2002. This Restatement shall
apply to all Plan distributions made after December 31, 2008. This Plan, effective, January 1,
2008, is also the successor to the Chevron Success Sharing Program.

SECTION III. DEFINITIONS.

     For
purposes of the Plan, the following terms have the meanings set forth below:

     (a) “Annual Income” means the Corporation’s reported earnings before special items and
account changes for the Performance Year.

     (b) “Award” means a cash payment approved by the Committee under Section V. of the
Plan.

     (c) “Benefit Protection Period” means the period commencing on the date 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.

     (d) “Board” means the Board of Directors of the Corporation.

     (e) “Business in Competition” means any person, organization or enterprise which is
engaged in or is about to be engaged in any line of business engaged in by the Corporation at such
time.

     (f) “Change in Control” means a “change in control” of the Corporation as defined in
Article VI. of the By-Laws of the Corporation, as such By-Laws may be amended from time to time.

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

E-20

 

     (h) “Committee” means the committee of the Board that it appoints to administer the
Plan. In the absence of specific action by the Board, the Board shall be deemed to have appointed
the Board’s Management Compensation Committee.

     (i) “Corporation” means Chevron Corporation, a Delaware corporation, or any Successors
or Assigns. Where the context shall permit, “Corporation” shall include the Subsidiaries of Chevron
Corporation.

     (j) “Corporation Confidential Information” includes:

          (1) Information embodied in inventions, discoveries and improvements, whether patentable or
unpatentable, including trade secrets;

          (2) Geological and geophysical data and analyses thereof, well information, discoveries,
development initiatives, reserves, offshore bidding strategies, potential value of unleased
offshore acreage, exploration and other business strategies and investment plans, business methods,
current and planned technology, processes and practices relating to the existence of, exploration
for, or the development of oil, gas, or other potentially valuable raw material, product, mineral
or natural resource of any kind;

          (3) Confidential personnel or Human Resources data;

          (4) Customer lists, pricing, supplier lists, and Corporation processes;

          (5) Any other information having present or potential commercial value; and

          (6) Confidential information of any kind in possession of the Corporation, whether developed
for or by the Corporation (including information developed by the Participant), received from a
third party in confidence, or belonging to others and licensed or disclosed to the Corporation in
confidence for use in any aspect of its business and without regard to whether it is designated or
marked as such through use of such words as “classified,”
“confidential” or “restricted”;

     Provided, however, that Corporation Confidential Information shall not include any information
that is or becomes generally known through no wrongful act or omission of the Participant.
However, information shall not fail to be Corporation Confidential Information solely because it is
embraced by more general information available on a non-confidential basis.

     (k) “Covered Employee” means the Corporation’s principal executive officer, principal
financial officer and three other most highly compensated executive officers (as defined in Item
402 of Regulation S-K) who were serving as such at the end of the last completed Performance Year.

     (l) “Director” means a member of the Board.

     (m) “Document” means any devices, records, data, notes, reports, abstracts, proposals,
lists, correspondence (including e-mails), specifications, drawings, blueprints,
sketches, materials, equipment, reproductions of any kind made from or about such documents or
information contained therein, recordings, or similar items.

E-21

 

     (n) “Eligible Employee” means any individual who is an employee on the Payroll.

     (o) “Executive Committee” means the Executive Committee of the Corporation.

     (p) “Independent Director” means a member of the Board that is independent of the
Corporation within the meaning of the rules of the New York Stock Exchange and the Corporation’s
Corporate Governance Guidelines.

     (q) “Misconduct” of a Participant means:

          (1) The Corporation has been required to prepare an accounting restatement due to material
noncompliance, as a result of misconduct, with any financial reporting requirement under the
securities laws, and the Committee has determined in its sole discretion that the Participant:

               (A) Had knowledge of the material noncompliance or circumstances giving rise to such
noncompliance and willfully failed to take reasonable steps to bring it to the attention of
appropriate individuals within the Corporation; or

               (B) Knowingly engaged in practices which materially contributed to the circumstances that
enabled such material noncompliance to occur;

          (2) A Participant commits an act of embezzlement, fraud or theft with respect to the property
of the Corporation, materially violates the Corporation’s conflict of interest policy, or breaches
his or her fiduciary duty to the Corporation;

          (3) A Participant, while still employed by the Corporation:

               (A) Willfully misappropriates or discloses to any person, firm or corporation any Corporation
Confidential Information, unless the Participant is expressly authorized by the Corporation’s
management to disclose such Corporation Confidential Information, pursuant to a written
non-disclosure agreement that sufficiently protects it;

               (B) Directly or indirectly engages in, commences employment with, or materially renders
services, advice or assistance to any Business in Competition with the Corporation other than on
behalf of the Corporation;

               (C) Induces or attempts to induce, directly or indirectly, any of the Corporation’s customers,
employees, representatives or consultants to terminate, discontinue or cease working with or for
the Corporation, or to breach any contract with the Corporation, in order to work with or for, or
enter into a contract with, the Participant or any third party other than when such action is taken
on behalf of the Corporation;

E-22

 

          (4) A Participant willfully fails to promptly return all Documents and other tangible items
belonging to the Corporation that are in his or her possession or control upon termination of
employment, whether pursuant to retirement or otherwise;

          (5) A Participant willfully commits an act which, under applicable law, constitutes the
misappropriation of a Corporation trade secret or otherwise violates the law of unfair competition
with respect to the Corporation; including, but not limited to, unlawfully:

               (A) Using or disclosing Corporation Confidential Information; or

               (B) Soliciting (or contributing to the soliciting of) the Corporation’s customers, employees,
representatives, or consultants to:

                    (i) Terminate, discontinue or cease working with or for the Corporation; or

                    (ii) To breach any contract with the Corporation, in order to work with or for, or enter into
a contract with, the Participant or any third party;

          (6) A Participant willfully fails to inform any new employer of the Participant’s continuing
obligation to maintain the confidentiality of the trade secrets and other Corporation Confidential
Information obtained by the Participant during the term of his or her employment with the
Corporation;

          The Committee shall determine in its sole discretion whether the Participant has engaged in
any of the acts set forth in subsections (1) through (6) above, and its determination shall be
conclusive and binding on all interested persons.

     (r) “Outside Director” means an outside director of the Board within the meaning of
Section 162(m) of the Code.

     (s) “Participant” means an Eligible Employee who receives an Award under the Plan.

     (t) “Payroll” means the system used by the Corporation to pay those individuals it
regards as Corporation employees for their services and to withhold employment taxes from the
compensation it pays to such employees. “Payroll” does not include any system the Corporation
uses to pay individuals whom it does not regard as Corporation employees and for whom it does not
actually withhold employment taxes (including, but not limited to, individuals it regards as
independent contractors) for their services.

     (u) “Performance Year” means the Corporation’s fiscal year with respect to which the
Committee makes Awards to Eligible Employees under the Plan.

     (v) “Plan” means the Chevron Incentive Plan, as amended from time to time.
Previously, the Chevron Incentive Plan was known as the Management Incentive Plan of Chevron
Corporation.

E-23

 

     (w) “Rules” mean the rules promulgated by the Committee within its sole discretion to
administer the Plan.

     (x) “Subsidiary” means any corporation or entity with respect to which the
Corporation, one or more Subsidiaries, or the Corporation together with one or more Subsidiaries,
owns not less than eighty percent (80%) of the total combined voting power of all classes of stock
entitled to vote, or not less than eighty percent (80%) of the total value of all shares of all
classes of stock.

     (y) “Successors or Assigns” means a corporation or other entity acquiring all or
substantially all the assets and business of the Corporation (including the Plan) whether by
operation of law or otherwise, including any corporation or other entity effectuating a Change in
Control of the Corporation.

     (z) “Termination”, “Terminated”, or “Terminates” means that an
Eligible Employee’s formal employment relationship with the Corporation has ended, including by
reason of death. A formal employment relationship with the Corporation cannot exist unless an
individual is on the Payroll.

SECTION IV. ADMINISTRATION.

     The Plan shall be administered by the Committee.

     (a) Composition of the Committee.

          (1) The Committee shall consist of not less than a sufficient number of Outside Directors so
as to qualify the Committee to administer the Plan as contemplated by Section 162(m) of the Code
and each of whom is also an Independent Director.

          (2) The Board shall appoint one (1) of the members of the Committee as chair.

          (3) If any member of the Committee does not qualify as an Outside Director, Awards under the
Plan with respect to a Covered Employee shall be administered by a subcommittee consisting of all
Committee members who qualify as Outside Directors. Such subcommittee must consist of at least two
(2) members of the Committee.

          (4) The Board may from, time to time, remove members from, add members to, or fill vacancies
on the Committee. If fewer than two (2) Committee members qualify as an Outside Director, the Board
shall appoint one or more new members who so qualify.

          (5) In the event that the Committee will not satisfy the requirements of paragraph (a)(1)
above, the Board shall appoint another committee that shall satisfy such requirements.

     (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.

E-24

 

     (c) Powers of the Committee.

          (1) The Committee shall have the authority to administer the Plan in its sole discretion. The
Committee’s authority includes the rights to:

               (A) Construe and interpret the Plan;

               (B) Promulgate, amend, interpret, and rescind Rules relating to the implementation of the
Plan;

               (C) Select which Eligible Employees to whom to make an Award and under what conditions;

               (D) Determine the Award amount;

               (E) Determine other terms and conditions of Awards;

               (F) Adopt procedures for the disposition of Awards in the event of a Participant’s divorce or
dissolution of marriage; and

               (G) Make all other determinations necessary or advisable for the administration of the Plan.

          (2) Notwithstanding Section IV.(c)(1) of the Plan:

               (A) No provision in the Plan referencing the Committee’s discretion shall be construed as
granting the Committee the authority to exercise discretion in a manner that is inconsistent with
the Plan; and

               (B) Adoption of Rules by the Committee is an exercise of the Committee’s discretion. Once
adopted, the Committee may not exercise additional discretion that is inconsistent with the Rules
without amending the Rules.

          (3) Subject to the requirements of applicable law, the Committee may designate the
Corporation’s Executive Committee to carry out its responsibilities and may prescribe such
conditions and limitations as it may deem appropriate in its sole discretion; provided, however,
the Committee may not delegate its authority with regard to the selection for participation of or
the grant of Awards to persons in salary classification PSG 41 or above (or at a level determined
by the Committee in its sole discretion to be the equivalent under a successor salary
classification system). The Executive Committee may further delegate this function as it deems
appropriate. The Committee may also designate the Corporation’s Vice President, Human Resources,
to perform the day-to-day administrative tasks as may be necessary for the Committee’s
administration of the Plans. Any determination, decision or action of the Committee in connection
with the construction, interpretation, administration, or application of
the Plan shall be final, conclusive and binding upon all persons participating in the Plan and
any person validly claiming under or through persons participating in the Plan.

E-25

 

     (d) Liability of Committee Members. No member of the Board or the Committee shall be
liable for any action or determination made in good faith by the Board or the Committee with
respect to the Plan or any Award under it.

     (e) Administration of the Plan Following a Change in Control. Within thirty (30) days
after the occurrence of a Change in Control, the Committee shall appoint an independent
organization which shall thereafter administer the Plan and have all of the powers and duties
formerly held and exercised by the Committee with respect to the Plan as provided in Section
IV.(c). Upon such appointment, the Committee shall cease to have any responsibility with respect
to the administration of the Plan.

SECTION V. AWARDS UNDER THE PLAN.

     (a) Discretion to Grant Awards. Subject to Section V.(b); the Committee, in its
discretion, may approve an Award under the Plan to any Eligible Employee for the Performance Year
in any amount.

     (b) Limitation for Covered Employees. The amount of any Award granted to Covered
Employees shall be subject to the following limitations:

          (1) 0.5% of the Corporation’s Annual Income shall be set aside for Awards to the Covered
Employees.

          (2) The maximum Award amount for the Covered Employees shall equal the indicated percentage of
the aggregate fund set forth in Section V.(b)(1), determined pursuant to the following schedule:

	 	 	 	 	 
	Officer	 	Percentage
	CEO
	 	 	40	%
	Other Covered Employees
	 	  	15	% each
	Total
	 	 	100	%

          (3) The Committee in its sole discretion may reduce the Award otherwise payable to any Covered
Employee as determined above, but in no event shall any such reduction result in an increase of the
Award payable to any other Participant, including but not limited to any other Covered Employee.

     (c) Awards Payable After Change in Control. Notwithstanding Section V.(a) and (b),
the following shall apply with respect to Awards for the Performance Year in which a Change in
Control occurs (and for the prior Performance Year to the extent such Awards have not been granted
prior to the Change in Control):

E-26

 

          (1) Eligible Employees below PSG 44 shall be entitled to receive an Award for such Performance
Year(s) in an amount that is not less than that Eligible Employee’s target Award, as may be
established from time-to-time by the Committee; provided that such Eligible Employee:

               (A) Received an Award for the Performance Year for which the Award had been paid prior to the
Change in Control;

               (B) Would have received such an Award but for his or her performance; and

               (C) Is an otherwise similarly situated Eligible Employee, who shall be determined by the
independent organization appointed by the Committee pursuant to this Section V.(c) on the basis of
the Committee’s practices in the Performance Year for which the Committee last determined Awards.

               Such Awards shall be prorated for the portion of the year the employee is an Eligible Employee
during the Performance Year.

               Eligible Employees above PSG 43 shall be entitled to receive an Award, if any, for such
Performance Year(s) as determined by the independent organization appointed by the Committee
pursuant to Section IV.(e).

          (2) All such Awards shall be vested upon grant.

     (d) Effect of Mandatory Wage Controls. Notwithstanding anything in this Section V. to
the contrary, the Committee may cancel the payment of all or any part of an Award under the Plan if
the Committee determines that the payment of such Award or part thereof would violate any mandatory
wage controls in effect at the time payment would otherwise be made.

SECTION VI. PAYMENT OF AWARDS.

     (a) Non-Deferred Awards. Non-deferred Awards shall be paid in the form of a cash lump
sum in the Payroll for which payment is scheduled by the Corporation, which in no event shall be
later than two and one-half (2 1/2) months following the end of the calendar year in which the
Committee makes the Award.

     (b) Deferral of Awards. Deferral of Awards shall be determined under the terms of the
Chevron Corporation Deferred Compensation Plan for Chevron Employees II (or any successor plan),
its Rules, and in compliance with the requirements of Section 409A of the Code.

SECTION VII. ASSIGNABILITY.

     Except as otherwise determined by the Committee, or a domestic relations order enforceable
under applicable law, a Participant’s Award or the interest, if any, of a Participant’s beneficiary
may not be assigned, either by voluntary or involuntary assignment or by operation of law,
including, but without limitation, garnishment, attachment or other creditor’s process and any act
in violation hereof shall be void.

E-27

 

SECTION VIII. FORFEITURE FOR MISCONDUCT.

     Notwithstanding any other provision of the Plan to the contrary, if a Participant engages in
Misconduct, the Committee (or its delegate) may determine that:

     (a) The Participant shall not receive any future Awards pursuant to the Plan; and

     (b) The Corporation may demand repayment of any Award received after June 29, 2005 with
respect to a period after the date of the Participant’s Misconduct; provided that, following a
Change in Control, this Section VIII. shall apply only in the event of Misconduct as defined in
Section II.(q)(1) and (2) of the Plan.

     (c) Any provision of this Section VIII. which is determined by a court of competent
jurisdiction to be invalid or unenforceable should be construed or limited in a manner that is
valid and enforceable and that comes closest to the business objectives intended by such invalid or
unenforceable provision, without invalidating or rendering unenforceable the remaining provisions
of this Section VIII;

SECTION IX. AMENDMENT OF THE PLAN OR AWARDS.

     The Board may, at any time, alter, amend or terminate the Plan, provided:

     (a) Subject to Sections V.(b)(3) and (d), no amendment, suspension or termination of the Plan
nor any amendment, cancellation or modification of any Award outstanding under it that would
adversely affect the right of any Participant in an Award or grant previously made under the Plan
shall be effective without the written consent of the affected Participant except to the extent
necessary to comply with applicable law (including compliance with any provision of law concerning
favorable taxation); and

     (b) No amendment, revision, suspension or discontinuation of the Plan (including any amendment
to this Section IX.) approved by the Board during the Benefit Protection Period under Change in
Control shall be valid or effective if such amendment, revision, suspension or discontinuation
would alter the provisions of this Section IX. or adversely affect an Award outstanding under the
Plan; provided, however, any amendment, revision, suspension or discontinuation may be effected,
even if so approved after the public announcement of the proposed transaction which effected, would
have constituted a Change in Control, if:

          (1) The alteration, amendment or termination 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

          (2) 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.

E-28

 

          (3) Any alteration, amendment or termination of the Plan 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 alteration, amendment or termination approved during the Benefit Protection Period.

SECTION X. GENERAL PROVISIONS.

     (a) Participant’s Rights Unsecured. A Participant shall have no rights other than
those of a general creditor of the Corporation. Awards shall represent unfunded and unsecured
obligations against the general assets of the Corporation.

     (b) Authority to Establish a Grantor Trust. The Committee is authorized in its sole
discretion to establish a grantor trust for the purpose of providing security for the payment of
Awards under the Plan; provided, however, that no Participant shall be considered to have a
beneficial ownership interest (or any other sort of interest) in any specific asset of the
Corporation or of its subsidiaries or affiliates as a result of the creation of such trust or the
transfer of funds or other property to such trust.

     (c) Awards in Foreign Countries. The Committee shall have the authority to adopt such
modifications, procedures and sub-plans as may be necessary or desirable to comply with provisions
of the laws of foreign countries in which the Corporation may operate to assure the viability of
the benefits of Awards made to Participants employed in such countries and to meet the intent of
the Plan.

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

     (e) Binding Effect of Plan. The Plan shall be binding upon and shall inure to the
benefit of the Corporation, its Successors or Assigns and the Corporation shall require any
Successor or Assign to expressly assume and agree to perform the Plan in the same manner and to the
same extent that the Corporation would be required to perform it if no such Succession or
Assignment had taken place.

     (f) No Waiver of Breach. 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 Plan to be
performed by such other party shall be deemed a waiver of similar or dissimilar provisions of
conditions at the same or at any prior or subsequent time.

     (g) No Right to Employment. Neither the Plan, its Rules, nor any Award granted under
the Plan shall be deemed to give any individual a right to remain employed by the Corporation. The
Corporation reserves the right to Terminate any Eligible Employee at any time and for any reason,
which right is hereby reserved.

     (h) Choice of Law. The Plan shall be administered, construed and governed in
accordance with the Code, and the laws of the State of California, but without regard to its
conflict of law rules. Notwithstanding the foregoing, domestic relations orders and the Section
III.(q) definition of Misconduct shall be subject to the jurisdiction’s law that would otherwise be
applicable, but without regard to that particular jurisdiction’s conflict of laws rules.

E-29

 

     (i) Severability. The provisions of the Plan shall be deemed severable and the
validity or unenforceability of any provision shall not affect the validity or enforceability of
the other provisions hereof.

SECTION XI. EXECUTION.

     Approved by the Board at a meeting held on December 10, 2008 and effective
January 1, 2008 and executed pursuant to the Board’s delegation.

	 	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Robert J. Eaton	 	 	 	Date	 	December 10, 2008	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

E-30exv10w3

Exhibit 10.3

LONG-TERM INCENTIVE PLAN OF CHEVRON CORPORATION

(Amended and Restated Effective January 1, 2009)

E-31

 

TABLE OF CONTENTS

	 	 	 	 	 
	SECTION I. PURPOSE OF THE PLAN
	 	 	E-35	 
	 
	 	 	 	 
	SECTION II. DEFINITIONS
	 	 	E-35	 
	 
	 	 	 	 
	(a)  “Award”
	 	 	E-35	 
	(b)  “Benefit Protection Period”
	 	 	E-35	 
	(c)  “Board”
	 	 	E-35	 
	(d)  “Business in Competition”
	 	 	E-35	 
	(e)  “Change in Control”
	 	 	E-35	 
	(f)  “Code”
	 	 	E-35	 
	(g)  “Commission”
	 	 	E-36	 
	(h)  “Committee”
	 	 	E-36	 
	(i)  “Common Stock”
	 	 	E-36	 
	(j)  “Corporation”
	 	 	E-36	 
	(k)  “Corporation Confidential Information”
	 	 	E-36	 
	(l)  “Covered Employee”
	 	 	E-36	 
	(m)  “Director”
	 	 	E-36	 
	(n)  “Dividend Equivalent”
	 	 	E-37	 
	(o)  “Document”
	 	 	E-37	 
	(p)  “Eligible Employee”
	 	 	E-37	 
	(q)  “Exchange Act”
	 	 	E-37	 
	(r)  “Fair Market Value”
	 	 	E-37	 
	(s)  “Full Value Award”
	 	 	E-37	 
	(t)  “Grant Eligible Employee”
	 	 	E-37	 
	(u)  “Independent Director”
	 	 	E-37	 
	(v)  “Misconduct”
	 	 	E-37	 
	(w)  “Non-Employee Director”
	 	 	E-39	 
	(x)  “Non-Stock Award”
	 	 	E-39	 
	(y)  “Non-Stock Award Agreement”
	 	 	E-39	 
	(z)  “Optionee”
	 	 	E-39	 
	(aa)  “Other Share-Based Award”
	 	 	E-39	 
	(bb)  “Other Share-Based Award Agreement”
	 	 	E-39	 
	(cc)  “Outside Director”
	 	 	E-39	 
	(dd)  “Participant”
	 	 	E-39	 
	(ee)  “Payroll”
	 	 	E-39	 
	(ff)  “Performance Share”
	 	 	E-39	 
	(gg)  “Plan”
	 	 	E-39	 
	(hh)  “Restricted Stock”
	 	 	E-39	 
	(ii)  “Restricted Stock Agreement”
	 	 	E-39	 
	(jj)  “Restricted Stock Award”
	 	 	E-40	 
	(kk)  “Restricted Stock Unit”
	 	 	E-40	 
	(ll)  “Restriction Period”
	 	 	E-40	 
	(mm)  “Rule 16b-3”
	 	 	E-40	 
	(nn)  “Rules”
	 	 	E-40	 
	(oo)  “Share”
	 	 	E-40	 

E-32

 

	 	 	 	 	 
	(pp)  “Stock Appreciation Right” or “SAR”
	 	 	E-40	 
	(qq)  “Stock Option”
	 	 	E-40	 
	(rr)  “Stock Option Agreement”
	 	 	E-40	 
	(ss)  “Subsidiary”
	 	 	E-40	 
	(tt)  “Stock Unit”
	 	 	E-40	 
	(uu)  “Successors or Assigns”
	 	 	E-40	 
	(vv)  “Termination”, “Terminated”, or “Terminate”
	 	 	E-40	 
	 
	 	 	 	 
	SECTION III. ADMINISTRATION
	 	 	E-41	 
	 
	 	 	 	 
	(a)  Composition of the Committee
	 	 	E-41	 
	(b)  Actions by the Committee
	 	 	E-41	 
	(c)  Powers of the Committee
	 	 	E-41	 
	(d)  Liability of Committee Members
	 	 	E-42	 
	(e)  Administration of the Plan Following a Change in Control
	 	 	E-43	 
	 
	 	 	 	 
	SECTION IV. DURATION OF THE PLAN
	 	 	E-43	 
	 
	 	 	 	 
	SECTION V. SHARES SUBJECT TO THE PLAN
	 	 	E-43	 
	 
	 	 	 	 
	(a)  Maximum Number of Shares
	 	 	E-43	 
	(b)  Accounting for Number of Shares
	 	 	E-43	 
	(c)  Source of Stock Issued Under the Plan
	 	 	E-43	 
	 
	 	 	 	 
	SECTION VI. PERSONS ELIGIBLE FOR AWARDS
	 	 	E-44	 
	 
	 	 	 	 
	SECTION VII. AGGREGATE LIMITS ON AWARDS
	 	 	E-44	 
	 
	 	 	 	 
	(a)  Stock Options, Stock Appreciation Rights, Restricted Stock and Other
Share-Based Awards
	 	 	E-44	 
	(b)  Non-stock Awards
	 	 	E-44	 
	 
	 	 	 	 
	SECTION VIII. STOCK OPTIONS
	 	 	E-44	 
	 
	 	 	 	 
	(a)  Limitation to Non-Statutory Stock Options
	 	 	E-44	 
	(b)  Awards of Stock Options
	 	 	E-44	 
	(c)  Number of Shares
	 	 	E-44	 
	(d)  Exercise Price
	 	 	E-44	 
	(e)  Method of Payment
	 	 	E-45	 
	(f)  Term and Exercise of Stock Options; Non-Transferability of Stock Options
	 	 	E-45	 
	(g)  Termination of Employment
	 	 	E-46	 
	(h)  Rights as a Stockholder
	 	 	E-46	 
	(i)  Stock Appreciation Rights
	 	 	E-46	 
	 
	 	 	 	 
	SECTION IX. RESTRICTED STOCK
	 	 	E-46	 
	 
	 	 	 	 
	(a)  Restricted Stock Awards
	 	 	E-46	 
	(b)  Terms, Conditions, and Restrictions
	 	 	E-47	 
	(c)  Limitations
	 	 	E-47	 
	(d)  Rights as a Stockholder
	 	 	E-48	 
	(e)  Recording of the Participant’s Interest
	 	 	E-48	 

E-33

 

	 	 	 	 	 
	SECTION X. OTHER SHARE-BASED AWARDS
	 	 	E-48	 
	 
	 	 	 	 
	(a)  Grants
	 	 	E-48	 
	(b)  Terms, Conditions, and Restrictions
	 	 	E-49	 
	(c)  Limitations
	 	 	E-50	 
	 
	 	 	 	 
	SECTION XI. NON-STOCK AWARDS
	 	 	E-50	 
	 
	 	 	 	 
	(a)  Grants
	 	 	E-50	 
	(b)  Terms and Conditions
	 	 	E-50	 
	 
	 	 	 	 
	SECTION XII. RECAPITALIZATION
	 	 	E-51	 
	 
	 	 	 	 
	SECTION XIII. FORFEITURE FOR MISCONDUCT
	 	 	E-52	 
	 
	 	 	 	 
	SECTION XIV. SECURITIES LAW REQUIREMENTS
	 	 	E-53	 
	 
	 	 	 	 
	SECTION XV. AMENDMENTS OF THE PLAN OR AWARDS
	 	 	E-54	 
	 
	 	 	 	 
	(a)  Amendment of the Plan
	 	 	E-54	 
	(b)  Amendments of Awards
	 	 	E-54	 
	(c)  Rights of Participant
	 	 	E-54	 
	 
	 	 	 	 
	SECTION XVI. GENERAL PROVISIONS
	 	 	E-55	 
	 
	 	 	 	 
	(a)  Authority to Satisfy Obligations
	 	 	E-55	 
	(b)  Participants’ Stockholder Rights
	 	 	E-55	 
	(c)  Participant’s Rights Unsecured
	 	 	E-55	 
	(d)  Authority to Establish a Grantor Trust
	 	 	E-55	 
	(e)  No Obligation to Exercise Stock Option
	 	 	E-55	 
	(f)  Participant’s Beneficiary
	 	 	E-55	 
	(g)  Deferral Elections
	 	 	E-55	 
	(h)  Awards in Foreign Countries
	 	 	E-55	 
	(i)  Withholding Taxes
	 	 	E-56	 
	(j)  Other Corporation Benefit and Compensation Programs
	 	 	E-56	 
	(k)  Application of Funds
	 	 	E-56	 
	(l)  Costs of the Plan
	 	 	E-56	 
	(m)  Binding Effect of Plan
	 	 	E-56	 
	(n)  No Waiver of Breach
	 	 	E-56	 
	(o)  No Right to Employment
	 	 	E-57	 
	(p)  Choice of Law
	 	 	E-57	 
	(q)  Severability
	 	 	E-57	 
	 
	 	 	 	 
	SECTION XVII. APPROVAL OF STOCKHOLDERS
	 	 	E-57	 
	 
	 	 	 	 
	SECTION XVIII. EXECUTION
	 	 	E-57	 

E-34

 

LONG-TERM INCENTIVE PLAN OF CHEVRON CORPORATION

(Amended and Restated Effective January 1, 2009)

SECTION I. PURPOSE OF THE PLAN.

     The purpose of the Long-Term Incentive Plan of Chevron Corporation (“Plan”) is to promote and
advance the interests of Chevron Corporation and its stockholders by strengthening the ability of
the Corporation to attract, motivate and retain managerial and other employees, and to strengthen
the mutuality of interests between such employees and the Corporation’s stockholders. The Plan was
originally adopted by the Board on January 24, 1990 and was approved by the stockholders of the
Corporation at the 1990 annual meeting of stockholders. The Plan replaced the Management
Contingent Incentive Plan. The Plan has been amended on various occasions. The Plan was amended
and restated by the Board effective January 28, 2004 and approved by the stockholders of the
Corporation at the 2004 annual meeting of stockholders. The Plan was further amended and restated
effective January 1, 2005 to comply with Section 409A of the Code. It was then amended and
restated effective December 7, 2005 and December 6, 2006. It is now amended and restated effective
January 1, 2009 in order to comply with the Internal Revenue Service’s final regulations under
Section 409A. This restatement of the Plan shall apply to all Awards made after December 31, 2008.
It shall also apply to earlier Awards (other than that of Stock Options, Stock Appreciation Rights,
and Restricted Stock) that will be distributed after December 31, 2008.

SECTION II. DEFINITIONS.

     For purposes of the Plan, the following terms shall have the meanings set forth below:

     (a) “Award” means a grant under the Plan of Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Other Share-Based Awards, or Non-Stock Awards.

     (b) “Benefit Protection Period” means the period commencing on the date 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) “Business in Competition” means any person, organization or enterprise which is
engaged in or is about to be engaged in any line of business engaged in by the Corporation at such
time.

     (e) “Change in Control” means a “change in control” of the Corporation as defined in
Article VI. of the bylaws of the Corporation, as such bylaws may be amended from time to time.

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

E-35

 

     (g) “Commission” means the federal Securities and Exchange Commission.

     (h) “Committee” means the committee of the Board that it appoints to administer the
Plan. In the absence of specific action by the Board, the Board shall be deemed to have appointed
the Board’s Management Compensation Committee.

     (i) “Common Stock” means the $0.75 par value common stock of the Corporation or any
security of the Corporation identified by the Committee as having been issued in substitution,
exchange or lieu thereof.

     (j) “Corporation” means Chevron Corporation, a Delaware corporation, or any Successors
or Assigns. Where the context shall permit, “Corporation” shall include the Subsidiaries of Chevron
Corporation.

     (k) “Corporation Confidential Information” includes:

          (1) Information embodied in inventions, discoveries and improvements, whether patentable or
unpatentable, including trade secrets;

          (2) Geological and geophysical data and analyses thereof, well information, discoveries,
development initiatives, reserves, offshore bidding strategies, potential value of unleased
offshore acreage, exploration and other business strategies and investment plans, business methods,
current and planned technology, processes and practices relating to the existence of, exploration
for, or the development of oil, gas, or other potentially valuable raw material, product, mineral
or natural resource of any kind;

          (3) Confidential personnel or Human Resources data;

          (4) Customer lists, pricing, supplier lists, and Corporation processes;

          (5) Any other information having present or potential commercial value; and

          (6) Confidential information of any kind in possession of the Corporation, whether developed
for or by the Corporation (including information developed by the Participant), received from a
third party in confidence, or belonging to others and licensed or disclosed to the Corporation in
confidence for use in any aspect of its business and without regard to whether it is designated or
marked as such through use of such words as “classified,” “confidential” or “restricted”;

     Provided, however, that Corporation Confidential Information shall not include any information
that is or becomes generally known through no wrongful act or omission of the Participant.
However, information shall not fail to be Corporation Confidential Information solely because it is
embraced by more general information available on a non-confidential basis.

     (l) “Covered Employee” means a covered employee of the Corporation as defined in
Section 162(m) of the Code.

     (m) “Director” means a member of the Board.

E-36

 

     (n) “Dividend Equivalent” means an amount equal to the dividends that would have been
payable with respect to Shares of Common Stock if the Participant held Shares rather than such
Restricted Stock Units.

     (o) “Document” means any devices, records, data, notes, reports, abstracts, proposals,
lists, correspondence (including e-mails), specifications, drawings, blueprints, sketches,
materials, equipment, reproductions of any kind made from or about such documents or information
contained therein, recordings, or similar items.

     (p) “Eligible Employee” means any individual who is an employee on the Payroll of the
Corporation.

     (q) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, or any successor statute.

     (r) “Fair Market Value” of a Share as of a specified date means a price that is based
on the opening, closing, actual, high, low or average selling prices of Shares on the New York
Stock Exchange (or other established exchange or exchanges), on the applicable date, the preceding
trading day, the next succeeding trading day, or an average of trading days as determined by the
Committee in its discretion.

     (s) “Full Value Award” means an Award other than in the form of a Stock Option or a
Stock Appreciation Right and which is settled by the issuance of Shares and which does not provide
for full payment in cash or property for such Shares by the Award recipient as determined under the
Rules.

     (t) “Grant Eligible Employee” means an Eligible Employee that is employed (at the time
of an Award or grant) by the Corporation.

     (u) “Independent Director” means a member of the Board that is independent of the
Corporation within the meaning of the rules of the New York Stock Exchange.

     (v) “Misconduct” of a Participant means:

          (1) The Corporation has been required to prepare an accounting restatement due to material
noncompliance, as a result of misconduct, with any financial reporting requirement under the
securities laws, and the Committee has determined in its sole discretion that the Participant:

               (A) Had knowledge of the material noncompliance or circumstances giving rise to such
noncompliance and willfully failed to take reasonable steps to bring it to the attention of
appropriate individuals within the Corporation; or

               (B) Knowingly engaged in practices which materially contributed to the circumstances that
enabled such material noncompliance to occur;

E-37

 

          (2) A Participant commits an act of embezzlement, fraud or theft with respect to the property
of the Corporation, materially violates the Corporation’s conflict of interest policy, or breaches
his or her fiduciary duty to the Corporation;

          (3) A Participant, while still employed by the Corporation:

               (A) Willfully misappropriates or discloses to any person, firm or corporation any Corporation
Confidential Information, unless the Participant is expressly authorized by the Corporation’s
management to disclose such Corporation Confidential Information, pursuant to a written
non-disclosure agreement that sufficiently protects it;

               (B) Directly or indirectly engages in, commences employment with, or materially renders
services, advice or assistance to any Business in Competition with the Corporation other than on
behalf of the Corporation;

               (C) Induces or attempts to induce, directly or indirectly, any of the Corporation’s customers,
employees, representatives or consultants to terminate, discontinue or cease working with or for
the Corporation, or to breach any contract with the Corporation, in order to work with or for, or
enter into a contract with, the Participant or any third party other than when such action is taken
on behalf of the Corporation;

          (4) A Participant willfully fails to promptly return all Documents and other tangible items
belonging to the Corporation that are in his or her possession or control upon termination of
employment, whether pursuant to retirement or otherwise;

          (5) A Participant willfully commits an act which, under applicable law, constitutes the
misappropriation of a Corporation trade secret or otherwise violates the law of unfair competition
with respect to the Corporation; including, but not limited to, unlawfully:

               (A) Using or disclosing Corporation Confidential Information; or

               (B) Soliciting (or contributing to the soliciting of) the Corporation’s customers, employees,
representatives, or consultants to:

                    (i) Terminate, discontinue or cease working with or for the Corporation; or

                    (ii) To breach any contract with the Corporation, in order to work with or for, or enter into
a contract with, the Participant or any third party;

          (6) A Participant willfully fails to inform any new employer of the Participant’s continuing
obligation to maintain the confidentiality of the trade secrets and other Corporation Confidential
Information obtained by the Participant during the term of his or her employment with the
Corporation;

     The Committee shall determine in its sole discretion whether the Participant has engaged in
any of the acts set forth in subsections (1) through (6) above, and its determination shall be
conclusive and binding on all interested persons.

E-38

 

     (w) “Non-Employee Director” means a Director who is not an employee of the Corporation
as provided in Rule 16b-3.

     (x) “Non-Stock Award” means an Award under the Plan, for which the amount, value and
denomination are not determined with reference to, or expressed in, Shares.

     (y) “Non-Stock Award Agreement” means the agreement between the Corporation and the
recipient of a Non-Stock Award that contains the terms and conditions pertaining to the Non-Stock
Award.

     (z) “Optionee” means an Eligible Employee who has received the grant of a Stock
Option. An Optionee shall also be a Participant.

     (aa) “Other Share-Based Award” means an Award granted pursuant to Section X. of the
Plan.

     (bb) “Other Share-Based Award Agreement” means the agreement between the Corporation
and the recipient of an Other Share-Based Award that contains the terms and conditions pertaining
to the Other Share-Based Award.

     (cc) “Outside Director” means an outside director of the Board within the meaning of
Section 162(m) of the Code.

     (dd) “Participant” means an Eligible Employee who is granted an Award under the Plan.

     (ee) “Payroll” means the system used by the Corporation to pay those individuals it
regards as Corporation employees for their services and to withhold employment taxes from the
compensation it pays to such employees. “Payroll” does not include any system the Corporation
uses to pay individuals whom it does not regard as Corporation employees and for whom it does not
actually withhold employment taxes (including, but not limited to, individuals it regards as
independent contractors) for their services.

     (ff) “Performance Share” means a unit granted by the Committee as described in Section
X. of the Plan.

     (gg) “Plan” means the Long-Term Incentive Plan of Chevron Corporation, as amended from
time to time.

     (hh) “Restricted Stock” means Shares granted pursuant to Section IX. of the Plan.

     (ii) “Restricted Stock Agreement” means the agreement between the Corporation and the
recipient of Restricted Stock that contains the terms, conditions and restrictions pertaining to
such Restricted Stock.

E-39

 

     (jj) “Restricted Stock Award” means an Award granted pursuant to the provisions of
Section IX. of the Plan.

     (kk) “Restricted Stock Unit” means a bookkeeping entry unit granted by the Committee
that is measurable with respect to Shares, and that is forfeitable and restricted as provided in
Section X. of the Plan.

     (ll) “Restriction Period” means with respect to a Restricted Stock Share or a
Restricted Stock Unit, the period from grant until the earlier of the date that the restrictions
lapse or the Share or Unit is forfeited.

     (mm) “Rule 16b-3” means Rule 16b-3 promulgated by the Commission pursuant to the
Exchange Act, or any successor or replacement rule adopted by the Commission.

     (nn) “Rules” means regulations and rules adopted from time to time by the Committee.

     (oo) “Share” means one share of Common Stock, adjusted in accordance with Section XII.
(if applicable).

     (pp) “Stock Appreciation Right” or “SAR” means a right to the payment of the
appreciation in Share price as described in Sections VIII. and X. of the Plan.

     (qq) “Stock Option” means a non-statutory stock option granted pursuant to Section
VIII. of the Plan.

     (rr) “Stock Option Agreement” means the agreement between the Corporation and the
Optionee that contains the terms and conditions pertaining to a Stock Option.

     (ss) “Subsidiary” means any corporation or entity with respect to which the
Corporation, one or more Subsidiaries, or the Corporation together with one or more Subsidiaries,
owns not less than eighty percent (80%) of the total combined voting power of all classes of stock
entitled to vote, or not less than eighty percent (80%) of the total value of all shares of all
classes of stock.

     (tt) “Stock Unit” means a bookkeeping entry unit granted by the Committee that is
measurable with respect to Shares as provided in Section X. of the Plan.

     (uu) “Successors or Assigns” means a corporation or other entity acquiring all or
substantially all the assets and business of the Corporation (including the Plan) whether by
operation of law or otherwise, including any corporation or other entity effectuating a Change in
Control of the Corporation.

     (vv) “Termination”, “Terminated”, or “Terminate” means that a Participant’s formal
employment relationship with the Corporation has ended, including by reason of death.

          (1) A formal employment relationship with the Corporation cannot exist unless an individual is
on the Payroll.

E-40

 

          (2) A Participant shall be deemed to have Terminated upon the earlier of

               (A) Twenty-nine (29) months after the commencement of long-term disability benefits under a
plan or program sponsored by the Corporation; or

               (B) The
date the Participant either fails to qualify or no longer qualifies for such long-term
disability benefits, provided that he or she does not return to active employment with the
Corporation at that time.

SECTION III. ADMINISTRATION. 

     The Plan shall be administered by the Committee.

     (a) Composition of the Committee.

          (1) The Committee shall consist of not less than a sufficient number of Non-Employee Directors
so as to qualify the Committee to administer the Plan as contemplated by Rule 16b-3 and each of
whom shall be an Independent Director.

          (2) The Board shall appoint one (1) of the members of the Committee as chair.

          (3) If any Committee member does not qualify as an Outside Director, Awards under the Plan for
Covered Employees shall be administered by a subcommittee consisting of each Committee member who
qualifies as an Outside Director. If fewer than two (2) Committee members qualify as an Outside
Director, the Board shall appoint one (1) or more other members to such subcommittee who do qualify
as Outside Directors so that it shall at all times consist of at least two (2) members who qualify
as an Outside Director for purposes of Section 162(m) of the Code.

          (4) The Board may, from time to time, remove members from, add members to, or fill vacancies
on the Committee. If fewer than two Committee members qualify as an Outside Director, the Board
shall appoint one (1) or more new members who so qualify and they shall be members of the
subcommittee described in Section III.(a)(3) so that at all times it consists of at least two (2)
members who qualify as Outside Directors.

          (5) In the event that the Committee will not satisfy the requirements of Rule 16b-3, the Board
shall appoint another committee that shall satisfy such requirements.

     (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.

     (c) Powers of the Committee.

          (1) The Committee’s authority includes the rights to:

E-41

 

               (A) Construe and interpret the Plan;

               (B) Promulgate, amend, interpret, and rescind Rules relating to the implementation of the
Plan;

               (C) Select which Grant Eligible Employees shall be granted Awards;

               (D) Determine the number of Shares or Share equivalents to be subject to each Award;

               (E) Determine the Award price, if any;

               (F) Determine the vesting or duration of Awards;

               (G) Determine other terms and conditions of Awards;

               (H) Adopt procedures for the disposition of Awards in the event of a Participant’s divorce or
dissolution of marriage; and

               (I) Make all other determinations necessary or advisable for the administration of the Plan.

          (2) Notwithstanding Section III.(c)(1) of the Plan:

               (A) No provision in the Plan referencing the Committee’s discretion shall be construed as
granting the Committee the authority to exercise discretion in a manner that is inconsistent with
the Plan; and

               (B) Adoption of Rules by the Committee is an exercise of the Committee’s discretion. Once
adopted, the Committee may not exercise additional discretion that is inconsistent with the Rules
without amending the Rules.

          (3) Subject to the requirements of applicable law, the Committee may designate other persons
to carry out its responsibilities and may prescribe such conditions and limitations as it may
determine in its sole discretion, except that the Committee may not delegate its authority with
regard to the selection for participation or the granting of Awards to persons subject to Section
16 of the Exchange Act.

          (4) Any determination, decision or action of the Committee in connection with the
construction, interpretation, administration, or application of the Plan shall be final, conclusive
and binding upon all persons participating in the Plan and any person validly claiming under or
through persons participating in the Plan.

     (d) Liability of Committee Members. No member of the Board or the Committee shall be
liable for any action or determination made in good faith by the Board or the Committee with
respect to the Plan or any Award under it.

E-42

 

     (e) Administration of the Plan Following a Change in Control. Within thirty (30) days
after the occurrence of a Change in Control, the Committee shall appoint an independent
organization which shall thereafter administer the Plan and have all of the powers and duties
formerly held and exercised by the Committee with respect to the Plan as provided in Section
III.(c). Upon such appointment, the Committee shall cease to have any responsibility with respect
to the administration of the Plan.

SECTION IV. DURATION OF THE PLAN.

     The Plan shall terminate on the earlier of the date it is terminated by the Board or January
27, 2014.

SECTION V. SHARES SUBJECT TO THE PLAN.

     (a) Maximum Number of Shares. Effective April 28, 2004 and with respect to April 28,
2004 and later grants, the maximum number of Shares which may be issued under the Plan shall be one
hundred sixty million (160,000,000) Shares; provided, however, that the maximum number of Shares
which may be issued under the Plan subject to Full Value Awards shall be sixty-four million
(64,000,000) Shares. The limitations set forth in this Section V.(a) have been adjusted and shall
be subject to adjustment as provided in Section XII. For Awards granted prior to April 28, 2004,
the maximum number of Shares for which Awards may be granted was set forth in the Plan prior to the
January 28, 2004 amendment and restatement.

     (b) Accounting for Number of Shares.

          (1) Shares covered by an Award shall only be counted against the limit set forth in Section
V.(a) as used to the extent that such Shares are actually issued;

          (2) Any Shares related to Awards which terminate by expiration, forfeiture, cancellation or
otherwise without the issuance of such Shares, are settled in cash in lieu of Shares, or are
exchanged, with the Committee’s permission, prior to the issuance of Shares, for Awards not
involving Shares, shall be available again for grant under the Plan;

          (3) If the exercise price of any Stock Option granted under the Plan or the tax withholding
requirements with respect to any Award under the Plan are satisfied by tendering Shares to the
Corporation (either by attestation or actual delivery) or if a Stock Appreciation Right is
exercised, only the number of Shares issued, net of the Shares tendered, if any, shall be deemed
delivered for purposes of determining the maximum number of Shares available for issuance under the
Plan; and

          (4) The maximum number of Shares available for issuance under the Plan under Section V.(a)
shall not be reduced to reflect any dividends or Dividend Equivalents that are reinvested into
additional Shares or credited with respect to any Award outstanding under the Plan.

     (c) Source of Stock Issued Under the Plan. Common Stock issued under the Plan may be
either authorized and unissued Shares or issued Shares that have been reacquired by the
Corporation, as determined in the sole discretion of the Committee. No fractional Shares of
Common Stock shall be issued under the Plan.

E-43

 

SECTION VI. PERSONS ELIGIBLE FOR AWARDS.

     Grant Eligible Employees (including officers, whether or not they are directors) are eligible
to receive Awards under the Plan within the sole discretion of the Committee. In its sole
discretion, the Committee may award a Grant Eligible Employee more than one Award, including Awards
of the same type.

SECTION VII. AGGREGATE LIMITS ON AWARDS.

     The following aggregate limits shall apply to grants of Awards under the Plan:

     (a) Stock Options, Stock Appreciation Rights, Restricted Stock and Other Share-Based
Awards. The aggregate number of Shares that may be granted in the form of Stock Options, Stock
Appreciation Rights, Restricted Stock and Other Share-Based Awards in any one calendar year to any
Participant shall not exceed four million (4,000,000) Shares. This limitation shall be subject to
adjustment as provided in Section XII.

     (b) Non-stock Awards. The value of all Non-Stock Awards granted in any single
calendar year to any Participant shall not exceed $4,000,000. For this purpose, the value of a
Non-Stock Award shall be determined on the grant date without regard to any conditions imposed on
the Non-Stock Award.

SECTION VIII. STOCK OPTIONS.

     (a) Limitation to Non-Statutory Stock Options. All Stock Options granted under the
Plan shall be in the form of non-statutory stock options, i.e. options that are not incentive stock
options within the meaning of Section 422 of the Code. All Stock Options shall be subject to the
following terms and conditions and shall contain such additional terms and conditions as the
Committee shall determine in its sole discretion.

     (b) Awards of Stock Options. The Committee shall have authority in its sole
discretion to determine the Grant Eligible Employees to whom and the time or times at which grants
of Stock Options shall be made. The terms of each Stock Option shall be set forth in a Stock
Option Agreement, including, without limitation, restrictions upon the exercise of the Stock Option
or restrictions on the transferability of Shares issued upon the exercise of a Stock Option, as the
Committee shall determine in its sole discretion. Stock Options may be granted alone, in addition
to, or in tandem with other Awards under the Plan.

     (c) Number of Shares. Each Stock Option Agreement shall state the number of Shares to
which the Stock Option Agreement pertains and shall provide for the adjustment thereof in
accordance with the provisions of Section XII. No fractional Shares shall be issued pursuant to
the exercise of a Stock Option.

     (d) Exercise Price. Each Stock Option Agreement shall state the exercise price per
Share, which shall be determined by the Committee in its sole discretion; provided, however,
that the exercise price shall never be less than one hundred percent (100%) of the Share’s
Fair Market Value on the grant date.

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     (e) Method of Payment. A Stock Option may be exercised, in whole or in part, by
giving notice of exercise in the manner prescribed by the Corporation specifying the number of
Shares to be purchased. Such notice shall be accompanied by payment in full of the purchase price
in cash or, if acceptable to the Committee in its sole discretion:

          (1) In Shares already owned by the Participant (including, without limitation, by attestation
to the ownership of such Shares);

          (2) By the withholding and surrender of the Shares subject to the Stock Option;

          (3) By delivery (on a form prescribed by the Committee) of an irrevocable direction to a
securities broker approved by the Committee to sell Shares and to deliver all or part of the sales
proceeds to the Corporation in payment of all or part of the purchase price and any withholding
taxes; or

          (4) In any other form acceptable to the Committee that is consistent with applicable law.

     (f) Term and Exercise of Stock Options; Non-Transferability of Stock Options.

          (1) Each Stock Option Agreement shall state the time or times when the Stock Options become
exercisable and the time or times when any Stock Appreciation Right granted with it may be
exercised, which shall be determined by the Committee in its sole discretion subject to the
following:

               (A) No Stock Option shall be exercisable before the completion of a specified period of
continued employment with the Corporation after the date the Stock Option is granted (except upon a
Change in Control where the Participant qualifies for severance pay under a Change in Control
severance pay program maintained by the Corporation).

               (B) No Stock Option shall be exercisable for more than ten (10) years from the date it is
granted.

          (2) Except as determined by the Committee in its sole discretion, the Participant shall not be
permitted to sell, transfer, pledge, assign or encumber Stock Options during the lifetime of the
Optionee. Notwithstanding the foregoing, any Stock Option may be transferred or assigned:

               (A) After the Optionee’s death to his or her beneficiary designated pursuant to procedures
adopted by the Committee; and

               (B) Pursuant to a domestic relations order enforceable under applicable law.

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     (g) Termination of Employment. The Rules and/or individual Stock Option Agreement
shall set forth the extent to which the Optionee shall have the right to exercise the Stock Option
following Termination. Such provisions shall be determined in the sole discretion of the
Committee, need not be uniform among all Stock Options issued pursuant to the Plan, and may reflect
distinctions based on the reasons for Termination.

     (h) Rights as a Stockholder. An Optionee or a transferee of an Optionee shall have no
rights as a stockholder with respect to any Shares covered by his or her Stock Option until the
date such interest is recorded as a book entry on the records of the Corporation. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to the date such
interest is recorded as a book entry in the records of the Corporation. Stock Options are subject
to adjustment as provided in Section XII.

     (i) Stock Appreciation Rights. In connection with the grant of any Stock Option
pursuant to the Plan, the Committee, in its sole discretion, may also grant a Stock Appreciation
Right pursuant to which the Optionee shall have the right to surrender all or part of the
unexercised portion of such Stock Option, exercise the Stock Appreciation Right, and thereby obtain
payment of an amount equal to (or less than, if the Committee shall so determine in its sole
discretion at the time of grant) the difference obtained by subtracting the aggregate exercise
price of the Shares subject to the Stock Option (or the portion thereof) so surrendered from the
market price (as determined under the Rules) of such Shares on the date of such surrender. The
exercise of such Stock Appreciation Right shall be subject to such limitations (including, but not
limited to, limitations as to time and amount) as the Committee shall determine in its sole
discretion. The payment for Stock Appreciation Rights may be made in Shares (determined with
reference to its Fair Market Value on the date of exercise), or in cash, or partly in cash and in
Shares, as determined in the sole discretion of the Committee. In the event of the exercise of a
Stock Appreciation Right, the underlying Stock Option shall be deemed to have been exercised for
all purposes under the Plan, including Section V. Stock Appreciation Rights are subject to
adjustment as provided in Section XII.

SECTION IX. RESTRICTED STOCK.

     (a) Restricted Stock Awards. The Committee shall have authority in its sole
discretion to determine the Grant Eligible Employees to whom, and the time or times at which,
grants of Restricted Stock shall be made; the number of Shares of Restricted Stock to be awarded;
the price (if any) to be paid by the recipient of Restricted Stock; the time or times within which
such Awards may be subject to forfeiture; the time or times when restrictions shall lapse; and all
other terms and conditions of the Awards.

          (1) For any Restricted Stock Award, the Corporation shall receive consideration in an amount
at least equal to any amount required to be received by the Corporation under Delaware law for the
valid issuance of fully paid and non-assessable stock.

          (2) The Committee may condition the grant of a Restricted Stock Award upon the attainment of
specified performance goals (such as earnings per share, total shareholder
return, return on capital employed, operating margin, operating expense, or cash flow) or such
other factors as the Committee may determine in its sole discretion.

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          (3) Restricted Stock Awards may be granted alone, in addition to, or in tandem with, other
Awards under the Plan.

          (4) Each Participant receiving a Restricted Stock Award shall have his or her interest in the
Restricted Stock recorded as a book entry on the records of the Corporation, subject to adjustment
as provided in Section XII.

     (b) Terms, Conditions, and Restrictions. The terms of each Restricted Stock Award
shall be set forth within the sole discretion of the Committee in the Restricted Stock Agreement.

          (1) The Committee shall specify the terms, conditions and restrictions applicable to Shares of
Restricted Stock.

          (2) These terms, conditions and restrictions must include continued employment with the
Corporation for a specified period of time following the grant date, provided that they may also
provide for the lapse of such restrictions upon Termination or taxation (other than through an
election under Section 83(b) of the Code or similar provision) prior to the completion of a
specified period or the attainment of designated performance objectives.

               (A) With respect to the Restricted Stock during the Restriction Period; the Committee may
provide for the lapse of any such term, condition or restriction in installments and may accelerate
or waive such term, condition or restriction, in whole or in part, based on service, performance,
and/or such other factors or criteria as the Committee may determine in its sole discretion.

               (B) Except as provided by the Committee, the Participant shall not be permitted to sell,
transfer, pledge, assign or encumber Restricted Stock awarded under the Plan during the Restriction
Period. Notwithstanding the foregoing, any Restricted Stock may be transferred:

                    (i) After the Participant’s death to his or her beneficiary designated pursuant to procedures
adopted by the Committee; or

                    (ii) Pursuant to a domestic relations order enforceable under applicable law.

     (c) Limitations. Notwithstanding Section IX.(b)(1);

          (1) With the exception for a sum of Restricted Stock and Restricted Stock Units counted
pursuant to Section V.(b) against Shares authorized for issuance up to a maximum of five percent
(5%) of the total Shares authorized under Section V.(a),

               (A) The restrictions on Restricted Stock may not lapse more rapidly than pro rata on an annual
basis over a three (3) year period; and

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               (B) Any Awards of Restricted Stock which vest upon the attainment of performance goals shall
provide for a performance period of no less than twelve (12) months.

          (2) The Restricted Stock may be forfeited as provided in Section XIII.

     (d) Rights as a Stockholder. Except as otherwise inconsistent with the provisions of
this Section IX.:

          (1) The Participant shall have all of the rights of a stockholder of the Corporation with
respect to the Shares of Restricted Stock, including the right to vote the Shares and the right to
receive any cash or stock dividends; and

          (2) Payment of cash dividends shall be made at a time consistent with that of other
shareholders, except that payment shall not be later than two and one-half (2 1/2) months after the
record date. Cash dividends may not be deferred.

     (e) Recording of the Participant’s Interest. If and when the Restriction Period
applicable to Shares of Restricted Stock expires without a prior forfeiture of the Restricted
Stock, an appropriate book entry recording the Participant’s interest in the unrestricted Shares
shall be entered on the records of the Company, subject to adjustment as provided in Section XII.

SECTION X. OTHER SHARE-BASED AWARDS.

     (a) Grants.

          (1) Other Share-Based Awards may include, but are not limited to:

               (A) Performance Shares;

               (B) Stock Units;

               (C) Restricted Stock Units;

               (D) Stock Appreciation Rights not granted in connection with the grant of Stock Options
pursuant to Section VIII.;

               (E) Dividend Equivalents;

               (F) The grant of Shares conditioned upon

                    (i) Some specified event; or

                    (ii) The lapse of restrictions on Restricted Stock;

               (G) The payment of cash based upon the performance of the Shares; or

               (H) The grant of securities convertible into Shares.

          (2) The Committee shall have sole discretion to determine:

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               (A) The Grant Eligible Employees to whom to grant Other Share-Based Awards;

               (B) When to grant Other Share-Based Awards;

               (C) The number of Shares or other securities, if any, to be granted pursuant to Other
Share-Based Awards; and

               (D) All other conditions of the Other Share-Based Awards, including, without limitation,
whether Stock Appreciation Rights not granted in connection with the grant of any Stock Option
shall be settled in cash or in Shares.

     (b) Terms, Conditions, and Restrictions. The terms of each Other Share-Based Award
shall be set forth in the Other Share-Based Award Agreement. Such terms shall be within the sole
discretion of the Committee.

          (1) The Committee shall specify the terms, conditions and restrictions governing the vesting,
forfeiture or lapse of restrictions for the Other Share-Based Awards.

               (A) These terms, conditions and restrictions must include continued employment with the
Corporation for a specified period of time (as determined under the Rules) following the grant
date; but may also provide for vesting upon Termination prior to the completion of a specified
period or the attainment of designated performance objectives.

               (B) The Committee may provide for the lapse of any such term, condition or restriction in
installments and may accelerate or waive such term, condition or restriction in whole or in part;
based on service, performance, and/or such other factors or criteria as the Committee may determine
in its sole discretion.

               (C) The Committee may condition the grant of an Other Share-Based Award upon the attainment of
specified performance goals (such as earnings per share, total shareholder return, return on
capital employed, operating margin, operating expense or cash flow) or such other factors as the
Committee may determine, in its sole discretion.

          (2) In making an Other Share-Based Award, the Committee may determine that a Participant shall
be entitled to receive (currently or on a deferred basis) interest, dividends, or Dividend
Equivalents with respect to the Shares or other securities covered by the Award; and the Committee
may provide that such amounts (if any) shall be deemed to have been reinvested in additional Shares
or otherwise reinvested.

          (3) Except as otherwise provided in the Rules or in an Other Share-Based Award Agreement, any
Other Share-Based Award may not be sold, assigned, transferred, pledged or otherwise encumbered
prior to the date on which the Shares are issued or the Award becomes payable, or, if later, the
date on which any applicable restriction, performance or deferral period expires or lapses.
Notwithstanding the foregoing, Other Share Based Awards may be transferred:

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               (A) After the Participant’s death, to his or her beneficiary designated pursuant to procedures
adopted by the Committee; and

               (B) Pursuant to a domestic relations order enforceable under applicable law.

          (4) The Rules or Other Share-Based Award Agreement shall contain provisions dealing with the
disposition of such Award in the event of a termination of the Participant’s employment prior to
the exercise, realization or payment of such Award.

     (c) Limitations. Notwithstanding Section X.(b)(1):

          (1) With the exception for a sum of Restricted Stock and Restricted Stock Units counted
pursuant to Section V.(b) against Shares authorized for issuance up to a maximum of five percent
(5%) of the total Shares authorized under Section V.(a),

               (A) The restrictions on Restricted Stock Units may not lapse more rapidly than pro rata on an
annual basis over a three (3) year period; and

               (B) Any Awards of Restricted Stock Units which vest upon the attainment of performance goals
shall provide for a performance period of no less than twelve (12) months.

          (2) The Other Share-Based Award may be forfeited as provided in Section XIII.

SECTION XI. NON-STOCK AWARDS.

     (a) Grants.

          (1) Non-Stock Awards may be granted to Grant Eligible Employees either alone or in addition to
or in conjunction with other Awards under the Plan. Awards under this Section XI. may take any
form that the Committee shall determine in its sole discretion.

          (2) The Committee shall have sole and complete authority to determine the Grant Eligible
Employees to whom and the time or times at which Non-Stock Awards shall be made, the amount of any
Non-Stock Award and all other conditions of the Non-Stock Awards. The Committee may condition the
grant of a Non-Stock Award upon the attainment of specified performance goals (such as earnings per
share, total shareholder return, return on capital employed, operating margin, operating expense or
cash flow) or such other factors as the Committee may determine, in its sole discretion.

     (b) Terms and Conditions.

          (1) The
terms of any Non-Stock Award shall be set forth in a Non-Stock Award Agreement between
the Corporation and the Eligible Employee, which shall contain provisions:

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               (A) Dealing with the disposition of such Award in the event of a Termination prior to the
exercise, realization or payment of such Award; and

               (B) Such other provisions as the Committee determines to be necessary or appropriate within
its sole discretion.

          (2) Non-Stock Awards may not be sold, assigned, transferred, pledged or otherwise encumbered
prior to the date on which the Award becomes payable, or, if later, the date on which the
requirements of any applicable restriction, condition, performance goal or deferral period is met
or lapses. Notwithstanding the foregoing, Non-Stock Awards may be transferred:

                    (i) As otherwise provided in the Non-Stock Award Agreement;

                    (ii) After the Participant’s death, to his or her beneficiary designated pursuant to
procedures adopted by the Committee; and

                    (iii) Pursuant to a domestic relations order enforceable under applicable law.

          (3) Notwithstanding any provision of this Section XI, Non-Stock Awards may be forfeited as
provided in Section XIII.

SECTION XII. RECAPITALIZATION.

     (a) Subject to any required action by the stockholders, the number of Shares covered by the
Plan as provided in Section V., the maximum number of Shares that may be granted to any one
individual in any calendar year as provided in Section VII., the number of Shares covered by or
referred to in each outstanding Award (other than an Award of Restricted Stock that is outstanding
at the time of the event described in this paragraph), and the Exercise Price of each outstanding
Stock Option and any price required to be paid for Restricted Stock not yet outstanding at the time
of the event described in this paragraph or Other Share-Based Award shall be proportionately
adjusted for:

          (1) Any increase or decrease in the number of issued Shares resulting from a subdivision or
consolidation of Shares;

          (2) The payment of a stock dividend (but only of Common Stock) or any other increase or
decrease in the number of such Shares effected without receipt of consideration by the Corporation;
or

          (3) The declaration of a dividend payable in cash that has a material effect on the price of
issued Shares.

     (b) Subject to any required action by the stockholders, if the Corporation is the surviving
corporation in any merger, consolidation or other reorganization, each outstanding Award (other
than an Award of Restricted Stock that is outstanding at such time) shall pertain
and apply to the securities to which a holder of the number of Shares subject to the Award
would have been entitled.

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     (c) In the event of a dissolution or liquidation of the corporation or a merger, consolidation
or other reorganization in which the Corporation is not the surviving corporation, each outstanding
Stock Option, each unvested Restricted Stock Award or Other Share-Based Award and each Non-Stock
Award shall be assumed by the surviving corporation and each Stock Option, unvested Restricted
Stock Award and Other Share-Based Award shall pertain to a comparable number of shares in the
surviving corporation, unless the terms of the agreement of merger, consolidation or reorganization
call for the full vesting and cash out of such Awards.

     (d) In the event of a change in the Common Stock, which is limited to a change of all of the
Corporation’s authorized shares with par value into the same number of shares with a different par
value or without par value, the shares resulting from any such change shall be deemed to be the
Common Stock within the meaning of the Plan.

     (e) The Committee shall make equitable adjustments in the number of Shares covered by the Plan
and the price or other value of any outstanding Awards in the event of a spin-off or other
distribution (other than normal cash dividends) of Corporation assets to stockholders.

     (f) To the extent that the foregoing adjustments relate to stock or securities of the
Corporation, such adjustments shall be made by the Committee, and the action in that respect shall
be final, binding and conclusive.

     (g) Except as expressly provided in this Section XII., a Participant shall have no rights by
reason of any subdivision or consolidation of shares of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of shares of stock of any class or
by reason of any dissolution, liquidation, merger or consolidation or spin-off of assets or stock
of another corporation, and any issuance by the Corporation of shares of stock of any class or
securities convertible into shares of stock of any class, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of Shares subject to the Stock
Option.

     (h) The grant of an Award pursuant to the Plan shall not affect in any way the right or power
of the Corporation to make adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge or consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets.

     (i) The Committee shall prescribe rules governing the adjustment of the number of shares
covered by the Plan as provided in Section V. and of Awards outstanding under the Plan in the event
that the preferred stock purchase rights issued pursuant to the Corporation’s stockholder rights
plan or any successor rights plan detach from the Common Stock and become exercisable.

SECTION XIII. FORFEITURE FOR MISCONDUCT.

     (a) Notwithstanding any other provision of this Plan to the contrary, if a Participant engages
in Misconduct the Committee (or its delegate) may:

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          (1) Rescind the exercise of any Stock Option granted on or after June 29, 2005 and exercised
on or after the date the Participant’s Misconduct occurred and cancel all Awards granted on or
after June 29, 2005 and outstanding on the date of discovery of the Participant’s Misconduct; and

          (2) Demand that the Participant repay any cash distributed to the Participant in respect of
any Award granted on or after June 29, 2005 or pay over to the Corporation the proceeds (less the
Participant’s purchase price, if any) received by the Participant upon the sale, transfer or other
transaction involving the Shares acquired upon the exercise of any Stock Option granted on or after
June 29, 2005 and exercised on or after the date the Participant’s Misconduct occurred or upon the
vesting of any Award granted on or after June 29, 2005 and vested after the date of the
Participant’s Misconduct, in such manner and on such terms and conditions as may be required, and,
without limiting any other remedy the Corporation or its affiliates may have, the Corporation shall
be entitled to set-off against the amount of any such proceeds any amount owed the Participant by
the Corporation or its affiliates to the fullest extent permitted by law;

          Provided that, following a Change in Control, this Section XIII. shall apply only in the event
of Misconduct as defined in Section II.(v)(1) and (2) of the Plan.

     (b) Notwithstanding any other provision of the Plan to the contrary, until any Award that does
not constitute non-qualified deferred compensation within the meaning of Section 409A of the Code
is delivered or distributed, such Award is subject to forfeiture if the Participant is indebted to
the Corporation at the time when the Award becomes payable or distributable. In such case, such
Award (to the extent that the amount thereof does not exceed such indebtedness determined as of the
date payment is scheduled to be made) shall be forfeited and the Participant’s indebtedness to the
Corporation shall be extinguished to the extent of such forfeiture.

     (c) Any provision of this Section XIII. which is determined by a court of competent
jurisdiction to be invalid or unenforceable should be construed or limited in a manner that is
valid and enforceable and that comes closest to the business objectives intended by such invalid or
unenforceable provision, without invalidating or rendering unenforceable the remaining provisions
of this Section XIII.

SECTION XIV. SECURITIES LAW REQUIREMENTS.

     No Shares shall be issued and no Stock Options shall become exercisable pursuant to the Plan
unless and until the Corporation has determined that:

     (a) It and the Participant have taken all actions required to register the Shares under the
Securities Act of 1933, as amended, or perfect an exemption from the registration requirements
thereof;

     (b) Any applicable listing requirement of any stock exchange on which the Common Stock is
listed has been satisfied; and

     (c) Any other applicable provision of state or federal law has been satisfied.

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SECTION XV. AMENDMENTS OF THE PLAN OR AWARDS. 

     (a) Amendment of the Plan. The Board may, at any time, alter, amend or terminate the
Plan; provided:

          (1) The Board may, insofar as permitted by law, from time to time, with respect to any Shares
at the time not already subject to Awards, suspend or discontinue the Plan or revise or amend it in
any respect whatsoever. However, unless the Board specifically otherwise provides, any revision or
amendment that would cause the Plan to fail to comply with Rule 16b-3 or any other requirement of
applicable law or regulation if such amendment were not approved by the holders of the Common Stock
of the Corporation shall not be effective unless and until the approval of the holders of Common
Stock of the Corporation is obtained.

          (2) No amendment, revision, suspension or discontinuation of the Plan (including any amendment
to this Section XV.) approved by the Board during the Benefit Protection Period under Change in
Control shall be valid or effective if such amendment, revision, suspension or discontinuation
would alter the provisions of this Section XV. or adversely affect an Award outstanding under the
Plan; provided, however, any amendment, revision, suspension or discontinuation may be effected,
even if so approved after the public announcement of the proposed transaction which effected, would
have constituted a Change in Control, if:

               (A) The amendment 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 (6) 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.

          (3) Any amendment, revision, suspension or discontinuation of the Plan 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, revision, suspension or discontinuation of the Plan so
approved during the Benefit Protection Period.

     (b) Amendments of Awards. Subject to the terms of the Plan, the Committee may amend,
cancel, modify, extend or renew outstanding Awards granted under the Plan; provided, however, that
the post-Termination exercise of an outstanding Stock Option shall not be extended to a date later
than the date the Stock Option is originally scheduled to expire. Notwithstanding the foregoing,
no Stock Option or, as applicable, any other Award shall be repriced under this Plan.

     (c) Rights of Participant. Notwithstanding any other provision of this Section XV.,
no amendment, suspension or termination of the Plan nor any amendment, cancellation or modification
of any Award outstanding under it that would adversely affect the right of any Participant in an
Award previously granted under the Plan shall be effective without the written
consent of the affected Participant except to the extent necessary to comply with applicable
law (including compliance with any provision of law concerning favorable taxation).

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SECTION XVI. GENERAL PROVISIONS.

     (a) Authority to Satisfy Obligations. The Committee shall have the authority to grant
Awards as an alternative to or as the form of payment for grants or rights earned or due under
other compensation plans or arrangements of the Corporation, including, without limitation, any
plans or arrangements of any employer acquired by the Corporation.

     (b) Participants’ Stockholder Rights. A Participant shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any Shares covered by his or her
Award prior to the date such interest is recorded as a book entry on the records of the
Corporation. No adjustment shall be made for cash dividends or other rights for which the record
date is prior to the date when such interest is recorded.

     (c) Participant’s Rights Unsecured. A holder of an Other Share-Based Award or a
Non-Stock Award shall have no rights other than those of a general creditor of the Corporation.
Other Share-Based Awards and Non-Stock Awards shall represent unfunded and unsecured obligations
against the general assets of the Corporation, subject to the terms and conditions of the
applicable Other Share-Based Award Agreement and of the Non-Stock Award Agreement.

     (d) Authority to Establish a Grantor Trust. The Committee is authorized in its sole
discretion to establish a grantor trust for the purpose of providing security for the payment of
Awards under the Plan; provided, however, that no Participant shall be considered to have a
beneficial ownership interest (or any other sort of interest) in any specific asset of the
Corporation as a result of the creation of such trust or the transfer of funds or other property to
such trust.

     (e) No Obligation to Exercise Stock Option. The granting of a Stock Option shall
impose no obligation upon the Optionee to exercise such Stock Option.

     (f) Participant’s Beneficiary. The Rules may provide that in the case of an Award
that is not forfeitable by its terms upon the death of the Participant, the Participant may
designate a beneficiary with respect to such Award in the event of death of a Participant.

     (g) Deferral Elections. Grants under the Plan other than Stock Options and Stock
Appreciation Rights may be deferred, if so provided in the Award agreement, to the extent permitted
under the terms of the Chevron Corporation Deferred Compensation Plan for Management Employees II
(or any successor plan) and in compliance with the requirements of Section 409A of the Code.

     (h) Awards in Foreign Countries. The Committee shall have the authority to adopt such
modifications, procedures and sub plans as may be necessary or desirable to comply with provisions
of the laws of foreign countries in which the Corporation may operate to assure the viability of
the benefits of Awards made to Participants employed in such countries and to meet the intent of
the Plan.

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     (i) Withholding Taxes.

          (1) General. To the extent required by applicable federal, state, local or foreign
law, the recipient of any payment or distribution under the Plan shall make arrangements
satisfactory to the Corporation for the satisfaction of any withholding tax obligations that arise
by reason of such payment or distribution. The Corporation shall not be required to make such
payment or distribution until such obligations are satisfied.

          (2) Stock Withholding. The Committee in its sole discretion may permit a Participant
to satisfy all or part of his or her withholding tax obligations incident to the exercise of a
Stock Option or the vesting of Restricted Stock by having the Corporation withhold a portion of the
Shares that otherwise would be issued to him or her. The payment of withholding taxes by
surrendering Shares to the Corporation, if permitted by the Committee, shall be subject to such
restrictions as the Committee may impose, including any restrictions required by rules of the
Commission.

     (j) Other Corporation Benefit and Compensation Programs. Payments and other benefits
received by a Participant under the Plan shall not be deemed a part of a Participant’s regular,
recurring compensation for purposes of the termination indemnity or severance pay law of any
country, state or political subdivision thereof and shall not be included in, nor have any effect
on, the determination of benefits under any other employee benefit plan or similar arrangement
provided by the Corporation unless expressly so provided by such other plan or arrangement, or
except where the Committee expressly determines that inclusion of an Award or portion of an Award
is necessary to accurately reflect competitive compensation practices or to recognize that an Award
has been made in lieu of a portion of competitive annual cash compensation. Awards under the Plan
may be made in combination with or in tandem with, or as alternatives to, grants, awards or
payments under any Corporation plans. The Plan notwithstanding, the Corporation may adopt such
other compensation programs and additional compensation arrangements as it deems necessary to
attract, retain and reward Eligible Employees for their service with the Corporation.

     (k) Application of Funds. The proceeds received by the Corporation from the sale of
Common Stock pursuant to the exercise of a Stock Option or the grant of Restricted Stock shall be
used for general corporate purposes.

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

     (m) Binding Effect of Plan. The Plan shall be binding upon and shall inure to the
benefit of the Corporation, its Successors or Assigns and the Corporation shall require any
Successor or Assign to expressly assume and agree to perform the Plan in the same manner and to the
same extent that the Corporation would be required to perform it if no such Succession or
Assignment had taken place.

     (n) No Waiver of Breach. 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 Plan to be
performed by such other party shall be deemed a waiver of similar or dissimilar provisions of
conditions at the same or at any prior or subsequent time.

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     (o) No Right to Employment. Neither the Plan, the Rules, or any Award granted under
the Plan shall be deemed to give any employee any right to remain in the employ of the Corporation
or to impair the Corporation’s right to Terminate any employee at any time, with or without cause,
which right is hereby reserved.

     (p) Choice of Law. The Plan shall be administered, construed and governed in
accordance with the Code, and the laws of the State of California, but without regard to its
conflict of law rules. Notwithstanding the foregoing, domestic relations orders and the Section
II.(v) definition of Misconduct shall be subject to the jurisdiction’s law that would otherwise be
applicable, but without regard to that particular jurisdiction’s conflict of laws rules.

     (q) Severability. The provisions of the Plan shall be deemed severable and the
validity or unenforceability of any provision shall not affect the validity or enforceability of
the other provisions hereof.

SECTION XVII. APPROVAL OF STOCKHOLDERS.

     Material amendments to the Plan shall be subject to approval by affirmative vote of the
stockholders of the Corporation in accordance with applicable law and the listing requirements of
the New York Stock Exchange.

SECTION XVIII. EXECUTION.

     Approved by the Board at a meeting held on December 10, 2008 and effective January 1,
2009 and executed pursuant to the Board’s delegation.

	 	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Robert J. Eaton	 	 	 	Date	 	December 10, 2008	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

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