Document:

exv10w1

 

Exhibit 10.1

CHEVRON CORPORATION

CHANGE IN CONTROL SURPLUS EMPLOYEE SEVERANCE PROGRAM FOR

 SALARY GRADES 41 THROUGH 43

(as
adopted effective March 29, 2000 and amended on December 7,
2005 and December 6, 2006)

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	I.
	 	INTRODUCTION	 	 	1	 
	II.
	 	COMMENCEMENT OF PARTICIPATION	 	 	1	 
	III.
	 	TERMINATION OF PARTICIPATION	 	 	1	 
	IV.
	 	SEVERANCE PAY BENEFIT	 	 	2	 
	(a)
	 	Eligibility for Severance Pay Benefit	 	 	2	 
	(b)
	 	Amount of Severance Pay Benefit	 	 	5	 
	(c)
	 	Repayment of the Severance Pay Benefit	 	 	6	 
	V.
	 	FORM OF SEVERANCE PAY BENEFIT	 	 	6	 
	VI.
	 	BENEFIT PLAN ALLOWANCE	 	 	8	 
	(a)
	 	Eligibility for Benefit Plan Allowance	 	 	8	 
	(b)
	 	Amount of Benefit Plan Allowance	 	 	9	 
	(c)
	 	Repayment of the Benefit Plan Allowance	 	 	11	 
	VII.
	 	FORM OF BENEFIT PLAN ALLOWANCE	 	 	11	 
	VIII.
	 	DEATH OF A MEMBER	 	 	11	 
	IX.
	 	BENEFITS PROVIDED UNDER OTHER PLANS	 	 	11	 
	(a)
	 	Eligible Employees Who Qualify As Eligible Retirees	 	 	11	 
	(b)
	 	Eligible Employees Who Do Not Qualify As Eligible Retirees	 	 	11	 
	X.
	 	AMENDMENT AND TERMINATION	 	 	12	 
	(a)
	 	General Rule	 	 	12	 
	(b)
	 	Restrictions on Amendments During Extended Benefit Protection Period	 	 	12	 
	XI.
	 	NON-ALIENATION OF BENEFITS	 	 	13	 
	XII.
	 	SUCCESSORS AND ASSIGNS	 	 	14	 
	XIII.
	 	LEGAL CONSTRUCTION	 	 	14	 
	XIV.
	 	ADMINISTRATION AND OPERATION OF THE PLAN	 	 	14	 
	(a)
	 	Plan Sponsor and Plan Administrator	 	 	14	 
	(b)
	 	Administrative Power and Responsibility	 	 	14	 
	(c)
	 	Review Panel	 	 	14	 
	(d)
	 	Service in More Than One Fiduciary Capacity	 	 	15	 
	(e)
	 	Performance of Responsibilities	 	 	15	 
	(f)
	 	Employee Communications and Other Plan Activities	 	 	15	 
	XV.
	 	CLAIMS, INQUIRIES AND APPEALS	 	 	15	 
	(a)
	 	Claims for Benefits and Inquiries	 	 	15	 
	(b)
	 	Denials of Claims	 	 	15	 
	(c)
	 	Review Panel	 	 	16	 
	(d)
	 	Requests for a Review	 	 	16	 
	(e)
	 	Decision on Review	 	 	17	 
	(f)
	 	Rules and Procedures	 	 	17	 
	(g)
	 	Exhaustion of Remedies	 	 	17	 
	XVI.
	 	BASIS OF PAYMENTS TO AND FROM PLAN	 	 	18	 

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	 	 	 	 	Page	 
	XVII.
	 	OTHER PLAN INFORMATION	 	 	18	 
	(a)
	 	Plan Identification Numbers	 	 	18	 
	(b)
	 	Ending Date of the Plan's Fiscal Year	 	 	18	 
	(c)
	 	Agent for the Service of Legal Process	 	 	18	 
	(d)
	 	Plan Sponsor and Administrator	 	 	18	 
	XVIII.
	 	STATEMENT OF ERISA RIGHTS	 	 	18	 
	XIX.
	 	AVAILABILITY OF PLAN DOCUMENTS FOR EXAMINATION	 	 	19	 
	XX.
	 	DEFINITIONS	 	 	21	 
	(a)
	 	“Affiliate”	 	 	21	 
	(b)
	 	“Affiliated Group”	 	 	21	 
	(c)
	 	“Approved Part-Time Schedule”	 	 	21	 
	(d)
	 	“Beneficiary”	 	 	21	 
	(e)
	 	“Buyer”	 	 	21	 
	(f)
	 	“Casual Employee”	 	 	21	 
	(g)
	 	“Change in Control”	 	 	22	 
	(h)
	 	“Chevron Corporation Retirement Plan”	 	 	22	 
	(i)
	 	“Chevron Part-Time Employment Guidelines”	 	 	22	 
	(j)
	 	“Company”	 	 	22	 
	(k)
	 	“Continuous Service”	 	 	22	 
	(l)
	 	“Corporation”	 	 	23	 
	(m)
	 	“Demotion”	 	 	24	 
	(n)
	 	“Eligible Employee”	 	 	24	 
	(o)
	 	“Eligible Retiree”	 	 	25	 
	(p)
	 	“Employee”	 	 	25	 
	(q)
	 	“Enhanced Regular Earnings”	 	 	26	 
	(r)
	 	“ERISA”	 	 	26	 
	(s)
	 	“Extended Benefit Protection Period”	 	 	26	 
	(t)
	 	“Extended Benefit Protection Period Commencement Date”	 	 	26	 
	(u)
	 	“Family Leave”	 	 	26	 
	(v)
	 	“Leave of Absence without Pay”	 	 	26	 
	(w)
	 	“Member”	 	 	26	 
	(x)
	 	“MIP Target Bonus”	 	 	27	 
	(y)
	 	“New Work Location”	 	 	27	 
	(z)
	 	“Off the Job Disability”	 	 	27	 
	(aa)
	 	“Outsourcing Supplier”	 	 	27	 
	(bb)
	 	“Overall Compensation”	 	 	27	 
	(cc)
	 	“Plan”	 	 	27	 
	(dd)
	 	“Plan Administrator”	 	 	27	 
	(ee)
	 	“Present Work Location”	 	 	28	 
	(ff)
	 	“Regular Earnings”	 	 	28	 
	(gg)
	 	“Regular Work Schedule”	 	 	28	 
	(hh)
	 	“Release”	 	 	28	 
	(ii)
	 	“Salary Grade”	 	 	28	 

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	 	 	 	 	Page	 
	(jj)
	 	“Seasonal Employee”	 	 	28	 
	(kk)
	 	“Special Assignment”	 	 	29	 
	(ll)
	 	“Subsidiary”	 	 	29	 
	(mm)
	 	“Successors and Assigns”	 	 	29	 
	(nn)
	 	“Temporary Employee”	 	 	29	 
	(oo)
	 	“Transfer”	 	 	29	 
	(pp)
	 	“Year of Continuous Service”	 	 	29	 

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CHEVRON CORPORATION

CHANGE IN CONTROL SURPLUS EMPLOYEE SEVERANCE PROGRAM FOR

 SALARY GRADES 41 THROUGH 43 

(as adopted effective March 29, 2000 and amended on December 7,
2005 and December 6, 2006)

I. INTRODUCTION

The Chevron Corporation Change in Control Surplus Employee Severance Program for Salary
Grades 41 — 43 (the “Plan”) was adopted by the Corporation effective March 29, 2000. For
all purposes herein, any reference to Salary Grades 41 through 43 shall be deemed to include
the equivalent to such Salary Grades under a successor system of classifying Salary Grades.

The purpose of the Plan is to provide a Severance Pay Benefit or a Benefit Plan Allowance to
certain Employees whose employment with the Company terminates in connection with a Change
in Control. The Corporation is the Plan Administrator for purposes of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”). The Plan shall terminate
three years after a Change in Control.

II. COMMENCEMENT OF PARTICIPATION

An Eligible Employee shall commence participation in the Plan and become a Member upon the
public announcement of the proposed transaction which, when effected, is a Change in
Control.

III. TERMINATION OF PARTICIPATION

A Member’s participation in the Plan shall terminate upon the occurrence of the earliest of
the following:

	 	(a)	 	The Member’s employment terminates without meeting the requirements of:

	 	(i)	 	Sections IV(a)(i)(2) or (3); or
	 
	 	(ii)	 	Sections VI(a)(i) to (iii).

	 	(b)	 	The Member’s employment terminates with a provision of Section IV(a)(ii) being
applicable.
	 
	 	(c)	 	The Member fails to meet the requirements of IV(a)(i)(4) or VI(a)(iv).

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	 	(d)	 	The Member has received a complete distribution of his or her Severance Pay
Benefit or Benefit Plan Allowance.
	 
	 	(e)	 	The Member ceases to be an Eligible Employee (other than by reason of
termination of his or her employment with the Company).
	 
	 	(f)	 	The Extended Benefit Protection Period ends because of the abandonment of any
plans to effectuate a transaction which, if effectuated, would have been a Change in
Control and such transaction has not occurred.
	 
	 	(g)	 	The Plan terminates.

IV. SEVERANCE PAY BENEFIT

	 	(a)	 	Eligibility for Severance Pay Benefit

	 	(i)	 	Subject to Section IV(a)(ii), a Member shall be eligible for a
Severance Pay Benefit only if the Member meets the requirements of Section
IV(a)(i)(1); Section IV(a)(i)(2) or (3); and Section IV(a)(i)(4).

	 	(1)	 	A Change in Control occurs during the Extended
Benefit Protection Period.
	 
	 	(2)	 	The Member’s employment is involuntarily
terminated by the Company on a date determined by the Company in its
sole discretion that is no earlier than the public announcement of the
proposed transaction which, when effected, is a Change in Control and
no later than the last day of the Extended Benefit Protection Period .
	 
	 	(3)	 	The Member meets all of the requirements of
Section IV(a)(i)(3)(a) to (c):

	 	(a)	 	The Member receives a written
offer no earlier than the public announcement of the proposed
transaction which, when effected, is a Change in Control and no
later than the last day of the Extended Benefit Protection
Period of a position with the Company or an Affiliate that is a
Demotion and does not have the option of remaining in his or her
present job. (Such written offer and notification may be
delivered in person or by mail. If the offer and notification
are mailed, the Member shall be deemed to have received it the
earlier of its actual receipt or three days after it is deposited in the United States mail, properly 

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	 	 	 	stamped and addressed to Member’s last known address as reflected on
the books of the Company.);

	 	(b)	 	The Member has failed to accept
such Demotion in writing within the time prescribed in the offer
or (if no such time is specified) within 7 days after the date
the offer is actually or deemed to be received, if earlier.
Failure to respond within the prescribed time shall be deemed a
rejection of the Demotion, regardless of the reason for the
failure to respond; and
	 
	 	(c)	 	Such Member resigns his or her
employment on a date determined by the Company, which shall be
no later than sixty (60) days after the date the offer is
actually or deemed to be received, whichever is earlier, or (if
the Member so agrees) a later date that is no later than three
years after the Change in Control;

	 	(4)	 	The Member executes the Release within
forty-five (45) days after its receipt (or such extension as may be
granted by the Company in its sole discretion) and the period for
revoking the execution of the Release under the Older Workers’ Benefit
Protection Act, 29 U.S.C. § 626(f), has expired.

	 	 	 	Under no circumstances shall a Member be construed as having terminated employment
or be eligible for a Severance Pay Benefit because he terminates employment with the
Company for the purpose of accepting employment with the entity that effectuates a
Change in Control, its subsidiaries or affiliates.

	 	(ii)	 	Notwithstanding Section IV(a)(i), a Member shall be
disqualified from receiving a Severance Pay Benefit upon the occurrence of any
of the following:

	 	(1)	 	Except as provided in Section IV(a)(i)(3)(c),
the Member voluntarily terminates employment with the Company for any
reason prior to the termination date set by the Company;
	 
	 	(2)	 	The Member’s employment with the Company is
terminated for cause or by death;
	 
	 	(3)	 	If the Member is receiving short-term sick
leave benefits under the Corporation’s Short-Term Disability Plan (or
similar program) on the date of termination, the Member fails to execute a written 

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	 	 	 	waiver of any short-term sick leave benefits that might otherwise be payable
after employment terminates;

	 	(4)	 	Subsequent to the offer of the Demotion and
before termination of employment, such Member:

	 	(a)	 	is offered another position with
the Company or an Affiliate (other than a Special Assignment)
that is other than a Demotion; or
	 
	 	(b)	 	accepts any job offer from the
Company or an Affiliate (other than a Special Assignment)
without regard to whether it is a Demotion;

	 	(5)	 	the Member terminates employment with the
Company in order to accept employment with an organization that is
wholly or partly owned (directly or indirectly) by the Company or an
Affiliate;

	 	(6)	 	The Member accepts any job with a Buyer or
Outsourcing Supplier; and

	 	(7)	 	The Member is offered full-time employment (or
part-time if the Member is on an Approved Part-Time Schedule under the
Chevron Part-Time Employment Guidelines when his or her employment
terminates) with a Buyer or Outsourcing Supplier at a New Work Location
when such position is:

	 	(a)	 	50 miles or less from his or her
Present Work Location with the Company; and
	 
	 	(b)	 	would not result in a:

	 	(i)	 	material
reduction in authority or responsibility; or
	 
	 	(ii)	 	reduction in
Overall Compensation.

	 	 	 	The business decisions that may result in a Member qualifying for a
Severance Pay Benefit are decisions to be made by the Company in its sole
discretion.

	 	 	 	In making these decisions, similarly situated organizations, locations, functions,
classifications, and/or Members need not be treated in the same manner. The date
selected by the Company to terminate the Member’s employment is within its sole discretion and (subject to Section IV(a)(i)(3)(c) with respect to Demotions) 

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	 	 	 	the Company is under no obligation to terminate a Member’s employment prior to three
years after the Change in Control.

	 	(b)	 	Amount of Severance Pay Benefit

	 	(i)	 	Subject to Section IV(b)(ii), the Severance Pay Benefit payable
to a qualifying Member shall be equal to two and one half years of such
Member’s Enhanced Regular Earnings.
	 
	 	(ii)	 	Notwithstanding Section IV(b)(i), any Severance Pay Benefit
otherwise payable under that section shall be reduced (but not below zero) as
follows:

	 	(1)	 	If the Member had been or is on an Approved
Part-Time Schedule under the Chevron Part-Time Employment Guidelines at
any time after January 1, 1994, the Severance Pay Benefit shall be
reduced by multiplication by a ratio. The numerator of the ratio shall
be the total number of full months of the Member’s Continuous Service
after January 1, 1994 while not on such an Approved Part-Time Schedule.
The denominator of the ratio shall be the Member’s total number of
full months of Continuous Service. In calculating the Severance Pay
Benefit for a Member currently on such an Approved Part-Time Schedule,
Enhanced Regular Earnings shall be based on a full-time equivalent.
	 
	 	(2)	 	If a Member is reemployed by the Company or an
Affiliate within three years after termination, the Severance Pay
Benefit shall be reduced to the amount that the Member’s Enhanced
Regular Earnings would have been for the period from the date of
termination to the date of reemployment. In all cases, the reduced
benefit will be based on the Member’s Enhanced Regular Earnings used to
calculate such Member’s Severance Pay Benefit under the Plan. A Member
will be considered “reemployed” under the Plan for purposes of the
repayment provision in this Section IV(b)(ii)(2) if retained at a
Company facility, as or through a contractor for more than a full-time
equivalent of more than 45 work days.
	 
	 	(3)	 	If a Member is employed by a Buyer or
Outsourcing Vendor within three years of termination, the Severance Pay
Benefit shall be reduced to the greater of:

	 	(a)	 	the amount that the Member’s
Enhanced Regular Earnings would have been for the period from
the date of

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	 	 	 	termination to the date of employment with the Buyer or Outsourcing Vendor; or

	 	(b)	 	the amount the Member has
received under Section V(b) prior to employment with the Buyer
or Outsourcing Vendor.

	 	 	 	This Section IV(b)(iii)(3) may be waived in writing by the
Corporation in its sole discretion.
	 
	 	(4)	 	By severance pay or other similar benefits
payable under any other plan or policy of the Company or an Affiliate
or government required payment (other than unemployment compensation
under United States law), including, but not limited to, any benefit
enhancement program that may be adopted as part of a pension plan.
	 
	 	(5)	 	By any amounts payable pursuant to the Worker
Adjustment and Retraining Notification Act (WARN) or any other similar
federal, state or local statute.
	 
	 	(6)	 	By the amount of any indebtedness to the
Company.
	 
	 	(7)	 	As described in Section 4(b) of the Chevron
Corporation Benefit Protection Program established effective March 29,
2000, as it may be amended from time to time.

	 	(c)	 	Repayment of the Severance Pay Benefit
	 
	 	 	 	If the Member has received payment under the Plan in excess of the Severance Pay
Benefit, as reduced in Section IV(b)(ii), the Member must agree as a condition of
reemployment that such excess will be repaid to the Company.

V. FORM OF SEVERANCE PAY BENEFIT

	 	(a)	 	Subject to Section V(b), the Severance Pay Benefit under the Plan may take any
one of the following forms of distribution as elected by the Member:

	 	(i)	 	a lump sum payment on or before December 31 of the year in
which employment terminates;
	 
	 	(ii)	 	a lump sum payment after December 31 of the year in which
employment terminates, but within twenty-four (24) months after the termination
of employment; or

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	 	(iii)	 	a maximum of two installment payments over a period not to
exceed twenty-four (24) months from the termination date. The amount and
timing of each installment may be different.

	 	(b)	 	If a Member’s employment with the Company is terminated in connection with a
sale of some or all of the Company’s interest applicable to, or with a transfer of
management of, the operation in which the Member was employed, the Severance Pay
Benefit will be paid in one of the following forms of distribution as elected by the
Member:

	 	(i)	 	Six Monthly Payments

	 	(1)	 	An initial payment of one month’s Enhanced
Regular Earnings will be paid on or about the date the Member’s
employment with the Company terminates;
	 
	 	(2)	 	Additional payments of up to one month’s
Enhanced Regular Earnings will be paid in one-month intervals for up to
the succeeding five months; and
	 
	 	(3)	 	If more than six monthly installments are
required to complete the Severance Pay Benefit, there will be a
lump-sum payment one month after the final monthly payment or it may be
deferred as provided under any form permitted under Section V(a); or

	 	(ii)	 	Any form permitted under Section V(a); provided that no payment
is made prior to six months from the date the Member’s employment with the
Company terminates.

	 	(c)	 	Interest

	 	(i)	 	Except as provided in this Section V(c), no interest shall be
paid on a Severance Pay Benefit.

	 	(ii)	 	With respect to a benefit paid in a form described in V(b)(i),
interest will be payable on any outstanding balance of the Severance Pay
Benefit from the date employment with the Company terminates; provided that it
shall not be payable during any period for which the Member elects a deferral
of payment. This accrued interest will be included in the final Severance Pay
Benefit payment described in Section V(b)(i)(3).

	 	(iii)	 	Where interest is payable, the rate of interest shall be equal
to the rate paid on U. S. Thirty Year Treasury obligations for January of the
year in which the Member terminated employment with the Company.

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VI. BENEFIT PLAN ALLOWANCE

	 	(a)	 	Eligibility for Benefit Plan Allowance
	 
	 	 	 	A Member shall be eligible for a Benefit Plan Allowance only if all of the following
requirements are met:

	 	(i)	 	the Member’s employment terminates on the date specified by the
Company that is no earlier than the public announcement of the proposed
transaction which, when effected, is a Change in Control and no later than the
last day of the Benefits Protection Period;

	 	(ii)	 	the Member is ineligible for a Severance Pay Benefit solely
because of Section IV(a)(ii)(6) or (7) of the Plan;

	 	(iii)	 	prior to the beginning of negotiations with the Buyer or
Outsourcing Supplier and at the time the written agreement with the Buyer or
Outsourcing Supplier is executed, the Buyer or Outsourcing Supplier does not
have any one of the following employee benefit plans in which the Member would
participate if an offer of employment with the Buyer or Outsourcing Supplier is
accepted:

	 	(1)	 	a defined benefit plan that is qualified under
§ 401 of the Internal Revenue Code;
	 
	 	(2)	 	a defined contribution plan that is qualified
under § 401 of the Internal Revenue Code;
	 
	 	(3)	 	a post-retirement medical plan for pre-age 65
retirees to which the Buyer or Outsourcing Supplier makes company
contributions (even if the amount of company contributions is zero for
some coverage options). The Buyer or Outsourcing Supplier shall be
deemed not to have such a plan unless the Buyer or Outsourcing Supplier
agrees in the contract of sale with the Company to recognize the
Member’s combined Company and Buyer/Outsourcing Supplier service for
purposes of eligibility for that plan. Notwithstanding the above, the
Buyer or Outsourcing Supplier shall be deemed to have such a plan with
respect to a particular Member if, on the date of closing, the Member
is an Eligible Retiree as defined in the Omnibus Health Care Plan of the Chevron Corporation Medical Plan
Organization; and

	 	(iv)	 	the Member executes the Release within forty-five (45) days
after its receipt (or such extension as may be granted by the Company in its sole 

8

 

	 	 	 	discretion) and the period for revoking the execution of the Release under
the Older Workers’ Benefit Protection Act, 29 U.S.C. § 626(f), has expired.

	 	 	 	The business decisions that may result in a Member qualifying for a Benefit Plan
allowance are decisions to be made by the Company in its sole discretion. In making
these decisions, similarly situated organizations, locations, functions,
classifications, and/or Members need not be treated in the same manner. The date
selected by the Company to terminate the Member’s employment is within its sole
discretion and the Company is under no obligation to terminate a Member’s employment
prior to three years after the Change in Control.

	 	(b)	 	Amount of Benefit Plan Allowance

	 	(i)	 	Subject to Section VI(b)(ii), the Benefit Plan Allowance
payable to a Member shall be equal to one (1) week of such Member’s Enhanced
Regular Earnings for each full Year of Continuous Service (prorated for
completed calendar months); provided, however, that the minimum Benefits Plan
Allowance shall be equal to four (4) weeks of the Member’s Enhanced Regular
Earnings and the maximum Benefits Plan Allowance of any Member shall not exceed
twenty-five (25) weeks of Enhanced Regular Earnings.
	 
	 	(ii)	 	Notwithstanding Section VI(b)(i), any Benefit Plan Allowance
otherwise payable under that section shall be reduced (but not below zero) as
follows:

	 	(1)	 	If the Member had been or is on an Approved
Part-Time Schedule under the Chevron Part-Time Employment Guidelines,
at any time after January 1, 1994, the Benefit Plan Allowance shall be
reduced by multiplication by a ratio. The numerator of the ratio shall
be the total number of months of the Member’s Continuous Service after
January 1, 1994 while not on such an Approved Part-Time Schedule. The
denominator of the ratio shall be the Member’s total number of months
of Continuous Service. In calculating any Benefit Plan Allowance for
any such Member currently on such an Approved Part-Time Schedule,
Enhanced Regular Earnings shall be based on a full-time equivalent.
	 
	 	(2)	 	If a Member is reemployed by the Company or an
Affiliate within the number of weeks after termination that is equal to
the number of weeks of Enhanced Regular Earnings of the Benefit Plan
Allowance as determined under Section V(b)(i), the Benefit Plan

9

 

	 	 	 	Allowance shall be reduced to the amount that the Member’s Enhanced
Regular Earnings would have been for the period from the date of
termination to the date of reemployment. In all cases, the reduced
benefit will be based on the Member’s Enhanced Regular Earnings used to
calculate such Member’s Severance Pay Benefit under the Plan. A Member
will be considered “re-employed” under the Plan for purposes of the
repayment provision in this Section VI(b)(ii)(2) if retained at a
Company facility, as or through a contractor, for a full-time
equivalent of more than 45 work days.

	 	(3)	 	If a Member is employed by a Buyer or
Outsourcing Supplier within the number of weeks after termination of
employment that is equal to the number of weeks of Enhanced Regular
Earnings of the Benefits Plan Allowance as determined under Section
V(b)(i), the Benefit Plan Allowance shall be reduced to the greater of:

	 	(a)	 	the amount that the Member’s
Enhanced Regular Earnings would have been for the period from
the date of termination to the date of employment with the Buyer
or Outsourcing Supplier; and
	 
	 	(b)	 	the amount the Member has
received under Section V(b) prior to employment with the Buyer
or Outsourcing Supplier.

	 	 	 	This Section VI(b)(ii)(3) may be waived in writing by the Corporation
in its sole discretion.

	 	(4)	 	By severance pay or other similar benefits
payable under any other plan or policy of the Company or an Affiliate
or government required payment (other than unemployment compensation
under United States law), including but not limited to any benefit
enhancement program that may be adopted as part of a pension plan.
	 
	 	(5)	 	By any amounts payable pursuant to the Worker
Adjustment and Retraining Notification Act or any other similar
federal, state or local statute.
	 
	 	(6)	 	By the amount of any indebtedness to the
Company.

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	 	(7)	 	As described in Section 4(b) of the Chevron
Corporation Benefit Protection Program established effective March 29,
2000, as it may be amended from time to time.

	 	(c)	 	Repayment of the Benefit Plan Allowance

	 	 	 	If the Member has received payment under the Plan in excess of Benefit Plan
Allowance, as reduced in Section VI(b)(ii), the Member must agree as a condition of
reemployment that such excess will be repaid to the Company.

VII. FORM OF BENEFIT PLAN ALLOWANCE

	 	 	The Benefit Plan allowance will be paid in a lump sum on or shortly after the latter of the
date employment with the Company terminates or the date the sale or other transfer of
management occurs; provided that the Member has properly signed and returned the Release to
the Company and the revocation period under the Older Worker’s Benefit Protection Act, 29
U.S.C. § 626(f), has expired.

VIII. DEATH OF A MEMBER

	 	 	If a Member dies after qualifying for a Severance Pay Benefit or a Benefit Plan Allowance
but before such benefit is completely paid, the balance of the Severance Pay Benefit
or Benefit Plan Allowance shall be paid in a lump sum to the Member’s Beneficiary.

IX. BENEFITS PROVIDED UNDER OTHER PLANS

	 	(a)	 	Eligible Employees Who Qualify As Eligible Retirees.
	 
	 	 	 	As of March 29, 2000, Eligible Retirees are presently eligible to continue their
health care coverage under the terms of the Omnibus Health Care Plan of the Chevron
Corporation Medical Plan Organization and its Supplement Plans. As of March 29,
2000, Eligible Retirees are presently eligible for Company contributions toward the
cost of that coverage under the terms of the Chevron Corporation Health Care
Contributions Policy.
	 
	 	(b)	 	Eligible Employees Who Do Not Qualify As Eligible Retirees.
	 
	 	 	 	As of March 29, 2000, Employees who terminate employment with the Company and their
dependents are generally presently eligible for continued coverage in the Omnibus
Health Care Plan of the Chevron Corporation Medical Plan Organization and its
Supplement Plans for (eighteen) 18 months after termination 

11

 

	 	 	 	of employment as required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”). As of March 29, 2000, Members who terminate employment with a Severance Pay Benefit under this Plan may generally presently qualify for Employee rates for
coverage under the Omnibus Health Care Plan of the Chevron Medical Plan Organization
and its Supplement Plans and for the applicable Company contribution for themselves
and their dependents for the first twelve (12) months of COBRA coverage under the
terms of the Chevron Corporation Health Care Contributions Policy (other than to the
extent such Supplement Plan provides dental coverage).

	 	(c)	 	Relocation
	 
	 	 	 	Members who subsequently qualify for a Severance Pay Benefit after having relocated
pursuant to a Transfer occurring after the Change in Control shall be entitled to a
reimbursement of relocations expenses to his or her Present Work Location
immediately prior to the Change in Control. Such reimbursement shall be no less
than that determined pursuant to the Company’s policy for post-retirement
relocations as it existed immediately prior to the Change in Control.

X. AMENDMENT AND TERMINATION

	 	(a)	 	General Rule.
	 
	 	 	 	Although the Corporation expects to continue the Plan indefinitely, inasmuch as
future conditions cannot be foreseen, (subject to Sections X(b) and (c)) the
Corporation reserves the right to amend or terminate the Plan at any time by action
of its board of directors or by action of a committee or individual(s) acting
pursuant to a valid delegation of authority of the board of directors. However, no
amendment or termination shall adversely affect the right to:

	 	(i)	 	Any unpaid Severance Pay Benefit or Benefit Plan Allowance; or
	 
	 	(ii)	 	Qualify for a Severance Pay Benefit or Benefit Plan by the
timely execution of the Release after such amendment or termination.

	 	(b)	 	Restrictions on Amendments During Extended Benefit Protection Period.
	 
	 	 	 	Notwithstanding Section X(a) of the Plan, subject to Section X(c), and except to the
extent required to comply with applicable law; no amendment or termination of the
Plan that is either not approved by the Corporation prior to the Extended Benefit
Protection Period Commencement Date or is not executed after the

12

 

	 	 	 	expiration of the Extended Benefit Protection Period shall be effective to the extent it:

	 	(i)	 	Deprives any individual who is an Employee as of the Change in
Control of coverage under the Plan as constituted at the time of such
amendment;
	 
	 	(ii)	 	Limits eligibility for or reduce the amount of any Severance
Pay Benefit or Benefit Plan Allowance;
	 
	 	(iii)	 	Amends Section X, XII, or the definitions of the terms
Extended Benefit Protection Period (except to lengthen such period), Extended
Benefit Protection Period Commencement Date (except to make it an earlier
date), Change in Control or Successors and Assigns in Section XX of the Plan;
	 
	 	(iv)	 	Terminates the Plan; or .
	 
	 	(v)	 	Is executed (or would otherwise become effective) at the
request of a third party who effectuates a Change in Control.

	 	 	 	For purposes of this Section X(b), approval by the Corporation shall mean written
approval (by a person or entity within the Corporation that has authority to do so)
of the subsequent execution of such Plan amendment or termination.
	 
	 	 	 	No person shall take any action that would directly or indirectly have the same
effect as any of the prohibited amendments or termination described in Section X(b).
	 
	 	(c)	 	Section X(b) shall not apply to the extent:

	 	(i)	 	the amendment or termination of the Plan 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
	 
	 	(ii)	 	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.

XI. NON-ALIENATION OF BENEFITS

13

 

	 	 	To the full extent permitted by law and except as provided in the Plan, no Severance Pay
Benefit shall be subject to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt to do so shall be void.

XII. SUCCESSORS AND ASSIGNS

	 	 	The Plan shall be binding upon the Corporation, its Successors and Assigns. Notwithstanding
that the Plan may be binding upon a Successor or Assign by operation of law, the Corporation
shall require any Successor or Assign to expressly assume and agree to be bound by the Plan
in the same manner and to the same extent that the Corporation would be if no succession or
assignment had taken place.

XIII. LEGAL CONSTRUCTION

	 	 	This Plan is governed by and shall be construed in accordance with ERISA and, to the extent
not preempted by ERISA, with the laws of the State of California.

XIV. ADMINISTRATION AND OPERATION OF THE PLAN

	 	(a)	 	Plan Sponsor and Plan Administrator.
	 
	 	 	 	The Corporation is the “Plan Sponsor” and the “Plan Administrator” of the Plan as
such terms are used in ERISA.
	 
	 	(b)	 	Administrative Power and Responsibility.
	 
	 	 	 	The Corporation in its capacity as Plan Administrator of the Plan is the named
fiduciary that has the authority to control and manage the operation and
administration of the Plan. The Corporation shall make such rules, regulations,
interpretations and computations and shall take such other action to administer the
Plan as it may deem appropriate. The Corporation shall have the sole discretion to
interpret the provisions of the Plan and to determine eligibility for benefits
pursuant to the objective criteria set forth in the Plan. In administering the
Plan, the Corporation shall at all times discharge its duties with respect to the
Plan in accordance with the standards set forth in Section 404(a)(1) of ERISA. The
Corporation may engage the services of such persons or organizations to render
advice or perform services with respect to its responsibilities under the Plan as it
shall determine to be necessary or appropriate. Such persons or organizations may
include (without limitation) actuaries, attorneys, accountants and consultants.
	 
	 	(c)	 	Review Panel.
	 
	 	 	 	Upon receipt of a request for review the Corporation shall appoint a Review Panel
that shall consist of three or more individuals. The Review Panel shall be the

14

 

	 	 	 	named fiduciary that shall have authority to act with respect to appeals from denial
of benefits under the Plan.

	 	(d)	 	Service in More Than One Fiduciary Capacity.
	 
	 	 	 	Any person or group of persons may serve in more than one fiduciary capacity with
respect to the Plan.
	 
	 	(e)	 	Performance of Responsibilities.
	 
	 	 	 	The responsibilities of the Corporation under the Plan shall be carried out on its
behalf by its officers, Employees and agents. The Corporation may delegate any of
its fiduciary responsibilities under the Plan to another person or persons pursuant
to a written instrument that specifies the fiduciary responsibilities so delegated
to each such person.
	 
	 	(f)	 	Employee Communications and Other Plan Activities.
	 
	 	 	 	In communications with its Employees and in any other activities relating to the
Plan, the Corporation shall comply with the rules, regulations, interpretations,
computations and instructions that were issued to administer the Plan. With respect
to matters relating to the Plan, directors, officers and Employees of the
Corporation shall act on behalf or in the name of the Corporation in their capacity
as directors, officers and Employees and not as individual fiduciaries.

XV. CLAIMS, INQUIRIES AND APPEALS

	 	(a)	 	Claims for Benefits and Inquiries.
	 
	 	 	 	All claims for benefits and all inquiries concerning the Plan or present or future
rights to benefits under the Plan, shall be submitted to the Plan Administrator in
writing and addressed as follows: “Chevron Corporation, Plan Administrator under
the Chevron Corporation Change in Control Surplus Employee Severance Program for
Salary Grades 41 through 43, 6001 Bollinger Canyon Road, Bldg. H. CHVPK, Room Number
H3501-B7, San Ramon, CA 94583-0967” or such other location as communicated to the
Member. A claim for benefits shall be signed by
the Member, or if a Member is deceased, by such Member’s spouse, designated
beneficiary or estate, as the case may be.
	 
	 	(b)	 	Denials of Claims.

15

 

	 	 	 	In the event that any claim for benefits is denied, in whole or in part, the Plan
Administrator shall notify the claimant in writing of such denial and of the right
to a review thereof. Such written notice shall set forth in a manner calculated to
be understood by the claimant, specific reasons for such denial, specific references
to the Plan provision on which such denial is based, a description of any
information or material necessary to perfect the claim, an explanation of why such
material is necessary and an explanation of the Plan’s review procedure. Such
written notice shall be given to the claimant within 90 days after the Plan
Administrator receives the claim, unless special circumstances require an extension
of time of up to an additional 90 days for processing the claim. If such an
extension of time for processing is required, written notice of the extension shall
be furnished to the claimant prior to the termination of the initial 90-day period.
This notice of extension shall indicate the special circumstances requiring the
extension of time and the date by which the Plan Administrator expects to render its
decision on the claim for benefits. If written notice of denial of the claim for
benefits is not furnished within the time specified in this Section XV(b), the claim
shall be deemed denied. The claimant shall be permitted to appeal such denial in
accordance with the Review Procedure set forth below.
	 
	 	(c)	 	Review Panel.
	 
	 	 	 	The Plan Administrator shall appoint a “Review Panel,” consisting of three or more
individuals who may (but need not) be Employees of the Company. The Review Panel
shall be the named fiduciary that has the authority to act with respect to any
appeal from a denial of benefits.
	 
	 	(d)	 	Requests for a Review.
	 
	 	 	 	Any person whose claim for benefits is denied (or is deemed denied) in whole or in
part, or such person’s duly authorized representative, may appeal from such denial
by submitting a request for a review of the claim to the Review Panel within 60 days
after receiving written notice of such denial from the Plan Administrator (or, in
the case of a deemed denial, within 60 days after the claim is deemed denied). The
Plan Administrator shall give the claimant or such representative an opportunity to
review pertinent documents that are not privileged in preparing a request for a
review. A request for review shall be in writing and shall be
addressed as follows: “Review Panel under the Chevron Corporation Change in Control
Surplus Employee Severance Program Salary Grades 41 through 43, 6001 Bollinger
Canyon Road, Bldg. H. CHVPK, Room Number H3501-B7, San Ramon, CA 94583-0967” or
such other location as communicated to the Member. A request for review shall set
forth all of the grounds on which it is based, all facts in support of the request
and any other matters that the claimant deems pertinent. The Review Panel may
require the 

16

 

	 	 	 	claimant to submit such additional facts, documents or other material as it may deem necessary or appropriate in making its review.

	 	(e)	 	Decision on Review.
	 
	 	 	 	The Review Panel shall act on each request for review and notify the claimant within
60 days after receipt thereof unless special circumstances require an extension of
time, up to an additional 60 days, for processing the request. If such an extension
for review is required, written notice of the extension shall be furnished to the
claimant within the initial 60-day period. The Review Panel shall give prompt,
written notice of its decision to the claimant and to the Plan Administrator. In
the event that the Review Panel confirms the denial of the claim for benefits, in
whole or in part, such notice shall set forth, in a manner calculated to be
understood by the claimant, the specific reasons for such denial, and specific
references to the Plan provisions on which the decision is based. If written notice
of the Review Panel’s decision is not given to the claimant within the time
prescribed in this Section XV(e), the claim will be deemed denied on review.
	 
	 	(f)	 	Rules and Procedures.
	 
	 	 	 	The Review Panel shall establish such rules and procedures, consistent with the Plan
and with ERISA, as it may deem necessary or appropriate in carrying out its
responsibilities under this Section XV. The Review Panel may require a claimant who
wishes to submit additional information in connection with an appeal from the denial
(or deemed denial) of benefits to do so at the claimant’s own expense.
	 
	 	(g)	 	Exhaustion of Remedies.
	 
	 	 	 	No legal action for benefits under the Plan shall be brought unless and until the
claimant:

	 	(i)	 	has submitted a written claim for benefits in accordance with
Section XV(a);
	 
	 	(ii)	 	has been notified by the Plan Administrator that the claim is
denied, or the claim is deemed denied;
	 
	 	(iii)	 	has filed a written request for a review of the claim in
accordance with Section XV(d); and
	 
	 	(iv)	 	has been notified in writing that the Review Panel has affirmed
the denial of the claim, or the claim is deemed denied.

17

 

XVI. BASIS OF PAYMENTS TO AND FROM PLAN

	 	 	All Severance Pay Benefits under the Plan shall be paid by the Company. The Plan shall be
unfunded and benefits hereunder shall be paid only from the general assets of the Company.

XVII. OTHER PLAN INFORMATION

	 	(a)	 	Plan Identification Numbers.
	 
	 	 	 	The Employer Identification Number (EIN) assigned to the Plan Sponsor (Chevron
Corporation) by the Internal Revenue Service is 94-0890210. The Plan Number (PN)
assigned to the Plan by the Plan Sponsor pursuant to instructions of the Internal
Revenue Service is 883.
	 
	 	(b)	 	Ending Date of the Plan’s Fiscal Year.
	 
	 	 	 	The date of the end of the year for the purpose of maintaining the Plan’s fiscal
records is December 31.
	 
	 	(c)	 	Agent for the Service of Legal Process.
	 
	 	 	 	The agent for the service of legal process with respect to the Plan is the Secretary
of Chevron Corporation, 6001 Bollinger Canyon Road, San Ramon, CA 94583-0967. The
service of legal process may also be made on the Plan by serving the Plan
Administrator.
	 
	 	(d)	 	Plan Sponsor and Administrator.
	 
	 	 	 	The “Plan Sponsor” and the “Plan Administrator” of the Plan is Chevron Corporation,
6001 Bollinger Canyon Road, Bldg. H. CHVPK, Room Number H3501-B7, San Ramon, CA
94583-0967; telephone (925) 842-0673 or such other location as communicated to the
Member. The Plan Administrator is the named fiduciary charged with responsibility
for administering the Plan.

	XVIII.	 	STATEMENT OF ERISA RIGHTS

	 	(a)	 	As a participant in this Plan (which is a welfare plan sponsored by the
Corporation), you are entitled to the following rights and protection (ERISA):
	 
	 	(b)	 	Examine, without charge, at the Plan Administrator’s office and at other
specified locations such as work sites, all plan documents, collective bargaining
agreements and copies of all documents filed by the plan with the U.S. Department of
Labor.

18

 

	 	(c)	 	Obtain copies of all plan documents and other plan information upon written
request to the Plan Administrator. The Administrator may make a reasonable charge for
the copies.
	 
	 	(d)	 	In addition to creating rights for plan participants, ERISA imposes duties upon
the people responsible for the operation of the Employee benefit plan. The people who
operate your plan, called “fiduciaries” of the plan, have a duty to do so prudently and
in the interest of you and other plan participants and beneficiaries.
	 
	 	(e)	 	No one, including your employer, your union, nor any other person, may fire you
or otherwise discriminate against you in any way to prevent you from obtaining a plan
benefit or exercising your rights under ERISA. If your claim for a plan benefit is
denied in whole or in part, you must receive a written explanation of the reason for
the denial. You have the right to have the claim reviewed and reconsidered.
	 
	 	(f)	 	Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the plan and do not receive them within 30
days, you may file suit in a federal court. In such a case, the court may require the
Plan Administrator to provide the materials and pay you up to $110 a day until you
receive the materials, unless the materials were not sent because of reasons beyond the
control of the Administrator. If you have a claim for benefits which is denied or
ignored, in whole or in part, you may file suit in a state or federal court. If it
should happen that the plan fiduciaries misuse the Plan’s money, or if you are
discriminated against for asserting your rights, you may seek assistance from the U.S.
Department of Labor, or you may file suit in a federal court. The court will decide
who should pay court costs and legal fees. If you are successful, the court may order
the person you have sued to pay these costs and fees. If you lose, the court may order
you to pay these costs and fees, for example, if it finds your claim is frivolous.

	 	 	If you have any questions about your plan, you should contact the Plan Administrator. If
you have any questions about this statement or about your rights under ERISA, you should
contact the nearest office of the U.S. Labor-Management Services Administration, Department
of Labor.

XIX. AVAILABILITY OF PLAN DOCUMENTS FOR EXAMINATION

19

 

	 	 	ERISA requires Chevron Corporation as the Plan Administrator of a benefit plan sponsored by
the Corporation to make available for your examination the plan documents under which the
plan is established and operated.
	 
	 	 	The pertinent plan documents include official plan texts and any other documents under which
the plan is established or operated, and applicable collective bargaining agreements.
	 
	 	 	These plan documents are available for your examination at the Plan Administrator’s office,
6001 Bollinger Canyon Road, Bldg. H. CHVPK, Room Number H3501-B7, San Ramon, CA 94583-0967,
and at certain other locations such as the Company’s Human Resources offices.
	 
	 	 	The following rules have been established by the Corporation for the examination and
distribution of plan documents:

RULES

	 	1.	 	When employed within a reasonable distance from a facility of the Company
having a Human Resources office:

	 	a.	 	Plan documents may be examined during regular business hours as
specified at each facility.
	 
	 	b.	 	Plan documents may not be removed from the premises.

	 	2.	 	When not employed within a reasonable distance from a facility of the
Corporation having a Human Resources office:

	 	a.	 	Plan documents may be requested from the Plan Administrator on
a 30-day loan basis.

	 	b.	 	Plan documents not returned within 30 days to the Plan
Administrator will result in the Employee being charged under Rule 3. below.

	 	3.	 	Copies of plan documents or sections thereof will be provided by the Plan
Administrator at a charge of 10 cents per page. Payments may be made only by check or
money order payable to Chevron Corporation.
	 
	 	4.	 	Plan documents covering only those plans for which an Employee is eligible will
be made available.

20

 

	 	5.	 	All requests for plan documents must be in writing and should include the
Employee’s name, Social Security number, mailing address, employing Company,
department/staff and location, and title of the document desired.

XX. DEFINITIONS

	 	(a)	 	“Affiliate”
	 
	 	 	 	means a member of the Affiliated Group other than the “Corporation” and a
“Subsidiary”
	 
	 	(b)	 	“Affiliated Group”
	 
	 	 	 	means the Corporation, each Subsidiary and each other entity that has been
designated in writing as a Member of the Affiliated Group by the Corporation.
	 
	 	(c)	 	“Approved Part-Time Schedule”
	 
	 	 	 	means a part-time schedule that is approved by the Company under the Corporation’s
Part-Time Employee Guidelines, as amended from time to time.
	 
	 	(d)	 	“Beneficiary”
	 
	 	 	 	means the person or persons so designated by a Member. A Member may change or
revoke a designation of a Beneficiary at any time. To be effective, any designation
of a Beneficiary, or any change or revocation thereof, must be made in writing on
the prescribed form, must be received by the Corporation (in a form acceptable to
the Corporation) before the Member’s death . If a Member fails to make a valid
designation of a Beneficiary, or if the validly designated Beneficiary is not living
when a payment is to be made to a Beneficiary hereunder, the Member’s Beneficiary
shall be the Member’s spouse if then living or, if not, the Member’s then living
children in equal shares or, if none, the Member’s estate.
	 
	 	(e)	 	“Buyer”
	 
	 	 	 	means an entity that purchases (or has purchased) some or all of the Affiliated
Group’s interest applicable to the operation in which the Member is employed, or an
entity that is a direct or indirect successor in ownership or management of the
operation in which the Member is employed. Notwithstanding the above, Buyer shall
not include the entity that effectuates a Change in Control.
	 
	 	(f)	 	“Casual Employee”

21

 

	 	 	 	means an individual who works a Regular Work Schedule but is hired for a job with
the expectation that employment will be terminated within four months. If a Casual
Employee’s employment is not terminated within such four-month period, status as an
Employee will be considered to commence on the first day following the date of
completion of such four-month period.
	 
	 	(g)	 	“Change in Control”
	 
	 	 	 	means a change in control of the Corporation as defined in Section IV of the
Corporation’s By-Laws, as it may be amended from time-to-time.
	 
	 	(h)	 	“Chevron Corporation Retirement Plan”
	 
	 	 	 	means the Chevron Corporation Retirement Plan, as it may be amended from time to
time.
	 
	 	(i)	 	“Chevron Part-Time Employment Guidelines”
	 
	 	 	 	means the formal written part-time employment guidelines issued by the Corporation
in its sole discretion.
	 
	 	(j)	 	“Company”
	 
	 	 	 	means Chevron Corporation, its Subsidiaries, and any of their Successors or Assigns.
	 
	 	(k)	 	“Continuous Service”
	 
	 	 	 	means the sum of the following:

	 	(i)	 	Any period of time during which a person qualifies as an
Employee or, having once so qualified, is on a leave of absence with pay, a
paid vacation or holiday or is receiving benefits under the Corporation’s
Short-Term Disability Plan; provided however that in the case of a Seasonal
Employee, “Continuous Service” shall not include any period of less than 90
consecutive calendar days of employment in a single season; provided, further,
that except as provided in (4) below, any period of time during which an
individual is on strike shall not constitute Continuous Service;
	 
	 	(ii)	 	Any period of authorized leave of absence without pay that
constitutes Continuous Service under the Corporation’s Leave of Absence Policy;
or
	 
	 	(iii)	 	Any other period that constitutes Continuous Service under
written rules or procedures adopted from time to time by the Corporation,
subject to 

22

 

	 	 	 	such terms and conditions as the Corporation may establish; and any period of time while employed by Corporation’s Successor or Assigns that that
would have constituted Continuous Service if the service had been with the
Company prior to the Change in Control.

	 	 	 	An Employee whose Continuous Service is interrupted and who subsequently returns to
a status that constitutes Continuous Service shall be disregarded for all purposes
of the Plan except under the following circumstances:

	 	(1)	 	In the case of an Employee laid off for lack of
work, as defined in the Retirement Plan, if such Employee is reemployed
within 365 calendar days after being laid off, all prior Continuous
Service and the period of layoff shall be considered Continuous
Service;
	 
	 	(2)	 	In such case of an Employee who resigns, if
such Employee is reemployed within 31 days following such resignation,
all prior Continuous Service and the time period between the date of
resignation and reemployment will be considered Continuous Service;
	 
	 	(3)	 	In the case of an Employee on an authorized
leave of absence without pay, any portion of which does not constitute
Continuous Service under the Corporation’s Leave of Absence Policy, if
such Employee abides by all the terms and conditions of such leave,
which may include a requirement of returning to active employment with
the Corporation, all prior Continuous Service will be considered
Continuous Service; and
	 
	 	(4)	 	In the case of an individual on strike, the
strike period shall count as Continuous Service only if:

	 	(a)	 	the individual returns to work as
an Employee at the end of the strike, and
	 
	 	(b)	 	Continuous Service treatment for
the period of strike is agreed to pursuant to the collective
bargaining process.

	 	(l)	 	“Corporation”
	 
	 	 	 	means Chevron Corporation, a publicly held Delaware Corporation, and any Successor
or Assigns.

23

 

	 	(m)	 	“Demotion”
	 
	 	 	 	means a reduction in Salary Grade, a material reduction in authority or
responsibility, or a reduction in Overall Compensation.
	 
	 	(n)	 	“Eligible Employee”

	 	 	 	means any Employee who meets all the following conditions:

	 	(i)	 	Prior to the Change in Control is in the Company’s salary grade
41 through 43; and
	 
	 	(ii)	 	At termination of employment with the Company:

	 	(1)	 	has at least one Year of Continuous Service
with the Company;
	 
	 	(2)	 	is not a Temporary, Casual or Seasonal Employee
of the Company;
	 
	 	(3)	 	is not on a Leave of Absence without Pay other
than the following:

	 	(a)	 	Family Leave;
	 
	 	(b)	 	Reserve or active military duty
leave;
	 
	 	(c)	 	Union business leave;
	 
	 	(d)	 	Political activity or public
office leave; or
	 
	 	(e)	 	Expatriate employee furlough
leave between foreign assignments (Form GO 120-19).

	 	(4)	 	is not included in a collective bargaining
unit, unless participation in the Plan for Employees in such unit:

	 	(a)	 	is provided for under an
agreement between the Company and the collective bargaining
representative; or
	 
	 	(b)	 	is offered to the collective
bargaining representative and, after exhaustion of statutory
bargaining requirements, is extended by the Corporation to such
Employees.

	 	 	 	Notwithstanding any other provision of the Plan, in the event a
collective bargaining representative becomes recognized or certified
for a unit of Employees that includes one or more Employees
previously eligible to participate in the Plan, their 

24

 

	 	 	 	eligibility shall not be affected by their inclusion in a bargaining until such
time as statutory bargaining requirements are completed regarding the
participation, if any, of such Employees in the Plan.

	 	 	 	An individual’s status as an Eligible Employee shall be determined by the
Corporation in its sole discretion, and such determination shall be conclusively
binding on all persons.
	 
	 	(o)	 	“Eligible Retiree”
	 
	 	 	 	means an Eligible Retiree as defined in the Omnibus Health Care Plan of the Chevron
Corporation Medical Plan Organization.
	 
	 	(p)	 	“Employee”
	 
	 	 	 	means a common law employee of the Company who meets all of the following
conditions:

	 	(i)	 	Is employed by the Company prior to the Change in Control;
	 
	 	(ii)	 	Prior to the Change in Control, is assigned to a Regular Work
Schedule of:

	 	(1)	 	at least 40 hours per week; or

	 	(2)	 	on or after January 1, 1994, at least 20 hours
per week, if such schedule is an Approved Part-Time Schedule pursuant
to the Corporation’s Part-Time Employment Guidelines.

	 	 	 	An individual who is disabled and receiving or entitled to receive benefits
under a long-term disability plan, such as the Long-Term Disability Plan of
the Chevron Corporation Disability Plan Organization are deemed to be
assigned to a Regular Work Schedule.
	 
	 	(iii)	 	Is not on the payroll of a person other than the Company and
who for any reason is deemed to be a common law employee of the Company; and
	 
	 	(iv)	 	Is not considered to be an independent contractor by the
Company in its sole discretion regardless of whether the individual is in fact
a common law employee of the Company.

	 	 	 	An individual’s status as an Employee shall be determined by the Corporation in its
sole discretion, and such determination shall be conclusively binding on all persons.

25

 

	 	(q)	 	“Enhanced Regular Earnings”
	 
	 	 	 	means the sum of Regular Earnings and MIP Target Bonus. For purposes of determining
Enhanced Regular Earnings for a period of less than one year, the MIP Target Bonus
for a Year will be allocated pro rata over the entire year.
	 
	 	(r)	 	“ERISA”
	 
	 	 	 	means the Employee Retirement Income Security Act of 1974, as amended from
time-to-time.
	 
	 	(s)	 	“Extended Benefit Protection Period”
	 
	 	 	 	means the period commencing on the Extended Benefit Protection Period Commencement
Date and terminating the earlier of the following:

	 	(i)	 	three years after the date of a Change in Control; or
	 
	 	(ii)	 	the date of abandonment of any plans to effectuate a
transaction which, if effectuated, would have been a Change in Control and such
transaction has not occurred.

	 	(t)	 	“Extended Benefit Protection Period Commencement Date”

	 	 	 	means the date six months prior to the public announcement of the proposed
transaction which, when effected, is a Change in Control.

	 	(u)	 	“Family Leave”

	 	 	 	means a Leave under the Corporation’s Family Leave Policy.

	 	(v)	 	“Leave of Absence without Pay”

	 	 	 	means a Leave of Absence without Pay under the Corporation’s Leave of Absence
Policy.

	 	(w)	 	“Member”

	 	 	 	means any Eligible Employee who has commenced participation in the Plan pursuant to
Section II and whose participation has not terminated pursuant to Section III.

26

 

	 	(x)	 	“MIP Target Bonus”

	 	 	 	means an amount equal to the Member’s target bonus under the Chevron
Corporation Management Incentive Plan for the year prior to his or her termination
of employment (or for the last year of the Chevron Corporation Management Incentive
Plan if it no longer exists in the year prior to the Member’s termination of
employment), as determined pursuant to the established procedures of that Plan prior
to the Change in Control.

	 	(y)	 	“New Work Location”

	 	 	 	means Member’s normal work location if he or she should accept a job offer with the
Company, a Buyer, or an Outsourcing Supplier. For a rotational job, the normal work
location shall be the actual work location and not either the point of demarcation
or the Member’s residence.

	 	(z)	 	“Off the Job Disability”
	 
	 	 	 	means a disability not directly caused by employment with the Company. The
classification of a disability shall be determined by the Corporation and such
classification shall be conclusive and binding on all persons.
	 
	 	(aa)	 	“Outsourcing Supplier”
	 
	 	 	 	means an entity to whom the Company outsources a function performed by Employees
where the Company agrees with such entity in the outsourcing agreement that it will
offer jobs to current Employees performing that function for the Company.
	 
	 	(bb)	 	“Overall Compensation”
	 
	 	 	 	means the sum of Regular Earnings, and the benefit under the Chevron Corporation
Long-Term Incentive Program for the benefit period immediately prior to the Change
in Control. It shall not include the value of any other employee benefit plan or
program.
	 
	 	(cc)	 	“Plan”
	 
	 	 	 	means the Chevron Corporation Change in Control Surplus Employee Severance Plan for
Salary Grades 41 and Above.
	 
	 	(dd)	 	“Plan Administrator”
	 
	 	 	 	means the Corporation.

27

 

	 	(ee)	 	“Present Work Location”
	 
	 	 	 	means a Member’s current normal work location with the Company without regard to any
Special Assignment. For a rotational job, the normal work location shall be the
actual work location and not either the point of demarcation or the Member’s
residence.
	 
	 	(ff)	 	“Regular Earnings”
	 
	 	 	 	means straight-time wages or salary paid to a Member by any entity within the
Affiliated Group for working a Regular work Schedule or for a leave of absence with
pay, and shall include the straight-time portion of amounts paid for regularly
scheduled overtime and any amount that is contributed to any employee benefit plan
on behalf of the Member by any entity within the Affiliated Group under a salary
reduction agreement entered into pursuant to such plan and that is excluded from the
Member’s gross income under §§ 125, 132(f), or 402(a)(8) of the Internal Revenue
Code. Notwithstanding the foregoing, if the Plan is applicable to Members employed
by PLEXCO Inc. or by the PLEXCO division of Chevron Chemical Company, “Regular
Earnings”, shall include PLEXCO-specific incentive compensation. Such Incentive
compensation shall be deemed paid in equal monthly installments over the period for
which it is awarded.
	 
	 	(gg)	 	“Regular Work Schedule”
	 
	 	 	 	means the continually recurring pattern of work established and changed as necessary
by the Company for a job in each work week or period of work weeks to meet operating
needs.
	 
	 	(hh)	 	“Release”
	 
	 	 	 	means a Release determined by the Company in its sole discretion. Pursuant to such
Release, the Member shall waive all employment-related claims in connection with his
or her employment with the Company other than claims for benefits under the actual
terms of an employee benefit plan and worker’s compensation. Such Release shall be
construed to comply with the requirements of the Older Workers’ Benefit Protection
Act, 29 U.S.C. § 626(f).
	 
	 	(ii)	 	“Salary Grade”
	 
	 	 	 	means the classification of a job under the Company’s written salary structure
providing a guiding minimum, competitive objective and guiding maximum in
compensation for the job.
	 
	 	(jj)	 	“Seasonal Employee”

28

 

	 	 	 	means an individual who is hired to work a Regular Work Schedule for a portion of
each year on a repetitive basis in a job described to cover a seasonal operating
need.
	 
	 	(kk)	 	“Special Assignment”
	 
	 	 	 	means a job assignment that is expected to be temporary and is designated as a
special assignment by the Company in its sole discretion.
	 
	 	(ll)	 	“Subsidiary”
	 
	 	 	 	means any Corporation with respect to which the Corporation, one or more
Subsidiaries, or the Corporation together with one or more Subsidiaries, own not
less than 80% of the total combined voting power of all classes of stock entitled to
vote, or not less than 80% of the total value of al shares of all classes of stock.
	 
	 	(mm)	 	“Successors and 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.
	 
	 	(nn)	 	“Temporary Employee”
	 
	 	 	 	means an Employee classified as a Temporary Employee by the Company in its sole
discretion.
	 
	 	(oo)	 	“Transfer”
	 
	 	 	 	means a non-temporary reassignment to a job with the Company in a New Work Location
that is more than 50 miles from the Employee’s Present Work Location. An offer of a
position with a Buyer is not a Transfer. Notwithstanding the above, “Transfer”
shall not include:

	 	(i)	 	in the case where an Employee’s current job is a rotational
job, a reassignment to a job with the Company in a New Work location that is no
more than 50 miles from the Employee’s last work location with the Company
that did not involve a rotational job, and
	 
	 	(ii)	 	in the case where an Employee’s current job is in a non-U.S.
location, a reassignment to a U.S. location at the Employee’s request.

	 	(pp)	 	“Year of Continuous Service”

	 	 	 	means the number of full months (as defined by the Corporation in written rules adopted by
it from time to time) of Continuous Service, divided by 12.

29exv10w2

 

Exhibit 10.2

CHEVRON CORPORATION

BENEFIT PROTECTION PROGRAM

(Amended and Restated Effective December 7, 2005)

(Amended Effective December 6, 2006)

Section 1. Establishment and Purpose.

     This Chevron Corporation Benefit Protection Program was established effective March 29, 2000
by action of the Board of Chevron Corporation and amended and restated effective December 7, 2005.
The Program was further amended effective December 6, 2006. The purpose of the Program is to
protect certain benefits provided to employees of the Corporation and its Subsidiaries against
elimination or reduction in the event of a Change in Control. In addition, the Program is designed
to provide individuals who are eligible to receive awards under the Chevron Corporation Long-Term
Incentive Plan compensation to offset any excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended.

Section 2. Definitions.

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

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

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

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

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

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

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

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

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

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

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

1

 

Section 3. Benefit Protection.

     (a) Severance Programs. Concurrent with the adoption of the Program, the Board has
adopted the Chevron Corporation Change in Control Surplus Employee Severance Program for Salary
Grades Below 27, the Chevron Corporation Change in Control Surplus Employee Severance Program for
Salary Grades 27 to 30 and the Chevron Corporation Change in Control Surplus Employee Severance
Program for Salary Grades 41 through 43 in order to provide protection to eligible employees of the
Corporation or its Subsidiaries in the event of a Change in Control.

     (b) Other Chevron Plans.

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

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

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

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

2

 

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

     (d) General Provisions.

     (i) No Mitigation of Damages. No employee shall be required to mitigate the
amount of any payment or benefit provided for in any plan or program of the corporation or a
Subsidiary by seeking other employment or otherwise and, except as otherwise provided in the
Chevron Corporation Change in Control Surplus Employee Severance Program for Salary Grades
27 to 30 or the Chevron Corporation Change in Control Surplus Employee Severance Program for
Salary Grades 41 through 43, as applicable, no such payment shall be offset or reduced by
the amount of any compensation or benefits provided to any employee in any subsequent
employment.

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

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

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

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

3

 

Section 4. Payment of Tax Equalization Benefits.

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

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

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

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

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

     (iv)Any other component of the Payment

4

 

Section 5. Administration.

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

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

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

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

Section 6. Amendment or Termination of the Program.

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

5

 

request of a third party who effectuates a Change in Control shall be deemed to be an
amendment, suspension or termination which is approved during the Benefit Protection Period.

Section 7. General.

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

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

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

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

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

6

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