MANAGEMENT INCENTIVE PLAN OF
CHEVRON CORPORATION
As Amended Effective March 29, 2000
1. Purpose.
The purpose of the Management Incentive Plan of Chevron Corporation is
to obtain, develop and retain able management personnel, stimulate
constructive and imaginative thinking, and contribute to the growth and
profits of the Corporation.
2. Effective Date.
The Plan was adopted effective January 1, 1966 and approved by the
Corporation's stockholders at the Annual Meeting on May 5, 1966. The
Plan was revised to read as set forth herein effective January 1, 1980,
subject to approval by the Corporation's stockholders at the Annual
Meeting held on May 6, 1980.
3. Awards Under the Plan.
Awards under the Plan shall be made in the sole discretion of the
Committee. After the close of an Award Year, the Committee shall
determine the dollar amount of the award to be made to each Eligible
Employee whom the Committee selects to be an award recipient for that
Award Year; provided, however, that the award amount for the chief
executive officer and the next four highest compensated officers of the
corporation shall be subject to the following limitations:
A. 0.5% of the Corporation's "Annual Income" shall be
set aside for awards to such officers. For this purpose,
"Annual Income" shall mean reported earnings before special
items and accounting changes.
B. The maximum awards to the following officers shall
equal the indicated percentage of the aggregate fund set forth
in A above, determined pursuant to the following schedule:
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Officer Percentage
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CEO 40%
Second and third highest compensated
officers 20% each
Fourth and fifth highest compensated
officers 10% each
Total 100%
C. The Committee in its sole discretion may reduce
the award otherwise payable to any such officer as determined
above, but in no event may any such reduction result in an
increase of the award payable to any other participant,
including but not limited to any other such officer.
The foregoing notwithstanding, following 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 (a "Change in
Control"), neither the Committee nor any other entity or individual(s)
shall have the discretion to make awards under the Plan. Rather, for
the calendar year in which the Change in Control occurs and, if payment
of awards for the calendar year prior to the year in which the Change
of Control occurs has not been completed as of the date of the Change
in Control, that prior calendar year, each Eligible Employee shall be
entitled to receive an award in an amount not less than that Eligible
Employee's target bonus, as determined pursuant to the Committee's
established procedures prior to the Change in Control. For any Eligible
Employee whose employment terminates other than on the last day of a
calendar year, the award determined pursuant to the preceding sentence
for the year in which such termination occurs shall be prorated on the
basis of the number of weeks elapsed in the calendar year to the date
of such termination of employment.
4. Management Compensation Committee.
The Management Compensation Committee of the Board of Directors of
Chevron Corporation will administer the Plan. If any member of the
Committee does not qualify as an "outside director" for purposes of
section 162(m) of the Internal Revenue Code of 1986, as amended, awards
under the Plan for the chief executive officer and the four most highly
compensated officers of the Corporation (other than the chief executive
officer) shall be administered by a subcommittee of the Board
consisting of each Committee member who qualifies as an "outside
director." If fewer than two Committee members qualify as an "outside
director," the Board shall appoint one or more other members to such
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subcommittee who do qualify as "outside directors" so that it will at
all times consist of at least two members who qualify as an "outside
director" for purposes of section 162(m) of the Code.
Decisions and determinations as to the number and identity of
participants, as to the form and amount of awards and as to any other
matters relating to awards made under the Plan, shall rest with the
Committee. The Corporation management will make recommendations to the
Committee, but the Committee will not be bound by such recommendations
and will make its own final determinations.
Within 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.
Upon such appointment, the Committee shall cease to have any
responsibility with respect to the administration of the Plan.
5. Eligibility for Management Incentive Awards.
Regular salaried employees including directors, officers, and other
individuals serving in important executive, administrative,
professional or technical capacities, as determined by the Committee,
who have been on the payroll of the Corporation or the payroll of a
participating affiliate at any time during the year, shall be eligible
for participation in the Plan. As used herein, the term "participating
affiliate" shall mean any corporation in which the Corporation holds
directly or indirectly more than 50% of the voting securities and whose
financial accounts are consolidated with those of the Corporation in
the financial statement included in the Annual Report to Stockholders.
6. Form, Amount, Time and Conditions of Awards.
(a) Form. Awards may be made in any of the following forms or in any
combination of forms as determined by the Committee:
(i) Units representing shares of Common Stock of the
Corporation, together with dividend equivalents,
as described in Section 7 ("stock units");
(ii) Cash, including cash measured by stock units or
any other investment performance measurement
selected by the Committee from time to time; or
(iii) Shares of Common Stock of the Corporation.
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In the case of awards in stock units or cash measured by stock units,
the number of units shall be adjusted for any stock splits, stock
dividends, or other relevant changes in capitalization occurring after
the date of award.
(b) Amount. The amount of each award shall be determined by the
Committee.
(c) Time and Conditions. Any award may be paid in a lump sum in the
year in which the award is made or in a series of annual installments,
or such awards may be deferred until retirement, death or disability,
and then paid in a lump sum or installments, all as the Committee shall
determine. The Committee in its discretion may determine that interest
(at such rate as may be selected by the Committee) shall be credited to
and paid at the same time and in the same manner as a deferred award.
Any award and the payment thereof may be made subject to such
forfeiture and other conditions for such period of time as the
Committee shall determine. Any award which becomes payable after the
recipient's death shall be delivered or distributed to the award
recipient's Beneficiary or Beneficiaries. Each recipient of an award
under the Plan may designate on the prescribed form filed with the
Committee one or more Beneficiaries. An award recipient may change such
designation at any time by filing the prescribed form with the
Committee. If a Beneficiary has not been designated or no designated
Beneficiary survives the award recipient, any award which becomes
payable after the award recipient's death will be made to the award
recipient's Surviving Spouse as Beneficiary if such Spouse is still
living or, if not living, in equal shares to the then living children
of the award recipient as Beneficiaries or, if none, to the award
recipient's estate as Beneficiary. The Committee, at its sole
discretion, shall determine the form and time of any distribution(s) to
an award recipient's Beneficiary or Beneficiaries.
In addition to any forfeiture condition established by the Committee
with respect to any award, until any award granted under the Plan (or a
portion thereof) is delivered or distributed, such award (or such
portion) shall be forfeited under the following circumstances:
(i) The participant is dismissed for cause or otherwise
ceases to be an employee of the Corporation or a
participating affiliate at a time when cause for
dismissal exists; or
(ii) The participant, before or after the termination of
his or her employment as an Employee, engages in any
activity which, in the Committee's opinion, is
prejudicial to the interests of the Corporation or
any participating affiliate; or
(iii) The participant is indebted to the Corporation or any
participating affiliate at the time when the
participant becomes entitled to payment of an award
under the Plan following termination of employment
with the Corporation or any participating affiliate.
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In such case, the payment, to the extent that the
amount thereof (determined as of the date payment is
scheduled to be made) does not exceed such
indebtedness, shall be forfeited and the
participant's indebtedness to the Corporation or
participating affiliate shall be extinguished to the
extent of such forfeiture.
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.
7. Dividend Equivalents.
The Committee may determine that any stock unit awarded (or a cash
award measured by stock units) will carry with it until paid a dividend
equivalent which will entitle the holder to receive payments from the
Corporation equal to the cash dividends paid on one share of Common
Stock of the Corporation during the periods from the time of the award
of the stock units to the time the shares are delivered to the
participant (or the cash award is paid). Payment of dividend
equivalents may be made in cash or stock and at such time or times as
determined by the Committee. Dividend equivalents shall be subject to
the same forfeiture and other provisions as the related stock unit.
8. Administration, Amendment and Termination of the Plan.
The Management Compensation Committee shall have the power and
authority to interpret and administer the Plan. The Board of Directors
may, at any time, alter, amend or terminate the Plan; provided,
however, that no alteration, amendment or termination approved by the
Board of Directors after six months prior to the public announcement of
the proposed transaction which, when effected, is a Change in Control
or before the date which is two years after the date of a Change in
Control (the "Benefit Protection Period") shall be valid or effective
if such alteration, amendment or termination would alter the provisions
of this Section 8 or adversely affect the amount of a participant's
award under the Plan, whether or not the participant's employment had
terminated at the time the alteration, amendment or termination was
approved; provided, however, any alteration, amendment or termination
may be effected, even if so approved after such a public announcement,
if (a) 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 (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
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to effect the Change in Control have been abandoned and the event
which would have constituted the Change in Control has not
occurred. Any alteration, amendment or termination of the Plan
which is approved by the Board of Directors 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.
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.
9. Assignability.
Except as otherwise determined by the Committee, a participant's award,
the interest, if any, of a participant's beneficiary and (during the
period, shares of Common Stock of the Corporation awarded under the
Plan are subject to forfeiture conditions) such shares 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.