CHEVRON CORPORATION
SALARY DEFERRAL PLAN
FOR MANAGEMENT EMPLOYEES
(Effective January 1, 1997)
1. ESTABLISHMENT AND PURPOSE.
Chevron Corporation (the "Corporation") hereby establishes the Chevron
Corporation Salary Deferral Plan for Management Employees (the "Plan"),
effective January 1, 1997, to enhance the ability of the Corporation and its
Subsidiaries to attract, motivate and retain executive and other key employees.
This Plan is intended to qualify as an unfunded ERISA pension plan maintained
by an employer for a select group of management or highly compensated
employees, as described in 26 C.F.R. Section 2520.104-23 (d)
2. DEFINITIONS.
For purposes of the Plan, the following terms shall have the meanings set
forth below:
(a) "Account" means the bookkeeping account maintained on behalf of a
Participant to which shall be credited any amount deferred pursuant to a
deferral election under Section 5.
(b) "Beneficiary" means the person designated as such by the
Participant pursuant to Section 11 (b).
(c) "Board" means the Board of Directors of the Corporation.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Committee appointed by the Board to
administer the Plan as provided in Section 3.
(f) "Corporation" means Chevron Corporation, a Delaware corporation, or
any successor corporation.
(g) "Eligible Employee" means an executive or other key employee
(including an officer, whether or not a director) of the Corporation or a
Subsidiary who holds a position of significant responsibility or whose
performance or potential contribution, in the judgment of the Committee, would
benefit the future success of the Corporation and who is designated by the
Committee as eligible to participate in the Plan.
(h) "Employee" means an individual who is a salaried employee on the
payroll of the Corporation or any Subsidiary.
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(i) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
(j) "Participant" means an Eligible Employee who elects to participate
in the Plan.
(k) "Plan" means the Chevron Corporation Salary Deferral Plan for
Management Employees, as set forth herein and as amended from time to time.
(l) "Plan Year" means the calendar year.
(m) "Subsidiary" means any corporation or entity in which the
Corporation directly or indirectly controls fifty percent (50%) or more 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 Plan.
3. ADMINISTRATION.
(a) The Committee.
The Plan 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 Plan in its sole
discretion. To this end, the Committee is authorized to construe and interpret
the Plan, to promulgate, amend and rescind Rules relating to the implementation
of the Plan and to make all other determinations necessary or advisable for the
administration of the Plan, including the selection of Employees who shall be
eligible to participate in the Plan. 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 Plan shall be final, conclusive and
binding upon all persons participating in the Plan and any person validly
claiming under or through persons participating in the Plan.
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(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 Plan.
4. PARTICIPATION.
Each Eligible Employee may elect to become a Participant in the Plan by
electing to defer base salary under the Plan in accordance with Section 5.
5. DEFERRAL ELECTION.
Each Eligible Employee shall be entitled to elect to defer either a
percentage of his or her base salary for each Plan Year or all of his or her
base salary attributable to the amount of his or her base salary rate in excess
of $1 million annually. This election shall be made by filing a form prescribed
by the Committee before the first day of the Plan Year. Each Participant must
indicate on such form whether he or she is electing to defer all of his or her
compensation in excess of a base salary rate in excess of $1 million annually
or to defer a percentage of his or her base salary for each Plan Year. The
following rules shall apply in the case of elections to defer a percentage of
compensation for a Plan Year:
(i) Each Participant must indicate on such form the percentage of
base salary he or she elects to defer for that Plan Year, expressed in
increments of five percent (5%)
(ii) The minimum amount that a Participant may defer in any Plan
Year is five percent (5%) of base salary.
(iii) The maximum amount that a Participant may defer in any Plan
Year is the lesser of (A) fifty percent (50%) of base salary or (B) the
amount of the Participant's base salary in excess of the limitation on
earnings imposed under section 401 (a) (17) of the Code for the
applicable Plan Year.
A deferral election shall be null, void and without effect if at the
time of making the deferral election the Participant fails to also submit to
the Committee an investment election form indicating the Participant's election
to have the value of the Participant's Account determined by crediting it with
such earnings, gains and losses as would have accrued had the Account actually
been invested and reinvested in one or more of the following funds maintained
in the Savings component of the Chevron Corporation Profit Sharing/Savings
Plan. This investment election shall be made in whole percentages totaling
100% of the deferred amount. These funds are as follows:
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Chevron Stock Fund
Short-Term Income Fund
Long-Term Income Fund
Balanced Fund
Diversified Equity Fund
Value Stock Fund
Growth Stock Fund
Small Cap Stock Fund
International Stock Fund
If an investment fund is eliminated from the Savings component of the Profit
Sharing/Savings Plan, the value of the portion of the Participant's Account
that the Participant previously had elected be determined with reference to
such investment fund shall thereafter be determined by the Committee in its
sole discretion.
Once each calendar year a Participant may elect to transfer amounts
credited to his or her Account among any of the available investment funds by
following the procedures prescribed by the Committee for this purpose.
Transfers between funds shall be effective on the last business day of the
calendar quarter in which the election is received, provided that the election
is received on or before the business day immediately preceding the last
business day of that quarter. Any election received after the business day
immediately preceding the last business day of a calendar quarter shall be
effective on the last business day of the following calendar quarter.
If no form is filed, the Eligible Employee will be deemed to have made no
deferral election for that Plan Year and shall not be a Participant in the Plan
for the Plan Year. Each deferral election filed with the Committee shall
become irrevocable on the date it is filed; provided, however that an Eligible
Employee may suspend his or her deferral election at any time during a Plan
Year by giving notice of suspension to the Committee. Such suspension shall be
effective with respect to base salary earned in the first payroll period
commencing after the date the suspension notice is received by the Committee.
Any other provision of this Plan to the contrary notwithstanding, a
Participant's deferral election shall be null, void and without effect if the
Committee determines that under the laws of the country or countries in which
the Participant is currently subject to income taxation the deferral election
would not be recognized for purposes of determining the Participant's income
tax liability. The foregoing sentence shall not apply if the Participant is on
an "expatriate assignment" (as determined by the Committee) and the Committee
determines that under the laws of the Participant's home country the deferral
election would be recognized for purposes of determining the Participant's tax
liability.
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6. TIME OF DISTRIBUTION.
(a) Distribution of a Participant's Account shall be made at such time or
times as the Committee shall determine in its sole discretion. In order to
assist the Committee in making such determinations, the following procedures
are established:
(i) Unless the Committee approves a Participant's distribution
request pursuant to Section 6(b), distribution shall commence in the
first January, April, July or October that is at least 12 months after
the date of the Participant's termination of employment and shall be made
in ten approximately equal annual installments.
(ii) At any time prior to the termination of a Participant's
employment with the Corporation and its Subsidiaries Participant may make
a request for distribution at the time described in (A) or (B) below by
filing the prescribed form with the Committee. A Participant may make
only one such request at any time and may not make such a request after
termination of employment with the Corporation and its Subsidiaries.
Distribution shall be made in accordance with such request, unless the
Committee has disapproved the Participant's request or has determined
that the distribution shall be made at some other time; provided,
however, that no distribution may be made pursuant to such request within
the 12-month period commencing on the date the request is filed with the
Committee and any distribution scheduled to be made pursuant to Section
6(a) (i) within the 12-month period commencing on the date the request is
filed with the Committee shall be made in accordance with the schedule
determined pursuant to Section 6(a) (i) and without regard to the request
made pursuant to this Section 6(a) (ii):
(A) In a lump sum in any January, April, July or October
after the Participant's termination of employment with the
Corporation and its Subsidiaries, but not later than the first
January after the later of the date the Participant attains age
70 1/2 or the date the Participant's employment with the Corporation
and its Subsidiaries terminates; or
(B) In fifteen or fewer annual installments, commencing in
any January, April, July or October after the Participant's
termination of employment with the Corporation and its
Subsidiaries, but not later than the later of the first January
after the date the Participant attains age 70 1/2 or the date the
participant's employment with the Corporation and its Subsidiaries
terminates.
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(b) The time of distribution pursuant to the request made by a
Participant under Section 6(a) (ii) or pursuant to a distribution scheduled to
be made pursuant to Section 6(a) (i) may only be changed by the Committee. The
Participant may request such a change by writing to the Committee setting forth
the Participant's reason for such request. The Committee shall approve such
distribution only upon a showing of hardship or significantly changed
circumstances, based on substantial evidence. Any distribution so requested
must be consistent with Section 6(a) (ii) (A) or (B) above.
(c) Distributions Prior to Termination of Employment. A Participant may
request distribution of all or a portion of the amounts credited to the
Participant's Deferred Account prior to the date of termination of the
Participant's employment with the Corporation. Such request shall be made in
writing to the Committee and shall set forth the reason for such request. The
Committee shall approve such distribution only upon a showing of hardship or
significantly changed circumstances, based on substantial evidence.
(d) Committee Guidelines. From time to time the Committee may establish
guidelines for its own use in determining what requests made pursuant to
Section 6(a) shall be disapproved, and what requests pursuant to Section 6(b)
above shall be approved, but such guidelines shall not in any way limit the
Committee's sole discretion to determine the time of distribution of a
Participant' s Account.
(e) Employment with Affiliates. For purposes of this Section 6,
employment with Aramco, Caltex, Amoseas, CPI or any other affiliate of the
Corporation which is designated for this purpose by the Committee shall
constitute employment with the Corporation or a Subsidiary for the purpose of
determining whether a Participant has terminated employment.
7. DEATH OF PARTICIPANT.
In the event of the death of the Participant, the Participant's Account
shall be paid to the Participant's Beneficiary at such time as the Committee
shall determine in its sole discretion.
8. FORM AND VALUE OF DISTRIBUTION.
(a) Establishment of Account.
An amount deferred pursuant to a deferral election shall be credited to a
separate bookkeeping Account for the Participant. The value of a Participant's
Account shall be determined with reference to the Participant's investment and
investment transfer elections made pursuant to Section 5.
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(b) Distribution of Account.
The Participant's Account shall be distributed in cash at the time
determined in Section 6; provided, however, that amounts attributable to the
portion of the Participant's Account which the Participant had elected to have
valued with reference to the Chevron Stock Fund shall be distributed in shares
of Common Stock. If a distribution is to be made in a lump sum, the Account
shall be paid in its entirety. If a distribution is to be made in
installments, the amount of each annual installment shall be determined by
dividing the balance of the Account by the number of annual payments remaining
to be made. The value of the Account shall continue to be determined with
reference to the investment funds elected by the Participant until the entire
Account is distributed.
9. AMENDMENT OR TERMINATION OF THE PLAN.
The Board may amend, suspend or terminate the Plan at any time. In the
event of such termination, the Accounts of Participants shall be paid at such
times and in such forms as shall be determined pursuant to Section 6, unless
the Board prescribes a different time or times for payment of such Accounts.
10. GENERAL.
(a) No Right of Employment.
Nothing contained in the Plan nor any action of the Committee pursuant to
the Plan shall give any employee any right to remain in the employ of the
Corporation or to impair the Corporation's right to terminate the employment of
any employee at any time, with or without cause, which right is hereby
reserved.
(b) Designation of Beneficiaries.
Participants may designate on the prescribed form one or more
Beneficiaries to whom distribution shall be made of any outstanding Account
balance at the time of the Participant's death. A Participant may change such
designation at any time by filing the prescribed form with the Committee. If a
Beneficiary has not been designated or if no designated Beneficiary survives
the Participant, distribution will be made to the Participant's surviving
spouse as Beneficiary if then living or, if not, in equal shares to the then
living children of the Participant as Beneficiaries or, if none, to the
Participant's estate as Beneficiary.
(c) Domestic Relations Orders.
The procedures established by the Corporation for the determination of
the qualified status of domestic relations
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orders and for making distributions under qualified domestic relations orders,
as provided in Section 206(d) of ERISA, shall apply to the Plan.
(d) Costs of the Plan.
The costs and expenses of administering the Plan shall be borne by the
Corporation.
(e) Severability.
The provisions of the Plan shall be deemed severable and the validity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
(f) Binding Effect of Plan.
The Plan 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 Plan in the
same manner and to the same extent that the Corporation would be required to
perform it if no such succession or assignment had taken place. 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 Plan) whether by operation of law or otherwise.
(g) No Waiver of Breach.
No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of the Plan to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions of conditions at the same or at any prior or subsequent
time.
(h) No Assignment.
The interest and property rights of any Participant under the Plan shall
not be subject to option nor 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 10(i) shall be void.
(i) Applicable Law.
The Plan shall be administered, construed and governed in accordance with
ERISA and, to the extent not preempted by ERISA, the laws of the State of
California.
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(j) Participant's Rights Unsecured.
This Plan 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 Plan of any Participant and
such Participant's right to receive a distribution of his or her Account shall
be an unsecured claim against the general assets of the Corporation. The
Account shall be a bookkeeping entry only and no Participant shall have any
interest in or claim against any specific asset of the Company pursuant to the
Plan.
(k) Authority to Establish a Grantor Trust.
The Committee is authorized in its sole discretion to establish a
grantor trust for the purpose of providing security for the payment of benefits
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.
(l) Other Benefit Plans.
To the extent permitted by applicable law, a Participant's deferral
elections made pursuant to this Plan shall be disregarded for purposes of
determining the Participant's benefits under any other benefit plan or program
established or maintained by the Corporation or its Subsidiaries.
11. EXECUTION.
To record the adoption of the Chevron Corporation Salary Deferral Plan
for Management Employees to read as set forth herein effective January 1, 1997,
Chevron Corporation has caused its authorized officer to affix the corporate
name hereto this 21st day of November, 1996.
CHEVRON CORPORATION
By: /s/ LYDIA I. BEEBE
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Attest : /s/ H. P. WALKER
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