SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
CHEVRON CORPORATION
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(Name of Registrant as Specified In Its Charter)
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Registrant)
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[logo]
CHEVRON CORPORATION
Notice of the
2000 Annual Meeting
and the
2000 Proxy Statement
TABLE OF CONTENTS
Notice of the Annual Meeting of Stockholders
2000 Proxy Statement.................................................. 2
General Information................................................... 2
- - Appointment of Proxy Holders................................ 2
- - Methods of Voting........................................... 2
- - Vote Required and Method of Counting........................ 3
- - Confidential Voting......................................... 4
- - Method and Cost of Soliciting and Tabulating Votes.......... 4
- - Multiple Copies of Annual Report to Stockholders............ 4
- - Electronic Access to Proxy Materials and Annual Report...... 4
Election of Directors (Item 1 on proxy form).......................... 6
- - Nominees for Directors...................................... 6
Proposal to Increase the Number of Authorized Shares of Common Stock 10
(Item 2 on proxy form)
Ratification of Appointment of Independent Public Accountants (Item 3 11
on proxy form)........................................................
Board Governance and Operations....................................... 12
- - Board Governance............................................ 12
- - Board Structure............................................. 12
- - Board Meetings and Attendance............................... 12
- - Board Committee Structure................................... 12
- - Board Committee Meetings and Functions...................... 13
Directors' Compensation............................................... 14
- - Stock Compensation.......................................... 14
- - Cash Compensation........................................... 14
- - Deferrals of Cash Compensation.............................. 14
- - Expenses.................................................... 14
Stock Ownership Information........................................... 15
- - Directors' and Executive Officers' Stock Ownership.......... 15
- - Section 16(a) Beneficial Ownership Reporting Compliance..... 15
Executive Compensation................................................ 16
- - Management Compensation Committee Report on Executive
Compensation................................................ 16
- - Summary Compensation Table.................................. 20
- - Long-Term Incentive Plan -- 1999 Performance Unit Awards
Table....................................................... 20
- - Option Grants in Last Fiscal Year Table..................... 21
- - Aggregate Option Exercises in Last Fiscal Year and Fiscal
Year-ended Options Values Table............................. 21
- - Pension Plan Table.......................................... 22
- - Performance Graph........................................... 23
Stockholder Proposals (Items 4 through 6 on the proxy form)........... 24
- - To report on Greenhouse Gas Emissions....................... 24
- - To eliminate Bioaccumulative Halogenated Pollutants......... 26
- - To report on Potential Environmental Damage to ANWR......... 28
Other Matters......................................................... 31
Submission of Future Stockholder Proposals............................ 31
Information About Attending the Annual Meeting........................ 31
[LOGO]
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
DATE: Wednesday, April 26, 2000
TIME: 9:30 a.m., Pacific Time
LOCATION: Chevron Park
Building A
6001 Bollinger Canyon Road
San Ramon, CA 94583
RECORD DATE: February 28, 2000
AGENDA:
- - To elect 12 directors;
- - To vote upon the proposal to increase the number of authorized shares of
Common Stock;
- - To ratify the Board's appointment of independent public accountants;
- - To take action on the stockholder proposals; and
- - To transact any other business that may be properly brought before the Annual
Meeting.
ADMISSION
All stockholders and representatives whom stockholders have authorized in
writing are cordially invited to attend the Annual Meeting. We will hold the
Annual Meeting at Chevron Park in San Ramon, California. Seating will be limited
at Chevron Park. We will give stockholders priority seating at the Annual
Meeting. Depending on stockholder attendance, we may have to seat guests in an
overflow area. Please refer to page XX for information about attending the
Annual Meeting.
VOTING
Stockholders owning Chevron Stock at the close of business on the Record Date,
or a representative whom a stockholder has authorized in writing, are entitled
to vote at the Annual Meeting. Please refer to page 4 for an explanation of
Chevron's confidential voting procedures.
STOCKHOLDER LIST
Chevron will make available on the Annual Meeting date at Chevron Park a list of
stockholders as of the Record Date. It will also make the list available for ten
days prior to the Annual Meeting, between the hours of 8:00 a.m. and 4:00 p.m.
at the office of Chevron Corporation, Chevron Park 6001 Bollinger Canyon Road,
San Ramon, California 94583. A stockholder may examine the list for any legally
valid purpose related to the Annual Meeting.
We are distributing this proxy statement, proxy form and Chevron's 1999 Annual
Report to Stockholders on or about March 22, 2000.
By Order of the Board of Directors,
Lydia I. Beebe
Corporate Secretary
[LOGO]
CHEVRON CORPORATION
575 Market Street
San Francisco, California 94105
March 22, 2000
2000 PROXY STATEMENT
This proxy statement contains important information you should know concerning
admission to Chevron's 2000 Annual Meeting of Stockholders, voting procedures
and the business matters on which you are being asked to vote.
GENERAL INFORMATION
- -----------------------------------------------------
APPOINTMENT OF PROXY HOLDERS
Your Board of Directors asks you to appoint Carla A. Hills, David J. O'Reilly
and Charles M. Pigott as your proxy holders to vote your shares at the 2000
Annual Meeting of Stockholders. YOU MAKE THIS APPOINTMENT BY VOTING THE ENCLOSED
PROXY FORM USING ONE OF THE METHODS OF VOTING DESCRIBED BELOW.
They will vote your shares (and the shares of all other Chevron stockholders who
vote) at the Annual Meeting as you direct. You give your direction by following
one of the methods of voting described below. For those items for which you have
not marked a box, they will vote your shares as recommended by the Board.
Unless you otherwise indicate on the proxy form or during the telephone or
Internet voting procedures, you also authorize your proxy holders to vote your
shares on any matters not known by the Board at the time this proxy statement
was printed and which, under Chevron's By-laws, may be properly presented for
action at the Annual Meeting.
You may also vote in person at the Annual Meeting. However, your Board
recommends that you vote by appointing the proxy holders as it is not practical
for most stockholders to attend the Annual Meeting. YOUR BOARD STRONGLY
ENCOURAGES YOU TO EXERCISE YOUR RIGHT TO VOTE BY USING ONE OF THE METHODS OF
VOTING DESCRIBED BELOW. Voting early may save Chevron the expense of a second
mailing in order to receive a quorum of shares necessary to hold the Annual
Meeting.
METHODS OF VOTING
- - VOTING BY MAIL. Stockholders may sign, date and return their proxy forms in
the pre-addressed, postage-paid envelope provided. If you return your proxy
form without indicating how you want to vote,
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the proxy holders will vote as recommended by your Board.
- - VOTING BY TELEPHONE OR THE INTERNET. If you have stock certificates issued in
your own name, you may vote by proxy using the mail, using the toll-free
number or at the Internet address listed on the proxy form. Telephone and
Internet voting are also available to those of you who own shares in the
Chevron Profit Sharing/Savings Plan.
The telephone and Internet voting procedures are designed to verify your vote
through the use of a Control Number that is provided on each proxy form. The
procedures also allow you to vote your shares and to confirm that your
instructions have been properly recorded. Please see your proxy form for
specific instructions.
Stockholders whose shares are held through a brokerage firm, bank or other
holder of record may vote by telephone or the Internet only if the holder of
record offers those options.
- - REVOKING YOUR VOTING INSTRUCTIONS TO YOUR PROXY HOLDERS. If you have
certificates issued in your own name and you vote by proxy, using the mail,
the Internet or a telephone, you may later revoke your proxy instructions by:
-- sending a written statement to that effect to the Corporate Secretary;
-- submitting a proxy form with a later date signed as your name appears
on the stock account;
-- voting at a later time by telephone or the Internet; or
-- voting in person at the Annual Meeting (except for shares held through
a brokerage firm, bank or other holder of record).
If you have shares held through a brokerage firm, bank or other holder of
record, and you vote by proxy, you may later revoke your proxy instructions by
informing the holder of record in accordance with that entity's procedures.
VOTE REQUIRED AND METHOD OF COUNTING
At the close of business on the Record Date, there were XXX,XXX,XXX shares of
Chevron Stock outstanding and entitled to vote at the Annual Meeting. Each
outstanding share is entitled to cast one vote.
A quorum, which is a majority of the outstanding shares as of the Record Date,
must be present to hold the Annual Meeting. A quorum is calculated based on the
number of shares represented by the stockholders attending in person and by
their proxy holders. If you indicate an abstention as your voting preference in
all matters, your shares will be counted toward a quorum but they will not be
voted on any matter.
The vote required and method of calculation is as follows for the various
business matters to be considered at the Annual Meeting:
ITEM 1--Election of Directors
Each outstanding share of Chevron Stock is entitled to cast one vote for as many
separate nominees as there are Directors to be elected. The nominees who receive
the most votes for the number of positions to be filled are elected Directors.
If you do not wish your shares to be voted for a particular nominee you may so
indicate in the space provided on the proxy form or withhold authority as
prompted during the telephone or Internet voting instructions.
ITEM 2--Proposal to increase the number of authorized shares of Chevron Stock is
approved if the number of votes cast in favor is a majority of the votes
entitled to vote.
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ITEM 3--Ratification of your Board's Appointment of Independent Public
Accountants and the stockholder proposals, ITEMS 4 THROUGH 6, are approved if
the number of votes cast in favor of each exceeds the number of votes cast
against. Abstentions and broker non-votes (i.e., when a broker does not have
authority to vote on a specific issue) do not affect the voting calculations.
CONFIDENTIAL VOTING
In 1979, we adopted a confidential voting policy to protect our stockholders'
voting privacy. Under this policy ballots, proxy forms and voting instructions
returned to brokerage firms, banks and other holders of record are treated as
confidential. Only the proxy solicitor, the proxy tabulator and the Inspector of
Election have access to the ballots, proxy forms and voting instructions. Anyone
who processes or inspects the ballots, proxy forms and voting instructions signs
a pledge to treat them as confidential. None of these persons is a Chevron
Director, officer or employee.
The proxy solicitor and the proxy tabulator will disclose information taken from
the ballots, proxy forms and voting instructions only in the event of a proxy
contest or as otherwise required by law.
The proxy tabulator will forward comments written on the proxy forms to
management but will not disclose your identity unless you request it in writing.
METHOD AND COST OF SOLICITING AND TABULATING VOTES
Chevron has retained Georgeson Shareholder Communications Inc. to assist in
distributing these proxy materials and soliciting votes at an estimated cost of
$25,000 plus their reasonable out-of-pocket expenses. Chevron employees,
personally or by telephone, may solicit your proxy voting instructions.
Chevron will reimburse brokerage firms, banks and other holders of record for
their reasonable out-of-pocket expenses for forwarding these proxy materials to
you.
ChaseMellon Shareholder Services, Chevron's transfer agent, will be the proxy
tabulator and also act as the Inspector of Election.
MULTIPLE COPIES OF ANNUAL REPORT TO STOCKHOLDERS
If you received more than one copy of the 1999 Annual Report, you may wish to
eliminate wasteful future duplication. This will also help save Chevron the cost
of producing and mailing duplicate reports.
Under current SEC regulations, Chevron must continue to send the annual report
to at least one account at your address unless all of the account owners elect
to view future annual reports and proxy statements over the Internet as
described below.
Mailing of dividends, dividend reinvestment statements, proxy statements, proxy
cards and special notices will not be affected by your election to discontinue
duplicate mailings of annual reports. To discontinue or resume the mailing of an
annual report for an account, please call ChaseMellon Shareholder Services'
toll-free number, 1-800-368-8357. If you own Chevron Stock through a brokerage
firm, bank or other holder of record and receive more than one Chevron annual
report, contact that holder of record to eliminate duplicate mailings.
ELECTRONIC ACCESS TO PROXY MATERIALS AND ANNUAL REPORT
This proxy statement and the 1999 Annual Report are available on Chevron's
Internet site at http://www.chevron.com.
If you are a stockholder of record, you can elect to view future proxy
statements and
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annual reports at this Internet site on the same day as the proxy statement is
filed with the SEC instead of receiving paper copies in the mail. You can make
this election by marking the appropriate box on your 2000 proxy card or by
following the instructions provided if you vote over the Internet or by
telephone.
If you choose to view future proxy statements and annual reports over the
Internet, you will receive a proxy card in the mail in 2001 with instructions
containing the Internet address of those materials. Your choice will remain in
effect until you call the ChaseMellon Shareholder Services' toll-free number and
tell them otherwise. You do not have to elect Internet access each year.
If you hold your Chevron Stock through a brokerage firm, bank or other holder of
record, please refer to the information provided by that entity for instructions
on how to elect to view future proxy statements and annual reports over the
Internet.
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ELECTION OF DIRECTORS
- -----------------------------------------------------
(ITEM 1 OF THE PROXY FORM)
Your Board has nominated the twelve current Directors for re-election.
The persons named as proxy holders on the proxy form will vote your shares FOR
the twelve nominees unless you withhold authority in the spaces provided on the
proxy form or as prompted during the telephone or Internet voting instructions.
All Directors are elected annually. They serve for a one-year term and until
their successors are elected.
If any nominee is unable to serve as a Director, which is not anticipated, the
Board by resolution may reduce the number of Directors or choose a substitute.
Detailed information on each nominee is provided below.
NOMINEES FOR DIRECTORS
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THESE NOMINEES.
[PHOTO] SAMUEL H. ARMACOST
Director since 1982
Mr. Armacost, age 60, became Chairman of SRI International,
formerly Stanford Research Institute, an independent research, technology
development and consulting organization, in 1998.
Prior Positions Held: Mr. Armacost was a Managing Director of Weiss, Peck &
Greer L.L.C. from 1990 until 1998. He was a Managing Director of Merrill Lynch
Capital Markets from 1987 until 1990. He was President, Director and Chief
Executive Officer of BankAmerica Corporation from 1981 until 1986.
Other Directorships: The James Irvine Foundation, Exponent, Inc., Scios, Inc.,
Toshiba International Advisory Group.
Other Memberships: The Business Council and the Advisory Council of the
California Academy of Sciences.
[PHOTO] SAMUEL L. GINN
Director since 1989
Mr. Ginn, age 62, has been Chairman of Vodafone AirTouch Plc, a worldwide
wireless telecommunications company, since June 30, 1999.
Prior Positions Held: Mr. Ginn was Chairman of the Board and Chief Executive
Officer of AirTouch Communications, Inc. from 1993 until June 29, 1999. He was
Chairman of the Board, President and Chief Executive Officer of Pacific Telesis
Group from 1988 until April 1, 1994.
Other Directorships: Hewlett-Packard Company.
Other Memberships: The Business Council, The Institute for International Studies
at Stanford, San Francisco Committee on JOBS, Council on Foreign Relations.
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[PHOTO] AMBASSADOR CARLA ANDERSON HILLS
Director 1977 through 1988 and since 1993
Ambassador Hills, age 66, has been Chairman and Chief Executive Officer of
Hills & Company International Consultants, a company giving advice on
investment, trade and risk issues abroad, since 1993.
Prior Positions Held: Ambassador Hills served as United States Trade
Representative from 1989 to 1993.
Other Directorships: American International Group, Inc., Lucent
Technologies Inc., Time Warner Inc., TCW Group, Inc.
Other Memberships: Director, Council on Foreign Relations; Trustee,
Inter-American Dialogue; Vice-Chair, US-China Business Council, Trustee, Asia
Society.
[PHOTO] SENATOR J. BENNETT JOHNSTON
Director since 1997
Senator Johnston, age 67, has been Chief Executive Officer of Johnston &
Associates, a governmental and business consulting firm, since 1997.
Prior Positions Held: Senator Johnston served as U.S. Senator from Louisiana
from 1972 through 1996. He was a member of the Senate Committee on Energy and
Natural Resources (Chairman from 1986 until 1994 and ranking Democrat from 1994
through 1996). He was a member of the Appropriations Committee and Chairman of
the Subcommittee on Energy & Water Development from 1986 until 1994. He also
served on the Select Committee on Intelligence; the Budget Committee; and the
Special Committee on Aging. Prior to serving in the Senate he served in the
Louisiana State Legislature for eight years.
Other Directorships: Columbia Energy Group Inc., Freeport-McMoRan Copper &
Gold Inc.
Other Memberships: President, U.S. Pacific Economic Cooperation Council.
[PHOTO] RICHARD H. MATZKE
Director since 1997
Mr. Matzke, age 63, has been a Vice-Chairman of the Board of Chevron since 2000.
Prior Positions Held: Mr. Mazke was Vice-President of Chevron and President of
Chevron Overseas Petroleum Inc. from 1990 until 1999. Between 1979 and 1989, he
served as a Vice-President of Chevron Chemical Company, manager of Chevron's
foreign operations staff, a Director of Caltex Pacific Indonesia, and Director
and President of Chevron Canada Resources Limited. Mr. Matzke joined Chevron in
1961 as a geologist and advanced through various positions in Chevron's
exploration, economics, research and corporate planning departments, becoming
Assistant to the President in 1976.
Other Directorships: Dynegy Inc., Trustees of The Africa America Institute and
the Advisory Board of the Center for Strategic and International Studies (CSIS),
Chairman of the Board of Directors of the United States-Kazakhstan Business
Association, Vice-Chairman of the United States-Azerbaijan Chamber of Commerce.
Other Memberships: American Institute of Professional Geologists, American
Association of Petroleum Geologists, World Affairs Council of Northern
California, United States-Russia Business Council, Business Council for
International Understanding, Council on Foreign Relations, Commonwealth Club of
California.
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[PHOTO] DAVID J. O'REILLY
Director since 1998
Mr. O'Reilly, age 53, has been Chairman of the Board of Chevron since 2000.
Prior Positions Held: Mr. O'Reilly was Vice-Chairman of the Board of Chevron
from 1998 until 1999. He was a Vice-President of Chevron from 1991 until 1998.
He was President of Chevron Products Company, from 1994 until 1998, a Director
of Caltex Petroleum Corporation from 1992 until 1994, and was a Senior
Vice-President and Chief Operating Officer of Chevron Chemical Company from 1989
until 1991. He joined Chevron in 1968.
Other Directorships: American Petroleum Institute, San Francisco Symphony Board
of Governors, National Action Council for Minorities in Engineering, Inc., the
Bay Area Council.
Other Memberships: The Business Council, The Business Roundtable.
[PHOTO] CHARLES M. PIGOTT
Director since 1973
Mr. Pigott, age 70, became Chairman Emeritus of PACCAR Inc, a
manufacturer of transportation equipment, in 1997.
Prior Positions Held: Mr. Pigott was President of PACCAR Inc from 1965 until
1968, was its Chief Executive Officer from 1967 until 1997 and was its Chairman
of the Board from 1986 until 1997.
Other Directorships: The Boeing Company, PACCAR Inc, Seattle Times Company.
[PHOTO] CONDOLEEZZA RICE
Director since 1991
Dr. Rice, age 45, recently completed a six year tenure as
Stanford's Provost in July 1999, during which she was the university's chief
budget and academic officer. Currently on an academic leave of absence from
Stanford for a year, Dr. Rice is a Hoover Senior Fellow and Professor of
Political Science.
Prior Positions Held: Dr. Rice has been a member of the Stanford University
faculty since 1981. From 1989 until April 1991, she served on the Bush
Administration's National Security Council as Special Assistant to President
Bush for National Security Affairs and Senior Director for Soviet Affairs.
Other Directorships: Charles Schwab Corporation, William and Flora Hewlett
Foundation.
Other Memberships: Council on Foreign Relations, J.P. Morgan International
Advisory Council.
[PHOTO] FRANK A. SHRONTZ
Director since 1996
Mr. Shrontz, age 68, was Chairman of the Board of The Boeing
Company, manufacturer and seller of aircraft and related products, from 1988
until February 1997.
Prior Positions Held: Mr. Shrontz was Chief Executive Officer of The Boeing
Company from 1986 until 1996 and was its President from 1985 until 1988. He
served as Assistant Secretary of the Air Force and as Assistant Secretary of
Defense from 1973 until 1976.
Other Directorships: Boise Cascade Corporation, Minnesota Mining and
Manufacturing Company.
Other Memberships: The Business Council, a citizen regent of The Smithsonian
Institution.
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[PHOTO] JAMES N. SULLIVAN
Director since 1988
Mr. Sullivan, age 62, has been a Vice-Chairman of the Board of
Chevron since 1989.
Prior Positions Held: Mr. Sullivan was a Vice-President of Chevron from 1983
until 1989. He joined Chevron in 1961 as a process engineer and held a
succession of manufacturing assignments.
Other Directorships: Weyerhaeuser Company, American Petroleum Institute, United
Way of the Bay Area.
Other Memberships: Board of Trustees of the University of San Francisco,
Committee for Economic Development, Asian Art Museum of San Francisco.
[PHOTO] CHANG-LIN TIEN
Director since 1997
Dr. Tien, age 64, has been University Professor, since 1999 and NEC
Distinguished Professor of Engineering at the University of California,
Berkeley, since 1997.
Prior Positions Held: Dr. Tien was Chancellor at the University of California,
Berkeley from 1990 until 1997.
Other Directorships: Kaiser Permanente, Shanghai Commercial Bank (Hong Kong),
Wells Fargo & Company.
Other Memberships: National Academy of Engineering, Pacific Council on
International Policy, U.S. Committee for Economic Development, Council on
Foreign Relations, Fellow of the American Academy of Arts and Sciences, Chairman
of The Asia Foundation.
[PHOTO] JOHN A. YOUNG
Director since 1985
Mr. Young, age 67, has been Vice-Chairman of the Board of
Novell, Inc., a networking software company, since 1997 and Vice-Chairman of the
Board of SmithKline Beechman PLC, since 1998.
Prior Positions Held: From 1993 to 1997, Mr. Young served on a variety of
corporate and non-profit boards. He was President and Chief Executive Officer of
Hewlett-Packard Company from 1978 until 1992.
Other Directorships: Affymetrix, Inc., Lucent Technologies Inc., Wells Fargo &
Company.
Other Memberships: The Business Council, National Academy of Engineering,
Co-Chair of the President's Committee of Advisors on Science and Technology.
9
PROPOSAL TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
- -----------------------------------------------------
(ITEM 2 ON THE PROXY FORM)
Your Board unanimously recommends a vote FOR the proposal to amend Chevron's
Restated Certificate of Incorporation to increase the number of authorized
shares of $1.50 par value Common Stock from one billion (1,000,000,000) to two
billion (2,000,000,000) shares of $.75 par value common stock. The resolution in
its entirety states:
"RESOLVED: That subject to stockholder approval, the Restated Certificate of
Incorporation is hereby amended by deleting in its entirety the first paragraph
of the existing Article IV of the Restated Certificate and substituting the
following:
"The total of shares of all classes of stock which the Corporation shall have
authority to issue is two billion one hundred million (2,100,000,000) of which
one hundred million (100,000,000) shares shall be Preferred Stock of the par
value of one dollar ($1.00) per share, and 2,000,000,000 shares shall be Common
Stock of the par value of seventy-five cents ($0.75) per share."
As of February 28, 2000 XXX,XXX,XXX shares of Chevron Stock were outstanding and
XX,XXX,XXX were held in treasury. The proposed amendment would not increase the
authorized number of shares of Preferred Stock. There are no shares of Preferred
Stock outstanding.
There will be no change in the aggregate amount of stockholders' equity as
reported in Chevron's consolidated financial statements as a result of the
increase in authorized shares. Rather there will be a reduction in the amount of
"stated" capital represented by the issued shares of Common Stock which will be
offset by a corresponding increase in the amount of "capital in excess of par
value". Retained earnings will not be affected.
The net effect of the change in par value will be to increase modestly the
amount legally available for the payment of dividends. However, we do not
anticipate that adoption of the amendment would affect the dividend rate, which
is set by your Board.
If you approve the increase in authorized shares, there will be approximately
X,XXX,XXX,XXX authorized but unissued shares available for future utilization.
Although Chevron has no present plan to issue any of these shares, the
additional shares would be available for the declaration of stock splits, stock
dividends, acquisitions and any other proper corporate purpose. Chevron
stockholders have no preemptive rights with respect to the issuance of
additional shares of Chevron Stock. Once authorized in the Restated Certificate
of Incorporation, your Board may issue shares of Chevron Stock without further
authorization by the stockholders unless Chevron is required to obtain
stockholder approval by applicable law or stock exchange regulations.
The primary reason Chevron is seeking your approval to increase the number of
authorized shares is to facilitate a stock split at a later date. Chevron last
split its stock in 1994. While Chevron has no present intent to effect a stock
split, if the proposal is adopted, it may do so at any time that your Board
10
believes it to be in the best interests of Chevron and its stockholders.
Chevron could also use the additional shares for acquisitions when its shares
constitute an attractive "currency" for payment. For example, last year Chevron
acquired oil and gas interests in Thailand by using treasury shares to purchase
the former owners' interest.
Chevron could also use the additional shares in part to fund its broad-based
profit sharing plan or its incentive compensation plans for senior management.
In addition, the shares could be used to raise additional equity capital.
However, Chevron does not foresee the need to use the shares for these purposes.
For many years, the New York Stock Exchange, on which Chevron Stock is listed,
has required stockholder approval for the issuance of shares to officers or
directors. In addition, the NYSE requires stockholder approval if the number of
new shares to be issued in an acquisition or capital raising transaction would
equal or exceed twenty percent of the outstanding common stock. The purpose of
these NYSE requirements is to give stockholders control over events that could
significantly dilute the value of their equity interests or result in excessive
compensation to corporation insiders. Chevron has no intentions to de-list its
shares from trading on the NYSE; and, therefore, these NYSE protections would
remain.
YOUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION.
RATIFICATION OF THE BOARD'S APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -----------------------------------------------------
(ITEM 3 OF THE PROXY FORM)
The Board's Audit Committee, which is composed entirely of non-employee
Directors, has selected PricewaterhouseCoopers LLP as independent public
accountants to audit the books, records and accounts of Chevron and its
subsidiaries for the year 2000. Your Board has endorsed this appointment.
PricewaterhouseCoopers LLP has audited the consolidated financial statements of
Chevron for many years and during the year ended December 31, 1999, provided
both audit and nonaudit services. Audit services included:
(1) regular examination of the consolidated financial statements, including work
relating to quarterly reviews, SEC filings, and consultation on accounting
and financial reporting matters;
(2) audit of the financial statements of certain subsidiary companies to meet
statutory or local regulatory requirements;
(3) audit of specific financial and statistical information in connection with
contracts and other agreements; and
(4) examination of the financial statements of various Chevron employee benefit
plans.
Nonaudit services provided by PricewaterhouseCoopers LLP included income tax
consulting, employee benefit advisory services and systems consulting projects.
All audit and nonaudit services provided by PricewaterhouseCoopers LLP are
approved by the Audit Committee, which
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considers the potential for conflict of interest in reviewing non-audit
services.
Representatives of PricewaterhouseCoopers LLP will be present at the Annual
Meeting, will have an opportunity to make statements if they desire, and will be
available to respond to appropriate questions.
If the stockholders do not approve the appointment of PricewaterhouseCoopers
LLP, the Audit Committee will select another firm of auditors for the ensuing
year.
YOUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT PUBLIC ACCOUNTANTS.
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BOARD GOVERNANCE AND OPERATIONS
- -----------------------------------------------------
BOARD GOVERNANCE
The business and affairs of Chevron are managed by or under the direction of
your Board. Your Board reaffirms its management accountability to the
stockholders through the annual election process. All Directors annually stand
for election. They do so based on Chevron's performance record, which is set
forth in Chevron's annual report and proxy statement.
Your Board reviews and ratifies senior management selection, succession planning
and compensation. It monitors overall corporate performance, ensures the
integrity of Chevron's financial controls and the effectiveness of its legal
compliance programs.
Your Board oversees Chevron's strategic and business planning process. Chevron's
strategic and business planning is a year-round process culminating in a
day-long Board review of Chevron's updated Corporate Strategic Plan, its
three-year business plan, the next year's capital expenditures budget plus other
key financial and supplemental objectives.
BOARD STRUCTURE
Your Board's structure, composition and operating practices provide the
foundation for the effective discharge of its leadership responsibilities. It is
made up of a majority of non-employee Directors.
Your Board's composition and size are assessed at least annually by the Board
Nominating and Governance Committee. The Committee recommends prospective
directors to the Board without regard to race, religion or sex with the goal of
creating a balance of knowledge, experience, and diversity.
As a stockholder you may recommend a nominee by writing to the Corporate
Secretary specifying the nominee's name and the qualifications for Board
membership. All recommendations will be brought to the attention of the Board
Nominating and Governance Committee.
Chevron has a policy of mandatory retirement at the age 65 for employee
Directors and the age 72 for outside Directors.
The Board Nominating and Governance Committee reviews and concurs in the
election of any officer-director to outside board seats.
BOARD MEETINGS AND ATTENDANCE
Your Board met at 10 regularly scheduled Board meetings and 14 Board committee
meetings in 1999. All Board members attended on average over 94% of the Board
and appropriate Board committee meetings.
BOARD COMMITTEE STRUCTURE
The Management Compensation Committee was established in 1966, the Audit
Committee in 1975, the Nominating Committee in 1978, and the Public Policy
Committee in 1989. In 1996, the Nominating Committee's responsibilities were
expanded to add governance oversight responsibility and its name was changed to
the Board Nominating and Governance Committee.
Each committee is chaired by a non-employee Director who determines the agenda,
the frequency and length of the meetings and who has unlimited access to
Chevron's management and information.
13
All Board committees are composed entirely of non-employee Directors except for
the Public Policy Committee. Mr. O'Reilly is a member of the Public Policy
Committee.
Each non-employee Director currently serves on two committees. Committee members
serve staggered four-year terms ensuring that all Directors in office longer
than four years will serve on all committees. Fixed four-year terms for
committee chairpersons facilitate rotation of committee chairpersons while
preserving experienced leadership.
BOARD COMMITTEE MEETINGS AND FUNCTIONS
The following table shows each committee member, the number of committee
meetings held during 1999 and the functions performed by the committees.
BOARD COMMITTEE MEETINGS AND FUNCTIONS
Committees Committee Functions
AUDIT -- Recommends to the Board the selection of independent
Meetings: 4 public accountants
Samuel L. Ginn* -- Reviews reports of independent and internal auditors
J. Bennett Johnston -- Reviews and approves the scope and cost of all services
Condoleezza Rice (including nonaudit services) provided by the firm
Frank A. Shrontz selected to conduct the audit
-- Monitors the effectiveness of the audit process and
financial reporting
-- Reviews the adequacy of financial and operating controls
-- Monitors the corporate compliance program
MANAGEMENT -- Reviews and approves salaries and other compensation
COMPENSATION matters for executive officers
Meetings: 4 -- Administers the Excess Benefit, Management Incentive,
Samuel H. Armacost* Long-Term Incentive and Salary Deferred Plans for
Carla A. Hills management employees
Charles M. Pigott
Chang-Lin Tien
John A. Young
PUBLIC POLICY -- Identifies, monitors and evaluates domestic and foreign
Meetings: 3 social, political and environmental issues
Samuel H. Armacost -- Recommends to the Board policies and strategies
Samuel L. Ginn concerning such issues
David J. O'Reilly
Condoleezza Rice*
Frank A. Shrontz
John A. Young
BOARD NOMINATING -- Reviews Chevron's corporate governance practices and
AND GOVERNANCE recommends changes as appropriate
Meetings: 3 -- Recommends changes to improve Board, Board committee and
Carla A. Hills individual director effectiveness
J. Bennett Johnston -- Assesses the size and composition of the Board
Charles M. Pigott* -- Recommends prospective director nominees
Chang-Lin Tien -- Periodically reviews the Stockholder Rights Plan
*COMMITTEE CHAIRPERSON
14
DIRECTORS' COMPENSATION
- -----------------------------------------------------
Chevron believes that non-employee Directors' compensation should provide total
compensation that is competitive, links rewards to business results and
stockholder returns and facilitates increased ownership of Chevron Stock.
Chevron does not have a retirement plan for non-employee Directors. Chevron's
executive officers are not paid additional compensation for their services as
Directors.
In 1999, compensation for non-employee Directors included the following stock
and cash elements:
STOCK COMPENSATION
An annual grant of 400 shares of restricted Chevron Stock is made under the
Chevron Restricted Stock Plan for Non-Employee Directors. The Plan provides that
the dividends attributable to the restricted shares may be paid in cash or used
by the Director to purchase additional shares of restricted Chevron Stock.
Annual awards under the Plan are subject to forfeiture if a non-employee
Director does not serve as a Chevron Director for a minimum of five years after
the award is granted. However, such forfeiture does not apply if a Director
dies, reaches mandatory retirement age, becomes disabled, changes primary
occupation or enters government service
CASH COMPENSATION
- - $35,000 annual retainer
- - $1,500 for each Board meeting attended
- - $1,500 for each Board committee meeting attended
- - $1,500 for each Board committee meeting chaired.
DEFERRALS OF CASH COMPENSATION
A non-employee Director may defer receipt of all or any portion of the annual
retainer and meeting fees. Deferred amounts are credited each quarter with
interest at a variable rate, or, alternatively at the election of the Director,
are converted into stock units representing shares of Chevron Stock equal in
value to the amount deferred. In such event, unpaid stock units are credited
each quarter with dividend equivalents in the same amounts as the dividends paid
on Chevron Stock.
Distribution is ultimately made in cash. The amount distributed to a Director
will reflect changes in the market value of Chevron Stock during the deferral
period. Any deferred amounts remaining unpaid at the time of a Director's death
are distributed to the Director's beneficiary.
EXPENSES
Non-employee Directors are reimbursed for out-of-pocket expenses that they incur
in connection with the business and affairs of Chevron.
15
STOCK OWNERSHIP INFORMATION
- -----------------------------------------------------
The following table shows the ownership interest in Chevron Stock for each
Director, nominee and executive officer as of January 26, 2000. No Director,
nominee or executive officer owns 1% or more of the outstanding shares of
Chevron Stock, nor do the Directors and executive officers as a group.
DIRECTORS' AND EXECUTIVE OFFICERS' STOCK OWNERSHIP
Name Shares Currently Exercisable Restricted Stock
("-" denotes a non-employee Director) Owned (1) Options (2) Units (3)
Samuel H. Armacost- 6,787 0 0
Samuel L. Ginn- 3,260 0 2,686
Carla A. Hills- 3,409 0 0
J. Bennett Johnston- 1,260 0 0
Martin R. Klitten 25,706 200,600 0
Richard H. Matzke 51,085 209,500 0
David J. O'Reilly 25,979 170,900 0
Charles M. Pigott- 70,136 0 3,334
Condoleezza Rice- 3,014 0 0
Frank A. Shrontz- 2,510 0 0
James N. Sullivan 60,529 378,800 0
Chang-Lin Tien- 1,200 0 0
John A. Young- 5,687 0 0
Directors and Executive Officers as a group (18 persons) 349,327 2,034,800 20,855
(1) For non-employee Directors the amounts shown include shares of restricted
Chevron Stock awarded under the Chevron Restricted Stock Plan for
Non-Employee Directors. For executive officers the amounts shown include
shares held for them in trust under the Profit Sharing/Savings Plan and in
the dividend reinvestment plan.
(2) These stock options were awarded under the Long-Term Incentive Plan and are
currently exercisable. Securities and Exchange Commission rules consider a
person to be the beneficial owner of shares of Chevron Stock if (a) he or
she has a right to vote or sell them or (b) can exercise an option to
acquire them now or at some time within the next 60 days.
(3) Restricted stock units do not carry voting rights and may not be sold. But
they represent economic ownership of Chevron Stock since their value depends
on the performance of Chevron Stock and they may ultimately be paid in
shares. For non-employee Directors, these are stock units awarded under the
Chevron Restricted Stock Plan for Non-Employee Directors. For executive
officers, these are stock units deferred under the Management Incentive
Plan, the Long-Term Incentive Plan and the Salary Deferred Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires Chevron Directors and
executive officers, and persons who own more than 10% of a registered class of
Chevron's equity securities to file with the U.S. Securities and Exchange
Commission, the New York Stock Exchange and Chevron reports of initial ownership
and reports of changes in ownership of Chevron equity securities.
Based solely on a review of the reports furnished to Chevron, we believe that
during 1999 all of your Directors, executive officers and 10% stockholders
complied with the requirements for reporting initial ownership and changes in
ownership of Chevron's equity securities.
16
EXECUTIVE COMPENSATION
- -----------------------------------------------------
MANAGEMENT COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Management Compensation Committee of the Board of Directors (the
"Committee") makes this report to help you understand the Committee's objectives
and the procedures used to determine the compensation of Chevron's Chief
Executive Officer and other senior Chevron executives.
The Committee, consisting of five of the nine non-employee Directors, is
responsible for Chevron's executive compensation program. All members of the
Committee qualify as "outside directors" under section 162(m) of the Internal
Revenue Code. In structuring Chevron's incentive programs, the Committee is
advised on plan design by external compensation consultants. Chevron's
compensation staff provides additional counsel, data and analysis as requested
by the Committee.
COMPENSATION PHILOSOPHY AND OBJECTIVES
The Committee believes that compensation of Chevron's key executives should:
- - link rewards to business results and stockholder returns;
- - encourage creation of stockholder value and achievement of strategic
objectives;
- - provide a total compensation opportunity that is competitive with major oil
companies, taking into account relative company size and performance as well
as individual experience, responsibility and performance;
- - maintain an appropriate balance between base salary and short- and long-term
incentive opportunity, with more compensation at risk at the higher salary
grades; and
- - attract and retain high caliber personnel on a long-term basis.
Chevron has used six major oil companies as its competition when determining
competitive compensation practice (BP Amoco, Arco, Exxon, Mobil, US Shell and
Texaco). The pending merger of BP Amoco and Arco and the completed Exxon and
Mobil merger will reduce the number of competitor companies in the peer group.
Therefore in 2000, the makeup of the peer group for future information surveys
and comparisons will be expanded to include Conoco, Marathon, Phillips and
Equiva (the downstream Joint Venture between US Shell and Texaco), which better
reflects the companies Chevron competes with for overall human resources talent.
The six competitors (BP Amoco, Arco, Exxon, Mobil, Royal Dutch Shell and Texaco)
are the primary competition in the marketplace where Chevron operates and have
comprised the competitor peer group for determining relative total stockholder
return ("TSR"), which is stock price appreciation plus dividends on a reinvested
basis. Royal Dutch Shell is used in place of US Shell because US Shell is not a
publicly traded company. In 2000 we will replace Exxon and Mobil with the new
merged company ExxonMobil. BP Amoco and Arco will be replaced by the resulting
BP Amoco-Arco if the pending merger is consummated.
KEY ELEMENTS OF EXECUTIVE COMPENSATION
Chevron's existing executive compensation program consists of three elements:
Base Pay,
17
Short-Term Incentives and Long-Term Incentives. For senior executives, the
Committee believes short- and long-term incentive pay, linked to Chevron's
financial performance, should represent half or more of their total compensation
opportunity.
Base Pay
- - The executive salary structure targets the average pay levels of the major oil
competitors. When establishing the salary structure, the Committee also
reviews non-oil pay information provided by its external consultant to ensure
compensation opportunity is appropriate on a broad industry basis.
- - Executive salaries and proposed changes are reviewed and approved by the
Committee. Pay increases under the executive salary program are administered
throughout the salary program year.
- - Actual salaries vary by individual and are based on sustained performance
toward achievement of Chevron's goals, objectives and strategic intents. The
Committee also considers experience and current salary compared to market
rates when considering salary actions.
Short-Term Incentive (Management Incentive Plan)
- - The Management Incentive Plan (MIP) is an annual cash incentive plan which
links awards to performance results of the prior year. Individual target
awards vary by salary grade and are based on the competitive annual bonus
practices of major oil competitors. ACTUAL individual awards vary from 150% of
target to zero.
- - Awards are based on the Committee's assessments of performance vs. objectives
for two components: corporate results and operating company or
department/staff results. For certain individuals in operating company
positions, a third component of strategic business unit (SBU) results is also
used in the award determination process. Each component is weighted about the
same (either one-half or one-third) depending on whether or not an SBU
component is included. A leadership performance factor (LPF) is used as an
overall modifier to the component ratings. The LPF is based on personal
contribution in achieving business results and leadership behaviors
demonstrated in achieving the results. Performance assessments within each of
the components are aggregate judgments; there is no specific weighting formula
for each factor within a component.
- - Corporate, operating company and SBU financial and strategic objectives are
set at the beginning of each year. Financial objectives are developed for:
earnings, return on capital employed (ROCE), cash flow and operating expense.
Non-financial measures such as organizational safety performance versus
objectives and reliable operations metrics are also included in the evaluation
process. Results are measured against objectives and against major oil
competitor results.
- - An individual's key job responsibilities and objectives are also established
at the beginning of each year. Individual objectives include achievement of
business unit financial goals as well as targets related to business
operations (e.g., refinery throughput, production volumes, product quality,
safety, environmental performance, etc.). Performance assessments are also
made on other factors including diversity, leadership, teamwork,
communication, planning and organizing, creativity and innovation, and quality
improvement.
18
- - The corporate performance assessment is the same for all MIP participants.
Individuals will have different operating company, SBU and leadership
performance assessments.
Long-Term Incentive (Long-Term Incentive Plan)
- - The Long-Term Incentive Plan (LTIP) is designed specifically to link a
substantial portion of executive pay to increases in stockholder value.
Individual grants vary by salary grade, and are based on valuations of grants
made by the major oil competitors (these valuations are provided by the
Committee's external consultant). Grants are typically in the form of
non-qualified stock options and performance units.
- - Non-Qualified Stock Options (NQSOs) are awarded at market price on the day of
grant, vest after one year, and have a ten-year term. Their ultimate value
depends entirely on appreciation of Chevron Stock. The Committee does not
grant discounted options.
- - Performance Units - The ultimate value of Performance Units (denominated in
shares of Chevron Stock) is tied to TSR as compared to TSRs for the peer group
competitors. Performance units have a three-year vesting period, with a
performance modifier based on relative TSR ranking that can vary from 0% to
150%. If Chevron's TSR is the lowest of the peer group competitors, the
modifier is 0%; if highest, the modifier is 150%. Moreover, if the difference
between one or more competitor's TSR and Chevron's TSR is less than one
percent, the TSR ranking modifiers are averaged. Payout is in cash and is
equal to the number of Performance Units multiplied by the performance
modifier multiplied by the 20 day trailing average price of Chevron Stock at
the end of the performance period.
EXECUTIVE STOCK OWNERSHIP
Chevron does not have formal stock ownership guidelines. Executives participate
in Chevron's Profit Sharing/Savings Plan (a broad-based employee stock ownership
and savings plan) which has a Chevron Stock fund account. They also have the
option to defer MIP awards and LTIP performance unit payouts into Chevron stock
units. As a result of these opportunities, the average value of Chevron Stock
holdings of executives as a group is more than five times their annual salaries.
1999 CEO COMPENSATION
Base Pay
Chevron had a strong year in 1998, meeting many of its operational targets.
However, financial performance was down compared to 1997, primarily due to low
crude prices (WTI spot prices averaged $14.38/bbl - a twenty-year low - down 30%
from 1997) and lower Henry Hub natural gas prices (average $2.08/mcf, a 19%
decline from 1997). Despite this difficult financial climate, operating expense
was reduced by over $600 million in 1998 to $7.0 billion or $5.32/bbl. The
Committee did not grant Mr. Derr a salary increase in 1999. Mr. Derr's annual
salary of $1,350,000 reflects his excellent performance throughout his
eleven-year tenure as CEO.
Annual Bonus (MIP)
In 1999, Chevron increased its efforts to reduce costs while continuing to seek
and acquire assets with the potential for long-term revenue growth. This
strategy, coupled with a rebound in crude prices, resulted in operational
earnings of $2.3 billion which is a 47% above target and 18% above 1998.
Chevron's operational ROCE
19
was 10.2%, up from 9.2% last year, and TSR for the year was 7.3%.
Operating expense continued to decline in 1999 to $5.16/bbl. This is a reduction
of $0.16/bbl from the 1999 yearly objective of $5.32/bbl. Cost Structure Action
Teams were formed in 1999 to oversee the cost reduction process across the whole
company. Initiatives related to global procurement, finance, human resources and
technology were initiated, and Chevron sold its remaining office buildings in
San Francisco and relocated many of its employees to lower cost facilities in
San Ramon.
Upstream operations continue to grow and net worldwide OEG production, worldwide
liquids production and international liquids production all established new
records in 1999. Chevron completed two acquisitions in 1999 that are expected to
contribute significantly to the Company's growth in international upstream. The
acquisition of Petrolera Argentina San Jorge S.A. will provide the foundation
for further growth opportunities in Latin America while the acquisition of
Rutherford-Moran Oil Corporation provides Chevron with a strategic entry into
the Southeast Asia gas market. Chevron's worldwide net proved OEG reserves
replacement ratio at the end of 1999 is about 108%. This marks the seventh
consecutive year of reserves replacement in excess of 100%. Combined U.S. and
international liquids production is up about 2% over 1998, with international
liquids production rising 4% above 1998 levels.
Gasoline sales have grown 5% from 1998 levels, and convenience store gross
margin increased by 20% from the prior year. The successful integration of the
Amoco lubricants business into the North American Finished Lubricants business
was also completed. In addition, Chevron formed two new companies in 1999 to
explore technology-related business opportunities.
Based on Chevron's 1999 performance, and Mr. Derr's contributions to Chevron,
the Committee granted Mr. Derr a MIP award of $1,960,000. The MIP awards granted
to Mr. Derr and to the other four highest-paid officers for the past three
performance years are presented in the summary compensation table which follows
this report.
LONG TERM INCENTIVES (LTIP)
Chevron's LTIP grants are made under the same determination rules for all LTIP
participants. In anticipation of his retirement at the end of 1999, the
Committee did not make a grant under LTIP for Mr. Derr in 1999.
Mr. Derr was granted 24,000 Performance Units in 1996 for the performance period
January 1, 1997 through December 31, 1999. Chevron's TSR of 14.1% for this
three-year period resulted in a performance unit payout of $1,267,065 to Mr.
Derr.
OTHER
The Committee also notes that Mr. Derr was allocated $5,970 from his
participation in Chevron's Profit Sharing/Savings Plan, a broad-based employee
stock ownership plan. The allocation to this Plan was based on Chevron's 1999
income.
January 19, 2000
MANAGEMENT COMPENSATION COMMITTEE
S. H. Armacost, Chairman
C. A. Hills C. M. Pigott
C. Tien J. A. Young
20
SUMMARY COMPENSATION TABLE
Long-Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
----------------------- ---------- ----------------------
Securities Vested Non-
Bonus ($) Underlying Performance Stock All Other
Name and Salary (Year Options Units Award Compensation(2)
Principal Position Year ($) Earned) (#) ($) ($) ($)
K. T. Derr 1999 $1,350,000 $1,965,000 0 $1,267,065 $ 75,451
Retired Chairman 1998 $1,275,000 $1,185,000 110,000 $1,743,046 -- $111,694
1997 $1,200,000 $1,595,000 125,000(1) $1,666,594 $118,563
D. J. O'Reilly 1999 $ 575,000 $ 720,000 150,000 $ 422,355 $ 32,132
Chairman 1998 $ 469,167 $ 420,000 58,600 $ 399,920 -- $ 41,544
1997 $ 420,000 $ 470,000 35,000 $ 270,103 $ 34,700
J. N. Sullivan 1999 $ 764,750 $ 685,000 60,000 $ 686,327 $ 42,877
Vice-Chairman 1998 $ 735,000 $ 545,000 58,600 $ 958,298 -- $ 64,293
1997 $ 701,250 $ 775,000 60,000 $ 913,753 $ 67,603
R. H. Matzke 1999 $ 568,525 $ 750,000 60,000 $ 422,655 $ 31,875
Vice-Chairman 1998 $ 527,500 $ 395,000 45,500 $ 399,920 -- $ 46,243
1997 $ 450,000 $ 415,000 35,000 $ 382,167 $ 41,434
M. R. Klitten 1999 $ 485,000 $ 375,000 33,000 $ 422,655 $ 27,105
Vice-President 1998 $ 473,750 $ 315,000 33,000 $ 558,378 -- $ 41,462
1997 $ 461,250 $ 405,000 35,000 $ 534,459 $ 36,404
(1) Includes a non-qualified stock option (NQSO) for 15,000 shares granted in
lieu of salary increase.
(2) Includes Chevron's contributions to the Profit Sharing/Savings Plan and
allocations under the Excess Benefit Plan for the Profit Sharing/Savings
Plan. For 1999, contributions under the Profit Sharing/Savings Plan for the
five named individuals were as follows: K. T. Derr, $5,970,
J. N. Sullivan, $5,970, D. J. O'Reilly, $6,155, R. H. Matzke, $6,184 and
M. R. Klitten, $6,184; and contributions under the Excess Benefit Plan for
the five named individuals were as follows: K. T. Derr, $69,481,
J. N. Sullivan, $36,907, D. J. O'Reilly, $25,977, R. H. Matzke, $25,691 and
M. R. Klitten, $20,694.
LONG-TERM INCENTIVE PLAN - 1999 PERFORMANCE UNIT AWARDS TABLE
Number of Performance Estimated Future Payout (1)
Performance Period Until ----------------------------
Name Units Granted Payout Threshold Target Maximum
K. T. Derr..................... 0 N/A -- -- --
D. J. O'Reilly................. 32,000 3 Years 9,600 32,000 48,000
J. N. Sullivan................. 12,500 3 Years 3,750 12,500 18,750
R. H Matzke.................... 12,500 3 Years 3,750 12,500 18,750
M. R. Klitten.................. 7,000 3 Years 2,100 7,000 10,500
(1) The payout can vary depending on Chevron TSR vs. its five peer group
competitors. A performance modifier provides the incentive to maximize TSR
relative to the five peer group competitor by modifying the payout value
(e.g., the modifier is 150% for the highest relative TSR and 0% for the
lowest relative TSR). Payout (in dollars) is equal to the number of units
times a performance modifier based on relative TSR times the 20-day trailing
average price of Chevron Stock at the end of the performance period.
21
OPTION GRANTS IN LAST FISCAL YEAR TABLE
Individual
Grants
Number of Percentage of
Securities Total NQSOs/SARs Exercise
Underlying Granted to or Base
Options Employees in Price Expiration
Name Granted (1) 1999 (per Share) Date
K. T. Derr 0 0 $ -- --
D. J. O'Reilly 150,000 7.7% $ 89.875 10/27/09
J. N. Sullivan 60,000 3.1% $ 89.875 10/27/09
R. H. Matzke 60,000 3.1% $ 89.875 10/27/09
M. R. Klitten 33,000 1.7% $ 89.875 10/27/09
Executive Plan
NQSO Stock Price/Share $89.8750
All Optionees for NQSOs 1,829,831
All Stockholders(2) 656,342,574
Optionee Gain as % of All
Stockholders' Gain
Potential Realizable Value After 10 Years
based on Assumed Compounded Annual
Rates of Stock Price Appreciation
-----------------------------------------------
Name 0% per Year 5% per Year 10% per Year
K. T. Derr $ -- $ -- $ --
D. J. O'Reilly $ -- $ 8,478,286 $ 21,485,640
J. N. Sullivan $ -- $ 3,391,314 $ 8,594,256
R. H. Matzke $ -- $ 3,391,314 $ 8,594,256
M. R. Klitten $ -- $ 1,856,223 $ 4,726,841
Executive Plan
NQSO Stock Price/Share $ 89.875 $ 146.3969 $ 233.1126
All Optionees for NQSOs $ 103,425,533 $ 262,100,607
All Stockholders(2) $37,097,732,340 $94,012,937,441
Optionee Gain as % of All
Stockholders' Gain 0.0% 0.3% 0.3%
(1) NQSOs have a 10-year term and are 100% vested one year after date of grant.
The exercise price is a fair market value on the date of grant.
(2) Represents the potential aggregate increase in market capitalization of
Chevron based upon the 656,342,574 outstanding shares of Chevron Stock as of
December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES TABLE
Value of Unexercised
Shares Unexercised Shares In-the-Money Shares
Acquired on Value ---------------------------- ------------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Derr, K. T. 74,400 $ 4,365,046 708,500 0 $ 21,313,988 $ 0
O'Reilly, D. J. 22,800 $ 1,356,232 170,900 150,000 $ 3,475,063 $ 0
Sullivan, J. N. 79,400 $ 4,588,781 378,800 60,000 $ 11,576,075 $ 0
Matzke, R. H. 4,400 $ 269,500 209,500 60,000 $ 5,943,163 $ 0
Klitten, M. R. 0 $ 0 200,600 33,000 $ 5,738,375 $ 0
22
PENSION PLAN TABLE
Years of Credited Service
----------------------------------------------------------------------------------
Remuneration 25 30 35 40
$1,000,000 383,400 450,900 519,200 635,900
$1,250,000 479,200 563,600 649,000 794,900
$1,500,000 575,000 676,300 778,800 953,900
$1,750,000 670,900 789,000 908,600 1,112,900
$2,000,000 766,700 901,700 1,038,400 1,271,900
$2,250,000 862,600 1,014,400 1,168,200 1,430,900
$2,500,000 958,400 1,127,200 1,298,000 1,589,900
$2,750,000 1,054,200 1,239,900 1,427,800 1,748,900
$3,000,000 1,150,100 1,352,600 1,557,600 1,907,900
$3,250,000 1,245,900 1,465,300 1,687,300 2,066,900
$3,500,000 1,341,800 1,578,000 1,817,100 2,225,900
The table above illustrates the approximate annual pension that the named
executive officers in the Summary Compensation Table would receive under the
Chevron Retirement Plan and the Retirement Plan portion of the Excess Benefit
Plan if the plans remained in effect and the named executive officers retired at
age 65 and elected an individual life pension. However, because of changes in
the tax laws or future adjustments to benefit plan provisions, actual pension
benefits could differ significantly from the amounts set forth in the table.
Mr. Derr retired at the end of 1999 with 38 years of credited service. If the
other named executive officers remain employees until they reach age 65, the
years of credited service will be as follows: J. N. Sullivan, 40 years; D. J.
O'Reilly, 40 years; R. H. Matzke, 40 years; and M. R. Klitten, 39 years. The
amounts set forth in the table above do not include modest reductions to reflect
the offset for federal social security benefits required by the Retirement Plan.
The Retirement Plan is a defined benefit pension plan. Eligible employees of
Chevron and consolidated subsidiaries automatically participate in the Plan and
start accruing benefits from their first day of employment. Eligible employees
become fully vested in their pension benefits after completing five years of
service.
Pension benefits are calculated on a "final average pay formula" based on the
length of credited service and the annual average of the highest 36 consecutive
months of earnings. For executive officers, earnings include MIP awards and
generally correspond with the combined amounts set forth in the "Salary" and
"Bonus" columns in the Summary Compensation table on page XX. The same 36
consecutive month period is used to determine the highest average earnings for
both salary and MIP awards.
The total pension benefit is equal to the sum of 1.4 percent of average earnings
(less $600) multiplied by years of credited service prior to July 1, 1971; plus
1.35 percent of average earnings multiplied by years of credited service after
June 30, 1971 and prior to July 1, 1986; plus 1.6 percent of average earnings
multiplied by years of credited service after June 30, 1986. The basic pension
is reduced by a portion of the federal social security benefit. Employees of
acquired companies might receive benefits calculated under different formulas
for their service under plans merged into the Retirement Plan. Benefits under
the Retirement Plan are ordinarily payable monthly in the form of an individual
life pension upon retirement at age
23
65, although reduced benefits are available to eligible employees who terminate
employment before attaining age 65. Instead
24
of an individual life pension, eligible employees may elect to receive a 50% or
100% joint-and-survivor pension, or a lump sum payment. Other forms of
distribution are available under the Excess Benefit Plan.
PERFORMANCE GRAPH
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
CHEVRON CORPORATION STANDARD & POOR'S 500 INDEX COMPETITOR PEER GROUP #1 COMPETITOR PEER GROUP #2
12/94 $100.00 $100.00 $100.00 $100.00
12/95 $122.08 $137.58 $133.59 $134.40
12/96 $156.82 $169.17 $163.46 $165.57
12/97 $191.67 $225.60 $200.24 $206.33
12/98 $212.86 $290.08 $241.47 $231.95
12/99 $228.73 $351.12 $294.19 $286.65
(1) Competitor Peer Group 1 is comprised of the predecessor companies of BP
Amoco Corporation P.L.C. (Amoco Corporation), Atlantic Richfield Company,
Exxon Mobil (Exxon Corporation and Mobil Corporation) and Texaco Inc.
(2) To better reflect the primary competition in the marketplace where Chevron
operates, the Management Compensation Committee added Royal Dutch Petroleum
to the Competitor Peer Group, which is now comprised of BP Amoco Corporation
P.L.C., Atlantic Richfield Company, Exxon Mobil and Texaco Inc.
(3) The SEC's rules require Chevron to show the performance of both of these
Competitor Peer Groups for the five-year period from 1994 to 1999.
The performance graph above was prepared by Standard & Poor's Compustat group.
It shows how an initial investment of $100 in Chevron Stock would have compared
to an equal investment in the S&P 500 Index or the Competitor Peer Group
indexes. The Competitor Peer Group companies are those with which Chevron
competes directly and against which for a number of years it has measured its
performance for purposes of calculating grants under its Management Incentive
Plan and its Long-Term Incentive Plan. The comparison covers a five-year period
beginning December 31, 1994 and ending December 31, 1999 and is weighted by
market capitalization as of the beginning of each year. It includes the
reinvestment of all dividends that an investor would be entitled to receive,
with the reinvestment made on the ex-dividend trading date. The interim
measurement points show the value of $100 invested on December 31, 1994 as of
the end of each year between 1994 and 1999.
25
STOCKHOLDER PROPOSALS
- -----------------------------------------------------
STOCKHOLDER PROPOSAL TO
REPORT ON GREENHOUSE GAS
EMISSIONS
(ITEM 4 ON THE PROXY FORM)
CHEVRON GLOBAL WARMING
WHEREAS:
The overwhelming majority of independent, peer-reviewed atmospheric scientists
agree that global warming is a real, existing problem, posing serious challenges
to our country;
The Intergovernmental Panel on Climate Change, composed of more than 2000
government selected scientists, warns that global warming caused by burning
fossil fuels and emitting greenhouse gases is already under way;
More frequent and deadly heat waves have claimed the lives of increasing numbers
of poor, asthmatic and elderly people nationwide;
Spring comes a week earlier across the Northern Hemisphere than it did 30 years
ago;
Severe rainstorms have grown by almost 20%;
The Arctic ice sheet is in many places 40 inches thinner than its normal 10 ft;
Warmer waters have bleached coral reefs around the globe;
Glaciers are melting;
Sea levels are rising.
WE BELIEVE:
In order to leave the children of the world a safe and healthy environment, and
protect threatened plants and animals, it is time for Chevron to live up to its
responsibility as a producer of the pollution which causes global warming. A
variety of companies including Enron, BP Amoco, 3M, Toyota and others have
stated that they "accept the views of most scientists that enough is known about
the science and environmental impacts of climate change for us to take actions
to address its consequences." These companies are preparing for the future now
by taking the concrete steps necessary to assess their opportunities for
reducing the amount of carbon pollution they produce. Failing to rise to the
challenge set by these industry leaders will hurt our company's competitiveness
and cost our shareholders increasing amounts of money.
RESOLVED: that the shareholders of Chevron request that the Board of Directors
report (at reasonable costs and omitting proprietary information), to
shareholders by August 2000, on the greenhouse gas emissions from our company's
own operations and products, including (with dollar amounts where relevant)
(i) what our company is doing in research and/or action to reduce those
emissions and ameliorate the problem, (ii) the financial exposure of our company
and its shareholders due to the likely costs of reducing those emissions and
potential liability for damages associated with climate change, and
(iii) actions by our company, or by the industry associations to which it pays
dues, promoting the view that the issue of climate change is exaggerated, not
real, or that global warming may be beneficial.
SUPPORTING STATEMENT
We believe that Chevron is exposing its shareholders to financial risk by
continuing to produce unnecessary amounts of the pollution which causes global
warming, even
26
as the problem of climate change becomes more severe, more widely understood,
and more likely to lead to legislation that will penalize excessive carbon
polluters. Furthermore, we believe that our company is using shareholder money
for advertising and lobbying to suggest that the problem of global warming is
exaggerated, not real, or too costly to deal with; and thus using our prestige
and influence to obstruct efforts to address climate change.
YOUR BOARD'S RECOMMENDATION ON REPORT ON GREENHOUSE GAS EMISSIONS
Recommendation of the Board AGAINST this Proposal:
Global climate change continues to be an issue of strategic importance to our
industry and company, and Chevron shares the concern about the possible effects
of climate change on future generations. This very important environmental issue
is covered under our Policy 530, PROTECTING PEOPLE & THE ENVIRONMENT, and
Chevron is doing what we can to slow worldwide growth in greenhouse gas
emissions without unduly harming the global economy.
As an international energy company, Chevron provides energy products vital to
the development of the world's economies and to our nation's continued economic
growth. While contributing significantly to economic growth, use of these fuels
has also contributed to an increase in the concentration of "greenhouse"
gases--mainly carbon dioxide and methane--in the atmosphere.
Our objective is to increase oil and natural gas production to meet the world's
growing energy needs, and at the same time steadily reduce emissions per unit of
output from operations. In recent years, Chevron has participated in energy
conservation efforts such as the Environmental Protection Agency's "Green
Lights" program and has continued to reduce emissions of methane from our US oil
and gas operations as a charter member of EPA's Natural Gas STAR Program. In
1999, the EPA recognized Chevron's North American oil and gas producing
operations as "STAR Partner of the Year."
As part of our ongoing efforts to reduce gas flaring in West Africa, Chevron has
completed the Escravos Natural Gas Plant and has signed memoranda of
understanding with four host governments to construct a natural gas pipeline
that would provide the clean energy needed to support sustainable economic
development. Operation of the Escravos Plant is already resulting in reduced
greenhouse gas emissions, and the West African Gas Pipeline will reduce total
greenhouse gas emissions by an additional 100 million metric tons of carbon
dioxide over a 20-year project life. Recently, Chevron also began operations at
a West African offshore oil production platform that re-injects, rather than
flares, all associated natural gas. All of these projects result in reduced
greenhouse gas emissions.
Chevron is using these and other results to develop an estimated "emissions
inventory" to track our progress in reducing emissions. In 1998 (the last year
for which date are available), Chevron's greenhouse gas emissions from worldwide
operations were up only 1% from 1997, compared to production growth of 3%,
indicating continued reduction in emissions per unit of output. In addition,
since 1991, Chevron has improved overall energy efficiency (which also results
in reduced greenhouse gas emissions) by about 16%.
Another aspect of our voluntary effort is to help facilitate the development of
practical tools to reduce emissions. Chevron sponsored
27
1998 and 1999 conferences on the Clean Development Mechanism, one of the more
promising efforts to reduce emissions using market-based incentives rather than
penalties.
As a result of these and other voluntary actions, Chevron's total greenhouse gas
emissions in the developed countries are declining and are currently more than
10% below 1990 levels. The success of these voluntary efforts confirms our
ongoing commitment to combining superior economic performance with environmental
responsibility.
Despite these and other people's voluntary actions, the concern that greenhouse
gas emissions are leading to, or could lead to, adverse effects on the
environment is causing a number of scientists and policy makers to call for
mandates to cut fossil fuel use. At the same time, many of these same scientists
recognize that the link between the human contribution to the increase in
greenhouse gases and potential climate change remains uncertain. Consequently,
in addition to stating our commitment to environmental protection, our policy
advocates that sound science should drive environmental regulations. So we
strongly endorse more scientific research to solve the climate change puzzle
before governments adopt additional mandates to restrict emissions.
Chevron understands the concern surrounding global climate change. We are
responding with voluntary actions to reduce emissions, while at the same time
providing vital energy products in an environmentally responsible manner. We
believe that Chevron's actions satisfy the concerns raised in the stockholder
proposal.
YOUR BOARD RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL.
STOCKHOLDER PROPOSAL TO ELIMINATE
BIOACCUMULATIVE HALOGENATED
POLLUTANTS
(ITEM 5 ON THE PROXY FORM)
CHEVRON
WHEREAS:
PCBs, PBBs, dioxins, polybrominated diphenyl ethers (PBDEs) and many similar
chemicals containing chlorine or bromine are extremely toxic and bioaccumulate
in food and mother's milk to levels that cause effects in children and
disproportionately affect health in many communities of color;
The Environmental Protection Agency has found that any emission of these
extremely toxic pollutants is of concern, and many governments are working
toward their virtual elimination. However, companies are not required to develop
and report Options for eliminating these pollutants under existing federal laws;
Exposure to these pollutants is associated with many health effects, which in
the case of dioxins may include cancer, diabetes, endometriosis, a range of
childhood learning problems, and other effects;
These pollutants are often created inadvertently, by reactions involving
chlorine or bromine, in many industrial processes;
We believe generating these pollutants, which is costly to companies and
economies, can be eliminated cost effectively with sound planning based on sound
information;
Processes used by Chevron refineries generate these pollutants, including PCBs
and dioxins, among the most toxic chemicals known. Chevron's mission to create
superior value, and the company's goal to be an
28
industry leader in health performance, indicate that we should lead in sharing
information about the virtual elimination of these pollutants.
Therefore, be it resolved that the shareholders request that Chevron;
1. Adopt a plan for virtual elimination of bioaccumulative halogenated
pollutants at its major facilities which identifies, for each facility, all
inputs and uses of chlorine and bromine, any sources of dioxin and other
bioaccumultive pollutants containing these compounds in the facility, and
any options that may eliminate the generation of these pollutants.
2. Provide a summary report to shareholders on these virtual elimination
options annually.
SUPPORTING STATEMENT
We believe this policy makes business sense because preventing pollution is cost
effective in the short term and avoids long-term liabilities related to toxic
chemical exposures.
Ethically this is the right thing for our company to do because recent reports
indicate that children and other family members are sick in disproportionately
exposed communities near petrochemical facilities, and our company's actions can
prevent some exposures.
It will improve our company's image if Chevron goes beyond its existing policy
to minimize pollution and joins the new efforts for virtual elimination of toxic
and bioaccumulative pollutants.
YOUR BOARD'S RECOMMENDATION ON THE PROPOSAL TO ELIMINATE BIOACCUMULATIVE
HALOGENATED POLLUTANTS
Recommendation of the Board AGAINST this Proposal:
Your Board believes that Chevron's existing Policy 530 - PROTECTING PEOPLE AND
THE ENVIRONMENT--together with associated operating, communication and
management practices, addresses the concerns raised in the proposal. We have
continually anticipated and responded to heightened stakeholder expectations in
the areas of health, safety and the environment. We are proud of our efforts and
continue to work hard to ensure our policies, practices and plans in this area
remain unsurpassed.
In 1992, we established the PROTECTING PEOPLE AND THE ENVIRONMENT program to
provide a systematic approach to manage health, safety and environmental
affairs. Implementation of the pollution prevention element of the program
commits Chevron facilities to have operational practices in place to identify,
minimize or prevent pollution. Practices include identification of potential
sources of emissions, assessment of exposures and health risks, and
implementation of plans to minimize or eliminate the emissions.
Chevron does not directly manufacture products such as PCB, PBB, polybrominated
diphenyl ethers (PBDE) or other so-called bioaccumulative halogenated compounds.
They are present in the environment from a multitude of different sources.
Because some chlorine and bromine, which are precursors of these compounds, are
present as naturally occurring contaminants in raw materials we use, it is
possible that extremely small quantities of these compounds might be formed and
be emitted from our industrial processes. However, we believe that these
29
trace emissions do not pose a real health risk to our employees or the
communities around our facilities.
Implementation of our Policy 530 also commits us to work with public
representatives and to encourage the development of regulations that are based
on sound science and consider cost-benefit principles. We are supporting the
development of U.S. EPA strategies for bioaccumulative halogenated compounds.
These strategies will help to quantify possible sources of emissions, assess
potential impacts and provide action plans for priority sources. We will comply
with the U.S. Toxic Release Inventory requirements, which in 2000 include the
annual collection of facility release data of certain persistent toxic materials
including bioaccumulative halogenated pollutants. This information will be
publicly available in 2001 from EPA's website.
We believe that our Policy 530 and PROTECTING PEOPLE AND ENVIRONMENT program and
our current operational, communications and management practices address the
stockholder proposal.
YOUR BOARD RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL.
STOCKHOLDER PROPOSAL TO REPORT
ON POTENTIAL ENVIRONMENTAL
DAMAGE TO ANWR
(ITEM 6 ON THE PROXY FORM)
WHEREAS: the Arctic National Wildlife Refuge (the "Refuge") is the only
conservation area in the nation that provides a complete range of Arctic and
sub-Arctic ecosystems balanced with a wide variety of wildlife, including large
populations of caribou, muskoxen, polar bears, snow geese and 180 species of
other migratory birds;
Interior Secretary Bruce Babbitt has likened drilling in the Refuge to damming
up the Grand Canyon;
the Refuge Coastal Plain, 1002 Area, is the only section of Alaska's entire
North Slope not open for oil and gas exploration and production; and
in 1998, our company announced an agreement with the Arctic Slope Regional
Corporation to drill for oil in the Kaktovik area of the Refuge;
RESOLVED, the Shareholders request that Board of Directors prepare a report, at
reasonable cost and omitting proprietary information, on the potential
environmental damage that would result from the company proceeding with plans to
drill for oil and gas in the coastal plain, 1002 Area, of the Arctic National
Wildlife Refuge. The report should also cover the financial costs of the plan
and the expected return.
SUPPORTING STATEMENT
"Ninety-five percent of Alaska's most promising oil-bearing lands are already
open for development, but it is imperative that we continue to protect the
wildlife, fish and wilderness that make up the rest of this invaluable part of
our American heritage."--President Jimmy Carter (1995)
Once part of the largest intact wilderness area in the United States, America's
Arctic now hosts one of the world's largest industrial complexes. Oil companies
already have access to 95 percent of the North Slope. More than 1500 miles of
roads and pipelines and thousands of acres of industrial facilities sprawl over
some 400 square miles of once pristine arctic tundra. Oil operations in
America's Arctic annually emit roughly 43,000 tons of oxides of nitrogen, which
contribute to smog and acid rain.
30
The Coastal Plain is the biological heart of the Refuge, to which the vast
Porcupine river caribou herd migrate each spring to give birth. The Department
of Interior has concluded that development in the Coastal Plain would result in
major adverse impacts on the caribou population. According to the Alaska
Department of Fish and Game caribou inhabiting the oil fields do not thrive as
well as members of the same herd that seldom encounter oil-related facilities.
The Coastal Plain is the most important onshore denning area for the entire
South Beaufort Sea polar bear population and serves as crucial habitat for
muskoxen and for at least 180 bird species that gather there for breeding,
nesting and migratory activities.
Balanced against these priceless resources is the small potential for
economically recoverable oil. The most recent federal estimate predicted that
only 2.6 billion barrels would be economically recoverable in the Coastal
Plain--less than 6 months worth of oil for the United States.
Vote YES for this proposal which will improve our Company's reputation as a
leader in environmentally responsible energy recovery.
YOUR BOARD'S RECOMMENDATION TO PREPARE A REPORT ON POTENTIAL ENVIRONMENTAL
DAMAGE TO ANWR
Recommendation of the Board AGAINST this Proposal:
There is currently no legislation before the Congress to open the Coastal Plain
of ANWR for petroleum exploration, development and production; and Chevron has
no established plan for drilling in that area. Therefore your Board feels that
the proposal is not relevant at this time.
We do support opening the ANWR Coastal Plan to oil operations. We respect the
environmental concerns that some have expressed regarding that area. However,
based on past experience, we believe that operations can be carried out there in
a way which protects the environment and that the pursuit of the area's
potential petroleum reserves is in the national interest.
The petroleum industry's many decades of exploration and production activities
in arctic Alaska--much of it next door at the Prudhoe Bay field--have provided
overwhelming evidence that these operations can be compatible with the
environment and wildlife in the area. Approximately 25% of domestic oil
production is produced in and around the Prudhoe Bay area. This activity has not
adversely impacted the area's caribou population. In fact, the herd that grazes
in the Prudhoe Bay oil field is now several times larger than when oil
development first began in the early 1970's.
Chevron, as stated in its Policy 530, PROTECTING PEOPLE AND THE ENVIRONMENT, is
expressly committed to conduct its business in a socially responsible and
ethical manner that protects safety, health and the environment. Chevron's
operations in some of the most sensitive environments in the world evidence this
commitment. Chevron has already conducted, in an environmentally responsible
manner, exploration operations in the Coastal Plain Area of ANWR on lands leased
from the native-owned Arctic Slope Regional Corporation (ASRC).
Any operations on ASRC lands are conducted pursuant to plans that must be
submitted for review and comment to the U.S. Fish and Wildlife Service, as well
as other state and federal agencies. Chevron plan design and agency review
ensured that such activities were conducted in a manner so as not to
significantly adversely affect the
31
wildlife, its habitat, or the environment of the ASRC lands or Refuge lands.
Chevron is confident that any future operations on the ANWR Coastal Plain would
be conducted in a similarly responsible manner.
Million of dollars have been spent towards understanding the Arctic ecosystems
and past operations have demonstrated that wildlife and petroleum development
can coexist. There are rigorous regulatory and permitting processes at the
Federal, State and Local level that require thoroughly researched and planned
development activities focused on environmental protection. Chevron believes
that oil and gas development in ANWR can take place in a responsible manner,
without degradation to the environment, while fulfilling the nation's need for
additional stable and dependable energy supplies.
ACCORDINGLY, YOUR BOARD RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL.
32
OTHER MATTERS
- -----------------------------------------------------
Your Board does not know of any other matter that will be presented for
considered at the Annual Meeting. Unless your Board otherwise permits, only the
matters described in this Notice of Meeting and the 2000 Proxy Statement will be
voted upon at the Annual Meeting. If any other matter does properly come before
the Annual Meeting, the proxy holders will vote on it as they think best unless
you direct otherwise in your proxy instruction.
SUBMISSION OF FUTURE STOCKHOLDER PROPOSALS
- -----------------------------------------------------
If a stockholder wishes to present a proposal for action at the Annual Meeting
of Stockholders in 2001, Chevron must include notice of the proposal and the
Board's recommendation on the proposal in the proxy statement that we send out
in advance of the meeting. Chevron's Articles of Incorporation preclude taking
action on any proposal that is not included in the proxy statement unless the
Board decides to waive the restriction.
For us to include a proposal in the proxy statement, the proponent and the
proposal must comply with the proxy proposal submission rules of the U.S.
Securities and Exchange Commission. One of the requirements is that the proposal
be received by the Corporate Secretary no later than November 22, 2000.
Proposals we receive after that date will not be included in the proxy statement
or acted upon at the Annual Meeting. We urge stockholders to submit proposals be
Certified Mail--Return Receipt Requested.
You may obtain a copy of the current rules for submitting stockholder proposals
from the U.S. Securities and Exchange Commissions at:
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, DC 20549
or through the Commission's internet site:
http//www.sec.gov. Request SEC Release No. 34-40018, May 21, 1998.
Chevron prints qualifying proposals in the proxy statement in the form that we
receive them. We do not print the name, address and share ownership of the
stockholder submitting a qualifying proposals but will promptly send the
information upon oral or written request.
INFORMATION ABOUT ATTENDING THE ANNUAL MEETING
- -----------------------------------------------------
We will hold the Annual Meeting at Chevron Park in San Ramon, California, as
part of our effort to aggressively reduce costs. Seating will be limited at
Chevron Park. We will give stockholders priority in seating at the Annual
Meeting.
33
Stockholders must present a ticket to be admitted to the Annual Meeting. For
stockholders of record, your parking and admission ticket is the detachable
portion of your proxy form. Please have your ticket out and available when you
reach Chevron Park.
For stockholders who hold shares through a brokerage firm, bank or other
custodian, your ticket is the copy of your latest account statement showing your
Chevron Stock balance. Please present your account statement to the registration
area at the Annual Meeting.
Depending on stockholder attendance, we may have to seat guests in an overflow
area.
We will have headsets available at the Annual Meeting for stockholders with
impaired hearing. If you require other special accommodations at the Annual
Meeting due to a disability, please write to the Corporate Secretary identifying
your specific need at 575 Market Street, San Francisco, CA 94105 by April 14,
2000.
By Order of your Board of Directors,
Lydia I. Beebe
Corporate Secretary
Directions To Chevron Park
[MAP]
34
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN
YOUR PROXY CARD
IN THE ENVELOPE PROVIDED
AS SOON AS POSSIBLE
35
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CHEVRON CORPORATION
The undersigned stockholder of Chevron Corporation hereby appoints Carla A.
Hills, David J. O'Reilly and Charles M. Pigott, and each of them, proxy
holders of the undersigned each with the power of substitution to represent
and to vote all the shares of common stock of Chevron Corporation held of
record by the undersigned on February 28, 2000, at Chevron's Annual Meeting
of Stockholders to be held on April 26, 2000, and any adjournment thereof.
The proxy holders will vote as directed by the undersigned. If the
undersigned gives no directions, the proxy holders will vote in accordance
with the Board's recommendations. The proxy holder will vote on such other
matters as may properly come before the meeting unless the undersigned
strikes out this sentence.
(Continued, and to be marked, dated and signed, on the other side)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
[CHEVRON LOGO]
Dear Stockholders:
The top portion of this card is your 2000 Chevron Corporation proxy. It is
important that you vote your shares. You may vote by telephone, by the
Internet or by mail. If you wish to vote by telephone or by the Internet,
instructions are printed on the reverse side of this card. If you wish to
vote by mail, mark, sign, date and return the proxy (the top portion of this
card) using the enclosed envelope.
The lower portion of this card is your 2000 Annual Meeting Ticket. I invite
you to attend Chevron's 2000 Stockholders' Meeting. As part of our effort to
continue to aggressively reduce costs, we are holding the 2000 Stockholders'
Meeting at Chevron Park, San Ramon, California. Seating will be limited at
Chevron Park and, depending on stockholder attendance, we may have to seat
guests in an overflow area. Please bring this ticket with you to the
Stockholders' Meeting. It is your parking and admission ticket.
Sincerely,
/s/ Lydia I. Beebe
Lydia I. Beebe
Corporate Secretary
2000 Annual Stockholders' Meeting Ticket
- Meeting Date: April 26, 2000
- Meeting Time: 9:30 a.m. (doors open at 8:30 a.m.)
- Meeting Location: Chevron Park, Building A, 6001 Bollinger Canyon Road,
San Ramon, CA
------------------------------------------------------------------
THIS IS YOUR PARKING AND ADMISSION TICKET.
PLEASE HAVE IT OUT AND AVAILABLE WHEN YOU REACH CHEVRON PARK.
------------------------------------------------------------------
Note: Cameras, tape recorders, cell phones, etc. will not be allowed in the
meeting, other than for Company purposes. A checkroom will be provided. For
your protection, all briefcases, purses, packages, etc. will be subject to an
inspection as you enter the meeting. We regret any inconvenience this may
cause you.
(See reverse side for additional information.)
(CONTINUED FROM FRONT)
Please mark your votes as indicated in this example /X/
YOUR BOARD RECOMMENDS FOR AND YOUR PROXY HOLDERS WILL VOTE FOR THE ELECTION
OF THE FOLLOWING DIRECTORS UNLESS YOU DIRECT OTHERWISE:
1. ELECTION OF DIRECTORS
01) S. H. Armacost 04) J. B. Johnston 07) C. M. Pigott 10) J. N. Sullivan
02) S. L. Ginn 05) R. H. Matzke 08) C. Rice 11) C. Tien
03) C. A. Hills 06) D. J. O'Reilly 09) F. A. Shrontz 12) J. A. Young
To vote for all nominees, To withhold authority to vote for any
check this box. / / individual nominee while voting for the
remainder, write that nominee's name in the
following space:
To withhold authority
to vote for all nominees,
check this box. / / ---------------------------------------------
YOUR BOARD RECOMMENDS FOR AND YOUR PROXY HOLDERS WILL VOTE FOR THE FOLLOWING
UNLESS YOU DIRECT OTHERWISE:
2. Amendment to Increase the Number of Authorized Shares of Common Stock
/ / FOR / / AGAINST / / ABSTAIN
3. PricewaterhouseCoopers LLP as Independent Public Accountants
/ / FOR / / AGAINST / / ABSTAIN
YOUR BOARD RECOMMENDS AGAINST AND YOUR PROXY HOLDERS WILL VOTE AGAINST THE
FOLLOWING STOCKHOLDER PROPOSALS UNLESS YOU DIRECT OTHERWISE:
4. Report on Greenhouse Gas Emissions
/ / FOR / / AGAINST / / ABSTAIN
5. Eliminate Bioaccumulative Halogenated Pollutants
/ / FOR / / AGAINST / / ABSTAIN
6. Report on Potential Environmental Damage to ANWR
/ / FOR / / AGAINST / / ABSTAIN
By checking the box to the right, I consent to future access of the Annual
Report, Proxy Statements, Prospectuses and other communications
electronically via the Internet. I understand that Chevron may no longer
distribute printed materials to me for any future stockholders' meeting until
such consent is revoked. I understand that I may revoke my consent at any
time by contacting Chevron's transfer agent, ChaseMellon Shareholder
Services, L.L.C., Ridgefield Park, NJ. I also understand that costs normally
associated with electronic access, such as usage and telephone charges, will
be my responsibility.
SIGNATURE(S) SIGNATURE(S) DATE
------------------------ ------------------ --------
Please sign your name exactly as it appears hereon. When signing for shares that
are owned jointly, each stockholder please sign. When signing as an executor,
administrator, trustee, custodian or guardian, please give your full title. When
signing on behalf of a corporation, please sign in the full corporate name by
an authorized officer.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
VOTE BY TELEPHONE OR INTERNET
QUICK * * * EASY * * * IMMEDIATE
Your telephone or Internet vote authorizes the named proxy holders to vote
your shares in the same manner as if you marked, signed and returned your
proxy card.
VOTE BY PHONE: CALL TOLL-FREE ON A TOUCH-TONE TELEPHONE 1-800-840-1208 ANYTIME.
THERE IS NO CHARGE TO YOU FOR THIS CALL.
You will be asked to enter a CONTROL NUMBER which is located in
the box in the lower right corner of this form.
OPTION A: To vote as your Board recommends on ALL items, press 1.
OPTION B: If you choose to vote on each item separately, press 0. You will
hear these instructions:
ITEM 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9. To WITHHOLD FOR AN INDIVIDUAL nominee,
press 0 and listen to the instructions.
ITEM 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN,
press 0.
The instructions are the same for all of the remaining
proposals.
WHEN ASKED, YOU MUST CONFIRM YOUR VOTE BY PRESSING 1.
VOTE BY INTERNET: THE WEB ADDRESS IS http://www.eproxy.com/chv/
PLEASE DO NOT RETURN THE ABOVE PROXY CARD IF YOU VOTE BY TELEPHONE OR INTERNET
THANK YOU FOR VOTING.
CALL * * TOLL-FREE * * ON A TOUCH-TONE TELEPHONE
1-800-840-1208 - ANYTIME
There is NO CHARGE to you for this call.