Delaware (State or other jurisdiction
of incorporation)
|
1-368-2 (Commission File Number)
|
94-0890210 (I.R.S. Employer No.) |
6001 Bollinger Canyon Road, San Ramon, CA (Address of principal executive offices) |
94583 (Zip Code) |
None (Former name or former address, if changed since last report) |
Item 5.02 | Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers. |
Item 9.01 | Financial Statements and Exhibits. | |
(d) Exhibits. |
Number | Exhibit | |
10.1
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Chevron Corporation Change In Control Surplus Employee Severance Program For | |
Salary Grades 41 Through 43 | ||
10.2
|
Chevron Corporation Benefit Protection Program | |
10.3
|
Management Incentive Plan of Chevron Corporation | |
10.4
|
Chevron Corporation Long-Term Incentive Plan | |
10.5
|
Chevron Corporation Deferred Compensation Plan for Management Employees II | |
10.6
|
Chevron Corporation Non-Employee Directors Equity Compensation and Deferral Plan |
Dated: December 12, 2006 | CHEVRON CORPORATION |
|||
By: | /s/ Christopher A. Butner | |||
Christopher A. Butner | ||||
Assistant Secretary | ||||
Page | ||||||
I. |
INTRODUCTION | 1 | ||||
II. |
COMMENCEMENT OF PARTICIPATION | 1 | ||||
III. |
TERMINATION OF PARTICIPATION | 1 | ||||
IV. |
SEVERANCE PAY BENEFIT | 2 | ||||
(a) |
Eligibility for Severance Pay Benefit | 2 | ||||
(b) |
Amount of Severance Pay Benefit | 5 | ||||
(c) |
Repayment of the Severance Pay Benefit | 6 | ||||
V. |
FORM OF SEVERANCE PAY BENEFIT | 6 | ||||
VI. |
BENEFIT PLAN ALLOWANCE | 8 | ||||
(a) |
Eligibility for Benefit Plan Allowance | 8 | ||||
(b) |
Amount of Benefit Plan Allowance | 9 | ||||
(c) |
Repayment of the Benefit Plan Allowance | 11 | ||||
VII. |
FORM OF BENEFIT PLAN ALLOWANCE | 11 | ||||
VIII. |
DEATH OF A MEMBER | 11 | ||||
IX. |
BENEFITS PROVIDED UNDER OTHER PLANS | 11 | ||||
(a) |
Eligible Employees Who Qualify As Eligible Retirees | 11 | ||||
(b) |
Eligible Employees Who Do Not Qualify As Eligible Retirees | 11 | ||||
X. |
AMENDMENT AND TERMINATION | 12 | ||||
(a) |
General Rule | 12 | ||||
(b) |
Restrictions on Amendments During Extended Benefit Protection Period | 12 | ||||
XI. |
NON-ALIENATION OF BENEFITS | 13 | ||||
XII. |
SUCCESSORS AND ASSIGNS | 14 | ||||
XIII. |
LEGAL CONSTRUCTION | 14 | ||||
XIV. |
ADMINISTRATION AND OPERATION OF THE PLAN | 14 | ||||
(a) |
Plan Sponsor and Plan Administrator | 14 | ||||
(b) |
Administrative Power and Responsibility | 14 | ||||
(c) |
Review Panel | 14 | ||||
(d) |
Service in More Than One Fiduciary Capacity | 15 | ||||
(e) |
Performance of Responsibilities | 15 | ||||
(f) |
Employee Communications and Other Plan Activities | 15 | ||||
XV. |
CLAIMS, INQUIRIES AND APPEALS | 15 | ||||
(a) |
Claims for Benefits and Inquiries | 15 | ||||
(b) |
Denials of Claims | 15 | ||||
(c) |
Review Panel | 16 | ||||
(d) |
Requests for a Review | 16 | ||||
(e) |
Decision on Review | 17 | ||||
(f) |
Rules and Procedures | 17 | ||||
(g) |
Exhaustion of Remedies | 17 | ||||
XVI. |
BASIS OF PAYMENTS TO AND FROM PLAN | 18 |
i
Page | ||||||
XVII. |
OTHER PLAN INFORMATION | 18 | ||||
(a) |
Plan Identification Numbers | 18 | ||||
(b) |
Ending Date of the Plan's Fiscal Year | 18 | ||||
(c) |
Agent for the Service of Legal Process | 18 | ||||
(d) |
Plan Sponsor and Administrator | 18 | ||||
XVIII. |
STATEMENT OF ERISA RIGHTS | 18 | ||||
XIX. |
AVAILABILITY OF PLAN DOCUMENTS FOR EXAMINATION | 19 | ||||
XX. |
DEFINITIONS | 21 | ||||
(a) |
Affiliate | 21 | ||||
(b) |
Affiliated Group | 21 | ||||
(c) |
Approved Part-Time Schedule | 21 | ||||
(d) |
Beneficiary | 21 | ||||
(e) |
Buyer | 21 | ||||
(f) |
Casual Employee | 21 | ||||
(g) |
Change in Control | 22 | ||||
(h) |
Chevron Corporation Retirement Plan | 22 | ||||
(i) |
Chevron Part-Time Employment Guidelines | 22 | ||||
(j) |
Company | 22 | ||||
(k) |
Continuous Service | 22 | ||||
(l) |
Corporation | 23 | ||||
(m) |
Demotion | 24 | ||||
(n) |
Eligible Employee | 24 | ||||
(o) |
Eligible Retiree | 25 | ||||
(p) |
Employee | 25 | ||||
(q) |
Enhanced Regular Earnings | 26 | ||||
(r) |
ERISA | 26 | ||||
(s) |
Extended Benefit Protection Period | 26 | ||||
(t) |
Extended Benefit Protection Period Commencement Date | 26 | ||||
(u) |
Family Leave | 26 | ||||
(v) |
Leave of Absence without Pay | 26 | ||||
(w) |
Member | 26 | ||||
(x) |
MIP Target Bonus | 27 | ||||
(y) |
New Work Location | 27 | ||||
(z) |
Off the Job Disability | 27 | ||||
(aa) |
Outsourcing Supplier | 27 | ||||
(bb) |
Overall Compensation | 27 | ||||
(cc) |
Plan | 27 | ||||
(dd) |
Plan Administrator | 27 | ||||
(ee) |
Present Work Location | 28 | ||||
(ff) |
Regular Earnings | 28 | ||||
(gg) |
Regular Work Schedule | 28 | ||||
(hh) |
Release | 28 | ||||
(ii) |
Salary Grade | 28 |
ii
Page | ||||||
(jj) |
Seasonal Employee | 28 | ||||
(kk) |
Special Assignment | 29 | ||||
(ll) |
Subsidiary | 29 | ||||
(mm) |
Successors and Assigns | 29 | ||||
(nn) |
Temporary Employee | 29 | ||||
(oo) |
Transfer | 29 | ||||
(pp) |
Year of Continuous Service | 29 |
iii
(a) | The Members employment terminates without meeting the requirements of: |
(i) | Sections IV(a)(i)(2) or (3); or | ||
(ii) | Sections VI(a)(i) to (iii). |
(b) | The Members employment terminates with a provision of Section IV(a)(ii) being applicable. | ||
(c) | The Member fails to meet the requirements of IV(a)(i)(4) or VI(a)(iv). |
1
(d) | The Member has received a complete distribution of his or her Severance Pay Benefit or Benefit Plan Allowance. | ||
(e) | The Member ceases to be an Eligible Employee (other than by reason of termination of his or her employment with the Company). | ||
(f) | The Extended Benefit Protection Period ends because of the abandonment of any plans to effectuate a transaction which, if effectuated, would have been a Change in Control and such transaction has not occurred. | ||
(g) | The Plan terminates. |
(a) | Eligibility for Severance Pay Benefit |
(i) | Subject to Section IV(a)(ii), a Member shall be eligible for a Severance Pay Benefit only if the Member meets the requirements of Section IV(a)(i)(1); Section IV(a)(i)(2) or (3); and Section IV(a)(i)(4). |
(1) | A Change in Control occurs during the Extended Benefit Protection Period. | ||
(2) | The Members employment is involuntarily terminated by the Company on a date determined by the Company in its sole discretion that is no earlier than the public announcement of the proposed transaction which, when effected, is a Change in Control and no later than the last day of the Extended Benefit Protection Period . | ||
(3) | The Member meets all of the requirements of Section IV(a)(i)(3)(a) to (c): |
(a) | The Member receives a written offer no earlier than the public announcement of the proposed transaction which, when effected, is a Change in Control and no later than the last day of the Extended Benefit Protection Period of a position with the Company or an Affiliate that is a Demotion and does not have the option of remaining in his or her present job. (Such written offer and notification may be delivered in person or by mail. If the offer and notification are mailed, the Member shall be deemed to have received it the earlier of its actual receipt or three days after it is deposited in the United States mail, properly |
2
stamped and addressed to Members last known address as reflected on the books of the Company.); |
(b) | The Member has failed to accept such Demotion in writing within the time prescribed in the offer or (if no such time is specified) within 7 days after the date the offer is actually or deemed to be received, if earlier. Failure to respond within the prescribed time shall be deemed a rejection of the Demotion, regardless of the reason for the failure to respond; and | ||
(c) | Such Member resigns his or her employment on a date determined by the Company, which shall be no later than sixty (60) days after the date the offer is actually or deemed to be received, whichever is earlier, or (if the Member so agrees) a later date that is no later than three years after the Change in Control; |
(4) | The Member executes the Release within forty-five (45) days after its receipt (or such extension as may be granted by the Company in its sole discretion) and the period for revoking the execution of the Release under the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f), has expired. |
Under no circumstances shall a Member be construed as having terminated employment or be eligible for a Severance Pay Benefit because he terminates employment with the Company for the purpose of accepting employment with the entity that effectuates a Change in Control, its subsidiaries or affiliates. |
(ii) | Notwithstanding Section IV(a)(i), a Member shall be disqualified from receiving a Severance Pay Benefit upon the occurrence of any of the following: |
(1) | Except as provided in Section IV(a)(i)(3)(c), the Member voluntarily terminates employment with the Company for any reason prior to the termination date set by the Company; | ||
(2) | The Members employment with the Company is terminated for cause or by death; | ||
(3) | If the Member is receiving short-term sick leave benefits under the Corporations Short-Term Disability Plan (or similar program) on the date of termination, the Member fails to execute a written |
3
waiver of any short-term sick leave benefits that might otherwise be payable after employment terminates; |
(4) | Subsequent to the offer of the Demotion and before termination of employment, such Member: |
(a) | is offered another position with the Company or an Affiliate (other than a Special Assignment) that is other than a Demotion; or | ||
(b) | accepts any job offer from the Company or an Affiliate (other than a Special Assignment) without regard to whether it is a Demotion; |
(5) | the Member terminates employment with the Company in order to accept employment with an organization that is wholly or partly owned (directly or indirectly) by the Company or an Affiliate; |
(6) | The Member accepts any job with a Buyer or Outsourcing Supplier; and |
(7) | The Member is offered full-time employment (or part-time if the Member is on an Approved Part-Time Schedule under the Chevron Part-Time Employment Guidelines when his or her employment terminates) with a Buyer or Outsourcing Supplier at a New Work Location when such position is: |
(a) | 50 miles or less from his or her Present Work Location with the Company; and | ||
(b) | would not result in a: |
(i) | material reduction in authority or responsibility; or | ||
(ii) | reduction in Overall Compensation. |
The business decisions that may result in a Member qualifying for a Severance Pay Benefit are decisions to be made by the Company in its sole discretion. |
In making these decisions, similarly situated organizations, locations, functions, classifications, and/or Members need not be treated in the same manner. The date selected by the Company to terminate the Members employment is within its sole discretion and (subject to Section IV(a)(i)(3)(c) with respect to Demotions) |
4
the Company is under no obligation to terminate a Members employment prior to three years after the Change in Control. |
(b) | Amount of Severance Pay Benefit |
(i) | Subject to Section IV(b)(ii), the Severance Pay Benefit payable to a qualifying Member shall be equal to two and one half years of such Members Enhanced Regular Earnings. | ||
(ii) | Notwithstanding Section IV(b)(i), any Severance Pay Benefit otherwise payable under that section shall be reduced (but not below zero) as follows: |
(1) | If the Member had been or is on an Approved Part-Time Schedule under the Chevron Part-Time Employment Guidelines at any time after January 1, 1994, the Severance Pay Benefit shall be reduced by multiplication by a ratio. The numerator of the ratio shall be the total number of full months of the Members Continuous Service after January 1, 1994 while not on such an Approved Part-Time Schedule. The denominator of the ratio shall be the Members total number of full months of Continuous Service. In calculating the Severance Pay Benefit for a Member currently on such an Approved Part-Time Schedule, Enhanced Regular Earnings shall be based on a full-time equivalent. | ||
(2) | If a Member is reemployed by the Company or an Affiliate within three years after termination, the Severance Pay Benefit shall be reduced to the amount that the Members Enhanced Regular Earnings would have been for the period from the date of termination to the date of reemployment. In all cases, the reduced benefit will be based on the Members Enhanced Regular Earnings used to calculate such Members Severance Pay Benefit under the Plan. A Member will be considered reemployed under the Plan for purposes of the repayment provision in this Section IV(b)(ii)(2) if retained at a Company facility, as or through a contractor for more than a full-time equivalent of more than 45 work days. | ||
(3) | If a Member is employed by a Buyer or Outsourcing Vendor within three years of termination, the Severance Pay Benefit shall be reduced to the greater of: |
(a) | the amount that the Members Enhanced Regular Earnings would have been for the period from the date of |
5
termination to the date of employment with the Buyer or Outsourcing Vendor; or |
(b) | the amount the Member has received under Section V(b) prior to employment with the Buyer or Outsourcing Vendor. |
This Section IV(b)(iii)(3) may be waived in writing by the Corporation in its sole discretion. | |||
(4) | By severance pay or other similar benefits payable under any other plan or policy of the Company or an Affiliate or government required payment (other than unemployment compensation under United States law), including, but not limited to, any benefit enhancement program that may be adopted as part of a pension plan. | ||
(5) | By any amounts payable pursuant to the Worker Adjustment and Retraining Notification Act (WARN) or any other similar federal, state or local statute. | ||
(6) | By the amount of any indebtedness to the Company. | ||
(7) | As described in Section 4(b) of the Chevron Corporation Benefit Protection Program established effective March 29, 2000, as it may be amended from time to time. |
(c) | Repayment of the Severance Pay Benefit | ||
If the Member has received payment under the Plan in excess of the Severance Pay Benefit, as reduced in Section IV(b)(ii), the Member must agree as a condition of reemployment that such excess will be repaid to the Company. |
(a) | Subject to Section V(b), the Severance Pay Benefit under the Plan may take any one of the following forms of distribution as elected by the Member: |
(i) | a lump sum payment on or before December 31 of the year in which employment terminates; | ||
(ii) | a lump sum payment after December 31 of the year in which employment terminates, but within twenty-four (24) months after the termination of employment; or |
6
(iii) | a maximum of two installment payments over a period not to exceed twenty-four (24) months from the termination date. The amount and timing of each installment may be different. |
(b) | If a Members employment with the Company is terminated in connection with a sale of some or all of the Companys interest applicable to, or with a transfer of management of, the operation in which the Member was employed, the Severance Pay Benefit will be paid in one of the following forms of distribution as elected by the Member: |
(i) | Six Monthly Payments |
(1) | An initial payment of one months Enhanced Regular Earnings will be paid on or about the date the Members employment with the Company terminates; | ||
(2) | Additional payments of up to one months Enhanced Regular Earnings will be paid in one-month intervals for up to the succeeding five months; and | ||
(3) | If more than six monthly installments are required to complete the Severance Pay Benefit, there will be a lump-sum payment one month after the final monthly payment or it may be deferred as provided under any form permitted under Section V(a); or |
(ii) | Any form permitted under Section V(a); provided that no payment is made prior to six months from the date the Members employment with the Company terminates. |
(c) | Interest |
(i) | Except as provided in this Section V(c), no interest shall be paid on a Severance Pay Benefit. |
(ii) | With respect to a benefit paid in a form described in V(b)(i), interest will be payable on any outstanding balance of the Severance Pay Benefit from the date employment with the Company terminates; provided that it shall not be payable during any period for which the Member elects a deferral of payment. This accrued interest will be included in the final Severance Pay Benefit payment described in Section V(b)(i)(3). |
(iii) | Where interest is payable, the rate of interest shall be equal to the rate paid on U. S. Thirty Year Treasury obligations for January of the year in which the Member terminated employment with the Company. |
7
(a) | Eligibility for Benefit Plan Allowance | ||
A Member shall be eligible for a Benefit Plan Allowance only if all of the following requirements are met: |
(i) | the Members employment terminates on the date specified by the Company that is no earlier than the public announcement of the proposed transaction which, when effected, is a Change in Control and no later than the last day of the Benefits Protection Period; |
(ii) | the Member is ineligible for a Severance Pay Benefit solely because of Section IV(a)(ii)(6) or (7) of the Plan; |
(iii) | prior to the beginning of negotiations with the Buyer or Outsourcing Supplier and at the time the written agreement with the Buyer or Outsourcing Supplier is executed, the Buyer or Outsourcing Supplier does not have any one of the following employee benefit plans in which the Member would participate if an offer of employment with the Buyer or Outsourcing Supplier is accepted: |
(1) | a defined benefit plan that is qualified under § 401 of the Internal Revenue Code; | ||
(2) | a defined contribution plan that is qualified under § 401 of the Internal Revenue Code; | ||
(3) | a post-retirement medical plan for pre-age 65 retirees to which the Buyer or Outsourcing Supplier makes company contributions (even if the amount of company contributions is zero for some coverage options). The Buyer or Outsourcing Supplier shall be deemed not to have such a plan unless the Buyer or Outsourcing Supplier agrees in the contract of sale with the Company to recognize the Members combined Company and Buyer/Outsourcing Supplier service for purposes of eligibility for that plan. Notwithstanding the above, the Buyer or Outsourcing Supplier shall be deemed to have such a plan with respect to a particular Member if, on the date of closing, the Member is an Eligible Retiree as defined in the Omnibus Health Care Plan of the Chevron Corporation Medical Plan Organization; and |
(iv) | the Member executes the Release within forty-five (45) days after its receipt (or such extension as may be granted by the Company in its sole |
8
discretion) and the period for revoking the execution of the Release under the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f), has expired. |
The business decisions that may result in a Member qualifying for a Benefit Plan allowance are decisions to be made by the Company in its sole discretion. In making these decisions, similarly situated organizations, locations, functions, classifications, and/or Members need not be treated in the same manner. The date selected by the Company to terminate the Members employment is within its sole discretion and the Company is under no obligation to terminate a Members employment prior to three years after the Change in Control. |
(b) | Amount of Benefit Plan Allowance |
(i) | Subject to Section VI(b)(ii), the Benefit Plan Allowance payable to a Member shall be equal to one (1) week of such Members Enhanced Regular Earnings for each full Year of Continuous Service (prorated for completed calendar months); provided, however, that the minimum Benefits Plan Allowance shall be equal to four (4) weeks of the Members Enhanced Regular Earnings and the maximum Benefits Plan Allowance of any Member shall not exceed twenty-five (25) weeks of Enhanced Regular Earnings. | ||
(ii) | Notwithstanding Section VI(b)(i), any Benefit Plan Allowance otherwise payable under that section shall be reduced (but not below zero) as follows: |
(1) | If the Member had been or is on an Approved Part-Time Schedule under the Chevron Part-Time Employment Guidelines, at any time after January 1, 1994, the Benefit Plan Allowance shall be reduced by multiplication by a ratio. The numerator of the ratio shall be the total number of months of the Members Continuous Service after January 1, 1994 while not on such an Approved Part-Time Schedule. The denominator of the ratio shall be the Members total number of months of Continuous Service. In calculating any Benefit Plan Allowance for any such Member currently on such an Approved Part-Time Schedule, Enhanced Regular Earnings shall be based on a full-time equivalent. | ||
(2) | If a Member is reemployed by the Company or an Affiliate within the number of weeks after termination that is equal to the number of weeks of Enhanced Regular Earnings of the Benefit Plan Allowance as determined under Section V(b)(i), the Benefit Plan |
9
Allowance shall be reduced to the amount that the Members Enhanced Regular Earnings would have been for the period from the date of termination to the date of reemployment. In all cases, the reduced benefit will be based on the Members Enhanced Regular Earnings used to calculate such Members Severance Pay Benefit under the Plan. A Member will be considered re-employed under the Plan for purposes of the repayment provision in this Section VI(b)(ii)(2) if retained at a Company facility, as or through a contractor, for a full-time equivalent of more than 45 work days. |
(3) | If a Member is employed by a Buyer or Outsourcing Supplier within the number of weeks after termination of employment that is equal to the number of weeks of Enhanced Regular Earnings of the Benefits Plan Allowance as determined under Section V(b)(i), the Benefit Plan Allowance shall be reduced to the greater of: |
(a) | the amount that the Members Enhanced Regular Earnings would have been for the period from the date of termination to the date of employment with the Buyer or Outsourcing Supplier; and | ||
(b) | the amount the Member has received under Section V(b) prior to employment with the Buyer or Outsourcing Supplier. |
This Section VI(b)(ii)(3) may be waived in writing by the Corporation in its sole discretion. |
(4) | By severance pay or other similar benefits payable under any other plan or policy of the Company or an Affiliate or government required payment (other than unemployment compensation under United States law), including but not limited to any benefit enhancement program that may be adopted as part of a pension plan. | ||
(5) | By any amounts payable pursuant to the Worker Adjustment and Retraining Notification Act or any other similar federal, state or local statute. | ||
(6) | By the amount of any indebtedness to the Company. |
10
(7) | As described in Section 4(b) of the Chevron Corporation Benefit Protection Program established effective March 29, 2000, as it may be amended from time to time. |
(c) | Repayment of the Benefit Plan Allowance |
If the Member has received payment under the Plan in excess of Benefit Plan Allowance, as reduced in Section VI(b)(ii), the Member must agree as a condition of reemployment that such excess will be repaid to the Company. |
The Benefit Plan allowance will be paid in a lump sum on or shortly after the latter of the date employment with the Company terminates or the date the sale or other transfer of management occurs; provided that the Member has properly signed and returned the Release to the Company and the revocation period under the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f), has expired. |
If a Member dies after qualifying for a Severance Pay Benefit or a Benefit Plan Allowance but before such benefit is completely paid, the balance of the Severance Pay Benefit or Benefit Plan Allowance shall be paid in a lump sum to the Members Beneficiary. |
(a) | Eligible Employees Who Qualify As Eligible Retirees. | ||
As of March 29, 2000, Eligible Retirees are presently eligible to continue their health care coverage under the terms of the Omnibus Health Care Plan of the Chevron Corporation Medical Plan Organization and its Supplement Plans. As of March 29, 2000, Eligible Retirees are presently eligible for Company contributions toward the cost of that coverage under the terms of the Chevron Corporation Health Care Contributions Policy. | |||
(b) | Eligible Employees Who Do Not Qualify As Eligible Retirees. | ||
As of March 29, 2000, Employees who terminate employment with the Company and their dependents are generally presently eligible for continued coverage in the Omnibus Health Care Plan of the Chevron Corporation Medical Plan Organization and its Supplement Plans for (eighteen) 18 months after termination |
11
of employment as required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA). As of March 29, 2000, Members who terminate employment with a Severance Pay Benefit under this Plan may generally presently qualify for Employee rates for coverage under the Omnibus Health Care Plan of the Chevron Medical Plan Organization and its Supplement Plans and for the applicable Company contribution for themselves and their dependents for the first twelve (12) months of COBRA coverage under the terms of the Chevron Corporation Health Care Contributions Policy (other than to the extent such Supplement Plan provides dental coverage). |
(c) | Relocation | ||
Members who subsequently qualify for a Severance Pay Benefit after having relocated pursuant to a Transfer occurring after the Change in Control shall be entitled to a reimbursement of relocations expenses to his or her Present Work Location immediately prior to the Change in Control. Such reimbursement shall be no less than that determined pursuant to the Companys policy for post-retirement relocations as it existed immediately prior to the Change in Control. |
(a) | General Rule. | ||
Although the Corporation expects to continue the Plan indefinitely, inasmuch as future conditions cannot be foreseen, (subject to Sections X(b) and (c)) the Corporation reserves the right to amend or terminate the Plan at any time by action of its board of directors or by action of a committee or individual(s) acting pursuant to a valid delegation of authority of the board of directors. However, no amendment or termination shall adversely affect the right to: |
(i) | Any unpaid Severance Pay Benefit or Benefit Plan Allowance; or | ||
(ii) | Qualify for a Severance Pay Benefit or Benefit Plan by the timely execution of the Release after such amendment or termination. |
(b) | Restrictions on Amendments During Extended Benefit Protection Period. | ||
Notwithstanding Section X(a) of the Plan, subject to Section X(c), and except to the extent required to comply with applicable law; no amendment or termination of the Plan that is either not approved by the Corporation prior to the Extended Benefit Protection Period Commencement Date or is not executed after the |
12
expiration of the Extended Benefit Protection Period shall be effective to the extent it: |
(i) | Deprives any individual who is an Employee as of the Change in Control of coverage under the Plan as constituted at the time of such amendment; | ||
(ii) | Limits eligibility for or reduce the amount of any Severance Pay Benefit or Benefit Plan Allowance; | ||
(iii) | Amends Section X, XII, or the definitions of the terms Extended Benefit Protection Period (except to lengthen such period), Extended Benefit Protection Period Commencement Date (except to make it an earlier date), Change in Control or Successors and Assigns in Section XX of the Plan; | ||
(iv) | Terminates the Plan; or . | ||
(v) | Is executed (or would otherwise become effective) at the request of a third party who effectuates a Change in Control. |
For purposes of this Section X(b), approval by the Corporation shall mean written approval (by a person or entity within the Corporation that has authority to do so) of the subsequent execution of such Plan amendment or termination. | |||
No person shall take any action that would directly or indirectly have the same effect as any of the prohibited amendments or termination described in Section X(b). | |||
(c) | Section X(b) shall not apply to the extent: |
(i) | the amendment or termination of the Plan is approved after any plans have been abandoned to effect the transaction which, if effected, would have constituted a Change in Control and the event which would have constituted the Change in Control has not occurred, and | ||
(ii) | within a period of six months after such approval, no other event constituting a Change in Control shall have occurred, and no public announcement of a proposed event which would constitute a change in control shall have been made, unless thereafter any plans to effect the Change in Control have been abandoned and the event which would have constituted the Change in Control has not occurred. |
13
To the full extent permitted by law and except as provided in the Plan, no Severance Pay Benefit shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. |
The Plan shall be binding upon the Corporation, its Successors and Assigns. Notwithstanding that the Plan may be binding upon a Successor or Assign by operation of law, the Corporation shall require any Successor or Assign to expressly assume and agree to be bound by the Plan in the same manner and to the same extent that the Corporation would be if no succession or assignment had taken place. |
This Plan is governed by and shall be construed in accordance with ERISA and, to the extent not preempted by ERISA, with the laws of the State of California. |
(a) | Plan Sponsor and Plan Administrator. | ||
The Corporation is the Plan Sponsor and the Plan Administrator of the Plan as such terms are used in ERISA. | |||
(b) | Administrative Power and Responsibility. | ||
The Corporation in its capacity as Plan Administrator of the Plan is the named fiduciary that has the authority to control and manage the operation and administration of the Plan. The Corporation shall make such rules, regulations, interpretations and computations and shall take such other action to administer the Plan as it may deem appropriate. The Corporation shall have the sole discretion to interpret the provisions of the Plan and to determine eligibility for benefits pursuant to the objective criteria set forth in the Plan. In administering the Plan, the Corporation shall at all times discharge its duties with respect to the Plan in accordance with the standards set forth in Section 404(a)(1) of ERISA. The Corporation may engage the services of such persons or organizations to render advice or perform services with respect to its responsibilities under the Plan as it shall determine to be necessary or appropriate. Such persons or organizations may include (without limitation) actuaries, attorneys, accountants and consultants. | |||
(c) | Review Panel. | ||
Upon receipt of a request for review the Corporation shall appoint a Review Panel that shall consist of three or more individuals. The Review Panel shall be the |
14
named fiduciary that shall have authority to act with respect to appeals from denial of benefits under the Plan. |
(d) | Service in More Than One Fiduciary Capacity. | ||
Any person or group of persons may serve in more than one fiduciary capacity with respect to the Plan. | |||
(e) | Performance of Responsibilities. | ||
The responsibilities of the Corporation under the Plan shall be carried out on its behalf by its officers, Employees and agents. The Corporation may delegate any of its fiduciary responsibilities under the Plan to another person or persons pursuant to a written instrument that specifies the fiduciary responsibilities so delegated to each such person. | |||
(f) | Employee Communications and Other Plan Activities. | ||
In communications with its Employees and in any other activities relating to the Plan, the Corporation shall comply with the rules, regulations, interpretations, computations and instructions that were issued to administer the Plan. With respect to matters relating to the Plan, directors, officers and Employees of the Corporation shall act on behalf or in the name of the Corporation in their capacity as directors, officers and Employees and not as individual fiduciaries. |
(a) | Claims for Benefits and Inquiries. | ||
All claims for benefits and all inquiries concerning the Plan or present or future rights to benefits under the Plan, shall be submitted to the Plan Administrator in writing and addressed as follows: Chevron Corporation, Plan Administrator under the Chevron Corporation Change in Control Surplus Employee Severance Program for Salary Grades 41 through 43, 6001 Bollinger Canyon Road, Bldg. H. CHVPK, Room Number H3501-B7, San Ramon, CA 94583-0967 or such other location as communicated to the Member. A claim for benefits shall be signed by the Member, or if a Member is deceased, by such Members spouse, designated beneficiary or estate, as the case may be. | |||
(b) | Denials of Claims. |
15
In the event that any claim for benefits is denied, in whole or in part, the Plan Administrator shall notify the claimant in writing of such denial and of the right to a review thereof. Such written notice shall set forth in a manner calculated to be understood by the claimant, specific reasons for such denial, specific references to the Plan provision on which such denial is based, a description of any information or material necessary to perfect the claim, an explanation of why such material is necessary and an explanation of the Plans review procedure. Such written notice shall be given to the claimant within 90 days after the Plan Administrator receives the claim, unless special circumstances require an extension of time of up to an additional 90 days for processing the claim. If such an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day period. This notice of extension shall indicate the special circumstances requiring the extension of time and the date by which the Plan Administrator expects to render its decision on the claim for benefits. If written notice of denial of the claim for benefits is not furnished within the time specified in this Section XV(b), the claim shall be deemed denied. The claimant shall be permitted to appeal such denial in accordance with the Review Procedure set forth below. | |||
(c) | Review Panel. | ||
The Plan Administrator shall appoint a Review Panel, consisting of three or more individuals who may (but need not) be Employees of the Company. The Review Panel shall be the named fiduciary that has the authority to act with respect to any appeal from a denial of benefits. | |||
(d) | Requests for a Review. | ||
Any person whose claim for benefits is denied (or is deemed denied) in whole or in part, or such persons duly authorized representative, may appeal from such denial by submitting a request for a review of the claim to the Review Panel within 60 days after receiving written notice of such denial from the Plan Administrator (or, in the case of a deemed denial, within 60 days after the claim is deemed denied). The Plan Administrator shall give the claimant or such representative an opportunity to review pertinent documents that are not privileged in preparing a request for a review. A request for review shall be in writing and shall be addressed as follows: Review Panel under the Chevron Corporation Change in Control Surplus Employee Severance Program Salary Grades 41 through 43, 6001 Bollinger Canyon Road, Bldg. H. CHVPK, Room Number H3501-B7, San Ramon, CA 94583-0967 or such other location as communicated to the Member. A request for review shall set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the claimant deems pertinent. The Review Panel may require the |
16
claimant to submit such additional facts, documents or other material as it may deem necessary or appropriate in making its review. |
(e) | Decision on Review. | ||
The Review Panel shall act on each request for review and notify the claimant within 60 days after receipt thereof unless special circumstances require an extension of time, up to an additional 60 days, for processing the request. If such an extension for review is required, written notice of the extension shall be furnished to the claimant within the initial 60-day period. The Review Panel shall give prompt, written notice of its decision to the claimant and to the Plan Administrator. In the event that the Review Panel confirms the denial of the claim for benefits, in whole or in part, such notice shall set forth, in a manner calculated to be understood by the claimant, the specific reasons for such denial, and specific references to the Plan provisions on which the decision is based. If written notice of the Review Panels decision is not given to the claimant within the time prescribed in this Section XV(e), the claim will be deemed denied on review. | |||
(f) | Rules and Procedures. | ||
The Review Panel shall establish such rules and procedures, consistent with the Plan and with ERISA, as it may deem necessary or appropriate in carrying out its responsibilities under this Section XV. The Review Panel may require a claimant who wishes to submit additional information in connection with an appeal from the denial (or deemed denial) of benefits to do so at the claimants own expense. | |||
(g) | Exhaustion of Remedies. | ||
No legal action for benefits under the Plan shall be brought unless and until the claimant: |
(i) | has submitted a written claim for benefits in accordance with Section XV(a); | ||
(ii) | has been notified by the Plan Administrator that the claim is denied, or the claim is deemed denied; | ||
(iii) | has filed a written request for a review of the claim in accordance with Section XV(d); and | ||
(iv) | has been notified in writing that the Review Panel has affirmed the denial of the claim, or the claim is deemed denied. |
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All Severance Pay Benefits under the Plan shall be paid by the Company. The Plan shall be unfunded and benefits hereunder shall be paid only from the general assets of the Company. |
(a) | Plan Identification Numbers. | ||
The Employer Identification Number (EIN) assigned to the Plan Sponsor (Chevron Corporation) by the Internal Revenue Service is 94-0890210. The Plan Number (PN) assigned to the Plan by the Plan Sponsor pursuant to instructions of the Internal Revenue Service is 883. | |||
(b) | Ending Date of the Plans Fiscal Year. | ||
The date of the end of the year for the purpose of maintaining the Plans fiscal records is December 31. | |||
(c) | Agent for the Service of Legal Process. | ||
The agent for the service of legal process with respect to the Plan is the Secretary of Chevron Corporation, 6001 Bollinger Canyon Road, San Ramon, CA 94583-0967. The service of legal process may also be made on the Plan by serving the Plan Administrator. | |||
(d) | Plan Sponsor and Administrator. | ||
The Plan Sponsor and the Plan Administrator of the Plan is Chevron Corporation, 6001 Bollinger Canyon Road, Bldg. H. CHVPK, Room Number H3501-B7, San Ramon, CA 94583-0967; telephone (925) 842-0673 or such other location as communicated to the Member. The Plan Administrator is the named fiduciary charged with responsibility for administering the Plan. |
XVIII. | STATEMENT OF ERISA RIGHTS |
(a) | As a participant in this Plan (which is a welfare plan sponsored by the Corporation), you are entitled to the following rights and protection (ERISA): | ||
(b) | Examine, without charge, at the Plan Administrators office and at other specified locations such as work sites, all plan documents, collective bargaining agreements and copies of all documents filed by the plan with the U.S. Department of Labor. |
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(c) | Obtain copies of all plan documents and other plan information upon written request to the Plan Administrator. The Administrator may make a reasonable charge for the copies. | ||
(d) | In addition to creating rights for plan participants, ERISA imposes duties upon the people responsible for the operation of the Employee benefit plan. The people who operate your plan, called fiduciaries of the plan, have a duty to do so prudently and in the interest of you and other plan participants and beneficiaries. | ||
(e) | No one, including your employer, your union, nor any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a plan benefit or exercising your rights under ERISA. If your claim for a plan benefit is denied in whole or in part, you must receive a written explanation of the reason for the denial. You have the right to have the claim reviewed and reconsidered. | ||
(f) | Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that the plan fiduciaries misuse the Plans money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. |
If you have any questions about your plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest office of the U.S. Labor-Management Services Administration, Department of Labor. |
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ERISA requires Chevron Corporation as the Plan Administrator of a benefit plan sponsored by the Corporation to make available for your examination the plan documents under which the plan is established and operated. | ||
The pertinent plan documents include official plan texts and any other documents under which the plan is established or operated, and applicable collective bargaining agreements. | ||
These plan documents are available for your examination at the Plan Administrators office, 6001 Bollinger Canyon Road, Bldg. H. CHVPK, Room Number H3501-B7, San Ramon, CA 94583-0967, and at certain other locations such as the Companys Human Resources offices. | ||
The following rules have been established by the Corporation for the examination and distribution of plan documents: |
1. | When employed within a reasonable distance from a facility of the Company having a Human Resources office: |
a. | Plan documents may be examined during regular business hours as specified at each facility. | ||
b. | Plan documents may not be removed from the premises. |
2. | When not employed within a reasonable distance from a facility of the Corporation having a Human Resources office: |
a. | Plan documents may be requested from the Plan Administrator on a 30-day loan basis. |
b. | Plan documents not returned within 30 days to the Plan Administrator will result in the Employee being charged under Rule 3. below. |
3. | Copies of plan documents or sections thereof will be provided by the Plan Administrator at a charge of 10 cents per page. Payments may be made only by check or money order payable to Chevron Corporation. | ||
4. | Plan documents covering only those plans for which an Employee is eligible will be made available. |
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5. | All requests for plan documents must be in writing and should include the Employees name, Social Security number, mailing address, employing Company, department/staff and location, and title of the document desired. |
(a) | Affiliate | ||
means a member of the Affiliated Group other than the Corporation and a Subsidiary | |||
(b) | Affiliated Group | ||
means the Corporation, each Subsidiary and each other entity that has been designated in writing as a Member of the Affiliated Group by the Corporation. | |||
(c) | Approved Part-Time Schedule | ||
means a part-time schedule that is approved by the Company under the Corporations Part-Time Employee Guidelines, as amended from time to time. | |||
(d) | Beneficiary | ||
means the person or persons so designated by a Member. A Member may change or revoke a designation of a Beneficiary at any time. To be effective, any designation of a Beneficiary, or any change or revocation thereof, must be made in writing on the prescribed form, must be received by the Corporation (in a form acceptable to the Corporation) before the Members death . If a Member fails to make a valid designation of a Beneficiary, or if the validly designated Beneficiary is not living when a payment is to be made to a Beneficiary hereunder, the Members Beneficiary shall be the Members spouse if then living or, if not, the Members then living children in equal shares or, if none, the Members estate. | |||
(e) | Buyer | ||
means an entity that purchases (or has purchased) some or all of the Affiliated Groups interest applicable to the operation in which the Member is employed, or an entity that is a direct or indirect successor in ownership or management of the operation in which the Member is employed. Notwithstanding the above, Buyer shall not include the entity that effectuates a Change in Control. | |||
(f) | Casual Employee |
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means an individual who works a Regular Work Schedule but is hired for a job with the expectation that employment will be terminated within four months. If a Casual Employees employment is not terminated within such four-month period, status as an Employee will be considered to commence on the first day following the date of completion of such four-month period. | |||
(g) | Change in Control | ||
means a change in control of the Corporation as defined in Section IV of the Corporations By-Laws, as it may be amended from time-to-time. | |||
(h) | Chevron Corporation Retirement Plan | ||
means the Chevron Corporation Retirement Plan, as it may be amended from time to time. | |||
(i) | Chevron Part-Time Employment Guidelines | ||
means the formal written part-time employment guidelines issued by the Corporation in its sole discretion. | |||
(j) | Company | ||
means Chevron Corporation, its Subsidiaries, and any of their Successors or Assigns. | |||
(k) | Continuous Service | ||
means the sum of the following: |
(i) | Any period of time during which a person qualifies as an Employee or, having once so qualified, is on a leave of absence with pay, a paid vacation or holiday or is receiving benefits under the Corporations Short-Term Disability Plan; provided however that in the case of a Seasonal Employee, Continuous Service shall not include any period of less than 90 consecutive calendar days of employment in a single season; provided, further, that except as provided in (4) below, any period of time during which an individual is on strike shall not constitute Continuous Service; | ||
(ii) | Any period of authorized leave of absence without pay that constitutes Continuous Service under the Corporations Leave of Absence Policy; or | ||
(iii) | Any other period that constitutes Continuous Service under written rules or procedures adopted from time to time by the Corporation, subject to |
22
such terms and conditions as the Corporation may establish; and any period of time while employed by Corporations Successor or Assigns that that would have constituted Continuous Service if the service had been with the Company prior to the Change in Control. |
An Employee whose Continuous Service is interrupted and who subsequently returns to a status that constitutes Continuous Service shall be disregarded for all purposes of the Plan except under the following circumstances: |
(1) | In the case of an Employee laid off for lack of work, as defined in the Retirement Plan, if such Employee is reemployed within 365 calendar days after being laid off, all prior Continuous Service and the period of layoff shall be considered Continuous Service; | ||
(2) | In such case of an Employee who resigns, if such Employee is reemployed within 31 days following such resignation, all prior Continuous Service and the time period between the date of resignation and reemployment will be considered Continuous Service; | ||
(3) | In the case of an Employee on an authorized leave of absence without pay, any portion of which does not constitute Continuous Service under the Corporations Leave of Absence Policy, if such Employee abides by all the terms and conditions of such leave, which may include a requirement of returning to active employment with the Corporation, all prior Continuous Service will be considered Continuous Service; and | ||
(4) | In the case of an individual on strike, the strike period shall count as Continuous Service only if: |
(a) | the individual returns to work as an Employee at the end of the strike, and | ||
(b) | Continuous Service treatment for the period of strike is agreed to pursuant to the collective bargaining process. |
(l) | Corporation | ||
means Chevron Corporation, a publicly held Delaware Corporation, and any Successor or Assigns. |
23
(m) | Demotion | ||
means a reduction in Salary Grade, a material reduction in authority or responsibility, or a reduction in Overall Compensation. | |||
(n) | Eligible Employee |
means any Employee who meets all the following conditions: |
(i) | Prior to the Change in Control is in the Companys salary grade 41 through 43; and | ||
(ii) | At termination of employment with the Company: |
(1) | has at least one Year of Continuous Service with the Company; | ||
(2) | is not a Temporary, Casual or Seasonal Employee of the Company; | ||
(3) | is not on a Leave of Absence without Pay other than the following: |
(a) | Family Leave; | ||
(b) | Reserve or active military duty leave; | ||
(c) | Union business leave; | ||
(d) | Political activity or public office leave; or | ||
(e) | Expatriate employee furlough leave between foreign assignments (Form GO 120-19). |
(4) | is not included in a collective bargaining unit, unless participation in the Plan for Employees in such unit: |
(a) | is provided for under an agreement between the Company and the collective bargaining representative; or | ||
(b) | is offered to the collective bargaining representative and, after exhaustion of statutory bargaining requirements, is extended by the Corporation to such Employees. |
Notwithstanding any other provision of the Plan, in the event a collective bargaining representative becomes recognized or certified for a unit of Employees that includes one or more Employees previously eligible to participate in the Plan, their |
24
eligibility shall not be affected by their inclusion in a bargaining until such time as statutory bargaining requirements are completed regarding the participation, if any, of such Employees in the Plan. |
An individuals status as an Eligible Employee shall be determined by the Corporation in its sole discretion, and such determination shall be conclusively binding on all persons. | |||
(o) | Eligible Retiree | ||
means an Eligible Retiree as defined in the Omnibus Health Care Plan of the Chevron Corporation Medical Plan Organization. | |||
(p) | Employee | ||
means a common law employee of the Company who meets all of the following conditions: |
(i) | Is employed by the Company prior to the Change in Control; | ||
(ii) | Prior to the Change in Control, is assigned to a Regular Work Schedule of: |
(1) | at least 40 hours per week; or |
(2) | on or after January 1, 1994, at least 20 hours per week, if such schedule is an Approved Part-Time Schedule pursuant to the Corporations Part-Time Employment Guidelines. |
An individual who is disabled and receiving or entitled to receive benefits under a long-term disability plan, such as the Long-Term Disability Plan of the Chevron Corporation Disability Plan Organization are deemed to be assigned to a Regular Work Schedule. | |||
(iii) | Is not on the payroll of a person other than the Company and who for any reason is deemed to be a common law employee of the Company; and | ||
(iv) | Is not considered to be an independent contractor by the Company in its sole discretion regardless of whether the individual is in fact a common law employee of the Company. |
An individuals status as an Employee shall be determined by the Corporation in its sole discretion, and such determination shall be conclusively binding on all persons. |
25
(q) | Enhanced Regular Earnings | ||
means the sum of Regular Earnings and MIP Target Bonus. For purposes of determining Enhanced Regular Earnings for a period of less than one year, the MIP Target Bonus for a Year will be allocated pro rata over the entire year. | |||
(r) | ERISA | ||
means the Employee Retirement Income Security Act of 1974, as amended from time-to-time. | |||
(s) | Extended Benefit Protection Period | ||
means the period commencing on the Extended Benefit Protection Period Commencement Date and terminating the earlier of the following: |
(i) | three years after the date of a Change in Control; or | ||
(ii) | the date of abandonment of any plans to effectuate a transaction which, if effectuated, would have been a Change in Control and such transaction has not occurred. |
(t) | Extended Benefit Protection Period Commencement Date |
means the date six months prior to the public announcement of the proposed transaction which, when effected, is a Change in Control. |
(u) | Family Leave |
means a Leave under the Corporations Family Leave Policy. |
(v) | Leave of Absence without Pay |
means a Leave of Absence without Pay under the Corporations Leave of Absence Policy. |
(w) | Member |
means any Eligible Employee who has commenced participation in the Plan pursuant to Section II and whose participation has not terminated pursuant to Section III. |
26
(x) | MIP Target Bonus |
means an amount equal to the Members target bonus under the Chevron Corporation Management Incentive Plan for the year prior to his or her termination of employment (or for the last year of the Chevron Corporation Management Incentive Plan if it no longer exists in the year prior to the Members termination of employment), as determined pursuant to the established procedures of that Plan prior to the Change in Control. |
(y) | New Work Location |
means Members normal work location if he or she should accept a job offer with the Company, a Buyer, or an Outsourcing Supplier. For a rotational job, the normal work location shall be the actual work location and not either the point of demarcation or the Members residence. |
(z) | Off the Job Disability | ||
means a disability not directly caused by employment with the Company. The classification of a disability shall be determined by the Corporation and such classification shall be conclusive and binding on all persons. | |||
(aa) | Outsourcing Supplier | ||
means an entity to whom the Company outsources a function performed by Employees where the Company agrees with such entity in the outsourcing agreement that it will offer jobs to current Employees performing that function for the Company. | |||
(bb) | Overall Compensation | ||
means the sum of Regular Earnings, and the benefit under the Chevron Corporation Long-Term Incentive Program for the benefit period immediately prior to the Change in Control. It shall not include the value of any other employee benefit plan or program. | |||
(cc) | Plan | ||
means the Chevron Corporation Change in Control Surplus Employee Severance Plan for Salary Grades 41 and Above. | |||
(dd) | Plan Administrator | ||
means the Corporation. |
27
(ee) | Present Work Location | ||
means a Members current normal work location with the Company without regard to any Special Assignment. For a rotational job, the normal work location shall be the actual work location and not either the point of demarcation or the Members residence. | |||
(ff) | Regular Earnings | ||
means straight-time wages or salary paid to a Member by any entity within the Affiliated Group for working a Regular work Schedule or for a leave of absence with pay, and shall include the straight-time portion of amounts paid for regularly scheduled overtime and any amount that is contributed to any employee benefit plan on behalf of the Member by any entity within the Affiliated Group under a salary reduction agreement entered into pursuant to such plan and that is excluded from the Members gross income under §§ 125, 132(f), or 402(a)(8) of the Internal Revenue Code. Notwithstanding the foregoing, if the Plan is applicable to Members employed by PLEXCO Inc. or by the PLEXCO division of Chevron Chemical Company, Regular Earnings, shall include PLEXCO-specific incentive compensation. Such Incentive compensation shall be deemed paid in equal monthly installments over the period for which it is awarded. | |||
(gg) | Regular Work Schedule | ||
means the continually recurring pattern of work established and changed as necessary by the Company for a job in each work week or period of work weeks to meet operating needs. | |||
(hh) | Release | ||
means a Release determined by the Company in its sole discretion. Pursuant to such Release, the Member shall waive all employment-related claims in connection with his or her employment with the Company other than claims for benefits under the actual terms of an employee benefit plan and workers compensation. Such Release shall be construed to comply with the requirements of the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f). | |||
(ii) | Salary Grade | ||
means the classification of a job under the Companys written salary structure providing a guiding minimum, competitive objective and guiding maximum in compensation for the job. | |||
(jj) | Seasonal Employee |
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means an individual who is hired to work a Regular Work Schedule for a portion of each year on a repetitive basis in a job described to cover a seasonal operating need. | |||
(kk) | Special Assignment | ||
means a job assignment that is expected to be temporary and is designated as a special assignment by the Company in its sole discretion. | |||
(ll) | Subsidiary | ||
means any Corporation with respect to which the Corporation, one or more Subsidiaries, or the Corporation together with one or more Subsidiaries, own not less than 80% of the total combined voting power of all classes of stock entitled to vote, or not less than 80% of the total value of al shares of all classes of stock. | |||
(mm) | Successors and Assigns | ||
means a corporation or other entity acquiring all or substantially all the assets and business of the Corporation (including the Plan) whether by operation of law or otherwise. | |||
(nn) | Temporary Employee | ||
means an Employee classified as a Temporary Employee by the Company in its sole discretion. | |||
(oo) | Transfer | ||
means a non-temporary reassignment to a job with the Company in a New Work Location that is more than 50 miles from the Employees Present Work Location. An offer of a position with a Buyer is not a Transfer. Notwithstanding the above, Transfer shall not include: |
(i) | in the case where an Employees current job is a rotational job, a reassignment to a job with the Company in a New Work location that is no more than 50 miles from the Employees last work location with the Company that did not involve a rotational job, and | ||
(ii) | in the case where an Employees current job is in a non-U.S. location, a reassignment to a U.S. location at the Employees request. |
(pp) | Year of Continuous Service |
means the number of full months (as defined by the Corporation in written rules adopted by it from time to time) of Continuous Service, divided by 12. |
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1
2
3
4
5
6
1. | Purpose | 1 | ||||||
2. | Effective Date | 1 | ||||||
3. | Awards Under the Plan | 1 | ||||||
4. | Management Compensation Committee | 2 | ||||||
5. | Eligibility for Management Incentive Awards | 2 | ||||||
6. | Form, Amount, Time and Conditions of Awards | 3 | ||||||
7. | Dividend Equivalents | 4 | ||||||
8. | Administration, Amendment and Termination of the Plan | 4 | ||||||
9. | Grantor Trust | 5 | ||||||
10. | Assignability | 5 | ||||||
11. | Forfeiture | 5 | ||||||
12. | Definitions | 7 | ||||||
A. | Annual Income | 7 | ||||||
B. | Award Year | 7 | ||||||
C. | Beneficiary | 7 | ||||||
D. | Board | 7 | ||||||
E. | Change in Control | 7 | ||||||
F. | Code | 7 | ||||||
G. | Committee | 7 | ||||||
H. | Corporation | 7 | ||||||
I. | Covered Employee | 7 | ||||||
J. | Eligible Employee | 8 | ||||||
K. | Participant | 8 | ||||||
L. | Participating Affiliate | 8 | ||||||
M. | Plan | 8 | ||||||
N. | Stock Units | 8 |
i
1. | Purpose. | |
The purpose of the Management Incentive Plan of Chevron Corporation is to obtain, develop and retain able management personnel, stimulate constructive and imaginative thinking, and contribute to the growth and profits of the Corporation. | ||
2. | Effective Date. | |
The Plan was adopted effective January 1, 1966 and approved by the Corporations stockholders at the Annual Meeting on May 5, 1966. Prior to this amendment and restatement, the Plan was last amended and restated effective October 9, 2001 and last approved by the Corporations stockholders at the Annual Meeting on May 15, 2002. | ||
3. | Awards Under the Plan. | |
Awards under the Plan shall be made in the sole discretion of the Committee. After the close of an Award Year, the Committee shall determine the dollar amount of the award to be made to each Eligible Employee whom the Committee selects to be an award recipient for that Award Year; provided, however, that the award amounts for the Covered Employees shall be subject to the following limitations: |
A. | 0.5% of the Corporations Annual Income shall be set aside for awards to the Covered Employees. | ||
B. | The maximum award amount for the Covered Employees shall equal the indicated percentage of the aggregate fund set forth in A above, determined pursuant to the following schedule: |
Officer | Percentage | |
CEO |
40% | |
Other Covered Employees |
15% each | |
Total |
100% |
C. | The Committee in its sole discretion may reduce the award otherwise payable to any Covered Employee as determined above, but in no event shall any such reduction result in an increase of the award payable to any other Participant, including but not limited to any other Covered Employee. |
1
The foregoing notwithstanding, following a Change in Control, neither the Committee nor any other entity or individual(s) shall have the discretion to make awards under the Plan. Rather, for the Award Year in which the Change in Control occurs and, if payment of awards for the Award Year prior to the year in which the Change of Control occurs has not been completed as of the date of the Change in Control, then that prior Award Year, each Eligible Employee shall be entitled to receive an award in an amount not less than that Eligible Employees target bonus, as determined pursuant to the Committees established procedures prior to the Change in Control, including the provision applicable to newly-Eligible Employees, which provides that their bonus shall be prorated on the basis of the number of weeks (days, for 2006 and later Award Years) elapsed in the Award Year from the date the newly-Eligible Employee becomes an Eligible Employee under the Plan; provided, however, that for individuals in PSG 44 and above, awards shall be determined by the Committee in the usual manner. For any Eligible Employee whose employment terminates other than on the last day of an Award Year, the award determined pursuant to the preceding sentence for the Award Year in which such termination occurs shall be prorated on the basis of the number of weeks (days, for 2006 and later Award Years) elapsed in the Award Year to the date of such termination of employment. |
4. | Management Compensation Committee. | |
The Committee will administer the Plan. If any member of the Committee does not qualify as an outside director for purposes of section 162(m) of the Code, awards under the Plan for the Covered Employees shall be administered by a subcommittee of the Board consisting of each Committee member who qualifies as an outside director. If fewer than two Committee members qualify as an outside director, the Board shall appoint one or more other members to such subcommittee who do qualify as outside directors so that it will at all times consist of at least two members who qualify as an outside director for purposes of section 162(m) of the Code. | ||
Decisions and determinations as to the number and identity of Participants, the form and amount of awards and any other matters relating to awards made under the Plan shall rest with the Committee. The Corporations management will make recommendations to the Committee, but the Committee will not be bound by such recommendations and will make its own final determinations. | ||
Within 30 days after the occurrence of a Change in Control, the Committee shall appoint an independent organization which shall thereafter administer the Plan and have all of the powers and duties formerly held and exercised by the Committee with respect to the Plan. Upon such appointment, the Committee shall cease to have any responsibility with respect to the administration of the Plan. | ||
5. | Eligibility for Management Incentive Awards. | |
Regular salaried employees including directors, officers, and other individuals serving in important executive, administrative, professional or technical capacities, as determined by the Committee, who have been on the payroll of the Corporation or the payroll of a |
2
Participating Affiliate at any time during the Award Year, shall be eligible for participation in the Plan. |
6. | Form, Amount, Time and Conditions of Awards. |
A. | Form. Awards may be made in any of the following forms or in any combination of forms as determined by the Committee: |
(i) | Stock Units, together with dividend equivalents, as described in Section 7; | ||
(ii) | Cash, including cash measured by Stock Units or any other investment performance measurement selected by the Committee from time to time; or | ||
(iii) | Shares of Common Stock of the Corporation. |
In the case of awards in Stock Units or cash measured by Stock Units, the number of units shall be adjusted for any stock splits, stock dividends, or other relevant capitalization adjustments occurring after the date of award. |
B. | Amount. The amount of each award shall be determined by the Committee. | ||
C. | Time and Conditions. Any award may be paid in a lump sum within two and one-half months following the end of the calendar year in which the Committee determines the amount of the award, or such awards may be deferred pursuant to rules established by the Committee under the Corporations Deferred Compensation Plan for Management Employees (or any successor plan) and in compliance with section 409A of the Code. Any award and the payment thereof may be made subject to such forfeiture and other conditions for such period of time as the Committee shall determine, including the forfeiture provisions of Section 11 hereof. Any award which becomes payable after the recipients death shall be delivered or distributed to the award recipients Beneficiary or Beneficiaries in a lump sum and at the time the award otherwise would have been paid under the Plan, provided, that the Beneficiary shall have no ability to defer receipt of the award. Each recipient of an award under the Plan may designate on the prescribed form filed in the manner prescribed by the Committee one or more Beneficiaries. An award recipient may change such designation at any time by filing the prescribed form. If a Beneficiary has not been designated or no designated Beneficiary survives the award recipient, any award which becomes payable after the award recipients death will be made to the award recipients surviving spouse as Beneficiary if such spouse is still living or, if not living or if none, in equal shares to the then living children of the award recipient as Beneficiaries or, if none, to the award recipients estate as Beneficiary. | ||
In addition to any forfeiture condition established by the Committee with respect to any award, including under Section 11 hereof, until any award granted under the Plan (or a portion thereof) is delivered or distributed, such award (or such portion) shall be forfeited under the following circumstances: |
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(i) | The Participant is dismissed for cause or otherwise ceases to be an employee of the Corporation or a Participating Affiliate at a time when cause for dismissal exists; or | ||
(ii) | The Participant is indebted to the Corporation or any Participating Affiliate at the time when the Participant becomes entitled to payment of an award under the Plan. |
In such case, the payment, to the extent that the amount thereof (determined as of the date payment is scheduled to be made) does not exceed such indebtedness, shall be forfeited and the Participants indebtedness to the Corporation or Participating Affiliate shall be extinguished to the extent of such forfeiture. | ||
The Committee may cancel the payment of all or any part of an award under the Plan if the Committee determines that the payment of such award or part thereof would violate any mandatory wage controls in effect at the time payment would otherwise be made. |
7. | Dividend Equivalents. | |
The Committee may determine that any Stock Unit awarded (or a cash award measured by Stock Units) will carry with it until paid a dividend equivalent which will entitle the holder to receive payments from the Corporation equal to the cash dividends paid on one share of Common Stock of the Corporation during the period from the time of the award of the Stock Units to the time the shares are delivered to the Participant (or the cash award is paid). Payment of dividend equivalents may be made in cash, stock or Stock Units and at such time or times as determined by the Committee. Dividend equivalents shall be subject to the same forfeiture and other provisions as the related Stock Unit. | ||
8. | Administration, Amendment and Termination of the Plan. | |
The Committee shall have the power and authority to interpret and administer the Plan. The Board may, at any time, alter, amend or terminate the Plan; provided, however, that no alteration, amendment or termination approved by the Board after six months prior to the public announcement of a proposed transaction which, when effected, is a Change in Control or before the date which is two years after the date of a Change in Control (the Benefit Protection Period) shall be valid or effective if such alteration, amendment or termination would alter the provisions of this Section 8 or adversely affect the amount of a Participants award under the Plan, whether or not the Participants employment had terminated at the time the alteration, amendment or termination was approved; provided, however, that any alteration, amendment or termination may be effected, even if so approved after such a public announcement, if (a) the alteration, amendment or termination is approved after any plans have been abandoned to effect the transaction which, if effected, would have constituted a Change in Control and the event which would have constituted the Change in Control has not occurred, and (b) within a period of six months after such approval, no other event constituting a Change in Control shall have occurred, and no public announcement of a proposed event which would constitute a Change in Control shall have been made, unless thereafter any plans to effect the |
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Change in Control have been abandoned and the event which would have constituted the Change in Control has not occurred. Any alteration, amendment or termination of the Plan which is approved by the Board prior to a Change in Control at the request of a third party who effectuates a Change in Control shall be deemed to be an alteration, amendment or termination approved during the Benefit Protection Period. |
9. | Grantor Trust | |
The Committee is authorized in its sole discretion to establish a grantor trust for the purpose of providing security for the payment of awards under the Plan; provided, however, that no Participant shall be considered to have a beneficial ownership interest (or any other sort of interest) in any specific asset of the Corporation or of its subsidiaries or affiliates as a result of the creation of such trust or the transfer of funds or other property to such trust. | ||
10. | Assignability. | |
Except as otherwise determined by the Committee, a Participants award, the interest, if any, of a Participants Beneficiary and (during the period shares of Common Stock of the Corporation awarded under the Plan are subject to forfeiture conditions) shares of Common Stock of the Corporation may not be assigned, either by voluntary or involuntary assignment or by operation of law, including, but without limitation, garnishment, attachment or other creditors process and any act in violation hereof shall be void. | ||
11. | Forfeiture. |
A. | Notwithstanding any other provision of the Plan to the contrary, if a Participant engages in Misconduct, the Committee (or its delegate) may determine that (i) the Participant shall not receive any future awards pursuant to the Plan and (ii) the Corporation may demand repayment of any award received after June 29, 2005 with respect to a period after the date of the Participants Misconduct. | ||
B. | For this purpose, Misconduct shall mean that: |
(i) | the Corporation has been required to prepare an accounting restatement due to material noncompliance, as a result of misconduct, with any financial reporting requirement under the securities laws, and the Committee (or its delegate) has determined in its sole discretion that a Participant (1) had knowledge of the material noncompliance or the circumstances that gave rise to such noncompliance and failed to take reasonable steps to bring it to the attention of appropriate individuals within the Corporation or (2) personally and knowingly engaged in practices which materially contributed to the circumstances that enabled a material noncompliance to occur; or | ||
(ii) | a Participant discloses to others, or takes or uses for his or her own purpose or the purpose of others, any trade secrets, confidential |
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information, knowledge, data or know-how or any other proprietary information or intellectual property belonging to the Corporation or Participating Affiliate and obtained by the Participant during the term of his or her employment, whether or not they are the Participants work product. Examples of such confidential information or trade secrets include, without limitation, customer lists, supplier lists, pricing and cost data, computer programs, delivery routes, advertising plans, wage and salary data, financial information, research and development plans, processes, equipment, product information and all other types and categories of information as to which the Participant knows or has reason to know that the Corporation or Participating Affiliate intends or expects secrecy to be maintained; or |
(iii) | a Participant fails to promptly return all documents and other tangible items belonging to the Corporation or Participating Affiliate in the Participants possession or control, including all complete or partial copies, recordings, abstracts, notes or reproductions of any kind made from or about such documents or information contained therein, upon termination of employment, whether pursuant to retirement or otherwise; or | ||
(iv) | a Participant directly or indirectly engages in, becomes employed by, or renders services, advice or assistance to any business in competition with the Corporation at any time during the twelve months following termination of employment with the Corporation or Participating Affiliate. As used herein, business in competition means any person, organization or enterprise which is engaged in or is about to become engaged in any line of business engaged in by the Corporation at the time of the termination of the Participants employment with the Corporation or Participating Affiliate; or | ||
(v) | a Participant fails to inform any new employer, before accepting employment, of the terms of this section and of the Participants continuing obligation to maintain the confidentiality of the trade secrets and other confidential information belonging to the Corporation or Participating Affiliate and obtained by the Participant during the term of his or her employment with the Corporation or Participating Affiliate; or | ||
(vi) | a Participant induces or attempts to induce, directly or indirectly, any of the Corporations or Participating Affiliates customers, employees, representatives or consultants to terminate, discontinue or cease working with or for the Corporation or Participating Affiliate, or to breach any contract with the Corporation or Participating Affiliate, in order to work with or for, or enter into a contract with, the Participant or any third party; or |
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(vii) | a Participant engages in conduct which is not in good faith and which disrupts, damages, impairs or interferes with the business, reputation or employees of the Corporation or Participating Affiliate; or | ||
(viii) | a Participant committed an act of embezzlement, fraud or theft with respect to the property of the Corporation or Participating Affiliate. |
The Committee (or its delegate) shall determine in its sole discretion whether the Participant has engaged in any of the acts set forth in subsections (i) through (viii) above, and its determination shall be conclusive and binding on all interested persons. | ||
Any provision of this Section 10 which is determined by a court of competent jurisdiction to be invalid or unenforceable should be construed or limited in a manner that is valid and enforceable and that comes closest to the business objectives intended by such invalid or unenforceable provision, without invalidating or rendering unenforceable the remaining provisions of this Section 10. | ||
12. | Definitions. | |
For purposes of the Plan, the following terms shall have the meanings set forth below: |
A. | Annual Income shall mean the Corporations reported earnings before special items and account changes for the Award Year. | ||
B. | Award Year shall mean the Corporations fiscal year. | ||
C. | Beneficiary shall mean the person designated as such by the Eligible Employee pursuant to Section 6.C. | ||
D. | Board shall mean the board of directors of the Corporation. | ||
E. | Change in Control shall mean a change in control of the Corporation as defined in Article VI of the bylaws of the Corporation, as such bylaws may be amended from time to time. | ||
F. | Code shall mean the Internal Revenue Code of 1986, as amended. | ||
G. | Committee shall mean the Management Compensation Committee of the Board. | ||
H. | Corporation shall mean Chevron Corporation, a Delaware corporation. | ||
I. | Covered Employee shall mean the chief executive officer, the chief financial officer and the three most highly compensated officers of the Corporation (other than the chief executive officer and the chief financial officer) who are defined as covered employees under code Section 162(m) of the Code. |
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J. | Eligible Employee shall mean a regular salaried employee of the Corporation or a Participating Affiliate including a director, officer or other individual serving in an important executive, administrative, professional or technical capacity. | ||
K. | Participant shall mean an Eligible Employee who receives an award under the Plan. | ||
L. | Participating Affiliate shall mean any corporation in which the Corporation holds directly or indirectly more than 50% of the voting securities and whose financial accounts are consolidated with those of the Corporation in the Corporations financial statements included in the Annual Report to Stockholders. | ||
M. | Plan shall mean the Management Incentive Plan of Chevron Corporation, as amended from time to time. | ||
N. | Stock Units shall mean an award denominated in shares of Common Stock equivalents of the Corporation in which the Eligible Employee has a right to receive a specified number of shares of Common Stock of the Corporation or the cash equivalent. |
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1. |
PURPOSE | 1 | ||
2. |
DEFINITIONS | 1 | ||
3. |
ADMINISTRATION | 3 | ||
4. |
DURATION OF THE PLAN AND SHARES SUBJECT TO THE PLAN | 5 | ||
5. |
PERSONS ELIGIBLE FOR AWARDS; LIMITS ON INDIVIDUAL AWARDS | 6 | ||
6. |
STOCK OPTIONS | 6 | ||
7. |
RESTRICTED STOCK | 8 | ||
8. |
OTHER SHARE-BASED AWARDS | 10 | ||
9. |
NONSTOCK AWARDS | 11 | ||
10. |
RECAPITALIZATION | 12 | ||
11. |
FORFEITURE | 13 | ||
12. |
SECURITIES LAW REQUIREMENTS | 15 | ||
13. |
AMENDMENTS OF THE PLAN AND AWARDS | 16 | ||
14. |
GENERAL PROVISIONS | 17 | ||
15. |
APPROVAL OF STOCKHOLDERS | 21 |
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(a) | Award or Awards means a grant of a Stock Option, Restricted Stock, a stock appreciation right, an Other Share-Based Award or a Nonstock Award under the Plan. | ||
(b) | Board means the Board of Directors of the Corporation. | ||
(c) | Code means the Internal Revenue Code of 1986, as amended. | ||
(d) | Committee means the committee appointed by the Board to administer the Plan as provided in Section 3. | ||
(e) | Common Stock means the $0.75 par value common stock of the Corporation or any security of the Corporation identified by the Committee as having been issued in substitution, exchange or lieu thereof. | ||
(f) | Corporation means Chevron Corporation, a Delaware corporation, or any successor corporation. |
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(g) | Disability means that because of an injury or sickness the Participant is unable to perform any occupation for which the Participant is qualified or may reasonably become qualified by reason of education, training, or experience, whether or not a job involving such occupation is available within the Corporation. | ||
(h) | Employee means any individual who is an employee on the payroll of the Corporation or any Subsidiary. | ||
(i) | Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute. | ||
(j) | Fair Market Value of a Share as of a specified date means a price that is based on the opening, closing, actual, high, low or average selling prices of Shares on the New York Stock Exchange (or other established exchange or exchanges), on the applicable date, the preceding trading day, the next succeeding trading day, or an average of trading days as determined by the Committee in its discretion. | ||
(k) | Full Value Award means an Award other than in the form of a Stock Option or a stock appreciation right and which is settled by the issuance of Shares and which does not provide for full payment in cash or property for such Shares by the Award recipient as determined under the Rules. | ||
(l) | Nonstock Award means an Award under the Plan the amount, value and denomination of which is not determined with reference to, or expressed in, Shares. Nonstock Award Agreement means the agreement between the Corporation and the recipient of a Nonstock Award that contains the terms and conditions pertaining to the Nonstock Award. | ||
(m) | Optionee means an Employee who has received the grant of a Stock Option. | ||
(n) | Other Share-Based Award means an Award granted pursuant to Section 8 of the Plan. Other Share-Based Award Agreement means the agreement between the Corporation and the recipient of an Other Share-Based Award that contains the terms and conditions pertaining to the Other Share-Based Award. | ||
(o) | Participant means an Employee who is granted an Award under the Plan. | ||
(p) | Plan means the Chevron Corporation Long-Term Incentive Plan, as amended from time to time. | ||
(q) | Restricted Stock Award means an Award granted pursuant to the provisions of Section 7 of the Plan. Restricted Stock means Shares granted pursuant to Section 7 of the Plan. Restricted Stock Agreement means the agreement between the Corporation and the recipient of Restricted Stock that contains the terms, conditions and restrictions pertaining to such Restricted Stock. | ||
(r) | Rules means regulations and rules adopted from time to time by the Committee. |
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(s) | Share means one share of Common Stock, adjusted in accordance with Section 10 (if applicable). | ||
(t) | Stock Option means a nonstatutory stock option granted pursuant to Section 6 of the Plan. Stock Option Agreement means the agreement between the Corporation and the Optionee that contains the terms and conditions pertaining to a Stock Option. | ||
(u) | Subsidiary means any corporation or entity in which the Corporation directly or indirectly controls more than 50% of the total voting power of all classes of its stock or other equity interests having voting power and which the Board has designated as a Subsidiary for purposes of the Plan. |
(a) | Composition of the Committee. |
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(b) | Actions by the Committee. |
(c) | Powers of the Committee. |
(d) | Liability of Committee Members. |
(e) | Administration of the Plan Following a Change in Control. |
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(a) | Duration of the Plan. |
(b) | Shares Subject to the Plan. |
(c) | Accounting for Number of Shares. |
(d) | Source of Stock Issued Under the Plan. |
1 | As adjusted for the 2-for-1 stock split effective for Shares on record as of August 19, 2004. |
5
(a) | Stock Options, Stock Appreciation Rights, Restricted Stock and Other Share-Based Awards: The aggregate number of Shares that may be granted in the form of Stock Options, stock appreciation rights, Restricted Stock and Other Share-Based Awards in any one calendar year to any Participant shall not exceed four million (4,000,000)2 Shares. This limitation shall be subject to adjustment as provided in Section 10. | ||
(b) | Nonstock Awards: The value of all Nonstock Awards granted in any single calendar year to any Participant shall not exceed $4,000,000. For this purpose, the value of a Nonstock Award shall be determined on the date of grant without regard to any conditions imposed on the Nonstock Award. |
(a) | Awards of Stock Options. |
(b) | Number of Shares. |
2 | As adjusted for the 2-for-1 stock split effective for Shares on record as of August 19, 2004. |
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(c) | Exercise Price. |
(d) | Method of Payment. |
(e) | Term and Exercise of Stock Options; Nontransferability of Stock Options. |
(f) | Termination of Employment. |
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(g) | Rights as a Stockholder. |
(h) | Stock Appreciation Rights. |
(a) | Restricted Stock Awards. |
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(b) | Restrictions and Conditions. |
(i) | Subject to the provisions of Section 14(r) below, the Committee in its sole discretion shall specify the terms, conditions and restrictions under which Shares of Restricted Stock shall vest or be forfeited. These terms, conditions and restrictions must include continued employment with the Corporation or a Subsidiary for a specified period of time (as determined under the Rules) following the date of grant except in the case of death or Disability, and may include termination of the Employees employment for specified reasons such as death or Disability prior to the completion of the specified period, or the attainment of certain performance objectives. The period of time commencing with the date of such Award and ending on the date on which all Shares of Restricted Stock in such Award either vest or are forfeited shall be known as the Restriction Period. With respect to the Restricted Stock during the Restriction Period, the Committee, in its sole discretion, may provide for the lapse of any such term, condition or restriction in installments and may accelerate or waive such term, condition or restriction in whole or in part, based on service, performance, and/or such other factors or criteria as the Committee may determine in its sole discretion. Except as otherwise provided in the Rules or in a Restricted Stock Agreement, during the Restriction Period the Participant shall not be permitted to sell, transfer, pledge, assign or encumber Restricted Stock awarded under the Plan. | ||
(ii) | Except as provided in this paragraph (ii) and paragraph (i) above, the Participant shall have, with respect to the Shares of Restricted Stock, all of |
9
the rights of a stockholder of the Corporation, including the right to vote the Shares and the right to receive any cash or stock dividends. The Committee, in its sole discretion, as determined at the time of Award, may provide that the payment of cash dividends shall or may be deferred. Any deferred cash dividends may be reinvested as the Committee shall determine in its sole discretion, including reinvestment in additional Shares of Restricted Stock. Stock dividends issued with respect to Restricted Stock shall be Restricted Stock and shall be subject to the same terms, conditions and restrictions that apply to the Shares with respect to which such dividends are issued. Any additional Shares of Restricted Stock issued with respect to cash or stock dividends shall not be counted against the maximum number of Shares for which awards may be granted under the Plan as set forth in Section 4. |
(iii) | If and when the Restriction Period applicable to Shares of Restricted Stock expires without a prior forfeiture of the Restricted Stock, an appropriate book entry recording the Participants interest in the unrestricted Shares shall be entered on the records of the Company. |
(a) | Grants. |
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(b) | Terms and Conditions. |
(i) | Except as otherwise provided in the Rules or in an Other Share-Based Award Agreement, any Other Share-Based Award may not be sold, assigned, transferred, pledged or otherwise encumbered prior to the date on which the Shares are issued or the Award becomes payable, or, if later, the date on which any applicable restriction, performance or deferral period lapses. | ||
(ii) | The Other Share-Based Award Agreement shall contain provisions dealing with the disposition of such Award in the event of a termination of the Employees employment prior to the exercise, realization or payment of such Award. |
(a) | Grants. |
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(b) | Terms and Conditions. |
(i) | Except as otherwise provided in the Rules or in a Nonstock Award Agreement, any Nonstock Award may not be sold, assigned, transferred, pledged or otherwise encumbered prior to the date on which the Award becomes payable, or, if later, the date on which the requirements of any applicable restriction, condition, performance goal or deferral period is met or lapses. | ||
(ii) | The Nonstock Award Agreement shall contain provisions dealing with the disposition of such Award in the event of a termination of the Employees employment prior to the exercise, realization or payment of such Award. |
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(a) | Rescind the exercise of any Stock Option granted on or after June 29, 2005 and exercised on or after the date the Participants Misconduct occurred and cancel all Awards granted on or after June 29, 2005 and outstanding on the date of discovery of the Participants Misconduct; and | ||
(b) | Demand that the Participant repay any cash distributed to the Participant in respect of any Award granted on or after June 29, 2005 or pay over to the Corporation the proceeds (less the Participants purchase price, if any) received by the Participant upon the sale, transfer or other transaction involving the Shares |
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acquired upon the exercise of any Stock Option granted on or after June 29, 2005 and exercised on or after the date the Participants Misconduct occurred or upon the vesting of any Award granted on or after June 29, 2005 and vested after the date of the Participants Misconduct, in such manner and on such terms and conditions as may be required, and, without limiting any other remedy the Corporation or its affiliates may have, the Corporation shall be entitled to set-off against the amount of any such proceeds any amount owed the Participant by the Corporation or its affiliates to the fullest extent permitted by law. |
(c) | For this purpose, Misconduct means that: |
(i) | the Corporation has been required to prepare an accounting restatement due to material noncompliance, as a result of misconduct, with any financial reporting requirement under the securities laws, and the Committee (or its delegate) has determined in its sole discretion that a Participant (i) had knowledge of the material noncompliance or the circumstances that gave rise to such noncompliance and failed to take reasonable steps to bring it to the attention of appropriate individuals within the Corporation or (ii) personally and knowingly engaged in practices which materially contributed to the circumstances that enabled a material noncompliance to occur; or | ||
(ii) | a Participant discloses to others, or takes or uses for his or her own purpose or the purpose of others, any trade secrets, confidential information, knowledge, data or know-how or any other proprietary information or intellectual property belonging to the Corporation and obtained by the Participant during the term of his or her employment, whether or not they are the Participants work product. Examples of such confidential information or trade secrets include, without limitation, customer lists, supplier lists, pricing and cost data, computer programs, delivery routes, advertising plans, wage and salary data, financial information, research and development plans, processes, equipment, product information and all other types and categories of information as to which the Participant knows or has reason to know that the Corporation intends or expects secrecy to be maintained; or | ||
(iii) | a Participant fails to promptly return all documents and other tangible items belonging to the Corporation in the Participants possession or control, including all complete or partial copies, recordings, abstracts, notes or reproductions of any kind made from or about such documents or information contained therein, upon termination of employment, whether pursuant to retirement or otherwise; or | ||
(iv) | a Participant directly or indirectly engages in, becomes employed by, or renders services, advice or assistance to any business in competition with the Corporation at any time during the twelve months following termination of employment with the Corporation. As used herein, |
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business in competition means any person, organization or enterprise which is engaged in or is about to become engaged in any line of business engaged in by the Corporation at the time of the termination of the Participants employment with the Corporation; or |
(v) | a Participant fails to inform any new employer, before accepting employment, of the terms of this section and of the Participants continuing obligation to maintain the confidentiality of the trade secrets and other confidential information belonging to the Corporation and obtained by the Participant during the term of his or her employment with the Corporation; or | ||
(vi) | a Participant induces or attempts to induce, directly or indirectly, any of the Corporations customers, employees, representatives or consultants to terminate, discontinue or cease working with or for the Corporation, or to breach any contract with the Corporation, in order to work with or for, or enter into a contract with, the Participant or any third party; or | ||
(vii) | a Participant engages in conduct which is not in good faith and which disrupts, damages, impairs or interferes with the business, reputation or employees of the Corporation; or | ||
(viii) | a Participant committed an act of embezzlement, fraud or theft with respect to the property of the Corporation. |
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(a) | Plan Amendments. |
(b) | Amendments of Awards. |
16
(c) | Rights of Participant. |
(a) | Application of Funds. |
(b) | Employment Rights. |
(c) | Stockholders Rights. |
(d) | Creditors Rights. |
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(e) | No Obligation to Exercise Stock Option. |
(f) | Deferral Elections. |
(g) | Withholding Taxes. |
(i) | General. |
(ii) | Stock Withholding. |
(h) | Other Corporation Benefit and Compensation Programs. |
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(i) | Costs of the Plan. |
(j) | Participants Beneficiary. |
(k) | Awards in Foreign Countries. |
(l) | Severability. |
(m) | Binding Effect of Plan. |
19
(n) | No Waiver of Breach. |
(o) | Authority to Establish Grantor Trust. |
(p) | Authority to Satisfy Obligations |
(q) | Choice of Law |
(r) | Vesting Requirements for Restricted Stock and Restricted Stock Units |
20
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1. | ESTABLISHMENT AND PURPOSE | 1 | ||||||
2. | DEFINITIONS | 1 | ||||||
(a) | Account | 1 | ||||||
(b) | Beneficiary | 1 | ||||||
(c) | Board | 1 | ||||||
(d) | Change in Control | 1 | ||||||
(e) | Code | 1 | ||||||
(f) | Committee | 2 | ||||||
(g) | Corporation | 2 | ||||||
(h) | Eligible Employee | 2 | ||||||
(i) | Employee | 2 | ||||||
(j) | ERISA | 2 | ||||||
(k) | Long-Term Incentive Plan | 2 | ||||||
(l) | Management Incentive Plan | 2 | ||||||
(m) | Participant | 2 | ||||||
(n) | Plan | 2 | ||||||
(o) | Plan Year | 2 | ||||||
(p) | Prior Plan | 2 | ||||||
(q) | Rules | 2 | ||||||
(r) | Subsidiary | 2 | ||||||
3. | ADMINISTRATION | 2 | ||||||
(a) | The Committee | 2 | ||||||
(b) | Actions by the Committee | 3 | ||||||
(c) | Powers of the Committee | 3 | ||||||
(d) | Liability of Committee Members | 3 | ||||||
(e) | Administration of the Plan Following a Change in Control | 3 | ||||||
4. | PARTICIPATION | 3 | ||||||
5. | DEFERRED COMPENSATION | 3 | ||||||
6. | FORFEITURE | 4 | ||||||
7. | AMENDMENT OR TERMINATION OF THE PLAN | 5 | ||||||
8. | GENERAL | 6 | ||||||
(a) | No Right of Employment | 6 | ||||||
(b) | Designation of Beneficiaries | 6 | ||||||
(c) | Domestic Relations Orders | 6 | ||||||
(d) | Costs of the Plan | 6 | ||||||
(e) | Severability | 6 | ||||||
(f) | Binding Effect of Plan | 6 |
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(g) | No Waiver of Breach | 7 | ||||||
(h) | No Assignment | 7 | ||||||
(i) | Applicable Law | 7 | ||||||
(j) | Participants Rights Unsecured | 7 | ||||||
(k) | Authority to Establish a Grantor Trust | 7 | ||||||
(l) | Other Benefit Plans | 7 |
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2
3
4
5
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1. | PURPOSE. |
2. | DEFINITIONS. |
(a) | Account means the bookkeeping account maintained on behalf of a Director to which shall be credited any amount described in Section 9. | |
(b) | Annual Meeting means the annual meeting of the stockholders of the Corporation. | |
(c) | Annual Cash Retainer means any yearly fees, including the Committee chair retainer, payable in cash to a Director for service as a non-employee Director during a 12-month period. | |
(d) | Award or Awards means a grant of an Option, Restricted Stock or Stock Units under the Plan. | |
(e) | Board means the Board of Directors of the Corporation. | |
(f) | Change in Control shall have the meaning set forth in Article VI of the By-Laws of the Corporation, as such By-Laws may be amended from time to time. | |
(g) | Code means the Internal Revenue Code of 1986, as amended. | |
(h) | Committee means the Board Nominating and Governance Committee. | |
(i) | Common Stock means the $0.75 par value common stock of the Corporation or any security of the Corporation identified by the Committee as having been issued in substitution, exchange or lieu thereof. |
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(j) | Corporation means Chevron Corporation, a Delaware corporation, or any successor corporation. | |
(k) | Director means a member of the Board who is not employed by the Corporation or its subsidiaries or affiliates. | |
(l) | Disability means a condition which causes a Director to be unable, by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than 12 months, to engage in any essential activity required of a Director. Whether a Director has a Disability shall be determined by the Committee on the basis of competent medical evidence. | |
(m) | Discretionary Transaction shall mean a transaction pursuant to any benefit plan that: (i) is at the volition of a plan participant; (ii) is not made in connection with the participants death, disability, retirement or termination of employment; (iii) is not required to be made available to a plan participant pursuant to a provision of the Internal Revenue Code; and (iv) results in either an intra-plan transfer involving an equity securities fund of the Corporation, or a cash distribution funded by a volitional disposition of an equity security of the Corporation, or otherwise as such term is defined under Rule 16b-3(b)(1) of the Exchange Act or successor provision thereto. | |
(n) | Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute. | |
(o) | Fair Market Value of a Share as of a specified date means the price per share at which Shares were traded at the close of business on such date as reported on the New York Stock Exchange (or other established exchange or exchanges) or, if no trading of Common Stock is reported for that day, the preceding day on which trading was reported. | |
(p) | Option means a nonstatutory stock option awarded pursuant to the Plan. Option Agreement means the agreement between the Corporation and the Director that contains the terms and conditions pertaining to an Option. | |
(q) | Plan means the Chevron Corporation Non-Employee Directors Equity Compensation and Deferral Plan, as amended from time to time. | |
(r) | Restricted Stock means Shares awarded pursuant to Section 7. | |
(s) | Restriction Period means the period of time commencing with the date of grant of a Restricted Stock Award and ending on the date on which all Shares of Restricted Stock in such Award either vest or are forfeited. | |
(t) | Rules means regulations and rules adopted from time to time by the Committee to interpret or administer the Plan. | |
(u) | Share means one share of Common Stock, adjusted in accordance with Section 10 (if applicable). |
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(v) | Stock Unit means a right to receive, in accordance with the provisions set forth herein and in the Rules, a Share. | |
3. | ADMINISTRATION. |
(a) | Composition and Powers of the Committee. |
Unless otherwise designated by the Board, the Plan shall be administered by the Board Nominating and Governance Committee. The Committee shall have the power to construe and interpret the Plan and the Rules and to make all other determinations necessary for the administration of the Plan. Subject to the requirements of applicable law, the Committee may designate persons other than members of the Committee to carry out its responsibilities and may prescribe such conditions and limitations as it may deem appropriate. Any determination, decision or action of the Committee in connection with the construction, interpretation, administration or application of the Plan shall be final, conclusive and binding on all persons. The Committee shall consist of two or more Directors who satisfy the requirements of Rule 16b-3 (or its successor) under the Exchange Act to the extent necessary for grants of Awards to the Directors under Section 16 of the Exchange Act. |
(b) | Liability of Board and Committee Members. | ||
No member of the Board or the Committee shall be liable for any action or
determination made in good faith by the Board or the Committee with respect to the
Plan or any Award under it. |
(c) | Administration of the Plan Following a Change in Control. | ||
Within 30 days after the occurrence of a Change in Control, the Committee shall
appoint an independent organization which shall thereafter administer the Plan and
have all of the powers and duties formerly held and exercised by the Committee with
respect to the Plan as provided in Section 3(a). Upon such appointment, the
Committee shall cease to have any responsibility with respect to the administration
of the Plan. |
4. | DURATION OF THE PLAN AND SHARES SUBJECT TO THE PLAN. |
(a) | Duration of the Plan. | ||
The Plan shall remain in effect until terminated by the Board. |
(b) | Shares Subject to the Plan. | ||
The maximum number of Shares for which Awards may be granted under the Plan is
800,000 Shares (adjusted for the two-for-one stock split dated September 10, 2004),
including the number of Shares previously authorized for use but unissued pursuant
to the Chevron Restricted Stock Plan for Non-Employee |
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Directors. The limitation set forth in this Section 4(b) shall be subject to adjustment as provided in Section 10. |
(c) | Accounting for Numbers of Shares. | ||
For the purpose of computing the total number of Shares available for Awards under
the Plan there shall be counted against the limitation under the Plan the number of
Shares issued or subject to issuance upon exercise or settlement of Options and
Restricted Stock Awards granted and the number of Shares that equals the number of
Stock Units granted, determined as of the dates on which Stock Unit Awards are
granted. Dividends paid, dividend equivalents granted and interest or other amounts
credited with respect to any Award outstanding under the Plan shall not apply
against the Plan limitation. |
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If Stock Units, Restricted Stock or Shares issued upon the exercise of Options are
forfeited or otherwise terminated before exercise or settlement, then the
corresponding Shares shall again become available for Awards under the Plan. If
Stock Units are settled, then only the number of Shares (if any) actually issued in
settlements of such Stock Units shall reduce the number available for
Awards. |
(d) | Source of Stock Issued Under the Plan. | ||
Common Stock issued under the Plan may be either authorized and unissued Shares or
issued Shares that have been reacquired by the Corporation, as determined in the
sole discretion of the Committee. No fractional Shares shall be issued under the
Plan. |
5. | PERSONS ELIGIBLE FOR AWARDS. |
6. | OPTIONS. |
(a) | Option Awards. | ||
The terms of each Option shall be set forth in an Option Agreement, which shall
contain such provisions not inconsistent with the terms of the Plan, including,
without limitation, restrictions upon the exercise of the Option, as the Committee
shall deem advisable in its sole discretion. Any Option may be sold, assigned, |
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transferred, pledged or otherwise encumbered only as specifically permitted in the Rules. |
(b) | Number of Shares Covered by Option. | ||
Each Option shall state the number of Shares to which it pertains and shall provide
for the adjustment thereof in accordance with the provisions of Section 10. No
fractional Shares shall be issued pursuant to the exercise of an
Option. |
(c) | Exercise Price. | ||
The exercise price of each Share covered by an Option shall be one hundred percent
(100%) of the Fair Market Value of a Share on the date the Option is awarded. |
(d) | Rights as a Stockholder. | ||
A Director who has been awarded an Option or any transferee of an Option (to the
extent transfers of an Option are permitted under the Rules) shall have no rights
with respect to any Shares covered by his or her Option until the date such interest
is recorded as a book entry on the records of the Corporation. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is prior
to the date the Directors interest is recorded as a book entry on the records of
the Corporation, except as provided elsewhere in this Plan or in the Rules. |
(e) | Nonstatutory Stock Options. | ||
All Options shall be designated as nonstatutory stock options which do not qualify
as incentive stock options under Section 422 of the Code. |
7. | RESTRICTED STOCK. |
(a) | Awards. | ||
As of the date of each Annual Meeting at which a Director is elected to serve on the
Board, each such Director shall receive an Award of a specified number of shares of
Restricted Stock, the number to be determined by the Board in its sole discretion by
resolution adopted on or before the date of the applicable Annual Meeting. This
annual Restricted Stock Award shall be subject to adjustment as provided in Section
10. |
(b) | Terms and Conditions of Awards. |
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The terms of each Restricted Stock Award shall be set forth in Rules, which Rules shall contain such provisions (including, without limitation, rules regarding vesting and forfeiture) as the Committee determines to be necessary or appropriate to carry out the intent of the Plan with respect to such Award. Except as otherwise provided in the Rules, any Restricted Stock Award may not be sold, assigned, transferred, pledged or otherwise encumbered prior to the date all applicable restrictions lapse. The Corporation shall maintain in its records a book entry account to which the Shares represented by each Restricted Stock Award shall be credited. The shares in the book entry account represented by such Restricted Stock Award shall be subject to the terms, conditions, and restrictions applicable to such Award. The Committee shall require that no change shall be made in the book entry account representing a Restricted Stock Award until the restrictions thereon shall have lapsed. At that time, a book entry shall be made in the records of the Corporation in the name of the Director in the amount of Shares as to which the restrictions have lapsed. |
(c) | Stockholders Rights. | ||
Except as provided in the Rules, the holders of Restricted Stock Awards shall have
the same voting, dividend and other rights as the Corporations
other stockholders. |
8. | STOCK UNITS. |
(a) | Awards. | ||
Each Stock Unit Award shall be subject to the terms and conditions set forth in the
Rules. |
(b) | Number of Shares Covered by Stock Units. | ||
As of the date of each Annual Meeting at which a Director is elected to serve on the
Board until the following Annual Meeting, each such Director shall receive an Award
of a specified number of Stock Units, the number and time of award to be determined
by resolution adopted by the Board on or before the date of the applicable Annual
Meeting. Stock Unit Awards shall be subject to adjustment as provided in Section
10. |
(c) | Terms and Conditions. | ||
In addition to the terms and conditions specified in the Rules, Stock Unit Awards
made pursuant to this Section 8 shall be subject to the following: |
(i) | Except as otherwise provided in the Rules, any Stock Unit Award may not be sold, assigned, transferred, pledged or otherwise encumbered prior to the date on which the Shares are issued or the Award becomes payable. |
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(ii) | The Rules shall contain provisions dealing with the disposition of Stock Unit Awards in the event of a termination of an individuals status as a Director. |
(d) | Stockholders Rights. | ||
Unless and until such time as a Director receives a distribution of all or a portion
of a Stock Unit Award in the form of Shares and prior to the date the Directors
interest in such Shares is recorded as a book entry on the records of the
Corporation, the Director shall have no dividend rights, voting rights or other
rights as a stockholder with respect to such Shares covered by his or her Stock Unit
Award. The holders of Stock Units shall have no voting rights. Prior to settlement
or forfeiture, if the Rules so provide, any Stock Unit awarded under the Plan may
carry with it dividend equivalents. Such right entitles the holder to be credited
with an amount equal to all cash dividends paid on one Share while such Stock Unit
is outstanding. Dividend equivalents may be converted into additional Stock Units,
as provided in the Rules. |
(e) | Stock Unit Accounts. | ||
The stock unit account of each Director who received an award of stock units
under the Chevron Corporation Restricted Stock Plan for Non-Employee Directors with
respect to service as a Director prior to the 1997 Annual Meeting shall continue to
be maintained pursuant to the terms of such plan as in effect prior to April 30,
1997. |
9. | DEFERRED COMPENSATION. |
(a) | Optional Deferral. A Director may elect to defer receipt of all or a portion of the Annual Cash Retainer. | ||
(b) | Rules Regarding Deferrals. The Committee shall promulgate Rules, in accordance with Section 409A of the Code, governing (i) elections by Directors to defer all or any part of the Directors Annual Cash Retainer, (ii) the establishment of Accounts to which shall be credited amounts deferred, (iii) the designation of investments to be used to measure the value of such Accounts, (iv) the crediting of interest or earnings to such Accounts, and (v) the time, form and value of distributions from such Accounts. |
10. | RECAPITALIZATION. | |
Subject to any required action by the stockholders, the number of Shares covered by the Plan
as provided in Section 4, the number of Shares covered by or referred to in each outstanding
Award and the exercise price, if applicable, of each outstanding Award shall be
proportionately adjusted for: (a) any increase or decrease in the number of issued and
outstanding Shares resulting from a subdivision or combination or consolidation of issued
and outstanding Shares by reclassification or otherwise, (b) the payment of a stock dividend
(but only of Common Stock) or any other increase or decrease in the
number of |
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such Shares effected without receipt of consideration by the Corporation, (c) the
declaration of a dividend payable in a form other than Shares in an amount that has a
material effect on the price of issued Shares, or (d) a recapitalization, spinoff or similar
occurrence. |
||
In the event of a dissolution or liquidation of the Corporation or a merger, consolidation
or other reorganization, the Shares subject to each non-vested Award shall be handled in
accordance with the terms of the agreement of merger, consolidation or reorganization which
may provide for the full vesting, cash-out or assumption of such Awards. |
||
The Committee shall prescribe Rules governing the adjustment of the number of Shares covered
by the Plan as provided in Section 4, the number of Shares covered by or referred to in each
outstanding Award and the exercise price, if applicable, of each outstanding Award in the
event that preferred stock purchase rights issued pursuant to any stockholder rights plan
detach from the Common Stock and become exercisable. |
||
Except as provided in this Section 10, a Director shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class, the payment of any dividend or
any other increase or decrease in the number of shares of stock of any class. Except as
provided in this Section 10, any issue by the Corporation of shares of stock of any class,
or securities convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or exercise price of
Shares subject to an Award. The grant of an Award pursuant to the Plan shall not affect in
any way the right or power of the Corporation to make adjustments, reclassifications, or
reorganizations or changes of its capital or business structure, to merge or consolidate or
to dissolve, liquidate, sell or transfer all or any part of its business or assets. |
11. | SECURITIES LAW REQUIREMENTS. | |
No Shares shall be issued and no Options shall become exercisable pursuant to the Plan
unless and until the Corporation has determined that: (i) it and the Director have taken
all actions required to register the Shares under the Securities Act of 1933, as amended, or
perfect an exemption from the registration requirements thereof; (ii) any applicable listing
requirement of any stock exchange on which the Common Stock is listed has been satisfied;
and (iii) any other applicable provision of state or federal law
has been satisfied. |
12. | AMENDMENTS OF THE PLAN AND AWARDS. |
(a) | Plan Amendments. | ||
The Board may, insofar as permitted by law, from time to time and in its discretion,
with respect to any Shares at the time not subject to Awards, suspend the Plan or
revise or amend it in any respect whatsoever without stockholder approval. However,
unless the Board specifically otherwise provides, any revision or amendment that
would cause the Plan to fail to comply with any requirement of applicable law or
regulation if such amendment were not approved |
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by the stockholders of the Corporation shall not be effective unless and until the approval of the stockholders of the Corporation is obtained. |
(b) | Amendments of Awards. | ||
Subject to the terms and conditions and within the limitations of the Plan, the
Board may amend, cancel, modify, extend or renew outstanding Awards granted under
the Plan, or accept the exchange of outstanding non-vested Awards (to the extent not
theretofore exercised) for the granting of new Awards in substitution
therefor. |
(c) | Rights of Directors. | ||
No amendment, suspension or termination of the Plan nor any amendment, cancellation
or modification of any Award outstanding under it that would adversely affect the
right of any Director in an Award previously granted under the Plan shall be
effective without the written consent of the affected Director. |
13. | TERMINATION OF THE PLAN |
(a) | Termination. | ||
The Committee may terminate the Plan at any time. In the event of termination of
the Plan, any deferred amounts may be distributed within the period beginning twelve
months after the date the Plan was terminated and ending twenty-four months after
the date the Plan was terminated, or pursuant to Sections IV-VI of the Rules, if
earlier. If the Plan is terminated and deferred amounts are distributed, the
Corporation shall terminate all account balance non-qualified deferred compensation
plans with respect to all participants and shall not adopt a new account balance
non-qualified deferred compensation plan for at least five years after the date the
Plan was terminated. |
(b) | Dissolution or Bankruptcy | ||
The Plan shall automatically terminate upon a dissolution of the Corporation that is
taxed under Code section 331 or with the approval of a bankruptcy court pursuant to
11 U.S.C. section 503(b)(1)(A), provided that the deferred amounts are distributed
and included in the gross income of the Directors by the latest of (i) the calendar
year in which the Plan terminates or (ii) the first calendar year in which payment
of the deferred amounts is administratively practicable. |
14. | GENERAL PROVISIONS. |
(a) | Application of Funds. | ||
The proceeds received by the Corporation from the sale of Common Stock pursuant to
the exercise of an Option shall be used for general corporate purposes. |
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(b) | Creditors Rights. | ||
Directors shall have no rights other than those of a general creditor of the
Corporation with respect to Stock Unit Awards and any Account established pursuant
to Section 9. These interests shall represent unfunded and unsecured obligations of
the Corporation, subject to the terms and conditions of the
applicable Rules. |
(c) | No Obligation to Exercise Option. | ||
The award of an Option shall impose no obligation upon the Director to exercise such
Option. |
(d) | Costs of the Plan. | ||
The costs and expenses of administering the Plan shall be borne by the Corporation. |
(e) | Directors Beneficiary. | ||
The Rules may provide that a Director may designate a beneficiary with respect to
any Award in the event of death of such Director. If such beneficiary is the
executor or administrator of the estate of the Director, any rights with respect to
such Award may be transferred to the person or persons or entity (including a trust,
if permitted under the Rules) entitled thereto by bequest of or inheritance from the
holder of such Award. |
(f) | Prohibition of Opposite Way Transactions. | ||
To the extent any transactions executed by a Director in securities of the
Corporation would be considered a non-exempt purchase or sale of an equity security
of the Corporation for purposes of the short-swing profit recovery provisions of
Section 16(b) of the Exchange Act, such Director shall be prohibited from executing,
or electing to enter into, any transaction relating to or resulting from Awards
under this Plan that would be considered an opposite way transaction within six
months from such prior non-exempt transaction. |
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In addition, a Director shall be prohibited from engaging in, or electing to engage
in, a Discretionary Transaction under the Plan if the election to engage in such
transaction is less than six months after an election to engage in an opposite way
Discretionary Transaction under any benefit plan of the Corporation, including this
Plan. |
(g) | Severability. | ||
The provisions of the Plan shall be deemed severable and the validity or
unenforceability of any provision shall not affect the validity or enforceability of
the other provisions hereof. |
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(h) | Binding Effect of Plan. | ||
The Plan shall be binding upon and shall inure to the benefit of the Corporation,
its successors and assigns and the Corporation shall require any successor or assign
to expressly assume and agree to perform the Plan in the same manner and to the same
extent that the Corporation would be required to perform it if no such succession or
assignment had taken place. The term the Corporation as used herein shall include
such successors and assigns. The term successors and assigns as used herein shall
mean a corporation or other entity directly or indirectly acquiring all or
substantially all the assets and business of the Corporation (including the Plan)
whether by operation of law or otherwise. |
(i) | No Waiver of Breach. | ||
No waiver by either party hereto at any time of any breach by the other party hereto
of, or compliance with, any condition or provision of the Plan to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions of
conditions at the same or at any prior or subsequent time. |
(j) | Authority to Establish Grantor Trust. | ||
The Committee is authorized in its sole discretion to establish a grantor trust for
the purpose of providing security for the payment of Awards under the Plan;
provided, however, that no Director shall be considered to have a beneficial
ownership interest (or any other sort of interest) in any specific asset of the
Corporation or of its subsidiaries or affiliates as a result of the creation of such
trust or the transfer of funds or other property to such trust. |
15. | APPROVAL OF STOCKHOLDERS. | |
Adoption of the Plan shall be subject to approval by affirmative vote of the stockholders of
the Corporation in accordance with applicable law. |
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