UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 28, 2007
Chevron Corporation
(Exact name of registrant as specified in its charter)
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| Delaware
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1-368-2
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94-0890210 |
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(I.R.S. Employer No.) |
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| 6001 Bollinger Canyon Road, San Ramon, CA
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94583 |
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| (Address of principal executive offices)
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(Zip Code) |
Registrant’s telephone number, including area code: (925) 842-1000
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| None |
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| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligations of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
| Item 5.02 |
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Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers. |
On March 28, 2007, the Management Compensation Committee of the Board of Directors of Chevron
Corporation approved the following salary increases, to be effective April 1, 2007, for the
executive officers who were named in the Summary Compensation Table in the Company’s 2007 Proxy
Statement: S.J. Crowe, $75,000 increase to an annual salary of $650,000; P.J. Robertson, $50,000
increase to an annual salary of $1,000,000; G.L. Kirkland, $65,000 increase to an annual salary of
$765,000; and J.S. Watson, $65,000 increase to an annual salary of $765,000. In addition, the
Management Compensation Committee approved the following grants of stock options and performance
shares, respectively, under the Chevron Corporation Long Term Incentive Plan (“LTIP”): D.J.
O’Reilly, 375,000 options and 58,000 performance shares; S.J. Crowe, 125,000 options and 20,000
performance shares; P.J. Robertson, 170,000 options and 27,000 performance shares; G.L. Kirkland,
125,000 options and 20,000 performance shares; and J.S. Watson, 125,000 options and 20,000
performance shares. Chevron does not have employment agreements with any of the foregoing
executive officers.
The stock options have a ten year term, and one-third of the grant vests at each anniversary of the
date of grant, except as described below. The exercise price for the options is $74.08 per share
and is based on the closing price on the March 28, 2007 date of grant. The performance shares will
result in a payout at the end of the three year performance period (January 1, 2007 through
December 31, 2009) only if Chevron achieves a certain Total Stockholder Return (TSR) for the
performance period as compared to the TSR of each company in Chevron’s peer group (BP p.l.c.,
ExxonMobil Corporation, Royal Dutch Shell p.l.c. and ConocoPhillips). The cash payout, if any, will
occur in an amount equal to the number of performance shares multiplied by the 20-day trailing
average price of Chevron common stock at the end of the performance period multiplied by a
performance modifier. The performance modifier is based on Chevron’s TSR ranking for the three-year
period compared to the TSR of each company in Chevron’s peer group and is from best TSR to lowest
TSR: 200 percent, 150 percent, 100 percent, 50 percent or zero percent. If the difference between
Chevron’s TSR and the TSR of any higher or lower member of the peer group is less than one
percentage point (rounded to one decimal point), the modifier will be the average of the sum of all
the modifiers for Chevron and for such other members of the peer group that fall less than one
percentage point (rounded to one decimal point) higher or lower than Chevron. The options and performance shares awarded to Mr. O’Reilly, Mr. Crowe and Mr. Robertson
will vest on any separation from service other than for cause, provided they are held for at
least one year from the date of grant. The stock options will continue to be exercisable any time
during the original term, and the payout of the performance shares, if any, will occur at the end of the
performance period. The accelerated vesting for each such officer is due to his having
accumulated 90 points (the sum of years of age and years of
service) under the LTIP. Each of Mr. Kirkland and Mr. Watson have accumulated more than 75 points under the LTIP, and, as a result, on
any separation from service other than for cause, options and performance shares held for at least one year
from the date of grant will vest on a pro rata basis based on the number of whole months from the grant
date to the separation from service date, divided by thirty-six. The options must be exercised the
sooner of 5 years from the date of grant or the remaining original term, and the payout of the
performance shares, if any, will occur at the end of the performance period.