Chevron Corporation (NYSE:CVX) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(e) On January 25, 2017, the independent Directors of the Board
of Directors (the Board) of Chevron Corporation (Chevron)
conducted an annual review of the base salaries of Chevrons
executive officers. Following such review, the independent
Directors of the Board approved an annual base salary of
$1,863,500 for John S. Watson, Chairman and Chief Executive
Officer, reflecting no increase to Mr. Watsons base salary from
the prior year, and ratified the decision of the Management
Compensation Committee of the Board (the Committee) to increase
the annual base salaries of the principal financial officer and
the other named executive officers of Chevron identified in
Chevrons 2016 proxy statement (the Named Executive Officers), as
follows: (i) Patricia E. Yarrington, Vice President and Chief
Financial Officer, by $41,100, resulting in an annual base salary
of $1,120,000; (ii) James W. Johnson, Executive Vice President,
Upstream, by $66,000, resulting in an annual base salary of
$1,100,000; (iii) R. Hewitt Pate, Vice President and General
Counsel, by $26,000, resulting in an annual base salary of
$900,000; and (iv) Michael K. Wirth, Executive Vice President,
Midstream and Development, by $151,600, resulting in an annual
base salary of $1,250,000. These base salary increases will be
effective April 1, 2017, other than for Mr. Wirth, whose base
salary increase will be effective February 1, 2017.

On January 25, 2017, the independent Directors of the Board and
the Committee assessed Chevrons 2016 corporate performance and
the individual performance of each of the Named Executive
Officers for the purpose of determining 2016 awards under the
Chevron Incentive Plan (CIP). This review resulted in the
independent Directors of the Board approving a 2016 CIP award for
Mr. Watson and ratifying the following 2016 CIP awards as
determined by the Committee:

On January 25, 2017, the independent Directors of the Board also
approved the grant of 250,000 stock options, 65,340 performance
shares, and 32,670 restricted stock units to Mr. Watson and
ratified the following grants by the Committee under the Long
Term Incentive Plan of Chevron Corporation (LTIP): (i) Ms.
Yarrington, 62,200 stock options, 16,250 performance shares, and
8,120 restricted stock units; (ii) Mr. Johnson, 80,800 stock
options, 21,110 performance shares, and 10,560 restricted stock
units; (iii) Mr. Pate, 47,300 stock options, 12,370 performance
shares, and 6,180 restricted stock units; and (iv) Mr. Wirth,
80,800 stock options, 21,110 performance shares, and 10,560
restricted stock units. This resulted in an intended mix of 50%
performance shares, 25% stock options and 25% restricted stock
units granted to each recipient.

The stock options have a ten-year term, and one-third of the
options grant vests on each of January 31, 2018, January 31, 2019
and January 31, 2020, except as described further herein. The
exercise price for the stock options is $117.24 per share, the
closing price of Chevrons common stock on January 25, 2017, the
date of grant. The number of stock options granted was determined
based on grant date inputs including stock price and
Black-Scholes valuation.

The performance shares may result in a cash payout at the end of
the three-year performance period (January 1, 2017 through
December 31, 2019) depending upon Chevrons Total Stockholder
Return (“TSR”) for the performance period as compared to the TSR
of the following Chevrons LTIP Performance Share Peer Group: BP
p.l.c., Exxon Mobil Corporation, Royal Dutch Shell p.l.c., Total
S.A., and the SP 500 Total Return Index. The cash payout, if any,
will occur in an amount equal to the number of performance shares
granted 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 Chevrons TSR ranking for the three-year performance
period compared to the TSR of each competitor in the LTIP
Performance Share Peer Group as follows (from best TSR to lowest
TSR): 200 percent, 160 percent, 120 percent, 80 percent, 40
percent or zero percent. If the difference between Chevrons TSR
and the TSR of any higher or lower competitor of the LTIP
Performance Share Peer Group is less than one percentage point
(rounded to one decimal point), the results will be considered a
tie, and the performance modifier will be the average of all of
the performance modifiers for Chevron and for such other
competitors of the LTIP Performance Share Peer Group that fall
less than one percentage point (rounded to one decimal point)
higher or lower than Chevron. The performance shares will accrue
dividend equivalents that will be reinvested as additional
performance shares and will vest on December 31, 2019 subject to
the payout modifier, except as described further herein. The
Committee may, in its discretion, adjust the cash payout of
performance shares downward if it determines that business or
economic considerations warrant such an adjustment.

The restricted stock units were awarded under the form of
standard restricted stock unit agreement approved by the
Committee. The award vests on January 31, 2022, will pay out in
cash based on the closing price of Chevron common stock on the
date of vesting (or, if not a trading day, on the last preceding
trading day), and will accrue dividend equivalents that will be
reinvested as additional restricted stock units, except as
described further herein.

Under the LTIP, if these individuals are separated from service
for any reason prior to January 31, 2018, the above-described
stock option, performance share and restricted stock unit awards
will be forfeited. Since Mr. Watson, Ms. Yarrington, Mr. Johnson
and Mr. Wirth each have reached 90 points (the sum of years of
age and years of service) under the LTIP, on January 31, 2018,
the unvested portion of the above-described stock option and
performance share awards will vest upon their separation from
service on or after that date for any reason other than for
misconduct (as defined under the LTIP rules). Further, the
unvested portion of the above-described restricted stock unit
awards will continue to vest upon their separation from service
on or after January 31, 2018 for any reason other than for
misconduct (as defined under the LTIP rules), but will not be
paid out prior to January 31, 2022. Since Mr. Pate will have less
than 75 points under the LTIP as of January 31, 2018, the
unvested portion of the above-described stock option, performance
share and restricted stock unit awards will be forfeited if Mr.
Pate is separated from service for any reason prior to August 1,
2019. to an agreement between Chevron and Mr. Pate, filed as
Exhibit 10.16 to Chevrons Annual Report on Form 10-K for the year
ended December 31, 2011, if Mr. Pate is separated from service
for any reason other than for misconduct (as defined under the
LTIP rules) on or after August 1, 2019, he will be treated as if
he had 75 points under the LTIP and the unvested portion of the
above-described stock option, performance share and restricted
stock unit awards will vest on a pro rata basis. For options and
performance shares, this is calculated as the number of granted
shares underlying the award multiplied by the number of whole
months from the

options grant date (or, for performance shares, the performance
period start date) to the separation from service date, up to 36
months, divided by 36 months). For restricted stock units, this
is calculated as the number of granted shares underlying the
award multiplied by the number of whole months from the
restricted stock units grant date to the separation from service
date, up to 60 months, divided by 60 months.

Effective January 25, 2017, the Committee approved new forms of
award agreements to be used for the award of stock options,
performance shares and restricted stock units under the LTIP on a
going-forward basis to executive officers and other eligible
employees of Chevron, including the awards to the named executive
officers described above. Copies of such forms of award
agreements are filed as exhibits hereto and are hereby
incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.