impact on pay and benefits

When your employment ends, you will receive your final pay. Your final paycheck includes:

• Payout of earned, unused vacation hours, if any.
• Unused current year personal choice holiday(s), if any.
• Other time off banks - such as bonding and family care - are not eligible for payout.
• If you owe debt to the company (such as cash advances or payroll loans) the amount of your final pay may be reduced.
• If applicable, benefit deductions may be taken depending on the timing of your employment end date.

If you’re eligible for a severance payment, that’s not included in your final pay. Severance is paid separately through a different process.

If you have a remaining balance of earned and unused vacation as of your termination date, you’ll receive a payout in your final paycheck.

• Payout as of day of termination, minus vacation already taken.

• Vacation payout is considered supplemental pay and is subject to income tax withholding in the year received

• The payout is not benefits bearing. This means no benefit deductions are taken out – such as medical and dental – it’s not eligible for 401(k) company match or contributions, and the payment is not included in the calculation of your pension benefit in the Chevron Retirement Plan.

If you have a negative vacation balance when your employment ends, you are not required to pay this vacation back to Chevron.

If you terminate on April 1 or later, you will be eligible for a U.S. CIP payout for the current performance year award if you meet either one of these requirements:

• You become eligible for Chevron severance plan benefits
• You have 75 points or more at the time of a qualifying termination

If you leave Chevron during the first quarter of the performance year, you are not eligible for a CIP payout, regardless of the reason your employment ends.

There are a few additional points to keep in mind about CIP after you’ve left Chevron:

• If you’re eligible for an award, it will be prorated. Payment is based on eligible earnings for the portion of the year that you worked

• Payment for terminated employees is processed at the same time as active employees. So, CIP for the current performance year would be made in March of next year. 

• Your CIP is issued consistent with the payroll preferences you had on file in Workday as an active employee – whether that’s through direct deposit to your bank of record or by physical check to your permanent or mailing address on record with Chevron. If this is acceptable, no action is required. But if you need to change this preference for any post-employment payments, submit an Authorization for Direct Deposit of Pay for Former Employees (Form F-2R) in advance of the payment.

• CIP received after termination isn’t considered regular pay for purposes of your Chevron pension and 401(k) plans. This means it’s not eligible for 401(k) company match or contributions and the payment is not included in the calculation of your pension benefit in the Chevron Retirement Plan.

If you participate in Chevron's 401(k) plan, the Employee Savings Investment Plan (ESIP), you can no longer contribute to the plan when your employment ends.

There are a variety of distribution options to choose from. In general, your choices include:

• Leave all your money in the ESIP.
• Take a lump sum distribution of your entire balance. 
• Leave it in the ESIP and elect partial distributions or installment payments.

Normally, the only time you are required to start receiving a distribution is in accordance with IRS Required Minimum Distribution requirements.

Approximately two weeks after your termination date, you will automatically receive a separate package with information about your ESIP distribution and loan repayment options, if applicable. You don’t have to move your money out of the plan upon leaving Chevron, so you’re encouraged to review the information you’ll receive and discuss your options with a financial or tax advisor before making decisions. If you want this package sooner, contact Fidelity.

If you choose a lump sum distribution of your entire ESIP account, you can have it paid in several ways:

• You can roll over the entire balance to an IRA or another employer plan.
• Receive the entire balance as cash.
• Choose a combination - rollover a portion of your balance and receive the rest in cash. 

If you have outstanding 401(k) loans, you’ll receive a package with more information about your repayment options. Repayment options generally include:

• Continuing repayment directly to the plan. This option is only available if you leave your account in the ESIP.
• Pay off your outstanding loan balance.

Should the loan default, be aware that penalties and tax consequences will apply because it will be treated as a distribution from the plan.

It’s important to have a general awareness of how your distribution will be taxed, including how Federal and state taxes may apply. See the resources listed below for an overview of basic concepts, but you should also consult a financial or tax advisor for further details and considerations that may apply to your situation.  

In addition, when it’s time to move your company stock balance out of your plan, there are tax consequences. This liability can vary, depending on what distribution option you choose. Review Fidelity's brochure, Taking a Company Stock Distribution to learn more.

Leaving Chevron with severance doesn't affect how your other employee health and protection benefit plans and programs will transition when your employment has ended. To learn more, you should review these resources:

• VIDEO: What Happens to my Pay and Benefits Provides a foundational understanding and is a good place to begin.

• READ: Health and Protection Benefits When You Leave Chevron - A plan-by-plan summary of what happens to your coverage and what you may need to do.

• READ: COBRA Continuation Coverage - More details about standard COBRA, including special considerations for situations like leaving with severance and Medicare eligibility. 

Take Action

• How to estimate the cost of COBRA coverage (subsidized and unsubsidized).
• How to start your post-employment benefits.
• Leaving with Severance: To-do Checklist and Milestones

If you’re eligible for retiree health and protection benefits, leaving Chevron (with or without severance) is an important enrollment milestone opportunity. 

• Be sure to review all the materials and resources we've provided in advance of your employment end date to understand your choices and know what to do.
• If you or a dependent is age 65 or older and/or eligible for Medicare, don’t delay! Advance action is required to enroll in Medicare to activate Chevron retiree health benefits.

If you are eligible for retiree health benefits when you leave Chevron, you must enroll for coverage during certain retiree health enrollment milestones. If you miss these select milestone opportunities to enroll, you and your eligible dependents must wait until the next applicable enrollment milestone, if any, to return to Chevron retiree health benefits. These enrollment milestones are:

• When you leave chevron (with or without severance) 
• At the loss of Chevron COBRA coverage, including Chevron subsidized COBRA
• When you turn age 65 and become Medicare eligible
• When you lose Chevron or other employer group health coverage (Note: group coverage does not include another employer's COBRA or retiree medical coverage) 

Leaving Chevron is an important enrollment milestone for retiree health benefits. If you are eligible for retiree health benefits at the time of your termination of employment with Chevron, you will have these options for you and your enrolled, eligible dependents: 

• Enroll in COBRA coverage (including subsidized COBRA) and waive Chevron retiree health benefits until you reach another enrollment milestone (if any).
• Enroll in COBRA coverage for some plans, and Chevron retiree health benefits for others (referred to as split coverage).
• Enroll in Chevron retiree health benefits and waive COBRA coverage.
• Waive both COBRA and Chevron retiree health benefits.

Leaving Chevron with severance does not affect retiree health and protection benefits - medical, dental, vision, supplemental life insurance - in any way. 

• You do not become automatically eligible for retiree health and protection benefits if you aren't already eligible on the day your employment terminates.

• You do not get additional years of service credit because you leave with severance, even if you came to Chevron through an acquisition.

• You do not get an increase to the company contribution for which you’re eligible.

The retiree health and protection eligibility requirements are the same for all participants, including those who participate in and are accepted for an Accelerated Expression of Interest (AEOI), an Expression of Interest (EOI) and for those who are left standing from a selection event without an EOI. To be eligible for retiree health and protection benefits you must generally meet all of the following requirements on the day your employment terminates:

• You are at least 50 years old
• You have at least 10 years or more of health and welfare eligibility service 
• You must have at least 5 years of health and welfare eligibility service since your most recent hire date. 

Can I enroll in COBRA while going through the Medicare enrollment process? Medicare is required to enroll in Chevron post-65 retiree health coverage. If you and/or your dependents are Medicare eligible, but you are unable to complete the Medicare enrollment process prior to your employment end date, you can enroll in COBRA coverage until the process is complete and you're eligible to enroll in Chevron post-65 coverage.

• Review the full rules and details listed under the At the loss of Chevron COBRA coverage retiree enrollment milestone to determine if this option is right for you and the rules and responsibilities you'll need to follow.

• Remember, for Medicare-eligible COBRA participants, Medicare will be the primary payer of your medical claims, and your Chevron medical COBRA coverage will automatically pay secondary, regardless of whether or not you are enrolled in Medicare. Learn more about this on the full COBRA coverage page. 

Should I enroll in COBRA first, then retiree health benefits later? Unfortunately, there are no one-size-fits-all answers. There are an assortment of rules - from Medicare rules to retiree health plan rules - that will affect each person differently. For one person, enrolling in COBRA might be the best answer but for another it may not. The answer depends heavily on a variety of personal factors including:

• Your age
• The age of your eligible dependents
• Are you already covering dependents, or do you need to add them to your coverage
• Are post-65 participants already enrolled in Medicare
• If you don’t enroll at the Leaving Chevron enrollment milestone, are there other retiree health enrollment milestones you can use to enroll yourself and desired dependents?

The best answer we can give is to do your research. Understanding the rules and features of each choice will help you weigh your options against your personal situation. See our list of resources below to get started.

If you are a Regular Long-Term Incentive Plan (LTIP) participant and you terminate prior to February 10 of the year following the grant date:

• 100% of the stock options or stock appreciation rights (SARs), performance shares and standard restricted stock units will be forfeited.
• All high-level restricted stock units, regardless of when they were awarded or the reason for termination, will be forfeited upon termination.

Your age and service at termination will impact which portions of your remaining LTIP awards will vest, as well as how long you have to exercise vested stock options and/or stock appreciation rights.

• Terminations due to layoff and/or with severance do not result in enhanced vesting or longer exercise periods.
• Review the LTIP Termination Rules document or view the LTIP at Termination video for more information. (intranet only)

Stock options or SAR expiration dates will be reflected in your Morgan Stanley account, typically within one week following your separation from service.

• Keep these expiration dates in mind, as you will be responsible for exercising your grants before they expire.
• If your grant is set to expire on a date when the stock market is closed, such as U.S. holidays or on a weekend, you will need to exercise before the plan-defined expiration date.

Performance shares (PSUs) and restricted stock units (RSUs) will vest and payout on the original schedule.

If you are an Expanded LTIP participant, your award will be forfeited upon termination, regardless of when your award was granted, your age and/or service at termination, or the reason for termination (including separation due to layoff and/or with severance).

Payments from the following executive compensation plans are based on your payment timing distribution elections:

• Deferred Compensation Plan (DCP) (intranet)
• ESIP-Restoration Plan (ESIP-RP) (intranet)
• Retirement Restoration Plan (RRP) (intranet)

Your distribution elections (payment timing) can be viewed on your Fidelity NetBenefits account or by contacting Fidelity.

Your distribution payment will be withdrawn from your Fidelity NetBenefits account at the beginning of the month and will be paid to you on or around the 22nd of the month. If you wish to change your distribution election:

• You must do so at least 12 months prior to the first scheduled payment date.
• Your new election must further defer payment for at least 5 years from the previously scheduled payment date.
• You are not permitted to change the number of installments without also further deferring payment for at least 5 years from the previously scheduled payment.
• To change your election, contact Executive Compensation.
• To update or set up direct deposit, contact Payroll for assistance.