Employment Agreement with Charles A. James – Chevron

A.

The Company will employ you initially as Vice President and General Counsel,
and any subsequent position shall not constitute a material reduction in your
title, position or any of your authority, duties or responsibilities. In such
capacity, you shall have customary management and oversight responsibilities for
such a position and such other duties as may be assigned to you from time to
time by the Chairman of the Board/Chief Executive Officer of the Company
including membership on the Executive Committee, Human Resources Committee and
Management Committee. You shall report directly to the Chairman of the
Board/Chief Executive Officer of the Company, and your principal office during
the term of this Agreement shall be located in the Company153s principal executive
offices.

B.

You agree to faithfully serve the Company, devote your full working time,
attention and energies to the business of the Company, its subsidiaries and
affiliated entities, and perform the duties under this Agreement to the best of
your abilities. You may also perform other services without direct compensation
in connection with charitable or civic organizations pursuant to Company Policy.

C.

You agree (i) to comply in all material respects with all applicable laws,
rules and regulations, and all requirements of all applicable regulatory,
self-regulatory, and administrative bodies; (ii) to comply in all material
respects with the Company153s written and generally publicized rules, procedures,
policies, requirements, and directions and (iii) not to engage in any other
business or employment without the prior written consent of the Company except
as otherwise specifically provided herein.

3.

A.

On the start date, the Company will pay you a base salary at the initial rate
of $475,000 per year (“Base Salary”), which will be payable in accordance with
the Company153s standard practices. Thereafter, modifications, if any, to your
Base Salary will be determined at such times and in such manner as is consistent
with the Company153s practices; provided, however, that under no circumstances
shall your Base Salary be reduced below the Base Salary paid to you in the
immediately preceding twelve (12) month period.

B.

Your target bonus percentage under the Management Incentive Plan will be
based on a position grade 44. The current target percentage for this level is
60.5% of Base Salary, and the Company is not aware of any pending circumstances
as of the date of this Agreement that would cause any changes to such target
percentage. You will participate in this plan and be paid bonus in accordance
with the Company153s standard practices for a position grade 44 employee. The
target and actual award is set annually by the Management Compensation
Committee, in its sole discretion, based upon job performance and other business
factors.

C.

The Company believes that ownership of its Common Stock by employees having
substantial responsibilities as to the conduct and development of the Company153s
business is important for the welfare of the stockholders. Your target award for
future awards under the Long Term Incentive Plan (LTIP) will be based on a
position grade 44 employee. The current award for this level is 24,500 stock
options and 5,200 performance units, and the Company is not aware of any pending
circumstances as of the date of this Agreement that would cause any changes to
such number of stock options or performance units. This award target level is
set annually by the Management Compensation Committee, in its sole discretion,
and grants are traditionally made in June of each year.

D.

Except as otherwise provided herein, during your employment with the Company,
you shall be eligible to participate in each of the Company153s existing executive
and employee benefit plans, policies or arrangements pursuant to their terms,
and any such plan, policies or arrangements that the Company may maintain or

establish during your period of employment (in addition to or in substitution
for any existing plan) for which your current position grade (initially salary
grade 44) make you eligible. In addition, you will:

i.

Be eligible for five (5) weeks of vacation per year

ii.

Immediately be eligible for a short term disability entitlement of 26 weeks
of full pay and 26 weeks of half pay

E.

i.

You will receive a one time cash payment of One Hundred Thousand Dollars
($100,000), excluding all applicable taxes and withholding, payable on the Start
Date.

ii.

On start date you will receive a restricted stock grant, under the terms of
the LTIP of four thousand five hundred (4,500) ChevronTexaco shares which will
vest per the following schedule:

a.

One third (1,500 shares) will vest one year from the Start Date

b.

One third (1,500 shares) will vest two years from the Start Date

c.

One third (1,500 shares) will vest three years from the Start Date

4.

A.

The Company may terminate your employment hereunder for “Cause” (as it
determines in good faith) at any time by providing written notice to you.

i.

For purposes of the Agreement, the term “Cause” shall mean any of the
following:

a.

the transfer by you on an unauthorized basis outside the scope of your duties
of confidential business information of any type concerning the Company to a
competitor of the Company or to any other unauthorized source.

b.

commission of an act or conduct by you in the course of your employment with
the Company which may cause material harm to the Company or its reputation
including, but not limited to, the following: an act which constitutes
dishonesty, conduct adverse to the best interests of the Company or its
subsidiaries and affiliates, or conduct in violation of company policy.

c.

committing a crime against the Company under federal law or the law of any
state, as determined by a court of competent jurisdiction.

d.

conviction of a crime (including entering on a nolo contendere plea)
involving a felony, as determined by a court of competent jurisdiction.

e.

refusal or failing to perform employment duties reasonably requested by the
Company153s Chairman of the Board/Chief Executive Officer after fifteen (15) days
written notice of such failure to perform (which notice shall include reasonable
specificity of such failure), specifying that the failure constitutes Cause
(other than as a result of sickness, illness or injury confirmed by a medical
doctor);

f.

engaging in theft, fraud or embezzlement determined in accordance with the
Company153s normal, internal audit procedures;

g.

gross misconduct or gross negligence in connection with the business of the
Company or any affiliate which has substantial adverse effect on The Company or
an affiliate following fifteen (15) days written notice of such misconduct or
negligence which notice shall include reasonable specificity of such misconduct
or negligence and the substantial adverse effect on the Company or an affiliate.

h.

Material breach of any of the covenants set forth in Section 6 below as
determined by a court of competent jurisdiction; or

i.

falsification by you of any material employment, scholastic, or personal
information furnished to the Company as part of your employment application
process.

ii.

You will be considered to have been terminated for Cause if the Company
determines that you engaged in an act or conduct constituting Cause. Any

such determination shall be made by the Chief Executive Officer or Board of
Directors of the Company.

B.

The Company may terminate your employment for any reason hereunder without
Cause at any time after providing thirty (30) days written notice to you.

C.

You may terminate employment hereunder at any time after providing thirty
(30) days written notice by the Company.

D.

This Agreement shall immediately terminate upon your death or in the event
that you become Disabled. For purposes of this Agreement, the term “Disabled”
shall be defined as such term is defined in the Company153s long-term disability
plan.

E.

You may terminate your employment hereunder for any Reduction in Position
upon written notice to the Company within thirty (30) days of notice of such
reduction. For purposes of this Agreement, Reduction in Position shall mean,
(i) A reduction in Base Salary, (ii) a reduction in salary grade, (iii) a
reduction in Executive Compensation Benefits unless such reduction(s) referred
to in (i), (ii) or (iii) is made as a result of (a) peer group practices or
other changes applicable to employees in the Company similarly situated to you,
(b) the provisions of applicable Executive Compensation Benefit Plans or
(c) required by law or regulation.

5.

A.

Upon termination of employment for any reason, you (or your beneficiary or
estate, as the case may be) will be entitled to receive (i) any accrued but
unpaid Base Salary for services rendered to the date of termination as
determined pursuant to Section 3A and (ii) any vacation accrued but unused to
the date of termination. The benefits to which you may be entitled upon
termination pursuant to the plans, policies, and arrangements referred to in
Section 3D hereof shall be determined and paid in accordance with the terms of
such plans, policies, and arrangements.

B.

Except as otherwise provided in the Agreement, or under the terms of any
incentive compensation, executive or employee benefit plan, policy or
arrangement applicable to you at the time of your termination or resignation of
employment, you shall have no right to receive any compensation, or to
participate in any other plan, arrangement or policy, with respect to future
periods after such termination or resignation.

C.

In the event your employment is terminated by the Company without Cause or by
your Voluntary Termination due to Reduction in Position within five (5) years of
your Start Date, you shall:

i.

On the date of termination, be entitled to a cash separation payment equal to
two (2) year153s Base Salary plus two (2) year153s target Management Incentive Plan
Bonus at the level of your then current annual target Management Incentive Plan
Bonus provided you provide the Company with a signed Mutual Release and Waiver
(in a form reasonably acceptable to the Company) of any and all claims and
causes of action against the Company, its benefit plans, Directors, affiliates
and employees; the Company shall also release you, your heirs and personal
representatives from any and all claims and causes of action by the Company, its
benefit plan, Directors, affiliates and employees. In the event payment under
the Company Change-of-Control Plan or a Severance Plan or other agreement (not
including any stock option plan, restricted stock or other similar equity plan
or arrangement) exceeds amounts due under this paragraph, then the payment under
this paragraph shall be zero and all severance benefits will come from the
Severance Plan or other agreement or Change-of-Control Plan.

ii.

Be deemed vested in the Company retirement plan.

iii.

Be eligible for the Company Retiree Relocation Assistance Program back to the
Washington D.C. area

D.

In the event your employment is terminated by the Company without Cause or by
your Voluntary Termination due to Reduction in Position on or after (5) years of
your Start Date but prior to ten (10) years of your Start Date, you shall:

i.

On the date of termination, be entitled to a cash separation payment equal to
one (1) year153s Base Salary plus one (1) year153s target Management Incentive Plan
Bonus at the level of your then current annual target Management Incentive Plan
Bonus provided you provide the Company with a signed Mutual Release and Waiver
(in a form reasonably acceptable to the Company) of any and all claims and
causes of action against the Company, its benefit plans, Directors, affiliates
and employees; the Company shall also release you, your heirs and personal
representatives from any and all claims and causes of action by the Company, its
benefit plan, Directors, affiliates and employees. In the event payment under
the Company Change-of-Control Plan or a Severance Plan or other agreement (not
including any stock option plan, restricted stock or other similar equity plan
or arrangement) exceeds amounts due under this paragraph, then the payment under
this paragraph shall be zero

and all severance benefits will come from the Severance Plan or other
agreement or Change-of-Control Plan.

ii.

Be subject to the termination provisions of the Long Term Incentive Plan as
if you were age 50 with a minimum of 10 years service or equivalent termination
provisions if current plan provisions are modified.

iii.

Be deemed eligible for retiree health care (and credited with a minimum of 60
points).

E.

In the event your employment with the Company is terminated due to your death
or if you become Disabled on or after (5) years of your Start Date but prior to
ten (10) years of your Start Date, you shall be subject to the termination
provisions of the Long Term Incentive Plan as if you were age 50 with a minimum
of 10 years service or equivalent termination provisions if current plan
provisions are modified.

The Company covenants that you shall be treated the same as all the other
Company executives at the same position grade level for purposes of the
Change-in-Control Plan.

6.

A.

You recognize and acknowledge that you will have access to various
confidential or proprietary information concerning The Company and entities
affiliated with The Company of a special and unique value which may include,
without limitation, (i) books and records related to operations, finance,
accounting, sales, personnel and management, (ii) policies and matters relating
particularly to operations such as exploration and production, customer service
requirements, costs of providing service and equipment and operating costs ,
(iii) various trade or business secrets, including business opportunities,
marketing or business diversification plans, business development and bidding
techniques, methods and processes, financial data and the like (collectively,
the “Protected Information”) and (iv) legal information, including litigation
strategy, defenses, and matters covered by the attorney client privilege and
attorney work product privilege. You therefore covenant and agree that you will
not at any time, either while employed by The Company or afterwards, knowingly
make any independent use of, or knowingly disclose to any other person or
organization (except as authorized by The Company) any of the Protected
Information. In addition, you agree that for the four year period following
separation you will not provide representation, services or consulting on any
matter in which The Company is involved, without The Company153s written
permission.

The term “Protected Information” does not include information which
(i) becomes generally available to the public other than as a result of
disclosure by you, (ii) was available to you on a non-confidential basis prior
to its disclosure by The Company or its representatives or (iii) becomes
available to you on a non-confidential basis from a source other than The
Company or its representatives, provided that such source is neither bound by a
confidentiality agreement with the disclosing party nor otherwise prohibited
from transmitting the information to you by a contractual, legal or fiduciary
obligation.

In the event that you are requested or required by a government authority,
subpoena or court order to disclose any Protected Information, you will provide
The Company with prompt notice of such request(s) prior to providing the
requested information so that The Company may, upon notice to you, seek an
appropriate protective order or other appropriate remedy and/or waive your
compliance with the provisions of this Agreement. In the event that such remedy
is not obtained, or that The Company grants a waiver hereunder, you or your
representatives may furnish that portion of the Protected Information which, in
the written opinion of The Company153s counsel, you are legally compelled to
disclose; provided, however, that you may comply with any final non-appealable
orders issued by a court of competent jurisdiction not withstanding any written
opinion of the Company153s counsel.

B.

You covenant and agree that at all times during your period of employment
with The Company, you will not, directly or indirectly, engage in, assist, or
have any active interest or involvement [whether as an employee, agent,
consultant, creditor, advisor, officer, Director, stockholder (excluding holding
of less than 1% of the stock of a publicly traded company), partner, proprietor,
or any type of principal whatsoever] in any person, firm, or business entity
which, directly or indirectly, is engaged in the same business as that conducted
and carried on by The Company, without The Company153s specific written consent to
do so.

C.

You covenant and agree that for a period of one year following termination of
employment for any reason, you will not directly or indirectly (i) induce any
material suppliers and/or customers of The Company or corporations affiliated
with The Company to provide services to or patronize any similar business which
competes with any material business of The Company; (ii) canvass or solicit any
similar business which competes with any material business of The Company and
entities affiliated with The Company from any supplier and/or customer of The
Company or corporations affiliated with The Company; (iii) request or advise any
customers of The Company or corporations affiliated with The Company to
withdraw, curtail or cancel their business with The Company; (iv) disclose to
any other person, firm or corporation the names or addresses of any of the
suppliers and/or customers of The Company or corporations affiliated with The
Company; or

(v) solicit the employment of or hire or employ in any capacity or entice
away or in any other manner persuade any employee of The Company to terminate
his/her employment with The Company. Notwithstanding the foregoing, you shall
not be prohibited from hiring any former employee (defined as an employee who
was discharged or resigned at least one year prior to your hiring such
individual).

D.

You and The Company covenant and agree that during the course of your
employment by The Company or at any time thereafter, you and The Company shall
not, directly or indirectly, in public or private, deprecate, impugn, disparage,
or make any remarks written or verbal that would tend to or be construed to tend
to defame you or The Company or any of its officers or employees, members of its
Board of Directors or agents, nor shall you or The Company assist any other
person, firm or company in so doing provided, however, that you may comply with
any binding, non-appealable legal or administrative order and any final
non-appealable order issued by a court of competent jurisdiction.

E.

You shall promptly deliver to The Company, upon termination of your
employment, or at any other time as The Company may so request all Company
property, all customer lists, leads and refunds, data processing programs and
documentation, employee information, memoranda, notes, records, reports, files,
tapes, manuals, drawings, blueprints, programs, and any other documents and
other materials (and all copies thereof) relating to The Company153s business
(including but not limited to exploration or producing operations activities,
etc.) or that of its customers, and all property associated therewith, which you
may then possess or have under your control which shall exclude all personal
files (including rolodexes, contacts files and similar databases).

7.

8.

A.

Except as provided in Section 8(D) below, the Company and you agree that any
dispute or controversy arising out of your employment or termination of
employment or relating to or in connection with the interpretation, validity,
construction, performance, breach or termination of this Agreement shall be
settled by binding arbitration to be held in Contra Costa County, California, in
accordance

with the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association as then in effect (the “Rules”). The arbitrator
selected will be neutral, will issue a decision in writing and may grant
injunctions, award damages, attorney fees, costs or other relief in such dispute
or controversy in the same manner as a court of law. The decision of the
arbitrator shall be final, conclusive and binding on the parties to the
arbitration. Judgment may be entered on the arbitrator153s decision in any court
of competent jurisdiction. The parties agree that the provisions of Section 8
are to be substituted in place of Step Four (Arbitration) in the Company153s
Employee Problem Solution Process (STEPS).

B.

The arbitrator shall apply California law to the merits of any dispute or
claim, without reference to conflicts of law rules.

C.

The Company shall pay the full administrative and filing costs and expenses
of such arbitration. Should any party to this Agreement bring a proceeding in
arbitration or seek to obtain an injunction to enforce the terms of this
Agreement, the party that prevails in any such action shall be entitled to its
reasonable attorneys153 fees as determined by the arbitrator or by a court of
competent jurisdiction.

D.

The parties may apply to any court of competent jurisdiction for a temporary
restraining order, preliminary injunction, or other interim or conservatory
relief, as necessary, without breach of this arbitration agreement and without
abridgment of the powers of the arbitrator. You and the Company hereby consent
to the personal jurisdiction of the state and federal courts located in
California, and agree that such jurisdiction shall be exclusive, for any
collateral action or proceeding arising from or relating to this Agreement or
relating to any arbitration in which the parties are participants.

E.

YOU AND THE COMPANY HAVE READ AND UNDERSTAND SECTION 8, WHICH DISCUSSES
ARBITRATION. YOU AND THE COMPANY UNDERSTAND THAT BY SIGNING THIS AGREEMENT, YOU
AND THE COMPANY AGREE TO SUBMIT ANY CLAIMS ARISING OUT OF YOUR EMPLOYMENT OR
TERMINATION OF EMPLOYMENT, OR RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT,
OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR
TERMINATION THEREOF, TO BINDING ARBITRATION, EXCEPT AS PROVIDED IN SECTION 8(D),
AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF THE RIGHT TO A TRIAL BY
COURT OR JURY AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL
ASPECTS OF THE RELATIONSHIP BETWEEN THE PARTIES.

9.

Any notice provided for or permitted to be given under this Agreement by any
party or to any party must be in writing, and may be served by depositing same
in the United States mail, addressed as provided below, postage prepaid,
registered or certified return receipt requested or by delivering the same in
person to such party. Notice deposited in the mail in the manner described above
shall be deemed to have been given and received on the third business day after
deposit in the mail. For purposes of notice, the address of each of the parties
shall be as set forth below, or such other address as such parties shall provide
to the other party pursuant to written notice.

10.

This Agreement shall be governed by the law of the State of California.

11.

The invalidity or unenforceability of any provision of this Agreement, or any
terms thereof, shall not affect the validity of this Agreement as a whole, which
shall at all times remain in full force and effect.

12.

The Company agrees to indemnify you under the provisions of the then current
Certificate of Incorporation and add you as an insured under the applicable
company D&O Company policies.

13.

This Agreement is the entire agreement of the parties and supersedes any
prior agreements between them, whether written or oral, with respect to the
subject matter hereof. No waiver, alteration, or modification of any of the
provisions of this Agreement shall be binding unless in writing and signed by
duly authorized representatives of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

CHARLES A. JAMES

/s/ Charles A. James

THE COMPANY

By:

/s/ John E. Bethancourt

Title:

Vice President