EXHIBIT 10.14
UNION CARBIDE CORPORATION
ENHANCED RETIREMENT
INCOME PLAN
(Effective as of January 1, 1998)
ENHANCED RETIREMENT INCOME PLAN
General
This is an enhanced retirement income plan for participants in the
Retirement Program Plan who receive a retirement benefit under the Retirement
Program Plan which is limited by Code Section 415 or Code Section 401(a)(17).
Specifically, the purpose of this Plan is to provide a retirement
benefit equal to the excess of:
(1) the retirement benefit which would be provided by the Retirement
Program Plan, determined without regard to Code Section 415 or Code Section
401(a)(17), if
(a) average monthly Compensation included Incentive
Compensation and base salary deferred pursuant to the
terms of the Compensation Deferral Program or any
successor or predecessor program, and
(b) all Incentive Compensation, whether deferred or not, were
averaged separately from Base Compensation (as defined in
the Retirement Program Plan); over
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(2) the retirement benefit actually provided by the Retirement
Program Plan, the Equalization Benefit Plan and the Supplemental Retirement
Income Plan.
This Plan is completely separate from the Retirement Program Plan,
the Supplemental Retirement Income Plan and the Equalization Benefit Plan, is
unfunded for purposes of Title I of the Employee Retirement Income Security Act
of 1974, as amended and is not qualified for special tax treatment under the
Code.
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ARTICLE I
Eligibility
Section 1. A Participant shall be eligible to participate in this
Plan if such Participant receives a retirement benefit from the Retirement Plan
which is limited by Code Section 401(a)(17) or Code Section 415, or is a
participant in the Compensation Deferral Program.
ARTICLE II
Administration
Section 1. (a) The Compensation Committee shall have the authority
to administer this Plan. The Compensation Committee may adopt such rules as it
may deem necessary for the proper administration of this Plan and its decision
in all matters involving the interpretation and application of the Plan shall be
final, conclusive, and binding on all parties.
(b) The Compensation Committee may, in its sole discretion,
designate any person(s) or committee to administer this Plan. To the extent
provided by the Compensation Committee, such person(s) or committee designated
to administer this Plan shall have the same powers and responsibilities as the
Compensation Committee.
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ARTICLE III
Amount of Enhanced Retirement Income
Section 1. (a) A Participant's monthly Enhanced Retirement
Income shall be computed by:
(i) determining the benefit which would be payable using the
applicable formula provided in Article V of the Retirement Program Plan,
determined without regard to Code Section 415 or Code Section 401(a)(17);
provided, however, that average monthly Compensation shall be:
(A) the larger of:
(I) 1/36 of a Participant's Base Salary related to the three
full calendar years in which such Base Salary was largest during the ten full
calendar years next preceding the date of death or retirement, or
(II) 1/36 of a Participant's Base Salary for the thirty-six
(36) full calendar months next preceding the date of death or retirement; plus
(B) 1/36 of the Participant's Incentive Compensation related to the
three full calendar years in which such Incentive Compensation was the largest
during the ten full calendar years next preceding the date of death or
retirement; provided, that the calendar years in which the Participant was hired
or terminated employment shall each be considered a full calendar year for the
purposes of this clause (B); and
(ii) reducing such benefit by the total monthly amount of such
Participant's retirement benefit actually payable under the Retirement Program
Plan, the Equalization Benefit Plan and the Supplemental Retirement Income Plan.
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(b) For purposes of this Section 1, "Incentive Compensation" will be
related to the calendar year in which a Participant performed the services for
which the Incentive Compensation was paid.
(c) For purposes of this Section 1, the amount of "Base Salary"
received in any calendar month shall be calculated in the same manner in which
average monthly Base Compensation used to compute pension benefits under the
Retirement Program Plan is calculated (determined without regard to Incentive
Compensation, as defined therein); provided, however, that Base Salary shall
also include any base salary deferred by a Participant pursuant to the terms of
the Compensation Deferral Program, in the calendar year in which it would
otherwise have been paid and any cash profit sharing for the calendar year
earned, to a maximum of twenty (20) days per year.
(d) Any benefits either payable under, or which have been satisfied
through the purchase of, non-qualified annuities in connection with the
Corporation's non-qualified plans shall be deducted from the amounts payable
pursuant to subparagraph (a) above.
(e) Notwithstanding the foregoing, the amount of a Participant's
Enhanced Retirement Income shall include any additional non-qualified retirement
benefits resulting from agreements entered into by the Corporation and the
Participant.
Section 2. If the Enhanced Retirement Income payable to a
Participant under this Plan commences before the grant to such Participant of
Incentive Compensation (whether or not deferred) which may be used to determine
average monthly Compensation under Section 1 of this Article III, the monthly
amount of Enhanced Retirement Income payable hereunder shall be recalculated
after such Incentive Compensation is granted (whether or not deferred). The
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monthly amount of Enhanced Retirement Income resulting from said recalculation
shall be paid commencing in or before the third calendar month after the month
in which such Incentive Compensation is awarded, provided that the first monthly
payment of such recalculated Enhanced Retirement Income shall be increased to
reflect any prior underpayment of Enhanced Retirement Income resulting from the
failure to include such Incentive Compensation in the initial calculation of
Enhanced Retirement Income.
ARTICLE IV
Vesting
Section 1. A Participant will be vested in such Participant's right
to receive Enhanced Retirement Income under the Plan in the same manner and to
the same extent as provided under the Retirement Program Plan.
ARTICLE V
Payments
Section 1. Enhanced Retirement Income shall be paid monthly to a
Participant or such Participant's survivor commencing with the month such
Participant or such Participant's survivor commence benefits under the
Retirement Program Plan, and shall cease or be suspended at the same time the
Participant or such Participant's survivor cease or have suspended benefits
under the Retirement Program Plan. Enhanced Retirement Income shall in no event
be payable after the death of a Participant who has declined the coverage of a
survivor's benefit.
Section 2. Unless otherwise elected, Enhanced Retirement Income
payable under this Plan shall include the coverage of a survivor's benefit. A
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survivor's benefit payable from this Plan shall be paid to that person
designated to receive a survivor's benefit under the Retirement Program Plan.
Section 3. Enhanced Retirement Income shall be received in the same
form, and with the same actuarial adjustments, as the Participant is receiving
distributions from the Retirement Program Plan.
Section 4. Notwithstanding the provisions of Sections 1 and 3 of
this Article V, Participants may elect, in the calendar year in which the last
amounts included in average monthly Compensation are determined, that their
payments under the Plan shall be made either (i) in a lump sum as of January 1
of the calendar year following such election, or (ii) in substantially equal
installments over a period of at least 2 but not more than 10 years commencing
as of that date. The lump sum payment or installment payments described in the
preceding sentence shall be calculated using (A) a discount rate equal to the
average of 10 and 20 year Aaa municipal bonds as published by Moody's or a
similar rating service for the third month prior to the month payments commence,
and (B) a mortality table determined by the Compensation Committee or its
designee. The Compensation Committee or its designee shall determine the
procedures for such elections and the time and method of payment for payments in
accordance with this Section 4. For Participants who make the election described
in this Section 4, the provisions of Sections 1 and 3 of this Article V shall
not apply.
Section 5. If the Compensation Committee determines, after a
hearing, that a Participant who is eligible to receive or is receiving Enhanced
Retirement Income has engaged in any activities which, in the opinion of the
Board, are detrimental to the interest of, or are in competition with the
Corporation, such Enhanced Retirement Income shall thereupon be terminated and
forfeited.
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Section 6. The Corporation may withhold the Participant's portion of
the FICA taxes due on the Participant's Enhanced Retirement Income benefit from
the payment of such benefit.
ARTICLE VI
Miscellaneous
Section 1. Unless otherwise defined in this Plan, all defined terms
shall have the same meaning as set forth in the Retirement Plan.
(a) "Code" means the Internal Revenue Code of 1986, as amended.
(b) "Compensation Committee" means the Compensation and
Management Development Committee of the Board of Directors of the Corporation.
(c) "Compensation Deferral Program" as used in this Plan means
the Union Carbide Compensation Deferral Program.
(d) "Corporation" means Union Carbide Corporation and any subsidiary
of the Corporation which is participating in the Retirement Program Plan.
(e) "Enhanced Retirement Income" means the benefit payable to a
Participant pursuant to Article III of this Plan.
(f) "EPS Plan" means the 1997 Union Carbide Corporation EPS
Incentive Plan.
(g) "Equalization Benefit Plan" means the Union Carbide Corporation
Equalization Benefit Plan, as amended and restated January 1, 1998.
(i) "Incentive Compensation" means those incentive compensation
awards which are made: (i) under any cash award plan and (ii) under any other
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variable compensation plans (whether or not deferred) designated by the Board of
Directors; provided, however, that with respect to the EPS Plan, "Incentive
Compensation" shall include variable compensation that would have been paid but
for participation in the EPS Plan, and shall not include any payouts under the
EPS Plan.
(j) "Participant" means an employee who is eligible to participate
in this Plan pursuant to Article II.
(k) "Plan" means this Union Carbide Corporation Enhanced Retirement
Income Plan.
(l) "Retirement Program Plan" means the Retirement Program Plan for
Employees of Union Carbide Corporation and its Participating Subsidiary
Companies.
(m) "Supplemental Retirement Income Plan" means the Union Carbide
Corporation Supplemental Retirement Income Plan, as amended and restated January
1, 1998. Section 2. The Corporation may amend or terminate this Plan at any
time, but any such amendment or termination shall not adversely affect the
rights of any Participant then receiving benefits, or the vested rights of any
Participant whose rights have vested.
Section 3. Except to the extent required by law, no assignment of
the rights and interests of a Participant under this Plan will be permitted nor
shall such rights be subject to attachment or other legal processes for debts.
Notwithstanding the foregoing, the Corporation will honor the terms of a QDRO,
as defined in Code ss. 414(p).
Section 4. The Corporation may satisfy all or any part of its
obligation to provide benefits hereunder by purchasing, and distributing to a
Participant, an annuity from an insurance carrier to provide such benefits.
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Section 5. This Plan is intended to be unfunded for purposes of
Title I of the Employee Retirement Income Security Act of 1974, as amended and
the right of a Participant shall be no greater than the right of an unsecured
general creditor of the Corporation.
Section 6. Participation in this Plan shall not affect the
Corporation's right to discharge any Participant.
UNION CARBIDE CORPORATION
By:
/s/ M. A. Kessinger
Vice President, Human Resources
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