Exhibit 10.28
UNION CARBIDE COMPENSATION DEFERRAL PROGRAM
(As Amended and Restated October 1, 1995)
UNION CARBIDE COMPENSATION DEFERRAL PROGRAM
ARTICLE I
PURPOSE
1.1 The purpose of this Program is to (i) allow Eligible
Employees under the Variable Compensation Plans to defer a
portion or all of their Variable Compensation, (ii) allow
Eligible Employees to defer a portion of their base salary, (iii)
allow Eligible Employees to defer a portion or all of their lump
sum payments otherwise payable from the SRIP and/or Equalization
Plan, and (iv) restore to Eligible Employees a portion of their
matching contribution under the Savings Program which is limited
by restrictions imposed under Section 401(a)(17) of the Code.
1.2 This Program shall be effective for amounts payable on
or after January 1, 1995.
ARTICLE II
DEFINITIONS
2.1 "Administrative Committee" means the Administrative
Committee of the Retirement Program Plan for Employees of Union
Carbide Corporation and its Participating Subsidiary Companies
and certain Non-Qualified Employee Benefit Plans of Union Carbide
Corporation.
2.2 "Aggregate Compensation" means the sum of a
Participant's Compensation and Deferred Compensation.
2.3 "Annual Plan" means the 1994 Union Carbide Variable
Compensation Plan or such successor plan thereto maintained by
the Corporation.
2.4 "Applicable Equity Investment Fund Rate" means the
difference between the value of each of the applicable investment
funds elected by a Participant under Section 8.2 of this Program:
Fidelity Asset Manager, Fidelity Equity Income Fund, Fidelity
Growth Company Fund, Fidelity Contrafund and Fidelity Overseas
Fund, determined on a fund by fund basis, as of (i) the later of
the Date of Deferral or the effective date of a Participant's
election under Section 8.2(c), and (ii) the relevant valuation
date for determining the amount of earnings of such investment
fund in accordance with Section VIII. Such value shall include
any hypothetical dividends and hypothetical capital gains
distributions paid on such investment fund during the period for
which the Applicable Equity Investment Fund Rate is being
determined, as if such hypothetical dividends or hypothetical
capital gains distributions are reinvested when payable in
additional shares of such fund. The value of a respective
investment fund for purposes of this Section 2.4, shall mean the
net asset value of such investment fund as reported by such fund.
2.5 "Beneficiary" means the person, persons or estate
entitled (as determined under Article VII) to receive payment
under this Program following a Participant's death.
2.6 "Change in Control" means the occurrence of any of
the following:
(1) A change in control of the Corporation would be
required to be reported in response to item 1(a) of the current
Report of Form 8-K, as in effect on the date hereof, pursuant to
Sections 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not the Corporation is
then subject to such reporting requirement;
(2) there shall be consummated (A) any consolidation or
merger of the Corporation in which the Corporation is not the
continuing or surviving corporation or pursuant to which shares
of the Corporation's common stock would be converted into cash,
securities or other property, other than a merger of the
Corporation in which the holders of the Corporation's common
stock immediately prior to the merger have the same proportion
and ownership of common stock of the surviving corporation
immediately after the merger, or (B) any sale, lease, exchange or
other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the
Corporation, provided, that the divestiture of less than
substantially all of the assets of the Corporation in one
transaction or a series of related transactions, whether effected
by sale, lease, exchange, spin-off, sale of the stock or merger
of a subsidiary or otherwise, shall not constitute a Change in
Control;
(3) any "person" or "group" within the meaning of
Sections 13(d) and 14(d) (2) of the Exchange Act (A) becomes the
"beneficial owner" as defined in Rule 13d-3 under the Exchange
Act of more than 20% of the then outstanding voting securities of
the Corporation, otherwise than through a transaction or
transactions arranged by, or consummated with the prior approval
of, the board of directors of the Corporation, or (B) acquires by
proxy or otherwise the right to vote for the election of
directors, for any merger or consolidation of the Corporation or
for any other matter or question more than 20% of the then
outstanding voting securities of the Corporation, otherwise than
through an arrangement or arrangements consummated with the prior
approval of the board of directors of the Corporation;
(4) during any period of twenty-four consecutive months,
Present Directors and/or New Directors cease for any reason to
constitute a majority of the Board of Directors of the
Corporation. For purposes of this Agreement, "Present Directors"
shall mean individuals who at the beginning of such consecutive
twenty-four month period were members of the Board and "New
Directors" shall mean any director whose election by the Board of
Directors of the Corporation or whose nomination for election by
the Corporation's stockholders was approved by a vote of at least
two-thirds of the Directors then still in office who were Present
Directors or New Directors.
Notwithstanding the foregoing, a Change of Control shall not
be deemed to occur pursuant to subparagraph (2), above, solely
because twenty percent (20%) or more of the combined voting power
of the Corporation's then outstanding securities is acquired by
one or more employee benefit plans maintained by the Corporation.
2.7 "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
2.8 "Compensation Committee" means the Compensation and
Management Development Committee of the Board of Directors of the
Corporation.
2.9 "Compensation" means, solely for purposes of this
Program, a Participant's taxable base salary, taxable Variable
Compensation awarded under a Variable Compensation Plan and any
compensation that is deferred by the Participant to any other
plan maintained by the Corporation which satisfies the
requirements of Code Sections 125 or 401(k).
2.10 "Corporation" means Union Carbide Corporation, a
New York Corporation, any predecessor thereof and any successor
thereof by merger, consolidation or otherwise.
2.11 "Date of Deferral" means (i) with respect to
Variable Compensation, the date on which the Corporation issues
checks for Variable Compensation awards for a given Service Year,
(ii) with respect to base salary deferral, the date on which the
relevant salary would be paid, (iii) with respect to matching
contributions made by the Corporation pursuant to Section 5.4 of
this Program, December 31st and (iv) with respect to amounts
which would otherwise have been paid from the SRIP or
Equalization Plan, the date on which lump sum amounts would have
otherwise been distributed in accordance with the terms of such
Plan.
2.12 "Deferred Compensation" means the amount of
Compensation deferred by a Participant under this Program
pursuant to Section 5.3 of this Program.
2.13 "Disability" means a Participant's total physical
or mental inability to perform any work for compensation or
profit in any occupation for which the Participant is reasonably
qualified by reason of training, education or ability, and which
inability is adjudged to be permanent, as determined by the
Administrative Committee or its designee.
2.14 "Eligible Employee" means (i) an individual who, at
the Date of Deferral, is employed in the United States by the
Corporation, or one of its subsidiaries that is participating in
this Program, and is a participant in the Annual Plan or the Mid-
Management Plan or is otherwise approved for participation in
this Program by the Compensation Committee.
2.15 "Equalization Plan" means the Equalization Benefit
Plan for Participants in the Retirement Program Plan for
Employees of Union Carbide Corporation and its Participating
Subsidiary Companies.
2.16 "Exchange Act" means the Securities Exchange Act of
1934 as amended.
2.17 "Fixed Income Rate" means the rate of interest for
the Fixed Income Fund under the Savings Program, in effect from
time to time.
2.18 "Mid-Management Plan" means the 1994 Union Carbide
Mid-Management Variable Compensation Plan.
2.19 "Participant" means an Eligible Employee who (i)
elects in advance to defer a portion of his or her base salary in
accordance with Section 5.3 of this Program, (ii) elects in
advance to defer a portion or all of his or her variable
compensation for a given Service Year under one of the Variable
Compensation Plans in accordance with Article V.2 of this
Program, if one were to be paid to such Participant for that
year, and who is in fact subsequently awarded Variable
Compensation for that year, payable during the following calendar
year on the Date of Deferral, (iii) elects in advance under this
Program to defer his or her lump sum distribution from the SRIP
or Equalization Plan or (iv) is a participant in the Savings
Program for a given calendar year and receives compensation (as
defined in Section 1.12 of the Savings Program) for such calendar
year in an amount which is in excess of the compensation which
may be considered under Section 1.12 of the Savings Program
because of the limitations imposed by Code Section 401(a)(17).
2.20 "Program" means this Union Carbide Compensation
Deferral Program.
2.21 "Retirement" means (a) for participants in the
Retirement Program, the date on which a Participant attains age
65 or is eligible for a non-actuarially reduced pension benefit
under the Retirement Program and actually retires from employment
with the Corporation and (b) for those employees who are not
participants in the Retirement Program, the date on which a
Participant attains age 65, attains age 62 with at least 10 years
of service or whose age and service totals at least 85 and
actually retires from employment with the Corporation.
2.22 "Retirement Program" means The Retirement Program
Plan for Employees of Union Carbide Corporation and its
Participating Subsidiary Companies.
2.23 "Savings Program" means The Savings Program for
Employees of Union Carbide Corporation and Participating
Subsidiary Companies.
2.24 "Service Year" means one of the calendar years on
and after 1994, as to which an election may be made in accordance
with Article V, and in respect of which Variable Compensation may
be paid during the following calendar year on the Date of
Deferral.
2.25 "SRIP" means the Union Carbide Corporation
Supplemental Retirement Income Plan.
2.26 "UCC Discounted Stock Value Rate" means the UCC
Stock Value Rate except that the value of the Corporation's
common stock as of the Date of Deferral pursuant to which
earnings shall accrue at the UCC Stock Value Rate, shall be
determined as if purchased as a ten percent (10%) discount.
2.27 "UCC Stock Value Rate" means the difference between
the value of the Corporation's common stock as of the later of
(i) the Date of Deferral or the effective date of a Participant's
election under Section 8.2 pursuant to which earnings shall
accrue at the UCC Stock Value Rate and (ii) the relevant date of
determination of the amount of earnings in accordance with
Section 8.2(c) of this Program. Such value shall include the
value of any hypothetical dividends paid on the common stock
during the period for which the UCC Stock Value Rate is being
determined, as if such hypothetical dividends were reinvested
when payable (at a five percent (5%) discount) in additional
shares of the Corporation's common stock as determined on the
later of the Date of Deferral or the effective date of a
Participant's election under Section 8.2(c) pursuant to which
earnings shall accrue at the UCC Stock Value Rate. The value of
the Corporation's common stock for purposes of this Section 2.27,
shall mean the closing price of the stock on the New York Stock
Exchange - Composite Transaction on the relevant date of
determination.
2.28 "Unforeseen Emergency" means an event beyond the
control of the Participant that would result in severe financial
hardship to the Participant if early withdrawal of the
Participant's Variable Compensation deferral were not permitted.
Whether a Participant has an Unforeseen Emergency shall be
determined by the Administrative Committee, except that if a
Participant is subject to Section 16 of the Exchange Act, the
Compensation Committee shall determine if such Participant has an
Unforeseen Emergency.
2.29 "Variable Compensation" means any amounts awarded
in accordance with one of the Variable Compensation Plans.
2.30 "Variable Compensation Plans" means, collectively,
the Annual Plan, the Mid-Management Plan and any other variable
compensation plan authorized by the Compensation Committee to
participate in this Program.
ARTICLE III
ADMINISTRATION
3.1 Except as otherwise indicated, the Compensation
Committee shall supervise the administration and interpretation
of this Program, may establish administrative regulations to
further the purpose of this Program and shall take any other
action necessary to the proper operation of this Program. All
decisions and acts of the Compensation Committee shall be final
and binding upon all Participants, their Beneficiaries and all
other persons.
ARTICLE IV
ELIGIBILITY
4.1 To be eligible to participate in this Program for a
given year, a person must have become an Eligible Employee not
later than the day on or before the date which an Eligible
Employee must make the election provided for in Article V of this
Program for that year and either be employed by the Corporation
on the Date of Deferral for that year, or be eligible to receive
a lump sum payment under the Equalization Plan or SRIP.
ARTICLE V
DEFERRALS
5.1 During each of the years this Program is in effect,
Eligible Employees shall be informed of the opportunity to
participate in this Program. An Eligible Employee choosing to
participate in this Program must make an election to do so on or
before the date designated by the Administrative Committee and
otherwise in accordance with such procedures as may be
established by the Administrative Committee.
5.2 (a) While an election to defer Variable Compensation
under one of the Variable Compensation Plans shall be irrevocable
when made until the next scheduled annual election period,
participation in this Program with respect to Variable
Compensation shall become effective only on the Date of Deferral
and only if, on such date, the Eligible Employee receives an
award under one of the Variable Compensation Plans (or would have
received an award but for an election to defer under this
Program).
Variable Compensation awards, if any, for services
performed in calendar years 1994 and 1995, must be deferred
during the 1994 annual election period. Variable Compensation
awards, if any, for services performed in calendar years 1996 and
beyond, must be deferred during the annual election period
immediately preceding the calendar year in which such services
will be performed. Notwithstanding the foregoing, an Eligible
Employee who becomes eligible to participate in this Program
after January 1, 1995 may elect to defer a Variable Compensation
award during the calendar year in which services will be
performed; provided, however, he or she makes an election to
defer within 31 days after becoming eligible to participate in
this Program.
(b) An Eligible Employee must elect to defer his or her
base salary for services performed in calendar year 1995 during
the 1994 annual election period. Participation in this Program
shall become effective only on the Date of Deferral and only if,
on such date, the Eligible Employee remains employed with the
Corporation. Base salary for services performed in calendar
years 1996, and beyond, must be deferred during the annual
election period immediately preceding the calendar year in which
such services will be performed. A Participant may suspend his
or her election to defer his or her base salary (but may not
otherwise reduce or change an election mid-year) at any time;
provided, however, that such Eligible Employee may not resume
deferrals of base salary until the following calendar year.
Notwithstanding the foregoing, an Eligible Employee who becomes
eligible to participate in this Program after January 1, 1995,
may elect to defer a portion of his or her base salary during the
calendar year in which services will be performed; provided he or
she makes an election to defer within 31 days after becoming
eligible to participate in this Program.
(c) A Participant must elect to defer lump sum payments
that he or she would otherwise receive in accordance with the
terms of the SRIP or Equalization Plan during the annual election
period immediately preceding the calendar year in which such
payments would otherwise be received.
5.3 (a) On or before the date designated by the
Administrative Committee and otherwise in accordance with such
procedures as may be established, a Participant may elect
voluntarily to defer (i) up to 100% of the Participant's award
under the Variable Compensation Plans (in 10% increments),
(ii) up to 25% of his or her base salary (in 5% increments)
and/or (iii) up to 100% of his or her lump sum payment from the
SRIP or Equalization Plan. Effective with elections made with
respect to payments that would otherwise be received in 1996 or
later, (i) only up to 85% of Variable Compensation may be
deferred, and the 10% increments will apply only for the first
80% of such deferrals, and (ii) base salary may be deferred in
increments of 1% up to the first 5% and 5% increments thereafter.
(b) A Participant must elect, during any applicable
calendar year, to defer in the aggregate a minimum of $2,000 of
his base salary, Variable Compensation or lump sum payment from
the SRIP or Equalization Plan in order to participate in this
Program. Notwithstanding any provision in this Program to the
contrary, if a Participant fails to defer at least $2,000 of his
base salary, Variable Compensation or lump sum payment from the
SRIP or Equalization Plan in any calendar year, the
Administrative Committee may, in its sole discretion, require
such Participant to irrevocably elect to defer a minimum of
$2,000 in the calendar year immediately following thereafter in
order to participate in this Program.
5.4 (a) The Corporation shall credit a Participant with an
amount equal to 75% of a Participant's deemed annual contribution
as determined under subsection (b) of this Section 5.4.
(b) A Participant's deemed annual contribution shall equal
A multiplied by B, where A and B are as follow:
A equals that portion of a Participant's
compensation in excess of the limits
contained in Code Section 401(a)(17) (as
defined in Section 1.12 of the Savings
Program without regard to Code Section
401(a)(17), and without regard to any
deferrals under this Program), up to $235,840
which is deferred under this Program. Such
$235,840 shall be adjusted at the same time
and in the same manner as the limitation
described in Code Section 415(d)(3); and
B equals the percentage of such Participant's
compensation (as defined under Section 1.12
of the Savings Program) which has been
contributed to the Savings Program for the
applicable calendar year as a Basic Deduction
pursuant to Section 2.7.2 of the Savings
Program.
(c) The Corporation shall credit each Participant with the
amount determined pursuant to subsection (a) of this Section 5.4,
in arrears, on each Deferral Date; provided that such Participant
remains eligible to participate in this Program and is employed
by the Corporation on the Deferral Date. Notwithstanding the
foregoing, the Corporation shall not credit a Participant with
the amount determined pursuant to subsection (a) of this Section
5.4 (as of the Participant's termination of employment) if the
Participant terminates employment with the Corporation during a
calendar year for any reason, except if the Participant's
employment is terminated by reason of death, Disability,
Retirement or termination by the Corporation other than for
cause.
ARTICLE VI
PAYMENTS TO PARTICIPANTS AND BENEFICIARIES
6.1 Time of Payment. (a) Subject to subsections (b), (c)
and (d) of this Section 6.1, a Participant shall begin to receive
payment of his or her deferrals, and any earnings accruals
credited under Article VIII, during the January next following
his or her date of termination of employment.
(b) (i) Notwithstanding any provision in this Program to
the contrary, a Participant may elect to commence receipt of
payments of any amounts deferred upon a specific future payment
date which is at least five years after the Date of Deferral or
such shorter schedule as the Compensation Committee may
determine. Such payments must begin no later than the calendar
year in which the Participant attains age 70 1/2. A Participant
making such an election shall receive his or her lump sum payment
in the January next following his or her future payment date or,
if applicable, such Participant shall receive installment
payments in accordance with Section 6.2.
(ii) With respect to a Participant who has attained age 55
at the time of the election of his or her deferral, the five year
period described in subsection (i) shall instead be one year with
respect to deferrals of base salary or Variable Compensation.
(iii) A Participant is limited to two future fixed year
payments. The amounts paid out in such fixed year payments (if
prior to termination of employment) may not exceed the sum of a
Participant's deferral of base salary or Variable Compensation
under this Program. Effective for elections made in November,
1995 or later, up to four such fixed payment dates may be
elected.
(c) A Participant who has not yet terminated employment,
but has an Unforeseen Emergency, may receive any or all of his or
her Variable Compensation and base salary deferrals, excluding
any earning accruals credited to him or her pursuant to Article
VIII of this Program; provided that the Participant may not
receive an amount greater than the amount necessary to meet the
Unforeseen Emergency and any amounts necessary to pay federal,
state and local income taxes or penalties reasonably anticipated
to result from a withdrawal under this Section 6.1. Earning
accruals will remain in the Program and continue to accrue
earnings under Article VIII until the payment date or dates
described in Article VI.
(d) Notwithstanding any provision in this Program to the
contrary, a Participant may, on the applicable Date of Deferral
or at any time thereafter prior to a Change in Control, elect to
receive payment of his or her entire account balance under this
Program at such time as the Board of Directors of the Corporation
determines that a Change in Control has occurred. Such payment
shall be made in a lump sum within 45 days after the Change in
Control.
6.2 Form of Payments. (a) A Participant may elect
to receive payments under this Program in annual or quarterly
installments. Such installments must commence as described in
Section 6.1, and must be completed by the calendar year in which
the Participant attains age 85.
(b) A Participant may elect to receive installment
payments either (i) annually during each January or
(ii) quarterly, commencing in the January that payment was
otherwise due in accordance with Section 6.1. If a Participant
does not elect the form of his or her installment payments, such
installment payments shall be made annually during each January.
(c) If a Participant does not elect the form of his or her
payments, such payments shall be made in a lump sum payment.
(d) A Participant may change the form of payment previously
elected only one time and subject to the following restrictions:
(i) such election is made in the calendar
year that the Participant terminates
employment, to be effective no earlier than
the following calendar year;
(ii) the election is subject to the consent
of the Administrative Committee.
(e) 1. If a Participant dies at any time prior to
receiving any portion of his or her account balance under this
Program, payment shall be made to the Participant's Beneficiary
as follows:
(A) If the Participant's Beneficiary is his or her
surviving spouse, such Participant's entire account balance under
this Program shall be paid as follows:
(i) ten annual installments or a shorter
schedule, if so elected by the surviving
spouse, or
(ii) a lump sum payment payable on or about
the January 1st following the Participant's
death.
(B) If the Participant's Beneficiary is someone other
than his or her surviving spouse, such Participant's entire
account balance under this Program shall be paid in a lump sum
payment as soon as practical following the Participant's death.
2. If a Participant dies at any time after payment of
his or her account balance under this Program has begun, such
Participant's Beneficiary shall continue to receive payment of
the Participant's account in the same manner as the Participant
elected, or such shorter payment schedule as elected by the
Beneficiary.
(f) If any lump sum distribution otherwise payable under
this Program would be disallowed in any part as a deduction to
the Corporation in accordance with Section 162(m) (or a successor
Section) of the Internal Revenue Code, the Compensation Committee
may determine to distribute the amount of such benefit in
installments such that the Participant or Beneficiary shall
receive the maximum amount permissible in each installment and
still preserve the Corporation's full tax deduction.
6.3 Amount of Payment (a) If a Participant is
terminated by the Corporation for cause, he or she shall receive
the lesser of (A) any amounts he or she actually deferred under
Article V, less any previous payments made or (B) his or her
account balance under this Program. Such payment shall be made
in a lump sum payment as soon as administratively practical
following the Participant's termination of employment; provided,
however, that such Participant will forfeit all Earnings Accruals
credited to him or her pursuant to Article VIII.
(b) If a Participant voluntarily separates from employment
with the Corporation or retires under the Retirement Program with
an actuarially reduced pension, he or she shall receive, (i) with
respect to deferral elections made before 1995, a lump sum
payment equal to the lesser of (A) any amounts he or she actually
deferred under this Program, plus credits to his or her account
at the Fixed Income Rate from his or her Date of Deferral less
any previous payments made or (B) his or her account balance
under this Program, and (ii) with respect to deferral elections
made in 1995 and later, his or her account balance. Such
payments will be made as soon as administratively practical after
the Participant's termination of employment. Notwithstanding the
foregoing, a Participant who retires under the Retirement Program
with an actuarially reduced pension may elect to receive his or
her payments in any form described in Section 6.2.
(c) If a Participant terminates employment on account of
Retirement, Disability, death, or through action of the
Corporation taken without cause, such Participant (or
Beneficiary) shall be entitled to receive the full amount of his
or her account balance.
6.4 Payment in U.S. Dollars. All payments under this
Program shall be made in U.S. dollars.
6.5 Reduction of Payments. All payments under this
Program shall be reduced by any and all tax payments that the
Corporation is required to withhold pursuant to applicable law.
ARTICLE VII
BENEFICIARIES
7.1 A Participant may at any time, and from time to time,
prior to his or her death designate one or more Beneficiaries to
receive any payments to be made following the Participant's
death. If no such designation is on file with the Corporation at
the time of a Participant's death, the Participant's Beneficiary
shall be the beneficiary or beneficiaries named in the
beneficiary designation most recently filed by the Participant
under the Corporation's Savings Program. If a Participant has
not effectively designated a beneficiary under the Savings
Program, or if no designated beneficiary has survived the
Participant, the Participant's Beneficiary shall be the
Participant's surviving spouse, or, if no spouse has survived the
Participant, the estate of the deceased Participant. If an
individual Beneficiary cannot be located for a period of one year
following the Participant's death, despite mail notification to
the Beneficiary's last known address, and if the Beneficiary has
not made a written claim for benefits within such period to the
Administrative Committee, the Beneficiary shall be treated as
having predeceased the Participant. The Administrative Committee
may require such proof of death and such evidence of the right of
any person to receive all or part of a deceased Participant
account balance, as the Administrative Committee may consider
appropriate. The Administrative Committee may rely upon any
direction by the legal representatives of the estate of a
deceased Participant, without liability to any other person.
ARTICLE VIII
EARNINGS ACCRUALS
8.1 Each Participant's account balance under this Program
shall be credited with earnings from the Date of Deferral through
the date such deferral is paid out or withdrawn pursuant to
Article VI. Earnings under this Section 8.1 shall accrue at the
rate elected in accordance with Section 8.2.
8.2 (a) Earnings accruing in accordance with Section
8.1 shall accrue at (i) the Fixed Income Rate, (ii) the UCC Stock
Value Rate, (iii) the UCC Discounted Stock Value Rate, (iv) the
Applicable Equity Investment Fund Rate or (v) a combination of
the four rates. An election to use the UCC Discounted Stock
Value Rate shall be effective for not less than one (1) year.
Amounts deferred pursuant to Section 5.2(c) cannot accrue at the
UCC Discounted Stock Rate. Notwithstanding the foregoing, if a
Participant has elected under Section 6.1 to receive payment of
his or her account balance upon termination of employment, and
such Participant's employment is terminated by the Corporation
without cause, such Participant may then receive a distribution
based on the UCC Discounted Stock Value Rate even if one (1) year
has not yet passed since the relevant Date of Deferral.
(b) Subject to subparagraph (c), a Participant shall
designate at the time of his or her election to defer any amounts
under this Program which accrual rate or rates shall apply to his
or her deferrals (deferrals of matching contributions made
pursuant to Section 5.4 shall be allocated to the same accrual
rates as those selected for base salary deferrals for the same
year); provided such elections must be in whole percentage
points. Such elections shall be effective as of the Date of
Deferral through the date such deferral is paid out or withdrawn
pursuant to Article VI.
(c) A Participant may, one time each calendar month, elect
to change the accrual rate under this Section 8.2 with respect to
any or all previous deferrals under this Program; provided,
however, that Participants may elect to utilize the UCC
Discounted Stock Value Rate with respect to future deferrals
only, and not for the reallocation of any prior deferrals.
Participants may utilize the UCC Stock Value Rate only for
reallocation of previous deferrals.
ARTICLE IX
GENERAL PROVISIONS
9.1 Prohibition of Assignment of Transfer. Any
assignment, hypothecation, pledge or transfer of a Participant's
or Beneficiary's right to receive payments under this Program
shall be null and void and shall be disregarded, except to the
extent required by law.
9.2 Program Not to Be Funded. The Corporation is not
required, for the purpose of funding this Program, to segregate
any monies from its general funds, create any trusts, or make any
special deposits, and the right of a Participant or Beneficiary
to receive a payment under this Program shall be no greater than
the right of an unsecured general creditor of the Corporation.
9.3 Effect of Participation. Neither selection as a
Participant, nor an election to participate or participation in
this Program, shall entitle a Participant to receive awards under
the Variable Compensation Plans, SRIP or Equalization Plan or a
matching contribution under the Savings Program, or affect the
Corporation's right to discharge a Participant.
9.4 Communications To Be in Writing. All elections,
requests and communications to the Corporation or its designated
agent from Participants and Beneficiaries, and all communications
to such persons from the Corporation, shall be in writing, and in
such form and manner, and within such time, as the Corporation
shall determine. In lieu of the foregoing, the Corporation may
install a telephonic voice response system for such elections,
requests and communications.
9.5 Absence of Liability. No officer, director or
employee of the Corporation shall be personally liable for any
acts or omission to act under this Program or, except in
circumstances involving bad faith, for such officer's, director's
or employee's own act or omission to act.
9.6 Titles for Reference Only. The titles given herein
to sections and subsections are for reference only and are not to
be used to interpret the provisions of this Program.
9.7 New York Law To Govern. All questions pertaining to
the construction, regulation, validity and effect of the
provisions of this Program shall be determined in accordance with
New York law.
9.8 Amendment. The Compensation Committee may amend
this Program at any time, but no amendment may be adopted which
alters the payments due Participants or Beneficiaries, as of the
date of the amendment, or the times at which payments are due,
without the consent of each Participant affected by the amendment
and of each Beneficiary (of a then deceased Participant) affected
by the amendment. In addition, any amendment which does not
increase the Corporation's annual cost of any past or future
benefits under this Program by more than $500,000, change the
eligibility requirements, or impact the ability of officers to
utilize the UCC Discounted Stock Value Rate or the UCC Stock
Value Rate, may be authorized by the Administrative Committee.
9.9 Program Termination. The Compensation Committee may
terminate this Program for any reason and at any time. In the
event of such termination, the accounts of each Participant or
Beneficiary under this Program shall become immediately payable
in accordance with Section 6.1; provided that the Compensation
Committee, in its sole discretion, upon Program termination or at
any time thereafter, may decide to make lump sum payments in lieu
of annual payments.
UNION CARBIDE CORPORATION
By: