Exhibit 10.7.1
April 1, 1990
SUPPLEMENTAL RETIREMENT
INCOME PLAN
As Amended Through November 30, 1988
SUPPLEMENTAL RETIREMENT INCOME PLAN
General
This is a supplemental retirement income plan for
participants in the Retirement Program Plan who are also eligible
to participate in designated incentive compensation plans of
Union Carbide Corporation. This plan has been established
primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees.
Specifically, the purpose of this plan is to provide a retirement
benefit, determined without regard to Code Section 415 or Code
Section 401(a)(17), equal to the excess of the retirement benefit
which would be provided by the Retirement Program Plan if (a)
average monthly compensation included deferred cash bonuses
awarded under designated incentive compensation plans, and (b)
all cash bonuses, whether deferred or not, were averaged
separately from base compensation, and the Equalization Benefit
Plan, over the retirement benefit actually provided by the
Retirement Program Plan and the Equalization Benefit Plan. This
plan is completely separate from the Retirement Program Plan and
the Equalization Benefit Plan, is unfunded, and is not qualified
for special tax treatment under the Internal Revenue Code.
ARTICLE I
Eligibility
Section 1. An employee, or the survivor of an employee who
has not declined the coverage of a survivor's benefit, will be
eligible to receive Supplemental Retirement Income under this
plan, provided that, on or after the date on which this plan is
approved by the Board of Directors of the Corporation, such
employee:
(a) has received (or has been
awarded and receipt has been deferred) at
least one Bonus, and either
(b) dies while in the service of the
Corporation or a subsidiary of the
Corporation which is then participating in
the Retirement Program Plan, provided that
such employee's survivor is eligible to
receive a survivor's benefit under the
Retirement Program Plan, or
(c) termination from employment with
the Corporation or said subsidiary and is
eligible to receive a pension benefit or a
disability benefit under the Retirement
Program Plan.
Section 2. An employee, or the survivor of an employee who
has not declined the coverage of a survivor's benefit, will also
be eligible to receive Supplemental Retirement Income under this
plan if such employee receives compensation in excess of the
compensation which may be considered by the Retirement Program
Plan under Code Section 401(a)(17).
ARTICLE II
Amount of Supplemental Retirement Income
Section 1. The monthly amount of Supplemental Retirement
Income payable to an employee will be the excess, if any, of (1)
the employee's monthly retirement income, as determined under
section 2, over (2) the employee's monthly pension under the
Retirement Program Plan and the Equalization Plan.
Section 2. The amount of monthly retirement income payable
to an eligible employee shall be computed by using the applicable
formula provided in Article V of the Retirement Program Plan
except that average monthly compensation shall for this purpose
be equal to an amount determined under section 3 of Article II of
this plan, and shall be determined without regard to the
limitation of Code Section 401(a)(17).
Section 3. An employee's average monthly compensation shall
be computed in the following manner:
(a) For employees who retire or die
prior to April 27, 1983, average monthly
compensation shall be computed by taking the
larger of:
(i) 1/36 of base salary
and Bonuses related to the three full
calendar years in which these combined
amounts were largest during the 10 full
calendar years next preceding the date
of death or retirement or
(ii) 1/36 of the sum of
(a) the base salary for the 36 full
calendar months next preceding the date
of death or retirement; provided that
for purposes of this calculation the
base salary received in any calendar
month within the third preceding
calendar year shall be the total
compensation received in such year
divided by the number of months worked
in such year and (b) the Bonuses related
to the three full calendar years next
preceding the date of death or
retirement.
(b) For employees who retire or die
on or after April 27, 1983, but prior to
February 22, 1984, average monthly
compensation shall be computed by determining
the sum of the following amounts:
(i) the larger of:
(I) 1/36 of base
salary related to the three full
calendar years in which such salary was
largest during the 10 full calendar
years next preceding the date of death
or retirement or
(II) 1/36 of base
salary for the 36 full calendar months
next preceding the date of death or
retirement calculated in the manner
described under Section 3(a)(ii) above;
and
(ii) 1/36 of the
employee's Bonuses related to the three
full calendar years in which such
Bonuses were the largest during the five
full calendar years next preceding the
date of death or retirement;
provided, that if it would
produce a larger benefit under the plan,
then payments under the plan shall be
computed in accordance with subpart (a)
of this Section for any participant who
received a Bonus related to a year prior
to 1983 who dies or retires prior to
January 1, 1993.
(c) For employees who retire or die
on or after February 22, 1984, average
monthly compensation shall be computed by
determining the sum of the following amounts
(or shall be computed in accordance with
subpart (a) of this Section if an employee is
eligible for such computation and such
computation produces a larger benefit under
the plan):
(i) the larger of:
(I) 1/36 of base
salary related to the three full
calendar years in which such salary was
largest during the 10 full calendar
years next preceding the date of death
or retirement or
(II) 1/36 of base
salary for the 36 full calendar months
next preceding the date of death or
retirement calculated in the manner
described under Section 3(a)(ii) above;
and
(ii) 1/36 of the
employee's Bonuses related to the three
full calendar years in which such
Bonuses were the largest during the 10
full calendar years next preceding the
date of death or retirement provided,
that for an employee retiring on or
after January 1, 1988, the calendar
years in which the employee was hired or
terminates employment shall each be
considered a full calendar year for the
purposes of this clause (ii).
(d) For purposes of the calculations
under subparts (a), (b) and (c) of this
Section, a Bonus will be related to the
calendar year in which an employee performed
the services for which the Bonus was paid
irrespective of the calendar year in which
the Bonus was awarded or paid. For purposes
of the calculations under subparts (a), (b)
and (c) of this Section, the amount of base
salary received in any calendar month will be
calculated in the same manner in which
average monthly compensation used to compute
pension benefits under the Retirement Program
Plan is calculated (determined without regard
to Incentive Compensation as defined
therein).
Section 4. If the Supplemental Retirement Income payable to
an employee under this plan commences before the award to such
employee of a Bonus (whether or not paid) which may be used to
determine average monthly compensation under Section 3 of this
Article II, the monthly amount of Supplemental Retirement Income
payable hereunder shall be recalculated after such Bonus is
awarded (whether or not paid). The monthly amount of
Supplemental Retirement Income resulting from said recalculation
shall be paid commencing in or before the third calendar month
after the month in which such Bonus is awarded, provided that the
first monthly payment of such recalculated Supplemental
Retirement Income shall be increased to reflect any prior
underpayment of Supplemental Retirement Income resulting from the
failure to include such Bonus in the initial calculation of
Supplemental Retirement Income.
Section 5. For purposes of calculating the amount of an
employee's Supplemental Retirement Income pursuant to Section 1
of this Article II, the amount of an employee's monthly
retirement income and monthly pension under the Retirement
Program Plan and the Equalization Benefit Plan shall be
determined without any adjustment on account of (i) a Survivor's
Benefit or (ii) an election to receive level retirement income.
Section 6. If an employee does not decline the coverage of
a survivor's benefit, the monthly amount of Supplemental
Retirement Income which such employee would otherwise have
received shall be reduced by applying the same factor used in the
Retirement Program Plan in connection with survivor's benefits.
Section 7. The monthly amount of Supplemental Retirement
Income payable to the eligible survivor of an employee shall be
calculated in the same manner that such survivor's benefit is
calculated under the Retirement Program Plan.
ARTICLE III
Vesting
Section 1. Subject to Section 4 of Article IV, an employee
will be vested in such employee's right to receive Supplemental
Retirement Income under the plan in the same manner and to the
same extent as provided under the Retirement Program Plan. Once
an employee has become vested, all of such employee's rights to
receive Supplemental Retirement Income under this Plan shall be
nonforfeitable.
ARTICLE IV
Payments
Section 1. Supplemental Retirement Income shall be paid
monthly to an employee or his survivor commencing with the month
such employee or his survivor commence benefits under the
Retirement Program Plan, and shall cease or be suspended at the
same time the employee or his survivor cease or have suspended
benefits under the Retirement Program Plan. However,
Supplemental Retirement Income shall in no event be payable after
the death of an employee who has declined the coverage of a
survivor's benefit.
Section 2. Unless otherwise elected, Supplemental
Retirement Income payable under this plan shall include the
coverage of a survivor's benefit. A 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. Supplemental 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. If the Compensation and Management Development
Committee of the Board of Directors determines, after a hearing,
that an employee who is eligible to receive or is receiving
Supplemental Retirement Income has engaged in any activities
which, in the opinion of that Committee, are detrimental to the
interests of, or are in competition with, this Corporation or any
of its subsidiaries, such Supplemental Retirement Income shall
thereupon be terminated.
ARTICLE V
Miscellaneous
Section 1. The Compensation and Management Development
Committee of the Board of Directors shall administer this plan.
The 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.
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 or spouse then
receiving benefits, or the spouse of any participant then
receiving benefits under this plan, or the vested rights of any
employee whose rights have vested.
Section 3. Except to the extent required by law, no
assignment of the rights and interests of an employee or survivor
under this plan will be permitted nor shall such rights be
subject to attachment or other legal processes for debts.
Section 4. "Corporation" as used in this plan means Union
Carbide Corporation.
Section 5. "Retirement Program Plan" as used in this plan
means the Retirement Program Plan for Employees of Union Carbide
Corporation and its Participating Subsidiary Companies.
Section 6. "Equalization Benefit Plan" as used in this Plan
means the Equalization Benefit Plan for Participants of the
Retirement Program Plan for Employees of Union Carbide
Corporation and Its Participating Subsidiary Companies, the
purpose of which is to restore retirement benefit payments to
those participants, and the spouses of such participants, whose
retirement benefits are, or will be, reduced by Section 415 of
the Internal Revenue Code, as from time to time amended.
Section 7. "Bonus" as used in this plan means those annual
cash bonuses paid under the 1984 Union Carbide Cash Bonus Plan,
the 1979 Union Carbide Incentive Compensation Plan, the 1974
Union Carbide Incentive Program (exclusive of long term and
multi-year bonus awards and bonus awards for a partial year of
service) the 1989 Union Carbide Bonus Plan and the Union Carbide
Mid-Management Incentive Plan and any cash bonuses awarded
(whether or not paid) under any other incentive compensation plan
designated by the Board of Directors (or such other plan as the
Board may authorize the Compensation and Management Development
Committee to designate).
Section 8. For purposes of this plan an employee will be
considered retired on the first day of the month following the
last month in which such employee is employed.
Section 9. The Corporation may satisfy all or any part of
its obligation to provide benefits hereunder by purchasing, and
distributing to a participant or survivor, an annuity from an
insurance carrier to provide such benefits.