Exhibit 10.2.1
1984 UNION CARBIDE STOCK OPTION PLAN
Effective January 1, 1984,
as amended through March 1, 1988
1984 UNION CARBIDE STOCK OPTION PLAN
Section 1: Purpose. The purpose of the 1984 Union Carbide Stock
Option Plan (hereinafter referred to as the "Plan") is to (a)
provide incentives and rewards to those employees who are in a
position to contribute to the long-term growth and profitability
of the Corporation; (b) assist the Corporation and its
subsidiaries in attracting, retaining, and motivating employees
with experience and ability; and (c) make the Corporation's
compensation program competitive with those of other major
employers.
Section 2: Administration. This Plan shall be administered by a
Committee of the Board of Directors (hereinafter referred to as
the "Committee") appointed by the Board. Members of the
Committee are not eligible to participate in this Plan and no
member may have been eligible within one year prior to serving on
the Committee. The Committee shall interpret the Plan, establish
administrative regulations to further the purpose of the Plan,
authorize awards to eligible participants and take any other
action necessary to the proper operation of the Plan. All
decisions and acts of the Committee shall be final and binding
upon all participants.
Section 3: Participation. This Plan is for Union Carbide
Corporation and such of its participating subsidiary companies as
shall be designated by the Board of Directors. Any employee of
Union Carbide Corporation or a participating subsidiary serving
in a managerial, administrative, or professional position which
is recommended to, and authorized by, the Committee shall be
eligible to participate in the Plan.
Section 4: Awards. Awards under this Plan may be stock option
awards, stock appreciation rights and exercise payment rights.
Section 5: Stock Options.
5.1: Each year during the Plan the Corporation may award
options to purchase common stock or restricted stock of the
Corporation (herein called "stock option awards") to such
eligible employees as the Committee in its discretion authorizes
and under such terms as it establishes.
5.2: The total number of shares of stock (including
restricted stock, if any) optioned under this Plan during the
five year period of the Plan shall not exceed 5,000,000 shares
(9,564,435 shares for the period commencing March 3, 1986 through
December 31, 1988), and no participant shall be granted options
in any one year for, in the aggregate, more than 50,000 shares
(150,000 shares for the period commencing March 3, 1986 through
December 31, 1988) including restricted shares, if any. Solely
for the purpose of computing the total number of shares of stock
optioned under this Plan, there shall not be counted any shares
covered by an option which, prior to such computation, has
terminated because the holder exercised a stock appreciation
right or the holder ceased for any reason other than death or
retirement to be an employee of the Corporation or a
participating subsidiary.
5.3: The option price of each share of stock subject to a
stock option award shall be the closing price of the common stock
of the Corporation on the date the award is authorized by the
Committee as reported in the New York Stock Exchange - Composite
Transactions.
5.4: A stock option by its terms shall not be transferable
by the participant other than by will or the laws of descent and
distribution, shall be of no more than 10 years' duration, and
shall be exercisable only after the earlier of: (i)(a) in the
case of options granted prior to October 28, 1987, two years
following the date of grant of such award, or (b) in the case of
options granted on or after October 28, 1987, such period of time
as the Committee shall determine but in no event less than one
year following the date of grant of such award; (ii) the
participant's death; (iii) the participant's retirement; or (iv)
a change in control of the Corporation, but only to the extent
permitted under subsection 5.7. An option shall be exercisable
following a participant's termination of employment by the
Corporation other than for cause only after such option otherwise
becomes exercisable in accordance with the first sentence of this
Section 5.4. An option is exercisable during a participant's
lifetime only by the participant or the participant's legal
guardian or legal representative.
An option is only exercisable by a participant while the
participant is in active employment with the Corporation except
(i) in the case of a participant's death, (ii) in the case of a
participant's retirement, (iii) in the case of a participant's
termination of employment by the Corporation other than for
cause, (iv) during a two-year period commencing on the date of
termination, by the participant or the Corporation, of employment
after a change in control of the Corporation, unless such
termination of employment is for cause, or (v) if the Committee
decides that it is in the best interest of the Corporation to
permit individual exceptions. In the case of a participant's
death, an option may be exercised within nine months after such
death and in the case of a participant's termination of
employment other than for cause under subclause (iii) of this
sentence, an option may be exercised only within three years
after such termination.
5.5: An option may be exercised with respect to part or all
of the shares subject to the option by giving written notice to
the Corporation of the exercise of the option. The option price
for the shares for which an option is exercised shall be paid on
or within ten business days after the date of exercise in cash,
in whole shares of common stock of the Corporation owned by the
participant prior to exercising the option, or in a combination
of cash and such shares of common stock. The value of any share
of common stock delivered in payment of the option price shall be
its Market Price on the date the option is exercised.
5.6: In the event of any change in capital, shares of
capital stock, or any special distribution to the stockholders,
the Board of Directors shall make equitable adjustments in the
number of shares and prices per share applicable to options then
outstanding and in the number of shares which are available
thereafter for stock option awards in total or to any one
participant.
5.7: Clauses (iii) and (iv) of the first sentence of
Section 5.4 herein, as amended and restated, shall not apply to a
stock option held by a "disqualified individual" within the
meaning of Section 280G(c) of the Internal Revenue Code who is a
party to an employment contract with the Corporation that grants
such person severance benefits in the event that the employment
is terminated subsequent to a change in control of the
Corporation, or who is entitled to receive benefits pursuant to a
severance plan in the event that the participant's employment is
terminated after a change in control to the extent that the
exercise of the option would cause such person to incur the tax
prescribed in Section 4999 of the Internal Revenue Code on
"excess parachute payments" within the meaning of Section 280G(b)
of the Internal Revenue Code.
Section 6: Stock Appreciation Rights.
6.1: The Committee may, in its discretion, grant stock
appreciation rights to employees who have received a stock option
award. The stock appreciation rights may relate to such number
of shares, not exceeding the number of shares that the employee
may acquire upon exercise of a related stock option, as the
Committee determines in its discretion. Upon exercise of a stock
option by an employee, the stock appreciation rights relating to
the shares covered by such exercise shall terminate. Upon
termination of a stock option, any unexercised stock appreciation
rights related to that option shall also terminate. Upon
exercise of stock appreciation rights, such rights and the
related option to the extent of an equal number of shares shall
terminate.
6.2: The Committee at its discretion may revoke at any time
any unexercised stock appreciation rights granted to an employee
under this Plan, without compensation to such employee.
Revocation of an employee's stock appreciation rights under this
section shall not affect any related stock options granted to the
employee under this Plan.
6.3: Upon an employee's exercise of some or all of the
employee's stock appreciation rights, the employee shall receive
an amount equal to the value of the stock appreciation for the
number of rights exercised, payable in cash, common stock,
restricted stock, or a combination thereof, at the discretion of
the Committee.
6.4: The Committee shall have the discretion either to
determine the form in which payment of a stock appreciation right
will be made, or to consent to or disapprove the election of the
employee to receive cash in full or partial settlement of the
right. Such consent or disapproval may be given at any time
before or after the election to which it relates.
Notwithstanding the foregoing provision, if an employee exercises
a stock appreciation right during the 60-day period commencing on
the date of a change in control of the Corporation, the form of
payment of such stock appreciation right shall be cash provided
that such stock appreciation right was granted at least six
months prior to the date of exercise, and shall be common stock
if such stock appreciation right was granted six months or less
prior to the date of exercise. Provided, however, that the
previous sentence shall not apply to a "disqualified individual"
within the meaning of Section 280G(c) of the Internal Revenue
Code who is a party to an employment contract with the
Corporation that grants such person severance benefits in the
event that his employment is terminated subsequent to a change in
control of the Corporation or who is entitled to receive benefits
pursuant to a severance plan in the event that his employment is
terminated after a change in control, to the extent that the
exercise of the stock appreciation right would cause such
participant to incur the tax prescribed in Section 4999 of the
Internal Revenue Code on "excess parachute payments" within the
meaning of Section 280G(b) of the Internal Revenue Code.
6.5: Except in the case of a stock appreciation right that
was granted at least six months prior to exercise and that is
exercised for cash during the 60-day period commencing on the
date of a change in control of the Corporation, any election by
the employee to receive cash in full or partial settlement of the
stock appreciation right, as well as any exercise by the employee
of the employee's stock appreciation right for such cash, shall
be made only during the period beginning on the third business
day following the date of release of the quarterly or annual
summary statements of sales and earnings and ending on the
twelfth business day following such date.
6.6: Settlement for exercised stock appreciation rights may
be deferred by the Committee in its discretion to such date and
under such terms and conditions as the Committee may determine.
6.7: A stock appreciation right is only exercisable during
the period when the stock option to which it is related is also
exercisable.
Section 7: Exercise Payments.
7.1: The Committee may, in its discretion, grant to holders
of stock options the right to receive exercise payments relating
to such number of shares covered by the holder's stock options as
the Committee determines in its discretion; provided, however,
that the exercise payment rights granted to each participant
under the Plan in any year shall be limited to optioned stock
having a total option price not exceeding $100,000 plus any
unused carryovers. The "carryover" from any year shall be one
half of the amount by which $100,000 exceeds the total option
price of the stock which was accompanied by exercise payment
rights and for which a participant was granted an option in such
year under this Plan or any prior incentive compensation plan of
the Corporation. A carryover may be used only in the three
calendar years immediately succeeding the year in which it
accrued. The amount of options granted in any calendar year
under this Plan shall be treated as first using up the $100,000
limitation and then as using up unused carryovers to such year in
the order of the calendar years in which the carryovers accrued.
A carryover shall not accrue for a participant for any calendar
year in which the participant was not granted a stock option
award.
7.2: At the discretion of the Committee, the exercise
payment may be made in cash, common stock, restricted stock, or a
combination thereof; provided, however, exercise payments may be
made in cash to participants subject to Section 16(b) of the
Securities Exchange Act of 1934 only if they exercise the related
stock option during a period beginning on the third business day
following the date of release of the quarterly or annual summary
statements of sales and earnings and ending on the twelfth
business day following such date. Exercise payments shall be
paid within 20 business days following the exercise of a related
stock option; provided, however, that payment may be deferred by
the Committee in its discretion to such date and under such terms
and conditions as the Committee may determine.
7.3: Exercise payments shall be paid only upon the exercise
of related stock options which are exercised by the holder while
an active employee; provided, however, that in the case of an
option holder's death or retirement, exercise payments will be
paid if such related stock options are exercised within nine
months after death or three months after retirement, as the case
may be, but before the expiration of the stock option's term.
Section 8: General Provisions.
8.1: Any assignment or transfer of any awards without the
written consent of the Corporation shall be null and void.
8.2: Nothing contained herein shall require the Corporation
to segregate any monies from its general funds, or to create any
trusts, or to make any special deposits for any immediate or
deferred amounts payable to any participant for any year.
8.3: Participation in this Plan shall not affect the
Corporation's right to discharge a participating employee.
Section 9: Definitions.
9.1: A 'change in control of the Corporation' shall be
deemed to occur in the event that any of the following
circumstances have occurred:
(i) if a change in control of the Corporation
would be required to be reported in response
to Item 1(a) of the Current Report on 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;
(ii) any 'person' or 'group' within the
meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act (x) becomes the 'beneficial
owner' as defined in Rule 13d-3 under the
Exchange Act of more than 35% 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 or (y) 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 35% of the then
outstanding voting securities of the
Corporation, otherwise than through an
arrangement or arrangements consummated with
the prior approval of the Board;
(iii)if during any period of twenty-four
consecutive months (not including any period
prior to the adoption of this section),
Present Directors and/or New Directors cease
for any reason to constitute a majority of
the Board. For purposes of this subsection
(iii), '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 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; or
(iv) any 'person' or 'group' within the
meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act that is the 'beneficial owner'
as defined in Rule 13d-3 under the Exchange
Act of 20% or more of the then outstanding
vesting securities of the Corporation
commences soliciting proxies.
9.2: "Employee" means all employees of the Corporation or
of a subsidiary of the Corporation participating in the Plan,
including officers of the Corporation, as well as officers of the
Corporation who are also Directors of the Corporation. However,
an individual who is a member of the Committee shall not be an
"employee" for purposes of this Plan.
9.3: "Exercise payment" is a payment upon the exercise of a
stock option of an amount determined by the Committee in its
discretion, which amount shall not be greater than 60% of the
excess of the Market Price (on the date the related stock option
is exercised) over the option price of the stock acquired upon
the exercise of the option.
9.4: "Market price" is the mean of the high and low prices
of the common stock of the Corporation as reported in the New
York Stock Exchange - Composite Transactions on the date the
option or stock appreciation right is exercised (or on the next
preceding day such stock was traded on a stock exchange included
in the New York Stock Exchange - Composite Transactions if it was
not traded on any such exchange on the date the option or stock
appreciation right is exercised), except that in the case of a
stock appreciation right that is exercised for cash during the
first three days of the ten-day period set forth in Section 6.5,
"Market Price" is the highest daily closing price of the common
stock of the Corporation as reported in the New York Stock
Exchange-Composite Transactions during such ten-day period.
Notwithstanding the foregoing provision, if a stock appreciation
right is exercised during the 60-day period commencing on the
date of a change in control of the Corporation, the Market Price
for purposes of determining the stock appreciation shall be the
highest of (1) the market price of the common stock of the
Corporation, as determined under the preceding sentence on the
date of exercise of the stock appreciation right; (2) the highest
market price of a share of the common stock of the Corporation
during the period commencing on the ninetieth day preceding the
date of exercise of the stock appreciation right and ending on
the date of exercise of the stock appreciation right; (3) the
highest price per share of common stock of the Corporation shown
on Schedule 13D or an amendment thereto filed pursuant to Section
13(d) of the Securities Exchange Act of 1934 by any person
holding 35% of the combined voting power of the Corporation's
then outstanding voting securities; or (4) the highest price paid
or to be paid per share of common stock of the Corporation
pursuant to a tender or exchange offer as determined by the
Committee. Provided, however, that the previous sentence shall
not apply to a 'disqualified individual' within the meaning of
Section 280G(c) of the Internal Revenue Code who prior to
December 1, 1986 is a party to an employment contract with the
Corporation that grants such person severance benefits in the
event that the employment is terminated subsequent to a change in
control of the Corporation, and after that date shall not apply
if the exercise of the stock appreciation right would cause such
participant to incur the tax prescribed in Section 4999 of the
Internal Revenue Code on 'excess parachute payments' within the
meaning of Section 280G(b) of the Internal Revenue Code.
9.5: "Retirement" shall mean retirement from employment by
the Corporation or a participating subsidiary with the right to
receive immediately a non-actuarially reduced pension under the
Corporation's Retirement Program.
9.6: "Restricted stock" means stock of the Corporation
subject to restrictions on the transfer of such stock, conditions
of forfeitability of such stock, or any other limitations or
restrictions as determined by the Committee.
9.7: "Stock Appreciation" shall be based on the excess of
the Market Price of the common stock over the option price of the
related option stock, as determined by the Committee.
Section 10: Amendment, Suspension, or Termination.
10.1: The Board of Directors may suspend, terminate, or
amend the Plan, but may not, without approval by the holders of a
majority of all outstanding shares entitled to vote on the
subject at a meeting of stockholders of Union Carbide
Corporation, increase the total number of shares of stock that
may be optioned under this Plan or that may be optioned to a
single participant during the term of this Plan.
10.2: This Plan is intended to comply with the requirements
of Rule 16b-3 under the Securities Exchange Act of 1934, as
applicable during the term of this Plan. Should the requirements
of Rule 16b-3 change, the Board of Directors may amend this Plan
to comply with the requirements of that rule or its successor
provision or provisions.
Section 11: Effective Date and Duration of the Plan.
This Plan shall be effective following approval by the
stockholders of the Corporation for years beginning on or after
January 1, 1984. No award shall be granted under this Plan for
any year commencing on or after January 1, 1989.