Exhibit 10.10
1997 UNION CARBIDE VARIABLE COMPENSATION PLAN
TABLE OF CONTENTS
Section Title Page
1 Purpose 1
2 Definitions 1
3 Administration 3
4 Participation Data 4
5 Variable Compensation Payments 4
6 Payment of Variable Compensation Payments 7
7 Termination of Employment 7
8 Change of Position During a Plan Year 7
9 Beneficiary Designation 8
10 General Provisions 10
11 Amendment, Suspension, or Termination 10
12 Effective Date and Duration of Plan 11
1997 UNION CARBIDE VARIABLE COMPENSATION PLAN
Section 1: Purpose
The purpose of the Plan is to (a) provide incentives and
rewards to certain employees who are Eligible Officers of the
Corporation or who are in a managerial, administrative,
professional or policy-making capacity for the Corporation; (b)
assist the Corporation in attracting, retaining, and motivating
employees of high caliber and experience; and (c) make the
Corporation's compensation program competitive with those of
other major employers.
Section 2: Definitions
2.1 "Beneficiary" shall mean a Participant's deemed
beneficiary pursuant to Section 9 hereof.
2.2 "Board" shall mean the Board of Directors of Union
Carbide Corporation.
2.3 "Chief Executive Officer" or "CEO" shall mean the
chief executive officer of Union Carbide Corporation.
2.4 "Committee" shall mean the Compensation and
Management Development Committee of the Board.
2.5 "Corporation" shall mean Union Carbide Corporation
and such of its subsidiary companies as shall be designated by
the Board to participate in the Plan.
2.6 "Department" shall mean the Corporate Human
Resources Department of Union Carbide Corporation.
2.7 "Disability" or "Disabled" shall mean a
Participant's inability to engage in any substantial gainful
activity because of any medically determinable physical or mental
impairment which can be expected to result in death or which has
lasted, or can be expected to last, for a continuous period of
six (6) months or longer.
2.8 "Eligible Officer" shall mean an officer of Union
Carbide Corporation who is elected, and each of the Vice
Presidents of the Corporation who are appointed by the Board.
2.9 "Eligible Position" shall mean (i) a position as an
Eligible Officer or (ii) another position in the Corporation in
which an employee acts in a managerial, administrative,
professional or policy-making capacity and which the Committee
designates as an Eligible Position pursuant to Section 4.2.
2.10 "Organizational Unit" shall mean each division or
component of Union Carbide Corporation or any of its subsidiary
companies as shall be designated by the Board to participate in
the Plan.
2.11 "Participant" shall mean an employee of the
Corporation who occupies an Eligible Position, except that an
Eligible Officer who is a director of the Corporation and a
member of the Committee shall not be eligible to participate in
the Plan.
2.12 "Plan" shall mean this 1997 Union Carbide Variable
Compensation Plan.
2.13 "Plan Year" shall mean the calendar year, or part
thereof in the event the Plan is in effect only for part of a
calendar year.
2.14 "Savings Program" shall mean The Savings and
Investment Program for Employees of Union Carbide Corporation and
Participating Subsidiary Companies.
2.15 "Variable Compensation Payment" shall mean the
amount of the annual payment under the Plan determined in
accordance with procedures authorized by the Committee to be
payable to a Participant for a Plan Year.
Section 3: Administration
3.1 The Plan shall be administered by the Committee, who
shall have full power and authority to construe and interpret the
Plan, establish and amend administrative regulations to further
the purpose of the Plan, select or authorize the selection
criteria of Participants, authorize Variable Compensation
Payments, and take any other action necessary to administer the
Plan. The Committee's decisions, actions, and interpretations
regarding the Plan shall be final and binding upon all
Participants and Beneficiaries.
3.2 The Department shall: (i) formulate and recommend
to the Committee such changes in the Plan as may facilitate the
administration of the Plan; (ii) maintain records of Variable
Compensation Payments; (iii) prepare communications to
Participants; (iv) prepare reports and data required by the
Corporation and government agencies; (v) obtain necessary
consents and approvals by government agencies; (vi) obtain any
data requested by the Committee; and (vii) take such other
actions requested by the Committee as are necessary for effective
implementation of the Plan.
Section 4: Participation Data
4.1 On or before March 1 of a Plan Year the Department
shall prepare and submit to the Committee (i) "List A", which
shall set forth the name, job title, and grade level of each
Eligible Officer and each person occupying any other position
designated by the Committee; (ii) a summary of the Variable
Compensation Payments for other Eligible Positions; and (iii)
such other information as the Committee shall request.
4.2 All Eligible Positions included in the material
prepared pursuant to Section 4.1(ii) must be approved, and the
grade level agreed to, by the corporate officer having
responsibility for that Organizational Unit in consultation with
the Department. If the recommendation is not supported by the
Department and by the corporate officer then the matter will be
resolved by the CEO. With the appropriate approval of the
Committee, Eligible Positions may be added throughout the
calendar year.
4.3 If after March 1 of a Plan Year, a position is made an
Eligible Position, an employee occupying such a position shall
immediately become a Participant and the Department shall prepare
and submit to the Committee upon request any required
information.
Section 5: Variable Compensation Payments
5.1 The Committee shall determine for each Plan Year the
amount of the Variable Compensation Payment for each Participant
included in List A. The Committee shall make this determination
with reasonable promptness following the end of a Plan Year. In
determining the amount of the Variable Compensation Payment
granted to each "List A" Participant, there shall be considered
the extent to which a Participant and such Participant's
Organizational Unit achieves, during a Plan Year, specific
internal and external measures of performance established from
time to time during the Plan Year for the Participant and the
Participant's Organizational Unit. Other factors to be
considered in determining the amount of the Variable Compensation
Payments granted to Participants are set forth in Sections 5.2,
5.3 and 5.4 below.
5.2 The Committee may consider the following factors in
determining the amount of the Variable Compensation Payment
granted to the Participant who occupies the position of CEO: (i)
the Committee's evaluation of the Corporation's overall financial
performance during the Plan Year; (ii) the Corporation's and the
CEO's achievement of such specific critical internal and external
measures of performance as were established for the Corporation
or the CEO, as the case may be, prior to the end of the Plan
Year, and (iii) the compensation levels of Chief Executive
Officers, or their equivalent, in companies with whom the
Corporation compares itself for compensation purposes.
5.3 The Committee, in consultation with the CEO, may
consider the following factors in determining the amount of the
Variable Compensation Payments granted to Participants, other
than the CEO, who are Eligible Officers: (i) the Committee's
evaluation of the overall performance of the Corporation and the
Eligible Officer during the Plan Year; (ii) the achievement by
the Eligible Officers or Organizational Units for which the
respective Eligible Officers are responsible of such specific
critical measures of performance as were established for such
Eligible Officers or Organizational Units, as the case may be,
before the end of the Plan Year, and (iii) the compensation
levels of officers with comparable responsibility in companies
with whom the Corporation compares itself for compensation
purposes.
5.4 The Variable Compensation Payments for Participants
other than Eligible Officers shall be determined as follows: (i)
the CEO shall determine the aggregate amount to be awarded to
each Organizational Unit. That determination shall be based upon
an evaluation of the performance of the Corporation and those
Organizational Units during the Plan Year against such specific
critical measures of performance as were established for such
Organizational Units before the end of the Plan Year; (ii) the
Department shall advise the Organizational Units of the total
Variable Compensation Payments available; (iii) the individual
Variable Compensation Payments within each Organizational Unit
(other than for Eligible Officers) shall be determined by
Organizational Unit management for the approved Participants
based on the Participant's performance and salary grade level.
Organizational Unit Variable Compensation Payment totals must be
within the amounts provided the Organizational Unit by the
Department.
5.5 Variable Compensation Payments shall be payable, at the
discretion of the Committee, in cash, in Union Carbide common
stock, Union Carbide restricted stock or a combination thereof.
The value of the stock used to satisfy a Variable Compensation
Payment shall be the average of the high and low prices of Union
Carbide common stock as reported on the New York Stock Exchange -
Composite Transactions on the date which is five business days
before the Variable Compensation Payment is made 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 Variable
Compensation Payment is made.
Section 6: Payment of Variable Compensation Payments
6.1 The Committee shall normally authorize Variable
Compensation Payments for a Plan Year to be made on or about
March 31 following the end of such Plan Year.
6.2 The Committee reserves the right to delay payment of
some or all Variable Compensation Payments, in whole or in part,
upon such terms and conditions as the Committee in its
discretion may determine. The Committee's decision regarding the
delay in a Variable Compensation Payment shall be final and
binding on all Participants and Beneficiaries.
Section 7: Termination of Employment
7.1 If a Participant's employment with the Corporation
is terminated during a Plan Year, the Committee (with respect to
any officers of the Corporation), and the Department (with regard
to all other Participants) shall determine whether the
Participant shall be entitled to a Variable Compensation Payment
for such Plan Year and the amount of any such Variable
Compensation Payment.
7.2 A Participant whose employment with the Corporation is
terminated for any reason shall be deemed to have terminated
employment with the Corporation on the last day of the month in
which the termination occurs.
Section 8: Change of Position During a Plan Year
8.1 If a Participant is reassigned to a different
Eligible Position during a Plan Year, then the Variable
Compensation Payment to such Participant shall be prorated based
on the number of months and the performance of the Participant in
each Position.
8.2 A Participant who is assigned to an Eligible Position
during a Plan Year, and continues to be a Plan Participant until
the end of the calendar year, shall receive a Variable
Compensation Payment based on the number of months and
Participant's performance in the Position.
8.3 If a Participant ceases to occupy an Eligible Position
during a Plan Year and remains employed by the Corporation, then
the Variable Compensation Payment to such Participant shall equal
the amount which would have been granted to such Participant had
such Participant not ceased to occupy an Eligible Position,
multiplied by a fraction the numerator of which is the number of
months that such Participant occupied an Eligible Position, and
the denominator of which is 12.
8.4 A Participant whose position changes during the Plan
Year for any reason shall be deemed to have changed position on
the last day of the month in which such change of position
occurs.
Section 9: Beneficiary Designation
9.1 The beneficiary or beneficiaries designated by the
Participant or deemed to have been designated by the Participant
under the Savings Program shall be deemed to be the Participant's
Beneficiary. If a Participant does not participate in the
Savings Program or if a Participant does participate in the
Savings Program and has not designated or been deemed to have
designated a beneficiary thereunder, and such Participant dies
without designating a Beneficiary, then the Variable Compensation
Payment shall be distributed to the Participant's estate. If a
Beneficiary does not survive the Participant, then the
Participant's Variable Compensation Payment shall be distributed
to the Participant's estate. If the Beneficiary of a deceased
Participant survives the Participant, and dies before such
Participant's Variable Compensation Payment is distributed, then
such Variable Compensation Payment shall be distributed to the
Beneficiary's estate.
Section 10: General Provisions
10.1 A Participant may not assign a Variable
Compensation Payment without the Department's prior written
consent. Any attempted assignment without such consent shall be
null and void. For purposes of this paragraph, any designation
of, or payment to, a Beneficiary shall not be deemed an
assignment.
10.2 The Plan is intended to constitute an unfunded
incentive compensation arrangement for a select group of key
management. Nothing contained in the Plan, and no action taken
pursuant to the Plan, shall create or be construed to create a
trust of any kind. A Participant's right to receive a Variable
Compensation Payment shall be no greater than the right of an
unsecured general creditor of the Corporation. All Variable
Compensation Payments shall be paid from the general funds of the
Corporation, and no special or separate fund shall be established
and no segregation of assets shall be made to assure payment of
such Variable Compensation Payments.
10.3 Nothing contained in the Plan shall give any
Participant the right to continue in the employment of the
Corporation, or affect the right of the Corporation to discharge
a Participant.
10.4 The Plan shall be construed and governed in
accordance with the laws of the State of New York.
Section 11: Amendment, Suspension, or Termination
11.1 The Board reserves the right to amend, suspend, or
terminate the Plan at any time; provided, however, that any
amendment, suspension or termination shall not adversely affect
the rights of Participants or Beneficiaries to receive Variable
Compensation Payments granted prior to such action.
Section 12: Effective Date and Duration of Plan
The Plan shall be effective beginning as of July 1, 1997
until and including the date of the annual meeting of
shareholders of the Corporation in 2002.
UNION CARBIDE CORPORATION
By: /s/ M.A. Kessinger