<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
UNION CARBIDE CORPORATION
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(Name of Registrant as specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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Union Carbide Corporation
[LOGO OF UNION
CARBIDE APPEARS Notice of Annual Meeting of Stockholders
HERE] to be held on April 24, 1996 and
Proxy Statement
March 12, 1996
<PAGE>
[LOGO OF UNION CARBIDE Union Carbide Corporation
APPEARS HERE] 39 Old Ridgebury Road, Danbury, CT 06817-0001
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NOTICE
of Annual Meeting of Stockholders
to be held on April 24, 1996
March 12, 1996
The annual meeting of the stockholders of Union Carbide Corporation will be
held at 10:00 a.m. on Wednesday, April 24, 1996, in the John C. Creasey Health
Education Center, 24 Hospital Avenue, Danbury, Connecticut, 06810, for the
following purposes:
1. To elect a Board of ten directors for the ensuing year.
2. To ratify KPMG Peat Marwick LLP as independent auditors for 1996.
3. To transact such other business as may properly come before the meeting.
So that your stock will be represented at the meeting in the event that you
do not attend, please sign the proxy and return it in the enclosed envelope.
By Order of the Board of Directors
/s/ SIGNATURE APPEARS HERE
Vice-President, General Counsel and Secretary
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[LOGO OF UNION CARBIDE Union Carbide Corporation
APPEARS HERE] 39 Old Ridgebury Road, Danbury, CT 06817-0001
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PROXY STATEMENT
Table of Contents
Page
General Information for Stockholders...................................... 5
Matters to be Considered at the Annual Meeting:
1. Election of Directors............................................. 7
Committees of the Board:
Audit...................................................... 11
Compensation and Management Development.................... 11
Executive.................................................. 11
Finance and Pension........................................ 12
Health, Safety and Environmental Affairs................... 12
Nominating................................................. 12
Public Policy.............................................. 13
Compensation of Directors....................................... 13
Stock Compensation Plan for Non-Employee Directors......... 13
Non-Employee Directors' Retirement Plan.................... 13
Other...................................................... 14
Compensation Committee Interlocks and
Insider Participation................................. 14
Five Year Cumulative Total Return............................... 14
Report of Compensation and Management Development Committee..... 15
Summary Compensation Table...................................... 20
Stock Options/SARs Granted -- 1995.............................. 21
Stock Options/SARs Exercised -- 1995............................ 22
Retirement Program.............................................. 22
Security Ownership of Management................................ 23
Security Ownership of Certain Beneficial Owners................. 24
Change in Control Arrangements.................................. 25
2. Management Proposal to Ratify KPMG Peat Marwick LLP as
Independent Auditors for 1996..................................... 26
3. Other Business.................................................... 27
Other Information......................................................... 27
4
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General Information for Stockholders
Proxies are solicited from stockholders by the Board of Directors of the
Corporation in order to provide every stockholder an opportunity to vote on all
matters scheduled to come before the meeting, whether or not he or she attends
in person. When the enclosed proxy card is properly executed and returned, the
shares represented will be voted by the proxyholders named on the card in
accordance with the stockholder's directions. Stockholders may vote on a matter
by marking the appropriate box on the card. If the card is executed and
returned, and no choice is specified for a matter, the shares will be voted as
recommended by the Board of Directors on that matter. If a stockholder is a
participant in the Corporation's Dividend Reinvestment and Stock Purchase Plan,
the proxy card will represent both the number of shares registered in the
participant's name and the number of whole shares credited to the participant's
Plan account, and all such shares will be voted in accordance with the
instructions on the proxy card.
It is Union Carbide's policy that all stockholder proxies, ballots and
voting tabulations that identify the votes of specific stockholders be kept
permanently confidential except as may be required by law or to carry out the
purpose of this policy or in the event of a contested proxy solicitation. Access
to proxies and other stockholder voting records will be limited to independent
inspectors of election, independent tabulators and to certain Union Carbide
employees engaged in the receipt, count and tabulation of proxies. Such
employees will be advised of this policy, instructed to comply therewith, and
will sign a statement specifying such compliance. The independent inspectors of
election, in their report to the Board of Directors, will confirm that, to the
best of their knowledge, the Corporation's policy was followed in the tabulation
of the votes. This policy shall not operate to prohibit stockholders from
disclosing the nature of their votes to the Corporation or the Board of
Directors if any stockholder so chooses or to impair free and voluntary
communication between the Corporation and its stockholders.
Management knows of no matters other than those set forth on the proxy card
that will be presented for action at the meeting. Execution of a proxy, however,
confers on the designated proxyholders discretionary authority to vote the
shares represented in accordance with their best judgment on any other business
that may come before the meeting, including stockholder proposals excluded from
the Proxy Statement pursuant to SEC rule 14a-8. Stockholder proposals to be
included in the Corporation's Proxy Statement must comply with rule 14a-8. See
page 27.
Any stockholder executing a proxy may revoke that proxy or submit a revised
one at any time before it is voted. A stockholder may also vote by ballot at the
annual meeting, thereby canceling any proxy previously returned as to any matter
voted on by ballot. A stockholder wishing to name as his or her proxy someone
other than those designated on the proxy card may do so by crossing out the
names of the three designated proxies and inserting the name(s) of the person(s)
he or she wishes to have act as his or her proxy. No more than three individuals
should be so designated. In such a case, it will be necessary that the proxy be
delivered by the stockholder to the person(s) named, and that the person(s)
named be present and vote at the meeting. Proxy cards on which alternate proxies
have been named should not be mailed directly to the Corporation.
Stockholders of record at the close of business on March 6, 1996 are
entitled to notice of the meeting and to vote the shares held on that date at
the meeting. Each share of common stock and each share of ESOP Convertible
Preferred Stock ("ESOP Stock") of the Corporation is entitled to one vote. A
holder of ESOP Stock is entitled to notice of the meeting and to vote on all
matters submitted to a stockholder vote, voting together with the holders of
common stock as one class. As of January 31, 1996, 133,994,257 shares of common
stock of the Corporation were outstanding. Those shares were held by 53,476
stockholders of record.
5
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As of January 31, 1996, 16,229,852 shares of ESOP Stock were outstanding.
Those shares are held by State Street Bank and Trust Company as Trustee of the
Corporation's Employee Stock Ownership Plan ("ESOP"), which is part of the
Corporation's Savings Program, for the benefit of employees who participate in
the Savings Program. By the terms of a trust agreement, the ESOP Trustee will
vote ESOP Stock allocated to individual participants' accounts (5,394,953 shares
as of January 31, 1996) as directed by such participants, and will vote all
other unallocated shares or any shares for which directions were not received in
the same proportion as the Trustee votes allocated shares for which voting
directions are received.
The nominees receiving a plurality of the votes cast will be elected as
directors. An affirmative vote of a majority of the votes cast is required to
ratify the appointment of auditors. Only those votes cast for or against a
proposal are used in determining the results of a vote. Abstentions are counted
for quorum purposes only. Broker non-votes have the same effect as abstentions.
6
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Matters to be Considered at the Annual Meeting
1. Election of Directors
Unless individual stockholders specify otherwise, each returned proxy will
be voted for the election to the Board of Directors of the Corporation of the
ten nominees who are named on the following pages. These nominees were
recommended by the Nominating Committee and approved by the Board. Each director
has consented to being named as a nominee for director and agreed to serve if
elected. Each director, if elected, would serve for a term of one year. If any
of those named is not available for election at the time of the annual meeting,
discretionary authority will be exercised to vote for substitutes unless the
Board chooses to reduce the number of directors. Management is not aware of any
circumstances that would render any nominee named herein unavailable. All
nominees are currently serving on the Corporation's Board of Directors. The ages
of the nominees are as of March 1, 1996.
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[PHOTO APPEARS HERE] John J. Creedon, age 71, Director since 1984, is
Consultant and Director of Various Corporations and
Retired President and Chief Executive Officer of
Metropolitan Life Insurance Company. Mr. Creedon
attended New York University undergraduate and law
schools, where he was awarded a B.S. degree in 1952, an
LL.B. in 1955 and an LL.M. in 1962. Mr. Creedon joined
Metropolitan Life in 1942. He became an officer of
Metropolitan Life in 1962 and was appointed Senior Vice-
President and General Counsel in 1973. In 1976, Mr.
Creedon became an Executive Vice-President of
Metropolitan Life. He was named President and elected a
director of Metropolitan Life in 1980 and became Chief
Executive Officer in 1983. He served as President and
Chief Executive Officer until retiring on September 1,
1989. Mr. Creedon is a director of Metropolitan Life
Insurance Company, Praxair, Inc., Rockwell International
and Sonat Inc. He is also a director, trustee or member
of a number of business, educational and civic
organizations. Mr. Creedon is Chairman of the Audit
Committee and a member of the Compensation and
Management Development, Executive and Health, Safety and
Environmental Affairs Committees of Union Carbide's
Board.
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[PHOTO APPEARS HERE] C. Fred Fetterolf, age 67, Director since 1987, is
Director of Various Corporations and Retired Director,
President and Chief Operating Officer of Aluminum
Company of America. Mr. Fetterolf is a graduate of Grove
City (PA) College, where he received a B.S. in chemistry
in 1952. He joined the Aluminum Company of America that
same year and, following a number of sales and marketing
assignments and service as Vice-President -- Operations,
Primary Products, he was named Vice-President -- Science
and Technology in February 1981 and Executive Vice-
President -- Mill Products later that year. Mr.
Fetterolf became President and a member of the Board of
Directors in 1983 and in 1985 he assumed the additional
responsibility of Chief Operating Officer until retiring
in 1991. Mr. Fetterolf is a director of Allegheny Ludlum
Corporation, Castech Aluminum Group, Inc., Dentsply
International, Inc., Mellon National Bank, Praxair,
Inc., Quaker State Corporation and Urethane Technologies
Inc., a trustee of Carnegie Mellon University and
Eastern College and serves on a number of non-profit
boards. He is Chairman of the Health, Safety and
Environmental Affairs Committee and a member of the
Audit, Compensation and Management Development and
Nominating Committees of Union Carbide's Board.
7
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[PHOTO APPEARS HERE] Joseph E. Geoghan, age 58, Director since 1990, is
Vice-President, General Counsel and Secretary of Union
Carbide Corporation. Mr. Geoghan was graduated from St.
John's University, where he received a B.B.A. degree in
1959, and from Fordham University's School of Law, where
he received the degree of J.D. in 1964. He joined Union
Carbide in 1957, became a member of Union Carbide's Law
Department in 1963 and in 1973 was appointed Chief
International Counsel. He was named Senior Group Counsel
in 1976, Assistant General Counsel in 1980 and, in 1985,
was appointed Deputy General Counsel. Mr. Geoghan was
elected Vice-President and General Counsel of the
Corporation in 1987 and in 1990 was elected to the
additional office of Corporate Secretary. At that time,
he also assumed responsibility for government affairs.
He is also a director and president of The Corporate Bar
Association of Westchester-Fairfield and a member of the
American Bar Association, the New York City Bar, the New
York State Bar Association and the Association of
General Counsel. Mr. Geoghan is a member of the
Executive and Public Policy Committees of Union
Carbide's Board.
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[PHOTO APPEARS HERE] Rainer E. Gut, age 63, Director since 1994, is
Chairman of the Board of Directors of CS Holding,
Zurich, since 1986 and of Credit Suisse, Zurich, since
1983. Mr. Gut was graduated from Cantonal School of Zug,
Switzerland, and had professional training in
Switzerland, Paris and London. Mr. Gut was a general
partner of Lazard Freres & Co., New York, from 1968 to
1971 when he joined Credit Suisse as Chairman and Chief
Executive Officer of Swiss American Corporation, New
York, Credit Suisse's investment banking affiliate at
that time. He was elected a member of the Executive
Board of Credit Suisse in 1975, Speaker of the Executive
Board in 1977 and President of the Executive Board in
1982. In 1983, he was elected Chairman of the Board of
Directors. Mr. Gut is Chairman of the Board of Directors
of CS First Boston, Inc., New York, and is Vice-Chairman
of the Board of Directors of Nestle S.A., Vevey, and
Swiss Reinsurance Company, Zurich, and is a Member of
the Board of Directors of Ciba-Geigy Ltd., Basle,
Daimler-Benz Holding, Zurich, and Sofina S.A., Brussels.
Mr. Gut is a member of the Compensation and Management
Development, Finance and Pension and Nominating
Committees of Union Carbide's Board.
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[PHOTO APPEARS HERE] Vernon E. Jordan, Jr., age 60, Director since 1987, is
Senior Partner, Akin, Gump, Strauss, Hauer & Feld, LLP.
Mr. Jordan is a graduate of DePauw University where he
received the degree of B.A. in 1957. He received the
degree of J.D. from Howard University Law School in 1960
and a fellowship from the Institute of Politics, John F.
Kennedy School of Government of Harvard University in
1969. Mr. Jordan has also received honorary degrees from
numerous colleges and universities. Mr. Jordan, former
Executive Director of The United Negro College Fund and
President of the National Urban League, Inc., became a
partner in the law firm of Akin, Gump, Strauss, Hauer
and Feld in 1982. He is a member of the Arkansas Bar,
District of Columbia Bar, Georgia Bar, The U.S. Supreme
Court Bar, The American Bar Association, The National
Bar Association and The Council on Foreign Relations. He
is a director of the American Express Company, Bankers
Trust Company, Bankers Trust New York Corporation,
Corning Incorporated, Dow Jones & Co., Inc., The Ford
Foundation, Howard University, Joint Center for
Political and Economic Studies, J.C. Penney Company,
Inc., Revlon Group, Inc., Ryder System Inc., Sara Lee
Corporation and Xerox Corporation. Mr. Jordan is
Chairman of the Nominating Committee and a member of the
Compensation and Management Development, Finance and
Pension and Public Policy Committees of Union Carbide's
Board.
8
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[PHOTO APPEARS HERE] William H. Joyce, age 60, Director since 1992, is
Chairman of the Board, President and Chief Executive
Officer of Union Carbide Corporation. Dr. Joyce was
graduated from Penn State University in 1957 with the
degree of B.S. in chemical engineering and from New York
University with the degree of M.B.A. in 1971 and a Ph.D.
in Business in 1984. He joined the Chemicals and
Plastics Division of Union Carbide in 1957 and has been
associated primarily with the Corporation's chemicals
and plastics business throughout his career. Dr. Joyce
became President of the Silicones and Urethane
Intermediates Division in 1982 and was appointed
President of the Polyolefins Division in 1985. Dr. Joyce
became Executive Vice-President, Union Carbide Chemicals
and Plastics Company Inc. in 1990, and that same year
was elected a Vice-President of the Corporation.
Subsequent to the Corporation's restructuring in 1992,
Dr. Joyce was elected Executive Vice-President of the
Corporation responsible for operations, and in 1993, was
elected President and Chief Operating Officer. In 1995,
Dr. Joyce was elected President and Chief Executive
Officer and effective January 1, 1996, he was also
elected Chairman of the Board. In 1993, Dr. Joyce
received a Medal of Technology from President Clinton.
He is a director of Melville Corporation, Reynolds
Metals Company, The Chemical Manufacturers Association
and The American Plastics Council and is a member of the
Management Committee of UOP, a Union Carbide
Corporation, AlliedSignal Inc. partnership. Dr. Joyce is
Chairman of the Executive Committee of Union Carbide's
Board.
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[PHOTO APPEARS HERE] Robert D. Kennedy, age 63, Director since 1985, is
Retired Chairman of the Board and Chief Executive
Officer of Union Carbide Corporation. Mr. Kennedy is a
graduate of Cornell University where he received a B.S.
degree in Mechanical Engineering in 1955. He joined
Union Carbide that same year at the Niagara Falls
operations of the National Carbon Division, where he
held various positions. In 1963 he became a Product
Manager and in 1971 he went to Geneva, Switzerland as
Marketing Director of Carbon Products for Union Carbide
Europe. There he became Product Director in 1973 and
Senior Vice-President responsible for gases, metals and
carbons in 1975. Mr. Kennedy returned to New York as
President of the Linde Division in 1977. He was elected
a Senior Vice-President of the Corporation in 1981 and
an Executive Vice-President in 1982. In 1985, he was
elected a Director and President of Union Carbide
Corporation, responsible for the Chemicals and Plastics
Group. In April 1986, he was elected President and Chief
Executive Officer of Union Carbide Corporation and
effective December 1986 he was elected Chairman of the
Board. He retired from the Corporation on December 31,
1995. Mr. Kennedy is a director of Union Camp
Corporation, Sun Company, Inc. and UCAR International,
Inc., past Chairman of the Chemical Manufacturers
Association, a member of the Board of Trustees of
Cornell University, Chairman of the New Hampton School
Trustees, past Chairman of INROADS, Inc., past Board
Member of the Fairfield/Westchester County Chapter of
INROADS, Inc., a member of the Business Council, past
member of the Business Round Table and of the Business
Round Table's Education Task Force and its Environmental
Task Force, past Chairman and past member of the
Connecticut Business For Education Coalition (CBEC) and
past member of the Commission on Education Excellence
for Connecticut. He is a member of the Executive,
Nominating and Public Policy Committees of Union
Carbide's Board.
9
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[PHOTO APPEARS HERE] Ronald L. Kuehn, Jr., age 60, Director since 1984, is
Director, Chairman, President and Chief Executive
Officer of Sonat Inc. Mr. Kuehn received the degrees of
B.S. in 1957 and LL.B. in 1964 from Fordham University.
He joined Sonat's legal staff in 1970 and was named
Vice-President in 1979. He was elected Senior Vice-
President in 1980 and Executive Vice-President in
January 1981. In April 1981, he was elected a director
of the Company and was named President and Chief
Operating Officer in 1982. He was appointed Chief
Executive Officer in 1984 and elected Chairman in 1986.
Mr. Kuehn is a director of various wholly-owned
subsidiaries of Sonat Inc., AmSouth Bancorporation,
Praxair, Inc., Protective Life Corporation, Sonat
Offshore Drilling Inc., Interstate Natural Gas
Association of America, Gas Research Institute and a
number of civic organizations. He is a member of the
Board of Trustees of Southern Research Institute,
Birmingham-Southern College and Tuskegee University. Mr.
Kuehn is Chairman of the Compensation and Management
Development Committee and a member of the Finance and
Pension, Health, Safety and Environmental Affairs and
Nominating Committees of Union Carbide's Board.
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[PHOTO APPEARS HERE] Rozanne L. Ridgway, age 60, Director since 1990, is
Co-Chair, The Atlantic Council of the United States. A
retired diplomat in the Foreign Service of the United
States, Ambassador Ridgway's 32 year career included
assignments as Ambassador to Finland, Ambassador to the
German Democratic Republic, Ambassador for Oceans and
Fisheries Affairs, Counselor of the United States State
Department and Special Assistant to the Secretary of the
State for negotiations. She served as Assistant
Secretary of State for European and Canadian Affairs
from 1985 to 1989. She was President of the Atlantic
Council from 1989 through 1992. Ambassador Ridgway is a
director of Bell Atlantic Corporation, The Boeing
Company, Citicorp, Citibank N.A., Emerson Electric Co.,
Minnesota Mining and Manufacturing Company, RJR Nabisco
and Sara Lee Corporation. She is a member of the
International Advisory Board of the New Perspective Fund
and a trustee of The CNA Corporation and the National
Geographic Society. She is a trustee of Hamline
University, a member of the Council on Foreign
Relations, a member of several nonprofit institutions
concerned with international affairs and non-executive
chairman of the Board of the Baltic-American Enterprise
Fund. Ambassador Ridgway is a member of the Audit,
Health, Safety and Environmental Affairs, Nominating and
Public Policy Committees of Union Carbide's Board.
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[PHOTO APPEARS HERE] William S. Sneath, age 69, Director since 1969, is
Director of Various Corporations and Retired Chairman of
the Board and Chief Executive Officer of Union Carbide
Corporation. Mr. Sneath joined Union Carbide in 1950
after graduating from Williams College with the degree
of B.A. and from the Harvard Graduate School of Business
Administration with the degree of M.B.A. He was elected
Treasurer of Union Carbide in 1961 and Vice-President
and Chief Financial Officer in 1965. Mr. Sneath was
elected a director in 1969 and President and Chief
Operating Officer in 1971. He served as Chairman of the
Board and Chief Executive Officer from 1977 to 1982. He
is a director of Metropolitan Life Insurance Company and
Rockwell International Corporation and is a member of
The Business Council. Mr. Sneath is Chairman of the
Finance and Pension Committee and a member of the
Executive, Health, Safety and Environmental Affairs and
Nominating Committees of Union Carbide's Board.
10
<PAGE>
During 1995, there were eight regular meetings of the Board of Directors.
At present, there are 11 directors. James M. Hester, a director for over 32
years, will not stand for reelection in accordance with the retirement policy of
the Board. Pursuant to action by the Board, the number of directors to be
elected at the annual meeting will be ten. The retirement policy of the Board
provides that non-employee directors are not eligible for re-election after
reaching age 72 and that employee directors, except the Chief Executive Officer,
will retire from the Board at the time of their retirement from the Corporation.
Of the ten nominees for election at the annual meeting of stockholders, two are
currently officers of the Corporation. Eight are non-employee directors, two of
whom are retired Chief Executive Officers of the Corporation.
Each director is required to be a stockholder of the Corporation. Each
director serves on one or more committees of the Board that oversee such vital
matters as audits, compensation, finance, health, safety and environmental
affairs, nominations, and public policy. Average attendance by directors at
meetings of the Board and its committees during 1995 was 97%. Each director
attended 75% or more of the aggregate of the meetings of the Board and of the
Board committees on which he or she served.
In addition to attending Board and committee meetings, the directors
devoted time during the year to conferring with officers regarding corporate
matters and to reviewing material submitted by management to the Board and Board
committees for consideration and action.
Committees of the Board -- The Board has seven standing committees. Their
functions are described below:
Audit -- The Audit Committee was established in 1972. The Committee supports
the independence of the Corporation's independent and internal auditors and
the objectivity of the Corporation's financial statements; reviews the
Corporation's principal policies for accounting, internal control and
financial reporting; recommends to the Board the engagement or discharge of
the independent auditors; reviews with the independent auditors the plan,
scope and timing of their audit; reviews the auditors' fees and, after
completion of the audit, reviews with management and the independent
auditors the auditors' report.
The Committee also reviews the annual financial statements of the
Corporation; management's recommendation for the selection of the
independent auditors; the Corporation's internal accounting control system;
and the procedures for monitoring compliance with the Corporation's policies
on business integrity and ethics and conflicts of interest. The Committee
also performs a number of other review functions related to auditing the
financial statements and internal controls. The Committee met five times
during 1995. Members of the Committee are: John J. Creedon, Chairman; C.
Fred Fetterolf; James M. Hester and Rozanne L. Ridgway.
Compensation and Management Development -- The Compensation and Management
Development Committee was established in 1972. The Committee reviews and
recommends to the Board the direct and indirect compensation and employee
benefits of the Chairman of the Board, and other elected officers of the
Corporation; reviews, recommends to the Board and administers any incentive
plans and variable compensation plans that include elected officers; and
reviews the Corporation's policies relating to the compensation of senior
management and, generally, other employees. In addition, the Committee
reviews management's long-range planning for executive development and
succession; establishes and periodically reviews policies on management
perquisites; and performs certain other review functions relating to
management compensation and employee relations policies. The Committee met
three times during 1995. Members of the Committee are: Ronald L. Kuehn, Jr.,
Chairman; John J. Creedon; C. Fred Fetterolf; Rainer E. Gut and Vernon E.
Jordan, Jr.
Executive -- The Executive Committee was established in 1917. Subject to any
limitations prescribed by law or by the Board, the Executive Committee has
and may exercise, when the Board is not in session, all the powers of the
Board. The Committee met three times during 1995. Members of the Committee
are: William H. Joyce, Chairman; John J. Creedon; Joseph E. Geoghan; James
M. Hester; Robert D. Kennedy and William S. Sneath.
11
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Finance and Pension -- The Finance and Pension Committee was established in
1980. The Committee reviews periodically the Corporation's financial
policies and objectives; monitors the Corporation's financial condition and
its requirements for funds; reviews management recommendations as to the
amounts, timing, types and terms of public stock issues and public and
private debt issues; and reviews periodically the Corporation's dividend
policy and foreign exchange operations. The Committee also reviews the
financial, investment and actuarial policies and objectives of the pension
program and, periodically, other employee benefit programs and the
investment performance of the fund established for the pension program. The
Committee also performs certain other review functions related to finance
and pension matters. The Committee met four times during 1995. Members of
the Committee are: William S. Sneath, Chairman; Rainer E. Gut; Vernon E.
Jordan, Jr. and Ronald L. Kuehn, Jr.
Health, Safety and Environmental Affairs -- The Health, Safety and
Environmental Affairs Committee was established in 1985, for the purpose of
enabling the Board to expand its review functions with respect to health,
safety and environmental matters. Prior to January 1985, those matters were
reviewed by the Public Policy Committee. The Health, Safety and
Environmental Affairs Committee reviews the Corporation's policies for
health, safety and environmental affairs ("HS&EA"); reviews the
Corporation's HS&EA performance and its compliance with HS&EA policies and
legal requirements; reviews the Corporation's system for monitoring its
compliance with HS&EA policies and legal requirements; reviews any
significant HS&EA problem and management's response to the problem; and
reviews significant scientific, legislative, governmental and judicial
developments and their effect on corporate policies. The Committee met three
times during 1995. Members of the Committee are: C. Fred Fetterolf;
Chairman; John J. Creedon; Ronald L. Kuehn, Jr.; Rozanne L. Ridgway and
William S. Sneath.
Nominating -- The Nominating Committee was established in 1977. The
Committee recommends to the Board nominees for election as directors, and
periodically reviews potential candidates, including incumbent directors.
The Committee reviews policies with respect to the composition,
organization and practices of the Board, and developments in corporate
governance matters generally. The Committee met twice during 1995. Members
of the Committee are: Vernon E. Jordan, Jr., Chairman; C. Fred Fetterolf;
Rainer E. Gut; James M. Hester; Robert D. Kennedy; Ronald L. Kuehn, Jr.;
Rozanne L. Ridgway and William S. Sneath.
Candidates for nomination as director are considered on the basis of
their broad business, financial and public service experience; their ability
to represent the interests of all stockholders, rather than the special
interests of a particular group; their reputation, capability and integrity
within their fields or professions; and their ability and willingness to
devote the time required to serve effectively as a director and as a member
of one or more Board committees. In addition, candidates are considered on
the basis of their ability, as a group, to bring to the Board familiarity
with national and international business matters, an appreciation of the
appropriate role of the Corporation in today's society and diverse points of
view regarding the many areas in which the Corporation is involved. Nominees
must also be free of any conflicts of interest, legal impediments or other
considerations that might preclude service as a director of the Corporation.
The Committee will consider nominees recommended by stockholders. All
letters of nomination should be sent to the Secretary of the Corporation and
should include the nominee's name and qualifications and a statement from
the nominee that he or she consents to being named in the proxy statement
and will serve as a director if elected. In order for any nominee to be
considered by the Nominating Committee and, if accepted, to be included in
the proxy statement, such recommendation should be received by the Secretary
on or before November 1 preceding the annual meeting at which directors will
be elected by the stockholders.
12
<PAGE>
Public Policy -- The Public Policy Committee was established in 1972. The
Committee reviews the Corporation's policies on and responses to important
social, political and public issues, including matters relating to
international operations, equal employment opportunity, charitable and
education contributions, and legislative issues, as well as policies on and
responses to important stockholder issues, including stockholder proposals
for the proxy statement. The Committee also performs various other functions
relating to public policy matters generally. The Committee met twice during
1995. Members of the Committee are: James M. Hester, Chairman; Joseph E.
Geoghan; Vernon E. Jordan, Jr.; Robert D. Kennedy and Rozanne L. Ridgway.
Compensation of Directors
No director who is an employee is compensated for service as a member of
the Board or any Committee of the Board. Each non-employee director receives an
annual retainer of $30,000. Each non-employee director receives a $1,500 fee for
each Board meeting attended, and a $1,500 fee for each committee meeting
attended. The Chairman of a meeting of a Committee of the Board receives a
$3,000 meeting fee. Non-employee directors who perform special services at the
request of the Chairman are compensated by a per diem fee of $1,500. No per diem
fees were paid in 1995. Reimbursement for travel expense is paid when
appropriate. Non-employee directors are not eligible to participate in the
Corporation's incentive compensation plans or employee benefit plans.
Stock Compensation Plan for Non-Employee Directors -- This plan was approved by
the stockholders on April 22, 1992. The following description gives retroactive
effect to antidilution adjustments made as a result of the spinoff of Praxair,
Inc. in 1992. Each non-employee director on that date received 479 shares for
each year the director was eligible to serve as a director between that date and
December 31, 1996, generally five years. Shares become non-forfeitable at the
rate of 479 shares a year. Also, a director's shares become non-forfeitable when
the director retires, dies or becomes disabled. All shares become non-
forfeitable upon a Change in Control of the Corporation.
Anyone who becomes a non-employee director during 1996 will receive 479
shares under this plan on the date of election to the Board. A participant may
vote and receive dividends on non-forfeitable shares. The sale or transfer of
shares is subject to certain restrictions. At the time shares become non-
forfeitable, a director receives a payment to cover the income tax liability.
During 1995, under a predecessor stock compensation plan, 4.311 shares
became non-forfeitable for all non-employee directors as a group and the
Corporation paid $81,573 to such directors to cover their income tax liability
on those shares.
Non-Employee Directors' Retirement Plan -- The Plan provides a retirement
benefit for non-employee directors who have completed at least five years of
service. The annual benefit equals the annual base retainer in effect when the
director's service ends. Currently, the annual base retainer is $30,000. The
benefit period is for the director's life commencing at the later of age 65 or
termination of service. The present value of the benefit is paid in a lump sum
at termination of service. If a director dies while in service, after having
completed five years of service as a director, then the director's surviving
spouse receives a benefit equal to 50% of the annual retainer for ten years. The
present value of the surviving spouse's benefit is paid in a lump sum at the
time of the director's death. If a director becomes disabled or dies before
completing five years of service, the Nominating Committee may authorize payment
of a benefit to the director or the surviving spouse. Payments are made by the
Corporation or through a grantor trust adopted by the Corporation.
In accordance with the retirement policy of the Board, C. Peter McColough,
a director for over 15 years, did not stand for reelection at the 1995 Annual
Meeting. Under the Plan, a lump sum payment of $213,416 was paid to Mr.
McColough upon his retirement.
13
<PAGE>
Other -- The Union Carbide Corporation Group Life Insurance Plan for Non-
Employee Directors extends group life insurance coverage of $50,000 to each non-
employee director. Costs of premiums are shared by the participating directors
and the Corporation. The Corporation's share of such premiums in 1995 was
$2,448.
Effective March 1, 1996, the Corporation purchased Director's and Officer's
liability insurance from Corporate Officers and Directors Assurance Ltd., X.L.
Insurance Company, Ltd., and ACE Limited to provide continuing coverage for the
individual directors and officers of the Corporation and its subsidiaries at an
annual cost of approximately $600,000.
Compensation Committee Interlocks and Insider Participation -- The members of
the Compensation and Management Development Committee are: Ronald L. Kuehn, Jr.,
Chairman; John J. Creedon; C. Fred Fetterolf; Rainer E. Gut and Vernon E.
Jordan, Jr. Mr. Jordan is a partner of the law firm of Akin, Gump, Strauss,
Hauer and Field. That law firm was retained by and rendered services to the
Corporation in 1995.
Five Year Cumulative Total Return/1/
- --------------------------------------------------------------------------------
[GRAPH APPEARS HERE]
(1) For fiscal years ending December 31. Total return assumes that the value of
an investment in UCC common stock and each index was $100.00 on December 31,
1990 and that all dividends, including the distribution of Praxair, Inc.
stock, were reinvested. Past performance is not necessarily an indicator of
future results.
<TABLE>
<CAPTION>
Graph Dollar Values 1991 1992 1993 1994 1995
------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
UCC 130.21 268.85 376.63 516.53 663.48
S&P 500 130.39 140.29 154.38 156.38 215.08
S&P Chemicals 130.41 142.83 159.74 184.64 241.05
</TABLE>
14
<PAGE>
Report of the Compensation and Management
Development Committee on Executive Compensation
UCC management compensation programs are approved and administered by the
Compensation and Management Development Committee of the Board of Directors (the
Committee), comprised since its inception only of non-employee ("outside")
Directors. The programs have three fundamental objectives: to set compensation
at levels sufficient to attract and retain a diverse mix of experienced, highly
competent executives; to provide incentives to improve the Corporation's
financial performance and performance against strategic and operational goals
(comprising corporate metrics and `measures of performance' or `MOPs' as
discussed in detail below); and to evaluate, reinforce and reward individual
achievement of business objectives and demonstration of "winning behaviors" with
pay that fluctuates with performance.
Programs that meet these objectives help ensure that UCC is well managed
and provide substantial assurance to shareholders that management's interests in
building value are closely aligned with those of its shareholders, as we believe
they are at the Corporation.
The Committee has a strong role in approving corporate goals and reviewing
performance in conjunction with the full Board. The Committee meets early each
year to review the Corporation's prior year performance against goals set at the
start of the year, to review executive compensation in light of performance, and
to consider goals for the new year in conjunction with the full Board. It meets
again later in the year with the Chairman/CEO and non-employee Directors to
evaluate executive performance and review management development and succession
planning, and meets at other times during the year with independent consultants
well acquainted with industry practice to review executive compensation and to
consider revisions or improvements to programs that may be useful in linking
compensation more closely to performance. The Committee met three times during
1995.
A significant organizational change occurred in 1995 affecting the two most
senior officers. At the February 1995 Board of Directors' meeting, the Chairman
and Chief Executive Officer, Robert D. Kennedy, announced his plan to step down
as CEO in April, continuing as Chairman until his retirement at year-end. At the
April 1995 Board of Directors meeting, the Board officially elected Dr. William
H. Joyce, then President and Chief Operating Officer, as President and CEO. At
the November 1995 Board of Directors' meeting, Dr. Joyce was named to succeed
Mr. Kennedy as Chairman, effective January 1, 1996, adding this role to his
ongoing duties as President and CEO. Subsequent references in the report to
these gentlemen will be made by name, rather than title, for clarity.
Sources of Competitive Data -- The Corporation surveys compensation data for a
limited number of companies to establish pay ranges by grade level for base
salary and total compensation which are competitive with industry generally.
Competitive compensation data for executive level positions are also obtained
through consultants. The data base thus obtained includes both chemical
companies and the chemicals and plastics segments of major oil companies. Since
the size of these comparison companies (as measured by sales) varies, the
consultant makes adjustments to the competitive analysis to account for this
variable. The Corporation believes these companies represent an appropriate
benchmark group, whose executive positions require talents and capabilities
similar to UCC's own executive positions.
For financial performance comparisons, the Corporation looks at subsets of
the surveyed companies, which include several of the companies in the S&P
Chemicals Index. These subsets are different for the Return on Capital (ROC)
performance comparison and the Market to Book ratio comparison described on page
17. The companies in the ROC performance group best approximate UCC's businesses
and are similarly affected by margins in the product markets in which the
Corporation competes. The companies in the market to book ratio comparison are
publicly traded chemical companies -- both those in the S&P Chemicals Index as
well as others -- which are considered chemical industry investment
alternatives. The Committee believes that comparison with the companies in each
group -- for ROC and market to book performance, respectively -- is more
appropriate than exclusive comparison with the companies currently comprising
the S&P Chemicals Index.
15
<PAGE>
Components of the Compensation Package -- The compensation package for the
Corporation's executives has four components: base salary, which reflects the
executive's pay grade and level of responsibility and permits income
predictability; profit sharing, paid in cash, which places a small percentage of
base pay at risk and provides for upside potential; variable compensation,
typically paid in cash, which reflects relative corporate, business unit and
individual performance; and long-term incentives, comprised chiefly of stock
options (which create value only if the price of the Corporation's shares
appreciates) and restricted stock (which encourages share ownership and long
term retention).
The Committee targets compensation decisions for executives to produce
median total compensation opportunity for similar jobs found in the surveyed
companies. However, the performance-based nature of the overall package may
produce total compensation above or below the median based on corporate,
business unit and individual performance.
Base Salary -- At least once a year, the Committee reviews the base salary of
the Chairman and CEO, and in consultation with the Chairman and CEO, reviews the
base salaries of corporate officers, evaluating their individual performance to
determine if adjustments are warranted. For executive positions, this is an
assessment of the overall manner in which the role is carried out. As noted, the
Committee also compares base salary levels with the average of those in the
companies surveyed to make sure they remain competitive. The objective is to
approximate the average base pay for a given position, after adding back the
"pay at risk" for profit sharing, described below as 5% -- the amount earned
when the Corporation's return on capital equals it average cost of capital.
For the past several years, Mr. Kennedy's base salary has been somewhat
higher than the average of the salaries of his peers in companies surveyed
(primarily a consequence of the previous corporate structure which included the
industrial gases and carbon businesses). Because of this difference, the
Committee elected not to grant Mr. Kennedy a salary increase during the period
1992-1994. However, in recognition of his superior performance in meeting the
operational goals of the Corporation, and his having foregone changes to base
pay since early 1991, the Committee elected to grant a salary increase of 7% of
base pay in January 1995.
Dr. Joyce is new to his position and grade level and, as a result, his base
pay is considerably below the competitive group average. As a consequence of
this and his noteworthy performance, the Committee elected to grant an increase
in February 1996 of 25% of base pay. The executive officers as a group
(exclusive of Dr. Joyce) were granted base pay increases averaging approximately
5% for 1996.
Profit Sharing -- The profit sharing plan covers virtually all employees.
Participants in the plan have the opportunity to earn extra pay every quarter in
which return on invested capital for the Corporation exceeds a predetermined
level. The maximum payout is ten days' base salary per calendar quarter. Profit
sharing returned 40 days' pay for 1995 performance. To accomplish the "pay at
risk" concept, the Corporation has set base salaries for all jobs at about 5%
below the average of the surveyed companies. Through profit sharing, the 5% can
be earned back to restore base pay to competitive levels, and in exceptional
years, to better the competitive average by 10%. The Corporation's officers
participate in the Profit Sharing Plan.
Variable Compensation -- Because earnings in the chemicals and plastics industry
are significantly affected by the chemical business cycle, the Corporation's
variable compensation program is largely based on relative performance against
the financial comparison companies, most of which are similarly affected by the
cycle. Variable compensation is also based on the degree of success in achieving
individual as well as corporate measures of performance. Given the Corporation's
policy to "pay for performance," when performance exceeds the competitive group
average, the combination of base salary, profit sharing and variable
compensation should also exceed the competitive group average. Similarly, when
performance falls short of the competitive group average, total compensation
should fall below the average as well.
16
<PAGE>
Variable compensation serves to focus executives on those activities most
directly within their control, for which they should be held accountable. It
recognizes that individual performance can be strong or weak despite business
results that year, affording an opportunity to recognize outstanding individual
contributions in any year. An implication of this design is that there may be
years in which some executives receive considerably larger variable compensation
payments than others. These differences indicate the presence of a "pay for
performance" environment. There are two plans which provide variable
compensation to corporate officers -- the Performance Incentive Plan [PIP] and
the Variable Compensation Plan [VCP], both described below. There are 14
corporate officers covered under both plans for 1995.
PIP was effective January 1, 1995 and was approved by shareholders in April
1995. The Plan is based exclusively on the Corporation's relative ROC
performance against financial comparison companies over a 12 month fiscal year
ending September 30. Since payouts under this Plan qualify as "performance
based," they are deductible by the Corporation under the provisions of Section
162(m) of the Internal Revenue Code, even if total compensation exceeds $1
million to any individual. The Committee retains discretion to reduce payouts
calculated by formula under this Plan, but would have no discretion to increase
individual awards above the maximum specified under the Plan. Pursuant to the
PIP, the Committee awarded $675,000 to Mr. Kennedy and $590,000 to Dr. Joyce for
1995 ROC performance. Total payments under PIP to the executive officers as a
group were $2,925,000 (including Mr. Kennedy and Dr. Joyce) for 1995 ROC
performance.
Variable Compensation Plan payments for corporate officers are determined
by the Committee. The calculation is based on specific measurable criteria known
as "metrics," progress against non-financial corporate measures of performance
and each officer's contribution to achievement of the metrics and MOPs. The
metrics include:
Relative Shareholder Value -- Market to Book ratio of the Corporation's
common stock vs. the market to book
comparison companies
Growth -- as measured by growth in sales volume over
three years
Productivity -- as measured by actual fixed cost per pound
of product
The above three metrics collectively represent 60% of the VCP award value
at target, leaving 40% consideration for the other key non-financial corporate
MOPs. There are no specific weights assigned to any single MOP, as distinguished
from the Corporate Metrics, which each have an assigned weight. In any given
year, the weighting of one performance measure over another may vary.
The 1995 MOPs included a number of ambitious short term goals. These
included continued improvement in Health, Safety and Environmental performance
and risk management; "people excellence," with an emphasis on upward mobility of
women and minorities, human asset management, and training and education;
attainment of corporate financial targets, as well as profit enhancement and
capital program goals; strategic plan implementation and technology leadership,
including successful implementation of global joint ventures which rely on the
Corporation's competitively advantaged technology; continued excellence in
customer focus; and continued effectiveness in communicating clearly and
credibly with our critical internal and external constituencies.
At its January 1996 meeting, the Committee gave heaviest weight to
performance against Responsible Care goals and corporate financial performance
MOPs. In the former case, they took favorable note of the fact that the
corporation had no fatalities or significant events of any kind for the first
year ever. Continued improvement in worker safety, as indicated by reductions in
total and work-caused recordable injuries and illnesses was also seen to be a
significant positive. The total number of spills also declined. On the
unfavorable side, however, the number of key spills increased somewhat over
1994.
17
<PAGE>
Among elements of corporate financial performance, other than those already
covered in the Metrics, the Committee took note of the fact that the
Corporation's credit rating was maintained and that UCC repurchased 14.1 million
shares of its stock, reducing the number of shares outstanding by 9.3 million
compared to end-of-year 1994. They noted, however, that the average inventory
levels were high, exceeding the MOP for this category.
Other noteworthy items were the Corporation's satisfactory execution of its
capital program; continuing progress in implementation of joint ventures in
Europe and the Mideast and an acquisition in the UK; achievements in "People
Excellence," including further progress toward upward mobility goals and
increased employee understanding of and alignment with the corporation's
strategic goals; and effective use of research and development resources to
support growth through new opportunities to capitalize on the corporation's
proprietary technologies.
The Committee also took note of continued excellence in Customer Focus as
evidenced by supplier recognition awards from a number of major customers, as
well as pilot testing of a survey process to better monitor and measure customer
satisfaction, and of continued communication effectiveness with investors,
lenders, employees, customers and other important consituencies of the
Corporation.
Based on the above assessment, the Committee rewarded Mr. Kennedy's
leadership in advancing the Corporation's strategic plan and elected to award a
Variable Compensation Plan payment of $275,000, which when combined with his
award under the Performance Incentive Plan, produced a total award of $950,000
- -- 109% of his December 1995 base salary. Dr. Joyce was awarded $235,000, which
when combined with his award under the Performance Incentive Plan, produced a
total award of $825,000, 137% of his December 1995 base salary. In authorizing
this award the Committee took special note of his strong role in the growth of
the company through a number of global joint ventures and enhancing the
company's stock performance. Consistent with similar award practices in the U.S.
chemical industry, standard individual awards under the two variable
compensation programs (the Performance Incentive Plan and Variable Compensation
Plan) can range from 5 to 60% of annual base salary, depending on pay grade, but
can be considerably greater (up to 150% of annual salary, at the Chairman and
CEO level) in years of exceptional performance. Awards may also be withheld
entirely when corporate performance falls short of goals, as happened in the
case of senior executive officers for 1991 performance.
Long-Term Incentives: Stock Options and Restricted Stock Matching -- Stock
options are generally granted annually, at the closing price of the
Corporation's common stock as reported on the New York Stock Exchange --
Composite Transactions on the date of the grant. Since 1989, they have specified
a holding period of at least two years from the grant date. Options expire after
ten years. Except for adjustments to reflect major changes in the Corporation's
capital base, as occurred after the industrial gases spin-off in 1992, the
Corporation has neither adjusted the price nor amended the financial terms of
outstanding options. This means executives cannot benefit from stock price
appreciation until and unless shareholders also benefit. Stock options serve as
the compensation "glue," tying all executives to a common goal, regardless of
where in the company they work. Stock options reward all executives for a common
outcome.
Beginning in 1995, the Restricted Stock Matching Program (authorized under
the 1994 Long-Term Incentive Plan) was made available to all employees eligible
for variable compensation (approximately 1,750 worldwide). Participants have 60
days from receipt of their variable compensation to deposit with the Corporation
for a period of three years UCC stock worth up to 25% of their variable
compensation. In lieu of depositing stock, employees may "pledge" shares held in
their Savings or Dividend Reinvestment Program accounts. In exchange for the
deposit or pledge of stock, the Corporation grants a share for share match of
restricted stock which vests after 3 years. Since the Restricted Stock Matching
Program was meant to complement the Stock Option Program, the value of the
restricted stock grant for which an employee was eligible in 1995 was offset
from the November 1995 stock option grant in a 3 to 1 ratio (i.e. 3 fewer
options for each share of restricted stock), delivering total competitive, long-
term incentive value to those participating in both programs.
18
<PAGE>
The Committee regularly reviews the competitiveness of the Corporation's
long-term incentives and may in the future consider other forms of long-term
compensation. For 1995, stock options and restricted stock matching were the
Corporation's only incentives tied to long-term performance. Most of the
surveyed companies have more incentive programs tied to long-term results. To
keep total compensation competitive, the Committee has generally granted more
stock options than would be the case if Union Carbide had a greater number of
programs tied to long-term performance.
Stock options are valued with formulas which estimate the value of a 10
year option on the date of grant. At any point in time, this value may vary
based on the stock's volatility, price and dividend levels. As a consequence of
the stock's estimated value and the offset required for the value of the
restricted stock matching grant, the Committee authorized 30% fewer shares for
grant in November 1995 than for the previous grant.
Given the strong 1995 performance of the Corporation, and Dr. Joyce's role
in particular, the Committee awarded him 111,000 stock options in November 1995.
Specifically, the Committee noted that the Corporation produced significant
returns to shareholders under his leadership -- 27+% return in 1995 (30+%
assuming reinvested dividends). The size of the grant to Dr. Joyce, as well as
to the other executive officers, was approximately at the median for long term
incentives granted by the surveyed companies for comparable positions (which
includes the value of restricted stock matching). In 1995, Dr. Joyce also
participated in the Restricted Stock Matching Program. After pledging 4,097
shares of UCC stock in his Savings Program account, he received a matching grant
of 4,097 restricted shares which will vest in June 1998.
Mr. Kennedy did not receive an option grant in November 1995 due to his
retirement at year end. However, he did elect to participate in the Restricted
Stock Matching Program earlier in the year and, after pledging 7,930 shares of
UCC stock in his Savings Program account, he received 7,930 restricted shares
which will vest in June 1998.
Stock Ownership -- Three years ago, the Board of Directors initiated stock
ownership guidelines for senior management to forge a direct link between
management and shareholders and create an incentive to increase the company's
market value. Under the guidelines, management would be expected to own stock
valued at four times the annual base salary for the Chairman/CEO; and amounts
equal to annual base salary for the remaining corporate officers, with a five
year period to achieve these guidelines. Most corporate officers already exceed
their guideline amount by a wide margin and the few who have not yet achieved
them have made substantial progress. Dr. Joyce, in particular, already holds
nearly fourteen times his December base pay in UCC stock, well above his
guideline of four times base pay. In October 1993, the Committee endorsed the
extension of these ownership guidelines to a broader group of managers
(approximately 110) who are expected to own stock valued at either one times
annual base salary or at one third of annual base salary, depending on position
level. They also have five years to achieve these stock ownership levels. At
year-end 1995, over 95% of the group had attained their guideline level of
ownership.
Deferred Compensation Program -- The Corporation maintains a nonqualified
compensation deferral program into which participants may defer up to 25% of
their base salary and up to 85% of their variable compensation, with payout
generally commencing at or after retirement. A portion of these deferrals may be
subject to a matching employer contribution.
Summary -- The Compensation and Management Development Committee believes that
the objectives of the compensation and incentive programs at Union Carbide
Corporation are consistent with programs maintained by comparable industrial
companies and serve to keep shareholder and management interest in building
value closely aligned. The Corporation's senior executives have successfully
positioned the organization for global competition and their efforts during 1995
have greatly expanded its worldwide opportunities for growth and profitability.
Compensation and Management Development Committee
Ronald L. Kuehn, Jr., Chairman C. Fred Fetterolf Rainer E. Gut
John J. Creedon Vernon E. Jordan, Jr.
19
<PAGE>
Summary Compensation Table
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
All Other
Annual Compensation Long Term Compensation Compensation/5/
------------------------------------------------- ------------------------ -----------------
Number of
Securities
Annual Other Underlying
Variable Annual Restricted Options/SARs
Name and Principal Position Year Salary Compensation Compensation/2/ Stock/3/ Granted
- ---------------------------------- ---- ------ ------------ --------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert D. Kennedy 1995 $875,000 $950,000/1/ $174,010 $230,961 -0- $301,819
Chairman 1994 815,000 900,000 122,581 -0- 130,000 81,252
1993 815,000 590,000 4,350 -0- 300,000/4/ 103,479
William H. Joyce 1995 $550,000 $825,000/1/ $ 92,308 $119,325 111,000 $114,740
President and Chief Executive 1994 445,833 465,000 42,404 -0- 90,000 44,902
Officer 1993 393,333 340,000 145,466 -0- 220,000/4/ 37,436
Joseph E. Geoghan 1995 $368,750 $275,000/1/ $ 63,444 $ 68,007 30,000 $ 46,674
Vice-President, General Counsel 1994 350,000 265,000 42,436 -0- 41,000 25,980
and Secretary 1993 343,750 195,000 6,936 -0- 140,000/4/ 34,370
Joseph C. Soviero 1995 $320,000 $235,000/1/ $ 56,081 $ 51,318 25,000 $ 30,786
Vice-President, Corporate 1994 303,333 200,000 30,154 -0- 29,000 17,687
Ventures & Purchasing 1993 293,340 145,000 122,645 -0- 80,000/4/ 26,278
Roger B. Staub 1995 $271,667 $260,000/1/ $ 43,077 $ 55,163 25,000 $ 53,040
Corporate Vice-President/General 1994 255,000 215,000 24,500 -0- 29,000 38,058
Manager - Unipol Systems 1993 238,755 155,000 91,664 -0- 80,000/4/ 40,613
John K. Wulff 1995 $271,667 $210,000/1/ $ 43,077 $ 46,192 15,000 $ 27,422
Vice-President, Controller and 1994 264,167 180,000 25,442 -0- 25,000 8,777
Principal Accounting Officer/6/ 1993 258,750 145,000 -0- -0- 60,000/4/ 16,241
</TABLE>
- --------------------------------------------------------------------------------
(l) Annual Variable Compensation includes payments under both the 1995
Performance Incentive Plan and the Variable Compensation Plan. The
Performance Incentive Plan rewards corporate officers exclusively for ROC
performance. The Variable Compensation portion of the annual award is based
on performance against other key metrics and corporate measures of
performance.
(2) Other Annual Compensation in 1993, 1994 and 1995 for Messrs. Kennedy and
Geoghan includes financial planning and related tax advice and service. In
1994 and 1995 for both individuals it also includes profit sharing. Mr.
Kennedy's total for 1994 and 1995 also includes $32,613 and $32,309,
respectively for personal transportation expenses. The 1993, 1994 and 1995
amounts for Dr. Joyce, Mr. Soviero and Mr. Staub include profit sharing and
in 1993, reimbursement for liabilities on annuity purchases to fund the
Corporation's obligations for certain nonqualified retirement benefits ("tax
liabilities") of $140,857 for Dr. Joyce, $119,183 for Mr. Soviero and
$88,837 for Mr. Staub. Also included in this column for Mr. Soviero is a tax
equalization payment of $6,850 in 1995 on his 1993 annuity purchase. The
1994 and 1995 amounts for Mr. Wulff are profit sharing.
(3) Restricted stock holdings as of December 31, 1995 and their fair market
value based on the per share closing price of the Company's common shares on
the New York Stock Exchange on December 29, 1995 ($37.500) were as follows:
<TABLE>
<CAPTION>
R.D. Kennedy W.H. Joyce J.E. Geoghan J. C. Soviero R. B. Staub J.K. Wulff
------------ ---------- ------------ ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
No. of Restricted Shares: 8,009 4,138 2,358 1,780 1,913 1,602
Value on Dec. 29, 1995: $300,843 $155,429 $88,584 $66,846 $71,853 $60,169
</TABLE>
Dividends are payable on the restricted shares to the extent and on the same
date as dividends are paid on all other Company common shares, are
reinvested in restricted shares, and their value is included in the totals
above.
(4) Stock Options Granted in 1993:
-----------------------------
<TABLE>
<CAPTION>
Date of Grant: R.D. Kennedy W.H. Joyce J.E. Geoghan J. C. Soviero R. B. Staub J.K. Wulff
-------------- ------------ ---------- ------------ ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Jan. 26, 1993 150,000 110,000 50,000 40,000 40,000 30,000
Dec. 10, 1993 150,000 110,000 90,000 40,000 40,000 30,000
</TABLE>
The normal annual stock option grant timing has been adjusted from January
to November/December of the preceding calendar year. The year 1993 was the
first year of that adjustment, therefore two grants appear for the calendar
year 1993.
(5) All Other Compensation includes annual life insurance premiums paid to split
dollar life insurance contracts and employer contributions to the Savings
Program. The amount of the whole life insurance portion reported as paid for
the named executive officer is the entire premium minus that portion of the
premium actually paid by the executive officer. For 1995, life insurance
premiums were $91,458 for Mr. Kennedy; $56,851 for Dr. Joyce; $38,237 for
Mr. Geoghan; $17,004 for Mr. Soviero; $32,659 for Mr. Staub and $2,263 for
Mr. Wulff. Employer contributions to the Savings Program were $8,437.50 for
Messrs. Kennedy, Geoghan, Soviero, Staub, Wulff and Dr. Joyce. This matching
contribution was made in the form of ESOP preferred stock. Under the Omnibus
Budget Reconciliation Act of 1993 (OBRA), the maximum amount of compensation
that may be recognized for employer matching contributions is limited to
$150,000 per year (a reduction from the 1993 limit of $235,840). Additional
allocations to the nonqualified compensation deferral program for 1995
include $49,452 for Dr. Joyce; $5,344 for Mr. Soviero; $11,944 for Mr. Staub
and $16,722 for Mr. Wulff. All Other Compensation for Mr. Kennedy also
includes accrued vacation pay of $201,923 paid December 31, 1995 in a lump
sum.
(6) Mr. Wulff was elected Vice-President, Chief Financial Officer and Controller
effective February 1, 1996.
Messrs. Kennedy, Geoghan, Soviero, Staub, Wulff and Dr. Joyce may also
receive income from the exercise of certain options to purchase the stock of
Praxair, Inc. which were granted in connection with the spinoff of Praxair,
Inc. to stockholders on June 30, 1992. On that date, each holder of UCC
options received an equal number of Praxair options and the exercise prices
of the UCC options were reduced. Immediately after the spinoff, the combined
exercise prices of the UCC options and Praxair options equaled the exercise
prices of the UCC options prior to the spinoff. For years prior to 1994, any
income received in connection with the exercise of Praxair options was
reported as income from Praxair, Inc. For 1994, the Internal Revenue Service
determined that this income must be treated for tax purposes as paid to the
reporting persons by UCC. The amount of income received by Messrs. Kennedy,
Geoghan, Soviero and Wulff in 1994 as a result of the exercise of Praxair
options was $1,296,560, $33,830, $111,033 and $230,920, respectively. In
1995, the amount of income received by Messrs. Geoghan and Wulff and Dr.
Joyce as a result of the exercise of Praxair options was $291,649, $217,447
and $327,628, respectively.
20
<PAGE>
Stock Options/SARs Granted -- 1995
<TABLE>
- -------------------------------------------------------------------------------
Potential Realizable Value at Assumed
Annual Rates of Stock Price
Individual Grants Appreciation for Option Term/1/
------------------------------------------------ -------------------------------------------------
5% 10%
Number of ---------------------- ------------------------
Securities % of Total
Underlying Options/SARs Assumed Potential Assumed Potential
Options/SARs Granted to Exercise Expiration Stock Realizable Stock Realizable
Name Granted Employees Price Date Price Value Price Value
- ------------------------------- ------------ ------------ -------- ---------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert D. Kennedy -0- -0- N/A N/A N/A -0- N/A -0-
Chairman
William H. Joyce 111,000 9.5% $40.375 11/29/05 $65.766 $2,818,401 $104.722 $7,142,517
President and
Chief Executive Officer
Joseph E. Geoghan 30,000 2.6% $40.375 11/29/05 $65.766 $ 761,730 $104.722 $1,930,410
Vice-President, General
Counsel and Secretary
Joseph C. Soviero 25,000 2.1% $40.375 11/29/05 $65.766 $ 634,775 $104,722 $1,608,675
Vice-President, Corporate
Ventures & Purchasing
Roger B. Staub 25,000 2.1% $40.375 11/29/05 $65.766 $ 634,775 $104.722 $1,608,675
Corporate Vice-President/General
Manager - Unipol Systems
John K. Wulff 15,000 1.3% $40.375 11/29/05 $65.766 $ 380,865 $104.722 $ 965,205
Vice-President,
Controller and Principal
Accounting Officer(2)
Gain of All Recipients of 1995 -- -- -- -- $65.766 0.9%/3/ $104.722 0.9%/3/
Stock Options, as % of All
Shareholders Gain
</TABLE>
- -------------------------------------------------------------------------------
(1) The assumed annual rates of stock price appreciation of 5% and 10% are set
by the SEC rule and are not intended as a forecast of possible future
appreciation in stock prices.
(2) Mr. Wulff was elected Vice-President, Chief Financial Officer and Controller
effective February 1, 1996.
(3) Assumes that the number of shares of common stock outstanding at December
31, 1995 is the same number outstanding at the relevant future date.
Note: Stock Options are generally exercisable two years from the date of grant.
In the event of a Change in Control of the Corporation, all outstanding
stock options become immediately exercisable. Options also become
immediately exercisable upon the death of the participant. Refer to Change
in Control discussion on page 25 for further provisions regarding Change
in Control.
21
<PAGE>
Stock Options/SARs Exercised in 1995 and Stock Option/SAR Values at 12/31/95
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs In-the-Money Options/SARs
Shares Held at 12/31/95 Held at 12/31/95/1/
Acquired Value -------------------------- ---------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert D. Kennedy
Chairman -0- -0- 720,000 130,000 $17,026,910 $1,153,750
William H. Joyce
President and Chief Executive Officer -0- -0- 326,000 201,000 $ 6,984,317 $ 798,750
Joseph E. Geoghan
Vice-President, General Counsel and
Secretary -0- -0- 225,000 71,000 $ 4,869,165 $ 363,875
Joseph C. Soviero
Vice-President, Corporate
Ventures & Purchasing -0- -0- 158,000 54,000 $ 3,606,867 $ 257,375
Roger B. Staub
Corporate Vice-President/General
Manager-Unipol Systems -0- -0- 164,800 54,000 $ 3,869,755 $ 257,375
John K. Wulff
Vice-President, Controller and
Principal Accounting Officer/2/ -0- -0- 102,000 40,000 $ 2,251,104 $ 221,875
- --------------------------------------------------------------------------------
</TABLE>
(1) Based on a closing price of $37.500 per share on December 29, 1995 as
reported on NYSE-Composite Transactions. No stock appreciation rights (SARs)
were exercised during 1995 and none are outstanding.
(2) Mr. Wulff was elected Vice-President, Chief Financial Officer and Controller
effective February 1, 1996.
There were no transactions that require disclosure in a table for long-term
incentive plan awards.
Retirement Program
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average
Annual Compensation Estimated Annual Retirement Benefits at Age 65
Used for for Years of Service Indicated
Calculating -------------------------------------------------------------------------------------
Retirement Benefits/1/ 15 Yrs. 20 Yrs. 25 Yrs. 30 Yrs. 35 Yrs. 40 Yrs.
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,500 $ 60,000
150,000 33,750 45,000 56,250 67,500 78,750 90,000
250,000 56,250 75,000 93,750 112,500 131,250 150,000
500,000 112,500 150,000 187,500 225,000 262,500 300,000
750,000 168,750 225,000 281,250 337,500 393,750 450,000
1,000,000 225,000 300,000 375,000 450,000 525,000 600,000
1,500,000 337,500 450,000 562,500 675,000 787,500 900,000
2,000,000 450,000 600,000 750,000 900,000 1,050,000 1,200,000
2,500,000 562,500 750,000 937,500 1,125,000 1,312,500 1,500,000
- --------------------------------------------------------------------------------
</TABLE>
(1) The compensation covered by the Retirement Program includes base salary,
annual variable compensation and eligible profit sharing. Benefits are
determined by average final compensation, are computed on a straight-life
annuity basis, and are subject to an offset for Social Security. The table
reflects the combination of qualified and nonqualified pension benefits. As
of December 31, 1995, Robert D. Kennedy, age 63 was credited with 40 years
of service; William H. Joyce, age 60, 38 years; Joseph E. Geoghan, age 58,
38 years; Joseph C. Soviero, age 57, 30 years; Roger B. Staub, age 61, 39
years and John K. Wulff, age 47, 8 years.
22
<PAGE>
Security Ownership of Management
At February 1, 1996, all directors and officers as a group (22 persons)
beneficially owned 3,149,103 shares (1.96%) of the Corporation's common stock.
As required by SEC rule, the number of shares of common stock beneficially owned
includes shares as to which a right to acquire ownership exists, such as through
the exercise of employee stock options and conversion of convertible securities.
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------
Number of Shares Title of
Name Position Beneficially Owned(l) Class
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
W. H. Joyce Director, Chairman, President and 206,910/2/ Common Stock
Chief Executive Officer 3,183 ESOP Convertible Preferred Stock
4,137 Restricted Stock
326,000 Exercisable Stock Options
------- --------------------------------
540,230 Total
J. E. Geoghan Director, Vice-President, 24,246 Common Stock
General Counsel and Secretary 3,143 ESOP Convertible Preferred Stock
2,358 Restricted Stock
225,000 Exercisable Stock Options
------- --------------------------------
254,747 Total
J. C. Soviero Vice-President, Corporate 10,870 Common Stock
Ventures and Purchasing 3,071 ESOP Convertible Preferred Stock
1,779 Restricted Stock
158,000 Exercisable Stock Options
------- --------------------------------
173,720 Total
Roger B. Staub Vice-President 18,272 Common Stock
General Manager - UNIPOL 3,000 ESOP Convertible Preferred Stock
1,912 Restricted Stock
164,800 Exercisable Stock Options
------- --------------------------------
187,984 Total
J. K. Wulff Vice-President, Chief Financial 37,970 Common Stock
Officer and Controller 3,048 ESOP Convertible Preferred Stock
1,601 Restricted Stock
102,000 Exercisable Stock Options
------- --------------------------------
144,619 Total
J. J. Creedon Director 11,369 Common Stock
C. F. Fetterolf Director 4,547 Common Stock
R. E. Gut Director 5,000 Common Stock
J. M. Hester Director 4,224 Common Stock
V. E. Jordan, Jr. Director 3,929 Common Stock
R. D. Kennedy Director 258,935/3/ Common Stock
1,476 ESOP Convertible Preferred Stock
8,009 Restricted Stock
660,000 Exercisable Stock Options
------- --------------------------------
928,420 Total
R. L. Kuehn, Jr. Director 6,096 Common Stock
R. L. Ridgway Director 2,941 Common Stock
W. S. Sneath Director 17,865/4/ Common Stock
All Officers and 836,171 Common Stock
Directors (22 persons) 36,846 ESOP Convertible Preferred Stock
30,336 Restricted Stock
2,245,750 Exercisable Stock Options
------- --------------------------------
3,149,103 Total
</TABLE>
- --------------------------------------------------------------------------------
(1) Except as noted in the footnotes below, the beneficial owners of the shares
shown above had sole voting power and sole investment power with respect to
the shares of common stock and shared voting power and shared investment
power with respect to the shares of ESOP Stock.
(2) The shares of common stock listed as beneficially owned by Dr. Joyce include
2,000 shares that are owned by his children as to which beneficial ownership
is disclaimed.
(3) The shares of common stock listed as beneficially owned by Mr. Kennedy
include 50,000 shares that are held by The Arnold F. Baggins Foundation in
which Mr. and Mrs. Kennedy have shared investment and voting power and
disclaim beneficial ownership.
(4) The shares of common stock listed as beneficially owned by Mr. Sneath
include 873 shares that are owned by his spouse as to which beneficial
ownership is disclaimed.
23
<PAGE>
Security Ownership of Certain Beneficial Owners
- --------------------------------------------------------------------------------
<TABLE>
Number of Shares Title of Percent of
Name and Address Beneficially Owned Class Class
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, New York 10260 8,336,257/1/ Common Stock 5.50%
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109 17,845,989/2/ Common Stock 11.79%
State Street Bank and Trust Company 16,242,506/3/ ESOP Convertible 100.00%
as Trustee of the Union Carbide Corporation Preferred Stock
Employee Stock Ownership Plan
200 Newport Avenue
Quincy, Massachusetts 02171
</TABLE>
- --------------------------------------------------------------------------------
(1) In a Schedule 13G dated February 15, 1996, J.P. Morgan & Co. Incorporated
stated that it beneficially owned 8,336,257 shares of the common stock of
the Corporation at December 31, 1995. As to such shares, J.P. Morgan & Co.
Incorporated has sole voting power for 4,498,196 shares, shared voting power
for 108,295 shares, sole investment power for 8,048,062 shares, and shared
investment power for 201,695 shares.
(2) In a Schedule 13G dated February 14, 1996, FMR Corp. stated that it
beneficially owned 17,845,989 shares of the common stock of the Corporation
at December 31, 1995. As to such shares, FMR Corp. has sole voting power for
948,160 shares and sole investment power for 17,845,989 shares.
(3) As of December 31, 1995, the ESOP Trustee held 16,242,506 shares of ESOP
Stock representing 100% of that class of stock. Each such share has the same
voting rights as, and is convertible into, one share of common stock. As of
that date, the ESOP Stock represents 10.7% of the total of common stock and
ESOP Stock outstanding. The Trustee has shared voting power and shared
investment power with respect to the ESOP Stock. The shares shown above
include the ESOP Stock shown in the preceding table. In a Schedule 13G dated
February 13, 1996, State Street Bank and Trust Company stated that as of
December 31, 1995, in its capacity as trustee for various collective
investment funds, index accounts and personal trusts, it also beneficially
owned 1,510,876 shares (1.0%) of the Corporation's common stock. As to such
shares, State Street Bank and Trust Company has sole voting power for
1,149,045 shares, shared voting power for 2,331 shares, sole investment
power for 1,500,845 shares and shared investment power for 1,031 shares.
24
<PAGE>
Change in Control Arrangements
The Corporation has severance compensation agreements with the officers
named in the Summary Compensation Table and certain other officers and
employees. If a Change in Control of the Corporation, as defined in the
severance compensation agreements occurs, and one or more of the following
events occurs within a period of up to 24 months thereafter, an executive may
resign and receive a lump sum payment and other benefits. The events include:
(1) a change or diminution of the executive's responsibilities or compensation;
(2) relocation; (3) discontinuance of compensation plans in which the executive
participated; (4) reduction of life insurance, medical, health and accident,
disability and certain other benefits for the executive; (5) failure by a
successor corporation to assume the severance compensation agreement; and (6)
termination of the executive's employment contrary to the terms of the severance
compensation agreement.
If an executive resigns because of one of the foregoing after a Change in
Control, the executive will receive: (1) a lump sum severance payment equal to
2.99 times the executive's average annual compensation (including base salary,
variable compensation, profit sharing, ordinary income from stock option
exercises and other "fringe" compensation, which amounts may differ from amounts
shown in the Summary Compensation Table), for the five calendar years preceding
the Change in Control; and (2) enhanced life, disability, accident and health
insurance and enhanced pension benefits. Payments will be made by the
Corporation or through a grantor trust adopted by the Corporation.
The severance compensation agreements terminate if the executive's
employment by the Corporation is terminated by the executive or the Corporation
prior to a Change in Control. In addition, the Corporation may terminate the
agreement at any time prior to a Change in Control with five days prior written
notice.
In the event of a Change in Control of the Corporation, all outstanding
stock options become exercisable.
A "Change in Control" for these purposes means the occurrence of any of the
following events: (i) a change in control for purposes of SEC Form 8-K; (ii) a
consolidation or merger where the Corporation is not the surviving company or
where the Corporation's common stock is converted, other than a merger in which
shareholders retain the same proportion of ownership; (iii) a sale or other
transfer of all or substantially all of the Corporation's assets; (iv)
acquisition by a person or group of more than 20% of the Corporation's
outstanding voting stock, except as approved by the Board of Directors; (v)
acquisition by a person or group of the right to vote more than 20% of the
Corporation's outstanding voting stock for (a) the election of directors; (b) a
merger or consolidation of the Corporation; or (c) any other matter, except as
approved by the Board of Directors; or (vi) in a 24 consecutive month period,
present directors and/or new directors approved by at least two-thirds of the
directors, cease to constitute a majority of the Board of Directors.
25
<PAGE>
2. Management Proposal to Ratify KPMG Peat Marwick LLP
as Independent Auditors for 1996
The Board of Directors, on the recommendation of the Audit Committee, has
selected the firm of KPMG Peat Marwick LLP as independent auditors to examine
the financial statements of the Corporation and its consolidated subsidiaries
for the year 1996.
KPMG Peat Marwick LLP is a member of the SEC Practice Section of the
American Institute of Certified Public Accountants and has submitted a copy of
each of their peer review results to date. The peer review consists of a review
and evaluation of the quality of a firm's accounting and auditing services by
partners and managers from another CPA firm or from several CPA firms.
KPMG Peat Marwick LLP and its predecessor firms have been serving the
Corporation in the capacity of independent auditors for many years. KPMG Peat
Marwick LLP states that no partner or professional employee of that firm has any
direct financial interest or any material indirect financial interest in the
Corporation or in any of its subsidiaries.
Accordingly, the following resolution will be offered at the meeting:
RESOLVED: That the selection by the Board of Directors of KPMG Peat Marwick
LLP as independent auditors of this Corporation and its consolidated
subsidiaries for the year 1996 is ratified.
The Board of Directors Recommends a Vote FOR this Proposal.
Representatives of KPMG Peat Marwick LLP will be present at the meeting,
will have an opportunity to make a statement if they wish to do so, and will be
available to respond to appropriate questions from stockholders.
26
<PAGE>
3. Other Business
As of the date of delivery of the text of this Proxy Statement to the
printer, management knew of no other business that will be presented for action
at the meeting. In the event that any other business should come before the
meeting, including proposals excluded from the Proxy Statement pursuant to SEC
rule 14a-8, it is the intention of the proxyholders named in the proxy card to
take such action as shall be in accordance with their best judgment.
Other Information
Certain matters are required to be considered at the annual meeting of
stockholders, such as the election of directors. From time to time, the Board of
Directors may wish to submit to the stockholders other matters for
consideration, such as the ratification of the selection of auditors, management
proposals regarding new incentive programs, and most changes in the Certificate
of Incorporation. Additionally, stockholders may be asked to consider and take
action on proposals submitted by stockholders who are not members of management
that cover matters deemed proper under regulations of the Securities and
Exchange Commission and applicable state laws.
Stockholders' eligibility to submit proposals for inclusion in the
Corporation's Proxy Statement, proper subjects for such proposals and the form
of stockholder proposals are regulated by Rule 14a-8 under Section 14(a) of the
Securities Exchange Act of 1934. Each proposal submitted should be sent to the
Secretary of the Corporation, 39 Old Ridgebury Road, Danbury, CT 06817-0001. The
stockholder or his or her representative must appear in person at the annual
meeting and must present the proposal, unless he or she can show good cause for
not doing so.
Stockholder proposals for the 1997 proxy statement must be received at the
Corporation's principal executive office on or before November 12, 1996. The
Corporation plans to hold the 1997 annual meeting in Danbury, Connecticut on
April 23, 1997.
Management carefully considers all proposals and suggestions from
stockholders. When adoption of a suggestion or proposal is clearly in the best
interests of the Corporation and the stockholders generally, and does not
require stockholder approval, it is usually adopted by the Board, if
appropriate, rather than being included in the proxy statement.
In addition to the solicitation of proxies by mail, officers or other
employees of the Corporation, without extra remuneration, may solicit proxies by
telephone or personal contact. The Corporation also will request brokerage
houses, nominees, custodians and fiduciaries to forward soliciting material to
beneficial owners of stock held of record and will pay such persons for
forwarding the material. All costs for the solicitation of proxies by the Board
of Directors will be borne by the Corporation.
27
<PAGE>
PRINTED ON RECYCLED PAPER [LOGO OF RECYCLED PAPER] PRINTED IN U.S.A.
<PAGE>
UNION CARBIDE CORPORATION
39 Old Ridgebury Road, Danbury, CT 06817-0001
To Our Stockholders:
It is my pleasure to invite you to our annual meeting. This year it will be
held on Wednesday, April 24, at 10:00 a.m., in the John C. Creasey Health
Education Center, 24 Hospital Avenue, Danbury, Connecticut 06810.
You will find the formal notice of the annual meeting in the enclosed proxy
statement. Please read the statement and when finished, promptly mark, sign, and
return the attached proxy card, to insure that your shares will be represented.
It is important that you exercise your right to vote, whether or not you plan to
attend the meeting.
We hope that many of you will be able to attend our annual meeting in person.
If you plan to do so, please return the enclosed ticket request. We will send
your ticket to you promptly together with directions to the meeting.
We appreciate the continuing interest of stockholders in the business of Union
Carbide and I look forward to seeing many of you at the Danbury meeting.
Sincerely yours,
March 12, 1996 /s/ William H. Joyce
William H. Joyce
Chairman of the Board
v Detach Proxy Card here v
PROXY
SOLICITED BY THE BOARD OF DIRECTORS OF UNION CARBIDE CORPORATION ANNUAL
MEETING OF STOCKHOLDERS ON APRIL 24, 1996
I or we authorize V.E. Jordan Jr., W.H. Joyce, and J.E. Geoghan, and any one or
more of them, as proxies, to vote all stock of mine or ours in Union Carbide
Corporation on any matters that come before its 1996 Annual Meeting of
Stockholders or any adjournment of the meeting. Each proxy may substitute
another to act for him. Each item of business listed on the reverse side of this
card is described in the Proxy Statement.
The proxies will vote: (1) as you specify on this card, (2) as the Board of
Directors recommends where you do not specify a choice, and (3) as the proxies
decide on any other matter.
To vote as the Board of Directors recommends, just sign, date and return this
card.
- --------------------------------------------------------------------------------
Signature(s)
- --------------------------------------------------------------------------------
(Please add your title if signing as agent, administrator,
executor, or trustee.)
- ---------------------------------------------------------------------------,1996
Date
<PAGE>
The Board of Directors Recommends a Vote FOR Management Proposals 1 and 2.
1. Election of Directors
[_] FOR all Nominees [_] WITHHELD from all Nominees
[_]FOR, except for the following Nominee(s)
-------------------------------------------
2. Ratification of KPMG Peat Marwick LLP as Independent Auditors
FOR [_] AGAINST [_] ABSTAIN [_]
Nominees for Director of Union Carbide Corporation
John J. Creedon
C. Fred Fetterolf
Joseph E. Geoghan
Rainer E. Gut
Vernon E. Jordan, Jr.
William H. Joyce
Robert D. Kennedy
Ronald L. Kuehn, Jr.
Rozanne L. Ridgway
William S. Sneath
- --------------------------------------------------------------------------------
If you wish to vote as the Board of Directors' recommends, you need not mark
this card. Just sign and date this card and return it promptly in the enclosed
envelope.
YOUR VOTE IS IMPORTANT PLEASE VOTE TODAY