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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 Rule 14a-11(c) or Rule 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] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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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[LOGO OF UNION Union Carbide Corporation
CARBIDE 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 22, 1998
March 12, 1998
The annual meeting of the stockholders of Union Carbide Corporation will be
held at 10:00 a.m. on Wednesday, April 22, 1998, in the John C. Creasy Health
Education Center, 24 Hospital Avenue, Danbury, Connecticut, 06810, for the
following purposes:
1. To elect a Board of nine directors for the ensuing year.
2. To ratify the selection of KPMG Peat Marwick LLP as independent auditors
for 1998.
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
[SIGNATURE APPEARS HERE]
Vice-President, General Counsel and Secretary
3
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[LOGO OF UNION Union Carbide Corporation
CARBIDE APPEARS HERE] 39 Old Ridgebury Road, Danbury, CT 06817-0001
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PROXY STATEMENT
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
General Information for Stockholders.............................................. 6
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................................................. 11
Health, Safety and Environmental Affairs............................ 11
Nominating.......................................................... 12
Public Policy....................................................... 12
Compensation of Directors.............................................. 12
Five Year Cumulative Total Return...................................... 13
Report of Compensation and Management Development Committee............ 14
Summary Compensation Table............................................. 18
Stock Options Granted -- 1997......................................... 19
Stock Options Exercised -- 1997....................................... 20
Retirement Program.................................................... 20
Long-Term Incentive Plan............................................... 21
Security Ownership of Management....................................... 22
Section 16(a) Beneficial Ownership Reporting Compliance ............... 23
Security Ownership of Certain Beneficial Owners........................ 23
Change in Control Arrangements......................................... 24
2. Management Proposal to Ratify KPMG Peat Marwick LLP as
Independent Auditors for 1998............................................ 25
3. Other Business........................................................... 26
Stockholder Proposals for 1999 Annual Meeting..................................... 26
Proxy Solicitation................................................................ 26
</TABLE>
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General Information for Stockholders
Proxies are solicited from stockholders by the Board of Directors of the
Corporation 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
account, and all 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 of 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.
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 3, 1998 are
entitled to notice of the meeting and to vote the shares held on that date at
the meeting. Each share of common stock of the Corporation is entitled to one
vote. As of January 31, 1998, 137,026,711 shares of common stock of the
Corporation were outstanding. Those shares were held by 47,529 stockholders of
record.
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
nine 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, 1998.
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[PHOTO C. Fred Fetterolf, age 69, Director since 1987, is Director of
APPEARS Various Corporations and Retired Director, President and Chief
HERE] 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 Teledyne Corporation, Dentsply
International, Inc., Mellon National Bank, Praxair, Inc., Quaker
State Corporation and Commonwealth Aluminum Corp., 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.
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[PHOTO Joseph E. Geoghan, age 60, Director since 1990, is
APPEARS Vice-President, General Counsel and Secretary of Union Carbide
HERE] 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 a director of The
Westchester-Fairfield Pro Bono Partnership and the Fund for
Modern Courts and is 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.
7
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[PHOTO Rainer E. Gut, age 65, Director since 1994, is Chairman of the
APPEARS Board of Directors of Credit Suisse Group, Credit Suisse First
HERE] Boston and Credit Suisse. Mr. Gut was graduated from Cantonal
School of Zug, Switzerland, and had professional training in
Switzerland, Paris and London. Prior to his nomination in 1971
as Chairman and Chief Executive Officer of Swiss American
Corporation, Credit Suisse's U.S. investment banking affiliate
at that time, Mr. Gut was a general partner of Lazard Freres &
Co. in New York. Elected as a Member of the Executive Board of
Credit Suisse in 1973, he became its Speaker in 1977 and its
President in 1982. In 1983, he was elected to Credit Suisse's
Board of Directors and became its Chairman. Since 1986 Mr. Gut
has chaired the Board of Directors of Credit Suisse Group. Mr.
Gut is Vice-Chairman of the Board of Directors of Nestle S.A.,
Vevey, and is a Member of the Board of Directors of Daimler-Benz
Holding, Zurich, Pechiney, Paris, 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 Vernon E. Jordan, Jr., age 62, Director since 1987, is Senior
APPEARS Partner, Akin, Gump, Strauss, Hauer & Feld, LLP. Mr. Jordan is a
HERE] 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 & 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, Callaway Golf Co., Chancellor Media Corporation,
Dow Jones & Co., Inc., The Ford Foundation, J.C. Penney Company,
Inc., Revlon Group, Inc., Ryder System Inc., Sara Lee
Corporation and Xerox Corporation and a trustee of Howard
University. Mr. Jordan is Chairman of the Nominating Committee
and a member of the Executive, Finance and Pension and Public
Policy Committees of Union Carbide's Board.
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[PHOTO William H. Joyce, age 62, Director since 1992, is Chairman of
APPEARS the Board, President and Chief Executive Officer of Union
HERE] 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. 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 the Medal of Technology from President
Clinton. He is a director of CVS Corporation, Reynolds Metals
Company, The Chemical Manufacturers Association and The American
Plastics Council and a trustee of Universities Research
Association, Inc. Dr. Joyce is Chairman of the Executive
Committee of Union Carbide's Board.
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8
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Robert D. Kennedy, age 65, 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. Mr.
Kennedy became President of the Linde Division in 1977, 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 Birmingham Steel Corporation,
General Signal Corporation, Kmart Corporation, Lion Ore Mining
International Ltd., Sun Company, Inc., Union Camp Corporation
and UCAR International, Inc. He is also a member of the Advisory
Boards of The Blackstone Group and RFE Investment Partners, past
Chairman of the Chemical Manufacturers Association, a member of
the Board of Trustees of Cornell University, member and past
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 Audit, Executive, Nominating
and Public Policy Committees of Union Carbide's Board.
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Ronald L. Kuehn, Jr., age 62, 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. and a director of
AmSouth Bancorporation, The Dun & Bradstreet Corporation,
Praxair, Inc., Protective Life Corporation, Transocean Offshore
Inc., Gas Research Institute and a number of civic
organizations. He is a member of the Board of Trustees of
Southern Research Institute and Tuskegee University. Mr. Kuehn
is Chairman of the Compensation and Management Development
Committee and a member of the Finance and Pension and Health,
Safety and Environmental Affairs Committees of Union Carbide's
Board.
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Rozanne L. Ridgway, age 62, Director since 1990, former
Assistant Secretary of State for Europe and Canada. A retired
diplomat in the Foreign Service of the United States, Ambassador
Ridgway's 32 year career included ambassadorial assignments to
Finland, to the German Democratic Republic, for Oceans and
Fisheries Affairs and as Counselor of the United States State
Department. 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 and
Co-Chairman through June, 1996. 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 member of several
nonprofit institutions concerned with public policy and serves
as non-executive chairman of the Board of the Baltic-American
Enterprise Fund. Ambassador Ridgway is chairman of the Public
Policy Committee and a member of the Audit, Health, Safety and
Environmental Affairs and Nominating Committees of Union
Carbide's Board.
9
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[PHOTO James M. Ringler, age 52, Director since 1996, is Chairman,
APPEARS President and Chief Executive Officer of Premark International,
HERE] Inc. Mr. Ringler received the degree of B.S. in Business
Administration in 1967 and an MBA degree in Finance in 1968 from
the State University of New York. Mr. Ringler was President and
Chief Operating Officer of the Tappan Company from 1982 to 1986
and President of White Consolidated Industries' Major Appliance
Group from 1986 to 1990. Both companies are subsidiaries of
Electrolux AB. He joined Premark International, Inc. in 1990 as
Executive Vice-President and was elected to the company's Board
of Directors. He became President and Chief Operating Officer in
1992 and was appointed Chief Executive Officer in 1996 upon the
completion of the spin-off of Tupperware. Mr. Ringler is a
director of Reynolds Metals Company, National Association of
Manufacturers, the Business Round Table and Evanston Hospital
and is a trustee of the Manufacturers' Alliance for Productivity
and Innovation. He is a member of the Compensation and
Management Development and Finance and Pension Committees of
Union Carbide's Board.
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During 1997, there were nine regular meetings of the Board of Directors.
At present, there are twelve directors. Pursuant to action by the Board, the
number of directors to be elected at the annual meeting will be nine. John J.
Creedon and William S. Sneath, directors for over 13 and 28 years, respectively,
will not stand for re-election in accordance with the retirement policy of the
Board. Thomas P. Gerrity, a director since February 1997 resigned from the Board
effective February 23, 1998. The retirement policy of the Board provides that
non-employee directors are not eligible for re-election after reaching age 72
unless an exception is granted by a majority of the Board. Employee directors,
except the Chief Executive Officer, will retire from the Board at the time of
their retirement from the Corporation. Of the nine nominees for election at the
annual meeting of stockholders, two are currently officers of the Corporation.
Seven are non-employee directors, one of whom is a retired Chief Executive
Officer 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 1997 was 94%. 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, except Mr. Gut who attended 67% of
the meetings.
Vernon E. Jordan, Jr. is a partner of the law firm of Akin, Gump, Strauss,
Hauer and Feld, LLP. That firm was retained by and rendered services to the
Corporation in 1997 and continues to provide services in 1998.
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.
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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; 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 four times during 1997. Members of the Committee are: John J.
Creedon, Chairman; C. Fred Fetterolf; Robert D. Kennedy 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 executive officers of the
Corporation; reviews, recommends to the Board and administers any incentive
plans and variable compensation plans that include executive 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
five times during 1997. Members of the Committee are: Ronald L. Kuehn, Jr.,
Chairman; John J. Creedon; C. Fred Fetterolf, Rainer E. Gut and James M.
Ringler.
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 did not meet during 1997. Members of the Committee
are: William H. Joyce, Chairman; John J. Creedon; Joseph E. Geoghan; Vernon
E. Jordan, Jr.; Robert D. Kennedy and William S. Sneath.
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 1997. Members of
the Committee are: William S. Sneath, Chairman; Rainer E. Gut; Vernon E.
Jordan, Jr.; Ronald L. Kuehn, Jr. and James M. Ringler.
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 four
times during 1997. Members of the Committee are: C. Fred Fetterolf,
Chairman; John J. Creedon; Ronald L. Kuehn, Jr.; Rozanne L. Ridgway and
William S. Sneath.
11
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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 1997. Members
of the Committee are: Vernon E. Jordan, Jr., Chairman; C. Fred Fetterolf;
Rainer E. Gut; Robert D. Kennedy; 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.
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
three times during 1997. Members of the Committee are: Rozanne L. Ridgway,
Chairman; Joseph E. Geoghan; Vernon E. Jordan, Jr. and Robert D. Kennedy.
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 1997. Reimbursement for travel expense is paid when
appropriate. Non-employee directors are not eligible to participate in the
incentive compensation plans or benefit plans which the Corporation maintains
for its employees.
Stock Option Plan for Non-Employee Directors -- The plan was approved by the
stockholders on April 23, 1997 and provides for awards to non-employee directors
of options to purchase shares of the Corporation's common stock. Under the Plan,
the number of shares subject to options may not exceed 200,000 and no award may
be granted subsequent to the date of the meeting of stockholders in 2002. The
option price will not be less than the closing price of the Corporation's common
stock as listed on the New York Stock Exchange-Composite Transactions on the
date the option is granted, the term of the option may not be longer than ten
years duration and the option will be exercisable only after the earliest of (i)
the second anniversary of date of grant; (ii) the participant's death; or (iii)
a Change in Control of the Corporation. During 1997, each non-employee director
was granted 5,800 options.
12
<PAGE>
Non-Employee Directors' Compensation Deferral Plan -- The plan, adopted by the
Board effective February 1, 1997, allows non-employee directors to defer all or
part of their annual retainer and meeting fees, generally until separation of
service as a non-employee director. Participants in this unfunded plan will be
credited with a return on the deferred amounts measured on the same choice of
investment features as those offered under an employee deferral program,
including a fixed income rate, discounted common stock of the Corporation and
five Fidelity Fund alternatives. For those non-employee directors who elected to
participate in the Plan, their allocations into Deferral Plan stock units are
reported in the Security Ownership of Management table on page 22.
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 who elects to participate in the Plan. Costs of premiums are
shared by the participating directors and the Corporation. The Corporation's
share of such premiums in 1997 was $1,368.
Effective March 1, 1998, 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 $450,000.
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 James M.
Ringler. Mr. Gut is chairman of the Board of Directors of Credit Suisse Group,
Credit Suisse First Boston and of Credit Suisse. During 1997 and in 1998 to
date, Credit Suisse First Boston and Credit Suisse rendered services to the
Corporation.
Five Year Cumulative Total Return/(1)/
- --------------------------------------------------------------------------------
[LINE 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,
1992 and that all dividends were reinvested. Past performance is not
necessarily an indicator of future results.
<TABLE>
<CAPTION>
Graph Dollar Values 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
UCC 140.09 192.13 246.79 273.60 295.16
S&P 500 110.05 111.47 153.31 188.46 251.26
S&P Chemicals 111.84 129.27 168.92 223.18 274.34
</TABLE>
13
<PAGE>
Report of the Compensation and Management
Development Committee on Executive Compensation
The Corporation's compensation programs are approved and administered by
the Compensation and Management Development Committee of the Board of Directors
(the Committee), consisting only of non-employee Directors. The programs have
three fundamental objectives: to set compensation at levels sufficient to
attract and retain highly competent executives; to provide incentives to achieve
the Corporation's strategic, financial and operational goals; and to reward
individual achievement of business objectives with pay based on performance.
Programs that meet these objectives ensure that the Corporation is well managed
and that management's interests in building value are closely aligned with those
of its shareholders.
The Committee meets annually to review the Corporation's prior year
performance against corporate goals set at the start of the year, to review
executive compensation in light of performance, competitive compensation levels,
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. The Committee considers revisions or improvements to
compensation and management development programs to link compensation more
closely to performance. The Committee met five times during 1997.
Sources of Comparison Data -- The Corporation engages an independent consultant
to advise it with respect to competitive compensation levels for both base
salaries and total compensation. The analysis includes both chemical companies
and the chemicals and plastics segments of major oil companies. The Corporation
believes these companies represent an appropriate benchmark group, whose
executive positions require talents and capabilities similar to the
Corporation's own executive positions.
For financial performance comparisons, the Corporation looks at different
groupings of companies, depending on the performance metric. The companies
selected for the Return on Capital (ROC) performance comparison best approximate
the Corporation's businesses and are similarly affected by margins in the
product markets in which the Corporation competes. The companies selected in the
Market to Book ratio comparison are publicly traded chemical companies that are
considered investment alternatives in the chemical industry. For both ROC and
Market to Book performance, companies within as well as outside the S&P
Chemicals Index are included in the comparison.
Components of the Compensation Package -- The compensation package for the
Corporation's executives has four components: base salary, which reflects the
executive's scope and level of responsibility; profit sharing, based on the
Corporation's ROC performance; variable compensation, which reflects relative
corporate, business unit and individual performance; and long-term incentives.
The Committee targets compensation for executives that will produce median
total compensation opportunity for similar jobs in the industry. Base salary
targets are established at 10% below median base salaries. When combined with
profit sharing and a highly leveraged variable compensation program, total cash
compensation including base salaries will pay at the median when program goals
are met. Total cash compensation will exceed the median when goals are exceeded
and will fall below the median when goals are not met.
Base Salary -- At least once a year, the Committee reviews the base salary of
the Chairman/CEO and, in consultation with the Chairman/CEO, reviews the base
salaries of executive officers. Based on individual performance and impact on
the Corporation's performance, as well as competitive pay levels, the Committee
determines whether an adjustment to base salary is warranted for each executive
officer. Dr. Joyce was granted an increase in 1998 of 8.8% of base pay.
14
<PAGE>
Profit Sharing -- The cash profit sharing plan and ESOP profit sharing plan
cover virtually all employees, including the Corporation's officers.
Participants in the plans have the opportunity to earn extra pay every quarter
in which ROC for the Corporation exceeds a predetermined level. The maximum
total payout is ten days' base salary per calendar quarter or approximately 15%
of base pay. For 1997, participants earned 32 days' pay. Sixteen days were paid
from the cash profit sharing plan. Sixteen days were paid by an allocation of
ESOP common stock to the participants' accounts in the ESOP profit sharing plan.
ESOP common stock worth an additional four days was also allocated to cover
additional taxes on a voluntary early withdrawal of the ESOP common stock by a
participant.
Variable Compensation -- Earnings in the chemicals and plastics industry
are affected by the chemical business cycle. Therefore, the Corporation's
variable compensation program is largely based on relative performance against
the financial performance comparator companies, most of which are similarly
affected by the cycle.
Variable compensation serves to focus executives on key business objectives
for which they are held accountable. It recognizes that individual performance
can be strong or weak despite overall corporate business results that year,
affording an opportunity to recognize outstanding individual contributions in
any year. Consequently, some executives may receive considerably larger variable
compensation payments than others. These individual differences reflect the
Corporation's "pay for performance" policy.
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.
The PIP is based on the Corporation's ROC performance relative to financial
performance comparator companies over a 12 month fiscal year ending September
30. The Corporation's expenses for the plan are deductible for federal income
tax purposes under Section 162(m) of the Internal Revenue Code. The Committee
awarded $725,000 to Dr. Joyce for 1997 ROC performance under the PIP.
VCP payments for corporate officers are determined by the Committee, based
on each officer's contribution to the achievement of specific financial measures
as well as progress against non-financial Corporate Measures of Performance
(MOPs).
The financial measures, which represent 60% of the VCP award at target,
include:
<TABLE>
<S> <C>
Relative Shareholder Value -- as measured by the Market to Book ratio of the Corporation's common stock
vs. the Market to Book of comparison companies
Growth -- as measured by growth in sales volume over three years
Productivity -- as measured by actual fixed cost per pound of product
</TABLE>
The balance of the VCP award is based on Corporate MOPs set annually by the
CEO and approved by the Board of Directors. The 1997 MOPs included a number of
ambitious goals.
. Continued improvement in Health, Safety and Environmental performance
under the Responsible Care(R) Program;
. "People Excellence," with continued emphasis on upward mobility of women
and minorities; management education programs, performance management and
career planning;
. Strategic plan implementation, including implementation of global joint
ventures and attainment of profit enhancement and capital program goals;
. Technology leadership, including growth projects which build on the
Corporation's competitively advantaged technology, and commercialization
of new technology which will yield high returns consistent with UCC's ROC
goals;
. Continued progress in implementing UCC's corporate wide information
system;
. Continued excellence in customer focus and effective communications with
our critical internal and external constituencies.
15
<PAGE>
The Board approved the 1997 VCP at its February, 1998 meeting. The
level of payment recommended by the Committee and approved by the Board balanced
varying levels of performance results against the metrics and measures of
performance. The Committee and Board gave particular consideration to financial
performance, implementation of the capital program and Responsible Care
performance. The Committee and Board also noted the higher levels of personal
performance required of employees during 1997 as the Corporation implemented the
first segment of its integrated information technology transformation program
while continuing to pursue other critical objectives. Based on the above
assessment, Dr. Joyce was awarded a VCP payment of $125,000.
Long-Term Incentives: Stock Options and Earnings Per Share Program -- The
Committee regularly reviews the competitiveness of the Corporation's long-term
incentives to ensure total compensation is competitive.
Stock Options -- 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. They have a minimum
holding period of two years from the grant date and expire after ten years.
Except for an adjustment 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 both the
Corporation and shareholder interests by linking all executives to a common
goal -- increasing shareholder value. The Committee awarded Dr. Joyce 135,000
stock options in December 1997.
Earnings Per Share Program -- In September 1997, the Board of Directors
approved a new incentive program for a limited number of senior managers which
is designed to grant awards if the Corporation achieves $4.00 or more diluted
Earnings Per Share ("EPS") performance during 1999 and 2000, widely anticipated
to be trough years in the chemical industry cycle. Under the leadership of Dr.
Joyce, the Corporation has developed programs specifically designed to further
constrain costs. Achieving the objectives of these programs will enhance the
Corporation's abilities to reach its goal of $4.00 or more EPS in 1999 and 2000.
Dr. Joyce will place an amount equivalent to 100% of one year's base salary at
risk. The other participants will place an amount equivalent to 40% or 65% of
base pay at risk, depending on their position level. This amount has been
converted to units equivalent to shares of the Corporation's common stock based
on the closing price on the day the program was approved by the Board.
Participants also will be credited with dividend equivalents in the form of
additional units. If the requirements of the plan are not met, Dr. Joyce and the
other participants will forfeit the at risk money. If the Corporation meets or
exceeds the $4.00 EPS target, the common stock units placed at risk will be
retained by the participants. In addition, the participants could be awarded a
multiple up to four times the number of common stock units at risk for each of
the years 1999 and 2000, depending on the extent to which the goals are
exceeded. The plan also provides that in order for participants to receive the
multiple, the $4.00 EPS level must be achieved using the spread between the
feedstock prices and product selling prices experienced in the last business
trough in 1993. Payments from the plan will be made in cash in 2002, 2003 and
2004 and will be based on the value of the Corporation's common stock at the
time of payment.
16
<PAGE>
Stock Ownership -- Five years ago, the Board of Directors initiated stock
ownership guidelines for senior management to directly link management and
shareholder interests and create an incentive to increase the company's market
value. Under the guidelines, the Chairman/CEO is expected to own stock valued at
four times his annual base salary within five years from inception of the plan.
Dr. Joyce now holds approximately twelve (12) times his December base salary in
the Corporation's stock. Other Corporate officers are expected to own stock
valued at one times their base salary. All have met or exceeded the guideline
amount. In October 1993, the Committee endorsed the extension of these ownership
guidelines to a broader group of managers (approximately 115 others) 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 1997, over 90% of the
group had attained their guideline level of ownership.
Compensation Deferral Program -- The Corporation maintains a voluntary unfunded
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. For those executive officers who
elected to participate in the program, their allocations into deferral program
stock units are reported in the Security Ownership of Management table on
page 22.
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 management closely aligned with shareholder interest
in building value for the enterprise.
Compensation and Management Development Committee
Ronald L. Kuehn, Jr., Chairman
John J. Creedon C. Fred Fetterolf Rainer E. Gut James M. Ringler
17
<PAGE>
Summary Compensation Table
- --------------------------------------------------------------------------------
<TABLE>
All Other
Annual Compensation Long-Term Compensation Compensation/(4)/
--------------------------------------------------- ----------------------- ----------------
Number of
Securities
Annual Other Underlying
Variable Annual Restricted Options
Name and Principal Position Year Salary Compensation/(1)/ Compensation/(2)/ Stock/(3)/ Granted
- --------------------------- ----- ------- --------------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
William H. Joyce 1997 $841,667 $ 850,000 $117,692 -0- 135,000 $118,045
Chairman, President and 1996 737,500 1,050,000 95,192 $222,396 130,000 166,538
Chief Executive Officer 1995 550,000 825,000 92,308 119,325 111,000 114,740
Joseph E. Geoghan 1997 $390,000 $ 246,000 $ 54,000 -0- 26,000 $ 14,712
Corporate Vice-President, 1996 378,750 265,000 49,500 $ 74,132 26,000 56,142
General Counsel and Secretary 1995 368,750 275,000 57,692 68,007 30,000 46,674
Lee P. McMaster 1997 $285,000 $ 283,000 $ 39,461 -0- 25,000 $ 24,282
Corporate Vice-President/General 1996 262,083 265,000 36,173 $ 62,006 21,000 53,514
Manager - Ethylene Oxide/Glycol 1995 241,667 230,000 40,000 46,192 25,000 33,502
Joseph C. Soviero 1997 $341,250 $ 226,000 $ 48,461 -0- 25,000 $ 14,712
Corporate Vice-President, 1996 333,750 265,000 42,519 $ 63,339 21,000 50,428
Corporate Ventures 1995 320,000 235,000 56,081 51,318 25,000 30,786
Roger B. Staub 1997 $308,333 $ 189,000 $ 44,308 -0- 25,000 $ 32,245
Corporate Vice-President/ 1996 290,000 265,000 38,077 $ 70,090 21,000 63,852
General Manager-UNIPOL Systems 1995 271,667 260,000 43,077 55,163 25,000 53,040
John K. Wulff 1997 $300,000 $ 197,000 $ 41,539 -0- 24,000 $ 29,885
Corporate Vice-President, 1996 280,000 215,000 35,538 $ 56,631 14,000 41,353
CFO and Controller 1995 271,667 210,000 43,077 46,192 15,000 27,422
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annual Variable Compensation includes payments under both the Performance
Incentive Plan and the Variable Compensation Plan. The Performance Incentive
Plan rewards executive 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. The amounts
in this column for 1997 do not include amounts which have been placed at
risk pursuant to the 1997 Earnings Per Share Incentive Plan referred to in
the Long-Term Incentive Plan table on page 21 and described in footnote 1 to
that table.
(2) Other Annual Compensation in 1995, 1996 and 1997 represents profit sharing
and, for 1996 and 1997, ESOP profit sharing. Also included in this column
for Mr. Soviero is a tax equalization payment of $6,850 in 1995 on the 1993
annuity purchase to fund the Corporation's obligations for certain
nonqualified retirement benefits.
(3) Restricted stock holdings as of December 31, 1997 and their fair market
value based on the per share closing price of the Corporation's common
shares on the New York Stock Exchange on December 31, 1997 ($42.875) were as
follows:
<TABLE>
W.H. Joyce J.E. Geoghan L.P. McMaster J. C. Soviero R. B. Staub J.K. Wulff
---------- ------------ ------------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
No. of Restricted Shares: 9,581 4,206 3,134 3,350 3,649 3,006
Value on Dec. 31, 1997: $410,785 $180,332 $134,370 $143,631 $156,451 $128,882
</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) All Other Compensation includes annual life insurance premiums, if any, paid
to split dollar life insurance contracts and employer contributions to the
Savings Program and allocations to the nonqualified compensation deferral
program. For 1997, employer contributions to the Savings Program were $9,000
for Dr. Joyce and Messrs. Geoghan, McMaster, Soviero, Staub and Wulff. This
matching contribution was made in the form of ESOP common 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 $160,000 per year (a reduction from the 1993 limit of $235,840.)
Additional allocations to the nonqualified compensation deferral program for
1997 include $109,045 for Dr. Joyce; $15,282 for Mr. McMaster; $5,712 each
for Messrs. Geoghan and Soviero; $23,245 for Mr. Staub and $20,885 for Mr.
Wulff.
18
<PAGE>
Stock Options Granted -- 1997
- --------------------------------------------------------------------------------
<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 Assumed Potential Assumed Potential
Options 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>
William H. Joyce 135,000 9.3% $46.312 12/03/07 $75.437 $3,931,875 $120.121 $9,964,215
Chairman, President and
Chief Executive Officer
Joseph E. Geoghan 26,000 1.8% $46.312 12/03/07 $75.437 $ 757,250 $120.121 $1,919,034
Corporate Vice-President,
General Counsel and
Secretary
Lee P. McMaster 25,000 1.7% $46.312 12/03/07 $75.437 $ 728,125 $120.121 $1,845,225
Corporate Vice-President/
General Manager -
Ethylene Oxide/Glycol
Joseph C. Soviero 25,000 1.7% $46.312 12/03/07 $75.437 $ 728,125 $120.121 $1,845,225
Corporate Vice-President,
Corporate Ventures
Roger B. Staub 25,000 1.7% $46.312 12/03/07 $75.437 $ 728,125 $120.121 $1,845,225
Corporate Vice-President/
General Manager -
UNIPOL Systems
John K. Wulff 24,000 1.6% $46.312 12/03/07 $75.437 $ 699,000 $120.121 $1,771,416
Corporate Vice-President,
CFO and Controller
Gain of All Recipients of
1997 Stock Options as % --- --- --- --- $75.437 1.0%/(2)/ $120.121 1.0%/(2)/
of All Shareholders Gain
</TABLE>
(1) The assumed annual rates of stock price appreciation of 5% and 10% are set
by SEC rule and are not intended as a forecast of possible future
appreciation in stock prices.
(2) Assumes that the number of shares of common stock outstanding at December
31, 1997 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 24 for further provisions regarding Change in Control.
19
<PAGE>
Stock Options Exercised in 1997 and Stock Option Values at 12/31/97
- --------------------------------------------------------------------------------
<TABLE>
Number of Securities
Underlying Unexercised Value of Unexercised
Options In-the-Money Options
Shares Held at 12/31/96 Held at 12/31/97(1)
Acquired Value --------------------------- ---------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William H. Joyce
Chairman, President and
Chief Executive Officer 29,000 $1,086,415 498,000 265,000 $9,321,471 -0-
Joseph E. Geoghan
Corporate Vice-President,
General Counsel and Secretary -0- -0- 236,000 52,000 $4,711,350 -0-
Lee P. McMaster
Corporate Vice-President/
General Manager - Ethylene Oxide/Glycol -0- -0- 152,400 46,000 $3,012,809 -0-
Joseph C. Soviero
Corporate Vice-President,
Corporate Ventures -0- -0- 134,000 46,000 $2,370,750 -0-
Roger B. Staub
Corporate Vice-President/General
Manager - UNIPOL Systems 12,800 $ 517,540 199,000 46,000 $4,569,634 -0-
John K. Wulff
Corporate Vice-President,
CFO and Controller -0- -0- 142,000 38,000 $3,193,104 -0-
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on a closing price of $42.875 per share on December 31, 1997 as
reported on NYSE-Composite Transactions. No stock appreciation rights were
outstanding in 1997.
Messrs. Geoghan, McMaster, 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. In 1997, the amount of
income received by Mr. Staub and Dr. Joyce as a result of the exercise of
Praxair options was $266,932, and $1,453,890, respectively.
Retirement Program
- --------------------------------------------------------------------------------
<TABLE>
Average Final
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. 45 Yrs.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,500 $ 60,000 $ 67,500
150,000 33,750 45,000 56,250 67,500 78,750 90,000 101,250
250,000 56,250 75,000 93,750 112,500 131,250 150,000 168,750
500,000 112,500 150,000 187,500 225,000 262,500 300,000 337,500
750,000 168,750 225,000 281,250 337,500 393,750 450,000 506,250
1,000,000 225,000 300,000 375,000 450,000 525,000 600,000 675,000
1,500,000 337,500 450,000 562,500 675,000 787,500 900,000 1,012,500
2,000,000 450,000 600,000 750,000 900,000 1,050,000 1,200,000 1,350,000
2,500,000 562,500 750,000 937,500 1,125,000 1,312,500 1,500,000 1,687,500
- ---------------------------------------------------------------------------------------------------------------------------
</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, 1997, William H. Joyce, age 62 was credited with 40 years;
Joseph E. Geoghan, age 60, 40 years; Lee P. McMaster, age 55, 25 years;
Joseph C. Soviero, age 59, 32 years; Roger B. Staub, age 63, 41 years and
John K. Wulff, age 49, 10 years.
20
<PAGE>
Long-Term Incentive Plan
- --------------------------------------------------------------------------------
<TABLE>
Performance Estimated Future Payouts Under
Number Period Non-Stock Price-Based Plan
of Units/Dollars Until ----------------------------------------
Name at Risk/(1)/ Maturation/(2)/ Threshold/(3)/ Target/(4)/ Maximum/(5)/
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William H. Joyce 17,802/ 01/01/99 - 12/31/00 -0- 53,406 160,218
Chairman, President and $850,000
Chief Executive Officer
Joseph E. Geoghan 5,309/ 01/01/99 - 12/31/00 -0- 15,927 47,781
Corporate Vice-President, $253,500
General Counsel and Secretary
Lee P. McMaster 3,880/ 01/01/99 - 12/31/00 -0- 11,640 34,920
Corporate Vice-President/ $185,250
General Manager - Ethylene Oxide/Glycol
Joseph C. Soviero 4,765/ 01/01/99 - 12/31/00 -0- 14,295 42,885
Corporate Vice-President, $227,500
Corporate Ventures
Roger B. Staub 4,357/ 01/01/99 - 12/31/00 -0- 13,071 39,213
Corporate Vice-President/General $208,000
Manager - UNIPOL Systems
John K. Wulff 4,084/ 01/01/99 - 12/31/00 -0- 12,252 36,756
Corporate Vice-President, $195,000
CFO and Controller
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The 1997 Earnings Per Share Incentive Plan requires the officers to place an
amount (shown above) equivalent to a portion of their annual base pay at
risk, up to 100%, should diluted earnings per share not equal or exceed
$4.00 in 2000. The amount at risk will be deducted from compensation over
three years and was converted to units (shown above) equivalent to common
stock using a $47.75 share price, the closing price of the Corporation's
common stock on the date the Plan was approved.
(2) Any payout under the Plan will be made during 2002, 2003 and
2004.
(3) If the requirements of the Plan are not met, there will be no payout
and the units at risk shown in the first column will be forfeited.
(4) If the minimum performance goals are achieved for each of 1999 and 2000, the
executive will receive the value of the units at risk, in addition to a
multiple of one times the units at risk for each such year, and dividend
equivalents in the form of additional units.
(5) If the performance goals are exceeded, the officers will receive the value
of the units at risk, in addition to a multiple of up to four times the
units at risk for each of 1999 and 2000, depending on the extent to which
the goals are exceeded, and dividend equivalents in the form of additional
units.
21
<PAGE>
Security Ownership of Management
At February 1, 1998, all directors and officers as a group (18 persons)
beneficially owned 3,324,858 shares (2.26%) 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.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Number of Shares Beneficially Owned(l)
ESOP Restricted
Common Common Common Deferral Plan Exercisable
Name Stock Stock/(2)/ Stock Stock/(3)/ Stock Options/(4)/ Total
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
W. H. Joyce
Director, Chairman, President
and Chief Executive Officer 252,379(5) 3,969 9,581 57,353 498,000 821,282
J. E. Geoghan
Director, Corporate Vice-President,
General Counsel and Secretary 24,504 1,199 4,206 -- 236,000 265,909
L. P. McMaster
Corporate Vice-President/
General Manager -
Ethylene Oxide/Glycol 6,115 3,077 3,134 6,794 152,400 171,520
J. C. Soviero
Corporate Vice-President
Corporate Ventures 10,795 3,880 3,350 -- 134,000 152,025
Roger B. Staub
Corporate Vice-President/
General Manager -
UNIPOL Systems 26,078 3,751 3,649 12,057 199,000 244,535
J. K. Wulff
Corporate Vice-President,
Chief Financial Officer
and Controller 36,495 3,795 3,006 10,981 142,000 196,277
J. J. Creedon, Director 15,460 -- 7,319 -- 22,779
C. F. Fetterolf, Director 4,677 -- 5,356 -- 10,033
R. E. Gut, Director 5,000 -- 1,345 -- 6,345
V. E. Jordan, Jr., Director 4,024 -- 873 -- 4,897
R. D. Kennedy, Director 226,829/(6)/ 8,282 -- 750,000 985,111
R. L. Kuehn, Jr., Director 6,096 -- 1,682 -- 7,778
R. L. Ridgway, Director 3,033 -- 3,484 -- 6,517
J. M. Ringler, Director 479 -- 1,319 -- 1,798
W. S. Sneath, Director 17,865/(7)/ -- -- -- 17,865
All Officers and
Directors (18 persons) 693,899 29,532 40,210 124,517 2,436,700 3,324,858
- ---------------------------------------------------------------------------------------------------------------------------
</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.
(2) The beneficial owners had shared voting power and shared investment power
with respect to the shares of ESOP Common Stock. (See note 3 on the
following table.)
(3) Deferral Plan Stock represents units based on the price of the Corporation's
common stock into which deferred compensation has been allocated pursuant to
the Compensation Deferral Plan and the Union Carbide Non-Employee Directors'
Compensation Deferral Program. There are no voting rights with respect to
Deferral Plan Stock. The value of the units of Deferral Plan Stock varies
with the price of the Corporation's common stock and, at the time of payout,
the units are payable in common stock of the Corporation.
(4) There are no voting rights with respect to Stock Options.
(5) 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.
(6) 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.
(7) 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.
22
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
During 1997, all reports required by Section 16(a) of the Securities Exchange
Act were filed on time.
Security Ownership of Certain Beneficial Owners
<TABLE>
<CAPTION>
Number of Shares Title of Percent of
Name and Address Beneficially Owned Class Class
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sanford C. Bernstein & Co., Inc.
767 Fifth Avenue
New York, N.Y. 10153 12,738,275/(1)/ Common Stock 9.2%
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109 13,894,709/(2)/ Common Stock 10.1%
State Street Bank and Trust Company
as Trustee of the Union Carbide Corporation
Employee Stock Ownership Plan
225 Franklin Street
Boston, Massachusetts 02110 18,303,959/(3)/ Common Stock 13.4%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In a Schedule 13G dated February 14, 1998, Sanford C. Bernstein & Co., Inc.
stated that it beneficially owned 12,738,275 shares of the common stock of
the Corporation at December 31, 1997. As to such shares, Sanford C.
Bernstein & Co., Inc. has sole voting power for 7,376,595 shares, shared
voting power for 1,235,660 shares, and sole investment power for 12,738,725
shares.
(2) In a Schedule 13G dated February 11, 1998, FMR Corp. stated that it
beneficially owned 13,894,709 shares of the common stock of the Corporation
at December 31, 1997. As to such shares, FMR Corp. has sole voting power for
949,109 shares and sole investment power for 13,894,709 shares.
(3) As of December 31, 1997, State Street Bank and Trust Company held 15,370,688
shares of common stock ("ESOP Stock") 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. Participants in the Saving Program are entitled to notice of the
meeting. By the terms of a trust agreement, the ESOP Trustee will vote ESOP
Common Stock allocated to individual participants' accounts (6,509,599
shares as of January 31, 1998) as instructed by such participants, and will
vote all other unallocated shares or any shares for which instructions were
not received in the same proportion as the Trustee votes allocated shares
for which voting instructions are received. As of December 31, 1997, the
ESOP Common Stock represented 11.2% of the total of common stock
outstanding. The shares shown above include the ESOP Common Stock shown in
the preceding table. In a Schedule 13G dated February 10, 1998, State Street
Bank and Trust Company stated that as of December 31, 1997, in its capacity
as trustee for various collective investment funds, index accounts and
personal trusts, it also beneficially owned 2,933,271 shares (2.1%) of the
Corporation's common stock. As to such shares, State Street Bank and Trust
Company has sole voting power for 1,826,428 shares, shared voting power for
954,043 shares, sole investment power for 1,976,153 shares and shared
investment power for 957,118 shares.
23
<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
three times the executive's annual compensation (including base salary, annual
variable compensation, profit sharing, stock option awards, restricted stock
awards and other "fringe" compensation (not including any payouts under the 1997
EPS Incentive Plan), which amounts may differ from amounts shown in the Summary
Compensation Table); (2) enhanced life, disability, accident and health
insurance and enhanced pension benefits; (3) outplacement and financial
counseling; and (4) tax gross-up payments in the event the payments exceed the
limitations of Section 280G of the Internal Revenue Code. 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 the event of a Change in Control of the Corporation, all outstanding
stock options become exercisable.
The Corporation has adopted the Mid-Career Hire Plan. Under the Plan, in
the event of a Change in Control of the Corporation, an employee who has a
severance compensation agreement and is not eligible for full retirement under
the Corporation's retirement program will receive a retirement benefit as if the
employee had additional years of service with the Corporation equal to the
employee's years of service with the employee's immediate prior employer.
A "Change in Control" for these purposes means the occurrence of any of
the following events: (i) stockholders of the Corporation approve a plan of
complete liquidation or dissolution of the Corporation; (ii) a consolidation,
reorganization or merger of all or substantially all of the assets of the
Corporation ("a Business Combination") unless, following such Business
Combination, (a) the stockholders of the Corporation prior to such Business
Combination own more that 50% of the common stock of the corporation resulting
from such Business Combination; (b) no person or group owns 20% or more of the
common stock of the corporation resulting from such Business Combination; and
(c) at least a majority of the board of directors of the corporation resulting
from such Business Combination were members of the Board of Directors of the
Corporation immediately prior to such Business Combination; (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; (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; 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.
24
<PAGE>
2. Management Proposal to Ratify KPMG Peat Marwick LLP as Independent Auditors
for 1998
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 1998.
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 its 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 1998 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.
25
<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.
Stockholder Proposals for 1999 Annual Meeting
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 inclusion in the 1999 proxy statement must be
received at the Corporation's principal executive office on or before November
12, 1998. The Corporation plans to hold the 1999 annual meeting in Danbury,
Connecticut on April 28, 1999.
The Corporation's by-laws require stockholders who intend to propose the
nominations of persons for election as directors or other business to be
considered by stockholders at the annual meeting (other than stockholder
proposals included in the Proxy Statement pursuant to Rule 14a-8) to give
written notice to the Secretary of the Corporation at least 90 days but no more
than 120 days prior to the anniversary date of the previous year's annual
meeting. Matters to be raised by a stockholder at the 1999 annual meeting must
be submitted on or after December 24, 1998 but no later than January 25, 1999.
The written notice must include information relating to a person or persons
nominated for director and the person's written consent to be named as nominee
and to serve, if elected; a brief description of the business, the reasons for
conducting such business and any material interest in such business by the
stockholders.
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.
Proxy Solicitation
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.
26
<PAGE>
UC-1336 [LOGO OF RECYCLED PAPER APPEARS HERE]
PRINTED ON 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 22, at 10:00 a.m., in the John C. Creasy 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,
/s/ William H. Joyce
March 12, 1998
William H. Joyce
Chairman of the Board
. Detach Proxy Card here .
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF UNION CARBIDE CORPORATION
ANNUAL MEETING OF STOCKHOLDERS ON APRIL 22, 1998
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 1998 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.)
, 1998
- ------------------------------------------------------------------------
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
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
James M. Ringler
<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 22, at 10:00 a.m., in the John C. Creasy 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. For your convenience and to reduce costs we
have consolidated your holdings except for those shares that you may hold at a
banking institution or brokerage house.
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,
/s/ William H. Joyce
March 12, 1998
William H. Joyce
Chairman of the Board
. Detach Proxy Card here .
The Board of Directors Recommends a Vote FOR Management Proposals 1 and 2.
1. Election of Directors
(Nominees: 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, James M. Ringler)
[_] 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 [_]
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.
________________________________________________________________________________
Signature(s)
___________________________________________________________________________,1998
Date
<PAGE>
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF UNION CARBIDE CORPORATION
ANNUAL MEETING OF STOCKHOLDERS ON APRIL 22, 1998
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 1998 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.
For Participants in the Union Carbide Common Stock Savings Program and for the
ESOP Program: As to those shares of Union Carbide Corporation, if any, that are
held for me, I instruct the Trustee of the applicable Program to sign a proxy
for me in substantially the form set forth on the reverse side. The Trustee
shall mark the proxy as I instruct. If the Trustee does not receive this proxy,
my shares will be voted in the same proportion as the Trustee votes the shares
for which it receives instructions.
<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 22, at 10:00 a.m., in the John C. Creasy 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, 1998 /s/ W. H. Joyce
William H. Joyce
Chairman of the Board
. Detach Proxy Card here .
The Board of Directors Recommends a Vote FOR Management Proposals 1 and 2.
1. Election of Directors
(Nominees: 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, James M. Ringler)
[ ] 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 [ ]
- ----------------------------------------------------------------
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.
- -------------------------------------------
Signature(s)
, 1998
- -------------------------------------------
Date
<PAGE>
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF UNION CARBIDE CORPORATION
ANNUAL MEETING OF STOCKHOLDERS ON APRIL 22, 1998
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 1998 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.
For Participants in the Praxair, Union Carbide, UCAR or OSi Savings Programs: As
to those shares in the aforementioned programs, that are held for me, I instruct
the Trustee of the applicable Program to sign a proxy for me in substantially
the form set forth on the reverse side. The Trustee shall mark the proxy as I
instruct. If the Trustee does not receive this proxy, my shares will be voted in
the same proportion as the Trustee votes the shares for which it receives
instructions.
