-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ABF3yYMVzfresvsl72zHw8NnF3lTi44hOMshoECIHN5I1xnflVHtbscw9fdco0aW 97O2T7cKC1wI3I637GjLYg== 0000100790-97-000014.txt : 19970625 0000100790-97-000014.hdr.sgml : 19970625 ACCESSION NUMBER: 0000100790-97-000014 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970624 SROS: CSX SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION CARBIDE CORP /NEW/ CENTRAL INDEX KEY: 0000100790 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 131421730 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01463 FILM NUMBER: 97628792 BUSINESS ADDRESS: STREET 1: 39 OLD RIDGEBURY RD CITY: DANBURY STATE: CT ZIP: 06817-0001 BUSINESS PHONE: 2037942000 MAIL ADDRESS: STREET 1: 39 OLD RIDGEBURY RD CITY: DANBURY STATE: CT ZIP: 06817-0001 FORMER COMPANY: FORMER CONFORMED NAME: UNION CARBIDE CORP DATE OF NAME CHANGE: 19890806 FORMER COMPANY: FORMER CONFORMED NAME: UNION CARBIDE & CARBON CORP DATE OF NAME CHANGE: 19710317 11-K 1 FORM 11-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1996 Commission file no. 2-61045 THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES (Full title of the plan) UNION CARBIDE CORPORATION (Name of issuer of the securities held pursuant to the plan) 39 OLD RIDGEBURY ROAD DANBURY, CT 06817-0001 (Address of principal executive office) Total number of sequentially numbered pages in this filing including exhibits thereto: 19 INDEX Page Financial Statements Statement of Net Assets Available for Benefits - The Savings and Investment Program for Employees of Union Carbide Corporation and Participating Subsidiary Companies - December 31, 1996 and 1995 3 Statement of Changes in Net Assets Available for Benefits - The Savings and Investment Program for Employees of Union Carbide Corporation and Participating Subsidiary Companies - Year Ended December 31, 1996 4 Notes to Financial Statements 5-9 Supplemental Schedules Line 27a - Schedule of Assets Held for Investment Purposes - December 31, 1996 10-14 Line 27d - Schedule of Reportable Transactions - Year Ended December 31, 1996 15 Signature 16 Independent Auditors' Report 17 Exhibit Index 18 - 2 - THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS (Millions of Dollars) December 31, 1996 1995 ASSETS Investments: Union Carbide Corporation, Common Stock - 5,431,967 shares and 4,894,015 shares at market value......... $ 222.0 $ 183.5 Union Carbide Corporation, Convertible Preferred Stock - 16,013,874 shares and 16,229,849 shares at fair value Unallocated....................................... 386.8 407.0 Allocated......................................... 267.8 201.6 Praxair, Inc., Common Stock - 1,412,764 shares and 1,574,404 shares at market value.................... 65.3 53.0 United States Savings Bonds at current redemption value............................................... 1.9 1.8 Short-term securities at market value................. 4.4 0.8 Fixed Income Fund - 9,355,071 units and 9,809,517 units - per unit value $74.24 and $69.91.. 694.5 685.8 Fidelity Equity-Income Fund, managed for the Trustee by Fidelity Investments - 757,680 shares and 583,589 shares at market value...................... 32.4 22.1 Fidelity U.S. Equity Index Portfolio, managed for the Trustee by Fidelity Investments - 1,610,423 shares and 1,320,091 shares at market value................ 43.4 29.8 Fidelity Magellan Fund, managed for the Trustee by Fidelity Investments - 752,646 shares and 674,511 shares at market value.............................. 60.7 58.0 Fidelity Contrafund, managed for the Trustee by Fidelity Investments - 850,686 shares and 518,171 shares at market value.............................. 35.9 19.7 Fidelity Growth Company Fund, managed for the Trustee by Fidelity Investments - 524,093 shares and 270,617 shares at market value.................. 21.2 9.9 Loans to participants................................... 55.2 48.4 Other receivables....................................... - 1.6 Total assets............................ $1,891.5 $1,723.0 LIABILITIES Amounts payable to participants......................... $ 0.8 $ 0.5 ESOP loan payable to Union Carbide Corporation.......... 91.5 97.5 Other liabilities....................................... 2.8 1.7 Total liabilities....................... $ 95.1 $ 99.7 Net assets available for benefits....... $1,796.4 $1,623.3 See accompanying notes to financial statements. - 3 - THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (Millions of Dollars) Year Ended December 31, 1996 Investment income: Dividends ....................................... $ 33.6 Interest ........................................ 47.2 80.8 Net change in appreciation of investments .................................. 61.5 Contributions and deposits: Amounts deposited by participating employees .... 48.6 Amounts contributed by participating employers .. 5.1 53.7 Allocation of ESOP Stock to participants .......... 54.2 Net additions .............................. 250.2 Withdrawals ....................................... (55.1) Administration costs and expenses ................. (3.5) Interest expense on ESOP loan ..................... (9.0) Transfers from previous employers' plans .......... 3.0 Allocation of ESOP Stock to participants .......... (12.5) Net increase ...................................... 173.1 Net assets available for benefits at: Beginning of year .......................... 1,623.3 End of year ................................ $1,796.4 See accompanying notes to financial statements. - 4 - THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES NOTES TO FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies Investments are stated at market value, based upon quoted market prices plus accrued income thereon, except for investments in United States Savings Bonds, which are carried at current redemption value, loans to participants, which are carried at face value, certain investment contracts, which are carried at contract value, and Union Carbide Corporation Convertible Preferred Stock, which is carried at fair value. Fair value of Union Carbide Corporation Convertible Preferred Stock is the greater of the market value of Union Carbide Corporation Common Stock or the established floor price of $8.981. Fixed Income Fund investments consist of investment contracts with banks and insurance companies, government, corporate and international securities and a short-term investment fund of the trustee (see Note 6). Purchases and sales of investments are recorded on the trade date. Unrealized appreciation and depreciation of investments stated at market and fair values is recognized currently in the financial statements. Participants' accounts are credited with participant contributions, contributions from Union Carbide Corporation ("the corporation", "UCC") and an allocation of earnings from the Savings and Investment Program for Employees of Union Carbide Corporation and Participating Subsidiary Companies ("the Program"). The allocation of earnings is based upon a participant's interest in a respective investment fund. The financial statements have been prepared on the accrual basis of accounting. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets at the date of the financial statements and the reported amounts of changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates. Note 2 - Description of the Program The following brief description of the Program is provided for general information purposes only. Participants should refer to the Summary Plan Description. Employees may elect to have the corporation pay from 1% to 17 1/2% of their compensation to the Program, subject to certain Internal Revenue Code ("IRC") restrictions (see Note 7). The amount elected by employees up to 7 1/2% of their compensation is considered a basic deduction, while an additional contribution from 1/2% to 10% of their compensation is considered a supplemental deduction. Basic and supplemental deductions can be made on either an after-tax or a before-tax basis. An employee may also elect to make a supplemental deposit to the Program in cash on an after-tax basis. Employees who choose to participate in the Program receive a monthly allocation, based on a weighted average market price of UCC Common Stock, of convertible preferred stock from the Employee Stock Ownership Plan ("ESOP") portion of the Program (see Note 4) equal to 75% of their basic deduction. The corporation contributes funds to the Program necessary to release such stock from the ESOP for allocation to participants' accounts. - 5 - THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES NOTES TO FINANCIAL STATEMENTS - (Continued) Note 2 - Description of the Program (Continued) The Program maintains two trusts, one related to the ESOP portion of the program ("ESOP Trust") and one related to the other investments (collectively the "trusts"). Note 3 - Investment Programs Participants may invest their basic deduction and their supplemental deduction in 1/2 percentage point increments in any or all of: Union Carbide Corporation Common Stock, United States Savings Bonds, the Fixed Income Fund, the Fidelity Equity-Income Fund, the Fidelity U.S. Equity Index Portfolio, the Fidelity Magellan Fund, the Fidelity Contrafund, the Fidelity Growth Company Fund, or the Discounted (UCC) Company Stock Fund. A participant may invest a supplemental deposit in any of these investment programs except for the Discounted Company Stock Fund. Investments in Praxair, Inc. ("Praxair") Common Stock are closed to new participants and existing participants are limited to selling and prohibited from purchasing Praxair Common Stock through the Program. Dividends earned on Praxair Common Stock are reinvested in the Fixed Income Fund. Effective April 18, 1997, the name of the Fidelity U.S. Equity Index Portfolio was changed to the Spartan U.S. Equity Index Fund. Note 4 - Employee Stock Ownership Plan The ESOP is an integral part of the Program. The ESOP Trust owns all of the issued shares of a series of UCC convertible preferred stock ("ESOP Stock") which it purchased with proceeds from a 15 year 10% loan maturing in 2005 from the corporation. The corporation's contributions, plus dividends on the unallocated shares held by the ESOP, are used to meet interest and principal payments. As loan payments are made, shares of the ESOP Stock are allocated to eligible participants. The conversion price, liquidation price and annual preferred dividend per share of the ESOP Stock are $8.981, $8.981 and $0.794, respectively. The ESOP Stock is convertible into the corporation's common stock at a ratio of one-to- one, has a preference in liquidation and each share has one voting right. The ESOP Stock annual dividend rate of $0.794 per share yields 8.84% based on the liquidation price. Dividends on allocated shares are credited quarterly to participants' accounts in the form of additional shares of ESOP Stock. During 1996, the Board of Directors of the corporation authorized an amendment to the ESOP, effective in 1996, to add a profit sharing formula for supplemental allocations of ESOP Stock to eligible employees. The supplemental allocations will be determined each year based on the corporation's return on capital. For the period ended December 31, 1996, the supplemental allocations of ESOP Stock totaled $29.5 million, which was credited to eligible employees' accounts in February 1997, per the terms of this amendment. - 6 - THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES NOTES TO FINANCIAL STATEMENTS - (Continued) Note 5 - Expenses Transfer taxes and other costs and expenses, if any, associated with the sale and transfer of UCC Common Stock for a participant's account, are deducted from the proceeds or charged to the account. Fees of the trustees and investment managers are paid by the Program. For the year ended December 31, 1996, the Program paid certain administration costs and recordkeeping expenses of the Program. The corporation paid those expenses not borne by the Program. Note 6 - Fixed Income Fund The Fixed Income Fund includes two bond portfolios actively managed by Pacific Investment Management Company and Jennison Associates Capital Corporation. The portfolios consist of government, corporate and international investment grade securities. Pacific Mutual Life Insurance Company and The Prudential Insurance Company of America were contracted to provide, in most instances, liquidity guarantees ("wrapper insurance") of these two bond portfolios in the event that participant book value withdrawals exceed 5% of the market value of the portfolios at the beginning of the calendar quarter. The following is a summary of the Fixed Income Fund. Contract value represents original deposits under the contract credited with actual earnings and charged for withdrawals. The contract value reported for contracts with banks and insurance companies generally approximates their fair value. (Millions of Dollars) Fund Investments Carrying Value December 31, 1996 1995 Contracts with Banks and Insurance Companies, at contract value.................................... $273.9 $284.7 Investments managed by Investment Firms under Wrapper Insurance Contracts: U.S. Government Securities, valued at market....... $271.5 $239.0 Corporate Securities, valued at market............. 134.8 159.2 International Securities, denominated in U.S. dollars, valued at market................... 6.3 - Commercial Paper and U.S. Treasury Bills........... 9.8 - Chemical Bank Temporary Investment Fund............ - 20.7 Chase Manhattan Bank Enhanced Cash Investment Fund. 9.1 - Unsettled Purchase and Sale Transactions........... (35.1) (42.5) Wrapper Insurance Contracts........................ 1.6 (3.1) Total Investments managed by Investment Firms.......... $398.0 $373.3 Chemical Bank Temporary Investment Fund................ - 27.8 Chase Manhattan Bank Enhanced Cash Investment Fund..... $ 22.6 $ - Total Fixed Income Fund................................ $694.5 $685.8 The average yield ranged from 4.29% to 9.31% and 6.11% to 13.98% for the years ended December 31, 1996 and 1995, respectively. The crediting interest rate, the fixed rate of return for the contracts, ranged from 5.05% to 9.31% and 5.61% to 9.31% as of December 31, 1996 and 1995, respectively. - 7 - THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES NOTES TO FINANCIAL STATEMENTS - (Continued) Note 6 - Fixed Income Fund (Continued) The crediting interest rates for the contracts with banks and insurance companies are determined at inception of the contracts. For those contracts that provide for fluctuations in their crediting interest rates, the rates are reset annually or daily and are based on an agreed upon method. The crediting interest rates for the investments managed by investment firms under wrapper insurance contracts are reset quarterly and are based on such factors as the individual bond portfolio's book value, duration, market value and current yield. The contract with The Prudential Insurance Company of America establishes a minimum crediting interest rate of 2% per quarter. Note 7 - Federal Income Taxes The corporation has received a determination letter from the Internal Revenue Service dated May 30, 1995 stating that the Program and related trusts are designed in accordance with applicable sections of the IRC. The Program has been amended since receiving the determination letter. However, the Program administrator and the Program's tax counsel believe that the Program is designed and is currently being operated in compliance with the applicable requirements of the IRC. Participant elective deferrals are subject to the maximum allowed by the IRC for the 401(k) portion of the Program, which in 1996 was $9,500. Employees are not subject to income tax on their salary reduction contributions to the 401(k) portion of the Program, corporation payments or other accumulations in their accounts until a distribution is made from the Program. Employee after-tax contributions are generally not subject to income tax upon distribution from the Program. An employee may withdraw an amount equal to his/her after-tax contributions made prior to 1987 without incurring any income tax. However, in the case of employee after-tax contributions made after 1986 an employee may exclude from income only the portion of the distribution that bears the same ratio to the total distribution as the employee's after-tax contributions bears to the total value of the employee's account. For employees making deferred contributions to the Program in accordance with IRC Section 401(k), distributions are generally taxed as ordinary income subject to special tax treatment afforded certain distributions that qualify as lump sum distributions under the IRC. Note 8 - Allocation of Changes in Net Assets Available for Benefits by Investment Program The allocation of changes in net assets available for benefits by investment program for the year ended December 31, 1996 is as follows: - 8 - THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES NOTES TO FINANCIAL STATEMENTS - (Continued) Note 8 - Allocation Of Changes in Net Assets Available for Benefits By Investment Program (Continued) (Millions of Dollars) Year Ended December 31, 1996
Total UCC ESOP ESOP Savings Common Allo- Unal- Program Stock cated located Investment income: Dividends................................ $ 33.6 $ 3.8 $ 4.5 $ 8.2 Interest................................. 47.2 - - - 80.8 3.8 4.5 8.2 Net change in appreciation (depreciation) of investments............ 61.5 12.2 17.0 (3.4) Contributions and deposits: Amounts deposited by participating employees.............................. 48.6 1.0 - - Amounts contributed by participating employers.............................. 5.1 - - 5.1 53.7 1.0 - 5.1 Allocation of ESOP Stock to participants... 54.2 - 54.2 - Loan repayments (including interest)....... - 2.4 - - Net additions (deductions).......... 250.2 19.4 75.7 9.9 Withdrawals................................ (55.1) (2.7) (3.3) - Administration costs and expenses.......... (3.5) - - (2.0) Interest expense on ESOP loan.............. (9.0) - - (9.0) Transfers from previous employers' plans... 3.0 0.8 - - Allocation of ESOP Stock to participants... (12.5) - - (12.5) Loans to participants...................... - (2.6) (0.1) - Transfers among investment programs........ - 11.5 (6.1) - Net increase (decrease).................... 173.1 26.4 66.2 (13.6) Net assets available for benefits at: Beginning of year........................ 1,623.3 110.8 201.6 309.7 End of year.............................. $1,796.4 $137.2 $267.8 $296.1 Dis- counted Fidelity Company U.S. Fixed Equity- Stock Savings Income Income Fund Bonds Fund Fund Investment income: Dividends................................ $ - $ - $ - $ 2.0 Interest................................. 0.1 0.1 43.6 - 0.1 0.1 43.6 2.0 Net change in appreciation (depreciation) of investments............ 5.9 - - 3.2 Contributions and deposits: Amounts deposited by participating employees.............................. 14.7 0.1 23.0 1.5 Amounts contributed by participating employers.............................. - - - - 14.7 0.1 23.0 1.5 Allocation of ESOP Stock to participants... - - - - Loan repayments (including interest)....... - - 20.1 0.4 Net additions (deductions).......... 20.7 0.2 86.7 7.1 Withdrawals................................ (0.5) (0.1) (41.1) (1.5) Administration costs and expenses.......... - - (1.5) - Interest expense on ESOP loan.............. - - - - Transfers from previous employers' plans... - - 0.7 0.3 Allocation of ESOP Stock to participants... - - - - Loans to participants...................... (0.7) - (23.6) (0.4) Transfers among investment programs........ (7.4) - (12.5) 4.8 Net increase (decrease).................... 12.1 0.1 8.7 10.3 Net assets available for benefits at: Beginning of year........................ 72.7 1.8 685.8 22.1 End of year.............................. $ 84.8 $ 1.9 $694.5 $ 32.4 Fidelity U.S. Fidel- Equity Fidelity ity Index Magellan Contra- Portfolio Fund fund Investment income: Dividends................................ $ 1.1 $ 9.9 $ 2.6 Interest................................. - - - 1.1 9.9 2.6 Net change in appreciation (depreciation) of investments............ 6.5 (3.3) 3.1 Contributions and deposits: Amounts deposited by participating employees.............................. 1.4 3.8 1.9 Amounts contributed by participating employers.............................. - - - 1.4 3.8 1.9 Allocation of ESOP Stock to participants... - - - Loan repayments (including interest)....... 0.4 1.3 0.6 Net additions (deductions).......... 9.4 11.7 8.2 Withdrawals................................ (0.9) (1.4) (0.5) Administration costs and expenses.......... - - - Interest expense on ESOP loan.............. - - - Transfers from previous employers' plans... 0.3 0.3 0.3 Allocation of ESOP Stock to participants... - - - Loans to participants...................... (0.5) (1.6) (0.4) Transfers among investment programs........ 5.3 (6.3) 8.6 Net increase (decrease).................... 13.6 2.7 16.2 Net assets available for benefits at: Beginning of year........................ 29.8 58.0 19.7 End of year.............................. $ 43.4 $ 60.7 $ 35.9 Fidel- ity Growth Praxair Company Common Fund Loans Stock Investment income: Dividends................................ $ 0.9 $ - $ 0.6 Interest................................. - 3.4 - 0.9 3.4 0.6 Net change in appreciation (depreciation) of investments............ 1.6 - 18.7 Contributions and deposits: Amounts deposited by participating employees.............................. 1.2 - - Amounts contributed by participating employers.............................. - - - 1.2 - - Allocation of ESOP Stock to participants... - - - Loan repayments (including interest)....... 0.4 (25.6) - Net additions (deductions).......... 4.1 (22.2) 19.3 Withdrawals................................ (0.3) (1.2) (1.6) Administration costs and expenses.......... - - - Interest expense on ESOP loan.............. - - - Transfers from previous employers' plans... 0.3 - - Allocation of ESOP Stock to participants... - - - Loans to participants...................... (0.1) 30.2 (0.2) Transfers among investment programs........ 7.3 - (5.2) Net increase (decrease).................... 11.3 6.8 12.3 Net assets available for benefits at: Beginning of year........................ 9.9 48.4 53.0 End of year.............................. $ 21.2 $ 55.2 $ 65.3
- 9 - THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES Line 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (Millions of Dollars) December 31, 1996 Description of Investment Current Identity of Issuer (Maturity Value in Millions of Dollars) Cost Value * Union Carbide Corporation Common Stock, Par Value $1.00, Annual Dividend $0.75 $147.9 $222.0 * Union Carbide Corporation Convertible Preferred Stock (Unallocated), Par Value $1.00, Annual Dividend $0.794 85.0 386.8 * Union Carbide Corporation Convertible Preferred Stock (Allocated), Par Value $1.00, Annual Dividend $0.794 150.7 267.8 Praxair, Inc. Common Stock, Par Value $0.01, Annual Dividend $0.38 16.8 65.3 United States Government Series E Savings Bonds, $0.1 0.1 0.2 United States Government Series EE Savings Bonds, $2.5 1.2 1.7 Fidelity Investments Equity-Income Fund 22.2 32.4 Fidelity Investments U.S. Equity Index Portfolio 24.1 43.4 Fidelity Investments Magellan Fund 38.0 60.7 Fidelity Investments Contrafund 27.0 35.9 Fidelity Investments Growth Company Fund 17.4 21.2 Chase Manhattan Bank Enhanced Cash Investment Fund, Interest Rate 5.87%, $4.4 4.4 4.4 * Union Carbide Corporation Participant Loans, 6.20% - 9.40%, Various Maturity Dates, $55.2 - 55.2 Fixed Income Fund (Where no interest rate is stated, rate is floating.) Contracts with Banks and Insurance Companies: Metropolitan Life Insurance Company Contract No. 1583, 5.05%, $34.6 $ 34.6 $ 34.6 Bankers Trust Company Contract No. 4, Money Market, 5.30%, $9.0 9.0 9.0 Bankers Trust Company Contract No. 4, FNMA 92-15E, 6.75%, Due 11/25/97, $4.3 4.3 4.3 New York Life Insurance Company Contract No. GA30049, 6.93%, Due 9/11/97, $48.2 48.2 48.2 Continental Assurance Company Contract No. GP-13088-006, 7.80%, Due 2/6/98, $47.1 47.1 47.1 Continental Assurance Company Contract No. GP-24019-006, 6.69%, Due 10/28/99, $70.8 70.8 70.8 John Hancock Mutual Life Ins. Co. Contract No. 7937 GAC, 6.11%, Due 7/1/98, $59.9 59.9 59.9 Total Contracts with Banks and Insurance Companies $273.9 $273.9 United States Government Securities: United States Government U.S. Treasury Bond, 0.00%, Due 10/06/01, $2.8 $ 2.0 $ 2.1 United States Government U.S. Treasury Bond, 10.75%, Due 8/15/05, $4.0 5.2 5.3 United States Government Tennessee Valley Authority Note, 6.235%, Due 7/15/45, $6.0 6.0 6.2 United States Government U.S. Treasury Note, 5.875%, Due 10/31/98, $4.7 4.7 4.8 United States Government U.S. Treasury Note, 5.625%, Due 2/28/01, $16.9 16.5 16.9 United States Government U.S. Treasury Note, 6.25%, Due 2/15/03, $3.0 3.0 3.1 United States Government U.S. Treasury Note, 6.625%, Due 6/30/01, $6.0 6.1 6.1 United States Government U.S. Treasury Note, 7.75%, Due 11/30/99, $13.4 14.2 14.1 United States Government U.S. Treasury Note, 9.125%, Due 5/15/99, $15.7 17.4 17.0 United States Government GNMA 276783, 10.00%, Due 8/15/19, $0.5 0.5 0.5 United States Government GNMA 038063, 10.00%, Due 10/15/10, $0.2 0.2 0.2 United States Government GNMA 226629, 10.00%, Due 3/15/18, $0.1 0.1 0.1 United States Government GNMA 253772, 10.00%, Due 7/15/18, $0.7 0.7 0.7 United States Government GNMA 254801, 10.00%, Due 6/15/18, $0.8 0.9 0.9 United States Government GNMA 284866, 10.00%, Due 4/15/20, $0.1 0.1 0.1 United States Government FHLMC Multiclass, 6.50%, Due 8/15/08, $1.5 1.4 1.5 United States Government FHLMC Multiclass, 6.00%, Due 2/15/09, $3.3 2.9 3.0 United States Government FHLMC Multiclass, 6.00%, Due 9/15/08, $1.2 1.1 1.1 United States Government FHLMC Multiclass, 9.00%, Due 12/15/05, $1.2 1.2 1.2 United States Government FNMA Pass-Through Certificate 050562, 7.50%, Due 2/1/22, $0.7 0.7 0.7 - 10 - THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES Line 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - (Continued) (Millions of Dollars) December 31, 1996 Description of Investment Current Identity of Issuer (Maturity Value in Millions of Dollars) Cost Value United States Government FNMA Pass-Through Certificate 050679, 7.50%, Due 1/1/23, $0.1 0.1 0.1 United States Government FNMA Pass-Through Certificate 146207, 7.50%, Due 3/1/22, $0.2 0.2 0.2 United States Government FNMA Pass-Through Certificate 271740, 7.50%, Due 9/1/23, $3.4 3.4 3.4 United States Government FNMA Gtd Remic Pass, 6.00%, Due 9/25/07, $2.5 2.1 2.4 United States Government FNMA Gtd Remic Pass, 10.00%, Due 6/25/19, $3.3 3.6 3.7 United States Government FNMA Pass-Through Certificate 180030, 7.50%, Due 9/1/22, $0.3 0.3 0.3 United States Government FNMA Pass-Through Certificate 190759, 6.00%, Due 4/1/09, $4.4 4.2 4.2 United States Government FNMA Pass-Through Certificate 190911, 6.00%, Due 6/1/09, $2.4 2.4 2.3 United States Government FNMA Pass-Through Certificate 250019, 7.50%, Due 4/1/24, $1.3 1.3 1.3 United States Government FNMA Pass-Through Certificate 250126, 7.50%, Due 8/1/24, $1.6 1.6 1.7 United States Government FNMA Pass-Through Certificate 269800, 6.00%, Due 5/1/09, $0.5 0.5 0.5 United States Government FNMA Pass-Through Certificate 271746, 7.50%, Due 8/1/23, $1.5 1.5 1.6 United States Government FNMA Pass-Through Certificate 275074, 6.00%, Due 4/1/09, $0.3 0.3 0.3 United States Government FNMA Pass-Through Certificate 276278, 6.00%, Due 7/1/09, $0.4 0.4 0.4 United States Government FNMA Pass-Through Certificate 277521, 6.00%, Due 4/1/09, $0.3 0.3 0.3 United States Government FNMA Pass-Through Certificate 277845, 6.00%, Due 4/1/09, $0.3 0.3 0.3 United States Government FNMA Pass-Through Certificate 281605, 7.00%, Due 5/1/24, $0.5 0.5 0.5 United States Government FNMA Pass-Through Certificate 283414, 7.00%, Due 5/1/24, $0.4 0.4 0.4 United States Government FNMA Pass-Through Certificate 283871, 6.00%, Due 8/1/09, $0.4 0.4 0.4 United States Government FNMA Pass-Through Certificate 293543, 7.50%, Due 1/1/23, $0.7 0.7 0.7 United States Government FNMA Pass-Through Certificate 293718, 7.50%, Due 9/1/24, $0.5 0.5 0.5 United States Government FNMA Pass-Through Certificate 327657, 7.00%, Due 1/1/26, $1.9 1.9 1.9 United States Government FNMA Pass-Through Certificate 328963, 6.00%, Due 10/1/08, $0.7 0.7 0.7 United States Government FNMA Pass-Through Certificate 329299, 7.00%, Due 1/1/26, $1.4 1.4 1.3 United States Government FNMA Pass-Through Certificate 329301, 7.00%, Due 1/1/26, $0.5 0.5 0.5 United States Government FNMA Pass-Through Certificate 331491, 7.00%, Due 1/1/26, $0.7 0.7 0.7 United States Government FNMA Pass-Through Certificate 331636, 7.00%, Due 1/1/26, $0.1 0.1 0.1 United States Government FNMA Pass-Through Certificate 333861, 7.00%, Due 1/1/26, $2.0 2.0 2.0 United States Government FNMA Pass-Through Certificate 335533, 7.00%, Due 1/1/26, $1.9 1.9 1.9 United States Government FNMA 100003, 10.00%, Due 3/15/18, $1.4 1.6 1.6 United States Government FNMA 142175, 7.50%, Due 1/1/22, $0.3 0.3 0.3 United States Government FNMA 144668, 7.50%, Due 1/1/22, $0.3 0.3 0.3 United States Government FNMA 165977, 7.50%, Due 6/1/22, $0.1 0.1 0.1 United States Government FNMA 207570, 7.50%, Due 4/1/23, $0.3 0.3 0.3 United States Government FNMA 231723, 7.50%, Due 7/1/22, $0.3 0.3 0.3 United States Government FNMA 266039, 6.00%, Due 3/1/09, $0.3 0.3 0.3 United States Government FNMA 269541, 6.00%, Due 6/1/09, $0.5 0.5 0.5 United States Government FNMA 269801, 6.00%, Due 5/1/09, $0.4 0.4 0.4 United States Government FNMA 270008, 6.00%, Due 4/1/09, $0.7 0.7 0.7 United States Government FNMA 276285, 6.00%, Due 7/1/09, $0.9 0.8 0.8 United States Government FNMA 280012, 6.00%, Due 5/1/09, $0.6 0.6 0.6 United States Government FNMA 281161, 6.00%, Due 4/1/09, $0.4 0.4 0.4 United States Government FNMA 284487, 6.00%, Due 5/1/09, $0.4 0.4 0.4 United States Government FNMA 289238, 6.00%, Due 7/1/09, $0.5 0.5 0.5 United States Government FNMA 291305, 6.00%, Due 5/1/09, $0.2 0.2 0.2 United States Government U.S. Treasury Note, 7.00%, Due 7/15/06, $3.2 3.3 3.4 United States Government U.S. Treasury Note, 7.25%, Due 8/15/04, $11.0 11.5 11.7 United States Government GNMA TBA, 7.50%, Due 1/15/27, $0.6 0.6 0.6 United States Government GNMA TBA, 8.00%, Due 1/15/27, $7.1 7.2 7.2 - 11 - THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES Line 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - (Continued) (Millions of Dollars) December 31, 1996 Description of Investment Current Identity of Issuer (Maturity Value in Millions of Dollars) Cost Value United States Government GNMA 080022, 6.00%, Due 12/20/26, $4.0 4.0 4.0 United States Government GNMA 008089, 7.00%, Due 12/20/22, $6.1 6.2 6.3 United States Government GNMA 008238, 7.25%, Due 7/20/23, $6.6 6.7 6.8 United States Government GNMA 008830, 5.00%, Due 3/20/26, $2.0 2.0 2.0 United States Government GNMA 008909, 5.00%, Due 7/20/26, $5.0 4.8 4.9 United States Government GNMA 008983, 7.00%, Due 9/20/26, $5.5 5.6 5.6 United States Government GNMA 411385, 6.50%, Due 4/15/26, $0.2 0.2 0.2 United States Government GNMA 422687, 6.50%, Due 5/15/26, $0.4 0.4 0.4 United States Government GNMA 008482, 7.25%, Due 8/20/24, $6.6 6.6 6.8 United States Government GNMA 008781, 5.00%, Due 1/20/26, $9.9 9.9 10.0 United States Government GNMA 008863, 4.50%, Due 5/20/26, $6.0 5.7 5.9 United States Government GNMA 008913, 6.00%, Due 7/20/26, $4.9 4.9 4.9 United States Government GNMA 425968, 6.50%, Due 3/15/26, $0.1 0.1 0.1 United States Government FHLMC TBA Gold, 6.50%, Due 1/15/27, $20.3 19.7 19.4 United States Government FHLMC Multiclass, 9.05%, Due 6/15/19, $1.3 1.4 1.4 United States Government FHLMC Multiclass, 6.50%, Due 7/15/21, $5.7 5.2 5.2 United States Government FHLMC Multiclass, 7.00%, Due 9/15/21, $8.3 2.3 1.3 United States Government FHLMC Multiclass, 7.75%, Due 1/15/18, $0.5 0.5 0.5 United States Government FHLMC 846183, Due 1/1/24, $6.7 6.8 7.0 United States Government FHLMC Gold C80374, 8.00%, Due 1/1/26, $0.2 0.2 0.2 United States Government FHLMC Gold D60672, 8.00%, Due 6/1/25, $0.1 0.1 0.1 United States Government FHLMC Gold D62854, 8.00%, Due 8/1/25, $0.1 0.1 0.1 United States Government FHLMC MMP 1689-L, 0.00%, Due 3/15/24, $1.4 1.2 1.3 United States Government FNMA Pass-Through Certificate 0054844, Due 9/1/27, $0.3 0.3 0.3 United States Government FNMA Pass-Through Certificate 0060680, Due 2/1/28, $0.7 0.7 0.7 United States Government FNMA Pass-Through Certificate 0062688, Due 5/1/28, $0.2 0.2 0.2 United States Government FNMA Pass-Through Certificate 0067694, Due 10/1/28, $1.0 1.0 0.9 United States Government FNMA Gtd Remic Pass, 7.00%, Due 11/25/06, $2.0 0.2 0.2 United States Government FNMA Gtd Remic Pass, 8.00%, Due 7/25/20, $2.3 2.4 2.4 United States Government FNMA Gtd Remic Pass, 8.00%, Due 12/25/06, $7.8 8.3 8.3 United States Government FNMA Pass-Through Certificate 0070713, 9.00%, Due 1/1/98, $0.3 0.3 0.3 United States Government FNMA Pass-Through Certificate 291254, Due 8/1/24, $1.3 1.3 1.4 United States Government FNMA Pass-Through Certificate 300309, 6.125%, Due 12/1/24, $2.6 2.6 2.6 United States Government FNMA Pass-Through Certificate 303298, Due 1/1/25, $3.2 3.3 3.3 United States Government FHA Project, 9.68%, Due 2/1/24, $0.2 0.2 0.2 United States Government FHA Project, 7.46%, Due 8/25/23, $5.4 5.5 5.5 Total Government Securities $270.3 $271.5 Corporate Securities: Columbia University Medium Term Note, 8.65%, Due 2/21/03, $0.8 $ 0.9 $ 0.9 Ford Motor Credit Co. Medium Term Note, 6.11%, Due 12/28/01, $3.2 3.1 3.2 Advanta Mortgage Loan Trust Asset Backed Certificate 94-1, 6.30%, Due 7/25/25, $2.1 2.1 2.1 Associates Corp. N.A. Bond, 6.25%, Due 3/15/99, $1.9 1.9 1.9 Bellsouth Telecom- munications, Inc. Note, 5.85%, Due 11/15/45, $1.0 1.0 1.0 Commercial Credit Group Inc. Bond, 8.70%, Due 6/15/09, $1.7 1.8 1.9 Ford Credit Auto Loan Master Trust Bond, 5.50%, Due 2/15/03, $5.0 5.0 4.9 Ford Credit Auto Owner Trust Bond, 6.30%, Due 1/15/01, $4.0 4.0 4.0 Ford Motor Credit Co. Bond, 7.00%, Due 9/25/01, $2.6 2.5 2.7 General Electric Cap. Corp. Medium Term Note, 8.09%, Due 4/1/04, $1.8 2.0 2.1 GMAC Bond, 8.625%, Due 6/15/99, $2.3 2.4 2.4 - 12 - THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES Line 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - (Continued) (Millions of Dollars) December 31, 1996 Description of Investment Current Identity of Issuer (Maturity Value in Millions of Dollars) Cost Value GMAC Medium Term Note, 6.25%, Due 1/11/00, $6.0 5.9 6.1 IBM Credit Receivables Lease Asset Trust, 4.55%, Due 11/15/00, $0.4 0.4 0.4 LB Mortgage Trust Mortgage Pass-Through Certificate 1992-1, 7.81%, Due 1/15/08, $2.5 2.5 2.6 Lehman Home Equity Loan Trust Mortgage Pass-Through Certificate 1993-1, 0.00%, Due 12/30/97, $7.4 6.0 6.9 Nynex Corp. Debenture, 9.55%, Due 5/1/10, $1.4 1.6 1.6 Penn. Power & Light Co. First Mortgage, 6.00%, Due 6/1/00, $4.5 4.5 4.4 Premier Auto Trust Asset Backed Security 96-4, 6.20%, Due 11/6/00, $7.0 7.0 7.0 AMR Corp. Medium Term Note, 9.125%, Due 10/24/01, $1.3 1.4 1.4 GMAC Medium Term Note, Due 3/3/99, $4.5 4.4 4.5 Merrill Lynch & Co. Medium Term Note, Due 1/14/99, $6.0 5.9 6.1 Salomon, Inc. Medium Term Senior Note, Due 4/5/99, $2.5 2.5 2.6 Salomon, Inc. Medium Term Senior Note, 6.36%, Due 4/1/98, $2.0 2.0 2.1 TCI Communications Inc. Medium Term Note, Due 4/3/02, $1.5 1.5 1.5 Capital One Bank Medium Term Bank Note, Due 3/21/97, $2.0 2.0 2.0 Capital One Bank Medium Term Bank Note, 8.625%, Due 1/15/97, $2.5 2.6 2.6 AMR Corp. Debenture, 10.00%, Due 2/1/01, $0.3 0.3 0.3 Chrysler Financial Corp. Medium Term Note, 5.60%, Due 1/21/99, $1.6 1.5 1.6 Citicorp Floating Rate Notes, Due 1/30/98, $1.7 1.7 1.7 Commonwealth Edison Co. First Mortgage S-79, 9.125%, Due 10/15/21, $1.0 1.1 1.1 CWMBS, Inc. Mortgage Pass-Through Certificate, 6.375%, Due 3/25/24, $3.2 3.2 3.2 DLJ Mortgage Accept. Corp. Mortgage Pass-Through Certificate, Due 12/25/22, $2.0 2.1 2.1 Ford Motor Credit Co. Medium Term Note, Due 11/9/98, $2.2 2.2 2.2 GE Cap. Mtg. Svc., Inc. Mortgage Pass-Through Certificate, 6.50%, Due 4/25/24, $3.4 3.4 3.4 GE Cap. Mtg. Svc., Inc. Mortgage Pass-Through Certificate, 7.50%, Due 3/25/19, $0.9 0.9 0.9 GE Cap. Mtg. Svc., Inc. Mortgage Pass-Through Certificate, 8.00%, Due 7/25/23, $2.0 2.1 2.0 Greenwich Cap. Accept., Inc. Mortgage Pass-Through Certificate, Due 1/25/23, $0.9 0.9 0.9 Lehman Brothers Holdings Inc. Senior Note, 0.00%, Due 5/16/98, $3.5 3.0 3.2 Residential Funding Mtg. Sec. I, Inc. Mortgage Pass-Through Certificate, 8.00%, Due 12/25/22, $4.0 4.1 4.1 Resolution Trust Corporation Mortgage Pass-Through Security, 7.25%, Due 10/25/23, $2.0 2.0 2.0 Resolution Trust Corporation Mortgage Pass-Through Security, Due 1/25/20, $1.5 1.5 1.6 Resolution Trust Corporation Mortgage Pass-Through Security, 7.25%, Due 10/25/23, $0.9 0.9 0.9 Resolution Trust Corporation Mortgage Pass-Through Security, 7.50%, Due 8/25/23, $0.5 0.5 0.5 RJR Nabisco, Inc. Note, 8.625%, Due 12/1/02, $8.5 8.6 8.8 Ryland Accept. Corp. Collateralized Mortgage Bond, 9.00%, Due 1/20/19, $4.3 4.5 4.5 Ryland Mortgage Sec. Corp. Collateralized Mortgage Bond, 8.10%, Due 6/25/23, $2.3 2.4 2.4 Salomon, Inc. Medium Term Senior Note, Due 5/19/97, $1.0 1.0 1.0 Sears Mortgage Sec. Corp. Mortgage Pass-Through Certificate, Due 4/25/23, $1.4 1.4 1.4 Time Warner, Inc. Debenture, 8.11%, Due 8/15/06, $0.6 0.5 0.6 Time Warner, Inc. Debenture, 8.18%, Due 8/15/07, $0.6 0.5 0.6 Time Warner, Inc. Note, 7.975%, Due 8/15/04, $0.3 0.3 0.3 Time Warner, Inc. Note, Due 8/15/00, $4.5 4.4 4.6 Total Corporate Securities $131.9 $134.8 International Securities, denominated in U.S. dollars: Province of Quebec, Canada Medium Term Note, 6.29%, Due 3/6/26, $0.8 $ 0.8 $ 0.8 Province of Quebec, Canada Medium Term Note, 5.735%, Due 3/2/26, $3.5 3.5 3.5 Province of Ontario, Canada Note, 8.00%, Due 10/17/01, $1.1 1.2 1.2 Province of Ontario, Canada Bond, 7.75%, Due 6/4/02, $0.7 0.7 0.8 Total International Securities $ 6.2 $ 6.3 - 13 - THE SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES Line 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - (Continued) (Millions of Dollars) December 31, 1996 Description of Investment Current Identity of Issuer (Maturity Value in Millions of Dollars) Cost Value Cash Equivalents: United States Government U.S. Treasury Bill, 4.66%, Due 1/23/97, $0.2 $ 0.2 $ 0.2 United States Government U.S. Treasury Bill, 4.97%, Due 3/13/97, $0.1 0.1 0.1 United States Government U.S. Treasury Bill, 4.96%, Due 3/6/97, $0.1 0.1 0.1 United States Government FNMA, Commercial Paper, Discounted, 5.39%, Due 1/17/97, $5.4 5.4 5.4 Ford Motor Credit Co. Commercial Paper, Discounted, 5.40%, Due 1/31/97, $4.0 4.0 4.0 Total Cash Equivalents $ 9.8 $ 9.8 Chase Manhattan Bank Enhanced Cash Investment Fund, Interest Rate 5.87%, $31.7 $ 31.7 $ 31.7 Unsettled Purchase and Sale Transactions: United States Government FHLMC 846183, Due 1/1/24 $ 0.1 $ 0.1 United States Government U.S. Treasury Note, 7.25%, Due 8/15/04 0.2 0.2 United States Government FHLMC TBA Gold, 6.50%, Due 1/15/27 (9.7) (9.7) United States Government FHLMC TBA Gold, 6.50%, Due 1/15/27 (10.0) (10.0) United States Government U.S. Treasury Note, 7.25%, Due 8/15/04 (7.7) (7.7) United States Government GNMA TBA, 8.00%, Due 1/15/27 (7.2) (7.2) United States Government GNMA TBA, 7.50%, Due 1/15/27 (0.6) (0.6) United States Government Bond Future, 10 Year U.S. Treasury Note - CBT (0.1) (0.1) United States Government Bond Future, 5 Year U.S. Treasury Note - CBT (0.1) (0.1) Total Unsettled Purchase and Sale Transactions $ (35.1) $ (35.1) Total Fixed Income Fund (exclusive of $ 1.6 million wrapper insurance) $ 688.7 $ 692.9 GRAND TOTALS $1,223.5 $1,889.9 * Party-in-interest to the Program. - 14 - The SAVINGS AND INVESTMENT PROGRAM FOR EMPLOYEES OF UNION CARBIDE CORPORATION AND PARTICIPATING SUBSIDIARY COMPANIES Line 27d - Schedule of Reportable Transactions Year Ended December 31, 1996 (Millions of Dollars) Identity of Purchase Cost of Current Party Involved Price Asset Value Description Selling Expense Net Gain of Asset Price Incurred (Loss) Series of transactions in the same security: Chemical Bank $ 1.00 $ 312.2 $ 312.2 Short Term Reserve Fund for Pension & Profit Sharing Plans n/a - n/a Chemical Bank n/a 315.9 315.9 Short Term Reserve Fund for Pension & Profit Sharing Plans 1.00 - - Chase Manhattan Bank 1.00 312.9 312.9 Enhanced Cash Investment Fund n/a - n/a Chase Manhattan Bank n/a 332.7 332.7 Enhanced Cash Investment Fund 1.00 - - Union Carbide Corporation 35.88-47.68 110.8 110.8 Common Stock n/a - n/a Union Carbide Corporation n/a 58.7 87.1 Common Stock 37.88-49.75 0.1 28.3 U.S. Government 99.73-100.44 73.6 73.6 Treasury Note, 6.125%, Due 3/31/98 n/a - n/a U.S. Government n/a 73.6 73.6 Treasury Note, 6.125%, Due 3/31/98 98.71-101.46 - - n/a = not applicable - 15 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Committee of the Plan has duly caused this Annual Report to be signed on its behalf by the undersigned thereunto duly authorized. The Savings and Investment Program for Employees of Union Carbide Corporation and Participating Subsidiary Companies Date: June 24, 1997 By: /s/John K. Wulff Name: JOHN K. WULFF Title: Vice-President, Chief Financial Officer and and Controller Union Carbide Corporation - 16 - Independent Auditors' Report To the Program Administrators of The Savings and Investment Program for Employees of Union Carbide Corporation and Participating Subsidiary Companies: We have audited the accompanying statement of net assets available for benefits of The Savings and Investment Program for Employees of Union Carbide Corporation and Participating Subsidiary Companies ("the Program") as of December 31, 1996 and 1995, and the related statement of changes in net assets available for benefits for the year ended December 31, 1996. These financial statements are the responsibility of the Program's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Program as of December 31, 1996 and 1995, and the changes in net assets available for benefits for the year ended December 31, 1996, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of the Program are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. KPMG PEAT MARWICK LLP Stamford, Connecticut May 30, 1997 - 17 - EXHIBIT INDEX Exhibit Page No. Exhibit No. 23 Independent Auditors' Consent 19 - 18 - EX-23 2 INDEPENDENT AUDITORS' CONSENT Exhibit 23 Independent Auditors' Consent To the Program Administrators of The Savings and Investment Program for Employees of Union Carbide Corporation and Participating Subsidiary Companies: We consent to incorporation by reference in the Registration Statement on Form S-8 (No. 33-58931) of Union Carbide Corporation of our report, dated May 30, 1997, relating to the statement of net assets available for benefits of The Savings and Investment Program for Employees of Union Carbide Corporation and Participating Subsidiary Companies as of December 31, 1996 and 1995 and the related statement of changes in net assets available for benefits for the year ended December 31, 1996, and all related schedules, included in this annual report on Form 11-K. KPMG PEAT MARWICK LLP June 23, 1997 Stamford, Connecticut - 19 - -----END PRIVACY-ENHANCED MESSAGE-----