PLAN STOCK PURCHASE AGREEMENT
Exhibit
1.1
THIS PLAN
STOCK PURCHASE AGREEMENT (“Agreement”) is made this 11th day of May, 2009, between THE
DOW CHEMICAL COMPANY (the “Company”) and FIDELITY MANAGEMENT TRUST COMPANY, not
in its individual or corporate capacity, but solely as trustee (the “Trustee”)
of THE DOW CHEMICAL COMPANY EMPLOYEES’ SAVINGS PLAN TRUST (“Purchaser” or the
“Trust”), a separate trust created under The Dow Chemical Company Employees’
Savings Plan (the “Plan”).
RECITALS:
WHEREAS,
the Company sponsors the Plan; and
WHEREAS,
pursuant to an agreement (the “Trust Agreement”) between Fidelity
Management Trust Company and the Company, the Trustee serves as
a trustee of the Plan in accordance with the Trust Agreement;
and
WHEREAS,
the Plan includes a leveraged employee stock ownership plan component (“LESOP
Component”); and
WHEREAS,
the LESOP Component includes a suspense account (“Suspense Account”) which holds
$552,528,842.34 in
cash and short term investments (the “Suspense Account Cash”); and
WHEREAS,
Section 4.1 of the Plan Document, and the Trust Agreement, provide
that the Plan shall purchase shares (“Shares”) of common stock of the Company
using the $552,528,842.34 Suspense
Account Cash no later than 90 days following April 1, 2009, or such later date
as set forth in Section 4.1 of the Plan ; and
WHEREAS,
the named fiduciary (“Named Fiduciary”) for the Plan is the Benefits Governance
and Finance Committee of The Dow Chemical Company (“BGFC”); and
WHEREAS,
pursuant to an amendment to the Trust Agreement, the Trustee shall be directed
by the Named Fiduciary or an investment manager appointed by the Named
Fiduciary, with respect to the purchase of the Shares; and
WHEREAS,
BGFC, as the named fiduciary for the Plan, appointed Independent Fiduciary
Services, Inc. (“IFS”) in accordance with section 402(c)(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”) to serve as a
fiduciary and investment manager of the Plan within the meaning of section 3(21)
of ERISA pursuant to an Investment Manager Engagement Agreement by
and Among The Dow Chemical Company, the Benefits Governance and Finance
Committee of The Dow Chemical Company and Independent Fiduciary Services Inc.,
executed on March 12, 2009 (“Investment Manager Engagement Agreement”) with
authority and responsibility to direct the Trustee to purchase shares (“Shares”)
of common stock of the Company, par value $2.50 per share, (the “Common Stock”)
using the Suspense Account
Cash as
required by the Plan unless IFS determines that proceeding with such purchases
would violate ERISA; and
WHEREAS,
IFS is an investment advisor under the Investment Advisors Act of 1940;
and
WHEREAS,
IFS has determined pursuant to the Investment Manager Engagement Agreement that
the purchase of 36,698,005 Shares at $15.0561 per Share by the Trustee on behalf
of the Plan with the Suspense Account Cash pursuant to Section 4.1 of the Plan
does not violate ERISA; and
WHEREAS,
IFS, as a result, has directed the Trustee to purchase the Shares with the
Suspense Account Cash; and
WHEREAS,
the Company desires to sell, and Purchaser desires to purchase, the Shares, with
an aggregate purchase price of $552,528,833.08, on behalf of the Plan;
and
WHEREAS,
to induce Purchaser to purchase the Shares, the Company wishes to make (i)
various representations and warranties and (ii) certain covenants for the
benefit of Purchaser.
NOW,
THEREFORE, in consideration of the foregoing and of the mutual agreements,
covenants, and undertakings contained herein, and subject to the terms and
conditions herein set forth below, the parties to this Agreement hereby agree as
follows:
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SECTION
1.
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PURCHASE
OF SHARES
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Subject
to the terms and conditions of this Agreement, the Company hereby sells to the
Purchaser, and Purchaser hereby purchases from the Company, the number of whole
Shares determined in accordance with Section 2 for the Purchase Price described
therein.
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SECTION
2.
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PURCHASE
PRICE AND PAYMENT
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(a) Upon the
Company’s transfer and delivery to Purchaser of the Shares at Settlement,
subject to the terms and conditions of this Agreement, Purchaser shall deliver
to the Company at Settlement by wire transfer in accordance with the following
wire instructions the amount of Five Hundred Fifty Two Million, Five Hundred
Twenty-Eight Thousand, Eight Hundred Thirty- Three Dollars and Eight Cents
($552,528,833.08) (the
“Purchase Price”) from the Suspense Account Cash in immediately available
funds:
The Dow
Chemical Company
[***]
[***]
[***]
The
whole number of Shares purchased hereunder shall be equal to the quotient
obtained by dividing (A) the Purchase Price by (B) $15.0561, which is the
negotiated price per Share.
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(b)
Fractional Shares. No fractional shares of common stock will be issued to
the Purchaser.
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SECTION
3.
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SETTLEMENT
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(a)
Time and Place. The settlement (the “Settlement”) of the purchase of
the Shares shall be held as soon as practicable, but in no event more than three
days after the date of this Agreement, upon a date and at a location mutually
agreed upon by the Trustee and the Company on the date hereof. The
date of the Settlement is referred to herein as the “Settlement
Date.”
(b) Deliveries. On
the Settlement Date, the Trustee shall deliver the Purchase Price in the manner
described in Section 2(a) and the Company shall cause the Shares purchased
hereunder to be issued to the Plan in the name of the Trustee through the
facilities of The Depository Trust Company, unless Purchaser shall otherwise
instruct. Shares shall be delivered into the following
account:
[***]
[***]
[***]
[***]
(c) The
Shares to be purchased hereunder shall, upon issuance, be the subject of a
registration statement on an appropriate form that has been declared effective
by the SEC, and such declaration of effectiveness shall not have been
withdrawn.
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SECTION
4.
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REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
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The
Company represents and warrants to the Purchaser as follows:
(a) Corporate
Existence and Authority. The Company (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; (ii) has all requisite corporate power to execute, deliver and perform
this Agreement; and (iii) has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement.
(b) Trustee
Appointment. The Company has taken all necessary corporate actions to
appoint Fidelity Management Trust Company as trustee of the Trust.
(c) IFS
Appointment. The Company has taken all necessary corporate actions to
appoint IFS as fiduciary and investment manager of the Plan with the authority
to direct the Trustee to enter into this Agreement.
(d) No
Conflict. The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated hereby will not, violate,
conflict with or constitute a default under (i) the Company’s Certificate of
Incorporation or By-Laws, (ii) any
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material
agreement, indenture or other instrument to which the Company is a party or by
which the Company or its assets may be bound or subject, or (iii) any law,
regulation, order, arbitration award, judgment or decree applicable to the
Company.
(e) Validity. This
Agreement has been duly executed and delivered by the Company and is a valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws affecting the enforcement of creditors’ rights
generally, or by general equitable principles.
(f) The
Shares. The Shares have been duly authorized and issued, and when
delivered against payment therefor as provided in Section 2 hereof, will be duly
and validly issued and will constitute fully-paid and nonassessable shares of
Common Stock of the Company. The Company will convey to Purchaser, on
the date of Settlement, good and valid title to the Shares free and clear of any
liens, claims, security interests and encumbrances, except for (i) beneficial
interests accruing to Plan participants and their beneficiaries and (ii) any
liens, claims, security interests and encumbrances, created or imposed by
Purchaser.
(g) Qualifying
Employer Securities. The
Shares are “qualifying employer securities” within the meaning of Section
407(d)(5) of ERISA and can be held in the Suspense Account, subject to the terms
of the Plan, to the same extent as if they were purchased with the proceeds of
the LESOP note.
(h)
Consents. The Company is not subject to any law,
ordinance, regulation, rule, order, judgment, injunction, decree, charter,
bylaw, contract, commitment, lease, agreement, instrument or other restriction
of any kind which would prevent the Company’s consummation of this Agreement or
any of the transactions contemplated hereby without the consent of any third
party, which would require the consent of any third party to the consummation of
this Agreement or any of the transactions contemplated hereby, or which would
result in any penalty, forfeiture or other termination as a result of such
consummation (other than with respect to consents that have been
obtained).
(i)
Financial Statements. The financial statements of the Company filed
(but excluding any financial statements that are solely “furnished”) with the
Securities Exchange Commission (the “SEC”) in the Company’s Recent SEC Reports
were prepared in accordance with accounting principles generally accepted in the
United States (“GAAP”) and present fairly, in all material respects, in
accordance with GAAP, the consolidated financial condition, results of
operations and changes in financial position of the Company as of the respective
dates thereof. “Recent SEC Reports” means: (i) the Company’s Annual
Report on Form 10-K for its fiscal year ended December 31, 2008; (ii) the
Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended March 31,
2009; (iii) each of the Company’s Current Reports on Form 8-K filed since the
end of the Company’s fiscal year ended December 31, 2008 (but excluding Current
Reports on Form 8-K that are solely “furnished” rather than filed); and (iv)
amendments filed to each of the preceding reports.
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(j) SEC
Filings. Purchaser has filed with the SEC all material forms,
statements, reports and documents (the “SEC Filings”) required to be filed by it
during its last three fiscal years and the period subsequent to the end of its
last completed fiscal year to the date hereof under the Securities Exchange Act
of 1934, as amended, (the “Exchange Act”) and the rules and regulations
promulgated thereunder. As of its filing date, each SEC Filing complied as to
form in all material respects with the applicable requirements of the Exchange
Act and the rules and regulations promulgated thereunder. As of its
filing date, each SEC Filing did not contain any untrue statement of material
fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
(k) Plan
Matters. The Plan and the Trust have been duly authorized, organized
and established by all necessary corporate action on the part of the
Company. The Plan is a legal and valid employee stock ownership plan
within the meaning of Section 4975(e)(7) of the Internal Revenue Code of 1986,
as amended (the “Code”) and ERISA Section 407(d)(6), is intended to be qualified
under Section 401(a) of the Code, and the Trust is intended to be exempt from
taxation under Section 501(a) of the Code, and has received a favorable
determination letter from the Internal Revenue Service (the “IRS”).
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SECTION
5.
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REPRESENTATIONS
AND WARRANTIES OF THE TRUSTEE.
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The
Trustee represents and warrants to the Company as follows:
(a) Trustee
Existence and Authority. The Trustee is a trust company organized and
validly existing under the laws of the Commonwealth of
Massachusetts. The Trustee has all requisite power and authority to
act as Trustee and exercise trust powers, including without limitation, the
trust powers provided in and contemplated under the Trust
Agreement. Further, the Trustee, on behalf of the Trust and at the
direction of IFS, has full power and authority under the Trust to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly authorized, executed and
delivered by the Trustee on behalf of the Trust.
(b) No
Conflict. The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated hereby will not, violate,
conflict with or constitute a default under (i) the terms of the Trust, (ii) any
agreement, indenture or other instrument to which the Trust is a party or by
which the Trust or its assets may be bound or subject, or (iii) any law,
regulation, order, arbitration award, judgment or decree applicable to the
Trust.
(c) Validity. The
Trustee has signed this Agreement not in its individual or corporate capacity
but solely in its capacity as the Trustee, as directed by
IFS (except that IFS’s direction does not apply to this Section
5) and this Agreement constitutes the legal, valid and binding
obligation of the Trustee and the Trust and is enforceable in accordance with
its provisions, except to the extent limited by any applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other laws
affecting creditors’ rights generally, or by
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general
equitable principles. The execution, delivery and performance of this
Agreement by the Trustee, on behalf of the Trust, and the consummation of the
transactions contemplated herein do not and will not require the Trustee to
obtain the consent or approval of, or make any filing with, any person or public
authority.
(d) No
Commissions. The Trustee has not incurred any obligation for any
finder’s, broker’s or agent’s fees or commissions or similar compensation in
connection with the transactions contemplated hereby.
(e) Litigation
and Compliance with Governmental Rules. There are no current actions,
suits, proceedings, arbitrations or investigations pending or, to the knowledge
of the Trustee, threatened against the Trust. The Trust is not
subject to any court or administrative judgment, order, or decree that would
reasonably be anticipated to have a material adverse effect on the Trust’s right
to enter into the transaction contemplated by this Agreement.
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SECTION
6.
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COVENANTS
OF THE COMPANY.
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The
Company hereby covenants and agrees with the Trustee as follows:
(a)
Plan Qualification. The Company shall apply for favorable
determination letters with respect to the matters referenced in Section 4(k) and
shall make such amendments as the IRS requests within the remedial amendment
period allowed by Section 401(b) of the Code and the regulations thereunder;
provided that no such amendments shall have a material adverse effect on the
transactions contemplated hereby. In addition, the Company will file
with the IRS any amendments to the Plan that are required with respect to the
Plan within the time prescribed by law for obtaining an effective date for the
amendments that is retroactive to the earliest date allowed by the
IRS.
(b) Expenses. The
Company will cause the Plan to pay the reasonable expenses of the Trustee and
the Trust (including, without limitation, the fees of its legal and financial
advisors) which are incurred (i) in connection with the authorization,
preparation, execution, performance, negotiation and/or review of this Agreement
and the documents ancillary thereto or (ii) in the performance of the Trustee’s
duties under and with respect to the Trust and the Plan following the
Settlement, except to the extent the Company pays such expenses.
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SECTION
7.
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SURVIVAL
OF REPRESENTATIONS AND WARRANTIES.
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The
representations and warranties in this Agreement or any instrument delivered
pursuant to this Agreement shall survive until the third anniversary of the
Settlement.
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SECTION
8.
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SEVERABILITY.
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The
invalidity or unenforceability of any provisions of this Agreement shall not
affect the validity or enforceability of any other provision under this
Agreement.
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SECTION
9.
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ASSIGNMENT,
SUCCESSORS AND ASSIGNS.
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This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. No party shall
assign any of its rights or obligations hereunder without the prior written
consent of the other party, except that the Trustee may assign its rights and
obligations hereunder without consent to any successor trustee or trustees of
the Trust or any successor Trust of the Plan.
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SECTION
10.
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GENERAL
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(a) Execution
of Counterparts. For the convenience of the parties, this Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
document.
(b)
Notices. All notices which are required or may be
given pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if delivered personally or by registered or certified
mail, postage prepaid, or facsimile as follows:
If to the
Company:
The Dow
Chemical Company
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention:
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, Executive Vice President, Law and Government
Affairs,
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and
General Counsel and Corporate Secretary
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Copies
to:
Shearman
& Sterling LLP
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
If to the
Trust to:
Fidelity
Management Trust Company
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇
and
to:
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Independent
Fiduciary Services, Inc.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇
Managing
Director and General Counsel
Facsimile:
973.424.6419
(c) Governing
Law. This Agreement shall be governed by and construed in accordance with ERISA,
the Code and, to the extent not preempted by Federal law, the laws of the
Commonwealth of Massachusetts. Whenever possible, each
provision of this Agreement shall be construed and interpreted in such manner as
to be effective and valid under ERISA and the Code, and the regulations issued
thereunder, but if any provision of this Agreement shall be prohibited or
invalid under such statutes or regulations, such provision shall be
unenforceable and ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
(d) Amendments,
Waivers, Discharges, etc. This Agreement may not be amended or
modified except by a writing signed by all parties to be bound by the amendment
or modification. The failure of a party to enforce any provision of
this Agreement shall not be deemed a waiver by such party of any other provision
or subsequent breach of the same or any other obligation hereunder.
(e)
Entire Agreement. This Agreement contains all the terms agreed upon
by the parties with respect to the purchase and sale of the Shares and, except
as to the Trustee’s Engagement Letter, it supersedes all prior agreements,
arrangements, or understandings, whether oral or written, with respect to the
purchase and sale of the Shares.
(f) Action
as Trustee. The Trustee has signed and delivered this Agreement
solely as trustee of the Plan, and not in its individual or corporate
capacity. The performance of this Agreement by the Trustee, and all
duties, obligations, and liabilities of the Trustee under this Agreement, will
be undertaken by the Trustee only in its capacity as the trustee of the
Plan. The Trustee does not undertake any individual or corporate
liability or obligation by virtue of the signing and delivery of this Agreement
or by reason of the representations, warranties, and covenants contained in this
Agreement.
[Signature pages to
follow]
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IN
WITNESS WHEREOF, the parties have signed this Agreement as of the date first
above written.
The
Trust:
Fidelity
Management Trust Company, not in its
individual
or corporate capacity, but
solely as
the Trustee of The Dow Chemical Company Employees’ Savings Plan Trust acting as
directed by IFS, except that such direction by IFS is not applicable to Section
5 of this Agreement
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| Title: | Senior Vice President | ||
The
Dow Chemical Company:
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
| Title: | Executive Vice President, | ||
| General Counsel and Corporate Secretary | |||
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