SPECIAL PERFORMANCE SHARES DEFERRED STOCK AGREEMENT PURSUANT TO THE DOW CHEMICAL COMPANY 1988 AWARD AND OPTION PLAN
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THE
DOW CHEMICAL COMPANY 1988 AWARD AND OPTION PLAN
The Dow
Chemical Company (“the Company” or “Dow”) has delivered to you prospectus
material pertaining to shares of Dow Common Stock covered by The Dow Chemical
Company 1988 Award and Option Plan (“the Plan”). This document is referred to
herein as “this Agreement.” Terms that are used herein and defined in the Plan
are used as defined in the Plan. THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS
COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933.
TERMS AND
CONDITIONS
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1.
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This
Agreement is in all respects subject to the provisions of the Plan, as the
Plan may be amended from time to time. The Plan is incorporated by
reference. In the event of any conflict between this Agreement and the
Plan, as the Plan may be amended from time to time, the provisions of the
Plan shall govern and this Agreement shall be deemed to be modified
accordingly.
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2.
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The
target number of performance shares of Deferred Stock you are awarded
under this Agreement (“Target Shares”) is outlined in the accompanying
award letter with _____ as the effective date of the grant. Shares are
earned over a two-year period beginning _____ and ending on _____ (the
"Performance Period"). The maximum number of shares that can be earned
totals _____ percent of Target
Shares.
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3.
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The
total number of shares earned under this grant will be determined and
released into your account on _____. Prior to issuance and delivery of the
Deferred Stock you shall have no rights as a stockholder with respect to
the Deferred Stock earned under this Agreement. In each year prior to
issuance and delivery, you (or your successors) shall make arrangements
satisfactory to the Compensation and Leadership Development Committee for
the payment of any taxes required to be withheld in connection with your
right to shares of Deferred Stock under all applicable laws and
regulations of any governmental authority, whether federal, state or local
and whether domestic or foreign. The Company and its Subsidiaries or
Affiliates (collectively and individually a “Dow Company”) and their
directors, officers, employees, or agents shall not be liable for any
delay in issuance or receipt of any shares pursuant to this
Agreement.
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4.
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This
Agreement shall terminate and your rights under this Agreement shall be
forfeited if your employment with any Dow Company is terminated for any
reason other than death or disability. Such forfeiture includes forfeiture
if you retire or otherwise leave the Company voluntarily. The
Compensation and Leadership Development Committee or their delegate have
the authority, however, to provide for the continuation of such rights in
whole or in part despite such a termination and forfeiture whenever, in
their sole judgment, it is determined that such continuation is in the
best interests of the Company. If you take a leave of absence
from a Dow Company, for any reason, your award under this Agreement will
be subject to the leave of absence policy established by the Compensation
and Leadership Development Committee for Plan awards. You shall
be considered to be disabled for the purposes of this Agreement in the
event you, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which can be
expected to last for a continuous period of not less than 12 months, are
receiving income replacement benefits for a period of not less than 3
months under an accident and health plan or arrangement covering employees
of the Company. Your death or disability shall not accelerate
the time of payment of Deferred Stock under this
Agreement.
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5.
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For
each Dow Common Stock dividend record date between _____ and _____, an
account in your name will be credited with a sum of money equal to the
amount that you would have received in dividends if the Shares Earned had
been issued to you (the "Dividend Equivalents"). The Dividend Equivalents
associated with each share delivered to you pursuant to Section 3 will be
paid in cash to you as additional compensation on a date between _____ and
_____. Awardees regularly paid compensation by a Dow Company in other than
U.S. dollars will receive such payment of Dividend Equivalents converted
from U.S. dollars at the Dow inter-company trading rate in effect at the
time of delivery.
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6.
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The
Company is under no obligation to grant you the right to receive any cash
payment under any law, federal, local, domestic or
foreign.
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7.
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Your
right to future issuance and delivery of Deferred Stock may not be sold,
pledged, assigned or otherwise transferred (except as hereinafter
provided) and any attempt to sell, pledge, assign or otherwise transfer
shall be void and your rights to Deferred Stock shall therefore be
forfeited. Your right to such future issuance and delivery shall, however,
be transferable by will or pursuant to the laws of descent and
distribution or you may make a written designation of a beneficiary on the
form prescribed by the Company, which beneficiary (if any) shall succeed
to your rights under this Agreement in the event of your
death.
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8.
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Upon
the occurrence of a Change of Control as defined in the Plan, your right
to receive the number of shares of Performance Shares credited to your
account under this Agreement shall not be forfeitable under any
circumstances, and your Performance Shares will generally continue to be
delivered based on the original deferral period schedule and Payment Date.
If you also experience an involuntary Separation from Service from Dow or
an affiliate thereof within two years following a Change
of
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141
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Control,
and prior to the Payment Date, the Company shall deliver the Performance
Shares credited to your account to you on the 30th
day following such Separation from Service. Shares credited to
Awardees account will be determined based on reported company performance
prior to the date of Separation from
Service.
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9.
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If
at any time during the term of this Agreement you engage in any act of
Unfair Competition (as defined below), this Agreement shall terminate
effective on the date on which you enter into such act of Unfair
Competition, unless terminated sooner by operation of another term or
condition of this Agreement or the Plan. In addition, if at any time
within three years after issuance and delivery of this Deferred Stock you
engage in any act of Unfair Competition, you shall promptly pay to the
Company the Fair Market Value of Shares Earned and Dividend Equivalents
paid. The Compensation and Leadership Development Committee shall, in its
sole discretion, determine when any act of Unfair Competition has
occurred, and the determination of the Compensation and Leadership
Development Committee shall be final and binding as to all parties. For
purposes of this Agreement, the term “Unfair Competition” shall mean and
include activity on your part that is in competition with a Dow Company or
is or may be harmful to the interests of a Dow Company, including but not
limited to conduct related to your employment for which either criminal or
civil penalties against you may be sought, or your acceptance of
employment with an employer that is in competition with a Dow
Company.
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10.
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In
the event that additional shares of Common Stock of the Company are issued
pursuant to a stock split or a stock dividend, the Board of Directors
shall make appropriate adjustments in the number and kind of Target Shares
credited to your account on the books of the Company as deemed
appropriate.
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11.
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Nothing
contained in this Agreement shall confer or be deemed to confer upon you
any right with respect to continuance of employment by a Dow Company, nor
interfere in any way with the right of a Dow Company to terminate your
employment at any time with or without assigning a reason
therefore.
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12.
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This
document shall constitute a Performance Shares Deferred Stock Agreement
between the Company and you, and this Agreement shall be deemed to have
been made on _____. To the extent that federal laws do not otherwise
control, this Agreement shall be governed by the laws of the state of
Delaware and construed accordingly. Subject to earlier termination by
operation of another term or condition of this Agreement or the Plan, this
Agreement will expire when Shares Earned are delivered or when it is
determined by the Compensation and Leadership Development Committee that
the Company’s strategic financial performance objectives have not been
achieved, whichever date is earlier. You may choose to reject this award
by written notice delivered to the Compensation and Leadership Development
Committee of the Company within ninety days of your receipt of this
instrument. Individuals who reject this Deferred Stock will not receive
additional cash or non-cash compensation in lieu of the Deferred
Stock.
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