exh10i.htm


    
       

      
        
          
            
              
                	 	
                         The
      Dow Chemical Company and Subsidiaries

                      	
                         EXHIBIT
      10(i)

                      
	 	
                         

                         

                      	 


              

            

          

        

         

      

    

    August
1, 1994

    


    


    
      
        	 	
                This
      document constitutes part of a prospectus covering securities
      that have been or will be registered under the Securities
      Act of 1933.

              


      

    

    


    


    THE
DOW CHEMICAL COMPANY

    


    1994
NON-EMPLOYEE DIRECTORS’ STOCK PLAN

    


    


    1.            Establishment and Purpose of the
Plan

    


    The Dow Chemical Company 1994 Non-Employee
Directors’ Stock Plan (the “Plan”) is established upon the
following terms and conditions. The purposes of the Plan are to advance the
interests of The Dow Chemical Company (the “Company”) through the attraction,
motivation and retention of qualified non-employee Directors; to provide a means
for such Directors to increase their equity ownership of the Company; and to
thereby more closely align their economic interests with those of the Company’s
other stockholders.

    


    2.            Definitions.

    


    2.01        Annual Directors’
Fee:  The annual fee paid by the Company lo a non-employee
Director for service as a Director, but not including meeting attendance fees,
Board committee chairmanship fees, committee membership fees or
expenses.

    


    2.02        Award:  A grant of
Options to an Awardee pursuant to Sections 6 and 7.

    


    2.03        Awardee:  An
Eligible Director to whom an Award is made.

    


    2.04        Board of
Directors:  The Board of Directors of the Company.

    


    2.05        Change of Control: A change of
control of the Company of a nature that would be required to be reported in
response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under cite
Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not
the Company is then subject to such reporting requirement; provided that,
without limitation, a Change in Control shall be deemed to have occurred if(a)
any individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity, or any syndicate or group deemed to
be a person under Section 14(d)(2) of the Exchange Act, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), directly or indirectly, of securities of
the Company representing 20% or more of the combined voting power of the
Company’s then outstanding securities entitled to vote in the election of
directors of the Company; or (b) during any period of two (2) consecutive years
(not including any period prior to the adoption of this Plan), individuals who
at the beginning of such period constitute the Board of Directors and any new
directors, whose election by the Board of Directors or nomination for election
by the Company’s stockholders was approved by a vote of at least three quarters
(3/4) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority
thereof.

    


    2.06        Common Stock:  The
Common Stock of the Company, par value $2.50 a share, or such other class or
kind of share or other securities as may be applicable under Section
8.

    


    2.07        Company:  The Dow
Chemical Company, a Delaware corporation. or any successor to substantially all
its business.

    


    2.08        Date of Grant:  The
date an Award is granted to an Eligible Director.

    


    2.09        Eligible
Director:  Any person who is a member of the Board of Directors
of the Company who is not an employee of the Company or of any Subsidiary as
defined in Section 2.14.


    
      
         


      

      
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    2.10        Fair Market
Value:  As applied to a specific date, the average of the
highest and lowest market prices of Common Stock, as reported on the
consolidated transaction reporting system for the New York Stock Exchange issues
on such date, or, if Common Stock was not traded on such date, on the next
preceding day on which the Common Stock was traded.

    


    2.11        Option:  Any option
or options providing for the purchase of a stated number of whole, not
fractional, shares of Common Stock, granted from time to time under the Plan,
pursuant to Sections 6 and 7.

    


    2.12        Option
Agreement:  The written agreement between the Company and the
Awardee for the grant of an Option pursuant to the Plan and signed by the
Awardee upon acceptance.

    


    2.13        Plan:  The Dow
Chemical Company 1994 Non-Employee Directors’ Stock Plan as herein set forth, as
the same may from time to time be amended.

    


    2.14        Subsidiary:  Any
business association (including a corporation or a partnership, other than the
Company) in an unbroken chain of such associations beginning with the Company if
each of the associations other than the last association in the unbroken chain
owns equity interests (including stock or partnership interests) possessing 50%
or more of the total combined voting power of all classes of equity interests in
one or the other associations in such chain.

    


    3.            Stock Subject to the
Plan.

    


                   Subject
to adjustment as provided in Section 8 of this Plan, the total number of shares
of Common Stock which may be awarded under the Plan, excluding those shares
constituting the unexercised portion of any canceled, terminated or expired
options, is 100,000 shares.  If any shares subject to any Award
granted hereunder are forfeited or such Award otherwise terminates without the
issuance of such shares or of other consideration in lieu of such shares, the
shares subject to such Award, to the extent of any such forfeiture or
termination, shall again be available for grant under the Plan.  Any
Common Stock issued hereunder shall consist only of treasury
shares.

    


    4.            Eligibility and Individual Election
Not to Participate.

    


                   On
the Dates of Grant specified in Section 6.01, each Eligible Director shall
receive an Award, subject to the Common Stock ownership requirements of Section
6.03, unless any such Eligible Director elects to reject such Award by written
notice delivered to the Company within ten business days after receiving notice
of the Award.  Eligible Directors who reject Awards under the Plan
will not receive additional cash or non-cash compensation in lieu of
Awards.

    


    5.            Plan
Administration.  The Plan shall be administered by the
Company’s Board of Directors. which shall have authority to adopt such rules and
regulations, and to make such determinations as are not inconsistent with the
Plan and are necessary or desirable for its implementation and administration:
provided, however, that the Board of Directors will have no authority,
discretion or power to select the Eligible Directors or to determine the number
of shares in any Award, the exercise price of any Option, when and under what
circumstances any Option will be granted or the period within which any Option
may be exercised.

    


    6.            Non-Discretionary Grants of
Options.

    


    6.01        Dates of
Grant.  Subject to the provisions of Sections 4 and 6.03, on
the first business day in September in 1994, and every five years thereafter,
Awards shall be granted to each Eligible Director who is serving on the Board of
Directors on such Date of Grant.  No Awards will be made pursuant to
the Plan after the year 2004.

    


    6.02        Size of
Grants.  Each Award shall grant Options for a specified
quantity of Common Stock equal to the then current Annual Directors Fee divided
by 30% of the Fair Market Value of Common Stock on August 15 of the year of the
Date of Grant, rounded up to the nearest higher 50 shares. However, no Award
shall grant Options for less than 1,000 shares of Common Stock nor more than
2,000 shares of Common Stock.

    


    6.03        Common Stock Ownership Requirements
for Award Eligibility.  Awards shall be made only to those
Eligible Directors who, on the Date of Grant and for the lesser of (a) the
period of one year preceding the Date of Grant or (b) the period of time since
the first meeting of the Board of Directors attended by the Eligible Director,
beneficially owned the requisite minimum number of shares of Common Stock
indicated below.  Beneficial ownership shall be determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934 or any
successor provisions.


    
      
         


      

      
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    Owned
1,500 shares of Common Stock to qualify for an Awardee’s first Award under the
Plan.

    Owned
2,000 shares of Common Stock to qualify for an Awardee’s second Award under the
Plan.

    Owned
2,500 shares of Common Stock to qualify for an Awardee’s third Award under the
Plan.

    


                   If
such requisite minimum stock ownership level is not met by the Eligible
Director, no Award will be made. Eligible Directors who do not satisfy such
stock ownership eligibility requirements will not receive cash or non-cash
compensation in lieu of Awards. Future Awards to an Awardee will be made on
identical terms as the first Award, but the minimum requisite Common Stock
ownership levels for eligibility will increase with each subsequent Award
received, as specified in the table above.

    


    7.            Terms of
Awards.  The grant of Options shall be upon the following terms
and conditions:

    


    7.01        Option
Agreement.  Each Award shall be evidenced by an Option
Agreement. Such Option Agreement shall conform to the requirements of the Plan,
and shall specify the Date of Grant and the Option Price.

    


    7.02        Option Price.  The
price at which Common Stock may be purchased upon the exercise of an Option
shall be the Fair Market Value on the Date of Grant.

    


    7.03        Terms of
Options.  The term of each Option granted under the Plan shall
be ten (10) years from the Date of Grant, subject to earlier termination in
accordance with Sections 7.06 and 10.

    


    7.04.       Incremental Vesting and Option
Exercisability Schedule.  No Option shall be exercisable less
than one year from the Date of Grant. For vesting purposes, each Award shall be
divided into three portions, as equal in number of shares as possible and each
such one-third portion of the Award shall vest respectively at each of the first
three annual anniversaries of the Date of Grant.  On the first
anniversary of the Date of Grant, one portion will vest and one-third of the
Award Options shall thereupon be exercisable in whole or in part.  On
the second and third anniversaries of the Date of Grant, each of the remaining
two portions of the Award will, respectively, vest and such Options shall become
exercisable in whole or in part.  The ten-year term for Options
pursuant to Section 7.03 is applicable regardless of when an Option may vest and
become exercisable.

    


    7.05        Payment of Option
Price.  The Option price of the shares of Common Stock for
which an Option shall be exercised shall be paid in full at the time of the
exercise in cash or by check, bank draft or money order payable to the order of
the Company.  An Awardee shall have no rights of a stockholder with
respect to any shares of Common Stock subject to an Option unless and until a
stock certificate for such shares shall have been issued to him or
her.

    


    7.06        Termination of Membership on the
Board of Directors.  Notwithstanding the provisions of Section
7.04, an Option whose term has not yet expired that is held by an Awardee shall
become fully vested and immediately exercisable upon such Awardee’s death or
retirement from the Board of Directors as provided for in the Outside Directors’
Pension Plan, or upon a Change of Control.  Any such Options must be
exercised (a) within 5 years from such termination of Board membership or Change
of Control or (b) within the original term of the Option, whichever time period
is less, or such Options shall thereafter automatically
terminate.  Options held by an Awardee whose membership on the Board
of Directors terminates for other reasons not described above, unless subject to
the provisions of Section 10, shall expire within 6 months from Board
termination and are exercisable only to the extent they have vested, as provided
in Section 7.04, prior to expiration.

    


    8.            Adjustments upon Changes in
Capitalization.

    


                   In
the event of a reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation or any other change in the
corporate structure of the Company affecting Common Stock, or a sale by the
Company of all or a substantial part of its assets, or any distribution to
stockholders other than a normal cash dividend, the Board of Directors shall
make appropriate adjustment in the number and kind of shares authorized by the
Plan and outstanding Awards.  No fractional shares of Common Stock
shall be issued pursuant to such adjustment, however, and the Fair Market Value
of any fractional shares resulting from adjustments pursuant to this Section
shall be paid in cash to the Awardee.


    
      
         


      

      
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    9.            Effective Date, Termination and
Amendment

    


                   This
Plan shall become effective upon its adoption by the Board of Directors or the
Executive Committee of the Board of Directors, and shall continue in effect
until all Options granted hereunder have expired or been exercised, unless
terminated sooner pursuant to the Plan.  The Board of Directors may
amend the Plan subject to the provisions of Section 5, provided however that the
Plan shall not be amended more frequently than once every six months, unless
such an amendment is required to comply with the Internal Revenue Code, the
Employee Retirement Income Security Act or the rules promulgated
thereunder.

    


    10.          Forfeiture.

    


                   All
unexercised Options shall automatically terminate and be null and void as of the
date an Eligible Director’s service on the Board of Directors terminates if the
directorship is terminated on account of any act of (a) fraud or intentional
misrepresentation, or (b) embezzlement, misappropriation or conversion of assets
or opportunities of the Company or any Subsidiary.

    


    11.          Non-Assignability.

    


                   Awards
may not be pledged, assigned or transferred for any reason during the Awardee’s
lifetime, and any attempt to do so shall be void and the relevant Award shall be
forfeited.

    


    12.          Beneficiary upon Awardee’s
Death.

    


                   An
Awardee’s Award shall be transferable at his or her death to the beneficiary
designated by the Awardee on forms prescribed and filed with
Company.  Upon the death of an Awardee, such beneficiary shall succeed
to the rights of the Awardee.  If no such designation of a beneficiary
has been made, the Awardee’s Award(s) shall succeed to his or her legal
representative and shall be transferable by will or pursuant to the laws of
descent and distribution.

    


    13.          General
Provisions.

    


    13.01      Nothing
contained in the Plan, or in any Award granted pursuant to the Plan, shall
confer upon any Awardee any right with respect to continuance as a
Director.

    


    13.02      If
any day on or before which action under the Plan must be taken falls on a
Saturday. Sunday or legal holiday, such action may be taken on the next
succeeding day not a Saturday, Sunday or legal holiday.

    


    13.03      The
Plan shall be governed by and construed in accordance with the laws of the State
of Delaware except as superseded by applicable U.S. federal law.

    


    13.04.     The
Plan is expressly intended to comport with the formula plan provisions of Rule
16b-3(c)(2)(ii) (or any successor provision) as promulgated under the Securities
Exchange Act of 1934, as amended, and any ambiguities in the Plan or Option
Agreement shall be resolved so as to effectuate such intent.  However,
this Section does not constitute an election to bring the Plan or any of the
Company’s other stock plans under new Rule 16b-3 of the Securities Exchange Act
of 1934.

    


    13.05      Should
shareholder approval of the Plan be required in the future for administration of
the Plan in full compliance with any applicable regulations, any Awards will be
deemed to be made contingent upon such shareholder approval.

    


    
      
         

      

      
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