ex-10ii.htm


    EXHIBIT
10(ii)

    
      
        

      

    

     

    February
14th, 2006

    


    


    


    Heinz
Haller

    Im
Boden

    Huetten
8825

    Switzerland

    


    Dear
Heinz:

    


    It
is my pleasure to offer you a position as Corporate Vice President of Strategic
Development for

    The
Dow Chemical Company, reporting to myself.  In welcoming you to Dow, I
feel confident that in this significant position you will help to lead Dow to
new heights of performance and leave a lasting impression on our
company.  I hope that you will decide to take up this challenge and
join what I believe is a very outstanding executive leadership team working to
increase Dow's standing as the largest, most profitable, and most respected
chemical company in the world.  I am personally committed to helping
you succeed, and am very excited at the prospect of having you on
board.

    


    While
there are a number of details that are understandably not included in this offer
letter, the following is a high level summary of the major components of the
compensation and benefits package Dow is offering to provide, should you accept
this position and meet the contingencies listed below.

    


    
      	
              Base
      Pay:

            	
              You
      will initially hire into Dow with a Swiss contract at Dow’s Horgen,
      Switzerland location.  Your annualized base pay salary will be
      754,000 Swiss Francs per year. Within a reasonable time frame yet to be
      determined following your hire, you will transfer into the US as a local
      hire located in Midland, Michigan.  Your initial salary will be
      $580,000 per year, or $48,333 per month.  Under our Salary
      Management Process, your future increases will be based upon your
      individual performance and Dow's overall annual salary
      plan.  Dow conducts a global compensation planning exercise in
      February of each year.  At that time, you will be eligible for
      consideration for a salary increase.  For calendar year 2006,
      such an increase has been incorporated into the amount offered to
      you.

            


    

    


    
      	
              Variable
      Pay:

            	
              You
      will also be eligible to participate in our annual variable pay program,
      called the Performance Award Program.  The Performance Award
      Program is linked to a combination of company performance and
      individual/team performance against business/functional goals, with a
      possible range of awards equal to 0 to 200% of your target award
      amount.  When the company, your team, and you deliver excellent
      results, Dow's Performance Award Program is designed to provide a
      significant financial reward.

            


    

    


    Your
target Variable Pay will be 75% of your year-end US base salary.  You
will receive a copy of the Program Guidelines and the target grid applicable to
you at the time you begin work.  Your actual payment for time worked
can range from 0 to 200% based on actual company and individual/team
performance.  The 2006 Performance Award Program payout, if any, would
be delivered in March of 2007, consistent with and subject to all other terms
and conditions of the 2006 Performance Award Program.

    


    
      	
              Long
      Term Incentives:

            	
              You
      will also be considered for participation in the annual Dow Long-Term
      Incentive (LTI) Program based on management review and the terms of the
      program.  This program involves traditional stock options,
      performance shares, and deferred stock issued under The Dow Chemical
      Company 1988 Award and Option Plan (the 1988 A&O
      Plan).  Participation levels each year are decided by your
      supervisor with Compensation Committee oversight.  For calendar
      year 2006, your award will consist of the following mix of stock options,
      deferred stock, and performance
shares:

            


    

    


    
      	
               
      

            	
              §

            	
              64,725
      non-qualified Stock Option Shares,

            


    

    
      	
               
      

            	
              §

            	
              7,861
      Performance Shares,

            


    

    
      	
               
      

            	
              §

            	
              and
      7,861 Deferred Shares.

            


    

     

    
 

    
      
        
           


        

        
          271

          
            

          

        

        
           


        

      

    

    


    
      	
               
      

            	
              The
      strike price of your non-qualified stock option grant will be calculated
      based on the fair market value of Dow stock on your date of hire, which
      will also be the date of grant.  More  complete
      terms and conditions, including the grant price and vesting periods of the
      awards, will be outlined in the actual award agreements you will receive,
      which, along with the terms of the A&O Plan, will control in the event
      of a conflict with the terms of this offer
  letter.

            


    

    


    If
you accept our offer and meet the contingencies listed below, you will, upon
reporting to work, also be eligible to receive the following, special, one time
employment incentives:

    


    
      	
              Cash
      Bonus:

            	
              You
      will receive a one-time, gross, lump sum cash bonus of $500,000 (less
      applicable taxes), payable 90 days from your hire
  date.

            


    

    


    
      	
               Additional
      One-Time

            	
               

            


    

    
      	
              Incentives:

            	
              You
      will receive a one-time lump sum payment of $75,000 as a car
      allowance.  The position does not provide for a company
      car.

            


    

    


    You
will receive a one-time lump sum amount of $50,000 as a housing allowance to
assist you with costs related to your house in Europe.

    


    
      	
              Deferred
      Stock:

            	
              Dow
      will make a Deferred Stock grant to you in the amount of 12,000 shares of
      Dow common stock, to be delivered on the sixtieth (60th)
      day following the third anniversary of your actual 2006 date of hire into
      Dow.  A Deferred Stock Award means that, consistent with the
      specified terms of the Award, the Company will deliver to you the
      indicated number of Dow common stock shares on the sixtieth (60th)
      day following the third anniversary date of your hire into
      Dow.  From the date of grant until the shares are actually
      delivered to you, you will be eligible to receive a payment on those
      shares equal to any Dow stock dividends that are declared.  Any
      such dividend equivalents (less applicable taxes) will be paid to you on a
      quarterly basis through the normal payroll process.  More
      complete terms and conditions of this award will be outlined in the actual
      agreement you will receive, which, along with the terms of the 1988
      A&O Plan, will control in the event of a conflict with the terms of
      this offer letter.

            


    

    


    In
addition to the above special, one-time employment incentives, you will also be
eligible to receive the following benefits upon reporting to work:

    


    
      	
              Vacation:

            	
              You
      will receive 25 working days of vacation for the calendar year 2006,
      prorated to your date of hire, as well as an additional 2 personal choice
      days per year.  You will enter the Dow vacation schedule at an
      equivalent of 25 years of employment service credited for vacation
      purposes.  With each successive year of service, you will
      acquire an additional year of employment service for purposes of vacation
      benefit calculation.

            


    

    


    
      	
              Pension:

            	
              As
      a Swiss employee, you will be eligible to join the Swiss Pension
      Foundation defined benefit plan (Swiss Pension Plan).  The Swiss
      Pension Plan is funded jointly by the Company and employees, with the
      employee contribution at 6% of pensionable pay.  The maximum
      pensionable pay designated by Swiss law is currently 774,000 CHF / year.
      As a participant in the Swiss Pension Plan you will be offered the
      opportunity to purchase years of service in the plan from the age of 25
      immediately after re-hire. Please work with Martin Aschwanden, our
      Switzerland H.R. Leader on the purchase of years of service into the Dow
      Swiss Pension Plan.

            


    

    


    
      	
              Retiree
      Medical

            	
              You
      will be eligible for the retiree medical program available at that time to
      retirees, in the country from which you retire which in your case is
      Switzerland.

            


    

     

    
      	
              Severance:

            	
              While,
      like all U.S. Dow employees, you have an at-will employment relationship
      with Dow, you will, in the event of your involuntary separation from Dow,
      and depending on the circumstances of your involuntary separation, be
      eligible to receive any standard transition assistance benefits that are
      otherwise available to employees at your job level under the terms and
      conditions of any then applicable severance plan in which you are eligible
      to participate.

            


    

     

     

    
      
        
           


        

        
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                Executive
      Benefits:

              	
                In
      addition to the full array of benefits available to all US-based salaried
      employees, you will also be eligible to participate in several of Dow's
      Executive Benefits Programs, including support for financial planning and
      executive physical examinations.

              


      

      


      
        	
                Relocation:

              	
                Dow
      will cover the shipment of your household goods from Europe to Midland and
      will provide temporary housing to you and your family for up to 30
      days.  Upon acceptance of this offer,
      
                  Dow’s
      Global Relocation Director, Traci Kellogg, will contact you to arrange
      details.

                

              


      

       

    

    
      	
              Other
      Benefits:

            	
              You
      will be eligible to participate in a range of additional benefits
      including health, life, dental and disability insurance, consistent with
      your enrollment elections and the terms and conditions of those
      programs.  The details of these programs will be provided to you
      in our standard benefits package
materials.

            


    

    


    More
complete terms and conditions of each of the active Dow employee benefit plans
and programs will be outlined in the official plan summaries for each plan or
program that will be made available to you which, along with the actual terms of
each such plan or program, which will control in the event of a conflict with
the terms of this offer letter.  Dow reserves the right to amend,
modify or terminate any or all of its benefit plans and programs at any
time.

    


    This
job offer, and all of the corresponding compensation and benefits summarized
above (including the special, one-time employment incentives), is contingent
upon:

    


    
      	
              ·

            	
              Providing
      documentation of the proper authorization to work in the United States
      and, if required, obtaining the appropriate U.S. export
      license(s).  Only U.S. citizens or nationals, U.S. Permanent
      Residents, or aliens who are authorized to work in the United States can
      be considered for employment with Dow. Upon acceptance of this offer,
      Traci Kellogg, Global Relocation Director will be contacting you as to
      arrange all the paperwork needed for your visa
  permit.

            


    

    


    
      	
              ·

            	
              Dow
      determining, to its satisfaction, that your commencing employment with Dow
      does not violate any confidentially and/or non-competition agreements you
      may have entered into with your current or former
      employers.  Should any such agreements or restrictions exist,
      you should forward them immediately to Gregory Freiwald via fax at
      989-638-7073.

            


    

    


    Continued
employment, and your eligibility to receive the special, one-time employment
incentives, are also contingent upon complying with the following
requirements:

    


    
      	
              ·

            	
              Signing
      two (2) standard Dow Chemical Employee Agreement forms (patent and trade
      secret) on your report-to-work date, a sample of which is enclosed for
      your review.  Among other things, this Agreement clarifies that
      you will at all times have an at-will employment status with
      Dow.  Nothing in this offer letter constitutes or may be relied
      upon as a contract of employment for any specified period or duration or
      otherwise alters your status as an at-will employee of
  Dow.

            


    

    


    
      	
              ·

            	
              Passing
      a screening for illegal and controlled substances (negative results)
      during the first week of employment by Dow Health Services.  You
      may voluntarily authorize a screening prior to acceptance of this job
      offer.

            


    

    


    
      	
              ·

            	
              Verifying
      your employment eligibility by completing an I-9 form with supportive
      documentation on your report-to-work date.  As required by law,
      Dow employs only U.S. citizens and aliens authorized to work in the United
      States.

            


    

    


    


    
      
        
           


        

        
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    Heinz,
we are confident you will find working for Dow an exciting and challenging
experience and hope you will give our offer your most serious
consideration.  Please indicate your acceptance of this offer by
signing and returning by fax (989-638-7073) the second copy of this letter and
mailing the original copy.  If we can answer any questions or concerns
that will assist you with your decision, please call me at (989) 636-4147 or
Gregory Freiwald at (989) 636-8763.

    


    Sincerely,

    


    


    


    Andrew
N. Liveris

    President,
CEO & Chairman Elect

    The
Dow Chemical Company

    


    Acceptance
of Dow Offer:

    


    


    _________________________________                                                                           __________________________

    Signature                                                                                                                                      
Date

     

     

     

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