ex-10z.htm


    
      EXHIBIT
10(z)

      
        
          

        

      

       

      


      NON-QUALIFIED
STOCK OPTION AGREEMENT PURSUANT TO

      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 instrument 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

      


      
        	
                1.

              	
                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.

              


      

       

      
        	
                2.

              	
                Subject
      to the vesting and exercise periods specified on the accompanying award
      letter and the conditions described below, this Agreement grants you the
      right to purchase the number of shares of Common Stock of the Company at
      the option price specified on the letter attached to this Agreement (the
      “Option”). Notice of the exercise of this Option in whole or in part shall
      be made to Smith Barney via on-line trading or Customer Service. Such
      notice of exercise shall be accompanied by payment in full for the shares
      covered thereby. Payment shall be in United States dollars or, at the
      discretion of the Compensation Committee, in Common Stock of the Company
      valued at Fair Market Value or a combination of dollars and Common Stock
      of the Company. Dollar payment shall be made by official bank check,
      certified check, or the equivalent. The Stock Award Resource Center shall
      have discretionary authority to accept a personal uncertified check or
      bank transfer in lieu of the foregoing methods of payment. Prior to such
      notice of exercise, and prior to the issuance and delivery of any shares,
      you (or your successors) shall make arrangements satisfactory to the
      Compensation Committee for the payment of any taxes required to be
      withheld in connection with the exercise of this Option 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 and 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.

              


      

       

      
        	
                3.

              	
                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, disability or retirement, or Special Separation
      Situation. In the event of your death, disability, or retirement while
      employed by a Dow Company, this Agreement shall, except as provided below,
      terminate upon the earlier to occur of (a) five years after your death,
      disability or retirement or (b) the original expiration date of this
      Agreement as specified on the reverse side of this Agreement. In the event
      of your retirement, death, or disability, your current year’s Stock Option
      Grant will be prorated based on the time period worked during the year. 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 Committee for Plan awards.  For
      purposes of this Agreement, “retirement” is defined in your home country
      retirement policy in effect at the inception of this Agreement. 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 vesting period of Options under this
  Agreement.

              


      

       

      
        	
                4.

              	
                If
      (a) you exercise any portion of this Option prior to the expiration date
      of this option, and (b) you leave the employment of a Dow Company within
      one year after such exercise for any reason except death, disability or
      retirement, then you shall pay to the Company any excess of the Fair
      Market Value over the exercise price on the date of exercise. You may be
      released from this obligation to pay the Company only if the Compensation
      Committee (or its duly appointed agent or agents) determines in its or
      their sole judgment that such action is in the best interests of a Dow
      Company.

              


      

       

      
        	
                5.

              	
                A
      “Special Separation Situation” is defined as a situation in which (a) a
      Dow Company terminates your employment by employer action for a reason
      that qualifies you for a severance benefit (which includes the Special
      Stock Treatment described in this section 5) under a severance plan
      sponsored by a Dow Company, and (i) you fulfill the requirements of the
      severance plan in order to qualify for payment of the severance benefit,
      and (ii) you and the Dow Company
sign

              


      

       


      
        
           


        

        
          244

          
            

          

        

        
           


        

      


      a
Release that provides for the Special Stock Treatment described in this section
5; or (b) a Dow Company terminates your employment by employer action, and i)
you do not qualify for a severance benefit under a severance plan sponsored by
the Dow Company under the circumstances specified in paragraph 5a, and ii) the
reason for termination was not because of the violation of an employer rule, or
a law, regulation or other such government requirement, or dishonesty or theft,
or because you engaged in activity harmful to the interests of, or in
competition with, a Dow Company, and iii) you and the Dow Company sign a Release
that provides for the Special Stock Treatment described in this section 5. If
your employment is terminated under a Special Separation Situation, then your
Award shall receive Special Stock Treatment. Special Stock Treatment means that
with respect to unexpired, unexercised options under this Agreement the time
period for vesting and exercise will continue for one year from the effective
date of termination of employment, but not to exceed the original expiration
date of the grant.

       

      
        	
                6.

              	
                The
      Company is under no obligation to grant you the right to receive any cash
      payment under any law, federal, local, domestic or
  foreign.

              


      

       

      
        	
                7.

              	
                Your
      right to exercise this Option may not be sold, pledged, or otherwise
      transferred (except as hereinafter provided) and any attempts to sell,
      pledge, assign or otherwise transfer shall be void and your rights to the
      Option shall therefore be forfeited. Your right to exercise such Option
      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.

              


      

       

      
        	
                8.

              	
                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 you exercise any portion of this Option you
      engage in any act of Unfair Competition, you shall promptly pay to the
      Company any excess of the Fair Market Value over the exercise price on the
      date of exercise. The Compensation Committee shall, in its sole
      discretion, determine when any act of Unfair Competition has occurred, and
      the determination of the Compensation 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.

              


      

       

      
        	
                9.

              	
                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 Stock Options
      credited to your account and the Option price recorded on the books of the
      Company as deemed appropriate, provided that any adjustments to a Stock
      Option shall be made in a manner that will not result in the grant of a
      new Stock Option under Code Section
409A

              


      

       

      
        	
                10.

              	
                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.

              


      

       

      
        	
                11.

              	
                This
      instrument shall constitute a Non-Qualified Stock Option 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
      expires when all Options granted under this Agreement have been exercised
      or on the expiration date outlined in the letter attached to this
      Agreement, whichever date is earlier. You may choose to reject this award
      by written notice delivered to the Compensation Committee of the Company
      within ninety days of your receipt of this instrument. Individuals who
      reject this Stock Option will not receive additional cash or non-cash
      compensation in lieu of the Stock
Option.

              


      

       

      
        	
                12.

              	
                Upon
      the occurrence of a Change of Control as defined in the Plan, your right
      to receive the number of unvested Stock Options credited to your account
      under this Agreement shall not be forfeitable under any circumstances. If
      you also experience an involuntary Separation from Service from Dow or an
      affiliate thereof within two years following a Change of Control, the
      Company shall deliver these Stock Options to you on the 30th day following
      such Separation from Service.

              


      

       

       

       

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