Document:

EXHIBIT 10(r)

 

SEVERANCE AGREEMENT AND GENERAL RELEASE

 

This Severance Agreement and General Release (the
“Agreement”) is entered into as of February 12, 2003 (the “Effective Date”)
between The Dow Chemical Company (together with its successors and assigns, the
“Company”) and Michael D. Parker (the “Executive”).  The Company and the Executive (individually, a “Party” and
together, the “Parties”) in exchange for their mutual promises herein set forth
hereby agree to the covenants as set forth below.

 

Section 1 — Benefits

 

(a)  In General:  The Company promises that, within 15 days
after the Executive signs this Agreement, he will receive the amounts or
benefits set forth in this Section 1 that are conditioned on his having
executed and not having revoked this Agreement, twenty percent of which are
being paid to induce him to release any claims he may have under the Age
Discrimination in Employment Act (ADEA). 
The Executive may revoke the waiver of ADEA claims in Section 2 of this
Agreement within 7 days after he signs this Agreement, in which case each
payment to be made pursuant to Section 1(b)(ii) and Section 1(c)(ii) below
(with respect to the U.S. Supplemental Benefit only) shall be reduced by twenty
percent.  Absent this Agreement, the
Executive acknowledges that the Company is not otherwise required to pay or
provide him such amounts or benefits.

 

(b)  Payments:

 

(i)  Salary and
Other Benefits:  The
Executive will continue to receive his present salary on his regular pay days,
through February 12, 2003, which will be his last day of employment, and shall
continue to be eligible (together with his eligible dependents, if applicable)
to participate as an active employee under all applicable medical, dental, life
insurance, retirement and other benefit plans of the Company in which the
Executive and his eligible dependents, if applicable, are enrolled as of the
Effective Date until his or their participation, as the case may be, terminates
under the terms of those plans following the Effective Date.

 

(ii)  Severance
Payments: In exchange for this Agreement, the Executive will receive
a series of three payments totaling $5,600,000.  This series of three payments shall occur as follows: 1) fifty
percent of this amount shall be payable within 15 days after execution of this
Agreement; 2) twenty-five percent shall be payable as soon as is
administratively feasible on or after January 1, 2004 (but no later than
January 20, 2004); and 3) twenty-five percent shall be payable on July 1, 2004.  If the Executive revokes his release of ADEA
claims hereunder within the 7-day revocation period set forth in Section 6
below, each payment due pursuant to this Section 1(b)(ii) shall be reduced by
twenty percent.

 

(c)  Compensation
and Benefit Plans:  The
Executive shall not be eligible to receive future awards or benefits under any
stock option, bonus, incentive compensation, medical, dental, life insurance,
fringe and other compensation or benefit plans, policies, or programs of the
Company or any entity which controls, is controlled by, or is under common
control with, the Company, and with respect to each of them, their predecessors
and successors (hereinafter, “Affiliates”) following the Effective Date, except
as follows:

 

(i) Retiree Medical Coverage:  On and following the Effective Date, the
Company will provide the Executive with a choice of participation for him and
his eligible dependents under the ongoing standard terms and conditions of
either the Dow Chemical Company Retiree Medical Care Program maintained in the
United States (or any successor thereto) or the Company’s International Medical
Plan currently provided by Cigna International (or any successor thereto),
subject to a one-time, non-changeable election of plan choice which shall be
made by the Executive no later than 30 days after the Effective Date.  Prior to the Executive and his eligible
dependents participating in any plan elected by the Executive in accordance
herewith, the Company agrees that the Executive and his eligible dependents
shall continue to participate, on the same terms and conditions, in the medical
plan or plans in which they were participating as of the Effective Date.

 

(ii)  Pension
Benefits: In addition to the Executive’s pension benefits which he
is entitled to receive under the terms and conditions of the Swiss Pension Plan
Rules I of the Dow Personalvorsorgestiftung Schweiz, Pension and Defined
Contribution Plan for Regular Employees (the “Swiss Pension Plan”) in which he
remains a participant (the “Swiss Pension Benefit”), he will receive a
supplemental monthly pension benefit, commencing in March 2003 (payable monthly
at the end of the month with first payment on March 31, 2003) under the terms
and conditions of The Dow Chemical Company Executive Supplemental Retirement
Plan (the “Supplemental Retirement Plan”) as in effect on the date of this
Agreement and applicable to him (the “U.S. Supplemental Benefit”).  This U.S. Supplemental Benefit shall be
calculated on a proration method based on the Executive’s age and final
compensation (as determined under the terms of the Supplemental Retirement
Plan) as of the date of his resignation from employment under Section 4(a) of
this Agreement and taking into account the

 

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approximately 15 years he worked for the Company while residing in the
United States and the approximately 19 years that he worked for the Company
while residing outside the United States. 
This benefit will not be reduced by any subsequent amendments or changes
to the Supplemental Retirement Plan, nor will it be reduced by any other
pension benefits the Executive is entitled to receive from the Company or its
Affiliates under the terms of such plans or programs or by any entitlements the
Executive may have to government provided social security benefits.  In addition, this benefit will not be
subject to forfeiture pursuant to any current or future provision of the
Supplemental Retirement Plan. This U.S. Supplemental Benefit shall be paid as
an annuity, under the terms and conditions of the Supplemental Retirement
Plan.  The Executive may elect a single
life annuity or an annuity providing a joint and survivor benefit as provided
for in the Supplemental Retirement Plan.

 

(iii)  Long-Term
Incentive Awards:  The
Executive is entitled to continue his outstanding Long-Term Incentive awards,
which awards shall include without limitation any outstanding stock option or
step-stock option awards (individually or collectively the “Stock Options”) and
any outstanding performance shares deferred stock awards (the “Performance
Shares”), according to the stated terms and conditions of the Company’s 1988
Award and Option Plan (the “AO Plan”) and the terms of the individual grant
agreements accompanying each such award, except as follows:

 

•                                          Any
outstanding Stock Options shall continue to vest and the Executive may exercise
any vested Stock Options at any time up to ten years from the Effective Date,
or the expiration of the remaining term of such options as provided in each
individual grant agreement, whichever is shorter;

 

•                                          The
value and payment of outstanding Performance Shares (including any dividends
payable thereon) shall not be reduced or pro-rated;

 

•                                          The
Executive shall not be subject to the provisions of the AO Plan and grant
agreements which permit the Company to require him to return the value of Stock
Options after he has exercised them, or any Performance Shares (or dividends
payable thereon) after the Performance Shares have been issued and delivered to
him (and the dividends paid to the Executive thereon); and

 

•                                          The
Executive will be subject to those provisions of the AO Plan and grant
agreements which permit the Company to declare forfeiture of unexercised Stock
Options or unexpired Performance Shares (and any dividends due thereon), but
only to the extent permitted by Section 8(e) of this Agreement.

 

(d)  Attorneys’
Fees:  The Company shall pay
to the Executive’s attorneys their fees of $100,000 incurred in connection with
his severance arrangements, including negotiating and drafting this Agreement.

 

(e)  Relocation
Benefits.  The Company agrees
that at any time prior to the time the payments are to be made pursuant to
Section 1(b)(ii)(2) and (3) above, the Executive can elect to reduce such
payments by a sum mutually agreed upon by the Parties in exchange for the
Company providing the Executive with relocation benefits in accordance with the
policy applicable to the Company’s localized employees.

 

(f)  Change in
Control Protections:  In the
event that any payment or benefit made or provided to or for the benefit of the
Executive in connection with this Agreement or his employment with the Company
or the termination thereof (a “Payment”) is determined to be subject to any
excise tax (“Excise Tax”) imposed by Section 4999 of the Internal Revenue Code
(or any successor to such Section), the Company shall pay to the Executive,
prior to the time any Excise Tax is payable with respect to such Payment
(through withholding or otherwise), an additional amount, which, after the
imposition of all income, employment, excise and other taxes thereon (including
any penalties and interest assessments), is equal to the sum of (i) the
Excise Tax on such Payment plus (ii) any penalty and interest
assessments associated with such Excise Tax. 
The Executive shall make all reasonable efforts to assist the Company in
rebutting any presumption that such Payments are subject to the Excise Tax and
the Executive shall promptly notify the Company of any Internal Revenue Service
notice demanding payment of Excise Tax or alleging that the Executive is
subject to such Excise Tax.

 

(g)  Treatment of
Payments:  Payments made
under this Agreement shall not be included in the Executive’s compensation for
purposes of calculating the benefits to which the Executive is entitled under
any employee benefit program.

 

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Section 2 — Executive Release

 

(a)  In General:  The Executive, on behalf of himself and any
other Executive Released Party (as defined in Section 3(d) below), irrevocably
and unconditionally releases all the Claims described in Section 2(b) below
that he may now have against the Company Released Parties (as defined in
Section 2(d) below), except that nothing herein shall release any Company
Released Party from any claims or damages based on (i) any right the Executive
may have to enforce this Agreement with the Company, (ii) any right or claim
that arises after the Effective Date, (iii) any right the Executive may have to
vested benefits or entitlements under the terms and conditions of any
applicable plan, agreement, program, award, policy or arrangement of the
Company that is an “employee benefit plan” under Section 3(3) of the Employee
Retirement Income Security Act of 1974 (“ERISA”), (iv) the Executive’s eligibility
for indemnification (and advance of expenses) in accordance with applicable law
or the certificate of incorporation and by-laws of the Company, or any
applicable insurance policy with respect to any liability the Executive incurs
or incurred as a director, officer or employee of the Company or any Affiliate,
(v) any right the Executive may have to obtain contribution as permitted by law
in the event of entry of judgment against the Executive as a result of any act
or failure to act for which the Executive and the Company are jointly liable,
(vi) any right or claim of a personal nature unrelated to the Executive’s
employment by or relationship with the Company or service as a director thereof
or (vii) the Executive’s right to claim interest on the $160,000 reimbursement
from the Company to the Executive to repay an inadvertent excess deduction by
the Company from the Executive’s regular compensation for contributions by the
Executive to the defined benefit portion of the Swiss Pension Plan.

 

(b)  Claims
Released:  Subject only to
the exceptions just noted in subclauses (i) through (vii) in Section 2(a)
above, the Executive agrees that he is releasing all known and unknown claims,
promises, causes of action, or similar rights of any type that he may have
(“Claims”) with respect to any Company Released Party listed in Section 2(d)
below.  The Executive understands that
the Claims he is releasing might arise under many different laws (including
statutes, regulations, other administrative guidance, and common law
doctrines), such as the following:

 

Anti-discrimination statutes and executive orders,
such as the Age Discrimination in Employment Act (“ADEA”) and Executive Order
11,141, which prohibit age discrimination in employment; Title VII of the Civil
Rights Act of 1964, Sections 1981 and 1983 of the Civil Rights Act of 1866,
Executive Order 11,246, and the Michigan Elliott Larsen Civil Rights Act, which
prohibit discrimination based on race, color, national origin, religion, or
sex; the Equal Pay Act, which prohibits paying men and women unequal pay for
equal work; the Americans With Disabilities Act and Sections 503 and 504 of the
Rehabilitation Act of 1973, which prohibit discrimination based on disability;
and any other federal, state, or local laws prohibiting employment
discrimination.

 

Federal employment statutes, such as the WARN Act,
which requires that advance notice be given of certain work force reductions;
the Employee Retirement Income Security Act of 1974, which, among other things,
protects employee benefits; the Fair Labor Standards Act of 1938, which
regulates wage and hour matters; the Family and Medical Leave Act of 1993,
which requires employers to provide leaves of absence under certain
circumstances; and any other federal laws relating to employment, such as
veterans’ reemployment rights laws.

 

Other laws, such as any international, national,
federal, state, provincial or local laws providing workers’ compensation
benefits, restricting an employer’s right to terminate employees, or otherwise
regulating employment; any international, national, federal, state, provincial
or local law enforcing express or implied employment contracts or requiring an
employer to deal with employees fairly or in good faith; any other
international, national, federal, state, or provincial or local laws providing
recourse for alleged wrongful discharge, tort, physical or personal injury,
emotional distress, fraud, negligent misrepresentation, defamation, and similar
or related claims.

 

Except as otherwise provided herein, examples of
released Claims include, but are not limited to the following:  (i) Claims that in any way relate to the
Executive’s employment with the Company, or the termination of that employment,
such as Claims for compensation, bonuses, commissions, lost wages, severance,
or unused accrued vacation or sick pay; (ii) Claims that in any way relate to
the design or administration of any employee benefit or compensation policy,
plan, or program (including without limitation the Company’s U.S. Severance
Plan); (iii) Claims that the Executive has irrevocable or vested rights to
severance or to post-employment health or group insurance benefits; or (iv) any
Claims to attorneys’ fees if the Executive brings a claim with respect to
Claims he is releasing hereunder.

 

(c)  Unknown
Claims:  The Executive
understands that he may be releasing Claims that he does not know about and
acknowledges that this is his knowing and voluntary intent, even though he
recognizes that someday he might learn that some or all of the facts he
currently believes to be true are untrue and even though he might then regret
having signed this Agreement with the release of Claims herein.  Nevertheless, the Executive agrees to assume
that risk and agrees that the

 

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release of Claims hereunder shall remain effective in all respects in
any such case.  The Executive expressly
waives all rights he might have under any law that is intended to protect him
from waiving unknown claims and understands the significance of doing so.

 

(d)  Company
Released
Parties:  The Company
Released Parties are the Company and its Affiliates and, with respect to each
such entity, all of its past and present officers, directors, employees,
assigns, attorneys, insurers, employee benefit programs (and the trustees,
administrators, fiduciaries, and insurers of such programs), and any other
persons acting by, through under or in concert with any of the persons or
entities listed in this Section 2(d), and their successors (but only to the
extent any such other person’s 
activities directly relate to the business of the Company).

 

Section 3 — Company Release

 

(a)  In  General: 
The Company, on behalf of itself and any other Company Released Party
(as defined in Section 2(d) above), irrevocably and unconditionally releases
all the Claims described in Section 3(b) below that it may now have against the
Executive Released Parties (as defined in Section 3(d) below), except that
nothing herein shall release the Executive and any other Executive Released
Party from any claims or damages based on (i) any right the Company may have to
enforce this Agreement, (ii) any right or claim that arises after the Effective
Date, (iii) any right the Company may have to obtain contribution as permitted
by law in the event of entry of judgment against the Company as a result of any
act or failure to act for which the Executive and Company are jointly liable,
or (iv) any right or claim of an individual Company Released Party which is of
a personal nature unrelated to the Executive’s employment by or relationship
with the Company or service as a director thereof .

 

(b)  Claims
Released:  Subject only to
the exceptions just noted in subclauses (i) through (iv) in Section 3(a) above,
the Company, on behalf of itself and any other Company Released Party, agrees
that it is releasing all known and unknown claims, promises, causes of action,
or similar rights of any type that the Company or any other Company Released
Party may have (“Claims”) with respect to any Executive Released Party listed
in Section 3(d) below.  The Company
understands that the Claims it is releasing hereunder might arise under many
different laws (including statutes, regulations, other administrative guidance,
and common law doctrines), such as the following:  Federal, state and local employment law or ordinance, tort,
contract or breach of trust or fiduciary obligation or alleged violation of any
other legal obligation; or any other federal, state, or local laws providing
recourse for alleged tort, physical or personal injury, emotional distress,
fraud, negligent misrepresentation, defamation, and similar or related claims.

 

(c)  Unknown
Claims:  The Company, on
behalf of itself and any other Company Released Party, understands that it may
be releasing Claims that it does not know about and acknowledges that this is
its knowing and voluntary intent, even though the Company recognizes that
someday it might learn that some or all of the facts it currently believes to
be true are untrue and even though it might then regret having signed this
Agreement with the release of Claims contained herein.  Nevertheless, the Company, on behalf of
itself and any other Company Released Party, agrees to assume that risk and
agrees that the release of Claims hereunder shall remain effective in all
respects in any such case.  The Company
expressly waives all rights it might have under any law that is intended to
protect the Company from waiving unknown Claims and understands the
significance of doing so.

 

(d)  Executive
Released Parties:  The
Executive Released Parties are the Executive, his dependents, heirs,
administrators, agents, successors and assigns.

 

Section 4 — Promises

 

(a)  Employment Termination:  The Executive agrees that his employment
with the Company and its Affiliates will end forever on February 12, 2003, and
that he will resign from the Board of Directors of the Company and its
committees, effective as of that date. 
The Executive has voluntarily resigned in exchange for the benefits he
is receiving because he signed this Agreement. 
The Company acknowledges that as of December 13, 2002 the Executive has
had no management duties or responsibilities with respect to the business or
operations of the Company or any Affiliate. 
The Executive’s termination of employment shall be treated as a
“retirement” for purposes of (i) any plan, policy, program, arrangement of, or
other agreement with, the Company or any Affiliate which is an “employee
benefit plan” within the meaning of Section 3(3) of ERISA, provided that the
Executive qualifies as a retiree under the terms and conditions of such plan,
policy, program, arrangement of or other agreement with the Company or any
Affiliate without regard to the provisions of this Agreement, or (ii) the AO
Plan.

 

114

 

(b)  Pursuit of
Released Claims:  The Parties
acknowledge that they have not filed or caused to be filed any lawsuit,
complaint, or charge with respect to any Claim released by such Party
hereunder.  Each Party expressly
promises never to file or prosecute a lawsuit, complaint or charge (except to
the extent expressly permitted by the terms of clear and unequivocal law) based
on such Claims, or seek any damages, remedies, or other relief for itself or himself,
as the case may be, in connection with any Claim released by such Party
hereunder by filing or prosecuting a charge with any administrative agency with
respect to any such Claim, and as to any such Claim agrees to request any
administrative agency or other body assuming jurisdiction of any such lawsuit,
complaint, or charge to withdraw from the matter (in respect of such Claim) or
dismiss the matter with prejudice (in respect of such Claim).

 

(c)  Company
Property:  Within 15 days of
the Effective Date, the Executive agrees to return to the Company all files,
memoranda, documents, records, copies of the foregoing, credit cards, keys, and
any other property of the Company or its Affiliates in his possession.  Anything to the contrary notwithstanding, nothing
in this Section 4(c) shall prevent the Executive from retaining (i) papers and
other materials of a purely personal nature, including, but not limited to,
photographs, correspondence, personal diaries, calendars and Rolodexes,
personal files and phone books, (ii) information showing his compensation
or relating to reimbursement of expenses, (iii) information that he
reasonably believes may be needed for tax purposes, (iv) a copy of the 360
degree performance feedback relating to the Executive for the past year and (v)
copies of plans, programs and agreements relating to his employment, or
termination thereof, with the Company or any Affiliate.  In addition, the Company agrees to make
arrangements for the Executive to obtain his personal papers and effects from
the Company’s offices and agrees to consider the Executive’s reasonable request
to provide the Executive with a copy of any minutes or presentation materials
from any meeting of the Board, or any committee thereof, while the Executive
was a member of such Board or committee.

 

(d)  Ownership of
Claims:  Each Party
represents that it or he has not 
assigned or transferred any Claim that such Party is purporting to
release hereunder and agrees that it or he shall not attempt to do so.

 

(e)  Nonadmission
of Liability:  Each Party
agrees not to assert that this Agreement is an admission of guilt or wrongdoing
and each Party acknowledges that the Company Released Parties or the Executive
Released Parties, as the case may be, do not believe or admit that any of them
has done anything wrong.

 

(f)  No
Disparagement:  The Executive
agrees not to publicly denigrate or disparage the Company and any of its
officers and directors (provided such officer or director served in such
capacity on or prior to the Effective Date) in any way.  The Company agrees not to publicly denigrate
or disparage the Executive in any way, and to make reasonable efforts to
prevent its officers and directors from doing so as well by informing them of
the Company’s obligation and commitment under this Section 4(f).  “Publicly” means in any forum or context in
which the statements are intended to or would reasonably be expected to be
communicated or repeated to a broad audience. 
The term “publicly” is not intended to preclude purely private social
conversation, but would encompass without limitation comments in a context in
which they could reasonably be expected to gain wide or notable circulation
either in Midland, Michigan or in executive corporate ranks generally or, in
the case of comments by the Company with respect to the Executive, become known
by an actual or prospective employer. 
Nothing in this Section 4(f) shall prevent any person from (i)
responding publicly to incorrect, disparaging or derogatory public statements
or reports after a request for a retraction has been made by the person
responding and refused by the Party that made such statement, to the extent
reasonably necessary to correct or refute any such public statement or report
or (ii) making any truthful statement to the extent (A) necessary with respect
to any litigation, arbitration or mediation involving this Agreement or any
other benefit plan or Long-Term Incentive award, including, but not limited to,
the enforcement of this Agreement or any such plan or award or (B) required by
law or by any court, arbitrator, mediator or administrative or legislative body
(including any committee thereof) with apparent or actual jurisdiction to order
such person to disclose or make accessible such information.  Each Party agrees to notify the other of any
statement that is intended to be made as provided in clause (ii)(A) of the
preceding sentence or is required to be made as provided in clause (ii)(B) of
the preceding sentence.  Such notice
shall be given as much in advance of the making of such statement as is
reasonably possible.  The obligation of
non-disparagement by the Executive as set forth in this subsection includes
disparagement by the Executive (or an authorized agent specifically directed by
the Executive, on his behalf, to engage in activity prohibited pursuant to this
Section 4(f)) in any public form or forum, including book, television, or other
public media, creation of or use of a web site or other internet feature, or
public statements by the Executive (or an authorized agent as defined in this
sentence) in the press or any trade press. The obligation of non-disparagement
by the Company (and its commitment regarding public statements by its officers
and directors) as set forth in this subsection includes disparagement by the
Company (or such officers and directors or an authorized agent specifically
directed by the Company to engaged in activity prohibited pursuant to this
Section 4(f)) in any public form or forum, including book, television, or other
public media, creation of or use of a web site or other internet feature, or
public statements by the Company or its officers and directors (or

 

115

 

authorized agent as defined in this sentence) in the press or any trade
press.  The obligations set forth in
this Section 4(f) survive the last severance payment under this Agreement and
have no expiration date.

 

(g)  Announcements:  The Company and the Executive have jointly
developed a public statement addressing the Executive’s employment and
contributions at the Company, which is attached hereto and incorporated herein
as Exhibit A.  The Company agrees that
any internal or external public statement regarding the Executive’s resignation
as an officer or director of the Company shall be consistent with Exhibit
A.  The Company and the Executive have
also jointly developed a letter from the Executive to employees of the Company
regarding his departure, which is attached hereto and incorporated herein as
Exhibit B.   This letter shall be
delivered to all Company employees in conjunction with the Company’s
announcement of the executive’s retirement and resignation as a director in
such reasonable manner as the Company shall determine consistent with its usual
process for internal announcements of this type.

 

(h)  Nondisclosure:  The Executive acknowledges that
he may possess secret, confidential, or proprietary business and technical
information or trade secrets of the Company concerning the research,
operations, future plans, or customers, suppliers, and business methods of the
Company and its Affiliates obtained by the Executive during the course of his
employment by the Company or in connection with his duties with the Company
(“Confidential Information”).  The
Executive agrees that the Company and its Affiliates would be severely damaged
if he did not preserve the confidentiality of such Confidential
Information.  To prevent this harm, the
Executive agrees (and acknowledges that the Company may be irreparably harmed
if he breaks such promise) that he shall not divulge to or use on behalf of any
person or entity other than the Company, without the Company’s express written
authorization, any Confidential Information. 
Anything herein to the contrary notwithstanding, the provisions of this
Section 4(h) shall not apply (i) when disclosure is required by law or by any
court, arbitrator, mediator or administrative or legislative body (including
any committee thereof) with apparent or actual jurisdiction to order the
Executive to disclose or make accessible any information, (ii) with respect to
any other litigation, arbitration or mediation involving this Agreement between
the Executive and the Company, including, but not limited to, the enforcement
of this Agreement, (iii) as to Confidential Information that becomes generally
known to the public or within the relevant trade or industry other than due to
the Executive’s violation of this Section 4(h), or (iv) in connection with any
assistance provided by the Executive pursuant to Section 4(m) below, provided
that prior to any disclosure under (i) and (ii) the Executive shall give as
much advance notice to the Company as is possible.  The Executive agrees that this promise shall never expire.  In addition, the Parties agree that
“Confidential Information” shall not include the 360 degree performance
feedback relating to the Executive in the past year, provided that to the
extent that any such document contains Confidential Information as defined in
this Section 4(h), the Executive agrees to redact such information prior to
disclosing any such feedback to an unrelated third party.  The Executive also continues to be bound by
the terms of confidentiality agreement that he signed on May 30, 1972 (the “Confidentiality
Agreement”), provided that (i) the second paragraph of clause 3 of such
agreement is superceded by this Section 4(h), and (ii) in the event of any
inconsistency between this Agreement and the Confidentiality Agreement, this
Agreement controls.

 

(i)  Non-Solicitation
of Customers and Suppliers: 
The Executive agrees that for two years from the Effective Date as to
any customer or supplier of the Company with whom the Executive had direct
dealings, or about whom the Executive acquired Confidential Information, during
his employment (provided that the Executive knew or should have known such
information was meant to be kept confidential by the Company), he shall not
interfere or attempt to interfere with any ongoing or prospective business
relationship with, or solicit or attempt to solicit, any such customer or
supplier in such a way as would reasonably be expected to cause such customer
or supplier to reduce its current or prospective business with the Company
(provided that with respect to any prospective business, the Executive knew or
should have known at the time of such alleged solicitation that the Company was
considering such business).  Anything
herein to the contrary notwithstanding, it shall not be a breach of this
Section 4(i) if any such customer or supplier had a relationship with any
subsequent employer or other entity using the Executive’s services that
pre-existed the Executive working for such employer or entity and the reduction
in current or prospective business with the Company occurs for reasons
unrelated to any activities prohibited by this Section 4(i).

 

(j)  Non-Solicitation
of Officers, Employees and Consultants: 
The Executive agrees that for two years after the Effective
Date he shall not solicit for employment any person who is, or within the
preceding 6 months was, an officer, 
employee or consultant of the Company or any Affiliate (to the extent
known to the Executive to be such after reasonable inquiry) unless the
individual was laid off or terminated his or her employment prior to any such
solicitation.  Anything herein to the
contrary notwithstanding, it shall not be a violation of this Section 4(j) for
the Executive to provide a personal reference for any such officer, employee or
consultant setting forth the Executive’s personal views about such officer, employee
or consultant nor shall it be a violation of this Section 4(j) for the
Executive to solicit a consultant of the Company or any of its Affiliates who
has been paid less than $500,000 by the Company or any of its Affiliates during
the preceding 12

 

116

 

months or who the Executive did not know (or had no reasonable basis to
know) was, at the time of such solicitation, a consultant of the Company.  In addition, it shall not be breach of this
Section 4(j) for the Executive to solicit a consultant if such solicitation
does not substantially interfere with such consultant’s current business with,
or services to, the Company or its Affiliate, as the case may be.  The Company acknowledges that one or more of
its officers, employees or consultants or those of its Affiliates may join
entities with which the Executive is affiliated and that this event shall not
constitute a violation of this Agreement if the Executive was not involved
directly or indirectly in the recruitment or hiring of any such officer,
employee or consultant.

 

(k)  Promise Not
to Engage in Certain Employment: 
The Executive agrees that for two years from the date he signs this
Agreement, he will not accept any employment (e.g., as a consultant, employee,
officer, director, principal, agent, or joint venture partner) with any of the
following companies and their respective subsidiaries and Affiliates (other
than joint ventures in which such entity owns less than 20% of the entity):
BASF Aktiengesellschaft, Bayer AG, BP p.l.c., Celanese AG, E.I. du Pont de
Nemours and Company, Exxon-Mobil Corporation, Lyondell Petrochemical Company,
Millenium Chemicals Inc., Monsanto Company, and Shell Chemicals (the “Covered
Entities”).  Anything herein to the
contrary notwithstanding, it shall not be a breach of this Agreement if after
the Effective Date the Executive is employed by an entity, or provides services
to an entity, which is not a Covered Entity (the “New Employer”) and the New
Employer subsequently is acquired by, merges with, or acquires one or more of
the Covered Entities, except to the extent that the Executive knew or
reasonably should have known of such acquisition or merger at the time he
accepted such employment.   For purposes
of this Section 4(k), the term “Affiliate” of a specified entity shall mean an
entity that directly or indirectly controls, is controlled by, or is under
common control with, the entity specified.

 

(l)  Representations:  The Executive understands that the
provisions of Sections 4(h) through (k) of this Agreement may limit his ability
to earn a livelihood in a business similar to the business of the Company and
its Affiliates but nevertheless agrees and hereby acknowledges that, due to the
Company’s legitimate business interest in protecting its Confidential
Information and due to the uniqueness of his services and confidential nature
of the Confidential Information he possesses, the covenants set forth herein
are reasonable and necessary for the protection of the business and goodwill of
the Company and its Affiliates, and do not impose an undue burden on his
ability to earn a living generally.  The
Executive waives and releases any and all claims that the covenants are not
reasonable and enforceable as written under the laws of Michigan or any other
state or nation that he resides in during the periods covered by the
restrictions.  The Executive covenants
not to sue or otherwise challenge the enforceability of these covenants,
including the time limitations or geographical scope provisions contained
herein (provided that nothing herein shall prevent the Executive from
challenging in any arbitration or judicial proceeding whether any specific
activity in which he is alleged to have engaged is encompassed by the terms of
the covenants in Sections 4(h) through (k)). 
The Executive stipulates that the covenants as set forth herein are
reasonable to protect legitimate business interests of the Company, ancillary
to otherwise enforceable agreements at the time this Agreement is made, and
fully enforceable under the laws of Michigan or any other state or nation that
he resides in during the periods covered by the restrictions.

 

(m)  Cooperation
Required:  For two years
after the Effective Date, the Executive agrees that, to the extent requested by
the Company and subject to the Executive’s personal and other business
commitments, that the Executive shall fully cooperate with the Company in
effecting a smooth transition of his responsibilities to others and shall
provide other assistance to the Company with respect to any matters of which
the Executive has actual knowledge or for which he had direct responsibility
during his employment with the Company. 
The Parties agree that the Executive’s obligations hereunder shall not
exceed 10 days (for a total of 20 days) per year during such two-year
period.  To the extent the Executive
incurs out-of-pocket expenses in assisting the Company at its request, the
Company shall reimburse him.

 

(n)  Confidentiality
of the Agreement:  Until the
Company publicly discloses this Agreement, the Executive shall neither discuss
any aspect of the terms of this Agreement with, nor disclose all or any portion
of this Agreement to, any person or organization.  Anything herein to the contrary notwithstanding, the Executive
may in any event discuss this Agreement with, and disclose all or any portion
of this Agreement to, (i) his legal, financial and tax advisors and immediate
family members, (ii) any prospective employer (limited to subsections 4(h),(i),
(j), (k), and (l) of this Agreement), (iii) when disclosure is required by law
or by any court, arbitrator, mediator or administrative or legislative body
(including any committee thereof) with apparent or actual jurisdiction to order
the Executive to disclose or make accessible any information or (iv) with
respect to any other litigation, arbitration or mediation involving this
Agreement, including, but not limited to, the enforcement of this
Agreement.  If prior to the Company making
public this Agreement, the Executive receives a request to disclose such
information pursuant to clauses (iii) or (iv) of the preceding sentence, the
Executive agrees, unless otherwise prohibited by law, to immediately notify the
Company’s General Counsel of such request in order to permit the Company to
take steps to prevent or limit the required disclosure.

 

117

 

(o)  Necessary
Corporate Actions:   The
Company represents and warrants to the Executive that (i) all corporate action
required to be taken by the Company to fully authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby (including, without limitation, any action required to be
taken by the Board, any committee of the Board, or any other person or body to
interpret or otherwise act with respect to any Company plan, policy, program,
arrangement or other agreement) has been or will be duly and effectively taken,
(ii) the officer signing this Agreement on behalf of the Company is duly
authorized to do so and (iii) upon the execution and delivery of this Agreement
by the Parties, and approval of this Agreement by the Compensation Committee of
the Board of Directors of the Company (and the Board of Directors if deemed appropriate
by the Compensation Committee), it shall be a valid and binding obligation of
the Company, enforceable against it in accordance with its terms, except to the
extent that enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting the enforcement of creditors’ rights generally.  As stated above, this Agreement shall take
effect as of 6 p.m. on February 12, 2003, provided that all actions necessary
to authorize this Agreement have taken place by that date and time (in which
event, the Company guarantees unconditionally to execute this Agreement by the
time stated in this sentence and in the form executed by the Executive).  In the event that all such actions by the
Compensation Committee or the Board as set forth herein have not occurred, this
Agreement shall not take effect but shall be considered null and void, and the
Executive shall have such rights as he would otherwise be entitled to under
existing and prospective policies, programs and plans of the Company.

 

(p)  Indemnification:  The
Company shall continue to indemnify the Executive under the terms of its
current indemnification policy or policies (including any future policy that
would cover actions by other senior officers on or prior to the Effective
Date), its certificate of incorporation or its by-laws.

 

(q)  Other
Representations:  In addition
to any other representations in this Agreement, the Executive has made the
following representations to the Company, on which he acknowledges it has
relied in entering into this Agreement with him:  The Executive has not suffered any discrimination on account of
his age, sex, race, national origin, marital status, sexual orientation, or any
other protected status, and none of these ever has been an adverse factor used
against him by any Released Party.  The
Executive has not suffered any job-related wrongs or injuries for which he
might still be entitled to compensation or relief, such as an injury for which
he might receive a workers’ compensation award in the future.

 

Section 5 — Injunctive and Other Relief

 

In addition to any other remedies or relief that may
be available, the Executive agrees to pay the reasonable attorneys’ fees and
any damages which any Company Released Party may incur as a result of the
Executive or any other Executive Released Party filing a claim, lawsuit or
other proceeding against any Company Released Party with respect to a Claim
released by the Executive Released Parties hereunder.  In addition to any other remedies or relief that may be available,
the Company agrees to pay the reasonable attorneys’ fees and any damages which
any Executive Released Party may incur as a result of the Company or any other
Company Released Party filing a claim, lawsuit or other proceeding against any
Executive Released Party with respect to a Claim released by the Company
Released Parties hereunder.  The
Executive further agrees that the Company would be irreparably harmed by any
actual or threatened violation of Section 4(f) (involving disparagement), 4(h)
(involving disclosure or use of confidential information or trade secrets),
4(i) (involving solicitation of customers and suppliers), 4(j) (involving
solicitation of employees) or 4(n) (which protects the fact or terms of this
Agreement from being disclosed until it is publicly disclosed pursuant to law),
and that the Company would be entitled to seek an injunction in court
prohibiting him from committing any such violation. The Company also agrees
that the Executive would be irreparably harmed by any actual or threatened
violation of Section 4(f) (involving disparagement) and that the Executive
would be entitled to seek an injunction in court prohibiting the breaching
party from committing any such violation.

 

Section 6 — Consideration of Agreement

 

The Executive acknowledges that, before signing this
Agreement, he was given a period of at least 21 days in which to consider this
Agreement and the release of Claims contained in Section 2 above.  The Executive waives any right he might have
to additional time beyond this consideration period within which to consider
this Agreement and the release of claims contained in Section 2 above.  The Executive further acknowledges
that:  (a) he took advantage of this
period to consider this Agreement and the release contained in Section 3 above
before signing it; (b) he carefully read this Agreement and the release
contained in Section 3 above; (c) he fully understands it; (d) he is entering
into this Agreement voluntarily; (e) he is receiving valuable consideration in
exchange for his execution of this Agreement that he would not otherwise be
entitled to receive; and (f) the Company, in writing, encouraged him to discuss
this Agreement with an attorney before signing it, and he did so to the extent
he deemed appropriate.

 

118

 

The Executive acknowledges that he may revoke the
waiver of ADEA claims in Section 2 above within 7 days after the Effective
Date, in which case the payments payable to the Executive pursuant to Sections
1(b)(ii) and 1(c)(ii) (with respect to the U.S. Supplemental Benefit only)
above shall be reduced by 20 percent.

 

Section 7 — Miscellaneous

 

(a)  Entire
Agreement:  This Agreement
(along with any related or referenced documents) is the entire agreement between
the Executive and the Company with respect to the subject matter hereof and,
except as otherwise provided herein, supercedes any other agreements between
the Executive and the Company.  This
Agreement may not be modified or canceled in any manner except by a writing
signed by both the Executive and an authorized Company official.  Any waiver by any person of any provision of
this Agreement shall be effective only if in writing and signed by the person
against whom the waiver is sought.  For
any waiver or modification to be effective, it must specifically refer to this
Agreement and to the terms or provisions being modified or waived.  No waiver of any provision of this Agreement
shall be effective as to any other provision of this Agreement except to the extent
specifically provided in an effective written waiver.  If any provision in this Agreement is found to be unenforceable,
all other provisions shall remain fully enforceable and the invalid or
unenforceable provisions shall be reformed so as to give maximum legal effect
to the agreements of the Parties contained herein; provided, however, that such
reformation shall be effective only if the economic or legal substance of the
transactions contemplated hereby would not thereby be affected in any manner adverse
to either Party.  In the event of any
inconsistency between Section 4(f), Section 4(h), Section 4(i), Section 4(j) or
Section 4(k)  of this Agreement and the
provisions of any other plan, policy, arrangement or program of, or other
agreement with, the Company or any Affiliate, the foregoing Sections of this
Agreement shall govern.

 

(b)  Successors:  This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective heirs and executors
(in the case of the Executive), administrators, representatives, successors,
and assigns.  No rights or obligation of
the Company under this Agreement may be assigned or transferred by the Company
without the Executive’s prior written consent, except that such rights or
obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or a sale,
liquidation or other disposition of all or substantially all of the assets of
the Company, provided that the assignee or transferee is the successor to all
or substantially all of the assets of the Company and assumes the liabilities,
obligations and duties of the Company under this Agreement, either
contractually or as a matter of law.  No
rights or obligations of the Executive under this Agreement may be assigned or
transferred by the Executive, without the Company’s prior written consent,
other than his rights to compensation and benefits, which may be transferred
only by will or operation of law; provided, however that the Executive shall be
entitled, to the extent permitted under applicable law or relevant plans, to
select and change a beneficiary or beneficiaries to receive any compensation or
benefit hereunder following his death by giving the Company written notice
thereof.  In the event of the
Executive’s death or a judicial determination of his incompetence, references
in this Agreement to the Executive shall be deemed, where appropriate, to refer
to his beneficiary or beneficiaries, estate or other legal representative.

 

(c)  Withholding
Taxes:  The Company may
withhold from any amounts or benefits payable under this Agreement taxes that
are required to be withheld pursuant to any applicable law or regulation.

 

(d)  Interpretation:  This Agreement shall be construed as a whole
according to its fair meaning.  It shall
not be construed strictly for or against the Executive or the Company.  Unless the context indicates otherwise, the
term “or” shall be deemed to include the term “and” and the singular or plural
number shall be deemed to include the other. 
Captions are intended solely for convenience of reference and shall not
be used in the interpretation of this Agreement.  This Agreement shall be governed by the statutes and common law
of the State of Michigan without reference to principles of conflicts of law,
except to the extent governed by United States federal law.

 

(e)  Notices:  Any notice, request or other
communication given in connection with this Agreement shall be in writing and
shall be deemed to have been given, provided that a written acknowledgement of
receipt is obtained (i) when personally delivered to the recipient or (ii)
three days after being sent by prepaid certified or registered mail, or two
days after being sent by a nationally recognized overnight courier, to the
address specified in this subsection (or such other address as the recipient
shall have specified by ten (10) days’ advance written notice given in
accordance with this subsection).  Such
communication should be addressed to the Executive at his principal residence
in Midland, Michigan and to the Company at its corporate headquarters in
Midland, Michigan, addressed to the attention of the Company’s General Counsel.

 

119

 

(f)  Counterparts:  This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one and the same instrument.  Signatures delivered by facsimile shall be effective
for all purposes.

 

(g)  No Offset:  Except as otherwise provided in Section 8(e)
below, the Company’s obligation to make any payment pursuant to, and otherwise
to perform its obligations under, this Agreement shall not be affected by any
offset, counterclaim or other right that the Company may have against the
Executive for any reason.

 

Section 8 — Arbitration of Disputes

 

(a)  Arbitrable Disputes:  Except as otherwise provided in Section 5
above, any controversy, dispute or claim arising out of or relating to this
Agreement (collectively, “Covered Claims”) shall be resolved by binding
arbitration.  The Executive  also agrees to resolve in accordance with
this provision any claim between him and any other Released Party who offers or
agrees to arbitrate the claim in this manner.

 

(b)  The Arbitration:  Arbitration shall take place in Detroit,
Michigan under the employment dispute resolution rules of the American
Arbitration Association in Michigan and this Section 8 before an experienced
employment arbitrator licensed to practice law in Michigan who has been
mutually agreed upon by the Parties, provided that if the Parties cannot so
agree within 30 days of the filing of any Covered Claim hereunder, such
arbitrator shall be selected in accordance with the applicable rules of the
American Arbitration Association.  The
arbitrator may not modify or change this Agreement in any way.  Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.  This arbitration provision applies to, among
other things, disputes about the validity, interpretation, or effect of this
Agreement or alleged violations of it. 
Except as set forth in Section 8(e) below, pending the resolution of any
Covered Claim, the Executive (and his beneficiaries) shall continue to receive
all pension payments and benefits due under this Agreement or otherwise.

 

(c)  Fees and
Expenses:  Each Party shall
pay the fees of his or its attorneys, the expenses of his or its witnesses, and
any other expenses that the Party incurs in connection with the arbitration,
but all other costs of the arbitration, including the fees of the arbitrator,
the cost of any record or transcript of the arbitration, administrative fees,
and other fees and costs shall be paid in equal shares by the Parties.  Neither party shall be liable for punitive
or exemplary damages.

 

(d)  Exclusive
Remedy:  Arbitration in this
manner shall be the exclusive remedy for any claim that must be arbitrated
pursuant to this Section.  Should the
Executive or the Company attempt to resolve such a claim by any method other
than arbitration pursuant to this Section, the responding party will be
entitled to recover from the initiating party all damages, expenses, and
attorneys’ fees incurred as a result of that breach if the other Party does not
withdraw such claim within 30 days after receiving notice from the responding
party that the filing of such claim is a breach of this Agreement.

 

(e)  Special
Procedure for Long-Term Incentive Award Forfeiture Disputes:  Forfeiture by the Executive of unexercised
Stock Options or unreceived Performance Shares provided as Long Term Incentive
awards under the AO Plan shall occur only under the following
circumstances:  (A) the Compensation
Committee of the Board of Directors of the Company makes a good faith
determination based on actual evidence that the Executive has engaged in an
activity harmful to interests of the Company or any of its Affiliates; (B)
within 10 days after such determination, the Company provides the Executive
with written notice of such determination, which notice sets forth the activity
and the steps the Executive needs to take to cure the harm to the Company, and
which notice is provided to the Executive within six months of the date an
officer of the Company first becomes aware, or reasonably should have been
aware, of activity that the Company is asserting pursuant to this Section 8(e)
is harmful to the interests of the Company or its Affiliates; (C) upon receipt
of such a notice, the Executive’s right to exercise Stock Options and receive
Performance Shares shall be suspended until the conclusion of the process
provided for under this Section 8(e) (provided, however, if it is determined
that the Executive has not engaged in an activity harmful to the interests of
the Company or any of its Affiliate as defined herein, the Company agrees to
pay the Executive an amount sufficient to make him whole with respect to any
lost opportunity that results from the suspension of the Stock Options or
Performance Shares hereunder); (D) the Executive is afforded 30 days from
receipt of written notice to cure such violation and to notify the Compensation
Committee in writing of the Executive’s efforts to cure such violation or the
Executive’s explanation for his belief that no such violation has occurred; (E)
if after the expiration of such 30-day cure period, the Compensation Committee
determines in good faith by a majority vote of the members of such committee
that the Executive has not cured the harm to the Company, the Company agrees to
refer the decision to whether any LTI Award should be subject to forfeiture to
an independent arbitrator selected in accordance with this Section 8(a)-(d);
and (F) if the Executive fails to timely respond to the Company with a written
response before the expiration of the 30-day cure period, the

 

120

 

Company shall have the right to cause a forfeiture of some or all of
such outstanding Long Term Incentive awards; provided, that the Executive shall
have the right to refer such action to an independent arbitrator selected in
accordance with Section 8(b).  The term
“harmful to the interests of the Company or any of its Affiliates” as used in
this Section 8(e) shall include without limitation the Executive’s violation of
Sections 4(f) (concerning nondisparagement), 4(h) (concerning nondisclosure),
4(i) (concerning non-solicitation of customers and suppliers), 4(j) (concerning
non-solicitation of officers, employees or consultants) and 4(k) (concerning
promises not to engage in certain employment), except that it shall not include
activity that would have been in violation of Sections 4(i), 4(j), or 4(k) that
first occurs on a date after the expiration of prohibitions contained in those
Sections by their own terms.  In
addition, the Company agrees that with respect to nondisparagement,
nondisclosure, non-solicitation of customers or suppliers, non-solicitation of
officers, employees or consultants, promises not to engage in certain
employment or cooperation, that any action (or inaction) by the Executive shall
not be deemed to be “harmful to the interests of the Company or any of its
Affiliate” if such action (or inaction) is not a violation of the applicable
provisions of this Agreement (i.e., Section 4(f), Section 4(h), Section 4(i),
Section 4(j), Section 4(k) or Section 4(m)). 
Except as otherwise provided herein, the LTI Awards shall continue to be
governed by the AO Plan and the terms of the individual grant agreements
accompanying each such award.

 

 

Executed at Midland, Michigan, this 10th day of
February, 2003.

 

 

	
   

  	
       /s/ Michael D. Parker

  	
   

  
	
   

  	
  MICHAEL D. PARKER

  

 

 

Executed at Midland, Michigan, this 12th day of
February, 2003.

 

 

	
   

  	
       /s/ Larry J.
  Washington, Jr.

  	
   

  
	
   

  	
  LARRY J. WASHINGTON, JR.

  
	
   

  	
  Corporate Vice President, Environment, Health &
  Safety

  Human Resources and Public Affairs

  The Dow Chemical Company

  

 

121Exhibit 10.7.4

 

EXTENSION

 

OF

 

EMPLOYMENT AGREEMENT

 

EXTENSION  AGREEMENT, this 16th day of

December 2002, by and between FIRSTBANK (Bank), a federally chartered stock

savings bank and its parent holding company ACCESS ANYTIME BANCORP., INC.

(Company) and Norman R. Corzine (Officer).

 

The Officer is Executive Vice President, Chief Investment Officer, and

a Director (Vice Chairman) of the Bank and has been duly elected to these

positions.  Also, the Officer is

Chairman, Chief Executive Officer, and a Director of the Company and has been

duly elected to these positions.

 

Effective January 1, 2003, the Bank/Company and the Officer desires to

amend an EMPLOYMENT AGREEMENT dated the 29th day of July, 1999, page

1 (one) Section 2 (two), Term to

read ..... shall continue for a period of three years through December 31,

2005.

 

Effective January 1, 2003, the Bank/Company and the Officer desires to

amend an EMPLOYMENT AGREEMENT dated the 29th day of July, 1999, page

2 (Two) Section 4 (four), Compensation, (a)

Salary, – From $160,000 to $170,000 annually.

 

This EXTENSION AGREEMENT herewith incorporates all other terms and

conditions of an EMPLOYMENT AGREEMENT dated the 29th day of July,

1999, and an EXTENSION OF EMPLOYMENT AGREEMENT dated the 23rd day of

August, 2001, by and between the Bank/Company and the Officer.

 

	

  FIRSTBANK

  	

  ACCESS ANYTIME BANCORP, INC.

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  BY:

  	

  \s\ Robert Chad Lydick

  	

   

  	

  BY:

  	

  \s\ Robert Chad Lydick

  	

   

  
	

   

  	

  Robert “Chad” Lydick, Chairman

  	

   

  	

  Robert “Chad” Lydick, Member

  
	

   

  	

  Board of Directors

  	

   

  	

  Board of Directors

  
	

   

  	

   

  	

   

  
	

  OFFICER

  	

   

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  BY:

  	

  \s\ Norman R. Corzine

  	

   

  	

   

  
	

   

  	

  Norman R. Corzine

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