Document:

exh10b.htm

    
      
         

        
          	 	
                   The
      Dow Chemical Company and Subsidiaries

                	
                   EXHIBIT
      10(b)

                
	 	
                   

                   

                	 

        

         

      

      THE
DOW CHEMICAL COMPANY 1979 AWARD AND OPTION PLAN

       

      

      
        	
                1.  

              	
                Establishment and Purpose of
      the Plan

              

      

            
The Dow Chemical Company hereby establishes The Dow Chemical Company 1979 Award
and Option Plan upon the terms and conditions hereinafter stated. The purpose of
the Plan is to attract and retain in the employ of the Company and its
Subsidiaries people of ability, training and experience by providing such
people, in consideration of services performed for the Company or a Subsidiary
by each Awardee, an incentive (which, under some components of the Plan, could
enable such people to become owners of Common Stock of the Company) for
outstanding performance for the Company and its Subsidiaries, to the end of
furthering the continued growth and profitability of the Company.

       

      
        	
                2.  

              	
                Definitions

              

      

            
Unless otherwise required by the context, the following terms when used in the
Plan shall have the meanings set forth in this Section 2:

       

      
        	
                (a)  

              	
                Awardee: An Employee to
      whom Deferred Stock, Dividend Units, an Option or Options or Incentive
      Rights are granted or awarded under the
Plan.

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                (c)  

              	
                Common Stock: The common
      stock of the Company, par value $2.50 a share, or such other class or kind
      of shares or other securities as may be applicable pursuant to the
      provisions of Section 10.

              

      

       

      
        	
                (d)  

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

              

      

       

      
        	
                (e)  

              	
                Compensation Committee or
      Committee: The committee designated to administer the Plan pursuant
      to the provisions of Section 4 of the
Plan.

              

      

       

      
        	
                (f)  

              	
                Deferred Stock: Common
      Stock awarded by the Compensation Committee pursuant to Section 6 of the
      Plan.

              

      

       

      
        	
                (g)  

              	
                Dividend Unit: The
      right, pursuant to either Section 7 or Section 9 of the Plan, to receive
      for a specified period of time cash payments from the Company or a
      Subsidiary equivalent in value to cash dividends paid during such period
      on one share of Common Stock.

              

      

       

      
        	
                (h)  

              	
                Employee: A full-time
      managerial, administrative or professional employee of the Company or a
      Subsidiary, including an officer or director who is such an
      employee.

              

      

       

      
        	
                (i)  

              	
                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 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.  However, in the case of an
      Incentive Stock Option, if such method of determining Fair Market Value
      shall not be consistent with the regulations of the Secretary of the
      Treasury or his delegate at the time applicable to an Incentive Stock
      Option, Fair Market Value shall be determined in accordance with such
      regulations and shall mean the value as so
  determined.

              

      

       

      
        	
                (j)  

              	
                Incentive Right: A right
      to receive a number of shares of Common Stock (and cash in lieu of a
      fractional share), or Dividend Units granted as Incentive Rights, based
      upon the increase in value of Common Stock, in respect of an Option
      granted under the Plan to the extent that such Option shall not have been
      exercised upon its expiration, as more particularly set forth in Section
      9.

              

      

       

      
        	
                (k)  

              	
                Incentive Stock
      Option:  Any Option or Options intended to meet the
      requirements of an incentive stock option or options as defined in Section
      422A of the Internal Revenue Code of 1954 as amended or any statutory
      provision that may replace such Section and designated an Incentive Stock
      Option by the Compensation
Committee.

              

      

       

      
        	
                (l)  

              	
                Non-Qualified Option or
      Options:  Any Option or Options not intended to meet
      either the requirements of a qualified stock option or options as defined
      in Section 422 of the Internal Revenue Code of 1954 as amended or the
      requirements of an incentive stock option or options as defined in Section
      422A of the Internal Revenue Code of 1954 as
  amended.

              

      

       

      
        	
                (m)  

              	
                Option or Options: Any
      option or options granted from time to time under the Plan, including both
      Non-Qualified Options and Incentive Stock
  Options.

              

      

       

      
        	
                (n)  

              	
                Plan: The Dow Chemical
      Company 1979 Award and Option Plan herein set forth, as the same may from
      time to time be amended.

              

      

       

      
        	
                (o)  

              	
                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, at the time of granting of an award or Option , each of the
      associations other than the last association in the unbroken chain owns
      equity interest (including stock or partnership interest)possessing 50% or
      more of the total combined voting power of all classes of equity interests
      - in one of the other associations in such
  chain.

              

      

       

      

      
        
           

        

        
          59

          
            

          

        

        
           

        

      

       

      
        	
                3.  

              	
                Components
      of the Plan

              

      

                
The Company may from time to time during the period of ten years from the date
of adoption of the Plan by its stockholders grant to Employees as a reward for
services performed Deferred Stock, Dividend Units, or a combination of them.
Furthermore, the Company may also from time to time during the period of ten
years from the date of adoption of the Plan by its stockholders grant to
Employees as a reward for services performed Non-Qualified Options or Incentive
Stock Options or may grant Incentive Rights, or a combination of them, provided,
however, that Incentive Rights may also be granted at any time prior to the
expiration date of any Option.

       

      
        	
                4.  

              	
                Compensation
      Committee; Interpretation and
Regulations

              

      

       

      
        	
                (a)  

              	
                Constitution and Noneligibility
      for Awards: The Plan shall be administered by the Compensation
      Committee as from time to time constituted pursuant to the By-Laws of the
      Company. No person appointed to the Compensation Committee shall be
      eligible for an award of Deferred Stock, Dividend Units, Options, or
      Incentive Rights pursuant to the Plan or the allocation of stock of the
      Company or the grant of a stock option pursuant to any other “plan” of the
      Company or any of its affiliates, as prescribed in Rule l6b-3, of the
      General Rules and Regulations under the Securities Exchange Act of 1934 as
      at such time in effect or any other provision that may replace such Rule
      and be in effect at such time, while serving on the Compensation
      Committee.

              

      

       

      
        	
                (b)  

              	
                Administrative Powers:
      The Compensation Committee shall have full power to interpret and
      administer the Plan and full authority to act in selecting the Employees
      to whom Deferred Stock, Dividend Units, Options or Incentive Rights will
      be granted, in determining the number of shares of Deferred Stock,
      Dividend Units, Options or Incentive Rights to be granted to each such
      Employee and the terms and conditions of awards granted under the Plan and
      shall have the power to make regulations for carrying out the Plan and to
      make such changes in such regulations as from time to time the
      Compensation Committee deems proper. Any interpretation by the
      Compensation Committee of the terms and provisions of the Plan and the
      administration thereof, and all action taken by the Compensation
      Committee, shall be final, binding and conclusive on the Company, its
      stockholders, Subsidiaries, all Employees, their respective legal
      representatives, successors and assigns and upon all other persons
      claiming under or through any of them.  Furthermore, the
      Compensation Committee shall have the authority to determine, in the
      committee’s sole discretion, which Options shall be intended to be
      Incentive Stock Options for the purpose of this Plan and to designate said
      Options as Incentive Stock Options in such manner as the Compensation
      Committee may deem appropriate.

              

      

       

      
        	
                (c)  

              	
                Limitation on Liability:
      Members of the Board of Directors and members of the Compensation
      Committee acting under the Plan shall be fully protected in relying in
      good faith upon the advice of counsel and shall incur no liability except
      for gross negligence or willful misconduct in the performance of their
      duties.

              

      

       

      
        	
                (d)  

              	
                Effect of Prior Awards on
      Qualification to Act: The fact that a member of the Board of
      Directors shall at the time be, or shall theretofore have been or
      thereafter may be, a person who has received or is eligible to receive
      Deferred Stock, Dividend Units, Options or Incentive Rights shall not
      disqualify such member from taking part in and voting at any time as a
      member of the Board of Directors in favor of or against any amendment or
      repeal of the Plan, provided that such action by the Board of Directors
      shall be only in accordance with the recommendations of the Compensation
      Committee as provided in Section
11.

              

      

       

      
        	
                5.  

              	
                Reservation
      of Shares

              

      

                 The
maximum number of shares of Deferred Stock that may be awarded under the Plan
and that are hereby reserved for those purposes of the Plan shall be, in the
aggregate, 3,500,000 shares of Common Stock, a number that shall be subject to
adjustment as provided in Section 10. The maximum number of shares of Common
Stock that may be purchased upon exercise of Options or that may be transferred
in respect of Incentive Rights, and which are hereby reserved for those purposes
of the Plan, shall be, in the aggregate, 7,000,000 shares of Common Stock, a
number that shall be subject to adjustment as provided in Section 10. If an
Option shall for any reason expire or terminate without having been exercised in
full and if shares of Common Stock shall not have been transferred in respect of
an Incentive Right relating to such Option or used as a measure of Dividend
Units in respect of an Incentive Right relating to such Option, the unpurchased
or unused shares of Common Stock theretofore subject to such Option shall be
added to the shares of Common Stock otherwise available for Options that may
thereafter be granted, and such unpurchased shares of Common Stock shall not be
deemed to increase the aggregate number of shares of Common Stock for which
Options may be granted. Awards of Deferred Stock, Options and Incentive Rights
may be made available, at the discretion of the Board of Directors, from
authorized but unissued shares of Common Stock from shares of Common Stock at
any time held in the treasury of the Company or from shares of Common Stock
acquired by the Company for the purpose of the Plan.

      

      

      

      
        
           

        

        
          60

          
            

          

        

        
           

        

      

      
        	
                6.  

              	
                Deferred
      Stock Rules and Conditions

              

      

                
The grant of Deferred Stock shall be upon the following rules and
conditions:

       

      
        	
                (a)  

              	
                Deferred Stock Grants:
      Deferred Stock shall be evidenced by Deferred Stock agreements in such
      form or forms as the Compensation Committee shall from time to time
      approve. Such agreements shall conform to the requirements of the plan and
      may contain such other provisions (including provisions for the protection
      of Deferred Stock in the event of mergers, consolidations, dissolutions,
      and liquidations, and provisions to the effect that the shares of Common
      Stock that may be issued subject to the Deferred Stock agreement shall be
      shares of Common Stock transferred subject to restrictions precluding a
      sale or other disposition for a period of time and requiring compliance
      with any other terms and conditions) as the Compensation Committee shall
      deem advisable.

              

      

       

      
        	
                (b)  

              	
                Crediting of Deferred
      Stock: Upon determination of the number of shares of Deferred Stock
      to be granted to an Awardee the Committee shall direct that the same be
      credited to the Awardee’s account on the books of the Company but that
      issuance and delivery of the same shall be deferred until the date or
      dates provided in subsection 6(d) hereof. Prior to issuance and delivery
      hereunder the Awardee shall have no rights as a stockholder with respect
      to any shares of Deferred Stock credited to his or her account. The
      Awardee’s right to future issuance and delivery of Deferred Stock may not
      be sold, pledged, assigned or otherwise transferred (except as hereinafter
      provided) and any attempt so to sell, pledge, assign or otherwise transfer
      (except as hereinafter provided) shall be void and the account of the
      Awardee shall be forfeited. The right of the Awardee to such future
      issuance and delivery shall, however, be transferable by will or pursuant
      to the laws of descent and distribution and an Awardee who has been
      granted Deferred Stock may make a written designation of a beneficiary on
      forms prescribed by and filed with the Compensation Committee. Upon the
      death of an Awardee, such beneficiary, or, if no such designation of any
      beneficiary has been made, the legal representative of such Awardee, shall
      succeed to the rights of the
Awardee.

              

      

       

      
        	
                (c)  

              	
                Payment Equivalent to
      Dividends: During the period that shares of Deferred Stock remain
      credited to the account of an Awardee and before their issuance and
      delivery, the Company shall pay to the Awardee as additional compensation
      on each date for the payment of dividends on Common Stock a sum of money
      equal to the amount the Awardee would have received if the shares of
      Deferred Stock credited to the Awardee’s account had been issued and
      delivered to the Awardee.

              

      

       

      
        	
                (d)  

              	
                Delivery: Subject to the
      terms and conditions described below, the shares of Deferred Stock
      credited to the account of an Awardee shall be issued and delivered to the
      Awardee in one or more installments beginning with such date as the
      Compensation Committee may determine. In each year prior to such delivery
      the Awardee shall make arrangements satisfactory to the Compensation
      Committee for the payment of any taxes required to be withheld in
      connection with his or her right to Deferred Stock under the applicable
      laws or other regulations of any governmental authority, whether Federal,
      state or local and whether domestic or foreign. The Compensation Committee
      may, in its sole discretion, modify or accelerate the delivery of any
      shares of Deferred Stock after consulting with the Awardee or his or her
      successors in the event of (i) death, (ii) hardship after termination of
      employment, or (iii) any change in tax or other applicable laws,
      decisions, regulations, or rulings that might have a substantial adverse
      effect on either such Awardee (or his or her successors) or the
      Company.

              

      

       

      
        	
                (e)  

              	
                Forfeiture: Shares of
      Deferred Stock may be forfeited if the Awardee terminates his or her
      employment with the Company or its Subsidiaries for any reason other than
      death or retirement, except that the Compensation Committee shall have the
      authority to provide for the continuation of such Deferred Stock in whole
      or in part whenever the Compensation Committee in its judgment shall
      determine that such continuation is in the best interests of the Company.
      Shares of Deferred Stock may furthermore be forfeited by an Awardee if the
      Compensation Committee determines that the Awardee has at any time engaged
      in any activity harmful to the interest of or in competition with the
      Company or its Subsidiaries or accepts employment with a
      competitor.

              

      

       

      
        	
                7.  

              	
                Dividend
      Unit Rules and Conditions

              

      

                
The grant of Dividend Units shall be upon the following rules and
conditions:

       

      
        	
                (a)  

              	
                Dividend Unit Grants:
      Dividend Units shall be evidenced by Dividend Unit agreements in such form
      or forms as the Compensation Committee shall from time to time approve.
      Such agreements shall conform to the requirements of the Plan and may
      contain such other provisions (including provisions for the protection of
      Dividend Units in the event of mergers, consolidations, dissolutions, and
      liquidations, provisions that may require the Awardee of Dividend Units to
      be available to render such consultant or advisory services for the
      Company or its Subsidiaries as the Company may request and as may be
      reasonable following the Awardee’s retirement before the expiration of his
      or her Dividend Units, and provisions requiring compliance with any other
      terms and conditions) as the Compensation Committee shall deem
      advisable.

              

      

      
        
           

        

        
          61

          
            

          

        

        
           

        

      

       

      
        	
                (b)  

              	
                Limitations on Numbers:
      The total number of Dividend Units granted to Employees under this Section
      7 shall not exceed 4,000,000 outstanding at any one time, a number that
      shall be subject to adjustment as provided in Section10. Any Dividend
      Units terminating during the period of granting authority may be granted
      again during such period to the same or different Employees at the
      discretion of the Committee.

              

      

       

      
        	
                (c)  

              	
                Duration: Unless
      forfeited as hereinafter provided, Dividend Units shall remain in effect
      for such period or periods of time as the Compensation Committee shall
      specify but in no event beyond the date of the death of the Awardee except
      that the Compensation Committee may upon granting Dividend Units provide
      for payment of the same to the surviving spouse of an Awardee until the
      death of such spouse or until the eightieth anniversary of the Awardee’s
      birth, whichever shall first occur.

              

      

       

      
        	
                (d)  

              	
                Forfeiture: Dividend
      Units may be forfeited if the Awardee terminates his or her employment
      with the Company or its Subsidiaries for any reason other than death or
      retirement, except that the Compensation Committee shall have the
      authority to provide for the continuation of such Dividend Units in whole
      or in part whenever the Compensation Committee in its judgment shall
      determine that such continuation is in the best interest of the Company.
      Dividend Units may furthermore be forfeited by an Awardee if the
      Compensation Committee determines that the Awardee has at any time engaged
      in any activity harmful to the interest of or in competition with the
      Company or its Subsidiaries or accepts employment with a
      competitor.

              

      

       

      
        	
                (e)  

              	
                Non-assignability:
      Dividend Units may not be pledged, assigned or transferred for any
      reason.

              

      

       

      
        	
                8.  

              	
                Option
      Rules and Conditions

              

      

                
The grant of Options shall be upon the following rules and
conditions:

       

      
        	
                (a)  

              	
                Option Grants: Options
      shall be evidenced by Option agreements in such form or forms as the
      Compensation Committee shall from time to time approve. Such agreements
      shall conform to the requirements of the Plan, and may contain such other
      provisions (including restrictions upon the exercise of the Option,
      provisions for the protection of Options in the event of mergers,
      consolidations, dissolutions, and liquidations, and provisions to the
      effect that the shares subject to the Option shall be shares of Common
      Stock transferred subject to restrictions precluding a sale or other
      disposition for a period of time and requiring compliance with any other
      terms and conditions) as the Compensation Committee shall deem
      advisable.

              

      

       

      
        	
                (b)  

              	
                Option Price: The price
      at which Common Stock may be purchased upon exercise of an Option shall be
      determined by the Compensation Committee, but shall in no event be less
      than the greater of the Fair Market Value of such shares on the date the
      Option is granted or the par value of such Common
  Stock.

              

      

       

      
        	
                (c)  

              	
                Terms of Options: Each
      Option shall be exercisable during such period of time as the Compensation
      Committee shall determine. Each such Option shall in all events, however,
      and notwithstanding any provision of Section 12(d), not be exercisable
      after the expiration of ten years from the date on which the Option shall
      have been granted. Except in the case of death, disability or retirement,
      each Option shall, however, terminate upon termination of employment of
      the Awardee with the Company and its Subsidiaries, notwithstanding the
      fact that the stated term of such Option may not have expired. In the
      event of retirement, any Non-Qualified Option shall terminate not later
      than three years after retirement and any Incentive Stock Option not later
      then three months after retirement, provided, however, that the expiration
      date for Options granted as Incentive Stock Options may be extended by the
      Compensation Committee to a date that is not more than three years after
      the date of an Awardee’s retirement (such Options being Non-Qualified
      Options after the original expiration date). In the case of death of the
      Awardee while employed by the Company or a Subsidiary the Option shall
      terminate on such date as shall be provided in the Option Agreement or
      three years from the date of death, whichever shall be the earlier. In the
      case of disability of the Awardee while employed by the Company or a
      Subsidiary, each Option shall terminate on such date as shall be provided
      in the Option Agreement or three years from the dare of disability in the
      case of a Non-Qualified Option and one year from such date in the case of
      an Incentive Stock Option, whichever shall be the earlier. In cases of the
      sale of a subsidiary, division, business or other unit of the Company or a
      Subsidiary, the expiration dates for Options held by Awardees who are
      transferred to the purchaser in connection with such a sale may be
      extended by the Compensation Committee to a date that is not more than
      three years after the date of the sale, but not beyond the original
      expiration date of the option. The Compensation Committee shall have the
      sole power to determine under the circumstances of each case whether or
      not a leave of absence or entering military service shall constitute
      cessation of employment, but with respect to an Incentive Stock Option
      such leaves of absence not constituting cessation of employment shall be
      limited to those permitted under the laws and regulations governing
      incentive stock options.

              

      

      
        
           

        

        
          62

          
            

          

        

        
           

        

      

       

      
        	
                (d)  

              	
                Incentive Stock
      Option:  Each provision of the Plan and of each Option
      agreement relating to an Incentive Stock Option shall be construed so that
      each Incentive Stock Option shall be an incentive stock option as defined
      in Section 422A of the Internal Revenue Code of 1954 as amended or any
      statutory provision that may replace such Section, and any provisions
      thereof that cannot be so construed shall be disregarded.  The
      total number of shares of Common Stock that may be purchased upon exercise
      of Incentive Stock Options shall not exceed the total specified in Section
      5.  Incentive Stock Options shall, in addition to complying with
      the other provisions of the Plan relating to Options generally, be subject
      to the following conditions:

              

      

       

      
        	
                (i)  

              	
                Each
      Incentive Stock Option shall in all events, and notwithstanding any
      provision of 8(c), 8(f) or 12(d), not be exercisable after the expiration
      of ten years from the date of which such Incentive Stock Option shall have
      been granted.

              

      

       

      
        	
                (ii)  

              	
                No
      Incentive Stock Option is exercisable by the Awardee while a previously
      granted Incentive Stock Option grated to the Awardee is
      outstanding.

              

      

       

      
        	
                (iii)  

              	
                In
      the case of an Incentive Stock Option granted to an Employee who, at the
      time the Incentive Stock Option is granted, owns stock possessing more
      then 10% of the total combined voting power of all classes of stock of the
      Company or any of its Subsidiaries, the option price shall be at least
      110% of the Fair Market Value of the stock subject to the Incentive Stock
      Option and such Incentive Stock Option shall not be exercisable after the
      expiration of 5 years for the date such Incentive Stock Option is granted
      notwithstanding any other provision of the Plan or any Option
      Agreement.

              

      

       

      
        	
                (iv)  

              	
                The
      aggregate Fair Market Value of the Common Stock for which any Employee may
      be granted Incentive Stock Options after December 31, 1980 is limited to
      $100,000 per year (determined as of the time the Incentive Stock Option is
      granted).  The maximum carryover from any single year is
      one-half of the amount by which $100,000 exceeds the Fair market Value of
      the Common Stock for which an Employee was granted Incentive Stock Options
      in that year.  Such amount may be carried over to each of the
      three succeeding calendar years.

              

      

       

      
        	
                (v)  

              	
                Any
      other terms and conditions that the Compensation Committee determines,
      upon advice of counsel, must be imposed for the Option to be an Incentive
      Stock Option.

              

      

       

      
        	
                (e)  

              	
                Multiple Non-Qualified
      Options/Incentive Stock Option Grants:  An Employee may
      be granted both Non-Qualified Option and Incentive Stock Options, either
      concurrently or separately, subject to the limitations set forth in 8(d),
      and to such other limitations as may be imposed on the aggregate number of
      shares of Common Stock that may be purchased under either or both types of
      grants.

              

      

       

      
        	
                (f)  

              	
                Exercise of
      Option:  An Option may be exercised by the Awardee to
      whom it is granted after the expiration of such period of time immediately
      following the date on which the Option is granted as shall be recommended
      by the Compensation Committee and prescribed in the Option Agreement. In
      no event shall the required period of time be less than one year. After
      the expiration of the required period of time, the Option may be exercised
      according to its terms during the balance of the term of the Option. The
      purchase price of the shares of Common Stock for which an Option shall be
      exercised shall be paid in full in cash at the time of the exercise or,
      with the consent of the Compensation Committee, in whole or in part in
      Common Stock valued at Fair Market Value. 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.  Incentive Stock Options must be
      exercised in the same sequential order in which they were
      granted.

              

      

       

      
        	
                (g)  

              	
                Assignment: During the
      lifetime of an Awardee, no Option may be exercised by any person other
      than the Awardee. An Option may not be pledged, assigned or transferred
      except by will, under the laws of descent and distribution or as otherwise
      provided in subsection (h) hereof, nor may any Incentive Rights be
      pledged, assigned or transferred except by will, under the laws of descent
      and distribution or as otherwise provided in subsection (h)
      hereof.

              

      

       

      
        	
                (h)  

              	
                Beneficiary Upon an Awardee’s
      Death: An Awardee holding an Option or an Incentive Right may make
      a written designation of a beneficiary on forms prescribed by and filed
      with the Compensation Committee. Upon the death of an Awardee, such
      beneficiary, or, if no such designation of any beneficiary has been made,
      the legal representative of such Awardee may exercise any unterminated and
      unexpired Option or any Incentive Right granted to such Awardee and
      otherwise succeed to the rights of such
Awardee.

              

      

       

      
        	
                (i)  

              	
                Forfeiture:  Options
      shall be forfeited by an Awardee if the Compensation Committee determines
      that the Awardee has at any time engaged in any activity harmful to the
      interest of or in competition with the Company or its Subsidiaries or
      accepts employment with a
competitor.

              

      

      
        
           

        

        
          63

          
            

          

        

        
           

        

      

       

      
        	
                9.  

              	
                Incentive
      Rights, Rules and Conditions

              

      

                
The Compensation Committee may, in its discretion, grant an Incentive Right to
the holder of an Option upon the following rules and conditions:

       

      
        	
                (a)  

              	
                Incentive Rights Grants:
      Incentive Rights shall be evidenced by Incentive Rights agreements in such
      form or forms as the Compensation Committee shall from time to time
      approve. Such agreements shall conform to the requirements of the Plan and
      may contain such other provisions (including provisions deferring the
      issuance and delivery of any Common Stock that may be granted to an
      Awardee pursuant to his or her Incentive Right until a date or dates
      determined pursuant to subsection (d) of Section 6, above, as well as
      providing for payments equivalent to dividends during the period the
      issuance and delivery of such Common Stock is deferred and requiring
      compliance with any other terms and conditions) as the Compensation
      Committee shall deem advisable. An Incentive Rights agreement relating to
      an Option may be made a part of the related Option agreement or may be
      granted pursuant to a separate Incentive Rights agreement at any time
      prior to the expiration of such
Option.

              

      

       

      
        	
                (b)  

              	
                Nature of Incentive
      Rights: An Incentive Right shall entitle the Awardee (or, in the
      event of his or her death, the person or persons to whom the related
      Option shall have been transferred by will, the laws of descent and
      distribution or as provided in Section 8(h) above) upon expiration of the
      related Option during the Awardee’s employment as a result of the lapse of
      time or following the termination of the Awardee’s employment as a result
      of his or her retirement or death, but not otherwise, to receive either
      (i) the number of shares of Common Stock determined under subsection (c)
      hereof, without payment to the Company, or (ii) a number of Dividend
      Units, determined by the Compensation Committee, which number shall not
      exceed three times the number of shares of Common Stock which would
      otherwise be transferred pursuant to the Incentive Right, the selection of
      the appropriate form of Incentive Right being made by the Compensation
      Committee in its discretion. Dividend Units granted as Incentive Rights
      shall not be subject to the limitations on numbers or otherwise affect the
      number of Dividend Units that may otherwise be granted under Section
      7.

              

      

       

      
        	
                (c)  

              	
                Limit on Size of Incentive
      Rights: The number of shares of Common Stock that shall be
      transferred in respect of an Incentive Right or used as a measure of
      Dividend Units granted as Incentive Rights shall be determined by
      dividing

              

      

       

      
        	
                (i)  

              	
                the
      total number of shares of Common Stock that could have been, but were not,
      purchased by exercise of the Option to which it relates (as determined
      pursuant to Sections 8(c) and 8(f), and as adjusted pursuant to Section
      10) on the last day such Option could have been exercised, multiplied by
      the amount by which the Fair Market Value of a share of Common Stock on
      such last day of exercise exceeds the option price of the Option,
      by

              

      

       

      
        	
                (ii)  

              	
                the
      Fair Market Value of a share of Common Stock on such last day of
      exercise.

              

      

       

      
        	
                (d)  

              	
                No
      fractional shares shall be issued under this subsection, but, in lieu
      thereof, an adjustment shall be made in cash equal to the same fraction of
      the Fair Market Value of a share of Common Stock on such date of
      expiration.

              

      

       

      
        	
                (e)  

              	
                Awardee’s Rights as a
      Stockholder: An Awardee shall have no rights as a stockholder with
      respect to any shares of Common Stock subject to an Incentive Right unless
      and until a stock certificate for such shares shall have been issued to
      him or her.

              

      

       

      
        	
                (f)  

              	
                Dividend Units Granted as
      Payment of Incentive Rights: Dividend Units shall be granted as
      payment of Incentive Rights for such period or periods of time as the
      Compensation Committee shall specify but in no event beyond the date of
      the death of the Awardee, except that the Compensation Committee may, upon
      granting such Dividend Units, provide for payment of the same to the
      surviving spouse of an Awardee until the death of such spouse or until the
      eightieth anniversary of the Awardee’s birth, whichever shall first occur.
      Such payments may be made subject to such other terms and conditions, if
      any, as the Compensation Committee shall
  specify.

              

      

       

      
        	
                10.  

              	
                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 part of its assets, or any distribution to stockholders other
than a cash dividend, the Board of Directors shall make appropriate adjustment
in the number and kind of shares authorized by the Plan, in the number and kind
of Dividend Units and shares of Deferred Stock authorized by the Plan, in the
aggregate and to any individual Awardee, in the number and kind of Dividend
Units and shares of Deferred Stock theretofore granted or awarded under the
Plan, in the number and kind of shares subject to unexercised Options and
Incentive Rights theretofore granted and in the option price of such shares, and
in the number and kind of Dividend Units granted as Incentive Rights. No
fractional shares of Common Stock shall be issued pursuant to such an
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.

      
        
           

        

        
          64

          
            

          

        

        
           

        

      

       

      
        	
                11.  

              	
                Termination
      and Amendment

              

      

            
           The Board of
Directors shall have the power to terminate the Plan at any time, and from time
to time may make such changes in and additions to the Plan as it may deem proper
and in the best interests of the Company, without further action on the part of
the stockholders of the Company, but only if, as and when the Compensation
Committee shall recommend, but not otherwise; provided, however, (subject to the
provisions of Sections 5, 7(b) and 10 hereof) that no such termination, change
or addition shall:

       

      
        	
                (a)  

              	
                Without
      the consent of the affected Awardee, impair any Option or the terms of any
      other award theretofore granted under the Plan or, except as otherwise
      provided in the Plan, deprive any Awardee of any shares of Common Stock
      that he or she may have acquired through or as a result of the
      Plan;

              

      

       

      
        	
                (b)  

              	
                Increase
      the total number of shares of Deferred Stock to be awarded or the total
      number of shares reserved for Options to be awarded under the
      Plan;

              

      

       

      
        	
                (c)  

              	
                Increase
      the total number of shares of Common Stock that may be transferred in
      respect of Incentive Rights or that may be used as a measure of Dividend
      Units, either in the aggregate or with respect to any one
      Awardee;

              

      

       

      
        	
                (d)  

              	
                Decrease
      the purchase price of any Option below the Fair Market Value on the date
      of grant;

              

      

       

      
        	
                (e)  

              	
                Extend
      the period during which shares of Deferred Stock, Dividend Units, Options
      or Incentive Rights may be awarded, or the period during which Options may
      be exercised;

              

      

       

      
        	
                (f)  

              	
                Extend
      the time during which payments in respect of Dividend Units may be
      made;

              

      

       

      
        	
                (g)  

              	
                Abolish
      the Compensation Committee, change eligibility for membership on the
      Compensation Committee (except as may from time to time be required by
      law) or permit the grant of Deferred Stock, Dividend Units, Options or
      Incentive Rights to members or former members of the Compensation
      Committee; or

              

      

       

      
        	
                (h)  

              	
                Change
      the provisions of this Section 11.

              

      

       

      
        	
                12.  

              	
                General
      Provisions

              

      

      
        	
                (a)  

              	
                Nothing
      contained in the Plan, or in any award granted pursuant to the Plan, shall
      confer upon any Employee any right with respect to continuance of
      employment by the Company or a Subsidiary, nor interfere in any way with
      the right of the Company or a Subsidiary to terminate the employment of
      any Employee at any time with or without assigning any reason
      therefor.

              

      

       

      
        	
                (b)  

              	
                For
      purposes of this Plan, transfer of employment from the Company to a
      Subsidiary, from a Subsidiary to the Company, or from one Subsidiary to
      another Subsidiary shall not be deemed termination of
      employment.

              

      

       

      
        	
                (c)  

              	
                Appropriate
      provision may be made for all taxes required to be withheld in connection
      with any award, the exercise thereof and the transfer of shares of Common
      Stock or grant of and payment in respect of any Dividend Units under the
      applicable laws or other regulations of any governmental authority,
      whether Federal, state or local and whether domestic or
      foreign.

              

      

       

      
        	
                (d)  

              	
                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.

              

      

       

      
        	
                (e)  

              	
                Without
      amending the Plan, awards may be granted to Employees who are foreign
      nationals or employed outside the United States or both, on such terms and
      conditions different from those specified in the Plan as may, in the
      judgment of the Compensation Committee, be necessary or desirable to
      further the purpose of the Plan.

              

      

       

      
        	
                (f)  

              	
                To
      the extent that Federal laws (such as the Securities Exchange Act of 1934
      or the Employee Retirement Income Security Act of 1974) do not otherwise
      control, the Plan and all determinations made and actions taken pursuant
      hereto shall be governed by the law of Delaware and construed
      accordingly.

              

      

       

      

      

      
        
           

        

        
          65exh10bi.htm

    
      
        
           

          
            	 	
                     The
      Dow Chemical Company and Subsidiaries

                  	
                     EXHIBIT
      10(b)(i)

                  
	 	
                     

                     

                  	 

          

        

      

    

     

    1979 Award and Option Plan
Amended

    

    

    RESOLVED,
that the language of Section 8(c) of The Dow Chemical Company 1979 Award and
Option Plan is hereby amended by deleting “In cases of the sale of a subsidiary,
division, business or other unit of the Company or a Subsidiary, the expiration
dates for Options held by Awardees who are transferred to the purchaser in
connection with such a sale may be extended by the Compensation Committee to a
date that is not more than three years after the date of the sale, but not
beyond the original expiration date of the Option.” and substituting therefore
the following sentence:

    

    “The
Compensation Committee may extend the term of any Option that would otherwise
terminate as the result of a change in the Awardee’s employment status related
to any merger; consolidation; acquisition, disposition, or other similar or
dissimilar transfer of property (including stock); separation; reorganization;
or liquidation; provided that no such extended Option shall, by its terms, be
exercisable more than three years from the date it would have terminated if the
term of such Option had not been extended by the Compensation Committee pursuant
to this provision, nor shall such Option, by its terms, be exercisable at a date
that is later than the original expiration date of such Option.”

     

    
      
         

      

      
        66

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