DEFA14A

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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Securities Exchange Act of 1934

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2015 ANNUAL MEETING OF STOCKHOLDERS

OF THE DOW CHEMICAL COMPANY

This Proxy Statement Supplement dated March 31, 2015 is issued in connection with the 2015 Annual Meeting of Stockholders of The Dow Chemical Company to be held on May 14, 2015. This supplement to the proxy statement filed by The Dow Chemical Company with the Securities and Exchange Commission on March 27, 2015 for use at the annual meeting of stockholders on May 14, 2015 (the “Proxy Statement”) is being filed solely to correct errors in the “Total” and “Total Without Change in Pension Value” columns to the Summary Compensation Table appearing on page 35 of the Proxy Statement and the “# of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (1))” column of the Equity Compensation Plan Information table appearing on page 46 of the Proxy Statement.

The “Summary Compensation Table” is amended to read as follows:

Summary Compensation Table

The following table summarizes the compensation of our CEO, CFO, and our three other most highly compensated executive officers for the fiscal year ended December 31, 2014. On October 1, 2014, Mr. Weideman stepped down as CFO and Mr. Ungerleider became CFO.

 

Name and Principal

Position

  Year     Salary ($)     Bonus
($)
    Stock
Awards
($) (a)
    Option
Awards
($) (b)
    Non-Equity
Incentive Plan
Compensation
($) (c)
    Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($) (d)
    All Other
Compensation
($) (e)
   

Total

($)

    Total
Without
Change in
Pension
Value ($)
 
Andrew Liveris,     2014        1,921,433        0        9,369,108        3,630,036        4,232,314        7,135,205        410,276        26,698,372        19,563,167   
CEO & Chairman     2013        1,865,500        0        8,312,228        5,324,003        4,559,027        3,212        388,907        20,452,877        20,449,665   
    2012        1,808,333        0        8,446,171        4,840,080        1,368,640        6,160,388        366,055        22,989,668        16,829,280   
Howard Ungerleider,     2014        932,278        0        2,853,865        1,105,568        1,516,743        3,013,541        76,130        9,498,125        6,484,584   
CFO & Exec. VP                    
William Weideman,     2014        935,888        0        2,723,673        1,055,357        1,303,468        2,927,610        19,071        8,965,066        6,037,456   
Former CFO & Exec VP     2013        904,447        0        2,301,569        1,474,051        1,601,053        393,911        16,024        6,691,054        6,297,143   
    2012        836,815        0        2,408,410        1,380,079        407,001        3,465,782        29,469        8,527,557        5,061,774   
James Fitterling,     2014        965,922        0        2,853,865        1,105,568        1,539,213        2,897,381        63,598        9,425,547        6,528,166   
Vice Chairman     2013        903,997        0        2,301,569        1,474,051        1,676,915        1,135        36,293        6,393,961        6,392,826   
    2012        836,636        35,518        2,408,410        1,380,079        424,879        2,853,921        53,243        7,992,687        5,138,765   
Joe Harlan,     2014        972,220        0        2,723,673        1,055,357        1,505,508        165,278        114,037        6,536,073        6,370,795   
Vice Chairman     2013        943,902        0        2,301,569        1,474,051        1,663,205        91,910        65,434        6,540,071        6,448,161   
    2012        902,067        0        2,199,134        1,260,015        435,116        75,987        56,555        4,928,873        4,852,886   
Charles Kalil,     2014        1,024,661        0        2,594,026        1,005,030        1,427,107        2,991,336        70,200        9,112,360        6,121,024   
General Counsel & Exec. VP     2013        995,131        0        2,499,820        1,407,017        1,752,920        2,613        76,834        6,734,334        6,731,721   
    2012        951,618        0        2,408,410        1,380,079        459,478        2,798,980        70,339        8,068,904        5,269,923   

Note: In order to show the effect that the year-over-year change in pension value had on total compensation, as determined under applicable SEC rules, we have included an additional column to show total compensation minus the change in pension value. The amounts reported in the Total Without Change in Pension Value column may differ substantially from the amounts reported in the Total column required under SEC rules and are not a substitute for total compensation. Total without Change in Pension Value represents total compensation, as determined under applicable SEC rules, minus the change in pension value reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column. The change in pension value is subject to many external variables, such as interest rates, that are not related to Company performance. Therefore, we do not believe a year-over-year change in pension value is helpful in evaluating compensation for comparative purposes.

(a) Amounts represent the aggregate grant date fair value of awards in the year of grant in accordance with the same standard applied for financial accounting purposes. If valued assuming a maximum payout on the Performance Share program, the value of the awards would be: Liveris $12,687,402; Ungerleider $3,864,554; Weideman $3,688,248; Fitterling $3,864,544; Harlan $3,688,248; Kalil $3,513,032.
(b) Dow’s valuation for financial accounting purposes uses the widely accepted lattice-binomial model. The option value calculated for the NEOs’ grants was $11.49 for the grant date of February 14, 2014. The exercise price of $46.71 is the closing Dow stock price on the date of grant.
(c) Individual results for Non-Equity Incentive Plan Compensation are detailed in the Performance Award section of the 2014 Executive Compensation Program in Detail and reflect income paid in 2015 under our annual Performance Award (PA) program for performance achieved in 2014.
(d)

Reflects the aggregate change in the actuarial present value of accumulated pension benefits at age 65 using the actuarial assumptions included in the Company’s audited financial statements. The amounts recorded in this column vary with a number of factors, including the discount rate applied to determine the value of future payment streams. An analysis of the Change in Pension Value for 2014 is shown below. As a result of a decrease in prevailing interest rates in the credit markets in 2014, the discount rate used pursuant to pension accounting rules to calculate the present value of future payments decreased from 5.00% for fiscal year 2013 to 4.10% for fiscal year 2014. The increase in pension value resulting from the change in interest rates does not


  result in any increase to the underlying benefits payable to participants under the plan. Mr. Harlan participates in the Personal Pension Account plan. The $165,278 represents the increase in his 2014 cash balance account due to the increase in annual pay and interest credits.

 

Name    Change in Discount
Interest Rate ($)
     Change in Deferral
Period, Benefits,
and Other ($)
     Change due to
Change in
Mortality Table
     Total Change ($)  
Andrew Liveris      3,924,306         2,437,810         773,089         7,135,205   
Howard Ungerleider      1,533,993         1,376,219         103,329         3,013,541   
William Weideman      1,476,858         1,163,473         287,279         2,927,610   
James Fitterling      1,673,863         1,044,913         178,605         2,897,381   
Joe Harlan      0         165,278         0         165,278   
Charles Kalil      1,479,430         1,134,501         377,405         2,991,336   
(e) All Other Compensation includes the cost of Company provided automobile (which was discontinued in 2013 for the NEOs other than the CEO), personal use of corporate aircraft by the CEO as required by Company policy for security and immediate availability purposes, Company contributions to employee savings plans, reimbursements of costs paid for financial and tax planning support, home security, executive health examinations and personal excess liability insurance premiums. The incremental cost to the Company of personal use of Company aircraft is calculated based on the variable operating costs to the Company including fuel, landing, catering, handling, aircraft maintenance and pilot travel costs. Fixed costs, which do not change based upon usage, such as pilot salaries or depreciation of the aircraft or maintenance costs not related to personal travel, are excluded. NEOs also are provided a tax reimbursement for taxes incurred when a spouse travels for business purposes as it is sometimes necessary for spouses to accompany NEOs to business functions. These taxes are incurred because of the Internal Revenue Service’s rules governing business travel by spouses and the Company reimburses the associated taxes. No NEO is provided a tax reimbursement for personal use of aircraft.

The following “All Other Compensation” items exceeded $10,000 in value:

  Liveris: Personal use of Company aircraft ($221,240), Company contributions to savings plans ($79,854), financial and tax planning ($56,238), tax reimbursements ($30,383)
  Ungerleider: Company contributions to savings plans ($41,189), financial and tax planning ($25,153)
  Weideman: Company contributions to savings plans ($15,616)
  Kalil: Company contributions to savings plans ($47,422)
  Harlan: Company contributions to savings plans ($46,237), financial and tax planning ($38,596), tax reimbursement ($24,294)
  Fitterling: Company contributions to savings plans ($41,578), financial and tax planning ($15,723)

The Equity Compensation Plan Information table is amended to read as follows:

Equity Compensation Plan Information

The table below shows the Equity Compensation Plan Information as of December 31, 2014.

EQUITY COMPENSATION PLAN INFORMATION

 

    (1)     (2)     (3)  
Plan Category   # of securities to be
issued upon
exercise of outstanding
options, warrants, rights
    Weighted-average exercise
price of outstanding
options, warrants, rights ($)
    # of securities
remaining available for
future issuance under
equity
compensation plans
(excluding securities
reflected in column (1))
 
Equity Compensation Plans Approved by Security Holders     67,497,037        35.75 (a)      86,072,758 (b) 
Equity Compensation Plans Not Approved by Security Holders (c)     —          —          —     
Total     67,497,037        35.75        86,072,758   

As of December 31, 2014

(a) Calculation does not include outstanding Performance Shares that have no exercise price.
(b) The 2012 Stock Incentive Plan was approved by shareholders on May 10, 2012 with an initial share pool of 44,500,000 shares and another 50,500,000 shares approved by shareholders on May 15, 2014. Shares available are calculated using the fungible method of counting shares which consumes 2.1 for each deferred stock and performance share awarded and 1 share for each stock option. The 2012 Plan also provides that stock awards under the prior 1988 Award and Option Plan which are forfeited or expire shall be added back into this share pool at the fungible ratios. Total includes 62,725,432 shares available under the 2012 Stock Incentive Plan, 23,069,119 shares available under the 2012 Employee Stock Purchase Plan, and 278,207 shares available under the 1994 Executive Performance Plan.
(c) The 1994 Plan previously allowed the Company to grant up to 300,000 stock options. The Plan is limited to non-employee directors, and provided that stock options were granted pursuant to a formula and had ten-year terms. No further grants will be issued under this plan and there are no longer outstanding shares.

Except as specifically revised by the information contained herein, this supplement does not revise or update any of the other information set forth in the Proxy Statement. This supplement should be read in conjunction with the Proxy Statement. From and after the date of this supplement, any references to the “Proxy Statement” are to the Proxy Statement as supplemented hereby.

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