| COMPENSATION TABLES AND NARRATIVES |
Scroll down to see Compensation Tables and Narratives below.
The following table summarizes the compensation of the principal executive officer (CEO), principal financial officer (CFO), and the Company’s three most highly compensated officers for the fiscal year ended December 31, 2007. The amounts shown in the stock and option awards columns in the table below reflect the expense reported for grants made in 2007 and for grants made in 2003-2006, which were previously reported.
SUMMARY COMPENSATION TABLE FOR 2007 [top]
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| (a) | On March 1, 2007, a special award was given to all salaried employees as recognition for outstanding efforts in achieving consecutive years of sustained earnings performance. |
| (b) | Amounts recognized for financial statement reporting purposes for the fiscal year ended December 31, 2007, in accordance with SFAS 123R for awards pursuant to the Company’s award and option plans and may include amounts from awards granted in and prior to 2007. Assumptions used in the calculation of amounts related to equity awards are included in Note N of the Company’s audited financial statements for the fiscal year ended December 31, 2007, which are included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on February 19, 2008. Assumptions used in the calculation of these programs related to grants awarded prior to 2004 are included in Note O of the Company’s audited financial statements for the fiscal year ended December 31, 2004 which are included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on February 18, 2005. |
| (c) | Dow’s SFAS 123R valuation uses the widely accepted lattice‑binomial model which calculated an option value of $9.81 (grant date of February 16, 2007). The exercise price is the average of the high and low Dow stock price on the date of grant. The exercise price was $43.59 for 2007 grants. |
| (d) | Annual Performance Award as described in the Compensation Elements section of the Compensation Discussion and Analysis |
| (e) | 2007 above‑market non-qualified deferred compensation earnings: Liveris $1,811, Merszei $0, Gambrell $88, Banholzer $3,421, Kepler $429. 2006 above‑market non-qualified deferred compensation earnings: Liveris $2,950, Merszei $0, Gambrell $97, Banholzer $5,458, Kepler $567. The actual change in pension value for 2007 was negative for Messrs. Liveris, Gambrell, Banholzer and Kepler due to a change in the discount rate used in determining the present value of accumulated benefits. This is included as zero in the Summary Compensation Table. |
| (f) | Details related to all other compensation can be found in the All Other Compensation table. |
| (g) | In order to replace forfeited incentive compensation that Mr. Merszei would have received from his previous employer, Mr. Merszei was granted a new hire cash award of $1,600,000 in 2005, payable in three installments on his anniversary date in 2006, 2007, and 2008. |
The following table provides additional details for the compensation information found in the Summary Compensation Table under the All Other Compensation column.
ALL OTHER COMPENSATION FOR 2007 [top]
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| (a) | Tax gross-up payment for unanticipated tax liabilities resulting from participation in the Key Employee Insurance Program and the Company’s termination of the Executive Split Dollar Life Insurance Plan. |
| (b) | Mr. Liveris is required by the Board of Directors to use the Company aircraft for personal use for security and immediate availability purposes. 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. |
| (c) | Employee Savings Plan company match, ESOP contribution, and Nonqualified Deferred Compensation Plan company contribution. |
| (d) | Reimbursement of costs paid for financial and tax planning support. |
| (e) | Reimbursement of costs paid for home security. |
| (f) | Market value of automobile lease, executive physical examinations, and Executive Excess Umbrella Liability Insurance. |
| (g) | Costs associated with Mr. Merszei’s relocation to Midland, MI. |
The following table provides additional information about plan-based compensation disclosed in the Summary Compensation Table. This table includes both equity and non-equity awards.
GRANTS OF PLAN-BASED AWARDS FOR 2007 [top]
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| (a) | Performance Award as described in the Compensation Elements section of the Compensation Discussion and Analysis. |
| (b) | Performance Shares as described in the Compensation Elements section of the Compensation Discussion and Analysis. |
| (c) | Deferred Stock awards as described in the Compensation Elements section of the Compensation Discussion and Analysis. |
| (d) | Stock Option awards as described in the Compensation Elements section of the Compensation Discussion and Analysis. |
The following table lists outstanding equity grants for each NEO as of December 31, 2007. The table includes outstanding equity grants from past years as well as the current year.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END [top]
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| (a) | Stock Option award grants vest in three equal installments on the first, second and third anniversaries of the grant date shown in the table. |
| (b) | Market values based on the 12/31/2007 closing stock price of $39.42 per share. |
| (c) | Deferred Shares vest and are delivered three years after the grant date. Prior to January 1, 2008, Deferred Shares vested over a five-year period. Mr. Merszei’s grant of 16,580 deferred shares on 7/1/2005 will vest on 7/1/2010 and his grant of 30,000 deferred shares granted on 7/1/2005 will vest on 8/29/2008. |
| (d) | Performance Shares granted on 2/15/2002 and 2/13/2004 will vest and be delivered on 4/16/2008. Performance Shares granted 2/14/2003, 2/18/2005, 3/1/2006 and 2/16/2007 will vest and be delivered April 16 or 17 of the year following the end of the performance period. Mr. Merszei’s grant of 24,860 Performance Shares granted 7/1/2005 will vest and be delivered on 4/17/2008. Performance Shares granted in 2006-2007 are shown at the target level of performance. The actual number of shares to be delivered will be determined at the end of the three-year performance period. |
| (e) | In addition to the equity grants described above, Mr. Liveris, Mr. Gambrell, and Mr. Kepler received dividend unit grants on 3/9/1988 of 846 shares, 1,125 shares and 846 shares, respectively, which generate a quarterly payment equal to the dividend paid on equivalent shares of Dow Common Stock. These grants will expire on 3/9/2013. |
The following table summarizes the value received from stock option exercises and stock grants vested during 2007.
OPTION EXERCISES AND STOCK VESTED FOR 2007 [top]
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| (a) | Performance Shares from grants on: 3/21/2001, 2/15/2002, 2/13/2004, and 5/24/2004. |
The following table lists the pension program participation and actuarial present value of each NEOs defined benefit pension at December 31, 2007.
PENSION BENEFITS AS OF 12/31/07 [top]
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| (a) | Unless otherwise noted, all present values reflect accrued age 65 benefits. The form of payment, discount rate (6.8%) and mortality (UP94G) are based upon SFAS 87 assumptions as reflected in the Company’s 2007 audited financial statements. |
| (b) | The present value for Mr. Liveris reflects benefits payable at the unreduced retirement date of 12/31/2007. It also reflects an offset for his Australian Superannuation Fund (“Australian Fund”) account of $829,624 USD ($943,397 AUD converted using 12/31/2007 internal Dow exchange rate of $1 AUD = $.8794 USD) for 2007 and $710,466 USD ($898,869 AUD converted using 12/31/2006 internal Dow exchange rate of $1 AUD = $.7904 USD) for 2006. Mr. Liveris was asked by the Company to permanently transfer to the United States in 1995 and, at that time, began participation in the Dow Employees’ Pension Plan (“DEPP”) and ceased contributions to the Australian Fund. In order to equitably determine a retirement benefit bridging the two plans, Mr. Liveris’ retirement benefit will be determined by the following formula: at the time of retirement, the pension amount would equal the amount payable under the DEPP formula, with the benefit being paid from the DEPP and the Executives’ Supplemental Retirement Plan (“ESRP”) (based on Mr. Liveris’ highest consecutive three-year average compensation (“HC3A”) and Mr. Liveris’ years of credited service as if a U.S. employee his entire Dow career) less the value of the accrued benefit in the Australian Fund. If legally permissible, Mr. Liveris will be required to waive any retirement benefits payable from the Australian Fund. If not legally permissible, the value of any retirement benefits received from the Australian Fund shall be deducted from any ESRP benefit due. |
| (c) | The present value for Mr. Merszei reflects benefits payable at the unreduced retirement date of 01/31/2009. Mr. Merszei was a participant in the Dow Personalvorsorgestiftung Schweiz (“Swiss Plan”) from 1978 through 2001 and received a portable benefit upon his termination from Dow Europe. Under the terms of his employment contract, Mr. Merszei will have his final benefit prorated under the formulas of the defined benefit plans in which he participated for the period of time spent under each plan using pensionable pay and service. As a U.S. employee, Mr. Merszei is now a participant in the DEPP and ESRP. Mr. Merszei will get credit for the years of service he spent at his previous employer in the ESRP, with the amount of such previous employer’s benefit and his previously paid portable benefit carved out of the ultimate benefit. |
| (d) | The present value for Messrs. Gambrell and Kepler reflect benefits payable at the unreduced retirement date of 12/31/2007. ESRP benefits will be offset by benefits obtained under the Key Employee Insurance Program (“KEIP”). |
| (e) | Under the terms of his employment contract, Dr. Banholzer will get credit for the years of service he spent at his previous employer in the ESRP. The present value for Dr. Banholzer reflects an offset for the age 65 benefit from his previous employer of $63,217. |
The NEOs participate in one or more of the following retirement plans:
The Dow Employees’ Pension Plan
The Company provides the Dow Employees’ Pension Plan (“DEPP”) for its employees and for employees of some of its wholly owned U.S. subsidiaries. DEPP has two active formulas: the DEPP formula, for employees hired prior to January 1, 2008, and the Personal Pension Account formula for employees hired January 1, 2008 and beyond. Upon retirement, a participant receives an annual pension under the DEPP formula subject to a statutory limitation. The benefit is paid in the form of a monthly annuity and is calculated based on the sum of the employee’s yearly basic and supplemental accruals up to a maximum of 425% for basic accruals and 120% for supplemental accruals. Basic accruals equal the employee’s highest consecutive three-year compensation (“HC3A”) multiplied by a percentage ranging from 4% to 18% dependent on the employee’s age in the years earned. Supplemental accruals are for compensation in excess of a rolling 36-month average of the Social Security wage base. Supplemental accruals range from 1% to 4%, based on the age of the employee in the years earned. The sum of the basic and supplemental accruals is divided by a conversion factor to calculate an immediate monthly benefit. If the employee terminates employment before age 65 and defers payment of the benefit, the account balance calculated under this formula will be credited with interest. This benefit is known as the DEPP formula benefit.
Certain U.S. plan participants who were hired prior to January 1996 may have a greater benefit calculated under the previous pension plan formula which was frozen as of December 31, 2005. This benefit is equal to 1.6% of the employee’s HC3A as of December 31, 2005, multiplied by the employee’s years of credited service as of December 31, 2005, using full credited service up to 35 years, and half of the years of credited service in excess of 35 years. No actuarial reductions are taken if the employee is at least age 50 and has combined age and years of service equal to 85 or greater. This formula also contains a provision for an offset of the employee’s estimated primary Social Security benefit, calculated using the method specified in the Tax Reform Act of 1986. Employees may receive either the DEPP formula benefit or the 1.6 formula benefit.
The Executives’ Supplemental Retirement Plan
Because the U.S. Internal Revenue Code limits the benefits otherwise provided by DEPP, the Board of Directors adopted the Executives’ Supplemental Retirement Plan (“ESRP”) in 1992 to provide certain management employees who participate in the DEPP with supplemental benefits. The benefits are calculated under the same formulas described above.
The Key Employee Insurance Program
Messrs. Gambrell and Kepler elected to have their ESRP benefit secured by enrolling in the Key Employee Insurance Program (“KEIP”) in 1999 and 1998, respectively. KEIP is a life insurance program which secured benefits otherwise available under ESRP, offered to certain management employees as an alternative to the ESRP. Dow has not offered KEIP to employees since 1999. The Company has no plans to reinstate this program for new participants.
Dow Savings Plan – 401(k)
The Company provides all U.S. salaried employees the opportunity to participate in a 401(k) plan (The Dow Chemical Company Employees’ Savings Plan). In 2007, if employees contributed 6% of annual salary, Dow provided a maximum matching contribution of 3% of salary and an additional automatic ESOP contribution of 1% of salary. Under the revised 401(k) plan which is effective for 2008 and beyond, for salaried employees who contribute 2% of annual salary, Dow provides a matching contribution of 100% of the employee’s contribution. For salaried employees who contribute up to an additional 4%, Dow provides a 50% match. The NEOs participate in the 401(k) plan on the same terms as other eligible employees.
The following table provides information on compensation the NEOs have elected to defer as described in the narrative that follows.
NON-QUALIFIED DEFERRED COMPENSATION FOR 2007 [top]
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| (a) | Non-Qualified Deferred Compensation contributions are also reported as salary for 2007 in the Summary Compensation Table. |
| (b) | Includes employee contributions reported as salary for 2006 in the Summary Compensation Table: Liveris $71,667, Gambrell $32,411, Banholzer $28,503, Kepler $25,556. |
In order to further assist certain U.S. salaried employees in saving for retirement, Dow provides an Elective Deferral Plan. This plan allows participants to voluntarily defer the receipt of base salary (maximum deferral of 50%) and Performance Award (maximum deferral of 85%).
Each Participant enrolled in the plan will receive a matching contribution using the same formula authorized for salaried participants under the 401(k) plan for employer matching contributions. The current formula provides for a matching contribution on the first 6% of base pay deferred. For purposes of calculating the match under the Elective Deferral Plan, the Company will assume each Participant is contributing the maximum allowable amount to the 401(k) plan and receiving a match thereon. The assumed match from the 401(k) plan will be offset from the matching contribution calculated under the Elective Deferral Plan. The sum of the matching contribution under the Elective Deferral Plan plus the employer matching contributions under the 401(k) plan may not exceed $15,000 per year.
Investment choices include an account with interest equivalent to 125% of the 120-month rolling average of ten-year U.S. Treasury Notes, a phantom Dow stock account tracking the market value of Dow Common Stock with market dividends paid and reinvested, as well as accounts tracking the performance of several mutual funds.
The Elective Deferral Plan allows for distributions to commence on the January 31 after retirement or after a specific future year that can be later or earlier than the retirement date. Retirement under the Plan is defined as termination from employment with The Dow Chemical Company or any of its wholly owned subsidiaries participating in the Elective Deferral Plan on or after age 65, or on or after age 50 with at least 10 years of Company service. Distributions may be paid either in a lump sum or in equal monthly, quarterly or annual installments up to 15 years based on the employee’s initial election as to the time and form of payment. If installments were elected, the unpaid balance will continue to accumulate gains and losses based on the employee’s investment selections.
The NEOs balances consist primarily of voluntary deferrals (and related earnings), not contributions made by the Company.
Potential Payments Upon Termination or Change-in-Control [top]
All NEOs are currently retirement eligible, and entitled to benefits similar to most other salaried employees upon separation from the Company. They are also entitled to additional benefits in the case of an involuntary termination without cause or a change-in-control event. All benefits and payments are subject to the terms of the applicable program documents, contracts, and other agreements. The summary below shows the impact of various types of separation events upon the different compensation elements the NEOs receive.
Retirement, Death, or Disability
- Base Salary: Paid through date of separation on the normal schedule.
- Performance Award: Prorated for the portion of the year worked and paid on the normal schedule.
- Benefits: All NEOs except Dr. Banholzer are eligible for retiree medical and life insurance coverage similar to many other salaried U.S. employees.
- Retirement Plans: Participants have access, in accordance with elections and plan features, to the following retirement plan benefits:
- Elective Deferral Plan benefits as shown in the Non‑qualified Deferred Compensation table and accompanying narrative.
- Pension benefits as shown in the Pension Benefits Table and described in the accompanying narrative. Participants in DEPP and ESRP are paid a monthly annuity. Participants in KEIP have additional lump-sum features available.
- Employee Savings Plan (Defined Contribution 401(k) plan).
- Elective Deferral Plan benefits as shown in the Non‑qualified Deferred Compensation table and accompanying narrative.
- Outstanding Long-Term Incentive Awards
- Stock Options: Outstanding grants are retained in full. Vesting period remains unchanged; expiration periods are shortened to the earlier of the existing expiration date or five years.
- Deferred Stock: Current year grants are prorated for the portion of year worked. Other grants are retained in full. Vesting and delivery dates remain unchanged.
- Performance Shares: Current year grants are prorated for the portion of year worked. Other grants are retained in full. Vesting periods and delivery dates remain unchanged.
- Stock Options: Outstanding grants are retained in full. Vesting period remains unchanged; expiration periods are shortened to the earlier of the existing expiration date or five years.
Involuntary Termination With Cause
Because all NEOs are currently retirement eligible, they generally will receive the same benefits under an Involuntary Termination with Cause as under retirement with the exception of incentive income, which may be recovered by the Company as described in the Executive Compensation Recovery Policy. In addition, there may be other bases for forfeiture or alternative treatment under the applicable programs for an Involuntary Termination With Cause, based on the particular program terms or other legal bases.
Involuntary Termination Without Cause
In addition to the benefits received due to retirement, as described above, the NEOs will receive the following benefits if involuntarily terminated without cause:
- A lump-sum severance payment of two weeks per year-of-service (up to a maximum of eighteen months) under the U.S. Severance Plan, plus six months base salary under the Executive Severance Supplement. The U.S. Severance Plan covers most salaried employees in the United States.
- Outplacement Counseling and Financial/Tax Planning with a value of $30,300.
- Eighteen months of health and welfare benefits at employee rates.
Change-in-Control
In addition to benefits received due to retirement, as described above, the NEOs will receive the following benefits if separated due to a Change-in-Control event as defined in the Compensation Discussion and Analysis:
- A severance payment equal to two times the executive’s base salary and target Performance Award (2.99 times for the CEO).
- An additional two years of credited service and age for purposes of calculating retirement benefits (three years for the CEO).
- A financial, tax, and outplacement allowance of $50,000.
- Eighteen months of health and welfare benefits at employee rates.
- Tax gross-up protection in the event severance exceeds statutory thresholds and becomes subject to an excise tax.
- LTI awards in the form of Performance Shares and Deferred Stock will vest and be delivered as soon as possible after the Change-in-Control event. Stock Options will vest immediately.
The following table summarizes the value of the incremental benefits to be received due to an Involuntary Termination (without cause) or a Change-in-Control event:
INVOLUNTARY TERMINATION OR CHANGE-IN-CONTROL VALUES [top]
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Director Compensation
The following table lists the compensation provided to Dow’s non-employee Directors in 2007.
DIRECTOR COMPENSATION FOR 2007 [top]
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| (a) | The March 5, 2007 grant date accounting fair value of Restricted Stock granted is $41.97 per share with a total value of $48,266 for each Director. Aggregate unvested Restricted Stock holdings at December 31, 2007 were: Barton 12,220; Bell 5,070; Fettig 11,070; Franklin 7,720; Hess 3,970; Reilley 2,820; Ringler 12,991; Shaw 5,070; and Stern 12,220. |
| (b) | The amounts reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 2007, in accordance with SFAS 123R for awards granted pursuant to the Company’s award and option plans. Assumptions used in the calculation of amounts related to equity awards are included in Note N of the Company’s audited financial statements for the fiscal year ended December 31, 2007 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on February 19, 2008. |
| (c) | The March 5, 2007 grant date accounting fair value of Stock Options granted is $9.83 per share with a total value of $59,472 for each Director. Aggregate historical vested and unvested option awards at December 31, 2007 were: Barton 37,400 vested, 6,050 unvested; Bell 4,900 vested, 6,050 unvested; Fettig 13,600 vested, 6,050 unvested; Franklin 37,400 vested, 6,050 unvested; Hess 6,050 unvested; Ringler 33,116 vested, 6,050 unvested; Shaw 4,900 vested, 6,050 unvested; Stern 37,400 vested, 6,050 unvested. |
| (d) | Consists exclusively of above‑market non-qualified deferred compensation earnings. |
| (e) | Mr. Reilley was elected on August 17, 2007, and received a cash payment of $44,507 upon election to the Board in lieu of the current year stock award. |
Directors’ fees as stated below are paid only to Directors who are not employees of the Company.
Fees paid in 2007
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Fees to be paid in 2008
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| Annual Retainer Fee: | $70,000 annually | $70,000 annually |
| Meeting Retainer Fee: | $45,000 annually | $45,000 annually |
| Audit Committee Chairmanship: | $15,000 annually | $15,000 annually |
| All Other Committee Chairmanships: | $10,000 annually | $10,000 annually |
| Audit Committee Membership: | $15,000 annually | $15,000 annually |
| Presiding Director Service: | $21,250 annually | $25,000 annually |
The Presiding Director Service fee increased from $20,000 per year to $25,000 per year in December 2007. For 2007, the Presiding Director received three quarterly fee installments at the prior rate and one installment at the increased rate, for a total fee of $21,250.
2003 Non-Employee Directors’ Stock Incentive Plan [top]
The 2003 Non-Employee Directors’ Stock Incentive Plan provides for an annual grant of Restricted Stock and Stock Options to each non-employee Director on March 5 of each year, and allows for occasional additional individual grants of Stock Options, Restricted Stock, Deferred Stock or some combination thereof, at the discretion of the Board of Directors. There were no additional grants in 2007. In 2007, each non-employee Director received 1,150 shares of Restricted Stock, with provisions limiting transfer while serving as a Director of the Company, and, at a minimum, two years from the date of grant. In 2007, each non-employee Director serving on the Board as of the grant date received 6,050 ten-year options with an exercise price of $41.97. The options vest one year following the date of grant.
As a guideline, non-employee Directors should own common stock of the Company equal in value to at least four times the amount of the annual Board retainer fee, with a four-year time period after first election to achieve this level.
Non-employee Directors who join the Board of Directors after the March 5 annual grants of Stock Options and Restricted Stock for that year and prior to December 31 of that year are eligible to receive a one-time cash payment (“New Director Retainer”) within 30 days of the effective date of their election as a Director. The intent of this New Director Retainer is to encourage a new Director to make an initial investment in the stock of the Company. The amount of the New Director Retainer is calculated from the net present value of the cash equivalent of that year’s Stock Option grant and Restricted Stock grant, awarded under the 2003 Non-Employee Directors’ Stock Incentive Plan, with stock values based on the then current price of Company stock. It is based on months of Board service for the first year, and is therefore pro-rated for the number of months remaining in the calendar year.
Non-Employee Director Deferred Compensation Plan [top]
Non-employee Directors may choose prior to the beginning of each year to have all or part of their fees credited to a deferred compensation account as participants in The Dow Chemical Company Voluntary Deferred Compensation Plan for Outside Directors As Amended and Restated on February 12, 1998, or The Dow Chemical Company Voluntary Deferred Compensation Plan for Non-Employee Directors effective January 1, 2005. At the election of the Director, fees are deferred into one of several hypothetical investment accounts that accrue investment returns according to the account selected. Investment choices include an account with interest equivalent to 125% of the 120-month rolling average of ten-year U.S. Treasury Notes, a phantom Dow stock account tracking the market value of Dow Common Stock with market dividends paid and reinvested, as well as accounts tracking the performance of several mutual funds. These funds are identical to funds offered as part of the Elective Deferral Plan for management level employees. Such deferred amounts will be paid in installments as elected by the Director at the time of deferral commencing on the July 15 following the Director’s termination of Board service, on the following July 15 or on July 15 of the calendar year following the Director’s 70th birthday. In The Dow Chemical Company Voluntary Deferred Compensation Plan for Outside Directors As Amended and Restated on February 12, 1998, if the Director elects to receive payment on the July 15 following his or her 70th birthday and if he or she remains on the Board beyond his or her 70th birthday, payments shall start on the July 15 following termination of Board service.
Compensation of Non-Management Employee Directors [top]
Employee Directors, who leave executive management, but remain as active employees and as Directors of the Company, are paid according to a fixed formula determined in advance by the Board of Directors pursuant to the Retirement Policy for Employee Directors (“RPED”). This fixed compensation for such Directors is designed to enhance effective Board service by providing independence from current management. As active employees, participants in the RPED are eligible for certain standard employee benefits, but are not eligible to participate in the Performance Award program, receive new LTI grants, or participate in the Employees’ Stock Purchase Plan. Employee Directors are not eligible for any non-employee Director compensation described above. Mr. Arnold Allemang was a participant in the RPED and received $736,205 in compensation in 2007. Mr. J. Pedro Reinhard was a participant in the RPED and received $343,847 in 2007.
In the event of a Change-in-Control, employee Directors participating in RPED will receive a lump sum payment in an amount equal to the net present value of the remaining benefit.
Business Travel Accident Insurance for Non-Employee Directors [top]
Dow has a rider on its Business Travel Accident insurance policy covering each non-employee Director for $300,000 which will cover accidental death and dismemberment if the Director is traveling on Dow business.