DowDuPont FAQ

1. What are the advantages of this transaction?

  • Strong Industrial Logic: Highly complementary companies create strong, focused businesses with enhanced scale, unique growth strategies and differentiated technologies.
  • Financially Compelling: Merger of equals unlocks significant market value through total cost synergies of approximately $3 billion.
    • Tax-free structure maximizes value.
    • Creates three powerhouse companies.
  • Customers Win: Superior solutions, complementary offerings and expanded choices.
  • Attractive Investment Profile: Creates distinct financial profiles and clear investment thesis for each business.

2. When will the merger transaction close?

  • The transaction is expected to close in the first half of 2017, subject to customary closing conditions, including receipt of stockholder and regulatory approvals.
  • Closing will occur as soon as possible after all closing conditions, including, but not limited to, receipt of stockholder and regulatory approvals, have been fulfilled, received or waived.

4. When are the intended separations expected to take place?

  • The intended separation of the three independent, publicly-traded companies is expected to occur as soon as practicable after the closing of the merger, at a time not expected to exceed 18 months following the closing of the merger.

5. What is the Form 10?

  • Dow’s initial filing of the Form 10 is a critical step toward securing the regulatory approval from the SEC for Dow to separate from DowDuPont and again exist as a publicly traded company.
  • Form 10 is a filing with the Securities and Exchange Commission (SEC) that is used to register a class of securities (in this case Dow common stock) in preparation for potential trading on U.S. exchanges.
  • The initial Form 10 will be reviewed by the SEC, which will provide comments. Dow will then make updates to the document in subsequent filings.
  • The document is iterative and will go through several updates. Once complete it contains important information about a company’s business and strategy, management structure and compensation, capital structure, dividend policy, assets and liabilities, unaudited pro forma financial information and other governance matters.

6. What types of information can be found in the initial Form 10 filing?

  • The initial Form 10 filed on September 7 contains important information about Dow’s business and strategy, management structure and compensation, capital structure, dividend policy, assets and liabilities, financial information, risk factors and other governance matters.
  • This initial filing also provides answers to frequently asked questions regarding Dow’s separation from DowDuPont and the distribution of Dow shares upon separation and once Dow’s stock resumes trading on a public stock exchange.
  • It is important to note that the filing is iterative and will go through several updates. So certain information – such as dividend policy, capital structure and management compensation – will be provided in subsequent updates to this filing.

7. What is the process of the Form 10 filing? What does an “initial” filing mean?

  • The Form 10 filing is an iterative process, and the document will go through several phases of review by SEC and updates where additional information will be included as it becomes available.
  • This initial Form 10 filing provides information such as business and strategy overview, competitive strengths of the new Dow, unaudited pro forma financial information for the new company, and answers to frequently asked questions regarding Dow’s separation from DowDuPont, and risk factors, among other topics.

8. When will the Form 10 be approved or complete?

  • A Form 10 must be filed with the SEC in order to register shares before any company can publicly trade its stock on a U.S. stock exchange.

9. Why isn’t all of the future company information available in the initial Form 10 filing?

  • The initial Form 10 will be reviewed by the SEC, which will provide comments. Dow will then make updates to the document in subsequent filings.
  • Information including capital structure, credit rating, and dividend policy for the new Dow, among other topics, need to be finalized, including approval in certain instance by the DowDuPont Board of Directors.

10. Why is the new Dow required to file this document?

  • A Form 10 must be filed with the SEC in order to register shares before any company can publicly trade its stock on a U.S. stock exchange.

11. Are the other future companies Corteva and DuPont also required to file this document?

  • Corteva is also required to file a Form 10; we expect its initial Form 10 to file in October.
  • The new DuPont, what remains of DowDuPont once Dow and Corteva have separated, is not required to file a Form 10 as DowDuPont is already authorized to publicly offer its stock for sale or purchase.

12. Is Dow changing its name from The Dow Chemical Company to Dow, or to Dow Holdings Inc.? Why?

  • No. As part of the Spin process, a new holding company – Dow Holdings Inc. -- has been created. Dow Holdings Inc. will not change the name or impact the day-to-day operations of The Dow Chemical Company, nor will it change the way in which we generally refer to the enterprise as Dow.
  • The term “Dow” refers to the brand and includes The Dow Chemical Company and any of its subsidiaries.
  • The Dow name and the Dow diamond are an extremely strong foundation from which we will grow and serve our customers. The red diamond logo will serve as a point of continuity for all of our stakeholders as we build the most innovative, customer-centric, inclusive and sustainable materials science company in the world.

Pension and Benefits

13. What will happen to the Dow stock in my U.S. 401(k) after the close of the intended merger?

Upon the close of the anticipated transaction with DuPont, a 1-for-1 exchange of Dow shares for DowDuPont shares will automatically occur for Dow stock invested in the Company Stock Funds currently held under the U.S. Dow Chemical Company Employees’ Savings Plan (401(k)). Therefore, if you are a Dow shareholder, that exchange ratio will apply to your ownership of Dow shares and you will become a DowDuPont shareholder should you choose to retain the shares at the close of the deal. The value of your investment in the Dow Stock Fund will vary depending on the performance of The Dow Chemical Company (or DowDuPont upon the closing of the Dow-DuPont transaction), the overall stock market, and the performance and amount of short-term investments held by the Fund, less any expenses accrued against the Fund.

14. How will the intended merger impact my U.S. 401(k) benefit?

We do not anticipate any impact to the U.S. Employees’ Savings Plan (401(k)) plan as a result of the anticipated merger. However, in the event a change were to occur, communications will be sent to all participants before becoming effective. If you have any questions or would like to access your account, Dow U.S. employees and retirees should contact Fidelity at 877-440-4015.

15. What will happen to the Dow stock in my U.S. 401(k) after the intended spins?

It is too early to comment on the impact of the intended spins. If any changes were to occur to the U.S. Employees’ Savings Plan (401(k)) plan, communications will be sent to all participants before becoming effective.

16. Is Dow current on funding its pension plans?

  • Dow’s pension plans continue to meet all local funding requirements in all countries. The pension plans comply with these requirements, and the company is committed to meeting its legal funding requirements for its plans.
  • More details on the U.S. qualified pension plans have been communicated through the annual funding notices, which include the plans’ funding percentage, the value of the plans’ assets and liabilities and a description of how the plans’ assets are invested as of specific dates. The Annual Funding Notices are sent to all plan participants at the end of April each year, and are available on www.dowfriends.com and www.retireesmatter.com. For specific questions about your pension, please call the HR Service Center at 877-623-8079.)

17. What will happen to the U.S. qualified pension plans as a result of the DowDuPont transaction?

No participant will suffer a loss to his or her accrued pension benefit as the result of the pending transaction.

  • The IRS and Department of Labor rules strictly protect a participant’s rights to his or her accrued benefit.
  • The amount of a participant’s vested accrued benefit in a qualified plan is strictly protected by federal law and cannot be reduced as a result of the contemplated transaction.

Qualified pension assets are held in trusts that are separate legal entities from both Dow and DuPont and will not be affected by the contemplated transaction. Qualified U.S. pension benefits are protected under federal law, and the plans must meet their obligation to existing pensioners and participants through the assets held in a secure trust. The protection under federal law generally prohibits plans from using pension funds for any purpose other than paying benefits.

Generally, funding rules require the pension plan to maintain a certain level of assets as compared to the amount of liabilities owed under the plan. Globally, the Dow pension plans comply with these requirements, and the Company is committed to meeting its legal funding requirements for its plans.

18. Can I get a pension lump sum payout?

This depends on the pension plan in which you participate and whether or not your pension has already commenced in the form of a monthly annuity. The DowDuPont transaction will not change the forms of payment available under the qualified plans. For specific questions about your pension, please call the Retiree Service Center at 800-344-0661, option 4.

19. What will happen to the U.S. medical plans?

There are no anticipated changes to the 2017 U.S. health care plans or pricing; however, Dow reserves the right to amend, modify and terminate the plans at any time in its sole discretion. The Company continually evaluates its benefits programs to ensure that it is providing high quality benefits plans for its employees and retirees.

20. How if at all will my Dow pension and other post-retirement benefits change under the new Dow structure?

  • Pension and other post-retirement benefits are a key element of the new Dow’s capital structure, and as such, these details are in progress with finalization expected by year-end 2018.
  • We are committed to providing updates regarding the new Dow’s capital structure as soon as they are available and through updates to the Form 10.
  • Employees can visit the DowDuPont transaction website for answers related to the treatment of post-retirement benefits prior to the intended separation date.

21. How will my stock options/LTIs (deferred shares, performance shares etc) be impacted upon the separation of Dow from DowDuPont?

  • The process for converting all outstanding LTI grants will be determined and approved by the DowDuPont Compensation Committee prior to spin.
  • Once details of the conversion process are determined and approved, then all owners of outstanding LTIs (active and inactive employees) will be notified.
  • Following the employee communications, the Form 10 will include a summary of the conversion process.

Shares/Stock Ownership

22. I am an employee/retiree of Dow, what happens to my stock options?

  • Dow stock options, whether vested or unvested, to purchase shares of Dow common stock will automatically convert into an equal number of options to purchase DowDuPont stock with the same vesting requirements if applicable
  • Each share of Dow deferred stock that is outstanding will be automatically converted into a share of DowDuPont deferred stock
  • Dow performance shares, whether vested or unvested, subject to performance targets that are outstanding will automatically convert into a share of DowDuPont deferred stock. The number of DowDuPont shares will be based on the greater of target or actual performance achieved at the effective time of the merger

23. As a Dow stockholder what obligations do I have after the merger closes?

  • Dow stockholders will receive a letter of transmittal and instructions from an exchange agent on how to surrender their share certificates in exchange for the Dow merger consideration

24. From which company will I receive a dividend payment after the merger close?

  • Dividend payments are made by DowDuPont to shareholders of DowDuPont stock.

25. What happens to open market options? Will strikes be reset and listed in the new entity?

  • Please refer to NYSE, NASDAQ or other exchange on which your options are listed

26. What is the current DowDuPont Dividend?

  • On April 25th, 2018, DowDuPont declared a dividend of 38 cents per share, payable June 15, 2018, to shareholders of record on February 28, 2018. This marks the second cash dividend issued by DowDuPont. Press Release

27. Why is the current DowDuPont Dividend lower than the Heritage Dow Dividend?

  • With the first DowDuPont dividend issued in December 2017, heritage Dow shareholders received a total of five dividend payments in 2017, a greater than a 20 percent increase in total dividends paid to Dow shareholders 2017 vs. 2016. Also, when considering dividends paid to heritage Dow shareholders over 2017 and 2018 collectively (assuming the current DowDuPont dividend amount through year-end 2018) it would deliver the same absolute amount of cash as the legacy Dow dividend and payment schedule through 2018. While at face value the DowDuPont dividend is lower than the heritage Dow dividend, it is actually not at all a reduction in value (nor a reduction in cash you are receiving) in the near-term.

  • In deciding on DowDuPont's dividend, the Board engaged multiple external advisors to work in coordination with our internal teams to ensure that as a combined company, we established a capital allocation approach that returns excess cash to shareholders, while also preserving the financial flexibility to achieve the target capital structures for each of the three companies we intend to create. The current DowDuPont quarterly dividend is consistent with the targeted dividend payout ratios of each heritage company (Dow and DuPont), and is equivalent to the weighted average quarterly dividend of both heritage companies.

28. How will my DowDuPont shares be treated when the new Dow spins?

  • Your number of DowDuPont held will not change upon distribution of Dow common stock.
  • Each DowDuPont stockholder will receive a specified number of shares of Dow common stock for every share of DowDuPont common stock held by the record date, prior to Dow’s separation from DowDuPont.
  • Information regarding the record date and number of Dow shares that DowDuPont stockholders can expect to receive for each share of DowDuPont stock held will be provided in subsequent updates to the Form 10.
  • DowDuPont will not distribute any fractional shares of Dow common stock. Instead, subject to the ratio of the distribution, all fractional shares that would have otherwise been issued in the distribution will be aggregated into whole shares and will sell the whole shares in the open market on behalf of all DowDuPont stockholders entitled to receive a fractional share. The distribution agent will then distribute the aggregate cash proceeds of the sales, net of brokerage fees and other costs, to these stockholders.

29. How many new Dow shares will I receive upon spin?

  • That information is not yet available.
  • Information regarding the record date and number of Dow shares that DowDuPont stockholders can expect to receive for each share of DowDuPont stock held will be provided in subsequent updates to the Form 10.

30. What do I have to do to receive my shares of Dow stock?

  • No action is required to receive your shares of Dow common stock upon Dow’s separation from DowDuPont.
  • We do however encourage you to read the Form 10 carefully to ensure you understand the potential benefits of, and risks associated, with the separation.

31. On what date must I own DowDuPont shares in order to be entitled to receiving shares of the new Dow, based on my DWDP ownership?

  • The date that is declared as the record date, which will be provided in subsequent updates to the Form 10.

32. On which exchange will Dow stock trade?

  • That information is not yet available. Dow common stock is expected to trade on a major U.S. exchange.
  • That information will be provided in subsequent updates to the Form 10.

33. How will DowDuPont distribute shares of Dow stock?

  • If you are a registered stockholder (meaning you own your shares of DowDuPont common stock directly through an account with DowDuPont’s transfer agent, Computershare), the distribution agent will credit the whole shares of Dow common stock you receive in the distribution to your book-entry account on or shortly after the distribution date.
  • About two weeks after the distribution date, the distribution agent will mail you a book-entry account statement that reflects the number of whole shares of Dow common stock you own, along with a check for any cash in lieu of fractional shares you were entitled to receive.
  • If you own your shares of DowDuPont common stock beneficially through a bank, broker or other nominee, your bank, broker or other nominee will credit your account with the whole shares of Dow common stock you receive in the distribution on or shortly after the distribution date.
  • Your bank, broker or other nominee will also be responsible for transmitting to you any cash payment you are entitled to receive in lieu of fractional shares
  • The shares of Dow common stock will not be certificated. As a result, no physical stock certificates will be issued to any stockholders.

34. Will my shares of DowDuPont continue to trade following the separation of Dow and my receipt of Dow shares?

  • Yes, DowDuPont stock will continue to trade on the NYSE after the distribution.

35. Will I receive shares for the other future companies Corteva and DuPont from my DowDuPont shares?

  • Yes.
  • The number of shares a DowDuPont shareholder would receive of Corteva will be described in Corteva’s Form 10 filing, along with other information and requirements associated with the distribution of Corteva shares.
  • The number of shares of DowDuPont common stock you own will not change as a result of the distribution of Corteva’s and Dow’s stock.

36. Will my share ownership of DWDP be reduced when the new Dow spins?

  • No, the number of shares of DowDuPont common stock you own will not change as a result of Dow’s separation.

37. When will I receive my shares of the new Dow?

  • If you are a registered stockholder (meaning you own your shares of DowDuPont common stock directly through an account with DowDuPont’s transfer agent, Computershare), the distribution agent will credit the whole shares of Dow common stock you receive in the distribution to your book-entry account on or shortly after the distribution date.
  • About two weeks after the distribution date, the distribution agent will mail you a book-entry account statement that reflects the number of whole shares of Dow common stock you own, along with a check for any cash in lieu of fractional shares you were entitled to receive.
  • If you own your shares of DowDuPont common stock beneficially through a bank, broker or other nominee, your bank, broker or other nominee will credit your account with the whole shares of Dow common stock you receive in the distribution on or shortly after the distribution date.
  • Your bank, broker or other nominee will also be responsible for transmitting to you any cash payment you are entitled to receive in lieu of fractional shares.
  • Please contact your bank, broker or other nominee for further information about your account and the payment of any cash you are entitled to receive in lieu of fractional shares.

38. Will the new Dow pay a dividend?

  • The Dow board of directors will determine the timing and amount of any quarterly cash dividend.
  • Information regarding the dividend policy for the new Dow will be provided in an update to the Form 10 as soon as it is available.

39. What are the U.S. income tax consequences of receiving shares in the new Dow?

  • For U.S. federal income tax purposes, no gain or loss will be recognized by you, and no amount will be included in your income, upon the receipt of shares of Dow common stock
  • However, any cash payments made instead of fractional shares will generally be taxable to you.
  • For a more detailed description, see “The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution” located in the Form 10.

40. Will this affect the tax basis of my shares of DWDP stock?

  • Assuming that the distribution is tax-free to DowDuPont stockholders (except for taxes related to any cash received in lieu of fractional shares), your tax basis in the DowDuPont common stock held by you immediately prior to the distribution will be allocated between your DowDuPont common stock and the Dow common stock that you receive in the distribution.
  • For a more detailed description, see “The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution” located in the Form 10.

41. Will the separation of Dow and receipt of new Dow shares impact the stock price (and therefore value) of my DWDP shares?

  • Yes, Dow expects the trading price of shares of DowDuPont common stock immediately following the distribution to be lower than immediately prior to the distribution because the trading price will no longer reflect the value of the materials science business.
  • Furthermore, until the market has fully analyzed the value of DowDuPont without Dow and the value of Dow as a standalone company, the trading price of shares of DowDuPont common stock and Dow common stock may fluctuate.
  • There can be no assurance that, following the distribution, the combined trading prices of DowDuPont common stock and Dow common stock will equal or exceed what the trading price of DowDuPont common stock would have been if Dow had not separated.
  • In addition, assuming DowDuPont also completes the separation of Corteva, there can be no assurance that the combined trading prices of the Dow stock, the stock of Corteva and the stock of New DuPont will equal or exceed what the trading price of DowDuPont stock would have been if DowDuPont had not completed the separations.