Dow Chemical 2011 Annual Report Download - page 230

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The following table shows changes in nonvested performance deferred stock:
Performance Deferred Stock
Shares in thousands
Nonvested at beginning of year
Granted
Vested
Canceled
Nonvested at end of year
2011
Target
Shares
Granted (1)
3,132
1,109
(2,210)
(127)
1,904
Grant Date
Fair Value (2)
$ 20.72
$ 38.07
$ 17.98
$ 27.30
$ 33.57
(1) At the end of the performance period, the actual number of shares issued can range from zero to 250
percent of the target shares granted.
(2) Weighted-average per share
Additional Information about Performance Deferred Stock
In millions
Total fair value of performance deferred stock vested and delivered (1)
Related tax benefit
Total compensation expense for performance deferred stock awards (2)
Related tax benefit
2011
$ 77
$ 28
$ 36
$ 13
2010
$ 28
$ 10
$ 143
$ 53
2009
$ 1
$ —
$ (7)
$ (2)
(1) Includes the fair value of shares vested in prior years and delivered in the reporting year.
(2) Compensation expense in 2010 included $25 million related to the modification of equity instruments to liability instruments
for certain executive employees.
During 2011, the Company settled 1.2 million shares of performance deferred stock for $36 million in cash. During 2010,
the Company settled 0.3 million shares of performance deferred stock for $8 million in cash. Total unrecognized compensation
cost related to performance deferred stock awards of $8 million at December 31, 2011 is expected to be recognized over a
weighted-average period of 0.83 years. At December 31, 2011, approximately 1.9 million performance deferred shares with a
grant date weighted-average fair value of $9.53 per share were vested, but not issued. These shares are scheduled to be issued
in April 2012.
In addition, the Company is authorized to grant up to 300,000 deferred shares of common stock to executive officers of the
Company under the 1994 Executive Performance Plan.
Under the 2003 Non-Employee Directors’ Stock Incentive Plan, a plan approved by stockholders, the Company may grant
up to 1.5 million shares (including options, restricted stock and deferred stock) to non-employee directors over the 10-year
duration of the program, subject to an annual aggregate award limit of 25,000 shares for each individual director. In 2011,
31,350 shares of restricted stock with a weighted-average fair value of $37.26 per share were issued under this plan. The
restricted stock issued under this plan cannot be sold, assigned, pledged or otherwise transferred by the non-employee director,
until the director is no longer a member of the Board.
NOTE U – PREFERRED SECURITIES OF SUBSIDIARIES
The following transaction was entered into for the purpose of providing diversified sources of funds to the Company.
In July 1999, Tornado Finance V.O.F., a former consolidated foreign subsidiary of the Company, issued $500 million of
preferred securities in the form of preferred partnership units. The units provided a distribution of 7.965 percent, could be
redeemed in 2009 or thereafter, and could be called at any time by the subsidiary. The distributions were included in “Net
income attributable to noncontrolling interests” in the consolidated statements of income. On June 4, 2009, the preferred
partner notified Tornado Finance V.O.F. that the preferred partnership units would be redeemed in full on July 9, 2009, as
permitted by the terms of the partnership agreement. On July 9, 2009, the preferred partnership units and accrued dividends
were redeemed for a total of $520 million. Upon redemption, Tornado Finance V.O.F. was dissolved.