Dow Chemical 2012 Annual Report Download - page 152

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Additional Information about ESPP
In millions, except per share amounts 2012 2011 2010
Weighted-average fair value per share of purchase rights granted $ 8.32 $ 11.39 $ 11.90
Total compensation expense for ESPP $ 79 $ 123 $ 164
Related tax benefit $ 29 $ 46 $ 61
Total amount of cash received from the exercise of purchase rights $ 166 $ 197 $ 224
Total intrinsic value of purchase rights exercised (1) $ 41 $ 98 $ 147
Related tax benefit $ 15 $ 36 $ 54
(1) Difference between the market price at exercise and the price paid by the employee to exercise the purchase rights.
On February 9, 2012, the Board of Directors authorized The Dow Chemical Company 2012 Employee Stock Purchase
Plan (the "2012 ESPP"), which was approved by stockholders at the Company's annual meeting held on May 10, 2012. The
2012 ESPP supersedes the 2003 ESPP. The first offering under the 2012 ESPP will commence in 2013.
Stock Incentive Plan
The Company has historically granted equity awards under various plans (the "Prior Plans"). On February 9, 2012, the Board of
Directors authorized The Dow Chemical Company 2012 Stock Incentive Plan (the "2012 Plan"). The 2012 Plan was approved
by stockholders at the Company's annual meeting on May 10, 2012 and became effective on that date. The 2012 Plan
supersedes the Prior Plans. Under the 2012 Plan, the Company may grant options, deferred stock, performance deferred stock,
restricted stock, stock appreciation rights and stock units to employees and non-employee directors over the 10-year duration of
the Plan, subject to an aggregate limit and annual individual limits. The terms of the grants are fixed at the grant date. At
December 31, 2012, there were 44,749,231 shares available for grant under the 2012 plan.
Stock Option Plans
The Company grants stock options to certain employees. Under the 1988 Award and Option Plan (the "1988 Plan"), a plan
approved by stockholders, the Company granted options or shares of common stock to its employees subject to certain annual
and individual limits. The terms of the grants are fixed at the grant date. At December 31, 2012, there were no shares available
for grant under this plan. The 1988 Plan was superseded by the 2012 Plan on May 10, 2012.
Under the 1994 Non-Employee Directors’ Stock Plan, the Company was previously allowed to grant up to 300,000 options
to non-employee directors; however, no additional grants will be made under this plan. At December 31, 2012, there were
19,250 options outstanding under this plan.
Under the 1998 Non-Employee Directors’ Stock Plan, the Company was previously allowed to grant up to 600,000 options
to non-employee directors; however, no additional grants will be made under this plan. At December 31, 2012, there were
14,600 options outstanding under this plan.
Under the 2003 Non-Employee Directors' Stock Incentive Plan, the Company was previously allowed to 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. The 2003 Plan was superseded by the 2012 Plan on May 10, 2012. No additional grants will be made under the
2003 Plan. At December 31, 2012, there were 106,950 options outstanding under this plan.
The following table provides stock option activity for 2012:
Stock Options 2012
Shares in thousands Shares
Exercise
Price (1)
Outstanding at January 1, 2012 63,704 $ 35.08
Granted 12,796 $ 34.00
Exercised (6,046) $ 22.64
Forfeited/Expired (1,586) $ 41.39
Outstanding at December 31, 2012 68,868 $ 35.82
Remaining contractual life in years 5.57
Aggregate intrinsic value in millions $ 187
Exercisable at December 31, 2012 46,574 $ 36.42
Remaining contractual life in years 4.18
Aggregate intrinsic value in millions $ 175
(1) Weighted-average per share