United states securities and exchange commission

1. At the end of the performance period, the actual number of shares issued can range from zero to 200 percent of the target shares granted.

2. Weighted-average per share.

3. Converted to deferred stock awards at Conversion Date.
The following table shows changes in nonvested performance deferred stock, including the conversion of nonvested performance deferred stock awards into deferred stock awards as a result of the Merger:

Dow Performance Deferred Stock	2017
Shares in thousands	Target Shares Granted		Grant Date Fair Value 1
Nonvested at Jan 1, 2017	4,454		$	55.85
Granted	1,960		$	80.71
Canceled	(131	)	$	58.91
Converted to deferred stock awards	(6,051	)	$	63.24
Nonvested at Dec 31, 2017	232		$	71.16

1. Weighted-average per share.

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Additional Information about Dow Performance Deferred Stock
In millions, except share amounts	2017			2016			2015
Total fair value of performance deferred stock vested and delivered 1	$	202		$	103		$	37
Related tax benefit	$	75		$	38		$	14
Total compensation expense for performance deferred stock awards	$	106		$	125		$	172
Related tax benefit	$	39		$	46		$	63
Shares of performance deferred stock settled in cash (in thousands) 2	616			861			327
Total cash paid to settle performance deferred stock awards 3	$	38		$	40		$	16

1. Includes the fair value of shares vested in prior years and delivered in the reporting year.

2. Performance deferred stock awards vested in prior years and delivered in the reporting year.

3. Cash paid to certain executive employees for performance deferred stock awards vested in prior periods and delivered in the reporting year, equal to the value of the stock award on the date of delivery.
Total unrecognized pretax compensation cost related to performance deferred stock awards of $15 million at December 31, 2017 , is expected to be recognized over a weighted-average period of 1.66 years .
Dow Restricted Stock

Under the 2012 Plan, Dow may grant shares (including options, stock appreciation rights, stock units and restricted stock) to non employee directors over the 10 -year duration of the program, subject to the plan's aggregate limit as well as annual individual limits. The restricted stock issued under this plan cannot be sold, assigned, pledged or otherwise transferred by the non-employee director, until retirement or termination of service to Dow. The following table shows the restricted stock issued under this plan:

Dow Restricted Stock	Shares Issued (in thousands)		Weighted-Average Fair Value
Year
2017	33		$	62.04
2016	32		$	50.55
2015	32		$	51.51

Dow Employee Stock Purchase Plan

On February 9, 2012, Dow's Board authorized The Dow Chemical Company 2012 Employee Stock Purchase Plan (the "2012 ESPP") which was approved by stockholders at Dow’s annual meeting on May 10, 2012. Under the 2017 annual offering, most employees were eligible to purchase shares of common stock of Dow valued at up to 10 percent of their annual base salary. The value is determined using the plan price multiplied by the number of shares subscribed to by the employee. The plan price of the stock is set at an amount equal to at least 85 percent of the fair market value (closing price) of the common stock on a date during the fourth quarter of the year prior to the offering, or the average fair market value (closing price) of the common stock over a period during the fourth quarter of the year prior to the offering, in each case, specified by Dow's Executive Vice President of Human Resources. The most recent offering of Dow's 2012 ESPP closed on July 15, 2017, and no current offerings remain outstanding.

Dow Employee Stock Purchase Plan	2017
Shares in thousands	Shares		Exercise Price 1
Outstanding and exercisable at Jan 1, 2017	—		$	—
Granted	3,578		$	50.22
Exercised	(3,560	)	$	50.22
Forfeited/Expired	(18	)	$	50.22
Outstanding and exercisable at Dec 31, 2017	—		$	—

1. Weighted-average price per share.

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Additional Information about Dow Employee Stock Purchase Plan
In millions, except per share amounts	2017			2016			2015
Weighted-average fair value per share of purchase rights granted	$	10.70		$	3.40		$	4.62
Total compensation expense for ESPP	$	38		$	7		$	15
Related tax benefit	$	14		$	3		$	5
Total amount of cash received from the exercise of purchase rights	$	179		$	86		$	131
Total intrinsic value of purchase rights exercised 1	$	48		$	23		$	25
Related tax benefit	$	18		$	9		$	9

1. Difference between the market price at exercise and the price paid by the employee to exercise the purchase rights.
DuPont Plans

Prior to the Merger, DuPont provided share-based compensation to its employees through grants of stock options, RSUs and PSUs. Most of these awards have been granted annually in the first quarter of each calendar year. Subsequent to the Merger, DowDuPont assumed sponsorship of the equity incentive compensation plan of DuPont.

DuPont Equity Incentive Plan

DuPont's Equity Incentive Plan ("DuPont EIP"), as amended and restated effective August 31, 2017, provides for equity-based and cash incentive awards to certain employees, directors and consultants. Under the DuPont EIP, the maximum number of shares reserved for the grant or settlement of awards is 110 million shares, provided that each share in excess of 30 million that is issued with respect to any award that is not an option or stock appreciation right will be counted against the 110 million share limit as four and one-half shares. DuPont will satisfy stock option exercises and vesting of RSUs and PSUs with newly issued shares of DowDuPont Common Stock. At December 31, 2017 , approximately 34 million shares were authorized for future grants under the EIP.

DuPont Stock Options

The exercise price of shares subject to option is equal to the market price of DuPont's stock on the date of grant. When converted into the right to receive 1.2820 shares of DowDuPont Common Stock, the exercise price was also adjusted by the 1.2820 conversion factor. All options vest serially over a three -year period. Stock option awards granted between 2010 and 2015 expire seven years after the grant date and options granted in 2016 and 2017 expire ten years after the grant date. The plan allows retirement-eligible employees of DuPont to retain any granted awards upon retirement provided the employee has rendered at least six months of service following grant date. The awards have the same terms and conditions as were applicable to such equity awards immediately prior to the Merger closing date.

DuPont uses the Black-Scholes option pricing model to determine the fair value of stock option awards and the assumptions set forth in the table below. The weighted-average grant-date fair value of options granted in the period September 1, 2017 through December 31, 2017 was $28.56 .

DuPont Weighted-Average Assumptions	2017
Dividend yield	2.2	%
Expected volatility	23.59	%
Risk-free interest rate	2.1	%
Expected life of stock options granted during period (years)	7.2

DuPont determines the dividend yield by dividing the annualized dividend on DowDuPont's Common Stock by the option exercise price. A historical daily measurement of volatility (using DowDuPont stock information after the Merger date and a weighted average of Dow and DuPont prior to Merger date) is determined based on the expected life of the option granted. The risk-free interest rate is determined by reference to the yield on an outstanding U.S. Treasury note with a term equal to the expected life of the option granted. Expected life is determined by reference to DuPont's historical experience, adjusted for expected exercise patterns of in-the-money options.

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The following table summarizes stock option activity for 2017 under DuPont's EIP:

DuPont Stock Options	2017
Shares in thousands	Shares			Exercise Price 1
Outstanding at Sep 1, 2017	16,447			$	48.24
Granted	174			$	45.29
Exercised	(702		)	$	43.07
Forfeited/Expired	(30		)	$	54.83
Outstanding at Dec 31, 2017	15,889			$	48.43
Remaining contractual life in years				3.74
Aggregate intrinsic value in millions	$	362
Exercisable at Dec 31, 2017	10,881			$	45.75
Remaining contractual life in years				3.06
Aggregate intrinsic value in millions	$	277