<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Rohm and Haas Company
----------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Rohm and Haas Company
----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE> 2
100 INDEPENDENCE MALL WEST PHILADELPHIA PA 19106 TELEPHONE (215) 592-3000
[ID: LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 1, 1995
The annual meeting of stockholders of Rohm and Haas Company will be held at
WHYY, Independence Mall West, 150 N. 6th Street, Philadelphia, Pennsylvania
19106, on Monday, May 1, 1995, at 10:30 a.m. to elect 14 directors and act on
such other business as may properly come before the meeting.
Stockholders of record at the close of business on March 10, 1995, are
entitled to vote their shares.
It is important that your shares be voted at the meeting. Please sign, date
and return the enclosed proxy promptly. The accompanying envelope requires no
postage if mailed in the United States.
A summary report of the meeting will be mailed to stockholders.
Gail P. Granoff
Secretary
March 24, 1995
<PAGE> 3
ROHM AND HAAS COMPANY
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 1, 1995
The enclosed proxy is solicited on behalf of the Board of Directors of Rohm
and Haas Company for use at the annual meeting of stockholders to be held at
WHYY, Independence Mall West, 150 N. 6th Street, Philadelphia, Pennsylvania
19106, on May 1, 1995, and at any adjournment thereof. Stockholders of record at
the close of business on March 10, 1995 are entitled to notice of and to vote at
the meeting. The Company had outstanding 67,684,377 shares of common stock and
2,672,048 shares of preferred stock on that date. Each share of common and
preferred stock is entitled to one vote.
All shares represented by duly executed proxies will be voted at the meeting.
Any stockholder giving a proxy may revoke it at any time prior to the voting of
the proxy by written notice to the Company's secretary. The Company has retained
Morrow & Co., Inc. to aid in the solicitation of proxies for a fee of $5,000
plus reasonable out-of-pocket expenses. The Company will pay the cost of
soliciting proxies, which are being mailed about March 24, 1995.
2
<PAGE> 4
ELECTION OF DIRECTORS
Fourteen directors are to be elected to hold office until the next annual
meeting of stockholders and until their successors are elected.
The persons identified on pages 3 through 6 were nominated by the Board of
Directors upon the recommendation of the Nominating Committee. All nominees
currently serve on the Board of Directors. If any nominee is unable to serve as
a director, the persons named in the proxy will vote for such other nominee as
may be designated by the Board of Directors. No nominee owns more than 1% of the
outstanding stock. Votes may be cast in favor of or withheld from each nominee.
Provided that a quorum is present, the affirmative vote of the holders of a
majority of the stock represented in person or by proxy at the meeting is
required for election.
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
GEORGE B. BEITZEL
DIRECTOR SINCE 1983
- ------------------------
</TABLE>
Mr. Beitzel, 66, senior vice president and director of International Business
Machines Corporation until retirement in March 1987; director of Bankers Trust
Company, Computer Task Group, Flight Safety International, Inc., Phillips Gas
Company, Phillips Petroleum Company, Roadway Services, Inc. and TIG Holdings.
Rohm and Haas Board Committees:
Chairman--Finance; member--Audit, Nominating, Strategic Planning
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
DANIEL B. BURKE
DIRECTOR SINCE 1986
- ------------------------
</TABLE>
Mr. Burke, 66, director of Capital Cities/ABC, Inc.; previously chief executive
officer, president and director of Capital Cities/ABC, Inc. from 1990 to 1994;
president, chief operating officer and director of Capital Cities/ABC, Inc. from
1986 to 1990; director of Avon Products, Inc., Consolidated Rail Corporation and
Morgan Stanley Group, Inc.
Rohm and Haas Board Committees:
Chairman--Executive Compensation; member--Corporate Responsibility, Nominating,
Strategic Planning
3
<PAGE> 5
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
EARL G. GRAVES
DIRECTOR SINCE 1984
- ------------------------
</TABLE>
Mr. Graves, 60, chairman and chief executive officer of Earl G. Graves Ltd.;
chairman and chief executive officer of Pepsi-Cola of Washington, D.C.;
publisher and editor of Black Enterprise magazine; EGOLI Beverages (Pepsi-Cola
S. A.) General Partner; director of Aetna Life and Casualty Company, Chrysler
Corporation, Federated Department Stores and American Airlines, Inc.
Rohm and Haas Board Committees:
Chairman--Strategic Planning; member--Corporate Responsibility, Executive
Compensation, Nominating
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
JAMES A. HENDERSON
DIRECTOR SINCE 1989
- ------------------------
</TABLE>
Mr. Henderson, 60, chairman, chief executive officer and director of Cummins
Engine Company, Inc. since 1995; chief executive officer, president and director
of Cummins Engine Company, Inc. from 1994 to 1995 and previously president,
chief operating officer and director of Cummins Engine Company, Inc.; director
of Inland Steel Industries, Inc. and Ameritech Corporation.
Rohm and Haas Board Committees:
Audit, Finance, Nominating, Strategic Planning
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
JAMES H. MCARTHUR
DIRECTOR SINCE 1977
- ------------------------
</TABLE>
Mr. McArthur, 60, dean of Harvard Business School; director of Cabot
Corporation, Chase Manhattan Corporation and Springs Industries, Inc.
Rohm and Haas Board Committees:
Chairman--Audit; member--Finance, Nominating, Strategic Planning
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
PAUL F. MILLER, JR.
DIRECTOR SINCE 1969
- ------------------------
</TABLE>
Mr. Miller, 67, partner, Miller Associates, a private investment partnership and
limited partner in the investment management firm of Miller, Anderson & Sherrerd
since 1992; previously general partner in Miller, Anderson & Sherrerd from 1969
to 1991; director of Hewlett-Packard Company, The Mead Corporation and SPS
Technologies Inc.
Rohm and Haas Board Committees:
Chairman--Nominating; member--Audit, Executive, Finance, Strategic Planning
4
<PAGE> 6
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
SANDRA O. MOOSE
DIRECTOR SINCE 1981
- ------------------------
</TABLE>
Dr. Moose, 53, senior vice president and director of The Boston Consulting
Group, Inc.; director of GTE Corporation and twenty-seven investment companies
sponsored by New England Funds.
Rohm and Haas Board Committees:
Chairman--Corporate Responsibility; member--Executive, Executive Compensation,
Nominating, Strategic Planning
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
JOHN P. MULRONEY
DIRECTOR SINCE 1982
- ------------------------
</TABLE>
Mr. Mulroney, 59, president and chief operating officer since 1986; director of
Teradyne Inc. and Aluminum Company of America.
Rohm and Haas Board Committees:
Corporate Responsibility, Executive, Strategic Planning
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
ROBERT E. NAYLOR, JR.
DIRECTOR SINCE 1986
- ------------------------
</TABLE>
Dr. Naylor, 62, group vice president; previously group vice president and
regional director for North America from 1989 to 1994; director of Airgas, Inc.
Rohm and Haas Board Committees:
Finance, Strategic Planning
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
GILBERT S. OMENN
DIRECTOR SINCE 1987
- ------------------------
</TABLE>
Dr. Omenn, 53, dean of the School of Public Health and Community Medicine at the
University of Washington, Seattle; Professor of Medicine and Professor of
Environmental Health; director of Amgen and Immune Response Corp.
Rohm and Haas Board Committees:
Audit, Finance, Nominating, Strategic Planning
5
<PAGE> 7
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
RONALDO H. SCHMITZ
DIRECTOR SINCE 1992
- ------------------------
</TABLE>
Dr. Schmitz, 56, member of the Board of Managing Directors of Deutsche Bank AG
since 1991; previously member of the Board of Managing Directors from 1980 until
1990 and Chief Financial Officer from 1984 until 1990 of BASF AG; director of
Bertelsmann AG, Deutsche Bundesbahn Holding GmbH, Deutsche und Hypothekenbank
AG, Godecke AG, Kaufhof Holding AG, Metallgesellschaft AG and Tchibo Holding AG.
Rohm and Haas Board Committees:
Audit, Finance, Nominating, Strategic Planning
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
ALAN SCHRIESHEIM
DIRECTOR SINCE 1989
- ------------------------
</TABLE>
Dr. Schriesheim, 65, chief executive officer and director of Argonne National
Laboratory since 1984; director of HEICO Corporation.
Rohm and Haas Board Committees:
Corporate Responsibility, Executive Compensation, Nominating, Strategic Planning
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
MARNA C. WHITTINGTON
DIRECTOR SINCE 1989
- ------------------------
</TABLE>
Dr. Whittington, 47, partner of the investment management firm of Miller,
Anderson & Sherrerd since 1994; previously head of the business core of Miller,
Anderson & Sherrerd from 1992 to 1993; executive vice president in 1992 and
senior vice president from 1988 to 1991 at the University of Pennsylvania;
director of Federated Department Stores.
Rohm and Haas Board Committees:
Audit, Executive, Finance, Nominating, Strategic Planning
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
J. LAWRENCE WILSON
DIRECTOR SINCE 1977
- ------------------------
</TABLE>
Mr. Wilson, 59, chairman and chief executive officer since 1988; director of The
Vanguard Group of Investment Companies and Cummins Engine Company, Inc.
Rohm and Haas Board Committees:
Chairman--Executive; member--Strategic Planning
6
<PAGE> 8
BOARD ORGANIZATION AND COMPENSATION
ORGANIZATION
The Board of Directors held five meetings in 1994. All directors except Dr.
Schmitz attended at least 75% of the meetings of the board and committees on
which they serve. The committees of the board, their functions and the number of
meetings held in 1994 are:
AUDIT COMMITTEE (three meetings)--reviews the Company's annual financial
statements; recommends to the Board of Directors the selection of the Company's
independent accountants; approves audit and non-audit fees of independent
accountants; reviews their independence and considers the scope of their audits
and audit results, including review of the auditors' management letter and the
Company's response to that letter; considers the adequacy of the Company's
internal accounting control systems; reviews the staffing and audit program of
the internal auditing department; and reviews the adequacy of the Company's
policies and procedures with respect to compliance with the Company's Code of
Business Conduct.
CORPORATE RESPONSIBILITY COMMITTEE (two meetings)--establishes guidelines and
monitors management performance in meeting the Company's responsibilities to its
employees, its customers, the general public and the communities in which the
Company operates.
EXECUTIVE COMMITTEE (no meeting)--considers matters requiring board action
between Board of Directors' meetings.
EXECUTIVE COMPENSATION COMMITTEE (three meetings)--reviews and approves
compensation plans and remuneration arrangements for senior management and
directors and oversees the administration of executive compensation plans.
FINANCE COMMITTEE (four meetings)--reviews the financial strategy of the
Company, particularly its policies for capital structure, dividend payout, and
return on assets; approves and recommends to the Board of Directors all dividend
payments; considers the Company's financing plans; reviews the Company's foreign
financial programs and currency exposure policies and practices; and provides
oversight to the Benefits Investment Committee.
NOMINATING COMMITTEE (four meetings)--determines corporate governance
policies, monitors the program for top management succession; evaluates the
performance of the chief executive officer, other executive officers and the
Board of Directors; and recommends the composition of the Board of Directors and
nominees for membership on the board. The Committee will consider board
nominations submitted by stockholders if names and biographical data are
submitted in writing to the Committee.
STRATEGIC PLANNING COMMITTEE (two meetings)--reviews and approves the
Company's long-term plans, strategies and resource allocations as well as
intermediate-term operating plans.
COMPENSATION
Directors who are employees of the Company do not receive compensation for
their services as directors.
7
<PAGE> 9
ANNUAL--Directors who are not employees receive the following compensation:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Annual Retainers Directors $20,000
Audit Committee chairman 5,250
Other Committee chairmen 2,750
Committee members 2,250
Attendance fee for board and committee meetings 1,000
</TABLE>
- --------------------------------------------------------------------------------
RESTRICTED STOCK PLAN OF 1992 FOR NON-EMPLOYEE DIRECTORS--All non-employee
directors received a grant of restricted stock equal to $25,000 in January 1988,
or upon election, if elected thereafter. The Restricted Stock Plan of 1992 for
Non-Employee Directors continued this practice with non-employee directors
receiving a grant of restricted stock equal to $25,000 every five years from the
initial grant of stock until the year 2001.
This plan covers an aggregate of 50,000 shares of Company common stock. As in
the initial grant, the shares vest 20% for each year of board service. All
shares are subject to forfeiture if a director leaves the board prior to
completing five years of board service following the date of grant except in the
event of retirement, death or disability.
Directors may also elect to receive their board and committee retainers in
restricted stock under the provisions of this plan; all such shares are
immediately 100% vested.
The Board of Directors may suspend, amend or terminate the plan at any time
except that no amendment may extend the duration of the plan or increase the
maximum number of shares that may be granted.
OTHER BENEFITS--Non-employee directors who retire at age 70 after serving on
the board for at least five years are entitled to receive an annual pension
equal to their annual retainer as a director for a period of time not exceeding
their length of service on the Board of Directors. Non-employee directors may
elect to defer all or part of their compensation for services as a director. Mr.
Beitzel and Dr. Omenn also receive a fee for their services as members of the
Company's Environmental Advisory Council.
OTHER INFORMATION--The equity fund in the Company's Savings Plan is invested
in The Vanguard Index 500 Fund. Mr. Wilson is a director of The Vanguard Group
of Investment Companies. The Company has a revolving credit agreement with
Deutsche Bank under which the Company and its subsidiaries may borrow up to $35
million. The Company and its subsidiaries also have other banking relationships
with Deutsche Bank in the normal course of business. Dr. Schmitz is a member of
the board of managing directors of Deutsche Bank.
8
<PAGE> 10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-----------------------
AWARDS PAYOUTS
---------- -------- ALL
ANNUAL COMPENSATION OTHER SECURITIES OTHER
NAME AND ------------------- COMPEN- UNDERLYING LTIP COMPEN-
PRINCIPAL SALARY BONUS SATION OPTIONS PAYOUTS SATION
POSITION YEAR ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
(1) (2) (1) (3)
J. Lawrence Wilson 1994 $579,500 $350,761 $ 0 9,500 $258,945 $10,279
Chairman & C.E.O. 1993 552,500 172,142 0 9,900 223,726 12,322
1992 525,000 401,524 0 11,000 291,240 11,853
Donald C. Garaventi 1994 $285,625 $125,438 $ 0 3,700 $ 94,622 $ 7,066
Vice President 1993 277,750 60,873 0 3,900 82,827 9,804
1992 267,333 154,651 0 4,300 109,363 9,534
John P. Mulroney 1994 $427,000 $218,423 $ 0 6,500 $169,390 $ 9,207
President 1993 413,250 115,467 0 6,700 148,275 13,748
1992 395,250 248,193 0 7,500 193,067 13,190
Robert E. Naylor, Jr. 1994 $321,625 $150,564 $ 0 4,500 $118,896 $ 8,706
Group Vice President 1993 310,875 79,722 0 4,700 104,076 11,350
1992 295,667 185,864 0 5,200 135,487 10,970
Basil A. Vassiliou 1994 $262,750 $125,438 $105,218 3,700 $ 87,385 $63,357
Vice President 1993 242,167 62,473 47,058 4,336 70,471 64,796
1992 219,750 127,919 95,626 3,500 80,756 89,247
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) A portion of both the annual bonus and long-term plan payout is paid in
restricted stock, valued at fair market value as of the first business day
of the month of grant, in lieu of cash and is included in the amounts shown
in the table. The total number (and value) of restricted shares granted
during the last five years in lieu of cash bonuses and held at the end of
1994 (which excludes 1995 grants made in lieu of a portion of the 1994
annual and long-term bonus awards) for the named executives were: Mr.
Garaventi, 7,987 ($456,257); Mr. Mulroney, 17,276 ($986,892); Dr. Naylor,
11,041 ($630,717); Dr. Vassiliou, 5,537 ($316,301) and Mr. Wilson, 30,037
($1,715,864). Dividends are paid currently on restricted shares and such
shares may be voted.
(2) These amounts represent the payment of taxes in excess of those that would
be incurred in the U.S. as provided in the Company's foreign service policy.
(3) All Other Compensation includes the Employee Stock Ownership and Savings
Plan allocation, foreign service allowances and the vacation, long service,
and benefits bonuses. During 1994 these were as follows: the Employee Stock
Ownership/Savings Plan allocation was $5,492 for each named executive. Dr.
Vassiliou received $56,782 for foreign service allowances. Benefit bonuses
paid in lieu of certain benefits provided at company expense to other
employees were: Mr. Garaventi -- $1,574, Mr. Mulroney -- $3,715, Dr.
Naylor -- $3,214, Dr. Vassiliou -- $1,083, and Mr. Wilson -- $4,787. The
vacation bonus program has been discontinued and no long service bonuses
were paid in 1994.
9
<PAGE> 11
OPTION GRANTS IN 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS GRANT VALUE DATE
- ---------------------------------------------------------------------------------------------------------
NUMBER OF % OF
SECURITIES TOTAL EXERCISE
UNDERLYING OPTIONS OR
OPTIONS GRANTED TO BASE GRANT DATE
GRANTED EMPLOYEES PRICE EXPIRATION PRESENT
NAME (#) IN 1994 (S/SH.) DATE VALUE
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
(1) (2) (3)
J. L. Wilson 9,500 9.4% $58.75 Jan. 4, 2004 $ 132,834
D. C. Garaventi 3,700 3.7% 58.75 Jan. 4, 2004 51,735
J. P. Mulroney 6,500 6.4% 58.75 Jan. 4, 2004 90,886
R. E. Naylor 4,500 4.4% 58.75 Jan. 4, 2004 62,921
B. A. Vassiliou 3,700 3.7% 58.75 Jan. 4, 2004 51,735
</TABLE>
- --------------------------------------------------------------------------------
(1) Options are first exercisable January 5, 1995, except in the case of death
or retirement when shares would be exercisable any time after July 4, 1994.
(2) The exercise price is the average of the high and low New York Stock
Exchange prices for Rohm and Haas common stock on the January 5, 1994 grant
date.
(3) Grant date values are estimated using the Black-Scholes option pricing
model; however the Company does not believe that model, or any other, can
determine with reasonable accuracy a present value of the stock options
because all models are based on unknown and volatile factors. Assumptions
used for the Black-Scholes model are as follows:
<TABLE>
<S> <C> <C> <C>
Risk-free interest rate: 5.20% Volatility: 0.2669
Dividend yield: 3.09% Time to exercise: 10 years
</TABLE>
Although executives face uncertain risks of forfeiture, these risks are not
considered in estimating the grant date values.
AGGREGATED OPTION EXERCISES IN 1994,
AND DECEMBER 31, 1994 OPTION VALUE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXERCISE REALIZED UNEXERCISABLE EXERCISABLE UNEXERCISABLE EXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
J. L. Wilson 4,704 $153,060 9,500 59,041 $ 0 $1,384,896
D. C. Garaventi 2,850 108,537 3,700 35,892 0 740,665
J. P. Mulroney 3,704 133,333 6,500 62,041 0 1,232,277
R. E. Naylor 4,245 105,519 4,500 30,939 0 558,591
B. A. Vassiliou 0 0 3,700 15,792 0 228,927
</TABLE>
- --------------------------------------------------------------------------------
10
<PAGE> 12
LONG-TERM INCENTIVE PLAN AWARDS IN 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF PERFORMANCES ESTIMATED FUTURE PAYOUTS
SHARES, UNITS PERIOD UNDER NON-STOCK PRICE PLANS
OR OTHER RIGHTS UNTIL ----------------------------
NAME (#) PAYOUT THRESHOLD TARGET
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
J. L. Wilson $248,540 12/31/96 $ 124,270 $248,540
D. C. Garaventi 92,630 12/31/96 46,315 92,630
J. P. Mulroney 166,700 12/31/96 83,350 166,700
R. E. Naylor 115,120 12/31/96 57,560 115,120
B. A. Vassiliou 92,630 12/31/96 46,315 92,630
</TABLE>
- --------------------------------------------------------------------------------
Long-term bonus awards payable in cash and restricted stock are determined by
multiplying a bonus standard for the executive's level times two factors: 1) the
Company's three-year average return on equity (ROE) divided by the combined ROE
of companies in the Value Line Industrial Composite and 2) the Company's ROE
divided by the greater of 13% or the Value Line Industrial Composite three year
ROE less 2%.
The numbers shown in the column titled "Number of Shares, Units or Other Rights"
are bonus standards in dollar amounts set so that resulting bonuses combined
with gains from stock options granted at the same time will produce total
long-term compensation slightly below the median level provided by other
industrial companies of like size and profitability, if the Company just meets
performance targets.
No payouts are allowed if the product of the two ROE ratios is less than 0.5,
which would occur for example when Company ROE performance is 70% or less of the
competition's ROE and of the ROE standard established by the Executive
Compensation Committee. The payouts in the Threshold column are based on that
number. Payouts in the Target column assume the Company's ROE matches both the
competitive and standard ROEs. There is no maximum ROE performance limit and,
therefore, no maximum award.
PENSION PLAN TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE SALARY YEARS OF SERVICE
AND ------------------------------------------------------------
ANNUAL BONUS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------
$ 200,000 $ 43,740 $ 58,320 $ 72,900 $ 87,480 $100,000
400,000 88,740 118,320 147,900 177,480 200,000
600,000 133,740 178,320 222,900 267,480 300,000
800,000 178,740 238,320 297,900 357,480 400,000
1,000,000 223,740 298,320 372,900 447,480 500,000
1,200,000 268,740 358,320 447,900 537,480 600,000
- -------------------------------------------------------------------------------
</TABLE>
This table shows the approximate aggregate annual pension benefit under the
Pension Plan for Salaried Employees and the supplemental Executive Pension
Parity Plan. Average salary is based on the highest consecutive 36 month base
salary. Annual bonus is the average of the bonuses earned under the annual bonus
plan in the seven years prior to retirement, excluding the highest and lowest of
those bonuses. The table includes offsets for Social Security. As of December
31, 1994, the years of credited service on which benefits are based for the
named executives are: Mr. Garaventi, 36 years; Mr. Mulroney, 37 years; Dr.
Naylor, 29 years; Dr. Vassiliou; 34 years Mr. Wilson, 29 years.
11
<PAGE> 13
REPORT ON EXECUTIVE COMPENSATION
COMPENSATION POLICIES
The Executive Compensation Committee is responsible for assuring appropriate
compensation of the Company's executive officers. Total compensation of Company
executives is based on corporate and individual performance. Corporate
performance is measured by the Company's return on equity compared to other
chemical companies and to the long-term returns of a broad range of U.S.
companies. Return on equity is used because of its strong relationship to
stockholder value. Individual performance is measured primarily by results
achieved compared to objectives agreed to at the start of the year. For the CEO
and other executive officers, these objectives and the results achieved are
reviewed by the Nominating Committee and its findings are communicated to the
Executive Compensation Committee which determines the compensation consequences.
Incentive compensation is paid in cash, restricted stock and by use of stock
options.
When the Company's performance just meets performance targets established by
the Executive Compensation Committee, the Committee intends executive
compensation to be slightly below the median levels of our competitors'
compensation. As the Company's performance moves beyond those targets and the
performance of our competitors, the Committee intends our executive compensation
to move toward the high end of our competitors' compensation. If the Company's
performance should fall below the performance targets, the Committee intends
executive compensation to fall toward the low end of our competitors'
compensation. The formulas described below are designed to achieve these
results.
It is the Committee's intention that all compensation paid to executive
officers be fully deductible under the Internal Revenue Code of 1986, as
amended.
SALARIES--Executive salaries are established under the same system used for
most Company salaried employees. Individual salaries are targeted to an amount,
based on the person's performance, in a salary range for that person's level.
The salary range for each level is centered around the median salary for
comparable positions in other industrial companies of generally the same size
and profitability as determined through widely used surveys.
ANNUAL BONUSES--The top six executive officers were paid annual bonuses under
two plans in 1994. One plan, the Top Executive Annual Performance Award Plan
(TEAPA) approved by stockholders in 1994, is based entirely on corporate
performance and amounts paid under this plan were determined by the following
formula: the product of a corporate factor times a bonus standard for the
individual's level. The corporate factor is determined by relating the Company's
return on opening equity (ROE) performance (adjusted for certain unusual items)
to the ROE of twenty five of the largest chemical companies and to an absolute
ROE standard equal to the greater of 13% or the average ROE of the twenty five
companies minus 2%. The product of those two ratios was 1.090 which is the
Company's 1994 corporate factor. The corporate factor would be 1.0 if the
Company just met performance targets. The bonus standards are dollar amounts set
to pay bonuses at approximately 70% of the median of bonuses paid by other
industrial companies of generally the same size and profitability, if the
Company just meets performance targets. Competitive bonus practices are
determined through the same surveys on which salary ranges are based. The second
plan is a discretionary bonus plan based on individual performance against
objectives established by the Nominating Committee at the
12
<PAGE> 14
beginning of the year. The Executive Compensation Committee determines bonuses
paid under this plan which may range from 0 to 60% of the amounts paid under
TEAPA.
LONG-TERM BONUSES--The long-term bonus is based on a three year cycle. For the
three year cycle starting in 1994, six top executives participated in the Top
Executive Long-Term Award Plan (TELTAP) approved by stockholders in 1994. The
bonuses under this plan are determined by the following formula: the product of
a corporate factor for the three year period times a long-term bonus standard.
The corporate factor for the long-term plan is determined by relating the
Company's three year ROE (adjusted for certain unusual items) to the three year
ROE of companies in the Value-Line Industrial Composite and to the greater of
13% or the Value Line Industrial Composite three year average less 2%. The bonus
standards for the long-term award are dollar amounts that are set to pay
bonuses, when combined with the stock options granted, slightly below the median
of bonuses paid by other industrial companies of generally the same size and
profitability, if the Company just meets performance targets.
For the three year cycle ending in 1994, these six executives participated in
the Long-Term Award Plan in which approximately 80 executives participated.
Bonuses under this plan are determined by the following formula: the product of
the average of the individual's performance ratings over the three year period
times a corporate factor for the three year period times a long-term bonus
standard. The determination of the corporate factor and the bonus standards is
the same as under TELTAP. For the cycle ending in 1994, the long-term corporate
factor was 1.075.
STOCK--Participants in the Amended Stock Option Plan of 1992 received stock
options with an exercise price equal to the average of the high and low prices
on the New York Stock Exchange on the date of grant. The Committee determines
guidelines for the granting of stock options so that the value of the stock
options granted combined with long-term bonus awards would pay slightly below
the median of total long-term compensation of other industrial companies of
generally the same size and profitability at target performance. Stock options
are granted to approximately 80 senior managers. Eight executive officers
received a portion of their annual and long-term bonuses in restricted stock in
lieu of cash. The restrictions lapse after a five-year period.
BENEFITS--The benefits provided for executives are in line with those of all
parent company employees and with those provided by other large chemical
companies.
PERFORMANCE OF THE COMPANY AND ITS CHIEF
EXECUTIVE OFFICER
Chief Executive Officer J. Lawrence Wilson committed the Company to a comeback
from the frustrating results of 1993 and, with the help of 12,000 Rohm and Haas
people around the world, did just that. The Company reported the highest sales
and earnings in its history. Major progress was made in improving productivity.
Mechanisms were put in place in every business to better identify and serve the
needs of the customers. Improvements in safety reduced worker injuries by more
than 30%. The Company continued to build upon its Total Quality Leadership and
environmental stewardship initiatives. In addition the Committee believes that
Mr. Wilson has initiated difficult and important changes that set the course for
continued improvements in the future. As a result, Mr. Wilson exceeded the
objectives the Nominating Committee established for him at the outset of the
year.
13
<PAGE> 15
CHIEF EXECUTIVE OFFICER'S COMPENSATION
The Executive Compensation Committee increased Mr. Wilson's salary by $26,000
early in 1994, reflecting the increase in the Company's salary ranges between
1993 and 1994, Mr. Wilson's long-term performance and the Committee's
expectations of his future performance.
Mr. Wilson's 1994 annual bonus under TEAPA was determined by multiplying the
corporate performance factor of 1.090 times a bonus standard established by the
Committee before the beginning of the year. The resulting bonus of $225,761 was
paid 28% in cash and 72% in restricted stock under the Rohm and Haas Restricted
Stock Plan of 1992. In addition, the Committee authorized a discretionary cash
bonus of $125,000 based on Mr. Wilson's performance against the objectives
established for him by the Nominating Committee at the beginning of the year.
Mr. Wilson's long-term bonus for the 1992-94 period was the product of the
average of his annual performance ratings over the three year period times the
three year corporate performance factor of 1.075 times a long-term bonus
standard established by the Committee before the beginning of the period. Half
of this award was paid in cash and half in restricted stock under the Rohm and
Haas Restricted Stock Plan of 1992.
Mr. Wilson's 1994 stock option grants followed the Committee's guidelines and
have an exercise price equal to the fair market price on the date granted.
EXECUTIVE COMPENSATION COMMITTEE--Daniel B. Burke, Chairman, Earl G. Graves,
Sandra O. Moose, Alan Schriesheim.
14
<PAGE> 16
CUMULATIVE TOTAL RETURN TO SHAREHOLDERS
ROHM AND HAAS COMPANY, S&P 500 INDEX AND S&P CHEMICAL INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD ROHM AND HAAS S&P 500 S&P CHEMICAL
(FISCAL YEAR COVERED) COMPANY INDEX INDEX
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 104.31 96.89 84.91
1991 133.93 126.42 110.73
1992 168.65 136.05 121.25
1993 192.16 149.76 135.60
1994 188.95 151.74 156.98
</TABLE>
Source: Standard & Poor
This comparison of five year cumulative total return assumes $100 invested on
December 31, 1989 in Rohm and Haas Company Common Stock, S&P 500 Index and S&P
Chemical Industry Composite Index and the reinvestment of dividends.
15
<PAGE> 17
STOCK OWNERSHIP
The following table lists the beneficial owners of more than 5% of the
outstanding shares of the common and $2.75 cumulative convertible preferred
stock of the Company.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY CLASS
SHAREHOLDERS CLASS OWNED OUTSTANDING
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
John C. Haas, John O. Haas, William D. Haas and Thomas W. common 10,414,457(2) 15.39%
Haas and two income trusts of which they, together with
Mellon Bank (East) N.A., are trustees(1)
Four charitable income trusts and a charitable foundation of common 12,721,372(3) 18.80%
which John C. Haas, John O. Haas, William D. Haas and
Thomas W. Haas, together or individually, are trustees or
directors with others(1)
Rohm and Haas Company Employee Stock Ownership Plan, 100 common 6,177,234(4) 9.13%
Independence Mall West, Philadelphia, PA 19106
AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie common 3,675,395 5.43%
Mutuelle, Alpha Assurances I.A.R.D. Mutuelle, Alpha
Assurances Vie Mutuelle and Uni Europe Assurance Mutuelle
as a group, AXA, The Equitable Companies Incorporated and
their subsidiaries(5)
Lucia H. Shipley and Charles R. Shipley, Jr.(6) preferred 1,955,305 73.18%
William H. MacCrellish, Jr.(7) preferred 249,283 9.33%
Trustees under the Shipley Company Employee Stock Ownership preferred 350,588 13.12%
Plan
</TABLE>
- --------------------------------------------------------------------------------
(1) John C. Haas, whose address is Rohm and Haas Company, 100 Independence Mall
West, Philadelphia, PA 19106, is a retired officer and director of the
Company. John O. Haas, 425 Lombard St., Philadelphia PA 19147, William D.
Haas, P. O. Box 125, Bear Creek, PA 18602 and Thomas W. Haas, 583 Bay Road,
Durham, NH 03824, are the sons of the late F. Otto Haas and the nephews of
John C. Haas.
(2) John C. Haas, John O. Haas, William D. Haas and Thomas W. Haas own directly
135,785, 169,253, 106,120 and 208,371 shares respectively. Together with
Mellon Bank they have voting and investment power for 9,794,928 shares in
the two income trusts.
(3) John C. Haas, John O. Haas, William D. Haas and Thomas W. Haas share voting
power and together with CoreStates Bank, N.A. have investment power for
9,163,380 shares in two charitable trusts. John C. Haas shares voting and
investment power with other trustees in another charitable trust holding
1,161,384 shares and John O. Haas, William D. Haas and Thomas W. Haas share
voting and investment power with other trustees in another charitable trust
holding 1,161,384 shares. John O. Haas, William D. Haas and Thomas W. Haas
share voting and investment power with other directors of The William Penn
Foundation which holds 1,235,224 shares. They disclaim beneficial interest
in these trusts and foundation.
(4) 825,333 of the shares have been allocated to employee accounts.
(5) Alpha Assurances I.A.R.D. Mutuelle and Alpha Assurances Vie Mutuelle are at
101-100 Terasse Boiedlieu, 92042 Paris La Defense France; AXA Assurances
I.A.R.D. Mutuelle and AXA Assurances Vie Mutuelle are at La Grande Arche,
Pardi Nord, 92044 Paris La Defense France; Uni Europe Assurance Mutuelle is
at 24 Rue Drouot, 75009 Paris France; AXA is at 23, Avenue Matignon, 75008
Paris France; The Equitable Companies Incorporated is at 787 Seventh Avenue,
New York, NY 10019.
(6) Lucia H. Shipley and Charles R. Shipley, Jr., 3507 West Gulf Drive, Sanibel,
FL 33957, are spouses. The Lucia H. Shipley 1993 Revocable Trust, of which
Mrs. Shipley is the trustee, and the Charles R. Shipley, Jr. 1993 Revocable
Trust, of which Mr. Shipley is the trustee, own 948,407 and 948,402 shares,
respectively, of Preferred Stock. As Shipley Institute of Medicine
directors, Mr. and Mrs. Shipley, together with others, share investment and
voting power in 58,496 shares owned by the Institute. The Institute's
Preferred
16
<PAGE> 18
Stock, beneficial ownership of which is disclaimed by Mr. and Mrs. Shipley,
is also shown in the table to be beneficially owned by Mr. MacCrellish.
(7) Mr. MacCrellish, Nutter, McClennen & Fish, One International Place, Boston,
MA 02110-2699, owns directly 10,390 shares of Preferred Stock and together
with others shares investment and voting power in 238,893 shares of
Preferred Stock held by Shipley Institute of Medicine and 11 Shipley family
trusts of which he is a director and trustee, respectively. He disclaims
beneficial interest in the trusts and the Institute. The numbers attributed
to Mr. MacCrellish do not include the shares held by the Shipley Company
ESOP of which he is a trustee. He is Of Counsel to Nutter, McClennen & Fish
which received $125,768 in legal fees from Shipley Company in 1994.
EXECUTIVE OFFICERS AND DIRECTORS
The following table lists the shares of Company common stock owned by the
listed executive officers, the directors and all executive officers and
directors as a group as of March 15, 1995. None of the executive officers or
directors owns preferred stock.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME SHARES BENEFICIALLY OWNED
<S> <C>
----------------------------------------------------------------------------
G. B. Beitzel 11,036
D. B. Burke 3,118
D. C. Garaventi 65,219 (including 39,592
exercisable options)
E. G. Graves 2,413
J. A. Henderson 2,205
J. H. McArthur 1,772
P. F. Miller 17,547
S. O. Moose 2,372
J. P. Mulroney 134,574 (including 68,541
exercisable options)
R. E. Naylor 61,880 (including 35,439
exercisable options)
G. S. Omenn 3,977
R. H. Schmitz 581
A. Schriesheim 2,205
B. A. Vassiliou 27,032 (including 19,492
exercisable options)
M. C. Whittington 3,153
J. L. Wilson 148,686 (including 84,546
exercisable options)
All executive officers and directors 774,949(1)
as a group
</TABLE>
----------------------------------------------------------
(1) Includes 453,138 exercisable options, 41,142 shares
allocated under the Company savings plan or ESOP and
89,340 restricted shares. All executive officers and
directors as a group own 1.14% of the outstanding
common stock.
17
<PAGE> 19
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP has served as the Company's principal independent
accountants since 1953 and will continue in that capacity for 1995.
A representative of KPMG Peat Marwick LLP will attend the annual meeting and
will have the opportunity to make a statement and respond to appropriate
questions from stockholders.
OTHER BUSINESS
The Board of Directors is not aware of any other business to be presented at
the meeting for stockholder action. If other matters arise at the meeting, the
shares represented by duly executed proxies will be voted in the best judgment
of the persons named in the proxy.
1996 ANNUAL MEETING PROPOSALS
Proposals from stockholders intended to be presented at the annual meeting in
1996 must be received by the Secretary of the Company by November 27, 1995.
18
<PAGE> 20
ROHM AND HAAS COMPANY
NOTICE OF 1995 ANNUAL MEETING
AND PROXY STATEMENT
(LOGO)THIS DOCUMENT HAS BEEN PRINTED
ENTIRELY ON RECYCLED PAPER.
<PAGE> 21
ROHM AND HAAS COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS P. F. MILLER, JR., J. P. MULRONEY AND J. L.
WILSON, AND EACH OF THEM, WITH POWER OF SUBSTITUTION, AS PROXIES AT THE ANNUAL
MEETING OF STOCKHOLDERS OF ROHM AND HAAS COMPANY TO BE HELD ON MAY 1, 1995, AND
AT ANY ADJOURNMENT THEREOF, AND TO VOTE THE SHARES OF STOCK OF THE COMPANY WHICH
THE UNDERSIGNED IF PERSONALLY PRESENT WOULD BE ENTITLED TO VOTE. IF THE
UNDERSIGNED PARTICIPATES IN THE ROHM AND HAAS EMPLOYEES SAVINGS PLAN, THE
UNDERSIGNED ALSO HEREBY DIRECTS THE TRUSTEES OF THE EMPLOYEE STOCK OWNERSHIP
TRUST AND THE NON-ESOP THRIFT FUND TO VOTE SHARES HELD IN THE TRUSTS AS
INDICATED ON THIS CARD.
(Continued and to be SIGNED on the other side)
<PAGE> 22
THIS PROXY WILL BE VOTED AS DIRECTED BELOW; WHERE NO DESIGNATION IS MADE, THIS
PROXY WILL BE VOTED FOR THE NOMINEES LISTED.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE PROPOSED
DIRECTORS.
1. ELECTION OF DIRECTORS: / / FOR / / WITHHELD
G. B. Beitzel, D. B. Burke, E. G. Graves, J. A. Henderson, J. H. McArthur,
P. F. Miller, Jr., S. O. Moose, J. P. Mulroney, R. E. Naylor, G. S. Omenn,
R. H. Schmitz, A. Schriesheim, M. C. Whittington, J. L. Wilson
FOR, except vote withheld from the following nominee:_______________________
2. IN THEIR DISCRETION ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
______________________________________________
Signature(of) of Stockholder(s) Date
_______________________________________________
Please sign your name exactly as it appears to
the left. In the case of joint owners, each
should sign. If signing as executor, trustee,
guardian or in any other representative capacity
or as an officer of a corporation, please give
your full title.
