<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
[ROHM AND HAAS COMPANY LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1996
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 6, 1996, at 10:30 a.m. to elect 13 directors and act on
such other business as may properly come before the meeting.
Stockholders of record at the close of business on March 8, 1996, 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 22, 1996
<PAGE> 3
ROHM AND HAAS COMPANY
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1996
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 6, 1996, and at any adjournment thereof. Stockholders of record at
the close of business on March 8, 1996 are entitled to notice of and to vote at
the meeting. The Company had outstanding 67,178,788 shares of common stock and
2,653,719 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 22, 1996.
2
<PAGE> 4
ELECTION OF DIRECTORS
Thirteen 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, 67, senior vice president and director of International Business
Machines Corporation until retirement in March 1987; director of Bankers Trust
Company, Computer Task Group, Datalogix International, FlightSafety
International, Inc., Phillips Gas Company, Phillips Petroleum Company, Caliber
System, Inc., TIG Holdings and Xillix Technologies.
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, 67, director of Capital Cities/ABC, Inc. until February 1996;
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, Darden Restaurants 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, 61, 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, American
Airlines, Inc., Chrysler Corporation and Federated Department Stores.
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, 61, 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]
JOHN H. MCARTHUR
DIRECTOR SINCE 1977
- ------------------------
</TABLE>
Mr. McArthur, 61, George F. Baker Professor of Business Administration Emeritus,
Harvard Business School, formerly dean of Harvard Business School until
retirement in 1995; director of BCE, Inc., Cabot Corporation, Chase Manhattan
Corporation, Glaxo Welcome Plc. 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, 68, partner, Miller Associates, a private investment
partnership; previously a limited partner in the investment management firm of
Miller, Anderson & Sherrerd from 1992-1995; general partner in Miller, Anderson
& Sherrerd from 1969 to 1991; director of Hewlett-Packard Company and The Mead
Corporation.
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, 54, senior vice president and director of The Boston Consulting
Group, Inc.; director of GTE Corporation and twenty-three investment companies
sponsored by The 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, 60, 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]
GILBERT S. OMENN
DIRECTOR SINCE 1987
- ------------------------
</TABLE>
Dr. Omenn, 54, 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, Immune Response Corp. and
Nutraceutix, Inc.
Rohm and Haas Board Committees:
Audit, Finance, Nominating, Strategic Planning
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
RONALDO H. SCHMITZ
DIRECTOR SINCE 1992
- ------------------------
</TABLE>
Dr. Schmitz, 57, 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 Pfandbrief-und Hypothekenbank AG, Kaufhof Holding AG,
Metallgesellschaft AG and Tchibo Holding AG.
Rohm and Haas Board Committees:
Audit, Finance, Nominating, Strategic Planning
5
<PAGE> 7
<TABLE>
<S> <C>
- ------------------------
[PHOTO]
ALAN SCHRIESHEIM
DIRECTOR SINCE 1989
- ------------------------
</TABLE>
Dr. Schriesheim, 66, 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, 48, 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, 60, 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
<TABLE>
<S> <C>
</TABLE>
6
<PAGE> 8
BOARD ORGANIZATION AND COMPENSATION
ORGANIZATION
The Board of Directors held five meetings in 1995. All directors 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 1995
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. A
subcommittee makes decisions in accordance with requirements of sec.162(m) of
the Internal Revenue Code of 1986, as amended.
FINANCE COMMITTEE (five 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 (two 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 (four 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.
Directors' compensation is currently being reviewed and changes are expected
to be made during 1996.
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 $35
million. The Company and its subsidiaries also have other banking relationships
with Deutsche Bank in the normal course of business. Dr. Schmitz is a member of
the board of managing directors of Deutsche Bank.
8
<PAGE> 10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-----------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ---------- -------- ALL
OTHER SECURITIES OTHER
NAME AND ------------------- COMPEN- UNDERLYING LTIP COMPEN-
PRINCIPAL SALARY BONUS SATION OPTIONS PAYOUTS SATION
POSITION YEAR ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
(1) (2)
J. Lawrence Wilson 1995 $616,000 $368,551 $ 0 13,200 $258,254 $ 10,592(3)
Chairman & C.E.O. 1994 579,500 350,761 0 9,500 258,945 10,279
1993 552,500 172,142 0 9,900 223,726 12,322
Donald C. Garaventi 1995 $293,125 $130,060 $ 0 5,100 $ 92,333 $596,729(4)
Vice President 1994 285,625 125,438 0 3,700 94,622 7,066
1993 277,750 60,873 0 3,900 82,827 9,804
John P. Mulroney 1995 $439,000 $226,341 $ 0 8,900 $168,592 $ 8,605(5)
President 1994 427,000 218,423 0 6,500 169,390 9,207
1993 413,250 115,467 0 6,700 148,275 13,748
Robert E. Naylor, Jr. 1995 $330,750 $156,435 $ 0 6,300 $116,401 $ 8,911(6)
Group Vice President 1994 321,625 150,564 0 4,500 118,896 8,706
1993 310,875 79,722 0 4,700 104,076 11,350
Basil A. Vassiliou 1995 $279,250 $130,060 $ 2,233 5,100 $ 91,539 $ 55,140(7)
Vice President 1994 262,750 125,438 105,218 3,700 87,385 63,357
1993 242,167 62,473 47,058 4,336 70,471 64,796
- -------------------------------------------------------------------------------------------------------
</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
1995 (which excludes 1996 grants made in lieu of a portion of the 1995
annual and long-term bonus awards) for the named executives were: Mr.
Mulroney, 14,611 ($940,583); Dr. Naylor, 10,033 ($645,874); Dr. Vassiliou,
5,285 ($340,222) and Mr. Wilson, 26,927 ($1,733,426). Restrictions have been
lifted on Mr. Garaventi's shares because of his retirement (see notes 4 and
6). Dividends are paid currently on restricted shares and such shares may be
voted.
(2) Reimbursement for tax liabilities related to payments for assignment outside
of home country.
(3) Includes the Employee Stock Ownership/Savings Plan allocation of $5,400 and
a benefit bonus of $5,192 paid in lieu of certain benefits provided at
company expense to other employees.
(4) Mr. Garaventi retired as Vice President on December 31, 1995. The All Other
Compensation column includes the Employee Stock Ownership/Savings Plan
allocation of $5,400, a benefit bonus of $1,329 paid in lieu of certain
benefits provided at company expense to other employees and $590,000 he will
receive as severance pay. In addition, Mr. Garaventi will receive annual
payments equal to what he would have received under the annual and long-term
bonus plans had he remained an employee until December 31, 1997.
(5) Includes the Employee Stock Ownership/Savings Plan allocation of $5,400 and
a benefit bonus of $3,205 paid in lieu of certain benefits provided at
company expense to other employees.
(6) Dr. Naylor retired as Group Vice President on December 31, 1995. He has
agreed to remain available to provide advice to the Company through December
31, 2000, and the restrictions on his stock, which otherwise would have
lapsed upon his retirement, shall remain in effect until they would have
lapsed had he not retired. The All Other Compensation column includes the
Employee Stock Ownership/Savings Plan allocation of $5,400 and a benefit
bonus of $3,511 paid in lieu of certain benefits provided at company expense
to other employees.
(7) Includes the Employee Stock Ownership/Savings Plan allocation of $5,400, a
benefit bonus of $810 paid in lieu of certain benefits provided at company
expense to other employees and $48,930 for certain other expenses related to
assignment outside his home country as allowed under the Company's
international personnel policy.
9
<PAGE> 11
OPTION GRANTS IN 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS GRANT VALUE DATE
- ---------------------------------------------------------------------------------------------------------
NUMBER OF % OF
SECURITIES TOTAL EXERCISE
UNDERLYING OPTIONS OR
OPTIONS GRANTED TO BASE GRANT DATE
GRANTED EMPLOYEES PRICE EXPIRATION PRESENT
NAME (#) IN 1994 ($/SH.) DATE VALUE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(1) (2) (3)
J. L. Wilson 13,200 9.5% $56.25 Jan. 4, 2005 $ 197,340
D. C. Garaventi 5,100 3.7% 56.25(4) Jan. 4, 2005 76,245
J. P. Mulroney 8,900 6.4% 56.25 Jan. 4, 2005 133,055
R. E. Naylor 6,300 4.6% 56.25(4) Jan. 4, 2005 94,185
B. A. Vassiliou 5,100 3.7% 56.25 Jan. 4, 2005 76,245
</TABLE>
- --------------------------------------------------------------------------------
(1) Options are first exercisable January 5, 1996, except in the case of death
or retirement when shares would be exercisable any time after July 4, 1995.
(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, 1995 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: 5.52% Volatility: 0.2326
Dividend yield: 2.45% Time to exercise: 7 years
</TABLE>
Although executives face uncertain risks of forfeiture, these risks are not
considered in estimating the grant date values.
(4) Upon the retirement of Mr. Garaventi and Dr. Naylor, the expiration date of
these options became December 31, 2000.
AGGREGATED OPTION EXERCISES IN 1995
AND DECEMBER 31, 1995 OPTION VALUE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXERCISE REALIZED UNEXERCISABLE EXERCISABLE UNEXERCISABLE EXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
J. L. Wilson 5,838 $174,802 13,200 78,708 $ 107,250 $1,806,589
D. C. Garaventi 4,887 169,206 5,100 34,705 41,438 829,369
J. P. Mulroney 5,367 139,063 8,900 63,174 72,313 1,537,309
R. E. Naylor 7,686 215,827 6,300 27,753 51,188 578,890
B. A. Vassiliou 3,300 73,425 5,100 16,192 41,438 267,293
</TABLE>
- --------------------------------------------------------------------------------
10
<PAGE> 12
LONG-TERM INCENTIVE PLAN AWARDS IN 1995(1)
- --------------------------------------------------------------------------------
<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 $261,940 12/31/97 $ 130,970 $261,940
D. C. Garaventi 95,180 12/31/97 47,590 95,180
J. P. Mulroney 174,460 12/31/97 87,230 174,460
R. E. Naylor 119,480 12/31/97 19,913 39,827
B. A. Vassiliou 95,180 12/31/97 47,590 95,180
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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.
(2) The amounts shown for Dr. Naylor have been reduced to reflect his
participation of only one year in the three year cycle.
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, 1995, the years of credited service on which benefits are based for the
named executives are: Mr. Garaventi, 37 years; Mr. Mulroney, 38 years; Dr.
Naylor, 30 years; Dr. Vassiliou, 35 years; Mr. Wilson, 30 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; a subcommittee makes decisions
in accordance with requirements of sec.162(m) of the Internal Revenue Code of
1986, as amended. 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 1995. 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 0.745 which is the
Company's 1995 corporate factor for this plan. 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
12
<PAGE> 14
on individual performance against objectives established by the Nominating
Committee at the beginning of the year.
LONG-TERM BONUSES--The long-term bonus is based on a three year cycle. For the
three year cycle starting in 1995, 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 1995, 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 bonus standards is the same as under TELTAP.
The corporate factor for this 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 an absolute ROE standard set by
the Committee at 13%. For the cycle ending in 1995, the long-term corporate
factor was 1.039.
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. Five 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 continued effective leadership on
initiatives launched in 1994 toward improving the Company's safety,
productivity, and financial performance.
The Company's safety record improved to better than the chemical industry
average as worker injuries were reduced 60% over two years.
Changes in the workforce were managed with fairness to employees and without
any major disruptions or material charges to earnings for severance costs.
Staffing at the end of 1995 was 14% below that of 1992 and lower than thirty
years ago when sales, in constant dollars, were
13
<PAGE> 15
approximately 25% of 1995 shipments to customers. These changes allowed the
Company to offset the impact of inflation and hold costs and expenses in 1995 at
about the same level as in 1993.
The 1995 sales and earnings established new records and the return on equity
was the fourth best since the 1950s.
The Committee believes Mr. Wilson has initiated difficult and important
changes, set the course for continued improvements in the future, and met the
highest standards of integrity and ethical conduct in all aspects of Rohm and
Haas affairs. As a result, Mr. Wilson exceeded the objectives the Nominating
Committee established for him at the outset of the year.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
The Executive Compensation Committee increased Mr. Wilson's salary by $40,000
early in 1995, reflecting the increase in the Company's salary ranges between
1994 and 1995, Mr. Wilson's long-term performance and the Committee's
expectations of his future performance.
Mr. Wilson's 1995 annual bonus under TEAPA was determined by multiplying the
corporate performance factor of 0.745 times a bonus standard established by the
Committee before the beginning of the year. The resulting bonus of $158,551 was
paid in restricted stock under the Rohm and Haas Restricted Stock Plan of 1992.
In addition, the Committee authorized a discretionary cash bonus of $210,000
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 1993-95 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 1.039 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 1995 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>
S&P 500
MEASUREMENT PERIOD ROHM AND HAAS COMPOSITE S&P CHEMICAL
(FISCAL YEAR COVERED) COMPANY INDEX INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 128.40 130.47 130.41
1992 161.68 140.41 142.80
1993 184.22 154.56 159.70
1994 181.14 156.60 184.88
1995 209.60 215.45 241.50
</TABLE>
Source: Standard & Poor
This comparison of five year cumulative total return assumes $100 invested on
December 31, 1990 in Rohm and Haas Company Common Stock, S&P 500 Composite Index
and S&P Chemical 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 10,384,830(2) 15.46%
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) 18.94%
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 6,116,247(4) 9.10%
Independence Mall West, Philadelphia, PA 19106
FMR Corp., Fidelity & Research Company, Fidelity Management common 5,190,153 7.73%
Trust Company, Edward C. Johnson and Abigail P. Johnson, 82
Devonshire Street, Boston, MA 02109
Lucia H. Shipley and Charles R. Shipley, Jr.(5) preferred 1,955,305 73.68%
William H. MacCrellish, Jr.(6) preferred 246,786 9.30%
Rohm and Haas Company Pension Plan, 100 Independence Mall preferred 188,680 7.11%
West, Philadelphia, PA 19106
Thomas P. Jalkut, Jr.(7) preferred 143,453 5.41%
Trustees under the Shipley Company Profit-Sharing Plan preferred 146,931 5.54%
</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, 139,626, 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) 986,551 of the shares have been allocated to employee accounts.
(5) 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 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.
(6) Mr. MacCrellish, Of counsel to 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 236,396
shares of Preferred Stock held by Shipley Institute of Medicine and 8
Shipley family trusts of which he is a director and trustee, respectively.
He disclaims beneficial interest in the trusts
16
<PAGE> 18
and the Institute. The numbers attributed to Mr. MacCrellish do not include
the shares held by the Shipley Company Profit-Sharing Plan of which he is a
trustee.
(7) Mr. Jalkut, a partner in Nutter, McClennen & Fish, LLP, shares investment
and voting power in 143,453 shares of Preferred Stock held by Shipley
Institute of Medicine and three Shipley family trusts of which he is a
director and trustee, respectively. He disclaims beneficial interest in the
trusts and the Institute.
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, 1996.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME SHARES BENEFICIALLY OWNED
----------------------------------------------------------------------------
<S> <C>
G. B. Beitzel 9,036(1)
D. B. Burke 3,118
D. C. Garaventi 42,410 (including 19,370
exercisable options)
E. G. Graves 2,413
J. A. Henderson 2,205
J. H. McArthur 1,772
P. F. Miller 18,036
S. O. Moose 2,372
J. P. Mulroney 126,408 (including 61,232
exercisable options)
R. E. Naylor 51,135 (including 24,853
exercisable options)
G. S. Omenn 4,285
R. H. Schmitz 889
A. Schriesheim 2,205
B. A. Vassiliou 28,481 (including 21,292
exercisable options)
M. C. Whittington 3,461
J. L. Wilson 156,663 (including 91,908
exercisable options)
All executive officers and directors 774,616(2)
as a group
</TABLE>
----------------------------------------------------------
(1) Includes 2,000 shares owned by Mrs. Beitzel.
(2) Includes 447,247 exercisable options, 47,346 shares
allocated under the Company savings plan or ESOP and
69,968 restricted shares. All executive officers and
directors as a group own 1.15% of the outstanding
common stock. One executive officer owns 298 shares of
$2.75 cumulative, convertible preferred stock through
the Shipley Company Profit-Sharing Plan; no other
executive officer or director owns preferred stock.
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
The Company believes that its executive officers and directors have complied
with all Section 16 filing requirements except that John F. Talucci was one week
late in filing a Form 4 reporting the sale of 1600 shares of stock, a Form 4 was
filed late reporting the grant of 442 stock options to Howard Levy, and two
Forms 4 were filed late reporting the grant of 390 and 563 stock options to
William Staas.
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 1996.
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.
1997 ANNUAL MEETING PROPOSALS
Proposals from stockholders intended to be presented at the annual meeting in
1997 must be received by the Secretary of the Company by November 22, 1996.
18
<PAGE> 20
ROHM AND HAAS COMPANY
NOTICE OF 1996 ANNUAL MEETING
AND PROXY STATEMENT
[RECYCLED PAPER LOGO]
THIS DOCUMENT HAS BEEN PRINTED
ENTIRELY ON RECYCLED PAPER. [ROHM AND HAAS COMPANY LOGO]
<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 6, 1996, 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; failure to return this proxy constitutes an instruction
to the Trustees to vote shares as directed by other participants.
(Continued and to be SIGNED on the other side)
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, 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(s) 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.
