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Filed pursuant to Rule 424(b)(3)
Registration 333-84195
PROSPECTUS
[ROHM AND HAAS COMPANY LOGO]
ROHM AND HAAS COMPANY
EXCHANGE OFFER FOR
$ 500,000,000 6.95% NOTES DUE 2004
$ 500,000,000 7.40% NOTES DUE 2009
$1,000,000,000 7.85% DEBENTURES DUE 2029
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TERMS OF THE EXCHANGE OFFER
- The exchange offer expires at 5:00 p.m., New York City time, on November
5, 1999, unless extended to allow additional tenders of outstanding notes
and debentures.
- All outstanding notes and debentures that are validly tendered and not
validly withdrawn will be exchanged.
- Tenders of outstanding notes and debentures may be withdrawn at any time
prior to the expiration of the exchange offer.
- The exchange offer is not subject to any condition, other than that the
exchange offer not violate applicable law or any applicable
interpretation of the staff of the Securities and Exchange Commission.
- Rohm and Haas will not receive any proceeds from the exchange offer.
- The exchange of notes and debentures will not be a taxable exchange for
U.S. federal income tax purposes.
- The terms of the registered notes and debentures and the outstanding
notes and debentures are substantially identical, except that the
outstanding notes and debentures are subject to transfer restrictions and
have registration rights.
- There is no existing market for the registered notes and debentures, and
Rohm and Haas does not intend to apply for their listing on any
securities exchange.
Each broker-dealer that receives registered debt for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such registered debt. Each letter of
transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of registered debt received in exchange for outstanding debt
acquired by such broker-dealer as a result of market-making activities or other
trading activities. Rohm and Haas has agreed that, ending on the close of
business on the 180th day following the expiration date of the exchange offer,
it will make this prospectus available to any broker-dealer for use in
connection with any such resale. See "Plan of Distribution."
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. ROHM
AND HAAS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND ROHM AND HAAS IS NOT SOLICITING AN OFFER
TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
THE DATE OF THIS PROSPECTUS IS AUGUST 9, 1999
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You should rely on the information contained in, or incorporated by
reference into, this prospectus. Rohm and Haas has not authorized anyone to
provide you with different information. Rohm and Haas is not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information contained in this prospectus is accurate as of any
date other than the date on the front cover of this prospectus.
TABLE OF CONTENTS
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PAGE
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Prospectus Summary.......................................... 1
Use of Proceeds............................................. 7
Ratio of Earnings to Fixed Charges.......................... 7
The Exchange Offer.......................................... 8
Selected Historical Financial Data of Rohm and Haas......... 16
Selected Unaudited Pro Forma Combined Financial
Information............................................... 18
Description of the Registered Debt.......................... 21
United States Federal Tax Consequences...................... 30
Plan of Distribution........................................ 33
Where You Can Find More Information......................... 34
Documents Incorporated by Reference......................... 34
Validity of the Registered Debt............................. 35
Experts..................................................... 35
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the more
detailed information and consolidated financial information appearing elsewhere
in or incorporated by reference into this prospectus. The pro forma net sales
amounts in this prospectus give effect to the acquisitions of Morton
International, Inc. and LeaRonal, Inc.
THE COMPANY
Rohm and Haas is a global specialty chemical manufacturing company with
1998 pro forma net sales of approximately $6.5 billion. We operate in the
following four major segments worldwide:
- Performance Polymers (56% of 1998 pro forma net sales)
- Chemical Specialties (18% of 1998 pro forma net sales)
- Electronic Materials (14% of 1998 pro forma net sales)
- Salt (12% of 1998 pro forma net sales)
Rohm and Haas was incorporated in 1917 under Delaware law. Our principal
executive offices are located at 100 Independence Mall West, Philadelphia,
Pennsylvania 19106-2399 (telephone number 215-592-3000).
PURPOSE OF THE EXCHANGE OFFER
On July 6, 1999, Rohm and Haas issued, through a private placement exempt
from the registration requirements of the Securities Act of 1933, $500 million
of its 6.95% Notes due 2004, $500 million of its 7.40% Notes due 2009 and $1
billion of its 7.85% Debentures due 2029. We refer to these three series of
outstanding notes and debentures as "outstanding debt" in this prospectus. Rohm
and Haas used the net proceeds from the issuance of the outstanding debt to
refinance outstanding commercial paper and other debt that was issued to fund a
portion of the cash paid to acquire Morton International, Inc.
Simultaneously with the private placement, Rohm and Haas entered into a
registration rights agreement with the initial purchasers of the outstanding
debt. Under the registration rights agreement, Rohm and Haas must use its
reasonable efforts to cause a registration statement for substantially identical
notes and debentures to be issued in exchange for the outstanding debt to become
effective on or before December 3, 1999. We refer to the notes and debentures to
be registered under this exchange offer registration statement as "registered
debt" in this prospectus. You may exchange your outstanding debt for registered
debt in this exchange offer. You should read the discussion under the heading
"Summary of Terms of Registered Debt" and "Description of the Registered Debt"
for further information regarding the registered debt.
Rohm and Haas did not register the outstanding debt under the Securities
Act or any state securities laws, nor does it intend to register the outstanding
debt after the exchange offer. As a result, you may only transfer the
outstanding debt in limited circumstances under the securities laws. If you do
not exchange your outstanding notes and debentures in the exchange offer, you
will lose your right to obtain debt registered under the Securities Act, subject
to certain limitations. Anyone who still holds outstanding debt after the
exchange offer may be unable to resell such outstanding debt.
Rohm and Haas believes that holders of the registered debt may resell the
registered debt without complying with the registration and prospectus delivery
provisions of the Securities Act if they meet certain conditions. You should
read the discussion under the headings "Summary of the Exchange Offer" and "The
Exchange Offer" for further information regarding the exchange offer and resales
of the registered debt.
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RECENT DEVELOPMENTS
On July 19, 1999, Rohm and Haas announced its financial performance for the
quarter ended June 30, 1999. During the second quarter, Rohm and Haas completed
the acquisition of Morton International on June 21, 1999. The acquisition
created North America's largest and one of the world's largest specialty
chemical companies with 1998 pro forma net sales of approximately $6.5 billion.
As a result of costs associated with the acquisition, Rohm and Haas reported a
loss of $9 million for the second quarter, or ($.06) per diluted common share.
The loss also reflected a settlement related to the 1998 sale of the AtoHaas
joint venture.
Excluding non-recurring items and the effect of nine days of Morton
operations at the end of the second quarter, Rohm and Haas's earnings for the
second quarter of 1999 were $116 million, or $.67 per common share. This
compares with $122 million in earnings for the second quarter of 1998, or $.65
per common share excluding non-recurring items in that quarter.
A number of non-recurring items affected the financial statements for the
second quarters of both 1998 and 1999 as follows:
- In the 1999 second quarter Rohm and Haas wrote off $105 million after tax
for acquired in-process research and development projects in connection
with the Morton acquisition and settled a claim by the buyer of Rohm and
Haas's interest in AtoHaas involving the value of certain joint venture
assets for $14 million.
- In the 1998 second quarter Rohm and Haas recognized a net gain of $48
million after tax resulting from gains on the divestitures of RohMax and
AtoHaas and charges for asset writedowns and the early retirement of
debt.
Sales for the first six months of 1999 were $2.1 billion, up 8 percent from
the $1.9 billion reported for the first six months of 1998. Reported earnings
for the first six months of 1999 were $99 million, compared to $275 million for
the first six months of 1998.
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SUMMARY OF THE EXCHANGE OFFER
Registration Rights........... Rohm and Haas issued the outstanding debt on
July 6, 1999 to Salomon Smith Barney Inc.,
Chase Securities Inc., Goldman, Sachs & Co. and
Banc One Capital Markets, Inc., the initial
purchasers. The initial purchasers then sold
the outstanding debt to institutional and
accredited investors. Simultaneously with the
initial issuance of the outstanding debt, Rohm
and Haas entered into a registration rights
agreement with the initial purchasers, which
provides for the exchange offer.
You may exchange your outstanding debt for
registered debt, which has substantially
identical terms. The exchange offer satisfies
our obligations under the registration rights
agreement. After the exchange offer is over,
you will not be entitled to any exchange or
registration rights with respect to your
outstanding debt. Therefore, if you do not
exchange your outstanding debt, you will not be
able to reoffer, resell or otherwise dispose of
your outstanding debt unless (1) you comply
with the registration and prospectus delivery
requirements of the Securities Act, or (2) you
are exempt from such Securities Act
requirements.
The Exchange Offer............ Rohm and Haas is offering to exchange $500
million total principal amount of its 6.95%
Notes due 2004, $500 million total principal
amount of its 7.40% Notes due 2009 and $1
billion total principal amount of its 7.85%
Debentures due 2029, which have been registered
under the Securities Act, for, respectively,
your outstanding 6.95% Notes due 2004, 7.40%
Notes due 2009 or 7.85% Debentures due 2029
sold in the July 1999 private placement. To
exchange your outstanding debt, you must
properly tender the outstanding debt, and Rohm
and Haas must accept it. Rohm and Haas will
exchange all of the outstanding debt that you
validly tender and do not validly withdraw.
Rohm and Haas will issue registered debt at or
promptly after the end of the exchange offer.
Resales....................... Rohm and Haas believes that you can offer for
resale, resell or otherwise transfer the
registered debt without complying with the
registration and prospectus delivery
requirements of the Securities Act if:
- you acquire the registered debt in the
ordinary course of your business;
- you are not participating, do not intend to
participate, and have no arrangement or
understanding with any person to participate,
in the distribution of the registered debt;
and
- you are not an "affiliate" of Rohm and Haas,
as defined in Rule 405 of the Securities Act.
If any of these conditions is not satisfied and
you transfer any registered debt without
delivering a prospectus or without qualifying
for a registration exemption, you may incur
liability under the Securities Act. Rohm and
Haas will not assume or indemnify you against
such liability.
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Each broker-dealer that receives registered
debt for its own account in exchange for
outstanding debt, where such outstanding debt
was acquired by such broker-dealer as a result
of market-making activities or other trading
activities, must acknowledge that it will
deliver a prospectus in connection with any
resale of such registered debt. See "Plan of
Distribution." A broker-dealer may use this
prospectus for an offer to resell, a resale or
other retransfer of the registered debt.
Expiration Date............... The exchange offer expires at 5:00 p.m., New
York City time, on November 5, 1999, unless
extended to allow additional tenders of
outstanding debt.
Conditions to the Exchange
Offer......................... The exchange offer is subject to conditions,
some of which Rohm and Haas may waive. Such
conditions are more fully described later in
this prospectus under "The Exchange
Offer -- Conditions to the Exchange Offer"
Procedures for Tendering
Outstanding Debt.............. You may tender your outstanding debt through
book-entry transfer in accordance with the
Automated Tender Offer Program, or "ATOP" of
The Depository Trust Company, commonly known as
"DTC". To tender your outstanding debt by a
means other than ATOP, a letter of transmittal
must be completed and signed according to the
instructions contained in such letter. The
letter of transmittal and any other documents
required by the letter of transmittal must be
delivered to the exchange agent by mail,
facsimile, hand delivery or overnight carrier.
In addition, you must deliver your outstanding
debt to the exchange agent or comply with the
procedures for guaranteed delivery. See "The
Exchange Offer -- Procedures for Tendering
Outstanding Debt" for more information.
Do not send letters of transmittal and
certificates representing outstanding debt, if
any, to Rohm and Haas. Send these documents
only to the exchange agent. See "The Exchange
Offer -- Exchange Agent" for more information.
Special Procedures for
Beneficial Owners............. If you are a beneficial owner whose outstanding
debt is registered in the name of a broker,
dealer, commercial bank, trust company or other
nominee, and you wish to tender your
outstanding debt in the exchange offer, please
contact the registered holder as soon as
possible and instruct such person to tender on
your behalf and comply with the instructions
set forth elsewhere in this prospectus.
Withdrawal Rights............. You may withdraw the tender of your outstanding
debt at any time before 5:00 p.m., New York
City time, on November 5, 1999, unless Rohm and
Haas extends the date.
Appraisal or Dissenters'
Rights........................ Holders of outstanding debt do not have any
appraisal or dissenters' rights in the exchange
offer. If you do not tender your outstanding
debt or Rohm and Haas does not accept your
tender because, among other things, you
invalidly tendered your outstanding debt, you
will not be entitled to any further
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registration rights under the registration
rights agreement, except under limited
circumstances. However, your notes and
debentures will remain outstanding and entitled
to the benefits of the indenture.
Federal Income Tax
Considerations................ The exchange of outstanding notes and
debentures is not a taxable exchange for United
States federal income tax purposes. You should
not recognize any taxable gain or loss or any
interest income as a result of the exchange.
For additional information regarding federal
income tax considerations, you should read the
discussion under the heading "United States
Federal Tax Consequences."
Use of Proceeds............... Rohm and Haas will not receive any proceeds
from the issuance of the registered debt, and
Rohm and Haas will pay the expenses of the
exchange offer.
Exchange Agent................ Chase Manhattan Trust Company is serving as
exchange agent in the exchange offer. The
mailing address of the exchange agent is 55
Water Street, Room 234, New York, New York
10041, Attention: Carlos Estevez. Deliveries by
hand or overnight courier should be addressed
to the address listed above. For information
about the exchange offer, call the exchange
agent at telephone number: (215) 988-1328 or
facsimile number: (215) 972-1685.
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SUMMARY OF TERMS OF REGISTERED DEBT
The form and terms of the registered debt are the same as the form and
terms of the outstanding debt, except that the registered debt will be
registered under the Securities Act. As a result, the registered debt will not
bear legends restricting its transfer and will not contain the registration
rights and liquidated damages provisions contained in the outstanding debt. The
registered debt represents the same debt as the outstanding debt. Both the
outstanding debt and the registered debt are governed by the same indenture.
Issuer........................ Rohm and Haas Company
Aggregate Amounts............. $500,000,000 principal amount of 6.95% Notes
due 2004
$500,000,000 principal amount of 7.40% Notes
due 2009
$1,000,000,000 principal amount of 7.85%
Debentures due 2029
Interest...................... Interest will accrue on the registered debt
from July 6, 1999 and will be payable on
January 15 and July 15 of each year, beginning
on January 15, 2000.
Ranking....................... The registered debt will be senior unsecured
obligations and will rank equally with all of
our other senior unsecured and unsubordinated
indebtedness.
Optional Redemption........... Each series of the registered debt will be
redeemable, as a whole or in part, at our
option, at any time, at a redemption price
equal to the greater of (1) 100% of the
principal amount of the registered debt to be
redeemed and (2) the sum of the present values
of the remaining scheduled principal and
interest payments discounted, on a semiannual
basis, at a rate equal to the sum of the
applicable Treasury Rate (as defined herein)
and 15 basis points for the Notes due 2004, 20
basis points for the Notes due 2009 and 25
basis points for the Debentures due 2029, plus
in each case accrued interest to the date of
redemption.
Use of Proceeds............... Rohm and Haas will not receive any cash
proceeds in the exchange offer.
Absence of a Public Market for
the Registered Debt........... Rohm and Haas does not intend to apply for a
listing of the registered debt on any
securities exchange. The initial purchasers of
the outstanding debt have advised Rohm and Haas
that they currently intend to make a market in
the registered debt following the exchange
offer, but they are not obligated to do so, and
any market-making may be stopped at any time
without notice. Rohm and Haas does not know if
an active public market for the registered debt
will develop or, if developed, will continue.
If an active public market does not develop or
is not maintained, the market price and
liquidity of the registered debt may be
adversely affected. Rohm and Haas cannot make
any assurances regarding the liquidity of the
market for such registered debt, the ability of
holders to sell their registered debt or the
price at which holders may sell their
registered debt.
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USE OF PROCEEDS
Rohm and Haas will not receive any proceeds from the exchange offer. In
consideration for issuing the registered debt, Rohm and Haas will receive in
exchange outstanding debt of like principal amount, the terms of which are
identical in all material respects to the registered debt. The outstanding debt
surrendered in exchange for registered debt will be retired and canceled and
cannot be reissued. Accordingly, issuance of the registered debt will not result
in any increase in Rohm and Haas's indebtedness. Rohm and Haas has agreed to
bear the expenses of the exchange offer.
RATIO OF EARNINGS TO FIXED CHARGES
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THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
- -------------------------- ---------------------------------------------
PRO FORMA PRO FORMA
1999 1999 1998 1998 1997 1996 1995 1994
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3.4x 11.3x 2.7x 11.7x 9.5x 8.2x 6.2x 5.9x
</TABLE>
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- - For purposes of computing the ratio of earnings to fixed charges, earnings
consist of earnings before income taxes and extraordinary item and exclude
undistributed earnings (losses) of affiliates and capitalized interest but
include fixed charges and amortization of previously capitalized interest.
Fixed charges consist of interest expensed and capitalized; amortized
premiums, discounts and capitalized expenses related to indebtedness; and a
share of rental expense which is deemed to represent an interest factor.
Earnings used in the computation of the ratio of earnings to fixed charges for
the year ended December 31, 1998 include the impact of a $19 million ($13
million after-tax) extraordinary loss on the early extinguishment of debt in
1998.
- - The pro forma ratio of earnings to fixed charges computations for the year
ended December 31, 1998 and the three months ended March 31, 1999 were
prepared on the same basis as the selected unaudited pro combined financial
information on pages 18 to 20 of this prospectus as if the acquisitions of
Morton and LeaRonal had occurred on January 1, 1998.
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THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
Simultaneously with the sale of the outstanding debt, Rohm and Haas entered
into a registration rights agreement with Salomon Smith Barney Inc., Chase
Securities Inc., Goldman, Sachs & Co. and Banc One Capital Markets, Inc., the
initial purchasers of the outstanding debt. Under this registration rights
agreement, Rohm and Haas agreed to file a registration statement regarding the
exchange of the outstanding debt for registered notes and debentures with terms
identical in all material respects. Rohm and Haas also agreed to use its
reasonable best efforts to cause that registration statement to become effective
with the Securities and Exchange Commission. A copy of the registration rights
agreement has been filed as an exhibit to the registration statement of which
this prospectus is as part.
Rohm and Haas is conducting the exchange offer to satisfy its contractual
obligations under the registration rights agreement. The form and terms of the
registered debt are the same as the form and terms of the outstanding debt,
except that the registered debt will be registered under the Securities Act, and
holders of the registered debt will not be entitled to liquidated damages. The
registration rights agreement provides that, if applicable interpretations of
the SEC's staff permit Rohm and Haas to conduct the exchange offer and the
exchange offer registration statement is not declared effective by December 3,
1999 or the exchange offer is not consummated by January 2, 2000, Rohm and Haas
will pay liquidated damages on the outstanding debt until effectiveness of the
exchange offer registration statement or consummation of the exchange offer, as
the case may be. Upon the completion of the exchange offer, holders of
outstanding debt will not be entitled to any liquidated damages on the
outstanding debt or any further registration rights under the registration
rights agreement, except under limited circumstances.
In the event that (1) applicable interpretations of the SEC's staff do not
permit Rohm and Haas to conduct the exchange offer, (2) the registered debt is
not freely tradeable (other than because the holder is an affiliate of Rohm and
Haas or is a person that must deliver a prospectus in connection with the
resale), or (3) the exchange offer is not consummated by January 2, 2000, Rohm
and Haas will file a shelf registration statement covering resales of the
affected securities, use its reasonable efforts to cause the shelf registration
to be declared effective and use its reasonable efforts to keep effective the
shelf registration statement until the earlier of (1) two years from the date of
issuance of the outstanding debt (or, if Rule 144(k) is amended to provide a
shorter restrictive period, the shorter period) or (2) such time as when all of
the securities covered by the shelf registration statement have been sold. If
the shelf registration statement is not declared effective by February 2, 2000,
Rohm and Haas will pay liquidated damages on the outstanding debt until
effectiveness of the shelf registration statement. If a shelf registration
statement is declared effective and Rohm and Haas fails to keep it continuously
effective or useable for resales for the period required by the registration
rights agreement and the failure continues for more than 60 days (whether or not
consecutive) in any 12-month period, then Rohm and Haas will pay liquidated
damages on the applicable outstanding debt from the 61st day until the earlier
of (1) the date that the shelf registration statement is again deemed effective
or is useable, (2) the date that is two years from the date of issuance of the
outstanding debt (or, if Rule 144(k) is amended to provide a shorter restrictive
period, the shorter period), or (3) the date as of which all of the applicable
securities are sold pursuant to the shelf registration statement.
The term "holder" as used in this prospectus means (1) any person in whose
name the outstanding debt is registered on Rohm and Haas's books, or (2) any
other person who has obtained a properly completed bond power from the
registered holder, or (3) any person whose outstanding debt is held of record by
DTC and who wants to deliver such outstanding debt by book-entry transfer at
DTC.
TERMS OF THE EXCHANGE OFFER
Rohm and Haas is offering to exchange up to $2 billion total principal
amount of registered debt for a like total principal amount of outstanding debt.
The outstanding debt must be tendered properly on or before the expiration date
of the exchange offer and not withdrawn. In exchange for outstanding debt
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properly tendered and accepted, Rohm and Haas will issue a like total principal
amount of up to $2 billion in registered debt.
The exchange offer is not conditioned upon holders tendering a minimum
principal amount of outstanding debt. As of the date of this prospectus, $2
billion aggregate principal amount of outstanding debt is outstanding.
Holders of the outstanding debt do not have any appraisal or dissenters'
rights in the exchange offer. If holders do not tender outstanding debt or
tender outstanding debt that Rohm and Haas does not accept, their outstanding
debt will remain outstanding. Any such outstanding debt will be entitled to the
benefits of the indenture, but will not be entitled to any further registration
rights under the registration rights agreement, except under limited
circumstances.
After the expiration date of the exchange offer, Rohm and Haas will return
to the holders any tendered outstanding debt that Rohm and Haas does not accept
for exchange due to, among other things, an invalid tender.
Holders exchanging outstanding debt will not have to pay brokerage
commissions or fees or transfer taxes if they follow the instructions in the
letter of transmittal. Rohm and Haas will pay the charges and expenses, other
than certain taxes described below, in the exchange offer. See "-- Fees and
Expenses" for further information regarding fees and expenses.
As used in this prospectus, the "expiration date" of the exchange offer is
5:00 p.m., New York City time on October 13, 1999, unless Rohm and Haas extends
the exchange offer to allow additional tenders of outstanding debt.
Rohm and Haas has the right, in accordance with applicable law, at any
time:
- to delay the acceptance of the outstanding debt;
- to terminate the exchange offer if Rohm and Haas determines that any of
the conditions to the exchange offer have not occurred or have not been
satisfied;
- to extend the expiration date of the exchange offer and keep all
outstanding debt tendered other than those outstanding notes and
debentures properly withdrawn; and
- to waive any condition or amend the terms of the exchange offer.
If Rohm and Haas materially changes the exchange offer, or if Rohm and Haas
waives a material condition of the exchange offer, Rohm and Haas will promptly
distribute a prospectus supplement to you disclosing the change or waiver. Rohm
and Haas also will extend the exchange offer as required by Rule 14e-1 under the
Securities Exchange Act of 1934.
If Rohm and Haas exercises any of the rights listed above, it will promptly
give oral or written notice of the action to the exchange agent and will issue a
release to an appropriate news agency. In the case of an extension, an
announcement will be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled expiration date.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF REGISTERED DEBT
Rohm and Haas will issue registered debt to the exchange agent for
outstanding debt tendered and accepted, and not withdrawn, promptly on or after
the expiration date. The exchange agent might not deliver the registered debt to
all tendering holders at the same time. The timing of delivery depends upon when
the exchange agent receives and processes the required documents.
Rohm and Haas will be deemed to have exchanged outstanding debt validly
tendered and not withdrawn when Rohm and Haas gives oral or written notice to
the exchange agent of its acceptance. The exchange agent is an agent for Rohm
and Haas for purposes of receiving tenders of outstanding debt, letters of
transmittal and related documents. The exchange agent also is an agent for
tendering holders for purposes of receiving outstanding debt, letters of
transmittal and related documents and transmitting
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registered debt to validly tendering holders. If, for any reason, Rohm and Haas
(1) delays the acceptance or exchange of any outstanding debt; (2) extends the
exchange offer; or (3) is unable to accept or exchange outstanding debt, then
the exchange agent may, on behalf of Rohm and Haas, and subject to Rule 14e-1(c)
under the Exchange Act, retain tendered notes and debentures. Tendered notes and
debentures retained by the exchange agent may not be withdrawn, except according
to the withdrawal procedures outlined in the section entitled "-- Withdrawal
Rights" below.
In tendering outstanding debt, you must warrant in the letter of
transmittal or in an "Agent's Message," as described below, that:
- you have full power and authority to tender, exchange, sell, assign and
transfer your outstanding debt;
- Rohm and Haas will acquire good, marketable and unencumbered title to the
tendered outstanding debt, free and clear of all liens, restrictions,
charges and other encumbrances; and
- the outstanding debt tendered for exchange is not subject to any adverse
claims or proxies.
You also must warrant and agree that you will, upon request, execute and
deliver any additional documents requested by Rohm and Haas or the exchange
agent to complete the exchange, sale, assignment, and transfer of the
outstanding debt and that you will comply with your obligations under the
registration rights agreement.
PROCEDURES FOR TENDERING OUTSTANDING DEBT
VALID TENDER
You may tender your outstanding debt by book-entry transfer or, if you hold
certificated securities, by other means, as described below. For book-entry
transfer, you must deliver to the exchange agent either (1) a completed and
signed letter of transmittal or (2) an "agent's message." An agent's message
means a message, transmitted by DTC to and received by the exchange agent which
forms part of a confirmation of a book-entry transfer of outstanding debt into
the exchange agent's account at DTC. The agent's message states that DTC has
received an express acknowledgment from the tendering participant that such
participant has received and agrees to be bound by the letter of transmittal and
that Rohm and Haas may enforce the letter of transmittal against such
participant.
You must deliver your letter of transmittal or the agent's message by mail,
facsimile, hand delivery or overnight carrier to the exchange agent on or before
the expiration date. In addition, to complete a book-entry transfer, you must
also either (1) have DTC transfer the outstanding debt into the exchange agent's
account at DTC using the ATOP procedures for transfer, and obtain a confirmation
of such transfer, or (2) follow the guaranteed delivery procedures described
below under "-- Guaranteed Delivery Procedures."
If you tender less than all of your outstanding debt, you should fill in
the principal amount of notes and debentures tendered in the appropriate box on
the letter of transmittal. If you do not indicate the amount tendered in the
appropriate box, Rohm and Haas will assume you are tendering all of the
outstanding debt that you hold.
For tendering your outstanding debt other than by book-entry transfer, you
must deliver a completed and signed letter of transmittal to the exchange agent.
Again, you must deliver the letter of transmittal by mail, facsimile, hand
delivery or overnight carrier to the exchange agent on or before the expiration
date. In addition, to complete a valid tender you must either (1) deliver your
outstanding debt to the exchange agent on or before the expiration date, or (2)
follow the guaranteed delivery procedures set forth below under "-- Guaranteed
Delivery Procedures."
DELIVERY OF REQUIRED DOCUMENTS BY WHATEVER METHOD YOU CHOOSE IS AT YOUR
SOLE RISK. DELIVERY IS COMPLETE WHEN THE EXCHANGE AGENT ACTUALLY RECEIVES THE
ITEMS TO BE DELIVERED. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY OF SUCH DOCUMENTS TO THE
10
<PAGE> 13
EXCHANGE AGENT. IF DELIVERY IS MADE BY MAIL, THEN REGISTERED MAIL, RETURN
RECEIPT REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS
RECOMMENDED. IN ALL CASES YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY
DELIVERY.
SIGNATURE GUARANTEES
You do not need to endorse certificates for the outstanding debt or provide
signature guarantees on the letter of transmittal, unless (1) someone other than
the registered holder tenders the certificate or (2) you complete the box
entitled "Special Issuance Instructions" or "Special Delivery Instructions" in
the letter of transmittal. In the case of (1) or (2) above, you must sign your
outstanding debt or provide a properly executed bond power, with the signature
on the bond power and on the letter of transmittal guaranteed by a firm or other
entity identified in Rule 17Ad-15 under the Exchange Act as an "eligible
guarantor institution."
An "eligible guarantor institution" includes: (1) a bank; (2) a broker,
dealer, municipal securities broker or dealer or government securities broker or
dealer; (3) a credit union; (4) a national securities exchange, registered
securities association or clearing agency; or (5) a savings association that is
a participant in a securities transfer association.
GUARANTEED DELIVERY
If you want to tender your outstanding debt in the exchange offer and (1)
the certificates for the outstanding debt are not immediately available or all
required documents are unlikely to reach the exchange agent on or before the
expiration date, or (2) a book-entry transfer cannot be completed in time, you
may tender your outstanding debt if you comply with the following guaranteed
delivery procedures:
(a) you tender through an eligible guarantor institution;
(b) you deliver a properly completed and signed notice of guaranteed
delivery, like the form provided with the letter of transmittal, to the
exchange agent on or before the expiration date; and
(c) you deliver the certificates or a confirmation of book-entry
transfer and a properly completed and signed letter of transmittal to the
exchange agent within three New York Stock Exchange trading days after the
notice of guaranteed delivery is executed.
You may deliver the notice of guaranteed delivery by hand, facsimile or
mail to the exchange agent and must include a guarantee by an eligible guarantor
institution in the form described in the notice.
Rohm and Haas's acceptance of properly tendered outstanding debt is a
binding agreement between the tendering holder and Rohm and Haas upon the terms
and subject to the conditions of the exchange offer.
DETERMINATION OF VALIDITY
Rohm and Haas will resolve all questions regarding the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered outstanding debt. Rohm and Haas's resolution of these questions and
Rohm and Haas's interpretation of the terms and conditions of the exchange
offer, including the letter of transmittal, are final and binding on all
parties. A tender of outstanding debt is invalid until all irregularities have
been cured or waived. None of Rohm and Haas, any of its affiliates or assigns,
the exchange agent nor any other person is under any obligation to give notice
of any irregularities in tenders nor will they be liable for failing to give any
such notice. Rohm and Haas reserves the absolute right, in its sole and absolute
discretion, to reject any tenders determined to be in improper form or unlawful.
Rohm and Haas also reserves the absolute right to waive any of the conditions of
the exchange offer or any condition or irregularity in the tender of outstanding
debt by any holder. Rohm and Haas need not waive similar conditions or
irregularities in the case of other holders.
If any letter of transmittal, endorsement, bond power, power of attorney,
or any other document required by the letter of transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-
11
<PAGE> 14
fact, officer of a corporation or other person acting in a fiduciary or
representative capacity, that person must indicate that capacity when signing.
In addition, unless waived by Rohm and Haas, the person must submit proper
evidence satisfactory to Rohm and Haas, in its sole discretion, of his or her
authority to so act.
A beneficial owner of outstanding debt that is held by or registered in the
name of a broker, dealer, commercial bank, trust company or other nominee or
custodian should contact that entity promptly if the holder wants to participate
in the exchange offer.
RESALES OF REGISTERED DEBT
Rohm and Haas is exchanging the outstanding debt for registered debt based
upon the position of the SEC's staff, set forth in interpretive letters to third
parties in other similar transactions. Rohm and Haas will not seek its own
interpretive letter. As a result, Rohm and Haas cannot assure you that the SEC's
staff will take the same position on this exchange offer as it did in the
interpretive letters to other parties. Based on the letters of the SEC's staff
to the other parties, Rohm and Haas believes that, except as described below,
holders of registered debt, other than broker-dealers, can offer the registered
notes and debentures for resale, resell and otherwise transfer such registered
debt without delivering a prospectus to prospective purchasers.
Any holder of outstanding debt who is an "affiliate" of Rohm and Haas or
who intends to distribute registered debt, or any broker-dealer who purchased
outstanding debt from Rohm and Haas for resale pursuant to Rule 144A or any
other available exemption under the Securities Act:
- cannot rely on the interpretations of the SEC's staff in the
above-mentioned interpretive letters;
- cannot tender outstanding debt in the exchange offer; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act to transfer the outstanding debt, unless the sale is
exempt.
In addition, if any broker-dealer acquired outstanding debt for its own
account as a result of market making or other trading activities and exchanges
such outstanding debt for registered debt, such broker-dealer must deliver a
prospectus with any resales of its registered debt.
If you want to exchange your outstanding debt for registered debt, you will
be required to affirm that:
- you are not an "affiliate" of Rohm and Haas;
- you are acquiring the registered debt in the ordinary course of your
business;
- you have no arrangement or understanding with any person to participate
in a "distribution," within the meaning of the Securities Act, of the
registered debt; and
- if you are not a broker-dealer, you are not engaged in, and do not intend
to engage in, a "distribution," within the meaning of the Securities Act,
of the registered debt.
In addition, Rohm and Haas may require you to provide information regarding
the number of "beneficial owners," within the meaning of Rule 13d-3 under the
Exchange Act, of the outstanding debt. Each broker-dealer that receives
registered debt for its own account must acknowledge that it acquired its
outstanding debt for its own account as the result of market-making activities
or other trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such registered debt. By making this acknowledgment and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" under the Securities Act. Based on the position of the SEC's staff
in certain interpretive letters, Rohm and Haas believes that broker-dealers who
acquired outstanding debt for their own accounts as a result of market-making
activities or other trading activities may fulfill their prospectus delivery
requirements with respect to the registered debt with a prospectus meeting the
requirements of the Securities Act. Accordingly, a broker-dealer may use this
prospectus to satisfy such requirements. Rohm and Haas has agreed that, starting
on the expiration date of the exchange offer and ending on the close of business
on the 180th day following such expiration date, it will make this prospectus,
as amended or supplemented, available to any broker-
12
<PAGE> 15
dealer for use in connection with any such resale. See "Plan of Distribution"
for more information. A broker-dealer intending to use this prospectus in the
resale of registered debt must notify Rohm and Haas, on or prior to the
expiration date, that it is a participating broker-dealer. This notice may be
given in the letter of transmittal or may be delivered to the exchange agent.
Any participating broker-dealer who is an "affiliate" of Rohm and Haas may not
rely on the interpretive letters of the SEC's staff and must comply with the
registration and prospectus delivery requirements of the Securities Act when
reselling its registered debt.
Rohm and Haas agrees to advise holders of, among other things:
- any SEC request for amendments or supplements to the registration
statement or this prospectus or for additional information;
- the SEC's issuance of any stop order suspending the effectiveness of the
registration statement or the initiation of any proceedings for that
purpose; and
- Rohm and Haas's receipt of any notification with respect to the
suspension of the qualification of the registered debt in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
Upon the occurrence of any of these events, Rohm and Haas agrees to notify
the holders, if applicable, to suspend use of this prospectus and Rohm and Haas
will prepare, using its reasonable efforts to do so as soon as possible, a
post-effective amendment to the registration statement or an amendment or
supplement to this prospectus or file any other required document so that, as
thereafter delivered to purchasers of the registered debt, the prospectus will
not include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements herein, in the light of the circumstances
under which they were made, not misleading. The holders, if applicable, agree
that they will suspend use of this prospectus until Rohm and Haas has amended or
supplemented the prospectus so that it does not contain any such untrue
statement or omission.
WITHDRAWAL RIGHTS
You can withdraw tenders of outstanding debt at any time on or before the
expiration date of the exchange offer.
For a withdrawal to be effective, you must deliver a written or facsimile
transmission of a "notice of withdrawal" to the exchange agent on or before the
expiration date. The notice of withdrawal must specify the name of the person
tendering the outstanding debt to be withdrawn, the total principal amount of
outstanding debt withdrawn, and the name of the registered holder of the
outstanding debt if it is different from the name of the person tendering the
outstanding debt. If you delivered outstanding debt to the exchange agent, you
must submit the serial numbers of the outstanding debt to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an eligible
guarantor institution, except in the case of outstanding debt tendered for the
account of an eligible guarantor institution. If you tendered outstanding debt
as a book-entry transfer, the notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawal of outstanding
debt and you must deliver the notice of withdrawal to the exchange agent by
written, telegraphic, telex or facsimile transmission. You may not rescind
withdrawals of tender. Outstanding debt properly withdrawn may again be tendered
at any time on or before the expiration date.
Rohm and Haas will determine all questions regarding the validity, form and
eligibility of withdrawal notices. Rohm and Haas's determination will be final
and binding on all parties. None of Rohm and Haas, any of its affiliates or
assigns, the exchange agent nor any other person is under any obligation to give
notice of any irregularities in any notice of withdrawal, nor will they be
liable for failing to give any such notice. Withdrawn outstanding debt will be
returned to the holder after withdrawal.
13
<PAGE> 16
INTEREST ON REGISTERED DEBT
The registered debt will bear interest at the respective rates per year
that appear on the cover page of this prospectus, payable semi-annually, on
January 15 and July 15 of each year, commencing January 15, 2000. Holders of
registered debt will receive interest on January 15, 2000 from the date of
initial issuance of the registered debt. Interest on the outstanding debt
accepted for exchange will cease to accrue upon issuance of the registered debt.
CONDITIONS TO THE EXCHANGE OFFER
Rohm and Haas need not exchange any outstanding debt, may terminate the
exchange offer or may waive any conditions to the exchange offer or amend the
exchange offer, if any of the following conditions have occurred:
- the SEC's staff no longer allows the registered debt to be offered for
resale, resold and otherwise transferred by certain holders without
compliance with the registration and prospectus delivery provisions of
the Securities Act;
- a governmental body passes any law, statute, rule or regulation which, in
Rohm and Haas's opinion, prohibits or prevents the exchange offer;
- the SEC or any state securities authority issues a stop order suspending
the effectiveness of the registration statement or initiates or threatens
to initiate a proceeding to suspend the effectiveness of the registration
statement; or
- Rohm and Haas is unable to obtain any governmental approval that Rohm and
Haas believes is necessary to complete the exchange offer.
If Rohm and Haas reasonably believes that any of the above conditions has
occurred, it may (1) terminate the exchange offer, whether or not any
outstanding debt has been accepted for exchange, (2) waive any condition to the
exchange offer or (3) amend the terms of the exchange offer in any respect. Rohm
and Haas's failure at any time to exercise any of these rights will not waive
such rights, and each right will be deemed an ongoing right which may be
asserted at any time or from time to time. However, Rohm and Haas does not
intend to terminate the exchange offer if none of the preceding conditions has
occurred.
EXCHANGE AGENT
Rohm and Haas appointed Chase Manhattan Trust Company as exchange agent for
the exchange offer. Holders should direct questions and requests for assistance,
requests for additional copies of this prospectus or of the letter of
transmittal and requests for notice of guaranteed delivery to the exchange agent
addressed as follows:
<TABLE>
<S> <C>
By Registered or Certified Mail: By Hand Or Overnight Delivery:
55 Water Street 55 Water Street
Room 234 Room 234
New York, NY 10041 New York, NY 10041
Attention: Carlos Estevez Attention: Carlos Estevez
</TABLE>
Confirm by Telephone:
(212) 638-0828
Facsimile Transmissions:
(ELIGIBLE GUARANTOR INSTITUTIONS ONLY)
(212) 638-7375
For Information Call:
Catherine Lenhardt
(215) 988-1328
If you deliver letters of transmittal and any other required documents to
an address or facsimile number other than those listed above, your tender is
invalid.
14
<PAGE> 17
FEES AND EXPENSES
Rohm and Haas will pay the exchange agent reasonable and customary fees for
its services and reasonable out-of-pocket expenses. Rohm and Haas will also pay
brokerage houses and other custodians, nominees and fiduciaries their reasonable
out-of-pocket expenses for sending copies of this prospectus and related
documents to holders of outstanding debt, and in handling or tendering for their
customers.
Rohm and Haas will pay the transfer taxes for the exchange of the
outstanding debt in the exchange offer. If, however, exchange debt is delivered
to or issued in the name of a person other than the registered holder, or if a
transfer tax is imposed for any reason other than for the exchange of
outstanding debt in the exchange offer, then the tendering holder will pay the
transfer taxes. If a tendering holder does not submit satisfactory evidence of
payment of taxes or exemption from taxes with the letter of transmittal, the
taxes will be billed directly to the tendering holder.
Rohm and Haas will not make any payment to brokers, dealers or other
nominees soliciting acceptances in the exchange offer.
ACCOUNTING TREATMENT
The registered debt will be recorded at the same carrying value as the
outstanding debt. Accordingly, Rohm and Haas will not recognize any gain or loss
for accounting purposes. Rohm and Haas intends to amortize the expenses of the
exchange offer and issuance of the outstanding debt over the respective terms of
each series of the registered debt.
15
<PAGE> 18
SELECTED HISTORICAL FINANCIAL DATA OF ROHM AND HAAS
The selected historical financial data set forth below for Rohm and Haas as
of December 31, 1998, 1997, 1996, 1995 and 1994 and for each of the years in the
five-year period ended December 31, 1998 are derived from audited financial
statements of Rohm and Haas for the three-year period ended December 31, 1998
incorporated by reference in this prospectus and audited financial statements
for the two-year period ended December 31, 1995 that were previously filed by
Rohm and Haas with the SEC. The summary historical financial data as of and for
the three-month periods ended March 31, 1999 and 1998 is unaudited. In the
opinion of Rohm and Haas management, the unaudited historical financial data of
Rohm and Haas presented below were prepared on the same basis as the audited
historical financial data and include all adjustments (consisting only of normal
recurring adjustments) necessary for a fair statement of the information set
forth herein. The results of operations for any interim period are not
necessarily indicative of the results for a full year. The summary historical
financial data should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the consolidated
financial statements and related notes incorporated by reference herein.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
--------------- ------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------ ------ ------ ------ ------ ------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................................... $ 940 $ 937 $3,720 $3,999 $3,982 $3,884 $3,534
Earnings before taxes and extraordinary
item(1)................................... 176 166 700 611 530 441 407
Earnings before extraordinary item(1)....... 110 109 453 410 363 292 264
Net earnings................................ 110 109 440 410 363 292 264
Net earnings applicable to common
stockholders.............................. 109 107 434 403 356 285 257
Earnings per common share before
extraordinary item:
-- Basic.................................. $ .65 $ .59 $ 2.55 $ 2.17 $ 1.82 $ 1.41 $ 1.26
-- Diluted................................ .64 .58 2.52 2.13 1.79 1.40 1.26
Net earnings per common share:
-- Basic.................................. $ .65 $ .59 $ 2.47 $ 2.17 $ 1.82 $ 1.41 $ 1.26
-- Diluted................................ .64 .58 2.45 2.13 1.79 1.40 1.26
Cash dividends per common share............. $ .18 $ .17 $ .70 $ .63 $ .57 $ .52 $ .48
BALANCE SHEET DATA (AT PERIOD END):
Total current assets........................ $1,508 $1,547 $1,287 $1,397 $1,456 $1,421 $1,440
Total assets................................ 4,362 3,908 3,648 3,900 3,933 3,916 3,861
Total current liabilities................... 1,019 853 875 850 886 828 932
Long-term debt, excluding current portion... 834 514 409 509 562 606 629
Total stockholders' equity.................. 1,642 1,862 1,561 1,797 1,728 1,781 1,620
CASH FLOW DATA:
Net cash provided by operating activities... $ 50 $ 35 $ 682 $ 791 $ 706 $ 513 $ 524
Net cash provided (used) by investing
activities................................ (490) (25) 37 (324) (330) (368) (336)
Net cash provided (used) by financing
activities................................ 485 (25) (743) (438) (408) (228) (97)
OTHER DATA:
Depreciation and amortization............... $ 71 $ 70 $ 281 $ 285 $ 272 $ 252 $ 239
Capital expenditures........................ 38 34 229 254 334 417 339
Research and development.................... 47 52 207 201 187 194 201
EBIT(1)(2).................................. 187 176 734 650 569 480 453
EBITDA(2)................................... 258 246 1,015 935 841 732 692
EBIT/Sales(2)............................... 20% 19% 20% 16% 14% 12% 13%
EBITDA/Sales(2)............................. 27% 26% 27% 23% 21% 19% 20%
</TABLE>
- -------------------------
(1) In the second and third quarters of 1998, we retired a total of $130 million
of high interest long-term debt resulting in an after-tax extraordinary loss
of $13 million.
16
<PAGE> 19
(2) EBIT represents earnings before interest and taxes. EBITDA represents
earnings before interest, taxes, depreciation and amortization. EBIT and
EBITDA are presented because we believe they are frequently used by security
analysts and others in evaluating companies and their ability to service
debt. However, EBIT and EBITDA should not be considered as alternatives to
net cash provided by operating activities as a measure of liquidity or as
alternatives to net income as an indicator of our operating performance or
any other measure of performance in accordance with generally accepted
accounting principles. EBIT and EBITDA, as we use the terms herein, may not
be comparable to EBIT and EBITDA as reported by other companies.
17
<PAGE> 20
SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
We are providing the following selected unaudited pro forma combined
financial information to show what the results of operations and financial
position of Rohm and Haas would have looked like, absent any operational or
other changes, had the Morton acquisition, and Rohm and Haas's January 26, 1999
acquisition of LeaRonal, Inc. for approximately $455 million in cash, been
completed for the periods and at the dates indicated.
The following selected unaudited pro forma combined balance sheet as of
March 31, 1999 and the following selected unaudited pro forma combined
statements of income for the year ended December 31, 1998 and the three months
ended March 31, 1999 were prepared using an exchange ratio of 1.088710 and the
number of outstanding Morton shares on May 18, 1999. For determining the
aggregate purchase consideration of Morton, the price of the Rohm and Haas
common stock issued in the transaction was $37.73.
This information is provided for illustrative purposes only. It does not
show what Rohm and Haas's results of operations or financial position would have
been if the transactions had actually occurred on the dates assumed and it does
not indicate what Rohm and Haas's future operating results or consolidated
financial position will be. You should read the selected unaudited pro forma
combined financial information in conjunction with the "Unaudited Pro Forma
Combined Financial Statements," including the notes thereto, the historical
consolidated financial statements of Rohm and Haas and Morton, including the
notes thereto incorporated by reference into this document.
Rohm and Haas anticipates that the Morton and LeaRonal acquisitions will
provide it with financial benefits and synergies including reduced operating
expenses and revenue enhancements. The selected unaudited pro forma combined
financial information does not give effect to any of the expense reductions,
revenue enhancements or the restructuring costs, including those costs which may
be accrued at the date of acquisition, as our plans are not sufficiently
advanced at this point in time to estimate those costs. To the extent those
costs are accounted for as accrued liabilities and included in the allocation of
the purchase price consideration, the amount allocated to assets acquired would
increase, and net income would decrease due to additional amortization. To the
extent those costs are not accounted for as accrued liabilities at the dates of
acquisition of Morton and LeaRonal, a charge may result which may be material.
The amount of this charge cannot be quantified at this time but is expected to
be recognized in the period in which the restructuring occurs.
18
<PAGE> 21
SELECTED UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31, 1999 DECEMBER 31, 1998
------------------ -------------------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
Net sales............................................... $1,687 $6,448
Cost of goods sold...................................... 1,079 4,174
------ ------
Gross profit............................................ 608 2,274
Selling and administrative expenses..................... 303 1,217
Research and development expense........................ 63 273
Interest expense........................................ 75 317
Share of affiliate net earnings (losses)................ (7) 1
Other income, net....................................... 27 128
------ ------
Earnings before income taxes and extraordinary item and
discontinued operations............................... 187 596
Income taxes............................................ 74 226
------ ------
Earnings before extraordinary item...................... $ 113 $ 370
====== ======
Earnings per common share before extraordinary item:
Basic................................................. $ 0.53 $ 1.65
Diluted............................................... 0.52 1.65
Weighted average common shares outstanding:
Basic................................................. 212.2 220.1
Diluted............................................... 215.9 224.2
</TABLE>
19
<PAGE> 22
SELECTED UNAUDITED PRO FORMA COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
PRO FORMA
COMBINED AT
MARCH 31, 1999
--------------
(IN MILLIONS)
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents................................... $ 241
Accounts receivable, net.................................... 1,338
Inventories................................................. 855
Prepaid expenses and other assets........................... 279
-------
Total current assets................................... 2,713
Investments in and advances to unconsolidated subsidiaries
and affiliates............................................ 270
Land, buildings and equipment, net.......................... 3,513
Cost in excess of businesses acquired, less amortization.... 2,109
Other assets, net........................................... 2,794
-------
Total assets........................................... $11,399
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes Payable............................................... $ 385
Accounts payable and accrued liabilities.................... 1,035
Federal, foreign and other income taxes..................... 163
-------
Total current liabilities.............................. 1,583
Long-term debt.............................................. 4,376
Deferred income taxes....................................... 1,329
Employee benefits........................................... 587
Other liabilities........................................... 281
Minority interest........................................... 28
-------
Total liabilities...................................... 8,184
Stockholders' equity........................................ 3,215
-------
Total liabilities and stockholders' equity............. $11,399
=======
</TABLE>
20
<PAGE> 23
DESCRIPTION OF THE REGISTERED DEBT
This section describes the general terms and provisions of the registered
debt. The outstanding debt was, and the registered debt will be, issued under an
indenture dated July 1, 1999, between us and Chase Manhattan Trust Company,
National Association, as trustee. The terms of the registered debt are the same
as the terms of the outstanding debt, except that (1) Rohm and Haas registered
the registered debt under the Securities Act, and, unlike the outstanding debt,
in general its transfer is not restricted and (2) holders of the registered debt
are not entitled to certain rights under the registration rights agreement.
BECAUSE THIS SECTION OF THE PROSPECTUS MERELY SUMMARIZES THE TERMS OF THE
REGISTERED DEBT, YOU SHOULD READ THE INDENTURE AND THE RELEVANT PORTIONS OF THE
TRUST INDENTURE ACT OF 1939, AS AMENDED, FOR MORE COMPLETE INFORMATION REGARDING
THE TERMS OF THE REGISTERED DEBT, INCLUDING THE DEFINITION OF TERMS USED IN THIS
SECTION. COPIES OF THE INDENTURE AND REGISTRATION RIGHTS AGREEMENT CAN BE
OBTAINED BY FOLLOWING THE INSTRUCTIONS CONTAINED IN THIS PROSPECTUS UNDER THE
HEADINGS "WHERE YOU CAN FIND MORE INFORMATION" AND "DOCUMENTS INCORPORATED BY
REFERENCE."
If we default on the securities, the trustee has the power to enforce the
holders' rights against us. In addition, the trustee performs administrative
duties on our behalf, including sending interest payments and transferring
securities to a new purchaser.
GENERAL TERMS OF THE REGISTERED DEBT
The registered debt has the following terms:
<TABLE>
<CAPTION>
PRINCIPAL INTEREST
AMOUNT RATE MATURITY DATE
-------------- -------- -------------
<S> <C> <C> <C>
Notes due 2004 $ 500,000,000 6.95% July 15, 2004
Notes due 2009 $ 500,000,000 7.40% July 15, 2009
Debentures due 2029 $1,000,000,000 7.85% July 15, 2029
</TABLE>
The registered debt consists of three separate series for the purposes of
the indenture and will be our senior unsecured obligations. The registered debt
will rank equally with all of our other senior unsecured debt. The registered
debt may be redeemable in whole or in part at any time at our option. See
"-- Optional Redemption." The registered debt will not be entitled to the
benefit of any mandatory redemption or sinking fund. The indenture does not
limit the amount of additional indebtedness that we or any of our subsidiaries
may incur. The indenture does not limit the amount of notes, debentures or other
evidences of indebtedness that we may issue thereunder and provides that notes,
debentures or other evidences of indebtedness may be issued from time to time in
one or more series. As of the date of this prospectus, no notes, debentures or
other evidences of indebtedness are outstanding under the indenture except for
the outstanding debt.
The registered debt will bear interest from July 6, 1999 at the respective
rates per annum set forth above payable semiannually in arrears on January 15
and July 15 of each year, commencing on January 15, 2000, to the persons in
whose names the registered debt is registered at the close of business on the
immediately preceding January 1 and July 1, respectively. Interest on the
registered debt will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of original issuance.
Principal of, premium, if any, and interest on the registered debt will be
payable, and the transfer of the registered debt will be registrable, at our
office or agency to be maintained for that purpose in the Borough of Manhattan,
The City of New York, except that, at our option, interest may be paid by
mailing a check to the address of the person entitled thereto as it appears on
the securities register.
Interest on the registered debt will be computed on the basis of a 360-day
year comprised of twelve 30-day months. The amount of interest payable for any
period shorter than a full semiannual period for which interest is computed will
be computed on the basis of the actual number of days elapsed per 30-day month.
In the event that any date on which principal, premium, if any, or interest is
payable on the
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registered debt is not a business day (as defined in the indenture), then
payment of the principal, premium, if any, or interest payable on that date will
be made on the next succeeding day that is a business day (and without any
interest or other payment in respect of any such delay). The registered debt
will be issued initially in minimum denominations of $100,000 and integral
multiples of $1,000 in excess thereof.
OPTIONAL REDEMPTION
The registered debt of each series will be redeemable, as a whole or in
part, at our option, at any time or from time to time, by mailing notice to the
registered address of each holder of securities at least 30 days but not more
than 60 days prior to the redemption. The redemption prices will be equal to the
greater of (1) 100% of the principal amount of the securities to be redeemed and
(2) the sum of the present values of the Remaining Scheduled Payments (as
defined below) on such registered debt discounted, on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months), at a rate equal to
the sum of the applicable Treasury Rate (as defined below) plus 15 basis points
for the Notes due 2004, 20 basis points for the Notes due 2009 and 25 basis
points for the Debentures due 2029. Accrued interest will be paid to the date of
redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity (computed as of the
second business day immediately preceding that redemption date) of the
Comparable Treasury Issue (as defined below), assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for that redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Reference Treasury Dealer (as defined below) as having a
maturity comparable to the remaining term of the Notes due 2004, the Notes due
2009 or the Debentures due 2029, as the case may be, to be redeemed that would
be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the series of securities to be redeemed.
"Comparable Treasury Price" means, with respect to any redemption date, the
average of the Reference Treasury Dealer Quotations (as defined below) for that
redemption date.
"Reference Treasury Dealer" means Salomon Smith Barney Inc. and its
successor. If it shall cease to be a primary U.S. Government securities dealer,
we will substitute another nationally recognized investment banking firm that is
a primary U.S. Government securities dealer.
"Reference Treasury Dealer Quotations" means, with respect to the Reference
Treasury Dealer and any redemption date, the average, as determined by the
trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by the Reference Treasury Dealer at 3:30 p.m., New York
City time, on the third business day preceding that redemption date.
"Remaining Scheduled Payments" means, with respect to the registered debt
to be redeemed, the remaining scheduled payments of principal of and interest on
that registered debt that would be due after the related redemption date but for
that redemption. If that redemption date is not an interest payment date with
respect to the registered debt to be redeemed, the amount of the next succeeding
scheduled interest payment on those securities will be reduced by the amount of
interest accrued on such registered debt to such redemption date.
On and after the redemption date, interest will cease to accrue on the
registered debt or any portion of the securities called for redemption (unless
we default in the payment of the redemption price and accrued interest). On or
before the redemption date, we will deposit with a paying agent (or the trustee)
money sufficient to pay the redemption price of and accrued interest on the
registered debt to be redeemed on that date. If less than all of the securities
of any series are to be redeemed, the registered debt to be redeemed shall be
selected by the trustee by a method the trustee deems to be fair and
appropriate.
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GLOBAL SECURITIES
The outstanding debt was, and the registered debt will be, issued in the
form of one or more global certificates, known as "global securities." The
global securities will be deposited on the date of the acceptance for exchange
of the outstanding debt and the issuance of the registered debt with, or on
behalf of, DTC and registered in the name of Cede & Co., as DTC's nominee.
Registered debt that is issued as described below under "Certificated
Securities" will be issued in the form of registered definitive certificates,
known as "certificated securities." Upon the transfer of certificated
securities, such certificated securities may, unless the global securities have
previously been exchanged for certificated securities, be exchanged for an
interest in the global securities representing the principal amount of
registered debt being transferred.
Persons holding interests in the global securities may hold their interests
directly through DTC, or indirectly through organizations which are participants
in DTC. Transfers between participants will be effected in the ordinary way in
accordance with DTC rules and will be settled in immediately available funds.
Persons who are not participants may beneficially own interests in global
securities held by DTC only through participants or certain banks, brokers,
dealers, trust companies and other parties that clear through or maintain a
custodial relationship with a participant, either directly or indirectly, and
have indirect access to the DTC system. So long as Cede & Co., as DTC's nominee,
is the registered owner of any global security, it will be considered the sole
holder of such global security for all purposes. Except as provided below,
owners of beneficial interests in a global security will not be entitled to have
certificates registered in their names, will not receive or be entitled to
receive physical delivery of certificates in definitive form, and will not be
considered the holder thereof.
None of Rohm and Haas, the trustee nor any registrar or paying agent will
have any responsibility for the performance by DTC or its participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations. DTC has advised Rohm and Haas that it
will take any action permitted to be taken by a holder of registered debt only
at the direction of one or more participants whose accounts are credited with
DTC interests in a global security.
DTC is a limited purpose trust company organized under the laws of the
State of New York, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. DTC was created to hold securities for its participants and to facilitate
the clearance and settlement of securities transactions, such as transfers and
pledges, among participants in deposited securities through electronic
book-entry changes to accounts of its participants, thereby eliminating the need
for physical movement of securities certificates. Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. Certain participants (or their
representatives), together with other entities, own DTC. The rules applicable to
DTC and its participants are on file with the SEC.
Purchases of securities under the DTC system must be made by or through
participants, which will receive a credit for the securities on DTC's records.
The ownership interest of each actual purchaser of securities, referred to as a
"beneficial owner," is in turn to be recorded on the participants' and indirect
participants' records. Beneficial owners will not receive written confirmation
from DTC of their purchase, but beneficial owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the participant or indirect participant
through which the beneficial owner entered into the transaction. Transfers of
ownership interests in the securities are to be accomplished by entries made on
the books of participants acting on behalf of beneficial owners. Beneficial
owners will not receive certificates representing their ownership interests in
securities, except in the event that use of the book-entry system for the
securities is discontinued.
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The deposit of securities with DTC and their registration in the name of
Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the
actual beneficial owners of the securities; DTC's records reflect only the
identity of the participants to whose accounts the securities are credited,
which may or may not be the beneficial owners. The participants will remain
responsible for keeping account of their holdings on behalf of their customers.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global security.
Conveyance of notices and other communications by DTC to participants, by
participants to indirect participants and by participants and indirect
participants to beneficial owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements that may be in effect from
time to time. Redemption notices will be sent to Cede & Co. If less than all of
the securities are being redeemed, DTC's practice is to determine by lot the
interest of each participant in the securities to be redeemed.
Principal and interest payments on the securities will be made to DTC by
wire transfer of immediately available funds. DTC's practice is to credit
participants' accounts on the payable date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payment on the payable date. Payments by participants to beneficial
owners will be governed by standing instructions and customary practices, as is
the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of the participant
and not of DTC, or us, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal and interest to DTC is
our responsibility, disbursement of payments to participants will be the
responsibility of DTC and disbursement of payments to the beneficial owners will
be the responsibility of participants and indirect participants. Neither we nor
the trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the global securities or for maintaining, supervising or reviewing
any records relating to beneficial ownership interests.
DTC may discontinue providing its services as securities depositary with
respect to the securities at any time by giving reasonable notice to us. In the
event DTC notifies us that it is unwilling or unable to continue as depositary
for any Global Security or if at any time DTC ceases to be a clearing agency
registered under the Exchange Act when DTC is required to be so registered and
no successor depositary is appointed within 90 days of the notification or of
our becoming aware of DTC's ceasing to be so registered, as the case may be,
certificates for the securities will be printed and delivered in exchange for
interests in such global security. Any global security that is exchangeable
pursuant to the preceding sentence will be exchangeable for securities
registered in the names that DTC identifies. It is expected that instructions
will be based upon directions received by DTC from its participants with respect
to ownership of beneficial interests in such global security.
We may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). In that event, certificates
representing the securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Rohm and Haas believes to be reliable, but
Rohm and Haas does not take responsibility for the accuracy of the information.
CERTIFICATED SECURITIES
The transfer and exchange of a beneficial interest in a global security
will be effected through DTC in accordance with the procedures of DTC. Upon any
such issuance of registered debt in the form of certificated securities, the
trustee is required to register such certificated securities in the name of, and
cause the same to be delivered to, such person or persons, or their nominee, if
applicable. In addition, if (1) Rohm and Haas notifies the trustee in writing
that DTC is no longer willing or able to act as
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depositary and Rohm and Haas is unable to locate a qualified successor within 90
days or (2) Rohm and Haas, at its option, notifies the trustee in writing that
it elects to cause the issuance of registered debt in the form of certificated
securities under the indenture, then, upon surrender by Cede & Co., or its
nominee, of global securities, registered debt in such form will be issued to
each person that Cede & Co., or its nominee, and DTC identify as being the
beneficial owner of the related registered debt.
Neither Rohm and Haas nor the trustee will be liable for any delay by Cede
& Co., or its nominee, or DTC in identifying the beneficial owners of registered
debt and Rohm and Haas and the trustee may conclusively rely on, and will be
protected in relying on, instructions from Cede & Co., or its nominee, or DTC
for all purposes.
YEAR 2000
DTC management is aware that some computer applications, systems and the
like for processing data ("Systems") that are dependent upon calendar dates,
including dates before, on and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its Participants and other members of the financial
community (the "Industry") that it has developed and is implementing a program
so that its Systems, as the same relate to the timely payment of distributions
(including principal and income payments) to security holders, book-entry
deliveries and settlement of trades within DTC ("DTC Services"), continue to
function appropriately. This program includes a technical assessment and a
remediation plan, each of which is complete. Additionally, DTC's plan includes a
testing phase, which is expected to be completed within appropriate time frames.
However, DTC's ability to perform its services properly is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as third-party vendors from whom DTC licenses software and hardware, and
third-party vendors on whom DTC relies for information or the provision of
services, including telecommunication and electrical utility service providers,
among others. DTC has informed the Industry that it is contacting (and will
continue to contact) third-party vendors from whom DTC acquires services to: (i)
impress upon them the importance of those services being Year 2000 compliant;
and (ii) determine the extent of their efforts for Year 2000 remediation (and,
as appropriate, testing) of their services. In addition, DTC is in the process
of developing contingency plans it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to the Industry for informational purposes only and is not intended to
serve as a representation, warranty or contract modification of any kind.
ABSENCE OF RIGHTS TO ASSETS OF SUBSIDIARIES
Our subsidiaries are separate legal entities and have no obligation to pay
any amounts due to the holders of the registered debt. The registered debt is
our obligation and is effectively subordinated to the indebtedness of our
subsidiaries.
We may have the right to receive assets of a subsidiary should it liquidate
or reorganize. Such right will be subordinated to the rights of creditors of
that subsidiary, including trade creditors. Therefore, the right of a holder of
registered debt to receive some of the assets of the liquidating or reorganizing
subsidiary will be subordinated to the rights of the subsidiary's creditors. If
we are a creditor of the subsidiary, we would receive any assets remaining after
the secured creditors and other debt holders of the subsidiary are paid.
RESTRICTIVE PROVISIONS
The indenture contains restrictive provisions that apply to us and our
Restricted Subsidiaries, as defined in the indenture.
Under the indenture, a Subsidiary is a corporation that we control because
we, or any of our Subsidiaries, own a majority of the Subsidiary's voting
shares, which gives us the right to elect its
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directors. A Restricted Subsidiary is a Subsidiary that owns or leases any
Principal Operating Property. A Principal Operating Property is any principal
manufacturing facility (or certain related facility) in the United States, any
of its territories or possessions, or Puerto Rico that we, or any Subsidiary,
have owned and operated for more than 90 days. A Subsidiary will not be a
Restricted Subsidiary if our Board of Directors determines that the facility is
not material to our business as a whole. Any Subsidiary that is not a Restricted
Subsidiary is an Unrestricted Subsidiary. (Section 101).
Limitations on Mortgages
Under the indenture, if we or any of our Restricted Subsidiaries incur debt
that is secured by a Principal Operating Property or stock or debt of a
Restricted Subsidiary, we must secure the registered debt at least equally and
ratably with the secured debt. However, if the total amount of our secured debt
and the present value of any remaining rent payments for certain sale and
leaseback transactions involving a Principal Operating Property would not exceed
5% of our consolidated net worth, this requirement does not apply. (Section
1009). In calculating consolidated net worth under the indenture, we include
capital stock, surpluses and surplus reserves of its Unrestricted Subsidiaries,
as defined in the indenture. However, in calculating the aggregate amount of
secured debt, we may exclude:
- mortgages that existed at the time the company became a Restricted
Subsidiary;
- mortgages in our favor or in favor of a Restricted Subsidiary;
- mortgages in favor of governmental bodies that secure progress or advance
payments;
- mortgages existing at the time of an acquisition;
- purchase money and construction mortgages which are entered into or for
which commitments are received within a certain time period; and
- any extensions, renewals or refunding of these categories of mortgages.
Limitations on Sales and Leasebacks
The indenture prohibits us and any Restricted Subsidiary from selling or
transferring a Principal Operating Property with the intention of leasing it
back. However, this restriction does not apply in the following situations:
- if we or the Restricted Subsidiary could mortgage the Principal Operating
Property for an amount equal to the present value of any remaining rent
payments without equally and proportionately securing the securities;
- if, within 120 days after the sale or transfer, we or the Restricted
Subsidiary use the greater of the net proceeds from the sale of the
property or the fair market value of the property (subject to certain
credits) to retire our or its long-term debt;
- if, within 120 days after the sale or transfer, we or the Restricted
Subsidiary use an amount equal to the greater of the net proceeds from
the sale of the property or the fair market value of the property to
purchase a similar property;
- if we or the Restricted Subsidiary sell or transfer the property (or
enter into an agreement for a sale or transfer) within 120 days after the
latest of the acquisition of the property, the completion of its
construction or the start of full operations;
- if the lease period, including renewals, is for not more than three
years; or
- if the sale and leaseback transaction is between us and a Restricted
Subsidiary or between Restricted Subsidiaries. (Section 1010).
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Restrictions on Consolidation, Merger and Sale of Assets
We may not consolidate with or merge into any other corporation or sell
substantially all of our assets to another corporation unless:
- the successor corporation is incorporated under the laws of the United
States or a state of the United States or the District of Columbia and
assumes the payment of principal of, and any interest and premium on, the
securities and the performance and observance of the covenants and
conditions of the indenture; and
- the successor corporation is not in default in the performance of any
covenant or condition of the indenture immediately following the merger,
consolidation or sale. (Section 801).
EVENTS OF DEFAULT
Under the indenture, it is an event of default if:
- we fail to pay the principal of, or any premium on, any security when
due;
- we fail to pay interest on any security for 30 days;
- we fail to perform any other covenant in the indenture for 60 days after
we receive written notice of that failure;
- there is an acceleration of the maturity of any of our indebtedness
because of a default that continues for ten days after we receive written
notice of that default; or
- certain events of bankruptcy, insolvency or reorganization occur.
(Section 501).
Remedies if an Event of Default Occurs
If an event of default for any series of registered debt occurs and is
continuing, the trustee or the holders of at least 25% in total principal amount
of the securities of the relevant series may declare the entire principal amount
of that series due and payable immediately. Subject to certain conditions, if
the debt is accelerated, the holders of a majority of the total principal amount
of the registered debt of that series can rescind the declaration of
acceleration. (Section 502).
MODIFICATION OF THE INDENTURE AND WAIVER OF COVENANTS
Under the indenture, in order to change our rights and obligations and the
rights of any holders of registered debt, a majority of the holders of the total
principal amount of the registered debt of that series must consent to the
change. However, we may not make any of the following changes unless each holder
of registered debt affected by the change gives his or her specific consent:
- changes to the maturity date of the principal of, any installment of the
principal of, or any interest on, the registered debt;
- reduction of the principal amount of, or the rate of interest or any
premium on, the registered debt;
- change in the place or currency of payment of principal of, or interest
or any premium on, the registered debt;
- changes that impair the right to institute suit for payment; and
- changes that reduce the percentage of principal amount held by holders
required to amend the indenture or waive certain defaults. (Section 902).
Under the indenture, a majority of the holders of registered debt of any
series may waive past defaults with respect to that series other than:
- defaults in the payment of principal of or interest or any premium on
that series of registered debt; or
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- defaults regarding provisions that cannot be modified or amended without
the consent of each holder of that series. (Section 513).
The holders of a majority of the total principal amount of the registered
debt of any series may waive certain requirements of the indenture on behalf of
the entire class of holders of that series. (Section 1012).
DEFEASANCE PROVISIONS
Defeasance and Discharge
We will be discharged from our obligations on the registered debt of any
series if we deposit with the trustee sufficient cash or government securities
to pay the principal of, any interest or premium on, and any sinking fund
payments with respect to that series as required by the terms of that series.
This discharge will become effective 91 days after we deposit the cash or
registered debt with the trustee. If we are discharged, we must continue to
register the transfer and exchange of the securities, replace lost, stolen or
mutilated certificates representing the registered debt and, if necessary,
convert the registered debt.
We will only be eligible for discharge if the Internal Revenue Service
rules that a discharge is not a taxable event to the holders of the registered
debt. (Section 403).
Defeasance of Certain Covenants
The indenture provides us with the option to not comply with the
restrictive covenants of Sections 1009 and 1010. Section 1009 refers to
limitations on mortgages and Section 1010 refers to limitations on sale and
leaseback transactions.
To exercise our option, we must deposit with the trustee sufficient cash or
government securities to pay the principal of and any interest or premium on,
that series as required by the terms of that series. In addition, we will have
to deliver to the trustee an opinion of counsel that the holders of the
registered debt will not have to recognize income, gain or loss for Federal
income tax purposes as a result of our covenant defeasance. (Section 1011).
Defeasance and Events of Default
If an event of default occurs after we exercise our option to not comply
with certain covenants of the indenture, as discussed above, the registered debt
may become due and payable. If the amount of money and government securities
held by the trustee is not sufficient to pay the amounts due upon acceleration,
we will remain liable to pay the amounts due on the registered debt.
THE TRUSTEE
Chase Manhattan Trust Company, National Association, is the trustee under
the indenture. Chase Manhattan Trust Company, National Association, is also the
successor trustee under an indenture dated April 1, 1986 under which we have
issued debt securities. We have supplemented that indenture by amendments dated
December 15, 1988 and May 1, 1992. We have issued the following series of
securities under that indenture:
- 9.375% Debentures due November 15, 2019;
- 9.875% Notes due September 1, 2000; and
- 9.50% Medium-Term Notes due 2021.
Chase Manhattan Trust Company, National Association, is also the trustee
under an indenture dated April 1, 1990 under which Rohm and Haas Holdings, Ltd.,
our wholly owned subsidiary, issued 9.80% Amortizing Debentures due April 15,
2020. We have guaranteed these debentures.
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In addition, Chase Manhattan Trust Company, National Association, is the
trustee under an indenture dated December 20, 1991 relating to a sale and
leaseback of assets at our Texas subsidiary.
The Obligations of the Trustee
Other than its duty in the event of a default to act with the required
standard of care, the trustee is not obligated to exercise its rights or powers
under the indenture at the request or direction of any of the holders of
securities unless the holders agree to indemnify the trustee. (Section 603). If
the holders of the securities agree to indemnify the trustee, the holders of a
majority of the total principal amount of any series of securities may take, or
direct the trustee to take, certain actions. For example, they may direct the
time, method and place of:
- conducting any proceeding or remedy available to the trustee; or
- exercising any trust or power conferred on the trustee with respect to
the securities of that series. (Section 512).
Our Duties to the Trustee
We are required to give the trustee an annual statement about our
performance of certain of our obligations under the indentures. In addition, we
must inform the trustee of any default in this performance. (Section 1008).
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UNITED STATES FEDERAL TAX CONSEQUENCES
The following is a discussion of the material United States federal tax
consequences associated with the exchange of the outstanding debt for the
registered debt pursuant to the exchange offer and disposition of the registered
debt. This discussion applies only to a beneficial owner of registered debt who
acquired outstanding debt at the initial offering from Salomon Smith Barney
Inc., Chase Securities Inc., Goldman, Sachs & Co. and Banc One Capital Markets,
Inc. For the original offering price thereof and who acquires the registered
debt pursuant to the exchange offer. This discussion is based upon the United
States federal tax law now in effect, which is subject to change, possibly
retroactively. This discussion does not consider any specific facts or
circumstances that may apply to a particular holder. Prospective investors are
urged to consult their tax advisors regarding the United States federal tax
consequences of acquiring, holding, and disposing of the registered debt, as
well as any tax consequences that may arise under the laws of any foreign,
state, local, or other taxing jurisdiction.
For purposes of this discussion, a "U.S. holder" means a holder of
registered debt that is either a citizen or resident of the United States, a
corporation, partnership, or other entity created or organized in the United
States or under the laws of the United States or of any political subdivision
thereof, an estate whose income is includible in gross income for United States
federal income tax purposes regardless of its source, or a trust whose
administration is subject to the primary supervision of a United States court
and for which one or more United States persons have the authority to control
all substantial decisions of the trust. A "non-U.S. holder" is a holder of
registered debt other than a U.S. holder.
EXCHANGE OFFER
The exchange of outstanding debt for registered debt pursuant to the
exchange offer will not constitute a "significant modification" of the
outstanding debt for United States federal income tax purposes and, accordingly,
the registered debt received will be treated as a continuation of the
outstanding debt in the hand of such holder. As a result, there will be no
United States federal income tax consequences to a U.S. holder who exchanges
outstanding debt for registered debt pursuant to the exchange offer, and any
such holder will have the same adjusted tax basis and holding period in the
registered debt for United States federal income tax purposes as it had in the
outstanding debt immediately before the exchange.
STATED INTEREST
The holders of registered debt will include stated interest in gross income
in accordance with their methods of accounting for tax purposes (including
accrued, unpaid interest on the outstanding debt to the date of the issuance of
the registered debt).
DISPOSITION
A holder of registered debt will recognize gain or loss upon the sale,
exchange, redemption or other taxable disposition of the registered debt
measured by the difference between (1) the amount of cash and fair market value
of property received (that is not attributable to accrued interest which has not
yet been recognized as gross income) and (2) the holder's adjusted tax basis in
the registered debt. Any such gain or loss will be long-term capital gain or
loss, provided the registered debt was a capital asset in the hands of the
holder and had been held for more than one year.
NON-U.S. HOLDERS
Under present United States federal income and estate tax law, assuming
certain certification requirements are satisfied (which include identification
of the beneficial owner of the instrument), and subject to the discussion of
backup withholding below:
(1) payments of interest on the registered debt to any non-U.S. holder
will not be subject to United States federal income or withholding tax,
provided that (a) the holder does not actually or
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constructively own 10% or more of the total combined voting power of all
classes of stock of Rohm and Haas entitled to vote, (b) the holder is not
(i) a bank receiving interest pursuant to a loan agreement entered into in
the ordinary course of its trade or business or (ii) a controlled foreign
corporation that is related to Rohm and Haas through stock ownership, and
(c) such interest payments are not effectively connected with the conduct
of a United States trade or business of the holder;
(2) a holder of registered debt who is a non-U.S. holder will not be
subject to the United States federal income tax or gain realized on the
sale, exchange, or other disposition of registered debt, unless (a) such
holder is an individual who is present in the United States for 183 days or
more during the taxable year and certain other requirements are met, or (b)
the gain is effectively connected with the conduct of a United States trade
or business of the holder; and
(3) if interest on the registered debt is exempt from withholding of
United States federal income tax under the rules described above (without
regard to the certification requirement), the registered debt will not be
included in the estate of a deceased non-U.S. holder for the United States
Federal estate tax purposes.
The certification referred to above may be made on an Internal Revenue
Service Form W-8 or a substantially similar substitute form.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Rohm and Haas will, where required, report to the holders of registered
debt and the Internal Revenue Service the amount of any interest paid on the
registered debt in each calendar year and the amounts of federal tax withheld,
if any, with respect to such payments. A noncorporate U.S. holder may be subject
to information reporting and to backup withholding at a rate of 31% with respect
to payments of principal and interest made on registered debt, or on proceeds of
the disposition of registered debt before maturity, unless such U.S. holder
provides a correct taxpayer identification number or proof of an applicable
exemption, and otherwise complies with applicable requirements of the
information reporting and backup withholding rules.
Under temporary United States Treasury regulations, United States
information reporting requirements and backup withholding tax will generally not
apply to interest paid on the registered debt to a non-U.S. holder at an address
outside the United States. Payments by a United States office of a broker of the
process of a sale of the registered debt are subject to both backup withholding
at a rate of 31% and information reporting unless the holder certifies its
non-U.S. holder status under penalties of perjury and provides its name and
address or otherwise establishes an exemption. Information reporting
requirements (but not backup withholding) will also apply to payments of the
proceeds of sales of the registered debt by foreign offices of United States
brokers, or foreign brokers with certain types of relationships to the United
States, unless the broker has documentary evidence in its records that the
holder is a non-U.S. holder and certain other conditions are met, or the holder
otherwise establishes an exemption.
Backup withholding is not an additional tax. Any amount withheld under the
backup withholding rules will be refunded or credited against the non-U.S.
holder's United States Federal income tax liability, provided that the required
information is furnished to the Internal Revenue Service.
NEW TREASURY REGULATIONS APPLICABLE TO NON-U.S. HOLDERS
On October 6, 1997, the United States Treasury Department issued final
Treasury regulations governing information reporting and the certification
procedures regarding withholding and backup withholding on certain amounts paid
to non-U.S. holders after December 31, 2000. The new Treasury regulations modify
and, in general, unify the way in which non-U.S. holders may establish
eligibility for United States federal withholding tax exemptions, including that
under a tax treaty, and an exemption from backup withholding.
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For example, the new Treasury regulations will require new forms, which
non-U.S. holders will generally have to provide earlier than you would have had
to provide replacements for expiring existing forms. The new Treasury
regulations also clarify the standards upon which withholding agents of non-U.S.
holders may rely, add requirements in order for non-U.S. holders to claim
reduced federal tax withholding under a tax treaty, and provide different
procedures in order for foreign intermediaries and flow-through entities (such
as foreign partnerships) to claim the benefit of applicable exemptions if they
receive payments on behalf of non-U.S. holders.
The new Treasury regulations are particularly complex. Non-U.S. holders
should consult their tax advisors concerning the effect, if any, of such new
Treasury regulations on their investment in the registered debt.
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PLAN OF DISTRIBUTION
Based on existing interpretations of the Securities Act by the SEC's staff
set forth in several no-action letters to third parties, and subject to the
immediately following sentence, Rohm and Haas believes that the registered debt
issued in the exchange offer may be offered for resale, resold and otherwise
transferred by the holders thereof, other than holders who are broker-dealers,
without further compliance with the registration and prospectus delivery
provisions of the Securities Act. However, any purchaser of outstanding debt who
is an affiliate of Rohm and Haas or who intends to participate in the exchange
offer for the purpose of distributing the registered debt, or any broker-dealers
who purchased the outstanding debt from Rohm and Haas to resell pursuant to Rule
144A or any other available exemption under the Securities Act, (1) will not be
able to rely on the interpretations of the SEC's staff set forth in the above-
mentioned no-action letters, (2) will not be entitled to tender its outstanding
debt in the exchange offer and (3) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
sale or transfer of the outstanding debt, unless such sale or transfer is made
pursuant to an exemption from such requirements. Rohm and Haas does not intend
to seek its own no-action letter, and there can be no assurance that the SEC's
staff would make a similar determination with respect to the registered debt as
it has in such no-action letters to third parties.
Each holder of the outstanding debt, other than certain specified holders,
who wishes to exchange the outstanding debt for registered debt in the exchange
offer is required to represent that:
- it is not an affiliate of Rohm and Haas;
- the registered debt to be received by it was acquired in the ordinary
course of its business;
- at the time of the exchange offer, it has no arrangement with any person
to participate in the "distribution," within the meaning of the
Securities Act, of the registered debt; and
- if such holder is not a broker-dealer, it is not engaged in, and does not
intend to engage in, a "distribution," within the meaning of the
Securities Act, of the registered debt.
In addition, in connection with any resales of registered debt, any
broker-dealer who acquired the outstanding debt for its own account as a result
of market-making or other trading activities, referred to in this section as a
"participating broker-dealer," must deliver a prospectus meeting the
requirements of the Securities Act. Based on the position the SEC has taken to
date, Rohm and Haas believes that participating broker-dealers may fulfill their
prospectus delivery requirements with respect to the exchange debt, other than a
resale of an unsold allotment from the original sale of the outstanding debt,
with this prospectus. Under the registration rights agreement, Rohm and Haas is
required to allow participating broker-dealers and other persons, if any,
subject to similar prospectus delivery requirements to use the prospectus in
connection with the resale of such registered debt for a period of 180 days from
the expiration date of the exchange offer.
Each broker-dealer that receives registered debt for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such registered debt. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with the resales of registered debt received in
exchange for outstanding debt where such outstanding debt was acquired by such
broker-dealer as a result of market-making activities or other trading
activities. Each broker-dealer agrees that it shall suspend use of this
prospectus upon notice from Rohm and Haas of the occurrence of certain events
until Rohm and Haas has amended or supplemented the prospectus so that it does
not contain any untrue statements or omissions of material facts.
Rohm and Haas will not receive any proceeds from any sale of registered
debt by broker-dealers. Registered debt received by broker-dealers for their own
account pursuant to the exchange offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the registered debt or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or at negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or
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dealers who may receive compensation in the form of commissions or concessions
from any such broker-dealer and/or the purchasers of any such registered debt.
Any broker-dealer that resells registered debt that was received by it for its
own account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such registered debt may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of registered debt and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. Each letter of transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the expiration date, Rohm and Haas will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the applicable letter of transmittal. Rohm and Haas has agreed to pay all
expenses incident to the exchange offer other than commissions or concessions of
any brokers or dealers and will indemnify the holders of the outstanding debt,
including any broker-dealers, against certain liabilities, including liabilities
under the Securities Act.
WHERE YOU CAN FIND MORE INFORMATION
Rohm and Haas is required to file reports and other information with the
SEC pursuant to the information requirements of the Securities Exchange Act of
1934, as amended.
Rohm and Haas's filings with the SEC may be inspected and copied at the
public reference facilities maintained by the SEC at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Regional Offices of
the SEC located at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and 7 World Trade Center, Suite 1300, New York, New
York 10048. Please call the SEC at 1-800-SEC-0330 for further information
relating to the public reference rooms. Copies of our filings may be obtained at
the prescribed rates from the Public Reference Section of the SEC, 450 Fifth
Street, N.W., Washington, D.C. 20549. In addition, the SEC maintains an Internet
site (http://www.sec.gov) that contains certain reports, proxy statements and
other information regarding Rohm and Haas. Our common stock is traded on the New
York Stock Exchange.
No person is authorized to give any information or to make any
representations with respect to the matters described in this memorandum other
than those contained herein or in the documents incorporated by reference
herein. Any information or representation with respect to matters not contained
herein or therein must not be relied upon as having been authorized by Rohm and
Haas. The delivery of this memorandum shall not, under any circumstances, create
any implication that there has been no change in the affairs of Rohm and Haas
since the date hereof or that the information in this memorandum or in the
documents incorporated by reference herein is correct as of any time subsequent
to the date hereof or thereof.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, which have been filed by us with the SEC, are
incorporated herein and specifically made a part hereof by this reference:
(1) Rohm and Haas's Annual Report on Form 10-K for the year ended
December 31, 1998;
(2) Rohm and Haas's Annual Report on Form 10-K/A for the year ended
December 31, 1998;
(3) Rohm and Haas's Current Reports on Form 8-K filed with the SEC on
January 26, 1999, February 2, 1999, June 8, 1999 and July 1, 1999; and
(4) Rohm and Haas's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999.
In addition, all documents filed with the SEC pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act by us subsequent to the date of this
memorandum shall be deemed to be incorporated by
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reference into this memorandum and to be a part hereof from the date of filing
of such documents with the SEC. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this memorandum to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
memorandum.
Statements contained in this memorandum or in any document incorporated by
reference in this memorandum as to the contents of any contract or other
document referred to herein or therein are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the documents incorporated by reference, each such statement
being qualified in all respects by such reference.
This memorandum incorporates by reference documents that are not presented
herein or delivered herewith. Copies of such documents, other than exhibits to
such documents that are not specifically incorporated by reference herein, are
available without charge to any person to whom this memorandum is delivered,
upon written or oral request to: Rohm and Haas Company, 100 Independence Mall
West, Philadelphia, Pennsylvania 19106-2399, Attention: Corporate Secretary,
telephone: (215) 592-3000.
VALIDITY OF THE REGISTERED DEBT
The validity of the registered debt offered hereby will be passed upon for
Rohm and Haas by Morgan Lewis & Bockius LLP.
EXPERTS
The consolidated financial statements of Rohm and Haas and its subsidiaries
incorporated in this document by reference to the Annual Report on Form 10-K for
the year ended December 31, 1998, have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, relating to the
consolidated financial statements as of and for the year ended December 31,
1998, and the report of KPMG LLP, independent auditors, relating to the
consolidated financial statements as of and for each of the two years in the
period ended December 31, 1997, given on the authority of these firms as experts
in auditing and accounting.
The consolidated financial statements of Morton and subsidiaries
incorporated by reference in the Rohm and Haas Current Report dated July 1, 1999
(Form 8-K) have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report incorporated by reference into the Form 8-K and
incorporated into this document by reference. These consolidated financial
statements are incorporated in this document by reference in reliance upon the
report given on the authority of the firm as experts in accounting and auditing.
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ROHM AND HAAS COMPANY
EXCHANGE OFFER FOR
$ 500,000,000 6.95% NOTES DUE 2004
$ 500,000,000 7.40% NOTES DUE 2009
$1,000,000,000 7.85% DEBENTURES DUE 2029
[ROHM AND HAAS COMPANY LOGO]
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PROSPECTUS
AUGUST 9, 1999
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