Back to GetFilings.com
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 COMMISSION FILE NUMBER 1-3507
___________________________
ROHM AND HAAS COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 23-1028370
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
100 INDEPENDENCE MALL WEST, PHILADELPHIA, PA 19106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 215-592-3000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
- ------------------------------- ------------------------
Common Stock of $2.50 par value New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes / X / No / /.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /
Aggregate market value of voting stock held by nonaffiliates of the registrant
as of March 7, 1997: $3,800,305,465
Common stock outstanding at March 7, 1997: 62,868,326 SHARES.
Documents incorporated by reference:
Part I --Annual Report to Stockholders for year ended December 31, 1996
Part II --Annual Report to Stockholders for year ended December 31, 1996
Part III --Definitive Proxy Statement to be filed with the Securities
and Exchange Commission on or about March 21, 1997, except
the Report on Executive Compensation and Graph titled
"Cumulative Total Return to Shareholders" on pages 13
through 16.
Part IV --Annual Report to Stockholders for year ended December 31, 1996
==============================================================================
PART I
ITEM 1. BUSINESS
The information indicated below appears in the 1996 Annual Report to
Stockholders (Stockholders' Report) and is incorporated by reference:
PAGE OF
STOCKHOLDERS'
REPORT
-------------
Business operations:
Polymers, Resins and Monomers .......................... 14
Performance Chemicals .................................. 16
Plastics ............................................... 17
Agricultural Chemicals ................................. 19
Industry segment information for years 1994-96 ........... 42
Foreign operations for years 1994-96 ..................... 42
Employees ................................................ 54
Raw Materials
The company uses a variety of commodity chemicals as raw materials
in its operations. In most cases, these raw materials are purchased
from multiple sources under long-term contracts. Most of these
materials are hydrocarbon derivatives such as propylene, acetone and
styrene.
Competition
The principal market segments in which the company competes are
described in the company's Annual Report to Stockholders on pages 14
through 19. The company experiences vigorous competition in each of
these segments. The company's competitors include many large
multinational chemical firms based in Europe, Japan and the United
States. In some cases, the company competes against firms which are
producers of commodity chemicals which the company must purchase as the
raw materials to make its products. The company, however, does not
believe this places it at any significant competitive disadvantage. The
company's products compete with products offered by other manufacturers
on the basis of price, product quality and specifications, and customer
service. Most of the company's products are specialty chemicals which
are sold to customers who demand a high level of customer service and
technical expertise from the company and its sales force.
Research and Development
The company maintains its principal research and development
laboratories at Spring House, Pennsylvania. Research and development
expenses, substantially all company sponsored, totaled $187,000,000,
$194,000,000 and $201,000,000 in 1996, 1995 and 1994, respectively.
Approximately 15% of the company's employees were engaged in research
and development activities in 1996, 1995 and 1994.
Environmental Matters
A discussion of environmental matters is incorporated herein by
reference to pages 27 and 28 of the Stockholders' Report.
ITEM 2. PROPERTIES
The company, its subsidiaries and affiliates presently operate 48
manufacturing facilities in 22 countries. A list identifying those
facilities is found on page 60 of the company's Annual Report to
Stockholders which is hereby incorporated by reference. Additional
information addressing the suitability, adequacy and productive capacity
of the company's facilities is found on pages 28 and 29 of the company's
Stockholders' Report and throughout the various business discussions of
the company's industry segments found on pages 14 through 19 of the
Stockholders' Report.
1
ITEM 3. LEGAL PROCEEDINGS
A discussion of legal proceedings is incorporated herein by
reference to pages 51 and 52 of the Stockholders' Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
the fourth quarter of 1996.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The company's common stock of $2.50 par value is traded on the New
York Stock Exchange (Symbol: ROH). There were 4,438 registered common
stockholders as of March 7, 1997. The 1996 and 1995 quarterly summaries
of the high and low prices of the company's common stock and the amounts
of dividends paid on common stock are presented on pages 32 and 33 of
the Stockholders' Report and are incorporated in this Form 10-K by
reference.
ITEM 6. SELECTED FINANCIAL DATA
The company's summary of selected financial data and related notes
for the years 1992 through 1996 are incorporated in this Form 10-K by
reference to pages 54 through 56 of the Stockholders' Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Management's discussion and analysis of 1994 to 1996 results is
incorporated herein by reference to pages 22 through 31 of the
Stockholders' Report. These items should be read in conjunction with
the consolidated financial statements presented on pages 34 through 53
of the Stockholders' Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated balance sheets as of December 31, 1996, and 1995,
and the related consolidated statements of earnings, stockholders'
equity and cash flows for the years ended December 31, 1996, 1995, and
1994, together with the report of KPMG Peat Marwick LLP dated February
24, 1997 are incorporated in this Form 10-K by reference to pages 34
through 53 of the Stockholders' Report. Supplementary selected
quarterly financial data is incorporated in this Form 10-K by reference
to pages 32 and 33 of the Stockholders' Report.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
No reports on Form 8-K were filed during 1996 or 1995 relating to
any disagreements with accountants on accounting and financial
disclosure.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
AND
ITEM 11. EXECUTIVE COMPENSATION
The information called for by Items 10 and 11 of this Form 10-K
report for the fiscal year ended December 31, 1996, has been omitted,
except for the information presented below, because the company on or
about March 21, 1997, will file with the Securities and Exchange
Commission a definitive Proxy Statement pursuant to regulation 14(a)
under the Securities Exchange Act of 1934.
Executive Officers
The company's executive officers along with their present position,
offices held and activities during the past five years are presented
below. All officers normally are elected annually and serve at the
pleasure of the Board of Directors. The company's non-employee
directors and their business experience during the past five years are
listed in the company's Proxy Statement.
2
Thomas L. Archibald, 47, effective April 1, 1997, will become vice
president and director of engineering and manufacturing; previously
plant manager for the Louisville, Kentucky plant.
Paul J. Baduini, 49, vice president since 1993; business unit
director for ion exchange resins since 1992.
Albert H. Caesar, 59, vice president since 1993; business unit
director and president of AtoHaas Americas Inc. since 1992.
A. Wayne Carney, 48, vice president since 1995; business unit
director for formulation chemicals since 1990.
Patrick R. Colau, 51, vice president since 1995; business unit
director for polymers and resins since 1996; previously chief operating
officer from 1994 to 1995 and chief executive officer from 1992 to 1994
of Shipley Company.
Nance K. Dicciani, 49, vice president since 1993; business unit
director for monomers and chairman of RohMax since 1996; previously
business unit director for petroleum chemicals from 1991 to 1996.
Robert M. Downing, 53, vice president since 1993; operations
director for the North American region since 1986.
David T. Espenshade, 58, vice president since 1993; director of
materials management since 1990.
Carlos Estevez, 54, vice president since 1996; regional director for
Latin America since 1996; previously business director for agricultural
chemicals in Latin America from 1994 to 1996 and general manager of Rohm
and Haas Brazil and Southern Cone countries from 1992 to 1996.
J. Gary Fischette, 62, vice president since 1995; director of
engineering since 1990.
J. Michael Fitzpatrick, 50, vice president since 1993; Chief
Technology Officer since 1996; previously director of research since
1993 and general manager of Rohm and Haas (UK) Limited and European
regional business director for polymers and resins from 1990 to 1993.
Marisa L. Guerin, 44, vice president since 1994; director of human
resources since 1994; previously manager of training and development
from 1991 to 1994.
Rajiv L. Gupta, 51, vice president since 1993; regional director of
Asia-Pacific since 1993; previously business unit director for plastics
additives from 1989 to 1993.
Howard C. Levy, 53, vice president since 1993; business unit
director for biocides since 1989.
Philip G. Lewis, 46, vice president since 1993; director of safety,
health and environmental affairs and product integrity since 1993;
previously director of safety, health and environmental affairs from
1989 to 1993 and corporate medical director from 1987 to 1993.
John P. Mulroney, 61, director since 1982; president and chief
operating officer since 1986; director of Teradyne Inc. and Aluminum
Company of America.
Fred W. Shaffer, 64, vice president since 1978; chief financial
officer since 1979.
Richard C. Shipley, 51, vice president since 1996; president of
Shipley Company L.L.C. since 1985.
William H. Staas, 53, vice president since 1993; director of
research since 1996; previously business unit director for monomers from
1990 to 1996.
David A. Stitely, 57, vice president since 1995; director of
information technology and chief information officer since 1990.
John F. Talucci, 57, vice president and business unit director for
agricultural chemicals since 1989.
Charles M. Tatum, 49, vice president since 1990; business unit
director of plastics additives since 1993; previously director of
research from 1989 to 1993.
Basil A. Vassiliou, 62, vice president since 1986; regional director
of Europe since 1985; business group executive for plastics since 1991.
3
Robert P. Vogel, 52, vice president since 1994; general counsel
responsible for legal, insurance, tax and regulatory matters since 1994;
previously associate general counsel, regulatory counsel and director of
safety, health and environment and product integrity from 1991 to 1993.
J. Lawrence Wilson, 61, director since 1977; chairman of the board
and chief executive officer since 1988; director of The Vanguard Group
of Investment Companies and Cummins Engine Company, Inc.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The security ownership of certain beneficial owners and management
is incorporated in this Form 10- K by reference to pages 21 through 23
of the definitive Proxy Statement to be filed with the Securities and
Exchange Commission on or about March 21, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information called for by Item 13 is incorporated in this Form
10-K by reference to page 9 of the definitive Proxy Statement to be filed
with the Securities and Exchange Commission on or about March 21, 1997.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of this report:
1. Financial Statements
The consolidated financial statements of Rohm and Haas Company
are incorporated in this Form 10-K by reference to pages 34 through
53 of the Stockholders' Report, a complete copy of which follows
page 6 of this report, together with the report of KPMG Peat Marwick
LLP dated February 24, 1997.
2. Financial Statement Schedule
The following supplementary financial information is filed in
this Form 10-K and should be read in conjunction with the financial
statements in the Stockholders' Report:
PAGE
----
Independent Auditors' Report on Financial Statement Schedule ... 6
Schedule submitted:
II -- Valuation and qualifying accounts for the
years 1996, 1995 and 1994 ................................ 7
The schedules not included herein are omitted because they
arenot applicable or the required information is presented in
the financial statements or related notes.
3. Exhibits
Exhibit (10), Material Contracts. The following compensatory
plans are filed as Exhibit (10)(a) and (b) and are attached as pages
9 through 18 of this Form 10-K.
(a) Agreement between Rohm and Haas and Mr. John F. Talucci
(b) 1997 Non-Employee Directors' Stock Plan
The following management compensatory plans, which are subject
to stockholders' approval at the annual meeting on May 5, 1997, are
incorporated in this Form 10-K by reference to Exhibits A and B of
the definitive Proxy Statement to be filed with the Securities and
Exchange Commission on or about March 21, 1997:
(a) Rohm and Haas Annual Bonus Plan
(b) Rohm and Haas Long-Term Bonus Plan
Exhibit (12), Computation of Ratio of Earnings to Fixed Charges
for the company and subsidiaries, is attached as page 19 of this
Form 10-K.
Exhibit (13), Annual Report to Stockholders, follows page 6 of
this report.
Exhibit (21), Subsidiaries of the registrant, is attached as
page 20 and 21 of this Form 10-K.
Exhibit (23), Consent of independent certified public
accountants, is attached as page 22 of this Form 10-K.
Exhibit (27), Financial Data Schedule.
4
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, Rohm and Haas Company has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
/s/ Fred W. Shaffer
---------------------------------
Fred W. Shaffer
Vice President and
Chief Financial Officer
March 21, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed on March 21, 1997 by the following persons on behalf of
the registrant and in the capacities indicated.
- ------------------------------------------------------------------------------
SIGNATURE AND TITLE SIGNATURE AND TITLE
- ------------------------------------------------------------------------------
/s/ J. Lawrence Wilson /s/ Jorge P. Montoya
- ----------------------------------- -----------------------------------
J. Lawrence Wilson Jorge P. Montoya
Director, Chairman of the Board and Director
Chief Executive Officer
/s/ Fred W. Shaffer /s/ Sandra O. Moose
- ----------------------------------- -----------------------------------
Fred W. Shaffer Sandra O. Moose
Vice President and Director
Chief Financial Officer
/s/ George B. Beitzel /s/ John P. Mulroney
- ----------------------------------- -----------------------------------
George B. Beitzel John P. Mulroney
Director Director
/s/ Daniel B. Burke /s/ Gilbert S. Omenn
- ----------------------------------- -----------------------------------
Daniel B. Burke Gilbert S. Omenn
Director Director
/s/ Earl G. Graves /s/ Ronaldo H. Schmitz
- ----------------------------------- -----------------------------------
Earl G. Graves Ronaldo H. Schmitz
Director Director
/s/ James A. Henderson /s/ Alan Schriesheim
- ----------------------------------- -----------------------------------
James A. Henderson Alan Schriesheim
Director Director
/s/ John H. McArthur /s/ Marna C. Whittington
- ----------------------------------- -----------------------------------
John H. McArthur Marna C. Whittington
Director Director
/s/ Paul F. Miller, Jr.
- -----------------------------------
Paul F. Miller, Jr.
Director
5
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Rohm and Haas Company:
Under date of February 24, 1997, we reported on the consolidated
balance sheets of Rohm and Haas Company and subsidiaries as of December
31, 1996 and 1995, and the related consolidated statements of earnings,
stockholders' equity and cash flows for each of the years in the
three-year period ended December 31, 1996, which are included in the
1996 Annual Report to Stockholders. These consolidated financial
statements and our report thereon are incorporated by reference in the
annual report on Form 10-K for the year 1996. In connection with our
audits of the aforementioned consolidated financial statements, we also
audited the related consolidated financial statement schedule as listed
in Item 14 of the Form 10-K for the year 1996 under the heading "Financial
Statement Schedule." This financial statement schedule is the
responsibility of the company's management. Our responsibility is to
express an opinion on this financial statement schedule based on our
audits.
In our opinion, such financial statement schedule, when considered
in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set
forth therein.
/s/ KPMG PEAT MARWICK LLP
-----------------------------------
KPMG PEAT MARWICK LLP
Philadelphia, PA
February 24, 1997
6
SCHEDULE II
ROHM AND HAAS COMPANY AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 31,
---------------------------------------
1996 1995 1994
---- ---- ----
(millions of dollars)
Deducted from Accounts Receivable --
Allowances for losses:
Balance at beginning of year..... $12 $11 $10
Additions charged to earnings.... 4 4 3
Charge-offs, net of recoveries... (2) (3) (2)
--- --- ---
Balance at end of year........... $14 $12 $11
=== === ===
7
[THIS PAGE INTENTIONALLY LEFT BLANK]
8