The Executive Compensation Committee reviews and
compensation plans and remuneration arrange-ments for senior management and
directors and oversees the administration of executive compensation plans. If
necessary, a subcommittee makes decisions in accordance with require-ments of
Section 162(m) of the Internal Revenue Code.
(As Amended, Approved and
Adopted March 2003)
The purposes of the Executive Compensation Committee of the
Board of Directors (“Board”) of Rohm and Haas Company (“Company”) shall be to:
(1) discharge the Board’s responsibilities relating to compensation of the
Company’s senior executives; (2) produce annually a report on executive
compensation for inclusion in the Company’s proxy statement; (3) assume
responsibility for approving and evaluating the compensation plans, policies and
programs for the Company’s senior executives; and (4) develop and recommend to
the Board all incentive and equity-based compensation plans and programs.
The Executive Compensation Committee shall be appointed by the
Board and be composed of at least three (3) directors, each of whom shall meet,
as affirmatively determined by the Board at least annually, the independence
requirements of governing law, rules, regulations and the listing standards of
the New York Stock Exchange. The members of the Executive Compensation
Committee, or a sub-committee thereof, also shall meet the independence criteria
required by applicable tax laws.
The members of the Executive Compensation Committee shall be
nominated by the Nominating Committee and appointed by the Board for one-year
terms. The Nominating Committee shall recommend, and the Board shall designate,
one member of the Executive Compensation Committee to serve as Chairperson. No
member of the Executive Compensation Committee shall be removed except by
majority vote of the independent directors of the full Board then in office.
The only compensation a member shall receive for service on
the Executive Compensation Committee is the member’s fees as a director.
- The Executive Compensation Committee shall fix its own
rules of procedure, which shall be consistent with the Bylaws of the Company
and this Charter.
- The Executive Compensation Committee shall meet as often as
it may deem necessary and appropriate in its judgment, and in no event less
than four (4) times per year, and members are expected to attend in person. A
majority of the members of the Executive Compensation Committee shall
constitute a quorum, and a member may participate in a meeting by telephone if
necessary to constitute a quorum or otherwise conduct the business of the
- The Chairperson of the Executive Compensation Committee, or
a majority of the members of the Executive Compensation Committee, may call a
special meeting of the Executive Compensation Committee.
- The Executive Compensation Committee may form and delegate
authority to subcommittees when appropriate or may designate one or more of
its members the authority to act on behalf of the Committee, unless the
authority so delegated or designated is required by law, regulation, listing
standard, or Company Bylaws to be exercised by the Executive Compensation
Committee as a whole.
- The Executive Compensation Committee may request that any
directors, officers or employees of the Company, or other persons whose advice
and counsel are sought by the Executive Compensation Committee, attend any
meeting to provide such information as the Executive Compensation Committee
- Following each of its meetings, the Executive Compensation
Committee shall deliver a report on its meeting to the Board, including a
description of all actions taken by the Executive Compensation Committee at
- The Executive Compensation Committee shall keep
written minutes of its meetings, and these minutes shall be maintained with
the books and records of the Company.
To fulfill its duties and responsibilities, the Executive
Compensation Committee shall:
- Have the sole responsibility to retain, set compensation
and retention terms for and to terminate any consultant or firm which the
Executive Compensation Committee desires to employ to assist in the
performance of its duties. Further, the Committee shall have the authority to
obtain advice and assistance from other internal and external advisors to
carry out its duties and responsibilities. Funding for the retention of the
consultant, firm and any such advisors will be provided by the Company. The
Committee also may obtain advice or assistance from resources within the
Company as it deems appropriate.
- Annually review and approve corporate goals and objectives
relevant to CEO compensation, evaluate the CEO’s performance in light of those
goals and objectives, and set the CEO’s compensation levels based on this
evaluation. The Committee will consider the Nominating Committee’s assessment
of the CEO’s performance in meeting this responsibility. In determining the
long-term incentive component of CEO compensation, the Committee shall
consider, among other things, the Company’s performance and relative
shareholder return, the value of similar incentive awards to the CEO at
comparable companies, and the awards given to the CEO in past years. The
Committee shall approve awards as may be required to comply with applicable
- Annually review and recommend to the Board for approval,
for the other senior executives of the Company, (a) the annual base salary
level, (b) the annual incentive opportunity level, (c) the long-term incentive
opportunity level, (d) employment agreements, severance arrangements, and
change-in-control agreements/provisions, in each case as, when and if
appropriate, and (e) any special or supplemental benefits. To facilitate
fulfilling this responsibility, the Committee shall monitor at regular
intervals the competitive standing of all components of executive
compensation, define and approve the group(s) of companies used for
competitive comparison and the basis for such comparison, and determine the
competitive standing the Company should seek to maintain.
- Periodically review and assess the Company’s incentive and
equity-based compensation plans and programs and recommend changes to such
plans and programs to the Board as appropriate.
- Oversee awards made under the Company’s incentive and
equity-based compensation plans and programs, including determining
eligibility, the number and type of awards available for grant, and the terms
and conditions of such grants.
- Produce annually a report on executive compensation for
inclusion in the Company’s proxy statement.
- Reassess on at least an annual basis, the adequacy of this
Charter and recommend any proposed changes to the Board for its approval.
- Perform an annual self-evaluation of its performance and
deliver a report to the Board setting forth the results of its evaluation. In
conducting this review, the Executive Compensation Committee shall address
matters that it considers relevant to its performance, including at a minimum,
the adequacy, appropriateness and quality of the information and
recommendations presented to the Board, the manner in which they were
discussed or debated, and whether the number and length of meetings of the
Executive Compensation Committee were adequate for the Executive Compensation
Committee to complete its work in a thorough and thoughtful manner.
- Recommend to the Board any changes to the schedule of
fees for outside directors.