exv10w1



 







Exhibit 10.1




2005 ROHM AND HAAS COMPANY

NON-EMPLOYEE DIRECTORS’ STOCK PLAN

(Effective January 1, 2005)




     1. Purpose. The purpose of this 2005 Non-Employee Directors’ Stock Plan (the
“Plan”) of Rohm and Haas Company (the “Company”) is to advance the interests of
the Company and its stockholders by providing a means (i) to promote ownership
by the directors of a greater proprietary interest in the Company, aligning the
directors’ interests more closely with the interests of stockholders, and (ii)
to attract and retain highly qualified persons to serve as non-employee
directors.



     2. Effectiveness. This Plan is intended to comply with the applicable
provisions of the American Jobs Creation Act of 2004 (“AJCA”) and is to be
construed in accordance with AJCA and the regulations issued thereunder.
Without affecting the validity of any other provision of the Plan, to the
extent that any Plan provision does not meet the requirements of AJCA and the
regulations issued thereunder, it shall be void ab initio and shall have no
effect.



     3. Definitions.



     (a) “Code” means the Internal Revenue Code of 1986, as amended.



     (b) “Deferred Stock” means the credits to a director’s deferral account
under Section 6, each of which represents the right to receive one share of
Stock upon settlement of the deferral account. Deferral accounts, and Deferred
Stock credited to the deferral accounts, are maintained solely as bookkeeping
entries by the Company evidencing unfunded obligations of the Company.



     (c) “Fair Market Value” of Stock means, as of any given date, the average
of the high and low price of a share of Stock reported in the New York Stock
Exchange Composite Transactions.



     (d) “Separation from Service” shall have the meaning provided in
regulations issued under section 409A of the Code.



     (e) “Stock” means the Common Stock, $2.50 par value, of the Company and
such other securities as may be substituted for Stock or such other securities
pursuant to Section 3.



     4. Shares Available Under the Plan. The total number of shares of Stock
reserved and available for issuance under the Plan is 500,000 shares. Such
shares may be authorized but unissued shares or treasury shares. The total
number and nature of shares so reserved shall be appropriately adjusted to
reflect stock dividends, stock splits, combinations of shares and any similar
change in the corporate capital structure which affects the Stock such that an
adjustment is appropriate to prevent dilution or enlargement of a director’s
rights under the Plan, including change as a result of a reorganization,
recapitalization, merger or consolidation.



     5. Administration of the Plan. The Plan will be administered by the Board of
Directors of the Company. Any action taken must be approved by the affirmative
vote of a majority of directors.



     6. Eligibility. Deferred Stock under this Plan may be issued only to
directors of the Company who are not employees of the Company or any of its
subsidiaries. The issuance of any share under this Plan shall not impose upon
the Company or its subsidiaries any obligation to retain the director for any
period.



     7. Receipt of Deferred Stock.



     (a) Automatic Deferral of One-Half of Annual Retainer. Each eligible
director will receive one-half of the amount of his or her annual retainer for
services as a director in Deferred Stock. The Company will credit the
director’s deferral account, on the fifth business day in January or promptly
after election if newly elected, with a



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number of shares of Deferred Stock calculated by dividing one-half the annual
retainer by the Fair Market Value of a share of Stock on such credit action.
If the director dies, retires or leaves the Board before the completion of the
calendar year, his or her account will be adjusted to subtract the amounts not
yet earned. Fees for services as a chair of a committee will be paid in cash.




     (b) Election
to Defer Remainder of Annual Retainer.



          (i) An eligible director may elect, no later than December 31 of any
year, to defer all or a portion of his or her annual retainer that would
otherwise be paid in cash during the next calendar year by filing a written
election with the Corporate Secretary. A new director may elect to defer all or
part of his or her annual retainer that would otherwise be paid in cash during
that calendar year by filing a written election with the Corporate Secretary
within 30 days following his or her election to the Board. Once the election
to defer is in place, the same election will remain in effect for each
succeeding year until the election is changed at any time prior to the start of
the calendar year when the new election will take effect.



          (ii) The Company will credit the director’s deferral account (at the same
time that the Deferred Stock is credited under Section 7(a)) with a number of
shares of Deferred Stock calculated by dividing the dollar amount being
deferred by the Fair Market Value of a share of Stock on the fifth business day
of the calendar year.



     (c) Crediting of Dividend Equivalents. Whenever dividends are paid or
distributions made with respect to Stock, each director shall be entitled to
receive, as dividend equivalents, an amount equal in value to the amount of the
dividend paid or property distributed on a single share of Stock multiplied by
the number of shares of Deferred Stock (including any fractional share)
credited to his or her deferral account as of the record date for the dividend
or distribution. The dividend equivalents shall be credited to the director’s
deferral account as a number of shares of Deferred Stock determined by dividing
the aggregate value of the dividend equivalents by the Fair Market Value of a
share of Stock at the payment date of the dividend or distribution.



     (d) Designation of Beneficiary. Each director may designate one or more
beneficiaries to receive the amounts distributable from the director’s deferral
account under the Plan in event of the director’s death. The Company may rely
upon the beneficiary designation last filed with the Company.



     (e) Distribution Elections. At the time of his or her initial
participation in the Plan, a director may elect to receive settlement of his or
her entire deferral account (i) in a single distribution on the tenth business
day following the earlier of his or her Separation from Service or death or
(ii) in a series of equal annual installments in such number as the director
shall specify (but not exceeding ten) commencing on the tenth business day
following the earlier of his or her Separation from Service or death. Such
election shall be filed with the Corporate Secretary before the commencement of
the director’s term in office and shall apply to all amounts subsequently
deferred under the Plan. Failure to make an election under this Section within
the time required will result in the settlement being made in a single
distribution on the tenth business day following the earlier of Separation from
Service or death.



     (f) Treatment of Amounts Deferred Prior to 2005 under the 1997
Non-Employee Directors’ Stock Plan. Within the time prescribed in regulations
issued under section 409A of the Code, a director who made a deferral election
under the 1997 Non-Employee Directors’ Stock Plan with respect to annual
retainers to be earned in 2005 may revoke such election or elect to defer the
same portion of such retainer into this Plan. An election to defer a 2005
annual retainer into the Plan shall designate a form of distribution (as
provided in Section 7(e)) with respect to such annual retainer and all amounts
subsequently deferred under the Plan. A director who fails to make an
affirmative election hereunder shall nevertheless be deemed to have made such
an election and settlement of his or her deferral account shall be made in a
single distribution on the tenth business day following the earlier of the
director’s Separation from Service or death.



     (g) Nonforfeitability. The interest of each director in the Deferred
Stock in his or her deferral account will be nonforfeitable.



     (h) Settlement of Deferred Stock. The Company will settle a director’s
deferral account by delivering to the director (or his or her beneficiary) a
number of shares of Stock equal to the number of whole shares of Deferred Stock
then credited to his or her deferral account (or a specified portion in the
event of an installment settlement),



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together with cash in lieu of any fractional share of Deferred Stock credited
to the deferral account. The settlement shall be made at the time specified in
the director’s election filed in accordance with Section 7(e) or 7(f), as
applicable.




     8. Changes to the Plan. The Board of Directors may amend, alter, suspend or
discontinue the Plan or authority to pay retainers in the form of Deferred
Stock under the Plan without the consent of stockholders unless stockholder
consent is required by any federal or state law or regulation or the rules of
any stock exchange. However, in no event shall a discontinuance of the Plan
cause the distribution of deferral accounts prior to the time provided in
Sections 7(e) or 7(f), as applicable. The Board may, in its discretion, decide
to submit amendments or alterations to stockholders for approval. Unless
required to comply with applicable law, including (without limitation) the
requirements of Section 409A of the Code and the regulations issued thereunder,
no action may materially impair the rights of the directors with respect to any
previously granted Deferred Stock without the consent of the affected director.



     9. General Provisions.



     (a) Compliance with Laws and Obligations. The Company will not be
obligated to issue or deliver shares of Stock in settlement of Deferred Stock
in a transaction subject to the registration requirements of the Securities Act
of 1933, as amended, or any other federal or state securities law, any listing
requirement under any listing agreement between the Company and any stock
exchange or any other law, regulation or contractual obligation of the Company
until the Company is satisfied that such laws, regulations and other
obligations of the company have been complied with in full, and no settlement
of the Deferred Stock shall be made within six months of the Deferred Stock
being awarded if necessary to qualify for an exemption under section 16 of the
Securities and Exchange Act of 1934. Certificates representing shares of Stock
issued under the Plan will be subject to stop-transfer orders and other
restrictions as may be applicable under such laws, regulations, and other
obligations of the Company, including any requirement that a legend or legends
be placed on the certificates.



     (b) Limitations on Transferability. Deferred Stock will not be
transferable except by will or the laws of descent and distribution (or to a
designated beneficiary in the event of a director’s death).



     (c) No Stockholder Rights Conferred. Nothing in this Plan will confer
upon a director any rights of a stockholder of the Company unless and until
shares of Stock are issued.



     (d) Governing Law. The validity, construction and effect of the Plan
will be determined in accordance with the Delaware General Corporation Law and
other laws of the State of Delaware, without giving effect to principles of
conflicts of laws, and applicable federal law.



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