Dow Chemical 2011 Annual Report Download - page 57

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Rohm and Haas Pension Plan Matters
In December 2005, a federal judge in the U.S. District Court for the Southern District of Indiana (the “District Court”) issued a
decision granting a class of participants in the Rohm and Haas Pension Plan (the “Rohm and Haas Plan”) who had retired from
Rohm and Haas, now a wholly owned subsidiary of the Company, and who elected to receive a lump sum benefit from the
Rohm and Haas Plan, the right to a cost-of-living adjustment (“COLA”) as part of their retirement benefit. In August 2007, the
Seventh Circuit Court of Appeals (the "Seventh Circuit") affirmed the District Court’s decision, and in March 2008, the U.S.
Supreme Court denied the Rohm and Haas Plan’s petition to review the Seventh Circuit’s decision. The case was returned to
the District Court for further proceedings. In October 2008 and February 2009, the District Court issued rulings that have the
effect of including in the class all Rohm and Haas retirees who received a lump sum distribution without a COLA from the
Rohm and Haas Plan since January 1976. These rulings are subject to appeal, and the District Court has not yet determined the
amount of the COLA benefits that may be due to the class participants. The Rohm and Haas Plan and the plaintiffs entered into
a settlement agreement that, in addition to settling the litigation with respect to the Rohm and Haas retirees, provides for the
amendment of the complaint and amendment of the Rohm and Haas Plan to include active employees in the settlement
benefits. The District Court preliminarily approved the settlement on November 24, 2009 and, following a hearing on
March 12, 2010, issued a final order approving the settlement on April 12, 2010. A group of objectors to the settlement filed an
appeal from the final order. In November 2010, the District Court issued an order approving class counsel’s fee award petition
in an amount consistent with the terms of the settlement. The same objectors also appealed this order. On September 2, 2011,
the Seventh Circuit affirmed the approval of the settlement and the award of attorneys' fees. A lone objector filed a petition for
rehearing, which was denied on October 17, 2011. The objector continued the appeal process by timely filing a petition for a
writ of certiorari to the U.S. Supreme Court, which is pending.
A pension liability associated with this matter of $185 million was recognized as part of the acquisition of Rohm and Haas
on April 1, 2009. The liability, which was determined in accordance with the accounting guidance for contingencies,
recognized the estimated impact of the above described judicial decisions on the long-term Rohm and Haas Plan obligations
owed to the applicable Rohm and Haas retirees and active employees. The Company had a liability associated with this matter
of $189 million at December 31, 2011 and $186 million at December 31, 2010.