SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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ROGERS CORPORATION
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(Name of Registrant as Specified in Its Charter)
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ROGERS [LOGO]
One Technology Drive / P. O. Box 188 / Rogers, CT 06263-0188 / 860.774.9605
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Rogers Corporation, a Massachusetts
corporation, will be held on Thursday, April 28, 2005, at 10:30 A.M. at the
Hilton Garden Inn Hartford South/Glastonbury, 85 Glastonbury Boulevard,
Glastonbury, Connecticut, for the following purposes:
1. To elect the members of the board of directors for the ensuing year.
2. To approve the Rogers Corporation 2005 Equity Compensation Plan.
3. To ratify the appointment of Ernst & Young LLP as the independent
registered public accounting firm of Rogers Corporation for the
fiscal year ending January 1, 2006.
4. To transact such other business as may properly come before the
meeting.
Shareholders entitled to receive notice of and to vote at the meeting are
determined as of the close of business on March 3, 2005, the record date
fixed by the board of directors for such purpose.
Regardless of whether or not you plan to attend the meeting, you can be
sure your shares are represented at the meeting by promptly signing, dating
and returning your proxy card in the enclosed pre-addressed, postage-paid
return envelope. If your shares are registered in the name of a bank or
brokerage firm, you may be able to vote your shares electronically over the
internet or by telephone. If for any reason you desire to revoke or change
your proxy, you may do so at any time before it is voted. The enclosed
proxy is solicited by the board of directors of Rogers Corporation.
We cordially invite you to attend the meeting.
By Order of the Board of Directors
Robert M. Soffer, Vice President and Secretary
March 18, 2005
Proxy Statement Table of Contents
Page
2 Proposal 1: Election of Directors
3 Stock Ownership of Management
4 Beneficial Ownership of More Than Five Percent of Rogers Stock
5 Corporate Governance Practices
6 Board of Directors
6 Independence of Board of Directors
6 Meetings; Certain Committees
8 Directors' Compensation
9 Audit Committee Report
10 Executive Compensation
10 Summary Compensation Table
12 Option Grants in Last Fiscal Year
13 Aggregated Option Exercises in the Last Fiscal Year and Fiscal
Year-End Option Values
14 Retirement Plans
16 Equity Compensation Plan Information
17 Compensation and Organization Committee Report
20 Performance Graph
21 Termination of Employment and Change of Control Arrangements
21 Section 16(a) Beneficial Ownership Reporting Compliance
22 Proposal 2: Approval of the 2005 Equity Compensation Plan
29 Proposal 3: Ratification of Appointment of Independent Registered
Public Accounting Firm
31 Proposals of Shareholders
31 Solicitation of Proxies
31 Bylaw Amendments Approved by the Directors in 2004
31 "Householding" of Proxy Materials
32 Communications with Members of the Board of Directors
32 Availability of Certain Documents
A-1 Rogers Corporation 2005 Equity Compensation Plan
B-1 Rogers Corporation Amendments to Bylaws
ROGERS [LOGO]
One Technology Drive / P. O. Box 188 / Rogers, CT 06263-0188 / 860.774.9605
Proxy Statement - March 18, 2005
We are providing you with this proxy statement and the enclosed proxy card
in connection with the solicitation of proxies by the board of directors of
Rogers Corporation for the Annual Meeting of Shareholders to be held on
Thursday, April 28, 2005, at 10:30 A.M. at the Hilton Garden Inn Hartford
South/Glastonbury, 85 Glastonbury Boulevard, Glastonbury, Connecticut.
If you are a shareholder of record as of the close of business on March 3,
2005, you are entitled to vote at the meeting and any adjournment thereof.
As of that date, 16,373,519 shares of capital stock, $1 par value per
share, of Rogers were outstanding. You are entitled to one vote for each
share owned. Execution of a proxy will not in any way affect your right to
attend the meeting and vote in person. Any shareholder submitting a proxy
has the right to revoke it any time before it is exercised by filing a
written revocation with the Secretary of Rogers, by executing a proxy with
a later date, or by attending and voting at the meeting.
If you sign your proxy card, but do not give voting instructions, the proxy
will be voted: (1) FOR the election of the nominees to the board of
directors shown under the heading "NOMINEES FOR DIRECTOR", (2) FOR the
approval of the Company's 2005 Equity Compensation Plan, and (3) FOR the
ratification of Ernst & Young LLP as the independent registered public
accounting firm of Rogers Corporation for the fiscal year ending January 1,
2006.
The presence, in person or by proxy, of the holders of a majority of the
shares of capital stock entitled to vote at the meeting is necessary to
constitute a quorum. Abstentions and broker "non-votes" are counted as
present and entitled to vote for purposes of determining a quorum. Neither
abstentions nor broker "non-votes" will be considered votes properly cast
at the meeting. Accordingly, because the approval of each of the proposals
is based on the votes properly cast at the meeting, neither abstentions nor
broker "non-votes" will have any effect upon the outcome of voting with
respect to any of the proposals. A broker "non-vote" occurs when a nominee
holding shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power for
that particular item and has not received instructions from the beneficial
owner. Under the rules of the stock exchange applicable to member firms,
brokers will have discretionary authority to vote shares held in their name
for the election of directors and for the ratification of the Company's
independent registered public accounting firm even if they do not receive
instructions from the beneficial owners.
With regard to each of the approval of the Company's 2005 Equity
Compensation Plan and the ratification of the Company's independent
registered public accounting firm, votes may be cast for or against such
proposal or you may abstain from voting on the proposal. With regard to the
election of directors, votes may be cast for all nominees or withheld from
all nominees or any particular nominee. Votes withheld in connection with
the election of one or more directors will not be counted as votes cast for
such individuals. Those nominees receiving the nine highest numbers of
votes at the meeting will be elected, even if such votes do not constitute
a majority of the votes cast.
We do not expect any matters other than those set forth in the accompanying
Notice of Annual Meeting of Shareholders to be presented at the meeting. If
any other matter should be presented at the meeting upon which a vote
properly may be taken, shares represented by all proxies properly executed
and received will be voted with respect to this matter in accordance with
the judgment of the persons named as proxies.
This proxy statement and the accompanying proxy are first being mailed to
you on or about March 25, 2005. In addition, we are enclosing a copy of our
2004 annual report.
1
Proposal 1: Election of Directors
The directors of Rogers are elected annually by shareholders and hold
office until the next Annual Meeting of Shareholders and thereafter until
their successors have been chosen and qualified. The board of directors has
been advised that each nominee will serve if elected. If any of these
nominees should become unavailable for election, proxies will be voted for
the election of such other person, or for fixing the number of directors at
a lesser number, as the board of directors may recommend. All of the
nominees are currently directors of Rogers and were elected to their
present term of office at the April 2004 Annual Meeting of Shareholders.
NOMINEES FOR DIRECTOR
Age/Year
First Became Principal Occupations During the Past
Name Director Five Years and Other Directorships
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Leonard M. Baker 70 / 1994 Retired (as of December 2001) Senior Vice
President and Chief Technical Officer,
June 2000 to December 2001 and prior to
that Vice President Technology, Praxair, Inc.
Walter E. Boomer 66 / 1997 Retired (as of April 2004) Chief Executive
Officer since March 31, 1997, Chairman of the
Board of Directors since April 25, 2002 and
prior to that President since March 31, 1997,
Rogers Corporation; Director: Baxter
International, Inc. and Cytyc Corporation
Edward L. Diefenthal 62 / 1998 Chief Executive Officer and Director, Southern
Holdings, LLC
Gregory B. Howey 62 / 1994 President and Director, Okay Industries, Inc.
Leonard R. Jaskol 67 / 1992 Retired (as of December 1998) Chairman, Chief
Executive Officer and Director, Lydall, Inc.
Eileen S. Kraus 66 / 2001 Retired (as of July 2000) Chairman, Fleet
National Bank - Connecticut, a subsidiary of
FleetBoston Financial Corporation; Director:
Kaman Corporation and The Stanley Works
William E. Mitchell 61 / 1994 President and Chief Executive Officer since
February 2003, Director, Arrow Electronics,
Inc.; Executive Vice President, September 2001
to January 2003 and Vice President, March 1999
to August 2001, Solectron Corporation and
President, Solectron Global Services, Inc.,
March 1999 to January 2003
Robert G. Paul 63 / 2000 Director, (Retired) President Base Station
Sub-Systems Group, Andrew Corporation since
July 2003; President, Chief Executive Officer
and Director, Allen Telecom Inc. from 1991 to
July 2003
Robert D. Wachob 57 / 2004 President and Chief Executive Officer since
April 2004, President and Chief Operating Officer
from April 25, 2002 to April 2004, Executive Vice
President, January 27, 2000 to April 25, 2002 and
prior to that Senior Vice President, Sales and
Marketing, Rogers Corporation
Vote Required and Recommendation of the Board of Directors
Directors must be elected by a plurality of the votes cast. This means
those nominees receiving the nine highest number of votes at the Annual
Meeting of Shareholders will be elected, even if such votes do not
constitute a majority of the votes cast.
The board of directors recommends a vote FOR the election of the above
named nominees to the board of directors.
2
Stock Ownership of Management
This table provides information about the beneficial ownership of Rogers
capital stock as of March 3, 2005, by each of the current directors, the
executive officers named in the Summary Compensation Table (the "Named
Executive Officers") and by all directors and executive officers as a
group. Unless otherwise noted, the persons listed below have sole voting
and investment power with respect to the shares reported.
Beneficial Ownership
-------------------------- Total
Total Percent Stock
Name of Person or Group Shares (1) of Class (2) Interest (3)
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Leonard M. Baker 43,463 * 43,463
Walter E. Boomer 290,586 1.75 299,652
Robert C. Daigle (4) 66,907 * 66,907
Edward L. Diefenthal 41,499 * 41,499
Gregory B. Howey 47,770 * 55,985
Leonard R. Jaskol 60,110 * 63,809
Eileen S. Kraus 18,581 * 22,633
William E. Mitchell 34,941 * 35,501
Robert G. Paul 29,238 * 29,238
John A. Richie 85,880 * 85,880
James M. Rutledge (5) 24,794 * 24,794
Robert M. Soffer (4) 98,260 * 98,260
Robert D. Wachob (4) 261,603 1.58 261,603
All Directors and Executive
Officers as a Group
(14 persons) 1,117,311 6.48 1,142,903
Represents the total number of currently owned shares and shares
acquirable within 60 days of March 3, 2005 through the exercise of
stock options. Shares acquirable under stock options exercisable
within 60 days for each individual are as follows (last name/number
of shares): Baker/34,750; Boomer/241,363; Daigle/ 58,000;
Diefenthal/37,132; Howey/36,750; Jaskol/38,466; Kraus/18,480;
Mitchell/31,750; Paul/22,564; Richie/68,600; Rutledge/21,333;
Soffer/56,600; Wachob/198,166; and the group of 14
individuals/876,953.
Represents the percent of ownership of total outstanding shares of
capital stock with the * indicating that the amount of ownership
represents less than 1% of outstanding capital stock.
Includes total beneficial ownership plus the number of shares of
capital stock that have been deferred pursuant to Rogers'
compensation programs.
Messrs. Daigle, Soffer and Wachob own, respectively, 1,829, 27,435
and 55,365 shares included above as to which investment and voting
power is shared with spouses.
Mr. Rutledge resigned as Vice President, Finance, Chief Financial
Officer and Treasurer effective March 11, 2005.
The address of all persons listed above is c/o Rogers Corporation, One
Technology Drive, P.O. Box 188, Rogers, Connecticut 06263-0188.
3
Beneficial Ownership of More Than Five Percent of Rogers Stock
This table provides information regarding beneficial ownership as of
December 31, 2004 of each person known to Rogers to own more than 5% of its
outstanding capital stock. The information in this table is based upon
filings by each such person with the Securities and Exchange Commission on
Schedule 13G (including amendments) under the Securities Exchange Act of
1934, as amended. Unless otherwise noted, the beneficial owners have sole
voting and investment power with respect to the shares listed below.
Shares
Beneficially Percent of
Name and Address of Beneficial Owner Owned Class (1)
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Capital Research and Management Company (2) 1,350,000 8.2
333 South Hope Street
Los Angeles, California 90071
Lord, Abbett & Co. 1,516,254 9.3
90 Hudson Street
Jersey City, New Jersey 07302
Westport Asset Management, Inc. (3) 1,546,501 9.4
253 Riverside Avenue
Westport, Connecticut 06880
As of the record date, March 3, 2005.
Capital Research and Management Company, a registered investment
advisor, has investment power with respect to all of the shares
listed above. SMALLCAP World Fund, Inc., an investment company that
is advised by Capital Research and Management Company, has sole
voting power with respect to 600,000 of the shares listed above.
Capital Research and Management Company disclaims beneficial
ownership of all such shares.
Westport Asset Management, Inc., a registered investment advisor, has
sole voting and investment power with respect to 164,800 of the
shares listed above, has shared voting power with its affiliate
Westport Advisers LLC with respect to 1,177,400 of the shares listed
above, and has shared investment power with respect to 1,381,701 of
the shares listed above. All shares are held in certain discretionary
managed accounts. Westport Asset Management, Inc. disclaims
beneficial ownership of all such shares.
Corporate Governance Practices
Rogers has long subscribed to sound corporate governance practices. Such
basic principles are summarized here.
* The board of directors is elected by and is accountable to the
shareholders. Its primary purpose is to oversee management and
to assure that the long-term interests of the shareholders are
being served.
* All directors stand for election annually.
* The board of directors has adopted a retirement policy for
directors, which is set forth in Rogers' Bylaws, under which
directors may not stand for re-election after age 72.
* The board of directors has determined that 7 of its 9 nominees
for director, representing a substantial majority of the board,
are independent. Rogers' corporate governance guidelines
require that a majority of the board be independent but also
state that it is the board of directors' goal (but not a
requirement) that at least two-thirds of the directors be
independent.
* The (i) Audit, (ii) Compensation and Organization and (iii)
Nominating and Governance Committees consist solely of
independent directors. The charters of all of the committees of
the board of directors are approved by the entire board and
clearly establish committee responsibilities.
* The Audit Committee has sole responsibility for selecting,
engaging, evaluating and terminating Rogers' independent
registered public accounting firm. The Audit Committee also has
full responsibility for determining the independent registered
public accounting firm's compensation and oversees and
evaluates Rogers' internal audit function. The Audit Committee
has more than one member who has accounting or financial
management expertise, and has one member who is an "Audit
Committee Financial Expert".
* The non-employee directors regularly meet in executive session
and there is an independent "Lead Director" who is responsible
for presiding over such meetings.
* The board of directors annually evaluates its own performance.
Each of the board committees conducts an annual self-evaluation
of its respective performance. These evaluations are overseen
by the Nominating and Governance Committee.
* The board of directors annually reviews a strategic plan and a
one-year operating plan that is linked to strategic objectives.
* Independent committees of the board of directors evaluate and
determine the compensation of the CEO. The board of directors
oversees CEO and other senior management succession planning.
* Directors have complete access to all levels of management and
also are provided with opportunities to meet with members of
management on a regular basis.
Rogers has adopted a set of Corporate Governance Guidelines, which are
available both on Rogers' web site and in print to shareholders. See
"Availability of Certain Documents" in this proxy statement.
5
Board of Directors
INDEPENDENCE OF BOARD OF DIRECTORS
The board of directors has determined that Messrs. Baker, Diefenthal,
Howey, Jaskol, Mitchell and Paul and Ms. Kraus, representing a majority of
the board of directors, are "independent" in accordance with the New York
Stock Exchange ("NYSE") listing standards. In order to make this
determination, the board made an assessment that each independent
director's material relationships with the Company were limited to: (1)
serving as a director and a board committee member, (2) receiving related
fees as disclosed in this proxy statement under "Directors' Compensation"
and (3) having beneficial ownership of Rogers securities as disclosed in
this proxy statement under "Stock Ownership of Management". The
relationships of the seven directors named above fall within the
categorical standards for evaluating independence that were adopted by the
board of directors. Under the categorical standards, in addition to
satisfying the NYSE independence requirements, a director should meet the
following additional standards:
* If a Rogers director (other than a member of the Audit
Committee) receives direct or indirect annual compensation or
other benefits (other than director and committee fees) from
Rogers, such amount should not exceed $30,000;
* If a Rogers director is an executive officer of another company
that does business with Rogers, the annual sales to, or
purchases from, Rogers should be less than 1% of the revenues
of the company he or she serves as an executive officer;
* If a Rogers director is an executive officer of another company
which is indebted to Rogers, or to which Rogers is indebted,
the total amount of either company's indebtedness to the other
should be less than 1% of the total consolidated assets of the
company he or she serves as an executive officer; and
* If a Rogers director serves as an officer, director or trustee
of a charitable organization, Rogers' discretionary charitable
contributions to the organization should be less than 1% of
that organization's total annual charitable receipts (Rogers'
matching of employee charitable contributions will not be
included in the amount of Rogers' contributions for this
purpose).
MEETINGS; CERTAIN COMMITTEES
Board of Directors
The Rogers board of directors held eight meetings during 2004. The board of
directors has five regular committees, including an Audit Committee,
Compensation and Organization Committee, and a Nominating and Governance
Committee. All directors attended more than 75% in the aggregate of the
total number of meetings in 2004 of the board and the committees on which
each such director served except for Mr. Boomer who attended two-thirds of
such meetings.
The Rogers board of directors adopted a set of Corporate Governance
Guidelines, which set forth information pertaining to director
qualifications and responsibilities, as well as other corporate governance
practices and policies. These guidelines are available both on Rogers' web
site and in print to shareholders. See "Availability of Certain Documents"
in this proxy statement.
6
Meetings Of Non-Employee Directors
Non-employee directors of the Company regularly meet in executive sessions
outside the presence of management. These meetings are presided over by a
non-employee director. The Company's Lead Director, if one has been
appointed, is the presiding director at these meetings. Currently, the non-
employee directors of the Company are Messrs. Baker, Boomer, Diefenthal,
Howey, Jaskol, Mitchell and Paul and Ms. Kraus. Mr. Mitchell serves as the
Lead Director. Any interested party who wishes to make their concerns known
to the non-management directors may contact the Lead Director, or the non-
management directors as a group, in writing at Rogers Corporation, One
Technology Drive, P. O. Box 188, Rogers, Connecticut 06263-0188, Attn: Lead
Director.
Audit Committee
The Audit Committee held three formal meetings in 2004 and in addition
participated telephonically in quarterly closing conferences. The Audit
Committee has functions that include appointing, terminating, evaluating,
and setting the compensation of the independent registered public
accounting firm of Rogers; meeting with the independent registered public
accounting firm to review the scope, accuracy and results of the audit; and
making inquiries as to the adequacy of Rogers accounting, financial and
operating controls. Mr. Paul is the chairperson of the Audit Committee,
with Mr. Howey and Ms. Kraus as members. The board of directors has
determined that each of these individuals is "independent" in accordance
with the NYSE's listing standards and the rules and regulations of the
Securities and Exchange Commission (the "SEC") and related federal law. In
addition, the board of directors has also determined that Mr. Paul is an
"Audit Committee Financial Expert" in accordance with the standards
established by the SEC. The Audit Committee's charter is available both on
Rogers' web site and in print to shareholders. See "Availability of Certain
Documents" in this proxy statement.
Compensation and Organization Committee
The Compensation and Organization Committee held five meetings in 2004.
This committee has functions that include reviewing the salary system with
regard to external competitiveness and internal consistency and reviewing
incentive compensation plans to ensure that they continue to be effective
incentive and reward systems. The Compensation and Organization Committee
also determines the CEO's compensation and considers and, if appropriate,
approves the CEO's recommendations with respect to the compensation of
executive officers who report to him. Ms. Kraus is chairperson of the
Compensation and Organization Committee, with Messrs. Mitchell and Paul as
members. The board of directors has determined that each of these
individuals is "independent" in accordance with the NYSE's listing
standards. The Compensation and Organization Committee's charter is
available both on Rogers' web site and in print to shareholders. See
"Availability of Certain Documents in this proxy statement."
Nominating and Governance Committee
The Nominating and Governance Committee held four meetings in 2004. This
committee has functions that include developing and recommending to the
board of directors criteria for board and committee membership, reviewing
the qualifications of candidates for director, nominating candidates for
election to the board of directors, overseeing the Rogers' corporate
governance policies and practices, developing and recommending to the board
of directors corporate governance guidelines, evaluating the performance of
the CEO, and at least yearly overseeing a review of the performance of the
board of directors and its committees. Mr. Jaskol is the chairperson of the
Nominating and Governance Committee, with Dr. Baker and Mr. Diefenthal as
members. The board of directors has determined that
7
each of these individuals is "independent" in accordance with the NYSE's
listing standards. The Nominating and Governance Committee charter is
available both on Rogers' web site and in print to shareholders. See
"Availability of Certain Documents" in this proxy statement.
The Nominating and Governance Committee will consider nominees for director
recommended by shareholders if such recommendations for director are
submitted in writing to the Vice President and Secretary of Rogers
Corporation, One Technology Drive, P. O. Box 188, Rogers, Connecticut
06263-0188. At this time, no additional specific procedures to propose a
candidate for consideration by the Nominating and Governance Committee, nor
any minimum criteria for consideration of a proposed candidate for
nomination to the board of directors, have been adopted.
DIRECTORS' COMPENSATION
In 2004, the annual retainer for Rogers' Lead Director and the Chairpersons
of the Audit Committee and the Compensation and Organization Committee was
$30,000 each, while the annual retainer for each of the remaining non-
employee directors was $25,000. In addition, each non-employee director
earns $1,260 for each board meeting attended and $1,500 or $1,000 for each
committee meeting attended, the amount varying by the individual's capacity
as chairperson or member of a committee. Fees for telephonic meetings are
generally one-half of such amounts.
Under the 1998 Stock Incentive Plan, the retainer fee for non-employee
directors is paid semi-annually in shares of Rogers capital stock, with the
number of shares of stock granted based on their then fair market value.
Stock options are also granted to non-employee directors twice a year. In
2004, such semi-annual stock option grants were for 2,250 shares each, and
in both cases with an exercise price equal to the fair market value of a
share of Rogers capital stock as of the date of grant. Such options are
immediately exercisable and expire ten years from the date of grant.
Under Rogers Voluntary Deferred Compensation Plan for Non-Employee
Directors, such individuals may defer all or a portion of their annual
retainer and meeting fees, regardless of whether such amounts would have
been paid in cash or in Rogers capital stock.
8
AUDIT COMMITTEE REPORT
The Audit Committee oversees Rogers' financial reporting process on behalf
of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process, including the system of
internal controls. In fulfilling its oversight responsibilities, the Audit
Committee reviewed and discussed the audited financial statements for the
Annual Report with management, including a discussion of the quality, not
just the acceptability, of the accounting principles; the reasonableness of
significant judgments; and the clarity of disclosures in the financial
statements.
The Audit Committee discussed with Ernst & Young LLP, Rogers' independent
registered public accounting firm (independent auditors), who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of Rogers'
accounting principles and such other matters as are required to be
discussed with the independent auditors under generally accepted auditing
standards including Statement on Auditing Standards No. 61, as amended by
Statement on Auditing Standards No. 90 (Communication with Audit
Committees). In addition, the Audit Committee has discussed with the
independent auditors the auditors' independence from management and Rogers,
including the matters in the written disclosures required by the
Independence Standards Board Standard No. 1 which the Audit Committee
received from the independent auditors, and considered the compatibility of
non-audit services with the auditors' independence.
The Audit Committee discussed with Rogers' independent auditors and the
persons responsible for the internal audit function the overall scope and
plans for their respective audits. The Audit Committee meets with the
independent auditors and the persons responsible for the internal audit
function, with and without management present, to discuss the results of
their examinations, their evaluations of Rogers' internal controls, and the
overall quality of Rogers' financial reporting. The Audit Committee held
three formal meetings during 2004. Additionally, the Audit Committee
participated telephonically in quarterly closing conferences with the
independent auditors and management during which financial results and
related issues were reviewed and discussed prior to the release of
quarterly results to the public.
The Audit Committee is governed by a charter which may be found on Rogers'
web site. The members of the Audit Committee are considered to be
"independent" because they satisfy the independence requirements of the New
York Stock Exchange listing standards and Rule 10A-3 of the Securities
Exchange Act of 1934.
Based on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors and the Board has approved the
inclusion of the audited financial statements in the Annual Report on Form
10-K for the year ended January 2, 2005 for filing with the Securities and
Exchange Commission. The Audit Committee has approved the appointment of
Ernst & Young LLP as Rogers' independent auditors for fiscal year 2005 and
shareholders are being asked to ratify this appointment at the 2005 annual
meeting.
Audit Committee: Robert G. Paul, Chairperson
Gregory B. Howey, Member
Eileen S. Kraus, Member
The Audit Committee Report does not constitute soliciting material, and
shall not be deemed to be filed or incorporated by reference into any other
Company filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates the Audit Committee Report by reference
therein.
9
Executive Compensation
The tables, graph and narrative on pages 10 through 20 of this proxy
statement set forth certain compensation information about Rogers' current
and former Chief Executive Officer and its other four most highly
compensated executive officers (the "Named Executive Officers") as of the
last completed fiscal year.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
----------------------------------- ------------
Other Stock All
Annual Options Other
Name and Principal Compen- (Number of Compen-
Position Year Salary Bonus (5) sation (6) Shares) sation (7)
-------------------------------------------------------------------------------------------------------
Robert D. Wachob (1) 2004 $384,098 $524,021 $ 6,879 40,000 $22,176
President and Chief 2003 323,094 291,736 5,471 55,000 11,437
Executive Officer 2002 290,702 113,745 50,000 7,500
Walter E. Boomer (2) 2004 152,280 184,488 17,394 3,363 21,285
Former Chairman of the 2003 470,812 527,109 2,844 30,000 28,215
Board and Chief Executive 2002 450,112 224,524 1,278 75,000 21,791
Officer
James M. Rutledge (3) 2004 233,231 165,000 13,000 13,474
Former Vice President, 2003 225,342 152,452 124 24,000 14,836
Finance, Chief Financial 2002 207,579 62,868 8 25,000 28,981
Officer and Treasurer
Robert C. Daigle (4) 2004 196,536 142,794 2 15,000 9,121
Vice President, R & D, 2003 180,717 113,718 2 23,000 38,658
Chief Technology Officer 2002 171,388 22,095 3 12,000 6,294
John A. Richie 2004 181,778 130,950 1,121 13,000 10,056
Vice President, 2003 174,456 109,130 4 18,000 8,665
Human Resources 2002 163,982 46,976 15,000 7,764
Robert M. Soffer 2004 173,036 103,881 824 8,000 9,316
Vice President and 2003 166,368 92,740 10,000 9,608
Secretary 2002 158,360 40,262 12,000 8,568
Mr. Wachob has been President and Chief Executive Officer of Rogers
since 4/1/2004, President and Chief Operating Officer from 4/25/2002
to 3/31/2004, and Executive Vice President from 1/27/2000 to
4/25/2002.
Mr. Boomer retired as Chairman of the Board of Directors and Chief
Executive Officer of Rogers on 4/1/2004 and he remains a director of
Rogers.
(footnotes continued on following page)
10
Mr. Rutledge resigned effective March 11, 2005.
Mr. Daigle became Vice President, R&D and Chief Technology Officer of
Rogers during 2003; prior to that, he was Vice President, Advanced
Circuit Materials Division.
For 2002, amounts include bonuses earned pursuant to the Rogers
Annual Incentive Compensation Plan (the "Annual Incentive Plan") and
the Long-Term Enhancement Plan for Senior Executives of Rogers
Corporation (the "Enhancement Plan"). The Enhancement Plan was
adopted in 1997 to indirectly supplement the retirement benefit
provided to senior management. Enhancement Plan payments were made in
shares of Rogers capital stock. The 2002 bonus under the Enhancement
Plan was equal to 10% of the bonus earned under the Annual Incentive
Plan. Such payments are based on an average closing price of the
capital stock. The next paragraph describes the specific amounts
earned under the Enhancement Plan by each of the Named Executive
Officers for bonuses earned for 2002. No such payments were made for
2003 or 2004 bonuses as the Enhancement Plan was terminated in
February 2004.
The amounts paid under the Enhancement Plan with respect to bonuses
earned for 2002 under the Annual Incentive Plan were as follows (for
each individual the number of shares is followed by the dollar amount
used to calculate the number of shares): Mr. Wachob - 401
shares/$10,261; Mr. Boomer - 791 shares/$20,255; Mr. Rutledge - 222
shares/$5,670; Mr. Daigle - 78 shares/$1,993; Mr. Richie - 166
shares/$4,237 and Mr. Soffer -142 shares/$3,632 The valuations in the
table are based upon the closing price of the capital stock on
February 27, 2003 ($27.78) in the case of payments made for 2002.
Excludes perquisites and other personal benefits because the
aggregate amount of such compensation is the lesser of either $50,000
or 10% of the total of annual salary and bonus reported for the
individual. All amounts shown, including the de minimis amounts,
reflect the reimbursement of taxes on non-qualified defined benefit
pension plan accruals.
Amounts shown for 2004 include: (i) Rogers matching contributions to
the Rogers Employee Savings and Investment Plan, a 401(k) plan -
Messrs. Wachob, Boomer, Daigle, Richie and Soffer each received
$5,125, while Mr. Rutledge received $5,122, (ii) matching
contributions under Rogers' non-qualified deferred compensation plan
for Messrs. Wachob, Boomer, Rutledge, Daigle, Richie, and Soffer of
$12,161, $12,262, $4,787, $2,843, $2,375 and $1,771, respectively,
and (iii) Rogers payment of life insurance premiums for Messrs.
Wachob, Boomer, Rutledge, Daigle, Richie and Soffer of $4,890,
$3,898, $3,565, $1,153, $2,556, and $2,420, respectively. Amounts for
2003 and 2002 include similar matching contributions by Rogers for
deferrals made under the 401(k) plan and the non-qualified deferred
compensation plan.
11
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants (1) Potential Realizable
--------------------------------------- Value at Assumed
% of Total Annual Rates of Stock
Number of Options Exercise Price Appreciation
Securities Granted to Price For Option Terms (3)
Underlying Employees Per Expiration ------------------------
Name Options in Fiscal Yr. Share Date 5% 10%
-----------------------------------------------------------------------------------------------------------
Robert D. Wachob 30,000 8.8% $59.85 4/29/2014 $1,129,180 $2,861,565
10,000 2.9% 59.85 4/29/2014 376,393 953,855
Walter E. Boomer 1,113 N.A. 63.50 6/15/2014 44,447 112,639
2,250 N.A. 46.45 12/15/2014 65,727 166,566
James M. Rutledge (2) 13,000 3.8% 59.85 2/3/2007 111,721 233,151
Robert C. Daigle 15,000 4.4% 59.85 4/29/2014 564,590 1,430,782
John A. Richie 13,000 3.8% 59.85 4/29/2014 489,311 1,240,011
Robert M. Soffer 8,000 2.3% 59.85 4/29/2014 301,115 763,084
Mr. Boomer retired as Chairman of the Board of Directors and Chief
Executive Officer of Rogers on 4/1/2004 and he remains a director of
Rogers. The 6/15/2004 and 12/15/2004 stock option grants for Mr.
Boomer are immediately exercisable and were granted to him in
connection with his service as a director for Rogers following his
retirement as Chief Executive Officer. All of the 4/29/2004 stock
option grants for Messrs. Wachob, Rutledge, Daigle, Richie and Soffer
are immediately exercisable, however, no shares from these grants can
be sold before 4/29/2008 unless the individual's employment is ended
due to retirement, disability, death or involuntary termination.
Stock option grants made on the same day for Mr. Wachob were
essentially one grant, but are shown separately since a portion of
the total amount was granted under one stock option plan and the
remaining portion from a different stock option plan. All stock
options may expire earlier than the date listed due to termination of
employment, death or retirement. The exercise price of all of these
stock options was based on the fair market value of a share of Rogers
capital stock as of the grant date.
Mr. Rutledge resigned as Vice President, Finance, Chief Financial
Officer and Treasurer effective March 11, 2005. Upon his resignation,
the expiration date of Mr. Rutledge's options accelerated from
4/29/2014 to 2/3/2007.
Potential realizable value is based on an assumption that the Rogers
stock price appreciates at the annual rate shown (compounded
annually) from the date of grant until the end of the stock option
term. The hypothetical future values reflected in this table
represent assumed rates of appreciation only. These rates are set by
the rules of the Securities and Exchange Commission. Actual gains, if
any, on stock option exercises and stock holdings are dependent on
many factors, including, but not limited to, the future performance
of Rogers stock and overall stock market conditions. There can be no
assurance that the amounts reflected in this table will be achieved.
12
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
Value of Unexercised
Number of Number of In-The-Money
Shares Unexercised Options Options at
Acquired at Fiscal Year-End Fiscal Year-End (2)
Upon Value ---------------------------- ----------------------------
Name Exercise Realized (1) Exercisable Unexercisable Exercisable Unexercisable
------------------------------------------------------------------------------------------------------------------
Robert D. Wachob 21,400 $ 937,402 218,166 94,334 $3,867,300 $871,755
Walter E. Boomer 89,154 3,024,419 241,363 3,605,800
James M. Rutledge (3) 3,333 81,418 18,000 40,667 84,950 369,651
Robert C. Daigle 58,000 33,000 954,950 259,050
John A. Richie 3,500 138,103 70,200 30,000 896,455 270,180
Robert M. Soffer 56,433 20,167 629,283 200,373
Defined as the difference between the fair market value of the
capital stock and the exercise price of the stock option at time of
exercise.
Defined as the difference between the closing price of the capital
stock at fiscal year-end and the exercise price of the option. An
option is "in-the-money" if the fair market value of the underlying
stock exceeds the exercise price of the option at the measurement
date.
Mr. Rutledge resigned as Vice President, Finance, Chief Financial
Officer and Treasurer effective March 11, 2005.
13
RETIREMENT PLANS
The Pension Plan Table below reflects estimated annual benefits payable at
age 65, the normal retirement age, at various compensation levels and years
of service pursuant to Rogers' non-contributory defined benefit pension
plans for domestic salaried employees.
Annual Pension Benefits (1) (2)
Final Years of Service
Average -------------------------------------------------------------------
Earnings (3) 5 years 10 years 15 years 20 years 25 years 30 years
-----------------------------------------------------------------------------------
$125,000 $10,020 $20,050 $ 30,070 $ 40,100 $ 50,120 $ 60,150
150,000 12,210 24,420 36,640 48,850 61,060 73,270
175,000 14,400 28,800 43,200 57,600 72,000 86,400
200,000 16,590 33,170 49,760 66,350 82,930 99,520
225,000 18,770 37,550 56,320 75,100 93,870 112,650
250,000 20,960 41,920 62,890 83,850 104,810 125,770
275,000 23,150 46,300 69,450 92,600 115,750 138,900
300,000 25,340 50,670 76,010 101,350 126,680 152,020
325,000 27,520 55,050 82,570 110,100 137,620 165,150
350,000 29,710 59,420 89,140 118,850 148,560 178,270
375,000 31,900 63,800 95,700 127,600 159,500 191,400
400,000 34,090 68,170 102,260 136,350 170,430 204,520
425,000 36,270 72,550 108,820 145,100 181,370 217,650
450,000 38,460 76,920 115,390 153,850 192,310 230,770
475,000 40,650 81,300 121,950 162,600 203,250 243,900
500,000 42,840 85,670 128,510 171,350 214,180 257,020
Benefits are calculated on a single life annuity basis.
Federal law limits the amount of benefits payable under tax qualified
plans, such as the Rogers Corporation Defined Benefit Pension Plan.
Rogers has adopted a non-qualified retirement plan (the "Pension
Restoration Plan") for: (i) the payment of amounts to all plan
participants who may be affected by such federal benefit limitations
and other plan provisions; and (ii) the payment of supplemental
amounts to certain senior executives specified by the Compensation
and Organization Committee of the Board of Directors. In general, the
total pension benefit due an individual will be actuarially
equivalent to the amount calculated under Rogers' qualified pension
plan as if such federal benefit limitations did not exist, as if
covered compensation included amounts deferred under a deferral plan,
and for certain senior executives specified by the Compensation and
Organization Committee of the Board of Directors, as if covered
compensation included bonuses paid on or after January 1, 2004, as
described in footnote 3 below. Accordingly, the benefits shown have
not been reduced by such limitations or provisions.
Final average earnings is the average of the highest consecutive five
of the last ten years' annual earnings as of June 1 of each year.
Covered compensation includes only salary, whether or not deferred
under a deferral plan, and for certain senior executives over age 55
that have been specified by the Compensation and Organization
Committee of the Board of Directors, including Messrs. Wachob, Richie
and Soffer, covered compensation under the Pension Restoration Plan
also includes bonuses paid on or after January 1, 2004, and will
include bonuses paid before January 1, 2004 in the event of their
death, disability, or termination of employment that results in the
payment of severance. If there is a change in control
(footnotes continued on following page)
14
of Rogers, covered compensation under the Pension Restoration Plan
for these senior executives and for certain additional senior
executives that have been specified by the Compensation and
Organization Committee of the Board of Directors will also include
bonuses paid before January 1, 2004. If there is a change in control
of Rogers, the Pension Restoration Plan provides that benefits
payable under such plan shall be reduced to an amount so that such
benefits would not constitute so-called "excess parachute payments"
under applicable provisions of the Internal Revenue Code of 1986. The
five-year average earnings for Messrs. Wachob, Daigle, Richie and
Soffer, and their estimated years of credited service are: Mr.
Wachob, $306,093 and 22 years; Mr. Daigle, $170,316 and 17 years; Mr.
Richie, $163,821 and 28 years and Mr. Soffer, $159,604 and 26 years.
Mr. Boomer retired on 4/1/2004 and Mr. Rutledge resigned on 3/11/2005
before he became eligible for a pension.
15
EQUITY COMPENSATION PLAN INFORMATION
The table and footnotes below describe those equity compensation plans
approved and not approved by security holders of Rogers Corporation as of
January 2, 2005, the end of the company's fiscal year.
Equity Compensation Plans
As of January 2, 2005
(a) (b) (c)
Number of securities
Number of securities remaining available for
to be issued upon Weighted average future issuance under
exercise of exercise price of equity compensation plans
outstanding options, outstanding options, (excluding securities
Plan category warrants and rights warrants and rights reflected in column (a))
----------------------------------------------------------------------------------------------------------------------
Equity Compensation Plans Approved
by Security Holders
Rogers Corporation 1988 Stock Option Plan 63,051 $43.42 18,183
Rogers Corporation 1994 Stock
Compensation Plan 200,357 $21.23 4,518
Rogers Corporation 1998 Stock Incentive
Plan 955,044 $29.49 65,050
Rogers Corporation Global Stock
Ownership Plan For Employees (1) 426,004
Equity Compensation Plans Not
Approved by Security Holders
Rogers Corporation 1990 Stock Option
Plan (2) 1,153,485 $37.07 125,536
-------------------------------------------------------------------------------------------------------------
Total 2,371,937 $32.86 639,291
This is an employee stock purchase plan within the meaning of Section
423(b) of the Internal Revenue Code of 1986, as amended.
The Rogers Corporation 1990 Stock Option Plan was adopted in 1990 to
award directors, officers and key employees of Rogers Corporation
with stock option grants. Stock options are Rogers' primary long-term
incentive vehicle. Under this plan, options generally have an
exercise price equal to at least the fair market value of Rogers'
stock as of the date of grant. Regular options generally have a ten-
year life and generally vest in one-third increments on the second,
third and fourth anniversary dates of the grant, except for the
grants made to employees in 2004. Such 2004 stock options were
immediately vested upon grant, but any options exercised during the
first four years after the grant date cannot be sold while the
individual is still actively employed at Rogers. Termination of
employment because of retirement, or for other reasons, may shorten
the vesting schedule and expiration date. See page 18 of this proxy
statement for further details on Rogers' stock options.
16
COMPENSATION AND ORGANIZATION COMMITTEE REPORT
This report is submitted by the Compensation and Organization Committee of
the Rogers Corporation Board of Directors. This committee report describes
the components of Rogers executive officer compensation programs for 2004
and the basis on which compensation determinations were made with respect
to the executive officers of Rogers.
Compensation and Organization Committee Interlocks and Insider
Participation
Rogers executive compensation program is administered by the Compensation
and Organization Committee of the Board of Directors, which is composed of
three independent non-employee directors who have no "interlocking"
relationships as defined by the Securities and Exchange Commission. The
committee members are: Eileen S. Kraus (chairperson of the committee),
William E. Mitchell, and Robert G. Paul.
Philosophy
The executive compensation philosophy is to align such compensation with
the long-term success of Rogers and increases in shareholder value, and to
attract, retain, and reward executive officers whose contributions are
critical to the long-term success of Rogers. The guiding principles for
compensation decisions are to:
* Provide a competitive total annual cash compensation package
that targets the 50th percentile of a broad spectrum of
manufacturing companies from a wide range of industries to
enable Rogers to attract and retain executives. Key elements of
the executive compensation program are base salary and the
possibility of a bonus under the Annual Incentive Compensation
Plan.
* Integrate compensation with the achievement of annual
objectives and long-term goals.
* Reward officers for above average corporate performance, and
individual initiative and achievement.
* Create long-term incentives that are consistent with the
interests of shareholders, primarily through stock option
grants.
Base Salaries
The committee reviews salaries for positions with similar responsibilities
in the marketplace from a broad spectrum of manufacturing companies in a
wide range of industries through published national executive compensation
survey data.
Salary adjustments are determined by considering merit increases generally
being offered in the aforementioned marketplace, achievement of annual
financial and other objectives by Rogers and the business units or
functions for which the executive officer is responsible, the overall
performance of the executive officer, and any changes in the executive
officer's responsibilities. None of these factors are assigned a specific
weighted value. The committee allows the factors to change to adapt to
various individual, business, economic, and marketplace conditions as they
arise. The committee is responsible
17
for approving salary increases for the CEO and recommendations for salary
increases made by the CEO for the corporate officers and other executives
that report to him.
Annual Bonuses
The Annual Incentive Compensation Plan has target bonuses of 60% to 75% of
base salary for the CEO, and between 25% and 45% for the other executive
officers, including the other Named Executive Officers. Actual bonuses may
vary from 0% to 300% of the target bonuses depending on performance
relative to annual profit improvement objectives. These amounts are
determined by the performance of Rogers (Net Income Per Share) and each
division (Division Profit) versus the annual objectives. In general, the
broader the responsibility of the executive, the larger the portion of his
or her award which is based upon corporate, rather than divisional results;
the corporate portion is 100% for the Named Executive Officers. For 2004,
overall corporate performance exceeded last year's results, which is the
bonus threshold, and, as a result, all of the Named Executive Officers
received a bonus.
Stock Options
Each year, the committee considers awards of stock options to key
personnel. Stock options have been Rogers' primary long-term incentive
vehicle. Usually all senior management personnel, including executive
officers, are granted stock options annually. Other selected personnel are
granted options from time to time. The number of options awarded to an
executive officer is based on the individual's level in the organization,
the same performance criteria used to determine salary adjustments, the
number of shares granted in prior years and the total number of shares
available for grants. The committee does not assign specific weights to
these criteria. Options generally have an exercise price equal to at least
the fair market value of the Rogers stock as of the date of grant. Regular
options generally have a ten-year life and generally vest in one-third
increments on the second, third and fourth anniversary dates of the grant.
Termination of employment because of retirement, or for other reasons, may
shorten the vesting schedule and expiration date.
In fiscal 2004, stock options for a total of 341,682 shares were granted to
employees, of which 92,363 shares were granted to the Named Executive
Officers and 7,000 shares were granted to all other executive officers.
Options granted to employees in 2004 had a special vesting schedule and
selling restriction. All options were immediately vested upon grant, but
any options exercised during the first four years after the grant date
cannot be sold while the employee is still actively employed by Rogers.
Stock Ownership
In 1998, Rogers established stock ownership guidelines for senior
executives. Such guidelines state that senior executives are expected to
own one times their annual salary in Rogers stock after approximately six
years in a senior executive position, and two times their annual salary in
Rogers stock by the tenth year. To encourage stock ownership, Rogers
previously adopted the aforementioned stock option program and in 1999 the
board of directors approved a new non-qualified deferred compensation plan.
This program allows participants to defer compensation and, ultimately,
receive Rogers stock instead of cash.
Chief Executive Officer Compensation
The committee approved a salary increase in March of 2004 of 21.3% for
Mr. Wachob as he was promoted to Chief Executive Officer. National survey
data from a broad spectrum of manufacturing
18
companies from a wide range of industries was considered, but the decision
was weighted heavily by his previous salary level and his continued
contributions to Rogers' success. He also received a stock option for
40,000 shares of Rogers stock exercisable at $59.85 per share, the fair
market value of such stock as of the grant date. This grant was based on
the aforementioned stock option criteria. Mr. Wachob is a participant in
the Rogers Annual Incentive Compensation Plan and for 2004, pursuant to the
provisions of the plan, he received a bonus of $524,021, which is
approximately 131% of his annualized base salary at the end of the year.
Mr. Boomer, Rogers' previous Chairman and CEO, retired at the end of the
first quarter and as a participant in the Rogers Annual Incentive
Compensation Plan for 2004, pursuant to the provisions of the plan, was
eligible for a bonus for that period of time. His bonus of $184,488 is
approximately 148% of his base salary in the first quarter of 2004.
Compliance with Internal Revenue Code Section 162(m)
Pursuant to Section 162(m) of the Internal Revenue Code of 1986, publicly
traded corporations are not permitted to deduct most compensation exceeding
$1,000,000 paid to certain top executives, unless the compensation
qualifies as "performance based compensation" or is otherwise exempt under
Section 162(m). All compensation paid to the Named Executive Officers of
Rogers for fiscal year 2004 was deductible for federal income tax purposes.
However, to maintain flexibility in compensating executive officers in a
manner designed to promote varying corporate goals, the Committee has not
adopted a policy that all compensation must be deductible.
Compensation and Organization Committee: Eileen S. Kraus, Chairperson
William E. Mitchell, Member
Robert G. Paul, Member
19
PERFORMANCE GRAPH
The following graph compares the cumulative total return on Rogers capital
stock over the past five fiscal years with the cumulative total return on
the Standard & Poor's Industrials Index (S&P Industrials) and the S&P
SmallCap 600 Electronic Equipment & Instruments Index (S&P 600 Electr Eqp &
Instru). Cumulative total return is measured assuming an initial investment
of $100 on January 2, 2000 and the reinvestment of dividends as of the end
of Rogers' fiscal years.
Comparison of 5 Year Cumulative Total Return
GRAPH
Fiscal Year Ends 1/2/00 12/31/00 12/30/01 12/29/02 12/28/03 1/2/05
-----------------------------------------------------------------------------------------------
ROGERS CORPORATION $100 $215 $161 $120 $230 $225
S&P INDUSTRIALS 100 106 100 74 97 115
S&P 600 ELECTR EQP & INSTRU 100 96 94 70 107 124
20
Termination of Employment and Change of Control Arrangements
Rogers' severance policy for regular, full-time salaried employees
provides, in general, for continuation of salary payments, health insurance
and certain other benefits for employees whose employment has been
involuntarily terminated. The number of weeks of salary and benefits
continuance is based on length of service. The policy may be amended,
modified or terminated at any time by Rogers, except in the case of the
executive officers of Rogers as of November 1991. Such officers may elect
the benefits of either the policy in effect in November 1991, or the
severance policy, if any, which may be in existence at the time each such
individual's employment terminates. The right of executive officers to make
such an election may be cancelled by Rogers or the executive on three years
written notice. Messrs. Wachob and Soffer would be entitled to 78 weeks of
salary and benefit continuance upon termination of employment covered by
the policy in effect in November 1991.
The board of directors determined that it would be in the best interests of
Rogers to ensure that the possibility of a change in control of Rogers
would not interfere with the continuing dedication of Rogers executive
officers to their duties to Rogers and its shareholders. Toward that
purpose, Rogers has agreements with all Named Executive Officers who are
still employees of Rogers as well as the other elected officers of Rogers
which provide certain severance benefits to them in the event of a
termination of their employment during a 36 month period following a change
in control, as defined in the agreements. The initial term of each
agreement is three years and the term is automatically extended for
additional one-year periods each anniversary date of the agreements, unless
either party objects to such extension. If within a 36 month period
following a change in control, an executive's employment is terminated by
Rogers without cause, as defined in the agreements, or if such executive
resigns in certain specified circumstances, then the executive is generally
entitled to the following severance benefits: (i) twice his annual base
salary plus bonus; (ii) two years of additional pension benefits; and (iii)
the continuation of health and life insurance plans and certain other
benefits for up to two years. The agreements provide that severance and
other benefits be reduced to an amount so that such benefits would not
constitute so-called "excess parachute payments" under applicable
provisions of the Internal Revenue Code of 1986.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Rogers
executive officers and directors, and persons who own more that 10% of
Rogers capital stock, to file reports of ownership and changes of ownership
on Forms 3, 4 and 5 with the Securities and Exchange Commission and the New
York Stock Exchange. Executive officers, directors and greater than 10%
shareholders are required to furnish Rogers with copies of all Forms 3, 4
and 5 they file.
Based solely on Rogers review of the copies of such forms it has received,
and written representations from certain reporting persons, Rogers believes
that all of its executive officers and directors complied with all Section
16(a) filing requirements applicable to them during Rogers fiscal year
ended January 2, 2005, with one exception. A Form 4 was inadvertently not
filed on behalf of William Mitchell, a director, in connection with a
transaction in February 2004. Mr. Mitchell timely filed a Form 5 reporting
this transaction.
21
Proposal 2: Approval of the Rogers Corporation 2005 Equity Compensation Plan
PROPOSAL
On February 17, 2005, our board of directors adopted the Rogers Corporation
2005 Equity Compensation Plan (the "2005 Plan") for officers, employees,
non-employee directors and other key persons of Rogers and its
subsidiaries, subject to the approval of the 2005 Plan by our shareholders.
The 2005 Plan has been structured to permit the granting of restricted
stock, stock appreciation rights and other forms of equity awards as well
as stock options. The vesting of these awards may be tied to specified
performance criteria. Furthermore, these types of awards can provide the
equivalent value of stock options to recipients while utilizing less shares
of Rogers stock, and therefore can be less dilutive to shareholders. For
stock options and stock appreciation rights, the exercise price cannot be
less than the fair market value of Rogers stock at time of grant and no
repricing of outstanding stock options is permitted unless necessary to
adjust for a change in capital structure (for example, a stock split).
The 2005 Plan will be administered by the Compensation and Organization
Committee of our board of directors. The Compensation and Organization
Committee, in its discretion, may grant stock-based awards to officers,
employees, non-employee directors and other key persons under the 2005
Plan.
Subject to adjustment for stock splits, stock dividends and similar events,
the total number of shares that can be issued under the 2005 Plan is
1,100,000 shares of common stock. Based solely upon the closing price of
our common stock as reported on the New York Stock Exchange on March 1,
2005, the maximum aggregate market value of the securities to be issued
under the 2005 Plan would be $49,885,000. The shares issued by Rogers under
the 2005 Plan may be authorized shares that have never been issued,
authorized but unissued shares, or shares reacquired by Rogers. To the
extent that awards under the 2005 Plan do not vest or otherwise revert to
Rogers under certain circumstances, the shares of common stock represented
by such awards may be the subject of subsequent awards under the 2005 Plan.
To satisfy the requirements of Section 162(m) of the Internal Revenue Code
of 1986, as amended, stock options or stock appreciation rights with
respect to no more than 80,000 shares of common stock (subject to
adjustment for stock splits and similar events) may be granted to any one
individual during any one calendar year period. In addition, the maximum
award of restricted stock and deferred stock for any one individual that is
intended to qualify as "performance-based compensation" will not exceed
80,000 shares of common stock (subject to adjustment for stock splits and
similar events) for any performance cycle.
RECOMMENDATION
Our board of directors believes that stock-based awards can play an
important role in the success of Rogers by encouraging and enabling the
officers and employees, non-employee directors and other key persons of
Rogers and its subsidiaries upon whose judgment, initiative and efforts
Rogers largely depends for the successful conduct of its business to
acquire a proprietary interest in Rogers. Our board of directors
anticipates that providing such persons with a direct stake in Rogers'
welfare will assure a closer identification of the interests of
participants in the 2005 Plan with those of Rogers, thereby stimulating
their efforts on Rogers' behalf and strengthening their desire to remain
with Rogers.
22
Our board of directors believes that the proposed 2005 Plan will help
Rogers to achieve its goals by keeping Rogers' incentive compensation
program dynamic and competitive with those of other companies. Accordingly,
our board of directors believes that the 2005 Plan is in the best interests
of Rogers and its shareholders and recommends that the shareholders approve
the 2005 Plan.
Our board of directors recommends that shareholders vote "FOR" the Rogers
Corporation 2005 Equity Compensation Plan.
SUMMARY OF THE 2005 PLAN
The following description of certain features of the 2005 Plan is intended
to be a summary only. The summary is qualified in its entirety by the full
text of the 2005 Plan that is attached hereto as
Appendix A.
2005 Plan Administration. The 2005 Plan provides for administration by the
Compensation and Organization Committee of the board of directors. The
Compensation and Organization Committee has full power to select, from
among the individuals eligible for awards, the individuals to whom awards
will be granted, to make any combination of awards to participants, and to
determine the specific terms and conditions of each award, subject to the
provisions of the 2005 Plan. However, the Compensation and Organization
Committee may not reprice outstanding options, other than to appropriately
reflect changes in the capital structure of Rogers (for example, due to a
stock split).
Eligibility and Limitations on Grants. All full-time and part-time
officers, full-time and part-time employees, non-employee directors and
other key persons of Rogers and its subsidiaries are eligible to
participate in the 2005 Plan, subject to the discretion of the Compensation
and Organization Committee. The number of individuals potentially eligible
to participate in the 2005 Plan is approximately 1,800 persons.
The maximum award of stock options or stock appreciation rights granted to
any one individual will not exceed 80,000 shares of common stock (subject
to adjustment for stock splits and similar events) for any calendar year
period. If any award of restricted stock or deferred stock granted to an
individual is intended to qualify as "performance based compensation" under
Section 162(m) of the Internal Revenue Code, then the maximum award shall
not exceed 80,000 shares of common stock (subject to adjustment for stock
splits and similar events) to any one such individual in any performance
cycle.
Stock Options. Options granted under the 2005 Plan may be either incentive
stock options (within the meaning of Section 422 of the Internal Revenue
Code) or non-qualified stock options. Incentive options may be granted only
to employees of Rogers or any domestic subsidiary. Options granted under
the 2005 Plan will be non-qualified options if they (i) fail to qualify as
incentive options, (ii) are granted to a person not eligible to receive
incentive options under the Internal Revenue Code, or (iii) are granted
pursuant to an award agreement that otherwise so provides. Non-qualified
options may be granted to any persons eligible to receive incentive stock
options and to non-employee directors and other key persons.
Other Option Terms. The Compensation and Organization Committee has
authority to determine the terms of options granted under the 2005 Plan.
Options shall be granted with an exercise price that is not less than the
fair market value of the shares of common stock on the date of the option
grant.
The term of each option will be fixed by the Compensation and Organization
Committee and may not exceed ten years from the date of grant. The
Compensation and Organization Committee will determine
23
at what time or times each option may be exercised and, subject to the
provisions of the 2005 Plan, the period of time, if any, after retirement,
death, disability or termination of employment during which options may be
exercised. Options may be made exercisable in installments, and the
exercisability of options may be accelerated under certain circumstances by
the Compensation and Organization Committee.
In general, unless otherwise permitted by the Compensation and Organization
Committee, no option granted under the 2005 Plan is transferable by the
optionee other than by will or by the laws of descent and distribution, and
options may be exercised during the optionee's lifetime only by the
optionee, or by the optionee's legal representative or guardian in the case
of the optionee's incapacity.
Options granted under the 2005 Plan may be exercised for cash, check or by
transfer to Rogers (either actually or by attestation) of shares of Rogers
common stock that are not then subject to restrictions under any Rogers
stock plan, and that have been held by the optionee for at least six months
or were purchased on the open market, and that have a fair market value
equivalent to the option exercise price of the shares being purchased.
Subject to applicable law, options granted under the 2005 Plan also may be
exercised by compliance with certain provisions pursuant to which a
securities broker delivers the purchase price for the shares to Rogers.
To qualify as incentive options, options must meet additional federal tax
requirements, including a $100,000 limit on the value of shares subject to
incentive options which first become exercisable in any one calendar year,
and a shorter term and higher minimum exercise price in the case of certain
large shareholders.
Stock and Stock Options Granted to Non-Employee Directors. The 2005 Plan
provides for the automatic grant of shares of common stock and non-
qualified stock options to non-employee directors. During June and December
of each year, each non-employee director will automatically be granted a
number of shares of common stock, free of any restrictions, in an amount
equal to one-half of such non-employee director's annual retainer fee. In
addition, each non-employee director will automatically be granted each
June and December a non-qualified stock option to acquire 2,250 shares of
common stock, or such other number of shares of common stock determined by
the board of directors. The exercise price of each such non-qualified stock
option is the fair market value of common stock on the date of grant. Each
such non-qualified stock option is immediately exercisable. Such non-
qualified stock options will expire ten years from the date of grant. The
Compensation and Organization Committee may also make discretionary grants
of non-qualified stock options to non-employee directors.
Stock Appreciation Rights. The Compensation and Organization Committee may
award a stock appreciation right either as a freestanding award or in
tandem with a stock option. Upon exercise of the stock appreciation right,
the holder will be entitled to receive an amount equal to the excess of the
fair market value on the date of exercise of one share of common stock over
the exercise price per share specified in the related stock option (or, in
the case of a freestanding stock appreciation right, the price per share
specified in such right) multiplied by the number of shares of common stock
with respect to which the stock appreciation right is exercised. This
amount shall be paid in shares of common stock. The exercise price per
share of stock appreciation rights may not be less than 100% of the fair
market value of the shares of common stock on the date of grant.
Restricted Stock Awards. The Compensation and Organization Committee may
grant shares of common stock, at a purchase price (which may be zero)
determined by the Compensation and Organization Committee, to any
participant subject to such conditions and restrictions as the
24
Compensation and Organization Committee may determine. These conditions and
restrictions may include the achievement of pre-established performance
goals and/or continued employment with Rogers through a specified vesting
period. The vesting period shall be determined by the Compensation and
Organization Committee. However, in the event these awards have a
performance-based goal, the restriction period will be at least one year,
and in the event these awards have a time-based restriction, the
restriction period will be at least three years. If the applicable
performance goals and other restrictions are not attained, the participant
will forfeit his or her award of restricted stock.
Unrestricted Stock Awards. The Compensation and Organization Committee may
also grant shares (at no cost or for a purchase price determined by the
Compensation and Organization Committee) of common stock that are free from
any restrictions under the 2005 Plan. Unrestricted stock may be granted to
any participant in recognition of past services or other valid
consideration, and may be issued in lieu of cash compensation due to such
participant.
Deferred Stock Awards. The Compensation and Organization Committee also may
award phantom stock units as deferred stock awards to participants. The
deferred stock awards are ultimately payable in the form of shares of
common stock and may be subject to such conditions and restrictions as the
Compensation and Organization Committee may determine. These conditions and
restrictions may include the achievement of certain performance goals
and/or continued employment with Rogers through a specified vesting period.
However, in the event these awards have a performance-based goal, the
restriction period will be at least one year, and in the event these awards
have a time-based restriction, the restriction period will be at least
three years. During the deferral period, subject to terms and conditions
imposed by the Compensation and Organization Committee, the deferred stock
awards may be credited with dividend equivalent rights (discussed below).
Subject to the consent of the Compensation and Organization Committee, a
participant may make an advance election to receive a portion of his or her
compensation or restricted stock award otherwise due in the form of a
deferred stock award. Deferred stock awards will comply with the
requirements of Section 409A of the Internal Revenue Code.
Dividend Equivalent Rights. The Compensation and Organization Committee may
grant dividend equivalent rights that entitle the recipient to receive
credits for dividends that would be paid if the recipient had held
specified shares of common stock. Dividend equivalent rights may be granted
as a component of another award or as a freestanding award. Dividend
equivalent rights credited under the 2005 Plan may be paid currently or be
deemed to be reinvested in additional shares of common stock, that may
thereafter accrue additional dividend equivalent rights at fair market
value at the time of deemed reinvestment or on the terms then governing the
reinvestment of dividends under our dividend reinvestment plan, if any.
Dividend equivalent rights may be settled in cash, shares of common stock
or a combination thereof, as specified in the award.
Tax Withholding. Participants under the 2005 Plan are responsible for the
payment of any federal, state or local taxes that we are required by law to
withhold upon any option exercise or vesting of other awards. Subject to
approval by the Compensation and Organization Committee, participants may
elect to have the minimum tax withholding obligations satisfied either by
authorizing Rogers to withhold shares of common stock to be issued pursuant
to an option exercise or other award, or by transferring to Rogers shares
of common stock having a value equal to the amount of such taxes.
Adjustments for Stock Dividends, Mergers, etc. The 2005 Plan authorizes the
Compensation and Organization Committee to make appropriate adjustments to
the number of shares of common stock that are subject to the 2005 Plan and
to any outstanding awards to reflect stock dividends, stock splits
25
and similar events. In the event of certain transactions, such as a merger,
consolidation, dissolution or liquidation of Rogers, all stock options and
stock appreciation rights will automatically become fully exercisable and
the restrictions and conditions on all other stock based awards will
automatically be deemed waived. In addition, upon the effective time of any
such transaction, the 2005 Plan and all awards will terminate unless the
parties to the transaction, in their discretion, provide for appropriate
substitutions or adjustments of outstanding stock options or other awards.
Amendments and Termination. Our board of directors may at any time amend or
discontinue the 2005 Plan and the Compensation and Organization Committee
may at any time amend or cancel any outstanding award for the purpose of
satisfying changes in law or for any other lawful purpose, but no such
action shall adversely affect the rights under any outstanding awards
without the holder's consent. Any amendments that materially change the
terms of the 2005 Plan, including any amendments that increase the number
of shares reserved for issuance under the 2005 Plan, expand the type of
awards available, materially expand the eligibility to participate or
materially extend the term of the 2005 Plan, or materially change the
method of determining fair market value, will be subject to approval by our
shareholders. To the extent required by the Internal Revenue Code to ensure
that options granted under the 2005 Plan qualify as incentive options or
that compensation earned under awards granted under the 2005 Plan qualify
as performance-based compensation under the Internal Revenue Code, 2005
Plan amendments shall be subject to approval by our shareholders.
NEW 2005 PLAN BENEFITS
No grants have been made with respect to the shares of common stock to be
reserved for issuance under the 2005 Plan. The number of shares of common
stock that may be granted to executive officers and all employees including
non-executive officers is indeterminable at this time. The number of shares
of common stock that may be granted to current directors who are not
executive officers is indeterminable at this time, other than the automatic
grants to non-employee directors, which benefits are described in the
following table:
Rogers Corporation 2005 Equity Compensation Plan
Name and Position Dollar Value ($) Number of Units
---------------------------------------------------------------------------------------------------
Non-Executive Director Group The dollar value will be based Option to purchase 18,000
upon the fair market value of shares of common stock in
common stock as of the aggregate to be granted as of
June 15, 2005. June 15, 2005.
$107,500, in the aggregate. Shares of common stock to be
granted as of June 15, 2005 with a
fair market value equal to the
annual retainer fee due on such
date.
EQUITY COMPENSATION PLAN INFORMATION
The table on page 16 gives information about the shares of common stock
that may be issued upon the exercise of options under Rogers' equity
compensation plans. The table does not include any shares for which
shareholder approval is being sought at the April 28, 2005 annual meeting.
26
TAX ASPECTS UNDER THE U.S. INTERNAL REVENUE CODE
The following is a summary of the principal United States federal income
tax consequences of transactions under the 2005 Plan. It does not describe
all federal tax consequences under the 2005 Plan, nor does it describe
state, local or foreign tax consequences.
Incentive Options. No taxable income is generally realized by the optionee
upon the grant or exercise of an incentive option. If shares of common
stock issued to an optionee pursuant to the exercise of an incentive option
are sold or transferred after two years from the date of grant and after
one year from the date of exercise, then (i) upon sale of such shares, any
amount realized in excess of the option price (the amount paid for the
shares) will be taxed to the optionee as a long-term capital gain, and any
loss sustained will be a long-term capital loss, and (ii) there will be no
deduction for Rogers for federal income tax purposes. However, the exercise
of an incentive option will give rise to an item of tax preference that may
result in alternative minimum tax liability for the optionee. An optionee
will not have any additional FICA (e.g., Social Security and Medicare)
taxes upon exercise of an incentive option.
If shares of common stock acquired upon the exercise of an incentive option
are disposed of prior to the expiration of the two-year and one-year
holding periods described above (a "disqualifying disposition"), generally
(i) the optionee will realize ordinary income in the year of disposition in
an amount equal to the excess (if any) of the fair market value of the
shares of common stock at exercise (or, if less, the amount realized on a
sale of such shares of common stock) over the option price thereof, and
(ii) Rogers will be entitled to deduct such amount. Special rules will
apply where all or a portion of the exercise price of the incentive option
is paid by tendering shares of common stock.
If an incentive option is exercised at a time when it no longer qualifies
for the tax treatment described above, the option is treated as a non-
qualified option. Generally, an incentive option will not be eligible for
the tax treatment described above if it is exercised more than three months
following termination of employment (or one year in the case of termination
of employment by reason of disability). In the case of termination of
employment by reason of death, the three-month rule does not apply.
Non-Qualified Options. With respect to non-qualified options under the 2005
Plan, no income is realized by the optionee at the time the option is
granted. Generally (i) at exercise, ordinary income is realized by the
optionee in an amount equal to the difference between the option price and
the fair market value of the shares of common stock on the date of
exercise, and Rogers receives a tax deduction for the same amount, and (ii)
at disposition, appreciation or depreciation after the date of exercise is
treated as either short-term or long-term capital gain or loss depending on
how long the shares of common stock have been held. Special rules will
apply where all or a portion of the exercise price of the non-qualified
option is paid by tendering shares of common stock. Upon exercise, the
optionee will also be subject to FICA taxes on the excess of the fair
market value over the exercise price of the option.
Parachute Payments. The vesting of any portion of any option or other award
that is accelerated due to the occurrence of a change of control may cause
a portion of the payments with respect to such accelerated awards to be
treated as "parachute payments" as defined in the Internal Revenue Code.
Any such parachute payments may be non-deductible to Rogers, in whole or in
part, and may subject the recipient to a non-deductible 20% federal excise
tax on all or a portion of such payment (in addition to other taxes
ordinarily payable).
27
Limitation on Rogers' Deductions. As a result of Section 162(m) of the
Internal Revenue Code, Rogers' deduction for certain awards under the 2005
Plan may be limited to the extent that a covered employee (generally the
executives listed in the summary compensation table of the proxy statement)
receives compensation in excess of $1,000,000 in such taxable year of
Rogers (other than performance-based compensation that otherwise meets the
requirements of Section 162(m) of the Internal Revenue Code).
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the votes cast at the annual meeting
at which a quorum is present and voting, either in person or by proxy, is
required for approval of this proposal. Abstentions and broker "non-votes"
will each be counted as present for purposes of determining the presence of
a quorum but will not have any effect on the outcome of the proposal.
Under New York Stock Exchange rules, brokerage firms, banks and other
nominees who hold shares on behalf of their clients in "street name" are
not permitted to vote the shares if the clients do not provide instructions
(either vote FOR, or vote AGAINST, or ABSTAIN) on this proposal.
Accordingly, if a majority of the shares entitled to vote are recorded as
broker "non-votes" on this proposal, the proposal will not be approved even
if all of the shares that are actually voted are "yes votes."
RECOMMENDATION
The board of directors unanimously recommends a vote FOR the approval of
the Rogers Corporation 2005 Equity Compensation Plan.
28
Proposal 3: Ratification of Appointment of Independent Registered Public
Accounting Firm
The Audit Committee has appointed Ernst & Young LLP as Rogers independent
registered public accounting firm for the fiscal year ending January 1,
2006 (i.e. the 2005 fiscal year) and the board of directors is asking that
shareholders ratify this appointment. Although advisory only because the
Audit Committee is required under the Sarbanes-Oxley Act of 2002 and the
related rules and regulations of the Securities and Exchange Commission to
have responsibility for the appointment of the Company's independent
registered public accounting firm, this proposal is put before the
shareholders in order to seek the shareholders' views on this important
corporate matter. If the shareholders do not ratify the appointment, the
Audit Committee will take the matter under advisement. We expect
representatives of Ernst & Young LLP, Rogers independent registered public
accounting firm selected as the independent registered public accounting
firm for the fiscal years ending January 2, 2005, and January 1, 2006, to
attend the annual meeting. They will have an opportunity to make a
statement if they wish, and will be available to respond to appropriate
questions.
Fees of Independent Registered Public Accounting Firm
The following table sets forth the aggregate fees billed to Rogers for the
fiscal years shown.
2004 2003
--------------------------------------------------
Audit Fees (1) $1,048,440 $367,715
Audited-Related Fees (2) 85,752 121,402
Tax Fees (3) 546,454 315,334
All Other Fees (4) - -
--------------------------------------------------
Total $1,680,646 $804,451
==================================================
Audit Fees consist of fees billed for professional services rendered
for the audit of the Company's consolidated annual financial
statements and review of the interim consolidated financial
statements included in quarterly reports and services that are
normally provided by Ernst & Young LLP in connection with statutory
and regulatory filings or engagements. Amounts for 2004 also include
fees for the audit of internal control over financial reporting as
required under the Sarbanes-Oxley Act of 2002. Fees paid for the
internal control over financial reporting audit totaled $513,000 in
2004.
Audit-Related Fees consist of fees billed for assurance and related
services that are reasonably related to the performance of the audit
or review of the Company's consolidated financial statements and are
not reported under "Audit Fees". This category includes fees related
primarily to accounting consultations and employee benefit plan
audits.
Tax Fees consist of fees billed for professional services rendered
for tax compliance, tax advice and tax planning (domestic and
international). These services include assistance regarding federal,
state and international tax compliance, tax planning and compliance
work in connection with acquisitions and international tax planning.
For 2004, such fees can be further categorized as tax compliance,
planning and preparation ($240,824) and tax consulting and advisory
($305,630).
All Other Fees consist of fees for products and services other than
the services reported above, however, there were no such fees in
either year.
29
Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of
Independent Registered Public Accounting Firm
The Audit Committee's policy is to pre-approve all audit and non-audit
services provided by the independent registered public accounting firm.
These services may include audit services, audit-related services, tax
services and other services. Pre-approval is generally provided for up to
one year and any pre-approval is detailed as to the particular service or
category of services and is generally subject to a specific budget. The
Audit Committee has delegated pre-approval authority to its Chairperson
when expedition of services is necessary. The independent registered public
accounting firm and management are required to periodically report to the
full Audit Committee regarding the extent of services provided by the
independent registered public accounting firm in accordance with this pre-
approval, and the fees for the services performed to date. All of the
audit, audit-related, tax and other services provided by Ernst & Young LLP
in fiscal year 2004 and related fees were approved in accordance with the
Audit Committee's policy.
Vote Required and Recommendation of the Board of Directors
The affirmative vote of a majority of the votes cast on this proposal shall
constitute approval of the ratification of the appointment of Ernst & Young
LLP as Rogers independent registered public accounting firm for fiscal year
2005, ending January 1, 2006.
The board of directors recommends a vote FOR the ratification of the
appointment of Ernst & Young LLP as Rogers independent registered public
accounting firm for fiscal year 2005.
30
Proposals of Shareholders
Proposals of shareholders intended to be presented at the 2006 Annual
Meeting of Shareholders must be received by Rogers on or before November
18, 2005, for inclusion in Rogers proxy statement and form of proxy.
Proposals of shareholders intended to be presented at the 2006 Annual
Meeting although not included in the proxy statement and form of proxy,
must be received by Rogers on or before November 29, 2005. Proposals
received after that date will not be voted at the 2006 Annual Meeting. If a
proposal is received before that date, the proxies that management solicits
for the meeting may still exercise discretionary authority on the proposal
under the circumstances consistent with the proxy rules of the Securities
and Exchange Commission. All shareholder proposals should be marked for the
attention of Office of the Corporate Secretary, Rogers Corporation, One
Technology Drive, P. O. Box 188, Rogers, Connecticut 06263-0188.
Solicitation of Proxies
Rogers will pay the cost of soliciting proxies. In addition to
solicitations by mail, officers and employees of Rogers may solicit proxies
personally and by telephone, facsimile or other means, for which they will
receive no compensation in addition to their normal compensation. Rogers
will also request banks, brokers and other nominees holding shares for a
beneficial owner to forward proxies and proxy soliciting materials to the
beneficial owners of capital stock held of record by such persons. Rogers
will upon request reimburse brokers and other persons for their related
reasonable expenses. In addition, Rogers has retained Morrow & Co., Inc. to
assist in the solicitation of proxies at a cost of approximately $7,500
plus reimbursement of expenses.
Bylaw Amendments Approved by the Directors in 2004
At the 2004 annual meeting, Rogers shareholders approved an amendment to
Rogers Bylaws which increased the mandatory retirement age for directors
from 70 to 72. In addition, on August 26, 2004, the Board of Directors of
Rogers amended and restated the Company's Bylaws. Such amendments did not
require shareholder approval and were primarily designed to address the
provisions of the new Massachusetts Business Corporation Act, which became
effective on July 1, 2004. Previously, Rogers was subject to the provisions
of the Massachusetts Business Corporation Law. Appendix B to this proxy
statement contains a summary of the revisions made to the Bylaws. The
descriptions of provisions of the amended Bylaws are qualified in their
entirety by reference to the amended Bylaws, which are available both on
Rogers' web site and in print to shareholders. See "Availability of Certain
Documents" in this proxy statement.
"Householding" of Proxy Materials
In December of 2000, the Securities and Exchange Commission adopted new
rules that permit companies and intermediaries (e.g., brokers) to satisfy
the delivery requirements for proxy materials with respect to two or more
security holders sharing the same address by delivering a single proxy
statement and annual report addressed to those security holders. This
process, which is commonly referred to as "householding," potentially means
extra convenience for security holders and cost savings for companies.
31
This year, a number of brokers with account holders who are Rogers
shareholders will be "householding" proxy materials. As indicated in the
notice previously provided by these brokers to such shareholders, a single
proxy statement and an annual report will be delivered to multiple
shareholders sharing an address unless contrary instructions have been
received from an affected shareholder. Once a shareholder has received
notice that the broker will be "householding," "householding" will continue
until the shareholder is notified otherwise or until the shareholder has
revoked consent by notifying the broker. If, at any time, a shareholder no
longer wishes to participate in "householding" and would prefer to receive
a separate proxy statement and annual report, please notify the broker,
send a written request to Rogers Corporation, Office of the Corporate
Secretary, One Technology Drive, P. O. Box 188, Rogers, Connecticut 06263-
0188 or contact Robert M. Soffer at (860) 779-5566.
Shareholders who share the same address, who currently receive multiple
copies of the Rogers proxy statement and annual report from their broker
and would like to request "householding" of such information should contact
their broker.
Communications with Members of the Board Of Directors
Although the board of directors has not formally adopted a process by which
shareholders may communicate directly with directors, it believes that the
procedures currently in place and described below will continue to serve
the needs of the board and shareholders. Until such time as the board may
adopt a different set of procedures, any such shareholder communications
should be sent to the Board of Directors, Rogers Corporation, One
Technology Drive, P. O. Box 188, Rogers, Connecticut 06263-0188, c/o Vice
President and Secretary of the Company. At the present time, all such
communications sent by shareholders to the above address will be forwarded
to the Lead Director of the board for consideration.
Availability of Certain Documents
Rogers Corporation maintains a web site (http://www.rogerscorporation.com).
Rogers Bylaws, Corporate Governance Guidelines, Code of Business Conduct
and Ethics, Audit Committee Charter, Compensation and Organization
Committee Charter and Nominating and Governance Committee Charter are
available on this web site. In addition, you may obtain a copy of any of
these documents without charge by sending a request to Rogers Corporation,
One Technology Drive, P. O. Box 188, Rogers, Connecticut 06263-0188, Attn:
Vice President and Secretary. Rogers Corporation's web site is not
incorporated into or a part of this proxy statement.
32
Appendix A
Rogers Corporation
2005 Equity Compensation Plan
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the Rogers Corporation 2005 Equity Compensation
Plan (the "Plan"). The purpose of the Plan is to encourage and enable the
officers, employees, Non-Employee Directors and other key persons
(including consultants and prospective employees) of Rogers Corporation
(the "Company") and its Subsidiaries upon whose judgment, initiative and
efforts the Company largely depends for the successful conduct of its
business to acquire a proprietary interest in the Company. It is
anticipated that providing such persons with a direct stake in the
Company's welfare will help assure a closer identification of their
interests with those of the Company, thereby stimulating their efforts on
the Company's behalf and strengthening their desire to remain with the
Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
"Award" or "Awards," except where referring to a particular category
of grant under the Plan, shall include Incentive Stock Options, Non-
Qualified Stock Options, Stock Appreciation Rights, Deferred Stock
Awards, Restricted Stock Awards, Unrestricted Stock Awards and
Dividend Equivalent Rights.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor thereto, and related rules, regulations and
interpretations.
"Committee" means the Compensation and Organization Committee of the
Board, or any successor committee thereto, provided that such
committee consists of not less than two Non-Employee Directors.
"Covered Employee" means an employee who is a "Covered Employee"
within the meaning of Section 162(m) of the Code.
"Deferred Stock Award" means Awards granted pursuant to Section 9.
"Directors Deferred Compensation Plan" means the Rogers Corporation
Voluntary Deferred Compensation Plan for Non-Employee Directors, as
amended from time to time, or any successor plan thereto.
"Disability" means (i) for purposes of Incentive Stock Options,
disability as set forth in Section 22(e)(3) of the Code, and (ii) for
purposes of all other Awards, any medically determinable physical or
mental impairment that the Committee determines generally qualified
as a "disability" for purposes of the employee benefits for which
such individual is eligible.
A-1
"Dividend Equivalent Right" means Awards granted pursuant to Section
12.
"Effective Date" means the date on which the Plan is approved by
shareholders as set forth in Section 18.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Fair Market Value" of the Stock on any given date means the "last"
selling price, the price at "close," or such other equivalent
reported price for Stock (as hereinafter defined) on the business day
immediately preceding that particular given date in each case as
quoted in the New York Stock Exchange Composite Transactions in The
Wall Street Journal newspaper; provided, however, that if there are
no such market quotations for such date, then as determined in good
faith by the Company.
"Incentive Stock Option" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of
the Code.
"Non-Employee Director" means a member of the Board who is not also
an employee of the Company or any Subsidiary.
"Non-Employee Director Stock Award" means any Award made pursuant to
Section 6.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Option" or "Stock Option" means any option to purchase shares of
Stock granted pursuant to Section 5.
"Performance Cycle" means one or more periods of time, which may be
of varying and overlapping durations, as the Committee may select,
over which the attainment of one or more performance criteria will be
measured for the purpose of determining a grantee's right to and the
payment of a Restricted Stock Award or Deferred Stock Award.
"Restricted Stock Award" means Awards granted pursuant to Section 8.
"Retainer Payment Date" means the day in June and the day in December
of each calendar year that are designated by the Company as the dates
upon which is payable a portion of the annual retainer fee due to a
Non-Employee Director with respect to such calendar year; provided,
however, that with respect to any individual who ceases to be a Non-
Employee Director, "Retainer Payment Date" shall also mean the date
designated by the Company on which is payable to such individual the
proportionate share of the retainer fee due to such individual for
his or her services as a Non-Employee Director since the later of the
Effective Date or the last Retainer Payment Date.
"Retirement" means termination of employment with the Company or its
Subsidiaries that the Company determines generally qualifies as
retirement for purposes of the employee benefits for which such
individual is eligible and shall include, in the event such
participant is eligible to participate in any qualified defined
benefit pension plan of the Company, retirement under any qualified
defined benefit pension plan of the Company (i.e., such individual
commences receipt of
A-2
pension benefits under such qualified defined benefit pension plan
within 60 days of termination of employment).
"Stock" means the common stock, par value $1.00 per share, of the
Company, subject to adjustments pursuant to Section 3.
"Stock Appreciation Right" means any Award granted pursuant to
Section 7.
"Subsidiary" means any corporation or other entity (other than the
Company) in any unbroken chain of corporations or other entities,
beginning with the Company if each of the corporations or entities
(other than the last corporation or entity in the unbroken chain)
owns stock or other interests possessing 50% or more of the total
combined voting power of all classes of stock or other interests in
one of the other corporations or entities in the chain.
"Unrestricted Stock Award" means any Award granted pursuant to
Section 10.
Except where otherwise indicated by the context, words in the
masculine shall include the feminine, the singular shall include the
plural, and the plural shall include the singular.
SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT GRANTEES
AND DETERMINE AWARDS
(a) Committee. The Plan shall be administered by the Committee.
(b) Powers of the Committee. The Committee shall have the power and
authority to grant Awards consistent with the terms of the
Plan, including the power and authority:
i. to select the individuals to whom Awards may from
time to time be granted;
ii. to determine the time or times of grant, and the
extent, if any, of Incentive Stock Options, Non-
Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Deferred Stock Awards,
Unrestricted Stock Awards and Dividend Equivalent
Rights, or any combination of the foregoing,
granted to any one or more grantees;
iii. to determine the number of shares of Stock
underlying any Award;
iv. to determine and, subject to the provisions of
Section 15, modify from time to time the terms and
conditions, including restrictions, not
inconsistent with the terms of the Plan, of any
Award, which terms and conditions may differ among
individual Awards and grantees, and to approve the
general form of written instruments evidencing the
Awards;
v. to accelerate at any time the exercisability or
vesting of all or any portion of any Award;
vi. subject to the provisions of Section 5(a)(ii), to
extend at any time the period in which Stock
Options may be exercised;
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vii. to determine at any time whether, to what extent,
and under what circumstances distribution or the
receipt of Stock and other amounts payable with
respect to an Award shall be deferred either
automatically or at the election of the grantee and
whether and to what extent the Company shall pay or
credit amounts constituting interest (at rates
determined by the Committee) or dividends or deemed
dividends on such deferrals; and
viii. at any time to adopt, alter and repeal such rules,
guidelines and practices for administration of the
Plan and for its own acts and proceedings as it
shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including
related written instruments); to make all
determinations it deems advisable for the
administration of the Plan; to decide all disputes
arising in connection with the Plan; and to
otherwise supervise the administration of the Plan.
All decisions and interpretations of the Committee shall be binding on all
persons, including the Company and Plan grantees.
(c) Delegation of Authority to Grant Awards. The Committee, in its
discretion, may delegate to the Chief Executive Officer of the
Company all or part of the Committee's authority and duties
with respect to the granting of Awards, to individuals who are
not subject to the reporting and other provisions of Section 16
of the Exchange Act or Covered Employees. Any such delegation
by the Committee shall include a limitation as to the amount of
Awards that may be granted during the period of the delegation
and shall contain guidelines as to the determination of the
exercise price of any Stock Option or Stock Appreciation Right,
the conversion ratio or price of other Awards and the vesting
criteria. The Committee may revoke or amend the terms of a
delegation at any time but such action shall not invalidate any
prior actions of the Committee's delegatee or delegatees that
were consistent with the terms of the Plan.
(d) Indemnification. Neither the Board nor the Committee, nor any
member of either or any delegatee thereof (including any person
signing on behalf of the Company), shall be liable for any act,
omission, interpretation, construction or determination made in
good faith in connection with the Plan, and the members of the
Board and the Committee (and any delegatee thereof) shall be
entitled in all cases to indemnification and reimbursement by
the Company in respect of any claim, loss, damage or expense
(including, without limitation, reasonable attorneys' fees)
arising or resulting therefrom to the fullest extent permitted
by law and/or under any directors' and officers' liability
insurance coverage which may be in effect from time to time.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) Stock Issuable. The maximum number of shares of Stock reserved
and available for issuance under the Plan shall be 1,100,000
shares, subject to adjustment as provided in Section 3(b). For
purposes of this limitation, the shares of Stock underlying any
Awards that are forfeited, canceled, held back upon exercise of
an Option or settlement of an Award to cover the exercise price
or tax withholding, reacquired by the Company prior to vesting,
satisfied without the issuance of Stock or otherwise terminated
(other than by exercise) shall be added back to the shares of
Stock available for issuance under the Plan. Subject to such
overall
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limitations, shares of Stock may be issued up to such maximum
number pursuant to any type or types of Award; provided,
however, that Stock Options or Stock Appreciation Rights with
respect to no more than 80,000 shares of Stock may be granted
to any one individual grantee during any one calendar year
period. The shares available for issuance under the Plan may be
(i) authorized shares of Stock that have never been issued,
(ii) authorized but unissued shares of Stock (formerly known as
"treasury shares"), or (iii) shares of Stock reacquired by the
Company.
(b) Changes in Stock. Subject to Section 3(c) hereof, if, as a
result of any reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock
split or other similar change in the Company's capital stock,
the outstanding shares of Stock are increased or decreased or
are exchanged for a different number or kind of shares or other
securities of the Company, or additional shares or new or
different shares or other securities of the Company or other
non-cash assets are distributed with respect to such shares of
Stock or other securities, or, if, as a result of any merger or
consolidation, sale of all or substantially all of the assets
of the Company, the outstanding shares of Stock are converted
into or exchanged for a different number or kind of securities
of the Company or any successor entity (or a parent or
subsidiary thereof), the Committee shall make an appropriate or
proportionate adjustment in (i) the maximum number of shares
reserved for issuance under the Plan, (ii) the number of Stock
Options or Stock Appreciation Rights that can be granted to any
one individual grantee and the maximum number of shares that
may be granted under a Performance-based Award (as hereinafter
defined), (iii) the number and kind of shares or other
securities subject to any then outstanding Awards, (iv) the
repurchase price, if any, per share subject to each outstanding
Restricted Stock Award, (v) the number of Stock Options
automatically granted to Non-Employee Directors, and (vi) the
price for each share subject to any then outstanding Stock
Options and Stock Appreciation Rights under the Plan, without
changing the aggregate exercise price (i.e., the exercise price
multiplied by the number of Stock Options and Stock
Appreciation Rights, subject to de minimis rounding) as to
which such Stock Options and Stock Appreciation Rights remain
exercisable. The adjustment by the Committee shall be final,
binding and conclusive. No fractional shares of Stock shall be
issued under the Plan resulting from any such adjustment, but
the Committee in its discretion may make a cash payment in lieu
of fractional shares, or round such amounts as it deems
appropriate.
The Committee may also adjust the number of shares subject to
outstanding Awards and the exercise price and the terms of
outstanding Awards to take into consideration material changes
in accounting practices or principles, extraordinary dividends,
acquisitions or dispositions of stock or property or any other
event if it is determined by the Committee that such adjustment
is appropriate to avoid distortion in the operation of the
Plan, provided that no such adjustment shall be made in the
case of an Incentive Stock Option, without the consent of the
grantee, if it would constitute a modification, extension or
renewal of the Option within the meaning of Section 424(h) of
the Code.
(c) Mergers and Other Transactions. In the case of and subject to
the consummation of (i) the dissolution or liquidation of the
Company, (ii) the sale of all or substantially all of the
assets of the Company on a consolidated basis to an unrelated
person or entity, (iii) a merger, reorganization or
consolidation in which the outstanding shares of Stock are
converted into or exchanged for a different kind of securities
of the successor entity and the holders of the Company's
outstanding voting power immediately prior to such transaction
do not own a
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majority of the outstanding voting power of the successor
entity immediately upon completion of such transaction, or (iv)
the sale of all of the Stock of the Company to an unrelated
person or entity (in each case, a "Sale Event"), all Options
and Stock Appreciation Rights that are not exercisable
immediately prior to the effective time of the Sale Event shall
become fully exercisable as of the effective time of the Sale
Event and all other Awards shall become fully vested and
nonforfeitable as of the effective time of the Sale Event,
except as the Committee may otherwise specify with respect to
particular Awards in the relevant Award documentation. Upon the
effective time of the Sale Event, the Plan and all outstanding
Awards granted hereunder shall terminate, unless provision is
made in connection with the Sale Event in the sole discretion
of the parties thereto for the assumption or continuation of
Awards theretofore granted by the successor entity, or the
substitution of such Awards with new Awards of the successor
entity or parent thereof, with appropriate adjustment as to the
number and kind of shares and, if appropriate, the per share
exercise prices, as such parties shall agree (after taking into
account any acceleration hereunder). In the event of such
termination, each grantee shall be permitted, within a
specified period of time prior to the consummation of the Sale
Event as determined by the Committee, to exercise all
outstanding Options and Stock Appreciation Rights held by such
grantee, including those that will become exercisable upon the
consummation of the Sale Event; provided, however, that the
exercise of Options and Stock Appreciation Rights not
exercisable prior to the Sale Event shall be subject to the
consummation of the Sale Event.
Notwithstanding anything to the contrary in this Section 3(c),
in the event of a Sale Event pursuant to which holders of the
Stock of the Company will receive upon consummation thereof a
cash payment for each share surrendered in the Sale Event, the
Company shall have the right, but not the obligation, to make
or provide for a cash payment to the grantees holding Options
and Stock Appreciation Rights, in exchange for the cancellation
thereof, in an amount equal to the difference between (A) the
value as determined by the Committee of the consideration
payable per share of Stock pursuant to the Sale Event (the
"Sale Price") times the number of shares of Stock subject to
outstanding Options and Stock Appreciation Rights (to the
extent then exercisable at prices not in excess of the Sale
Price) and (B) the aggregate exercise price of such outstanding
Options and Stock Appreciation Rights.
SECTION 4. ELIGIBILITY
Grantees under the Plan will be such full or part-time officers and other
full or part-time employees and key persons (including consultants and
prospective employees) of the Company and its Subsidiaries as are selected
from time to time by the Committee in its sole discretion. Non-Employee
Directors are also eligible to participate in the Plan, but only to the
extent provided in Sections 5(b) and 6 below.
SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such general form as
the Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock Options
or Non-Qualified Stock Options. Incentive Stock Options may be granted only
to employees of the Company or any Subsidiary that is a "subsidiary
corporation" within the meaning of Section 424(f) of the Code. To the
extent that any Option does not qualify as an Incentive Stock Option, it
shall be deemed a Non-Qualified Stock Option.
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(a) Stock Options Granted to Officers, Employees and Other Key
Persons. The Committee in its discretion may grant Stock
Options to eligible officers, employees and other key persons
of the Company or any Subsidiary. Stock Options granted
pursuant to this Section 5(a) shall be subject to the following
terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable. If the Committee so
determines, Stock Options may be granted in lieu of cash
compensation at the optionee's election, subject to such terms
and conditions as the Committee may establish.
(i) Exercise Price. The exercise price per share for the
Stock covered by a Stock Option granted pursuant to this
Section 5(a) shall be determined by the Committee at the
time of grant but shall not be less than 100% of the Fair
Market Value as of the date of grant. If an employee owns
or is deemed to own (by reason of the attribution rules
of Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the
Company or any parent or subsidiary corporation and an
Incentive Stock Option is granted to such employee, the
option price of such Incentive Stock Option shall be not
less than 110% of the Fair Market Value as of the grant
date.
(ii) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Stock Option shall be
exercisable more than 10 years after the date the Stock
Option is granted. If an employee owns or is deemed to
own (by reason of the attribution rules of Section 424(d)
of the Code) more than 10% of the combined voting power
of all classes of stock of the Company or any parent or
subsidiary corporation and an Incentive Stock Option is
granted to such employee, the term of such Stock Option
shall be no more than five years from the date of grant.
(iii) Exercisability; Rights of a Shareholder. Stock Options
shall become exercisable at such time or times, whether
or not in installments, as shall be determined by the
Committee at or after the grant date. The Committee may
at any time accelerate the exercisability of all or any
portion of any Stock Option. An optionee shall have the
rights of a shareholder only as to shares acquired upon
the exercise of a Stock Option and not as to unexercised
Stock Options. Except as provided in Section 3(b), no
adjustment shall be made for dividends or other rights,
the record date for which is prior to the date of
issuance of the Stock that evidences the shares acquired
by an optionee.
(iv) Method of Exercise. Stock Options may be exercised in
whole or in part, by giving an acceptable notice of
exercise to the Company, specifying the number of shares
to be acquired, together with payment of the exercise
price. Payment of the exercise price may be made by one
or more of the following methods to the extent provided
in the Option Award agreement:
(A) In cash, by certified or bank check or other
instrument acceptable to the Company;
(B) Through the delivery (or attestation to the
ownership) of shares of Stock that have been
purchased by the optionee on the open market or
that have been beneficially owned by the optionee
for at least six months and are not then subject to
restrictions under any Company plan. Such
surrendered shares shall be valued at Fair Market
Value on the exercise date; or
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(C) By the optionee delivering to the Company
irrevocable instructions to a broker to promptly
deliver to the Company cash or a certified or bank
check payable or other instrument acceptable to the
Company for the exercise price; provided that in
the event the optionee chooses to pay the exercise
price as so provided, the optionee and the broker
shall comply with such procedures and enter into
such agreements of indemnity and other agreements
as the Company shall prescribe as a condition of
such payment procedure.
Payment instruments will be received subject to collection. The delivery of
shares of Stock to be acquired pursuant to the exercise of a Stock Option
will be contingent upon receipt from the optionee (or a purchaser acting in
his or her stead in accordance with the provisions of the Stock Option) by
the Company of the full exercise price for such shares and the fulfillment
of any other requirements contained in the Option Award agreement or
applicable provisions of laws. In the event an optionee chooses to pay the
exercise price by previously-owned shares of Stock through the attestation
method, the number of shares of Stock transferred to the optionee upon the
exercise of the Stock Option shall be net of the number of shares attested
to.
(v) Annual Limit on Incentive Stock Options. To the extent
required for "incentive stock option" treatment under
Section 422 of the Code, the aggregate Fair Market Value
(determined as of the time of grant) of the shares of
Stock with respect to which Incentive Stock Options
granted under this Plan and any other plan of the Company
or its parent and subsidiary corporations become
exercisable for the first time by an optionee during any
calendar year shall not exceed $100,000. To the extent
that any Stock Option exceeds this limit, it shall
constitute a Non-Qualified Stock Option.
(b) Stock Options Granted to Non-Employee Directors.
(i) Automatic Grant of Options. Each Non-Employee Director
shall automatically be granted, as of each Retainer
Payment Date, beginning with the Retainer Payment Date of
June, 2005, a Non-Qualified Stock Option to purchase
2,250 shares of Stock (or, with respect to any individual
who has become or ceased to be a Non-Employee Director
since the last Retainer Payment Date, an amount equal to
a prorated portion of 2,250 shares as determined on an
equitable basis by the Company (the "Partial Retainer")).
Notwithstanding anything herein to the contrary, the
Board may from time to time increase and/or decrease the
number of shares set forth in the preceding sentence. The
exercise price per share for the Stock covered by a Stock
Option granted to a Non-Employee Director under this
Section 5(b) shall be equal to the Fair Market Value of
the Stock as of the date the Stock Option is granted.
(ii) Exercise; Termination. Each Option granted under Section
5(b) is immediately exercisable as of the date of grant
by the Non-Employee Director to whom it is granted (or,
in the case of the death of the Non-Employee Director,
his or her beneficiary) and may be exercisable by the
Non-Employee Director (or, in the case of the death of
the Non-Employee Director, his or her beneficiary) at any
time until the tenth anniversary of the date such Option
is granted regardless of whether the Non-Employee
Director continues to be a member of the Board. Except as
specifically provided for in this Section 5(b), Options
granted under this Section 5(b) shall be subject to the
same terms and conditions as are generally applicable to
Non-Qualified Stock Options granted under the Plan.
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(iii) Limited to Non-Employee Directors. The provisions of this
Section 5(b) shall apply only to Options granted or to be
granted to Non-Employee Directors, and shall not be
deemed to modify, limit or otherwise apply to any other
provision of this Plan or to any Option issued under this
Plan to a participant who is not a Non-Employee Director.
To the extent inconsistent with the provisions of any
other Section of this Plan, the provisions of this
Section 5(b) shall govern the rights and obligations of
the Company and Non-Employee Directors respecting Options
granted or to be granted to Non-Employee Directors.
(c) Non-transferability of Options. All Stock Options shall be
exercisable, during the optionee's lifetime, only by the
optionee, or by the optionee's legal representative.
Notwithstanding the foregoing, the Committee, in its sole
discretion, may provide in the Award agreement regarding a
given Option that the optionee may transfer his or her Non-
Qualified Stock Options to members of his or her immediate
family, to trusts for the benefit of such family members, or to
partnerships in which such family members are the only
partners, provided that the transferee agrees in writing with
the Company to be bound by all of the terms and conditions of
this Plan and the applicable Option.
SECTION 6. NON-EMPLOYEE DIRECTOR STOCK AWARDS
(a) Stock Awards.
(i) Annual Retainer. Subject to Section 6(b) below, each Non-
Employee Director shall be granted, as of each Retainer
Payment Date, shares of Stock free of any restrictions
(except as otherwise provided in the Plan) in lieu of all
of the annual retainer fee due to such Non-Employee
Director on such Retainer Payment Date.
(ii) Meeting Fees. Subject to Section 6(b) below, each Non-
Employee Director shall have the right to elect to
receive, in lieu of all or a portion of the meeting fees
due to such Non-Employee Director, a grant of shares of
Stock free of any restrictions (except as otherwise
provided in the Plan).
Each Award granted under this Section 6(a) shall be for the number of
shares of Stock obtained by dividing the applicable dollar amount by the
Fair Market Value per share of Stock as of the meeting date, in all cases
rounded up to the next higher whole number of shares.
(b) Deferral of Awards. Each Non-Employee Director who is entitled
to an Award under Section 6(a) above will have the right to
elect to defer up to 100% of such Award in accordance with the
rules and procedures of the Directors Deferred Compensation
Plan. Dividends, if any, which would have been paid on any
Stock so deferred, but for such deferral, will be payable to
the Non-Employee Director in accordance with the provisions of
the Directors Deferred Compensation Plan.
SECTION 7. STOCK APPRECIATION RIGHTS
(a) Nature of Stock Appreciation Rights. A Stock Appreciation Right
is an Award entitling the recipient to receive an amount in
whole shares of Stock (rounded as the Company deems appropriate
in its sole discretion) having a value equal to the excess of
the Fair Market Value of the Stock on the date of exercise over
the exercise price of the Stock Appreciation Right,
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which price shall not be less than 100% of the Fair Market
Value of the Stock as of the date of grant multiplied by the
number of shares of Stock with respect to which the Stock
Appreciation Right shall have been exercised.
(b) Grant and Exercise of Stock Appreciation Rights. Stock
Appreciation Rights may be granted by the Committee in tandem
with, or independently of, any Stock Option granted pursuant to
Section 5 of the Plan. In the case of a Stock Appreciation
Right granted in tandem with a Non-Qualified Stock Option, such
Stock Appreciation Right may be granted either at or after the
time of the grant of such Option. In the case of a Stock
Appreciation Right granted in tandem with an Incentive Stock
Option, such Stock Appreciation Right may be granted only at
the time of the grant of the Option.
A Stock Appreciation Right or applicable portion thereof
granted in tandem with a Stock Option shall terminate and no
longer be exercisable upon the termination or exercise of the
related tandem Option.
(c) Terms and Conditions of Stock Appreciation Rights. Stock
Appreciation Rights shall be subject to such terms and
conditions as shall be determined from time to time by the
Committee, subject to the following:
(i) Stock Appreciation Rights granted in tandem with Options
shall be exercisable at such time or times and to the
extent that the related Stock Options shall be
exercisable.
(ii) Upon exercise of a Stock Appreciation Right, the
applicable portion of any related Option shall be
surrendered.
(iii) All Stock Appreciation Rights shall be exercisable during
the grantee's lifetime only by the grantee or the
grantee's legal representative.
SECTION 8. RESTRICTED STOCK AWARDS
(a) Nature of Restricted Stock Awards. A Restricted Stock Award is
an Award entitling the recipient to acquire, at such purchase
price (which may be zero) as determined by the Committee,
shares of Stock subject to such restrictions and conditions as
the Committee may determine at the time of grant ("Restricted
Stock"). Conditions may be based on continuing employment (or
other service relationship) and/or achievement of pre-
established performance goals and objectives. The terms and
conditions of each such agreement shall be determined by the
Committee, and such terms and conditions may differ among
individual Awards and grantees.
(b) Rights as a Shareholder. Upon execution of a written instrument
setting forth the Restricted Stock Award and payment of any
applicable purchase price, a grantee shall have the rights of a
shareholder with respect to the voting of the Restricted Stock,
subject to such conditions contained in the written instrument
evidencing the Restricted Stock Award. Unless the Committee
shall otherwise determine, (i) uncertificated Restricted Stock
shall be accompanied by a notation on the records of the
Company or the transfer agent to the effect that it is subject
to forfeiture until such Restricted Stock is vested as provided
in Section 8(d) below, and (ii) certificated Restricted Stock
shall remain in the possession of the Company until such
Restricted Stock is vested as provided in Section 8(d) below,
and the grantee shall
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be required, as a condition of the grant, to deliver to the
Company such instruments of transfer as the Committee may
prescribe.
(c) Restrictions. Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of
except as specifically provided herein or in the Restricted
Stock Award agreement.
(d) Vesting of Restricted Stock. The Committee at the time of grant
shall specify the date or dates and/or the attainment of pre-
established performance goals, objectives and other conditions
on which the non-transferability of the Restricted Stock and
the Company's right of repurchase, or the grantee's risk of
forfeiture, shall lapse. Notwithstanding the foregoing, in the
event that any such Restricted Stock shall have a performance-
based goal, the restriction period with respect to such shares
shall not be less than one year, and in the event any such
Restricted Stock shall have a time-based restriction, the
restriction period with respect to such shares shall not be
less than three years. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals,
objectives and other conditions, the shares on which all
restrictions have lapsed shall no longer be Restricted Stock
and shall be deemed "vested." Except as may otherwise be
provided by the Committee either in the Award agreement or,
subject to Section 15 below, in writing after the Award
agreement is issued, a grantee's rights in any shares of
Restricted Stock that have not vested shall automatically
terminate upon the grantee's termination of employment (or
other service relationship) with the Company and its
Subsidiaries and such shares shall be subject to the provisions
of Section 8(c) above.
SECTION 9. DEFERRED STOCK AWARDS
(a) Nature of Deferred Stock Awards. A Deferred Stock Award is an
Award of phantom stock units to a grantee, subject to
restrictions and conditions as the Committee may determine at
the time of grant. Conditions may be based on continuing
employment (or other service relationship) and/or achievement
of pre-established performance goals and objectives. The grant
of a Deferred Stock Award is contingent on the grantee
executing the Deferred Stock Award agreement. The terms and
conditions of each such agreement shall be determined by the
Committee, and such terms and conditions may differ among
individual Awards and grantees. Notwithstanding the foregoing,
in the event that any such Deferred Stock Award shall have a
performance-based goal, the restriction period with respect to
such award shall not be less than one year, and in the event
any such Deferred Stock Award shall have a time-based
restriction, the restriction period with respect to such award
shall not be less than three years. At the end of the deferral
period, the Deferred Stock Award, to the extent vested, shall
be paid to the grantee in the form of shares of Stock.
(b) Election to Receive Deferred Stock Awards in Lieu of
Compensation. The Committee may, in its sole discretion, permit
a grantee to elect to receive a portion of the cash
compensation or Restricted Stock Award otherwise due to such
grantee in the form of a Deferred Stock Award. Any such
election shall be made in writing and shall be delivered to the
Company no later than the date specified by the Committee and
in accordance with rules and procedures established by the
Committee. The Committee shall have the sole right to determine
whether and under what circumstances to permit such elections
and to impose such limitations and other terms and conditions
thereon as the Committee deems appropriate.
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(c) Rights as a Shareholder. During the deferral period, a grantee
shall have no rights as a shareholder; provided, however, that
the grantee may be credited with Dividend Equivalent Rights
with respect to the phantom stock units underlying his or her
Deferred Stock Award, subject to such terms and conditions as
the Committee may determine.
(d) Restrictions. A Deferred Stock Award may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of
during the deferral period.
(e) Termination. Except as may otherwise be provided by the
Committee either in the Award agreement or, subject to Section
15 below, in writing after the Award agreement is issued, a
grantee's right in all Deferred Stock Awards that have not
vested shall automatically terminate upon the grantee's
termination of employment (or cessation of service
relationship) with the Company and its Subsidiaries for any
reason.
SECTION 10. UNRESTRICTED STOCK AWARDS
Grant or Sale of Unrestricted Stock. The Committee may, in its sole
discretion, grant (or sell at par value or such higher purchase price
determined by the Committee) an Unrestricted Stock Award to any grantee
pursuant to which such grantee may receive shares of Stock free of any
restrictions ("Unrestricted Stock") under the Plan. Unrestricted Stock
Awards may be granted in respect of past services or other valid
consideration, or in lieu of cash compensation due to such grantee.
SECTION 11. PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES
Notwithstanding anything to the contrary contained herein, if any
Restricted Stock Award or Deferred Stock Award granted to a Covered
Employee is intended to qualify as "Performance-based Compensation" under
Section 162(m) of the Code and the regulations promulgated thereunder (a
"Performance-based Award"), such Award shall comply with the provisions set
forth below:
(a) Performance Criteria. The performance criteria used in
performance goals governing Performance-based Awards granted to
Covered Employees may include any or all of the following: (i)
the Company's return on equity, assets, capital or investment;
(ii) pre-tax or after-tax profit levels of the Company or any
Subsidiary, a division, an operating unit or a business segment
of the Company, or any combination of the foregoing; (iii) cash
flow, funds from operations or similar measure; (iv) total
shareholder return; (v) changes in the market price of the
Stock; (vi) sales or market share; or (vii) earnings per share.
(b) Grant of Performance-based Awards. With respect to each
Performance-based Award granted to a Covered Employee, the
Committee shall select, within the first 90 days of a
Performance Cycle (or, if shorter, within the maximum period
allowed under Section 162(m) of the Code) the performance
criteria for such grant, and the achievement targets with
respect to each performance criterion (including a threshold
level of performance below which no amount will become payable
with respect to such Award). Each Performance-based Award will
specify the amount payable, or the formula for determining the
amount payable, upon achievement of the various applicable
performance targets. The performance criteria established by
the Committee may be (but need not be) different for each
Performance Cycle and different goals may be applicable to
Performance-based Awards to different Covered Employees.
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(c) Payment of Performance-based Awards. Following the completion
of a Performance Cycle, the Committee shall meet to review and
certify in writing whether, and to what extent, the performance
criteria for the Performance Cycle have been achieved and, if
so, to also calculate and certify in writing the amount of the
Performance-based Awards earned for the Performance Cycle. The
Committee shall then determine the actual size of each Covered
Employee's Performance-based Award, and, in doing so, may
reduce or eliminate the amount of the Performance-based Award
for a Covered Employee if, in its sole judgment, such reduction
or elimination is appropriate.
(d) Maximum Award Payable. The maximum Performance-based Award
payable to any one Covered Employee under the Plan for a
Performance Cycle is 80,000 Shares (subject to adjustment as
provided in Section 3(b) hereof).
SECTION 12. DIVIDEND EQUIVALENT RIGHTS
(a) Dividend Equivalent Rights. A Dividend Equivalent Right is an
Award entitling the grantee to receive credits based on cash
dividends that would have been paid on the shares of Stock
specified in the Dividend Equivalent Right (or other award to
which it relates) if such shares had been issued to and held by
the grantee. A Dividend Equivalent Right may be granted
hereunder to any grantee as a component of another Award or as
a freestanding award. The terms and conditions of Dividend
Equivalent Rights shall be specified in the Award agreement.
Dividend equivalents credited to the holder of a Dividend
Equivalent Right may be paid currently or may be deemed to be
reinvested in additional shares of Stock, which may thereafter
accrue additional equivalents. Any such reinvestment shall be
at Fair Market Value on the date of reinvestment or such other
price as may then apply under a dividend reinvestment plan
sponsored by the Company, if any. Dividend Equivalent Rights
may be settled in cash or shares of Stock or a combination
thereof, in a single installment or installments. A Dividend
Equivalent Right granted as a component of another Award may
provide that such Dividend Equivalent Right shall be settled
upon exercise, settlement, or payment of, or lapse of
restrictions on, such other award, and that such Dividend
Equivalent Right shall expire or be forfeited or annulled under
the same conditions as such other Award. A Dividend Equivalent
Right granted as a component of another Award may also contain
terms and conditions different from such other Award.
(b) Termination. Except as may otherwise be provided by the
Committee either in the Award agreement or, subject to Section
15 below, in writing after the Award agreement is issued, a
grantee's rights in all Dividend Equivalent Rights or interest
equivalents granted as a component of another Award that has
not vested shall automatically terminate upon the grantee's
termination of employment (or cessation of service
relationship) with the Company and its Subsidiaries for any
reason.
SECTION 13. TAX WITHHOLDING
(a) Payment by Grantee. Each grantee shall, no later than the date
as of which the value of an Award or of any Stock or other
amounts received thereunder first becomes includable in the
gross income of the grantee for United States Federal income
tax purposes, pay to the Company, or make arrangements
satisfactory to the Company regarding payment of, any United
States Federal, state, or local taxes of any kind required by
law to be withheld with respect to such income. The Company and
its Subsidiaries shall, to the extent permitted by
A-13
law, have the right to deduct any such taxes from any payment
of any kind otherwise due to the grantee (or a grantee's
beneficiaries, as the case may be). The Company's obligation to
deliver stock to any grantee is subject to and conditioned on
tax obligations being satisfied by the grantee.
(b) Payment in Stock. Subject to approval from time to time by the
Board or the Committee, a grantee may elect to have the minimum
required tax withholding obligation satisfied, in whole or in
part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Award a number of shares
with an aggregate Fair Market Value (as of the date the
withholding is effected) that would satisfy the withholding
amount due, or (ii) transferring to the Company shares of Stock
owned by the grantee with an aggregate Fair Market Value (as of
the date the withholding is effected) that would satisfy the
withholding amount due.
SECTION 14. TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary
or from the Company to a Subsidiary, or from one Subsidiary to
another; or
(b) an approved leave of absence for military service or sickness,
or for any other purpose approved by the Company, if the
employee's right to re-employment is guaranteed either by a
statute or by contract or under the policy pursuant to which
the leave of absence was granted or if the Committee otherwise
so provides in writing.
SECTION 15. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the Committee
may, at any time, amend or cancel any outstanding Award for the purpose of
satisfying changes in law or for any other lawful purpose, but no such
action shall adversely affect rights under any outstanding Award without
the holder's consent. Except as provided in Section 3(b) or 3(c), in no
event may the Committee exercise its discretion to reduce the exercise
price of outstanding Stock Options or effect repricing through cancellation
and re-grants. Any material Plan amendments (other than amendments that
curtail the scope of the Plan), including any Plan amendments that: (i)
increase the number of shares reserved for issuance under the Plan; (ii)
expand the type of Awards available, materially expand the eligibility to
participate or materially extend the term of the Plan; or (iii) materially
change the method of determining Fair Market Value, shall be subject to
approval by the shareholders of the Company entitled to vote at a meeting
of shareholders. In addition, to the extent determined by the Committee to
be required by the Code to ensure that Incentive Stock Options granted
under the Plan are qualified under Section 422 of the Code or to ensure
that compensation earned under Awards qualifies as performance-based
compensation under Section 162(m) of the Code, Plan amendments shall be
subject to approval by the Company shareholders entitled to vote at a
meeting of shareholders. Nothing in this Section 15 shall limit the
Committee's authority to take any action permitted pursuant to Section 3(b)
or 3(c).
SECTION 16. STATUS OF PLAN
With respect to the portion of any Award that has not been exercised and
any payments in cash, Stock or other consideration not received by a
grantee, a grantee shall have no rights greater than those of a
A-14
general creditor of the Company unless the Committee shall otherwise
expressly determine in connection with any Award or Awards. In its sole
discretion, the Committee may authorize the creation of trusts or other
arrangements to meet the Company's obligations to deliver Stock or make
payments with respect to Awards hereunder, provided that the existence of
such trusts or other arrangements is consistent with the foregoing
sentence.
SECTION 17. GENERAL PROVISIONS
(a) No Distribution; Compliance with Legal Requirements. The
Committee may require each person acquiring Stock pursuant to
an Award to represent to and agree with the Company in writing
that such person is acquiring the shares without a view to
distribution thereof for purposes of the United States Federal
securities laws.
No shares of Stock shall be issued pursuant to an Award until
all applicable securities law and other legal and stock
exchange or similar requirements have been satisfied. The
Committee may require the placing of such stop-orders and
restrictive legends on certificates for Stock and Awards as it
deems appropriate.
(b) Delivery of Stock. Stock certificates to grantees under this
Plan shall be deemed delivered for all purposes when the
Company or a stock transfer agent of the Company shall have
either mailed such certificates in the United States mail or
sent such certificates by means of an overnight delivery or
other similar service, addressed to the grantee, at the
grantee's last known address on file with the Company.
Uncertificated Stock shall be deemed delivered for all purposes
when the Company or a Stock transfer agent of the Company shall
have given to the grantee notice, addressed to the grantee, at
the grantee's last known address on file with the Company, of
issuance and recorded the issuance in its records (which may
include electronic "book entry" records).
(c) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting
other or additional compensation arrangements, including
trusts, and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption
of this Plan and the grant of Awards do not confer upon any
employee any right to continued employment with the Company or
any Subsidiary.
(d) Trading Policy Restrictions. Option exercises and other Awards
under the Plan shall be subject to such Company's insider
trading policy and procedures, as in effect from time to time.
(e) Designation of Beneficiary. Each grantee to whom an Award has
been made under the Plan may designate a beneficiary or
beneficiaries to exercise any Award or receive any payment
under any Award payable on or after the grantee's death. Any
such designation shall be on a form provided for that purpose
by the Company and shall not be effective until received by the
Company. If no beneficiary has been designated by a deceased
grantee, or if the designated beneficiaries have predeceased
the grantee, the beneficiary shall be the grantee's estate.
A-15
SECTION 18. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon approval by the holders of a majority
of the votes cast at a meeting of shareholders at which a quorum is
present. Subject to such approval by the shareholders and to the
requirement that no Stock may be issued hereunder prior to such approval,
Stock Options and other Awards may be granted hereunder on and after
adoption of this Plan by the Board. No grants of Incentive Stock Options
may be made hereunder after the tenth (10th) anniversary of the date the
Plan is approved by the Board.
SECTION 19. GOVERNING LAW
This Plan and all Awards and actions taken thereunder shall be governed by,
and construed in accordance with, the laws of the Commonwealth of
Massachusetts, applied without regard to conflict of law principles.
DATE APPROVED BY THE BOARD OF DIRECTORS: February 17, 2005
A-16
Appendix B
Rogers Corporation
Amendments to Bylaws
On August 26, 2004, the Board of Directors of Rogers Corporation (the
"Company") amended and restated the Company's Bylaws. The amendments
primarily are designed to address the provisions of the new Massachusetts
Business Corporation Act (the "MBCA"), which became effective on July 1,
2004. Previously, the Company was subject to the provisions of the
Massachusetts Business Corporation Law (the "MBCL"). This report contains a
summary of the revisions made to the Bylaws. The descriptions of provisions
of the amended Bylaws are qualified in their entirety by reference to the
amended Bylaws, which are available on the Company's web site
(www.rogerscorporation.com).
Many of the amendments were made to conform the language of the amended
Bylaws to that used in the MBCA. Bylaw provisions frequently replicate
statutory provisions; accordingly, in many cases, the Bylaws were modified
to reflect language differences between the MBCA and the MBCL. For some
provisions the amended Bylaws have not been revised to conform with the
language used in the MBCA; instead, language contained in the superseded
Bylaws has been deleted because repeating the statutory provisions was not
deemed useful. Finally, some changes reflect logistical matters covered by
the MBCA, such as the use of electronic transmission of materials to the
Company's shareholders.
Changes include the following:
I. Meetings of Shareholders
The MBCL required that an annual meeting be held within 6 months of
the fiscal year end, and the superseded Bylaws reflected that
requirement. Because a comparable provision is not contained in the
MBCA, the applicable language has been removed from the amended
Bylaws.
The MBCA revised the requirements regarding a corporation's
obligation to notify its shareholders of an upcoming annual or
special meeting. The MBCL required that notice be delivered to
shareholders at least 7 days prior to the date of the meeting. The
MBCA requires that notice be given no fewer than 7 days nor more than
60 days prior to the date of the meeting. The amended Bylaws conform
with the timing provisions of the MBCA.
The Bylaws have been revised to provide that in the case of any
special meeting called upon the written demands of shareholders, such
meeting must be scheduled not less than 60 days nor more than 90 days
after the date on which the secretary of the Company has received
sufficient demands to require that such a meeting be called and
notice of such meeting must be given within 30 days after receipt of
such demands.
The Bylaws have been revised to provide that whenever notice of a
meeting is required to be given to a shareholder under applicable
law, the articles of organization or the Bylaws, such notice can be
waived by certain actions of a shareholder.
The Bylaws have also been amended to explicitly provide that, in
addition to traditional delivery methods, notice of an annual or
special shareholders meeting may be delivered to a shareholder in the
future (if permitted by the Company) by electronic transmission in a
manner specified to the
B-1
Company by the shareholder. The Company has not yet considered using
electronic transmission to its shareholders.
The MBCA provides that, absent a contrary provision in the articles
of organization, the purposes of a shareholder meeting must be
included in the notice to shareholders of the meeting. The Bylaws
have been revised to provide that any shareholder that wants to
present business at a shareholders meeting must follow specific
procedures, including compliance with the applicable requirements of
the Securities Exchange Act of 1934, as amended, as a condition to
such business constituting valid business at a shareholders meeting.
The MBCA uses the concept of "voting groups." A voting group consists
of all shares of one or more classes or series of capital stock that
are entitled to vote and to be counted together collectively on a
matter at a meeting of shareholders. The amended Bylaws incorporate
the concept of voting groups in the provisions dealing with
establishing quorums and determining whether matters presented to the
shareholders have been approved. With respect to each voting group,
when a quorum is present, a director is elected by a plurality of
votes properly cast for election of that director, while all other
matters are considered approved when votes properly cast in favor of
the matter exceed the votes properly cast in opposition to the
matter, in each case, except when a different vote is required by
law, the articles of organization, or the Bylaws, or when the board
of directors requires a larger aggregate number of affirmative votes.
The use of voting groups is not yet relevant for the Company as the
Company presently only has one class of capital stock authorized,
issued and outstanding.
The Bylaws have been amended to provide that, unless otherwise
provided in the articles of organization and subject to the
guidelines and procedures adopted by the board of directors,
shareholders and proxy holders may participate in shareholders
meetings by means of remote communications if such remote
communications are used by the Company in the future.
II. Directors and Officers
Under the MBCL, Massachusetts corporations were required to have a
clerk. The MBCA requires Massachusetts corporations to have a
secretary. The amendments to the Bylaws replace references to the
clerk with references to the secretary.
The superseded Bylaws provided that vacancies on the board of
directors (other than a vacancy resulting from the enlargement of the
board of directors) would be filled by the shareholders, or in the
absence of shareholder action, by the directors. Consistent with the
MBCA, the Bylaws have been amended to provide that any vacancy,
however occurring, will be filled by a majority of directors then in
office, not by the shareholders.
The provisions regarding quorums and action at meetings of the board
of directors have been revised to include cross-references to the
MBCA.
Certain requirements regarding the qualifications necessary to be an
officer of the Company have been deleted in the amended Bylaws.
A provision has been added to the amended Bylaws that provides,
consistent with the MBCA, that the Company may enter into employment
contracts authorized by the board of directors extending beyond the
terms of office of the directors who approved the employment
contracts.
B-2
The indemnification provisions of the MBCL were permissive and left
most of the details regarding indemnification to each corporation to
determine. The MBCA, however, contains specified procedures and
requirements for indemnification of directors and officers. The
Company's Bylaws have been revised to conform the indemnification
language to the MBCA, including with respect to advancement of
expenses, and to provide that directors and officers are indemnified
to the fullest extent permitted by applicable law.
III. Capital Stock
The Bylaws have been amended to provide that the directors may
authorize the issuance of uncertificated securities.
The provision in the Bylaws regarding fixing a record date has been
amended so that such date can be no more than seventy days preceding
the date on which a particular action is to occur, as contemplated by
the MBCA.
B-3
ROGERS [LOGO]
One Technology Drive
P. O. Box 188
Rogers, Connecticut 06263-0188
PHONE:
860.774.9605
WEB SITE:
http://www.rogerscorporation.com
[X] PLEASE MARK VOTE REVOCABLE PROXY
AS IN THIS EXAMPLE ROGERS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 2005
The undersigned hereby appoints PAUL B. MIDDLETON and ROBERT M.
SOFFER, and each of them acting singly, with full power of substitution,
as attorneys and proxies of the undersigned, to vote all shares of capital
stock of Rogers Corporation which the undersigned is entitled to vote at
the Annual Meeting of Shareholders of Rogers Corporation to be held on
April 28, 2005 at 10:30 a.m. at the Hilton Garden Inn Hartford South/
Glastonbury, 85 Glastonbury Boulevard, Glastonbury, Connecticut, and at any
and all adjournments thereof. The proxies are authorized to vote all shares
of stock in accordance with the following instructions and with discretionary
authority upon such other business as may properly come before the meeting or
any adjournment thereof.
With- For All
For hold Except
1. To elect the following nominees as [ ] [ ] [ ]
directors (except as marked to the
contrary below):
Leonard M. Baker, Walter E. Boomer, Edward L. Diefenthal,
Gregory B. Howey, Leonard R. Jaskol, Eileen S. Kraus,
William E. Mitchell, Robert G. Paul and Robert D. Wachob.
INSTRUCTION: To withhold authority to vote for any individual nominee(s),
mark "For All Except" and write that nominee's name in the space provided
below.
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For Against Abstain
2. To approve the Rogers Corporation [ ] [ ] [ ]
2005 Equity Compensation Plan.
For Against Abstain
3. To ratify the appointment of [ ] [ ] [ ]
Ernst & Young LLP as Rogers
Corporation's independent
registered public accounting firm
for the fiscal year ending
January 1, 2006.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED OR, WHERE NO
DIRECTION IS GIVEN, WILL BE VOTED FOR PROPOSALS 1, 2 AND 3, AND AT THE
DISCRETION OF THE PROXIES ON ANY OTHER MATTERS THAT MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THE BOARD RECOMMENDS A VOTE "FOR" PROPOSALS 1-3.
-----------------------
Please be sure to date and sign | Date |
this Proxy in the box below. | |
-------------------------------------------------------------
| |
| |
| |
|--Shareholder sign above-----Co-holder (if any) sign above--|
Detach above card, date, sign and mail in postage paid envelope provided.
ROGERS CORPORATION
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| Please sign exactly as your name(s) appear(s) on this proxy card. When |
| signing in a representative capacity, please give full title. |
| |
| As a shareholder, you are entitled to vote at this year's Annual |
| Meeting of Shareholders and are encouraged to do so by signing, dating |
| and returning this proxy card as soon as possible. |
| PLEASE ACT PROMPTLY |
| DATE, SIGN AND MAIL YOUR PROXY CARD TODAY |
--------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE
PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY CARD IN THE ENVELOPE
PROVIDED.
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[X] PLEASE MARK VOTE REVOCABLE PROXY
AS IN THIS EXAMPLE ROGERS CORPORATION (RESIP)
ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 2005
The undersigned hereby appoints, as applicable, PAUL B. MIDDLETON,
ROBERT M. SOFFER, and/or PRUDENTIAL BANK & TRUST, FSB, Trustee of the Rogers
Employee Savings and Investment Plan, and each of them, as applicable, acting
singly, with full power of substitution, as attorneys and proxies of the
undersigned, to vote all whole and fractional shares of capital stock of
Rogers Corporation which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of Rogers Corporation to be held on April 28, 2005 at
10:30 a.m. at the Hilton Garden Inn Hartford South/Glastonbury, 85 Glastonbury
Boulevard, Glastonbury, Connecticut, and at any and all adjournments thereof.
The proxies are authorized to vote all shares of stock in accordance with the
following instructions and with discretionary authority upon such other
business as may properly come before the meeting or any adjournment thereof.
With- For All
For hold Except
1. To elect the following nominees as [ ] [ ] [ ]
directors (except as marked to the
contrary below):
Leonard M. Baker, Walter E. Boomer, Edward L. Diefenthal,
Gregory B. Howey, Leonard R. Jaskol, Eileen S. Kraus,
William E. Mitchell, Robert G. Paul and Robert D. Wachob.
INSTRUCTION: To withhold authority to vote for any individual nominee(s),
mark "For All Except" and write that nominee's name in the space provided
below.
---------------------------------------------------------------------------
For Against Abstain
2. To approve the Rogers Corporation [ ] [ ] [ ]
2005 Equity Compensation Plan.
For Against Abstain
3. To ratify the appointment of [ ] [ ] [ ]
Ernst & Young LLP as Rogers
Corporation's independent
registered public accounting firm
for the fiscal year ending
January 1, 2006.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED OR, WHERE NO
DIRECTION IS GIVEN, WILL BE VOTED FOR PROPOSALS 1, 2 AND 3, AND AT THE
DISCRETION OF THE PROXIES ON ANY OTHER MATTERS THAT MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THE BOARD RECOMMENDS A VOTE "FOR" PROPOSALS 1-3.
-----------------------
Please be sure to date and sign | Date |
this Proxy in the box below. | |
-------------------------------------------------------------
| |
| |
| |
|--Shareholder sign above-----Co-holder (if any) sign above--|
Detach above card, date, sign and mail in postage paid envelope provided.
ROGERS CORPORATION
--------------------------------------------------------------------------
| This proxy is evidence of your ownership of Rogers Corporation Capital |
| Stock through the Rogers Employee Savings and Investment Plan (RESIP) |
| held by the Trustee, Prudential Bank & Trust, FSB. |
| |
| As a shareholder, you are entitled to vote at this year's Annual |
| Meeting of Shareholders and are encouraged to do so by signing, dating |
| and returning this proxy card as soon as possible. |
| PLEASE ACT PROMPTLY |
| DATE, SIGN AND MAIL YOUR PROXY CARD TODAY |
--------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE
PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY CARD IN THE ENVELOPE
PROVIDED.
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