SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.)
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ROGERS CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[LOGO] ROGERS
CORPORATION
One Technology Drive / P.O. Box 188 / Rogers, CT 06263-0188 / 860.774.9605
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Rogers Corporation, a Massachusetts
corporation, will be held on Thursday, April 24, 2003, at 10:30 A.M. in the
Boardroom on the 26th floor of Fleet Bank, 777 Main Street, Hartford,
Connecticut, for the following purposes:
1. To fix the number of and to elect a board of directors for the
ensuing year.
2. To transact such other business as may properly come before the
meeting.
Stockholders entitled to receive notice of and to vote at the meeting are
determined as of the close of business on March 5, 2003, 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.
We cordially invite you to attend the meeting.
By Order of the Board of Directors
Robert M. Soffer, Clerk
March 20, 2003
Proxy Statement Table of Contents
Page
1 Voting Information
2 Election of Directors (Proposal 1)
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 Meetings; Certain Committees
6 Directors' Compensation
7 Audit Committee Report
8 Executive Compensation
8 Summary Compensation Table
10 Option Grants in Last Fiscal Year
11 Aggregated Option Exercises in the Last Fiscal Year and Fiscal
Year-End Option Values
12 Retirement Plans
13 Equity Compensation Plan Information
14 Compensation and Organization Committee Report
17 Performance Graph
18 Termination of Employment and Change of Control Arrangements
18 Audit Matters
19 Section 16(a) Beneficial Ownership Reporting Compliance
19 Proposals of Stockholders
19 Solicitation of Proxies
19 By-Law Amendments Approved By the Directors in 2002
20 "Householding" of Proxy Materials
A-1 Appendix A: Rogers Corporation Audit Committee Charter
[LOGO] ROGERS
CORPORATION
One Technology Drive / P.O. Box 188 / Rogers, CT 06263-0188 / 860.774.9605
Proxy Statement
March 20, 2003
We are providing you with this proxy statement in connection with the
solicitation of proxies by the board of directors of Rogers Corporation for
the Annual Meeting of Stockholders to be held on Thursday, April 24, 2003,
at 10:30 A.M. in the Boardroom on the 26th floor of Fleet Bank,
777 Main Street, Hartford, Connecticut.
If you are a stockholder of record as of the close of business on March 5,
2003, you are entitled to vote at the meeting and any adjournment thereof.
As of that date, 15,570,444 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 stockholder submitting a proxy
has the right to revoke it any time before it is exercised by filing a
written revocation with the Clerk 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 FOR fixing the number of directors for the ensuing year at
nine and the election of the nominees to the board of directors shown on
the next page under the heading "NOMINEES FOR DIRECTOR".
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. 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 to fix the size of the board
and for the election of directors even if they do not receive instructions
from the beneficial owners.
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 number of votes 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 Stockholders 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 24, 2003. In addition, we are enclosing a copy of our
2002 annual report.
1
Proposal 1: Election of Directors
The directors of Rogers are elected annually and hold office until the next
Annual Meeting of Stockholders and thereafter until their successors have
been elected 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 2002 Annual Meeting of Stockholders.
NOMINEES FOR DIRECTOR
Age/Year
First Became
Name Director Principal Occupations During the Past Five Years and Other Directorships
----------------------------------------------------------------------------------------------------------------
Leonard M. Baker 68 / 1994 Retired (as of December 2001) Senior Vice President, Chief
Technical Officer, June 2000 to December 2001 and prior to that
Vice President Technology, Praxair, Inc.
Harry H. Birkenruth 71 / 1964 Retired (as of June 1998) Chairman, March 1997 to June 1998, and
prior to that President, Chief Executive Officer, Rogers
Corporation; Director: Instrument Manufacturing Co., Inc.
Walter E. Boomer 64 / 1997 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 60 / 1998 Vice Chairman and Chief Executive Officer, Director, Southern
Holdings, Inc.
Gregory B. Howey 60 / 1994 President, Director, Okay Industries, Inc.
Leonard R. Jaskol 65 / 1992 Retired (as of December 1998) Chairman, Chief Executive Officer,
Director, Lydall, Inc.
Eileen S. Kraus 64 / 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 59 / 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; Chairman, May
1997 to February 1999, Chief Executive Officer, June 1996 to
February 1999, Director, Sequel, Inc.
Robert G. Paul 61 / 2000 President, Chief Executive Officer, Director, Allen Telecom Inc.
The board of directors recommends a vote FOR fixing the number of directors
for the ensuing year at nine and the election of the above named nominees.
2
Stock Ownership of Management
This table provides information about the beneficial ownership of Rogers
capital stock as of March 5, 2003, 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)
------------------------------------------------------------------------------------------
Leonard M. Baker 40,538 * 40,538
Harry H. Birkenruth 153,328 * 155,096
Walter E. Boomer 210,872 1.34 219,938
Edward L. Diefenthal 31,540 * 31,540
Gregory B. Howey 38,770 * 45,151
Leonard R. Jaskol 48,047 * 51,850
Bruce G. Kosa (4) 59,012 * 59,012
Eileen S. Kraus 9,480 * 11,483
William E. Mitchell (4) 32,165 * 32,165
Robert G. Paul 19,186 * 19,186
John A. Richie 63,412 * 63,412
Frank H. Roland 20,672 * 20,672
James M. Rutledge 1,017 * 1,017
Robert D. Wachob (4) 238,338 1.51 238,338
All Directors and Executive Officers as a Group
(16 persons) 1,057,196 6.44 1,080,217
Represents the total number of currently owned shares and shares
acquirable within 60 days of March 5, 2003 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/32,784; Birkenruth/138,837; Boomer/184,018;
Diefenthal/28,132; Howey/30,512; Jaskol/33,052; Kosa/37,433;
Kraus/9,480; Mitchell/29,466; Paul/13,564; Richie/50,033;
Roland/18,901; Rutledge/0; Wachob/188,291; and the group of 16
individuals/850,936.
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. Kosa, Mitchell and Wachob own, respectively, 13,576; 2,699
and 34,347 shares included above as to which investment and voting
power is shared with spouses.
3
Beneficial Ownership of More Than Five Percent of Rogers Stock
This table provides information regarding beneficial ownership 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 under
the Securities and 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)
------------------------------------------------------------------------
Capital Research and Management Company(2) 1,706,800 11.0
333 South Hope Street
Los Angeles, California 90071
Lord, Abbett & Co. 1,406,413 9.0
90 Hudson Street
Jersey City, New Jersey 07302
Westport Asset Management, Inc.(3) 1,997,100 12.8
253 Riverside Avenue
Westport, Connecticut 06880
As of the record date, March 5, 2003.
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 which
is advised by Capital Research and Management Company, has sole
voting power with respect to 956,800 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 158,400 of the
shares listed above, has shared voting power with its affiliate
Westport Advisers LLC with respect to 1,420,500 of the shares listed
above, and has shared investment power with respect to 1,838,700 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.
4
Corporate Governance Practices
Rogers has long subscribed to sound corporate governance practices and such
basic principles are described below. Once the new regulatory requirements
are finalized, these principles will be modified, but what will not change
is the company's commitment to achieving corporate governance excellence.
1. The board of directors is accountable to stockholders. Its
primary purpose is to work with management to maximize long-
term stockholder value while ensuring that procedures are in
place to maintain the integrity of the company.
2. All directors stand for election annually.
3. No current member of management, other than the CEO, serves on
the board of directors.
4. Except for the current CEO and the previous CEO, all of the
directors are independent under the proposed New York Stock
Exchange rules.
5. The charters of the committees of the board of directors are
approved by the entire board and such charters clearly
establish committee responsibilities.
6. The: (i) Audit, (ii) Compensation and Organization and (iii)
Nominating and Governance Committees consist solely of
independent directors.
7. 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" as defined by the SEC.
8. The board of directors regularly meets in executive session and
there is a "lead director".
9. The board of directors annually evaluates its own performance
and that of the CEO.
10. The board of directors annually reviews and approves a
strategic plan and a one-year operating plan that is linked to
strategic objectives.
11. The board of directors oversees CEO and other senior management
succession planning.
12. 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.
5
Board of Directors
MEETINGS; CERTAIN COMMITTEES
The Rogers board of directors held eight meetings during 2002. The board of
directors has five regular committees, including an Audit Committee, a
Compensation and Organization Committee and a Nominating and Governance
Committee. All directors attended more than 75 percent in the aggregate of
the total number of meetings in 2002 of the board and the committees on
which each such director served.
The Audit Committee held three formal meetings in 2002. The Audit Committee
has functions that include making recommendations with respect to the
selection of the independent auditors of Rogers, meeting with the
independent auditors 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. Each of these
individuals is "independent", as defined in the New York Stock Exchange's
listing standards and Mr. Paul is deemed to be an "Audit Committee
Financial Expert" as defined by the SEC. The Audit Committee Report is on
the next page and its revised charter is attached to this proxy statement
as Appendix A.
The Compensation and Organization Committee held five meetings in 2002.
This committee has functions that include reviewing the salary system to
ensure 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 approves or disapproves the
CEO's recommendations with respect to the compensation of executive
officers who report to him. Mr. Jaskol is chairperson of the Compensation
and Organization Committee, with Messrs. Diefenthal and Paul as members.
This committee's compensation report begins on page 14.
The Nominating and Governance Committee held four meetings in 2002. This
committee has functions that include reviewing the qualifications of
candidates for director, nominating incumbent directors for reelection,
addressing corporate governance issues, evaluating the performance of the
CEO and at least yearly, conducting a review of the performance of the
board of directors. Mr. Mitchell is the chairperson of the Nominating and
Governance Committee with Dr. Baker and Ms. Kraus as members. The
Nominating and Governance Committee will consider nominees recommended by
stockholders if such recommendations for director are submitted in writing
to the Clerk of Rogers.
DIRECTORS' COMPENSATION
For 2002, each director who was not an employee of Rogers earned an annual
retainer of $18,000, plus $1,260 for each board meeting attended and $1,500
or $1,000 for each committee meeting attended, the amount varying by
capacity as chairperson or as a member. 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 its then fair market value.
Stock options are also granted to non-employee directors twice a year. In
2002, the first such semi-annual stock option grant was for 2,250 shares,
while the second stock option grant was for 4,500 shares and in both cases
with an exercise price equal to the fair market value of a share of Rogers
capital
6
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.
Mr. Birkenruth, a former Rogers executive and a member of its board of
directors, provided consulting services to Rogers in 2002. He received
$8,800 of compensation for such services. In 2002, Dr. Baker received
$2,544 of consulting fees from Rogers.
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
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
(Communication with Audit Committees). In addition, the Audit Committee has
discussed with the independent auditors the auditors' independence from
management and Rogers and has received the written disclosure and the
letter from the independent auditors required by the Independence Standards
Board Standard No. 1 and considered the compatibility of non-audit services
with the auditors' independence.
The Audit Committee discussed with the Rogers internal and independent
auditors the overall scope and plans for their respective audits. The Audit
Committee meets with the internal and independent auditors, 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 2002. 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.
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 December 29, 2002 for filing with the Securities
and Exchange Commission. The Audit Committee has recommended and the Board
of Directors has approved the selection of Ernst & Young LLP as Rogers
independent auditors for fiscal year 2003.
Audit Committee: Robert G. Paul, Chairperson
Gregory B. Howey, Member
Eileen S. Kraus, Member
7
Executive Compensation
The tables, graph and narrative on pages 8 through 17 of this proxy
statement set forth certain compensation information about Rogers' Chief
Executive Officer and its other five most highly compensated 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(1) Year Salary Bonus(2) sation(3) Shares) sation(4)
-----------------------------------------------------------------------------------------------------
Walter E. Boomer 2002 $450,112 $224,524 $1,278 75,000 $21,791
Chairman of the Board and 2001 439,816 1,235 40,000 31,978
Chief Executive Officer 2000 400,198 442,462 874 50,000 30,547
Robert D. Wachob 2002 290,702 113,745 50,000 7,500
President and Chief 2001 255,228 966 18,000 11,598
Operating Officer 2000 239,078 215,801 543 50,500 10,742
James M. Rutledge 2002 207,579 62,868 8 25,000 28,981
Vice President, 2001
Finance and CFO 2000
Bruce G. Kosa 2002 171,072 48,123 794 10,000 9,989
Vice President, Technology 2001 164,712 487 12,800 11,432
2000 154,272 104,090 159 23,300 11,122
John A. Richie 2002 163,982 46,976 15,000 7,764
Vice President, 2001 148,084 508 6,000 9,629
Human Resources 2000 139,182 95,512 50 27,000 9,437
Frank H. Roland 2002 207,272 62,455 4,000 12,352
Vice President, 2001 200,366 114 6,000 15,177
Business Development 2000 190,828 126,350 101 5,000 18,545
During 2002, Mr. Roland ceased being Vice President, Finance and CFO
and was succeeded in such positions by Mr. Rutledge. Accordingly,
during 2002, Mr. Roland ceased to be an executive officer even though
he continues to be employed as an officer of Rogers.
For 2002 and 2000, 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"). Overall corporate
performance did not meet targeted levels for 2001, and as a result,
none of the Named Executive Officers earned a bonus for 2001.
(footnotes continued on following page)
8
The Enhancement Plan was adopted in 1997 to indirectly supplement the
retirement benefit provided to senior management. Enhancement Plan
payments are made in shares of Rogers capital stock. In general, the
bonus under the Enhancement Plan is equal to 10% of the bonus earned
under the Annual Incentive Plan except as increased by an "earnings
credit" for bonuses earned before 1996. Such payments are based on an
average closing price of the capital stock. In addition, certain
individuals received, over time, retroactive Enhancement Plan related
payments for bonuses earned for 1993, 1994 and 1995 and the amounts
for 1995 are reflected in the table. The next paragraph describes the
specific amounts earned under the Enhancement Plan by each of the
Named Executive Officers.
The amounts paid in 2003 under the Enhancement Plan with respect to
bonuses earned for 2002 under the Annual Incentive Plan are as
follows (for each individual the number of shares is followed by the
dollar amount used to calculate the number of shares): Mr. Boomer -
791 shares/$20,255; Mr. Wachob - 401 shares/$10,261; Mr. Rutledge -
222 shares/$5,670; Mr. Kosa - 170 shares/$4,340; Mr. Richie - 166
shares/$4,237 and Mr. Roland - 220 shares/$5,634. No bonuses were
earned for 2001 and hence there were no related Enhancement Plan
payments. The amounts paid in 2001 under the Enhancement Plan with
respect to bonuses earned for 2000 under the Annual Incentive Plan
are as follows (for each individual, the number of shares is followed
by the dollar amount used to calculate the number of shares): Mr.
Boomer - 1,034shares/$40,550; Mr. Wachob - 466 shares/$18,274; Mr.
Kosa - 224 shares/$8,754; Mr. Richie - 202 shares/$7,898 and Mr.
Roland - 296 shares/$11,577. The amounts paid in July of 2000 under
the Enhancement Plan with respect to retroactive payments for the
1995 bonuses are as follows (for each individual, the number of
shares is followed by the dollar amount used to calculate the number
of shares): Mr. Wachob - 426 shares/$15,484; Mr. Kosa - 222
shares/$8,053 and Mr. Richie - 242 shares/$8,785. The valuations in
the table are, however, based upon the closing price of the capital
stock on February 27, 2003 ($27.78) in the case of payments made for
2002, February 20, 2001 ($35.75) in the case of payments made for
2000, and on July 7, 2000 ($38.50) in the case of retroactive
payments made for 1995. If an employee disposes of any shares of
capital stock received under the Enhancement Plan, then the employee
may not be entitled to any future awards under the Enhancement Plan.
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 reflect the reimbursement of taxes on
non-qualified defined benefit pension plan accruals.
Amounts shown for 2002 include: (i) Rogers matching contributions to
the Rogers Employee Savings and Investment Plan, a 401(k) plan -
Messrs. Boomer and Wachob each received $5,000, while Messrs.
Rutledge, Kosa, Richie and Roland received $4,355; $4,205; $4,189 and
$4,708, respectively, (ii) matching contributions under Rogers' non-
qualified deferred compensation plan for Messrs. Boomer, Wachob, Kosa
and Roland of $6,614; $2,500; $394 and $913, respectively, (iii)
Rogers payment of life insurance premiums for Messrs. Boomer,
Rutledge, Kosa, Richie and Roland of $10,177; $4,626; $4,523; $3,575
and $6,731, respectively, (iv) a patent award for Mr. Kosa of $867
and (v) a hiring bonus for Mr. Rutledge of $20,000. Amounts for 2001
and 2000 include similar matching contributions by Rogers for
deferrals made under the 401(k) plan and the non-qualified deferral
plan.
9
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants 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(1) in Fiscal Yr. Share(2) Date 5% 10%
------------------------------------------------------------------------------------------------------
Walter E. Boomer 75,000 15.8% $26.11 10/23/12 $1,231,533 $3,120,946
Robert D. Wachob 7,658 1.6% 26.11 10/23/12 125,748 318,669
42,342 8.9% 26.11 10/23/12 695,274 1,761,961
James M. Rutledge 10,000 2.1% 29.59 1/3/12 186,090 471,588
15,000 3.2% 26.11 10/23/12 246,307 624,189
Bruce G. Kosa 10,000 2.1% 26.11 10/23/12 72,137 159,404
John A. Richie 6,218 1.3% 26.11 10/23/12 44,855 99,118
8,782 1.9% 26.11 10/23/12 63,351 139,989
Frank H. Roland 4,000 0.8% 26.11 10/23/12 28,855 63,762
The 10/23/02 stock option grants for Messrs. Boomer, Rutledge, Kosa
and Roland become exercisable in one-third increments on the second,
third, and fourth anniversary dates of the grant. Mr. Wachob's
10/23/02 stock option grant for 7,658 shares becomes exercisable as
follows: 3,829 shares on the fourth anniversary of the grant date;
and 3,829 shares on 1/1/07. Mr. Wachob's 10/23/02 stock option grant
for 42,342 shares becomes exercisable as follows: 16,666 shares each
on the second and third anniversary dates of the grant; and 9,010
shares on the fourth anniversary of the grant date. Mr. Rutledge's
1/3/02 stock option grant for 10,000 shares becomes exercisable in
one-third increments on the second, third, and fourth anniversary
dates of the grant. Mr. Richie's 10/23/02 stock option grant for
6,218 shares becomes exercisable as follows: 1,218 shares on the
third anniversary of the grant date; 3,829 shares on the fourth
anniversary of the grant date; and 1,171 shares on 1/1/07. Mr.
Richie's 10/23/02 stock option grant for 8,782 shares becomes
exercisable as follows: 5,000 shares on the second anniversary of the
grant date and the remainder on the third anniversary of the grant
date. Stock option grants made on the same day for the same
individual were essentially one grant, but are shown separately since
a portion of the total amount was an incentive stock option and a
portion was a non-qualified stock option. If combined, the related
vesting schedules would, in general, follow Rogers' more traditional
patterns. The exercise schedules may change in the event of death,
retirement or a change in control of Rogers, in which case the stock
options become immediately exercisable in full. 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.
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.
10
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
-------------------------------------------------------------------------------------------------------------
Walter E. Boomer 14,316 $135,000 184,018 176,666 $1,052,507 $175,235
Robert D. Wachob 193,291 70,209 1,361,832
James M. Rutledge 25,000
Bruce G. Kosa 9,000 139,750 49,333 17,667 135,955
John A. Richie 50,033 22,667 161,917
Frank H. Roland 9,433 186,426 18,901 16,666 143,714 13,994
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.
11
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) (3)
Years of Service
Final Average -------------------------------------------------------------------------------------------
Earnings(4) 5 years 10 years 15 years 20 years 25 years 30 years 35 years 40 years
------------------------------------------------------------------------------------------------------------
$125,000 $10,110 $20,230 $ 30,340 $ 40,450 $ 50,570 $ 60,680 $ 63,800 $ 66,930
150,000 12,300 24,600 36,900 49,200 61,500 73,800 77,550 81,300
175,000 14,490 28,980 43,460 57,950 72,440 86,930 91,300 95,680
200,000 16,680 33,350 50,030 66,700 83,380 100,050 105,050 110,050
225,000 18,860 37,730 56,590 75,450 94,320 113,180 118,800 124,430
250,000 21,050 42,100 63,150 84,200 105,250 126,300 132,550 138,800
275,000 23,240 46,480 69,710 92,950 116,190 139,430 146,300 153,180
300,000 25,430 50,850 76,280 101,700 127,130 152,550 160,050 167,550
325,000 27,610 55,230 82,840 110,450 138,070 165,680 173,800 181,930
350,000 29,800 59,600 89,400 119,200 149,000 178,800 187,550 196,300
375,000 31,990 63,980 95,960 127,950 159,940 191,930 201,300 210,680
400,000 34,180 68,350 102,530 136,700 170,880 205,050 215,050 225,050
425,000 36,360 72,730 109,090 145,450 181,820 218,180 228,800 239,430
450,000 38,550 77,100 115,650 154,200 192,750 231,300 242,550 253,800
475,000 40,740 81,480 122,210 162,950 203,690 244,430 256,300 268,180
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 for the payment of
amounts to all plan participants who may be affected by such
limitations. 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. Accordingly, the benefits shown have not been reduced by such
limitations.
Rogers also maintains a Supplemental Executive Retirement Agreement
with Mr. Boomer who is currently 64 years old. Under this agreement,
if Mr. Boomer remains employed by Rogers until at least April 1,
2004, he will be entitled to an annual retirement benefit equal to
$54,735 for the rest of his life or the actuarial equivalent of this
amount. Such payments are in addition to any benefits he is eligible
to receive under Rogers' qualified and non-qualified pension plans.
Mr. Boomer or Mr. Boomer's spouse, in the event of Mr. Boomer's
death, is also entitled to this retirement benefit if, prior to April
1, 2004, Mr. Boomer dies, becomes disabled, or if his employment is
terminated without cause or as a result of a constructive
termination, or if there is a change in control of Rogers. If Mr.
Boomer's employment is terminated for cause, however, he is not
entitled to any retirement benefit under the agreement. In addition,
if Mr. Boomer violates the terms of the agreement's seven year non-
competition provision, Rogers may stop making payments under the
agreement to him.
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. The five-year average
earnings for such individuals, other than Messrs. Rutledge and
Roland, and their estimated years of credited service are: Mr.
Boomer, $409,152 and 6 years; Mr. Wachob, $246,958 and 20 years; Mr.
Kosa, $156,738 and 40 years and Mr. Richie, $143,577 and 26 years. In
the case of Mr. Rutledge, earnings for calculating his pension would
currently be based on average earnings of $210,002 and two years of
service and in the case of Mr. Roland, earnings for calculating his
pension would currently be based on average earnings of $196,996 and
five years of service.
12
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
December 29, 2002, the end of the company's fiscal year.
Equity Compensation Plans
As of December 29, 2002
(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 73,548 $20.35 49,432
Rogers Corporation 1994 Stock
Compensation Plan 569,648 $14.42 22,234
Rogers Corporation 1998 Stock Incentive Plan 1,130,389 $24.67 241,545
Rogers Corporation Global Stock Ownership
Plan For Employees 477,587
Equity Compensation Plans Not Approved
by Security Holders
Rogers Corporation 1990 Stock Option
Plan (1) 914,452 $22.56 662,394
Long-Term Enhancement Plan for Senior
Executives of Rogers Corporation(2) 115,308
Total 2,688,037 $21.66 1,568,500
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. Termination of
employment because of retirement, or for other reasons, may shorten
the vesting schedule and expiration date. See page 15 of this proxy
statement for further details on Rogers' stock options.
The Long-Term Enhancement Plan for Senior Executives of Rogers
Corporation (the "Enhancement Plan") was adopted in 1997 to
indirectly supplement the retirement benefit provided to senior
management. Enhancement Plan payments are made in shares of Rogers
capital stock. In general, the bonus under the Enhancement Plan is
equal to 10% of the bonus earned under the Rogers Annual Incentive
Compensation Plan except as increased by an "earnings credit" for
bonuses earned before 1996. Payments in capital stock are based on an
average closing price of the capital stock. See Executive
Compensation on page 8 of this proxy statement for further details on
the Enhancement Plan.
13
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 2002
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, composed of three
independent non-employee directors who have no "interlocking" relationships
as defined by the Securities and Exchange Commission. The committee members
are: Leonard R. Jaskol (chairperson of the committee), Edward L.
Diefenthal, and Robert G. Paul.
Philosophy
The executive compensation philosophy is to align such compensation with
the long-term success of Rogers and increases in stockholder 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
stockholders, 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 for approving salary increases for the
CEO and recommendations for salary increases made by the CEO for the
elected corporate officers that report to him.
Annual Bonuses
The Annual Incentive Compensation Plan has target bonuses of 50% of base
salary for the CEO, and between 20% and 40% for the other executive
officers, including the other Named Executive Officers.
14
Subject to an overall corporate percentage of pre-tax profit limitation,
actual bonuses may vary from 0% to 200% of the target bonuses depending on
performance relative to plan. 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 fiscal
2002, overall corporate performance met targeted levels and, as a result,
all of the Named Executive Officers received a bonus.
In 1997, Rogers conducted a number of studies and concluded that its
retirement benefit for senior executives was not competitive. Therefore,
the Long-Term Enhancement Plan for Senior Executives of Rogers Corporation
was established to supplement the retirement benefits of such individuals.
Enhancement payments are made in stock of Rogers and are equal to 10% of
the bonuses described in the preceding paragraph.
Stock Options
Each year, the committee considers awards of stock options to key
personnel. Stock options are 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 2002, stock options for a total of 474,560 shares were granted to
employees, of which 179,000 shares were granted to the Named Executive
Officers and 20,000 shares were granted to all other executive officers.
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 compensation programs 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
In February of 2001, the committee approved a two-year salary increase of
$44,616 (11%) for Mr. Boomer. National survey data from a broad spectrum of
manufacturing 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. A two-year increase, rather than
the traditional annual increase, was approved to reflect the committee's
philosophy that the CEO have more of a long-term than a short-term
influence on Rogers. Reviewing his salary every two years gives the
committee a better time frame for that evaluation and salary determination
than every year. In February 2002, Mr. Boomer requested and the committee
approved a salary decrease of $22,308. At the time, this eliminated the
15
second year of Mr. Boomer's two-year increase and was consistent with a
2002 salary freeze which was implemented for other executives. Salary
increases for Mr. Boomer and other executives were retroactively restored
later in the year as the company began to achieve satisfactory operating
results. He also received a stock option for 75,000 shares of Rogers stock
exercisable at $26.11 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. Boomer is a participant in Rogers Annual Incentive
Compensation Plan and for 2002 received a bonus equal to 45% of his
annualized base salary pursuant to the plan.
In December of 2002, after determining that it would be appropriate and in
the best interest of Rogers to continue the employment of Mr. Boomer until
he reaches retirement, and after working with an outside consultant on the
matter, the committee and the Board of Directors approved an Executive
Supplemental Retirement Agreement for Mr. Boomer. Generally, under the
terms of this agreement, if Mr. Boomer continues in the employment of
Rogers until at least April 1, 2004, he will be entitled to retire and
receive an additional annual retirement benefit of $54,735 for the rest of
his life or the actuarial equivalent of this amount. (Additional
information about this agreement is located under the heading "RETIREMENT
PLANS" on page 12.)
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code generally limits the corporate
deduction for compensation paid to executive officers named in the proxy
statement and who are employed on the last day of Rogers taxable year to $1
million, unless certain requirements are met. The committee has considered
the impact of this tax code provision and has determined that there is
little likelihood that Rogers would pay any amounts in 2003 that would
result in the loss of a Federal tax deduction under Section 162(m).
Accordingly, the committee has not recommended that any special actions be
taken or any plans changed at this time.
Compensation and Organization Committee: Leonard R. Jaskol, Chairperson
Edward L. Diefenthal, Member
Robert G. Paul, Member
16
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 December 28, 1997 and the reinvestment of dividends as of the
end of Rogers fiscal years.
Comparison of Five-Year Cumulative Total Return
Fiscal Year Ends 12/28/97 1/3/99 1/2/00 12/31/00 12/30/01 12/29/02
------------------------------------------------------------------------------------------------
ROGERS CORPORATION $100 $ 79 $102 $218 $163 $122
S&P INDUSTRIALS 100 138 174 146 131 98
S&P 600 ELECTR EQP & INSTRU 100 75 131 116 92 67
17
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 on three years notice. Mr.
Wachob would be entitled to 78 weeks of salary and benefit continuance upon
termination of employment covered by the policy in effect in November 1991.
In the case of Mr. Boomer, if employment is terminated by Rogers, other
than for cause, severance pay will equal one year of annual base salary
including all employee benefits.
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 stockholders. Toward that
purpose, Rogers has agreements with all current elected officers of Rogers,
including the Named Executive Officers, 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, provided the executive enters into a two-year non-
competition agreement with Rogers, 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.
Audit Matters
We expect representatives of Ernst & Young LLP, Rogers independent auditors
selected as the independent auditors for the fiscal years ending December
29, 2002, and December 28, 2003, 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.
Audit Fees: Ernst & Young LLP fees for the 2002 annual audit were $178,300.
Financial Information and System Design and Implementation Fees: No Ernst &
Young LLP fees were billed for financial information design and
implementation services rendered during 2002.
All Other Fees: Ernst & Young LLP fees for all other services rendered
during 2002 were $334,213, including audit related services of $116,528 and
non-audit related services of $217,685. Audit related services generally
include fees for pension and statutory audits, business acquisitions and
accounting consultations while non-audit related services generally include
tax advice.
18
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%
stockholders 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 December 29, 2002.
Proposals of Stockholders
Proposals of stockholders intended to be presented at the 2004 Annual
Meeting of Stockholders must be received by Rogers on or before November
21, 2003, for inclusion in Rogers proxy statement and form of proxy.
Proposals of stockholders received after February 8, 2004, will not be
considered timely and may not be presented at the 2004 Annual Meeting of
Stockholders.
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 InvestorCom, Inc. to
assist in the solicitation of proxies at a cost of approximately $2,500
plus reimbursement of expenses.
By-Law Amendments Approved By the Directors in 2002
In accordance with the Rogers Articles of Organization and By-Laws,
amendments to Rogers By-Laws were made and adopted by the Board of
Directors on April 25, 2002 and June 19, 2002. The Massachusetts Business
Corporation Law expressly permits by-law amendments by the directors (when
the articles of organization so provide) except with respect to provisions
thereof which by law, the articles of organization or the by-laws requires
action by the stockholders. The By-Law amendments identified above did not
require action by Rogers stockholders. Rogers stockholders are hereby
notified of such amendments but are not being asked to approve the By-Laws
as so amended. The most important changes are summarized below.
The amendments adopted on April 25, 2002 relate primarily to the separation
of the positions of President and Chief Executive Officer ("CEO") and the
creation of the new position of Chief Operating Officer ("COO"). Under the
amended By-Laws, the officers of the Corporation may now include a COO as
well as a President and a CEO (Art. III, Sec. 1). The CEO has general
supervision and control of Rogers business, subject to the direction of the
Directors (Art. III, Sec. 6). Neither the CEO nor the
19
President needs to be a Director of Rogers (Art. III, Sec. 3); previously,
the By-Laws required that the President be a Director. The Chairman of the
Board ("Chairman"), if any is elected, must be a Director, as in the past
(Art. III, Sec. 3). The Chairman, if any is elected, will share certain
authority held by the President under the previous By-Laws, such as the
authority to accept resignations of Directors (Art. II, Sec. 5) and
officers (Art. III, Sec. 4), designate the time and place of special
meetings of the Board (Art. II, Sec. 7), and sign stock certificates (Art.
IV, Sec. 1).
With a few exceptions, the June 19, 2002 amendments are administrative in
nature. Under the amended By-Laws, regular as well as special meetings of
the Directors may be held by means of a conference telephone or similar
communications equipment, unless the law or Rogers Articles of Organization
provides otherwise (Art. II, Sec. 7), and notice of special meetings of the
Board can be given by telecopy or other electronic means (Art. II, Sec. 8).
Any Vice President (Art. III, Sec. 6), Assistant Treasurer (Art. III, Sec.
7), Assistant Clerk (Art. III, Sec. 8), and other officers (Art. III, Sec.
10) shall have such powers as designated by the CEO or the President in the
absence of specific delegation by the Directors. Unless otherwise ordered
by the Board of Directors, the CEO, the President, any Vice President, or
the Treasurer, acting singly, have full power and authority on behalf of
Rogers to vote securities of other corporations in which Rogers has an
ownership interest (Art. V, Sec. 4). In addition, the amended By-Laws
provide that Rogers may make charitable contributions without a vote of the
Board of Directors, subject to the monetary limitations previously
contained in the By-Laws (Art. V, Sec. 9).
"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.
This year, a number of brokers with account holders who are Rogers
stockholders will be "householding" proxy materials. As indicated in the
notice previously provided by these brokers to such stockholders, a single
proxy statement and an annual report will be delivered to multiple
stockholders sharing an address unless contrary instructions have been
received from an affected stockholder. Once a stockholder has received
notice that the broker will be "householding," "householding" will continue
until the stockholder is notified otherwise or until the stockholder has
revoked consent by notifying the broker. If, at any time, a stockholder 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.
Stockholders 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.
20
Appendix A
Rogers Corporation
Audit Committee Charter
As approved by the Board of Directors on February 20, 2003
I. General Statement of Purpose
The Audit Committee of the Board of Directors (the "Audit Committee")
of Rogers Corporation (the "Company") assists the Board of Directors
(the "Board") in general oversight and monitoring of: (i) the
integrity of financial statements of the Company; (ii) the
independent auditors' qualifications and independence, (iii) the
performance of the Company's internal audit function and independent
auditors, and (iv) the Company's procedures for compliance with legal
and regulatory requirements. In discharging its objectives, the Audit
Committee is empowered to investigate any matter brought to its
attention with full access to all books, records, facilities and
personnel of the Company and the power to retain counsel, or other
experts for this purpose. The Audit Committee shall make regular
reports to the Board.
II. Audit Committee Composition
The membership of the Audit Committee shall consist of at least three
members and shall consist solely of outside independent directors.
The term "independent director" will be defined in accordance with
the rules of the New York Stock Exchange, Section 10A(m)(3) of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules
and regulations of the Securities and Exchange Commission. At a
minimum, this will require directors who are independent of
management and the Company, are financially literate, or who will
become financially literate within a reasonable period of time after
appointment to the Audit Committee, and who are free of any
relationship that, in the opinion of the Board of Directors, would
interfere with their exercise of independent judgment as committee
members. At least one member of the Audit Committee shall have
accounting or related financial management expertise, and, if
possible, at least one member will be an "Audit Committee Financial
Expert" as defined by the Securities and Exchange Commission. The
Board shall designate one member of the Audit Committee to be
Chairperson of the Audit Committee. Audit Committee members shall not
simultaneously serve on the audit committees of more than two other
public companies.
III. Meetings
The Audit Committee will meet as often as may be deemed necessary or
appropriate and at such times and places as it shall determine, but
not less frequently than quarterly. The Audit Committee will meet
periodically with management, the internal auditors and the
independent auditors in separate executive sessions. The Audit
Committee will record the actions taken at such meetings and will
report to the full Board with respect to its meetings. A majority of
the members of the committee shall constitute a quorum. In the
absence of the Chairperson of the Audit Committee, the members may
appoint any other member to preside.
IV. Responsibilities
The policies and procedures of the Audit Committee shall remain
flexible, in order to permit the Audit Committee to react to changing
conditions and circumstances.
A-1
The Audit Committee shall have the sole authority to appoint or
replace the independent auditors (subject, if applicable, to
shareholder ratification). The Audit Committee shall be directly
responsible for the compensation and oversight of the work of the
independent auditors (including resolution of disagreements between
management and the independent auditors regarding financial
reporting) for the purpose of preparing or issuing an audit report or
related work, or performing other audit, review or attest services
for the Company. The independent auditors shall report directly to
the Audit Committee.
The Audit Committee shall pre-approve all auditing services and
permitted non-audit services (including the fees and terms thereof)
to be performed for the Company by its independent auditors in
accordance with applicable rules and regulations. The Audit Committee
may delegate the authority to one or more members to pre-approve
audit and permitted non-audited services, provided that decisions of
such subcommittee to grant such pre-approvals shall be presented to
the full Audit Committee at its next scheduled meeting. The Audit
Committee may establish policies and procedures for pre-approval of
non-audit services; provided that such policies and procedures are
detailed as to the particular service and the Audit Committee is
promptly informed of each service.
The Audit Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain independent legal, accounting or
other advisors. The Company shall provide for appropriate funding, as
determined by the Audit Committee, for payment of compensation to the
independent auditors for the purpose of rendering or issuing an audit
report and to any advisors employed by the Audit Committee.
The Audit Committee shall annually review the Audit Committee's own
performance.
V. Audit Committee Principal Processes
The principal processes of the Audit Committee will generally include
the following which are set forth as a guide with the understanding
that the Audit Committee may supplement them as appropriate:
A. Review of Charter and Proxy Statement Report
The Audit Committee shall review and assess the adequacy of
this Charter annually and recommend any proposed changes to the
Board for approval.
The Audit Committee shall prepare the report required by the
rules of the Securities and Exchange Commission to be included
in the Company's annual proxy statement.
B. Matters Relating to Selection, Independence and Performance of
Independent Auditors
The Audit Committee shall have a clear understanding with
management and the independent auditors that the independent
auditors are ultimately accountable to the Board and the Audit
Committee, as representatives of the Company's shareholders.
The Audit Committee shall have the ultimate authority and
responsibility to select, evaluate and, where appropriate,
replace the independent auditors. The Audit Committee shall
discuss with the auditors their independence from management
and the Company and the matters included in the written
disclosures required by the Independence Standards Board.
A-2
The Audit Committee shall, at least annually, obtain and review
a report by the independent auditors describing: the firm's
internal quality-control procedures; and material issues raised
by the most recent internal quality-control review, or peer
review, of the firm, or by any inquiry or investigation by
governmental or professional authorities, within the preceding
five years, respecting one or more independent audits carried
out by the firm, and any steps taken to deal with any such
issues; and (to assess the auditors' independence) all
relationships between the independent auditors and the Company.
The Audit Committee shall review with the independent auditors
any audit problems or difficulties and management's response,
including any restrictions on the scope of the independent
auditors' activities or on access to requested information, and
any significant disagreements with management.
The Audit Committee shall set clear hiring policies for
employees or former employees of the independent auditors.
C. Matters Related to Company Policies and Procedures
The Audit Committee shall receive regular reports from the
independent auditors on the critical policies and practices of
the Company, and all alternative treatments of financial
information within generally accepted accounting principles
that have been discussed with management.
The Audit Committee shall review management's assertion on its
assessment of the effectiveness of internal controls as of the
end of the most recent fiscal year and the independent
auditors' report on management's assertion.
The Audit Committee shall review and discuss earnings press
releases, including the use of "pro-forma" or "adjusted" non-
GAAP information, as well as such other financial information
and earnings guidance as the Audit Committee shall deem
appropriate.
The Audit Committee shall establish procedures for the receipt,
retention, and treatment of complaints received by the Company
regarding accounting, internal accounting controls, or auditing
matters, and the confidential, anonymous submission by
employees of the Company of concerns regarding questionable
accounting or auditing matters.
The Audit Committee shall discuss policies with respect to risk
assessment and risk management, including the Company's major
financial risk exposures and the steps management has taken to
monitor and control such exposures.
D. Audited Financial Statements and Related Audits
The Audit Committee shall discuss with the internal auditors
and the independent auditors the overall scope and plans for
their respective audits including the adequacy of staffing and
compensation and the matters required to be discussed pursuant
to Statement on Auditing Standards No. 61.
The Audit Committee shall discuss with management, the internal
auditors, and the independent auditors the adequacy and
effectiveness of the accounting and financial controls,
A-3
including the Company's system to monitor and manage major
business risks, and legal and ethical compliance programs.
Further, the Audit Committee shall periodically meet separately
with management, with internal auditors (or other personnel
responsible for the internal audit function) and with
independent auditors to discuss the results of their
examinations.
The Audit Committee shall review with management and the
independent auditors the financial statements and disclosures
under Management's Discussion and Analysis of Financial
Condition and Results of Operations to be included in the
Company's Annual Report on Form 10-K (or the annual report to
shareholders if distributed prior to the filing of Form 10-K),
including their judgment about the quality, not just the
acceptability, of accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in
the financial statements. Also, the Audit Committee shall
discuss the results of the annual audit and any other matters
required to be communicated to the Audit Committee by the
independent auditors under generally accepted auditing
standards.
E. Interim Financial Statements
The Audit Committee shall review the interim financial
statements and disclosures under Management's Discussion and
Analysis of Financial Condition and Results of Operations with
management and the independent auditors prior to the filing of
the Company's Quarterly Report on Form 10-Q, including the
results of the independent auditor's review of the quarterly
financial statements and any other matters required to be
communicated to the Audit Committee by the independent auditors
under generally accepted auditing standards.
VI. General
The Audit Committee shall perform such other oversight functions as
may be requested by the Board.
The Audit Committee shall, as appropriate, obtain advice and
assistance from outside legal, accounting or other advisors.
Notwithstanding the responsibilities and powers of the Audit
Committee set forth in this Charter, the Audit Committee does not
have the responsibility of planning or conducting audits of the
Company's financial statements or determining whether or not the
Company's financial statements are complete, accurate and in
accordance with generally accepted accounting principles. Such
responsibilities are the duty of management and the independent
auditors. Management is also responsible for the preparation,
presentation, and integrity of the Company's financial statements and
for the appropriateness of the accounting principles and reporting
policies that are used by the Company. The independent auditors are
responsible for auditing the Company's financial statements and for
reviewing the Company's unaudited interim financial statements.
A-4
[LOGO] ROGERS
CORPORATION
One Technology Drive
P. O. Box 188
Rogers, Connecticut 06263-0188
PHONE:
860.774.9605
WEBSITE:
http://www.rogerscorporation.com
[X] PLEASE MARK VOTE REVOCABLE PROXY
AS IN THIS EXAMPLE ROGERS CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 2003
The undersigned hereby appoints JAMES M. RUTLEDGE and ROBERT M.
SOFFER, and each of them, acting singly, as attorneys and proxies of the
undersigned, with full power of substitution, to vote all shares of stock
which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of Rogers Corporation to be held on April 24, 2003 at 10:30
a.m. in the Boardroom on the 26th floor of Fleet Bank, 777 Main Street,
Hartford, 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. FIXING THE BOARD OF DIRECTORS AT [ ] [ ] [ ]
NINE AND ELECTING DIRECTORS. To fix
the number of persons constituting the full board of directors at
nine and to elect the following nominees as directors (except as
marked to the contrary below):
Leonard M. Baker, Harry H. Birkenruth, Walter E. Boomer,
Edward L. Diefenthal, Gregory B. Howey, Leonard R. Jaskol,
Eileen S. Kraus, William E. Mitchell and Robert G. Paul.
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.
---------------------------------------------------------------------------
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED OR,
WHERE NO DIRECTION IS GIVEN, WILL BE VOTED TO FIX THE BOARD AT NINE AND TO
ELECT THE NOMINEES AS DIRECTORS, 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 OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
NOMINEES AS DIRECTORS.
-----------------------
Please be sure to date and sign | Date |
this Proxy in the box below. | |
-------------------------------------------------------------
| |
| |
| |
|--Stockholder sign above-----Co-holder (if any) sign above--|
Detach above card, date, sign and mail in postage paid envelope provided.
ROGERS CORPORATION
--------------------------------------------------------------------------
| 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 stockholder, you are entitled to vote at this year's Annual |
| Meeting of Stockholders and are encouraged to do so by signing, dating |
| and returning this proxy card as soon as possible. |
| PLEASE ACT PROMPTLY |
| DATE, SIGN & 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.
----------------------------------------
----------------------------------------
----------------------------------------
[X] PLEASE MARK VOTE REVOCABLE PROXY
AS IN THIS EXAMPLE ROGERS CORPORATION (RESIP)
ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 2003
The undersigned hereby appoints JAMES M. RUTLEDGE and ROBERT M. SOFFER,
and each of them, acting singly, as attorneys and proxies of the
undersigned, with full power of substitution, to vote all shares of stock
which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of Rogers Corporation to be held on April 24, 2003 at 10:30
a.m. in the Boardroom on the 26th floor of Fleet Bank, 777 Main Street,
Hartford, 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. FIXING THE BOARD OF DIRECTORS AT [ ] [ ] [ ]
NINE AND ELECTING DIRECTORS. To fix
the number of persons constituting the full board of directors at
nine and to elect the following nominees as directors (except as
marked to the contrary below):
Leonard M. Baker, Harry H. Birkenruth, Walter E. Boomer,
Edward L. Diefenthal, Gregory B. Howey, Leonard R. Jaskol,
Eileen S. Kraus, William E. Mitchell and Robert G. Paul.
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.
---------------------------------------------------------------------------
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED OR,
WHERE NO DIRECTION IS GIVEN, WILL BE VOTED TO FIX THE BOARD AT NINE AND TO
ELECT THE NOMINEES AS DIRECTORS, 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 OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
NOMINEES AS DIRECTORS.
-----------------------
Please be sure to date and sign | Date |
this Proxy in the box below. | |
-------------------------------------------------------------
| |
| |
| |
|--Stockholder 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 Corporaion Capital |
| Stock through the Rogers Employee Savings and Investment Plan (RESIP) |
| held by the Trustee, CIGNA Bank & Trust Company, FSB. |
| |
| As a stockholder, you are entitled to vote at this year's Annual |
| Meeting of Stockholders and are encouraged to do so by signing, dating |
| and returning this proxy card as soon as possible. |
| PLEASE ACT PROMPTLY |
| DATE, SIGN & 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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