SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
ROGERS CORPORATION
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
TO ASSURE YOUR REPRESENTATION AT THE MEETING,
PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
ROGERS
SINCE 1832
Rogers Corporation
One Technology Drive
P.O. Box 188
Rogers, CT 06263-0188
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Rogers Corporation, a
Massachusetts corporation, will be held on Thursday, April 23,
1998, at 10:30 A.M. in the Boardroom on the 26th floor of Fleet
National 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 approve the Corporation's 1998 Stock Incentive Plan.
3. To amend the Corporation's Restated Articles of Organization,
as amended, to increase the authorized Capital Stock, $1 par
value per share, to 50,000,000 shares.
4. 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 February
25, 1998, the record date fixed by the Board of Directors for such
purpose.
You are cordially invited to attend the meeting.
By Order of the Board of Directors
Robert M. Soffer, Clerk
March 16, 1998
<PAGE>
[To be printed on the inside front cover]
PROXY STATEMENT TABLE OF CONTENTS
Page
Election of Directors (Proposal 1) 2
Stock Ownership of Management 3
Beneficial Ownership of More Than Five Percent 4
Board of Directors 5
Executive Compensation 6
Other Arrangements and Payments 14
Certain Relationships and Related Transactions 14
Proposal to Approve the 1998 Stock Incentive Plan
(Proposal 2) 15
Proposal to Authorize Additional Shares of Capital Stock
(Proposal 3) 21
Miscellaneous Matters 23
1998 Stock Incentive Plan (Exhibit A) 24
RETURN OF PROXY
Please complete, date, sign, and return the accompanying
proxy card promptly in the enclosed pre-addressed envelope even
if you plan to attend the Annual Meeting. Postage need not be
affixed to the enclosed envelope if mailed in the United States.
If you attend the Annual Meeting and vote in person, your proxy
will not be used. The immediate return of your proxy will be of
great assistance in preparing for the Annual Meeting and is
therefore urgently requested.
<PAGE>
Proxy Statement
ROGERS
SINCE 1832
Rogers Corporation
One Technology Drive
P.O. Box 188
Rogers, Connecticut 06263-0188
March 16, 1998
This proxy statement is furnished 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 23, 1998, at 10:30 A.M. in the Boardroom on the
26th floor of Fleet National Bank, 777 Main Street, Hartford,
Connecticut.
Stockholders of record as of the close of business on February
25, 1998, are entitled to vote at the meeting and any adjournment
thereof. As of that date, 7,591,730 shares of Capital Stock, $1
par value per share (the "Capital Stock"), of the Corporation
were outstanding. Stockholders are entitled to one vote for each
share owned. Execution of a proxy will not in any way affect a
stockholder's 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 with the Clerk of the
Corporation a written revocation, by executing a proxy with a
later date, or by attending and voting at the meeting.
If a properly executed proxy is submitted and no instructions are
given, except as provided below, the proxy will be voted: FOR
fixing the number of Directors for the ensuing year at ten and
the election of the nominees to the Board of Directors shown on
the next page under the heading "NOMINEES FOR DIRECTOR" (except
for any nominee or nominees as to whom authority is withheld),
FOR the approval of the Corporation's 1998 Stock Incentive Plan,
and FOR the amendment of the Corporation's Restated Articles of
Organization, as amended, to increase the authorized Capital
Stock to 50,000,000 shares.
Abstentions will have the effect of being cast against fixing the
number of Directors at ten and will have no effect on the outcome
of the vote for the election of Directors, but will have the
effect of being cast against the Proposal to approve the
Corporation's 1998 Stock Incentive Plan and the Proposal to amend
the Corporation's Restated Articles of Organization, as amended,
to increase the authorized Capital Stock to 50,000,000 shares,
even though the stockholder so abstaining intends a different
interpretation. Shares of Capital Stock held of record by
brokers who do not return a signed and dated proxy will not be
considered present at the meeting, will not be counted towards a
quorum and will not be voted in the election of Directors or on
Proposals 2 and 3. Shares of Capital Stock held of record by
brokers who return a signed and dated proxy but who do not vote
on the election of Directors or on either of the Proposals, will
count towards the quorum, but will count neither for nor against
the election of Directors or the Proposal not voted, as the case
may be.
No matters other than those set forth in the accompanying Notice
of Annual Meeting of Stockholders are expected 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 thereto in accordance with the judgment of the
persons named as proxies.
This proxy statement and the accompanying proxy are first being
mailed to stockholders on or about March 16, 1998.
1
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
The Directors of the Corporation 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. In the event that 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
the Corporation and were elected to their present term of office
at the May 1997 Annual Meeting of Stockholders, except for Mr.
Diefenthal, who has been nominated for Director for the first
time.
NOMINEES FOR DIRECTOR
Age/Year
First Became Principal Occupations During the Past
Name Director Five Years and Other Directorships
- --------------------------------------------------------------------------------
Leonid V. Azaroff 71/1976 Consultant; Professor Emeritus (1994),
Professor (1993), University of
Connecticut
Leonard M. Baker 63/1994 Vice President Technology, Praxair, Inc.
Harry H. Birkenruth 66/1964 Chairman (since March 31, 1997) and
prior to that President, Chief Executive
Officer, Rogers Corporation
Walter E. Boomer 59/1997 President, Chief Executive Officer,
Rogers Corporation (since March 31,
1997); President, Babcock & Wilcox Power
Generation Group and Executive Vice
President of McDermott International,
Inc., the parent corporation of Babcock
& Wilcox (February 1995 to October
1996), Senior Vice President of
McDermott International, Inc. (August
1994 to January 1995) and prior to that
a General in the U.S. Marine Corps from
1986; Director, Baxter International,
Inc.
Edward L. Diefenthal 55 Vice Chairman and Chief Executive
Officer (since August 1995), prior to
that Executive Vice President,
Director, Southern Holdings, Inc.
Mildred S. Dresselhaus 67/1986 Institute Professor, Massachusetts
Institute of Technology
Donald J. Harper 70/1986 Retired Chairman and Chief Executive
Officer, Insilco Corporation; Director,
Okay Industries, Inc.
Gregory B. Howey 55/1994 President, Director, Okay Industries,
Inc.
Leonard R. Jaskol 60/1992 Chairman, President, Director, Chief
Executive Officer, Lydall, Inc.;
Director, Eastern Enterprises
William E. Mitchell 54/1994 Chief Executive Officer (since June
1996), President, Chief Operating
Officer (September 1995 to May 1996),
Director, Sequel, Inc.; President,
Director, Chief Executive Officer,
Nashua Corporation (October 1993 to
August 1995); prior to that Senior Vice
President of Raychem Corporation
The Board of Directors recommends a vote FOR fixing the number of
Directors for the ensuing year at ten (which requires approval of
a majority of the shares of Capital Stock present or represented
and entitled to vote at the meeting) and the election of the
above named nominees. Such individuals will be elected as
Directors upon approval of a plurality of the votes cast at the
1998 Annual Meeting of Stockholders.
2
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding beneficial
ownership of the Corporation's Capital Stock as of March 1,
1998, by each of the current Directors, an individual being
nominated for Director for the first time, the executive officers
named in the Summary Compensation Table (the "Named Executive
Officers") and by all Directors, the new nominee for Director and
the executive officers as a group.
Amount and Nature of Beneficial Ownership - Shares of Capital Stock
- -------------------------------------------------------------------------
Acquirable
Name of Person Currently Within 60 Percent
or Group Owned Days(1) Total(2) of Class(2)
- -------------------------------------------------------------------------
Leonid V. Azaroff 10,823 (3)(4) 1,985 12,808 *
Leonard M. Baker 2,017 1,851 3,868 *
Wallace Barnes (5) 4,151 1,985 6,136 *
Harry H. Birkenruth 79,803 74,846 154,649 2.02
Walter E. Boomer 1,869 (3) - 1,869 *
Edward L. Diefenthal (6) - - - *
Mildred S. Dresselhaus 8,953 1,583 10,536 *
Donald J. Harper 2,000 (4) 1,985 3,985 *
Aarno A. Hassell 14,951 39,533 54,484 *
Gregory B. Howey 3,153 715 3,868 *
Leonard R. Jaskol 4,151 1,985 6,136 *
Bruce G. Kosa 6,155 (3) 21,399 27,554 *
William E. Mitchell 1,717 1,851 3,568 *
Robert D. Wachob 9,336 (3) 48,666 58,002 *
Directors, Nominee for
Director and Executive
Officers as a Group
(18 persons) 155,906 254,983 410,889 5.24
(1) Represents shares which may be acquired under stock options
exercisable within the 60 days immediately following
March 1, 1998.
(2) Represents the total number of currently owned shares and
shares acquirable within 60 days. The percent of class
represents the percent of such total to the number of
outstanding shares of Capital Stock.
(3) Dr. Azaroff, Mr. Boomer, Mr. Kosa and Mr. Wachob own, respectively,
400, 500, 4,500 and 6,574 shares, included above, as to which
investment and voting power is shared with others.
(4) Dr. Azaroff and Mr. Harper each deferred 718 shares of 1994
stock compensation, which is not included above. Mr. Harper
also deferred 552 shares of 1995 stock compensation, 523
shares of 1996 stock compensation and 358 shares of 1997
stock compensation, which are not included above.
(5) Mr. Barnes will be retiring as a Director at the 1998 Annual
Meeting of Stockholders.
(6) Mr. Diefenthal is being nominated for Director for the first
time.
* Less than 1% of outstanding Capital Stock.
3
<PAGE>
BENEFICIAL OWNERSHIP OF MORE THAN FIVE PERCENT OF THE
CORPORATION'S STOCK
The following table sets forth information regarding beneficial
ownership of each person known to the Corporation to own more
than 5% of the outstanding Capital Stock. The information in the
table is based solely upon filings by each such person with the
Securities and Exchange Commission on Schedule 13G under the
Securities Exchange Act of 1934, as amended.
Shares Percent
Name and Address Beneficially of
of Beneficial Owner Owned Class
- --------------------------------------------------------------
Capital Research and 670,000 8.8
Management Company (1)
333 South Hope Street
Los Angeles, California 90071
President and Fellows of Harvard
College 409,362 5.4
c/o Harvard Management Company, Inc.
600 Atlantic Avenue
Boston, Massachusetts 02210
State Farm Mutual Automobile 400,000 5.3
Insurance Company
One State Farm Plaza
Bloomington, Illinois 61710
Westport Asset Management, Inc.(2) 1,071,300 14.1
253 Riverside Avenue
Westport, Connecticut 06880
(1) Capital Research and Management Company, a registered
investment advisor and an operating subsidiary of The
Capital Group Companies, Inc., acts as investment advisor to
various investment companies and in connection therewith
exercises investment discretion with respect to the shares
reported. The Capital Group Companies, Inc. may be deemed
to have investment discretion with respect to the shares
reported, but neither The Capital Group Companies, Inc. nor
Capital Research and Management Company have the power to
direct the vote of such shares.
(2) Westport Asset Management, Inc., a registered investment
advisor, has sole voting and investment power with respect
to 111,900 of the shares listed above, and has shared voting
and investment power with respect to the other 959,400
shares. All shares are held in certain discretionary
managed accounts, except for 111,900 shares which are owned
by officers and stockholders of Westport Asset Management,
Inc.
4
<PAGE>
BOARD OF DIRECTORS
MEETINGS; CERTAIN COMMITTEES
The Board of Directors of the Corporation, which held six
meetings during 1997, has six 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 1997 of the Board and the committees on which each
such Director served.
The Audit Committee held two meetings in 1997, and has among its
functions, making recommendations with respect to the selection
of the independent auditors of the Corporation, meeting with the
independent auditors to review the scope, accuracy and results of
the audit, and making inquiries as to the adequacy of the
Corporation's accounting, financial and operating controls. Dr.
Azaroff is chairperson of the Audit Committee, with Dr. Baker and
Mr. Jaskol as members.
The Compensation and Organization Committee held four meetings in
1997, and has among its functions, 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
Chairman's and the President's compensation and approves or
disapproves the President's recommendations with respect to the
compensation of executive officers who report to the President.
Mr. Barnes is chairperson of the Compensation and Organization
Committee, with Messrs. Harper and Jaskol as members.
The Nominating and Governance Committee held four meetings in
1997, and has among its functions, reviewing the qualifications
of candidates for Director, nominating incumbent Directors for
reelection, evaluating the performance of the Chief Executive
Officer and at least yearly, conducting a review of the
performance of the Board of Directors. Mr. Mitchell is
chairperson of the Nominating and Governance Committee with Dr.
Azaroff and Messrs. Barnes, Birkenruth and Boomer as members.
The Nominating and Governance Committee will consider nominees
recommended by stockholders if such recommendations are submitted
in writing to the Clerk of the Corporation.
DIRECTORS' COMPENSATION
For 1997, each Director who was not an employee of the
Corporation earned an annual retainer of $13,500, $1,200 for each
Board meeting attended and $1,400 or $950 for each committee
meeting attended, the amount varying by capacity as chairperson
or as a member.
Pursuant to the 1994 Stock Compensation Plan, the retainer fee
for non-employee Directors will be paid semi-annually in shares
of the Corporation's Capital Stock, with the number of shares of
stock granted based on its then fair market value. Stock options
also are granted to non-employee Directors twice a year. The
number of shares in each six-month period for which stock options
are granted is determined by dividing $6,750 (half of the annual
non-employee Director retainer fee at the time the plan was
established) by the fair market value of a share of the
Corporation's Capital Stock as of the date of grant. Existing
stock options issued under this plan are exercisable within a
period of ten years from date of grant. No further stock grants
or stock option grants will be made to non-employee Directors
pursuant to the 1994 Stock Compensation Plan if stockholders
approve the 1998 Stock Incentive Plan as described in Proposal 2.
Pursuant to the Corporation's 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 the Corporation's Capital Stock.
5
<PAGE>
EXECUTIVE COMPENSATION
The tables, graph and narrative on pages 6 through 13 of this
proxy statement set forth certain compensation information about
the Corporation's Chief Executive Officer and its other four most
highly compensated executive officers as of the last completed
fiscal year. The Corporation does not presently have any Long-
Term Incentive Plans and did not reprice any stock options (as
defined by the executive compensation reporting rules of the
Securities and Exchange Commission). Therefore, no corresponding
tables are provided.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
------------------- -----------
Other Stock All
Name and Annual Options Other
Principal Compen- (Number Compen-
Position Year Salary Bonus(1) sation(2) of Shares) sation(3)
- --------------------------------------------------------------------------------
Walter E. Boomer(4) 1997 $237,500 $178,635 $ 515 50,000 $24,816
President and Chief
Executive Officer
Harry H. Birkenruth 1997 347,683 520,030 4,710 - 36,131
Chairman of the 1996 330,692 231,700 4,275 30,000 35,964
Board of Directors 1995 308,942 304,920 3,455 35,000 23,002
Robert D. Wachob 1997 192,954 158,589 273 15,000 6,170
Senior Vice President, 1996 170,692 85,000 107 12,000 5,531
Sales and Marketing 1995 152,019 105,758 10 15,000 2,400
Aarno A. Hassell 1997 156,020 54,135 2,000 10,459
Vice President, 1996 149,885 45,000 3,000 9,703
Market Development 1995 141,231 60,000 6,000 8,606
Bruce G. Kosa 1997 129,320 89,485 4,500 3,722
Vice President, 1996 122,769 49,800 4,000 3,000
Technology 1995 115,038 55,000 7,000 2,400
The footnotes for this table are on the next page.
6
<PAGE>
(1) For 1997, all amounts include bonuses earned pursuant to the
Corporation's Annual Incentive Compensation Plan (the "Annual
Incentive Plan") and the Long-Term Enhancement Plan For
Senior Executives (the "Enhancement Plan"). For 1995 and
1996, all amounts relate only to bonuses under the Annual
Incentive Plan. The Enhancement Plan was adopted in 1997 to
indirectly supplement the retirement benefit provided to
senior management. Enhancement Plan payments are made in
the Corporation's Capital Stock, except for those individuals
retiring in 1998 who receive cash payments. 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. Payments
in Capital Stock are valued at an average closing price of
the Capital Stock. In addition, certain individuals will
receive, over time, retroactive payments for bonuses earned
since 1993.
The amounts paid under the Enhancement Plan are as follows
(for each individual, the number of shares is followed by the
dollar amount used to calculate the number of shares and the
year to which the enhancement payment relates): Mr. Boomer -
415 shares/$16,250/1997; Mr. Wachob - 224 shares/$8,500/1996
and 348 shares/$13,628/1997; Mr. Hassell - 119
shares/$4,500/1996 and 115 shares/$4,500/1997 and Mr. Kosa -
131 shares/$4,980/1996 and 196 shares/$7,674/1997. The
valuation in the table is, however, based upon the closing
price of the Capital Stock on February 24, 1998 ($39.19) in
the case of payments made for 1996, and on February 26, 1998
($38.88) in the case of payments made for 1997. Mr.
Birkenruth, who is scheduled to retire in 1998, received the
following cash payments (dollar amounts followed by the year
to which they relate): $49,099/1993; $28,066/1994;
$36,895/1995; $23,170/1996 and $34,800/1997. If an employee
participating in the Enhancement Plan transfers any shares of
Capital Stock received thereunder, the employee will not be
entitled to any future awards under the Enhancement Plan.
(2) 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 Named Executive Officer. The amounts shown
reflect the reimbursement of taxes on non-qualified defined
benefit pension plan accruals.
(3) Amounts shown for 1997 include (i) the Corporation's matching
contributions to the Rogers Employee Savings and Investment
Plan, a 401(k) plan, of $3,200 for each Named Executive
Officer; (ii) matching contributions under the Corporation's
non-qualified deferred compensation plan for Messrs. Boomer,
Birkenruth, Wachob and Kosa of $2,747; $9,000; $2,970 and
$522, respectively; (iii) the Corporation's payments on
executive owned whole life insurance policies for Messrs.
Birkenruth and Hassell of $5,287 and $1,741, respectively and
(iv) "above-market" interest earned on deferred compensation
to the extent the rate of interest exceeds 120% of the
applicable federal long-term rate, amounting to $18,644 and
$5,518 for Messrs. Birkenruth and Hassell, respectively.
Amounts for 1996 and 1995 include similar categories of compensation.
For Mr. Boomer, the amount shown also includes $18,869 for
temporary living expenses while he was relocating to
Connecticut after he commenced employment as President and
Chief Executive Officer of the Corporation.
(4) Mr. Boomer joined the Corporation on March 31, 1997 as
President and Chief Executive Officer.
7
<PAGE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
% of Total
Number of Options Exercise
Securities Granted to Price
Underlying Employees in Per Expiration Grant Date
Name Options (1) Fiscal Year Share Date Present Value(2)
- --------------------------------------------------------------------------------
Walter E. Boomer 30,000 14.6% $27.94 03/31/07 $455,700
20,000 9.8 45.00 10/27/07 469,600
Harry H. Birkenruth - - - - -
Robert D. Wachob 15,000 7.3 45.00 10/27/07 352,200
Aarno A. Hassell 2,000 1.0 45.00 10/27/07 46,960
Bruce G. Kosa 4,500 2.2 45.00 10/27/07 105,660
(1) These stock options become exercisable in one-third
increments on the second, third and fourth anniversary dates
of the grant unless in the event of death, retirement or a
change in control of the Corporation, in which case the stock
options will become immediately exercisable in full. These
options expire ten years after the date of grant, or earlier
due to termination of employment, death, or retirement.
(2) Black-Scholes Assumption Disclosure
The estimated grant date present values reflected in the
above table are determined by using the Black-Scholes model.
The March 31, 1997 grant of 30,000 shares to Mr. Boomer at an
exercise price of $27.94 per share is hereinafter referred to
as the "March Grant" and the other grants are hereinafter
referred to as the "October Grants". The material
assumptions and adjustments incorporated into the Black-
Scholes model in estimating the value of the options
reflected in the above table include the following:
- An exercise price of $27.94 for the March Grant and
$45.00 for the October Grants, in both cases, equal to
the fair market value of the underlying Capital Stock
as of the date of grant;
- An option term of ten years;
- An interest rate of 6.69 percent for the March Grant
and 6.03 percent for the October Grants, in both cases,
representing the interest rate on a U.S. Treasury
security on the date of grant with a maturity date
corresponding to that of the option term;
- Volatility of 24.31 percent for the March Grant and
24.54 percent for the October Grants, in both cases,
calculated using daily stock prices for the one-year
period prior to the grant date; and
- Dividends at the rate of $0.00 per share, representing
the annualized dividends paid with respect to a share
of Capital Stock at the date of grant.
The ultimate values of the options will depend on the future
market price of the Corporation's Capital Stock, which cannot
be forecast with reasonable accuracy. The actual value, if
any, an optionee will realize on exercise of an option will
depend on the excess of the market value of the Corporation's
Capital Stock over the exercise price on the date the option
is exercised.
8
<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES DURING FISCAL 1997 AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Value of Unexercised
Number of Number of In-The-Money
Shares Unexercised Options at Options at
Acquired Fiscal Year-End Fiscal Year-End<F2>
Upon Value -------------------------- --------------------------
Name Exercise Realized<F1> Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Walter E. Boomer - $ - - 50,000 $ - $290,550
Harry H. Birkenruth 16,341 474,215 98,525 63,334 2,496,867 875,893
Robert D. Wachob 1,400 36,750 51,466 40,334 1,340,851 346,493
Aarno A. Hassell 8,800 258,387 39,533 11,667 1,066,208 144,362
Bruce G. Kosa 2,500 66,238 24,399 15,501 610,301 158,709
<F1>Defined as the difference between the fair market value of the
Capital Stock and the exercise price of the option at time of
exercise.
<F2>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.
</TABLE>
9
<PAGE>
RETIREMENT PLANS
The Pension Plan Table below reflects estimated annual benefits
payable at age 65 ("normal retirement age") at various
compensation levels and years of service pursuant to the
Corporation's non-contributory defined benefit pension plans for
domestic salaried employees.
ANNUAL PENSION BENEFITS
Years of Service(1)(2)
----------------------------------------------------------------------
Final
Average
Earnings
(3) 5 years 10 years 15 years 20 years 25 years 30 years 35 years 40 years
- --------------------------------------------------------------------------------
$100,000 $ 7,820 $15,650 $23,470 $ 31,300 $ 39,120 $ 46,950 $ 49,300 $ 51,640
125,000 10,120 20,230 30,350 40,470 50,580 60,700 63,730 66,770
150,000 12,410 24,820 37,220 49,630 62,040 74,450 78,170 81,890
175,000 14,700 29,400 44,100 58,800 73,500 88,200 92,610 97,020
200,000 16,990 33,980 50,970 67,970 84,960 101,950 107,050 112,140
225,000 19,280 38,570 57,850 77,130 96,420 115,700 121,480 127,270
250,000 21,570 43,150 64,720 86,300 107,870 129,450 135,920 142,390
275,000 23,870 47,730 71,600 95,470 119,330 143,200 150,360 157,520
300,000 26,160 52,320 78,470 104,630 130,790 156,950 164,800 172,640
325,000 28,450 56,900 85,350 113,800 142,250 170,700 179,230 187,770
350,000 30,740 61,480 92,220 122,970 153,710 184,450 193,670 202,890
- --------------------------------------------------------------------------------
(1) Benefits are calculated on a straight life annuity basis and
such amounts are reduced by offsets for estimated applicable
Social Security benefits.
(2) Federal law limits the amount of benefits payable under tax
qualified plans, such as the Rogers Corporation Defined
Benefit Pension Plan. The Corporation 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 the same as that calculated under the
Corporation's qualified pension plan as if such federal
benefit limitations did not exist. Accordingly, the benefits
shown have not been reduced by such limitations.
(3) 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, and such amount in the Summary Compensation Table is
substantially the amount covered for 1997 for the individuals
named. The five-year average earnings for the named
executive officers (other than for Mr. Boomer) and their
estimated years of credited service are: Mr. Birkenruth,
$296,122 and 38 years; Mr. Wachob, $158,366 and 15 years; Mr.
Hassell, $142,366 and 36 years and Mr. Kosa, $114,720 and 35
years. In the case of Mr. Boomer, earnings for calculating
his pension would currently be based on an annual salary of
$325,000 and one year of service.
COMPENSATION AND ORGANIZATION COMMITTEE REPORT
This report is submitted by the Compensation and Organization
Committee of the Corporation's Board of Directors (the
"Committee"). This Committee report describes the components of
the Corporation's executive officer compensation programs for
1997 and the basis on which compensation determinations were made
with respect to the executive officers of the Corporation.
Compensation and Organization Committee Interlocks and Insider
Participation
The Corporation's 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: Wallace Barnes
(Chairperson of the Committee), Donald J. Harper, and Leonard R. Jaskol.
10
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Philosophy
The executive compensation philosophy is to align such
compensation with the long-term success of the Corporation and
increases in stockholder value, and to attract, retain, and
reward executive officers whose contributions are critical to the
long-term success of the Corporation. 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 the Corporation to attract and
retain executives. Key elements of the executive
compensation program are base salary, the possibility
of a bonus under the Annual Incentive Compensation Plan
and the grant of stock options.
- 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, through stock option
grants.
Base Salaries
The Committee establishes salary ranges for executives by
reviewing positions with similar responsibilities in the
marketplace. The Corporation obtains information on such
positions for a broad spectrum of manufacturing companies from a
wide range of industries through published national executive
compensation survey data. The data includes a substantial number
of companies beyond those reflected in the Performance Graph on
page 13.
Salary adjustments are determined by considering merit increases
generally being offered in the aforementioned marketplace,
achievement of annual financial and other objectives by the
Corporation 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 Corporation allows the factors to change to
adapt to various individual, business, economic, and marketplace
conditions as they arise. The Committee is responsible for
approving recommendations for salary increases made by the
President for the officers who report to the President.
Annual Bonuses
The Annual Incentive Compensation Plan has target bonuses of 50%
of base salary for the Chairman and for the President, and
between 20% and 40% for the other executive officers, including
the other Named Executive Officers. 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 the Corporation (Net Income Per Share) and
each division (Controllable Cash 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% to 80% for the Named Executive
Officers. For fiscal 1997, corporate performance exceeded
targeted levels and, as a result, all of the Named Executive
Officers received bonuses.
In 1997, the Corporation 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
indirectly supplement the retirement benefits of such
individuals. In general, enhancement payments are made in
Capital Stock of the Corporation and are equal to 10% of the
bonuses described in the preceding paragraph.
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Stock Options
Each year, the Committee considers awards of stock options to key
personnel. Stock options are the Corporation's long-term
incentive vehicle. In recent years senior management personnel,
including executive officers, (except the Chairman who received no
award in 1997) have been 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, salary, 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 Corporation
does not assign specific weights to these criteria. The options
all have an exercise price equal to at least the fair market
value of the Corporation's stock as of the date of grant. These
options have a ten-year life (however, earlier termination is
provided for retirees and others whose employment terminates
prior to retirement) and vest in one-third increments on the
second, third and fourth anniversary dates of the grant.
In fiscal 1997, stock options for a total of 205,050 shares were
granted to employees, of which 71,500 shares were granted to the
Named Executive Officers and 28,000 shares were granted to all
other executive officers.
Chief Executive Officer Compensation
Effective on March 31, 1997, Walter E. Boomer was elected
President, Chief Executive Officer and a Director of the
Corporation. To attract an executive of this caliber, the
Corporation provided Mr. Boomer with a base salary of $325,000
per year, subject to such increases as may be approved by the
Committee. In connection with his election to these positions
Mr. Boomer was also granted options for 30,000 shares of the
Capital Stock, exercisable at $27.94 per share, the fair market
value as of the date of grant. In October 1997, he was also
granted an option for 20,000 shares of Capital Stock with an
exercise price of $45.00 per share, the fair market value as of
the date of the grant. This October award was a regular annual
stock option grant and was based on the aforementioned stock
option criteria. Mr. Boomer is a participant in the
Corporation's Annual Incentive Compensation Plan and for 1997
received a bonus equal to 50% of his annualized base salary
pursuant to this plan.
Harry H. Birkenruth was President and Chief Executive Officer of
the Corporation until March 31, 1997, when he became Chairman of
the Board of Directors. At the beginning of 1997 he received a
salary increase of $17,000 (5.1%). National survey data from a
broad spectrum of manufacturing companies from a wide range of
industries was considered, but the decision was weighted heavily
on his previous salary level and his contributions to the
Corporation's success. Mr. Birkenruth continues to be a senior
executive of the Corporation and as such, a participant in the
Annual Incentive Compensation Plan. His bonus pursuant to this
plan for 1997 was equal to 100% of his base salary as a result of
the Corporation exceeding its performance target.
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 the Corporation's 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 the Corporation would pay any amounts in 1998
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: Wallace Barnes, Chairperson
Donald J. Harper, Member
Leonard R. Jaskol, Member
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PERFORMANCE GRAPH
The following graph compares the cumulative total return on the
Corporation's 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 Hambrecht & Quist Total Return
Technology Index (H&Q Technology). The American Stock Exchange
High Technology Index (Amex High Technology) was discontinued by
the American Stock Exchange, Inc. at the end of 1996 and
therefore, information for this index is shown for only four
years through the end of fiscal year 1996. For purposes of this
graph, the Corporation is replacing the American Stock Exchange High
Technology Index with the Hambrecht & Quist Total Return Technology Index.
Cumulative total return is measured assuming an initial investment of
$100 on January 3, 1993, and the reinvestment of dividends as of the
end of the Corporation's fiscal years.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
GRAPH APPEARS HERE
Fiscal Year Ends
-----------------------------------------------------
1/3/93 1/2/94 1/1/95 12/31/95 12/29/96 12/28/97
- -------------------------------------------------------------------------
Rogers Corporation $100 $187 $355 $311 $386 $538
S&P Industrials 100 109 113 151 189 235
H&Q Technology 100 117 141 211 266 294
Amex High Technology 100 111 107 166 181 N/A
(Textual description of performance graph for EDGAR transmission
- - the chart compares the performance of the Corporation's Capital
Stock over a five-year period to the Standard & Poor's Industrials
Index and the Hambrecht & Quist Total Return Technology Index and
over a four-year period to the American Stock Exchange High Technology
Index, as reflected in the numerical data under the chart, with $100
representing the invested value in the Corporation's Capital Stock
and the three indices at January 3, 1993.)
13
<PAGE>
OTHER ARRANGEMENTS AND PAYMENTS
The Corporation's 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 the Corporation, except in the case of
the executive officers of the Corporation 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 the Corporation on three years'
notice. Each of Messrs. Birkenruth, Hassell and 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 the Corporation, 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 the Corporation to ensure that the possibility of a
change in control of the Corporation would not interfere with the
continuing dedication of the Corporation's executive officers to
their duties to the Corporation and its stockholders. Toward
that purpose, the Corporation has agreements with all current
elected officers of the Corporation, 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 agreement, 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 the Corporation 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 noncompetition agreement with the Corporation, 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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Beverly C. Hassell, the spouse of Aarno A. Hassell, Vice
President, Market Development, provided consulting services to
the Corporation during 1997. Her compensation from the
Corporation was $72,600.
14
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PROPOSAL 2: PROPOSAL TO APPROVE THE ROGERS CORPORATION 1998
STOCK INCENTIVE PLAN
PROPOSAL
The purpose of the 1998 Stock Incentive Plan (the "1998 Plan") is
to advance the interests of the Corporation by affording plan
participants an opportunity to acquire or increase their
ownership interests in the Corporation and thus encourage
continued service and additional incentives to achieve the
Corporation's goals. On December 17, 1997, the Board of
Directors voted to adopt the 1998 Plan and to submit it to the
Corporation's stockholders for their consideration at the 1998
Annual Meeting. A summary of the principal features of the 1998
Plan is set forth below. The 1998 Plan is attached as Exhibit A
to this proxy statement. (The term "Company" is used in the plan
document and is synonymous with the term "Corporation" used
elsewhere in this proxy statement.)
The 1998 Plan is administered by the Compensation and
Organization Committee of the Board of Directors (the
"Committee"), the members of which are non-employee members of
the Board of Directors ("Non-Employee Directors"), and permits
the granting, at the discretion of the Committee, of a variety of
stock incentive awards based on the Capital Stock of the
Corporation. Awards under the 1998 Plan include the grants of
stock options (both Incentive Options and Non-Qualified Options,
as defined below), and grants of Capital Stock to Non-Employee
Directors. Officers, employees, other key persons and
Non-Employee Directors of the Corporation and its subsidiaries
are eligible to receive awards under the 1998 Plan.
Subject to adjustment for stock splits and similar events, the
total number of shares of Capital Stock that can be issued under
the 1998 Plan is the sum of the following: 750,000 shares;
shares underlying any awards which are forfeited, reacquired by
the Corporation, satisfied without the issuance of Capital Stock
or otherwise terminated; shares which are repurchased by the
Corporation in the open market or otherwise with the proceeds of
option exercises; and shares surrendered to the Corporation in
payment of the exercise price of options or to satisfy tax
withholding requirements.
Subject to adjustment for stock splits and similar events, no
awards for more than 100,000 shares of Capital Stock will be
granted to any one individual during any 12-month period.
Shares issued by the Corporation under the 1998 Plan may be
authorized but unissued shares or shares reacquired by the
Corporation.
The closing price of a share of Capital Stock on March 9, 1998,
was $38.69.
RECOMMENDATION
The Board of Directors believes that the proposed 1998 Plan,
which provides for a range of stock based incentive awards and
permits flexibility in the terms of awards to officers,
employees, other key persons and Non-Employee Directors, will
help the Corporation to achieve its goals by keeping the
Corporation's incentive compensation program competitive with
those of other companies. Accordingly, the Board of Directors
believes that the 1998 Plan is in the best interests of the
Corporation and its stockholders and recommends that the
stockholders approve the 1998 Plan. No Capital Stock can be
issued under the 1998 Plan unless the 1998 Plan is approved by
the affirmative vote of the holders of at least a majority of the
shares of Capital Stock represented and entitled to vote at the
1998 Annual Meeting.
The Board of Directors recommends a vote FOR this proposal.
15
<PAGE>
DESCRIPTION OF THE 1998 PLAN
The following description of certain features of the 1998 Plan is
intended to be a summary only and reference is made to the full
text of the 1998 Plan.
Plan Administration; Eligibility. The 1998 Plan is administered
by the Committee, which is comprised of Non-Employee Directors,
or any other committee of not less than two Non-Employee
Directors performing similar functions, as appointed from time to
time by the Board of Directors. All members of the Committee
must be "non-employee directors" as that term is defined under the
rules promulgated by the Securities and Exchange Commission and
"outside directors" as that term is defined under the Internal
Revenue Code of 1986, as amended (the "Code").
The Committee has full power to select the recipients of awards,
from among the officers, employees and other key persons eligible
for awards, of whom there are currently approximately 125, to
make any combination of awards and to determine the specific
amount and terms of each award, all subject to the provisions of
the 1998 Plan. Persons eligible to participate in the 1998 Plan
will be those officers, employees and other key persons of the
Corporation and its subsidiaries who are responsible for or
contribute to the management, growth or profitability of the
Corporation and its subsidiaries, as selected from time to time
by the Committee. Non-Employee Directors are also eligible to
participate in the 1998 Plan subject to restrictions set out in
the 1998 Plan. There are currently eight Non-Employee Directors.
Stock Options Granted to Employees. The 1998 Plan permits the
granting of stock options that qualify as incentive stock options
("Incentive Options") under Section 422 of the Code and the
granting of stock options that do not so qualify ("Non-Qualified
Options"). The option exercise price of each option shall be
determined by the Committee but shall not be less than 100
percent of the fair market value of the shares as of the date of
grant in the case of Incentive Options and not less than 85
percent of the fair market value as of the date of grant in the
case of Non-Qualified Options. The term of each option shall be
fixed by the Committee and may not exceed ten years from the date
of grant. The Committee shall determine at what time or times each
option may be exercised and, subject to the provisions of the 1998
Plan, the period of time, if any, after 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 by the Committee. The Committee also has the
ability to determine whether the distribution or receipt of the
Capital Stock will be deferred, either automatically or at the
election of the participant.
Upon exercise of options, the option exercise price must be paid
in full either in cash, by certified or bank check, by other
dollar denominated instruments acceptable to the Corporation, in
a "cashless exercise" transaction effected through a broker, or,
if the Committee so determines, by delivery of shares of Capital
Stock (either actually or by attestation) valued at their fair
market value on the exercise date.
To qualify as Incentive Options, options must meet certain
Federal tax requirements, including limits on the value of shares
subject to Incentive Options which first become exercisable in
any one year, and a shorter term and higher minimum exercise
price in the case of certain large stockholders.
Stock Options Granted to Non-Employee Directors. Stock options
are granted to Non-Employee Directors pursuant to the 1998 Plan
in June and December of each year or upon an individual ceasing
to be a Non-Employee Director. The 1998 Plan provides for the
automatic semi-annual grant to each Non-Employee Director of a
Non-Qualified Option to purchase 500 shares of Capital Stock or a
portion thereof if such person is not a Director for the entire
six-month period. Such options are immediately exercisable on
the date of grant, and will expire ten years from the date of
grant, regardless of whether such person continues to be a
Director. All such options shall have an exercise price equal to
the fair market value of the Capital Stock as of the date of
grant.
16
<PAGE>
Non-Employee Director Stock Awards. The 1998 Plan also provides
for the automatic grant to each Non-Employee Director of shares
of Capital Stock free of any restrictions in lieu of the retainer
fee due to such Non-Employee Director in June and December of
each year or upon an individual ceasing to be a Non-Employee
Director. All or a portion of such stock awards may be deferred
at the option of each Non-Employee Director in accordance with
such rules and procedures as may from time to time be established
by the Board of Directors.
Adjustments for Stock Dividends, Mergers, Etc. The Committee
shall make appropriate adjustments in connection with outstanding
awards to reflect stock dividends, stock splits and similar
events. In the event of a merger, liquidation or similar event,
the Committee in its discretion may provide for substitution or
adjustments or may (subject to the provisions described below
under "Change of Control Provisions") accelerate, amend or, upon
such payment or other consideration with respect to the vested
portion of any award as the Committee deems equitable in the
circumstances, terminate such awards.
Tax Withholding. Plan participants are responsible for the
payment of any Federal, state or local taxes which the
Corporation is required by law to withhold from the value of any
award. The Corporation may deduct any such taxes from any payment
otherwise due to the participant. Subject to the consent of the
Committee, participants may elect to have such tax obligations
satisfied either by authorizing the Corporation to withhold shares
of Capital Stock to be issued pursuant to an award under the 1998
Plan or by transferring to the Corporation shares of Capital Stock
having a value equal to the amount of such taxes.
Amendments and Termination. The Board of Directors may at any
time amend or discontinue the 1998 Plan and the Committee may at
any time amend or cancel outstanding awards (or provide
substitute awards at the same or a reduced exercise or purchase
price) for the purpose of satisfying changes in the law or for
any other lawful purpose. However, no such action shall be taken
which adversely affects any rights under outstanding awards
without the holder's written consent. Moreover, no such
amendment, unless approved by the stockholders of the
Corporation, shall be effective if it would cause the 1998 Plan
to fail to satisfy any of the then applicable incentive stock
option rules under Federal tax law. Currently, the incentive
stock option regulations would require stockholder approval for
an increase in the maximum number of shares issuable pursuant to
Incentive Options under the 1998 Plan or a modification in
eligibility requirements under the 1998 Plan.
Change of Control Provisions. The 1998 Plan provides that in the
event of a "Change of Control" (as defined in the 1998 Plan) of
the Corporation all stock options shall automatically become
fully exercisable, unless otherwise determined by the Committee
at the time of grant. In addition, at any time prior to or after
a Change of Control, the Committee may accelerate the grant of
stock options and waive conditions and restrictions on any
outstanding stock options, to the extent it may determine
appropriate.
New Plan Benefits. Subject to the limitations set forth in the
1998 Plan, the number of options that will be granted to the
employee Directors, officers, employees and other key persons of
the Corporation and its subsidiaries is undeterminable at this
time, as any such grants are subject to the discretion of the
Committee.
The number of options that will be granted and estimated number
of shares that will be awarded to Non-Employee Directors in 1998
is set forth in the following table:
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NEW PLAN BENEFITS FOR NON-EMPLOYEE DIRECTORS
_______________________________________________________________________________
Annual Retainer
------------------------------------ Number of Shares
Number of Shares Subject to Stock
Name Dollar Value(1) of Capital Stock(2) Options (1)(3)
_______________________________________________________________________________
Leonid V. Azaroff $ 15,000 388 1,000
Leonard M. Baker 15,000 388 1,000
Edward L. Diefenthal (4) 10,320 267 687
Mildred S. Dresselhaus 15,000 388 1,000
Donald J. Harper 15,000 388 1,000
Gregory B. Howey 15,000 388 1,000
Leonard R. Jaskol 15,000 388 1,000
William E. Mitchell 15,000 388 1,000
Current Non-Employee
Directors as a Group (5) $109,680 2,837 7,313
(1) No dollar value is assigned to the stock options because
there is no difference between the exercise price of such
stock options and the fair market value of the Capital Stock
on the date of grant of the stock options.
(2) The number of shares is estimated by dividing the amount of
the retainer payable to the non-employee Directors in 1998
by the March 9, 1998 fair market value of the Capital Stock.
(3) The exercise price of each such option is the mean of the
highest and lowest selling price as of the date of grant.
Each such option is exercisable in full on the date of
grant.
(4) Currently not a Director, but nominated for the first time.
(5) Includes a Director retiring at the 1998 Annual Meeting of
Stockholders.
FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the principal Federal
income tax consequences of transactions under the 1998 Plan.
Incentive Options. Under the Code, a participant will not
recognize taxable income by reason of the grant or the exercise
of an Incentive Option. If a participant exercises an Incentive
Option and does not dispose of the shares of Capital Stock
acquired until the later of (a) two years from the date the
option was granted or (b) one year from the date shares were
transferred to the participant, the entire gain, if any, realized
upon disposition of such shares will be taxable to the
participant as capital gain, and the Corporation will not be
entitled to any deduction. If a participant disposes of the
shares within such two-year or one-year period in a manner so as
to violate the holding period requirements (a "disqualifying
disposition"), the participant generally will recognize ordinary
income in the year of disposition, and, provided the Corporation
complies with the applicable reporting requirements, the
Corporation will receive a corresponding deduction, in an amount
equal to the excess of (1) the lesser of (x) the amount, if any,
realized on the disposition and (y) the fair market value of the
shares on the date the option was exercised over (2) the option
price. Any additional gain realized on the disposition will be
capital gain and any loss will be capital loss. The participant
will be considered to have disposed of his or her shares of
Capital Stock if such participant sells, exchanges, makes a gift
of or transfers legal title to the shares (except by pledge or by
transfer on death). If the disposition is by gift and violates
the holding period requirements, the amount of the participant's
ordinary income (and the Corporation's deduction) is equal to the
fair market value of the shares on the date of exercise less the
option price. If the disposition is by sale or exchange, the
participant's tax basis will equal the amount paid for the shares
plus any ordinary income realized as a result of the
disqualifying disposition. The exercise of an Incentive Option
may subject the participant to the alternative minimum tax.
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<PAGE>
A participant who surrenders shares of Capital Stock in payment
of the exercise price of his or her Incentive Option generally
will not, under proposed Treasury Regulations, recognize gain or
loss on his or her surrender of such shares. The surrender
(either actually or by attestation) of shares of Capital Stock
previously acquired upon exercise of an Incentive Option in
payment of the exercise price of another Incentive Option is,
however, a "disposition" of such shares. If the Incentive Option
holding period requirements described above have not been
satisfied with respect to such shares, such disposition will be a
disqualifying disposition that may cause the participant to
recognize ordinary income as discussed above.
All of the shares of Capital Stock received by a participant upon
exercise of an Incentive Option by surrendering shares of Capital
Stock will be subject to the Incentive Option holding period
requirements. Of those shares, a number of shares (the "Exchange
Shares") equal to the number of shares of Capital Stock
surrendered by the participant will have the same tax basis for
capital gains purposes (increased by any ordinary income
recognized as a result of any disqualifying disposition of the
surrendered shares if they were Incentive Option shares) and the
same capital gains holding period as the shares surrendered. For
purposes of determining ordinary income upon a subsequent
disqualifying disposition of the Exchange Shares, the amount paid
for such shares will be deemed to be the fair market value of the
shares surrendered. The balance of the shares received by the
participant will have a tax basis (and a deemed purchase price)
of zero and a capital gains holding period beginning on the date
of exercise. The Incentive Option holding period for all shares
will be the same as if the option had been exercised for cash.
An Incentive Option may not be exercised by a participant more
than three months after the participant retires or otherwise
terminates employment. In the case of a participant who is
disabled, the three-month period is extended to one year. This
three-month requirement is waived for a participant who dies.
Non-Qualified Options. There are no Federal income tax
consequences to either an employee, a Non-Employee Director or
the Corporation on the grant of a Non-Qualified Option. Upon the
exercise of a Non-Qualified Option, such an individual (except as
described below) has taxable ordinary income equal to the excess
of the fair market value of the shares of Capital Stock received
on the exercise date over the option price of the shares. The
individual's tax basis for the Capital Stock acquired upon
exercise of a Non-Qualified Option is increased by the amount of
such taxable income. The Corporation will be entitled to a
Federal income tax deduction in an amount equal to such excess,
provided the Corporation complies with applicable withholding
rules. Upon the sale of the Capital Stock acquired by exercise
of a Non-Qualified Option, individuals will recognize capital
gain or loss depending upon their holding period for such shares.
A participant who surrenders (either actually or by attestation)
shares of Capital Stock in payment of the exercise price of a
Non-Qualified Option will not recognize gain or loss on his or
her surrender of such shares. Such an individual will recognize
ordinary income on the exercise of the Non-Qualified Option as
described above. Of the shares received in such an exchange,
that number of shares equal to the number of shares surrendered
will have the same tax basis and capital gains holding period as
the shares surrendered. The balance of the shares received will
have a tax basis equal to their fair market value on the date of
exercise, and the capital gains holding period will begin on the
date of exercise.
Non-Employee Directors Stock Awards. A Non-Employee Director
receiving awards of Capital Stock as retainer payments will
recognize ordinary taxable income at the time of grant in an
amount equal to the fair market value of the shares of Capital
Stock as of the date of grant. The individual's tax basis for
the Capital Stock received will equal the amount of ordinary
income recognized. The Corporation will be entitled to a Federal
income tax deduction in an equal amount. Upon the sale of the
Capital Stock, individuals will recognize capital gain or loss
depending upon their holding period for such shares.
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<PAGE>
The Taxpayer Relief Act of 1997 has created three different types
of capital gains for individuals: short-term gains (on assets
held for one year or less) which are taxed at ordinary income
rates; mid-term capital gains (from the sale of assets held more
than a year but not more than 18 months) which are taxed at a
maximum rate of 28 percent; and long-term capital gains (from the
sale of assets held more than 18 months) which are taxed at a
maximum rate of 20 percent.
As a result of Section 162(m) of the Code, the Corporation's
deduction for Non-Qualified Options may be limited to the extent
that a "covered employee" (i.e., the chief executive officer or
any one of the four most highly compensated officers who is
employed on the last day of the Corporation's taxable year and
whose compensation is reported in the Summary Compensation Table)
receives compensation in excess of $1,000,000 in such taxable
year of the Corporation, other than performance-based
compensation that otherwise meets the requirements of Section
162(m) of the Code. The 1998 Plan is intended to meet these
requirements with the result that the Corporation should not lose
the benefit of any tax deductions by reason of Section 162(m).
EFFECTIVE DATE OF 1998 PLAN
The 1998 Plan shall become effective upon approval by the holders
of a majority of the shares of Capital Stock present or
represented and entitled to vote at the 1998 Annual Meeting of
Stockholders. Grants of stock options or other awards may be
made prior to such approval, but no Capital Stock will be issued
prior and subject to such approval.
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PROPOSAL 3: PROPOSAL TO AMEND THE RESTATED ARTICLES OF
ORGANIZATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
CAPITAL STOCK
PROPOSAL
On December 17, 1997, the Board of Directors unanimously
approved, and recommends that the Corporation's stockholders
consider and approve an amendment (the "Amendment") to the
Corporation's Restated Articles of Organization, as amended (the
"Restated Articles of Organization"), to increase the number of
authorized shares of Capital Stock, $1 par value, from 25,000,000
to 50,000,000.
As of February 25, 1998, of the 25,000,000 shares of Capital
Stock currently authorized for issuance under the Restated
Articles of Organization, 7,591,730 shares were outstanding, and
13,411,672 shares were reserved for issuance under the
Corporation's stock option and employee benefit plans and the
Rights Agreement, as amended through July 7, 1997 (the "Rights
Agreement") between the Corporation and Registrar and Transfer
Company, as Rights Agent (the "1997 Shareholder Rights Plan").
The Board of Directors believes that the Amendment increasing the
number of authorized shares is desirable and in the best
interests of the Corporation because it will provide the
Corporation with more flexibility to issue additional shares of
Capital Stock as the need may arise without the expense and time
required for a special meeting of the stockholders, unless
stockholder approval is otherwise required by applicable law or
the rules of the American Stock Exchange, Inc., the Pacific
Exchange, Inc., or any other stock exchange on which the
Corporation's Capital Stock may then be listed. Such shares may
be issued by the Board of Directors in connection with possible
future stock dividends or stock splits, financing transactions,
strategic investments or acquisitions, current and future stock
option and employee benefit plans, the 1997 Shareholder Rights
Plan and other proper corporate purposes. However, the Board of
Directors has no present plans or commitments regarding the
issuance of the proposed additional authorized shares of Capital
Stock.
Each additional share of Capital Stock authorized by the proposed
Amendment, if and when issued, will have the same rights and
privileges as each share of Capital Stock currently authorized,
issued and outstanding, including the right, upon issuance, to
receive a Right under the 1997 Shareholder Rights Plan as
described below. Stockholders of the Corporation do not now have
statutory preemptive rights to subscribe for or purchase
additional shares of Capital Stock and stockholders will have no
statutory preemptive rights to receive or purchase any of the
shares of Capital Stock authorized by the proposed Amendment.
The increase in authorized Capital Stock will not have any
immediate effect on the rights of existing stockholders. To the
extent that the additional authorized shares are issued in the
future, however, they will decrease the existing stockholders'
percentage equity ownership and, depending on the price at which
they are issued, could be dilutive to the existing stockholders.
The increase in the number of authorized shares of Capital Stock
could have an anti-takeover effect. Shares of authorized and
unissued Capital Stock could be issued in one or more
transactions that would make a takeover of the Corporation more
difficult, and therefore less likely. Any such issuance of
additional shares of Capital Stock could have the effect of
diluting the earnings per share and book value per share of
outstanding shares of Capital Stock, and such additional shares
could be used to dilute the stock ownership or voting rights of
persons seeking to obtain control of the Corporation.
On February 25, 1997, pursuant to the 1997 Shareholder Rights
Plan, the Board of Directors declared a dividend distribution of
one share purchase right (a "Right") for each outstanding share
of Capital Stock held of record on March 31, 1997 (the "Rights
Plan Record Date"). One Right will also be issued with each
share of Capital Stock issued between March 31,1997, and the
earlier of the Distribution Date (as such term is defined below)
or the redemption, exchange or expiration of the Rights. Each
Right entitles the registered holder to purchase from the
Corporation one share of Capital Stock at a price of $120 per
share (the "Purchase Price"), subject to adjustment.
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Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or has obtained the
right to acquire, beneficial ownership of 20% or more of the then
outstanding shares of Capital Stock or (ii) 10 days following the
commencement or announcement of an intention by any person to
make a tender offer or exchange offer if, upon consummation
thereof, such person would be the beneficial owner of 20% or more
of such outstanding shares of Capital Stock, (the earlier of such
dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Capital Stock share certificates
outstanding as of the Rights Plan Record Date, by such Capital Stock share
certificate with a copy of a summary of Rights attached thereto.
Until the Distribution Date, the Rights will be transferred only
with shares of Capital Stock. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new Capital
Stock share certificates issued after the Rights Plan Record Date
upon transfer or new issuance of shares of Capital Stock will
contain a notation incorporating the Rights Agreement by
reference. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of shares of
Capital Stock on the Distribution Date and such separate Rights
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on March 30, 2007 (the "Final Expiration
Date"), unless earlier redeemed or exchanged by the Corporation
as described below.
In the event that after the Distribution Date the Corporation
should consolidate or merge with and into any other person and
the Corporation is not the surviving company, or, if the
Corporation should be the surviving company, all or part of the
shares of Capital Stock are changed or exchanged for securities
of any other person or if 50% or more of its consolidated assets
or earning power are sold, proper provision will be made so that
each holder of a Right will thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price,
that number of shares of common stock of the acquiring company
which at the time of such transaction will have the market value
of two times the Purchase Price. In the event that any person
becomes an Acquiring Person or any Acquiring Person or any
affiliate or associate of any Acquiring Person enters into a
merger, combination or certain other defined transactions with
the Corporation, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the
Acquiring Person or any affiliate or associate of an Acquiring
Person (which will thereafter be null and void), will thereafter
have the right to receive upon the exercise thereof at the then
current Purchase Price, that number of shares of Capital Stock
which at such time will have a market value of two times the
Purchase Price.
At any time after a person or group becomes an Acquiring Person
and prior to the acquisition by such person or group of 50% or
more of the outstanding shares of Capital Stock, the Board of
Directors of the Corporation may exchange the Rights (other than
Rights owned by such person or group which have become null and
void), in whole or in part, at an exchange ratio of one share of
Capital Stock per Right (subject to adjustment).
At any time prior to the earlier of (i) 10 days following the
date that a person or group of affiliated or associated persons
becomes an Acquiring Person (subject to extension by the Board of
Directors of the Corporation) or (ii) the Final Expiration Date,
the Board of Directors of the Corporation may redeem the Rights
in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price").
The Corporation's Restated Articles of Organization require a two-
thirds vote of stockholders to approve a merger or consolidation
of the Corporation with or into another corporation unless no
stockholder approval is required by statute. This provision
could have the effect of making it more difficult to gain control
of the Corporation. The Corporation has also entered into change
in control protection agreements with each of its officers
providing for severance benefits in the event of the termination
of their employment during a 36 month period following a change
in control of the Corporation. See "Other Arrangements and
Payments" above. These agreements could have the effect of
increasing the cost of any attempt to gain control of the
Corporation.
The Corporation is not aware of any efforts to accumulate the
Corporation's Capital Stock or to obtain control of the
Corporation. The proposed Amendment is not part of any plan by
the Corporation to adopt a series of anti-takeover measures.
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The affirmative vote of a majority of the outstanding shares of
Capital Stock of the Corporation is required for the adoption of
the Amendment to the Restated Articles of Organization.
RECOMMENDATION
The Board of Directors recommends a vote FOR the Amendment to the
Restated Articles of Organization.
AUDIT MATTERS
It is expected that Ernst & Young LLP, the Corporation's
independent auditors selected as the independent auditors for the
fiscal years ended December 28, 1997, and ending January 3, 1999,
will be represented at the annual meeting, with an opportunity to
make a statement if they so desire, and will be available to
respond to appropriate questions.
In addition to the audit of the 1997 financial statements, the
Corporation engaged Ernst & Young LLP to perform certain other
services, including income tax consultation and assistance in
connection with corporate tax planning.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Corporation's executive officers and Directors, and
persons who own more than 10% of the Corporation's Capital Stock,
to file reports of ownership and changes in ownership on Forms 3,
4 and 5 with the Securities and Exchange Commission, the American
Stock Exchange, Inc. and the Pacific Exchange, Inc. Executive
officers, Directors and greater than 10% stockholders are
required to furnish the Corporation with copies of all Forms 3, 4
and 5 they file.
Based solely on the Corporation's review of the copies of such
Forms it has received and written representations from certain
reporting persons that they were not required to file Form 5's
for specified fiscal years, the Corporation believes that all of
its executive officers and Directors complied with all Section
16(a) filing requirement applicable to them during the
Corporation's fiscal year ended December 28, 1997, except as
follows: as a result of the Corporation's error,
Leonid V. Azaroff filed a Form 4 late reporting the sale of 9,790
shares of Capital Stock; Harry H. Birkenruth filed a Form 5 late
reporting a charitable contribution of 90 shares of Capital
Stock; and John A. Richie filed a Form 4 late reporting the
exercise of an option to purchase 900 shares of Capital Stock.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 1999
Annual Meeting of Stockholders must be received by the
Corporation on or before November 16, 1998, for inclusion in the
Corporation's proxy statement and form of proxy.
SOLICITATION OF PROXIES
The cost of solicitation of proxies will be borne by the
Corporation. In addition to solicitations by mail, officers and
employees of the Corporation may solicit proxies personally and
by telephone, facsimile or other means, for which they will
receive no compensation in addition to their normal compensation.
Arrangements will also be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of
proxies and proxy soliciting materials to the beneficial owners
of Capital Stock held of record by such persons, and the
Corporation will, upon request, reimburse them for their
reasonable expenses in doing so. The Corporation has retained
Corporate Investor Communications, Inc. to assist in the solicitation of
proxies at a cost to the Corporation of approximately $6,000 plus
expenses.
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EXHIBIT A
ROGERS CORPORATION
1998 STOCK INCENTIVE PLAN
SECTION 1. General Purpose of the Plan; Definitions.
The name of the plan is the Rogers Corporation 1998 Stock
Incentive Plan (the "Plan"). The purpose of the Plan is to
advance the interests of Rogers Corporation (the "Company"), its
Subsidiaries and its stockholders by providing officers,
employees, other key persons and Non-Employee Directors with an
incentive to achieve superior Company performance, by encouraging
them to take an equity interest in the success of the Company
through Stock ownership, and by enabling the Company to attract
and retain the services of officers, employees, other key persons
and Non-Employee Directors upon whose judgment, interest, and
special effort the successful conduct and profitability of its
operations are largely dependent.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Award" or "Awards," except where referring to a particular
category of grant under the Plan, shall include Incentive
Stock Options, Non-Qualified Stock Options, and Non-Employee
Director Stock Awards.
"Award Agreement" means the agreement (if any) executed and
delivered to the Company by the recipient of an Award.
"Board" means the Board of Directors of the Company.
"Change of Control" is defined in Section 11.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor code, and related rules, regulations and
interpretations.
"Committee" means the Compensation and Organization
Committee of the Board so long as it is composed of two or
more Non-Employee Directors that are "outside directors"
within the meaning of Section 162(m) of the Code and "non-
employee directors" within the meaning of Rule 16b-
3(b)(3)(i) of the Act; if said committee at any time fails
to be so composed, "Committee" shall mean a committee
appointed by the Board that is so composed.
"Disability" means (1) for purposes of Incentive Stock
Options, disability as set forth in Section 22(e)(3) of the
Code and (2) for purposes of Non-Qualified Stock Options,
any medically determinable physical or mental impairment
which the Committee determines generally qualifies as a
"disability" for purposes of the employee benefits for which
such individual is eligible.
"Effective Date" means January 1, 1998.
"Fair Market Value" as of any given date means the mean of
the highest and lowest selling prices for Stock as quoted in
the American Stock Exchange Composite Transactions in The
Wall Street Journal on the business day immediately
preceding that particular date (or, if the Stock ceases to
be traded on the American Stock Exchange, as determined
based on such other method as is designated by the
Committee).
"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.
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"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.
"Retainer Payment Date" means the day in June and day in
December of each calendar year which are designated by the
Company as the dates upon which is payable one half 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 (1) that, for any individual who
is eligible to participate in the Rogers Corporation Defined
Benefit Pension Plan, qualifies as retirement under such
plan and (2) that, for any individual who is not eligible to
participate in the Rogers Corporation Defined Benefit
Pension Plan, the Committee determines generally qualifies
as retirement for purposes of the employee benefits for
which such individual is eligible.
"Stock" means the Capital Stock, $1.00 par value, of the
Company, subject to adjustments pursuant to Section 3.
"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 30% 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.
"Subsidiary Corporation" means a subsidiary corporation
within the meaning of Section 424(f) of the Code.
SECTION 2. Administration of Plan; Committee Authority to Select
Participants and Determine Awards, Etc.
a) Committee. The Plan shall be administered by the
Committee. All determinations, interpretations,
decisions and selections made by the Committee pursuant
to this Plan shall be made by vote of a majority of the
Committee present at a meeting at which a majority of
members is present or by the unanimous written consent
of the members of the Committee. Determinations,
interpretations, or other actions made or taken by the
Committee shall be pursuant to and in accordance with
the provisions of the Plan, shall be made or taken in
the Committee's sole discretion and shall be final,
binding and conclusive for all purposes and upon all
persons whomsoever.
b) Powers of Committee. The Committee shall have the
power and authority to grant Awards and to administer
the Plan, consistent with the terms of the Plan,
including the power and authority:
i) to select the officers and employees and other key
persons of the Company or its Subsidiaries 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 or Non-
Qualified Stock Options or any combination of the
foregoing, granted to such participants;
iii) to determine the number of shares to be covered by
any Award;
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iv) to determine and modify 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
participants, and to approve the form of Award
Agreements; provided, however, that no such action
may be taken with respect to outstanding Award
Agreements without the written consent of the
optionee;
v) to determine and/or accelerate the exercisability
or vesting of all or any portion of any Option;
vi) subject to the provisions of Section 5(a)(ii), to
extend the period during which Options may be
exercised;
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
participant 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)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 Award Agreements and any other 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
participants.
SECTION 3. Shares 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 the sum of (a) 750,000 shares of Stock; plus
(b) the shares of Stock underlying any Awards which are
forfeited, cancelled, satisfied without the issuance of
Stock or otherwise terminated (other than by exercise);
plus (c) a number of shares of Stock equal to the
number of shares repurchased by the Company in the open
market or otherwise having an aggregate repurchase
price no greater than the amount of cash proceeds
received by the Company from the sale of shares of
Stock under the Plan; plus (d) any shares of Stock
surrendered to the Company in payment of the exercise
price of Options issued under the Plan and/or
withholding taxes. Notwithstanding the foregoing, the
maximum number of shares of Stock for which Incentive
Stock Options may be granted under the Plan shall not
exceed 750,000 shares, reduced by the aggregate number
of shares issued under the Plan and the aggregate
number of shares subject to outstanding Awards granted
under the Plan. Subject to such overall limitation,
shares may be issued up to such maximum number pursuant
to any type or types of Award; provided, however, that
no Awards for more than 100,000 shares of Stock may be
granted to any one individual during any twelve-month
period, subject to adjustment pursuant to Section 3(b)
below. Shares issued under the Plan may be authorized
but unissued shares or shares reacquired by the
Company.
b) Stock Dividends, Mergers, etc. In the event of a stock
dividend, stock split or similar change in
capitalization affecting the Stock, the Committee shall
make appropriate adjustments in (i) the number and kind
of shares of Stock or securities on which Awards may
thereafter be granted, (ii) the number and kind of
shares remaining subject to outstanding Awards, and
(iii) the option or purchase price in respect of such
shares. In the event of any merger, consolidation,
dissolution or liquidation of the Company, the
Committee in its sole discretion may, as to any
outstanding Awards, make such substitution or
adjustment in the aggregate number of shares reserved
for issuance under the Plan and in the number and
purchase price (if any) of shares subject to such
Awards as it may determine and as may be permitted by
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the terms of such transaction, or accelerate, amend or
terminate such Awards upon such terms and conditions as
it shall provide (which, in the case of the termination
of the vested portion of any Award, shall require
payment or other consideration which the Committee
deems equitable in the circumstances), subject, however
to the provisions of Section 11.
c) Substitute Awards. The Company may grant Awards under
the Plan in substitution for stock and stock based
awards held by employees of another corporation who
concurrently become employees of the Company or a
Subsidiary as the result of a merger or consolidation
of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a
Subsidiary of property or stock of the employing corporation.
The Committee may direct that the substitute awards be
granted on such terms and conditions as the Committee
considers appropriate in the circumstances.
SECTION 4. Eligibility.
Participants in the Plan will be those officers and employees and
other key persons of the Company or its Subsidiaries who are
responsible for or contribute to the management, growth or
profitability of the Company and its Subsidiaries and who 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 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 Corporation. To the extent that any option does not
qualify as an Incentive Stock Option, it shall constitute a Non-
Qualified Stock Option. All Stock Options granted to Non-
Employee Directors shall be Non-Qualified Stock Options.
No Incentive Stock Option shall be granted under the Plan
following the 10th anniversary of the Effective Date.
a) Grant of Stock Options. The Committee in its sole
discretion may grant Stock Options to officers,
employees and other key persons of the Company or any
Subsidiary. Stock Options granted to such employees
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:
i) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be
determined by the Committee at the time of grant
but shall be, in the case of Incentive Stock
Options, not less than 100% of Fair Market Value
as of the date of grant, and in the case of Non-
Qualified Stock Options, not less than 85% of Fair
Market Value as of the date of grant. If an
employee owns or is deemed to own (by reason of
the attribution rules applicable under Section
424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the
Company or any Subsidiary Corporation or parent
corporation and an Incentive Stock Option is
granted to such employee, the option price shall
be not less than 110% of Fair Market Value as of
the date of grant.
ii) Option Term. The term of each Stock Option shall
be fixed by the Committee, but no Stock Option
shall be exercisable more than ten years after the
date the 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 Subsidiary Corporation
or parent corporation and an Incentive Stock
Option is granted to such employee, the term of
such option shall be no more than five years from
the date of grant.
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iii) Exercisability; Rights of a Stockholder. Stock
Options shall become vested and exercisable at
such time or times, whether or not in
installments, as shall be determined by the
Committee. An optionee shall have the rights of a
stockholder only as to shares acquired upon the
exercise of a Stock Option and not as to any
shares of Stock covered by 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 which evidences the
shares acquired by an optionee.
iv) Method of Exercise. Stock Options may be
exercised in whole or in part, by giving written
notice of exercise to the Company, specifying the
number of shares to be purchased. Payment of the
purchase price may be made by one or more of the
following methods:
(1) In cash, by certified or bank check or
other instrument acceptable to the
Company;
(2) In the form of shares of Stock (either
actually or by attestation) that the
optionee has beneficially owned for more
than six months and that are not then
subject to restrictions under any
Company plan. Such surrendered or
attested shares shall be valued at Fair
Market Value on the exercise date; or
(3) Delivery by a broker of cash, a
certified or bank check or other
instrument payable and acceptable to the
Company to pay the option purchase
price; provided that in the event the
optionee chooses to pay the option
purchase 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 purchased 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 applicable Award Agreement)
by the Company of the full purchase price for such shares and the
fulfillment of any other requirements contained in the Award
Agreement or applicable provisions of laws. In the event an
optionee chooses to pay the purchase price by previously-owned
shares of Stock through the attestation method, only the net
amount of shares shall be issued.
v) Non-transferability of Options. Subject to the
approval of the Committee, an optionee may
transfer a Non-Qualified Stock Option to a family
member, trust, or charitable organization to the
extent permitted by applicable law, provided that
the transferee agrees in writing with the Company
to be bound by all of the terms and conditions of
such Option and this Plan. Except as permitted in
the preceding sentence, no Stock Option shall be
transferable by the optionee otherwise than by
will or by the laws of descent and distribution
and all Stock Options shall be exercisable, during
the optionee's lifetime, only by the optionee.
vi) 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 Stock with respect to which
Incentive Stock Options granted under this Plan
and any other plan of the Company or its
Subsidiaries or any parent corporation 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.
vii) Form of Settlement. Shares of Stock issued upon
exercise of a Stock Option shall be free of all
restrictions under the Plan except as otherwise
provided in the Plan.
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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, a Non-Qualified Stock
Option to purchase 500 shares of Stock (or, with
respect to any individual who has become or ceased
to be a Non-Employee Director since the later of
the Effective Date or the last Retainer Payment
Date, an amount equal to a prorated portion of 500
shares as determined on an equitable basis by the
Company (the "Partial Retainer")). 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; Non-transferability. Each
Option granted under Section 5(b) is immediately
exercisable on 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 Director.
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,
including, without limitation, the restrictions on
transferability contained in Section 5(a)(v).
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 of the Company. 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.
SECTION 6. Non-Employee Director Stock Awards.
a) Stock Awards. 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.
b) Deferral of Awards. Each Non-Employee Director who is
entitled to an Award under Section 6(a) above, will
have the right to defer up to 100% of such Award in
accordance with such rules and procedures as may from
time to time be established by the Company for that
purpose. 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 at the same
time and in the same manner as the shares of Stock to
which they relate.
SECTION 7. Tax Withholding.
a) Payment by Participant. Each participant 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 includible in the gross income of the
participant for Federal income tax purposes, pay to the
Company, or make arrangements satisfactory to the
Company regarding payment of, any 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 law,
have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
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b) Payment in Shares. Subject to the consent or
disapproval of the Committee, a participant may elect
to have such 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 participant with an aggregate Fair
Market Value (as of the date the withholding is
effected) that would satisfy the withholding amount
due.
SECTION 8. 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;
b) an approved leave of absence for military service or
sickness, or for any other purpose approved by the
Company or the Subsidiary, 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 9. 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
(or provide substitute Awards at the same or reduced exercise or
purchase price or with no exercise or purchase price, but such
price, if any, must satisfy the requirements which would apply to
the substitute or amended Award if it were then initially granted
under this Plan) 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
written consent. However, no such amendment, unless approved by
the stockholders of the Company, shall be effective if it would
cause the Plan to fail to satisfy the incentive stock option
requirements of the Code.
SECTION 10. Status of Plan.
With respect to the portion of any Award which has not been
exercised and any payments in cash, Stock or other consideration
not received by a participant, a participant shall have no rights
greater than those of a 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
provision of the foregoing sentence.
SECTION 11. Change of Control.
Upon the occurrence of a Change of Control as defined in this
Section 11:
a) Each Stock Option shall automatically become fully
exercisable unless the Committee shall otherwise
expressly provide at the time of grant.
b) "Change of Control" shall mean the occurrence of any
one of the following events:
i) any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the Act) becomes a
"beneficial owner" (as such term is defined in
Rule 13d-3 promulgated under the Act) (other than
the Company, any trustee or other fiduciary
holding securities under an employee benefit plan
of the Company, or any corporation owned, directly
or indirectly, by the stockholders of the Company
in substantially the same proportions as their
ownership of stock of the Company), directly or
indirectly, of securities of the Company
representing twenty percent (20%) or more of the
combined voting power of the Company's then
outstanding securities; or
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ii) persons who, as of the Effective Date, constitute
the Company's Board (the "Incumbent Board") cease
for any reason, including without limitation as a
result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a
majority of the Board, provided that any person
becoming a Director of the Company subsequent to
the Effective Date whose nomination or election
was approved by at least a majority of the
Directors then comprising the Incumbent Board
shall, for purposes of this Plan, be considered a
member of the Incumbent Board; or
iii) the stockholders of the Company approve a merger
or consolidation of the Company with any other
corporation or other entity, other than (a) a
merger or consolidation which would result in the
voting securities of the Company outstanding
immediately prior thereto continuing to represent
(either by remaining outstanding or by being
converted into voting securities of the surviving
entity) more than 60% of the combined voting power
of the voting securities of the Company or such
surviving entity outstanding immediately after
such merger or consolidation or (b) a merger or
consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than
20% of the combined voting power of the Company's then
outstanding securities; or
iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an
agreement for the sale or disposition by the
Company of all or substantially all of the
Company's assets.
SECTION 12. General Provisions.
a) No Distribution, Compliance with Legal Requirements.
The Committee may require each person acquiring shares
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 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 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) Other Compensation Arrangements; No Employment Rights.
Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation
arrangements, subject to stockholder approval if such
approval is required; and such arrangements may be
either generally applicable or applicable only in
specific cases.
SECTION 13. Rights of Employees.
Nothing in the Plan shall interfere with or limit in any way the
right of the Company or Subsidiary to terminate any individual's
employment at any time, nor confer upon any individual any right
to continue in the service of the Company or any Subsidiary. No
individual shall have a right to be granted a Stock Option
pursuant to the terms of the Plan or, having received a Stock
Option, to again be granted a Stock Option.
SECTION 14. Governing Law.
The Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the Commonwealth of
Massachusetts.
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SECTION 15. Effective Date of Plan.
The Plan shall become effective upon approval by the holders
of a majority of the shares of Capital Stock of the Company
present or represented and entitled to vote at a meeting of
stockholders. Subject to such approval by the stockholders, and
to the requirement that no Stock may be issued hereunder prior to
such approval, Awards may be granted hereunder by the Committee
on and after adoption of the Plan by the Board.
Executed this 18th day of December, 1997.
ROGERS CORPORATION
By: /s/ Robert M. Soffer
Robert M. Soffer, Treasurer
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BACK COVER
ROGERS
SINCE 1832
Rogers Corporation
One Technology Drive
P.O. Box 188
Rogers, CT 06263-0188
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REVOCABLE PROXY
ROGERS CORPORATION
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS - APRIL 23, 1998
The undersigned hereby appoints DALE S. SHEPHERD 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 23, 1998, at 10:30 a.m. in the Boardroom on
the 26th floor of Fleet National 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.
1. ELECTION OF DIRECTORS (except as marked to the contrary
below):
Leonid V. Azaroff, Leonard M. Baker,
Harry H. Birkenruth, Walter E. Boomer,
Edward L. Diefenthal, Mildred S. Dresselhaus,
Donald J. Harper, Gregory B. Howey, Leonard R. Jaskol
and William E. Mitchell.
[ ] FOR [ ] WITHHOLD [ ] EXCEPT
INSTRUCTION: To withhold authority to vote for any
individual nominee(s), mark "Except" and write that
nominee's name in the space provided below.
------------------------------------------------------
2. PROPOSAL to approve the Corporation's 1998 Stock
Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL to amend the Corporation's Restated Articles
of Organization to increase the authorized Capital
Stock, $1 par value per share, to 50,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED
AS SPECIFIED OR, WHERE NO DIRECTION IS GIVEN, WILL
BE VOTED FOR THE ELECTION OF THE NOMINEES AS
DIRECTORS AND FOR PROPOSALS 2 AND 3, AND AT THE
DISCRETION OF THE PROXIES ON ANY OTHER MATTERS
THAT MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY IS SOLICITATED ON BEHALF OF THE BOARD
OF DIRECTORS.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF THE NOMINEES AS DIRECTORS AND FOR PROPOSALS
2 AND 3.
Please be sure to date and sign this Proxy in the box below.
-------------------
Date
------------------------------
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 title.
PLEASE ACT PROMPTLY
DATE, SIGN & MAIL YOUR PROXY CARD TODAY
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