Exhibit 10r
SUMMARY OF DIRECTOR AND EXECUTIVE OFFICER COMPENSATION.
I. DIRECTOR COMPENSATION. The following table sets forth current rates
of cash compensation for non-employee directors.
Annual Retainer
- ---------------
Audit Committee Chairperson $30,000
Compensation and Organization Committee Chairperson $30,000
Lead Director Annual Retainer $30,000
Each Other Non-Employee Director $25,000
Board Meeting Attendance Fees
- -----------------------------
Non-Employee Directors $1,260
Committee Meeting Attendance Fees
- ---------------------------------
Committee Chairpersons $1,500
Committee Members $1,000
Telephone Meetings 50% of the fee entitled
had meeting been held in
person
Under the 1998 Stock Incentive Plan, the retainer fee for non-employee
directors is paid semi-annually in shares of Rogers capital stock, with the
number of shares of stock granted based on their then fair market value. Stock
options are also granted to each non-employee director twice a year. In 2004,
such semi-annual stock option grants were for 2,250 shares each, and in both
cases with an exercise price equal to the fair market value of a share of Rogers
capital stock as of the date of grant. Such options are immediately exercisable
and expire ten years from the date of grant.
Under Rogers Voluntary Deferred Compensation Plan for Non-Employee
Directors, such individuals may defer all or a portion of their annual retainer
and meeting fees, regardless of whether such amounts would have been paid in
cash or in Rogers capital stock.
II. EXECUTIVE COMPENSATION. The following table sets forth the base
salaries provided to the current Executive Officers of Rogers Corporation as of
the dates shown below.
Annual Salary Annual Salary
Executive Officer 4/1/04 4/1/05
----------------- ------ ------
Robert D. Wachob $384,098 $416,338
President and Chief Executive Officer
Robert C. Daigle $196,536 $214,006
Vice President, R&D
Chief Technology Officer
John A. Richie $181,778 $190,762
Vice President, Human Resources
Robert M. Soffer $173,036 $181,584
Vice President, Treasurer and Secretary
Paul B. Middleton $168,038 $178,126
Acting Chief Financial Officer
and Corporate Controller
..
Executive Officers are also eligible to receive a bonus each year under
the Rogers Annual Incentive Compensation Plan. The Annual Incentive Compensation
Plan has target bonuses of 60% to 75% of base salary for the CEO, and between
25% and 45% for the other executive officers, including the other current
executive officers. Actual bonuses may vary from 0% to 300% of the target
bonuses depending on performance relative to annual profit improvement
objectives. These amounts are determined by the performance of Rogers (Net
Income Per Share) and each division (Division Profit) versus the annual
objectives. In general, the broader the responsibility of the executive, the
larger the portion of his or her award which is based upon corporate, rather
than divisional results; the corporate portion is 100% for the current executive
officers. For 2004, overall corporate performance exceeded last year's results,
which is the bonus threshold, and, as a result, all of the current executive
officers earned a bonus.
Bonuses earned by the Company's current executive officers for fiscal
year 2004 are shown in the following table.
Fiscal Year
Executive Officer 2004 Bonus
----------------- ----------
Robert D. Wachob $524,021
President and Chief Executive Officer
Robert C. Daigle $142,794
Vice President, R&D
Chief Technology Officer
John A. Richie $130,950
Vice President, Human Resources
Robert M. Soffer $103,881
Vice President, Treasurer and Secretary
Paul B. Middleton $99,983
Acting Chief Financial Officer and
Corporate Controller
III. EXECUTIVE OFFICER STOCK OPTION GRANTS. Executive officers of the
Company are eligible to receive option grants each year, based on the
individual's level in the organization, the same performance criteria used to
determine salary adjustments, the number of shares granted in prior years and
the total number of shares available for grants. These criteria are not
weighted. Options generally have an exercise price equal to at least the fair
market value of the Rogers stock as of the date of grant. Regular options
generally have a ten-year life and generally vest in one-third increments on the
second, third and fourth anniversary dates of the grant. Options granted to
employees in 2004 had a special vesting schedule and selling restriction. All
such 2004 options were immediately vested upon grant, but any options exercised
during the first four years after the grant date cannot be sold while the
individual is still actively employed by Rogers. Termination of employment
because of retirement, or for other reasons, may shorten the vesting schedule
and expiration date.
Option grants made to current executive officers in 2004 are as shown
in the following table:
Executive Officer Option Grants (1)
----------------- ------------------
(in shares)
Robert D. Wachob 40,000
President and Chief Executive Officer
Robert C. Daigle 15,000
Vice President, R&D
Chief Technology Officer
John A. Richie 13,000
Vice President, Human Resources
Robert M. Soffer 8,000
Vice President, Treasurer and Secretary
Paul B. Middleton 7,000
Acting Chief Financial Officer and
Corporate Controller
(1)The exercise price of all options was $59.85/share.
IV. RETIREMENT PLANS. The Company also maintains the Rogers Corporation
Defined Benefit Pension Plan (the "Pension Plan"), for which the current
Executive Officers are eligible. The Pension Plan Table below reflects estimated
annual benefits payable at age 65, the normal retirement age, at various
compensation levels and years of service pursuant to Rogers' non-contributory
defined benefit pension plans for domestic salaried employees.
Annual Pension Benefits (1) (2)
-------------------------------------------------------------------------------
Final Average Years of Service
- -------------------------------------------------------------------------------------------------
Earnings (3) 5 years 10 years 15 years 20 years 25 years 30 years
- -------------------------------------------------------------------------------------------------
$125,000 $10,020 $20,050 $30,070 $40,100 $50,120 $60,150
150,000 12,210 24,420 36,640 48,850 61,060 73,270
175,000 14,400 28,800 43,200 57,600 72,000 86,400
200,000 16,590 33,170 49,760 66,350 82,930 99,520
225,000 18,770 37,550 56,320 75,100 93,870 112,650
250,000 20,960 41,920 62,890 83,850 104,810 125,770
275,000 23,150 46,300 69,450 92,600 115,750 138,900
300,000 25,340 50,670 76,010 101,350 126,680 152,020
325,000 27,520 55,050 82,570 110,100 137,620 165,150
350,000 29,710 59,420 89,140 118,850 148,560 178,270
375,000 31,900 63,800 95,700 127,600 159,500 191,400
400,000 34,090 68,170 102,260 136,350 170,430 204,520
425,000 36,270 72,550 108,820 145,100 181,370 217,650
450,000 38,460 76,920 115,390 153,850 192,310 230,770
475,000 40,650 81,300 121,950 162,600 203,250 243,900
500,000 42,840 85,670 128,510 171,350 214,180 257,020
(1) Benefits are calculated on a single life annuity basis.
(2) Federal law limits the amount of benefits payable under tax qualified
plans, such as the Rogers Corporation Defined Benefit Pension Plan. Rogers
has adopted a non-qualified retirement plan (the "Pension Restoration
Plan") for: (i) the payment of amounts to all plan participants who may be
affected by such federal benefit limitations and other plan provisions; and
(ii) the payment of supplemental amounts to certain senior executives
specified by the Compensation and Organization Committee of the Board of
Directors. In general, the total pension benefit due an individual will be
actuarially equivalent to the amount calculated under Rogers' qualified
pension plan as if such federal benefit limitations did not exist, as if
covered compensation included amounts deferred under a deferral plan, and
for certain senior executives specified by the Compensation and
Organization Committee of the Board of Directors, as if covered
compensation included bonuses paid on or after January 1, 2004, as
described in footnote 3 below. Accordingly, the benefits shown have not
been reduced by such limitations or provisions.
(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, whether or not deferred under a deferral
plan, and for certain senior executives over age 55 that have been
specified by the Compensation and Organization Committee of the Board of
Directors, including Messrs. Wachob, Richie and Soffer, covered
compensation under the Pension Restoration Plan also includes bonuses paid
on or after January 1, 2004, and will include bonuses paid before January
1, 2004 in the event of their death, disability, or termination of
employment that results in the payment of severance. If there is a change
in control of Rogers, covered compensation under the Pension Restoration
Plan for these senior executives and for certain additional senior
executives that have been specified by the Compensation and Organization
Committee of the Board of Directors will also include bonuses paid before
January 1, 2004. If there is a change in control of Rogers, the Pension
Restoration Plan provides that benefits payable under such plan shall be
reduced to an amount so that such benefits would not constitute so-called
"excess parachute payments" under applicable provisions of the Internal
Revenue Code of 1986. The five-year average earnings for Messrs. Wachob,
Daigle, Richie, Soffer, and Middleton and their estimated years of credited
service are: Mr. Wachob, $306,093 and 22 years; Mr. Daigle, $170,316 and 17
years; Mr. Richie, $163,821 and 28 years; Mr. Soffer, $159,604 and 26
years; and Mr. Middleton, $160,160 and 4 years.
V. TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS.
Rogers' severance policy for regular, full-time salaried employees provides, in
general, for continuation of salary payments, health insurance and certain other
benefits for employees whose employment has been involuntarily terminated. The
number of weeks of salary and benefits continuance is based on length of
service. The policy may be amended, modified or terminated at any time by
Rogers, except in the case of the executive officers of Rogers as of November
1991. Such officers may elect the benefits of either the policy in effect in
November 1991, or the severance policy, if any, which may be in existence at the
time each such individual's employment terminates. The right of executive
officers to make such an election may be cancelled by Rogers or the executive on
three years written notice. Messrs. Wachob and Soffer would be entitled to 78
weeks of salary and benefit continuance upon termination of employment covered
by the policy in effect in November 1991.
The board of directors determined that it would be in the best
interests of Rogers to ensure that the possibility of a change in control of
Rogers would not interfere with the continuing dedication of Rogers executive
officers to their duties to Rogers and its shareholders. Toward that purpose,
Rogers has agreements with all current Executive Officers which provide certain
severance benefits to them in the event of a termination of their employment
during a 36 month period following a change in control, as defined in the
agreements. The initial term of each agreement is three years and the term is
automatically extended for additional one-year periods each anniversary date of
the agreements, unless either party objects to such extension. If within a 36
month period following a change in control, an executive's employment is
terminated by Rogers without cause, as defined in the agreements, or if such
executive resigns in certain specified circumstances, then 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.