EX-10 5 a4846542ex10r.txt EXHIBIT 10R 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.