ROGERS CORP
10-Ks and 10-Qs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One Technology Drive / Rogers, Connecticut 06263 / 860-774-9605
The Annual Meeting of Shareholders of Rogers Corporation, a Massachusetts corporation, will be held on Thursday, May 4, 2017, at 10:30 a.m., local time, at the Hyatt Regency Boston Harbor, 101 Harborside Drive, Boston, Massachusetts 02128 for the following purposes:
|
1.
|
To elect seven members of the Board of Directors for the ensuing year: Keith L. Barnes, Michael F. Barry, Bruce D. Hoechner, Carol R. Jensen, Ganesh Moorthy, Helene Simonet and Peter C. Wallace.
|
|
2.
|
To vote on a non-binding advisory resolution to approve the compensation of the Company’s named executive officers.
|
|
3.
|
To recommend, by non-binding advisory vote, the frequency of future non-binding advisory votes on the compensation of the Company’s named executive officers.
|
|
4.
|
To ratify the appointment of PricewaterhouseCoopers LLP
as the independent registered public accounting firm of Rogers Corporation for the fiscal year ending December 31, 2017.
|
|
5.
|
To transact such other business as may properly come before the meeting or any adjournment thereof.
|
Shareholders entitled to receive notice of and to vote at the meeting are determined as of the close of business on Tuesday, March 7, 2017, the record date fixed by the Board of Directors for such purpose.
Regardless of whether you plan to attend the meeting, you can be sure your shares are represented at the meeting by promptly voting electronically over the Internet or by telephone or by marking, dating, signing, and returning your proxy card in the pre-addressed, postage-paid return envelope (which will be provided to those shareholders who request to receive paper copies of these materials by mail), or by returning your voting instruction card to your broker. If for any reason you desire to revoke or change your proxy, you may do so at any time before it is exercised. The proxy is solicited by the Board of Directors of Rogers Corporation.
We cordially invite you to attend the meeting.
By Order of the Board of Directors
Jay B. Knoll, Vice President, General Counsel & Corporate Secretary
March 22, 2017
1
Proxy Statement Table of Contents
2
One Technology Drive / Rogers, Connecticut 06263 / 860-774-9605
Proxy Statement
We are providing you with this proxy statement and proxy card (by mail, email, or over the Internet) in connection with the solicitation of proxies by the Board of Directors of Rogers Corporation (“Rogers,” “Company,” “Registrant,” “we” or, when used in the possessive form, “our”) for the Annual Meeting of Shareholders to be held on Thursday, May 4, 2017, at 10:30 am local time at the Hyatt Regency Boston Harbor, 101 Harborside Drive, Boston, Massachusetts 02128.
What is the “Notice Regarding the Availability of Proxy Materials” (the “Notice”) and why did I receive it but no proxy materials by mail or email?
Unless you have requested that we provide a copy of our proxy materials (including our 2016 annual report) to you by mail or email, we are providing only the Notice to you by mail or email. The Notice will instruct you as to how you may access and review the proxy materials on the Internet. The Notice will also instruct you as to how you may access your proxy card to vote over the Internet. If you received the Notice by mail or email and would like to receive a paper copy of our proxy materials, free of charge, please follow the instructions included in the Notice. This proxy statement is dated March 22, 2017 and distribution of the Notice to shareholders is scheduled to begin on or about March 22, 2017. We have adopted this procedure pursuant to rules adopted by the Securities and Exchange Commission (“SEC”) in order to conserve natural resources and reduce our costs of printing and distributing the proxy materials, while providing a convenient method for shareholders to access the materials and vote.
What is the purpose of the Annual Meeting of Shareholders?
|
•
|
To elect seven members of the Board of Directors for the ensuing year: Keith L. Barnes, Michael F. Barry, Bruce D. Hoechner, Carol R. Jensen, Ganesh Moorthy, Helene Simonet, and Peter C. Wallace. (See pages 7-9 for additional information.)
|
|
•
|
To vote on a non-binding advisory resolution to approve the compensation of our named executive officers (“NEOs”). (See page 47 for additional information.)
|
|
•
|
To vote on a non-binding advisory proposal regarding the frequency of future non-binding advisory votes on the compensation of the Company’s NEOs. (See page 48 for additional information.)
|
|
•
|
To ratify the appointment of PricewaterhouseCoopers LLP
(“PwC”)
as the independent registered public accounting firm of Rogers Corporation for the fiscal year ending December 31, 2017. (See pages 49-50 for additional information.)
|
|
•
|
To transact such other business as may properly come before the meeting or any adjournment thereof. As of the date of this proxy statement, the Company is not aware of any other business to come before the meeting.
|
3
Who can vote at the Annual Meeting of Shareholders?
If you are a shareholder of record as of the close of business on March 7, 2017 (the “record date”), you are entitled to vote at the meeting and any adjournment thereof. As of that date, 18,087,384 shares of Rogers’ capital stock (also referred to as common stock), $1 par value per share, were outstanding.
You are entitled to one vote for each share owned as of the close of business on the record date.
How do I get admitted to the Annual Meeting of Shareholders?
Attendance at the meeting will be limited to the following:
|
•
|
Shareholders that hold shares of our capital stock in their own name (as “shareholders of record”) as of the record date;
|
|
•
|
Shareholders that beneficially own shares of our capital stock through a bank, brokerage firm, dealer or other similar organization as nominee (in “street name”) as of the record date;
|
|
•
|
Invited guests from the media and financial community; and
|
|
•
|
Director nominees and members of Company management who will facilitate the meeting.
|
You will need an admission ticket or proof of ownership to enter the meeting. An admission ticket is attached to your proxy card if you are a shareholder of record. If your shares are held in street name, you must present proof of your ownership of our capital stock, such as a bank or brokerage account statement, to be admitted to the meeting. Please note that if you hold your shares in street name and plan to vote in person at the meeting, you will also need to bring a legal proxy from your nominee and present it to the inspector of elections with your ballot.
All shareholders also must present a form of photo identification, such as a driver’s license, in order to be admitted to the meeting.
How do I vote shares held under my name?
If you are a shareholder of record, you may instruct the Company on how to vote your shares by:
|
•
|
using the Internet voting site listed on the proxy card or Notice;
|
|
•
|
using the toll-free telephone number listed on the proxy card; or
|
|
•
|
marking, signing, dating and returning the proxy card by mail.
|
You may also attend the meeting and vote your shares in person at the meeting.
How do I vote shares that I hold through the Company’s Global Stock Purchase Plan (“GSPP”)?
Shares owned by employees or former employees as a result of participation in the GSPP may, to the extent such shares are held in the name of the employee or former employee, be voted as set forth in “How do I vote shares held under my name?”. Shares purchased under the GSPP but held in street name by a nominee must be voted in accordance with the instructions for voting in “How do I vote shares not held under my name?”.
4
How do I vote shares not held under my name?
If your shares are held in street name by a nominee, the Notice or proxy materials, as applicable, are being forwarded to you by that organization, and you should follow the instructions for voting as set forth on that organization’s voting instruction card. Shares held in employees’ or former employees’ 401(k) plans (the “Rogers Employee Savings and Investment Plan”) may be voted in a similar manner.
Under the rules and practices of the New York Stock Exchange (“NYSE”), if you hold shares through a nominee, your nominee is permitted to vote your shares on certain “routine” matters in its discretion even if the nominee does not receive instructions from you. The proposal to ratify the appointment of PwC is considered a “routine” matter, and your nominee will have discretionary authority to vote your shares if you do not provide instructions as to how your shares should be voted on this proposal. The proposals to elect directors and to approve, on an advisory basis, both the compensation of our NEOs and the frequency of the shareholder vote on the same are “non-routine” matters. The absence of voting instructions from you to your nominee on these “non-routine” matters will result in a “broker non-vote” because the nominee does not have discretionary voting power for those proposals. “Broker non-votes” do not constitute votes properly cast favoring or opposing proposals on “non-routine” matters.
How many holders of the Company’s outstanding shares must be present to hold the Annual Meeting of Shareholders?
In order to conduct business at the meeting, it is necessary to have a quorum. The presence, in person or by proxy, of the holders of a majority of the shares of capital stock entitled to vote on a matter at the meeting constitutes a quorum with respect to that matter. “Broker non-votes” and abstentions will be considered present for the purpose of establishing a quorum.
How many votes are required to elect directors? How many votes are required for the other proposals to pass?
|
•
|
Election of directors: The seven director nominees receiving the highest number of votes at the meeting will be elected to the Board of Directors, even if such votes do not constitute a majority of the votes cast. Abstentions and “broker non-votes” do not constitute votes properly cast favoring or opposing director elections and, accordingly, neither will have any effect on the outcome of this vote.
|
|
•
|
Ratification of PwC appointment: To pass, the proposal to ratify the appointment of PwC must be approved by the affirmative vote of the majority of votes properly cast (i.e., the number of shares voted “FOR” the proposal must exceed the number of shares voted “AGAINST” the proposal). Abstentions will not have any effect on the outcome of these votes, but your nominee will have discretionary authority to vote your shares if you do not provide instructions as to how your shares should be voted on this proposal.
|
|
•
|
Advisory vote on NEO compensation: To pass, the proposal to approve, on an advisory basis, the compensation of our NEOs must be approved by the affirmative vote of the majority of votes properly cast. Abstentions and “broker non-votes” will not have any effect on the outcome of these votes.
|
|
•
|
Frequency of advisory vote on NEO compensation: Shareholders have the choice of voting for a frequency of advisory votes every one, two or three years, or abstaining from the vote. The choice receiving the highest number of votes will be given due regard by, but will not be binding on, the Board of Directors. Abstentions and “broker non-votes” will not have any effect on the outcome of this vote.
|
You are strongly encouraged to vote your shares.
5
How will my shares be voted if I complete and return my proxy card?
Whichever method you use to transmit your instructions, your shares of Rogers’ capital stock will be voted as you direct. If you sign and return the enclosed proxy card or otherwise designate the proxies named on the proxy card to vote on your behalf, but do not specify how to vote your shares, your shares will be voted:
|
•
|
FOR
the election of the nominees for director;
|
|
•
|
FOR
the advisory vote to approve the 2016 compensation of our NEOs;
|
|
•
|
FOR
the advisory vote on NEO compensation to take place every year;
|
|
•
|
FOR
the ratification of the appointment of PwC as the Company’s independent accounting firm for 2017; and
|
|
•
|
In accordance with the judgment of the persons voting the proxy on any other matter properly brought before the meeting, if any such matters are properly raised at the meeting.
|
If I execute a proxy, may I still attend the Annual Meeting of Shareholders to vote in person or choose to change or revoke my vote?
Execution of a proxy will not in any way affect your right to attend the meeting and vote in person.
Any shareholder submitting a proxy has the right to revoke it any time before it is exercised by filing a written revocation with the Corporate Secretary of Rogers, by executing a proxy with a later date, by voting again on a later date on the Internet or by telephone (only your latest Internet or telephone proxy submitted prior to the meeting will be counted) or by attending and voting at the meeting.
Who counts the votes?
Representatives of Alliance Advisors, LLC will tabulate the vote and act as inspectors of the election.
6
Proposal 1: Election of Directors
The directors of Rogers are elected annually by shareholders and hold office until the next Annual Meeting of Shareholders and thereafter until their successors are chosen and qualified. The Board of Directors has been advised that each nominee will serve if elected. If any of these nominees should become unavailable for election, proxies will be voted for the election of such other person, or for fixing the number of directors at a lesser number, as the Board of Directors may recommend. All of the nominees are currently directors of Rogers and were elected to their present term at the 2016 Annual Meeting of Shareholders.
Nominees for Director, Director Qualifications and Experience
The biographical information below identifies the primary experience, qualifications, attributes and skills of the seven nominees for director at our 2017 Annual Meeting of Shareholders.
|
Name, age as of March 7, 2017, and positions with the Company
|
Principal Occupation, Business Experience,
Directorships and Qualifications
|
|
|
Keith L. Barnes
Age 65
Director since 2015
Compensation & Organization Committee
Nominating and Governance Committee
|
Mr. Barnes is the retired Chairman and CEO of Verigy Pte Ltd. Mr. Barnes was CEO of Verigy from 2006-2011 and Chairman of the Board from 2009-2011. Verigy was a leading manufacturer of semiconductor capital equipment started by Hewlett Packard and spun out of Agilent Technologies. Verigy was acquired by Advantest of Japan in 2011. From 2003-2006, Mr. Barnes was Chairman and CEO of Electroglas, a leading manufacturer of semiconductor probing solutions. Mr. Barnes was Chairman and CEO of Integrated Measurement Systems (“IMS”) from 1995-2001 when IMS was acquired. Mr. Barnes also serves as a director of the following public companies: Knowles Corporation of Itasca, Illinois; Mentor Graphics Corporation, Wilsonville, Oregon; and Viavi Solutions, Milpitas, California. The qualifications and skills that make Mr. Barnes well suited to serve as a member of our Board include his experience in global manufacturing, supply chain management, semiconductor systems and software development, marketing and sales, international business, governance and executive management, along with his public board and committee experience.
|
|
|
Michael F. Barry
Age 58
Director since 2010
Compensation & Organization Committee - Chairperson
Audit Committee
|
Since 2009, Mr. Barry has been Chairman of the Board of Directors of Quaker Chemical Corporation. He joined the Quaker Board and became Quaker’s President and Chief Executive Officer in 2008. Mr. Barry has held a number of other positions with Quaker since 1998, including Chief Financial Officer, Vice President and Global Industry Leader - Industrial Metalworking and Coatings, and Senior Vice President and Managing Director - North America. By serving in a variety of leadership and executive positions with Quaker, Mr. Barry has gained experience in accounting/finance, financial reporting, risk assessment, industrial marketing and services, organizational development, global organizations, governance, strategic planning, corporate development, research and development and manufacturing. This extensive and varied business experience is a valuable resource to the Rogers’ Board of Directors and its management.
|
|
7
|
Bruce D. Hoechner
Age 57
Director since 2011
President and Chief Executive Officer
|
Mr. Hoechner, who became the Company’s President and Chief Executive Officer in 2011, has many years of broad leadership experience across numerous geographies, businesses and functions in the specialty chemicals industry with particularly strong international business expertise. For over ten years of his career he lived and worked in Singapore, Thailand and most recently, Shanghai, People’s Republic of China. His Asian assignments were first with Rohm and Haas Company, for which he worked for 28 years, and then The Dow Chemical Company after its acquisition of Rohm and Haas in 2009. While in Shanghai, Mr. Hoechner was responsible for a variety of businesses, most recently as President, Asia Pacific Region, Dow Advanced Materials Division. He has also led a number of specialty chemical global business units, which had wide-ranging operations in Europe, North America, Latin America and Asia. Mr. Hoechner’s broad, global industry experience and his service as our Chief Executive Officer led the Board to conclude that he should continue to serve as a director.
|
|
Carol R. Jensen
Age 64
Director since 2006
Audit Committee
Nominating and Governance Committee
|
Ms. Jensen is currently President and Principal Partner of Lightning Ranch Group, a privately held group of companies in ranching, real estate, technology consulting, energy and aviation. She previously served as a director of the Microelectronic Computer Corporation and the American Chamber of Commerce - Denmark. She previously held positions at The Dow Chemical Company (as Vice President of Research & Development of Performance Chemicals 2001-2004); 3M Corporation (as Executive Director of Research & Development 2000-2001, Managing Director of 3M Denmark 1998-2000, and Technical Director of 3M’s Electronic Products business 1990-1998) and IBM Corporation (various research, development, marketing and strategic corporate positions 1979-1990). She was also an adjunct professor of Chemistry at the University of Texas, Austin (1991-1994). In these positions she gained experience in the electronics and Internet industries, the chemical and materials industry, and in research, marketing, development, manufacturing, sales, international business, governance and executive management. This technical background and experience make Ms. Jensen a valuable member of the Company’s Board of Directors and a great resource to its management.
|
|
Ganesh Moorthy
Age 57
Director since 2013
Audit Committee
Compensation and Organization Committee
|
In February 2016, Mr. Moorthy was named President of Microchip Technology Incorporated, adding that position to the post of Chief Operating Officer, a title he has held since 2009. Microchip is a leading provider of microcontroller, mixed-signal, analog, memory and Flash-IP solutions. He served as Executive Vice President of Microchip from 2006 to 2009. From 2001 to 2006, Mr. Moorthy served as Vice President of several Microchip divisions. From 2010 to 2014, he served as a member of the Board of Directors of Hua-Hong Grace Semiconductor in Shanghai, China. He is also a member of the University of Washington’s Electrical Engineering Board of Advisors. Mr. Moorthy’s extensive background in a number of Rogers’ key industries and his global expertise in business and technology leadership make him well qualified to provide valuable insight to the Board of Directors and management of Rogers.
|
|
Helene Simonet
Age 64
Director since 2014
Audit Committee - Chairperson
Compensation and Organization Committee
|
Ms. Simonet served as Executive Vice President and Chief Financial Officer of Coherent, Inc. from 2002 until her retirement in February 2016. Ms. Simonet
served as Vice President of Finance of Coherent’s former Medical Group and Vice President of Finance of its Photonics Division from 1999 to 2002. Prior to joining Coherent, Ms. Simonet spent over twenty years in senior finance positions at Raychem Corporation’s Division and Corporate organizations, including Vice President of Finance of Raynet Corporation. Ms. Simonet is a well-rounded executive with broad experience in both executive and financial management of a global technology manufacturing company, international business, mergers and acquisitions, and strategic planning. This experience and her expertise in areas important to Rogers make her an important asset to the Board.
|
8
|
Peter C. Wallace
Age 62
Director since 2010
Nominating and Governance Committee - Chairperson
Compensation and Organization Committee
|
Mr. Wallace served as Chief Executive Officer and a director of Gardner Denver Inc., an industrial manufacturer of compressors, blowers, pumps and other fluid control products used in numerous global end markets until his retirement in January 2016. He served as President and Chief Executive Officer and a director of Robbins & Myers, Inc. from 2004 until 2013, when the company was acquired by National Oilwell Varco, Inc. Prior to joining Robbins & Myers, he was President and Chief Executive Officer of IMI Norgren Group from 2001 to 2004. Mr. Wallace is a director of Curtiss-Wright Corporation and a director and chairman of the board of Applied Industrial Technologies, Inc., both public companies. He also serves on the board of a private manufacturing firm engaged in packaging equipment and consulting services. Mr. Wallace’s career has included senior functional roles in application engineering, sales, marketing, and international operations as well as chief executive officer at three multinational corporations. This broad and extensive leadership and board experience is valuable to Rogers’ Board of Directors and to management.
|
None of the nominees for director are subject to any arrangement pursuant to which directors will be elected nor are there any family relationships between any directors and any of the Company’s executive officers. To the best of our knowledge, there are no pending material legal proceedings in which any of our directors or nominees for director, or any of their associates, is a party adverse to us or any of our affiliates, or has a material interest adverse to us or any of our affiliates. Additionally, to the best of our knowledge, there have been no events under any bankruptcy act, no criminal proceedings and no judgments, sanctions, or injunctions that are material to the evaluation of the ability or integrity of any of our directors or nominees for director during the last 10 years.
Pursuant to the Company’s retirement policy, the Board did not nominate for election at the 2017 Annual Meeting of Shareholders William E. Mitchell because he had reached 72 years of age. Mr. Mitchell will retire from the Board of Directors when his term expires on the date of the Company’s 2017 Annual Meeting of Shareholders. At that time, the size of the Board will be reduced to seven members. The Board may increase the size of the Board at a future time as permitted under the bylaws.
Vote Required
Directors will be elected by a plurality of the votes properly cast. This means those nominees receiving the seven highest numbers of votes at the Annual Meeting of Shareholders will be elected, even if such votes do not constitute a majority of the votes properly cast. Abstentions and “broker non-votes” will not have any effect on the outcome of this vote.
The Board recommends a vote “FOR” the election of each of the director nominees listed above.
9
Stock Ownership of Management and Directors
This table provides information about the beneficial ownership of Rogers’ capital stock as of March 7, 2017, by each of the current members of the Board of Directors, the NEOs listed in the “Summary Compensation Table” on page 32, and by all current directors and executive officers as a group. Unless otherwise noted, the persons listed below have sole voting and investment power with respect to the shares reported.
|
Beneficial Ownership
|
||
|
Name of Person or Group
|
Amount and Nature of Beneficial Ownership (1)
|
Percent of Class (2)
|
|
Keith L. Barnes
|
2,300
|
*
|
|
Michael F. Barry
|
13,900
|
*
|
|
Robert C. Daigle (3)
|
46,680
|
*
|
|
Bruce D. Hoechner (3)
|
101,169
|
*
|
|
Carol R. Jensen (4)
|
12,188
|
*
|
|
Jay B. Knoll
|
5,535
|
*
|
|
William E. Mitchell
|
4,715
|
*
|
|
Ganesh Moorthy (4)
|
6,400
|
*
|
|
Helene Simonet
|
4,100
|
*
|
|
Janice E. Stipp
|
6,414
|
*
|
|
Peter C. Wallace
|
13,900
|
*
|
|
Helen Zhang
|
6,775
|
*
|
|
All Directors and Executive Officers as a Group (15 Persons) (1)
|
269,828
|
1.5
|
* None of our executive officers or directors owned more than 1.0% of our outstanding capital stock as of March 7, 2017.
|
(1)
|
Represents the total number of currently owned shares and shares acquirable within 60 days of March 7, 2017. Shares acquirable under stock options exercisable, or by way of the vesting of restricted stock units, or, with respect to members of the Board of Directors, which would be owed to them in the event of a separation from service, within 60 days of March 7, 2017, are as follows (last name/number of shares): Barnes/1,700, Barry/1,700; Daigle/13,800; Hoechner/23,200; Jensen/1,700; Mitchell/1,700; Moorthy/1,700; Simonet/1,700; and Wallace/1,700.
|
|
(2)
|
Represents the percent ownership of total outstanding shares of capital stock, based on
18,087,384
shares of common stock outstanding as of March 7, 2017, and on an individual or group basis those shares acquirable by the respective directors and executive officers within 60 days of March 7, 2017, as described above.
|
|
(3)
|
Mr. Daigle and Mr. Hoechner own, respectively, 46,680 shares and 101,169 shares as to which investment and voting power is shared with their respective spouses. Mr. Hoechner’s total ownership includes 820 shares held by trust for which his spouse serves as trustee.
|
|
(4)
|
Ms. Jensen and Mr. Moorthy own, respectively, 12,188 and 6,400 shares in trusts in which investment and voting power is shared with their respective spouses.
|
10
Beneficial Ownership of More than Five Percent of Rogers’ Stock
Except as otherwise noted below, this table provides information regarding beneficial ownership of each person known to Rogers to own more than 5% of its outstanding capital stock as of December 31, 2016 based upon filings by each such person with the SEC on Schedule 13G (including amendments) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless otherwise noted, the beneficial owners have sole voting and dispositive power with respect to the shares listed below.
|
Name and Address of Beneficial Owner
|
Shares Beneficially Owned
|
Percent of Class (1)
|
|
BlackRock, Inc. (2)
55 East 52
nd
Street
New York, NY 10055
|
2,042,924
|
11.3
|
|
Neuberger Group (3)
1290 Avenue of the Americas
New York, NY 10104
|
1,517,643
|
8.4
|
|
The Vanguard Group (4)
100 Vanguard Blvd.
Malvern, PA 19355
|
1,510,378
|
8.4
|
|
Dimensional Fund Advisors, LP (5) 6300 Bee Cave Road, Building One Austin, TX 78746
|
1,010,156
|
5.6
|
|
Wellington Group (6)
c/o Wellington Management Company LLP
280 Congress Street Boston, MA 02210
|
1,000,403
|
5.5
|
|
(1)
|
Based on
18,087,384
shares outstanding as of the record date, March 7, 2017.
|
|
(2)
|
Blackrock, Inc., a parent holding company, reported it has sole voting power with respect to 1,997,899 of the shares listed above and sole dispositive power with respect to all of the shares listed above.
|
|
(3)
|
Each of Neuberger Berman Group LLC, a parent holding company, and Neuberger Berman Investment Advisers LLC, a registered investment adviser, reported that it has shared voting power and shared dispositive power with respect to all of the shares listed above. Neuberger German Equity Funds, a registered investment company, reported it has shared voting power and shared dispositive power with respect to 1,090,851 of the shares listed above. These entities are collectively referred to above as the “Neuberger Group.”
|
|
(4)
|
The Vanguard Group, a registered investment adviser, reported it has sole voting power with respect to 26,322 of the shares listed above, shared voting power with respect to 2,889 of the shares listed above, shared dispositive power with respect to 1,482,107 of the shares listed above, and sole dispositive power with respect to 28,271 of the shares listed above.
|
|
(5)
|
Dimensional Fund Advisors, LP, a registered investment adviser, reported it has sole voting power with respect to 956,681 of the shares listed above and sole dispositive power with respect to all of the shares listed above.
|
|
(6)
|
Each of Wellington Management Group LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP, parent holding companies or control persons, reported it has shared voting power with respect to 780,002 of the shares listed above and shared dispositive power with respect to all of the shares listed above. Wellington Management Company LLP, a registered investment adviser, reported that it has shared voting power with respect to 779,492 of the shares listed above and shared dispositive voting power with respect to 950,735 of the shares listed above. These entities are collectively referred to above as the “Wellington Group.”
|
11
Corporate Governance Practices
The Board of Directors has adopted Corporate Governance Guidelines, provisions of our bylaws and other formal policies that establish a framework for our corporate governance practices. In addition to practices described below under “Board of Directors,” our corporate governance practices include the following:
|
•
|
All directors stand for election annually.
|
|
•
|
The Board of Directors has adopted a retirement policy for directors, which is set forth in Rogers’ Corporate Governance Guidelines, under which directors may not be nominated for election after age 72 unless the Board deems it advisable to do so.
|
|
•
|
Under NYSE listing standards, a majority of the Board must be independent, but our Corporate Governance Guidelines set a goal for at least two-thirds of our directors to be independent. The Board of Directors has determined that seven of its eight current directors, representing approximately 88% of the Board, are independent.
|
|
•
|
The Audit Committee has three members whom the Board of Directors has determined are “audit committee financial experts” as defined under SEC regulations.
|
|
•
|
The non-management directors (all of whom currently are independent) regularly meet in executive session, and there is an independent “Lead Director” who is responsible for presiding over such meetings.
|
|
•
|
The Board of Directors actively participates in Company strategy by, among other things, annually reviewing a strategic plan and a one-year operating plan that is linked to strategic objectives.
|
|
•
|
The Board of Directors oversees, with the assistance of our Compensation and Organization Committee, succession planning for our executive officers, including the CEO.
|
|
•
|
The Company’s Stock Ownership Guidelines are designed to encourage executive officers and directors to accumulate a significant level of direct stock ownership, thereby aligning their interests with the interests of shareholders.
|
|
•
|
The Company’s Compensation Recovery Policy enables the Board of Directors to recover any compensation earned by or paid to an executive officer from any financial result or operating objective that was impacted by the officer’s misconduct.
|
|
•
|
The Company’s Insider Trading Policy prohibits directors and executive officers from engaging in hedging transactions involving the Company’s stock.
|
|
•
|
Directors have complete access to all levels of management and are provided with opportunities to meet with members of management on a regular basis.
|
|
•
|
The Board of Directors and each committee thereof conduct self-evaluations at least once per year to assess their respective performance and ways in which such performance could be improved.
|
|
•
|
Our shareholder rights agreement will expire on March 31, 2017, and the Board of Directors does not presently intend to replace it; however, the Board of Directors may, subject to its fiduciary duties under applicable law, choose to implement a new shareholder rights plan in the future.
|
12
Board of Directors
Director Independence
Under NYSE listing standards, the Board of Directors is required to determine annually which of its directors are independent based on the absence of any direct or indirect material relationship between the Company and the director. To evaluate the materiality of any such relationship, the Board has adopted categorical independence standards consistent with the NYSE listing standards. In addition, the Board has adopted the following categorical standards, contained in the Rogers Corporation Corporate Governance Guidelines, which identify certain relationships deemed by the Board to be immaterial provided that they satisfy the criteria below:
|
•
|
If a Rogers’ director (other than a member of the Audit Committee) receives direct or indirect annual compensation or other benefits (other than board and committee fees) from Rogers, the amount of such compensation must not exceed $30,000. (This immateriality standard is not applicable to Audit Committee members, with respect to whom any compensation or benefits received from Rogers other than board and committee fees must be evaluated by the Board for materiality.);
|
|
•
|
If a Rogers’ director is an executive officer of another company that does business with Rogers, the annual sales to, or purchases from, Rogers must be less than 1% of the revenues of the company for which he or she serves as an executive officer;
|
|
•
|
If a Rogers’ director is an executive officer of another company which is indebted to Rogers, or to which Rogers is indebted, the total amount of either company’s indebtedness to the other must be less than 1% of the total consolidated assets of the company for which he or she serves as an executive officer; and
|
|
•
|
If a Rogers’ director serves as an officer, director or trustee of a charitable organization, Rogers’ discretionary charitable contributions to the organization must be less than 1% of that organization’s total annual charitable receipts. (Rogers’ matching of employee charitable contributions will not be included in the calculation of the amount of Rogers’ contributions for this purpose.)
|
The Board of Directors has determined that all of the current directors other than Mr. Hoechner satisfy these standards and do not have any direct or indirect material relationship with Rogers. Until his retirement from the Board at the 2016 Annual Meeting of Shareholders, Robert G. Paul was also independent.
Board Leadership Structure
The Company’s bylaws provide that unless otherwise provided by the directors, the CEO will preside, when present, at all meetings of shareholders and (unless a chairman of the Board of Directors has been appointed and is present) of the directors. If a chairman of the Board of Directors is appointed, he or she will preside at all meetings of the Board of Directors at which he or she is present. Currently, there is no chairman of the Board as for approximately twenty years the Board has selected only recently retired, or soon to be retired, Presidents and CEOs of the Company to serve in this capacity. Accordingly, our President and CEO, Bruce Hoechner presides over meetings of our Board of Directors and shareholders.
Additionally, we currently have an independent Lead Director whose responsibilities include calling meetings of independent directors, presiding at executive sessions of the non-management directors, and, if not all non-management directors are independent
13
directors, at meetings of the independent directors, providing periodic feedback to the CEO, reviewing board agendas and being a person whom shareholders can contact should they wish to communicate with the Board. Other independent directors also provide input for board agendas. Our non-management directors hold executive sessions without management present as frequently as they deem appropriate, and generally such an executive session is held at each in-person, regularly scheduled board meeting. The Board currently has three standing committees: (1) Audit, (2) Compensation and Organization, and (3) Nominating and Governance. Each of these committees is comprised solely of independent directors, with each of the three committees having a separate chairperson who participates in the development of committee agendas.
We believe that this leadership structure and compact board size has worked well for the Company. This structure creates an environment in which there are candid disclosures by management about the Company’s performance and a culture in which directors can regularly engage management and each other in active and meaningful discussions about various corporate matters. The Board periodically reviews its leadership structure and developments in the area of corporate governance to ensure that this approach continues to strike the appropriate balance for the Company and our shareholders.
Board Diversity
As set forth in its Corporate Governance Guidelines, Rogers endeavors to have a board with diverse experience at policy-making or strategic-planning levels in business or in other areas that are relevant to the Company’s activities. The Nominating and Governance Committee does not have a formal policy with respect to diversity in identifying or selecting nominees for Rogers’ Board, but in evaluating nominees, the committee assesses the background of each candidate in a number of different ways, including how the individual’s qualifications complement, strengthen and enhance those of existing board members as well as the future needs of the Board.
The Board’s Role in Risk Oversight
The Board has an active role as a whole, and also at the committee level, in overseeing management of the Company’s risks. The entire Board receives regular reports from management concerning areas of material risk to the Company, including operational, financial, legal and regulatory, and strategic risks. Although the Board as a whole is responsible for overseeing the Company’s risk management, each Board committee is responsible for evaluating the risks associated with its area of responsibility and discussing its findings and making recommendations to the Board.
The Board considers the most significant risks facing the Company and the Company’s general risk management strategy and evaluates risks to be taken by the Company based on the Company’s strategy and the current business environment. While the Board oversees the Company’s risk management, the Company’s senior management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our Company and that our board leadership structure supports this approach.
14
Meetings of the Board and Committees
Board of Directors
The Board of Directors held seven meetings during 2016. All directors attended at least 75% in the aggregate of the meetings held in 2016 of the Board and the committees on which each such director served during his or her tenure as a Board or committee member. Our Corporate Governance Guidelines provide that all directors are expected to attend the Annual Meeting of Shareholders absent an unavoidable conflict. All of the members of the Board of Directors attended the 2016 Annual Meeting of Shareholders.
Meetings of Non-Management Directors
The Board holds regularly scheduled sessions for the non-management directors of the Company (all of whom the Board has determined to be independent) without management present. These meetings are presided over by the Lead Director, or, in the absence of the Lead Director, another independent director. The non-management directors may meet without management present at other times as determined by the Lead Director. On May 6, 2016, Mr. Mitchell was appointed Lead Director for a one year term, and our directors are evaluating who will replace Mr. Mitchell upon his retirement when his term expires on May 4, 2017. Anyone wishing to contact our non-management directors may contact the Lead Director or the non-management directors as a group in writing at Rogers Corporation, 2225 West Chandler Boulevard, Chandler, AZ 85224, Attention: Lead Director.
Committee Membership
The following table illustrates the current membership of each committee and the number of meetings held in 2016:
|
Name
|
Board
|
Audit
|
Compensation and Organization
|
Nominating and Governance
|
|
Keith L. Barnes
|
Ÿ
|
Ÿ
|
Ÿ
|
|
|
Michael F. Barry
|
Ÿ
|
Ÿ
|
Chair
|
|
|
Bruce D. Hoechner
|
Ÿ
|
|||
|
Carol R. Jensen
|
Ÿ
|
Ÿ
|
Ÿ
|
|
|
William E. Mitchell*
|
Ÿ
|
Ÿ
|
Ÿ
|
|
|
Ganesh Moorthy
|
Ÿ
|
Ÿ
|
Ÿ
|
|
|
Helene Simonet
|
Ÿ
|
Chair
|
Ÿ
|
|
|
Peter C. Wallace
|
Ÿ
|
Ÿ
|
Chair
|
|
|
Number of Meetings in 2016
|
7
|
8
|
7
|
4
|
*Pursuant to the Company’s retirement policy, Mr. Mitchell will retire from the Board of Directors when his term expires on May 4, 2017.
Audit Committee
The Audit Committee has been established in accordance with the Exchange Act and related SEC regulations. The Audit Committee’s responsibilities, which are set forth in a written charter adopted by the Board, include oversight of the Company’s financial reporting function, internal audit function, internal controls and risk management, selection, evaluation and oversight of the Company’s independent auditor, and assessment and review of compliance, investigations and legal matters. The Board of
15
Directors has determined that each member of the Committee is “independent” in accordance with the NYSE’s listing standards and SEC regulations. In addition, the Board of Directors has also determined that Messrs. Barry and Mitchell and Ms. Simonet are “audit committee financial experts” in accordance with SEC regulations and that all of the Audit Committee members are financially literate in accordance with NYSE listing standards. From January 1, 2016 until his retirement on May 6, 2016, Mr. Paul served on the Audit Committee. During this time, he (i) met the independence criteria above, (ii) was financially literate in accordance with NYSE listing standards and (iii) was an “audit committee financial expert” in accordance with SEC regulations.
Compensation and Organization Committee
The Compensation and Organization Committee’s authority and responsibilities, which are set forth in a written charter adopted by the Board, include review and evaluation of the Company’s compensation philosophy, establishment of the compensation of our CEO and other executive officers, oversight with respect to the company’s equity incentive and stock-based plans and material employee benefit plans, and review of succession plans for the CEO and other senior leadership positions.
During 2016, the Compensation and Organization Committee was comprised of non-management directors who were each: (i) independent as defined under the NYSE listing standards and as determined by the Board of Directors, (ii) “non-employee directors” for purposes of Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and (iii) “outside directors” for purposes of Section 162(m) of the Internal Revenue Code. From January 1, 2016 until his retirement on May 6, 2016, Mr. Paul served on the Compensation and Organization Committee, and he also met the criteria listed in items (i), (ii) and (iii) above during this time.
Nominating and Governance Committee
The Nominating and Governance Committee has responsibilities, which are set forth in a written charter adopted by the Board, that include developing and recommending to the Board criteria for board and committee membership, evaluating and presenting to the Board its determinations with respect to director independence and satisfaction of other requirements, overseeing Rogers’ corporate governance policies and practices, developing and recommending to the Board an annual Board and committee evaluation process, and overseeing director orientation and training programs.
The Board of Directors has determined that each member of this committee is “independent” in accordance with the NYSE’s listing standards.
The Nominating and Governance Committee leads the search for individuals qualified to become board members and identifies potential directors from several sources, including executive search firms retained by the committee, incumbent directors, management, and shareholders. See “Shareholder Proposals and Other Shareholder Business at the 2018 Annual Meeting of Shareholders” for additional information regarding shareholder nominations of director candidates.
16
Directors’ Compensation
Directors who are employees of Rogers receive no additional compensation for their services as directors. Accordingly, Mr. Hoechner received no compensation for his service on the Board of Directors during 2016. In 2016, compensation for non-management directors consisted of an annual retainer and meeting fees and equity awards as described in the table below.
The table below shows the total compensation earned by our non-management directors during 2016. Each component of director compensation is summarized following the table.
|
Name
|
Retainer and Fees Earned (1)
|
Fair Value of Deferred Stock Unit Awards (2)
|
Total
|
|
Keith L. Barnes
|
$54,000
|
$100,000
|
$154,000
|
|
Michael F. Barry
|
$73,003
|
$100,000
|
$173,003
|
|
Carol R. Jensen
|
$59,500
|
$100,000
|
$159,500
|
|
William E. Mitchell
|
$73,500
|
$100,000
|
$173,500
|
|
Ganesh Moorthy
|
$60,500
|
$100,000
|
$160,500
|
|
Robert G. Paul (3)
|
$27,073
|
$0
|
$27,073
|
|
Helene Simonet
|
$67,898
|
$100,000
|
$167,898
|
|
Peter C. Wallace
|
$66,000
|
$100,000
|
$166,000
|
|
(1)
|
Includes annual retainer and meeting fees, which are paid in cash. Directors may elect to defer such fees pursuant to a non-qualified deferred compensation plan.
|
|
(2)
|
The fair value of Deferred Stock Unit Awards is the same as the compensation cost reported in Rogers’ financial statements. All Deferred Stock Units awarded to directors are fully vested as of the award date. On May 6, 2016, we granted a Deferred Stock Unit Award for 1,700 units to each non-management director then serving on the Board. The number of Deferred Stock Units was calculated based on the average closing price of the stock over the preceding 30 business days, which was $59.14, and the total was rounded up to the nearest increment of 50 units.
|
|
(3)
|
Mr. Paul retired when his term expired on May 6, 2016.
|
Annual Retainer
Non-management directors earned an annual retainer of $40,000 in 2016. The Lead Director and any chairperson of a board committee earned an additional annual retainer amount in 2016 as follows: (i) Lead Director - $15,000; (ii) Audit Committee Chairperson - $10,000; (iii) Compensation and Organization Committee Chairperson - $7,500; (iv) Nominating and Governance Committee Chairperson - $5,000. The annual retainer for non-management directors and committee chairpersons is pro-rated for directors who serve for only a portion of the year and is normally paid in June and December.
17
Meeting Fees
Directors received $1,500 for each in-person board meeting attended in 2016. Committee chairpersons received $1,500 for each in-person committee meeting attended and other committee members received $1,000 for each in-person committee meeting attended. Fees for telephonic meetings are reduced by 50%.
Deferred Stock Unit Awards
Deferred Stock Unit Awards were granted to non-management directors as set forth in the table above. These awards were fully vested on the grant date. The stock subject to these awards is scheduled to be issued on the 13-month anniversary of the grant date unless the director elects to defer the receipt of these shares.
Perquisites and Reimbursable Expenses
Rogers does not provide its non-management directors with any perquisites. Rogers does reimburse its directors for expenses associated with attending any board or committee meetings and attending certain other meetings in their capacity as board or committee members. The Board of Directors established a Directors’ Education and Training Allowance Policy to provide reimbursement of up to $10,000 during any two-year period to non-management directors for the reasonable costs to attend education and training programs, as well as membership fees in any appropriate professional organizations, in all such cases reflective of the director’s duties to the Board, the director’s background and experience, and developments relevant to corporate governance and to the Company’s operations.
2017 Director Compensation
The Compensation and Organization Committee periodically reviews the Company’s non-management director compensation program with the assistance of Pay Governance LLC, its compensation consultant (the "Consultant") and makes recommendations to the Board regarding the same. Following a review of director compensation at the peer groups discussed in Compensation Discussion and Analysis below, the Compensation and Organization Committee recommended that the Board approve certain changes to Rogers’ director compensation program in 2017. Based on the recommendation of the Compensation and Organization Committee, the Board concluded that such changes were appropriate. To align the Company’s director compensation program more closely with the compensation packages for directors in these peer groups, the Board determined that, effective from the term beginning at the Annual Meeting, directors would no longer receive meeting fees, the annual cash retainer for each non-employee director would be increased to $65,000 and the fair value of the deferred stock unit award granted to each non-management director would be increased to $120,000. The Board also approved increases to the annual cash retainers for the Lead Director and committee chairs to align them more closely with market practice. Accordingly, effective from the term beginning at the Annual Meeting, the annual cash retainers for these positions will be as follows: (i) Lead Director - $16,500, (ii) Audit Committee Chairperson - $20,000, (iii) Compensation and Organization Committee Chairperson - $15,000, and (iv) Nominating and Governance Committee Chairperson - $10,000. These changes represent the first changes to the director compensation program since 2012.
18
Director Stock Ownership Guidelines
The Company’s Corporate Governance Guidelines provide that a non-management director’s ownership of Company stock should be equal to at least five times the director’s base annual retainer by the fifth anniversary of the first annual meeting of shareholders after such person becomes a non-management director. As of March 7, 2017, all of our directors except Mr. Barnes, who joined the Board of Directors in late 2015, held shares exceeding these ownership guidelines.
Management directors are subject to the stock ownership guidelines applicable to executive officers, which are discussed in “2016 Compensation - Share Ownership and Retention Guidelines; Prohibition on Hedging” on page 30.
Audit Committee Report
The Audit Committee oversees and monitors the Company’s financial reporting process and systems of internal accounting and financial controls on behalf of the Board of Directors. In fulfilling these responsibilities, the Audit Committee reviewed and discussed with management the audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 Form 10-K”). The Audit Committee discussed with PwC, Rogers’ independent registered public accounting firm, the matters required to be discussed with the independent registered public accounting firm under generally accepted auditing standards including Auditing Standard No. 1301. In addition, the Audit Committee has received the written disclosures and the letter from PwC required by the Public Company Accounting Oversight Board regarding PwC’s communications with the Audit Committee concerning independence, and has discussed its independence with PwC.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board approved, the inclusion of the audited financial statements in the 2016 Form 10-K for filing with the Securities and Exchange Commission.
The Audit Committee’s responsibility is one of oversight, and it recognizes that management is responsible for preparing the Company’s financial statements and that the Company’s independent registered public accounting firm is responsible for auditing those financial statements. Consequently, in carrying out its oversight responsibilities, the Audit Committee is not providing any expert or special assurance as to the Company’s financial statements or any professional certification as to the work of the Company’s independent registered public accounting firm. In giving its recommendation to the Board, the Audit Committee has relied on (i) management’s representation that such financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States, and (ii) the report of the Company’s independent registered public accounting firm with respect to such financial statements.
|
Audit Committee:
|
Helene Simonet, Chairperson
|
|
Michael F. Barry, Member
|
|
|
Carol R. Jensen, Member
|
|
|
William E. Mitchell, Member
|
|
|
Ganesh Moorthy, Member
|
|
19
Compensation Discussion and Analysis
Overview of Business and Results
Rogers Corporation designs, develops, manufactures and sells high-quality and high-reliability engineered materials and components for mission critical applications. We operate principally three strategic business segments - Advanced Connectivity Solutions (ACS), Elastomeric Material Solutions (EMS) and Power Electronics Solutions (PES). We have a history of innovation and established the Rogers Innovation Center for our leading research and development activities. Rogers was founded in 1832 and incorporated in Massachusetts in 1927. In August 2016, we announced plans to relocate our global headquarters from Rogers, Connecticut to Chandler, Arizona. The move will build upon our presence in Arizona, where we have significant business and manufacturing operations. Rogers operates manufacturing facilities in the United States, China, Germany, Belgium, Hungary and South Korea, with joint ventures and sales offices worldwide.
In 2016, Rogers reported net sales of $656.3 million. Net sales for the full year 2015 were $641.4 million, which included $18.6 million from divested non-core assets. Net sales during 2016 were unfavorably impacted by $7.8 million as a result of currency fluctuations. In addition, 2016 net sales were favorably impacted by $5.4 million of net sales from DeWAL Industries (“DeWAL”), which we acquired in November 2016.
ACS recorded $277.8 million in net sales in 2016, a 3.8% increase from $267.6 million in net sales in 2015. Fluctuations in currency exchange rates unfavorably impacted net sales in 2016 by 1.0% as compared with 2015 net sales.
EMS recorded $203.2 million in net sales in 2016, a 12.3% increase compared to $180.9 million in net sales in 2015. Fluctuations in currency exchange rates unfavorably impacted net sales in 2016 by approximately 1.8% as compared with 2015 net sales. EMS’s net sales in 2016 included $5.4 million attributable to the acquisition of DeWAL, which favorably impacted net sales in 2016 by 3.0%.
PES recorded $152.4 million in net sales in 2016, a 1.4% increase compared to $150.3 million in net sales in 2015. PES’ net sales were unfavorably impacted by approximately 0.9% due to currency exchange rate fluctuations in 2016.
Key Compensation Actions and Decisions
At our 2016 Annual Meeting of Shareholders, 96% of the shares voted were voted in favor of our 2015 NEO compensation package. Accordingly, in 2016, we maintained our commitment to the use of at-risk compensation (base salary and awards under our Long-Term Incentive Program (“LTIP”) and Annual Incentive Compensation Plan (“AICP”)) and to pay for performance, compensation transparency, and the pursuit of pay practices competitive with those of our peers:
|
•
|
We increased target compensation under our LTIP but did not increase base pay or target payouts under our AICP. Accordingly, at-risk compensation made up approximately 77% of our CEO’s target compensation in 2016, up from approximately 76% in 2015. For our remaining NEOs, at-risk compensation in 2016 made up approximately 63% of their target compensation, on average, up from approximately 61% in 2015.
|
|
•
|
Performance-based pay made up approximately 50% of our CEO’s target compensation in 2016, consistent with 2015, and approximately 42% of target compensation for our remaining NEOs, on average, up from approximately 40% with 2015.
|
20
|
•
|
We continued to employ multiple performance measures to balance short- and long-term objectives. With respect to longer-term incentives, we granted performance-based restricted stock units (“RSUs”) tied to the Company’s three-year total shareholder return (“TSR”) in 2016, rather than a weighting of TSR and return on invested capital (“ROIC”).
|
|
•
|
We maintained an equity-based compensation structure with multi-year vesting periods to drive long-term shareholder value creation.
|
Our Approach to Compensation and our Decision Making Process
The Compensation and Organization Committee (the “Committee” for purposes of this section) began its consideration of 2016 executive compensation by evaluating our compensation philosophy. The Committee affirmed our existing philosophy, indicating that our approach to compensation is fundamentally defined by our efforts to efficiently recruit, retain and motivate the right executives to achieve outstanding business performance and shareholder value. Specifically, the Committee seeks to provide competitive base pay for our NEOs, and to leverage short-term and long-term variable compensation-- in line with performance-- to appropriately reward our NEOs for the value they create. To achieve these goals, we seek to provide opportunity for our executive officers and other senior managers to earn compensation that is competitive with other technology companies of comparable size, global reach and complexity. In addition, we strongly emphasize a culture of pay for performance in order to provide incentives and accountability for our executive officers and other senior managers in working toward the achievement of our strategic and operational objectives. Accordingly, the Committee considers market compensation (overall and by element), Company performance and individual performance, along with cost reasonableness in establishing executive compensation.
Use of Peer Group and Survey Data
The Committee’s use of peer group and survey data demonstrates our focus on efficient recruitment and retention of executives who will drive our business performance and enhance shareholder value at a reasonable cost. The Committee changed the peer group used to establish 2016 NEO compensation after concluding that our historical peer group alone was no longer representative of the technology companies with which we compete or from which we recruit. In particular, the Committee believed that consideration of data from a broader set of peers would enhance its ability to design competitive compensation packages that provide appropriate incentives to our NEOs. Therefore, instead of the relatively small peer group of companies used in prior years, the Committee considered data from the three different peer groups discussed below when setting 2016 NEO compensation.
The Committee considered compensation information disclosed in proxy statements for the CEOs and CFOs of (1) the Company’s historical peer group, consisting of 16 public companies in the electronics equipment industry (Global Industry Classification Standard code 452030) with median annual revenue of $540 million in 2015 (the “Historical Peer Group”), (2) a group of 27 public technology companies that participated in the Radford Global Technology Survey (the “Radford Survey”) in 2015 and are part of the index of companies used to evaluate payouts under performance-based RSUs (the “Select LTIP Peer Group”), with median annual revenue of $669 million in 2015 and (3) all companies participating in the Radford Survey with annual revenues between $500 million and $1 billion (the “Radford Survey Peer Group”).
21
|
Historical Peer Group
|
|||
|
Cabot Microelectronics Corp.
|
Comtech Telecommunications Corp.
|
CTS Corp.
|
Diodes Inc.
|
|
Entegris
|
Hutchinson Technology Inc.
|
International Rectifier Corp.
|
Intersil Corp.
|
|
IXYS Corp.
|
KEMET Corp.
|
Littelfuse Inc.
|
Methode Electronics
|
|
MKS Instruments Inc.
|
Pulse Electronics Corp.
|
Semtech Corp.
|
Vicor Corp.
|
|
Select LTIP Peer Group
|
|||
|
Adtran Inc.
|
Advanced Energy Industries, Inc.
|
Arris Group Inc.
|
Avid Technology, Inc.
|
|
Benchmark Electronics Inc.
|
Brooks Automation Inc.
|
Cabot Microelectronics Corp.
|
Cirrus Logic Inc.
|
|
Coherent Inc.
|
Diodes Inc.
|
Electronics for Imaging, Inc.
|
Entegris
|
|
FEI Company
|
Harmonic Inc.
|
Intersil Corp.
|
Ixia
|
|
Littelfuse Inc.
|
Mercury Computer Systems Inc.
|
Micrel Inc.
|
Microsemi Corporation
|
|
MKS Instruments Inc.
|
Netgear Inc.
|
OSI Systems Inc.
|
Plexus Corp.
|
|
Power Integrations Inc.
|
QLogic Corp.
|
Semtech Corp.
|
|
|
Radford Survey Peer Group
|
||||
|
Adtran Inc
|
Advanced Energy Industries, Inc.
|
Align Technology
|
Analogic
|
ANSYS, Inc.
|
|
Arista Networks
|
Aruba Networks
|
Athenahealth, Inc.
|
Avid Technology, Inc.
|
Blackbaud, Inc.
|
|
Blucora
|
Callaway Golf Company
|
Ciber
|
Cirrus Logic
|
Coherent Inc.
|
|
Commvault Systems
|
Concur Technologies
|
Conmed Corporation
|
Cray Inc.
|
CSG International
|
|
Datalink Corporation
|
Dealertrack
|
Digitalglobe
|
Diodes Incorporated
|
Dolby Laboratories
|
|
Dreamworks Animation
|
Electronics for Imaging, Inc.
|
Endurance International
|
Extreme Networks
|
Fair Isaac
|
|
FEI Company
|
Fortinet
|
Green Dot Corporation
|
Huron Consulting Group
|
Infinera Corporation
|
|
Intersil Corp.
|
IPG Photonics Corporation
|
Irobot Corporation
|
Kulicke And Soffa
|
Littelfuse, Inc.
|
|
Masimo Corporation
|
Medassets, Inc.
|
Microsemi Corporation
|
Microstrategy, Inc.
|
MKS Instruments, Inc.
|
|
Monster Worldwide
|
Multi-Fineline Electronix
|
Neustar, Inc.
|
Nuvasive, Inc.
|
Orbitz Worldwide
|
|
OSI Systems, Inc.
|
Palo Alto Networks, Inc.
|
Pegasystems, Inc.
|
Plantronics
|
Pmc-Sierra
|
|
Qlik Technologies, Inc.
|
Quantum Corporation
|
Rovi Corporation
|
Semtech Corp.
|
Servicenow, Inc.
|
|
Shutterfly
|
Silicon Graphics International
|
Silicon Laboratories
|
Vonage
|
Wex Inc.
|
|
Zynga Game Network
|
||||
With respect to the remaining NEOs, compensation information disclosed in proxy statements was not consistently available for comparable executives in any of the groups above. The Radford Survey data for the Select LTIP Group included aggregate compensation data for executive officers with positions similar to those held by Mr. Daigle, Mr. Knoll and Ms. Zhang, accordingly, the Committee determined that use of this data was appropriate when setting the compensation package for these NEOs.
22
The Committee considered the market data above, along with certain other survey data, when establishing the overall compensation package for our NEOs and each element of compensation within that package and, as part of that process, evaluating total target cash compensation for each NEO (defined as base salary and target payments under our AICP) and total target direct compensation for each NEO (defined as base salary and target payments under our AICP and LTIP). In general, the Committee aims to set overall executive compensation, as well as each element of executive compensation, for each NEO around the median of this market data, with variations in (1) base salary to account for experience, (2) each compensation element to account for performance and (3) overall compensation for recently hired NEOs to reflect circumstances at the time of hiring, such as terms of employment negotiated by the NEO and compensation historically paid by the Company for the position.
Role of Management
The Committee, in making any and all executive compensation decisions, solicits input from management as appropriate with respect to individual and Company performance. The Committee receives recommendations and evaluations with respect to NEO compensation and performance from Mr. Hoechner (other than with respect to his own compensation). While Mr. Hoechner does not make a recommendation to the Committee with respect to his own compensation, he provides the Committee with a summary of his annual performance. The Committee considers this assessment in conjunction with materials provided by the Company’s Chief Human Resource Officer regarding Mr. Hoechner’s performance and recommended compensation. The Committee evaluates this input as well as the input of the Consultant as it independently makes its assessments and compensation decisions.
Role of the Consultant
The Committee is authorized to select and retain its own independent compensation consultant. In 2016, the Committee engaged the Consultant to provide independent compensation advice, perspective and data. Among other things, the Consultant advised the Committee on changes to the peer group and survey data it uses when establishing executive compensation and evolving best pay practices and provided benchmarking data and recommendations on NEO compensation. In addition, the Consultant annually assesses our compensation program’s potential for risk and its competitiveness relative to our industry and our peers and advises the Committee with respect to these issues. The Consultant did not provide any services to the Company and was not paid for services to the Company other than for those related to work for the Committee during 2016. The Committee annually reviews the independence of the Consultant as part of its standard governance practices and has determined that the Consultant is independent.
23
2016 Compensation
Compensation Mix
The Committee believes that executive compensation should include a competitive combination of base salary, annual incentive compensation and long-term incentive compensation that emphasizes performance and balances shorter-term results with execution of longer-term strategic initiatives. The target compensation mix for 2016 for Mr. Hoechner, our CEO, consisted of approximately 77% at-risk compensation, up from approximately 76% in 2015. Target compensation mix on average for our other NEOs for 2016 consisted of approximately 63% at-risk compensation, up from approximately 61% in 2015. The charts below illustrate the target pay mix for our CEO and our other NEOs for 2016.
1. “Non-Equity Incentive Plan Compensation” refers to the AICP target payment for 2016.
2. “Stock” refers to the target LTIP award for 2016 (based on grant date fair value).
Base Salary
Base salary is the compensation we provide to our executives for their qualification, experience, and regular contribution to the business. Our goal is to ensure that business decisions are in the hands of executives with proven track records, and our ability to efficiently recruit, retain and motivate such talented people depends in part on competitive base salaries. Adjustments or changes to base salary in a given year are dependent upon many factors, including an executive’s tenure, internal equity across the executive
24
team based on individual roles and contributions, market trends, and general affordability based on business results
.
Base salary is generally subject to annual review, unless circumstances dictate otherwise. Generally speaking, any salary adjustments are effective at the beginning of the second quarter of the year and take into account the Company’s prior year performance.
In 2016, the Committee began its assessment of NEO base salaries with an analysis of base salary relative to the peer group and survey data discussed above and aimed to set NEO base salaries around the median of this market compensation. NEO base salaries in 2015 approximated the median of the Company’s peer group. The Committee also considered the risk of increasing fixed costs given uncertainty in the economic environment and the CEO’s recommendation not to increase the NEO base salaries in 2016. After evaluating this information the Committee concluded that 2016 NEO base salaries should remain consistent with the prior-year NEO base salaries.
|
NEO
|
2015 Salary
|
2016 Salary
|
Salary % Increase for 2016
|
|
Bruce D. Hoechner
|
$625,000
|
$625,000
|
0%
|
|
Janice E. Stipp
|
$400,000
(1)
|
$400,000
|
0%
|
|
Jay Knoll
|
$350,000
|
$350,000
|
0%
|
|
Robert C. Daigle
|
$345,000
|
$345,000
|
0%
|
|
Helen Zhang
|
$340,700
|
$340,700
|
0%
|
(1) Represents the annual salary established pursuant to the offer letter, dated October 1, 2015, between the Company and Ms. Stipp.
Annual Incentive Compensation Plan
Our AICP is intended to compensate executives for their annual contributions to the Company’s performance. Consistent with the terms of the AICP, the Committee established a performance goal (the achievement of positive operating income, where operating income is adjusted to exclude restructuring and other non-recurring charges, gains and losses on foreign currency transactions, and the effects of accounting changes and certain tax adjustments) and target and maximum potential payouts early in 2016. The Committee used the peer group and survey data described above when evaluating the target and maximum potential AICP awards for the NEOs in 2016. The Committee concluded that the base salary percentages (which determine target payouts) for all NEOs should remain consistent with the 2015 percentages, determining that total target cash compensation payable to the NEOs continued to approximate the market median of the peer groups evaluated by the Committee.
|
NEO
|
2016 Base Salary
|
Base Salary Percentage
|
2016 Target Payout
|
2016 Maximum Payout
|
|
Bruce D. Hoechner
|
$625,000
|
100%
|
$625,000
|
$2,500,000
|
|
Janice Stipp
|
$400,000
|
50%
|
$200,000
|
$500,000
|
|
Jay Knoll
|
$350,000
|
50%
|
$175,000
|
$500,000
|
|
Robert C. Daigle
|
$345,000
|
50%
|
$172,500
|
$500,000
|
|
Helen Zhang
|
$340,700
|
50%
|
$170,350
|
$500,000
|
Following the end of 2016, the Committee determined that the Company had generated positive annual operating income, thereby satisfying the performance goal. To assist in making decisions as to when, and to what extent, to exercise negative discretion to
25
reduce awards otherwise payable under the AICP, the Committee then looked to each NEO’s achievement with respect to certain previously identified corporate/business unit and individual performance metrics.
The Committee considered the following corporate performance metrics in its analysis (dollars in millions):
|
Performance Metric (1)
|
Threshold Performance (25% target payout)
|
Target Performance (100% target payout)
|
Maximum Performance (200% target payout)
|
Actual Performance
|
|
Net sales (2)
|
$520.0
|
$650.0
|
$780.0
|
$645.2
|
|
Operating income (3)
|
$71.4
|
$89.3
|
$107.1
|
$88.0
|
(1) The Committee did not include net sales or operating income attributable to DeWAL in either the targets or the actual performance.
(2) In addition to excluding net sales attributable to DeWAL when measuring 2016 net sales, the Committee also excluded certain currency adjustments.
(3) In addition to excluding operating income attributable to DeWAL when measuring 2016 operating income, the Committee excluded the following charges which the Committee believes will result in long term benefits to the Company: (i) severance charges and related costs for the relocation of the Company’s headquarters and (ii) acquisition costs related to the Diversified Silicone Products, Inc. and DeWAL acquisitions. The Committee also excluded a bad debt allowance adjustment, certain currency adjustments and the positive effect of an environmental accrual reversal.
With respect to Messrs. Hoechner, Knoll, Daigle and Ms. Stipp, each corporate performance metric was assigned a 40% weight. With respect to Ms. Zhang, each corporate performance metric was assigned a 10% weight. Because Ms. Zhang is responsible for the PES business segment, the Committee also considered net sales and operating income for PES, each given a 30% weight, when determining her actual AICP payout. The Company believes publication of these business unit metrics would cause it competitive harm. While the specific performance targets for PES are confidential, the Committee believes these net sales and operating income metrics were reasonably difficult to achieve. In 2016, PES fell between threshold and target performance with respect to net sales and operating income.
In addition to the corporate/business unit metrics discussed above, the Committee assigned a 20% weight to achievement of annual individual performance metrics (“MBOs”) by each NEO. Mr. Hoechner established the MBOs for each NEO other than himself following consultation with the NEOs in early 2016. The Committee established Mr. Hoechner’s MBOs following consultation with Mr. Hoechner. The MBOs for the NEOs related to both quantitative performance objectives such as achievement of the annual financial plan and sales, operating efficiencies, and safety goals, and qualitative performance objectives such as updating the corporate/business unit growth strategy, expanding the Company’s research and development pipeline and streamlining the Company’s financial reporting process. Mr. Hoechner evaluated the performance of each NEO other than himself against his or her MBOs and provided his evaluation to the Committee. The Committee evaluated Mr. Hoechner’s performance following discussions with Mr. Hoechner and then making its own assessment of Mr. Hoechner’s performance against his MBOs.
26
Following consideration of each NEO’s achievement of the performance metrics discussed above, the Committee awarded the following AICP payouts to the NEOs:
|
NEO
|
Actual AICP payout
|
|
Bruce D. Hoechner
|
$684,000
|
|
Janice Stipp
|
$224,880
|
|
Robert C. Daigle
|
$193,584
|
|
Jay Knoll
|
$190,520
|
|
Helen Zhang
|
$158,181
|
Long-Term Incentive Compensation
Our LTIP is intended to compensate executives for their longer-term contributions to Company performance, based upon metrics that closely align with long-term shareholder value. For our NEOs, we use a combination of time- and performance-based RSUs to balance retention and attainment of financial and operational goals. The Committee believes that such long-term incentive compensation aligns the interests of our NEOs with the interests of our shareholders.
In early 2016, Mr. Hoechner recommended to the Committee the target total dollar value of the 2016 long-term incentive award for each then-serving NEO other than himself. The Committee considered this recommendation, along with input from the Consultant regarding median market compensation, in establishing the target-long term incentive award values below. The Committee concluded that an increase in the total LTIP award for each NEO was appropriate to bring target direct compensation for all NEOs closer to the market median.
|
NEO
|
Target Total LTIP Award
|
Performance-Based RSUs
|
Time-Based RSUs
|
|
Bruce D. Hoechner
|
$1,550,000
|
$775,000
|
$775,000
|
|
Janice Stipp
|
$430,000
|
$215,000
|
$215,000
|
|
Robert C. Daigle
|
$430,000
|
$215,000
|
$215,000
|
|
Jay Knoll
|
$370,000
|
$185,000
|
$185,000
|
|
Helen Zhang
|
$420,000
|
$210,000
|
$210,000
|
Additional information regarding the equity awards provided to our NEOs during 2016, including, where applicable, the number of target and maximum number of shares, is set forth in both the “Grants of Plan Based Awards for Fiscal Year 2016” table on page 34, the “Outstanding Equity Awards at End of Fiscal Year 2016” table on page 36, and the “Options Exercises and Stock Vested for Fiscal Year 2016” table on page 37.
Performance-Based RSUs
Performance-based RSUs are settled in shares after a three-year performance period. The number of shares delivered under performance-based RSUs can range from zero to 200% of the units initially awarded, depending on performance, and delivery generally requires employment throughout the three-year performance period. There are up to three outstanding performance-
27
based RSU awards at any time. Performance for RSUs awarded in 2014 and 2015 is tied to the Company’s three-year TSR performance (60% weighting) and three-year ROIC (40% weighting), each relative to the performance of the Index (as defined below). In 2016, the Committee concluded that performance tied solely to the Company’s three-year TSR performance relative to the Index was appropriate given (i) the Company’s strategic focus on synergistic acquisition opportunities and (ii) the Committee’s focus on the selection of challenging performance metrics subject to efficient assessment at the end of a performance period. The three-year performance period for awards granted in 2014 (based on both TSR and ROIC performance) was completed in 2016.
At the end of the performance period, the Committee compares the relevant performance measure(s) to those of a specified group of peer companies selected by the Committee from within Standard and Poor’s Semiconductor/Semiconductor Equipment group and the Technology Hardware/Equipment Industry group at the time that each grant is made (the “Index”). The Committee believes that the Index is an appropriate group against which to measure the Company’s performance with respect to the relevant performance metric(s). The Committee excludes from the Index any companies that cease to be publicly reported at any time during the performance period from the calculation of the performance measures.
Measuring TSR performance
|
•
|
TSR performance is calculated for the Company and all companies in the Index by comparing the relevant company’s average daily closing stock price for a specified period prior to the start of the performance period to its average daily closing stock price for the corresponding period immediately preceding the end of the performance period. The calculation reflects adjustments for stock splits, reverse stock splits and similar extraordinary events that occur during the performance period. For performance-based awards granted in 2014 and 2015, the calculation disregards regular cash dividends, while performance-based awards granted in 2016 will reflect cash dividends paid during the performance period.
|
|
•
|
Vesting at the end of the applicable three-year performance period is based on the Company’s TSR performance ranked against the TSR performance of the companies in the Index. The amount vested, if any, is established on a straight-line basis based on the table set forth below.
|
Measuring ROIC performance (for grants prior to 2016)
|
•
|
ROIC performance is calculated for the Company and all companies in the Index by computing the three-year average of annual ROIC, defined as earnings before interest and taxes as a percentage of annual invested capital, for the performance period. The calculation disregards certain non-recurring items to the extent recognized in company financial statements: (i) any loss or gain resulting from the early extinguishment of debt, (ii) the cumulative effect of a change in accounting principles, (iii) write offs related to fresh start accounting adjustments or (iv) extraordinary items under GAAP.
|
|
•
|
Vesting at the end of the applicable three-year performance period is based on the Company’s ROIC performance ranked against the ROIC performance of the companies in the Index. The amount vested, if any, is established on a straight-line basis based on the table below.
|
28
|
Company Relative TSR or ROIC Performance
|
Payout Percentage for TSR Performance
|
Payout Percentage for ROIC Performance
|
|
25%
|
0% (threshold)
|
0% (threshold)
|
|
30%
|
20%
|
20%
|
|
35%
|
40%
|
40%
|
|
40%
|
60%
|
60%
|
|
45%
|
80%
|
80%
|
|
50%
|
100% (target)
|
100% (target)
|
|
55%
|
120%
|
120%
|
|
60%
|
140%
|
140%
|
|
65%
|
160%
|
160%
|
|
70%
|
180%
|
180%
|
|
75%
|
200% (maximum)
|
200% (maximum)
|
With respect to the TSR and ROIC measures, the performance goals are designed to be appropriately challenging, and there is a risk that the performance-based RSUs will not vest or will vest at less than 100% of target.
Following the end of the 2014-2016 performance period, the Committee reviewed calculations of the Company’s relative TSR and ROIC performance prepared by the Consultant. Following this review, the Committee determined that the payout percentage for TSR performance was 57.2% and for ROIC performance was 177.6%. Multiplying these performance percentages by their respective ratings, the Committee concluded that the NEOs had earned 105.4% of the target number of shares under these awards.
Time-Based RSUs
The Committee uses time-based RSUs to provide a long-term incentive vehicle that emphasizes retention. Annual time-based RSUs granted to our NEOs are generally subject to three-year ratable vesting and require executives to remain continuously employed by the Company through the applicable vesting dates. See “Potential Payments on Termination or Change in Control” beginning on page 40 for information about the limited circumstances in which these awards could be subject to accelerated vesting. The value of time-based RSUs ultimately earned is tied to the price of the Company’s capital stock following the vesting period, and the Committee believes the awards align NEO interests with long-term shareholder interests. As noted above at the outset of this section, the Committee granted time-based RSUs to the NEOs during 2016. In addition, a ratable portion of awards made in 2014 and 2015 vested during the year.
Phantom Stock Award
Ms. Zhang received a cash payment of $76,930 in connection with the vesting of the final tranche of a phantom stock award granted to her in 2013. Prior to 2014, the Company could not make equity awards to its China-based employees. Accordingly, in lieu of the three-year time-based RSU being granted to other executives in 2013, Ms. Zhang received a phantom stock award for 5,050 shares, which vested ratably over three years beginning in 2014. The final tranche of this award vested in February 2016, and due to the decrease in company stock price between February 2015 and February 2016, resulted in a smaller cash payout than in 2015.
29
Other Benefits
We also provide our NEOs with the following additional benefits:
|
•
|
Section 401(k) and health and welfare benefits on substantially the same terms and conditions as they are provided to most of our other employees;
|
|
•
|
A non-qualified funded deferred compensation plan that allows executives to defer salary and bonus and receive matching contributions on deferred amounts in a cost effective tax-advantaged basis;
|
|
•
|
Severance and change-in-control protection to increase retention and mitigate potential conflicts of interest when NEOs perform their duties in connection with a potential change in control transaction; and
|
|
•
|
Physicals as part of an annual executive physical program.
|
Among our NEOs, only Mr. Daigle is eligible for pension benefits, as described further on page 38.
In addition, the Company provides Ms. Zhang with an allowance for housing and travel (including an automobile) similar to allowances provided to certain other Company executives based in China. In 2016, Ms. Stipp received compensation as reimbursement for relocation expenses associated with the commencement of her employment in late 2015 and Mr. Knoll received compensation as reimbursement for relocation expenses associated with our headquarters relocation.
Share Ownership and Retention Guidelines; Prohibition on Hedging
Share ownership and retention guidelines help to foster a focus on long-term growth. NEOs other than the CEO are expected to own Company stock valued at least two times base salary no later than the completion of 10 years of service as an executive officer. With respect to the CEO, the Committee expects stock ownership to reach three times base salary within seven years of service as CEO. As of March 7, 2017, Messrs. Hoechner and Daigle held Company shares exceeding these stock ownership guidelines. Mr. Knoll, who joined the Company in late 2014, Ms. Stipp, who joined the Company in late 2015, and Ms. Zhang, who received her first equity award in 2014 when the Company began granting such awards in China, are making progress towards meeting our stock ownership guidelines.
The Company’s Insider Trading Policy prohibits executive officers (as well as directors) from engaging in hedging transactions involving the Company’s stock.
Risk Considerations Related to Compensation
The Committee does not believe that our compensation programs encourage risks that are reasonably likely to have a material adverse effect on the Company. This belief is based on the following:
|
•
|
The compensation philosophy and strategy are reviewed by the Committee on an annual basis to ensure they align with and support our business strategy.
|
30
|
•
|
At-risk pay comprises a substantial majority of our executive compensation, with company, business unit and individual performance having a meaningful effect on payouts to our NEOs. In connection therewith, performance of the CEO and the other NEOs is evaluated by the Committee each year.
|
|
•
|
Equity awards for executives vest over a three-year period, which discourages undue short-term risk taking.
|
|
•
|
Equity represents a significant portion of our executive compensation, and payouts with respect to 50% of our equity awards are contingent on Company performance.
|
|
•
|
Our equity ownership guidelines encourage a long-term perspective by our executives.
|
|
•
|
Our Committee engages an independent compensation consultant.
|
|
•
|
The Committee has negative discretion to lower compensation plan payouts.
|
|
•
|
We have a compensation recovery policy in place to recover any compensation earned by or paid to an executive officer from any financial result or operating objective that was impacted by the officer’s misconduct.
|
Compensation and Organization Committee Interlocks and Insider Participation
None of the Compensation and Organization Committee members:
|
•
|
Has ever been an officer or employee of the Company;
|
|
•
|
Is or has been a participant in a related party transaction with the Company (see “Related Party Transactions” for a description of our policy on related party transactions); or
|
|
•
|
Has any other interlocking relationships requiring disclosure under applicable SEC rules.
|
Compensation and Organization Committee Report
The Compensation and Organization Committee of the Board of Directors of Rogers Corporation reviewed and discussed this Compensation Discussion and Analysis set forth above with management, and based upon such review and discussion, recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
March 5,
2017
Members of the Compensation and Organization Committee
|
Michael F. Barry, Chairperson
|
|
Keith L. Barnes, Member
|
|
Ganesh Moorthy, Member
|
|
Helene Simonet, Member
|
|
Peter C. Wallace, Member
|
31
Summary Compensation Table
The following table sets forth summary information concerning compensation paid or accrued for services rendered to the Company by the following executive officers during the year ended December 31, 2016: (i) the Company’s President and CEO, (ii) the Company’s CFO, and (iii) the three other most highly compensated executive officers who were serving as executive officers at the end of fiscal year.
|
Years
|
Bonus
|
Stock Awards
|
Non-Equity Incentive Plan Compensation
|
Change in Pension Value and Non-Qualified Deferred Compensation Earnings
|
All Other Compensation
|
|||
|
Name and Principal Position
|
Covered
|
Salary
|
(1)
|
(2)
|
(3)
|
(4)
|
Total
|
|
|
Bruce D. Hoechner
|
2016
|
$625,000
|
$0
|
$1,515,464
|
$684,000
|
$0
|
$38,182
|
$2,862,646
|
|
President and
|
2015
|
$619,231
|
$0
|
$1,470,405
|
$130,000
|
$0
|
$78,072
|
$2,297,708
|
|
Chief Executive Officer
|
2014
|
$576,923
|
$0
|
$1,327,658
|
$1,302,346
|
$0
|
$35,073
|
$3,242,000
|
|
Janice E. Stipp
|
2016
|
$400,000
|
$0
|
$420,838
|
$224,880
|
$0
|
$23,013
|
$1,068,731
|
|
VP Finance,
|
2015
|
$53,846
|
$50,000
|
$400,218
|
$0
|
$0
|
$2,946
|
$507,010
|
|
Chief Financial Officer
|
||||||||
|
and Treasurer
|
||||||||
|
Robert C. Daigle
|
2016
|
$345,000
|
$0
|
$420,838
|
$193,584
|
$12,036
|
$19,555
|
$991,013
|
|
Sr. VP and Chief
|
2015
|
$341,885
|
$0
|
$409,785
|
$40,000
|
$158,681
|
$37,977
|
$988,328
|
|
Technology Officer
|
2014
|
$329,308
|
$0
|
$384,703
|
$317,146
|
-$133,672
|
$30,187
|
$927,672
|
|
Jay B. Knoll
|
2016
|
$350,000
|
$0
|
$362,636
|
$190,520
|
$0
|
$60,201
|
$963,357
|
|
VP, General Counsel and
|
||||||||
|
Secretary
|
||||||||
|
Helen Zhang
|
2016
|
$323,222 (5)
|
$0
|
$411,884
|
$158,181
|
$0
|
$117,370
|
$1,010,657
|
|
VP PES and
|
2015
|
$327,350 (5)
|
$0
|
$357,558
|
$20,000
|
$0
|
$110,850
|
$815,758
|
|
President Rogers Asia (6)
|
2014
|
$326,191 (5)
|
$0
|
$358,083
|
$233,794
|
$0
|
$117,434
|
$1,035,502
|
|
(1)
|
Ms. Stipp was paid a sign-on bonus when she joined the Company in November 2015.
|
|
(2)
|
Reflects the aggregate grant date fair value of the performance-based RSUs and time-based RSUs granted during each listed year. The grant date fair value of the performance-based RSUs is based on the probable outcome (as of the grant date) of the performance conditions applicable to those grants. For this purpose, the probable outcome was considered to be the compensation cost over the performance period that would have resulted if the Company achieved target performance during the performance period. The performance-based RSUs granted during 2014 had a 105.4.% payout (for a discussion of the performance goals and actual performance that resulted in this payment, see pages 27-29). The grant date fair value of the 2016 performance-based RSUs assuming the highest level of performance achievement would be $1,515,464, $420,882, $420,882, $362,636, and $411,884, respectively, for Mr. Hoechner, Ms. Stipp, Messrs. Daigle and Knoll, and Ms. Zhang. The grant date fair value of the time-based RSUs reported above is based on the closing price of Rogers’ stock on the grant date. The assumptions used to calculate the compensation cost are disclosed in footnote 14 of the Company’s 2016 Form 10-K, footnote 14 of the Company’s 2015 Form 10-K and footnote 13 of the Company’s 2014 Form 10-K.
|
|
(3)
|
Reflects the aggregate change in the accumulated present value of each NEO’s accumulated benefit under the Pension Plan and Pension Restoration Plan, and aggregate earnings in the Non-Qualified Deferred Compensation Plan for Key Employees for each listed year. None of the NEOs accrued additional pension benefits in 2016. Information regarding the calculation of these amounts can be found in the “Pension Benefits at End of Fiscal Year 2016” section beginning on page 41. As explained on page 38, Mses. Stipp and Zhang and Messrs. Hoechner and Knoll are ineligible to participate in the Pension Plan and Pension Restoration Plan.
|
|
(4)
|
Reflects the total amount of All Other Compensation reported in the “All Other Compensation for Fiscal Year 2016” table set forth on page 33.
|
32
|
(5)
|
Ms. Zhang’s annual salary (as approved by the Committee) was $340,700 for 2016 and 2015, and $324,500 for 2014. The variations to these amounts shown in the table reflect fluctuations in currency exchange rates, timing in accordance with local payment practices, and other factors.
|
|
(6)
|
Using 2016 12-month average currency exchange rate of 6.64310 CNY per USD. The same exchange rate has been applied, where applicable, to the remaining compensation tables.
|
All Other Compensation for Fiscal Year 2016
The following table sets forth aggregate amounts of All Other Compensation earned or accrued by the Company for the year ended December 31, 2016 on behalf of the NEOs. Rogers does not provide any additional perquisites to its NEOs other than what is reported in the table below. The total amount reflected below is set forth in the “All Other Compensation” column of the “Summary Compensation Table” on page 32.
|
Name
|
401(k) Match
|
Relocation, Housing and Transportation Allowance (1)
|
Executive Physical
|
Insurance (2)
|
Deferred Compensation Company Match (3)
|
All Other Compensation Total
|
|
|
Bruce D. Hoechner
|
$9,104
|
$0
|
$5,904
|
$2,124
|
$21,050
|
$38,182
|
|
|
Janice E. Stipp
|
$9,077
|
$7,087
|
$0
|
$2,124
|
$4,725
|
$23,013
|
|
|
Robert C. Daigle
|
$9,031
|
$0
|
$0
|
$2,124
|
$8,400
|
$19,555
|
|
|
Jay Knoll
|
$6,419
|
$43,357
|
$8,301
|
$2,124
|
$0
|
$60,201
|
|
|
Helen Zhang
|
$0
|
$67,484
|
$3,012
|
$46,874
|
$0
|
$117,370
|
|
|
(1)
|
The amount paid to Mr. Knoll relates to reimbursement for relocation expenses associated with our headquarters relocation. The amount paid to Ms. Stipp relates to relocation expenses incurred in 2016 in connection with the commencement of her employment in late 2015. For Ms. Zhang, the amount includes $36,128 for housing, $27,096 for automobile and gasoline reimbursement, and $4,260 for flight allowances.
|
|
(2)
|
Reflects amounts paid by Rogers for life insurance premiums. For Ms. Zhang, this represents the Company’s payment of supplementary Insurance Allowance ($19,569, Supplementary Insurance Allowance Reimbursement ($7,527), other statutory benefits ($15,890) and Other Benefits ($3,888).
|
|
(3)
|
Reflects Rogers’ matching contributions to the Rogers Corporation Deferred Compensation Plan.
|
33
Grants of Plan Based Awards for Fiscal Year 2016
The following table shows all plan-based awards granted to the NEOs during fiscal year 2016. The awards under the AICP are cash awards, and the time-based RSUs and performance-based RSUs are non-cash awards (i.e., equity awards). The equity awards identified in the table below are also reported in the “Outstanding Equity Awards at End of Fiscal Year 2016” table beginning on page 36 and the “Summary Compensation Table” on page 32.
|
All other
|
|||||||||
|
Stock
|
Grant Date
|
||||||||
|
Awards:
|
Fair Value
|
||||||||
|
Estimated Possible
|
Estimated Future Payouts
|
Number of
|
of Stock
|
||||||
|
Grant
|
Payouts under Non-Equity
|
under Equity Incentive
|
Shares of
|
and Option
|
|||||
|
Date
|
Incentive Plan Awards
|
Plan Awards (Expressed in Shares)
|
Stock or
|
Awards
|
|||||
|
Name
|
(1)
|
Units
|
(2)
|
||||||
|
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Maximum
|
||||
|
Bruce D.
|
$625,000
|
$2,500,000
|
|||||||
|
Hoechner
|
2/10/2016
|
16,925
|
$757,732
|
||||||
|
2/10/2016
|
0
|
16,925
|
33,850
|
$757,732
|
|||||
|
Janice
|
$200,000
|
$500,000
|
|||||||
|
Stipp
|
2/10/2016
|
4,700
|
$210,419
|
||||||
|
2/10/2016
|
0
|
4,700
|
9,400
|
$210,419
|
|||||
|
Robert C.
|
$172,500
|
$500,000
|
|||||||
|
Daigle
|
2/10/2016
|
4,700
|
$210,419
|
||||||
|
2/10/2016
|
0
|
4,700
|
9,400
|
$210,419
|
|||||
|
Jay B.
|
$175,000
|
$500,000
|
|||||||
|
Knoll
|
2/10/2016
|
4,050
|
$181,318
|
||||||
|
2/10/2016
|
0
|
4,050
|
8,100
|
$181,318
|
|||||
|
Helen
|
$170,350
|
$500,000
|
|||||||
|
Zhang
|
2/10/2016
|
4,600
|
$205,942
|
||||||
|
2/10/2016
|
0
|
4,600
|
9,200
|
$205,942
|
|||||
|
(1)
|
Represents performance-based RSUs where the actual number of shares to be issued will vary depending upon the Company’s TSR relative to a group of peer companies during the Company’s 2016 through 2018 performance cycle. These peer companies were selected by the Committee at the time of grant.
|
|
(2)
|
Reflects the aggregate grant date fair value for time-based RSUs and performance-based RSUs.
|
34
Additional Information Regarding (i) the Summary Compensation Table and (ii) Stock Awards Shown in Grants of Plan-Based Awards for Fiscal Year 2016
Time-Based and Performance-Based RSUs
The Committee converts each NEO’s target long-term incentive award value into a number of target shares using the average closing price per share of Rogers’ common stock for the 30 trading days prior to the grant date, rounding up to the nearest 50 shares. The share price that was used in 2016 for this conversion was $45.83, based on the average closing price per share of Rogers’ stock for the 30 trading days prior to the February 10, 2016 grant date. The RSUs are then divided equally between time-based and performance-based RSUs. Each NEO receiving performance-based RSUs may earn up to twice the target award if performance is achieved beyond target levels.
35
Outstanding Equity Awards at End of Fiscal Year 2016
The following table contains information regarding outstanding equity awards held by the NEOs as of December 31, 2016. Stock options are reported under the heading “Option Awards.” Time-based RSUs are reported in the first two columns under the heading “Stock Awards.” Performance-based RSUs are reported under the heading “Equity Incentive Plan.”
|
Option Awards
|
Stock Awards
|
|||||||||||||||||
|
Equity Incentive Plan
|
||||||||||||||||||
|
Plan Awards:
|
Plan Awards:
|
|||||||||||||||||
|
Name
|
Grant Date
|
Number of
|
Number
|
Market Value of
|
Number of
|
Market or
|
||||||||||||
|
Securities
|
of Shares
|
Shares or
|
Unearned Shares,
|
Payout Value of
|
||||||||||||||
|
Underlying
|
or Units of
|
Units of
|
Units or Other
|
Unearned Shares,
|
||||||||||||||
|
Unexercised
|
Option
|
Option
|
Stock That
|
Stock That
|
Rights That
|
Units or Other
|
||||||||||||
|
Options
|
Exercise
|
Expiration
|
Have Not
|
Have Not
|
Have Not
|
Rights That Have
|
||||||||||||
|
Exercisable
|
Price
|
Date
|
Vested
|
Vested
|
Vested
|
Not Vested
|
||||||||||||
|
(1)
|
(2)
|
(3)
|
(4)
|
(3)
|
||||||||||||||
|
Bruce D.
|
10/3/2011
|
23,200
|
|
$
|
37.05
|
|
10/3/2021
|
|||||||||||
|
Hoechner
|
2/11/2014
|
3,825
|
$293,798
|
|||||||||||||||
|
2/18/2015
|
6,100
|
$468,541
|
||||||||||||||||
|
2/10/2016
|
16,925
|
$1,300,009
|
||||||||||||||||
|
2/18/2015
|
18,300
|
$1,405,623
|
||||||||||||||||
|
2/10/2016
|
33,850
|
$2,600,019
|
||||||||||||||||
|
Janice
|
11/9/2015
|
2,600
|
$199,706
|
|||||||||||||||
|
Stipp
|
2/10/2016
|
4,700
|
$361,007
|
|||||||||||||||
|
11/9/2015
|
7,800
|
$599,118
|
||||||||||||||||
|
2/10/2016
|
9,400
|
$722,014
|
||||||||||||||||
|
Robert C.
|
5/12/2011
|
5,800
|
|
$
|
47.89
|
|
5/12/2021
|
|||||||||||
|
Daigle
|
2/9/2012
|
8,000
|
|
$
|
41.27
|
|
2/9/2022
|
|||||||||||
|
2/11/2014
|
1,108
|
$85,105
|
||||||||||||||||
|
2/18/2015
|
1,700
|
$130,577
|
||||||||||||||||
|
2/10/2016
|
4,700
|
$361,007
|
||||||||||||||||
|
2/18/2015
|
5,100
|
$391,731
|
||||||||||||||||
|
2/10/2016
|
9,400
|
$722,014
|
||||||||||||||||
|
Jay B.
|
11/10/2014
|
717
|
$55,073
|
|||||||||||||||
|
Knoll
|
2/18/2015
|
1,216
|
$93,401
|
|||||||||||||||
|
2/10/2016
|
4,050
|
$311,081
|
||||||||||||||||
|
2/18/2015
|
3,650
|
$280,357
|
||||||||||||||||
|
2/10/2016
|
8,100
|
$622,161
|
||||||||||||||||
|
Helen
|
11/24/2014
|
1,650
|
$126,737
|
|||||||||||||||
|
Zhang
|
2/18/2015
|
1,483
|
$113,909
|
|||||||||||||||
|
2/10/2016
|
4,600
|
$353,326
|
||||||||||||||||
|
2/18/2015
|
4,450
|
$341,805
|
||||||||||||||||
|
2/10/2016
|
9,200
|
$706,652
|
||||||||||||||||
36
|
(1)
|
The stock options for Mr. Daigle have a ten year term and are subject to earlier termination as follows: in the case of death, disability or retirement, the option term expires upon the earlier of the end of the remaining term or five years following the termination event and in all other cases of termination, the option term expires upon the earlier of the end of the remaining term of the option or three months following the termination event. Mr. Hoechner’s stock options are subject to the same terms as described above but they will expire five years after any qualifying involuntary termination or the tenth anniversary of the grant date of such stock options, whichever is earlier.
|
|
(2)
|
Represents 2014, 2015, and 2016 time-based RSUs that vest in equal one-third increments on each of the first three anniversaries of the grant date, provided that the executive is still employed by the Company. For the 2014 grants, accelerated pro-rata vesting applies in the case of death or disability, and in certain cases, in connection with a Change in Control (as defined below). For the 2015 and 2016 grants, accelerated pro-rata vesting applies in case of death, disability or termination of employment after attaining at least 60 years of age and completing five years of service and in certain cases, in connection with a Change in Control. See the discussion under “Potential Payments on Termination or Change in Control” beginning on page 45.
|
|
(3)
|
Calculation based on the closing price of the Company’s common stock of $76.81 per share on December 30, 2016 (the last trading day of the Company’s fiscal year).
|
|
(4)
|
Represents 2015 and 2016 performance-based RSUs outstanding as of year-end 2016. The disclosed amounts for the 2015 - 2017 grant and the 2016 - 2018 grant reflect the maximum possible payout (200%) as the payout of 2014-2016 performance-based RSUs was above target. Except as described in connection with a Change in Control below, payment of shares earned based on performance generally requires that the executive remain employed on the last day of the fiscal year in the relevant performance period.
|
Option Exercises and Stock Vested for Fiscal Year 2016
The following table sets forth time-based and performance-based RSUs for all NEOs that vested during 2016. There were no stock option exercises by NEOs during 2016.
|
|
Stock Awards
|
||
|
Name
|
Number of Shares Acquired on Vesting
|
Value Realized Upon Vesting (1)(2)
|
|
|
Bruce D. Hoechner
|
22,078
|
$1,376,328
|
|
|
Janice Stipp
|
1,300
|
$93,392
|
|
|
Robert C. Daigle
|
6,791
|
$416,646
|
|
|
Jay B. Knoll
|
3,591
|
$252,827
|
|
|
Helen Zhang
|
4,075 (3)
|
$231,315
|
|
|
(1)
|
With respect to performance-based RSUs, reflects the shares earned for performance during the 2014 - 2016 period at the closing price of $76.81 of Rogers’ stock on December 30, 2016, the last day of the performance period.
|
|
(2)
|
With respect to the phantom stock award previously made to Ms. Zhang and time-based RSUs, reflects the value of shares vesting during 2016 based on the closing price of Rogers’ stock on the respective vesting dates.
|
|
(3)
|
Includes vesting of 1,683 shares of phantom stock granted in 2013.
|
37
Pension Benefits at End of Fiscal Year 2016
The table below sets forth information regarding the present value as of December 31, 2016 of the accumulated pension benefits of the NEOs. The present values were determined using assumptions consistent with those outlined in footnote 10 of the Company’s 2016 Form 10-K.
|
Name
|
Plan Name
|
Number of Years Credited Service
|
Present Value
of
Accumulated
Benefit
|
Payments
During the Last
Fiscal Year
|
|
Bruce D. Hoechner
(1)
|
Rogers Corporation Pension Plan
|
0
|
0
|
0
|
|
Rogers Corporation Pension Restoration Plan
|
0
|
0
|
0
|
|
|
Janice E. Stipp
(1)
|
Rogers Corporation Pension Plan
|
0
|
0
|
0
|
|
Rogers Corporation Pension Restoration Plan
|
0
|
0
|
0
|
|
|
Robert C. Daigle
|
Rogers Corporation Pension Plan
|
25
|
740,379
|
0
|
|
Rogers Corporation Pension Restoration Plan
|
25
|
154,619
|
0
|
|
|
Jay Knoll
(1)
|
Rogers Corporation Pension Plan
|
0
|
0
|
0
|
|
Rogers Corporation Pension Restoration Plan
|
0
|
0
|
0
|
|
|
Helen Zhang
(1)
|
Rogers Corporation Pension Plan
|
0
|
0
|
0
|
|
Rogers Corporation Pension Restoration Plan
|
0
|
0
|
0
|
|
|
(1)
|
Salaried employees hired after December 31, 2007 are ineligible to participate in Rogers Corporation’s Pension Plan or Pension Restoration Plan.
|
Rogers maintains a tax-qualified defined benefit pension plan (the “Pension Plan”) and a non-qualified unfunded pension plan (the “Pension Restoration Plan”) that is primarily designed to restore pension benefits that cannot be provided under the tax-qualified defined benefit pension plan. Benefit accrual under these plans ceased as of June 30, 2013.
A participant may commence payment of early retirement benefits under the Pension Plan at any time after attaining age 55. The early retirement benefit equals the normal retirement benefit reduced by 0.333% for each month (4% per year) that a participant commences benefits before attaining normal retirement age.
A lump sum payment is unavailable under the Pension Plan (except for a single lump sum benefit if the actuarially equivalent value is $5,000 or less). Payment options under the Pension Plan are as follows:
|
•
|
Single life annuity
|
|
•
|
Joint and survivor annuity (50%, 66 2/3%, 75% and 100%)
|
|
•
|
10 year certain annuity
|
Annuity features providing for continued payment to a survivor or guaranteed payments to beneficiaries are not subsidized by Rogers. Employees may elect their form of payment under the Pension Plan when they begin to collect their pension benefit.
If a participant dies before commencing payments under the Pension Plan, a death benefit is payable to the participant’s surviving spouse or, if there is no surviving spouse, the participant’s surviving children under the age of 21. In general, this benefit equals
38
the amount payable under the survivor portion of the 50% joint and survivor annuity beginning in no event before the participant’s 55th birthday.
Pension Restoration Plan
Benefits under the Pension Restoration Plan are only payable in a lump sum. The lump sum amount is calculated using mortality tables applicable to tax qualified plans under IRS rules and an interest rate equal to the average of the annual interest rates on 10-year U.S. Treasury notes over the five years (as reported on September 1) prior to the year of employment termination plus 20 basis points. In general, the benefit under the Pension Restoration Plan is paid six months and one day following the termination of employment.
Non-Qualified Deferred Compensation at End of Fiscal Year 2016
This table provides information about the Voluntary Deferred Compensation Plan for Key Employees (the “Plan”) maintained for the benefit of our NEOs. A NEO may only earn nonqualified deferred compensation by electing to defer receipt of compensation that would otherwise be payable to him or her in cash. The amounts shown in the column “Executive Contributions” reflect deferrals of NEO salaries earned in 2016 and, with respect to Messrs. Hoechner and Daigle, the 2015 AICP award which was payable in 2016. If the NEOs had not chosen to defer this compensation, we would have paid these amounts to the NEOs in cash in 2016.
|
Registrant
|
|||||
|
Executive
|
Contributions in
|
Aggregate
|
Aggregate
|
||
|
Contributions in
|
the Last Fiscal
|
Earnings in the
|
Aggregate
|
Balance at Last
|
|
|
the Last Fiscal
|
Year
|
Last Fiscal Year
|
Withdrawals
|
Fiscal Year
|
|
|
Name
|
Year (1)
|
(2)
|
(3)
|
Distribution
|
End (5)
|
|
Bruce D. Hoechner
|
$45,300
|
$21,050
|
$18,958
|
$0
|
$399,712
|
|
Janice E. Stipp
|
$40,000
|
$4,725
|
$2,273
|
$0
|
$46,998
|
|
Robert C. Daigle
|
$55,016
|
$8,400
|
$35,027
|
-$28,561
|
$431,055
|
|
Jay Knoll
|
$0
|
$0
|
$2,042
|
$0
|
$17,121
|
|
Helen Zhang (4)
|
$0
|
$0
|
$0
|
$0
|
$0
|
|
(1)
|
Deferred earnings are included in the “Salary” (Messrs. Hoechner and Daigle and Ms. Stipp) and “Non-Equity Incentive Plan Compensation” (Messrs. Hoechner and Daigle) columns of the Summary Compensation Table on page 32.
|
|
(2)
|
Reflects 2016 matching credit on executive contributions; included in the “Deferred Compensation Company Match” column in the All Other Compensation Table on page 37.
|
|
(3)
|
Reflects interest and investment returns on balances in 2016.
|
|
(4)
|
Ms. Zhang is ineligible to participate in the Plan.
|
|
(5)
|
This column includes amounts for Mr. Hoechner ($169,215) and Mr. Daigle ($350,119) which had been previously reflected in Summary Compensation tables.
|
The Plan allows participants to elect to defer up to 100% of their annual bonus and 50% of their base salary. The Plan allows for the participant to make investment elections similar to the qualified 401(k) plan. The participants’ balances and any earnings
39
thereon will be reflected on the Company’s books as general unsecured obligations of the Company. All payments under the Plan will come from the general assets of the Company. The Company has placed assets to pay plan benefits in a Rabbi Trust to protect the assets against a change in control in the ownership or management of the Company. Once a change in control occurs the assets may only be used to pay the promised benefit to participants, except in the event of the Company’s bankruptcy or insolvency. In the event of such an occurrence, Rabbi Trust assets are treated like all other corporate assets and are subject to the claims of all general creditors of the Company. Participants will be considered a general creditor and will have no greater rights to their balance than other general creditors.
The minimum dollar amount deferred for any year is $4,000 of salary and/or $4,000 of bonus. Compensation deferred after 2009 is only paid in cash.
A Company match is credited on all salary and bonus deferrals but with the amount of the match being equal to the rate of the 401(k) Company match (which is currently 100% of the first 1% and 50% of the next 5% of eligible compensation). The Company match on deferrals is made in cash. Each participant has a fully vested interest in the Company match.
Payment(s) of deferred amounts with respect to the deferrals made for a specific year will commence on April 15th of the year following the passage of the number of years specified by the individual in the deferral election for that year, or 30 days after the participant ceases to be an employee. Payment elections are made at the time of the deferral election. Payments are made in a lump sum or installments over a period of not more than 10 years. Any requested changes in the timing of the payments by participants must result in the extension of the existing payment date by at least an additional five years. Accelerated payment may occur upon a Change in Control or a bona fide unforeseen financial hardship. Payments made upon a participant’s separation from service may be delayed six months if necessary to avoid penalties under Internal Revenue Code Section 409A. To the extent permitted under Internal Revenue Code Section 409A, certain amounts in a participant’s deferred compensation account, such as amounts deferred and vested prior to January 1, 2005, are not subject to Section 409A.
Potential Payments on Termination or Change in Control
The section below describes the payments that may be made to NEOs upon termination of employment or in connection with a Change in Control (as defined below).
Payments Made Upon Termination
A NEO may be entitled to receive the following amounts earned during his/her term of employment regardless of the manner in which a NEO’s employment terminates, except where indicated to the contrary below:
|
•
|
Unpaid base salary through the date of termination;
|
|
•
|
Any unpaid award under the AICP with respect to a completed performance period and all vested equity awards granted under the Rogers’ equity compensation plans (except in the event of termination for cause);
|
•
All accrued and vested benefits under the Pension Plan and the Pension Restoration Plan and under the Voluntary
Deferred Compensation Plan For Key Employees, as described on pages 38-40; and
40
|
•
|
All other benefits under the Company’s compensation and benefit programs that are available to all salaried employees and do not discriminate in scope, terms or operation in favor of the NEOs.
|
Payments Made Upon Retirement
In the event of the retirement of a NEO, in addition to the items listed under the heading Payments Made Upon Termination, the retiring NEO will receive the following benefits:
|
•
|
Vesting of all outstanding unvested stock options;
|
|
•
|
Payment of a pro-rata portion of the NEO’s AICP award for the performance year in which the termination occurs, based on actual performance; and
|
|
•
|
Vesting of a pro-rata portion of time- and performance-based grants, provided that the NEO is at least 60 years old and has
at least five years of service at Rogers.
|
Payments Made Upon Death or Disability
In the event of the death or disability (as defined in the applicable compensation program) in addition to the benefits listed under the heading Payments Made Upon Termination above, the NEO will receive the following:
|
•
|
Benefits under Rogers’ disability plan or payments under Rogers’ life insurance plan, as appropriate;
|
|
•
|
Vesting of all outstanding unvested stock options;
|
|
•
|
Vesting of a pro-rata portion of any performance-based RSUs based on employment and the Company’s actual performance during the performance period. Shares with respect to vested units will be paid at the end of the performance period;
|
|
•
|
Vesting of a pro-rata portion of any time-based RSUs based on employment during the vesting period; and
|
|
•
|
Payment of a pro-rata portion of the NEO’s AICP award for the performance year in which the termination occurs based on actual performance.
|
Payments Made Upon Involuntary Termination of Employment Without Cause Prior to a Change in Control
Rogers provides separation pay to all of its regular U.S. full-time salaried employees, including the NEOs, pursuant to the Severance Pay Plan for Exempt Salaried Employees Policy (the “Severance Policy”). The Severance Policy provides severance pay to eligible salaried employees whose employment is terminated by the Company without cause. Benefits end on the last day worked and the amount of severance due under the plan is paid in a lump sum. Basic severance pay, as described below, is provided to eligible employees without any conditions, but the additional severance pay, as described below, requires the employee to sign a general release and settlement agreement. The number of weeks of severance pay is based on length of service as follows:
41
|
Length of Severance Pay
|
|||
|
Length of Service
|
Basic Severance Pay
|
Additional Severance Pay
|
Total Potential Severance
|
|
Under 6 months
|
4 weeks
|
2 weeks
|
6 weeks
|
|
6 months to under 1 year
|
4 weeks
|
4 weeks
|
8 weeks
|
|
1 year to under 4 years
|
4 weeks
|
6 weeks
|
10 weeks
|
|
4 years to under 7 years
|
4 weeks
|
8 weeks
|
12 weeks
|
|
7 years to under 21 years
|
4 weeks
|
8 weeks plus 2 weeks for each
|
Based on years of service
|
|
year of service over 6 years
|
|||
|
21 years and more
|
4 weeks
|
36 weeks plus 1 week for each
|
Based on years of service
|
|
year of service over 20 years
|
|||
The Severance Policy may be amended, modified or terminated at any time by Rogers.
In lieu of payment under the Severance Policy, Mr. Hoechner’s offer letter provides that he will receive ninety (90) weeks of base salary and continued insured welfare benefits, each provided over a period of one year after a termination of his employment by the Company without cause. Ms. Stipp’s offer letter provides that she will be entitled to a severance benefit equal to 52 weeks of her salary and target bonus due to an involuntary termination of her employment by the Company other than for cause.
Payments Made Upon Certain Events in Connection with a Change in Control
Rogers has entered into Officer Special Severance Agreements with each of its US-based NEOs. These agreements, which are also referred to below as “Change in Control Agreements,” provide for enhanced severance benefits if there is a qualifying termination during the two-year period beginning upon a Change in Control. The enhanced severance benefits under the Officer Special Severance Agreements are in lieu of any other severance benefits to which an NEO may be entitled under the Severance Policy or any other arrangements. The following severance benefits would be provided upon a qualifying termination of employment (as defined below) within two years following a Change in Control:
|
•
|
Cash severance pay equal to two and one half (2.5) multiplied by the sum of (a) base salary plus (b) target annual incentive compensation and/or any other cash bonus awards last determined for the NEO (or, if greater, most recently paid prior to the Change in Control);
|
|
•
|
Pro-rata payment of the NEO’s AICP target, except for Mr. Hoechner, who will receive a pro-rata payment based upon actual Company performance;
|
|
•
|
Continued medical, dental and life insurance benefits at active-employee rates, for a period of two and one half (2.5) years, subject to offset from subsequent employment;
|
|
•
|
Outplacement assistance up to six months; and
|
|
•
|
Reimbursement of legal and accounting fees and expenses incurred to enforce the agreement.
|
A qualifying termination of employment consists of (1) termination of employment by Rogers without cause or (2) resignation by the NEO due to a Constructive Termination. An NEO is not eligible for enhanced severance benefits under the Change in Control Agreements if his or her termination is due to death or disability. Time-based RSUs will vest upon a Change in Control only if the NEO’s employment is terminated in a manner entitling him/her to severance benefits under the Officer Special Severance Agreement or if the buyer does not assume or replace the time-based RSUs. All performance-based RSUs will vest on a pro-rata
42
basis upon a Change in Control based upon the extent to which the Company and its affiliates have met the designated performance objectives as determined by the Committee.
All of the payments described above are limited to the extent that payment would result in triggering golden parachute excise taxes under Section 280G of the Internal Revenue Code.
A “Change in Control” generally consists of one or more of the following events:
|
•
|
Closing of the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity;
|
|
•
|
Closing of the sale of all of the Company’s common stock to an unrelated person or entity; or
|
|
•
|
Consummation of any merger, reorganization, consolidation or share exchange unless the persons who were the beneficial owners of the outstanding shares of the common stock of the Company immediately before the consummation of such transaction beneficially own more than 50% of the outstanding shares of the common stock of the successor or survivor entity in such transaction immediately following the consummation of such transaction. For purposes of this paragraph, the percentage of the beneficially owned shares of the successor or survivor entity described above will be determined exclusively by reference to the shares of the successor or survivor entity which result from the beneficial ownership of shares of common stock of the Company by the persons described above immediately before the consummation of such transaction.
|
A “Constructive Termination” generally includes any of the following actions by Rogers following a Change in Control:
|
•
|
A material reduction in the officer’s annual base salary as in effect immediately prior to a Change in Control or as the same may be increased from time to time, and/or a material failure to provide the executive with an opportunity to earn annual incentive compensation and long-term incentive compensation at least as favorable as in effect immediately prior to a Change in Control or as the same may be increased from time to time;
|
|
•
|
A material diminution in the officer’s authority, duties, or responsibilities as in effect at the time of the Change in Control;
|
|
•
|
A material diminution in the authority, duties, or responsibilities of the supervisor to whom the officer is required to report (it being understood that if the officer reports to the Board, a requirement that the officer report to any individual or body other than the Board will constitute “Constructive Termination” hereunder);
|
|
•
|
A material diminution in the budget over which the officer retains authority;
|
|
•
|
Requiring the officer to be based anywhere outside a fifty mile radius of the Company’s offices at which the officer is based as of immediately prior to a Change in Control (or any subsequent location at which the officer has previously consented to be based) except for required travel on the Company’s business to an extent that is not substantially greater than the officer’s business travel obligations as of immediately prior to a Change in Control or, if more favorable, as of any time thereafter; or
|
|
•
|
Any other action or inaction that constitutes a material breach by the Company or any of its subsidiaries of the terms of the Change in Control Agreement.
|
43
The officer will not be entitled to terminate employment with the Company on account of “Constructive Termination” unless the officer provides notice of the existence of the purported condition that constitutes “Constructive Termination” within a period not to exceed 90 days of its initial existence, and the Company fails to cure such condition (if curable) within 30 days after the receipt of such notice.
A termination “for Cause” means the willful commission of material theft or embezzlement or other serious and substantial crimes against the Company and its subsidiaries.
Confidentiality and Non-Compete Agreements
The Company entered into confidentiality and non-compete agreements with most of its salaried employees, including its NEOs. These agreements generally prohibit the NEOs from accepting employment with a competitor of the Company for two years following termination of employment. If a NEO terminates employment prior to a Change in Control and cannot obtain employment at a rate of compensation at least equal to the rate in effect upon terminating employment with Rogers during this period, the NEOs may become entitled to additional payment from the Company. This payment will equal the difference between the executive’s current compensation and their last regular rate of compensation with the Company, reduced by any retirement or severance income. In lieu of making payments on account of an employment termination prior to a Change in Control, the Company can waive its rights to enforce the non-compete agreement. Enhanced severance benefits under the Officer Special Severance Agreement are contingent upon complying with non-compete obligations.
44
Post Termination Table
The following table was prepared as though each NEO terminated employment on December 31, 2016 using the closing share price of Rogers’ common stock of $76.81 as of December 30, 2016 (the last trading day of the fiscal year). The amounts under the column labeled “Termination by Rogers without Cause or Constructive Termination on or after a Change in Control” assume that a Change in Control occurred on December 31, 2016.
|
Summary of Separation Benefits
|
Termination by Rogers without Cause absent a CIC
|
Termination by Rogers without Cause or by Constructive Termination on or after a CIC
|
Termination Due to
Death or Disability
|
Termination Due to Retirement
|
|||||||
|
Bruce D. Hoechner
|
|||||||||||
|
Cash Severance
|
$1,081,731
|
(1)
|
$3,125,000
|
(3)
|
$0
|
(9)
|
$0
|
||||
|
Accelerated Vesting of Unvested Equity
|
$0
|
$2,964,226
|
(4)
|
$1,861,157
|
(10)
|
$0
|
|||||
|
Benefits Continuation
|
$28,440
|
(2)
|
$70,246
|
(5)
|
$0
|
$0
|
|||||
|
Retirement Benefits
|
$0
|
$0
|
$0
|
$0
|
|||||||
|
Outplacement Services
|
$0
|
$8,500
|
(7)
|
$0
|
$0
|
||||||
|
280G Payment Reduction
|
N/A
|
-$301,430
|
(8)
|
N/A
|
N/A
|
||||||
|
Total Pre-Tax Payment
|
$1,110,171
|
$5,866,542
|
$1,861,157
|
$0
|
|||||||
|
Janice E. Stipp
|
|||||||||||
|
Cash Severance
|
$600,000
|
(1)
|
$1,500,000
|
(3)
|
$0
|
(9)
|
$0
|
||||
|
Accelerated Vesting of Unvested Equity
|
$0
|
$880,755
|
(4)
|
$503,095
|
(10)
|
$0
|
|||||
|
Benefits Continuation
|
$0
|
$65,689
|
(5)
|
$0
|
$0
|
||||||
|
Retirement Benefits
|
$0
|
$0
|
$0
|
$0
|
|||||||
|
Outplacement Services
|
$0
|
$8,500
|
(7)
|
$0
|
$0
|
||||||
|
280G Payment Reduction
|
N/A
|
-$812,779
|
(8)
|
N/A
|
N/A
|
||||||
|
Total Pre-Tax Payment
|
$600,000
|
$1,642,165
|
$503,095
|
$0
|
|||||||
|
Robert C. Daigle
|
|||||||||||
|
Cash Severance
|
$325,096
|
(1)
|
$1,293,750
|
(3)
|
$0
|
(9)
|
$0
|
||||
|
Accelerated Vesting of Unvested Equity
|
$0
|
$827,628
|
(4)
|
$521,002
|
(10)
|
$0
|
|||||
|
Benefits Continuation
|
$26,088
|
(2)
|
$68,359
|
(5)
|
$0
|
$0
|
|||||
|
Retirement Benefits
|
$0
|
$318,317
|
(6)
|
$0
|
$0
|
||||||
|
Outplacement Services
|
$0
|
$8,500
|
(7)
|
$0
|
$0
|
||||||
|
280G Payment Reduction
|
N/A
|
$0
|
N/A
|
N/A
|
|||||||
|
Total Pre-Tax Payment
|
$351,184
|
$2,516,554
|
$521,002
|
$0
|
|||||||
|
Jay Knoll
|
|||||||||||
|
Cash Severance
|
$67,308
|
(1)
|
$1,312,500
|
(3)
|
$0
|
(9)
|
$0
|
||||
|
Accelerated Vesting of Unvested Equity
|
$0
|
$656,726
|
(4)
|
$303,403
|
(10)
|
$0
|
|||||
|
Benefits Continuation
|
$5,053
|
(2)
|
$65,689
|
(5)
|
$0
|
$0
|
|||||
|
Retirement Benefits
|
$0
|
$0
|
(6)
|
$0
|
$0
|
||||||
|
Outplacement Services
|
$0
|
$8,500
|
(7)
|
$0
|
$0
|
||||||
|
280G Payment Reduction
|
N/A
|
-$571,056
|
(8)
|
N/A
|
N/A
|
||||||
|
Total Pre-Tax Payment
|
$72,361
|
$1,472,358
|
$386,709
|
$0
|
|||||||
|
Helen Zhang
|
|||||||||||
|
Cash Severance
|
$0
|
$0
|
$0
|
$0
|
|||||||
|
Accelerated Vesting of Unvested Equity
|
$0
|
$825,708
|
(4)
|
$496,107
|
(10)
|
$0
|
|||||
|
Benefits Continuation
|
$0
|
$0
|
$0
|
$0
|
|||||||
|
Retirement Benefits
|
$0
|
$0
|
$0
|
$0
|
|||||||
|
Outplacement Services
|
$0
|
$0
|
$0
|
$0
|
|||||||
|
280G Payment Reduction
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||
|
Total Pre-Tax Payment
|
$0
|
$825,708
|
$496,107
|
$0
|
|||||||
|
(1)
|
Messrs. Daigle and Knoll are eligible to receive cash severance benefits (base salary only) under the Severance Policy, while Mr. Hoechner and Ms. Stipp are eligible to receive severance benefits under their offer letters. The severance period (assuming, in the cases of Messrs. Daigle and Knoll, the NEO signs a General Release and Settlement Agreement) for these executives is 49, 10, 90 and 52 weeks, respectively.
|
45
|
(2)
|
Reflects Rogers’ cost to provide Messrs. Hoechner, Daigle and Knoll 52, 49 and 10 weeks, respectively, of continued medical, dental, vision, and life insurance under the Severance Policy, or, in the case of Mr. Hoechner, pursuant to his offer letter.
|
|
(3)
|
Represents cash severance pay equal to two and one-half times the sum of the executive’s base salary plus the higher of target bonus or the last actual bonus paid (paid in 2016 for services in 2015). No pro-rata AICP payment is reflected in this calculation because AICP payments were already fully earned by the NEO’s continuing employment as of December 31, 2016.
|
|
(4)
|
Time-based RSUs granted under the Rogers Corporation 2009 Long-Term Equity Compensation Plan become fully vested upon a qualifying termination event occurring within two years of a Change in Control. Performance-based RSUs vest pro-rata based on the performance achieved (as determined by the Compensation and Organization Committee) during the performance period. The data reflects acceleration of the 2015 and 2016 performance-based RSUs on a pro-rata basis assuming the achievement of target performance as of December 31, 2016. This amount does not reflect the value of all outstanding equity awards as set forth on the “Outstanding Equity Awards at End of Fiscal Year 2016.”
|
|
(5)
|
Represents the cost to the Company of providing medical, dental, and life insurance for two and one-half years based on rates for 2016.
|
|
(6)
|
Represents the incremental benefits provided under the Rogers Corporation Pension Restoration Plan.
|
|
(7)
|
Represents the present value of 6 months of outplacement services.
|
|
(8)
|
Represents the estimated reduction as of December 31, 2016 to the payments set forth in this column as required in order to avoid triggering excise taxes under Section 280G of the Internal Revenue Code. The reported figure does not take into account that amounts may not be subject to reduction under Section 280G on account of being treated as reasonable compensation.
|
|
(9)
|
No pro-rata AICP payment is reflected in this estimate because AICP payments were fully earned by the NEO’s continuing employment as of December 31, 2016.
|
|
(10)
|
Represents (i) vesting of the pro-rata portion of the performance-based RSUs (based on the probable level of achievement as of December 31, 2016) and (ii) vesting of the pro-rata portion of the time-based RSUs based on employment during the vesting period.
|
46
Proposal 2: Vote on a Non-Binding Advisory Resolution to Approve 2016 NEO Compensation
In accordance with Section 14A of the Exchange Act, we are requesting shareholder approval, on a non-binding advisory basis, of the compensation of our NEOs during 2016, as described under the heading “Compensation Discussion and Analysis” beginning on page 20.
Executive compensation is an important matter for Rogers and our shareholders. We believe that our executive compensation program provides an appropriate balance between salary and incentive compensation as well as an appropriate balance between risk and reward so that such compensation practices are strongly aligned with the long-term interests of our shareholders.
We urge you to carefully read the Compensation Discussion and Analysis section of this proxy statement for additional details on Rogers’ executive compensation, including Rogers’ compensation philosophy and the 2016 compensation of our NEOs. Our Board of Directors believes that our executive compensation program is effective in implementing our compensation philosophy.
Although the advisory vote is non-binding, our Compensation and Organization Committee will review the results and consider the outcome of this vote in making future determinations regarding our executive compensation program.
Vote Required and Recommendation of the Board of Directors
The advisory vote on the compensation of our NEOs will be approved by the affirmative vote of the majority of votes properly cast (i.e., the number of shares voted “FOR” the proposal must exceed the number of shares voted “AGAINST” the proposal). Abstentions and “broker non-votes” will have no effect on the outcome of the vote.
The Board of Directors recommends a vote “FOR” the approval, on a non-binding advisory basis, of the 2016 compensation of our NEOs
.
47
Proposal 3: Advisory Vote on Frequency of Future Advisory Votes on NEO Compensation
We are requesting that our shareholders vote, on a non-binding advisory basis, on whether we present a request for a non-binding advisory vote on our NEO compensation once every one, two or three years. Pursuant to Section 14A of the Exchange Act, we are required to conduct such a vote at least once every six years.
The Board of Directors believes that having an advisory vote on NEO compensation every year will continue to be an effective way to gather feedback on the Company’s executive compensation philosophy and policies. The Board of Directors further believes that holding the advisory vote on NEO compensation annually should allow for frequent and timely feedback from shareholders. Receiving feedback from shareholders on executive compensation philosophy, policies and procedures is important to us, and we believe that an annual vote on NEO compensation is a meaningful way to conduct dialogue with shareholders on this issue.
Vote Required and Recommendation of the Board of Directors
Shareholders have the choice of voting for advisory votes on NEO compensation to occur once every one, two or three years, or abstaining from the vote. The choice receiving the highest number of votes will be given due regard by, but will not be binding on, the Board of Directors. Abstentions and “broker non-votes” will not have any effect on the outcome of this vote.
The Board of Directors recommends a vote, on an advisory basis, for future shareholder advisory votes on NEO compensation to be held EVERY YEAR.
48
Proposal 4
:
Ratification of PricewaterhouseCoopers LLP as Independent Auditor
We are asking our shareholders to ratify the selection of PwC as our independent registered public accounting firm for 2017. Although ratification is not required by our bylaws or otherwise, the Board is submitting this proposal as a matter of good corporate practice. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another independent auditor. Even if the selection is ratified, the committee may select a different independent auditor at any time during the year if it determines that doing so would be in the best interests of Rogers and our shareholders. Rogers expects representatives of PwC to attend the Annual Meeting of Shareholders. They will have an opportunity to make a statement if they wish and will be available to respond to appropriate questions.
Fees of Independent Registered Public Accounting Firm
The following table sets forth the aggregate fees billed to Rogers by PwC for the 2016 and 2015 fiscal years.
|
2016
|
|
2015
|
|
|
|
Audit Fees (1)
|
$1,742,000
|
$1,742,000
|
|
|
|
Audit-Related Fees (2)
|
$508,700
|
$35,000
|
|
|
|
Tax Fees (3)
|
$73,700
|
$140,972
|
|
|
|
All Other Fees (4)
|
—
|
—
|
||
|
Total
|
$2,324,400
|
$1,917,972
|
|
|
|
(1)
|
Audit fees consist of fees billed for professional services rendered for the audit of the Company’s consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements. Amounts also include fees for the required audit of the Company’s internal control over financial reporting.
|
|
(2)
|
Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements that are not reported under “Audit Fees.” This category includes fees related primarily to accounting consultations.
|
|
(3)
|
Tax fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning (domestic and international). These services include assistance regarding federal, state and international tax compliance; tax planning and compliance work in connection with acquisitions and international tax planning.
|
|
(4)
|
All other fees consist of fees for products and services other than the services reported above; however, there were no such fees in either year.
|
The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The Audit Committee has delegated pre-approval authority to its chairperson when expedition of services is necessary. The independent registered public accounting firm and management are required to periodically report to the full Audit Committee regarding the extent of services provided by the independent registered public accounting firm in
49
accordance with this pre-approval, and the fees for the services performed to date. All of the audit, audit-related and tax services provided by PwC in fiscal year 2016 and related fees were approved in accordance with the Audit Committee’s policy.
Vote Required for Ratification and Recommendation of the Board of Directors
The affirmative vote of a majority of the votes properly cast on this proposal will constitute approval of the ratification of the appointment of PwC as Rogers’ independent registered public accounting firm for 2017. Abstentions will not have any effect on the outcome of the proposal. If shares are held in street name by a nominee, that nominee has discretionary authority to vote shares held through it in the absence of instructions regarding how such shares should be voted.
The Board of Directors recommends a vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as Rogers’ independent registered public accounting firm for 2017.
50
Related Party Transactions
Since January 1, 2016, neither Rogers nor any of its subsidiaries has been a participant in any transaction in which any of its executive officers, directors, more than 5% shareholders, or any immediate family member of the foregoing (with any one of these being a “Related Party”) has a material interest.
Policies and Procedures for Approval of Related Party Transactions
Rogers’ Code of Business Ethics, which sets forth standards applicable to all directors, officers and employees of Rogers, prohibits the giving or accepting of personal benefits that could result in a conflict of interest. Any waiver of the Code for a director or an officer may only be granted by the Nominating and Governance Committee of the Board of Directors (as used in this section, the “Committee”). Any waiver of the Code that is granted to a director or an officer or amendment of the code will be posted on Rogers’ website, located at http://www.rogerscorp.com, or otherwise publicly disclosed, as required by applicable law or NYSE rules and regulations. Waivers for other employees must be approved by certain members of senior management.
In addition, to supplement the Code of Business Ethics, the Board of Directors has adopted a Related Party Transactions Policy. The purpose of the policy is to describe the procedures used to identify, review, approve and disclose, if necessary, any transaction or series of transactions in which: (i) the amount involved will or may be expected to exceed $120,000 in any calendar year, (ii) Rogers was, is or will be a participant (even if not necessarily a party); and (iii) a Related Party has or will have a direct or indirect interest (other than solely being a director or less than 10 percent beneficial owner of another entity) (with such transactions being “Interested Transactions”).
The Committee reviews the material facts relating to all Interested Transactions and either approves or disapproves of the Company’s entry into the Interested Transaction, subject to certain exceptions. If advance Committee approval of an Interested Transaction is not feasible, then at the Committee’s next meeting, the Interested Transaction will be considered and, if the Committee determines it to be appropriate, ratified (or if not ratified, the Committee will determine if the transaction should be terminated). In determining whether to approve or ratify an Interested Transaction, the Committee will take into account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable to the Company than terms generally available from an unaffiliated third-party under the same or similar circumstances, whether the Interested Transaction is material to the Company, the role the Related Party has played in arranging the Interested Transaction, and the extent of the Related Party’s interest in the Interested Transaction.
51
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires Rogers’ executive officers and directors, and persons who own more than 10% of Rogers’ capital stock, to file reports of ownership and changes of ownership with the SEC. Executive officers, directors and greater than 10% shareholders are required to furnish Rogers with copies of all reports they file.
Based solely on Rogers’ review of the such forms furnished to it during 2016, and written representations from certain reporting persons, Rogers believes that all of its executive officers and directors, and persons who own more than 10% of Rogers’ capital stock, complied with all Section 16(a) filing requirements applicable to them during Rogers’ year ended December 31, 2016, except as follows:
|
•
|
The Form 3 for Christopher Shadday, the newly appointed Vice President of EMS, was not timely filed.
|
|
•
|
The Form 4s disclosing deferred stock unit awards made to each non-management director on May 6, 2016 were not timely filed.
|
|
•
|
The Form 5 for Carol Jensen, a director, disclosing a bona fide gift of stock made during 2015 was not filed.
|
Shareholder Proposals and Other Shareholder Business at the 2018 Annual Meeting of Shareholders
The Nominating and Governance Committee will consider director nominees recommended by shareholders as set forth below. To be considered for inclusion in Rogers’ proxy statement and form of proxy in connection with the 2018 Annual Meeting of Shareholders, shareholder proposals must be received by Rogers on or before November 22, 2017. In addition, the Company’s bylaws establish an advance notice procedure for shareholders to present business to be conducted at the 2018 Annual Meeting of Shareholders. In order for a shareholder to present a proposal at the 2018 Annual Meeting of Shareholders pursuant to the advance notice bylaw, Rogers must receive written notice of the proposal no earlier than November 5, 2017 and no later than December 5, 2017, and the written notice must comply with the requirements of the Company’s bylaws.
Under the company’s bylaws, a shareholder who wishes to directly nominate a director candidate at the 2018 Annual Meeting of Shareholders (i.e., to propose a candidate for election who is not otherwise nominated through the process described above) must give the company written notice no earlier than November 5, 2017 and no later than December 5, 2017. The notice must contain prescribed information about the candidate and about the shareholder proposing the candidate, as described in more detail in the bylaws.
All shareholder proposals or notices of an intention to nominate a director or present other business at the 2018 Annual Meeting of Shareholders should be marked for the attention of the Office of the Corporate Secretary, Rogers Corporation, 2225 West Chandler Boulevard, Chandler, AZ 85224.
Solicitation of Proxies
Rogers will pay the cost of soliciting proxies, including preparing, assembling and mailing the Notice Regarding the Availability of Proxy Materials, proxy statement, proxy card and other proxy materials, except for some costs associated with individual shareholders’ use of the Internet or telephone. In addition to solicitations by mail, officers and employees of Rogers may solicit
52
proxies personally and by telephone, facsimile or other means, for which they will receive no compensation in addition to their normal compensation. Rogers will also request banks, brokers and other nominees holding shares for a beneficial owner to forward proxies and proxy soliciting materials to the beneficial owners of capital stock held of record by such persons. Rogers will upon request reimburse brokers and other persons for their related reasonable expenses. In addition, Rogers has retained Alliance Advisors LLC to assist it in the solicitation of proxies at a cost of approximately $5,000 plus reimbursement of certain expenses.
“Householding” of Proxy Materials
The SEC permits companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy materials with respect to two or more security holders sharing the same address by delivering a single Notice Regarding the Availability of Proxy Materials, and, for those who request, a single paper copy of the proxy statement and annual report addressed to those security holders. This process, which is commonly referred to as “householding,” potentially means extra convenience for security holders and cost savings for companies. This year, a number of brokers with account holders who are Rogers’ shareholders will be “householding” proxy materials. A single Notice Regarding the Availability of Proxy Materials and, for those who request, a single paper copy of the proxy statement and annual report will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from an affected shareholder. If, at any time, a shareholder no longer wishes to participate in “householding” and would prefer to receive a separate Notice Regarding the Availability of Proxy Materials, proxy statement and/or annual report, please notify the broker and send a written request to Rogers Corporation, Office of the Corporate Secretary, 2225 West Chandler Boulevard, Chandler, Arizona 85224 (phone: 480-917-6000) and Rogers will promptly deliver a separate copy of the proxy statement and annual report to such shareholder. Shareholders who share the same address, who currently receive multiple copies of the Notice Regarding the Availability of Proxy Materials, proxy statement and annual report and would like to request “householding” of such information should contact their broker or Rogers, using the contact information above.
Communications with Members of the Board of Directors
Although the Board of Directors has not formally adopted a process by which shareholders may communicate directly with directors, it believes that the procedures currently in place and described below will continue to serve the needs of the Board and shareholders. Until such time as the Board may adopt a different set of procedures, any such shareholder communications should be sent to the Board of Directors, Rogers Corporation, 2225 West Chandler Boulevard, Chandler, Arizona, 85224, c/o Office of the Corporate Secretary of the Company. At the present time, all such communications sent by shareholders to the above address will be forwarded to the Lead Director of the Board for consideration.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on May 4, 2017
This proxy statement and our 2016 Form 10-K for the fiscal year ended December 31, 2016, as filed with the Securities and Exchange Commission, are available at
https://materials.proxyvote.com/
775133.
53
Availability of Certain Documents
Rogers maintains a website at http://www.rogerscorp.com. Rogers’ Bylaws, Corporate Governance Guidelines, Code of Business Ethics, Related Party Transactions Policy, Audit Committee Charter, Compensation and Organization Committee Charter and Nominating and Governance Committee Charter are each available in a printable format on this page of the website: http://www.rogerscorp.com/cg/. Rogers Corporation’s website is not incorporated into or a part of this proxy statement.
54
One Technology Drive
Rogers, Connecticut 06263
PHONE:
860-774-9605
WEBSITE:
http://www.rogerscorp.com
ROGERS CORPORATION
ONE TECHNOLOGY DRIVE
P.O. BOX 188
ROGERS, CT 06263-0188
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on May 3, 2017 (May 1, 2017 for employee stock purchase plan participants). Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on May 3, 2017 (May 1, 2017 for employee stock purchase plan participants). Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
55
|
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
|
|
|
|
KEEP THIS PORTION FOR YOUR RECORDS
|
|
|
|
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
|
DETACH AND RETURN THIS PORTION ONLY
|
|
|
|
|
|
|
|
|
|
|
|
ROGERS CORPORATION
|
|
|
For
|
Withhold
|
For All
|
To withhold authority to vote for any individual
|
|
|
|
|
|
|
All
|
All
|
Except
|
nominee(s), mark “For All Except” and write the
|
|
|
|
The Board of Directors recommends a vote FOR
|
|
|
|
|
number(s) of the nominee(s) on the line below.
|
|
||
|
the following:
|
|
|
|
|
|
|
|
|
|
1.
|
Election of Directors
|
|
|
o
|
o
|
o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominees
|
|
|
|
|
|
|
|
|
|
01) Keith L. Barnes
|
|
|
|
|
|
|
|
|
|
02) Michael F. Barry
|
05) Ganesh Moorthy
|
|
|
|
|
|
|
|
|
03) Bruce D. Hoechner
|
06) Helene Simonet
|
|
|
|
|
|
|
|
|
04) Carol R. Jensen
|
07) Peter C. Wallace
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56
|
The Board of Directors recommends you vote FOR the following proposal:
|
|
|
|
||
|
|
For
|
Against
|
Abstain
|
||
|
2.
|
To vote on a non-binding advisory resolution to approve the compensation of our 2016 named executive officers.
|
o
|
o
|
o
|
|
|
The Board of Directors recommends you vote FOR 1 Year on the following proposal:
|
|||||
|
One (1) year
|
Two (2) years
|
Three (3) years
|
Abstain
|
||
|
3.
|
To vote on the frequency of future advisory votes on the compensation of our named executive officers.
|
o
|
o
|
o
|
o
|
|
The Board of Directors recommends you vote FOR the following proposal:
|
|||||
|
For
|
Against
|
Abstain
|
|||
|
4.
|
To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Rogers Corporation for the fiscal year ending December 31, 2017.
|
o
|
o
|
o
|
|
|
NOTE
: To transact such other business as may properly come before the meeting or any adjournment thereof.
|
|||||
|
For address change/comments, mark here.
|
o
|
|
|
(see reverse for instructions)
|
|
|
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
|
|
|
|
|
|
|
|
Signature [PLEASE SIGN WITHIN BOX]
|
Date
|
|
Signature (Joint Owners)
|
Date
|
|
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com
57
As a shareholder, you are entitled to vote at this year's Annual Meeting of Shareholders and are encouraged to do so by dating, signing and returning the proxy card as soon as possible.
PLEASE ACT PROMPTLY
DATE, SIGN AND MAIL YOUR PROXY CARD TODAY
|
Please detach and mail in the envelope provided only IF you are not voting via telephone or Internet.
|
||
|
|
1
|
|
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting
:
The Notice and Proxy Statement, Annual Report is/are available at
www.proxyvote.com
ROGERS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
MAY 4, 2017
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints JAY B. KNOLL and JANICE E. STIPP, and each of them, acting singly, with full power of substitution, as attorneys and proxies of the undersigned, to vote all shares of capital stock of Rogers Corporation which the undersigned is entitled to vote at the Annual Meeting of Shareholders of Rogers Corporation to be held on May 4, 2017 at 10:30 a.m., local time, at the Hyatt Regency Boston Harbor, 101 Harborside Drive, Boston, Massachusetts 02128 and any adjournment thereof. The proxies are authorized to vote all shares of stock in accordance with the instructions and with discretionary authority upon such other business as may properly come before the meeting or any adjournment thereof. The proxies will vote as The Board of Directors recommends where a choice is not specified.
|
|
|
|
|
|
Address Changes/Comments:
_______________________________________________________________
|
|
|
|
__________________________________________________________________________________
|
|
|
|
|
|
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on the reverse side
58
TABLE OF CONTENTS
Proxy StatementProposal 1: Election of DirectorsNominees for Director, Director Qualifications and ExperienceStock Ownership of Management and DirectorsBeneficial Ownership of More than Five Percent of Rogers StockCorporate Governance PracticesBoard of DirectorsDirector IndependenceBoard Leadership StructureBoard DiversityThe Boards Role in Risk OversightMeetings of the Board and CommitteesDirectors CompensationAudit Committee ReportCompensation Discussion and Analysis2016 CompensationCompensation and Organization Committee ReportSummary Compensation TableAll Other Compensation for Fiscal Year 2016Grants of Plan Based Awards for Fiscal Year 2016Additional Information Regarding (i) the Summary Compensation Table, and (ii) Stock Awards Shown in Grants of Plan-Based Awards for Fiscal Year 2016Outstanding Equity Awards at the End of Fiscal Year 2016Option Exercises and Stock Vested for Fiscal Year 2016Pension Benefits at End of Fiscal Year 2016Non-Qualified Deferred Compensation at End of Fiscal Year 2016Potential Payments on Termination or Change in ControlPost Termination TableProposal 2: Vote on a Non-Binding Advisory Resolution to Approve the Compensation of NEOsProposal 3: Advisory Vote on Frequency of Future Advisory Votes on NEO CompensationProposal 4: Ratification of PricewaterhouseCoopers LLP as Independent AuditorRelated Party TransactionsSection 16(a) Beneficial Ownership Reporting ComplianceShareholder Proposals and Other Shareholder Business at the 2018 Annual Meeting of ShareholdersSolicitation of ProxiesHouseholding of Proxy MaterialsCommunications with Members of the Board of DirectorsImportant Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on May 4, 2017Availability of Certain DocumentsProxy Card