10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________

FORM 10-Q

_______________________________

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 193

For the quarterly period ended June 30, 2011

 or

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to _______________________

Commission file number 1-4347

_______________________________

ROGERS CORPORATION

 (Exact name of Registrant as specified in its charter)

_______________________________

Massachusetts	06-0513860
(State or other jurisdiction of	(I. R. S. Employer Identification No.)
incorporation or organization)

P.O. Box 188, One Technology Drive, Rogers, Connecticut	06263-0188
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (860) 774-9605

_______________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes X   No___

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  X  No___

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer                                             Accelerated filer     X

Non-accelerated filer  ____(Do not check if a smaller reporting company)           Smaller reporting company ____

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes__ No  X

The number of shares outstanding of the registrant's common stock as of July 22, 2011 was 16,063,672.

ROGERS CORPORATION

FORM 10-Q

June 30, 2011

TABLE OF CONTENTS

Part I – Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited):
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Financial Position	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33
Part II – Other Information
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 6.	Exhibits	34
Signatures		36

Exhibits:
Exhibit 10.2	Amended [and Restated]  Rogers Corporation 2009 Long-Term Equity Compensation Plan
Exhibit 10.3	Form of Basic Time-Based Restricted Stock Unit Award Agreement to Rogers Corporation 2009 Long-Term Equity Compensation Plan
Exhibit 10.4	Form of Performance-Based Restricted Stock Award Agreement to Rogers Corporation 2009 Long-Term Equity Compensation Plan
Exhibit 23.1	Consent of National Economic Research Associates, Inc.
Exhibit 23.2	Consent of Marsh U.S.A., Inc.
Exhibit 31(a)	Certification of President and CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31(b)	Certification of Vice President, Finance and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32	Certification of President and CEO and Vice President, Finance and CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 101.INS	XBRL Instance Document
Exhibit 101.SCH	XBRL Schema Document
Exhibit 101.CAL	XBRL Calculation Linkbase Document
Exhibit 101.LAB	XBRL Labels Linkbase Document
Exhibit 101.PRE	XBRL Presentation Linkbase Document
Exhibit 101.DEF	XBRL Definition Linkbase Document

2

Part I – Financial Information

Item 1.  Financial Statements

ROGERS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Net sales	$	143,685		$	96,608		$	279,744		$	180,545
Cost of sales		95,495			59,273			189,442			112,951
Gross margin		48,190			37,335			90,302			67,594
Selling and administrative expenses		26,837			23,709			51,336			44,683
Research and development expenses		6,175			5,879			12,196			9,422
Operating income		15,178			7,747			26,770			13,489
Equity income in unconsolidated joint ventures		1,323			1,757			2,751			3,975
Other income, net		280			1,055			1,629			1,864
Realized investment loss, net:
Increase (decrease) in fair value of investments		602			(232	)		699			644
Less: Portion of gains (losses) in other comprehensive income		573			(112	)		667			816
Net realized gain (loss)		29			(120	)		32			(172	)
Interest income (expense), net		(1,265	)		(3	)		(2,843	)		103
Income before income taxes		15,545			10,436			28,339			19,259
Income tax expense		3,417			2,123			6,776			4,092
Net income	$	12,128		$	8,313		$	21,563		$	15,167
Net income per share:
Basic	$	0.76		$	0.53		$	1.35		$	0.96
Diluted		0.73			0.52			1.30			0.95
Shares used in computing:
Basic		15,944,483			15,785,656			15,918,979			15,777,176
Diluted		16,678,377			15,985,195			16,603,543			15,940,857

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ROGERS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)

(Dollars in thousands, except share amounts)

	June 30, 2011		December 31, 2010
Assets
Current assets
Cash and cash equivalents	$	71,647	$	80,135
Short-term investments		3,704		186
Accounts receivable, less allowance for doubtful accounts of  $1,220 and  $1,630		89,242		61,995
Accounts receivable from joint ventures		2,254		1,338
Accounts receivable, other		3,159		3,773
Taxes receivable		247		1,706
Inventories		71,517		47,574
Prepaid income taxes		3,580		1,938
Deferred income taxes		1,485		1,492
Asbestos-related insurance receivables		8,563		8,563
Assets held for sale		2,548		5,841
Other current assets		10,158		7,042
Total current assets		268,104		221,583
Property, plant and equipment, net of accumulated depreciation of $227,818 and $182,435		155,080		120,087
Investments in unconsolidated joint ventures		25,664		25,452
Deferred income taxes		15,168		17,120
Goodwill and other intangibles		185,068		35,984
Asbestos-related insurance receivables		20,733		20,733
Long-term marketable securities		26,773		33,592
Investments, other		5,000		5,000
Other long-term assets		7,905		5,323
Total assets	$	709,495	$	484,874
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable		22,423	$	16,296
Accrued employee benefits and compensation		26,009		26,692
Accrued income taxes payable		4,371		1,528
Current portion of lease obligation		1,786		-
Asbestos-related liabilities		8,563		8,563
Other current liabilities		13,625		12,362
Total current liabilities		76,777		65,441
Long term debt		135,000		-
Long term lease obligation		9,046		-
Pension liability		31,980		31,980
Retiree health care and life insurance benefits		8,144		8,144
Asbestos-related liabilities		21,159		21,159
Non-current income tax		18,610		15,339
Deferred income taxes		24,857		8,745
Other long-term liabilities		597		3,534
Shareholders’ Equity
Capital Stock - $1 par value; 50,000,000 authorized shares; 16,044,317 and           15,841,341 shares outstanding		16,044		15,841
Additional paid-in capital		42,458		33,194
Retained earnings		316,607		295,044
Accumulated other comprehensive income (loss)		8,216		(13,547	)
Total shareholders' equity		383,325		330,532
Total liabilities and shareholders' equity	$	709,495	$	484,874

The accompanying notes are an integral part of the condensed consolidated financial statements.

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ROGERS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

	Six Months Ended
	June 30, 2011			June 30, 2010
Operating Activities:
Net income	$	21,563		$	15,167
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		13,190			7,868
Stock-based compensation expense		3,610			4,355
Deferred income taxes		2,148			782
Equity in undistributed income of unconsolidated joint ventures, net		(2,751	)		(3,975	)
Dividends received from unconsolidated joint ventures		2,762			7,184
Pension and postretirement benefits		2,970			3,121
Gain from the sale of property, plant and equipment		(1,900	)		-
Amortization of inventory fair value		1,805			-
Changes in operating assets and liabilities excluding effects of       acquisition and disposition of businesses:
Accounts receivable		(12,059	)		(13,356	)
Accounts receivable, joint ventures		(917	)		(741	)
Inventories		(12,165	)		(8,888	)
Pension contribution		-			(1,478	)
Other current assets		(3,207	)		(1,606	)
Accounts payable and other accrued expenses		(22,177	)		6,918
Other, net		767			(232	)
Net cash provided by (used in) operating activities		(6,361	)		15,119
Investing Activities:
Capital expenditures		(8,006	)		(3,118	)
Acquisition of business, net of cash received		(139,825	)		(25,908	)
Proceeds from short-term investments		4,000			3,250
Proceeds from the sale of property, plant and equipment, net		5,900			-
Return of investment in unconsolidated joint ventures		-			919
Net cash used in investing activities		(137,931	)		(24,857	)
Financing Activities:
Proceeds from long term borrowings		145,000			-
Repayment of debt principal		(10,000	)		-
Payment of long term borrowings acquired through acquisition		(7,452	)		-
Proceeds from sale of capital stock, net		5,464			115
Proceeds from issuance of shares to employee stock purchase plan		396			380
Net cash provided by financing activities		133,408			495
Effect of exchange rate fluctuations on cash		2,396			(3,777	)
Net decrease in cash and cash equivalents		(8,488	)		(13,020	)
Cash and cash equivalents at beginning of year		80,135			57,738
Cash and cash equivalents at end of quarter	$	71,647		$	44,718
Supplemental disclosure of noncash investing and financing activities
Deferred purchase price for acquisition of business	$	-		$	2,910
Capital lease obligation acquired through acquisition		10,831			-

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

ROGERS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Accordingly, these statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In our opinion, the accompanying statements of financial position and related interim statements of operations and cash flows include all normal recurring adjustments necessary for their fair presentation in accordance with U.S. generally accepted accounting principles.  All significant intercompany transactions have been eliminated.

We changed the presentation of our external segment reporting structure as of the first quarter of 2011.  All prior periods have been recast accordingly for the new presentation. See Note 10 for further discussion regarding the new structure.

Interim results are not necessarily indicative of results for a full year.  For further information regarding our accounting policies, refer to the audited consolidated financial statements and footnotes thereto included in our Form 10-K for the fiscal year ended December 31, 2010.

Note 2 –Fair Value Measurements

The accounting guidance for fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

·   Level 1 – Quoted prices in active markets for identical assets or liabilities.

·   Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

·   Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets measured at fair value on a recurring basis during the period, categorized by the level of inputs used in the valuation, include:

(Dollars in thousands)	Carrying amount as of June 30, 2011		Level 1		Level 2		Level 3
Auction rate securities	$	30,477	$	-	$	-	$	30,477
Foreign currency option contracts	$	1,729	$	-	$	1,729	$	-

Current accounting guidance requires that an other-than-temporary impairment must be recognized in earnings for a security in an unrealized loss position when an entity either (a) has the intent to sell the security or (b) more likely than not will be required to sell the security before its anticipated recovery.  Prior to the adoption of this guidance, we were required to record an other-than-temporary impairment for a security in an unrealized loss position unless we could assert that we had both the intent and ability to hold the security for a period of time sufficient to allow for a recovery of its cost basis.

When an other-than-temporary impairment of a security has occurred, the amount of the other-than-temporary impairment recognized in earnings depends on whether we intend to sell the security or more likely than not will be required to sell the security before recovery of its cost basis. If we do not intend to sell the security and it is not more likely than not that we will be required to sell the security before the recovery of its cost basis, the other-than-temporary loss should be separated into the amount representing the credit loss and the amount related to all other factors.  The amount representing the credit loss is recognized in earnings, and as long as the factors above are not met, the remaining amount is recorded in other comprehensive income.

Auction Rate Securities

We have historically classified our auction rate securities as available-for-sale and recorded them at fair value as determined in the active market at the time.  However, due to events in the credit markets, the auctions failed during the first quarter of 2008 for the auction rate securities that we held at the end of the first quarter of 2008, and all of our auction rate securities have been in a loss position since that time.  Accordingly, the securities changed from a Level 1 valuation to a Level 3 valuation.

6

Through the end of the second quarter of 2011, approximately $20.8 million of auction rate securities in total have been redeemed at par value, including approximately $4.0 million in the first six months of 2011.  As of June 30, 2011, the par value of our remaining auction rate securities was approximately $33.6 million, which was comprised 96% of student loan-backed auction rate securities and 4% of municipality-backed auction rate securities.  We performed a fair value assessment of these securities based on a discounted cash flow model, utilizing various assumptions that included estimated interest rates, probabilities of successful auctions, the timing of cash flows, and the quality and level of collateral of the securities.  These inputs were chosen based on our current understanding of the expectations of the market and are consistent with the assumptions utilized during our assessment of these securities at year-end 2010.  This analysis resulted in an insignificant change in the fair value of our auction rate securities in the second quarter of 2011 and a total impairment of approximately $3.1 million overall on our current portfolio.

We have concluded that the impairment on the auction rate securities is other-than-temporary and should be separated into two amounts, one amount representing a credit loss and one amount representing an impairment due to all other factors.  The credit loss is primarily based on the underlying ratings of the securities.  As described above, we have determined that the amount representing the credit loss on our auction rate securities should be recorded in earnings, while the remaining impairment amount should be recorded in other comprehensive income (loss) in the equity section of our condensed consolidated statements of financial position.  We do not have the intent to sell the impaired securities, nor do we believe that it is more likely than not that we will be required to sell these securities before the recovery of their cost basis.  In the second quarter of 2011, we contracted to redeem $4.0 million of auction rate securities at 92.6% of par value, which was one tranche of our auction rate securities.  The cash received, subsequent to June 30, 2011, was approximately $3.7 million.

Additionally, due to our belief that it may take over twelve months for the auction rate securities market to recover, these securities are classified as long-term assets, except for those that are scheduled to be redeemed within the next twelve months, which are classified as short-term investments.  As of the second quarter we had approximately $3.7 million of auction rate securities classified as short-term investments.  These were subsequently redeemed on July 18, 2011.  The securities that we hold have maturities ranging from 21 to 36 years.

The reconciliation of our assets measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows:

(Dollars in thousands)	Auction Rate Securities
Balance at December 31, 2010	$	33,778
Redeemed at par		(4,000	)
Reported in other comprehensive income		667
Reported in earnings		32
Balance at June 30, 2011	$	30,477

A roll-forward of credit losses recognized in earnings from the date of the first other-than-temporary impairment, pertaining to the auction rate securities held by us, is as follows:

(Dollars in thousands)	Credit Losses
Balance at December 31, 2010	$	917
Additional credit losses		39
Reduction in credit losses due to redemptions		(71	)
Balance at June 30, 2011	$	885

These securities currently earn interest at rates ranging from 0.35% to 0.65%.  Upon the failure of these securities at auction, a penalty interest rate is triggered.  Since the securities we hold are investment-grade securities, the penalty rates are market-based, and therefore the aggregate interest rate that we earned has declined to 1% to 2% from a historical rate of 3% to 7% due to reductions in the referenced interest rates by the Federal government.

Foreign Currency Option Derivatives

As further explained below in Note 3 “Hedging Transactions and Derivative Financial Instruments”, we are exposed to certain risks relating to our ongoing business operations, and the primary risk managed using derivative instruments is foreign currency exchange rate risk.  The fair value of these foreign currency option derivatives is based upon valuation models applied to current market information such as strike price, spot rate, maturity date and volatility, and by reference to market values resulting from an over-the-counter market or obtaining market data for similar instruments with similar characteristics.

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Note 3 – Hedging Transactions and Derivative Financial Instruments

The guidance for the accounting and disclosure of derivatives and hedging transactions requires companies to recognize all of their derivative instruments as either assets or liabilities in the statement of financial position at fair value.  The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship, and further on the type of hedging relationship.  For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.

We are exposed to certain risks relating to our ongoing business operations.  The primary risk mitigated by using derivative instruments is foreign currency exchange rate risk.  Option contracts on various foreign currencies are entered into to mitigate the foreign currency exchange rate risk on forecasted revenue denominated in foreign currencies.

We do not use derivative financial instruments for trading or speculation purposes.

We designate certain foreign currency option contracts as cash flow hedges of forecasted revenues.

For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings.   The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of the future cash flows of the hedged item, if any, are recognized in the statement of operations during the current period.  The ineffective portion of a derivative instrument’s change in fair value is immediately recognized in income.  We do not hold any derivative instruments as of the end of the second quarter of 2011 that are designated and qualified as cash flow hedges.

As of the end of the second quarter of 2011, we have entered into five hedge programs.  These programs, which do not qualify as cash flow hedges, are intended to minimize foreign currency exposures on our condensed consolidated statements of financial position.

Notional Values of Derivative Instruments
Euro	€	4,800
U.S. Dollar	$	10,000
Japanese Yen	¥	230,000

(Dollars in thousands)	The Effect of Current Derivative Instruments on the Financial Statements for the six-month period ended June 30, 2011			Fair Values of Derivative Instruments as of June 30, 2011
Foreign Exchange Option Contracts	Location of gain	Amount of gain		Other Assets
Contracts not designated as hedging instruments	Other income, net	$	623	$	1,729

Concentration of Credit Risk

By using derivative instruments, we are subject to credit and market risk.  If a counterparty fails to fulfill its performance obligations under a derivative contract, our credit risk will equal the fair value of the derivative instrument. Generally, when the fair value of a derivative contract is positive, the counterparty owes the Company, thus creating a receivable risk for the Company. We minimize counterparty credit (or repayment) risk by entering into derivative transactions with major financial institutions with investment grade credit ratings.

Note 4 – Acquisition of Business

Curamik Electronics GmbH

On January 4, 2011, we acquired Curamik Electronics GmbH (Curamik), a manufacturer of power electronic substrate products headquartered in Eschenbach, Germany.  The aggregate purchase price was $151.1 million, which reflects post closing adjustments.

8

Curamik, founded in 1983, is the worldwide leader for development and production of direct copper bonded ceramic substrate products which are used primarily in the design of intelligent power management devices, such as insulated gate bipolar transistor (IGBT) modules that enable a wide range of products including highly efficient industrial motor drives, wind and solar energy converters and hybrid electric vehicle drive systems.  Most of Curamik’s products are manufactured using state of the art automated processes in its facility located in Eschenbach, Germany.

The acquisition has been accounted for in accordance with applicable purchase accounting guidance.  The following table represents the preliminary fair market value assigned to the acquired assets and liabilities in the transaction.  As of the filing date of this Form 10-Q, we are still in the process of valuing the net assets of the business, including inventory, fixed assets and intangible assets.

(Dollars in thousands)
Assets:
Cash	$	11,256
Accounts receivable		11,876
Other current assets		1,386
Inventory		12,259
Property, plant & equipment		32,312
Other non-current assets		1,808
Intangible assets		52,820
Goodwill		85,947
Total assets		209,664
Liabilities
Accounts payable		6,042
Other current liabilities		20,284
Deferred tax liability		15,923
Other long-term liabilities		16,334
Total liabilities		58,583
Fair value of net assets acquired	$	151,081

For the three and six months ended June 30, 2011, Curamik realized $34.6 million in sales and operating profits of $2.9 million and $67.5 million in sales and $3.2 million in operating profits, respectively.  It is impracticable to disclose comparable prior period amounts on a consistent basis as reported in this Form 10-Q, as the business acquired in the transaction was not consolidated as a reporting unit for the prior periods.

Total costs incurred related to the acquisition were approximately $3.4 million, of which $1.3 million were incurred in the first quarter of 2011 and are included in “Selling and administrative expenses” on our condensed consolidated statement of operations.

9

SK Utis Co., Ltd.

On March 23, 2010, we entered into an acquisition agreement with SK Utis Co., Ltd. (Utis) and its parent, SK Chemical Co., Ltd. (SK Chemical), both Korean companies, to purchase the common stock of Utis and certain intellectual property owned by SK Chemical related to the Utis business, for an aggregate purchase price of $29.1 million.  The agreement called for an initial payment of $26.0 million, which was made on March 31, 2010, when the transaction closed, which gave us a 90% interest in the outstanding stock of Utis and full ownership of the intellectual property.  SK Chemical will retain a 10% interest in Utis for a two year period, at which point we will purchase the remaining 10% share for a fixed price of $3.1 million.

Utis, established in 2005, is a high-quality supplier of polyurethane foam material solutions for portable communications, entertainment, and industrial applications to leading Korean-based original equipment manufacturers (OEMs).  We believe that this acquisition will expand our presence as a polyurethane foam material solutions provider in several key markets that we have targeted for continued growth, including mobile internet devices, high definition television, and other markets requiring high reliability, high performance materials.  We also believe this acquisition will strengthen our relationships with some of the fastest growing makers of these products and extend our worldwide presence into the Korean marketplace.  We have integrated this business into our High Performance Foams operating segment.

The acquisition has been accounted for in accordance with applicable purchase accounting guidance.  The following table represents the fair market value assigned to the acquired assets and liabilities in the transaction.

(Dollars in thousands)
Assets:
Accounts receivable	$	2,725
Inventory		1,890
Other current assets		685
Property, plant & equipment		1,978
Intangible assets		9,250
Goodwill		15,574
Total assets		32,102
Liabilities
Accounts payable		1,328
Other current liabilities		492
Other long-term liabilities		1,517
Total liabilities		3,337
Fair value of net assets acquired	$	28,765

Total costs incurred related to the acquisition were approximately $0.9 million in the first quarter of 2010 and are included in “Selling and administrative expenses” on the condensed consolidated statement of operations.

As of the date of the acquisition, we acquired 90% of the equity of Utis and SK Chemical retained a 10% interest.  However, SK Chemical, as part of the acquisition agreement, effectively waived all future economic rights to the activities of the business (i.e. dividends, share of profits and losses).  SK Chemical only has the right to the $3.1 million deferred purchase price that will be paid by us to acquire the remaining 10% of Utis in two years.  Therefore, we have consolidated 100% of the activities of Utis in accordance with applicable accounting guidance.  Operational results were included beginning in the second quarter of 2010.  The deferred purchase price at the date of purchase was recorded at its present value (approximately $2.9 million).  This is classified as a short-term liability on our condensed consolidated statement of financial position.

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Note 5 - Inventories

Inventories were as follows:

(Dollars in thousands)	June 30,  2011		December 31 2010
Raw materials	$	27,077	$	14,979
Work-in-process		18,102		6,422
Finished goods		26,338		26,173
	$	71,517	$	47,574

Note 6 - Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)

Comprehensive income for the periods ended June 30, 2011 and 2010 was as follows:

	Three Months Ended					Six Months Ended
(Dollars in thousands)	June 30, 2011		June 30, 2010			June 30, 2011		June 30, 2010
Net income	$	12,128	$	8,313		$	21,563	$	15,167
Foreign currency translation adjustments		6,298		(6,747	)		21,262		(11,333	)
Unrealized gain on marketable securities, net of tax		420		9			501		969
Unrealized gain (loss) on derivative instruments		-		95			-		(256	)
Comprehensive income	$	18,846	$	1,670		$	43,326	$	4,547

The components of accumulated other comprehensive income (loss) at June 30, 2011 and December 31, 2010 were as follows:

(Dollars in thousands)	June 30, 2011			December 31, 2010
Foreign currency translation adjustments	$	33,769		$	12,507
Funded status of pension plans and other postretirement benefits, net of tax		(24,996	)		(24,996	)
Unrealized loss on marketable securities, net of tax		(557	)		(1,058	)
Accumulated other comprehensive income (loss)	$	8,216		$	(13,547	)

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Note 7 - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share, for the periods indicated:

(In thousands, except per share amounts)	Three Months Ended				Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Numerator:
Net income	$	12,128	$	8,313	$	21,563	$	15,167
Denominator:
Denominator for basic earnings per share -           Weighted-average shares		15,945		15,786		15,919		15,777
Effect of dilutive stock options		734		199		685		164
Denominator for diluted earnings per share - Adjusted
weighted-average shares and assumed conversions		16,678		15,985		16,604		15,941
Basic net income per share:	$	0.76	$	0.53	$	1.35	$	0.96
Diluted net income per share:		0.73		0.52		1.30		0.95

Note 8 – Stock-Based Compensation

Equity Compensation Awards

Stock Options

We currently grant stock options under various equity compensation plans.  While we may grant options to employees that become exercisable at different times or within different periods, we have generally granted options to employees that vest and become exercisable in one-third increments on the 2nd, 3rd and 4th anniversaries of the grant dates.  The maximum contractual term for all options is generally ten years.

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of an option.  The fair value of options granted during the three and six month periods ended June 30, 2011 and 2010 were calculated using the following weighted-average assumptions:

	Three Months Ended						Six Months Ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Options granted		58,550			500			58,550			340,150
Weighted average exercise price	$	47.89		$	30.80		$	47.89		$	24.26
Weighted-average grant date fair value		22.30			14.23			22.30			11.40
Assumptions:
Expected volatility		45.15	%		46.48	%		45.15	%		45.41	%
Expected term (in years)		6.00			5.50			6.00			5.86
Risk-free interest rate		2.64	%		2.95	%		2.64	%		3.12	%
Expected dividend yield		--			--			--			--

Expected volatility – In determining expected volatility, we have considered a number of factors, including historical volatility and implied volatility.

Expected term – We use historical employee exercise data to estimate the expected term assumption for the Black-Scholes valuation.

Risk-free interest rate – We use the yield on zero-coupon U.S. Treasury securities for a period commensurate with the expected term assumption as its risk-free interest rate.

Expected dividend yield – We do not issue dividends on our common stock; therefore, a dividend yield of 0% was used in the Black-Scholes model.

In most cases, we recognize expense using the straight-line attribution method for stock option grants.  The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest.  Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.  The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered option.  We currently expect, based on an analysis of our historical forfeitures, a forfeiture rate of approximately 3% and applied that rate to grants issued.  This assumption will be reviewed periodically and the rate will be adjusted as necessary based on these reviews.  Ultimately, the actual expense recognized over the vesting period will only be for those shares that vest.

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During the three and six month periods ended June 30, 2011 we recognized approximately $0.8 million and $1.3 million of stock option compensation expense, respectively.  During the three and six month periods ended June 30, 2010 we recognized approximately $0.7 million and $2.8 million of stock option compensation expense, respectively.

A summary of the activity under our stock option plans as of June 30, 2011 and changes during the three month period then ended, is presented below:

	Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Options outstanding at March 31, 2011		2,527,647		$	36.79		5.6	$	27,475,580
Options granted		58,550			47.89
Options exercised		(71,783	)		27.75
Options cancelled		(2,700	)		53.23
Options outstanding at June 30, 2011		2,511,714			37.15		5.3		28,613,872
Options exercisable at June 30, 2011		1,758,940			41.63		4.0		13,820,779
Options vested or expected to vest at June 30, 2011*		2,489,131			37.25		5.2		28,170,080

* In addition to the vested options, we expect a portion of the unvested options to vest at some point in the future.  Options expected to vest are calculated by applying an estimated forfeiture rate to the unvested options.

	Options Outstanding			Weighted- Average Exercise Price Per Share
Options outstanding at December 31, 2010		2,626,371		$	36.63
Options granted		58,550			47.89
Options exercised		(167,191	)		32.68
Options cancelled		(6,016	)		38.80
Options outstanding at June 30, 2011		2,511,714

During the six month period ended June 30, 2011, the total intrinsic value of options exercised (i.e., the difference between the market price at time of exercise and the price paid by the individual to exercise the options) was $2.2 million, and the total amount of cash received from the exercise of these options was $5.5 million.

Restricted Stock

In 2006, we began granting restricted stock to certain key executives.  The restricted stock granted is either time-based or performance-based.  The performance-based grants award shares of common stock of the Company at the end of a three-year measurement period.  Awards associated with this program granted in 2008 cliff vested at the end of the three-year period and eligible participants were eligible to be awarded shares ranging from 0% to 200% of the original award amount, based on defined performance measures associated with earnings per share.  The 2008 grant did not meet performance measures and there was no payout.  The 2009, 2010 and 2011grants cliff vest at the end of the three-year period, except for those recipients who are retirement eligible, and therefore have awards that are subject to accelerated vesting.   Eligible participants can be awarded shares ranging from 0% to 200% of the original award amount, based on defined performance measures associated with a combined measure using earnings per share, net sales and free cash flow.  In the second quarter of 2011 we granted 20,630 performance-based restricted stock awards.

In the second quarter of 2011, we granted 42,270 time-based restricted stock awards.  These awards cliff vest at the end of a three-year period.

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We recognize compensation expense on these awards ratably over the vesting period, or on an accelerated basis, depending on the retirement eligibility of the recipient.  The fair value of the award will be determined based on the market value of the underlying stock price at the grant date.  The amount of compensation expense recognized over the vesting period will be based on our projections of the performance measure over the requisite service period and, ultimately, how that performance compares to the defined performance measure.  If, at any point during the vesting period, we conclude that the ultimate result of this measure will change from that originally projected, we will adjust the compensation expense accordingly and recognize the difference ratably over the remaining vesting period.

	Restricted Share Awards
Non-vested awards outstanding at December 31, 2010		117,750
Awards granted		62,900
Awards issued		-
Awards expired		(70	)
Non-vested awards outstanding at  June 30, 2011		180,580

As of the first quarter of 2011, the restricted stock granted in 2008 has been forfeited, due to the performance target not being reached that was required for vesting of this grant.

For the three and six month periods ended June 30, 2011 we recognized compensation expense for restricted stock awards of $1.0 million and $1.3 million, respectively, and for the three and six month periods ended June 30, 2010 we recognized compensation expense of $0.3 million and $0.6 million, respectively.

Deferred Stock Units

We grant deferred stock units to non-management directors.  These awards are fully vested on the date of grant and the related shares are generally issued on the 13th month anniversary of the grant date unless the individual elects to defer the receipt of these shares.  Each deferred stock unit results in the issuance of one share of Rogers’ stock.  The grant of deferred stock units is typically done annually in the second quarter.

	Deferred Stock Units
Awards outstanding at December 31, 2010		30,250
Awards granted		16,650
Stock issued		(16,800	)
Awards outstanding at June 30, 2011		30,100

For each of the three month periods ended June 30, 2011 and June 30 2010, we recognized compensation expense of $0.7 million related to deferred stock units.  There was no expense associated with these grants in the first quarter of either year.

Employee Stock Purchase Plan

We have an employee stock purchase plan (ESPP) that allows eligible employees to purchase, through payroll deductions, shares of our common stock at 85% of the fair market value.  The ESPP has two six month offering periods per year, the first beginning in January and ending in June and the second beginning in July and ending in December.  The ESPP contains a look-back feature that allows the employee to acquire stock at a 15% discount from the underlying market price at the beginning or end of the respective period, whichever is lower.  We recognize compensation expense on this plan ratably over the offering period based on the fair value of the anticipated number of shares that will be issued at the end of each respective period.  Compensation expense is adjusted at the end of each offering period for the actual number of shares issued.  Fair value is determined based on two factors: (i) the 15% discount amount on the underlying stock’s market value on the first day of the respective plan period, and (ii) the fair value of the look-back feature determined by using the Black-Scholes model.  We recognized approximately $0.1 million of compensation expense associated with the plan in the three month periods ended June 30, 2011 and June 30, 2010, respectively, and approximately $0.2 million of compensation expense associated with the six month periods ended June 30, 2011 and June 30, 2010, respectively.

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Note 9 – Pension Benefit and Other Postretirement Benefit Plans

Components of Net Periodic Benefit Cost

The components of net periodic benefit cost for the periods indicated are:

(Dollars in thousands)	Pension Benefits												Retirement Health and Life Insurance
													Benefits
	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
Change in benefit obligation:	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Service cost	$	1,060		$	897		$	2,120		$	1,794		$	176		$	169		$	352		$	338
Interest cost		2,116			2,099			4,232			4,198			97			101			194			202
Expected return on plan assets		(2,591	)		(2,361	)		(5,182	)		(4,722	)		--			--			--			--
Amortization of prior service cost		150			149			300			298			(157	)		(156	)		(314	)		(312	)
Amortization of net loss		553			461			1,106			922			81			89			162			178
Settlement charge		--			--			--			225			--			--			--			--
Net periodic benefit cost	$	1,288		$	1,245		$	2,576		$	2,715		$	197		$	203		$	394		$	406

Employer Contributions

We made no voluntary contributions to our qualified defined benefit pension plans and we made a de minimis benefit payment to our non-qualified defined benefit pension plan the first six months of 2011.  For the first six months of 2010, we had no voluntary contributions to our qualified defined benefit pension plans and made $1.5 million in benefit payments to our non-qualified defined benefit pension plans.

Note 10 – Segment Information

In the first quarter of 2011, due to the acquisition of Curamik and management’s current view of our business, we determined that it was appropriate to adjust our segment structure.

Our previous reporting structure was comprised of three business categories – Core Strategic, Development Stage, and Other.  Our new structure eliminates the Development Stage category and expands the Core Strategic category, as shown in the below table:

Old Structure		New Structure
Core Strategic		Core Strategic
	High Performance Foams		High Performance Foams
	Printed Circuit Materials		Printed Circuit Materials
	Power Distribution Systems		Power Electronic Solutions
Development Stage				Curamik Electronic Solutions
	Custom Electrical Components			Power Distribution Systems
	Thermal Management Systems			Thermal Management Solutions
Other		Other

In the new structure, we created a new segment called “Power Electronic Solutions”, which is comprised of three operating segments – Curamik Electronic Solutions, Power Distribution Systems, and Thermal Management Solutions.  We now separately report the results of operations for all three of these segments.  Also, we eliminated the Development Stage category, as the Thermal Management Systems business is now part of our Core Strategic segment of Power Electronic Solutions and the Custom Electrical Components segment will now be aggregated in “Other”.  Management concluded that the development activities at the Custom Electrical Components segment were not gaining traction in the market and, therefore, suspended most of the development efforts associated with the segment.  This new structure aligns our reporting with management’s current view of the business, particularly as we work to further penetrate our core target mega-trend markets.

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The following table sets forth the information about our reportable segments for the periods indicated:

(Dollars in thousands)	Three Months Ended						Six Months Ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Core Strategic
High Performance Foams
Net sales	$	44,021		$	38,915		$	83,156		$	70,697
Operating income		6,658			5,529			11,293			7,751
Printed Circuit Materials
Net sales	$	43,375		$	33,582		$	86,228		$	68,154
Operating income		4,405			2,128			9,234			6,599
Power Electronic Solutions
Curamik Electronic Solutions
Net sales	$	34,613			-		$	67,510			-
Operating income		2,855			-			3,157			-
Power Distribution Systems
Net sales	$	13,978		$	10,143		$	26,413		$	19,277
Operating income		1,644			143			3,909			159
Thermal Management Solutions
Net sales	$	184		$	194		$	315		$	384
Operating loss		(1,328	)		(961	)		(2,967	)		(1,661	)
Other
Net sales	$	7,514		$	13,774		$	16,122		$	22,033
Operating income		944			908			2,144			641

Inter-segment sales have been eliminated from the sales data in the previous table

Note 11 – Joint Ventures

As of June 30, 2011, we had two joint ventures, each 50% owned, which are accounted for under the equity method of accounting.

Joint Venture	Location	Reportable Segment	Fiscal Year-End
Rogers INOAC Corporation (RIC)	Japan	High Performance Foams	October 31
Rogers INOAC Suzhou Corporation (RIS)	China	High Performance Foams	December 31

Equity income of $1.3 million and $2.8 million for the three and six month period ended June 30, 2011 and equity income of $1.8 million and $4.0 million for the three and six month period ended June 30, 2010, respectively, is included in the condensed consolidated statements of operations.

On March 31, 2010, Rogers and Mitsui Chemicals, Inc., the 50% owners of the Polyimide Laminate Systems, LLC (PLS) joint venture, entered into an agreement to dissolve the joint venture and to have Rogers assume on that date any outstanding assets and liabilities of PLS, which resulted in a $0.1 million charge recorded as of March 31, 2010.  The parties also agreed that, going forward, all the distribution activity that PLS had previously engaged in would be conducted through Rogers.  Therefore, beginning in the second quarter of 2010, these activities are reported on a gross basis as part of our consolidated results.  PLS also became an operating segment and is reported in the Other reportable segment.

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In October 2010, we sold our ownership interest in the 50/50 joint venture, Rogers Chang Chun Technology Co., Ltd. (RCCT) to our joint venture partner, Chang Chun Plastics Co., Ltd., for $9.3 million, which resulted in a $3.2 million gain recorded during 2010.

Commission income from our PLS joint venture was $0.6 million for the six month period ended June 30, 2010 and is included in “Other income (expense), net” on the condensed consolidated statements of operations.

The summarized financial information for the joint ventures for the periods indicated is as follows:

(Dollars in thousands)	Three Months Ended				Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Net sales	$	16,783	$	22,921	$	34,863	$	53,416
Gross profit		3,211		3,686		7,535		10,317
Net income		2,646		3,514		5,502		7,950

The effect of transactions between us and our unconsolidated joint ventures was accounted for on a consolidated basis.  Receivables from and payables to joint ventures arise during the normal course of business from transactions between us and the joint ventures, typically from the joint venture purchasing raw materials from us to produce end products, which are sold to third parties, or from us purchasing finished goods from our joint ventures, which are then sold to third parties.

Note 12 - Debt

On November 23, 2010, we terminated our existing $50 million Multicurrency Revolving Credit Agreement with RBS Citizens (Citizens Credit Facility), National Association, a successor in interest to Citizens Bank of Connecticut, and concurrently entered into a $165 million, secured revolving credit agreement (Credit Agreement) with (i) JPMorgan Chase Bank, N.A. as administrative agent; (ii) HSBC Bank USA, National Association; (iii) RBS Citizens, National Association; (iv) Fifth Third Bank; and (v) Citibank, N.A.  JPMorgan Securities LLC and HSBC Bank USA, National Association acted as joint bookrunners and joint lead arrangers; HSBC Bank USA, National Association and RBS Citizens, National Association acted as co-syndication agents; and Fifth Third Bank and Citibank, N.A. acted as co-documentation agents.

The Credit Agreement provides for the extension of credit in the form of revolving loans, in multiple currencies, at any time and from time to time until the maturity of the Credit Agreement, which is November 23, 2014.  Borrowings under the Credit Agreement will bear interest based under one of two options: (1) Alternate base rate loans will bear interest that includes a base reference rate plus a spread of 1.00-1.75%, depending on leverage ratio.  The base reference rate will be the greater of (a) the prime rate, (b) federal funds effective rate plus 0.5%, and (c) adjusted 1-month London interbank offered (“LIBO”) rate plus 1.00%.  (2) Eurocurrency loans will bear interest based on the adjusted LIBO rate plus a spread of 2.00-2.75%, depending on leverage ratio.  We capitalized $1.6 million of debt issuance costs associated with the Credit Agreement which will be amortized over the four year life of the agreement.

The Credit Agreement is secured by many of the assets of Rogers and our World Properties, Inc, subsidiary, including but not limited to receivables, equipment, intellectual property, inventory, stock in certain subsidiaries and real property.

As part of the agreement, we are restricted in our ability to perform certain actions, including, but not limited to our ability to pay dividends, incur additional debt, sell certain assets, and make capital expenditures, with certain exceptions.  The key financial covenants include a requirement for us to maintain, at the end of each fiscal quarter ending on or after December 31, 2010, a fixed charge coverage ratio of no less than 3.0 to 1.0 and a leverage ratio of no more than 2.50 to 1.0.  If an event of default occurs, the lenders may, among other things, terminate their commitments and declare all outstanding borrowings to be immediately due and payable together with accrued interest and fees.

In the first quarter of 2011, we made an initial draw on the line of credit of $145.0 million to fund the acquisition of Curamik.  In the second quarter of 2011, we made $10 million in repayments of principal.  We were in compliance with all covenants as of June 30, 2011.

At June 30, 2011 we had the following standby letters of credit (LOC) and guarantees that were backed by the Credit Facility:

·   $1.0 million irrevocable standby LOC - to guarantee Rogers’ self insured workers compensation plan; and

·   $0.2 million letter guarantee – to guarantee a payable obligation for a Chinese subsidiary (Rogers Shanghai).

No amounts were owed on the LOCs as of June 30, 2011 or December 31, 2010.

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Interest

We incurred interest expense on the borrowing of $1.0 million and $2.1 million in the three and six months ended June 30, 2011, respectively.  We incurred an unused commitment fee of approximately $20,000 and $40,000 in the three and six months ended June 30, 2011, respectively.  There were no interest charges in the first six months of 2010 and the unused commitment fee under the Citizens Credit Facility, for the three and six months ended June 30, 2010 was $37,000 and $55,000, respectively.

Restriction on Payment of Dividends

Pursuant to the Credit Agreement, we cannot make a cash dividend payment if a default or event of default has occurred and is continuing or shall result from the cash dividend payment.

On July 13, 2011, we entered into an amended and restated $265 million, secured, five year credit agreement.  Refer to the subsequent event footnote, Note 16, for further information.

Note 13 – Goodwill and Intangible Assets

Definite-lived Intangible Assets

(Dollars in thousands)	June 30, 2011						December 31, 2010
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and patents	$	2,094	$	1,134	$	960	$	2,041	$	1,091	$	950
Technology		40,567		3,830		36,737		6,423		1,448		4,975
Covenant-not-to-compete		1,664		722		942		1,604		668		936
Customer Relationships		22,273		923		21,350		4,324		387		3,937
Total other intangible assets	$	66,598	$	6,609	$	59,989	$	14,392	$	3,594	$	10,798

Gross carrying amounts may be different from prior periods due to foreign exchange rate fluctuations.

Amortization expense for the six months ended June 30, 2011 was approximately $2.9 million and $0.3 million for the same period in 2010.  The anticipated future amortization expense is $2.9 million, $5.1 million, $6.6 million, $6.7 million and $6.4 million for the remainder of 2011 and 2012, 2013, 2014 and 2015, respectively.

The weighted average amortization period as of June 30, 2011, by intangible asset class, is presented in the table below:

Intangible Asset Class	Weighted Average Amortization Period
Trademarks and patents		8.4
Technology		5.4
Covenant not-to-compete		3.3
Customer relationships		9.0
Total other intangible assets		6.7

On January 4, 2011 we acquired Curamik, which included $52.8 million of intangible assets and $85.9 million of goodwill.  The intangible assets are comprised of trademarks, technology, and customer relationships.  This includes $5.7 million of indefinite-lived intangible assets, which are assessed for impairment annually.  The definite-lived intangibles are amortized using an accelerated method of amortization that is expected to reflect the estimated pattern of economic use.

On November 2, 2010, we entered into a technology license agreement with Polyworks, Inc.  Included in this agreement was $2.0 million of intangible assets.  These assets are amortized on a straight line basis over 10 years.

On March 31, 2010, we acquired the assets of Utis, which included $9.3 million of intangible assets and $15.6 million of goodwill.  The intangible assets are comprised of trademarks, technology, covenants not-to-compete and customer relationships.  These intangibles are amortized using an accelerated method of amortization that is expected to reflect the estimated pattern of economic use.

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Goodwill

The changes in the carrying amount of goodwill for the period ending June 30, 2011, by reportable segment, are as follows:

(Dollars  in thousands)	High Performance Foams		Printed Circuit Materials		Power Distribution Systems		Curamik Electronic Solutions		Thermal Management Solutions		Other		Total
December 31, 2010	$	22,962	$	-	$	--	$	-	$	-	$	2,224	$	25,186
Curamik acquisition		-		-		-		85,947		-		-		85,947
Foreign currency translation adjustment		961		-		-		7,259		-		-		8,220
June 30, 2011	$	23,923	$	-	$	-	$	93,206	$	-	$	2,224	$	119,353

Note 14 – Commitments and Contingencies

We are currently engaged in the following environmental and legal proceedings:

Superfund Sites

We are currently involved as a potentially responsible party (PRP) in one active case involving a waste disposal site.  Currently, this proceeding is at a stage where it is not possible to estimate the ultimate cost of remediation, the timing and extent of remedial action that may be required by governmental authorities, or the amount of our liability, if any, alone or in relation to that of any other PRPs.  The costs incurred since inception for this claim have been immaterial and have been primarily covered by insurance policies, for both legal and remediation costs.  We have been assessed a cost sharing percentage of approximately 2% in relation to the range for estimated total cleanup costs of $17 million to $24 million.  We believe we have sufficient insurance coverage to fully cover this liability and have recorded a liability and related insurance receivable of approximately $0.3 million as of June 30, 2011, which approximates our share of the low end of the range.  We believe we are a de minimis participant and have been allocated an insignificant percentage of the total PRP cost sharing responsibility.  Based on facts presently known to us, we believe that the potential for the final results of this case having a material adverse effect on our results of operations, financial position or cash flows is remote.  This case has been ongoing for many years and we believe that it will continue on for the indefinite future.  No time frame for completion can be estimated at the present time.

PCB Contamination

We have been working with the Connecticut Department of Environmental Protection (CT DEP) and the United States Environmental Protection Agency (EPA) Region I in connection with certain polychlorinated biphenyl (PCB) contamination in the soil beneath a section of cement flooring at our Woodstock, Connecticut facility.  We completed clean-up efforts in 2000 in accordance with a previously agreed upon remediation plan.  To address the small amount of residual soil contamination at the site, we had proposed a plan of Monitored Natural Attenuation, which was subsequently rejected by the CT DEP.  The CT DEP has additionally rejected two revised plans that were submitted.  During the second quarter of 2009, the CT DEP required us to install additional wells on site to better determine the amount and location of the residual contamination.  During the third quarter of 2009, one of the additional wells tested positive for PCBs, and we were therefore required to install additional wells to continue to try and determine the extent of the contamination.  During 2010, the additional wells tested positive for contamination and therefore a pump and treat system was installed to alleviate further contamination of the ground water.  Since inception, we have spent approximately $2.5 million in remediation and monitoring costs related to the PCB soil contamination at this site.

In addition, during the first quarter of 2010, we discovered PCB contamination of the building at our Woodstock, Connecticut facility, due to it having contained the equipment that was the source of the original PCB soil contamination.  Remediation of the contamination within the facility is currently projected to cost between $0.8 million and $2.4 million; therefore, we recorded a liability of $0.8 million related to the building contamination, which represents the low end of the estimated range, as no other amount in the range is more probable at this time.

We believe that these situations will continue for several more years and no time frame for completion can be estimated at the present time.

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Asbestos Litigation

A significant number of asbestos-related product liability claims have been brought against numerous United States industrial companies where the third-party plaintiffs allege personal injury from exposure to asbestos-containing products. We have been named, along with hundreds of other companies, as a defendant in some of these claims. In virtually all of these claims filed against us, the plaintiffs are seeking unspecified damages, or, if an amount is specified, such amount merely represents jurisdictional amounts.  Even in those situations where specific damages are alleged, the claims frequently seek the same amount of damages, irrespective of the disease or injury.  Plaintiffs’ lawyers often sue dozens or even hundreds of defendants in individual lawsuits on behalf of hundreds or even thousands of claimants.  As a result, even when specific damages are alleged with respect to a specific disease or injury, those damages are not expressly identified as to us.

We did not mine, mill, manufacture or market asbestos; rather we made a limited number of products which contained encapsulated asbestos.  Such products were provided to industrial users.  We stopped manufacturing these products in the late 1980s.

·   Claims

We have been named in asbestos litigation primarily in Illinois, Pennsylvania and Mississippi.  As of June 30, 2011, there were approximately 213 pending claims compared to approximately 194 pending claims at December 31, 2010.  The number of open claims during a particular time can fluctuate significantly from period to period depending on how successful we have been in getting these cases dismissed or settled.  Some jurisdictions prohibit specifying alleged damages in personal injury tort cases such as these, other than a minimum jurisdictional amount which may be required for such reasons as allowing the case to be litigated in a jury trial (which the plaintiffs believe will be more favorable to them than if heard only before a judge) or allowing the case to be litigated in federal court.  This is in contrast to commercial litigation, in which specific alleged damage claims are often permitted.  The prohibition on specifying alleged damage sometimes applies not only to the suit when filed but also during the trial – in some jurisdictions the plaintiff is not actually permitted to specify to the jury during the course of the trial the amount of alleged damages the plaintiff is claiming.  Further, in those jurisdictions in which plaintiffs are permitted to claim specific alleged damages, many plaintiffs nonetheless still choose not to do so. In those cases in which plaintiffs are permitted to and do choose to assert specific dollar amounts in their complaints, we believe the amounts claimed are typically not meaningful as an indicator of a company’s potential liability. This is because (1) the amounts claimed may bear no relation to the level of the plaintiff’s injury and are often used as part of the plaintiff’s litigation strategy, (2) the complaints typically assert claims against numerous defendants, and often the alleged damages are not allocated against specific defendants, but rather the broad claim is made against all of the defendants as a group, making it impossible for a particular defendant to quantify the alleged damages that are being specifically claimed against it and therefore its potential liability, and (3) many cases are brought on behalf of plaintiffs who have not suffered any medical injury, and ultimately are resolved without any payment or payment of a small fraction of the damages initially claimed.  Of the approximately 213 claims pending as of June 30, 2011, 54 claims do not specify the amount of damages sought, 156 claims cite jurisdictional amounts, and only three (3) claims (less than 2.0% of the total pending claims) specify the amount of damages sought not based on jurisdictional requirements.  Of these three (3) claims, one (1) claim alleges compensatory and punitive damages of $20,000,000 each; one (1) claim alleges compensatory damages of $65,000,000 and punitive damages of $60,000,000 and one (1) claim alleges compensatory and punitive damages of $1,000,000 each.  These three (3) claims name between ten (10) and 109 defendants.  However, for the reasons cited above, we do not believe that this data allows for an accurate assessment of the relation that the amount of alleged damages claimed might bear to the ultimate disposition of these cases.

The rate at which plaintiffs filed asbestos-related suits against us increased in 2001, 2002, 2003 and 2004 because of increased activity on the part of plaintiffs to identify those companies that sold asbestos containing products, but which did not directly mine, mill or market asbestos.  A significant increase in the volume of asbestos-related bodily injury cases arose in Mississippi in 2002.  This increase in the volume of claims in Mississippi was apparently due to the passage of tort reform legislation (applicable to asbestos-related injuries), which became effective on September 1, 2003 and which resulted in a higher than average number of claims being filed in Mississippi by plaintiffs seeking to ensure their claims would be governed by the law in effect prior to the passage of tort reform.  The number of asbestos related suits filed against us decreased slightly in 2005 and 2006, but increased slightly in 2007, declined in 2008 and increased again in 2009 and 2010.  As of the end of the second quarter, the number of suits filed in 2011 is about 70% higher than the number filed in 2010, but it is too early to be able to determine if this is a meaningful trend and the reasons for the increase.

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·   Defenses

In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable loss as a result of exposure to our asbestos-containing products.  We continue to believe that a majority of the claimants in pending cases will not be able to demonstrate exposure or loss.  This belief is based in large part on two factors: the limited number of asbestos-related products manufactured and sold by us and the fact that the asbestos was encapsulated in such products.  In addition, even at sites where the presence of an alleged injured party can be verified during the same period those products were used, our liability cannot be presumed because even if an individual contracted an asbestos-related disease, not everyone who was employed at a site was exposed to the asbestos-containing products that we manufactured.  Based on these and other factors, we have and will continue to vigorously defend ourselves in asbestos-related matters.

·   Dismissals and Settlements

Cases involving us typically name 50-300 defendants, although some cases have had as few as one and as many as 833 defendants.  We have obtained dismissals of many of these claims.  For the six months ended June 30, 2011, we were able to have 63 claims dismissed and settled 2 claims.  For the year ended December 31, 2010, 163 claims were dismissed and 20 were settled.  The majority of costs have been paid by our insurance carriers, including the costs associated with the small number of cases that have been settled.  Such settlements totaled approximately $5.5 million for 2010, and $0.8 million for the six months ended June 30, 2011.  Although these figures provide some insight into our experience with asbestos litigation, no guarantee can be made as to the dismissal and settlement rate that we will experience in the future.

Settlements are made without any admission of liability.  Settlement amounts may vary depending upon a number of factors, including the jurisdiction where the action was brought, the nature and extent of the disease alleged and the associated medical evidence, the age and occupation of the claimant, the existence or absence of other possible causes of the alleged illness of the alleged injured party and the availability of legal defenses, as well as whether the action is brought alone or as part of a group of claimants.  To date, we have been successful in obtaining dismissals for many of the claims and have settled only a limited number.  The majority of settled claims were settled for immaterial amounts, and the majority of such costs have been paid by our insurance carriers.  In addition, to date, we have not been required to pay any punitive damage awards.

·   Potential Liability

National Economic Research Associates, Inc. (NERA), a consulting firm with expertise in the field of evaluating mass tort litigation asbestos bodily-injury claims, has historically been engaged to assist us in projecting our future asbestos-related liabilities and defense costs with regard to pending claims and future unasserted claims.  Projecting future asbestos costs is subject to numerous variables that are extremely difficult to predict, including the number of claims that might be received, the type and severity of the disease alleged by each claimant, the long latency period associated with asbestos exposure, dismissal rates, costs of medical treatment, the financial resources of other companies that are co-defendants in claims, uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case and the impact of potential changes in legislative or judicial standards, including potential tort reform.  Furthermore, any predictions with respect to these variables are subject to even greater uncertainty as the projection period lengthens.  In light of these inherent uncertainties, the limited amount and variability of our claims history and consultations with NERA, we believe that five years is the most reasonable period for recognizing a reserve for future costs, and that costs that might be incurred after that period are not reasonably estimable at this time.  As a result, we also believe that our ultimate asbestos-related contingent liability (i.e., our indemnity or other claim disposition costs plus related legal fees) cannot be estimated with certainty.

·   Insurance Coverage

Our applicable insurance policies generally provide coverage for asbestos liability costs, including coverage for both resolution and defense costs.  Following the initiation of asbestos litigation, an effort was made to identify all of our primary and excess level insurance carriers that provided applicable coverage beginning in the 1950s through the mid-1980s.  Where appropriate, carriers were put on notice of the litigation.  Marsh Risk Consulting (Marsh), a consulting firm with expertise in the field of evaluating insurance coverage and the likelihood of recovery for asbestos-related claims, has historically been engaged to work with us to project our insurance coverage for asbestos-related claims. Marsh’s conclusions are based primarily on a review of our coverage history, application of reasonable assumptions on the allocation of coverage consistent with industry standards, an assessment of the creditworthiness of the insurance carriers, analysis of applicable deductibles, retentions and policy limits, the experience of NERA and a review of NERA’s reports.

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·   Cost Sharing Agreement

To date, our insurance carriers have paid for substantially all of the settlement and defense costs associated with our asbestos-related claims.  There is a new cost sharing agreement between us and such insurance carriers which is primarily designed to facilitate the ongoing administration and payment of such claims by the carriers until the applicable insurance coverage is exhausted.  This new four year agreement expires on January 25, 2015 and replaces an older agreement that had expired.

·   Impact on Financial Statements

Given the inherent uncertainty in making future projections, we have had the projections of current and future asbestos claims periodically re-examined, and we will have them updated if needed based on our experience, changes in the underlying assumptions that formed the basis for NERA’s and Marsh’s models, and other relevant factors, such as changes in the tort system and our success in resolving claims.  Based on the assumptions employed by and the report prepared by NERA and other variables, NERA and Marsh updated their respective analyses for year end  2010 and the estimated liability and estimated insurance recovery, for the five-year period through 2015, is $29.7 million and $29.3 million, respectively.  These amounts are currently reflected in our financial statements at June 30, 2011 as no material changes occurred during the first half of 2011 that would cause us to believe that an additional update to the analysis was required.

The amounts recorded for the asbestos-related liability and the related insurance receivables described above were based on facts known at the time and a number of assumptions.  However, projecting future events, such as the number of new claims to be filed each year, the average cost of disposing of such claims, coverage issues among insurers and the continuing solvency of various insurance companies, as well as the numerous uncertainties surrounding asbestos litigation in the United States could cause the actual liability and insurance recoveries for us to be higher or lower than those projected or recorded.

There can be no assurance that our accrued asbestos liabilities will approximate our actual asbestos-related settlement and defense costs, or that our accrued insurance recoveries will be realized.  We believe that it is reasonably possible that we will incur additional charges for our asbestos liabilities and defense costs in the future, which could exceed existing reserves, but such excess amount cannot be estimated at this time.  We will continue to vigorously defend ourselves and believe we have substantial unutilized insurance coverage to mitigate future costs related to this matter.

Other Environmental and General Litigation

·   On May 16, 2007, CalAmp Corp. (CalAmp) filed a lawsuit against us for unspecified damages.  During the second quarter of 2008, CalAmp responded to discovery requests in the litigation and stated that its then current estimated total damages were $82.9 million. In the lawsuit, which was filed in the United States District Court, Central District of California, CalAmp alleged performance issues with certain printed circuit board laminate materials we had provided for use in certain of its products.  In the first quarter of 2009 this lawsuit was settled for $9.0 million. The settlement was reached through mediation mandated by the United States District Court for the Central District of California.  Both parties acknowledged that Rogers admitted no wrongdoing or liability for any claim made by CalAmp. We agreed to settle this litigation solely to avoid the time, expense and inconvenience of continued litigation.  Under the settlement reached through mediation mandated by the U.S. District Court for the Central District of California, we paid CalAmp the $9.0 million settlement amount in January 2009.  We had accrued $0.9 million related to this lawsuit in 2007 and recorded an additional $8.1 million in the fourth quarter of 2008.  Legal and other costs related to this lawsuit were approximately $1.8 million in 2008.  In February 2009, subsequent to the settlement with CalAmp, we reached an agreement with our primary level insurance carrier to recover costs associated with a portion of the settlement ($1.0 million) as well as certain legal fees and other defense costs associated with the lawsuit (approximately $1.0 million).  Payment for these amounts was received in the first quarter of 2009.  On February 6, 2009, we filed suit in the United States District Court for the District of Massachusetts against Fireman’s Fund Insurance Company, our excess level insurance carrier, seeking to collect the remaining $8.0 million of the settlement amount.  In December 2010, we settled the suit filed against Fireman’s Fund Insurance Company and received a payment of $2.5 million.  This is recorded in operating income and as an operating activity in the condensed consolidated financial statements.  These funds will be used in normal business operations.

·   In the second quarter of 2010, the CT DEP identified us as a potentially responsible party at a disposal site in Killingly, Connecticut.  We have continued internal due diligence work related to the site to better understand the issue and our alleged involvement.  Based on the facts and circumstances known to us at the present time, we are unable to estimate the probability or amount of any potential costs associated with this matter.  As such, no reserve has been established at this time.

In addition to the above issues, the nature and scope of our business brings us in regular contact with the general public and a variety of businesses and government agencies.  Such activities inherently subject us to the possibility of litigation, including environmental and product liability matters that are defended and handled in the ordinary course of business.  We have established accruals for matters for which management considers a loss to be probable and reasonably estimable. It is the opinion of management that facts known at the present time do not indicate that such litigation, after taking into account insurance coverage and the aforementioned accruals, will have a material adverse impact on our results of operations, financial position, or cash flows.

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Note 15 – Income Taxes

Our effective tax rate was 22.0% and 20.3% for the three month periods ended June 30, 2011 and June 30, 2010, respectively, and was 23.9% and 21.2% for the six month periods ended June 30, 2011 and 2010, respectively, as compared with the statutory rate of 35.0%. In both the six month periods ended June 30, 2011 and 2010, our tax rate continued to benefit from favorable tax rates on certain foreign business activity.

In 2009, we established a valuation allowance against substantially all of our U.S. deferred tax asset based upon the consideration of all available evidence, both positive and negative, using a “more likely than not” standard.  As of June 30, 2011, we have concluded, based on this standard, that a valuation allowance is still appropriate against a significant portion of our U.S. deferred tax assets.

Our accounting policy is to account for interest expense and penalties related to uncertain tax positions as income tax expense.  As of June 30, 2011, we have approximately $1.3 million of accrued interest related to uncertain tax positions included in the $18.7 million of unrecognized tax benefits, $10.5 million of which, if recognized, would impact the effective tax rate.

We are subject to numerous tax filings including U.S. Federal, various state and foreign jurisdictions.  Currently, the following tax years remain open to the possibility of audit, by jurisdiction: U.S. Federal 2007 – 2010, various states 2006 – 2010, and foreign 2006 – 2010.

Note 16 – Subsequent Event

On July 13, 2011, we entered into an amended and restated $265 million, secured, five year credit agreement.  Key features of this agreement, relative to the November 23, 2010 credit agreement, include (1) an increase in credit from $165 million to $265 million with the addition of a $100 million term loan; (2) the extension of maturity from November 23, 2014 to July 13, 2016; (3) a 25 basis point reduction in  borrowing spread; (4) an increase in the size of permitted acquisitions from $25 million to $100 million; and (5) an increase in permitted additional indebtedness from $20 million to $120 million.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

As used herein, the “Company”, “Rogers”, “we”, “us”, “our” and similar terms include Rogers Corporation and its subsidiaries, unless the context indicates otherwise.

Forward Looking Statements

This information should be read in conjunction with the unaudited financial statements and related notes included in Item 1 of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Form 10-K for the year-ended December 31, 2010.

Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are based on management’s expectations, estimates, projections and assumptions.  Words such as “expects,” “anticipates,” “intends,” “believes,” “estimates,” “should,” “target,” “may,” “project,” “guidance,” and variations of such words and similar expressions are intended to identify such forward-looking statements.  Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results or performance to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such factors include, but are not limited to, changing business, economic, and political conditions both in the United States and in foreign countries; increasing competition; the impact of a failure to raise the U.S. federal debt ceiling; any difficulties in integrating acquired businesses into our operations and the possibility that anticipated benefits of acquisitions may not materialize as expected; delays or problems in completing planned operational enhancements to various facilities; changes in product mix; the development of new products and manufacturing processes and the inherent risks associated with such efforts; the outcome of current and future litigation; the accuracy of our analysis of our potential asbestos-related exposure and insurance coverage; changes in the availability and cost of raw materials; and fluctuations in foreign currency exchange rates.  Such factors also apply to our joint ventures.  We make no commitment to update any forward-looking statement or to disclose any facts, events, or circumstances after the date hereof that may affect the accuracy of any forward-looking statements, unless required by law. Additional information about certain factors that could cause actual results to differ from such forward-looking statements include, but are not limited to, those items described in Item 1A, Risk Factors, to the Company’s Form 10-K for the year-ended December 31, 2010.

Overview

Company Background and Strategy

We are a global enterprise that provides our customers with innovative solutions and industry leading products for use in a variety of markets, including portable communications, communications infrastructure, consumer electronics, mass transit, automotive, defense and clean technology.  We generate revenues and cash flows through the development, manufacture, and distribution of specialty material-based products that are sold to multiple customers, primarily original equipment manufacturers (OEMs) and contract manufacturers that, in turn, produce component products that are sold to end-customers for use in various applications.  As such, our business is highly dependent, although indirectly, on market demand for these end-user products.  Our ability to forecast future sales growth is largely dependent on management’s ability to anticipate changing market conditions and how our customers will react to these changing conditions.  It is also highly limited due to the short lead times demanded by our customers and the dynamics of serving as a relatively small supplier in the overall supply chain for these end-user products.  In addition, our sales represent a number of different products across a wide range of price points and distribution channels that do not always allow for meaningful quantitative analysis of changes in demand or price per unit with respect to the effect on sales and earnings.

Strategically, our focus is on three “mega-trends” that we believe will fuel the future growth of our Company – continued growth of the internet, expansion of mass transit, and further investment in clean technology.  These trends and their related markets all require materials that perform to the highest standards, which has been a key strength of our products over the years.  We are also focused on growing our business organically and through strategic acquisitions or technology investments that will add to or expand our product portfolio, as well as strengthen our presence in existing markets or expand into new ones.  We will continue to focus on business opportunities and invest in expansion around the globe.  In the first quarter of 2011, we finalized the acquisition of Curamik Electronics GmbH (“Curamik”) and have been working diligently to integrate the business into Rogers. Additionally, in the first half of 2011. we have made significant progress on our new manufacturing operations for two of our Core Strategic segments: Printed Circuit Materials (PCM) in Suzhou, China, and Power Distribution Systems (PDS) in North America.  Once complete, both PCM and PDS will have a manufacturing presence in each of our three major geographic regions – North America, Europe and Asia – further solidifying our commitment to be close to our customers in order to better serve their needs. Our vision is to be the supplier of choice for our customers in all of the various markets in which we participate.  To achieve this goal, we strive to make the best products in these respective markets and to deliver the highest level of service to our customers.

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2011 Second Quarter Executive Summary

In the second quarter of 2011, we achieved all time record quarterly sales of $143.7 million, an almost 50% improvement from second quarter 2010 sales of $96.6 million.  The second quarter of 2011 included sales from our new acquisition, Curamik (CES), of $34.6 million; therefore, organic growth was approximately $12.5 million, or 12.9%, quarter over quarter.  Earnings for the first quarter of 2011 improved to $0.73 per diluted share from $0.52 per diluted share in the first quarter of 2010.

Our sales growth was driven by improved performance across all of our Core Strategic businesses, led by Printed Circuit Materials (PCM) (29.2% quarter over quarter improvement from $33.6 million to $43.4 million), High Performance Foams (HPF) (13.1% growth from $38.9 million to $44.0 million) and Power Distribution Systems (PDS) (38.6% growth from $10.1 million to $14.0 million).  Our new business, Curamik, continued to perform well during the quarter, achieving sales levels of $34.6 million, which was an all time quarterly record for the business.  In the second quarter of 2011, approximately 95% of our sales were generated by our core businesses, as compared to 86% in the second quarter of 2010.

From an operating results standpoint, we grew our profits by almost 94% on a sales volume increase of almost 50% from $7.8 million in the second quarter of 2010 to $15.2 million in the second quarter of 2011.  Once again, all of our core businesses improved quarter over quarter, led by PCM (109.5% increase from $2.1 million to $4.4 million quarter over quarter), HPF (21.8% increase from $5.5 million in the second quarter of 2010 to $6.7 million in the second quarter of 2011) and PDS ($0.1 million operating profit in the second quarter of 2010 to $1.7 million operating profit in the second quarter of 2011).

In the second quarter of 2011, we continued to make progress on our strategic growth initiatives.  We have been working on the integration of Curamik into Rogers, and the new acquisition has delivered strong results in the first half of the year.  Our efforts are focused on leveraging our organizations to increase our operational efficiencies, as well as to expand Curamik’s base into new regions and customers to help drive its future growth.  We have also made significant progress on our new manufacturing facility in Suzhou, China for our PCM business and in Arizona for our PDS operation.  In Asia, PCM celebrated the grand opening of its facility on April 13, 2011 and is now manufacturing product for qualification, with sales expected late in the third quarter.  In Arizona, our PDS facility is also manufacturing product and our efforts are focused on gaining traction in the North American marketplace and winning new business at new customers.

Overall, we have been able to increase sales and improve profitability in almost all of our businesses across the many markets and regions we serve, even as the uncertainty in the global economy continues.  We have felt certain negative impacts from the overall economic environment, as rising raw material prices have impacted margins in certain sectors and it remains very difficult to forecast demand at our customers.  However, we believe that we have a very strong product portfolio that continues to be enhanced through our strategic initiatives, and that we have opportunities for strong growth in the markets we target through our mega-trend strategy.  We will continue to focus on growth, both organically and through acquisitions and strategic partnerships, as well as on controlling our costs in order to continue to deliver value to our shareholders.  With the uncertain state of the global economy, we will continue to be cautiously optimistic about our business going forward.  Ultimately, we believe that we are well positioned to take advantage of any opportunities to profitably grow our business for the future.

Segment Realignment

Due to the acquisition of Curamik and management’s current view of our business, we determined that it was appropriate to adjust our segment structure in the first quarter of 2011.

Our previous reporting structure was comprised of three business categories – Core Strategic, Development Stage, and Other.  Our new structure eliminates the Development Stage category and expands the Core Strategic category, as shown in the below table:

Old Structure		New Structure
Core Strategic		Core Strategic
	High Performance Foams		High Performance Foams (HPF)
	Printed Circuit Materials		Printed Circuit Materials (PCM)
	Power Distribution Systems		Power Electronic Solutions
Development Stage				Curamik Electronic Solutions (CES)
	Custom Electrical Components			Power Distribution Systems (PDS)
	Thermal Management Systems			Thermal Management Solutions (TMS)
Other		Other

In the new structure, we created a new segment called “Power Electronic Solutions”, which is comprised of three operating segments – Curamik Electronic Solutions, Power Distribution Systems, and Thermal Management Solutions.  We now separately report the results of operations for all three of these segments.  Also, we eliminated the Development Stage category, as the Thermal Management Systems business is now part of our Core Strategic segment of Power Electronic Solutions and the Custom Electrical Components segment will now be aggregated in “Other” as management concluded that the development activities at the segment were not gaining traction in the market and, therefore, suspended most of the development efforts associated with the segment.  We believe that this new structure better reflects our reporting with management’s current view of the business, particularly as we work to further penetrate our target mega-trend markets.

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Results of Operations

The following table sets forth, for the periods indicated, selected operations data expressed as a percentage of net sales.

	Three Months Ended						Six Months Ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Manufacturing margins		33.5			38.6			32.3			37.4
Selling and administrative expenses		18.7			24.5			18.4			24.7
Research and development expenses		4.3			6.1			4.4			5.2
Operating income		10.6			8.0			9.6			7.5
Equity income in unconsolidated joint ventures		0.9			1.8			1.0			2.2
Other income, net		-			1.1			0.6			1.0
Net realized gains (losses)		-			-			-			-
Interest income (expense), net		(0.9	)		-			(1.0	)		-
Income before income taxes		10.8			10.9			10.1			10.7
Income tax expense		2.4			2.2			2.4			2.3
Net income		8.4	%		8.6	%		7.7	%		8.4	%

Net Sales

Net sales in the second quarter of 2011 were $143.7 million as compared to $96.6 million in the second quarter of 2010, an increase of 48.7%, and $279.7 million in the first six months of 2011 as compared to $180.5 million for the comparable period in 2010, an increase of 54.9%. Second quarter and year to date 2011 results included approximately $34.6 million and $67.5 million, respectively, of sales from our new acquisition, Curamik.  Excluding these amounts, quarter over quarter growth was approximately $12.5 million, or 12.9%, and half year growth was approximately $31.7 million, or 17.6%.  Quarterly organic sales growth was driven primarily by increased volumes at our Core Strategic segments, as PCM increased sales by $9.8 million, or 29.2%; HPF increased sales by $5.1 million, or 13.1%; and PDS achieved sales increases of $3.9 million, or 38.6%.  On a year to date basis, organic sales increases were also driven by these core segments, as PCM increased sales by $18.1 million, or 26.6%; HPF by $12.5 million, or 17.7%; and PDS by $7.1 million, or 36.8%.  See “Segment Sales and Operations” below for further discussion on the segment performance.

Manufacturing Margins

Manufacturing margins as a percentage of sales decreased from 38.6% in the second quarter of 2010 to 33.5% in the second quarter of 2011, and from 37.4% to 32.3% in the first half of 2010 as compared to the first half of 2011, respectively.  In the second quarter and first half of 2011, margins were impacted by several factors, many of which were anticipated and planned for by management.  Most notably these factors included, the start up costs associated with our new PCM manufacturing facility in Suzhou, China and our PDS operations in North America, as well as the increasing costs of raw materials used in many of our production processes and unfavorable product mix in certain segments.  However, as we move into the production phase in these new production facilities, we expect the start up and qualification costs to decline and margins to improve over time.  Also, our new Curamik business has historically operated at lower margins than our legacy businesses, which also contributed to the overall decline from 2010. (However, Curamik also has lower operating costs, so the overall profitability is very similar to our core businesses).  Sequentially, as anticipated, margins have improved from the first quarter of 2011, as our two new manufacturing operations are beginning to enter into the qualification phase for their products and the one-time negative impact from the fair value write up of Curamik inventory, as required by purchase accounting, only  impacted the first quarter results, as well as the year to date comparisons..

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Selling and Administrative Expenses

Selling and administrative expenses increased 13.2% from $23.7 million in the second quarter of 2010 to $26.8 million in the second quarter of 2011 and 14.9% for the first half of 2011 to $51.3 million from $44.7 million during the first half of 2010.  The increase in the second quarter of 2011 from the second quarter of 2010 can be primarily attributable to the acquisition of Curamik, which added approximately $3.3 million of expense related to the normal operations of the business, as well as $1.0 million in amortization expense related to the intangible assets created in the acquisition transaction; as well as an increase in equity compensation costs of approximately $1.1 million as the 2011 equity grant awards were issued in the second quarter, while 2010’s corresponding grants were issued in the first quarter of 2010; partially offset by a $1.8 million decrease in other incentive compensation costs.  After considering these items, selling and administrative spending was essentially flat quarter over quarter, even though organic sales volumes increased by almost 13%.  On a year to date basis, the increase in expense is primarily attributable to similar factors that impacted the second quarter comparisons, including Curamik costs of $9.5 million that impacted 2011 and not 2010 (comprised of $6.4 million of operational selling and administrative costs, $2.0 million of amortization costs on intangible assets, and $1.3 million of acquisition related costs), which were partially offset by lower overall equity and incentive compensation costs.  Overall, after consideration of these items, spending increased slightly by approximately $0.5 million, even though organic sales volumes increased on a year to date basis by almost 18%.  As evidenced by these comparisons, we were able to control our selling and administrative costs while still supporting much higher sales volumes levels, resulting in the reduction of selling and administrative costs as a percentage of sales on both a quarterly and year to date basis from approximately 25% in 2010 to 19% in 2011.

Research and Development Expenses

Research and development (R&D) expense increased from $5.9 million to $6.2 million in the second quarter of 2011 as compared to the second quarter of 2010 and increased from $9.4 million in the first half of 2010 to $12.2 million in the first half of 2011.  As a percentage of sales, research and development expenses were 4.3% in the second quarter of 2011 as compared to 6.1% in the second quarter of 2010 and, on a year-to-date basis, 4.4% in 2011 as compared to 5.2% in 2010.  In the near term, we believe that our R&D spending will be consistent with levels incurred during the quarter and should range between 4% to 5% of sales.  As a Company, we are focused and committed to continually investing in R&D, both in our efforts to improve the technology and products in our current portfolio, as well as researching product extensions and new business development opportunities to further expand and grow our product portfolio.  Investment in technology and R&D initiatives has been a key driver to our past success and we expect will be a key factor to our continued success in the future.

Equity Income/Loss in Unconsolidated Joint Ventures

Equity income in unconsolidated joint ventures decreased from $1.8 million in the second quarter of 2010 to $1.3 million in the second quarter of 2011 and decreased from $4.0 million for the first six months of 2010 to $2.8 million for the first six months of 2011.  The reduction can be primarily attributed to the sale of our joint venture in Taiwan, Rogers Chang Chun Technology Co., Ltd. (RCCT), in the third quarter of 2010, which had contributed $0.3 million and $0.8 million of equity income in the second quarter and first half of 2010, respectively.

Other Income, Net

Other income decreased from $1.1 million in the second quarter of 2010 to $0.3 million for the second quarter of 2011 and from $1.9 million in the first half of 2010 to $1.6 million in the first half of 2011.  The decline in the quarter over quarter results can be primarily attributable to the impact of foreign currency exchange rate fluctuations and our related hedge program as, in the second quarter of 2010, the U.S. dollar appreciated against the Euro by approximately 9.6% while, in the second quarter of 2011, the U.S. dollar depreciated against the Euro by approximately 2.0%, resulting in approximately $0.8 million more income in the second quarter of 2010 than in the comparable period in 2011.  On a year to date basis, 2010 results included approximately $0.6 million of commission income from the former Polyimide Laminate Systems LLC joint venture that we fully acquired in the second quarter of 2010 and has since come to end of life for its products, while 2011 results included a gain on the sale of a building in China of approximately $1.9 million. The remaining difference is primarily attributable to foreign currency exchange rate fluctuations as the U.S. dollar appreciated against the Euro by approximately 14.7% in the first half of 2010, while depreciating against the Euro in the comparable 2011 period by approximately 7.5%, resulting in a decline in other income of approximately $1.8 million from 2010 to 2011.

Interest Income (Expense), Net

Interest income (expense), net, increased from effectively break-even in the second quarter of 2010 to $1.3 million in the second quarter of 2011 and, on a year to date basis, from income of $0.1 million in 2010 to expense of $2.8 million in 2011.  The primary driver of this change was the recognition of approximately $1.1 million and $2.1 million in the second quarter and first half of 2011, respectively, of interest expense related to our long-term debt obligations resulting from funding of the Curamik acquisition in the first quarter of 2011, as well as approximately $0.2 million and $0.4 million in the second quarter and first half of 2011, respectively of interest expense associated with the capital lease obligation we acquired as part of the Curamik transaction.

Income Taxes

Our effective tax rate was 22.0% and 20.3% for the three month periods ended June 30, 2011 and June 30, 2010, respectively, and was 23.9% and 21.2% for the six month periods ended June 30, 2011 and 2010, respectively, as compared with the statutory rate of 35.0%. In both the six month periods ended June 30, 2011 and 2010 our tax rate continued to benefit from favorable tax rates on certain foreign business activity.

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In 2009, we established a valuation allowance against substantially all of our U.S. deferred tax asset based upon the consideration of all available evidence, both positive and negative, using a “more likely than not” standard.  As of June 30, 2011, we have concluded, based on this standard, that a valuation allowance is still appropriate against a significant portion of our U.S. deferred tax assets.

Segment Sales and Operations

Core Strategic

High Performance Foams

(Dollars in millions)	Three Months Ended				Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Net sales	$	44.0	$	38.9	$	83.2	$	70.7
Operating income		6.7		5.5		11.3		7.8

Our HPF operating segment is comprised of our polyurethane and silicone foam products.  Net sales in this segment were $44.0 million in the second quarter of 2011, an increase of 13.1% from $38.9 million in the second quarter of 2010.  On a year to date basis, sales increased 17.7% from $70.7 million in 2010 to $83.2 million in 2011.  Accordingly, operating results in this segment also improved in the second quarter of 2011, increasing by 21.8% from $5.5 million in the second quarter of 2010 to $6.7 million in the second quarter of 2011, as well as on a year to date basis, increasing 44.9% from $7.8 million in 2010 to $11.3 million in 2011.  These results were drivenby record quarterly sales levels for our high reliability silicone foam products as a result of strong demand in aircraft, communications infrastructure, solar power and hybrid-electric vehicle applications.  Sales of urethane foam products also reached an all-time quarterly record in the second quarter of 2011 with significant growth in large-screen mobile internet devices and general industrial applications.  In addition, our unique Poron® XRD™ shock-absorbing materials continue to win new adoptions in sports and impact apparel.

Printed Circuit Materials

(Dollars in millions)	Three Months Ended				Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Net sales	$	43.4	$	33.6	$	86.2	$	68.1
Operating income		4.4		2.1		9.2		6.6

Our PCM operating segment is comprised of our high frequency circuit material products.  Net sales in this segment increased by 29.2% to $43.4 million in the second quarter of 2011 from $33.6 million in the second quarter of 2010 and by 26.6% on a year to date basis from $68.1 million in the first six months of 2010 to $86.2 million in the first six months of 2011.  Operating profits also increased in both comparative periods – quarter over quarter, operating profit more than doubled from $2.1 million in 2010 to $4.4 million in 2011 and increased by 39.4% year over year from $6.6 million in 2010 to $9.2 million in 2011.  These results were driven by strong demand in the wireless infrastructure market, primarily due to the global expansion of third generation (3G) and fourth generation (4G) systems.  Radar applications for both high reliability and automotive markets remained strong.  Sales and design activity for new programs in wireless antennas continued at a rapid pace.  Our high speed digital Theta® products have completed qualification by a major original equipment manufacturer (OEM) and have now been released to new program designers.  However, these results were also negatively impacted by several factors, including cost increases related to certain raw materials, specifically copper and PTFE (polytetrafluoroethylene) materials caused in part by a worldwide shortage, particularly of PTFE.  To address these cost increases, prices were adjusted in the first half of 2011 and began to take effect late in the second quarter of 2011.  Results were also unfavorably impacted by costs associated with the start up of the segment’s manufacturing facility in China, where we held the grand opening of our facility on April 14, 2011 and are now in the process of qualifying our products with customers.  We are currently producing inventory and anticipate shipping product for satellite television applications to customers late in the third quarter of 2011.

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Power Electronic Solutions

(Dollars in millions)	Three Months Ended						Six Months Ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Curamik Electronic Solutions
Net sales	$	34.6		$	-		$	67.5		$	-
Operating income		2.8			-			3.2			-
Power Distribution Systems
Net sales	$	14.0		$	10.1		$	26.4		$	19.3
Operating income		1.6			0.1			3.9			0.1
Thermal Management Solutions
Net sales	$	0.2		$	0.2		$	0.3		$	0.4
Operating loss		(1.3	)		(0.9	)		(3.0	)		(1.7	)

Curamik Electronic Solutions

Our CES operating segment is comprised of our power electronic substrate products, which are used primarily in the design of intelligent power management devices, such as insulated gate bipolar transistor (IGBT) modules that enable a wide range of products including highly efficient industrial motor drives, wind and solar energy converters and hybrid electric and electric vehicle (HEV/EV) drive systems.  We signed an agreement to acquire Curamik on December 31, 2010 and officially closed the transaction on January 4, 2011.  In the second quarter of 2011, CES sales were $34.6 million with operating profits of $2.8 million and year to date sales were $67.5 million with operating profits of $3.2 million.  The sales volumes represent a record quarter for the business and an improvement of 5.2% from the $32.9 million in sales achieved in the first quarter of 2011.  These results were driven by strong demand for the segments structured ceramic substrates, which are used for IGBT (Insualted Gate Bipolar Transistor) power modules, in major markets, such as energy efficient motor drives, wind and solar power generation, and hybrid electric vehicle applications.  We continue working to integrate the business into Rogers, particularly from a sales and marketing standpoint, as we believe there are opportunities for growth within its primary markets in Europe and Japan, as well as in North America and Asia.  To meet the growing sales volumes, we increased our capacity at Curamik in the first half of 2011 and are currently planning additional capacity expansion in the second half of 2011 to keep pace with expected growth.

In the first quarter of 2011, CES operating profits reflected approximately $1.3 million of one-time costs associated with the acquisition and integration of the business, which includes consulting, legal and audit fees, as well as severance charges and other integration related costs.  The first quarter of 2011 results also include approximately $2.8 million of non-cash amortization charges related to the purchase accounting surrounding the acquisition, as we needed to assign a fair market value to the assets and liabilities of the business (see Note 4 for further detail).  Of the $2.8 million, approximately $1.8 million related to a one-time charge related to the amortization of the inventory step-up to fair value, charges that did not recur in the second quarter.  The remaining charges related primarily to the amortization of intangible assets.  In the second quarter and in each quarter for the remainder of 2011, we expect to incur approximately $1.0 million of amortization costs associated with these intangible assets.  Subsequent to 2011, these amounts will fluctuate as the amortization schedules are based on the timing of the estimated cash flows generated by these various intangible assets, which fluctuate over time.

Power Distribution Systems

Our PDS operating segment is comprised of our busbar products, which are used primarily in power distribution systems products in mass transit and clean technology applications.  Sales increased by 38.6% in the second quarter of 2011 to a quarterly record of $14.0 million from $10.1 million in the second quarter of 2010.  On a year to date basis, sales have increased by 36.8% from $19.3 million in 2010 to $26.4 million in 2011.  Operating profits improved quarter over quarter from $0.1 million in 2010 to $1.6 million in 2011 and on a year to date basis from $0.1 million in 2010 to $3.9 million in 2011.  These increases were driven by continued high demand for this segment’s products in mass transit applications, as well as in wind and solar power inverters.  The capacity expansion for PDS in Arizona is progressing on schedule.  We are currently working to expand our customer base in the North American market and are in the process of making several prototypes for our customers.  We expect production sales out of this facility late in the second half of 2011.

Thermal Management Systems

Our TMS business was formed at the end of 2007 and is focused on serving markets where thermal heat management is a priority, such as heat dissipation in electronic devices and hybrid electric vehicles.  This venture recognized its first material sales in the second quarter of 2010, as it received its first significant order for its base plate products, and continues to focus on additional opportunities in the marketplace.  Costs have escalated over the past year as the business focuses on improving its manufacturing processes and expanding its marketing efforts in order to gain traction in the marketplace.  Progress has been slower than anticipated and management closely monitors this business to determine if continued investment in their technology platforms will ultimately yield positive returns and cash flows for the Company and its investors.  Ultimately, decision points will be reached as to whether to continue to invest in this business or to no longer invest in it if we believe that future growth is not likely.

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Other

(Dollars in millions)	Three Months Ended				Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Net sales	$	7.5	$	13.8	$	16.1	$	22.0
Operating income		0.9		1.0		2.2		0.7

Our Other reportable segment consists of our elastomer rollers, floats, and non-woven materials products; and electroluminescent lamps and inverters.  Net sales in this segment declined from $13.8 million in the second quarter of 2010 to $7.5 million in the second quarter of 2011 and from $22.0 million in the first half of 2010 to $16.1 million in the first half of 2011.  Second quarter and year to date 2010 results included approximately $5.0 million of sales and $0.6 million of operating income from our former polyimide laminate systems business that we fully acquired in the second quarter of 2010 and has since come to end of life for its products.  Excluding these results, sales were relatively flat across our remaining businesses, although profits improved significantly, primarily as a result of stronger sales of our inverter products.

Liquidity, Capital Resources and Financial Position

We believe that our ability to generate cash from operations to reinvest in our business is one of our fundamental strengths, as demonstrated by the strength of our financial position through the second quarter of 2011.  For the first time since 2002, we have debt on our balance sheet, as we drew down our line of credit in the first quarter of 2011 by approximately $145 million to fund the strategic acquisition of Curamik Electronics GmbH.  While the world financial markets have grown more stable, the continued volatility in the credit markets has generally diminished liquidity and capital availability worldwide.  However, we believe that our existing sources of liquidity and cash expected to be generated from future operations, together with available long-term financing, will be sufficient to fund operations, capital expenditures, research and development efforts, and debt service commitments, among our other operating and investment needs, for at least the next twelve months.  In addition, we continue to have access to the remaining portion of the recently increased line of credit should any unforeseen need or strategic opportunity present itself to the business.  We continually review and evaluate the adequacy of our cash flows, lending facilities and banking relationships to ensure we have the appropriate access to cash to fund both our near-term operating needs and our long-term, strategic initiatives.

(Dollars in thousands)	June 30, 2011			December 31, 2010
Key Balance Sheet Accounts:
Cash, cash equivalents and short-term investments	$	75,351		$	80,321
Accounts receivable		89,242			61,995
Inventory		71,517			47,574
	Six Months Ended
	June 30, 2011			June 30, 2010
Key Cash Flow Measures:
Cash provided by (used in) operating activities	$	(6,361	)	$	15,119
Cash used in investing activities		(137,931	)		(24,857	)
Cash provided by financing activities		133,408			495

At June 30, 2011, cash, cash equivalents and short-term investments totaled $75.4 million as compared to $80.3 million at December 31, 2010, a decline of approximately 6.1%.  This decline was due to a cash payment of $12.6 million to partially fund the Curamik acquisition, as well as approximately $13.0 million in payments for incentive compensation earned in 2010, offset by a joint venture dividend of $2.8 million, the receipt of $5.5 million for stock options exercised, $5.2 million received for the sale of property in China and $4.0 million of auction rate security redemptions.

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Significant changes in our balance sheet accounts from December 31, 2010 to June 30, 2011 are as follows:

o   Accounts receivable increased 44%, from $62.0 million at December 31, 2010 to $89.2 million at June 30, 2011 due to a combination of the increased sales in the first half of 2011 and the acquisition of Curamik in the first quarter, which increased accounts receivable by $11.9 million.

o   Inventories increased $23.9 million, or 50%, from $47.6 million at December 31, 2010 to $71.5 million at June 30, 2011 which is attributable to the increased customer demand and resultant increase in sales volumes across segments that led to higher inventory levels to meet such demand.  Inventory levels were also increased by $12.2 million due to the first quarter acquisition of Curamik.

o   Goodwill and other intangibles at June 30, 2011 increased $149.1 million from December 31, 2010, due primarily to the valuations of the amortizable intangible assets and goodwill created as a result of the acquisition of Curamik during the first quarter.

o   Accounts payable increased 38% to $22.4 million at June 30, 2011 from $16.3 million at December 31, 2010 primarily as a result of the first quarter acquisition of Curamik, which contributed $6.0 million to this increase.

Credit Facilities

On November 23, 2010, we terminated our existing $50 million Multicurrency Revolving Credit Agreement with RBS Citizens (Citizens Credit Facility), National Association, a successor in interest to Citizens Bank of Connecticut, and concurrently entered into a $165 million, secured revolving credit agreement (Credit Agreement) with (i) JPMorgan Chase Bank, N.A. as administrative agent; (ii) HSBC Bank USA, National Association; (iii) RBS Citizens, National Association; (iv) Fifth Third Bank; and (v) Citibank, N.A.  JPMorgan Securities LLC and HSBC Bank USA, National Association acted as joint bookrunners and joint lead arrangers; HSBC Bank USA, National Association and RBS Citizens, National Association acted as co-syndication agents; and Fifth Third Bank and Citibank, N.A. acted as co-documentation agents.

The Credit Agreement provides for the extension of credit in the form of revolving loans, in multiple currencies, at any time and from time to time until the maturity of the Credit Agreement, on November 23, 2014.  Borrowings under the Credit Agreement will bear interest based under one of two options: (1) Alternate base rate loans will bear interest that includes a base reference rate plus a spread of 1.00-1.75%, depending on leverage ratio.  The base reference rate will be the greater of (a) the prime rate, (b) federal funds effective rate plus 0.5%, and (c) adjusted 1-month London interbank offered (“LIBO”) rate plus 1.00%.  (2) Eurocurrency loans will bear interest based on the adjusted LIBO rate plus a spread of 2.00-2.75%, depending on leverage ratio.  We capitalized $1.6 million of debt issuance costs associated with the Credit Agreement which will be amortized over the four year life of the agreement.

The Credit Agreement is secured by many of the assets of Rogers and our World Properties, Inc, subsidiary, including but not limited to receivables, equipment, intellectual property, inventory, stock in certain subsidiaries and real property.

As part of the agreement, we are restricted in our ability to perform certain actions, including, but not limited to our ability to pay dividends, incur additional debt, sell certain assets, and make capital expenditures, with certain exceptions.  The key financial covenants include a requirement for us to maintain, at the end of each fiscal quarter ending on or after December 31, 2010, a fixed charge coverage ratio of no less than 3.0 to 1.0 and a leverage ratio of no more than 2.50 to 1.0.   If an event of default occurs, the lenders may, among other things, terminate their commitments and declare all outstanding borrowings to be immediately due and payable together with accrued interest and fees.

In the first quarter of 2011, we made an initial draw on the line of credit of $145.0 million to fund the acquisition of Curamik.  In the second quarter of 2011, we made $10 million in repayments of principal.  We were in compliance with all covenants as of June 30, 2011.

At June 30, 2011 we had the following standby letters of credit (LOC) and guarantees that were backed by the Credit Facility:

·   $1.0 million irrevocable standby LOC - to guarantee Rogers’ self insured workers compensation plan; and

·   $0.2 million letter guarantee – to guarantee a payable obligation for a Chinese subsidiary (Rogers Shanghai).

No amounts were owed on the LOCs as of June 30, 2011 or December 31, 2010.

On July 13, 2011, we entered into an amended and restated $265 million, secured, five year credit agreement.  Key features of this agreement, relative to the November 23, 2010 credit agreement, include (1) an increase in credit from $165 million to $265 million with the addition of a $100 million term loan; (2) the extension of maturity from November 23, 2014 to July 13, 2016; (3) a 25 basis point reduction in  borrowing spread; (4) an increase in the size of permitted acquisitions from $25 million to $100 million; and (5) an increase in permitted additional indebtedness from $20 million to $120 million.

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Interest

We incurred interest expense on the borrowing of $1.0 million and $2.1 million in the three and six months ended of June 30, 2011, respectively.  We incurred an unused commitment fee of approximately $20,000 and $40,000 in the three and six months ended June 30, 2011, respectively.  There were no interest charges in the first six months of 2010 and the unused commitment fee for the three and six months ended June 30, 2010 was $37,000 and $55,000, respectively, under the Citizens Credit Facility.

Auction Rate Securities

As of June 30, 2011, we held approximately $33.6 million of auction rate securities at par value as compared to approximately $37.6 million as of December 31, 2010.  Historically, these securities were classified as available-for-sale and recorded at fair value based on market valuations at that time (Level 1 input in accordance with accounting guidance).  However, in the first quarter of 2008, the markets in which these securities traded became illiquid, causing us to reclassify these securities from a Level 1 input to a Level 3 input, as an active market no longer existed for these securities, and therefore we had to base our valuations on unobservable inputs.

Accordingly, our asset value was determined considering several factors, including an estimated time horizon for redeeming such securities, a discount factor to determine the present value of such securities, as well as the quality of the underlying securities, most of which were backed by investment grade student loans or municipalities.  As of the second quarter of 2011, we performed a fair value assessment of these securities based on a discounted cash flow model, utilizing various assumptions that included estimated interest rates, probabilities of successful auctions, the timing of cash flows, and the quality and level of collateral of the securities.  These inputs were chosen based on our current understanding of the expectations of the market and are consistent with the assumptions utilized during our assessment of these securities at year-end 2009.  This analysis resulted in an insignificant increase in the fair value of our auction rate securities in the second quarter of 2011 and a total impairment of $3.1 million overall on our current portfolio.

The total fair value of the auction rate securities at June 30, 2011, was $30.5 million.  These securities are classified as long-term assets, except for those that are scheduled to be redeemed within the next three months, which are classified as short-term investments.

The impairment described above, as of the second quarter of 2011, is classified as an other-than-temporary loss, separated into the amount representing the credit loss and the amount related to all other factors.  The amount representing the credit loss is recognized in earnings, and as long as we do not intend to sell the security or it is not more likely than not that we will be required to sell the security before recovery of its cost basis, the remaining amount is recorded in other comprehensive income.  The amount recognized in earnings during the first half of 2011 was insignificant.  The assumptions utilized in the valuation will continue to be reviewed and, as market conditions continue to evolve and change, we will adjust our assumptions accordingly, which could result in either positive or negative valuation adjustments in the future.

We have the ability and intent to hold these securities until recovery.  We also do not believe that the illiquid nature of these securities will negatively impact our business, as we believe we have the ability to generate sufficient cash to fund the operations and organic growth of the business absent these securities.

Contingencies

During the second quarter of 2011, we did not become aware of any new material developments related to environmental matters or other contingencies.  We have not had any material recurring costs and capital expenditures related to environmental matters.  Refer to Note 14“Commitments and Contingencies”, to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q, for further discussion on ongoing environmental and contingency matters.

Contractual Obligations

As of June 30, 2011, we had drawn down on our line of credit for $135 million to facilitate the purchase of Curamik.  Associated with the Curamik purchase was a lease obligation of approximately $10.8 million.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements that have or are, in the opinion of management, likely to have a current or future material effect on our financial condition or results of operations.

Critical Accounting Policies

There have been no material changes in our critical accounting policies during the second quarter of 2011.

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Item 3.  Quantitative and Qualitative Disclosures About Market Risk

There have been no significant changes in our exposure to market risk during the second quarter of 2011.  For discussion of our exposure to market risk, refer to Item 7A, Quantitative and Qualitative Disclosures About Market Risk, contained in our 2010 Annual Report on Form 10-K.

Item 4.  Controls and Procedures

The Company, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the design and operation of our disclosure controls and procedures, as defined under Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), as of June 30, 2011.  Our disclosure controls and procedures are designed (i) to ensure that information required to be disclosed by it in the reports that it files or submits under the Exchange Act are recorded, processed,  summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2011 to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and are accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Except as noted below, there were no changes in the Company’s internal control over financial reporting during its most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect its internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act.

On January 4, 2011, we acquired Curamik Electronics GmbH, which is located in Eschenbach, Germany, for $151.1 million, which reflects post closing adjustments.  Since this acquisition occurred in January 2011, the scope of our assessment of the effectiveness of internal control over financial reporting does not include the acquired operations of Curamik Electronics GmbH, as permitted by SEC rules for recently acquired businesses.

Part II - Other Information

Item 1.        Legal Proceedings

See a discussion of environmental, asbestos and other litigation matters in Note 14, “Commitments and Contingencies”, to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q.

Item 1A.     Risk Factors

There have been no material changes in our risk factors from those disclosed in our 2010 Annual Report on Form 10-K.

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Item 6.        Exhibits

List of Exhibits:

3a	Restated Articles of Organization of Rogers Corporation were filed as Exhibit 3a to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006 filed on February 27, 2007*.
3b	Amended and Restated Bylaws of Rogers Corporation, effective February 21, 2007 filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 22, 2007*.
4a	Shareholder Rights Agreement, dated as of February 22, 2007, between the Registrant and Registrar and Transfer Company, as Rights Agent, filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on February 23, 2007*.
4b	Certain Long-Term Debt Instruments, each representing indebtedness in an amount equal to less than 10 percent of the Registrant’s total consolidated assets, have not been filed as exhibits to this report on Form 10-Q.  The Registrant hereby undertakes to file these instruments with the Commission upon request.
10.1	Fourth Amendment to Rogers Corporation Annual Incentive Compensation Plan, filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 18, 2011*.
10.2	Amended [and Restated]  Rogers Corporation 2009 Long-Term Equity Compensation Plan, filed herewith.
10.3	Form of Basic Time-Based Restricted Stock Unit Award Agreement to Rogers Corporation 2009 Long-Term Equity Compensation Plan, filed herewith.
10.4	Form of Performance-Based Restricted Stock Award Agreement to Rogers Corporation 2009 Long-Term Equity Compensation Plan, filed herewith.
23.1	Consent of National Economic Research Associates, Inc., filed herewith.
23.2	Consent of Marsh U.S.A., Inc., filed herewith.
31.1	Certification of President and Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.2	Certification of Vice President, Finance and Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32	Certification of President and Chief Executive Officer (Principal Executive Officer) and Vice President, Finance and Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.
*	In accordance with Rule 12b-23 and Rule 12b-32 under the Securities Exchange Act of 1934, as amended, reference is made to the documents previously filed with the Securities and Exchange Commission, which documents are hereby incorporated by reference.
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.LAB	XBRL Labels Linkbase Document
101.PRE	XBRL Presentation Linkbase Document
101.DEF	XBRL Definition Linkbase Document

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Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Income for the three months ended June 30, 2011 and June 30, 2010 and for the six months ended June 30, 2011 and June 30, 2010, (ii) Condensed Consolidated Balance Sheets at June 30, 2011 and December 31, 2010, (iii) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and June 30, 2010 and (iv) Notes to Condensed Consolidated Financial Statements.

In accordance with Rule 406T of Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act, is deemed not filed for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ROGERS CORPORATION

(Registrant)

/s/  Dennis M. Loughran	/s/ Ronald J. Pelletier
Dennis M. Loughran	Ronald J. Pelletier
Vice President, Finance and Chief Financial Officer	Corporate Controller and Principal Accounting Officer
Principal Financial Officer

Dated:  August 2, 2011

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EX-10.2

                                                                                                                                                                                   Exhibit 10.2

Rogers Corporation

2009 Long-Term Equity Compensation Plan

(As amended by the Board of Directors on February 9, 2011 and approved by shareholders on May 12, 2011)

Article 1.

Background and Purpose

1.1.           Background.  This Rogers Corporation 2009 Long-Term Equity Compensation Plan (the “Plan”) permits the grant of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Deferred Stock Units, Performance Shares and other equity-based awards.

1.2.           Purpose.  The purposes of the Plan are (a) to attract, reward and retain highly competent persons as Employees, Directors, and Consultants; (b) to provide additional incentives to Employees, Directors, and Consultants as determined by the Committee by aligning their interests with those of the Company’s shareholders; and (c) to promote the success of the Company’s business.

1.3.           Eligibility.  Employees, Consultants, and Directors are eligible to be granted Awards under the Plan.  However, Incentive Stock Options may be granted only to Employees.

1.4.           Definitions.  Capitalized terms used in the Plan and not otherwise defined herein shall have the meanings set forth in Article 13 below.

Article 2.

Share Limits

2.1            Shares Subject to the Plan.

(a)           Share Reserve.  Subject to adjustment under Section 2.3 of the Plan, the aggregate number of Shares that may be delivered pursuant to Awards shall be increased by 415,000 Shares from 860,000 Shares to 1,275,000 Shares.  All of the available Shares may, but need not, be issued pursuant to the exercise of Incentive Stock Options.  At all times the Company will reserve and keep available a sufficient number of Shares in such manner as it may consider appropriate in order to satisfy the requirements of all outstanding Awards made under the Plan and all other outstanding but unvested Awards made under the Plan that are to be settled in Shares.

(b)           Shares Counted Against Limitation.  If an Option is exercised, in whole or in part, by either the tender of Shares under Section 5.4(b) or a net exercise under Section 5.4(c), or if the Company’s tax withholding obligation is satisfied by withholding Shares under Section 11.7(b), the number of Shares deemed to have been issued under the Plan for purposes of the limitation set forth in this Section 2.1 shall be the net number of Shares actually issued upon exercise.  To the extent that an Award is designated to be paid in cash, such cash payment will not reduce the number of Shares available for issuance under the Plan.

(c)           Lapsed Awards.  If an Award: (i) expires; (ii) is terminated, surrendered, or canceled without having been exercised in full; or (iii) is otherwise forfeited in whole or in part (including as a result of Shares constituting or subject to an Award being repurchased by the Company pursuant to a contractual repurchase right), then the unissued Shares that were subject to such Award and/or such surrendered, canceled, or forfeited Shares (as the case may be) shall become available for future grant or sale under the Plan (unless the Plan has terminated), subject however, in the case of Incentive Stock Options, to any limitations under the Code.

(d)           Substitute Awards.  The Committee may grant Awards under the Plan in substitution for stock and stock-based awards held by employees, directors, consultants or advisors of another company (an “Acquired Company”) in connection with a merger, consolidation or similar transaction involving such Acquired Company and the Company or an Affiliate or the acquisition by the Company or an Affiliate of property or stock of the Acquired Company.  The Committee may direct that the substitute Awards be granted on such terms and conditions as the Committee considers appropriate in the circumstances, including provisions that preserve the aggregate exercise price and the aggregate option spread as of the closing date of any such transaction in a manner that complies with Section 409A of the Code.  Any substitute Awards granted under the Plan shall not count against the share limitations set forth in Section 2.1(a) and 2.2.

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2.2.           Individual Share Limit.  No individual shall be granted Options and Stock Appreciation Rights with respect to more than 80,000Shares during any Tax Year.  No individual shall be granted Restricted Stock, Restricted Stock Units, Deferred Stock Units, Performance Shares or any other type of Equity-Based Award described under Section 9.1 with respect to more than 80,000 during any Tax Year.  The limits described in this Section 2.2 shall be construed and applied consistently with Section 162(m) of the Code.

(a)           Awards not Settled in Shares.  If an Award is to be settled in cash or any medium other than Shares, the number of Shares on which the Award is based shall count toward the individual share limit set forth in this Section 2.2.

(b)           Canceled Awards.  Any Awards granted to a Participant that are canceled shall continue to count toward the individual share limit applicable to that Participant as set forth in this Section 2.2.

2.3.           Adjustments.  The following provisions will apply if any extraordinary dividend or other extraordinary distribution occurs in respect of the Shares (whether in the form of cash, Shares, other securities, or other property), or any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend), reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company or any similar, unusual or extraordinary corporate transaction (or event in respect of the Shares), including a Change in Control, or a sale of all or substantially all the assets of the Company occurs.  The Committee will, in such manner and to such extent (if any) as it deems equitable in its absolute discretion to prevent dilution or enlargement of the rights of Participants:

(a)           proportionately adjust any or all of (i) the number and type of Shares (or other securities) that thereafter may be made the subject of Awards (including the specific maximums and numbers of Shares set forth elsewhere in the Plan), (ii) the number, amount and type of Shares (or other securities or property) subject to any or all outstanding Awards, (iii) the grant, purchase, or exercise price of any or all outstanding Awards, (iv) the securities, cash or other property deliverable upon exercise of any outstanding Awards, (v) the repurchase price, if any per Share subject to each outstanding Restricted Stock Award, or (vi) the performance standards appropriate to any outstanding Awards (subject to the limitations for performance based compensation under Section 162(m) of the Code), or

(b)           subject to Section 11.9 of the Plan, in the case of an extraordinary dividend or other distribution, recapitalization, reclassification, merger, reorganization, consolidation, combination, sale of assets, split up, exchange, or spin off, including, without limitation, in the event of a Change in Control, make provision for (i) a cash payment, (ii) the substitution or exchange of any or all outstanding Awards, (iii) the cash, securities or property deliverable to the holder of any or all outstanding Awards based upon the distribution or consideration payable with respect to Shares upon or in respect of such event, (iv) all vested Options and Stock Appreciation Rights to be exercised by a date certain in connection with such event at which time these stock rights (whether or not then vested) shall terminate, provided Participants are given advance written notice or (v) a combination of the foregoing, which may vary among Participants.

The Committee shall value Awards as it deems reasonable in the event of a cash settlement and, in the case of Options, Stock Appreciation Rights or similar stock rights, may base such settlement solely upon the excess, if any, of the per Share amount payable upon or in respect of such event over the exercise price of the Award.  The Committee’s determination with respect to any adjustments under this Section 2.3 shall be final and conclusive.  The Committee may act under this Section 2.3 at any time to the extent that the Committee deems such action necessary to permit a Participant to realize the benefits intended to be conveyed with respect to the underlying Shares in the same manner as is or will be available to shareholders generally.  In the case of any stock split or reverse stock split, if no action is taken by the Committee, the proportionate adjustments contemplated by Section 2.3(a) above shall nevertheless be made.  Any adjustments made under this Section 2.3 shall be done in a manner that complies with Section 409A of the Code, to the extent applicable.

Article 3.

Plan Administration

3.1.           Administrator.  The Plan shall be administered by the Committee.

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3.2           Powers of the Committee.  Subject to the provisions of the Plan, Applicable Law, and the specific duties delegated by the Board to the Committee, the Committee shall have the authority in its discretion: (a) to determine the Fair Market Value; (b) to select the Service Providers to whom Awards may be granted hereunder and the types of Awards to be granted to each; (c) to determine the number of Shares to be covered by each Award granted hereunder; (d) to determine whether, to what extent, and under what circumstances an Award may be settled in cash, Shares, other securities, other Awards, or other property; (e) to approve forms of Award Agreements; (f) to determine, in a manner consistent with the terms of the Plan, the terms and conditions of any Award granted hereunder, based on such factors as the Committee, in its sole discretion, shall determine; (g) to construe and interpret the terms of the Plan and Award Agreements; (h) to correct any defect (including but not limited to amending an Award Agreement to comply with Applicable Law), supply any omission, or reconcile any inconsistency in the Plan or any Award Agreement in the manner and to the extent it shall deem desirable to carry out the purposes of the Plan; (i) to prescribe, amend, and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established pursuant to Section 14.1 of the Plan; (j) to authorize withholding arrangements pursuant to Section 11.7(b) of the Plan; (k) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Committee; (l) to accelerate at any time the vesting, exercisability or both of all or any portion of an Award; (m) to determine the treatment of Awards in connection with a Change in Control; (n) subject to the restrictions under Section 409A of the Code, to extend at any time the period during which a Stock Option may be exercised or a Stock Appreciation Right may be settled, and (o) to make all other determinations and take all other action described in the Plan or as the Committee otherwise deems necessary or advisable for administering the Plan and effectuating its purposes.

3.3.           Compliance with Applicable Law.  The Committee shall administer, construe, interpret, and exercise discretion under the Plan and each Award Agreement in a manner that is consistent and in compliance with a reasonable, good faith interpretation of all Applicable Laws, and that avoids (to the extent practicable) the classification of any Award as “non-qualified deferred compensation” for purposes of Section 409A of the Code, as determined by the Committee, or if an Award is subject to Section 409A of the Code, in a manner that complies with Section 409A of the Code.  Notwithstanding the foregoing, the failure to satisfy the requirements of Section 409A of the Code or Section 162(m) of the Code with respect to the grant of an Award under the Plan shall not affect the validity of the action of the Committee otherwise duly authorized and acting in the matter.

3.4.           Effect of Committee’s Decision and Committee’s Liability.  The Committee’s decisions, determinations and interpretations shall be final and binding on all Participants and any other holders of Awards.  Neither the Board nor the Committee, nor any member of either or any delegatee thereof (including any person signing on behalf of the Company) shall be liable for any act, omission, interpretation, construction, or determination made in good faith in connection with the Plan or any Award Agreement.

3.5.           Awards may be Granted Separately or Together.  In the Committee’s discretion, Awards may be granted alone, in addition to, or in tandem with any other Award or any award granted under another plan of the Company or an Affiliate.  Awards granted in addition to or in tandem with other awards may be granted either at the same time or at different times.

Article 4.

Vesting and Performance Objectives

4.1.           General.  The vesting schedule or Period of Restriction for any Award shall be specified in the Award Agreement.  The criteria for vesting and for removing restrictions on any Award may include (i) performance of substantial services for the Company for a specified period; (ii) achievement of one or more Performance Objectives; or (iii) a combination of (i) and (ii), as determined by the Committee.

4.2.           Period of Absence from Providing Substantial Services.  To the extent that vesting or removal of restrictions is contingent on performance of substantial services for a specified period, a leave of absence (whether paid or unpaid) shall not count toward the required period of service unless the Award Agreement specifically provides otherwise or unless otherwise determined by the Committee.

4.3.           Performance Objectives.

(a)           Possible Performance Objectives.  Any Performance Objective shall relate to the Service Provider’s performance for the Company (or an Affiliate) or the Company’s (or Affiliate’s) business activities or organizational goals, and shall be sufficiently specific that a third party having knowledge of the relevant facts could determine whether the Performance Objective is achieved.  Performance Objectives may be absolute in their terms or measured against or in relationship to other companies comparably, similarly or otherwise situated or other external or internal measures.  The designated level of performance for a Performance Objective may vary from Participant to Participant.  Performance Objectives with respect to any Award may include any one or more of the following General Financial and/or Operational Objectives or combination thereof, as established by the Committee in its sole discretion, which may be applicable on a Company-wide basis and/or with respect to operating units, divisions, subsidiaries, acquired businesses, minority investments, partnerships, or joint ventures:

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(i)           General Financial Objectives:

·      Achieving a target return on the Company’s (or an Affiliate’s) sales, revenues, capital, assets, or shareholders’ equity;

·      Increasing the Company’s net sales;

·      Achieving a target level of earnings (including gross earnings; earnings before certain deductions, such as interest, taxes, depreciation, or amortization; or diluted earnings per share);

·      Achieving a target level of pre-tax or after-tax income (including net income or income before consideration of certain factors, such as overhead) or a target level of gross profits for the Company, an Affiliate or a business unit;

·      Maintaining or achieving a target level of appreciation in the price of the Shares;

·      Increasing the Company’s (or an Affiliate’s) market share to a specified target level;

·      Achieving or maintaining a Share price that meets or exceeds the performance of specified stock market indices or other benchmarks over a specified period;

·      Achieving a level of Share price, earnings, or income performance that meets or exceeds performance in comparable areas of peer companies over a specified period;

·      Achieving specified reductions in costs or targeted levels in costs;

·      Achieving specified improvements in collection of outstanding accounts or specified reductions in non-performing debts;

·      Achieving a level of cash flow, funds from operations or similar measure and

(ii)           Operational Objectives:

·      Introducing one or more products into one or more new markets;

·      Acquiring a prescribed number of new customers in a line of business;

·      Achieving a prescribed level of productivity within a business unit;

·      Completing specified projects within or below the applicable budget;

·      Acquiring other businesses or integrating acquired businesses; and

·      Expanding into other markets.

The  Committee is authorized to exclude one or more of the following items in establishing performance goals that may be established for Awards: (1) the dilutive effects of acquisitions or joint ventures; (2) restructuring and/or other nonrecurring charges; (3) exchange rate effects, as applicable, for non-US dollar denominated net sales and operating earnings; (4) the effects of changes to generally accepted accounting standards required by the Financial Accounting Standards Board; (5) the effects to any statutory adjustments to corporate tax rates; (6) the impact of any “extraordinary items” as determined under generally accepted accounting principles; and (7) the effect of any change in the outstanding shares of common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common shareholders other than regular cash dividends.  Any such exclusion must be taken prior to the earlier to occur of 90 days after the commencement of the period of service to which the performance goals relate and the lapse of 25% of the period of service.

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(b)           Shareholder Approval of Performance Objectives.  The list of possible Performance Objectives set forth in Section 4.3(a) above, and the other material terms of Awards that are intended to qualify as “performance based compensation” under Section 162(m) of the Code, shall be subject to reapproval by the Company’s shareholders in the time period prescribed by Section 162(m) of the Code.

(c)           Documentation of Performance Objectives.  With respect to any Award, the Performance Objectives shall be set forth in writing no later than ninety (90) days after commencement of the period to which the Performance Objective(s) relate(s) (or, if sooner, before 25% of such period has elapsed) and at a time when achievement of the Performance Objectives is substantially uncertain.  Such writing shall also include the period for measuring achievement of the Performance Objectives, which shall be no greater than five consecutive years, as established by the Committee.  Once established by the Committee, the Performance Objective(s) with respect to an Executive Officer may not be changed to accelerate the settlement of an Award or to accelerate the lapse or removal of restrictions on any Award that otherwise would be due upon the attainment of the Performance Objective(s).

(d)           Committee Certification.  Prior to settlement of any Award that is contingent on achievement of one or more Performance Objectives, the Committee shall certify in writing that the applicable Performance Objective(s) and any other material terms of the Award were in fact satisfied.  For purposes of this Section 4.3(d), approved minutes of the Committee shall be adequate written certification.

(e)           Adjustments.  The Committee may adjust in any manner the number of Shares deliverable or the amount payable under any Award subject to Performance Objectives under this Section 4.3 notwithstanding satisfaction of any Performance Objective in the event that exceptional circumstances arise that, in the Committee's judgment, would result in payouts not consistent with the Committee's intentions as of the grant date or would otherwise cause the Award to result in an outcome materially inconsistent with the best interests of the Company; provided, however, that in no event shall the Committee increase the number of Shares deliverable or the amount payable under any Award with respect to any Participant who is an Executive Officer at any time during the performance period or the time of payment.

Article 5.

Stock Options

5.1.           Terms of Option. Subject to the provisions of the Plan, the type of Option, term, exercise price, vesting schedule, and other conditions and limitations applicable to each Option shall be as determined by the Committee and shall be stated in the Award Agreement.

5.2.           Type of Option.

(a)           Each Option shall be designated in the Award Agreement as either an Incentive Stock Option or a Non-Qualified Stock Option.  Only an Employee may be granted an Incentive Stock Option – a Director or Consultant may only receive an Option in the form of a Non-Qualified Stock Option.  To the extent that any Option does not qualify as an Incentive Stock Option, it shall be treated as a Non-Qualified Stock Option.

(b)           Neither the Company nor the Committee shall have liability to a Participant or any other party if an Option (or any part thereof) which is intended to be an Incentive Stock Option does not qualify as an Incentive Stock Option.  In addition, the Committee may make an adjustment or substitution described in Section 2.3 of the Plan that causes the Option to cease to qualify as an Incentive Stock Option without the consent of the affected Participant or any other party.

5.3.           Limitations.

(a)           Maximum Term.  No Option shall have a term in excess of ten (10) years measured from the date the Option is granted.  In the case of any Incentive Stock Option granted to a 10% Stockholder (as defined in Section 5.3(d), below), the term of such Incentive Stock Option shall not exceed five years measured from the date the Option is granted.

(b)           Minimum Exercise Price.  Subject to Section 2.3 of the Plan, the exercise price per share of an Option shall not be less than 100% of the Fair Market Value per Share on the date the Option is granted.  In the case of any Incentive Stock Option granted to a 10% Stockholder (as defined in Section 5.3(d), below), subject to Section 2.3 of the Plan, the exercise price per share of such Incentive Stock Option shall not be less than 110% of the Fair Market Value per Share on the date the Option is granted.

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(c)           $100,000 Limit for Incentive Stock Options.  Notwithstanding an Option’s designation, to the extent that Incentive Stock Options are exercisable for the first time by the Participant during any calendar year with respect to Shares whose aggregate Fair Market Value exceeds $100,000 (regardless of whether such Incentive Stock Options were granted under the Plan, or any other plan of the Company or any Affiliate), such Options shall be treated as Non-Qualified Stock Options.  For purposes of this Section 5.3(c), Fair Market Value shall be measured as of the date the Option was granted and Incentive Stock Options shall be taken into account in the order in which they were granted consistent with Applicable Law.

(d)           10% Stockholder.  For purposes of this Section 5.3, a “10% Stockholder” is an individual who, immediately before the date an Award is granted, owns (or is treated as owning) Shares possessing more than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, determined under Section 424(d) of the Code.

(e)           Time Limit on Granting Incentive Stock Options.  Incentive Stock Options may only be granted within ten years after the date the Board approves the Plan.

5.4.           Form of Consideration.  The Committee shall determine the acceptable form of consideration for exercising an Option, including the method of payment.  In the case of an Incentive Stock Option, the Committee shall determine the acceptable form of consideration at the time of grant.  To the extent approved by the Committee, the consideration for exercise of an Option may be paid in any one, or any combination, of the forms of consideration set forth in subsections (a), (b), (c), (d) and (e) below.

(a)           Cash Equivalent.  Consideration may be paid by cash, check, electronic transfer of funds, or other cash equivalent approved by the Committee.

(b)           Tender or Attestation of Shares.  Consideration may be paid by the tendering of other Shares to the Company or the attestation to the ownership of the Shares that otherwise would be tendered to the Company in exchange for the Company’s reducing the number of Shares issuable upon the exercise of the Option.  Shares tendered or attested to in exchange for Shares issued under the Plan may not be Shares of Restricted Stock at the time they are tendered or attested to.  The Committee shall determine acceptable methods for tendering or attesting to Shares to exercise an Option under the Plan and may impose such limitations and prohibitions on the use of Shares to exercise Options as it deems appropriate (including requiring that any such Shares be held for a certain minimum period of time, to the extent required by applicable accounting rules).  For purposes of determining the amount of the Option price satisfied by tendering or attesting to Shares, such Shares shall be valued at their Fair Market Value on the date of tender or attestation, as applicable.

(c)           Net-Exercise.  The Exercise Price may be paid by having the Company retain from Shares otherwise issuable upon the exercise of the Option a number of Shares having a Fair Market Value equal to the Exercise Price (a “net-exercise”).  For purposes of determining the amount of the Option price satisfied by retaining Shares, such Shares shall be valued at their Fair Market Value on the date of exercise.

(d)           Broker-Assisted Cashless Exercise.  Subject to the Committee’s approval and further subject to the Shares being actively traded on a securities exchange, consideration may be paid by the Participant’s (i) irrevocable instructions to the Company to deliver the Shares issuable upon exercise of the Option promptly to a broker (acceptable to the Company) for the Participant’s account, and (ii) irrevocable instructions to the broker to sell Shares sufficient to pay the exercise price and upon such sale to deliver the exercise price to the Company.  A Participant may use this form of exercise only if the exercise would not subject the Participant to liability under Section 16(b) of the Exchange Act or would be exempt pursuant to Rule 16b-3 promulgated under the Exchange Act or any other exemption from such liability.  Shares acquired by a cashless exercise shall be deemed to have a Fair Market Value on the Option exercise date equal to the gross sales price at which the broker sold the Shares to pay the exercise price.

(e)           Other Methods.  Consideration may be paid using such other methods of payment as the Committee, at its discretion, deems appropriate from time to time.

5.5.           Exercise of Option.

(a)           Procedure for Exercise.  Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as set forth in the Award Agreement.  An Option shall be deemed exercised when the Company or the Company’s designee designated to accept notice of exercise receives: (i) written or electronic notice of exercise (in accordance with the Award Agreement) from the person entitled to exercise the Option specifying the number of Shares to be purchased and (ii) full payment for the Shares (in a form permitted under Section 5.4 of the Plan) with respect to which the Option is exercised.

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(b)           Rights as a Shareholder.  Shares subject to an Option shall be deemed issued, and the Participant shall be deemed the record holder of such Shares, on the Option exercise date.  Until such Option exercise date, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares subject to the Option.

 Article 6.

Stock Appreciation Rights

6.1.           Terms of Stock Appreciation Right.  Each Stock Appreciation Right shall be subject to the terms, conditions and restrictions consistent with the Plan as the Committee may impose, subject to the limitations set forth below.  Except as otherwise specifically provided for by the Committee, all Awards of Stock Appreciation Rights shall be settled in shares of Common Stock issuable upon the exercise of the Stock Appreciation Right.

(a)           Base Price.  The base price per Share subject to a Stock Appreciation Right shall be determined by the Committee and may not be less than the Fair Market Value of a share of Common Stock on the date the Stock Appreciation Right is granted.

(b)           Exercise Period.  Stock Appreciation Rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee; provided, however, that no Stock Appreciation Right shall be exercisable later than ten years after the date it is granted.  Stock Appreciation Rights shall terminate at such earlier times and upon such conditions or circumstances as the Committee shall determine, as set forth in the applicable Award Agreement.

6.2.           Exercise of Stock Appreciation Right.

(a)           Procedure for Exercise.  Any Stock Appreciation Right granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as set forth in the Award Agreement.  A Stock Appreciation Right shall be deemed exercised when the Company receives written or electronic notice of exercise (in accordance with the Award Agreement) from the person entitled to exercise the Stock Appreciation Right.

(b)           Rights as a Shareholder.  Shares subject to a Stock Appreciation Right shall be deemed issued, and the Participant shall be deemed the record holder of such Shares, on the date the Stock Appreciation Right is exercised.  Until such date, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares subject to the Stock Appreciation Right.

Article 7.

Restricted Stock

7.1.           Terms of Restricted Stock.  Subject to the provisions of the Plan, the Period of Restriction, the number of Shares granted, and other conditions and limitations applicable to each Award of Restricted Stock shall be as determined by the Committee and shall be stated in the Award Agreement.  Unless the Committee determines otherwise, Shares of Restricted Stock shall be held by the Company as escrow agent until the restrictions on such Shares have lapsed.

7.2.           Transferability.  Except as provided in this Article 7, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

7.3.           Other Restrictions.  The Committee, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock on the grant date as it may deem advisable or appropriate.

7.4.           Removal of Restrictions.  Except as otherwise provided in this Article 7, and subject to Section 11.5 of the Plan, Shares of Restricted Stock covered by an Award of Restricted Stock made under the Plan shall be released from escrow, and shall become fully transferable, as soon as practicable after the Period of Restriction ends, and in any event no later than 2½ months after the end of the Tax Year in which the Period of Restriction ends.

7.5.           Voting Rights.  During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless otherwise provided in the Award Agreement.

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7.6.           Dividends and Other Distributions.  During the Period of Restriction, Service Providers holding Shares of Restricted Stock shall be entitled to receive all dividends and other distributions paid with respect to such Shares, unless otherwise provided in the Award Agreement, as follows:

(a)           If any such dividends or distributions are paid in Shares, the Shares shall be subject to the same restrictions (and shall therefore be forfeitable to the same extent) as the Shares of Restricted Stock with respect to which they were paid.

(b)           If any such dividends or distributions are paid in cash, the cash payments shall be subject to the same restrictions as the related Restricted Stock, in which case they shall be accumulated (without interest) during the Period of Restriction and paid or forfeited when the related Shares of Restricted Stock become nonforfeitable or are forfeited, as the case may be.  In no event shall any cash dividend or distribution be paid later than 2½ months after the Tax Year in which the dividend or distribution becomes nonforfeitable.

Article 8.

Restricted Stock Units

8.1.           Terms of Restricted Stock Units.  Subject to the provisions of the Plan, the Period of Restriction, number of underlying Shares, and other conditions and limitations applicable to each Award of Restricted Stock Units shall be as determined by the Committee and shall be stated in the Award Agreement.

8.2.           Settlement of Restricted Stock Units.  Subject to Section 11.5 of the Plan, unless otherwise provided in an Award Agreement, the number of Shares specified in the Award Agreement shall be delivered to the Participant as soon as practicable after the end of the applicable Period of Restriction, and in any event no later than 2½ months after the end of the Tax Year in which the Period of Restriction ends.

8.3.           Dividend and Other Distribution Equivalents.  The Committee is authorized to grant to holders of Restricted Stock Units the right to receive payments equivalent to dividends or other distributions with respect to Shares underlying Awards of Restricted Stock Units.  Dividend equivalents or other distributions shall be subject to the same restrictions as the related Restricted Stock Units, in which case they shall be accumulated (without interest) during the Period of Restriction and paid or forfeited when the related Restricted Stock Units are paid or forfeited, as the case may be.

8.4.           Deferral Election.Notwithstanding anything to the contrary in Sections 8.2 or 8.3, a Participant may elect in accordance with the terms of the Award Agreement and Section 409A of the Code to defer receipt of all or any portion of the Shares or other property otherwise issuable to the Participant pursuant to a Restricted Stock Unit Award to the extent permitted by the Committee.

Article 9.

Other Equity-Based Awards

9.1.           Other Equity-Based Awards.  The Committee shall have the right to grant other Awards based upon or payable in Shares having such terms and conditions as the Committee may determine, including Deferred Stock Units, Unrestricted Shares, Performance Shares and the grant of securities convertible into Shares.  The Committee shall determine the terms and conditions of such Awards, including the number of Shares and any vesting or performance restrictions.  Shares delivered pursuant to an Award in the nature of a purchase right granted under this Article 9 shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Shares, other Awards, notes, or other property, as the Committee shall determine.

Article 10.

termination of service

10.1          Effect of Termination of Service on Awards; Forfeiture.  The Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, the circumstances in which Awards shall be exercised, vested, paid or forfeited in the event a Participant ceases to be a Service Provider prior to the end of a performance period, Period of Restriction or the exercise, vesting or settlement of such Award.  Unless otherwise determined by the Committee if, with respect to any Award, (a) a Participant’s Termination of Service occurs before the end of the Period of Restriction or the vesting date applicable to such Award (or the applicable portion of such Award) or (b) any Performance Objectives are not achieved in whole or in part (as determined by the Committee) by the end of the period for measuring such Performance Objectives, then all such then unvested and/or unearned Awards shall be forfeited by the Participant without any consideration due to such Participant.

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Article 11.

Additional Terms of Awards

11.1.           No Rights to Awards.  No Service Provider shall have any claim to be granted any Award under the Plan, and the Company is not obligated to extend uniform treatment to Participants or Beneficiaries under the Plan.  The terms and conditions of Awards and treatment of an Award under Section 2.3(b) need not be the same with respect to each Participant.

11.2.           No Effect on Employment or Service.  Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor shall it interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time for any reason to the extent permitted by Applicable Laws.

11.3.           No Fractional Shares.  No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.

11.4.           Transferability of Awards.  Unless otherwise determined by the Committee, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant.  Subject to the approval of the Committee in its sole discretion, Non-Qualified Stock Options may be transferable to members of the immediate family of the Participant and to one or more trusts for the benefit of such family members, partnerships in which such family members are the only partners, or corporations in which such family members are the only shareholders.  “Members of the immediate family” means the Participant’s spouse, children, stepchildren, grandchildren, parents, grandparents, siblings (including half brothers and sisters), and individuals who are family members by adoption.  To the extent that any Award is transferable, such Award shall contain such additional terms and conditions as the Committee deems appropriate.

11.5.           Conditions on Delivery of Shares and Lapsing of Restrictions.  The Company shall not be obligated to deliver any Shares pursuant to the Plan or to remove restrictions from Shares previously delivered under the Plan until (a) all conditions of the Award have been met or removed to the satisfaction of the Committee, (b) subject to approval by the Company’s counsel, all other legal matters (including any Applicable Laws) in connection with the issuance and delivery of such Shares have been satisfied, and (c) the Participant has executed and delivered to the Company such representations or agreements as the Committee may consider appropriate to satisfy the requirements of Applicable Laws.

11.6.           Inability to Obtain Authority.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance or sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

11.7.           Tax Withholding.

(a)           Withholding Requirements.  Prior to the delivery of any Shares or cash pursuant to the grant, exercise, vesting, or settlement of an Award, the Company shall have the power and the right to deduct or withhold, or to require a Participant or Beneficiary to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes (including the Participant’s FICA obligation) that the Company determines is required to be withheld to comply with Applicable Laws.  The Participant or Beneficiary shall remain responsible at all times for paying any federal, state, local and foreign income or employment tax due with respect to any Award, and the Company shall not be liable for any interest or penalty that a Participant or Beneficiary incurs by failing to make timely payments of tax.

(b)           Withholding Arrangements.  The Committee, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant or Beneficiary to satisfy a tax withholding obligation with respect to an Award, in whole or in part or some combination thereof, by electing to have the Company withhold otherwise deliverable Shares with respect to such Award or delivering to the Company already-owned Shares having a Fair Market Value equal to the minimum statutory amount required by Applicable Law to be withheld.  The Fair Market Value of the Shares to be withheld or delivered, or with respect to which restrictions are removed, shall be determined as of the date that the taxes are required to be withheld.

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11.8.          Other Provisions in Award Agreements.  In addition to the provisions described in the Plan, any Award Agreement may include on the grant date such other provisions (whether or not applicable to the Award of any other Participant) as the Committee determines appropriate, including but not limited to restrictions on resale or other disposition, rights of the Company to repurchase or recover Shares or Shares underlying Awards, provisions with respect to the treatment and/or forfeiture of Awards in the event that a Participant breaches any confidentiality, non-competition, non-solicitation or other restrictive covenant and provisions to comply with Applicable Laws.  Without limiting any other express authority of the Committee under (but subject to) the express limits of the Plan, the Committee may waive conditions of or limitations on Awards to Participants that the Committee in the prior exercise of its discretion had imposed, without the Participant’s consent.  Notwithstanding the foregoing, the Committee shall not adjust or change previously imposed terms and conditions for an Option or a Stock Appreciation Right in such a manner as would constitute a Repricing of the exercise price or base amount of any Option or Stock Appreciation Right without shareholder approval except as contemplated in Section 2.3 (with respect to a stock split, merger, acquisition, spin-off or any other similar, unusual or extraordinary corporate transaction or event in respect of the Shares as described therein).

11.9           Change in Control.  Unless otherwise determined by the Committee:

(a)           The vesting of Awards that vest solely on the basis of continued employment with the Company or any of its Affiliates shall be accelerated solely by reason of a Change in Control only if the surviving corporation or acquiring corporation following a Change in Control refuses to assume or continue such Awards or to substitute similar Awards for those outstanding immediately prior to the Change in Control.  If such Awards are so continued, assumed or substituted and at any time after the Change in Control a Participant is terminated without Cause, then the vesting and exercisability of all such unvested Awards held by such Participant shall be accelerated in full and any reacquisition rights held by the Company with respect to an Award shall lapse in full, in each case, upon such termination.

(b)           The vesting of Awards that vest, in whole or in part, based upon achieving Performance Objectives shall be accelerated on a pro rata basis by reason of a Change in Control.  The pro rata vesting amount shall be determined in good faith by the Committee based upon (A) the extent to which the Performance Objectives for any such award has been achieved after evaluating actual performance from the start of the performance period until the date of the Change in Control and equitably adjusting performance targets for the shortened period during which the Performance Objectives could be achieved, and (B) the number of days the Participant was employed during the Award’s performance period as of the date of the Change in Control.

(c)           Unless otherwise compliant with Section 409A of the Code, notwithstanding the foregoing, any Award that is subject to Section 409A of the Code shall only be settled upon a Change in Control if such Change in Control also constitutes a change in the ownership or a change in the effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, as each is defined under Section 409A of the Code and the regulations thereunder (a “Qualifying Change in Control”).  Upon a Change in Control that does not constitute a Qualifying Change in Control, Awards that are subject to Section 409A of the Code shall remain payable at the times and in the forms provided for in the applicable Award (without regard to such Change in Control).

11.10.           Section 16 of the Exchange Act.  It is the intent of the Company that Awards and transactions permitted by Awards be interpreted in a manner that, in the case of Participants who are or may be subject to Section 16 of the Exchange Act, qualify, to the maximum extent compatible with the express terms of the Awards, for the exemption from liability provided in Rule 16b-3 promulgated under the Exchange Act.  The Company shall have no liability to any Participant or other person for Section 16 consequences of Awards or events in connection with Awards if an Award or related event does not so qualify.

11.11.           Trading Policy Restrictions.  Awards shall be subject to the Company’s insider trading policy as may be in effect from time to time, including any blackout period trading prohibition or requirement to obtain mandatory pre-clearance of a transaction.

11.12.           Not Benefit Plan Compensation.  Payments and other benefits received by a Participant under an Award made pursuant to the Plan shall not be deemed a part of a Participant’s compensation for purposes of determining the Participant’s benefits under any other employee benefit plans or arrangements provided by the Company or an Affiliate, except where the Committee expressly provides otherwise in writing.

11.13.           Other Compensation Arrangements.  Nothing contained in the Plan shall prevent the Board or the Committee from adopting other or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable only in specific cases.

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Article 12.

Term, Amendment, and Termination of Plan

12.1.           Term of Plan.  The Plan shall become effective on the Effective Date.

12.2.           Termination.  The Plan shall terminate upon the earliest to occur of (i)the tenth anniversary of Board approval of the Plan; (ii) the date on which all Shares available for issuance under the Plan have been issued as fully vested Shares; or (iii) the date determined by the Board pursuant to its authority under Section 12.3 of the Plan.

12.3.           Amendment.  The Board may at any time amend, alter, suspend, or terminate the Plan, without the consent of the Participants or Beneficiaries.  The Company shall obtain shareholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.  Any revision that deletes or limits the scope of the provisions of Section 11.8 prohibiting Repricing of Options or Stock Appreciation Rights without shareholder approval shall require shareholder approval.

12.4.           Effect of Amendment or Termination.  No amendment, alteration, suspension, or termination of the Plan or an Award Agreement shall impair the rights of any Participant or Beneficiary under an outstanding Award, unless required to comply with an Applicable Law or mutually agreed otherwise between the Participant and the Committee; any such agreement must be in writing and signed by the Participant and the Company.  Termination of the Plan shall not affect the Committee’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

Article 13.

Definitions

“Affiliate” means any corporation or other entity (other than the Company) in any unbroken chain of corporations or other entities, beginning with the Company if each of the corporations or entities (other than the last corporation or entity in the unbroken chain) owns stock or other interests possessing 50% or more of the total combined voting power of all classes of stock or other interests in one of the other corporations or entities in the chain.

“Applicable Laws” means the requirements relating to, connected with, or otherwise implicated by the administration of long-term incentive plans under applicable state corporation laws, United States federal and state securities laws, the Code, any stock exchange or quotation system on which the Shares are listed or quoted, applicable accounting standards and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.

“Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, or other equity-based awards.

“Award Agreement” means a written agreement setting forth the terms and provisions applicable to an Award granted under the Plan (which may, but need not be executed, at the discretion of the Committee).  A writing includes an electronic form of agreement.  Each Award Agreement shall be subject to the terms and conditions of the Plan.

“Beneficiary” means the person or persons entitled to exercise any Award or receive any payment under an Award after a Participant’s death as determined under Section 14.4 of the Plan.

“Board” means the board of directors of the Company.

“Cause”, as used in connection with the termination of a Participant’s services, means (1) with respect to any Participant covered under an Officer Special Severance Agreement with the Company, “cause” as defined in that agreement, or (2) with respect to any other Participant, any of the following:

(i)           the failure of the Participant to perform any of his or her duties to the Company that results in material harm to the Company, including, without limitation, breach of the Company’s code of ethics, conflict of interest or a material violation of a material restriction under any other Company policy.

(ii)           the Participant’s commission of any felony or other crime that the Committee determines adversely impacts the Participant’s ability to continue performing services with the Company;

(iii)           acts of theft, embezzlement, fraud, dishonesty, misrepresentation or falsification of documents or records involving the Company; or

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(iv)           a breach of the terms of any confidentiality agreement, non-competition agreement and non-solicitation agreement or any other agreement between the Participant and the Company, after giving effect to the notification provisions, if any, and the mechanisms to remedy or cure a breach, if appropriate, as described in any such agreement.

The Committee shall determine whether conduct constituting “Cause” has occurred for purposes of the Plan.  For purposes of this definition, the term “Company” includes any Affiliate of the Company.

“Change in Control” shall mean the first to occur of any one of the following events:

(i)           the 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;

(ii)           the closing of the sale of all of the Company’s Shares to an unrelated person or entity;

(iii)           the consummation of any merger, reorganization, consolidation or share exchange unless the persons who were the beneficial owners of the outstanding Shares 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 subsection, the percentage of the beneficially owned shares of the successor or survivor entity described above shall be determined exclusively by reference to the shares of the successor or survivor entity which result from the beneficial ownership of Shares by the persons described above immediately before the consummation of such transaction; or

(iv)           the complete dissolution or liquidation of the Company.

“Code” means the Internal Revenue Code of 1986, as amended.  Any reference to a section of the Code herein shall include any regulations or other guidance of general applicability promulgated under such section, and shall further include any successor or amended section of such section of the Code that is so referred to and any regulations thereunder.

“Committee” means the Compensation and Organization Committee of the Board; provided, however, for the purpose of granting Awards with Service Providers in their capacity as Directors, “Committee” shall mean the Board.

“Company” means Rogers Corporation, a Massachusetts corporation, or any successor thereto.

“Consultant” means any natural person, including an advisor, engaged by the Company or an Affiliate to render services (other than in connection with the offer or sale of securities in a capital raising transaction or to promote or maintain a market for securities) to such entity who is eligible to be covered under an S-8 registration statement.

“Deferred Stock Unit” means an Award that is vested on the date of grant that entitles the recipient to receive Shares after a designated period of time.  Deferred Stock Units shall be subject to such restrictions and conditions as set forth in the Award Agreement, which shall be consistent with the provisions for Restricted Stock Units set forth in Article 8 above except for the requirement to have a Period of Restriction.

“Director” means a member of the Board.

“Effective Date” means the date of approval of the Plan by the Board; provided that the Plan and any Awards granted hereunder shall be null and void if the Plan is not approved by the Company’s shareholders under Applicable Laws before any compensation under the Plan is paid.

“Employee” means any person who is treated as an employee in the books and records of the Company or any Affiliate.  Neither service as a Director nor payment of a Director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Executive Officer” means an individual who is an “executive officer” of the Company (as defined by Rule 3b-7 under the Exchange Act).

“Fair Market Value” means, with respect to a Share as of any date (except in the case of a cashless exercise pursuant to Section 5.4(d)), (i) if the Shares are admitted to trading on a national securities exchange, the closing price of a Share on such date (or, if the Shares were not traded on such day, then the next preceding day on which the Shares were traded), (ii) if the Shares are not admitted to trading on a national securities exchange, the average of the closing bid and asked prices for a Share as quoted by the National Quotation Bureau’s “Pink Sheets” or the National Association of Securities Dealers’ OTC Bulletin Board System (or, if the Shares were not quoted on such day, then the next preceding day on which the Shares were quoted) or (iii) otherwise, the fair market value as determined in good faith by the Committee on such basis as it deems appropriate.

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“Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

“Non-Qualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

“Option” means an option to purchase Shares that is granted pursuant to Article 5 of the Plan.  An Option may be an Incentive Stock Option or a Non-Qualified Stock Option.

“Participant” means the holder of an outstanding Award granted under the Plan.

“Performance Objective” means a performance objective or goal that must be achieved before an Award, or a feature of an Award, becomes nonforfeitable, as described in Section 4.3 of the Plan.

“Performance Shares” means a contractual right to payment in the form of Shares upon the attainment of one or more Performance Objectives and any other terms and conditions specified by the Committee.

“Period of Restriction” means the period during which Restricted Stock, the remuneration underlying Restricted Stock Units or Performance Shares, or any other feature of an Award is subject to a substantial risk of forfeiture.  A Period of Restriction shall be deemed to end when the applicable Award ceases to be subject to a substantial risk of forfeiture.

“Plan” means the Rogers Corporation 2009 Long-Term Equity Compensation Plan.

“Repricing” means (i) reducing the exercise price or base amount of an Option or Stock Appreciation Right after it is granted, (ii) taking any action that is treated as a “repricing” under generally accepted accounting principles, (iii) canceling an Option or a Stock Appreciation Right at a time when its exercise price or base amount exceeds the Fair Market Value of a Share (each, an “Underwater Award”), in exchange for another Option, Stock Appreciation Right, Restricted Stock or other Award, or (iv) repurchasing an Option or Stock Appreciation Right that is an Underwater Award.

“Restricted Stock” means Shares that, during a Period of Restriction, are subject to restrictions as described in Article 7 of the Plan.

“Restricted Stock Unit” means an Award that entitles the recipient to receive Shares after a Period of Restriction as described in Article 8 of the Plan.

“Service Provider” means an Employee, Director, or Consultant of the Company or an Affiliate.

“Share” means a share of the Company’s common stock, par value $1.00 per share.

“Stock Appreciation Right” means an Award that entitles the recipient to receive, upon exercise, the excess of (i) the Fair Market Value of a Share on the date the Award is exercised, over (ii) a base amount specified by the Committee that shall not be less than the Fair Market Value of a Share on the date the Award is granted, as described in Article 6 of the Plan.

“Tax Year” means the Company’s taxable year.  If an Award is granted by an Affiliate, such Affiliate’s taxable year shall apply instead of the Company’s taxable year.

“Termination of Service” means, (a) with respect to an Employee, the date the individual ceases to be an Employee, (b) with respect to a Director, the date the individual ceases to be a Director, and (c) with respect to a Consultant, the date the individual ceases to be a Consultant.  Awards under the Plan shall not be affected by the change of a Participant’s status within or among the Company and any Affiliate, so long as the Participant continues to provide services in substantially the same capacity as a Service Provider.  For purposes of the Plan and any Award hereunder, if an entity ceases to be an Affiliate, Termination of Service shall be deemed to have occurred with respect to each Participant in respect of such Affiliate who does not continue as a Service Provider in respect of the Company or another Affiliate after such giving effect to such Affiliate’s change in status.  The employment relationship is treated as continuing intact while the individual is on military leave, sick leave, or other leave of absence if the period of such leave does not exceed six months, or if longer, so long as the individual retains a right to reemployment with the Company under an applicable statute or by contract.  If the period of leave exceeds six months and the individual does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period.  Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the employee to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29-month period of absence may be substituted for such six-month period.

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“Unrestricted Shares” means a grant of Shares free of any employment based restrictions.  Unrestricted Shares may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to a Service Provider.

Article 14.

Miscellaneous

14.1.           Authorization of Sub-Plans.

(a)           The Committee may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities, and/or tax laws of various jurisdictions.  The Committee shall establish such sub-plans by adopting supplements to the Plan containing (i) such limitations as the Committee deems necessary or desirable, and (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Committee shall deem necessary or desirable.  All sub-plans adopted by the Committee shall be deemed to be part of the Plan, but each sub-plan shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any sub-plans to Participants in any jurisdiction which is not the subject of such sub-plan.

(b)           In addition, the Committee may make Awards to Participants who are foreign nationals, who are employed outside of the United States of America or both (collectively, “Foreign Participants”) on terms and conditions consistent with the Plan’s purpose but different from the provisions specified herein without amending the Plan as may be necessary, desirable or appropriate, as determined in its sole discretion.  Subject to any requirement of shareholder approval imposed by applicable law, rule or regulation, the Committee may modify previously granted Awards granted to Foreign Participants to reflect special terms to recognize differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.

14.2.           Governing Law.  Except as specifically provided to the contrary in a sub-plan applicable to a Participant or Beneficiary, the provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts, regardless of the laws that might otherwise govern under any state’s applicable principles of conflicts of laws.

14.3.           Committee Manner of Action.  Unless otherwise provided in the bylaws of the Company or the charter of the Committee: (a) a majority of the members of a Committee shall constitute a quorum, and (b) the vote of a majority of the members present who are qualified to act on a question assuming the presence of a quorum or the unanimous written consent of the members of the Committee shall constitute action by the Committee.  The Committee may delegate authority to grant Awards to a subcommittee of its members in order to deduct amounts as performance based compensation under Section 162(m) of the Code.  The Committee may delegate the performance of ministerial functions in connection with the Plan to such person or persons as the Committee may select.

14.4.           Beneficiary.  A Participant to whom an Award has been made under the Plan may designate a Beneficiary or Beneficiaries to exercise any Award or receive any payment under any Award payable on or after the Participant’s death.  Any such designation shall be made on a form provided for that purpose by the Company and shall not be effective until received by the Company.  If no Beneficiary has been designated by a Participant, of if the designated Beneficiaries have predeceased the Participant, the Beneficiary shall be the Participant’s estate.

14.5.           Expenses.  The costs of administering the Plan shall be paid by the Company.

14.6           Severability.  If any provision of the Plan, an Award or an Award Agreement is determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any jurisdiction, or as to any person or Award, such provision shall be construed or deemed to be amended to resolve the applicable infirmity, unless the Committee determines that it cannot be so construed or deemed amended without materially altering the Plan or the Award, in which case such provision shall be stricken as to such jurisdiction, person, or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

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14.7.           Construction.  Unless the contrary is clearly indicated by the context, (a) the use of the masculine gender shall also include within its meaning the feminine and vice versa; (b) the use of the singular shall also include within its meaning the plural and vice versa; and (c) the word “include” shall mean “include but not be limited to,” and the word “including” shall mean “including but not limited to.”

14.8.           No Trust or Fund Created.  Neither the Plan nor any Award Agreement shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company (or an Affiliate) and a Participant or any other person.  To the extent that any person acquires a right to receive payments from the Company (or an Affiliate) pursuant to an Award, such right shall be no more secure than the right of any unsecured general creditor of the Company (or the Affiliate, as applicable).

14.9.           Headings.  Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

14.10.         Complete Statement of Plan.  This document is a complete statement of the Plan

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EX-10.3

Exhibit 10.3

Standard Form of Time-Based Restricted Stock Unit Agreement

ROGERS CORPORATION

2009 LONG-TERM EQUITY COMPENSATION PLAN

TIME-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT

Rogers Corporation (the “Company”) hereby grants to ____________________ (the “Grantee”) ________ Restricted Stock Units (this “Award”) under Article 8 of the Rogers Corporation 2009 Long-Term Equity Compensation Plan, as amended (the “Plan”).  This Time-Based Restricted Stock Unit Award Agreement (this “Agreement”) entitles the Grantee to payment in the form of Shares upon satisfying the vesting conditions described in Section 2 below.  The number of Restricted Stock Units subject to this Award shall be subject to adjustment as provided under Section 2.3 of the Plan.  This Award is granted as of _________________ (the “Grant Date”).

By checking the applicable acceptance box on the Charles Schwab & Co., Inc. website, Grantee agrees to all of the terms and conditions described in this Agreement and in the Plan.  Grantee acknowledges that the Grantee has carefully reviewed the Plan, and agrees that the Plan will control in the event any provision of this Agreement is inconsistent with the Plan.  Certain capitalized terms used in this Agreement are defined in the Plan and have the meaning set forth in the Plan.

1.Acceptance of Award.  The Grantee shall have no rights with respect to this Agreement unless the Grantee has accepted this Agreement in the manner described in the immediately preceding paragraph prior to the close of business on the first business day on or after the 90th calendar day following the Grant Date.

2.Vesting.

(a)The total number of Restricted Stock Units subject to this Award shall vest in full on the third anniversary of the Grant Date provided the Grantee is then employed by the Company or an Affiliate.  Except to the extent provided in Section 2(b) below for special circumstances, a Grantee’s unvested Restricted Stock Units shall be immediately forfeited upon Separation from Service.

(b)In the event of the Grantee’s Separation from Service due to Retirement (as defined below) or death or the Grantee’s Disability (as defined below) prior to the third anniversary of the Grant Date, a “Pro-Rata Percentage” (as defined below) of the total number of Restricted Stock Units subject to this Award shall be immediately vested.  For purposes of this Section 2(b), “Pro-Rata Percentage” is equal to total number of Restricted Stock Units subject to this Award multiplied by a fraction, the numerator of which shall equal the number of days that the Grantee was employed by the Company or its Affiliates since the Grant Date, and the denominator of which shall equal 1,095 (3 x 365).

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For purposes of this Agreement, the following terms shall have the following meanings:

“Disability” means the date on which the Grantee (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Rogers entity employing the Grantee, each as reasonably determined by the Committee.  In addition, the Committee may determine that the Grantee has incurred a Disability if the Grantee is considered “totally disabled” by the Social Security Administration.

“Retirement” means Separation from Service after the Grantee attains fifty-five years of age and completes at least five years of vesting service.  For avoidance of doubt, it is not necessary to complete five years of vesting service prior to attaining age fifty-five in order to qualify for Retirement.  For purposes of this Agreement, “years of vesting service” shall be determined in the same manner as provided for under the Section 401(k) plan maintained by the Company as in effect on the Grant Date.

3.Settlement of Restricted Stock Units.

(a)Except as provided in either Section 3(b), Section 3(c), or Section 3(e) below, the Company shall deliver or cause to be delivered to the Grantee the number of vested Shares determined under Section 2 above as soon as administratively practicable following the third (3rd) anniversary of the Grant Date, but in no event later than the end of the calendar year in which such anniversary occurs.

(b)In the event of either the Grantee’s Disability, the Grantee’s death (whether on or contemporaneous with the Grantee’s Separation from Service) or a Change in Control, the Company shall deliver or cause to be delivered to or on the behalf of the Grantee the number of vested Shares determined under Section 2 above as soon as practicable following any such event.  Vested Shares to be delivered due to death shall be paid to the Grantee’s Beneficiary designated under Section 16 below.

(c)In the event that the Grantee has a “Separation from Service” (as defined in Section 3(d) below) on account of Retirement as described in Section 2(b) above, the Company shall deliver the Grantee’s vested Shares as determined under Section 2 as soon as practicable following any such separation; provided, however, that if, at the time of such Separation from Service, the Grantee is a “specified employee” (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and using the identification methodology selected by the Company from time to time), then the Company shall not deliver such Shares until the earliest of (A) the first business day after the six-month anniversary of such Separation from Service or (B) the date of the Grantee’s death.

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(d)For purposes of this Agreement, “Separation from Service” or “Separates from Service” means a termination of employment by the Grantee with the Company and its Affiliates, whether voluntarily or involuntarily, other than by reason of death, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(h) and consistent with the rules set forth below.  In determining whether a Grantee has experienced a Separation from Service, the following provisions shall apply:

(i)A Grantee terminates employment when the facts and circumstances indicate that the Grantee and the Company reasonably anticipate that no further services will be performed for the Company and its Affiliates after a certain date, or that the level of bona fide services the Grantee will perform for the Company and its Affiliates after such date (whether as a common law employee or as an independent contractor) will permanently decrease to no more than 20% of the average level of bona fide services performed by such Grantee (whether as a common law employee or an independent contractor) over the immediately preceding 36-month period.

(ii)If a Grantee is on military leave, sick leave, or other bona fide leave of absence, the Grantee’s employment relationship shall be treated as continuing intact, provided that the period of such leave does not exceed 6 months, or if longer, so long as the Grantee retains a right to reemployment with the Company or any of its Affiliates under an applicable statute or by contract.  If the period of military leave, sick leave, or other bona fide leave of absence exceeds 6 months and the Grantee does not retain a right to reemployment under an applicable statute or by contract, the employment relationship shall be considered to be terminated for purposes of this Agreement as of the first day immediately following the end of such 6-month period.  In applying the provisions of this part (ii), a leave of absence shall be considered a bona fide leave of absence only if there is a reasonable expectation that the Grantee will return to perform services for the Company or one of its Affiliates.

(iii)For a Grantee who provides services to the Company, its Affiliates or both, as a common law employee and an independent contractor concurrently, a Separation from Service generally shall not occur until the Grantee has ceased providing services for such entities as both a common law employee and as an independent contractor, as determined in accordance with the provisions set forth in parts (i) and (ii) above, respectively.  Similarly, if a Grantee ceases providing services for the Company and its Affiliates as a common law employee and begins providing services for any such entity as an independent contractor, the Grantee will not be considered to have experienced a Separation from Service until the Grantee has ceased providing services for all such entities in both capacities, as determined in accordance with the applicable provisions set forth in parts (i) and (ii) above.  Notwithstanding the foregoing, if a Grantee provides services for the Company, its Affiliates or both as a common law employee and as a member of the Board of the Company, any of its Affiliates or both, to the extent permitted by Treas. Reg. §1.409A-1(h)(5), the services provided by such Grantee as a director shall not be taken into account in determining whether the Grantee has experienced a Separation from Service as an employee.

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(e)Payment of Shares under this Section 3 shall be made by the Company not more than more than 90 days after the event triggering payment under this Section 3 and the Grantee shall in no event have a right to designate the taxable year of the payment.  If the Company reasonably anticipates that the income tax deduction with respect to a payment under this Award would be limited or eliminated by application of Section 162(m) of the Code, then to the extent permitted by Treas. Reg. §1.409A-2(b)(7)(i), payment shall be deferred as deemed necessary to ensure that the entire amount of Shares (and related dividends, if any) payable under this Award is deductible.  Any Shares that are not paid due to this Section 162(m) of the Code limitation shall continue to be credited with dividends under Section 4 below.  Any delayed payment of Shares (and related dividends, if any) shall be paid to the Grantee (or his or her Beneficiary in the event of the Grantee’s death) upon either (i) the earliest date the Company reasonably anticipates that the deduction of a delayed payment will not be limited or eliminated by application of Section 162(m) of the Code or (ii) the calendar year in which the Grantee Separates from Service.  In the event payment is to be made under clause (ii) above, then to the extent deemed necessary to comply with Treas. Reg. 1.409A-3(i)(2) (with respect to the Separation from Service of a “specified employee”), the delayed payment shall not be made before the end of the six-month period following the Grantee’s Separation from Service.

(f)The Grantee shall have no rights of a shareholder with respect to any Shares subject to the Restricted Stock Units until such time, if any, as such Shares are actually delivered.

4.Dividends. The Grantee shall also be paid cash in an amount equal to (a) the dollar value of cash dividends paid by the Company per Share during the period starting on the Grant Date and ending on the date Shares are actually delivered to the Grantee under the terms of this Agreement, multiplied by (b) the number of Shares vested under this Agreement.  Any such dividends shall be paid to the Grantee, without interest, on the date Shares are actually delivered to the Grantee under the terms of this Agreement.

5.Change in Control. The Restricted Stock Units will only vest upon a Change in Control to the extent determined by the Committee in its sole discretion under Section 11.9 of the Plan and only if the Grantee is then employed by the Company or one of its Affiliates.  If the Grantee is a party to an Officer Special Severance Agreement, treatment of the Restricted Stock Units under this Award upon and following a Change in Control shall be governed by such agreement.

6.Compensation Recovery.  This Award shall be subject to being recovered under the Company’s Compensation Recovery Policy or any similar policy that the Company may adopt from time to time.  For avoidance of doubt, compensation recovery rights to Shares issued under this Agreement shall extend to any proceeds realized by the Grantee upon the sale or other transfer of such Shares.

7.Tax Withholding. The Grantee hereby agrees to make appropriate arrangements with the Company for such income and employment tax withholding as may be required of the Company under applicable United States federal, state, local or foreign law on account of the Grantee’s rights under this Agreement.  The Grantee may satisfy any withholding obligation, in whole or in part, by electing (i) to make a payment to the Company in cash, by check, electronic funds transfer or by other instrument acceptable to the Company, (ii) to deliver to the Company a number of already-owned Shares having a value not greater than the amount required to be withheld (such number may be rounded up to the next whole share), as may be permitted pursuant to written policies or rules adopted by the Committee in effect at the time of the delivery of the Shares, or (iii) by any combination of (i) and (ii).  In addition, the Committee may also permit, in its sole discretion and in accordance with such policies and rules as it deems appropriate, the Grantee to have the Company withhold a number of Shares which would otherwise be issued pursuant to this Agreement having a value not greater than the amount required to be withheld (such number may be rounded up to the next whole share).  The value of Shares to be withheld or delivered (as may be permitted by the Committee) shall be based on the Fair Market Value of a Share as of the date the amount of tax to be withheld is to be determined.  For avoidance of doubt, the Committee may change its policies and rules for tax withholding in its sole discretion from time to time for any reason.

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8.Section 409A of the Code.  It is intended that the provisions of this Agreement comply with Section 409A of the Code, and all provisions of this Agreement shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code.

9.The Plan.  This Agreement is subject in all respects to the terms, conditions, limitations, and definitions contained in the Plan.  In the event of any discrepancy or inconsistency between this Agreement and the Plan, the terms and conditions of the Plan shall control.

10.No Obligation to Continue Employment.  Neither the Company nor any Affiliate is obligated to continue to employ the Grantee, nor does the Plan or this Agreement impose any such obligation.  In addition, the Company or an Affiliate may at any time dismiss the Grantee from employment free from any liability or any claim under this Agreement, unless otherwise expressly provided in this Agreement.

11.Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

12.Purchase Only for Investment.  To insure the Company’s compliance with the Securities Act of 1933, as amended, the Grantee agrees for himself or herself, the Grantee’s legal representatives and estate, or other persons who acquire the rights under this Agreement upon his or her death, that Shares will be acquired hereunder for investment purposes only and not with a view to their distribution, as that term is used in the Securities Act of 1933, as amended, unless in the opinion of counsel to the Company such distribution is in compliance with, or exempt from, the registration and prospectus requirements of that Act.

13.Consent to Electronic Delivery.  In lieu of receiving documents in paper format, the Grantee agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company may be required to deliver (including, but not limited to, the Plan, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other agreements, forms and communications) in connection with this and any other prior or future incentive award or program made or offered by the Company or its predecessors or successors.  Electronic delivery of a document to the Grantee may be via a Company e-mail system, by reference to a location on a Company intranet site to which the Grantee has access, or by a website maintained by a third party engaged to provide administrative services to the Plan.

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14.Electronic Signature.  All references to signatures of documents in this Agreement can be satisfied by procedures the Company has established or may establish for an electronic signature system for delivery and acceptance of any such documents, including this Agreement.  The Grantee’s electronic signature is the same as, and shall have the same force and effect as, the Grantee’s manual signature.  Any such procedures and delivery may be effected by a third party engaged by the Company to provide administrative services related to the Plan.

15.Governing Law.  This Agreement shall be governed by the laws of the Commonwealth of Massachusetts, United States of America.

16.           Beneficiary Designation. The Grantee may designate Beneficiary(ies) to whom shall be transferred any rights under this Agreement which survive the Grantee’s death.  To obtain the beneficiary designation form, please go to the “My Equity Award Account” section of the Schwab Equity Award Center website (http://equityawardcenter.schwab.com) after completing the login procedure and click on the “Review message” from your “employer” and then click on the “Equity Awards Beneficiary Designation Form”.  Alternatively, you may request this beneficiary designation form by sending an e-mail to equityawardsadmin@rogerscorporation.com or calling the Office of the Corporate Secretary of Rogers Corporation at 800-227-6437.

In the absence of an effective beneficiary designation in accordance with the terms of the Plan and this Agreement, the Grantee acknowledges that any rights under this Agreement that survive the Grantee’s death shall be rights of his or her estate notwithstanding any other agreements or documents (including the Grantee’s will) to the contrary.

By: Rogers Corporation

By clicking the Accept button I hereby acknowledge receipt of the foregoing Award and agree to its terms and conditions.

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EX-10.4

Exhibit 10.4

ROGERS CORPORATION

2009 LONG-TERM EQUITY COMPENSATION PLAN

PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT

Rogers Corporation (the “Company”) hereby grants to _____________ (the “Grantee”) Restricted Stock Units under Section 8 of the Rogers Corporation 2009 Long-Term Equity Compensation Plan, as amended (the “Plan”).  This Performance-Based Restricted Stock Award Agreement (this “Agreement”) entitles the Grantee to payment in the form of Shares following the attainment of the Performance Objectives and employment requirements set forth below.  The target number of shares of (capital) common stock of the Company (the “Capital Stock”) subject to this Agreement is   _______Shares (the “Target Shares”), subject to adjustment under Section 2.3 of the Plan.  This Award is granted as of May 12, 2011 (the “Grant Date”).

1 .Acceptance of Award.  The Grantee shall have no rights with respect to this Agreement unless he or she shall have accepted this Agreement prior to the close of business on August 12, 2011 by signing and delivering to the Company a copy of this Agreement.

2.Issuance of Shares.

(a)           Subject to Paragraph 6 below, the actual number of shares of Capital Stock to be issued to the Grantee shall be determined based on the Weighted Average Performance Achievement Percentage (as defined in Paragraph 2(b) below) during the Company’s 2011, 2012 and 2013 fiscal years (the “Performance Period”) using the following table:

	Weighted Average Performance	Percentage of
	Achievement Percentage	Target Shares
Below Threshold	Less than 0%	None
Threshold	0%	0% of Target Shares
Target	100%	100% of Target Shares
Maximum	200% or more	200% of Target Shares

For avoidance of doubt, no Shares shall be awarded for a Weighted Average Performance Achievement Percentage of 0% or less, and no more than two times the number of Target Shares shall be deliverable if the Weighted Average Performance Achievement Percentage exceeds 200%.

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(b)           The “Weighted Average Performance Achievement Percentage” for purposes of this table shall be the average percentage for the Performance Objectives determined pursuant to Schedule A to this Agreement.  Straight-line interpolation shall be used to determine the “Percentage of Target Shares” under the table set forth in Paragraph 2(a) above if the Weighted Average Performance Achievement Percentage is between Threshold and Target and between Target and Maximum.  For example, a 50% Weighted Average Performance Achievement Percentage will result in delivery of 50% of the Target Shares.  Any partial Share shall be rounded up to the nearest whole Share.

3.Restrictions and Conditions.  If the Grantee’s employment with the Company and its Affiliates is terminated for any reason, other than death, Disability or Retirement, as such terms are set forth and defined in Schedule B hereto, prior to the end of the Performance Period, the Grantee shall forfeit any and all rights hereunder and no shares of Capital Stock shall be issued hereunder regardless of actual performance during the Performance Period.  If the Grantee’s employment with the Company and its Affiliates is terminated due to the Grantee’s death, Disability or Retirement prior to the end of the Performance Period, the number of shares of Capital Stock determined pursuant to Paragraph 2 to be issued to the Grantee shall be pro rated based on the number of days that the Grantee was actively employed during the Performance Period, rounded up to the nearest whole Share.  For example, if the Grantee was actively employed by the Company, one of its Affiliates or both, for 600 days during the Performance Period and then terminated employment due to Retirement, then the Grantee shall receive 54.79% [600 days / (365 x 3)] of the number of shares of Capital Stock determined under Paragraph 2 based on the performance achieved at the end of the Performance Period, rounded up to the nearest whole Share.

4.Scheduled Payment Date.  Subject to Paragraph 6 below, the Company shall deliver or cause to be delivered to the Grantee the number of earned and vested Shares, if any, as certified by the Compensation and Organization Committee of the Board of Directors of the Company (the “Committee”) under Paragraph 2 and Paragraph 3 above, on or before the Scheduled Payment Date in compliance with applicable law.  The Company shall determine in its sole discretion the manner of delivering Shares under this Paragraph 4.  For purposes of this Agreement, the “Scheduled Payment Date” means the March 15th within the calendar year immediately following the expiration of the Performance Period.

5.Dividends.  The Grantee shall also be paid cash in an amount equal to (a) the dollar value of cash dividends paid by the Company per share of Capital Stock during the period starting on the Grant Date and ending on the date Shares are actually delivered to the Grantee under the terms of this Agreement, multiplied by (b) the number of Shares earned and vested under this Agreement.  Any such dividends shall be paid to the Grantee on the date Shares are actually delivered to the Grantee under the terms of this Agreement.

6.Change in Control.  The Restricted Stock Units under this Agreement shall be considered to be earned and vested upon a Change in Control that occurs before the end of the Performance Period to the extent determined by the Committee in good faith under Section 11.9(b) of the Plan; provided that the Grantee is then employed by the Company or one of its Affiliates.  In the event that Restricted Stock Units become earned and vested under this Paragraph 6, payment shall be made consistent with the terms of the Plan as soon as practicable (but in no event more than five business days) following a Change in Control.

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7.Tax Withholding.  The Grantee hereby agrees to make appropriate arrangements with the Company for such income and employment tax withholding as may be required of the Company under applicable United States federal, state, local or foreign law on account of the Grantee’s rights under this Agreement.  The Grantee may satisfy any withholding obligation, in whole or in part, by electing (i) to make a payment to the Company in cash, by check, electronic funds transfer or by other instrument acceptable to the Company, (ii) to deliver to the Company a number of already-owned shares of Capital Stock having a value not greater than the amount required to be withheld (such number may be rounded up to the next whole share) as may be permitted pursuant to written policies or rules adopted by the Committee in effect at the time of the delivery of the earned and vested Shares, or (iii) by any combination of (i) and (ii).  In addition, the Committee may also permit, in its sole discretion and in accordance with such policies and rules as it deems appropriate, the Grantee to have the Company withhold a number of shares which would otherwise be issued pursuant to this Agreement having a value not greater than the amount required to be withheld (such number may be rounded up to the next whole share).  The value of Shares to be withheld or delivered (as may be permitted by the Committee) shall be based on the Fair Market Value of a share of Capital Stock as of the date the amount of tax to be withheld is to be determined.  For avoidance of doubt, the Committee may change its policies and rules for tax withholding in its sole discretion from time to time for any reason.

8 .The Plan.  This Agreement is subject in all respects to the terms, conditions, limitations and definitions contained in the Plan.  In the event of any discrepancy or inconsistency between this Agreement and the Plan, the terms and conditions of the Plan shall control. Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.

9.No Obligation to Continue Employment.  Neither the Company nor any Affiliate is obligated by or as a result of the Plan or this Agreement to continue the Grantee in employment.

10.Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

11.Purchase Only for Investment.  To insure the Company’s compliance with the Securities Act of 1933, as amended, the Grantee agrees for himself or herself, the Grantee’s legal representatives and estate, or other persons who acquire the rights under this Agreement upon his or her death, that Shares will be acquired hereunder for investment purposes only and not with a view to their distribution, as that term is used in the Securities Act of 1933, as amended, unless in the opinion of counsel to the Company such distribution is in compliance with or exempt from the registration and prospectus requirements of that Act.

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12.Governing Law.  This Agreement shall be governed by the laws of the Commonwealth of Massachusetts, United States of America.

13.Beneficiary Designation.  The Grantee hereby designates the following person(s) as the Grantee’s Beneficiary(ies) to whom shall be transferred any rights under this Agreement which survive the Grantee’s death. If the Grantee names more than one primary beneficiary and one or more of such primary beneficiaries die, the deceased primary beneficiary’s interest will be apportioned among any surviving primary beneficiaries before any contingent beneficiary receives any amount, unless the Grantee indicates otherwise in a signed and dated additional page. The same rule shall apply within the category of contingent beneficiaries. Unless the Grantee has specified otherwise herein, any rights which survive the Grantee’s death will be divided equally among the Grantee’s primary beneficiaries or contingent beneficiaries, as the case may be.

 PRIMARY BENEFICIARY(IES) 

 

	Name	%	Address
(a)	_____________________________________________	__	_____________________________________________
(b)	_____________________________________________	__	_____________________________________________
(c)	_____________________________________________	__	_____________________________________________

 CONTINGENT BENEFICIARY(IES)

	Name	%	Address
(a)	_____________________________________________	__	_____________________________________________
(b)	_____________________________________________	__	_____________________________________________
(c)	_____________________________________________	__	_____________________________________________

In the absence of an effective beneficiary designation in accordance with the terms of the Plan and this Agreement, the Grantee acknowledges that any rights under this Agreement that survive the Grantee’s death shall be rights of his or her estate notwithstanding any other agreements or documents (including the Grantee’s will) to the contrary.

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14.Section 409A.  It is intended that this Award be exempt from Section 409A of the Code as a “short-term deferral” (as defined under Treasury Regulation Section 1.409A-1(b)(4)).

This Agreement is to be executed in duplicate.

 ROGERS CORPORATION

 By: _____________________________

The undersigned hereby acknowledges receipt of this Agreement and agrees to its terms and conditions:
	_________________________________
	Grantee

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SCHEDULE A

Weighted Average Performance Achievement Percentage

For purposes of this Agreement, there are three metrics:  “Net Sales Growth”, “EPS Growth” and the “Free Cash Flow Percentage” with each of these three metrics defined in SCHEDULE B and each metric is also called a “Performance Objective”.  Each metric is weighted one-third and the total award is based on the sum of these three metrics (i.e., the “Weighted Average Performance Achievement Percentage”) - up to a 200% maximum.

2011 Performance Based Restricted Stock Plan Grant Metrics

Net Sales Growth			Result		EPS Growth			Result			Free Cash Flow Percentage			Result
12	%		300	%		14	%		300	%		5	%		300	%
10	%		200	%		12	%		200	%		4	%		200	%
8	%		100	%		10	%		100	%		3	%		100	%
6	%		50	%		6	%		50	%		2.50	%		50	%
3	%		25	%		3	%		25	%		2.25	%		25	%
0	%	Threshold				0	%	Threshold				2	%	Threshold

Straight-line interpolation shall be used to determine the applicable percentage with respect to Rogers Corporation’s achievement of a Performance Objective designated above when performance is between two stated levels in this table.  For example, if Net Sales Growth is 7%, the applicable percentage for this Performance Objective to be used in determining the Weighted Average Performance Achievement Percentage is 75% (50% + ((1% / (8% - 6%)) x 50%).

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SCHEDULE B

Definitions

The following terms shall have the meanings set forth below:

“Disability” means the Grantee’s inability, due to physical or mental incapacity resulting from injury, sickness or disease, for one hundred and eighty (180) days in any twelve-month period to perform his or her duties.

“EPS Growth” means the Company's compound annual growth rate in EPS during the Performance Period, expressed as a percentage, as follows:

((Ending Value for EPS /Beginning Value for EPS)^(1/3)) -1 x 100%

For purposes of this definition:

(a) “Ending Value for EPS” means EPS for the Company’s 2013 fiscal year,

(b) “Beginning Value for EPS” means the EPS for the Company’s 2010 fiscal year, and

(c) “EPS” means, for a given fiscal year, the Company’s net income per share on a fully diluted basis from continuing operations as reported on the Company’s financial statements for that year in accordance with GAAP.

Notwithstanding the foregoing, in the event that there is a divestiture, acquisition or other extraordinary event during any fiscal year within the Performance Period, the Committee shall calculate EPS Growth in a manner so as to insure comparable business unit sales are used to determine the Company’s compound annual growth in EPS.

“Free Cash Flow Percentage” means the Company’s average Free Cash Flow during the Performance Period expressed as a percentage of Company’s Net Sales, which shall be determined as follows:

((Year 1 Free Cash Flow/Year 1 Net Sales) + (Year 2 Free Cash Flow/Year 2 Net Sales) + (Year 3 Free Cash Flow/Year 3 Net Sales)) / 3, where “Year 1” is 2011, “Year 2” is 2012, and “Year 3” is 2013.

For purposes of determining the Free Cash Flow Percentage, “Free Cash Flow” for a given fiscal year shall be equal to:

Net income:

Plus: non-cash impairment charges, depreciation, amortization and stock compensation expense

Less:    capital expenditures

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Less (if applicable): the increase, if any, in net working capital (i.e., total current assets (excluding cash and cash equivalents) minus current liabilities)

Plus (if applicable):  the decrease, if any, in net working capital

as such amounts are reported on the Company’s applicable audited financial statement in accordance with GAAP.

“GAAP” means Generally Accepted Accounting Principles.

“Net Sales Growth” means the Company's compound annual growth rate in Net Sales during the Performance Period, expressed as a percentage, as follows:

((Ending Value for Net Sales /Beginning Value for Net Sales)^(1/3)) -1 x 100%

For purposes of this Schedule B:

(a) “Ending Value for Net Sales” means the Net Sales for the Company’s 2013 fiscal year,

(b) “Beginning Value for Net Sales” means the Net Sales for the Company’ 2010 fiscal year, and

(c) “Net Sales” means, for a given fiscal year, the net sales reported on the Company’s financial statements for that year in accordance with GAAP.

Notwithstanding the foregoing, in the event that there is a divestiture, acquisition or other extraordinary event during any fiscal year within the Performance Period, the Committee shall calculate Net Sales and Net Sales Growth in a manner so as to insure comparable business unit sales are used to determine the Company’s compound annual growth in Net Sales.

“Retirement” means Termination of Service (as defined in the Plan) after the Grantee attains fifty-five years of age and completes at least five years of vesting service.  For avoidance of doubt, it is not necessary to complete five years of vesting service prior to attaining age fifty-five in order to qualify for Retirement.  For purposes of this Schedule B, “years of vesting service” shall be determined in the same manner as provided for under the Section 401(k) plan maintained by the Company as in effect on the Grant Date.

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EX-23.1

Exhibit 23.1

CONSENT OF NATIONAL ECONOMIC RESEARCH ASSOCIATES, INC.

We hereby consent to the references to our firm with respect to the economic analysis we performed regarding Rogers Corporation’s projected liability for its asbestos-related liabilities and defense costs contained in the Form 10-Q for the fiscal quarter ended June 30, 2011 of Rogers Corporation and any amendments thereto, and to all references to us as having conducted such analysis.  In giving the foregoing consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended (the “Securities Act”), or the rules and regulations promulgated thereunder, nor do we admit that we are experts with respect to any part of such Form 10-Q within the meaning of the term “experts” as used in the Securities Act or the rules and regulations promulgated thereunder.

	National Economic Research Associates, Inc.
	By:	/s/ Mary Elizabeth Stern
		Name: Mary Elizabeth Stern
		Title: Vice President
New York, New York
July 28, 2011

EX-23.2

Exhibit 23.2

CONSENT OF MARSH USA, INC.

We hereby consent to the references to our firm with respect to the analysis we performed regarding Rogers Corporation’s insurance coverage for its asbestos-related liabilities and defense costs contained in the Form 10-Q for the fiscal quarter ended June 30, 2011 of Rogers Corporation and any amendments thereto, and to all references to us as having conducted such analysis.  In giving the foregoing consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended (the “Securities Act”), or the rules and regulations promulgated thereunder, nor do we admit that we are experts with respect to any part of such Form 10-Q within the meaning of the term “experts” as used in the Securities Act or the rules and regulations promulgated thereunder.

		MARSH USA, INC.
	By:	/s/ John H. Denton
		Name: John H. Denton
		Title: Senior Vice President
New York, New York
July 29, 2011

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Robert D. Wachob, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Rogers Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a.   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  August 2, 2011

/s/ Robert D. Wachob

Robert D. Wachob

President and Chief Executive Officer

Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Dennis M. Loughran, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Rogers Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a.   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  August 2, 2011

/s/ Dennis M. Loughran

Dennis M. Loughran

Vice President, Finance and Chief Financial Officer

Principal Financial Officer

EX-32

Exhibit  32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Rogers Corporation, a Massachusetts corporation (the “Corporation”), does hereby certify that:

The Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011 (the “Form 10-Q”) of the Corporation fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Robert D. Wachob

Robert D. Wachob

President and Chief Executive Officer

Principal Executive Officer

August 2, 2011

/s/ Dennis M. Loughran

Dennis M. Loughran

Vice President, Finance and Chief Financial Officer

Principal Financial Officer

August 2, 2011

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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Current assets
Cash and cash equivalents	$ 71,647	$ 80,135
Short-term investments	3,704	186
Accounts receivable, less allowance for doubtful accounts of $1,220 and $1,630	89,242	61,995
Accounts receivable from joint ventures	2,254	1,338
Accounts receivable, other	3,159	3,773
Taxes receivable	247	1,706
Inventories	71,517	47,574
Prepaid income taxes	3,580	1,938
Deferred income taxes	1,485	1,492
Asbestos-related insurance receivables	8,563	8,563
Assets held for sale	2,548	5,841
Other current assets	10,158	7,042
Total current assets	268,104	221,583
Property, plant and equipment, net of accumulated depreciation of $227,818 and $182,435	155,080	120,087
Investments in unconsolidated joint ventures	25,664	25,452
Deferred income taxes	15,168	17,120
Goodwill and other intangibles	185,068	35,984
Asbestos-related insurance receivables	20,733	20,733
Long-term marketable securities	26,773	33,592
Investments, other	5,000	5,000
Other long-term assets	7,905	5,323
Total assets	709,495	484,874
Current liabilities
Accounts payable	22,423	16,296
Accrued employee benefits and compensation	26,009	26,692
Accrued income taxes payable	4,371	1,528
Current portion of lease obligation	1,786
Asbestos-related liabilities	8,563	8,563
Other current liabilities	13,625	12,362
Total current liabilities	76,777	65,441
Long term debt	135,000
Long term lease obligation	9,046
Pension liability	31,980	31,980
Retiree health care and life insurance benefits	8,144	8,144
Asbestos-related liabilities	21,159	21,159
Non-current income tax	18,610	15,339
Deferred income taxes	24,857	8,745
Other long-term liabilities	597	3,534
Shareholders' Equity
Capital Stock - $1 par value; 50,000,000 authorized shares; 16,044,317 and 15,841,341 shares outstanding	16,044	15,841
Additional paid-in capital	42,458	33,194
Retained earnings	316,607	295,044
Accumulated other comprehensive income (loss)	8,216	(13,547)
Total shareholders' equity	383,325	330,532
Total liabilities and shareholders' equity	$ 709,495	$ 484,874

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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) (USD $) In Thousands, except Share data	Jun. 30, 2011	Dec. 31, 2010
Accounts receivable, allowance for doubtful accounts	$ 1,220	$ 1,630
Property, plant and equipment, accumulated depreciation	$ 227,818	$ 182,435
Capital Stock, par value	$ 1	$ 1
Capital Stock, authorized shares	50,000,000	50,000,000
Capital Stock, shares outstanding	16,044,317	15,841,341

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Document and Entity Information	6 Months Ended
	Jun. 30, 2011	Jul. 22, 2011
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Trading Symbol	ROG
Entity Registrant Name	ROGERS CORP
Entity Central Index Key	0000084748
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		16,063,672

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Earnings Per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share

Note 7 - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share, for the periods indicated:

(In thousands, except per share amounts)	Three Months Ended				Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Numerator:
Net income	$	12,128	$	8,313	$	21,563	$	15,167
Denominator:
Denominator for basic earnings per share -           Weighted-average shares		15,945		15,786		15,919		15,777
Effect of dilutive stock options		734		199		685		164
Denominator for diluted earnings per share - Adjusted
weighted-average shares and assumed conversions		16,678		15,985		16,604		15,941
Basic net income per share:	$	0.76	$	0.53	$	1.35	$	0.96
Diluted net income per share:		0.73		0.52		1.30		0.95

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Debt

6 Months Ended

Jun. 30, 2011

Debt

Note 12 - Debt

On November 23, 2010, we terminated our existing $50 million Multicurrency Revolving Credit Agreement with RBS Citizens (Citizens Credit Facility), National Association, a successor in interest to Citizens Bank of Connecticut, and concurrently entered into a $165 million, secured revolving credit agreement (Credit Agreement) with (i) JPMorgan Chase Bank, N.A. as administrative agent; (ii) HSBC Bank USA, National Association; (iii) RBS Citizens, National Association; (iv) Fifth Third Bank; and (v) Citibank, N.A.  JPMorgan Securities LLC and HSBC Bank USA, National Association acted as joint bookrunners and joint lead arrangers; HSBC Bank USA, National Association and RBS Citizens, National Association acted as co-syndication agents; and Fifth Third Bank and Citibank, N.A. acted as co-documentation agents.

The Credit Agreement provides for the extension of credit in the form of revolving loans, in multiple currencies, at any time and from time to time until the maturity of the Credit Agreement, which is November 23, 2014.  Borrowings under the Credit Agreement will bear interest based under one of two options: (1) Alternate base rate loans will bear interest that includes a base reference rate plus a spread of 1.00-1.75%, depending on leverage ratio.  The base reference rate will be the greater of (a) the prime rate, (b) federal funds effective rate plus 0.5%, and (c) adjusted 1-month London interbank offered (“LIBO”) rate plus 1.00%.  (2) Eurocurrency loans will bear interest based on the adjusted LIBO rate plus a spread of 2.00-2.75%, depending on leverage ratio.  We capitalized $1.6 million of debt issuance costs associated with the Credit Agreement which will be amortized over the four year life of the agreement.

The Credit Agreement is secured by many of the assets of Rogers and our World Properties, Inc, subsidiary, including but not limited to receivables, equipment, intellectual property, inventory, stock in certain subsidiaries and real property.

As part of the agreement, we are restricted in our ability to perform certain actions, including, but not limited to our ability to pay dividends, incur additional debt, sell certain assets, and make capital expenditures, with certain exceptions.  The key financial covenants include a requirement for us to maintain, at the end of each fiscal quarter ending on or after December 31, 2010, a fixed charge coverage ratio of no less than 3.0 to 1.0 and a leverage ratio of no more than 2.50 to 1.0.  If an event of default occurs, the lenders may, among other things, terminate their commitments and declare all outstanding borrowings to be immediately due and payable together with accrued interest and fees.

In the first quarter of 2011, we made an initial draw on the line of credit of $145.0 million to fund the acquisition of Curamik.  In the second quarter of 2011, we made $10 million in repayments of principal.  We were in compliance with all covenants as of June 30, 2011.

At June 30, 2011 we had the following standby letters of credit (LOC) and guarantees that were backed by the Credit Facility:

·   $1.0 million irrevocable standby LOC - to guarantee Rogers’ self insured workers compensation plan; and

·   $0.2 million letter guarantee – to guarantee a payable obligation for a Chinese subsidiary (Rogers Shanghai).

No amounts were owed on the LOCs as of June 30, 2011 or December 31, 2010.

Interest

We incurred interest expense on the borrowing of $1.0 million and $2.1 million in the three and six months ended June 30, 2011, respectively.  We incurred an unused commitment fee of approximately $20,000 and $40,000 in the three and six months ended June 30, 2011, respectively.  There were no interest charges in the first six months of 2010 and the unused commitment fee under the Citizens Credit Facility, for the three and six months ended June 30, 2010 was $37,000 and $55,000, respectively.

Restriction on Payment of Dividends

Pursuant to the Credit Agreement, we cannot make a cash dividend payment if a default or event of default has occurred and is continuing or shall result from the cash dividend payment.

On July 13, 2011, we entered into an amended and restated $265 million, secured, five year credit agreement.  Refer to the subsequent event footnote, Note 16, for further information.

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Hedging Transactions and Derivative Financial Instruments

6 Months Ended

Jun. 30, 2011

Hedging Transactions and Derivative Financial Instruments

Note 3 – Hedging Transactions and Derivative Financial Instruments

The guidance for the accounting and disclosure of derivatives and hedging transactions requires companies to recognize all of their derivative instruments as either assets or liabilities in the statement of financial position at fair value.  The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship, and further on the type of hedging relationship.  For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.

We are exposed to certain risks relating to our ongoing business operations.  The primary risk mitigated by using derivative instruments is foreign currency exchange rate risk.  Option contracts on various foreign currencies are entered into to mitigate the foreign currency exchange rate risk on forecasted revenue denominated in foreign currencies.

We do not use derivative financial instruments for trading or speculation purposes.

We designate certain foreign currency option contracts as cash flow hedges of forecasted revenues.

For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings.   The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of the future cash flows of the hedged item, if any, are recognized in the statement of operations during the current period.  The ineffective portion of a derivative instrument’s change in fair value is immediately recognized in income.  We do not hold any derivative instruments as of the end of the second quarter of 2011 that are designated and qualified as cash flow hedges.

As of the end of the second quarter of 2011, we have entered into five hedge programs.  These programs, which do not qualify as cash flow hedges, are intended to minimize foreign currency exposures on our condensed consolidated statements of financial position.

Notional Values of Derivative Instruments
Euro	€	4,800
U.S. Dollar	$	10,000
Japanese Yen	¥	230,000

(Dollars in thousands)	The Effect of Current Derivative Instruments on the Financial Statements for the six-month period ended June 30, 2011			Fair Values of Derivative Instruments as of June 30, 2011
Foreign Exchange Option Contracts	Location of gain	Amount of gain		Other Assets
Contracts not designated as hedging instruments	Other income, net	$	623	$	1,729

Concentration of Credit Risk

By using derivative instruments, we are subject to credit and market risk.  If a counterparty fails to fulfill its performance obligations under a derivative contract, our credit risk will equal the fair value of the derivative instrument. Generally, when the fair value of a derivative contract is positive, the counterparty owes the Company, thus creating a receivable risk for the Company. We minimize counterparty credit (or repayment) risk by entering into derivative transactions with major financial institutions with investment grade credit ratings.

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Pension Benefit and Other Postretirement Benefit Plans

6 Months Ended

Jun. 30, 2011

Pension Benefit and Other Postretirement Benefit Plans

Note 9 – Pension Benefit and Other Postretirement Benefit Plans

Components of Net Periodic Benefit Cost

The components of net periodic benefit cost for the periods indicated are:

(Dollars in thousands)	Pension Benefits												Retirement Health and Life Insurance
													Benefits
	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
Change in benefit obligation:	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Service cost	$	1,060		$	897		$	2,120		$	1,794		$	176		$	169		$	352		$	338
Interest cost		2,116			2,099			4,232			4,198			97			101			194			202
Expected return on plan assets		(2,591	)		(2,361	)		(5,182	)		(4,722	)		--			--			--			--
Amortization of prior service cost		150			149			300			298			(157	)		(156	)		(314	)		(312	)
Amortization of net loss		553			461			1,106			922			81			89			162			178
Settlement charge		--			--			--			225			--			--			--			--
Net periodic benefit cost	$	1,288		$	1,245		$	2,576		$	2,715		$	197		$	203		$	394		$	406

Employer Contributions

We made no voluntary contributions to our qualified defined benefit pension plans and we made a de minimis benefit payment to our non-qualified defined benefit pension plan the first six months of 2011.  For the first six months of 2010, we had no voluntary contributions to our qualified defined benefit pension plans and made $1.5 million in benefit payments to our non-qualified defined benefit pension plans.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies

Note 14 – Commitments and Contingencies

We are currently engaged in the following environmental and legal proceedings:

Superfund Sites

We are currently involved as a potentially responsible party (PRP) in one active case involving a waste disposal site.  Currently, this proceeding is at a stage where it is not possible to estimate the ultimate cost of remediation, the timing and extent of remedial action that may be required by governmental authorities, or the amount of our liability, if any, alone or in relation to that of any other PRPs.  The costs incurred since inception for this claim have been immaterial and have been primarily covered by insurance policies, for both legal and remediation costs.  We have been assessed a cost sharing percentage of approximately 2% in relation to the range for estimated total cleanup costs of $17 million to $24 million.  We believe we have sufficient insurance coverage to fully cover this liability and have recorded a liability and related insurance receivable of approximately $0.3 million as of June 30, 2011, which approximates our share of the low end of the range.  We believe we are a de minimis participant and have been allocated an insignificant percentage of the total PRP cost sharing responsibility.  Based on facts presently known to us, we believe that the potential for the final results of this case having a material adverse effect on our results of operations, financial position or cash flows is remote.  This case has been ongoing for many years and we believe that it will continue on for the indefinite future.  No time frame for completion can be estimated at the present time.

PCB Contamination

We have been working with the Connecticut Department of Environmental Protection (CT DEP) and the United States Environmental Protection Agency (EPA) Region I in connection with certain polychlorinated biphenyl (PCB) contamination in the soil beneath a section of cement flooring at our Woodstock, Connecticut facility.  We completed clean-up efforts in 2000 in accordance with a previously agreed upon remediation plan.  To address the small amount of residual soil contamination at the site, we had proposed a plan of Monitored Natural Attenuation, which was subsequently rejected by the CT DEP.  The CT DEP has additionally rejected two revised plans that were submitted.  During the second quarter of 2009, the CT DEP required us to install additional wells on site to better determine the amount and location of the residual contamination.  During the third quarter of 2009, one of the additional wells tested positive for PCBs, and we were therefore required to install additional wells to continue to try and determine the extent of the contamination.  During 2010, the additional wells tested positive for contamination and therefore a pump and treat system was installed to alleviate further contamination of the ground water.  Since inception, we have spent approximately $2.5 million in remediation and monitoring costs related to the PCB soil contamination at this site.

In addition, during the first quarter of 2010, we discovered PCB contamination of the building at our Woodstock, Connecticut facility, due to it having contained the equipment that was the source of the original PCB soil contamination.  Remediation of the contamination within the facility is currently projected to cost between $0.8 million and $2.4 million; therefore, we recorded a liability of $0.8 million related to the building contamination, which represents the low end of the estimated range, as no other amount in the range is more probable at this time.

We believe that these situations will continue for several more years and no time frame for completion can be estimated at the present time.

Asbestos Litigation

A significant number of asbestos-related product liability claims have been brought against numerous United States industrial companies where the third-party plaintiffs allege personal injury from exposure to asbestos-containing products. We have been named, along with hundreds of other companies, as a defendant in some of these claims. In virtually all of these claims filed against us, the plaintiffs are seeking unspecified damages, or, if an amount is specified, such amount merely represents jurisdictional amounts.  Even in those situations where specific damages are alleged, the claims frequently seek the same amount of damages, irrespective of the disease or injury.  Plaintiffs’ lawyers often sue dozens or even hundreds of defendants in individual lawsuits on behalf of hundreds or even thousands of claimants.  As a result, even when specific damages are alleged with respect to a specific disease or injury, those damages are not expressly identified as to us.

We did not mine, mill, manufacture or market asbestos; rather we made a limited number of products which contained encapsulated asbestos.  Such products were provided to industrial users.  We stopped manufacturing these products in the late 1980s.

·   Claims

We have been named in asbestos litigation primarily in Illinois, Pennsylvania and Mississippi.  As of June 30, 2011, there were approximately 213 pending claims compared to approximately 194 pending claims at December 31, 2010.  The number of open claims during a particular time can fluctuate significantly from period to period depending on how successful we have been in getting these cases dismissed or settled.  Some jurisdictions prohibit specifying alleged damages in personal injury tort cases such as these, other than a minimum jurisdictional amount which may be required for such reasons as allowing the case to be litigated in a jury trial (which the plaintiffs believe will be more favorable to them than if heard only before a judge) or allowing the case to be litigated in federal court.  This is in contrast to commercial litigation, in which specific alleged damage claims are often permitted.  The prohibition on specifying alleged damage sometimes applies not only to the suit when filed but also during the trial – in some jurisdictions the plaintiff is not actually permitted to specify to the jury during the course of the trial the amount of alleged damages the plaintiff is claiming.  Further, in those jurisdictions in which plaintiffs are permitted to claim specific alleged damages, many plaintiffs nonetheless still choose not to do so. In those cases in which plaintiffs are permitted to and do choose to assert specific dollar amounts in their complaints, we believe the amounts claimed are typically not meaningful as an indicator of a company’s potential liability. This is because (1) the amounts claimed may bear no relation to the level of the plaintiff’s injury and are often used as part of the plaintiff’s litigation strategy, (2) the complaints typically assert claims against numerous defendants, and often the alleged damages are not allocated against specific defendants, but rather the broad claim is made against all of the defendants as a group, making it impossible for a particular defendant to quantify the alleged damages that are being specifically claimed against it and therefore its potential liability, and (3) many cases are brought on behalf of plaintiffs who have not suffered any medical injury, and ultimately are resolved without any payment or payment of a small fraction of the damages initially claimed.  Of the approximately 213 claims pending as of June 30, 2011, 54 claims do not specify the amount of damages sought, 156 claims cite jurisdictional amounts, and only three (3) claims (less than 2.0% of the total pending claims) specify the amount of damages sought not based on jurisdictional requirements.  Of these three (3) claims, one (1) claim alleges compensatory and punitive damages of $20,000,000 each; one (1) claim alleges compensatory damages of $65,000,000 and punitive damages of $60,000,000 and one (1) claim alleges compensatory and punitive damages of $1,000,000 each.  These three (3) claims name between ten (10) and 109 defendants.  However, for the reasons cited above, we do not believe that this data allows for an accurate assessment of the relation that the amount of alleged damages claimed might bear to the ultimate disposition of these cases.

The rate at which plaintiffs filed asbestos-related suits against us increased in 2001, 2002, 2003 and 2004 because of increased activity on the part of plaintiffs to identify those companies that sold asbestos containing products, but which did not directly mine, mill or market asbestos.  A significant increase in the volume of asbestos-related bodily injury cases arose in Mississippi in 2002.  This increase in the volume of claims in Mississippi was apparently due to the passage of tort reform legislation (applicable to asbestos-related injuries), which became effective on September 1, 2003 and which resulted in a higher than average number of claims being filed in Mississippi by plaintiffs seeking to ensure their claims would be governed by the law in effect prior to the passage of tort reform.  The number of asbestos related suits filed against us decreased slightly in 2005 and 2006, but increased slightly in 2007, declined in 2008 and increased again in 2009 and 2010.  As of the end of the second quarter, the number of suits filed in 2011 is about 70% higher than the number filed in 2010, but it is too early to be able to determine if this is a meaningful trend and the reasons for the increase.

·   Defenses

In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable loss as a result of exposure to our asbestos-containing products.  We continue to believe that a majority of the claimants in pending cases will not be able to demonstrate exposure or loss.  This belief is based in large part on two factors: the limited number of asbestos-related products manufactured and sold by us and the fact that the asbestos was encapsulated in such products.  In addition, even at sites where the presence of an alleged injured party can be verified during the same period those products were used, our liability cannot be presumed because even if an individual contracted an asbestos-related disease, not everyone who was employed at a site was exposed to the asbestos-containing products that we manufactured.  Based on these and other factors, we have and will continue to vigorously defend ourselves in asbestos-related matters.

·   Dismissals and Settlements

Cases involving us typically name 50-300 defendants, although some cases have had as few as one and as many as 833 defendants.  We have obtained dismissals of many of these claims.  For the six months ended June 30, 2011, we were able to have 63 claims dismissed and settled 2 claims.  For the year ended December 31, 2010, 163 claims were dismissed and 20 were settled.  The majority of costs have been paid by our insurance carriers, including the costs associated with the small number of cases that have been settled.  Such settlements totaled approximately $5.5 million for 2010, and $0.8 million for the six months ended June 30, 2011.  Although these figures provide some insight into our experience with asbestos litigation, no guarantee can be made as to the dismissal and settlement rate that we will experience in the future.

Settlements are made without any admission of liability.  Settlement amounts may vary depending upon a number of factors, including the jurisdiction where the action was brought, the nature and extent of the disease alleged and the associated medical evidence, the age and occupation of the claimant, the existence or absence of other possible causes of the alleged illness of the alleged injured party and the availability of legal defenses, as well as whether the action is brought alone or as part of a group of claimants.  To date, we have been successful in obtaining dismissals for many of the claims and have settled only a limited number.  The majority of settled claims were settled for immaterial amounts, and the majority of such costs have been paid by our insurance carriers.  In addition, to date, we have not been required to pay any punitive damage awards.

·   Potential Liability

National Economic Research Associates, Inc. (NERA), a consulting firm with expertise in the field of evaluating mass tort litigation asbestos bodily-injury claims, has historically been engaged to assist us in projecting our future asbestos-related liabilities and defense costs with regard to pending claims and future unasserted claims.  Projecting future asbestos costs is subject to numerous variables that are extremely difficult to predict, including the number of claims that might be received, the type and severity of the disease alleged by each claimant, the long latency period associated with asbestos exposure, dismissal rates, costs of medical treatment, the financial resources of other companies that are co-defendants in claims, uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case and the impact of potential changes in legislative or judicial standards, including potential tort reform.  Furthermore, any predictions with respect to these variables are subject to even greater uncertainty as the projection period lengthens.  In light of these inherent uncertainties, the limited amount and variability of our claims history and consultations with NERA, we believe that five years is the most reasonable period for recognizing a reserve for future costs, and that costs that might be incurred after that period are not reasonably estimable at this time.  As a result, we also believe that our ultimate asbestos-related contingent liability (i.e., our indemnity or other claim disposition costs plus related legal fees) cannot be estimated with certainty.

·   Insurance Coverage

Our applicable insurance policies generally provide coverage for asbestos liability costs, including coverage for both resolution and defense costs.  Following the initiation of asbestos litigation, an effort was made to identify all of our primary and excess level insurance carriers that provided applicable coverage beginning in the 1950s through the mid-1980s.  Where appropriate, carriers were put on notice of the litigation.  Marsh Risk Consulting (Marsh), a consulting firm with expertise in the field of evaluating insurance coverage and the likelihood of recovery for asbestos-related claims, has historically been engaged to work with us to project our insurance coverage for asbestos-related claims. Marsh’s conclusions are based primarily on a review of our coverage history, application of reasonable assumptions on the allocation of coverage consistent with industry standards, an assessment of the creditworthiness of the insurance carriers, analysis of applicable deductibles, retentions and policy limits, the experience of NERA and a review of NERA’s reports.

·   Cost Sharing Agreement

To date, our insurance carriers have paid for substantially all of the settlement and defense costs associated with our asbestos-related claims.  There is a new cost sharing agreement between us and such insurance carriers which is primarily designed to facilitate the ongoing administration and payment of such claims by the carriers until the applicable insurance coverage is exhausted.  This new four year agreement expires on January 25, 2015 and replaces an older agreement that had expired.

·   Impact on Financial Statements

Given the inherent uncertainty in making future projections, we have had the projections of current and future asbestos claims periodically re-examined, and we will have them updated if needed based on our experience, changes in the underlying assumptions that formed the basis for NERA’s and Marsh’s models, and other relevant factors, such as changes in the tort system and our success in resolving claims.  Based on the assumptions employed by and the report prepared by NERA and other variables, NERA and Marsh updated their respective analyses for year end  2010 and the estimated liability and estimated insurance recovery, for the five-year period through 2015, is $29.7 million and $29.3 million, respectively.  These amounts are currently reflected in our financial statements at June 30, 2011 as no material changes occurred during the first half of 2011 that would cause us to believe that an additional update to the analysis was required.

The amounts recorded for the asbestos-related liability and the related insurance receivables described above were based on facts known at the time and a number of assumptions.  However, projecting future events, such as the number of new claims to be filed each year, the average cost of disposing of such claims, coverage issues among insurers and the continuing solvency of various insurance companies, as well as the numerous uncertainties surrounding asbestos litigation in the United States could cause the actual liability and insurance recoveries for us to be higher or lower than those projected or recorded.

There can be no assurance that our accrued asbestos liabilities will approximate our actual asbestos-related settlement and defense costs, or that our accrued insurance recoveries will be realized.  We believe that it is reasonably possible that we will incur additional charges for our asbestos liabilities and defense costs in the future, which could exceed existing reserves, but such excess amount cannot be estimated at this time.  We will continue to vigorously defend ourselves and believe we have substantial unutilized insurance coverage to mitigate future costs related to this matter.

Other Environmental and General Litigation

·   On May 16, 2007, CalAmp Corp. (CalAmp) filed a lawsuit against us for unspecified damages.  During the second quarter of 2008, CalAmp responded to discovery requests in the litigation and stated that its then current estimated total damages were $82.9 million. In the lawsuit, which was filed in the United States District Court, Central District of California, CalAmp alleged performance issues with certain printed circuit board laminate materials we had provided for use in certain of its products.  In the first quarter of 2009 this lawsuit was settled for $9.0 million. The settlement was reached through mediation mandated by the United States District Court for the Central District of California.  Both parties acknowledged that Rogers admitted no wrongdoing or liability for any claim made by CalAmp. We agreed to settle this litigation solely to avoid the time, expense and inconvenience of continued litigation.  Under the settlement reached through mediation mandated by the U.S. District Court for the Central District of California, we paid CalAmp the $9.0 million settlement amount in January 2009.  We had accrued $0.9 million related to this lawsuit in 2007 and recorded an additional $8.1 million in the fourth quarter of 2008.  Legal and other costs related to this lawsuit were approximately $1.8 million in 2008.  In February 2009, subsequent to the settlement with CalAmp, we reached an agreement with our primary level insurance carrier to recover costs associated with a portion of the settlement ($1.0 million) as well as certain legal fees and other defense costs associated with the lawsuit (approximately $1.0 million).  Payment for these amounts was received in the first quarter of 2009.  On February 6, 2009, we filed suit in the United States District Court for the District of Massachusetts against Fireman’s Fund Insurance Company, our excess level insurance carrier, seeking to collect the remaining $8.0 million of the settlement amount.  In December 2010, we settled the suit filed against Fireman’s Fund Insurance Company and received a payment of $2.5 million.  This is recorded in operating income and as an operating activity in the condensed consolidated financial statements.  These funds will be used in normal business operations.

·   In the second quarter of 2010, the CT DEP identified us as a potentially responsible party at a disposal site in Killingly, Connecticut.  We have continued internal due diligence work related to the site to better understand the issue and our alleged involvement.  Based on the facts and circumstances known to us at the present time, we are unable to estimate the probability or amount of any potential costs associated with this matter.  As such, no reserve has been established at this time.

In addition to the above issues, the nature and scope of our business brings us in regular contact with the general public and a variety of businesses and government agencies.  Such activities inherently subject us to the possibility of litigation, including environmental and product liability matters that are defended and handled in the ordinary course of business.  We have established accruals for matters for which management considers a loss to be probable and reasonably estimable. It is the opinion of management that facts known at the present time do not indicate that such litigation, after taking into account insurance coverage and the aforementioned accruals, will have a material adverse impact on our results of operations, financial position, or cash flows.

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Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information

Note 10 – Segment Information

In the first quarter of 2011, due to the acquisition of Curamik and management’s current view of our business, we determined that it was appropriate to adjust our segment structure.

Our previous reporting structure was comprised of three business categories – Core Strategic, Development Stage, and Other.  Our new structure eliminates the Development Stage category and expands the Core Strategic category, as shown in the below table:

Old Structure		New Structure
Core Strategic		Core Strategic
	High Performance Foams		High Performance Foams
	Printed Circuit Materials		Printed Circuit Materials
	Power Distribution Systems		Power Electronic Solutions
Development Stage				Curamik Electronic Solutions
	Custom Electrical Components			Power Distribution Systems
	Thermal Management Systems			Thermal Management Solutions
Other		Other

In the new structure, we created a new segment called “Power Electronic Solutions”, which is comprised of three operating segments – Curamik Electronic Solutions, Power Distribution Systems, and Thermal Management Solutions.  We now separately report the results of operations for all three of these segments.  Also, we eliminated the Development Stage category, as the Thermal Management Systems business is now part of our Core Strategic segment of Power Electronic Solutions and the Custom Electrical Components segment will now be aggregated in “Other”.  Management concluded that the development activities at the Custom Electrical Components segment were not gaining traction in the market and, therefore, suspended most of the development efforts associated with the segment.  This new structure aligns our reporting with management’s current view of the business, particularly as we work to further penetrate our core target mega-trend markets.

The following table sets forth the information about our reportable segments for the periods indicated:

(Dollars in thousands)	Three Months Ended						Six Months Ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Core Strategic
High Performance Foams
Net sales	$	44,021		$	38,915		$	83,156		$	70,697
Operating income		6,658			5,529			11,293			7,751
Printed Circuit Materials
Net sales	$	43,375		$	33,582		$	86,228		$	68,154
Operating income		4,405			2,128			9,234			6,599
Power Electronic Solutions
Curamik Electronic Solutions
Net sales	$	34,613			-		$	67,510			-
Operating income		2,855			-			3,157			-
Power Distribution Systems
Net sales	$	13,978		$	10,143		$	26,413		$	19,277
Operating income		1,644			143			3,909			159
Thermal Management Solutions
Net sales	$	184		$	194		$	315		$	384
Operating loss		(1,328	)		(961	)		(2,967	)		(1,661	)
Other
Net sales	$	7,514		$	13,774		$	16,122		$	22,033
Operating income		944			908			2,144			641

Inter-segment sales have been eliminated from the sales data in the previous table

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2011

Stock-Based Compensation

Note 8 – Stock-Based Compensation

Equity Compensation Awards

Stock Options

We currently grant stock options under various equity compensation plans.  While we may grant options to employees that become exercisable at different times or within different periods, we have generally granted options to employees that vest and become exercisable in one-third increments on the 2nd, 3rd and 4th anniversaries of the grant dates.  The maximum contractual term for all options is generally ten years.

We use the Black-Scholes option-pricing model to calculate the grant-date fair value of an option.  The fair value of options granted during the three and six month periods ended June 30, 2011 and 2010 were calculated using the following weighted-average assumptions:

	Three Months Ended						Six Months Ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Options granted		58,550			500			58,550			340,150
Weighted average exercise price	$	47.89		$	30.80		$	47.89		$	24.26
Weighted-average grant date fair value		22.30			14.23			22.30			11.40
Assumptions:
Expected volatility		45.15	%		46.48	%		45.15	%		45.41	%
Expected term (in years)		6.00			5.50			6.00			5.86
Risk-free interest rate		2.64	%		2.95	%		2.64	%		3.12	%
Expected dividend yield		--			--			--			--

Expected volatility – In determining expected volatility, we have considered a number of factors, including historical volatility and implied volatility.

Expected term – We use historical employee exercise data to estimate the expected term assumption for the Black-Scholes valuation.

Risk-free interest rate – We use the yield on zero-coupon U.S. Treasury securities for a period commensurate with the expected term assumption as its risk-free interest rate.

Expected dividend yield – We do not issue dividends on our common stock; therefore, a dividend yield of 0% was used in the Black-Scholes model.

In most cases, we recognize expense using the straight-line attribution method for stock option grants.  The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest.  Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.  The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered option.  We currently expect, based on an analysis of our historical forfeitures, a forfeiture rate of approximately 3% and applied that rate to grants issued.  This assumption will be reviewed periodically and the rate will be adjusted as necessary based on these reviews.  Ultimately, the actual expense recognized over the vesting period will only be for those shares that vest.

 During the three and six month periods ended June 30, 2011 we recognized approximately $0.8 million and $1.3 million of stock option compensation expense, respectively.  During the three and six month periods ended June 30, 2010 we recognized approximately $0.7 million and $2.8 million of stock option compensation expense, respectively.

A summary of the activity under our stock option plans as of June 30, 2011 and changes during the three month period then ended, is presented below:

	Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Options outstanding at March 31, 2011		2,527,647		$	36.79		5.6	$	27,475,580
Options granted		58,550			47.89
Options exercised		(71,783	)		27.75
Options cancelled		(2,700	)		53.23
Options outstanding at June 30, 2011		2,511,714			37.15		5.3		28,613,872
Options exercisable at June 30, 2011		1,758,940			41.63		4.0		13,820,779
Options vested or expected to vest at June 30, 2011*		2,489,131			37.25		5.2		28,170,080

* In addition to the vested options, we expect a portion of the unvested options to vest at some point in the future.  Options expected to vest are calculated by applying an estimated forfeiture rate to the unvested options.

	Options Outstanding			Weighted- Average Exercise Price Per Share
Options outstanding at December 31, 2010		2,626,371		$	36.63
Options granted		58,550			47.89
Options exercised		(167,191	)		32.68
Options cancelled		(6,016	)		38.80
Options outstanding at June 30, 2011		2,511,714

During the six month period ended June 30, 2011, the total intrinsic value of options exercised (i.e., the difference between the market price at time of exercise and the price paid by the individual to exercise the options) was $2.2 million, and the total amount of cash received from the exercise of these options was $5.5 million.

Restricted Stock

In 2006, we began granting restricted stock to certain key executives.  The restricted stock granted is either time-based or performance-based.  The performance-based grants award shares of common stock of the Company at the end of a three-year measurement period.  Awards associated with this program granted in 2008 cliff vested at the end of the three-year period and eligible participants were eligible to be awarded shares ranging from 0% to 200% of the original award amount, based on defined performance measures associated with earnings per share.  The 2008 grant did not meet performance measures and there was no payout.  The 2009, 2010 and 2011grants cliff vest at the end of the three-year period, except for those recipients who are retirement eligible, and therefore have awards that are subject to accelerated vesting.   Eligible participants can be awarded shares ranging from 0% to 200% of the original award amount, based on defined performance measures associated with a combined measure using earnings per share, net sales and free cash flow.  In the second quarter of 2011 we granted 20,630 performance-based restricted stock awards.

In the second quarter of 2011, we granted 42,270 time-based restricted stock awards.  These awards cliff vest at the end of a three-year period.

We recognize compensation expense on these awards ratably over the vesting period, or on an accelerated basis, depending on the retirement eligibility of the recipient.  The fair value of the award will be determined based on the market value of the underlying stock price at the grant date.  The amount of compensation expense recognized over the vesting period will be based on our projections of the performance measure over the requisite service period and, ultimately, how that performance compares to the defined performance measure.  If, at any point during the vesting period, we conclude that the ultimate result of this measure will change from that originally projected, we will adjust the compensation expense accordingly and recognize the difference ratably over the remaining vesting period.

	Restricted Share Awards
Non-vested awards outstanding at December 31, 2010		117,750
Awards granted		62,900
Awards issued		-
Awards expired		(70	)
Non-vested awards outstanding at  June 30, 2011		180,580

As of the first quarter of 2011, the restricted stock granted in 2008 has been forfeited, due to the performance target not being reached that was required for vesting of this grant.

For the three and six month periods ended June 30, 2011 we recognized compensation expense for restricted stock awards of $1.0 million and $1.3 million, respectively, and for the three and six month periods ended June 30, 2010 we recognized compensation expense of $0.3 million and $0.6 million, respectively.

Deferred Stock Units

We grant deferred stock units to non-management directors.  These awards are fully vested on the date of grant and the related shares are generally issued on the 13th month anniversary of the grant date unless the individual elects to defer the receipt of these shares.  Each deferred stock unit results in the issuance of one share of Rogers’ stock.  The grant of deferred stock units is typically done annually in the second quarter.

	Deferred Stock Units
Awards outstanding at December 31, 2010		30,250
Awards granted		16,650
Stock issued		(16,800	)
Awards outstanding at June 30, 2011		30,100

For each of the three month periods ended June 30, 2011 and June 30 2010, we recognized compensation expense of $0.7 million related to deferred stock units.  There was no expense associated with these grants in the first quarter of either year.

Employee Stock Purchase Plan

We have an employee stock purchase plan (ESPP) that allows eligible employees to purchase, through payroll deductions, shares of our common stock at 85% of the fair market value.  The ESPP has two six month offering periods per year, the first beginning in January and ending in June and the second beginning in July and ending in December.  The ESPP contains a look-back feature that allows the employee to acquire stock at a 15% discount from the underlying market price at the beginning or end of the respective period, whichever is lower.  We recognize compensation expense on this plan ratably over the offering period based on the fair value of the anticipated number of shares that will be issued at the end of each respective period.  Compensation expense is adjusted at the end of each offering period for the actual number of shares issued.  Fair value is determined based on two factors: (i) the 15% discount amount on the underlying stock’s market value on the first day of the respective plan period, and (ii) the fair value of the look-back feature determined by using the Black-Scholes model.  We recognized approximately $0.1 million of compensation expense associated with the plan in the three month periods ended June 30, 2011 and June 30, 2010, respectively, and approximately $0.2 million of compensation expense associated with the six month periods ended June 30, 2011 and June 30, 2010, respectively.

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Basis of Presentation

6 Months Ended

Jun. 30, 2011

Basis of Presentation

Note 1 - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Accordingly, these statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In our opinion, the accompanying statements of financial position and related interim statements of operations and cash flows include all normal recurring adjustments necessary for their fair presentation in accordance with U.S. generally accepted accounting principles.  All significant intercompany transactions have been eliminated.

We changed the presentation of our external segment reporting structure as of the first quarter of 2011.  All prior periods have been recast accordingly for the new presentation. See Note 10 for further discussion regarding the new structure.

Interim results are not necessarily indicative of results for a full year.  For further information regarding our accounting policies, refer to the audited consolidated financial statements and footnotes thereto included in our Form 10-K for the fiscal year ended December 31, 2010.

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Acquisition of Business

6 Months Ended

Jun. 30, 2011

Acquisition of Business

Note 4 – Acquisition of Business

Curamik Electronics GmbH

On January 4, 2011, we acquired Curamik Electronics GmbH (Curamik), a manufacturer of power electronic substrate products headquartered in Eschenbach, Germany.  The aggregate purchase price was $151.1 million, which reflects post closing adjustments.

Curamik, founded in 1983, is the worldwide leader for development and production of direct copper bonded ceramic substrate products which are used primarily in the design of intelligent power management devices, such as insulated gate bipolar transistor (IGBT) modules that enable a wide range of products including highly efficient industrial motor drives, wind and solar energy converters and hybrid electric vehicle drive systems.  Most of Curamik’s products are manufactured using state of the art automated processes in its facility located in Eschenbach, Germany.

The acquisition has been accounted for in accordance with applicable purchase accounting guidance.  The following table represents the preliminary fair market value assigned to the acquired assets and liabilities in the transaction.  As of the filing date of this Form 10-Q, we are still in the process of valuing the net assets of the business, including inventory, fixed assets and intangible assets.

(Dollars in thousands)
Assets:
Cash	$	11,256
Accounts receivable		11,876
Other current assets		1,386
Inventory		12,259
Property, plant & equipment		32,312
Other non-current assets		1,808
Intangible assets		52,820
Goodwill		85,947
Total assets		209,664
Liabilities
Accounts payable		6,042
Other current liabilities		20,284
Deferred tax liability		15,923
Other long-term liabilities		16,334
Total liabilities		58,583
Fair value of net assets acquired	$	151,081

For the three and six months ended June 30, 2011, Curamik realized $34.6 million in sales and operating profits of $2.9 million and $67.5 million in sales and $3.2 million in operating profits, respectively.  It is impracticable to disclose comparable prior period amounts on a consistent basis as reported in this Form 10-Q, as the business acquired in the transaction was not consolidated as a reporting unit for the prior periods.

Total costs incurred related to the acquisition were approximately $3.4 million, of which $1.3 million were incurred in the first quarter of 2011 and are included in “Selling and administrative expenses” on our condensed consolidated statement of operations.

SK Utis Co., Ltd.

On March 23, 2010, we entered into an acquisition agreement with SK Utis Co., Ltd. (Utis) and its parent, SK Chemical Co., Ltd. (SK Chemical), both Korean companies, to purchase the common stock of Utis and certain intellectual property owned by SK Chemical related to the Utis business, for an aggregate purchase price of $29.1 million.  The agreement called for an initial payment of $26.0 million, which was made on March 31, 2010, when the transaction closed, which gave us a 90% interest in the outstanding stock of Utis and full ownership of the intellectual property.  SK Chemical will retain a 10% interest in Utis for a two year period, at which point we will purchase the remaining 10% share for a fixed price of $3.1 million.

Utis, established in 2005, is a high-quality supplier of polyurethane foam material solutions for portable communications, entertainment, and industrial applications to leading Korean-based original equipment manufacturers (OEMs).  We believe that this acquisition will expand our presence as a polyurethane foam material solutions provider in several key markets that we have targeted for continued growth, including mobile internet devices, high definition television, and other markets requiring high reliability, high performance materials.  We also believe this acquisition will strengthen our relationships with some of the fastest growing makers of these products and extend our worldwide presence into the Korean marketplace.  We have integrated this business into our High Performance Foams operating segment.

The acquisition has been accounted for in accordance with applicable purchase accounting guidance.  The following table represents the fair market value assigned to the acquired assets and liabilities in the transaction.

(Dollars in thousands)
Assets:
Accounts receivable	$	2,725
Inventory		1,890
Other current assets		685
Property, plant & equipment		1,978
Intangible assets		9,250
Goodwill		15,574
Total assets		32,102
Liabilities
Accounts payable		1,328
Other current liabilities		492
Other long-term liabilities		1,517
Total liabilities		3,337
Fair value of net assets acquired	$	28,765

Total costs incurred related to the acquisition were approximately $0.9 million in the first quarter of 2010 and are included in “Selling and administrative expenses” on the condensed consolidated statement of operations.

As of the date of the acquisition, we acquired 90% of the equity of Utis and SK Chemical retained a 10% interest.  However, SK Chemical, as part of the acquisition agreement, effectively waived all future economic rights to the activities of the business (i.e. dividends, share of profits and losses).  SK Chemical only has the right to the $3.1 million deferred purchase price that will be paid by us to acquire the remaining 10% of Utis in two years.  Therefore, we have consolidated 100% of the activities of Utis in accordance with applicable accounting guidance.  Operational results were included beginning in the second quarter of 2010.  The deferred purchase price at the date of purchase was recorded at its present value (approximately $2.9 million).  This is classified as a short-term liability on our condensed consolidated statement of financial position.

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Inventories

6 Months Ended

Jun. 30, 2011

Inventories

Note 5 - Inventories

Inventories were as follows:

(Dollars in thousands)	June 30,  2011		December 31 2010
Raw materials	$	27,077	$	14,979
Work-in-process		18,102		6,422
Finished goods		26,338		26,173
	$	71,517	$	47,574

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2011

Goodwill and Intangible Assets

Note 13 – Goodwill and Intangible Assets

Definite-lived Intangible Assets

(Dollars in thousands)	June 30, 2011						December 31, 2010
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and patents	$	2,094	$	1,134	$	960	$	2,041	$	1,091	$	950
Technology		40,567		3,830		36,737		6,423		1,448		4,975
Covenant-not-to-compete		1,664		722		942		1,604		668		936
Customer Relationships		22,273		923		21,350		4,324		387		3,937
Total other intangible assets	$	66,598	$	6,609	$	59,989	$	14,392	$	3,594	$	10,798

Gross carrying amounts may be different from prior periods due to foreign exchange rate fluctuations.

Amortization expense for the six months ended June 30, 2011 was approximately $2.9 million and $0.3 million for the same period in 2010.  The anticipated future amortization expense is $2.9 million, $5.1 million, $6.6 million, $6.7 million and $6.4 million for the remainder of 2011 and 2012, 2013, 2014 and 2015, respectively.

The weighted average amortization period as of June 30, 2011, by intangible asset class, is presented in the table below:

Intangible Asset Class	Weighted Average Amortization Period
Trademarks and patents		8.4
Technology		5.4
Covenant not-to-compete		3.3
Customer relationships		9.0
Total other intangible assets		6.7

On January 4, 2011 we acquired Curamik, which included $52.8 million of intangible assets and $85.9 million of goodwill.  The intangible assets are comprised of trademarks, technology, and customer relationships.  This includes $5.7 million of indefinite-lived intangible assets, which are assessed for impairment annually.  The definite-lived intangibles are amortized using an accelerated method of amortization that is expected to reflect the estimated pattern of economic use.

On November 2, 2010, we entered into a technology license agreement with Polyworks, Inc.  Included in this agreement was $2.0 million of intangible assets.  These assets are amortized on a straight line basis over 10 years.

On March 31, 2010, we acquired the assets of Utis, which included $9.3 million of intangible assets and $15.6 million of goodwill.  The intangible assets are comprised of trademarks, technology, covenants not-to-compete and customer relationships.  These intangibles are amortized using an accelerated method of amortization that is expected to reflect the estimated pattern of economic use.

Goodwill

The changes in the carrying amount of goodwill for the period ending June 30, 2011, by reportable segment, are as follows:

(Dollars  in thousands)	High Performance Foams		Printed Circuit Materials		Power Distribution Systems		Curamik Electronic Solutions		Thermal Management Solutions		Other		Total
December 31, 2010	$	22,962	$	-	$	--	$	-	$	-	$	2,224	$	25,186
Curamik acquisition		-		-		-		85,947		-		-		85,947
Foreign currency translation adjustment		961		-		-		7,259		-		-		8,220
June 30, 2011	$	23,923	$	-	$	-	$	93,206	$	-	$	2,224	$	119,353

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Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2011

Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)

Note 6 - Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)

Comprehensive income for the periods ended June 30, 2011 and 2010 was as follows:

	Three Months Ended					Six Months Ended
(Dollars in thousands)	June 30, 2011		June 30, 2010			June 30, 2011		June 30, 2010
Net income	$	12,128	$	8,313		$	21,563	$	15,167
Foreign currency translation adjustments		6,298		(6,747	)		21,262		(11,333	)
Unrealized gain on marketable securities, net of tax		420		9			501		969
Unrealized gain (loss) on derivative instruments		-		95			-		(256	)
Comprehensive income	$	18,846	$	1,670		$	43,326	$	4,547

The components of accumulated other comprehensive income (loss) at June 30, 2011 and December 31, 2010 were as follows:

(Dollars in thousands)	June 30, 2011			December 31, 2010
Foreign currency translation adjustments	$	33,769		$	12,507
Funded status of pension plans and other postretirement benefits, net of tax		(24,996	)		(24,996	)
Unrealized loss on marketable securities, net of tax		(557	)		(1,058	)
Accumulated other comprehensive income (loss)	$	8,216		$	(13,547	)

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Subsequent Event

6 Months Ended

Jun. 30, 2011

Subsequent Event

Note 16 – Subsequent Event

On July 13, 2011, we entered into an amended and restated $265 million, secured, five year credit agreement.  Key features of this agreement, relative to the November 23, 2010 credit agreement, include (1) an increase in credit from $165 million to $265 million with the addition of a $100 million term loan; (2) the extension of maturity from November 23, 2014 to July 13, 2016; (3) a 25 basis point reduction in  borrowing spread; (4) an increase in the size of permitted acquisitions from $25 million to $100 million; and (5) an increase in permitted additional indebtedness from $20 million to $120 million.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Operating Activities:
Net income	$ 21,563	$ 15,167
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	13,190	7,868
Stock-based compensation expense	3,610	4,355
Deferred income taxes	2,148	782
Equity in undistributed income of unconsolidated joint ventures, net	(2,751)	(3,975)
Dividends received from unconsolidated joint ventures	2,762	7,184
Pension and postretirement benefits	2,970	3,121
Gain from the sale of property, plant and equipment	(1,900)
Amortization of inventory fair value	1,805
Changes in operating assets and liabilities excluding effects of acquisition and disposition of businesses:
Accounts receivable	(12,059)	(13,356)
Accounts receivable, joint ventures	(917)	(741)
Inventories	(12,165)	(8,888)
Pension contribution		(1,478)
Other current assets	(3,207)	(1,606)
Accounts payable and other accrued expenses	(22,177)	6,918
Other, net	767	(232)
Net cash provided by (used in) operating activities	(6,361)	15,119
Investing Activities:
Capital expenditures	(8,006)	(3,118)
Acquisition of business, net of cash received	(139,825)	(25,908)
Proceeds from short-term investments	4,000	3,250
Proceeds from the sale of property, plant and equipment, net	5,900
Return of investment in unconsolidated joint ventures		919
Net cash used in investing activities	(137,931)	(24,857)
Financing Activities:
Proceeds from long term borrowings	145,000
Repayment of debt principal	(10,000)
Payment of long term borrowings acquired through acquisition	(7,452)
Proceeds from sale of capital stock, net	5,464	115
Proceeds from issuance of shares to employee stock purchase plan	396	380
Net cash provided by financing activities	133,408	495
Effect of exchange rate fluctuations on cash	2,396	(3,777)
Net decrease in cash and cash equivalents	(8,488)	(13,020)
Cash and cash equivalents at beginning of year	80,135	57,738
Cash and cash equivalents at end of quarter	71,647	44,718
Supplemental disclosure of noncash investing and financing activities
Deferred purchase price for acquisition of business		2,910
Capital lease obligation acquired through acquisition	$ 10,831

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Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

Note 2 –Fair Value Measurements

The accounting guidance for fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

·   Level 1 – Quoted prices in active markets for identical assets or liabilities.

·   Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

·   Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets measured at fair value on a recurring basis during the period, categorized by the level of inputs used in the valuation, include:

(Dollars in thousands)	Carrying amount as of June 30, 2011		Level 1		Level 2		Level 3
Auction rate securities	$	30,477	$	-	$	-	$	30,477
Foreign currency option contracts	$	1,729	$	-	$	1,729	$	-

Current accounting guidance requires that an other-than-temporary impairment must be recognized in earnings for a security in an unrealized loss position when an entity either (a) has the intent to sell the security or (b) more likely than not will be required to sell the security before its anticipated recovery.  Prior to the adoption of this guidance, we were required to record an other-than-temporary impairment for a security in an unrealized loss position unless we could assert that we had both the intent and ability to hold the security for a period of time sufficient to allow for a recovery of its cost basis.

When an other-than-temporary impairment of a security has occurred, the amount of the other-than-temporary impairment recognized in earnings depends on whether we intend to sell the security or more likely than not will be required to sell the security before recovery of its cost basis. If we do not intend to sell the security and it is not more likely than not that we will be required to sell the security before the recovery of its cost basis, the other-than-temporary loss should be separated into the amount representing the credit loss and the amount related to all other factors.  The amount representing the credit loss is recognized in earnings, and as long as the factors above are not met, the remaining amount is recorded in other comprehensive income.

Auction Rate Securities

We have historically classified our auction rate securities as available-for-sale and recorded them at fair value as determined in the active market at the time.  However, due to events in the credit markets, the auctions failed during the first quarter of 2008 for the auction rate securities that we held at the end of the first quarter of 2008, and all of our auction rate securities have been in a loss position since that time.  Accordingly, the securities changed from a Level 1 valuation to a Level 3 valuation.

Through the end of the second quarter of 2011, approximately $20.8 million of auction rate securities in total have been redeemed at par value, including approximately $4.0 million in the first six months of 2011.  As of June 30, 2011, the par value of our remaining auction rate securities was approximately $33.6 million, which was comprised 96% of student loan-backed auction rate securities and 4% of municipality-backed auction rate securities.  We performed a fair value assessment of these securities based on a discounted cash flow model, utilizing various assumptions that included estimated interest rates, probabilities of successful auctions, the timing of cash flows, and the quality and level of collateral of the securities.  These inputs were chosen based on our current understanding of the expectations of the market and are consistent with the assumptions utilized during our assessment of these securities at year-end 2010.  This analysis resulted in an insignificant change in the fair value of our auction rate securities in the second quarter of 2011 and a total impairment of approximately $3.1 million overall on our current portfolio.

We have concluded that the impairment on the auction rate securities is other-than-temporary and should be separated into two amounts, one amount representing a credit loss and one amount representing an impairment due to all other factors.  The credit loss is primarily based on the underlying ratings of the securities.  As described above, we have determined that the amount representing the credit loss on our auction rate securities should be recorded in earnings, while the remaining impairment amount should be recorded in other comprehensive income (loss) in the equity section of our condensed consolidated statements of financial position.  We do not have the intent to sell the impaired securities, nor do we believe that it is more likely than not that we will be required to sell these securities before the recovery of their cost basis.  In the second quarter of 2011, we contracted to redeem $4.0 million of auction rate securities at 92.6% of par value, which was one tranche of our auction rate securities.  The cash received, subsequent to June 30, 2011, was approximately $3.7 million.

Additionally, due to our belief that it may take over twelve months for the auction rate securities market to recover, these securities are classified as long-term assets, except for those that are scheduled to be redeemed within the next twelve months, which are classified as short-term investments.  As of the second quarter we had approximately $3.7 million of auction rate securities classified as short-term investments.  These were subsequently redeemed on July 18, 2011.  The securities that we hold have maturities ranging from 21 to 36 years.

The reconciliation of our assets measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows:

(Dollars in thousands)	Auction Rate Securities
Balance at December 31, 2010	$	33,778
Redeemed at par		(4,000	)
Reported in other comprehensive income		667
Reported in earnings		32
Balance at June 30, 2011	$	30,477

A roll-forward of credit losses recognized in earnings from the date of the first other-than-temporary impairment, pertaining to the auction rate securities held by us, is as follows:

(Dollars in thousands)	Credit Losses
Balance at December 31, 2010	$	917
Additional credit losses		39
Reduction in credit losses due to redemptions		(71	)
Balance at June 30, 2011	$	885

These securities currently earn interest at rates ranging from 0.35% to 0.65%.  Upon the failure of these securities at auction, a penalty interest rate is triggered.  Since the securities we hold are investment-grade securities, the penalty rates are market-based, and therefore the aggregate interest rate that we earned has declined to 1% to 2% from a historical rate of 3% to 7% due to reductions in the referenced interest rates by the Federal government.

Foreign Currency Option Derivatives

As further explained below in Note 3 “Hedging Transactions and Derivative Financial Instruments”, we are exposed to certain risks relating to our ongoing business operations, and the primary risk managed using derivative instruments is foreign currency exchange rate risk.  The fair value of these foreign currency option derivatives is based upon valuation models applied to current market information such as strike price, spot rate, maturity date and volatility, and by reference to market values resulting from an over-the-counter market or obtaining market data for similar instruments with similar characteristics.

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Joint Ventures

6 Months Ended

Jun. 30, 2011

Joint Ventures

Note 11 – Joint Ventures

As of June 30, 2011, we had two joint ventures, each 50% owned, which are accounted for under the equity method of accounting.

Joint Venture	Location	Reportable Segment	Fiscal Year-End
Rogers INOAC Corporation (RIC)	Japan	High Performance Foams	October 31
Rogers INOAC Suzhou Corporation (RIS)	China	High Performance Foams	December 31

Equity income of $1.3 million and $2.8 million for the three and six month period ended June 30, 2011 and equity income of $1.8 million and $4.0 million for the three and six month period ended June 30, 2010, respectively, is included in the condensed consolidated statements of operations.

On March 31, 2010, Rogers and Mitsui Chemicals, Inc., the 50% owners of the Polyimide Laminate Systems, LLC (PLS) joint venture, entered into an agreement to dissolve the joint venture and to have Rogers assume on that date any outstanding assets and liabilities of PLS, which resulted in a $0.1 million charge recorded as of March 31, 2010.  The parties also agreed that, going forward, all the distribution activity that PLS had previously engaged in would be conducted through Rogers.  Therefore, beginning in the second quarter of 2010, these activities are reported on a gross basis as part of our consolidated results.  PLS also became an operating segment and is reported in the Other reportable segment.

In October 2010, we sold our ownership interest in the 50/50 joint venture, Rogers Chang Chun Technology Co., Ltd. (RCCT) to our joint venture partner, Chang Chun Plastics Co., Ltd., for $9.3 million, which resulted in a $3.2 million gain recorded during 2010.

Commission income from our PLS joint venture was $0.6 million for the six month period ended June 30, 2010 and is included in “Other income (expense), net” on the condensed consolidated statements of operations.

The summarized financial information for the joint ventures for the periods indicated is as follows:

(Dollars in thousands)	Three Months Ended				Six Months Ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Net sales	$	16,783	$	22,921	$	34,863	$	53,416
Gross profit		3,211		3,686		7,535		10,317
Net income		2,646		3,514		5,502		7,950

The effect of transactions between us and our unconsolidated joint ventures was accounted for on a consolidated basis.  Receivables from and payables to joint ventures arise during the normal course of business from transactions between us and the joint ventures, typically from the joint venture purchasing raw materials from us to produce end products, which are sold to third parties, or from us purchasing finished goods from our joint ventures, which are then sold to third parties.

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Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Note 15 – Income Taxes

Our effective tax rate was 22.0% and 20.3% for the three month periods ended June 30, 2011 and June 30, 2010, respectively, and was 23.9% and 21.2% for the six month periods ended June 30, 2011 and 2010, respectively, as compared with the statutory rate of 35.0%. In both the six month periods ended June 30, 2011 and 2010, our tax rate continued to benefit from favorable tax rates on certain foreign business activity.

In 2009, we established a valuation allowance against substantially all of our U.S. deferred tax asset based upon the consideration of all available evidence, both positive and negative, using a “more likely than not” standard.  As of June 30, 2011, we have concluded, based on this standard, that a valuation allowance is still appropriate against a significant portion of our U.S. deferred tax assets.

Our accounting policy is to account for interest expense and penalties related to uncertain tax positions as income tax expense.  As of June 30, 2011, we have approximately $1.3 million of accrued interest related to uncertain tax positions included in the $18.7 million of unrecognized tax benefits, $10.5 million of which, if recognized, would impact the effective tax rate.

We are subject to numerous tax filings including U.S. Federal, various state and foreign jurisdictions.  Currently, the following tax years remain open to the possibility of audit, by jurisdiction: U.S. Federal 2007 – 2010, various states 2006 – 2010, and foreign 2006 – 2010.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net sales	$ 143,685	$ 96,608	$ 279,744	$ 180,545
Cost of sales	95,495	59,273	189,442	112,951
Gross margin	48,190	37,335	90,302	67,594
Selling and administrative expenses	26,837	23,709	51,336	44,683
Research and development expenses	6,175	5,879	12,196	9,422
Operating income	15,178	7,747	26,770	13,489
Equity income in unconsolidated joint ventures	1,323	1,757	2,751	3,975
Other income, net	280	1,055	1,629	1,864
Realized investment loss, net:
Increase (decrease) in fair value of investments	602	(232)	699	644
Less: Portion of gains (losses) in other comprehensive income	573	(112)	667	816
Net realized gain (loss)	29	(120)	32	(172)
Interest income (expense), net	(1,265)	(3)	(2,843)	103
Income before income taxes	15,545	10,436	28,339	19,259
Income tax expense	3,417	2,123	6,776	4,092
Net income	$ 12,128	$ 8,313	$ 21,563	$ 15,167
Net income per share:
Basic	$ 0.76	$ 0.53	$ 1.35	$ 0.96
Diluted	$ 0.73	$ 0.52	$ 1.30	$ 0.95
Shares used in computing:
Basic	15,944,483	15,785,656	15,918,979	15,777,176
Diluted	16,678,377	15,985,195	16,603,543	15,940,857