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Stock-based Compensation Expense
3 Months Ended
Apr. 03, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-based Compensation Expense
Stock-based Compensation Expense
Stock-based compensation expense was $3.1 million in the first quarter of 2015 and $2.1 million in the first quarter of 2014, which includes awards settled in shares and in cash.
The Company granted approximately 160,000 stock appreciation rights (SARs) to certain employees in the first quarter of 2015 at a strike price of $36.81 per share. The fair value of the SARs, which was determined on the grant date using a Black-Scholes model, was $13.27 per share and will be amortized over the vesting period of three years. The SARs expire in seven years from the date of the grant. Exercises of SARs totaled approximately 41,000 in the first quarter of 2015 and 27,000 in the first quarter of 2014.
The Company granted approximately 40,000 stock-settled restricted stock units (RSUs) in the first quarter of 2015. These shares will be amortized over a vesting period of three years using the closing price of Materion's common stock on the date of grant of $36.81. Additionally, approximately 21,000 cash-settled RSUs were granted to employees in the first quarter of 2015. Because these shares are settled in cash, the liability and related expense are adjusted based on the closing price of Materion’s common stock over the vesting period of three years.
The Company granted approximately 77,000 stock-settled performance-based restricted stock units (PRSUs) to certain employees in the first quarter of 2015 at a weighted-average fair value of $33.31 per share. The fair value will be expensed over the vesting period of three years. In addition, approximately 39,000 cash-settled PRSUs were awarded to employees in the first quarter of 2015. The liability for cash-settled PRSUs is remeasured at fair value each reporting period, and the expense is recorded accordingly. The final payout to the employees for all PRSUs will be based upon the Company’s return on invested capital and the total return to shareholders over the vesting period relative to a peer group’s performance over the same period.