SEC Contract Filing

Filing Date: 2020-02-13

Document Content:
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<TYPE>EX-10.12
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<FILENAME>a2019mipplandocumentfina.htm
<DESCRIPTION>EXHIBIT 10.12
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<DIV><FONT size="1" style="font-size:1pt;color:white"> MATERION and SUBSIDIARIES MANAGEMENT INCENTIVE PLAN FOR THE 2019 PLAN YEAR Summary Plan Document I. INTRODUCTION The Materion and Subsidiaries Management Incentive Plan for the 2019 Plan Year (the &#8220;Plan&#8221;), has been established by the Compensation Committee (the &#8220;Compensation Committee&#8221;), of the Company&#8217;s Board of Directors to provide incentive compensation to certain eligible employees based principally on annual financial performance. Plan awards have a significant portion based on Company performance and potentially Business Unit or Corporate Function Performance (&#8220;Financial Performance&#8221;), and a remaining component that recognizes individual and combined contributions toward personal/team objectives (&quot;Personal/Team Performance&#8221;). II. DEFINITIONS Base Salary: The Participant's annual base salary as of September 30 of the Plan Year will be used to calculate any earned award. Plan Year: Calendar year 2019, which is the fiscal year for which Financial Performance and Personal/Team Performance, and any Plan awards, will be calculated. Business Unit or Corporate Function Performance: The Compensation Committee has delegated authority to the Company&#8217;s executive staff to designate the Company&#8217;s business units/subsidiaries and corporate functions (and their eligible employees) that are eligible for participation in the Plan for the Plan Year. Each business unit or corporate function has defined Financial Performance measures, which have in turn been approved by the Compensation Committee and/or the executive staff. For each of these Financial Performance measures, a minimum goal, target goal and maximum goal will be established. Plan awards include a Financial Performance component based on Company Performance alone, or Company Performance and/or Business Unit/Corporate Function Performance. Company Performance: The Company Performance portion of the Financial Performance component of Plan awards will consist of an Operating Profit measure (weighted at 70%), a Growth in Value-added Sales measure (weighted at 15%) and a Simple Free Cash Flow measure (weighted at 15%). Operating Profit (&#8220;OP&#8221;): Operating Profit is defined as profit or loss, before interest and taxes, and for domestic and international operations, OP will include accrued performance or incentive compensation. Any adjustment to exclude the effect of any extraordinary, unusual or non-reoccurring items will be subject to review and approval by the Compensation Committee. Growth in Value-added Sales (&#8220;VAS&#8221;): Growth in Value-added Sales is defined as the percent increase in VAS for the Plan Year over the prior year. VAS is the amount equal to (1) the Company&#8217;s sales for the Plan Year minus (2) the aggregate cost to the Company for the Plan Year of gold, silver, platinum, palladium and copper. Simplified Free Cash Flow (&#8220;SFCF&#8221;): Simple Free Cash Flow is defined as the amount equal to (1) operating profit plus depreciation and amortization minus (2) the change in working capital (accounts receivable, accounts payable, and inventory) and capital investments. Approved by Compensation Committee January 29, 2019 Page 1 of 4 </FONT></DIV>
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<DIV><FONT size="1" style="font-size:1pt;color:white"> Other Metrics: From time to time, other metrics may be adopted that are aligned with a business unit&#8217;s strategy and market challenges or a corporate function&#8217;s strategic imperatives. These metrics will be defined and tracked by the corporate accounting department, subject to approval by the executive staff. Personal/Team Performance: An assessment is made of an individual's achievements and his/her contributions to work/project teams during the Plan Year. This assessment is expressed as a percentage of Base Salary. The Personal/Team Performance component is distinct from the Financial Performance component. Performance Objectives: Performance Objectives shall mean the measurable performance objective or objectives established for Participants under the Plan for the Plan Year. The Compensation Committee may provide for such adjustments in the Performance Objectives or their evaluation as it may deem necessary or appropriate for purposes of administering this Plan. Target Annual Award Opportunity Each Plan Year, MIP eligible participants will be assigned a Target Annual Award Opportunity, expressed as a percent of Base Salary. III. PARTICIPATION At the beginning of the Plan Year, the executive staff will, based on delegated authority from the Compensation Committee, identify exempt salaried employees whose responsibilities affect progress on critical issues facing the Company, and those employees will participate in the Plan for the Plan Year. Those individuals selected by the executive staff will be notified of their participation in the Plan, their Target Annual Award Opportunity and applicable business unit designation. Following the beginning of the Plan Year, the executive staff may admit new hires or individuals who are promoted or assigned additional and significant responsibilities to also participate in the Plan for the Plan Year. The executive staff may also alter Target Annual Award Opportunitie