Materion Corporation (NYSE:MTRN) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On March 3, 2017, Materion Corporation (the “Company”) announced
that its Board of Directors (the Board) appointed Jugal
Vijayvargiya as President and Chief Executive Officer of the
Company. Mr. Vijayvargiya’s appointment as President and Chief
Executive Officer is effective as of March 3, 2017 (the “Effective
Date”). Mr. Vijayvargiya will succeed Richard J. Hipple, who has
served as the Companys Chairman, President and Chief Executive
Officer since 2006. Mr. Hipple will serve as the Executive Chairman
of the Board and will remain the principal executive officer of the
Company through the filing of the Companys quarterly report on Form
10-Q for the first quarter of 2017, after which Mr. Vijayvargiya
will assume such role. Mr. Vijayvargiya has also been elected to
the Board, effective as of March 3, 2017.

Mr. Vijayvargiya had an extensive 26-year international career with
Delphi Automotive PLC, a leading global technology solutions
provider to the automotive and transportation sectors. Since 2012,
he has led Delphi Automotive’s Electronics Safety segment, a $3
billion global business based in Germany. The segment provides
leading-edge automated driving, active safety, infotainment, user
experience, and software/services technologies from manufacturing
and technology centers across 16 countries. In this role, Mr.
Vijayvargiya served as an executive officer of Delphi and a member
of its Executive Committee. Previously, he served in progressively
responsible positions in Europe and North America at Delphi in
product and manufacturing engineering, sales, product line
management, acquisition integration and general management. Mr.
Vijayvargiya is 48 years old.

In connection with Mr. Vijayvargiyas appointment, the Company and
Mr. Vijayvargiya entered into an offer letter dated March 1, 2017
(the Offer Letter) and a Severance Agreement dated March 3, 2017
(the Severance Agreement). to the Offer Letter, Mr. Vijayvargiya is
eligible to receive a base salary of $700,000 per year and a target
annual bonus of 90% of base salary, subject to certain performance
criteria to be established by the Compensation Committee of the
Board (the Committee). For 2017, Mr. Vijayvargiyas bonus amount
will be based on the full amount of his annual base salary and will
not be pro-rated based on the number of days in 2017 in which he is
employed by the Company. Mr. Vijayvargiya is also eligible to
participate in each of the Companys welfare and retirement employee
benefit plans and relocation plans made available to other
executive officers of the Company and the Companys long-term
incentive plans. Mr. Vijayvargiya will receive a sign-on bonus of
$1,400,000 that will become non-forfeitable as to one-third of the
amount on the first anniversary of the Effective Date and as to
two-thirds of the amount on the second anniversary of the Effective
Date, as well as upon Mr. Vijayvargiyas death, disability, or his
termination by the Company without cause or by him upon the
occurrence of certain events constituting good reason (as described
in the Severance Agreement).

Upon his commencement of employment with the Company, Mr.
Vijayvargiya will receive equity awards with an aggregate grant
date fair value of $1,600,000, to be divided evenly (based on grant
date fair value) between (i) stock appreciation rights (SARs) which
will vest in three equal installments on the first three
anniversaries of the Effective Date, (ii) time-based restricted
stock units (RSUs) which will also vest in three equal installments
on the first three anniversaries of the Effective Date, (iii)
performance-based RSUs which will vest based on the Companys
achievement of certain total stockholder return performance goals
determined by the Board or the Committee over a three-year
performance period, and (iv) performance-based RSUs which will vest
based on the Companys achievement of certain return on invested
capital performance goals determined by the Board or the Committee
over a three-year performance period, in each case, subject to Mr.
Vijayvargiyas continued service with the Company on each applicable
vesting date. In fiscal 2018, any SARs or RSUs granted to Mr.
Vijayvargiya will also vest as to one-third of the number of SARs
or RSUs, as applicable, on each of the first three anniversaries of
the grant date, and any performance-based RSUs granted to Mr.
Vijayvargiya will vest on the Companys achievement of performance
goals to be determined by the Board or the Committee over a
three-year performance period.

to the Severance Agreement, if Mr. Vijayvargiyas employment is
terminated by the Company without cause or by him upon the
occurrence of certain events constituting good reason (as described
in the Severance Agreement), in each case, other than in connection
with a change in control of the Company, then he will be eligible
to receive (i) a lump sum payment of 1.5 times his highest annual
base salary; (ii) a lump sum payment of 1.5 times (x) his target
annual bonus amount, if such termination occurs prior to the end of
the third fiscal year following the Effective Date or (y) his
average annual bonus amount for the three fiscal years preceding
his termination, if such termination occurs on or after the end of
the third fiscal year following the Effective Date; (iii) the
continuation of medical and life insurance benefits for up to 18
months; (iv) full acceleration of any then-outstanding time-based
equity awards; (v) prorated vesting of all performance-based equity
awards, based on actual achievement of the applicable performance
conditions through the last day of the applicable performance
period and (vi) reasonable fees for outplacement services, up to a
maximum of $20,000.

If Mr. Vijayvargiyas employment is terminated by the Company
without cause or by him upon the occurrence of certain events
constituting good reason (as described in the Severance Agreement)
following a change in control of the Company, he will

be eligible to receive, in lieu of the severance benefits described
in the immediately preceding paragraph, (i) a lump sum payment of
two times his highest annual base salary; (ii) a lump sum payment
of two times the higher of his target annual bonus amount for the
year of termination or his average annual bonus amount for the
three fiscal years preceding his termination; (iii) the
continuation of medical and life insurance benefits for up to two
years; (iv) reasonable fees for outplacement services, up to a
maximum of $20,000; and (v) vesting acceleration of his outstanding
equity-based awards to the terms of the applicable award agreements
and plans for such awards. The Severance Agreement also includes
certain confidentiality, non-competition and non-solicitation
covenants to which Mr. Vijayvargiya will be bound during and after
his employment with the Company.

The foregoing is not a complete description of the Offer Letter and
the Severance Agreement and is qualified in its entirety by
reference to the full text of the Offer Letter and the Severance
Agreement, copies of which are filed as Exhibits 10.1 and 10.2,
respectively, to this Current Report on Form 8-K.

There are no family relationships between Mr. Vijayvargiya and any
of the Companys executive officers or directors or persons
nominated or chosen to become a director or executive officer.
There is no arrangement or understanding between Mr. Vijayvargiya
and any other person to which Mr. Vijayvargiya was appointed. The
Company is not aware of any transaction in which Mr. Vijayvargiya
has an interest requiring disclosure under Item 404(a) of
Regulation S-K.

In order to ensure a smooth succession, Mr. Hipple has agreed to
serve as Executive Chairman through at least December 2017, and
will remain flexible to extend to the end of 2018. In connection
with Mr. Hipples agreement to continue to serve as Executive
Chairman, as well as his agreement to relinquish as of the end of
2017 his rights to receive any benefits under his severance
agreement with respect to any involuntary termination of his
employment, the Committee agreed that, upon the orderly transition
and Mr. Hipple’s eventual retirement from the Company, all of Mr.
Hipples unvested stock appreciation rights and restricted stock
units will continue to vest.

In connection with the announcement of Mr. Vijayvargiyas
appointment as President and Chief Executive Officer, the Company
issued a press release. A copy of the press release is furnished as
Exhibit 99.1 to this Current Report on Form 8-K. The information in
this Item 7.01 and Exhibit 99.1 attached hereto shall not be deemed
filed for purposes of Section 18 of the Securities Exchange Act of
1934, nor shall it be deemed incorporated by reference in any
filings under the Securities Act of 1933, except as expressly set
forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits