Capital Stock and Equity Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Share Repurchases

In 2015, we initiated a share repurchase program (the “Program”) of up to $100.0 million of the Company’s capital stock to mitigate the dilutive effects of stock option exercises and vesting of restricted stock units granted by the Company, in addition to enhancing shareholder value. The Program has no expiration date and may be suspended or discontinued at any time without notice. For the three months ended March 31, 2024, we purchased 1,500 shares for a total value of $0.2 million using cash from operations and cash on hand. As of March 31, 2024, $23.8 million remained available to purchase under the Program. Our stock repurchases may occur from time to time through open market purchases, privately negotiated transactions or plans designed to comply with Rule 10b5-1 promulgated under the Exchange Act.


(Dollars in millions, except shares and per share amounts)
Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs
March 1, 2024 to March 31, 2024	1,500	$	109.92	1,500	$	23.8

Equity Compensation

Performance-Based Restricted Stock Units

As of March 31, 2024, we had outstanding performance-based restricted stock units with a market condition from 2024 and 2023. These awards generally cliff vest at the end of a three-year measurement period. However, employees whose employment terminates during the measurement period due to death, disability, or, in certain cases, retirement may receive a pro-rata payout based on the number of days they were employed during the measurement period. Participants are eligible to be awarded shares ranging from 0% to 200% of the original award amount, based on certain defined performance measures.

The performance-based restricted stock units with a market condition have one measurement criterion: the three-year total shareholder return (“TSR”) on our capital stock as compared to that of a specified group of peer companies. The fair value of this measurement criterion was determined on the grant date using a Monte Carlo simulation valuation model. We recognize compensation expense on all of these awards on a straight-line basis over the vesting period with no changes for final projected payout of the awards. We account for forfeitures as they occur.

The following table sets forth the assumptions used in the Monte Carlo calculation for each material award granted in 2024 and 2023:


	February 19, 2024	February 13, 2024	February 9, 2023
Expected volatility	46.3%	46.2%	53.2%
Expected term (in years)	2.9	2.9	2.9
Risk-free interest rate	4.35%	4.35%	4.08%

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

Expected term – We use the vesting period of the award to determine the expected term assumption for the Monte Carlo simulation valuation model.

Risk-free interest rate – We use an implied “spot rate” yield on U.S. Treasury Constant Maturity rates as of the grant date for our assumption of the risk-free interest rate.

Expected dividend yield – We do not currently pay dividends on our capital stock; therefore, a dividend yield of 0% was used in the Monte Carlo simulation valuation model.

As of March 31, 2024, we had outstanding performance-based restricted stock units with a performance condition from 2024. These awards generally cliff vest at the end of a two-year performance period. However, employees whose employment terminates during the measurement period due to death, disability, or, in certain cases, retirement may receive a pro-rata payout based on the number of days they were employed during the measurement period. Participants are eligible to be awarded shares ranging from 0% to 200% of the original award amount, based on certain defined performance measures.

The performance-based restricted stock units with a performance condition have one measurement criterion: 2025 net revenue. The fair value of these awards was determined based on the market value of the underlying stock price at the grant date with cumulative compensation expense recognized to-date being increased or decreased based on the changes in the forecasted payout percentage as of the end of each reporting period. We account for forfeitures as they occur.

A summary of activity of the outstanding performance-based restricted stock units for the three months ended March 31, 2024 is presented below:


			Performance-Based Restricted Stock Units
Awards outstanding as of December 31, 2023			73,528
Awards granted			79,700
Stock issued			—
Awards cancelled			(26,737)
Awards outstanding as of March 31, 2024			126,491

We recognized $1.3 million and $0.1 million of compensation expense for performance-based restricted stock units for the three months ended March 31, 2024 and 2023, respectively.

Time-Based Restricted Stock Units

As of March 31, 2024, we had time-based restricted stock unit awards from 2024, 2023, 2022 and 2021 outstanding. The outstanding awards all ratably vest on the first, second and third anniversaries of the original grant date. However, employees whose employment terminates during the measurement period due to death, disability, or, in certain cases, retirement may receive a pro-rata payout based on the number of days they were employed subsequent to the last grant anniversary date. Each time-based restricted stock unit represents a right to receive one share of Rogers’ capital stock at the end of the vesting period. The fair value of the award is determined by the market value of the underlying stock price at the grant date. We recognize compensation expense on all of these awards on a straight-line basis over the vesting period. We account for forfeitures as they occur.

A summary of activity of the outstanding time-based restricted stock units for the three months ended March 31, 2024 is presented below:


			Time-Based Restricted Stock Units
Awards outstanding as of December 31, 2023			100,999
Awards granted			67,480
Stock issued			(34,261)
Awards cancelled			(3,688)
Awards outstanding as of March 31, 2024			130,530

We recognized $1.9 million and $2.1 million of compensation expense for time-based restricted stock units for the three months ended March 31, 2024 and 2023, 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 13-month anniversary of the grant date unless the individual elects to defer the receipt of those shares. Each deferred stock unit results in the issuance of one share of Rogers’ capital stock. The grant of deferred stock units is typically done annually during the second quarter of each year. The fair value of the award is determined by the market value of the underlying stock price at the grant date.

A summary of activity of the outstanding deferred stock units for the three months ended March 31, 2024 is presented below:


			Deferred Stock Units
Awards outstanding as of December 31, 2023			8,100
Awards granted			450
Stock issued			(950)
Awards outstanding as of March 31, 2024			7,600

We recognized an immaterial amount of compensation expense and no compensation expense for deferred stock units for the three months ended March 31, 2024 and 2023, respectively.

Employee Stock Purchase Plan

We have an ESPP that allows eligible employees to purchase, through payroll deductions, shares of our capital stock at a discount to fair market value. The ESPP has two six-month offering periods each year, the first beginning in mid-December and ending in mid-June and the second beginning in mid-June and ending in mid-December. The ESPP contains a look-back feature that allows the employee to acquire shares of our capital stock at a 15% discount from the underlying market price at the beginning or end of the applicable 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 offering 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 on the underlying stock’s market value on the first day of the applicable offering period, and (ii) the fair value of the look-back feature determined by using the Black-Scholes model. We recognized $0.2 million of compensation expense associated with the ESPP for the three months ended March 31, 2024.