(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the Fiscal Year Ended December 31, 2009 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the Transition Period from to |
Ohio
|
34-1919973 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
|
6070 Parkland Blvd., Mayfield Heights, Ohio
(Address of principal executive offices) |
44124
(Zip Code) |
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|
Common Stock, no par value
Rights to Purchase Series A Junior Participating Preferred Stock, no par value |
New York Stock Exchange
New York Stock Exchange |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o |
| The global economy, including the uncertainties related to the impact of the global economic crisis; | |
| The condition of the markets in which we serve, whether defined geographically or by segment, with the major market segments being telecommunications and computer, aerospace and defense, medical, industrial components, data storage, automotive electronics and appliance; | |
| Changes in product mix and the financial condition of customers; | |
| Actual sales, operating rates and margins for the year 2010; | |
| Our success in developing and introducing new products and new product ramp-up rates; | |
| Our success in passing through the costs of raw materials to customers or otherwise mitigating fluctuating prices for those materials, including the impact of fluctuating prices on inventory values; | |
| Our success in integrating newly acquired businesses, including the acquisitions of Barr Associates, Inc. and Academy Corporation; | |
| The impact of the results of operations of Barr Associates, Inc. and Academy Corporation on our ability to fully achieve the strategic and financial objectives related to these acquisitions, including the acquisitions being accretive to earnings in 2010; | |
| Our success in implementing our strategic plans and the timely and successful completion and start-up of any capital projects, including the new primary beryllium facility being constructed in Elmore, Ohio; | |
| The availability of adequate lines of credit and the associated interest rates; | |
| Other financial factors, including the cost and availability of raw materials (both base and precious metals), tax rates, exchange rates, metal financing fees, pension costs and required cash contributions and other employee benefit costs, energy costs, regulatory compliance costs, the cost and availability of insurance, and the impact of the Companys stock price on the cost of incentive compensation plans; | |
| The uncertainties related to the impact of war and terrorist activities; | |
| Changes in government regulatory requirements and the enactment of new legislation that impacts our obligations and operations; | |
| The conclusion of pending litigation matters in accordance with our expectation that there will be no material adverse effects; and | |
| The risk factors set forth elsewhere in Part I, Item 1A of this Form 10-K. |
Item 1. | BUSINESS |
1
2
3
4
5
Name
|
Age
|
Positions and Offices
|
||||
Richard J. Hipple
|
57 | Chairman of the Board, President and Chief Executive Officer. In May 2006, Mr. Hipple was named Chairman of the Board and Chief Executive Officer of Brush Engineered Materials Inc. He had served as President since May 2005. He was Chief Operating Officer from May 2005 until May 2006. Mr. Hipple served as President of Alloy Products from May 2002 until May 2005. He joined the Company in July 2001 as Vice President of Strip Products and served in that position until May of 2002. Prior to joining Brush, Mr. Hipple was President of LTV Steel Company, a business unit of the LTV Corporation (integrated steel producer and metal fabricator). Prior to running LTVs steel business, Mr. Hipple held numerous leadership positions in engineering, operations, strategic planning, sales and marketing and procurement since 1975 at LTV. Mr. Hipple has served on the Board of Directors of Ferro Corporation since June 2007. | ||||
John D. Grampa
|
62 | Senior Vice President Finance and Chief Financial Officer. Mr. Grampa was named Senior Vice President Finance and Chief Financial Officer in December 2006. Prior to that, he had served as Vice President Finance and Chief Financial Officer since November 1999 and as Vice President Finance since October 1998. Prior to that, he had served as Vice President, Finance for the Worldwide Materials Business of Avery Dennison Corporation since March 1994 and held other various positions at Avery Dennison Corporation (producer of pressure sensitive materials, office products, labels and other converted products) from 1984. | ||||
Daniel A. Skoch
|
60 | Senior Vice President Administration. Mr. Skoch was named Senior Vice President Administration in July 2000. Prior to that time, he had served as Vice President Administration and Human Resources since March 1996. He had served as Vice President Human Resources since July 1991 and prior to that time, he was Corporate Director Personnel. |
Item 1A. | RISK FACTORS |
6
7
8
9
| burdens to comply with multiple and potentially conflicting foreign laws and regulations, including export requirements, tariffs and other barriers, environmental health and safety requirements and unexpected changes in any of these factors; | |
| difficulty in obtaining export licenses from the United States government; |
10
| political and economic instability and disruptions, including terrorist attacks; | |
| potentially adverse tax consequences due to overlapping or differing tax structures; and | |
| fluctuations in currency exchange rates. |
11
12
| changes in credit markets that reduce available credit or the ability to renew existing liquidity facilities on acceptable terms; | |
| a deterioration of our credit; | |
| a deterioration in the financial condition of the banks in which we do business; |
13
| extreme volatility in our markets that increases margin or credit requirements; and | |
| the collateral pledge of substantially all of our assets in connection with our existing indebtedness, which limits our flexibility in raising additional capital. |
14
Item 1B. | UNRESOLVED STAFF COMMENTS |
15
Item 2.
PROPERTIES
Approximate
Number of
Owned or Leased
Square Feet
Leased
53,800
Leased
23,400
Leased
75,000
Leased
35,000
Owned
97,000
Owned
86,000
Owned/Leased
556,000/300,000
Leased
16,800
Leased
18,000
Owned/Leased
130,000/11,000
Owned
55,000
Leased
19,800
Owned/Leased
99,000/7,300
Owned
30,000
Owned
123,000
Leased
5,800
Leased
4,500
Leased
5,000
Leased
22,400
Leased
11,500
Owned
53,000
Leased
38,000
Leased
75,000
Owned
35,000
Leased
34,700
Leased
28,500
Owned
35,500
Leased
2,500
Leased
24,800
Leased
9,700
Leased
6,900
Leased
34,500
(1)
Advanced Material Technologies and Services
(2)
Specialty Engineered Alloys
(3)
Beryllium and Beryllium Composites
(4)
Engineered Material Systems
(5)
All Other
16
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76
95
96
97
98
99
Item 3.
LEGAL
PROCEEDINGS
two plaintiffs were added to one pending case;
one plaintiff was dismissed from one pending case;
two cases (involving nine plaintiffs) were dismissed;
three cases (involving 16 plaintiffs) were settled and
dismissed; and
two plaintiffs were dismissed from one purported class action
(involving nine named plaintiffs) during the third quarter; and
the denial of class certification was affirmed by the appellate
court during the third quarter, which plaintiffs did not appeal;
therefore, the case is proceeding as an individual claim
(involving five plaintiffs), and two additional plaintiffs were
dismissed because they have separate claims pending.
17
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18
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19
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Item 4.
RESERVED
Item 5.
MARKET
FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Stock Price Range
High
Low
$
17.27
$
10.50
19.19
12.41
25.38
14.11
27.06
17.11
$
38.12
$
23.77
34.63
24.60
31.27
19.07
19.41
6.98
20
Table of Contents
2004
2005
2006
2007
2008
2009
$
100
$
86
$
183
$
200
$
69
$
100
$
100
$
108
$
124
$
124
$
85
$
107
$
100
$
105
$
124
$
122
$
81
$
103
21
Table of Contents
Item 6.
SELECTED
FINANCIAL DATA
(Thousands except for per share data)
2009
2008
2007
2006
2005
$
715,186
$
909,711
$
955,709
$
763,054
$
541,267
623,764
757,836
759,037
600,882
431,024
91,422
151,875
196,672
162,172
110,243
(19,485
)
28,071
84,465
43,840
19,509
1,299
1,995
1,760
4,135
6,372
(20,784
)
26,076
82,705
39,705
13,137
(8,429
)
7,719
29,420
(9,898
)
(4,688
)
(12,355
)
18,357
53,285
49,603
17,825
(0.61
)
0.90
2.62
2.52
0.93
(0.61
)
0.89
2.59
2.45
0.92
32,369
34,204
24,296
25,141
22,790
44,173
35,515
26,429
15,522
13,775
808
421
7,121
Year-end position
140,482
189,899
216,253
158,061
115,531
2.0 to 1
2.8 to 1
2.9 to 1
2.4 to 1
2.4 to 1
665,361
635,266
583,961
557,861
540,420
227,766
207,254
186,175
175,929
177,062
621,953
581,897
550,551
498,606
402,702
131,630
116,524
69,140
70,731
73,492
8,305
10,605
10,005
20,282
32,916
339,859
347,097
353,714
291,000
211,478
20,191
20,335
20,320
19,665
19,219
20,191
20,543
20,612
20,234
19,371
22
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Item 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(Millions except for per share data)
2009
2008
2007
$
715.2
$
909.7
$
955.7
(19.5
)
28.1
84.5
(20.8
)
26.1
82.7
(12.4
)
18.4
53.3
(0.61
)
0.89
2.59
23
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24
Table of Contents
25
Table of Contents
26
Table of Contents
Income (Expense)
(Millions)
2009
2008
2007
$
(0.7
)
$
(3.7
)
$
(0.6
)
(4.0
)
(3.5
)
(1.2
)
(3.3
)
(4.5
)
(2.0
)
(0.1
)
1.2
(0.3
)
(0.3
)
(1.4
)
(3.1
)
(1.3
)
$
(9.5
)
$
(13.6
)
$
(5.7
)
27
Table of Contents
(Dollars in millions)
2009
2008
2007
$
(20.8
)
$
26.1
$
82.7
(8.4
)
7.7
29.4
(40.6
)%
29.6
%
35.6
%
28
Table of Contents
(Millions)
2009
2008
2007
$
460.8
$
480.3
$
533.5
22.6
10.8
60.4
29
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30
Table of Contents
(Millions)
2009
2008
2007
$
172.5
$
299.9
$
290.0
(32.3
)
5.8
7.6
31
Table of Contents
32
Table of Contents
(Millions)
2009
2008
2007
$
47.0
$
63.6
$
60.5
2.1
8.4
7.8
33
Table of Contents
(Millions)
2009
2008
2007
$
34.7
$
65.9
$
70.9
(2.5
)
5.9
4.7
34
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35
Table of Contents
(Dollars in millions)
2009
2008
2007
$
163.9
$
197.5
$
283.4
73.5
115.3
110.8
11.8
20.8
19.9
$
249.2
$
333.6
$
414.1
35
%
37
%
43
%
December 31,
2009
2008
2007
4
9
9
8
36
31
0(2
)
1(6
)
0(0
)
3(16
)
0(0
)
1(1
)
$
850
$
$
100
2(14
)
1(1
)
3(22
)
36
Table of Contents
December 31,
(Millions)
2009
2008
Asset (liability)
$
(0.6
)
$
(2.0
)
0.3
1.7
37
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38
Table of Contents
39
Table of Contents
(Millions)
2009
2008
2007
$
44.2
$
35.5
$
26.4
0.8
0.4
7.1
45.0
35.9
33.5
28.2
8.0
3.5
$
16.8
$
27.9
$
30.0
40
Table of Contents
41
Table of Contents
(Millions)
2010
2011
2012
2013
2014
Thereafter
Total
$
$
$
$
$
$
8.3
$
8.3
7.8
7.3
4.5
3.9
3.6
20.3
47.4
8.1
8.1
1.8
1.8
$
17.7
$
7.3
$
4.5
$
3.9
$
3.6
$
28.6
$
65.6
December 31,
(Millions)
2009
2008
2007
$
64.5
$
41.8
$
35.5
12.3
18.5
31.7
52.2
23.3
3.8
46.3
218.2
217.0
42
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43
Table of Contents
2009
2008
2007
2006
2005
6,425
6,454
6,531
6,550
6,601
0.266
%
0.266
%
0.266
%
0.267
%
0.268
%
3,519
3,519
3,519
3,519
3,519
0.232
%
0.232
%
0.232
%
0.232
%
0.232
%
39
64
52
48
38
0.330
%
0.321
%
0.321
%
0.352
%
0.316
%
44
Table of Contents
45
Table of Contents
46
Table of Contents
47
Table of Contents
Item 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
foreign currency derivative financial instruments that hedge our
currency exposure in the normal course of business;
an embedded copper derivative that provides an economic hedge of
our inventory carrying cost; and
investments held by our directors deferred compensation plan
trust.
48
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49
Item 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements
Page
51
52
54
55
56
57
58
50
Table of Contents
51
Table of Contents
52
Table of Contents
53
Table of Contents
Years Ended December 31, 2009, 2008 and 2007
Consolidated Statements of
Income
(Thousands except per share amounts)
2009
2008
2007
$
715,186
$
909,711
$
955,709
623,764
757,836
759,037
91,422
151,875
196,672
89,762
104,523
110,127
6,771
6,522
4,992
(1,059
)
(8,699
)
4,892
171
121
9,482
13,647
5,666
(19,485
)
28,071
84,465
1,299
1,995
1,760
(20,784
)
26,076
82,705
1,636
1,563
14,120
(10,065
)
6,156
15,300
(8,429
)
7,719
29,420
$
(12,355
)
$
18,357
$
53,285
$
(0.61
)
$
0.90
$
2.62
outstanding basic
20,191
20,335
20,320
$
(0.61
)
$
0.89
$
2.59
outstanding diluted
20,191
20,543
20,612
54
Table of Contents
Years Ended December 31, 2009, 2008 and 2007
Consolidated Statements of Cash
Flows
(Dollars in thousands)
2009
2008
2007
$
(12,355
)
$
18,357
$
53,285
31,939
33,826
23,880
430
378
416
3,484
2,552
3,932
4,892
171
121
(10,065
)
6,156
15,300
10,045
16,513
(8,471
)
(7,678
)
7,885
(11,263
)
34,162
12,897
(13,269
)
(4,606
)
4,713
(3,913
)
(754
)
(11,890
)
(4,926
)
319
(2,456
)
2,255
5,456
(14,074
)
(2,306
)
(16,607
)
1,960
(775
)
2,796
(176
)
(3,322
)
41,458
76,812
50,944
(44,173
)
(35,515
)
(26,429
)
(808
)
(421
)
(7,121
)
28,200
8,017
3,472
(54,107
)
(86,052
)
22,915
2,150
3
323
75
66
47
(70,810
)
(90,990
)
(27,558
)
25,778
4,870
(3,607
)
25,700
46,200
16,082
(28,600
)
(45,600
)
(26,392
)
(126
)
(352
)
(825
)
(4,999
)
497
243
4,961
53
455
2,751
23,302
817
(7,030
)
(243
)
177
(270
)
(6,293
)
(13,184
)
16,086
18,546
31,730
15,644
$
12,253
$
18,546
$
31,730
55
Table of Contents
December 31, 2009 and 2008
Consolidated Balance
Sheets
(Dollars in thousands)
2009
2008
$
12,253
$
18,546
83,997
87,878
11,056
3,378
130,098
156,718
28,020
23,660
14,752
4,199
280,176
294,379
90
98
4,873
9,944
665,361
635,266
(437,595
)
(428,012
)
227,766
207,254
42,014
34,444
67,034
35,778
$
621,953
$
581,897
$
56,148
$
30,622
600
36,573
28,014
16,292
22,568
763
1,132
27,027
21,431
432
113
2,459
139,694
104,480
49,276
19,356
82,354
97,168
2,329
3,028
136
163
8,305
10,605
173,776
170,597
321,974
334,329
(111,370
)
(110,865
)
(46,684
)
(47,801
)
2,163
837
339,859
347,097
$
621,953
$
581,897
56
Table of Contents
Years Ended December 31, 2009, 2008 and 2007
Consolidated Statements of Shareholders
Equity
Common
Other
Other
Common
Retained
Stock In
Comprehensive
Equity
(Dollars in thousands)
Stock
Earnings
Treasury
Income (Loss)
Transactions
Total
$
155,552
$
264,100
$
(105,765
)
$
(23,320
)
$
433
$
291,000
53,285
53,285
1,624
1,624
(4,049
)
(4,049
)
1,169
1,169
52,029
(1,413
)
(1,413
)
4,961
4,961
2,751
2,751
3,932
3,932
151
187
116
454
167,347
315,972
(105,578
)
(24,576
)
549
353,714
18,357
18,357
2,305
2,305
97
97
(25,627
)
(25,627
)
(4,868
)
243
243
455
455
(4,999
)
(4,999
)
2,552
2,552
(288
)
288
170,597
334,329
(110,865
)
(47,801
)
837
347,097
(12,355
)
(12,355
)
(22
)
(22
)
825
825
314
314
(11,238
)
497
497
53
53
3,484
3,484
(855
)
(505
)
1,326
(34
)
$
173,776
$
321,974
$
(111,370
)
$
(46,684
)
$
2,163
$
339,859
57
Table of Contents
Note A
Significant
Accounting Policies
58
Table of Contents
5 to 25
10 to 40
Life of lease
3 to 15
4 to 15
2 to 8
6 to 12
3 to 10
3 to 10
59
Table of Contents
60
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Note B
Acquisitions
Asset
(Dollars in thousands)
(Liability)
$
14,441
12,200
7,330
54
31,256
(3,147
)
(2,974
)
(3,995
)
$
55,165
61
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Pro Forma Results (Unaudited)
(Dollars in thousands except for per share amounts)
2009
2008
$
748,059
$
953,914
(18,625
)
31,453
(10,952
)
21,852
$
(0.54
)
$
1.06
Asset
(Dollars in thousands)
(Liability)
$
22,915
8,739
26,200
15,000
13,879
(222
)
$
86,511
62
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Note C
Inventories
December 31,
(Dollars in thousands)
2009
2008
$
38,740
$
41,468
119,698
139,552
38,950
50,579
197,388
231,599
67,290
74,881
$
130,098
$
156,718
Note D
Property,
Plant and Equipment
December 31,
(Dollars in thousands)
2009
2008
$
8,690
$
8,729
114,114
111,239
460,068
452,702
25,884
24,570
50,918
25,455
(435,416
)
(420,790
)
224,258
201,905
5,029
5,029
658
7,542
(2,179
)
(7,222
)
3,508
5,349
$
227,766
$
207,254
63
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Note E
Intangible
Assets
Weighted-average
(Dollars in thousands)
Amount
Amortization Period
$
9,900
9.5 Years
1,700
3.0 Years
600
2.0 Years
200
17.0 Years
126
1.0 Years
$
12,526
8.3 Years
$
31,256
Not Applicable
64
Table of Contents
(Dollars in thousands)
2009
2008
$
4,437
$
4,311
(3,170
)
(2,740
)
1,267
1,571
34,550
24,650
(6,721
)
(4,013
)
27,829
20,637
11,120
9,420
(2,025
)
(1,054
)
9,095
8,366
690
690
(690
)
(690
)
283
283
(283
)
(283
)
420
220
(167
)
(118
)
253
102
500
500
(479
)
(229
)
21
271
600
(58
)
542
$
52,600
$
40,074
(13,593
)
(9,127
)
$
39,007
$
30,947
$
4,466
$
3,900
65
Table of Contents
(Dollars in thousands)
2009
2008
$
35,778
$
21,899
31,256
13,879
$
67,034
$
35,778
Note F
Debt
December 31,
(Dollars in thousands)
2009
2008
$
$
2,300
600
8,305
8,305
8,305
11,205
(600
)
$
8,305
$
10,605
$
8,305
$
8,305
66
Table of Contents
December 31, 2009
December 31, 2008
(Dollars in thousands)
Total
Outstanding
Available
Total
Outstanding
Available
$
51,101
$
11,418
$
39,683
$
211,466
$
$
211,466
11,303
435
10,868
16,794
10,052
6,742
50,862
44,295
6,567
20,570
20,570
$
113,266
$
56,148
$
57,118
$
248,830
$
30,622
$
218,208
Note G
Leasing
Arrangements
Note H
Fair
Value Information and Derivative Financial Instruments
67
Table of Contents
Fair Value Measurements
Quoted Prices
in Active
Markets for
Significant
Significant
Identical
Observable
Unobservable
(Dollars in thousands)
Assets
Inputs
Inputs
Total
(Level 1)
(Level 2)
(Level 3)
$
596
$
596
$
$
220
220
$
816
$
596
$
220
$
$
596
$
596
$
$
105
105
4,892
4,892
$
5,593
$
596
$
4,997
$
68
Table of Contents
December 31, 2009
December 31, 2008
Notional
Fair
Notional
Fair
(Dollars in thousands)
Amount
Value
Amount
Value
$
6,562
$
220
$
18,997
$
(2,390
)
6,209
(93
)
22,513
537
375
(12
)
3,194
485
$
13,146
$
115
$
44,704
$
(1,368
)
$
$
$
2,689
$
212
$
18,433
$
(4,892
)
$
$
69
Table of Contents
December 31,
(Dollars in thousands)
2009
2008
$
220
$
1,234
(4,997
)
(2,354
)
(36
)
$
(4,777
)
$
(1,156
)
Effective Portion of Hedge
Ineffective Portion of Hedge
Recognized
Reclassified From OCI
Recognized in Income on
In OCI at
Into Income During Period
Derivative During Period
(Dollars in thousands)
End of Period
Location
Amount
Location
Amount
$
115
Other-net
$
(810
)
Other-net
$
Other-net
212
Other-net
115
(598
)
Cost of sales
478
Cost of sales
$
115
$
(120
)
$
$
(1,368
)
Other-net
$
(2,325
)
Other-net
$
212
Other-net
(735
)
Other-net
(1,156
)
(3,060
)
Cost of sales
Cost of sales
$
(1,156
)
$
(3,060
)
$
70
Table of Contents
71
Table of Contents
Note I
Pensions
and Other Post-retirement Benefits
Pension Benefits
Other Benefits
(Dollars in thousands)
2009
2008
2009
2008
$
145,524
$
134,741
$
32,786
$
34,239
4,463
5,297
289
303
8,994
8,490
1,929
2,127
8,171
4,241
(1,765
)
(1,325
)
(6,393
)
(5,682
)
(104
)
(112
)
(2,710
)
(2,955
)
(392
)
(360
)
(547
)
357
397
313
(1,091
)
160,029
145,524
30,886
32,786
81,810
111,872
15,944
(27,372
)
18,494
4,451
(6,393
)
(5,682
)
(392
)
(360
)
266
(1,099
)
109,729
81,810
$
(50,300
)
$
(63,714
)
$
(30,886
)
$
(32,786
)
$
$
$
(2,609
)
$
(2,856
)
(50,300
)
(63,714
)
(28,277
)
(29,930
)
$
(50,300
)
$
(63,714
)
$
(30,886
)
$
(32,786
)
$
67,446
$
67,518
$
(2,214
)
$
(449
)
(4,560
)
(6,139
)
129
93
$
62,886
$
61,379
$
(2,085
)
$
(356
)
$
2,834
$
2,024
$
$
(530
)
(644
)
(36
)
(36
)
$
2,304
$
1,380
$
(36
)
$
(36
)
$
156,942
$
142,896
N/A
N/A
160,029
142,602
N/A
N/A
109,729
78,806
N/A
N/A
156,942
139,974
N/A
N/A
109,729
78,806
N/A
N/A
72
Table of Contents
Pension Benefits
Other Benefits
(Dollars in thousands)
2009
2008
2007
2009
2008
2007
$
4,463
$
5,297
$
5,001
$
289
$
303
$
301
8,994
8,490
7,977
1,929
2,127
1,909
(9,746
)
(9,061
)
(9,002
)
(549
)
(644
)
(660
)
(36
)
(36
)
(36
)
1,557
1,186
1,823
(1,069
)
$
3,650
$
5,268
$
5,139
$
2,182
$
2,394
$
2,174
Pension Benefits
Other Benefits
(Dollars in thousands)
2009
2008
2007
2009
2008
2007
$
61,379
$
21,337
$
27,437
$
(356
)
$
933
$
(2,203
)
549
644
660
36
36
36
(1,557
)
(1,225
)
(1,823
)
39
889
1,974
40,677
(5,817
)
(1,765
)
(1,325
)
3,100
522
19
(93
)
(9
)
$
62,886
$
61,379
$
21,337
$
(2,085
)
$
(356
)
$
933
Summary of key valuation
assumptions
Pension Benefits
Other Benefits
2009
2008
2007
2009
2008
2007
5.86
%
6.16
%
N/A
5.88
%
6.15
%
N/A
3.00
%
2.03
%
N/A
3.00
%
2.00
%
N/A
6.65
%
6.41
%
5.95
%
6.15
%
6.50
%
6.13
%
8.22
%
8.21
%
8.46
%
N/A
N/A
N/A
2.09
%
4.34
%
4.35
%
2.00
%
4.50
%
4.50
%
73
Table of Contents
Assumed health care trend rates
at fiscal year end
2009
2008
8.00
%
8.00
%
5.00
%
5.00
%
2016
2012
1-Percentage-Point Increase
1-Percentage-Point Decrease
(Dollars in thousands)
2009
2008
2009
2008
$
46
$
53
$
(41
)
$
(48
)
629
796
(573
)
(718
)
74
Table of Contents
Fair Value Measurements
Quoted
Prices
in Active
Markets for
Significant
Significant
Identical
Observable
Unobservable
Assets
Inputs
Inputs
Total
(Level 1)
(Level 2)
(Level 3)
$
16,331
$
16,331
$
$
26,590
19,179
7,411
11,773
4,741
7,032
9,156
8,951
205
17,962
17,962
18,101
17,583
518
5,523
5,523
3,507
3,507
786
786
$
109,729
$
90,270
$
15,166
$
4,293
(a)
Mutual funds that invest in various sectors of the U.S. market.
(b)
Mutual funds that invest in
non-U.S.
companies primarily in developed countries that are generally
considered to be value stocks.
(c)
Mutual funds that invest in
non-U.S.
companies in emerging market countries.
(d)
Includes a mutual fund that employs a value-oriented approach to
fixed income investment management.
(e)
Mutual funds that invest in domestic and foreign sovereign
securities, fixed income securities, mortgage-backed and
asset-backed bonds, convertible bonds, high yield bonds and
emerging market bonds.
(f)
Includes a mutual fund that typically invests at least 80% of
its assets in equity and debt securities of companies in the
real estate industry or related industries or in companies which
own significant real estate assets at the time of investment.
(g)
Includes hedge funds that employ multiple strategies to multiple
asset classes with low correlations.
75
Table of Contents
Fair Value Measurements
Using Significant
Unobservable Inputs (Level 3)
Multi-
Private
strategy
equity
(Dollars in thousands)
hedge funds
funds
Total
$
5,965
$
781
$
6,746
787
(24
)
763
(16
)
(16
)
(3,229
)
29
(3,200
)
$
3,507
$
786
$
4,293
Other Benefits
Net of
Medicare
Gross Benefit
Part D
Pension Benefits
Payment
Subsidy
$
6,389
$
3,003
$
2,609
6,677
3,064
2,651
7,251
3,133
2,695
7,766
3,168
2,710
8,131
3,115
2,638
48,423
15,121
12,397
Table of Contents
Note J
Contingencies
and Commitments
77
Table of Contents
(Dollars in thousands)
2009
2008
$
(6,272
)
$
(5,196
)
(353
)
(1,337
)
1,033
261
$
(5,592
)
$
(6,272
)
$
(953
)
$
(1,407
)
(4,639
)
(4,865
)
78
Table of Contents
Note K
Common
Stock and Stock-based Compensation
26,362
296
29
26,687
12
8
26,707
32
61
26,800
79
Table of Contents
Weighted-
average
Weighted-
Exercise
Aggregate
average
Number of
Price per
Intrinsic
Remaining
(Shares in thousands)
Options
Share
Value
Term
355
$
15.81
(32
)
15.71
(3
)
14.91
320
15.83
$
1,054,000
3.50 years
320
15.83
1,054,000
3.50 years
320
15.83
1,054,000
3.50 years
Number
Weighted-
Weighted-
Outstanding
average
average
and Exercisable
Remaining
Exercise
(Thousands)
Life (Years)
Price
34
3.25
$
6.12
74
3.06
12.81
162
4.48
17.26
50
1.13
22.22
320
3.50
$
15.83
80
Table of Contents
Weighted-
average
Number of
Grant Date
(Shares in thousands)
Shares
Fair Value
135
$
34.35
184
15.67
(27
)
19.31
(9
)
20.44
283
$
23.11
81
Table of Contents
Weighted-
average
Number of
Grant Date
(Shares in thousands)
Shares
Fair Value
105
$
28.53
16
14.74
(4
)
15.68
(10
)
15.68
107
$
27.29
Weighted-
average
Weighted-
Exercise
Aggregate
average
Number of
Price per
Intrinsic
Remaining
(Shares in thousands)
SAR
Share
Value
Term
180
$
29.09
350
15.01
530
19.80
$
1,234,000
8.33 years
530
19.80
1,234,000
8.33 years
111
24.03
6.34 years
82
Table of Contents
Weighted-
Weighted-
Number
average
average
Outstanding
Remaining
Exercise
(Thousands)
Life (Years)
Price
350
9.11
$
15.01
111
6.34
24.03
30
8.13
27.78
39
7.13
44.72
530
8.33
$
19.80
2009
2008
2007
0.31
%
2.14
%
5.03
%
0
%
0
%
0
%
55.0
%
49.2
%
45.7
%
6.5
6.5
6.0
Note L
Other
Comprehensive Income
December 31,
(Dollars in thousands)
2009
2008
2007
$
2,324
$
2,346
$
41
1,477
652
555
(50,485
)
(50,799
)
(25,172
)
$
(46,684
)
$
(47,801
)
$
(24,576
)
83
Table of Contents
Note M
Segment
Reporting and Geographic Information
Advanced
Material
Specialty
Beryllium
Engineered
Technologies
Engineered
and Beryllium
Material
All
(Dollars in thousands)
and Services
Alloys
Composites
Systems
Subtotal
Other
Total
$
460,837
$
172,507
$
47,030
$
34,749
$
715,123
$
63
$
715,186
639
2,555
176
1,493
4,863
4,863
22,622
(32,273
)
2,121
(2,526
)
(10,056
)
(9,429
)
(19,485
)
11,642
15,937
850
2,361
30,790
1,149
31,939
4,496
3,802
34,542
430
43,270
1,711
44,981
274,949
191,806
81,073
21,252
569,080
52,873
621,953
$
480,327
$
299,867
$
63,604
$
65,913
$
909,711
$
$
909,711
2,332
776
452
1,405
4,965
4,965
10,847
5,846
8,372
5,931
30,996
(2,925
)
28,071
10,152
18,246
740
2,273
31,411
2,415
33,826
7,901
9,145
13,165
1,145
31,356
4,580
35,936
215,700
239,810
54,224
23,087
532,821
49,076
581,897
$
533,503
$
289,971
$
60,489
$
70,886
$
954,849
$
860
$
955,709
1,862
3,546
1,062
2,127
8,597
8,597
60,445
7,585
7,837
4,726
80,593
3,872
84,465
5,589
12,510
900
2,340
21,339
2,541
23,880
10,709
12,485
5,089
2,963
31,246
2,304
33,550
195,110
229,582
38,148
26,843
489,683
60,868
550,551
84
Table of Contents
(Dollars in thousands)
2009
2008
2007
$
466,031
$
576,141
$
541,589
249,155
333,570
414,120
$
715,186
$
909,711
$
955,709
$
321,141
$
260,353
$
203,473
12,553
13,626
12,896
$
333,694
$
273,979
$
216,369
Note N
Litigation
Settlement Gain
85
Table of Contents
Note O
Interest
(Dollars in thousands)
2009
2008
2007
$
1,411
$
2,365
$
2,138
112
370
378
$
1,299
$
1,995
$
1,760
$
898
$
2,193
$
2,104
$
517
$
595
$
567
Note P
Income
Taxes
(Dollars in thousands)
2009
2008
2007
$
(21,288
)
$
24,646
$
79,545
504
1,430
3,160
$
(20,784
)
$
26,076
$
82,705
$
1,018
$
659
$
13,152
618
904
968
1,636
1,563
14,120
$
(10,241
)
$
6,267
$
13,215
(107
)
(268
)
1,160
283
157
925
(10,065
)
6,156
15,300
$
(8,429
)
$
7,719
$
29,420
86
Table of Contents
2009
2008
2007
(35.0
)%
35.0
%
35.0
%
(1.9
)
2.1
0.9
(2.3
)
(5.4
)
(1.4
)
(1.3
)
(1.5
)
(1.2
)
0.1
0.7
1.5
(3.4
)
(5.0
)
0.9
0.6
1.0
2.3
3.1
(0.2
)
(40.6
)%
29.6
%
35.6
%
December 31,
(Dollars in thousands)
2009
2008
$
12,141
$
12,964
4,211
7,404
8,088
6,927
1,975
2,181
7,771
15,527
15,900
1,920
466
5,095
4,488
380
80
57,108
50,410
(3,696
)
(2,952
)
53,412
47,458
(24,674
)
(26,028
)
(8,248
)
(4,238
)
(1,602
)
(348
)
(440
)
(653
)
(1,170
)
(33,923
)
(33,478
)
$
19,489
$
13,980
87
Table of Contents
(Dollars in thousands)
2009
2008
$
3,476
$
5,368
359
(1,029
)
(3
)
(2,251
)
$
2,444
$
3,476
Note Q
Earnings
Per Share
(Thousands except per share data)
2009
2008
2007
$
(12,355
)
$
18,357
$
53,285
20,191
20,335
20,320
85
240
29
28
94
24
208
292
20,191
20,543
20,612
$
(0.61
)
$
0.90
$
2.62
$
(0.61
)
$
0.89
$
2.59
88
Table of Contents
(Thousands)
2009
2008
2007
50
180
69
230
69
Note R
Related
Party Transactions
Note S
Subsequent
Event (Unaudited)
89
Table of Contents
Note T
Quarterly Data (Unaudited)
2009
First
Second
Third
Fourth
(Dollars in thousands except per share data)
Quarter
Quarter
Quarter
Quarter
Total
$
135,359
$
174,134
$
190,538
$
215,155
$
715,186
14,602
22,134
25,191
29,495
91,422
10.8
%
12.7
%
13.2
%
13.7
%
12.8
%
$
(8,144
)
$
(785
)
$
126
$
(3,552
)
$
(12,355
)
(0.40
)
(0.04
)
0.01
(0.18
)
(0.61
)
(0.40
)
(0.04
)
0.01
(0.18
)
(0.61
)
17.27
19.19
25.38
27.06
10.50
12.41
14.11
17.11
2008
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Total
$
226,347
$
246,584
$
240,494
$
196,286
$
909,711
36,958
44,639
45,173
25,105
151,875
16.3
%
18.1
%
18.8
%
12.8
%
16.7
%
$
4,596
$
7,158
$
9,909
$
(3,306
)
$
18,357
0.23
0.35
0.49
(0.16
)
0.90
0.22
0.35
0.48
(0.16
)
0.89
38.12
34.63
31.27
19.41
23.77
24.60
19.07
6.98
90
Table of Contents
Item 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Item 9A.
CONTROLS
AND PROCEDURES
Item 9B.
OTHER
INFORMATION
91
Table of Contents
Item 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 11.
EXECUTIVE
COMPENSATION
92
Table of Contents
Item 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Number of
Securities
Securities to be
Remaining Available
Issued Upon
for Future Issuance
Exercise of
Weighted-average
Under Equity
Outstanding
Exercise Price of
Compensation Plans
Options, Warrants
Outstanding
(Excluding Securities
and Rights
Options, Warrants
Reflected
(a)
and Rights
in Column(a))
1,202,051
(1)
$
18.30
(2)
362,842
(3)
1,202,051
$
18.30
362,842
(1)
Consists of options awarded under the 1979, 1984, 1989, 1995 and
2006 Stock Incentive Plans, the 1997 Non-employee Director
Stock Incentive Plans and the 2006 Non-employee Director Equity
Plan. This amount includes 258,557 restricted shares, 24,640
restricted stock units and 68,918 performance restricted shares
at the target level. In addition, up to 30,625 performance
shares could be issued if performance goals are achieved above
target.
(2)
The weighted-average calculation does not include
restricted shares, restricted stock units or performance
restricted shares as they have no exercise price.
(3)
Represents the number of shares of common stock available to be
awarded as of December 31, 2009. Effective May 2,
2006, all equity compensation awards are granted pursuant to the
shareholder approved 2006 Stock Incentive Plan and the 2006
Non-employee Director Equity Plan.
Item 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Item 14.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
93
Table of Contents
Item 15.
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
(a)
2.
Financial Statement Schedules
(a)
3.
Exhibits
(3a)
Amended and Restated Articles of Incorporation of Brush
Engineered Materials Inc. (filed as Annex B to the Registration
Statement on Form S-4 filed by the Company on February 1, 2000,
Registration No. 333-95917), incorporated herein by reference.
(3b)
Amended and Restated Code of Regulations of Brush Engineered
Materials Inc. (filed as Exhibit 4b to the Current Report on
Form 8-K filed by the Company on May 16, 2000), incorporated
herein by reference.
(3c)
Amended and Restated Code of Regulations of Brush Engineered
Materials Inc. (filed as Appendix A to the Companys
Proxy Statement dated March 26, 2009), incorporated herein
by reference.
(4a)
Rights Agreement, dated as of May 10, 2000, by and between Brush
Engineered Materials Inc. and National City Bank, N.A. as Rights
Agent (filed as Exhibit 4a to the Current Report on Form 8-K
filed by the Company on May 16, 2000), incorporated herein by
reference.
(4b)
First Amendment to Rights Agreement, dated as of December
7, 2004, by and between Brush Engineered Materials Inc. and
LaSalle Bank, N.A. as Rights Agent (filed as Exhibit 4.1 to the
Current Report on Form 8-K filed by the Company on December 13,
2004), incorporated herein by reference.
(4c)
Second Amendment to Rights Agreement, dated as of July
31, 2008, by and between Brush Engineered Materials Inc.
and Wells Fargo Bank, N.A., as Rights Agent (filed as Exhibit
4.1 to the Registration Statement on Form 8-A/A filed on July
31, 2008) incorporated herein by reference.
(4d)
Indenture Modification between Toledo-Lucas County Port
Authority, dated as of May 30, 2003 (filed as Exhibit 4 to the
Companys Quarterly Report on Form 10-Q for the period
ending June 27, 2003), incorporated herein by reference.
(4e)
Pursuant to Regulation S-K, Item 601(b)(4), the Company agrees
to furnish to the Securities and Exchange Commission, upon its
request, a copy of the instruments defining the rights of
holders of long-term debt of the Company that are not being
filed with this report.
(4f)
Credit Agreement dated November 7, 2007 among Brush
Engineered Materials Inc. and other borrowers and JPMorgan
Chase, N.A., acting for itself and as agent for certain
other banking institutions as lenders (filed as Exhibit 99.1 to
the Current Report on Form 8-K filed by the Company on November
7, 2007), incorporated herein by reference.
(4g)
First Amendment to Credit Agreement dated December 20, 2007
among Brush Engineered Materials Inc. and other borrowers and
JPMorgan Chase, N.A., acting for itself and as agent for certain
other banking institutions as lenders (filed as Exhibit 99.1 to
the Current Report on Form 8-K filed by the Company on December
26, 2007), incorporated herein by reference.
94
Table of Contents
(4h)
Second Amendment to Credit Agreement dated June 11, 2008 among
Brush Engineered Materials Inc. and other borrowers and JP
Morgan Chase, N.A., acting for itself and as agent for certain
other banking institutions as lenders (filed as Exhibit 99.1 to
the Current Report on Form 8-K filed by the Company on June 16,
2008), incorporated herein by reference.
(4i)
Second Amended and Restated Precious Metals Agreement dated
December 28, 2007 between Brush Engineered Materials Inc. and
The Bank of Nova Scotia (filed as Exhibit 99.1 to the Current
Report on Form 8-K filed by the Company on December 28, 2007),
incorporated herein by reference.
(4j)
First Amendment to the Second Amended and Restated Precious
Metals Agreement dated March 3, 2008 between Brush Engineered
Materials Inc. and the Bank of Nova Scotia (filed as Exhibit
99.1 to the Current Report on Form 8-K filed by the Company on
March 3, 2008), incorporated herein by reference.
(4k)#
Second Amendment to the Second Amended and Restated Precious
Metals Agreement dated June 25, 2008 between Brush Engineered
Materials Inc. and the Bank of Nova Scotia.
(4l)
Third Amendment to the Second Amended and Restated Precious
Metals Agreement dated October 2, 2009 between Brush
Engineered Materials Inc. and The Bank of Nova Scotia (filed as
Exhibit 4.1 to the Companys Form 8-K on October 8, 2009),
incorporated herein by reference.
(4m)#
Fourth Amendment to the Second Amended and Restated Precious
Metals Agreement dated February 11, 2010 between Brush
Engineered Materials Inc. and The Bank of Nova Scotia.
(10a)
Form of Indemnification Agreement entered into by the Company
and its executive officers (filed as Exhibit 10a to the
Companys Annual Report on Form 10-K for the year ended
December 31, 2008), incorporated herein by reference.
(10b)
Form of Indemnification Agreement entered into by the Company
and its directors. (filed as Exhibit 10b to the Companys
Annual Report on Form 10-K for the year ended December 31,
2008), incorporated herein by reference.
(10c)*
Amended and Restated Form of Severance Agreement for Executive
Officers (filed as Exhibit 10.2 to the Companys Quarterly
Report on Form 10-Q for the period ending June 27, 2008),
incorporated herein by reference.
(10d)*
Amended and Restated Form of Severance Agreement for Key
Employees (filed as Exhibit 10.1 to the Companys Quarterly
Report on Form 10-Q for the period ending June 27, 2008),
incorporated herein by reference.
(10e)*
Form of Executive Insurance Agreement entered into by the
Company and certain employees dated January 2, 2002 (filed as
Exhibit 10g to the Companys Annual Report on Form 10-K for
the year ended December 31, 1994), incorporated herein by
reference.
(10f)*
Form of Trust Agreement between the Company and Key Trust
Company of Ohio, N.A. (formerly Ameritrust Company National
Association) on behalf of the Companys executive officers
(filed as Exhibit 10e to the Companys Annual Report on
Form 10-K for the year ended December 31, 1994), incorporated
herein by reference.
(10g)*
2009 Management Performance Compensation Plan (filed as Exhibit
10.1 to the Current Report on Form 8-K filed by the Company on
February 2, 2009), incorporated herein by reference.
(10h)*#
2010 Management Performance Compensation Plan.
(10i)*
Long-term Incentive Plan for the performance period January 1,
2007 through December 31, 2009 (filed as Exhibit 10.2 to
Amendment No. 1 to the Current Report on Form 8-K filed by the
Company on February 16, 2007), incorporated herein by reference.
(10j)*
Long-term Incentive Plan for the performance period January 1,
2008 through December 31, 2010 (filed as Exhibit 10o to the
Companys Annual Report on Form 10-K for the year ended
December 31, 2007), incorporated herein by reference.
(10k)*
1979 Stock Option Plan, as amended pursuant to approval of
shareholders on April 21, 1982 (filed by Brush Wellman Inc. as
Exhibit 15A to Post-Effective Amendment No. 3 to Registration
Statement No. 2-64080), incorporated herein by reference.
(10l)*
Amendment, effective May 16, 2000, to the 1979 Stock Option Plan
(filed as Exhibit 4b to Post-Effective Amendment No. 5 to
Registration Statement on Form S-8, Registration No.
2-64080), incorporated herein by reference.
Table of Contents
(10m)*
1984 Stock Option Plan as amended by the Board of Directors on
April 18, 1984 and February 24, 1987 (filed by Brush Wellman
Inc. as Exhibit 4.4 to Registration Statement on Form S-8,
Registration No. 33-28605), incorporated herein by reference.
(10n)*
Amendment, effective May 16, 2000, to the 1984 Stock Option Plan
(filed as Exhibit 4b to Post-Effective Amendment No. 1 to
Registration Statement on Form S-8, Registration No.
2-90724), incorporated herein by reference.
(10o)*
1989 Stock Option Plan (filed as Exhibit 4.5 to Registration
Statement on Form S-8, Registration No. 33-28605), incorporated
herein by reference.
(10p)*
Amendment, effective May 16, 2000, to the 1989 Stock Option Plan
(filed as Exhibit 4b to Post-Effective Amendment No. 1 to
Registration Statement on Form S-8, Registration No. 33-28605),
incorporated herein by reference.
(10q)*
1995 Stock Incentive Plan (as Amended March 3, 1998) (filed as
Appendix A to the Companys Proxy Statement dated March 16,
1998), incorporated herein by reference.
(10r)*
Amendment, effective May 16, 2000, to the 1995 Stock Incentive
Plan (filed as Exhibit 4b to Post-Effective Amendment No. 1
to Registration Statement No. 333-63357), incorporated
herein by reference.
(10s)*
Amendment No. 2, effective February 1, 2005, to the 1995 Stock
Incentive Plan (filed as Exhibit 10.4 to the Current Report on
Form 8-K filed by the Company on February 7, 2005) incorporated
herein by reference.
(10t)*
Amended and Restated 2006 Stock Incentive Plan (filed as Exhibit
10.3 to the Companys Quarterly Report on Form 10-Q for the
period ended June 27, 2008), incorporated herein by reference.
(10u)*
Form of Nonqualified Stock Option Agreement, (filed as Exhibit
10t to the Companys Form 10-K Annual Report for the year
ended December 31, 2004) incorporated herein by reference.
(10v)*
Form of Nonqualified Stock Option Agreement (filed as Exhibit
10.7 to the Current Report on Form 8-K filed by the Company on
February 7, 2005) incorporated herein by reference.
(10w)*
Form of 2007 Restricted Stock Agreement (filed as Exhibit 10.3
to Amendment No. 1 to the Current Report on Form 8-K filed by
the Company on February 16, 2007), incorporated herein by
reference.
(10x)*
Form of 2008 Restricted Stock Agreement (filed as Exhibit 10ag
to the Companys Annual Report on Form 10-K the year ended
December 31, 2007), incorporated herein by reference.
(10y)*
Form of 2009 Restricted Stock Agreement (filed as Exhibit 10z to
the Companys Annual Report on
Form 10-K the year ended December 31, 2008), incorporated herein
by reference.
(10z)*#
Form of 2010 Restricted Stock Agreement.
(10aa)*#
Form of 2010 Restricted Stock Units Agreement.
(10ab)*
Form of 2007 Performance Restricted Share and Performance Share
Agreement (filed as Exhibit 10.4 to the Current Report on Form
8-K filed by the Company on February 16, 2007), incorporated
herein by reference.
(10ac)*
Form of 2008 Performance Restricted Share and Performance Share
Agreement (filed as Exhibit 10ak to the Companys Annual
Report on Form 10-K for the year ended December 31,
2007), incorporated herein by reference.
(10ad)*
Form of 2006 Stock Appreciation Rights Agreement (filed as
Exhibit 10.3 to the Current Report on Form 8-K filed by the
Company on May 8, 2006), incorporated herein by reference.
(10ae)*
Form of 2007 Stock Appreciation Rights Agreement (filed as
Exhibit 10.5 to Amendment No. 1 to the Current Report on Form
8-K filed by the Company on February 16, 2007), incorporated
herein by reference.
(10af)*
Form of 2008 Stock Appreciation Rights Agreement (filed as
Exhibit 10an to the Companys Annual Report on Form 10-K
for the year ended December 31, 2007), incorporated herein by
reference.
(10ag)*
Form of 2009 Stock Appreciation Rights Agreement (filed as
Exhibit 10ag to the Companys Annual Report on Form 10-K
for the year ended December 31, 2008), incorporated herein by
reference.
(10ah)*#
Form of 2010 Stock Appreciation Rights Agreement.
Table of Contents
(10ai)*
Supplemental Retirement Plan as amended and restated December 1,
1992 (filed as Exhibit 10n to the Companys Annual
Report on Form 10-K for the year ended December 31, 1992),
incorporated herein by reference.
(10aj)*
Amendment No. 2, adopted January 1, 1996, to Supplemental
Retirement Benefit Plan as amended and restated December 1, 1992
(filed as Exhibit 10o to the Companys Annual Report on
Form 10-K for the year ended December 31, 1995), incorporated
herein by reference.
(10ak)*
Amendment No. 3, adopted May 5, 1998, to Supplemental Retirement
Benefit Plan as amended and restated December 1, 1992 (filed as
Exhibit 10s to the Companys Annual Report on Form 10-K for
the year ended December 31, 1998), incorporated herein by
reference.
(10al)*
Amendment No. 4, adopted December 1, 1998, to Supplemental
Retirement Benefit Plan as amended and restated December 1, 1992
(filed as Exhibit 10t to the Companys Form 10-K Annual
Report for the year ended December 31, 1998), incorporated
herein by reference.
(10am)*
Amendment No. 5, adopted December 31, 1998, to Supplemental
Retirement Benefit Plan as amended and restated December 1,
1992 (filed as Exhibit 10u to the Companys Form 10-K
Annual Report for the year ended December 31, 1998),
incorporated herein by reference.
(10an)*
Amendment No. 6, adopted September 1999, to Supplemental
Retirement Benefit Plan as amended and restated December 1, 1992
(filed as Exhibit 10u to the Companys Form 10-K Annual
Report for the year ended December 31, 2000), incorporated
herein by reference.
(10ao)*
Amendment No. 7, adopted May 2000, to Supplemental Retirement
Benefit Plan as amended and restated December 1, 1992 (filed as
Exhibit 10v to the Companys Annual Report on Form 10-K for
the year ended December 31, 2000), incorporated herein by
reference.
(10ap)*
Amendment No. 8, adopted December 21, 2001, to Supplemental
Retirement Benefit Plan as amended and restated December 1,
1992 (filed as Exhibit 10u to the Companys Form 10-K
Annual Report for the year ended December 31, 2000),
incorporated herein by reference.
(10aq)*
Amendment No. 9, adopted December 22, 2003, to Supplemental
Retirement Benefit Plan as amended and restated December 1,
1992 (filed as Exhibit 10s to the Companys Form 10-K
Annual Report for the year ended December 31, 2000),
incorporated herein by reference.
(10ar)*
Key Employee Share Option Plan (filed as Exhibit 4.1 to the
Registration Statement on Form S-8, Registration No. 333-52141,
filed by Brush Wellman Inc. on May 5, 1998), incorporated herein
by reference.
(10as)*
Amendment No. 1 to the Key Employee Share Option Plan,
(effective May 16, 2005) (filed as Exhibit 4b to Post-Effective
Amendment No. 1 to Registration Statement on Form S-8,
Registration No. 333-52141), incorporated herein by reference.
(10at)*
Amendment No. 2 to the Key Employee Share Option Plan dated June
10, 2005 (filed as Exhibit 10aw to the Companys Annual
Report on Form 10-K for the year ended December 31, 2006),
incorporated herein by reference.
(10au)*
1997 Stock Incentive Plan for Non-employee Directors, (As
Amended and Restated as of May 1, 2001) (filed as Appendix B to
the Companys Proxy Statement dated March 19, 2001),
incorporated herein by reference.
(10av)*
Amendment No. 1 to the 1997 Stock Incentive Plan for
Non-employee Directors, (filed as Exhibit 10gg to the
Companys Annual Report on Form 10-K for the year
ended December 31, 2003), incorporated herein by reference.
(10aw)*
Form of Nonqualified Stock Option Agreement for Non-employee
Directors (filed as Exhibit 10mm to the Companys Annual
Report on Form 10-K for the year ended December 31, 2004),
incorporated herein by reference.
(10ax)*
1992 Deferred Compensation Plan for Non-employee Directors (As
Amended and Restated as of December 2, 1997) (filed as Exhibit
4d to the Registration Statement on Form S-8, Registration No.
333-63355, filed by Brush Wellman Inc.), incorporated herein by
reference.
(10ay)*
2000 Reorganization Amendment, dated May 16, 2000, to the 1997
Deferred Compensation Plan for Non-employee Directors (filed as
Exhibit 4b to Post-Effective Amendment No. 1 to Registration
Statement No. 333-63353), incorporated herein by reference.
Table of Contents
(10az)*
Amendment No. 1 (effective September 11, 2001) to the 1992
Deferred Compensation Plan for Non-employee Directors (filed
as Exhibit 4c to the Companys Post-Effective
Amendment No. 1 to Registration Statement No. 333-74296),
incorporated herein by reference.
(10ba)*
Amendment No. 2 (effective September 13, 2004) to the 1992
Deferred Compensation Plan for Non-employee Directors (filed as
Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q
for the period ended October 1, 2004), incorporated herein by
reference.
(10bb)*
Amendment No. 3 (effective January 1, 2005) to the 1992 Deferred
Compensation Plan for Non- employee Directors (filed as Exhibit
10rr to the Companys Annual Report on Form 10-K for the
year ended December 31, 2004), incorporated herein by reference.
(10bc)*
Amendment No. 4 (effective April 1, 2009) to the 1992
Deferred Compensation Plan for Non-employee Directors (filed
as Exhibit 10bb to the Companys Annual Report on Form 10-K
for the year ended December 31, 2008), incorporated herein by
reference.
(10bd)*
Amended and Restated 2005 Deferred Compensation Plan for
Non-employee Directors (filed as Exhibit 10.2 to the
Companys Quarterly Report on Form 10-Q for the period
ended September 26, 2008), incorporated herein by reference.
(10be)*
Amended and Restated 2006 Non-employee Director Equity
Plan (filed as Exhibit 10.1 to the Companys Quarterly
Report on Form 10-Q for the period ended September 26, 2008),
incorporated herein by reference.
(10bf)*
Amended and Restated Executive Deferred Compensation
Plan II (filed as Exhibit 10.1 to the Companys
Quarterly Report on Form 10-Q for the period ended March 28,
2008), incorporated herein by reference.
(10bg)*
Amendment No. 1 to the Amended and Restated Executive Deferred
Compensation Plan II (filed as Exhibit 10bf to the
Companys Annual Report on Form 10-K for the year ended
December 31, 2008), incorporated herein by reference.
(10bh)*
Amendment No. 2 to the Amended and Restated Executive Deferred
Compensation Plan II (filed as Exhibit 10.2 to the
Companys Quarterly Report on Form 10-Q for the period
ended July 3, 2009), incorporated herein by reference.
(10bi)*
Trust Agreement between the Company and Fidelity
Investments dated September 26, 2006 for certain deferred
compensation plans for Non-employee Directors of the Company
(filed as Exhibit 99.4 to the Current Report on Form 8-K filed
by the Company on September 29, 2006), incorporated herein by
reference.
(10bj)*
Trust Agreement between the Company and Fidelity Management
Trust Company, dated June 25, 2009 relating to the Executive
Deferred Compensation Plan II (filed as Exhibit 10.1 to the
Companys Quarterly Report on Form 10-Q for the period
ended July 3, 2009), incorporated herein by reference.
(10bk)*
Trust Agreement between the Company and Fifth Third Bank dated
September 25, 2006 relating to the Key Employee Share Option
Plan (filed as Exhibit 99.3 to the Current Report on Form 8-K
filed by the Company on September 29, 2006), incorporated herein
by reference.
(10bl)
Lease dated as of October 1, 1996, between Brush Wellman Inc.
and Toledo-Lucas County Port Authority (filed as Exhibit 10v to
the Companys Annual Report on Form 10-K for the year ended
December 31, 1996), incorporated herein by reference.
(10bm)
Amended and Restated Inducement Agreement with the Prudential
Insurance Company of America dated May 30, 2003 (filed as
Exhibit 10 to the Companys Quarterly Report on Form 10-Q
for the period ended June 27, 2003), incorporated herein by
reference.
(10bn)
Amended and Restated Supply Agreement between RWE Nukem, Inc.
and Brush Wellman Inc. for the sale and purchase of beryllium
products (filed as Exhibit 10 to the Companys Quarterly
Report on Form 10-Q for the period ended September 26, 2003),
incorporated herein by reference.
(10bo)
Supply Agreement between the Defense Logistics Agency and Brush
Wellman Inc. for the sale and purchase of beryllium products
(filed as Exhibit 10tt to the Companys Annual Report on
Form 10-K for the year ended December 31, 2004), incorporated
herein by reference.
(10bp)
Asset Purchase Agreement by and between Williams Advanced
Materials Inc. and Techni-Met, Inc. dated December 20, 2007
(filed as Exhibit 10bw to the Companys Annual Report on
Form 10-K for the year ended December 31, 2007), incorporated
herein by reference.
Table of Contents
(10bq)
Consignment Agreement dated October 2, 2009 between Brush
Engineered Materials Inc. and Canadian Imperial Bank of Commerce
(filed as Exhibit 10.1 to the Companys Form 8-K on October
8, 2009), incorporated herein by reference.
(21)
Subsidiaries of the Registrant
(23)
Consent of Ernst & Young LLP
(24)
Power of Attorney
(31
.1)
Certification of Chief Executive Officer required by Rule
13a-14(a) or 15d-14(a)
(31
.2)
Certification of Chief Financial Officer required by Rule
13a-14(a) or 15d-14(a)
(32
.1)
Certification of Chief Executive Officer and Chief Financial
Officer required by 18 U.S.C. Section 1350
*
Denotes a compensatory plan or arrangement.
#
Filed herewith
Table of Contents
Chairman of the Board, President
and Chief Executive Officer
By:
Senior Vice President Finance
and Chief Financial Officer
Chairman of the Board, President, Chief Executive Officer and
Director (Principal Executive Officer)
March 8, 2010
Senior Vice President Finance and Chief Financial Officer
(Principal Financial and Accounting Officer)
March 8, 2010
Director
March 8, 2010
Director
March 8, 2010
Director
March 8, 2010
Director
March 8, 2010
Director
March 8, 2010
Director
March 8, 2010
Director
March 8, 2010
Director
March 8, 2010
Director
March 8, 2010
Director
March 8, 2010
*
The undersigned, by signing his name hereto, does sign and
execute this report on behalf of each of the above-named
officers and directors of Brush Engineered Materials Inc.,
pursuant to Powers of Attorney executed by each such officer and
director filed with the Securities and Exchange Commission.
By:
100
Table of Contents
COL. A
COL. B
COL. C
COL. D
COL. E
ADDITIONS
(1)
(2)
Balance at Beginning
Charged to Costs
Charged to Other
Deduction-
Balance at End
of Period
and Expenses
Accounts-Describe
Describe
of Period
$
1,051,000
$
(173,000
)
$
486,000
(A)
$
(33,000
)(B)
$
1,397,000
$
3,629,000
$
2,221,000
$
235,000
(A)
$
1,857,000
(C)
$
4,228,000
$
1,120,000
$
142,000
$
0
$
211,000
(B)
$
1,051,000
$
3,348,000
$
3,551,000
$
0
$
3,270,000
(C)
$
3,629,000
$
1,822,000
$
(300,000
)
$
0
$
402,000
(B)
$
1,120,000
$
4,455,000
$
2,744,000
$
0
$
3,851,000
(C)
$
3,348,000
101
-2-
-3-
-4-
-2-
-3-
-4-
-5-
Annex I-2
Annex I-3
Annex II-2
Technical Materials, Inc.
5 Wellington Road
Lincoln, Rhode Island 02865
Techni-Met, LLC
300 Lamberton Road
Windsor, Connecticut 06095
Techni-Met, LLC
30 East Newberry Rd.
Bloomfield, Connecticut 06002
Cerac, inc. (a Williams Advanced Materials site)
404-407 N. 13
th
St. and
1316 W. St. Paul St.
Milwaukee, Wisconsin 53233
Williams Advanced Materials Inc.
3500 Thomas Rd, Suite C
Santa Clara, California 95054
Brush Wellman Inc.
27555 College Park Drive
Warren, Michigan 48088
Academy Corporation
5531 Midway Park Place NE
Albuquerque, New Mexico 87109
Academy Corporation
5941 Midway Park Place NE
Albuquerque, New Mexico 87109
OMC Scientific Czech, sro
Prumyslova ul.
440 01 Louny
Czech Republic
Seagate
1 Disc Drive
Springtown Industrial Estate
Londonderry, Northern Ireland
BT48 OBF United Kingdom
Annex III-2
Grade | Financial Component | Personal Team | ||
D | 20% | 0-14% | ||
E | 10% | 0-14% |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Dated:
|
||
|
Grantee |
BRUSH ENGINEERED MATERIALS INC.
|
||||
By | ||||
17
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Dated:
|
|
|
||||
|
Grantee |
BRUSH ENGINEERED MATERIALS INC.
|
||||
By | ||||
[NAME] | ||||
[TITLE] | ||||
19
2
3
4
5
6
7
8
9
10
Date:
|
|
|
|
||||
|
[GRANTEE NAME] |
11
BRUSH ENGINEERED MATERIALS INC.
|
||||
By: | ||||
12
State or Country | ||
Name of Subsidiary | of Incorporation | |
|
||
Barr Associates, Inc.
|
Massachusetts | |
BEM Services, Inc.
|
Ohio | |
Brush Wellman Inc.
|
Ohio | |
Brush Ceramic Products Inc.
|
Arizona | |
Brush International, Inc.
|
Ohio | |
Brush Resources Inc.
|
Utah | |
Brush Wellman GmbH
|
Germany | |
Brush Wellman (Japan) Ltd.
|
Japan | |
Brush Wellman Limited
|
England | |
Brush Wellman (Singapore) Pte Ltd.
|
Singapore | |
CERAC, incorporated
|
Wisconsin | |
OMC Scientific Czech s.r.o.
|
Czech Republic | |
OMC Scientific Holdings Limited
|
Ireland | |
Techni-Met, LLC
|
Connecticut | |
Technical Materials, Inc.
|
Ohio | |
Thin Film Technology, Inc.
|
California | |
Williams Advanced Materials Inc.
|
New York | |
Williams Advanced Materials Far East Pte Ltd.
|
Singapore | |
Williams Advanced Materials Japan Inc.
|
Japan | |
Williams Advanced Materials (Netherlands) B.V.
|
Netherlands | |
Williams Advanced Materials (Suzhou) Ltd.
|
China | |
Williams Advanced Materials Technologies Taiwan Co. Ltd.
|
Taiwan | |
Zentrix Technologies Inc.
|
Arizona |
(1) | Registration Statement Number 333-88994 on Form S-8 dated May 24, 2002; | ||
(2) | Post-Effective Amendment Number 1 to Registration Statement Number 333-74296 on Form S-8 dated November 30, 2001; | ||
(3) | Post-Effective Amendment Number 5 to Registration Statement Number 2-64080 on Form S-8 dated May 17, 2000; | ||
(4) | Post-Effective Amendment Number 1 to Registration Statement Number 333-63355 on Form S-8 dated May 17, 2000; | ||
(5) | Post-Effective Amendment Number 1 to Registration Statement Number 33-28605 on Form S-8 dated May 17, 2000; | ||
(6) | Post-Effective Amendment Number 1 to Registration Statement Number 333-63353 on Form S-8 dated May 17, 2000; | ||
(7) | Post-Effective Amendment Number 1 to Registration Statement Number 333-63357 on Form S-8 dated May 17, 2000; | ||
(8) | Post-Effective Amendment Number 1 to Registration Statement Number 333-52141 on Form S-8 dated May 17, 2000; | ||
(9) | Post-Effective Amendment Number 1 to Registration Statement Number 2-90724 on Form S-8 dated May 17, 2000; | ||
(10) | Registration Statement Number 333-63353 on Form S-8 dated September 14, 1998; | ||
(11) | Registration Statement Number 333-63355 on Form S-8 dated September 14, 1998; | ||
(12) | Registration Statement Number 333-63357 on Form S-8 dated September 14, 1998; | ||
(13) | Registration Statement Number 333-52141 on Form S-8 dated May 5, 1998; | ||
(14) | Registration Statement Number 33-28605 on Form S-8 dated May 5, 1989; | ||
(15) | Registration Statement Number 2-90724 on Form S-8 dated April 27, 1984; | ||
(16) | Post-Effective Amendment Number 3 to Registration Statement Number 2-64080 on Form S-8 dated April 22, 1983; | ||
(17) | Registration Statement Number 333-114147 on Form S-3 dated July 1, 2004; | ||
(18) | Registration Statement Number 333-127130 on Form S-8 dated August 3, 2005; | ||
(19) | Registration Statement Number 333-133428 on Form S-8 dated April 20, 2006; | ||
(20) | Registration Statement Number 333-133429 on Form S-8 dated April 20, 2006; and | ||
(21) | Registration Statement Number 333-145149 on Form S-8 dated August 6, 2007 |
/s/ Richard J. Hipple
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/s/ William P. Madar | |||
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Richard J. Hipple, Chairman, President,
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William P. Madar, Director | |||
Chief Executive Officer and Director
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(Principal Executive Officer)
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/s/ John D. Grampa
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/s/ William G. Pryor | |||
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John D. Grampa, Senior Vice President
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William G. Pryor, Director | |||
Finance and Chief Financial Officer
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(Principal Financial Officer)
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/s/ Albert C. Bersticker
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/s/ N. Mohan Reddy | |||
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Albert C. Bersticker, Director
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N. Mohan Reddy, Director | |||
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/s/ Joseph P. Keithley
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/s/ William R. Robertson | |||
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Joseph P. Keithley, Director
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William R. Robertson, Director | |||
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/s/ Vinod M. Khilnani
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/s/ John Sherwin, Jr. | |||
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Vinod M. Khilnani, Director
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John Sherwin, Jr, Director | |||
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/s/ William B. Lawrence
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/s/ Craig S. Shular | |||
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William B. Lawrence, Director
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Craig S. Shular, Director |
I, Richard J. Hipple, certify that: |
1) | I have reviewed this annual report on Form 10-K of Brush Engineered Materials Inc. (the registrant); | |
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 registrants other certifying officer 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5) | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
/s/ Richard J. Hipple | ||||
Dated: March 8, 2010 | Richard J. Hipple | |||
Chairman, President and Chief Executive Officer |
I, John D. Grampa, certify that: |
1) | I have reviewed this annual report on Form 10-K of Brush Engineered Materials Inc. (the registrant); | |
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 registrants other certifying officer 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5) | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
/s/ John D. Grampa | ||||
Dated: March 8, 2010 | John D. Grampa | |||
Senior Vice President Finance and
Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)), and | |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. |
/s/ Richard J. Hipple | ||||
Richard J. Hipple | ||||
Chairman of the Board, President and
Chief Executive Officer |
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/s/ John D. Grampa | ||||
John D. Grampa | ||||
Senior Vice President Finance and
Chief Financial Officer |
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