(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, 2008
|
||
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 Hts., Ohio | 44124 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock, no par value
|
New York Stock Exchange | |
Rights to Purchase Series A
|
New York Stock Exchange | |
Junior Participating Preferred Stock, no par value
|
Large accelerated
filer
þ
|
Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
The global and domestic economies, including the uncertainties
related to the impact of the current 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, data storage, aerospace
and defense, automotive electronics, industrial components,
appliance and medical;
Changes in product mix and the financial condition of customers;
Actual sales, operating rates and margins for the year 2009;
Our success in developing and introducing new products and new
product
ramp-up
rates, especially in the media market;
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 recent acquisition of the assets of Techni-Met, Inc.;
Our success in implementing our strategic plans and the timely
and successful completion of any capital projects;
The availability of adequate lines of credit and the associated
interest rates;
Other financial factors, including cost and availability of raw
materials (both base and precious metals), tax rates, exchange
rates, interest 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 and deferred 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
Table of Contents
2
Table of Contents
3
Table of Contents
4
Table of Contents
5
Table of Contents
56
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.
61
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.
59
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
Table of Contents
7
Table of Contents
8
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9
Table of Contents
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;
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.
10
Table of Contents
11
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12
Table of Contents
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;
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.
13
Table of Contents
14
Table of Contents
Item 1B.
UNRESOLVED
STAFF COMMENTS
15
Table of Contents
Item 2.
PROPERTIES
Approximate
Number of
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
Owned
35,000
Leased
34,700
Leased
53,800
Leased
28,500
Owned
35,500
Leased
2,500
Leased
24,800
Leased
19,700
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
Table of Contents
Item 3.
LEGAL
PROCEEDINGS
one case (involving six plaintiffs) was filed;
as previously reported, one case (involving one plaintiff) had
been voluntarily dismissed by the plaintiff during the fourth
quarter of 2007, but the Company was not made aware of this
until 2008.
17
Table of Contents
18
Table of Contents
Item 4.
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
19
Table of Contents
Stock price range
High
Low
$
38.12
$
23.77
34.63
24.60
31.27
19.07
19.41
6.98
$
50.45
$
30.58
61.82
39.70
53.00
34.17
58.74
33.57
(1)
Represents common shares surrendered to us to satisfy tax
withholding requirements on performance restricted shares
granted to employees under our 2006 Stock Incentive Plan (2006
Plan).
(2)
Represents common shares surrendered to us by employees holding
performance restricted shares granted under the 2006 Plan to
correct overpayment of incentive compensation for 2007.
(3)
Represents common shares purchased for directors who elected to
defer their annual director fees and are held in a rabbi trust
established under our 2006 Non-employee Directors Equity
Plan.
20
Table of Contents
2003
2004
2005
2006
2007
2008
$
100
$
121
$
104
$
221
$
242
$
83
$
100
$
123
$
132
$
152
$
152
$
104
$
100
$
118
$
124
$
146
$
144
$
95
21
Table of Contents
Item 6.
SELECTED
FINANCIAL DATA
(Dollars in thousands
2008
2007
2006
2005
2004
$
909,711
$
955,709
$
763,054
$
541,267
$
496,276
757,567
759,037
600,882
431,024
385,202
152,144
196,672
162,172
110,243
111,074
28,071
84,465
43,840
19,509
25,034
1,995
1,760
4,135
6,372
8,377
26,076
82,705
39,705
13,137
16,657
7,719
29,420
(9,898
)
(4,688
)
1,141
18,357
53,285
49,603
17,825
15,516
0.90
2.62
2.52
0.93
0.87
0.89
2.59
2.45
0.92
0.85
34,204
24,296
25,141
22,790
23,826
35,515
26,429
15,522
13,775
9,093
421
7,121
57
189,899
216,253
158,061
115,531
108,799
2.8 to 1
2.9 to 1
2.4 to 1
2.4 to 1
2.0 to 1
635,266
583,961
557,861
540,420
540,937
207,254
186,175
175,929
177,062
177,619
581,897
550,551
498,606
402,702
414,181
116,524
69,140
70,731
73,492
60,527
10,605
10,005
20,282
32,916
41,549
347,097
353,714
291,000
211,478
208,138
20,335,000
20,320,000
19,665,000
19,219,000
17,865,000
20,543,000
20,612,000
20,234,000
19,371,000
18,164,000
22
Table of Contents
Item 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(Millions, except for share data)
2008
2007
2006
$
909.7
$
955.7
$
763.1
28.1
84.5
43.8
26.1
82.7
39.7
18.4
53.3
49.6
0.89
2.59
2.45
23
Table of Contents
In 2008, the market price of ruthenium declined significantly,
from $415 per troy ounce at the beginning of the year to $100
per troy ounce at the end of the year and fell below the
carrying cost of our inventory. Accounting regulations require
inventory to be carried at the lower of its cost or market
value. As a result, we recorded lower of cost or market charges
to write down the carrying value of our inventory
$15.2 million, reducing margins and profits in 2008.
After a rapid increase in the market price of ruthenium late in
2006 and early 2007, we sold products at prices significantly
higher than their original material cost generating an
additional $22.9 million of margin, primarily in the first
half of 2007. We subsequently changed our pricing practices so
that our purchase price for ruthenium forms the basis for the
price charged to our customers. The price of ruthenium then
declined during 2007 and dropped below our purchase price and
the carrying value of the inventory. This resulted in lower of
cost or market charges totaling $4.5 million during 2007.
Margins were also reduced $5.7 million in 2007 as a result
of quality returns from a key customer and related rework and
scrap costs.
24
Table of Contents
25
Table of Contents
Income/ (Expense)
(Millions)
2008
2007
2006
$
(3.7
)
$
(0.6
)
$
1.4
(3.5
)
(1.2
)
(1.0
)
(4.5
)
(2.0
)
(2.1
)
1.2
(0.3
)
(1.3
)
(0.2
)
(0.1
)
0.2
(0.3
)
(3.1
)
(1.3
)
(0.4
)
$
(13.8
)
$
(5.8
)
$
(3.2
)
26
Table of Contents
(Millions)
2008
2007
2006
$
7.5
$
28.5
$
11.9
0.2
0.9
(21.8
)
$
7.7
$
29.4
$
(9.9
)
27
Table of Contents
(Millions)
2008
2007
2006
$
466.4
$
519.9
$
343.4
10.3
59.4
30.5
28
Table of Contents
29
Table of Contents
(Millions)
2008
2007
2006
$
299.9
$
290.0
$
275.6
5.8
7.6
7.9
30
Table of Contents
(Millions)
2008
2007
2006
$
63.6
$
60.5
$
57.6
8.4
7.8
7.4
31
Table of Contents
(Millions)
2008
2007
2006
$
$
0.8
$
2.8
2.3
5.9
63.6
57.4
48.9
$
63.6
$
60.5
$
57.6
(Millions)
2008
2007
2006
$
65.9
$
70.9
$
68.7
5.9
4.7
2.7
32
Table of Contents
33
Table of Contents
(Millions)
2008
2007
2006
$
217.1
$
241.4
$
178.3
102.1
171.6
85.1
$
319.2
$
413.0
$
263.4
35%
43%
35%
December 31,
2008
2007
2006
9
9
13
36
31
54
1(6
)
0(0)
2(3)
0(0
)
1(1)
1(2)
$
$
100
$
20
1(1
)
3(22)
1(1)
34
Table of Contents
December 31,
(Millions)
2008
2007
$
(2.0
)
$
(1.3
)
1.7
1.0
35
Table of Contents
36
Table of Contents
37
Table of Contents
38
Table of Contents
39
Table of Contents
There-
(Millions)
2009
2010
2011
2012
2013
after
Total
$
0.6
$
$
$
2.3
$
$
8.3
$
11.2
7.1
6.6
6.0
3.2
2.9
26.5
52.3
18.3
18.3
1.4
1.4
$
27.4
$
6.6
$
6.0
$
5.5
$
2.9
$
34.8
$
83.2
December 31,
(Millions)
2008
2007
2006
$
41.8
$
35.5
$
49.0
18.5
31.7
15.6
$
23.3
$
3.8
$
33.4
218.2
217.0
84.8
40
Table of Contents
41
Table of Contents
2008
2007
2006
2005
2004
6,454
6,531
6,550
6,601
6,640
0.266
%
0.266
%
0.267
%
0.268
%
0.268
%
3,519
3,519
3,519
3,519
3,519
0.232
%
0.232
%
0.232
%
0.232
%
0.232
%
64
52
48
38
39
0.321
%
0.321
%
0.352
%
0.316
%
0.248
%
42
Table of Contents
43
Table of Contents
44
Table of Contents
Item 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
45
Table of Contents
46
Table of Contents
47
Item 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
Page
49
50
52
53
54
55
56
48
Table of Contents
49
Table of Contents
50
Table of Contents
51
Table of Contents
Years ended December 31, 2008, 2007 and 2006
Consolidated Statements of Income
(Dollars in thousands except share and per share amounts)
2008
2007
2006
$
909,711
$
955,709
$
763,054
757,567
759,037
600,882
152,144
196,672
162,172
104,792
110,127
111,002
6,522
4,992
4,166
(1,059
)
(8,699
)
13,818
5,787
3,164
28,071
84,465
43,840
1,995
1,760
4,135
26,076
82,705
39,705
1,563
14,120
2,761
6,156
15,300
(12,659
)
7,719
29,420
(9,898
)
$
18,357
$
53,285
$
49,603
$
0.90
$
2.62
$
2.52
20,335,000
20,320,000
19,665,000
$
0.89
$
2.59
$
2.45
20,543,000
20,612,000
20,234,000
52
Table of Contents
Years ended December 31, 2008, 2007 and 2006
Consolidated Statements of Cash Flows
(Dollars in thousands)
2008
2007
2006
$
18,357
$
53,285
$
49,603
33,826
23,880
24,602
378
416
539
2,552
3,932
1,717
6,156
15,300
(12,659
)
171
121
(214
)
2,297
14,546
(8,471
)
(10,853
)
9,852
(11,263
)
12,897
(13,269
)
(41,634
)
4,713
(3,913
)
(5,236
)
(11,890
)
(4,926
)
20,718
(2,456
)
2,255
60
(14,074
)
(2,306
)
4,493
1,960
(775
)
2,307
(176
)
(3,322
)
3,056
76,812
50,944
38,796
(35,515
)
(26,429
)
(15,522
)
(421
)
(7,121
)
8,017
3,472
9
(86,052
)
(25,694
)
22,915
2,150
323
56
66
47
46
(90,990
)
(27,558
)
(41,105
)
4,870
(3,607
)
3,924
46,200
16,082
26,000
(45,600
)
(26,392
)
(38,634
)
(352
)
(825
)
(4,999
)
243
4,961
13,612
455
2,751
2,620
817
(7,030
)
7,522
177
(270
)
(211
)
(13,184
)
16,086
5,002
31,730
15,644
10,642
$
18,546
$
31,730
$
15,644
53
Table of Contents
December 31, 2008 and 2007
Consolidated Balance Sheets
(Dollars in thousands)
2008
2007
$
18,546
$
31,730
89,845
97,424
1,411
11,263
156,718
165,189
23,660
17,723
4,199
6,107
294,379
329,436
34,444
11,804
98
98
9,944
1,139
635,266
583,961
(428,012
)
(397,786
)
207,254
186,175
35,778
21,899
$
581,897
$
550,551
$
30,622
$
24,903
600
600
28,014
27,066
22,568
34,170
1,132
2,209
21,431
19,557
113
2,569
2,109
104,480
113,183
19,356
11,629
97,168
57,511
3,028
4,327
163
182
10,605
10,005
170,597
167,347
334,329
315,972
(110,865
)
(105,578
)
(47,801
)
(24,576
)
837
549
347,097
353,714
$
581,897
$
550,551
54
Table of Contents
Years ended December 31, 2008, 2007 and 2006
Consolidated Statements of Shareholders
Equity
Common
Other
Other
Common
Retained
Stock In
Comprehensive
Equity
Stock
Earnings
Treasury
Income (Loss)
Transactions
Total
(Dollars in thousands)
$
137,665
$
214,497
$
(105,795
)
$
(35,037
)
$
148
$
211,478
49,603
49,603
605
605
623
623
7,840
7,840
58,671
2,649
2,649
13,612
13,612
2,620
2,620
1,717
1,717
(62
)
30
285
253
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
55
Table of Contents
Note A
Significant
Accounting Policies
56
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
57
Table of Contents
58
Table of Contents
Note B
Acquisitions
Asset
(Dollars in thousands)
(Liability)
$
22,915
8,739
26,200
15,000
13,879
(222
)
$
86,511
59
Table of Contents
(Dollars in thousands, except
Pro Forma Results (Unaudited)
for per share amounts)
2008
2007
$
913,518
$
970,175
27,539
86,510
19,261
55,653
$
0.94
$
2.70
Note C
Inventories
December 31,
(Dollars in thousands)
2008
2007
$
41,468
$
30,338
139,552
156,789
50,579
54,530
231,599
241,657
74,881
76,468
$
156,718
$
165,189
60
Table of Contents
Note D
Property,
Plant and Equipment
December 31,
2008
2007
(Dollars in thousands)
$
8,729
$
7,959
111,239
107,970
452,702
416,663
24,570
21,826
25,455
17,393
(420,790
)
(395,736
)
201,905
176,075
5,029
5,029
7,542
7,121
(7,222
)
(2,050
)
5,349
10,100
$
207,254
$
186,175
Note E
Intangible
Assets
Weighted-average
Amount
Amortization Period
(Dollars in thousands)
$
18,300
10.0 Years
7,400
10.0 Years
500
2.0 Years
352
4.8 Years
$
26,552
9.8 Years
$
13,879
Not Applicable
61
Table of Contents
2008
2007
(Dollars in thousands)
$
4,311
$
3,959
(2,740
)
(2,362
)
1,571
1,597
24,650
6,350
(4,013
)
(1,658
)
20,637
4,692
9,420
2,020
(1,054
)
(254
)
8,366
1,766
690
690
(690
)
(690
)
283
283
(283
)
(189
)
94
220
220
(118
)
(74
)
102
146
500
(229
)
271
$
40,074
$
13,522
(9,127
)
(5,227
)
$
30,947
$
8,295
$
3,900
$
1,592
62
Table of Contents
(Dollars in thousands)
2008
2007
$
21,899
$
21,843
13,879
116
(60
)
$
35,778
$
21,899
Note F
Debt
December 31,
(Dollars in thousands)
2008
2007
$
2,300
$
1,100
600
1,200
8,305
8,305
11,205
10,605
(600
)
(600
)
$
10,605
$
10,005
$
600
2,300
8,305
$
11,205
63
Table of Contents
December 31, 2008
December 31, 2007
(Dollars in thousands)
Total
Outstanding
Available
Total
Outstanding
Available
$
211,466
$
$
211,466
$
211,584
$
$
211,584
16,794
10,052
6,742
10,470
5,076
5,394
20,570
20,570
19,827
19,827
$
248,830
$
30,622
$
218,208
$
241,881
$
24,903
$
216,978
Note G
Leasing
Arrangements
64
Table of Contents
Note H
Derivative
Financial Instruments and Fair Value Information
Level 3
Unobservable inputs developed using estimates and assumptions
developed by the Company, which reflect those that a market
participant would use.
65
Table of Contents
December 31, 2008
December 31, 2007
Notional
Carrying
Notional
Carrying
(Dollars in thousands)
Amount
Amount
Amount
Amount
$
18,997
$
(2,390
)
$
15,044
$
(151
)
22,513
537
23,185
(1,164
)
3,194
485
4,382
97
$
44,704
$
(1,368
)
$
42,611
$
(1,218
)
$
2,689
$
212
$
7,210
$
(302
)
$
$
$
23,201
$
(444
)
$
(41,827
)
$
(35,508
)
December 31,
(Dollars in thousands)
2008
2007
$
1,234
$
97
12
(2,354
)
(2,073
)
(36
)
$
(1,156
)
$
(1,964
)
(Dollars in thousands)
2008
2007
$
(1,304
)
$
4,926
(2,912
)
(2,145
)
3,060
(4,085
)
$
(1,156
)
$
(1,304
)
66
Table of Contents
67
Table of Contents
Note I
Pensions
and Other Post-retirement Benefits
Pension Benefits
Other Benefits
(Dollars in thousands)
2008
2007
2008
2007
$
134,741
$
134,128
$
34,239
$
31,437
5,297
5,001
303
301
8,490
7,977
2,127
1,909
889
4,241
(6,620
)
(1,325
)
3,100
(5,682
)
(6,461
)
(112
)
(109
)
(2,955
)
(3,119
)
(360
)
(649
)
397
611
(1,091
)
585
145,524
134,741
32,786
34,239
111,872
106,630
(27,372
)
8,199
4,451
4,111
(5,682
)
(6,461
)
(360
)
(649
)
(1,099
)
42
81,810
111,872
$
(63,714
)
$
(22,869
)
$
(32,786
)
$
(34,239
)
$
$
$
(2,856
)
$
(3,033
)
(63,714
)
(22,869
)
(29,930
)
(31,206
)
$
(63,714
)
$
(22,869
)
$
(32,786
)
$
(34,239
)
$
67,518
$
28,159
$
(449
)
$
876
(6,139
)
(6,822
)
93
57
$
61,379
$
21,337
$
(356
)
$
933
$
2,024
$
1,182
$
$
(644
)
(644
)
(36
)
(36
)
$
1,380
$
538
$
(36
)
$
(36
)
$
142,896
$
132,050
N/A
N/A
142,602
130,435
N/A
N/A
78,806
107,138
N/A
N/A
139,974
127,744
N/A
N/A
78,806
107,138
N/A
N/A
68
Table of Contents
Pension Benefits
Other Benefits
(Dollars in thousands)
2008
2007
2006
2008
2007
2006
$
5,297
$
5,001
$
5,442
$
303
$
301
$
295
8,490
7,977
7,445
2,127
1,909
1,903
(9,061
)
(9,002
)
(8,558
)
(644
)
(660
)
(709
)
(36
)
(36
)
(36
)
1,186
1,823
2,199
(470
)
$
5,268
$
5,139
$
5,349
$
2,394
$
2,174
$
2,162
Pension Benefits
Other Benefits
(Dollars in thousands)
2008
2007
2006
2008
2007
2006
$
21,337
$
27,437
$
36,830
$
933
$
(2,203
)
N/A
644
660
36
36
N/A
(1,225
)
(1,823
)
N/A
39
889
N/A
40,677
(5,817
)
(1,325
)
3,100
N/A
Statement No. 158
(11,875
)
N/A
Statement No. 158
2,432
(2,203
)
(93
)
(9
)
50
$
61,379
$
21,337
$
27,437
$
(356
)
$
933
$
(2,203
)
Pension Benefits
Other Benefits
(Dollars in thousands)
2008
2007
2006
2008
2007
2006
N/A
N/A
$
(11,875
)
N/A
N/A
N/A
N/A
N/A
$
(6,526
)
N/A
N/A
$
2,162
69
Table of Contents
Pension Benefits
Other Benefits
2008
2007
2006
2008
2007
2006
6.16
%
6.44
%
N/A
6.15
%
6.50
%
N/A
2.03
%
4.43
%
N/A
2.00
%
4.50
%
N/A
6.41
%
5.95
%
5.61
%
6.50
%
6.13
%
5.75
%
8.21
%
8.46
%
8.47
%
N/A
N/A
N/A
4.34
%
4.35
%
4.35
%
4.50
%
4.50
%
4.50
%
2008
2007
8.00
%
9.00
%
5.00
%
5.00
%
2012
2012
1-Percentage-
1-Percentage-
Point Increase
Point Decrease
(Dollars in thousands)
2008
2007
2008
2007
$
53
$
40
$
(48
)
$
(36
)
796
879
(718
)
(795
)
70
Table of Contents
Percentage of Pension
Plan Assets
Target
At Fiscal Year End
Allocation
2008
2007
25-55
%
33
%
56
%
20-40
%
39
%
26
%
5-15
%
6
%
8
%
3-43
%
22
%
10
%
100
%
100
%
100
%
Other Benefits
Net of
Medicare
Gross Benefit
Part D
Pension Benefits
Payment
Subsidy
(Dollars in thousands)
$
5,772
$
3,248
$
2,856
6,169
3,329
2,914
6,533
3,367
2,934
7,261
3,368
2,912
7,848
3,358
2,889
48,110
15,888
13,253
71
Table of Contents
Note J
Contingencies
and Commitments
72
Table of Contents
73
Table of Contents
Note K
Common
Stock and Stock-based Compensation
25,557
841
26,398
296
14
26,708
12
8
26,728
74
Table of Contents
Weighted-
average
Weighted-
Exercise
Aggregate
average
Number of
Price Per
Intrinsic
Remaining
(Shares in thousands)
Options
Share
Value
Term
367
$
15.95
(12
)
20.19
355
15.81
$
271
4.30 years
355
15.81
$
271
4.30 years
355
15.81
$
271
4.30 years
Number
Weighted-
Weighted-
Outstanding
average
average
and Exercisable
Remaining
Exercise
(in Thousands)
Life (in Years)
Price
36
4.25
$
6.09
75
4.05
12.81
193
4.98
17.10
51
2.13
22.22
355
4.30
$
15.81
75
Table of Contents
Weighted-average
Grant Date Fair
(Shares in thousands)
Number of Shares
Value
83
$
39.82
63
28.67
(8
)
46.01
(3
)
37.15
135
$
34.35
Weighted-average
Grant Date Fair
(Shares in thousands)
Number of Shares
Value
77
$
18.98
12
24.18
89
$
19.68
76
Table of Contents
Weighted-
average
Weighted-
Exercise
Aggregate
average
Number of
Price Per
Intrinsic
Remaining
SAR
Share
Value
Term
(Shares in thousands)
157
$
29.35
32
27.78
(9
)
28.92
180
29.09
7.81 years
180
29.09
7.81 years
Number
Weighted-average
Weighted-average
Outstanding
Remaining Life
Exercise
(in thousands)
(in Years)
Price
111
7.34
$
24.03
30
9.13
27.78
39
8.13
44.72
180
7.81
$
29.09
2008
2007
2006
2.14
%
5.03
%
4.69
%
0
%
0
%
0
%
49.2
%
45.7
%
44.2
%
6.5
6.0
6.0
77
Table of Contents
Note L
Other
Comprehensive Income
December 31,
2008
2007
2006
(Dollars in thousands)
$
2,346
$
41
$
(1,583
)
652
555
4,604
(50,799
)
(25,172
)
(26,341
)
$
(47,801
)
$
(24,576
)
$
(23,320
)
78
Table of Contents
Note M
Segment
Reporting and Geographic Information
Advanced
Beryllium
Material
Specialty
and
Engineered
Technologies
Engineered
Beryllium
Material
All
(Dollars in thousands)
and Services
Alloys
Composites
Systems
Subtotal
Other
Total
$
466,447
$
299,867
$
63,604
$
65,913
$
895,831
$
13,880
$
909,711
7,180
776
452
1,405
9,813
9,813
10,336
5,846
8,372
5,931
30,485
(2,414
)
28,071
9,872
18,246
740
2,273
31,131
2,695
33,826
7,759
9,145
13,165
1,145
31,214
4,722
35,936
208,388
239,810
54,224
23,087
525,509
56,388
581,897
$
519,940
$
289,971
$
60,489
$
70,886
$
941,286
$
14,423
$
955,709
5,152
3,546
1,062
2,127
11,887
11,887
59,366
7,585
7,837
4,726
79,514
4,951
84,465
5,340
12,510
900
2,340
21,090
2,790
23,880
10,337
12,485
5,089
2,963
30,874
2,676
33,550
188,936
229,582
38,148
26,843
483,509
67,042
550,551
$
343,448
$
275,641
$
57,627
$
68,734
$
745,450
$
17,604
$
763,054
4,332
5,572
732
3,000
13,636
27
13,663
30,536
7,948
7,448
2,742
48,674
(4,834
)
43,840
5,770
12,540
1,040
2,436
21,786
2,816
24,602
6,283
4,530
1,920
1,756
14,489
1,033
15,522
149,451
234,366
33,042
26,232
443,091
55,515
498,606
79
Table of Contents
(Dollars in thousands)
2008
2007
2006
$
590,501
$
542,753
$
499,681
319,210
412,956
263,373
$
909,711
$
955,709
$
763,054
$
260,353
$
203,473
$
196,328
13,626
12,896
10,506
$
273,979
$
216,369
$
206,834
Note N
Litigation
Settlement Gain
80
Table of Contents
Note O
Interest
(Dollars in thousands)
2008
2007
2006
$
2,365
$
2,138
$
4,271
370
378
136
$
1,995
$
1,760
$
4,135
$
2,193
$
2,104
$
3,874
$
595
$
567
$
525
Note P
Income
Taxes
(Dollars in thousands)
2008
2007
2006
$
24,646
$
79,545
$
34,001
1,430
3,160
5,704
$
26,076
$
82,705
$
39,705
$
659
$
13,152
$
1,159
904
968
1,602
1,563
14,120
2,761
$
6,267
$
13,215
$
9,259
(268
)
1,160
(160
)
157
925
(21,758
)
6,156
15,300
(12,659
)
$
7,719
$
29,420
$
(9,898
)
81
Table of Contents
2008
2007
2006
35.0
%
35.0
%
34.0
%
2.1
0.9
2.0
(5.4
)
(1.4
)
(2.7
)
(1.5
)
(1.2
)
0.7
1.5
1.0
(5.0
)
(3.5
)
0.6
1.0
(1.3
)
(54.8
)
3.1
(0.2
)
0.4
29.6
%
35.6
%
(24.9
)%
December 31,
(Dollars in thousands)
2008
2007
$
12,964
$
13,633
7,404
9,677
6,927
8,375
2,181
1,817
15,900
7,721
466
622
2,934
2,279
80
48,856
44,124
(1,398
)
(1,241
)
47,458
42,883
(26,028
)
(28,430
)
(4,238
)
(4,135
)
(1,602
)
(7
)
(440
)
(676
)
(1,170
)
(2,475
)
(96
)
(33,478
)
(35,819
)
$
13,980
$
7,064
82
Table of Contents
(Dollars in thousands)
2008
2007
$
5,368
$
5,405
359
7
(44
)
(2,251
)
$
3,476
$
5,368
83
Table of Contents
Note Q
Earnings
Per Share
2008
2007
2006
$
18,357
$
53,285
$
49,603
20,335,000
20,320,000
19,665,000
85,000
240,000
542,000
29,000
28,000
27,000
94,000
24,000
208,000
292,000
569,000
20,543,000
20,612,000
20,234,000
$
0.90
$
2.62
$
2.52
$
0.89
$
2.59
$
2.45
Note R
Related
Party Transactions
84
Table of Contents
2008
First
Second
Third
Fourth
(Dollars in thousands except per share data)
Quarter
Quarter
Quarter
Quarter
Total
$
226,347
$
246,584
$
240,494
$
196,286
$
909,711
37,018
44,848
45,173
25,105
152,144
16.4%
18.2%
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
2007
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Total
$
250,314
$
233,563
$
230,928
$
240,904
$
955,709
69,384
41,781
46,273
39,234
196,672
27.7%
17.9%
20.0%
16.3%
20.6%
$
23,114
$
7,939
$
9,908
$
12,324
$
53,285
1.15
0.39
0.49
0.60
2.62
1.12
0.38
0.48
0.60
2.59
50.45
61.82
53.00
58.74
30.58
39.70
34.17
33.57
85
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
86
Table of Contents
Item 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 11.
EXECUTIVE
COMPENSATION
87
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 in
(a)
and Rights
Column(a))
810,032
(1)
$
20.28
(2)
1,189,806
(3)
810,032
$
20.28
1,189,806
(1)
Consists of options awarded under the 1979, 1984, 1989, 1995 and
2006 Stock Incentive Plans, the 1990 and 1997 Non-employee
Director Stock Incentive Plans and the 2006 Non-employee
Director Equity Plan. This amount includes 122,692 restricted
shares, 12,582 restricted stock units and 139,264 performance
restricted shares at the target level. In addition, up to 69,616
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, 2008. 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
88
Table of Contents
90
91
92
93
Item 15.
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
(a)
1. Financial
Statements and Supplemental Information
(a)
2. Financial
Statement Schedules
(a)
3. Exhibits
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
89
Table of Contents
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.
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.
Form of Indemnification Agreement entered into by the Company
and its executive officers.
Form of Indemnification Agreement entered into by the Company
and its directors.
Amended and Restated Form of Severance Agreement for Executive
Officers (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.
Amended and Restated Form of Severance Agreement for Key
Employees (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.
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.
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.
2008 Management Performance Compensation Plan (filed as Exhibit
10.1 to the Current Report on Form 8-K filed by the Company on
February 12, 2008), incorporated herein by reference.
2009 Management Performance Compensation Plan.
Long-term Incentive Plan for the performance period January 1,
2006 through December 31, 2008 (filed as Exhibit 10m to the
Companys Annual Report on Form 10-K for the year ended
December 31, 2007), incorporated herein by reference.
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.
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.
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.
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.
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.
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.
1989 Stock Option Plan (filed as Exhibit 4.5 to Registration
Statement on Form S-8, Registration No. 33-28605), incorporated
herein by reference.
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.
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.
Table of Contents
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.
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.
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.
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.
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.
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.
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.
Form of 2009 Restricted Stock Agreement.
Form of 2006 Performance Restricted Share and Performance Share
Agreement (filed as Exhibit 10.2 to Amendment No. 1 to the
Current Report on Form 8-K filed by the Company on May
8, 2006), incorporated herein by reference.
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.
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.
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.
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.
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.
Form of 2009 Stock Appreciation Rights Agreement.
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.
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.
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.
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.
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.
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.
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.
Table of Contents
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Amendment No. 4 (effective April 1, 2009) to the 1992 Deferred
Compensation Plan for Non-employee Directors.
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.
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.
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.
Amendment No. 1 to the Amended and Restated Executive Deferred
Compensation Plan II.
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.
Table of Contents
Trust Agreement between the Company and Fifth Third, dated March
10, 2005 relating to the 2005 Executive Deferred Compensation
Plan II (filed as Exhibit 10ww to the Companys Annual
Report on Form 10-K for the year ended December 31, 2004),
incorporated herein by reference.
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.
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.
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.
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.
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.
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.
Subsidiaries of the Registrant
Consent of Ernst & Young LLP
Power of Attorney
Certification of Chief Executive Officer required by Rule
13a-14(a) or 15d-14(a)
Certification of Chief Financial Officer required by Rule
13a-14(a) or 15d-14(a)
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
Sr. Vice President Finance
and Chief Financial Officer
Chairman of the Board, President,
Chief Executive Officer and
Director
(Principal Executive Officer)
February 27, 2009
Sr. Vice President Finance
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
Director
February 27, 2009
By:
Attorney-in-Fact
February 27, 2009
94
Table of Contents
COL. A | COL. B | COL. C | COL. D | COL. E | ||||||||||||||||
ADDITIONS | ||||||||||||||||||||
(1)
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(2)
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Balance at Beginning
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Charged to Costs
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Charged to Other
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Deduction-
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Balance at End
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||||||||||||||||
DESCRIPTION
|
of Period | and Expenses | Accounts-Describe | Describe | of Period | |||||||||||||||
Year ended December 31, 2008
|
||||||||||||||||||||
Deducted from asset accounts:
|
||||||||||||||||||||
Allowance for doubtful accounts receivable
|
$ | 1,120,000 | $ | 142,000 | $ | 0 | $ | 211,000(B | ) | $ | 1,051,000 | |||||||||
Inventory reserves and obsolescence
|
$ | 3,348,000 | $ | 3,551,000 | $ | 0 | $ | 3,270,000(C | ) | $ | 3,629,000 | |||||||||
Year ended December 31, 2007
|
||||||||||||||||||||
Deducted from asset accounts:
|
||||||||||||||||||||
Allowance for doubtful accounts receivable
|
$ | 1,822,000 | $ | (300,000 | ) | $ | 0 | $ | 402,000(B | ) | $ | 1,120,000 | ||||||||
Inventory reserves and obsolescence
|
$ | 4,455,000 | $ | 2,744,000 | $ | 0 | $ | 3,851,000(C | ) | $ | 3,348,000 | |||||||||
Year ended December 31, 2006
|
||||||||||||||||||||
Deducted from asset accounts:
|
||||||||||||||||||||
Allowance for doubtful accounts receivable
|
$ | 1,315,000 | $ | 856,000 | $ | 0 | $ | 349,000(B | ) | $ | 1,822,000 | |||||||||
Inventory reserves and obsolescence
|
$ | 2,711,000 | $ | 1,348,000 | $ | 1,554,000 | (A) | $ | 1,158,000(C | ) | $ | 4,455,000 | ||||||||
Note (A) Beginning balance from acquisition
|
||||||||||||||||||||
Note (B) Bad debts written-off, net of
recoveries
|
||||||||||||||||||||
Note (C) Inventory write-off
|
95
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BRUSH ENGINEERED MATERIALS INC.
6070 Parkland Blvd. Mayfield Hts., OH 44124 |
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By: | ||||
Name: | ||||
Title: | ||||
[INDEMNITEE]
[Address] |
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[Indemnitee] | ||||
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STATE OF
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COUNTY OF
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[Signature of Indemnitee] |
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BRUSH ENGINEERED MATERIALS INC.
6070 Parkland Blvd. Mayfield Hts., OH 44124 |
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By: | ||||
Name: | ||||
Title: | ||||
[INDEMNITEE]
[Address] |
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[Indemnitee] | ||||
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STATE OF
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COUNTY OF
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. |
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[INDEMNITEE NAME] |
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[Signature of Indemnitee] |
i | The Indemnitee shall not be eligible to execute Part A of this Undertaking if, at the time of the Indemnitees act or omission at issue, the Articles or the Regulations of the Company prohibit such advances by specific reference to the Ohio Revised Code (the ORC ) Section 1701.13(E)(5)(a), or if the only liability asserted against the Indemnitee is in an action, suit, or proceeding on the Companys behalf pursuant to ORC Section 1701.95. In the event that the Indemnitee is eligible to and does execute both Part A and Part B hereof, the costs, charges, and expenses which are paid by the Company pursuant hereto shall be required to be repaid by the Indemnitee only if the Indemnitee is required to do so under the terms of both Part A and Part B. |
17
Grade
D E |
Financial Component
20% 10% |
Personal Team
0-14% 0-14% |
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Dated:
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Grantee |
BRUSH ENGINEERED MATERIALS INC. | ||||
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By | |||
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Date:
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[GRANTEE NAME] |
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BRUSH ENGINEERED MATERIALS INC. | ||||
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By: | |||
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BRUSH ENGINEERED MATERIALS INC. | ||||
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By: | /s/ Michael C. Hasychak | ||
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Name: | Michael C. Hasychak | ||
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Title: | Vice President, Treasurer and Secretary |
State or Country | ||
Name of Subsidiary | of Incorporation | |
|
||
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 Holdings Limited
|
Ireland | |
OMC Scientific Czech s.r.o.
|
Czech Republic | |
Technical Materials, Inc.
|
Ohio | |
Techni-Met,
Inc.
|
Connecticut | |
Thin Film Technology, Inc.
|
California | |
Williams Acquisition, LLC
|
New York | |
Williams Advanced Materials Inc.
|
New York | |
Williams Advanced Materials
Far East Pte Ltd.
|
Singapore | |
Williams Advanced Materials
(Netherlands) B.V.
|
Netherlands | |
Williams Advanced Materials
Japan Inc.
|
Japan | |
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
|
/s/ William P. Madar
|
|||
Chief Executive Officer and Director
|
||||
(Principal Executive Officer)
|
||||
|
||||
/s/ John D. Grampa
|
/s/ William G. Pryor | |||
|
||||
John D. Grampa, Senior Vice President
|
William G. Pryor, Director | |||
Finance and Chief Financial Officer
|
||||
(Principal Financial Officer)
|
||||
|
||||
/s/ Albert C. Bersticker
|
/s/ N. Mohan Reddy | |||
|
||||
Albert C. Bersticker, Director
|
N. Mohan Reddy, Director | |||
|
||||
/s/ Joseph P. Keithley
|
/s/ William R. Robertson | |||
|
||||
Joseph P. Keithley, Director
|
William R. Robertson, Director | |||
|
||||
/s/ Vinod M. Khilnani
|
/s/ John Sherwin, Jr. | |||
|
||||
Vinod M. Khilnani, Director
|
John Sherwin, Jr, Director | |||
|
||||
/s/ William B. Lawrence
|
/s/ Craig S. Shular | |||
|
||||
William B. Lawrence, Director
|
Craig S. Shular, Director |